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EXHIBIT 1
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Source Services Corporation
and
ChaseMellon Shareholder Services L.L.C.
Rights Agent
Rights Agreement
Dated as of May 30, 1997
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TABLE OF CONTENTS
Page
Section 1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3. Issuance of Rights Certificates . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 4. Form of Rights Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 5. Countersignature and Registration . . . . . . . . . . . . . . . . . . . . . . . 7
Section 6. Transfer, Split-Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights . . . . . . . . . . 8
Section 8. Cancellation and Destruction of Rights Certificates . . . . . . . . . . . . . . 10
Section 9. Availability of Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 10. Preferred Shares Record Date . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 12. Certificate of Adjusted Purchase Price or Number of Shares . . . . . . . . . . 19
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power . . . . . 20
Section 14. Fractional Rights and Fractional Shares . . . . . . . . . . . . . . . . . . . . 22
Section 15. Rights of Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 16. Agreement of Rights Holders . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 17. Rights Certificate Holder Not Deemed a Stockholder . . . . . . . . . . . . . . 25
Section 18. Concerning the Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 19. Merger or Consolidation or Change of Name of Rights Agent . . . . . . . . . . . 26
Section 20. Duties of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 21. Change of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 22. Issuance of New Rights Certificates . . . . . . . . . . . . . . . . . . . . . . 29
Section 23. Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 24. Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 25. Notice of Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 26. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 27. Supplements and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 28. Determination and Actions by the Board of Directors, etc. . . . . . . . . . . . 33
Section 29. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 30. Benefits of this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 31. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 32. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 33. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 34. Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
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Page
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Exhibit A - Form of Certificate of Designations of Series A Junior
Participating Preferred Stock of Source Services Corporation . . . . . . . . . . . . . A-1
Exhibit B - Form of Rights Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
Exhibit C - Summary of Rights to Purchase Preferred Shares . . . . . . . . . . . . . . . . . . . . . C-1
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RIGHTS AGREEMENT
Agreement, dated as of May 30, 1997, between Source Services
Corporation, a Delaware corporation (the "Company"), and ChaseMellon
Shareholder Services L.L.C. (the "Rights Agent").
The Board of Directors of the Company has authorized and declared a
dividend of one preferred share purchase right (a "Right") for each Common
Share (as hereinafter defined) of the Company outstanding on June 18, 1997 (the
"Record Date"), each Right representing the right to purchase one one-hundredth
of a Preferred Share (as hereinafter defined), upon the terms and subject to
the conditions herein set forth, and has further authorized and directed the
issuance of one Right with respect to each Common Share that shall become
outstanding between the Record Date and the earliest of the Distribution Date,
the Redemption Date and the Final Expiration Date (as such terms are
hereinafter defined).
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement,
the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such
term is hereinafter defined) who or which, together with all
Affiliates and Associates (as such terms are hereinafter defined) of
such Person, shall be the Beneficial Owner (as such term is
hereinafter defined) of 20% or more of the Common Shares of the
Company then outstanding, but shall not include (i) the Company, (ii)
any Subsidiary (as such term is hereinafter defined) of the Company,
(iii) any employee benefit plan of the Company or any Subsidiary of
the Company, or (iv) any entity organized, appointed or established by
the Company for or pursuant to the terms of any such plan.
Notwithstanding the foregoing, no Person shall become an "Acquiring
Person" as the result of (a) an acquisition of Common Shares by the
Company which, by reducing the number of shares outstanding, increases
the proportionate number of shares beneficially owned by such Person
to 20% or more of the Common Shares of the Company then outstanding or
(b) the acquisition by such Person of newly issued Common Shares
directly from the Company (it being understood that a purchase from an
underwriter or other intermediary is not directly from the Company);
provided, however, that if a Person shall become the Beneficial Owner
of 20% or more of the Common Shares of the Company then outstanding by
reason of share purchases by the Company or the receipt of
newly-issued Common Shares directly from the Company and shall, after
such share purchases or direct issuance by the Company, become the
Beneficial Owner of any additional Common Shares of the Company, then
such Person shall be deemed to be an "Acquiring Person".
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 Section 1(a), has become such inadvertently, and such Person
divests as promptly as practicable a sufficient number of
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Common Shares so that such Person would no longer be an Acquiring
Person, as defined pursuant to the foregoing provisions of this
Section 1(a), then such Person shall not be deemed to be 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 Exchange Act as in effect on the date of this
Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of
and shall be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's
Affiliates or Associates 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), or upon the exercise of conversion rights,
exchange rights, rights, warrants or options, or otherwise;
provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, (x) securities
tendered pursuant to a tender or exchange offer made by or on
behalf of such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for
purchase or exchange, (y) securities issuable upon exercise of
Rights at any time prior to the occurrence of a Triggering
Event or (z) securities issuable upon exercise of Rights from
and after the occurrence of a Triggering Event which Rights
were acquired by such Person or any of such Person's
Affiliates or Associates prior to the Distribution Date or
pursuant to Section 3(a) or Section 22 hereof (the "Original
Rights") or pursuant to Section 11(i) hereof in connection
with an adjustment made with respect to any Original Rights;
or (B) the sole or shared right to vote or dispose pursuant to
any agreement, arrangement or understanding; provided,
however, that a Person shall not be deemed the Beneficial
Owner of, or to beneficially own, any security if the
agreement, arrangement or understanding to vote such security
(1) arises solely from a revocable proxy or consent given to
such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the
applicable rules and regulations promulgated under the
Exchange Act and (2) is not also then reportable on Schedule
13D or Schedule 13G under the Exchange Act (or any comparable
or successor report); or (C) has "beneficial ownership" of (as
determined pursuant to Rule 13d-3 of the General Rules and
Regulations under the Exchange Act); or
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(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate
thereof) with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding, whether written or oral (other than customary
agreements with and between underwriters and selling group
members with respect to a bona fide public offering of
securities), for the purpose of acquiring, holding, voting
(except to the extent contemplated by the proviso to Section
1(c)(ii)(B)) or disposing of any securities of the Company.
Notwithstanding anything in this definition of Beneficial
Ownership to the contrary, the phrase "then outstanding," when used
with reference to a Person's Beneficial Ownership of securities of the
Company, shall mean the number of such securities then issued and
outstanding together with the number of such securities not then
actually issued and outstanding which such Person would be deemed to
own beneficially hereunder.
(d) "Business Day" shall mean any day other than a
Saturday, a Sunday or a day on which banking institutions in Texas 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., Dallas, Texas time, on such date; provided, however, that if
such date is not a Business Day it shall mean 5:00 P.M., Dallas, Texas
time, on the next succeeding Business Day.
(f) "Common Shares" when used with reference to the
Company shall mean the shares of Common Stock, par value $.02 per
share, of the Company. "Common Shares" when used with reference to
any Person other than the Company shall mean the capital stock (or
equity interest) of such other Person with the greatest voting power,
or the equity securities or other equity interest having power to
control or direct the management of such Person.
(g) "Distribution Date" shall have the meaning set forth
in Section 3 hereof.
(h) "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
(i) "Final Expiration Date" shall have the meaning set
forth in Section 7 hereof.
(j) "Person" shall mean any individual, firm, corporation
or other entity, and shall include any successor (by merger or
otherwise) of such entity.
(k) "Preferred Shares" shall mean shares of Series A
Junior Participating Preferred Stock, par value $.01 per share, of the
Company having the rights and
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preferences set forth in the Form of Certificate of Designations
attached to this Agreement as Exhibit A.
(l) "Redemption Date" shall have the meaning set forth in
Section 7 hereof.
(m) "Section 11(a)(ii) Event" shall mean an event
described in Section 11(a)(ii) hereof.
(n) "Shares Acquisition Date" shall mean the first date of
public announcement (which for purposes of this definition, shall
include, without limitation, a report filed pursuant to Section 13(d)
under the Exchange Act) by the Company or an Acquiring Person that an
Acquiring Person has become such.
(o) "Subsidiary" of any Person shall mean any corporation
or other entity of which a majority of the voting power of the voting
equity securities or equity interest is owned, directly or indirectly,
by such Person.
(p) "Triggering Event" shall mean a Section 11(a)(ii)
Event or an event described in Section 13(a) hereof.
Section 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.
Section 3. Issuance of Rights Certificates.
(a) Until the earlier of (i) the Close of Business on the
tenth day after the Shares Acquisition Date or (ii) the Close of
Business on 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 the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company or any person or entity organized, appointed
or established by the Company for or pursuant to the terms of any such
plan) of, or of the first public announcement of the intention of any
Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of the
Company or any person or entity organized, appointed or established by
the Company for or pursuant to the terms of any such plan) to
commence, a tender or exchange offer the consummation of which would
result in any Person becoming the Beneficial Owner of Common Shares
aggregating 20% or more of the then outstanding Common Shares
(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(b) hereof) by the
certificates for Common Shares registered
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in the names of the holders thereof (which certificates shall also be
deemed to be certificates for Rights) and not by separate
certificates, (y) the Rights will be transferable only in connection
with the transfer of Common Shares and (z) each transfer of Common
Shares (including a transfer to the Company) shall constitute a
transfer of the Rights associated with such Common Shares. 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, send) by
first-class, insured, postage-prepaid mail, to each record holder of
Common Shares as of the Close of Business on the Distribution Date, at
the address of such holder shown on the records of the Company, a
Rights Certificate, in substantially the form of Exhibit B hereto (a
"Rights Certificate"), evidencing one Right for each Common Share so
held. As of the Distribution Date, the Rights will be evidenced
solely by such Rights Certificates.
(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 Shares, in substantially the form of Exhibit C
hereto (the "Summary of Rights"), by first-class, postage-prepaid
mail, to each record holder of Common Shares as of the close of
business on the Record Date, at the address of such holder shown on
the records of the Company. With respect to certificates for Common
Shares outstanding as of the Record Date, until the Distribution Date,
the Rights will be evidenced by such certificates registered in the
names of the holders thereof together with a copy of the Summary of
Rights attached thereto. Until the Distribution Date (or the earlier
of the Redemption Date or the Final Expiration Date), the surrender
for transfer of any certificate for Common Shares outstanding on the
Record Date, with or without a copy of the Summary of Rights attached
thereto, shall also constitute the transfer of the Rights associated
with the Common Shares represented thereby.
(c) Certificates for Common Shares which become
outstanding (including, without limitation, reacquired Common Shares
referred to in the last sentence of this Section 3 (c)) after the
Record Date but prior to the earliest of the Distribution Date, the
Redemption Date or the Final Expiration Date shall have impressed on,
printed on, written on or otherwise affixed to them the following
legend:
This certificate also evidences and entitles the holder hereof
to certain rights as set forth in a Rights Agreement between
Source Services Corporation and ChaseMellon Shareholder
Services L.L.C. dated as of May 30, 1997 (the "Rights
Agreement"), the terms of which are hereby incorporated herein
by reference and a copy of which is on file at the principal
executive offices of Source Services Corporation. 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. Source
Services Corporation will mail to the holder of this
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certificate a copy of the Rights Agreement without charge
after receipt of a written request therefor. As described in
the Rights Agreement, Rights issued to any Person who becomes
an Acquiring Person or any Associate or Affiliate thereof (all
as defined in the Rights Agreement) shall become null and
void.
With respect to such certificates containing the foregoing legend,
until the Distribution Date, the Rights associated with the Common
Shares represented by such certificates shall be evidenced by such
certificates alone, and the surrender for transfer of any such
certificate shall also constitute the transfer of the Rights
associated with the Common Shares represented thereby. In the event
that the Company purchases or acquires any Common Shares after the
Record Date but prior to the Distribution Date, any Rights associated
with such Common Shares shall be deemed cancelled and retired so that
the Company shall not be entitled to exercise any Rights associated
with the Common Shares which are no longer outstanding.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates and the forms of election to
purchase and of assignment to be printed on the reverse thereof, shall
be substantially the same as Exhibit B hereto, and may have such marks
of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and
as are not inconsistent with the provisions of this Agreement, or as
may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
stock exchange on which the Rights may from time to time be listed, or
to conform to usage. Subject to the terms, provisions and
restrictions elsewhere herein, the Rights Certificates shall entitle
the holders thereof to purchase such number of one one-hundredths of a
Preferred Share as shall be set forth therein at the price per one
one-hundredth of a Preferred Share set forth therein (the "Purchase
Price"), but the amount and type of securities purchasable upon the
exercise of each Right and the Purchase Price shall be subject to
adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a)
or Section 22 hereof that represents Rights beneficially owned by:
(i) an Acquiring Person or any Associate or Affiliate of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring
Person becomes such, or (iii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) who becomes a transferee prior to
or concurrently with the Acquiring Person becoming such and receives
such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity
interests in such Acquiring Person or to any Person with whom such
Acquiring Person has any continuing agreement, arrangement or
understanding, whether written or oral, regarding the transferred
Rights or (B) a transfer which the Board of Directors of the Company
has
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determined in good faith is part of a plan, arrangement or
understanding, whether written or oral, which has as a primary purpose
or effect avoidance of the second paragraph of Section 11(a)(ii)
hereof, and any Rights Certificate issued pursuant to Section 6 or
Section 11 hereof upon transfer, exchange, replacement or adjustment
of any other Rights Certificate referred to in this sentence, shall
contain (to the extent feasible) the following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person (as
such terms are defined in the Rights Agreement). Accordingly,
this Rights Certificate and the Rights represented hereby may
become null and void in the circumstances specified in Section
11(a)(ii) of such Agreement.
The provisions of the second paragraph of Section 11(a)(ii) shall
apply whether or not any Rights Certificate actually contains the foregoing
legend.
Section 5. Countersignature and Registration. The Rights
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, its Chief Executive Officer, its President, any of its Vice Presidents,
or its Treasurer, either manually or by facsimile signature, shall have affixed
thereto the Company's seal or a facsimile thereof, and shall be attested by the
Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Rights Certificates shall be manually countersigned
by the Rights Agent and shall not be valid for any purpose unless
countersigned. In case any officer of the Company who shall have signed any of
the Rights Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Rights Certificates, nevertheless, may be countersigned by the Rights
Agent and issued and delivered by the Company with the same force and effect as
though the Person who signed such Rights Certificates had not ceased to be such
officer of the Company; and any Rights Certificate may be signed on behalf of
the Company by any Person who, at the actual date of the execution of such
Rights Certificate, shall be a proper officer of the Company to sign such
Rights Certificate, although at the date of the execution of this Rights
Agreement any such Person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or cause
to be kept, at its principal office, books for registration and transfer of the
Rights Certificates of each series issued hereunder. Such books shall show the
names and addresses of the respective holders of the Rights Certificates, the
number of Rights evidenced on its face by each of the Rights Certificates and
the date of each of the Rights Certificates.
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Section 6. Transfer, Split-Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Sections 4(b), 14 and 24
hereof, at any time after the Close of Business on the Distribution
Date, and at or prior to the Close of Business on the earlier of the
Redemption Date or the Final Expiration Date, any Rights Certificate
or Rights Certificates (other than Rights Certificates representing
Rights that have become void pursuant to Section 11(a)(ii) hereof or
that have been exchanged pursuant to Section 24 hereof) may be
transferred, split-up, combined or exchanged for another Rights
Certificate or Rights Certificates, entitling the registered holder to
purchase a like number of one one-hundredths of a Preferred Share (or
Common Shares, other securities or property, as the case may be) as
the Rights Certificate or Rights Certificates surrendered then entitle
such holder to purchase. Any registered holder desiring to transfer,
split-up, combine or exchange any Rights Certificate or Rights
Certificates shall make such request in writing delivered to the
Rights Agent, and shall surrender the Rights Certificate or Rights
Certificates to be transferred, split-up, combined or exchanged at the
principal office of the Rights Agent. Neither the Rights Agent nor
the Company shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Rights Certificate
until the registered holder shall have completed and signed the
certificate contained in the form of assignment on the reverse side of
such Rights Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial
Owner) or Affiliates or Associates thereof as the Company shall
reasonably request. Thereupon the Rights Agent shall, subject to
Sections 4 and 11(a)(ii) hereof, countersign and deliver to the Person
entitled thereto a Rights Certificate or Rights Certificates, as the
case may be, as so requested. The Company may require payment of a
sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split-up, combination or
exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Rights Certificate, and, in case of
loss, theft or destruction, of indemnity or security reasonably
satisfactory to them, and, at the Company's request, reimbursement to
the Company and the Rights Agent of all reasonable expenses incidental
thereto, and upon surrender to the Rights Agent and cancellation of
the Rights Certificate, if mutilated, the Company will make and
deliver a new Rights Certificate of like tenor to the Rights Agent for
delivery to the registered holder in lieu of the Rights Certificate so
lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) Subject to Section 11(a)(ii) hereof, the registered
holder of any valid Rights Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein including,
without limitation, the restrictions on exercisability set forth in
Section 9(c) hereof) in whole or in part at any time after the
Distribution Date upon surrender
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of the Rights Certificate, with the form of election to purchase on
the reverse side thereof duly executed, to the Rights Agent at the
principal office of the Rights Agent, together with payment of the
Purchase Price (as defined below) for each one one-hundredth of a
Preferred Share (or Common Shares, other securities, cash or other
assets, as the case may be) as to which the Rights are exercised, at
or prior to the earliest of (i) the close of business on June 18, 2007
(the "Final Expiration Date"), (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof (the "Redemption Date"), or
(iii) the time at which such Rights are exchanged as provided in
Section 24 hereof.
(b) The Purchase Price for each one one-hundredth of a
Preferred Share to be issued upon exercise of a Right shall initially
be $90, shall be subject to adjustment from time to time as provided
in Sections 11 and 13 hereof and shall be payable in lawful money of
the United States of America in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the
certificate on the reverse side of the Rights Certificate duly
executed, accompanied by payment of the Purchase Price for the shares
(or other securities or property, as the case may be) to be purchased
and an amount equal to any applicable transfer tax required to be paid
by the holder of such Rights Certificate in accordance with Section 9
hereof by wire transfer, certified check, cashier's check or money
order payable to the order of the Company, or such other payment
method reasonably required by the Company, the Rights Agent shall
thereupon promptly (i) (A) requisition from any transfer agent of the
Preferred Shares (or make available if the Rights Agent is the
transfer agent of the Preferred Shares) certificates for the number of
Preferred Shares to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests or (B)
requisition from the depositary agent depositary receipts as provided
in Section 14(b) hereof, representing such number of one
one-hundredths of a Preferred Share as are to be purchased (in which
case certificates for the Preferred Shares represented by such
receipts shall be deposited by the transfer agent with the depositary
agent and the Company hereby directs the depositary agent to comply
with such request, (ii) when appropriate, requisition from the Company
or such other entity the amount of cash to be paid in lieu of issuance
of fractional shares in accordance with Section 14 hereof, (iii) after
receipt of such certificates or depositary receipts, cause the same to
be delivered to or upon the order of the registered holder of such
Rights Certificate, registered in such name or names as may be
designated by such holder, and (iv) when appropriate, after receipt,
deliver such cash to or upon the order of the registered holder of
such Rights Certificate. In the event that the Company elects or is
obligated to issue other securities (including Common Shares) of the
Company, pay cash and/or distribute other property pursuant to Section
11(a)(iii) hereof, the Company will make all arrangements necessary so
that such other securities, cash and/or property are available for
distribution by the Rights Agent, if and when appropriate.
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(d) In case the registered holder of any Rights
Certificate shall exercise less than all the Rights evidenced thereby,
a new Rights Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent to the
registered holder of such Rights 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) completed and signed the
certificate contained in the form of election to purchase set forth on
the reverse side of the Rights Certificate surrendered for such
exercise, and (ii) provided such additional evidence of the identity
of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
(f) Notwithstanding any statement to the contrary
contained in this Agreement or in any Rights Certificate, if the
Distribution Date or the Shares Acquisition Date shall occur prior to
the Record Date, the provisions of this Agreement, including (without
limitation) Sections 3 and 11(a)(ii), shall be applicable to the
Rights upon their issuance to the same extent such provisions would
have been applicable if the Record Date were the date of this
Agreement.
Section 8. Cancellation and Destruction of Rights Certificates.
All Rights Certificates surrendered for the purpose of exercise, transfer,
split-up, combination or exchange shall, if surrendered to the Company or to
any of its agents, be delivered to the Rights Agent for cancellation or in
cancelled form, or, if surrendered to the Rights Agent, shall be cancelled by
it, and no Rights Certificates shall be issued in 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 other Rights Certificate
purchased or acquired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all cancelled Rights Certificates to the
Company, or shall, at the written request of the Company, destroy such
cancelled Rights Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.
Section 9. Availability of Capital Stock.
(a) The Company covenants and agrees that it will cause to
be reserved and kept available out of its authorized and unissued
Preferred Shares (and, following the occurrence of a Distribution
Date, out of its authorized and unissued Common Shares and/or other
securities or out of its authorized and issued shares held in its
treasury), the number of Preferred Shares (or Common Shares and/or
other securities, as the case may be) that will be sufficient to
permit the exercise in full of all outstanding Rights as provided in
this Agreement.
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(b) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all Preferred Shares
(or Common Shares and/or other securities, as the case may be)
delivered upon exercise of Rights shall be, at the time of delivery of
the certificates for such Preferred Shares (or Common Shares and/or
other securities, as the case may be) (subject to any necessary
payment of the Purchase Price), duly and validly authorized and issued
and fully paid and nonassessable shares.
(c) The Company further covenants and agrees that it will
pay when due and payable any and all federal and state transfer taxes
and charges which may be payable in respect of the issuance or
delivery of the Rights Certificates or of any Preferred Shares (or
Common Shares and/or other securities, as the case may be) upon the
exercise of Rights. The Company shall not, however, be required to
pay any transfer tax which may be payable in respect of any transfer
or delivery of Rights Certificates to a Person other than, or the
issuance or delivery of certificates or depositary receipts for the
Preferred Shares (or Common Shares and/or other securities, as the
case may be) in a name other than that of, the registered holder of
the Rights Certificate evidencing Rights surrendered for exercise or
to issue or to deliver any certificates or depositary receipts for
Preferred Shares (or Common Shares and/or other securities, as the
case may be) upon the exercise of any Rights until any such tax shall
have been paid (any such tax being payable by the holder of such
Rights Certificate at the time of surrender) or until it has been
established to the Company's reasonable satisfaction that no such tax
is due.
(d) So long as the Preferred Shares (and, following the
occurrence of a Distribution Date, Common Shares and/or other
securities, as the case may be) issuable and deliverable upon the
exercise of the Rights may be listed on any inter-dealer quotation
system or national securities exchange, the Company shall use its best
efforts to cause, from and after such time as the Rights become
exercisable, all shares reserved for such issuance to be listed on
such exchange upon official notice of issuance upon such exercise.
(e) The Company shall use its best efforts to (i) file on
the appropriate form, as soon as practicable following the earliest
date after the first occurrence of a Section 11(a)(ii) Event on which
the consideration to be delivered by the Company upon exercise of the
Rights has been determined hereunder, a registration statement under
the Securities Act of 1933, as amended (the "Act"), with respect to
the securities purchasable upon exercise of the Rights, (ii) cause
such registration statement to become effective as soon as practicable
after such filing, and (iii) cause such registration statement to
remain effective (with a prospectus at all times meeting the
requirements of the Act) until the earlier of (A) the date as of which
the Rights are no longer exercisable for such securities, and (B) the
Final Expiration Date. The Company may temporarily suspend, for a
period of time not to exceed ninety (90) days after the date set forth
in clause (i) of the first sentence of this Section 9(e), the
exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. Upon any
such suspension, the Company shall issue a public announcement stating
that the
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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. In addition, if the Company shall determine that a
registration statement is required following the Distribution Date,
the Company may temporarily suspend the exercisability of the Rights
until such time as a registration statement has been declared
effective. The Company will also take such action as may be
appropriate under, or to ensure compliance with, the securities or
"blue sky" laws of the various states in connection with the
exercisability of the Rights. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction if the requisite qualification in such jurisdiction shall
not have been obtained, the exercise thereof shall not be permitted
under applicable law or a registration statement shall not have been
declared effective.
Section 10. Preferred Shares Record Date. Each Person in whose
name any certificate for Preferred Shares (or Common Shares and/or other
securities, as the case may be) is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the Preferred
Shares (or Common Shares and/or other securities, as the case may be)
represented thereby on, and such certificate shall be dated, the date upon
which the Rights certificate evidencing such Rights was duly surrendered and
payment of the applicable Purchase Price (and any applicable transfer taxes)
was made (or Rights were duly surrendered in exchange for Common Shares
pursuant to Section 24 hereof); provided, however, that if the date of such
surrender and payment is a date upon which the Preferred Shares (or Common
Shares and/or other securities, as the case may be) transfer books of the
Company are closed, such Person shall be deemed to have become the record
holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which the Preferred Shares (or Common Shares and/or
other securities, as the case may be) transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby, the holder of a Rights
Certificate shall not be entitled to any rights of a holder of Preferred Shares
(or Common Shares and/or other securities, as the case may be) for which the
Rights shall be exercisable, including, without limitation, the right to vote,
to receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights. The Purchase Price, the number and kind of shares
covered by and obtainable upon exercise of each Right, and the number of Rights
outstanding, are subject to adjustment from time to time as provided in
Sections 11 and 13 of this Agreement.
(a) (i) In the event the Company shall at
any time after the date of this Agreement (A) declare a
dividend on the Preferred Shares payable in Preferred Shares,
(B) subdivide the outstanding Preferred Shares, (C) combine
the outstanding Preferred Shares into a smaller number of
Preferred Shares or (D) issue any shares of its capital stock
in a reclassification of the Preferred Shares (including any
such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving
corporation), except as
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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 capital
stock issuable on such date, shall be proportionately adjusted
so that the holder of any Right exercised after such time
shall be entitled to receive the aggregate number and kind of
shares of capital stock which, if such Right had been
exercised immediately prior to such date and at a time when
the Preferred Shares transfer books of the Company were open,
he would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination
or reclassification; provided, however, that in no event shall
the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital
stock of the Company issuable upon exercise of one Right. If
an event occurs which would require adjustment under both
Section 11(a)(i) and Section 11(a)(ii), the adjustment
provided for in this Section 11(a)(i) shall be in addition to,
and shall be made prior to, any adjustment required pursuant
to Section 11(a)(ii).
(ii) Subject to Section 24 of this
Agreement, in the event any Person shall become an Acquiring
Person, each holder of a valid Right shall thereafter have a
right to receive, upon exercise thereof at a price equal to
the then current Purchase Price multiplied by the number of
one one-hundredths of a Preferred Share for which a Right is
then exercisable, in accordance with the terms of this
Agreement, and in lieu of Preferred Shares, such number of
Common Shares of the Company as shall equal the result
obtained by (x) multiplying the then current Purchase Price by
the number of one one-hundredths of a Preferred Share for
which, a Right is then exercisable and dividing that product
by (y) 50% of the then current per share market price of the
Company's Common Shares (determined pursuant to Section 11(d)
hereof) on the date of the occurrence of the event described
above. In the event that any Person shall become an Acquiring
Person and the Rights shall then be outstanding, the Company
shall not take any action which would eliminate or diminish
the benefits intended to be afforded by the Rights.
From and after the time when a Person becomes an
Acquiring Person (a "Section 11(a)(ii) Event") any Rights that
are or were acquired or beneficially owned by (i) any
Acquiring Person (or any Associate or Affiliate of such
Acquiring Person), (ii) a transferee of such Acquiring Person
(or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person became an Acquiring
Person or (iii) a transferee of such Acquiring Person (or of
any such Associate or Affiliate) who becomes a transferee
prior to or concurrently with the Acquiring Person's becoming
an Acquiring Person and receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from
the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom the Acquiring
Person has any
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continuing agreement, arrangement or understanding, whether
written or oral, regarding the transferred Rights or (B) a
transfer which the Board of Directors has determined in good
faith is part of a plan, arrangement or understanding, whether
written or oral, which has as a primary purpose or effect the
avoidance of this Section 11(a)(ii), shall each be void and
any holder of such Rights shall thereafter have no exercise or
any other rights whatsoever with respect to such Rights under
any provision of this Agreement or otherwise. No Rights
Certificate shall be issued pursuant to Section 3, this
Section 11(a)(ii) or Section 24 that represents Rights
beneficially owned by an Acquiring Person or any Associate or
Affiliate thereof whose Rights would be void pursuant to the
preceding sentence; no Rights Certificate shall be issued at
any time upon the transfer of any Rights to an Acquiring
Person or any Associate or Affiliate thereof whose Rights
would be void pursuant to the preceding sentence or to any
nominee of such Acquiring Person, Associate or Affiliate; and
any Rights Certificate delivered to the Rights Agent for
transfer to an Acquiring Person, Associate or Affiliate
thereof whose Rights would be void pursuant to the preceding
sentence shall be cancelled.
(iii) In lieu of issuing Common Shares of
the Company in accordance with Section 11(a)(ii) hereof, the
Company may, in the sole discretion of the Board of Directors,
elect to (and, in the event that the Board of Directors has
not exercised the exchange right contained in Section 24
hereof and there are not sufficient issued but not outstanding
and authorized but unissued Common Shares to permit the
exercise in full of the Rights in accordance with the
foregoing subparagraph (ii), the Company shall) take all such
action as may be necessary to authorize, issue or pay, upon
the exercise of the Rights, cash (including by way of a
reduction of the Purchase Price), property, other securities
or any combination thereof having an aggregate value equal to
the value of the Common Shares of the Company which otherwise
would have been issuable pursuant to Section 11(a)(ii), which
aggregate value shall be determined by the Board of Directors.
For purposes of the preceding sentence, the value of the
Common Shares shall be determined pursuant to Section 11(d)
hereof and the value of any equity securities which the Board
of Directors determines to be a "common stock equivalent"
(including the Preferred Shares, in such ratio as the Board of
Directors shall determine) shall be deemed to have the same
value as the Common Shares. Any such election by the Board of
Directors must be made and publicly announced within 60 days
following the date on which the event described in Section
11(a)(ii) shall have occurred. Following the occurrence of
the event described in Section 11(a)(ii), the Board of
Directors may suspend the exercisability of the Rights for a
period of up to 60 days following the date on which the event
described in Section 11(a)(ii) shall have occurred to the
extent that the directors have not determined whether to
exercise the Company's right of election under this Section
11(a)(iii). 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.
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(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred
Shares entitling them (for a period expiring within 45 calendar days
after such record date) to subscribe for or purchase Preferred Shares
(or shares having the same rights, privileges and preferences as the
Preferred Shares ("equivalent preferred shares")) or securities
convertible into Preferred Shares or equivalent preferred shares at a
price per Preferred Share or equivalent preferred share (or having a
conversion price per share, if a security convertible into Preferred
Shares or equivalent preferred shares) less than the then current per
share market price of the Preferred Shares (as defined in Section
11(d)) 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 Preferred Shares outstanding
on such record date plus the number of Preferred Shares which could be
purchased at the current per share market price for the aggregate
offering price of the total number of Preferred Shares and/or
equivalent preferred shares so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be
offered) and the denominator of which shall be the number of Preferred
Shares outstanding on such record date plus the number of additional
Preferred Shares and/or equivalent preferred shares to be offered for
subscription or purchase (or into which the convertible securities so
to be offered are initially convertible); provided, however, that in
no event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of capital
stock of the Company issuable upon exercise of one Right. In case
such subscription price may be paid in a consideration part or all of
which shall be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent. Preferred Shares owned by or
held for the account of the Company shall not be deemed outstanding
for the purpose of any such computation. Such adjustment shall be
made successively whenever such a record date is fixed; and in the
event that such rights, options or warrants are not so issued, the
Purchase Price shall be adjusted to be the Purchase Price which would
then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the
making of a distribution to all holders of the Preferred Shares
(including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation) of evidences of indebtedness or assets (other
than a regular quarterly cash dividend or a dividend payable in
Preferred Shares) 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 then current per share
market price of the Preferred Shares on such record date, less the
fair market value (as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent) of the portion of the assets or
evidences of indebtedness so to be
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distributed or of such subscription rights or warrants applicable to
one Preferred Share and the denominator of which shall be such current
per share market price of the Preferred Shares; provided, however,
that in no event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the shares of
capital stock of the Company to be issued upon exercise of one Right.
Such adjustments shall be made successively whenever such a record
date is fixed; and in the event that such distribution is not so made,
the Purchase Price shall again be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder,
the "current per share market price" of any security (a "Security" for
the purpose of this Section 11(d)(i)) on any date shall be deemed to
be the average of the daily closing prices (determined as provided in
the next sentence) per share of such Security for the 30 consecutive
Trading Days (as such term is hereinafter defined) immediately prior
to such date, and for the purpose of any computation under Section
11(a)(iii) hereof, the "current per share market price" of a Security
on any date shall be deemed to be the average of the daily closing
prices per share of such Security for the 30 consecutive Trading Days
immediately following such date; provided, however, that in the event
that the current per share market price of the Security is determined
during a period following the announcement by the issuer of such
Security of (A) a dividend or distribution on such Security payable in
shares of such Security or securities convertible into such shares
(other than the Rights), or (B) any subdivision, combination or
reclassification of such Security and prior to the expiration of 30
Trading Days after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the current per share
market price shall be appropriately adjusted to reflect the current
market price per share equivalent of such Security as if such
dividend, distribution, combination or reclassification has not been
declared. The closing price for each day shall be the last sale
price, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction
reporting system with respect to securities listed on the Nasdaq
National Market or, if the Security is listed or admitted for trading
on a national exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the
principal national securities exchange on which the Security is listed
or admitted to trading, or, if the Security is not listed on the
Nasdaq National Market or listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by any other system then in use,
or, if on any such date the Security is 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
Security selected by the Board of Directors of the Company. The term
"Trading Day" shall mean a day on which the principal national
securities exchange on which the Security is listed or admitted to
trading is open for the transaction of business or, if the Security is
not listed or admitted to trading on any national securities exchange,
a Business Day.
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(ii) For the purpose of any computation hereunder,
the "current per share market price" of the Preferred Shares shall be
determined in accordance with the method set forth in Section
11(d)(i). If the Preferred Shares are not publicly traded, the
"current per share market price" of the Preferred Shares shall be
conclusively deemed to be the current per share market price of the
Common Shares as determined pursuant to Section 11(d)(i)
(appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof), multiplied by
one hundred. If neither the Common Shares nor the Preferred Shares
are publicly held or so listed or traded, "current per share market
price" 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.
(e) No adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or decrease of at
least 1% in the Purchase Price; provided, however, that any
adjustments which by reason of this Section 11(e) are not required to
be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall
be made to the nearest cent or to the nearest one one-millionth of a
Preferred Share or one ten-thousandth of any other share or security,
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 requires such adjustment or (ii) the date of the
expiration of the right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to
Section 11(a) hereof, the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock of the
Company other than Preferred Shares, thereafter the number of such
other shares so receivable upon exercise of any Right shall be subject
to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the
Preferred Shares contained in Sections 11(a), 11(b) and 11(c), and the
provisions of Sections 7, 9, 10, 13 and 14 with respect to the
Preferred Shares shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent
to any adjustment made to the Purchase Price hereunder shall evidence
the right to purchase, at the adjusted Purchase Price, the number of
one one-hundredths of a Preferred Share 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
11(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-hundredths of a
Preferred Share (calculated to the nearest one one-millionth of a
Preferred Share) obtained by (i) multiplying (x) the number of
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one one-hundredths of a share covered by a Right immediately prior to
this adjustment by (y) the Purchase Price in effect immediately prior
to such adjustment of the Purchase Price and (ii) dividing the product
so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in
substitution for any adjustment in the number of one one-hundredths of
a Preferred Share purchasable upon the exercise of a Right. Each of
the Rights outstanding after such adjustment of the number of Rights
shall be exercisable for the number of one one-hundredths of a
Preferred Share 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 ten-thousandth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the purchase Price
by the Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement of its
election to adjust the number of Rights, indicating the record date
for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the
Purchase Price is adjusted or any day thereafter, but, if the Rights
Certificates have been issued, shall be at least 10 days later than
the date of the public announcement. If Rights Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable, cause to
be distributed to holders of record of Rights Certificates on such
record date Rights Certificates evidencing, subject to Section 14
hereof, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by such
holders prior to the date of adjustment, and upon surrender thereof,
if required by the Company, new Rights Certificates evidencing all the
Rights to which such holders shall be entitled after such adjustment.
Rights Certificates so to be distributed shall be issued, executed and
countersigned in the manner provided for herein and shall be
registered in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of one one-hundredths of a Preferred
Share issuable upon the exercise of the Rights, the Rights
Certificates theretofore and thereafter issued may continue to express
the Purchase Price and the number of one one-hundredths of a Preferred
Share which were expressed in the initial Rights Certificates issued
hereunder, without prejudice to the validity of such Rights
Certificate(s) or the application of the provisions hereof.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below one one-hundredth of the
then par value, if any, of the Preferred Shares issuable upon exercise
of the Rights, the Company shall take any corporate action which may,
in the opinion of its counsel, be necessary in order that the Company
may
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validly and legally issue fully paid and nonassessable Preferred
Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require
that an adjustment in the Purchase Price be made effective as of a
record date for a specified event, the Company may elect to defer
until the occurrence of such event the issuing to the holder of any
Right exercised after such record date of the Preferred Shares and
other capital stock or securities of the Company, if any, issuable
upon such exercise over and above the Preferred Shares and other
capital stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to such
holder a due xxxx or other appropriate instrument evidencing such
holder's right to receive such additional shares upon the occurrence
of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions
in the Purchase Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that it in its sole
discretion shall determine to be advisable in order that any
consolidation or subdivision of the Preferred Shares, issuance wholly
for cash of any Preferred Shares at less than the current market
price, issuance wholly for cash of Preferred Shares or securities
which by their terms are convertible into or exchangeable for
Preferred Shares, dividends on Preferred Shares payable in Preferred
Shares or issuance of rights, options or warrants referred to in
Section 11(b), hereafter made by the Company to holders of its
Preferred Shares shall not be taxable to such stockholders.
(n) In the event that at any time after the date of this
Agreement and prior to the Shares Acquisition Date, the Company shall
(i) declare or pay any dividend on the Common Shares payable in Common
Shares or (ii) effect a subdivision, combination or consolidation of
the Common Shares (by reclassification or otherwise than by payment of
dividends in Common Shares) into a greater or lesser number of Common
Shares, then in any such case (i) the number of one one-hundredths of
a Preferred Share purchasable after such event upon proper exercise of
each Right shall be determined by multiplying the number of one
one-hundredths of a Preferred Share so purchasable immediately prior
to such event by a fraction, the numerator of which is the number of
Common Shares outstanding immediately before such event and the
denominator of which is the number of Common Shares outstanding
immediately after such event, and (ii) each Common Share outstanding
immediately after such event shall have issued with respect to it that
number of Rights which each Common Share outstanding immediately prior
to such event had issued with respect to it. The adjustments provided
for in this Section 11(n) shall be made successively whenever such a
dividend is declared or paid or such a subdivision, combination or
consolidation is effected.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Section 11 and 13
hereof, the Company shall promptly (a)
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prepare a certificate setting forth such adjustment, and a brief statement of
the facts accounting for such adjustment, (b) file with the Rights Agent and
with each transfer agent for the Common Shares or the Preferred Shares a copy
of such certificate and (c) mail a brief summary thereof to each holder of a
Rights Certificate in accordance with Section 25 hereof.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) If, after the Shares Acquisition Date, directly or
indirectly, (w) the Company shall consolidate with, or merge with and
into, any other Person, (x) any Person shall consolidate with the
Company, or merge with and into the Company and the Company shall be
the continuing or surviving corporation of such merger and, in
connection with such merger or consolidation all or part of the
outstanding Common Shares are changed into or exchanged for stock or
other securities of any other Person (or the Company) or cash or any
other property, (y) the Company shall sell, mortgage or otherwise
transfer (or one or more of its Subsidiaries shall sell, mortgage or
otherwise transfer), in one or more transactions, assets or earning
power aggregating 50% or more of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any Person other
than the Company or one or more of its wholly-owned Subsidiaries, or
(z) any Acquiring Person or any Associate or Affiliate of any such
Acquiring Person, at any time after the date of this Agreement,
directly or indirectly, (A) shall, in one transaction or a series of
transactions, transfer any assets to the Company or to any of its
Subsidiaries in exchange (in whole or in part) for Common Shares, for
shares of other equity securities of the Company or for securities
exercisable for or convertible into shares of equity securities of the
Company (Common Shares or otherwise) or otherwise obtain from the
Company, with or without consideration, any additional shares of such
equity securities or securities exercisable for or convertible into
shares of such equity securities (other than pursuant to a pro rata
distribution to all holders of Common Shares), (B) shall sell,
purchase, lease, exchange, mortgage, pledge, transfer or otherwise
acquire or dispose of assets, in one transaction or a series of
transactions, to, from or with the Company or any of its Subsidiaries
without obtaining a written opinion from a nationally recognized
investment banking firm that the terms of such transaction or
arrangement are no less favorable to the Company than the Company
would be able to obtain in arm's- length negotiation with an
unaffiliated third party, (C) shall sell, purchase, lease, exchange,
mortgage, pledge, transfer or otherwise acquire or dispose of in one
transaction or a series of transactions, to, from or with the Company
or any of the Company's Subsidiaries (other than incidental to the
lines of business, if any, engaged in as of the date hereof between
the Company and such Acquiring Person or Associate or Affiliate)
assets having an aggregate fair market value of more than $5,000,000,
(D) shall receive any compensation from the Company or any of the
Company's Subsidiaries other than compensation for full-time
employment as a regular employee at rates in accordance with the
Company's (or its Subsidiaries') past practices, or (E) shall receive
the benefit, directly or indirectly (except proportionately as a
stockholder and except if resulting from a requirement of law or
governmental regulation), of any loans, advances, guarantees, pledges
or other financial assistance or
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any tax credits or other tax advantage provided by the Company or any
of its Subsidiaries, then, and in each such case, (i) each holder of a
Right (except as otherwise provided herein) shall thereafter have the
right to receive, upon the exercise thereof at a price equal to the
then current Purchase Price multiplied by the number of one
one-hundredths of a Preferred Share for which a Right is then
exercisable in accordance with the terms of this Agreement, and in
lieu of Preferred Shares, such number of validly authorized and
issued, fully paid, non-assessable and freely tradeable Common Shares
of the Principal Party (as hereinafter defined) not subject to any
liens, encumbrances, rights of first refusal or other adverse claims,
as shall equal the result obtained by (A) multiplying the then current
Purchase Price by the number of one one-hundredths of a Preferred
Share for which a Right is then exercisable and dividing that product
by (B) 50% of the then current per share market price of the Common
Shares of the Principal Party (determined pursuant to Section 11(d)
hereof) on the date of consummation of such consolidation, merger,
sale or transfer; (ii) such Principal Party shall thereafter be liable
for, and shall assume, by virtue of such consolidation, merger, sale
or transfer, all the obligations and duties of the Company pursuant to
this Agreement; (iii) the term "Company" shall thereafter be deemed to
refer to such Principal Party; and (iv) such Principal Party shall
take such steps (including, but not limited to, the reservation of a
sufficient number of its Common Shares in accordance with Section 9
hereof) in connection with such consummation as may be necessary to
assure that the provisions hereof shall thereafter be applicable, as
nearly as reasonably may be, in relation to the Common Shares
thereafter deliverable upon the exercise of the Rights.
(b) "Principal Party" shall mean:
(i) In the case of any transaction described in
(w) or (x) of the first sentence of Section 13(a), the Person
that is the issuer of any securities into which Common Shares
of the Company are converted in such merger or consolidation,
and if no securities are so issued, the Person that is the
surviving entity of such merger or consolidation (including
the Company if applicable); and
(ii) in the case of any transaction described in
(y) or (z) of the first sentence in Section 13(a), the Person
that is the party receiving the greatest portion of the
assets, securities, earning power or other benefit transferred
pursuant to such transaction or transactions;
provided, however, that in any such case described in clauses (b)(i)
and (b)(ii): (1) if the Common Shares of such Person are not at such
time and have 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 Shares of
which are and have been so registered, "Principal Party" shall refer
to such other Person; (2) in case such Person is a Subsidiary,
directly or indirectly, of more than one person, the Common Shares of
two or more of which are and have been so registered,
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"Principal Party" shall refer to whichever of such Persons is the
issuer of the Common Shares having the greatest aggregate market
value; and (3) in case 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 (1)
and (2) above shall apply to each of the chains of ownership having an
interest in such joint venture as if such party were a "Subsidiary" of
both or all of such joint venturers and the Principal Parties in each
such chain shall bear the obligations set forth in this Section 13 in
the same ratio as their direct or indirect interests in such Person
bear to the total of such interests.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless the Principal Party
shall have sufficient Common Shares authorized to permit the full
exercise of the Rights and prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent
a supplemental agreement providing for the terms set forth in
paragraphs (a) and (b) of this Section 13 and further providing that,
as soon as practicable after the date of any consolidation, merger,
sale or transfer mentioned in paragraph (a) of this Section 13, the
Principal Party will:
(i) prepare and file a registration statement
under the Act, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate
form, and will use its best efforts to cause such registration
statement to (A) become effective as soon as practicable after
such filing and (B) remain effective (with a prospectus at all
times meeting the requirements of the Act) until the Final
Expiration Date;
(ii) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates which comply in all respects with the requirements
for registration on Form 10 under the Exchange Act; and
(iii) take such actions as may be necessary or
appropriate under the blue sky laws of the various states.
The Company shall not enter into any transaction of the kind
referred to in this Section 13 if at the time of such transaction
there are any rights, warrants, instruments or securities outstanding
or any agreements or arrangements which, as a result of the
consummation of such transaction, would eliminate or substantially
diminish the benefits intended to be afforded by the Rights. The
provisions of this Section 13 shall similarly apply to successive
mergers, consolidations, sales or transfers.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions
of Rights or to distribute Rights Certificates which evidence
fractional Rights. In lieu of such fractional Rights, there shall be
paid to the registered holders of the Rights Certificates with regard
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to which such fractional Rights would otherwise be issuable, an amount
in cash equal to the same fraction of the current market value of a
whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights
for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing
price for any day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing
bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the principal national
securities exchange on which the Rights are listed or admitted to
trading or, if the Rights are not listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by Nasdaq or such other system
then in use, or, if on any such date the Rights are not quoted by any
such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Rights
selected by the Board of Directors of the Company. If on any such
date no such market maker is making a market in the Rights, the fair
value of the Rights on such date as determined in good faith by the
Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions
of Preferred Shares (other than fractions which are integral multiples
of one one-hundredth of a Preferred Share) upon exercise of the Rights
or to distribute certificates which evidence fractional Preferred
Shares (other than fractions which are integral multiples of one
one-hundredth of a Preferred Share). Fractions of Preferred Shares in
integral multiples of one one-hundredth of a Preferred Share may, at
the election of the Company, be evidenced by depositary receipts,
pursuant to an appropriate agreement between the Company and a
depositary 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 Preferred Shares represented by such
depositary receipts. In lieu of fractional Preferred Shares that are
not integral multiples of one one-hundredth of a Preferred Share, the
Company shall pay to the registered holders of Rights Certificates at
the time such Rights are exercised as herein provided an amount in
cash equal to the same fraction of the current market value of one
Preferred Share. For the purposes of this Section 14(b), the current
market value of a Preferred Share shall be the closing price of a
Preferred Share (as determined pursuant to the second sentence of
Section 11(d)(i) hereof) for the Trading Day immediately prior to the
date of such exercise.
(c) Following the occurrence of a Distribution Date, the
Company shall not be required to issue fractions of shares of Common
Stock upon exercise of the Rights or to distribute certificates which
evidence fractional shares of Common Stock. In lieu of fractional
shares of Common Stock, the Company may pay to the registered holders
of Rights Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the current
market value of one share of Common
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Stock. For purposes of this Section 14(c), the current market value
of one share of Common Stock shall be the closing price of one share
of Common Stock (as determined pursuant to the second sentence of
Section 11(d)(i) hereof) for the Trading Day immediately prior to the
date of such exercise.
(d) The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Rights or any
fractional shares upon exercise of a Right (except as provided above).
Section 15. Rights of Action. All rights of action in respect of
this Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the
Rights Certificates (and, prior to the Distribution Date, the registered
holders of the Common Shares); and any registered holder of any Rights
Certificate (or, prior to the Distribution Date, of the Common Shares), without
the consent of the Rights Agent or of the holder of any other Rights
Certificate (or, prior to the Distribution Date, of the Common Shares), may, in
his own behalf and for his own benefit, enforce, and may institute and maintain
any suit, action or proceeding against the Company to enforce, or otherwise act
in respect of, his right to exercise the Rights evidenced by such Rights
Certificate in the manner provided in such Rights Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of the obligations of
any Person subject to, this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a Right,
by accepting the same, consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common
Shares;
(b) after the Distribution Date, the Rights Certificates
will be transferable only on the registry books of the Rights Agent if
surrendered at the principal office of the Rights Agent, duly endorsed
or accompanied by a proper instrument of transfer and with appropriate
forms and certificates fully executed;
(c) the Company and the Rights Agent may deem and treat
the Person in whose name the Rights Certificate (or, prior to the
Distribution Date, the associated certificate for Common Shares) is
registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated certificate for Common Shares
made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent
shall be affected by any notice to the contrary; and
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(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 any other Person as a result of
its inability to perform any of its obligations under this Agreement
by reason of any preliminary or permanent injunction or other order,
decree or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, or
any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority prohibiting or otherwise
restraining performance of such obligation.
Section 17. Rights Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Rights Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or any other securities of the Company which may at any time be issuable
on the exercise of the Rights represented thereby, nor shall anything contained
herein or in any Rights Certificate be construed to confer upon the holder of
any Rights Certificate, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in Section 25 hereof), or to
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Rights Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. The Company agrees to
pay to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the exercise and performance
of its duties hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, or expense, incurred
without negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability arising, directly or
indirectly, therefrom. In no case shall the Rights Agent be liable for
special, indirect, incidental or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Rights
Agent has been advised of the possibility of such loss or damage.
The Rights Agent shall be protected and shall incur no liability for,
or in respect of any action taken, suffered or omitted by it in connection
with, its administration of this Agreement in reliance upon any Rights
Certificate or certificate for the Preferred Shares or Common Shares or for
other securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper Person or Persons, or otherwise upon the advice of counsel as set
forth in Section 20 hereof.
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Section 19. Merger or Consolidation or Change of Name of Rights
Agent. Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
stock transfer or corporate trust business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all such
cases such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be changed and
at such time any of the Rights Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned, the Rights
Agent may countersign such Rights Certificates either in its prior name or in
its changed name; and in all such cases such Rights Certificates shall have the
full force provided in the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes
the duties and obligations imposed by this Agreement upon the following terms
and conditions, by all of which the Company and the holders of Rights
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who
may be legal counsel for the Company), and the opinion of such counsel
shall be full and complete authorization and protection to the Rights
Agent as to any action taken or omitted by it in good faith and in
accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that
any fact or matter be proved or established by the Company prior to
taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a
certificate signed by any one of the Chairman of the Board, the Chief
Executive Officer, the President, any Vice President, the Treasurer or
the Secretary of the Company and delivered to the Rights Agent; and
such certificate shall be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the provisions
of this Agreement in reliance upon such certificate.
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(c) The Rights Agent shall be liable hereunder to the
Company and any other Person only for its own negligence, bad faith or
willful misconduct.
(d) The Rights Agent shall not be liable for or by reason
of any of the statements of fact or recitals contained in this
Agreement or in the Rights Certificates (except its countersignature
thereof) or be required to verify the same, but all such statements
and recitals are and shall be deemed to have been made by the Company
only.
(e) The Rights Agent shall not be under any responsibility
in respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights Agent)
or in respect of the validity or execution of any Rights Certificate
(except its countersignature thereof); nor shall it be responsible for
any breach by the Company of any covenant or condition contained in
this Agreement or in any Rights Certificate; nor shall it be
responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 11(a)(ii)
hereof) or any adjustment in the terms of the Rights (including the
manner, method or amount thereof) provided for in Section 3, 11, 13,
23 or 24, or the ascertaining of the existence of facts that would
require any such change or adjustment (except with respect to the
exercise of Rights evidenced by Rights Certificates after actual
notice that such change or adjustment is required); nor shall it by
any act hereunder be deemed to make any representation or warranty as
to the authorization or reservation of any Preferred Shares (or Common
Shares and/or other securities, as the case may be) to be issued
pursuant to this agreement or any Rights Certificate or as to whether
any Preferred Shares (or Common Shares and/or other securities, as the
case may be) will, when issued, be validly authorized and issued,
fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the Rights
Agent for the carrying out or performing by the Rights Agent of the
provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept, prior to the Shares Acquisition Date, instructions with
respect to the performance of its duties hereunder from any one of the
Chairman of the Board, the Chief Executive Officer, the President, any
Vice President, the Secretary or the Treasurer of the Company, and to
apply to such officers for advice or instructions in connection with
its duties, and it shall not be liable for any action taken or
suffered by it in good faith in accordance with instructions of any
such officer or for any delay in acting while waiting for those
instructions.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal in any
of the Rights or other securities of the Company, or become
pecuniarily interested in any transaction in which the Company
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may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent
from acting in any other capacity for the Company or for any other
legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the Rights
Agent shall not be answerable or accountable for any act, default,
neglect or misconduct of any such attorneys or agents or for any loss
to the Company resulting from any such act, default, neglect or
misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and thereafter be discharged from its duties
under this Agreement upon 30 days' notice in writing mailed to the Company and
to each transfer agent of the Common Shares or Preferred Shares by registered
or certified mail, and to the holders of the Rights Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent
upon 30 days' notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Common Shares or
Preferred Shares by registered or certified mail, and to the holders of the
Rights Certificates by first-class mail. If the Rights Agent shall resign or
be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make
such appointment within a period of 30 days after giving notice of such removal
or after it has been notified in writing of such resignation or incapacity by
the resigning or incapacitated Rights Agent or by the holder of a Rights
Certificate (who shall, with such notice, submit his Rights Certificate for
inspection by the Company), then the registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be either (A) a corporation
organized and doing business under the laws of the United States or of any
state of the United States, in good standing, authorized under such laws to
exercise corporate trust or stock transfer powers, and 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
million or (B) an affiliate of such a corporation. 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 Shares or
Preferred Shares, and mail a notice thereof in writing to the registered
holders of the Rights Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.
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Section 22. Issuance of New Rights Certificates. Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the Rights
Certificates made in accordance with the provisions of this Agreement.
Section 23. Redemption.
(a) The Rights may be redeemed by action of the Board of
Directors pursuant to paragraph (b) of this Section 23 and shall not
be redeemed in any other manner.
(b) The Board of Directors of the Company may, at its
option, at any time prior to such time as any Person becomes an
Acquiring Person, redeem all, but not less than all, of the then
outstanding Rights at a redemption price of $.01 per Right,
appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such redemption
price being hereinafter referred to as the "Redemption Price"). The
redemption of the Rights by the Board of Directors may be made
effective at such time on such basis and with such conditions as the
Board of Directors in its sole discretion may establish. If
redemption of the Rights is to be effective as of a future date, the
Rights shall continue to be exercisable, subject to Section 11(a)(ii)
hereof, until the effective date of the redemption, provided that
nothing contained herein shall preclude the Board of Directors from
subsequently causing the Rights to be redeemed at a date earlier than
the previously scheduled effective date of the redemption. The
Company may, at its option, pay the Redemption Price in cash, Common
Shares (based on the current per share market price of the Common
Shares at the time of redemption) or any other form of consideration
deemed appropriate by the Board of Directors.
(c) Immediately upon the action of the Board of Directors
of the Company ordering the redemption of the Rights pursuant to
paragraph (b) of this Section 23 (or at the effective time of such
redemption established by the Board of Directors of the Company
pursuant to paragraph (b) of this Section 23), 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; provided, however, that the
failure to give, or any defect in, any such notice shall not affect
the validity of such redemption. Within 10 days after such action of
the Board of Directors ordering the redemption of the Rights pursuant
to paragraph (b) of this Section 23 or if later, the effectiveness of
the redemption of the rights pursuant to the last sentence of
paragraph (b), 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 Shares. Any notice which is mailed in the manner herein
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provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of redemption will state the method by which
the payment of the Redemption Price will be made. The 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, (ii) depositing with a bank or trust company
having a capital and surplus of at least $100 million, funds necessary
for such redemption, in trust, to be applied to the redemption of the
Rights so called for redemption and (iii) arranging for the mailing of
the Redemption Price to the registered holders of the Rights; then,
and upon such action, all outstanding Rights Certificates shall be
null and void without further action by the Company. Neither the
Company nor any of its Affiliates or Associates may redeem, acquire or
purchase for value any Rights at any time in any manner other than
that specifically set forth in this Section 23 or in Section 24
hereof, and other than in connection with the purchase of Common
Shares prior to the Shares Acquisition Date.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its
option, at any time after any Person becomes an Acquiring Person,
exchange all or part of the then outstanding and exercisable Rights
(which shall not include Rights that have become void pursuant to the
provisions of Section 11(a)(ii) hereof) for Common Shares at an
exchange ratio of one Common Share per Right, appropriately adjusted
to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof. Notwithstanding the foregoing, the
Board of Directors shall not be empowered to effect such exchange at
any time after any Person (other than the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or any such
Subsidiary, or any entity holding Common Shares for or pursuant to the
terms of any such plan), together with all Affiliates and Associates
of such Person, becomes the Beneficial Owner of 50% or more of the
Common Shares then outstanding.
(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 Common Shares equal to the number of valid
Rights held by such holder. The Company shall promptly give public
notice of any such exchange; provided, however, that the failure to
give, or any defect in, such notice shall not affect the 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
Common Shares 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
30
34
number of Rights (other than Rights which have become 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 Preferred Shares (or equivalent
preferred shares, as such term is defined in Section 11(b) hereof) for
Common Shares exchangeable for Rights, at the initial rate of one
one-hundredth of a Preferred Share (or equivalent preferred share) for
each Common Share, as appropriately adjusted to reflect adjustments in
the voting rights of the Preferred Shares pursuant to the terms
thereof, so that the fraction of a Preferred Share delivered in lieu
of each Common Share shall have the same voting rights as one Common
Share.
(d) In the event that there shall not be sufficient Common
Shares or Preferred Shares 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 Common Shares or
Preferred Shares for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions
of Common Shares or to distribute certificates which evidence
fractional Common Shares. In lieu of such fractional Common Shares,
the Company shall pay to the registered holders of the Rights
Certificates with regard to which such fractional Common Shares would
otherwise be issuable an amount in cash equal to the same fraction of
the current market value of a whole Common Share. For the purposes of
this paragraph (e), the current market value of a whole Common Share
shall be the closing price of a Common Share (as determined pursuant
to the second sentence of Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose (i) to pay any
dividend payable in stock of any class to the holders of its Preferred
Shares or to make any other distribution to the holders of its
Preferred Shares (other than a regular quarterly cash dividend), (ii)
to offer to the holders of its Preferred Shares rights or warrants to
subscribe for or to purchase any additional Preferred Shares or shares
of stock of any class or any other securities, rights or options,
(iii) to effect any reclassification of its Preferred Shares (other
than a reclassification involving only the subdivision of outstanding
Preferred Shares), (iv) to effect any consolidation or merger into or
with, 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 50% or more of the assets or earning power of
the Company and its Subsidiaries (taken as a whole) to, any other
Person, (v) to effect the liquidation, dissolution or winding up of
the Company, or (vi) to declare or pay any dividend on the Common
Shares payable in Common Shares or to effect a subdivision,
combination or consolidation of the Common Shares (by reclassification
or otherwise),
31
35
then, in each such case, the Company shall give to each holder of a
Rights Certificate, in accordance with Section 26 hereof, a notice of
such proposed action, which shall specify the record date for such
event, and the date of participation therein by the holders of the
Common Shares and/or Preferred Shares, 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 the Preferred Shares 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 the Common
Shares and/or Preferred Shares, whichever shall be the earlier.
(b) In case any of the events set forth in Section
11(a)(ii) hereof shall occur, then the Company shall as soon as
practicable thereafter give to each holder of a Rights Certificate, in
accordance with Section 26 hereof, a notice of the occurrence of such
event, which notice shall describe such event and the consequences of
such event to holders of Rights under Section 11(a)(ii) hereof.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
Rights Certificate to or on the Company shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Rights Agent) as follows:
Source Services Corporation
0000 XXX Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Corporate Secretary
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Rights Certificate to or on the Rights Agent shall be deemed given or made upon
receipt and shall be addressed (until another address is filed in writing with
the Company) as follows:
ChaseMellon Shareholder Services L.L.C.
00 Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Corporate Agencies Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. Supplements and Amendments. The Company may from time
to time supplement or amend this Agreement without the approval of any holders
of Rights Certificates
32
36
in order to cure any ambiguity, to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provisions herein, or to make any other provisions with respect to the Rights
which the Company may deem necessary or desirable, any such supplement or
amendment to be evidenced by a writing signed by the Company and the Rights
Agent; provided, however, that from and after such time as any Person becomes
an Acquiring Person, this Agreement shall not be amended in any manner which
would adversely affect the interests of the holders of Rights (except the
interests of any Acquiring Person and its Affiliates and Associates).
Section 28. Determination 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 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, without limitation, a
determination to redeem or not redeem the Rights or to amend the Agreement and
whether any proposed amendment adversely affects the interests of the holders
of Rights Certificates). For all purposes of this Agreement, any calculation
of the number of Common Shares or other securities outstanding at any
particular time, including for purposes of determining the particular
percentage of such outstanding Common Shares or any other securities 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 of this Agreement. All such actions,
calculations, interpretations and determinations (including, for purposes of
clause (y) below, all omissions with respect to the foregoing) which are done
or made by the Board of Directors in good faith, shall (x) be final, conclusive
and binding on the Company, the Rights Agent, the holders of the Rights
Certificates and all other parties unless the Board of Directors specifically
states that such action, calculations, interpretation or determination is not
final, conclusive and binding, and (y) not subject the Board of Directors to
any liability to the holders of the Rights Certificates.
Section 29. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 30. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any Person or corporation other than the Company,
the Rights Agent and the registered holders of valid Rights Certificates (and,
prior to the Distribution Date, the Common Shares) any legal or equitable
right, remedy or claim under this Agreement; but this Agreement shall be for
the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of valid Rights Certificates (and, prior to the Distribution
Date, the Common Shares).
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or
33
37
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
Section 32. Governing Law. This Agreement and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State.
Section 33. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
34
38
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and attested, all as of the day and year first above written.
SOURCE SERVICES CORPORATION
Attest:
By: /s/ XXXXXXX XXXXXX By: /s/ D. XXX XXXX
------------------------------ ------------------------------------
Name: Xxxxxxx Xxxxxx Name: D. Xxx Xxxx
Title: Chief Financial Officer Title: President and Chief Executive
Officer
CHASEMELLON SHAREHOLDER
SERVICES L.L.C.
Attest:
By: /s/ XXXX X. XXXXXXX By: /s/ XXXXXXX XXXXX XXXXXXX
------------------------------- ------------------------------------
Name: Xxxx X. Xxxxxxx Name: Xxxxxxx Xxxxx Xxxxxxx
Title: Relationship Manager Title: Vice-President
35
39
EXHIBIT A
FORM
of
CERTIFICATE OF DESIGNATIONS
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
SOURCE SERVICES CORPORATION
(Pursuant to Section 151 of the
Delaware General Corporation Law)
------------------------------------------
Source Services Corporation, a corporation organized and existing
under the General Corporation Law of the State of Delaware (hereinafter called
the "Company"), hereby certifies that the following resolution was adopted by
the Board of Directors of the Company as required by Section 151 of the General
Corporation Law at a meeting duly called and held on May 28, 1997:
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Company (hereinafter called the "Board of Directors"
or the "Board") in accordance with the provisions of the Restated Certificate
of Incorporation, the Board of Directors hereby creates a series of Preferred
Stock, par value $.01 per share (the "Preferred Stock"), of the Company and
hereby states the designation and number of shares, and fixes the relative
rights, preferences, and limitations thereof as follows:
Series A Junior Participating Preferred Stock:
Section 1. Designation and Amount. The shares of such series
shall be designated as "Series A Junior Participating Preferred Stock" (the
"Series A Preferred Stock") and the number of shares constituting the Series A
Preferred Stock shall initially be [___________]. Such number of shares may be
increased or decreased by resolution of the Board of Directors; provided, that
no decrease shall reduce the number of shares of Series A Preferred Stock to a
number less than the number of shares then outstanding plus the number of
shares reserved for issuance upon the exercise of outstanding options, rights
or warrants or upon the conversion of any outstanding securities or rights
issued by the Company convertible into Series A Preferred Stock and further
provided that the Board of Directors shall increase the number of shares
A-1
40
constituting the Series A Preferred Stock to the extent necessary for the
Company to have available sufficient shares of such Series A Preferred Stock
available to fulfill all of the Company's obligations to holders of securities
and Rights of the Company.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of
any series of Preferred Stock (or any similar stock) ranking prior and
superior to the Series A Preferred Stock with respect to dividends,
the holders of shares of Series A Preferred Stock, in preference to
the holders of Common Stock, par value $.02 per share (the "Common
Stock"), of the Company, and of any other junior stock, shall be
entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, dividends
payable when and as dividends are declared on the Company's Common
Stock in an amount, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate per share
amount of all cash dividends, and 100 times the aggregate per share
amount (payable in kind) of all non-cash dividends or other
distributions, declared on the Company's Common Stock (except as
provided in the next sentence). In the event the Company shall at any
time declare or pay any dividend on the Common Stock payable in shares
of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the amount to which holders of shares of
Series A Preferred Stock were entitled immediately prior to such event
under the preceding sentence shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares
of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Company shall declare a dividend or distribution
on the Series A Preferred Stock as provided in paragraph (A) of this
Section immediately after it declares a dividend or distribution on
the Common Stock.
Section 3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(A) Each share of Series A Preferred Stock shall entitle
the holder thereof to 100 votes on all matters submitted to a vote of
the stockholders of the Company.
(B) Except as otherwise provided herein, in any other
Certificate of Designations creating a series of Preferred Stock or
any similar stock, or by law, the holders of shares of Series A
Preferred Stock and the holders of shares of Common Stock and any
other capital stock of the Company having general voting rights shall
vote together as one class on all matters submitted to a vote of
stockholders of the Company.
(C) Except as set forth herein, or as otherwise provided
by law, holders of Series A Preferred Stock shall have no special
voting rights and their consent shall not
A-2
41
be required (except to the extent they are entitled to vote with
holders of Common Stock as set forth herein) for taking any corporate
action.
Section 4. Reacquired Shares. Any shares of Series A Preferred
Stock purchased or otherwise acquired by the Company in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All
such shares shall upon their cancellation become authorized but unissued shares
of Preferred Stock and may be reissued as part of a new series of Preferred
Stock subject to the conditions and restrictions on issuance set forth herein,
in the Certificate of Incorporation, or in any other Certificate of
Designations creating a series of Preferred Stock or any similar stock or as
otherwise required by law.
Section 5. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Company, no distribution shall be
made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received an aggregate 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 shares of Common
Stock. In the event the Company shall at any time declare or pay any dividend
on the Common Stock payable in shares of Common Stock, or effect a subdivision
or combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the aggregate amount to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under the proviso in clause
(1) of the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such event.
Section 6. Consolidation, Merger, etc. In case the Company shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each share of
Series A Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 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 share of Common Stock is changed or exchanged.
In the event the Company shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
A-3
42
Section 7. No Redemption. The shares of Series A Preferred Stock
shall not be redeemable.
Section 8. Rank. The Series A Preferred Stock shall rank, with
respect to the payment of dividends and the distribution of assets, junior to
all series of any other class of the Company's Preferred Stock.
Section 9. Amendment. The Restated Certificate of Incorporation
of the Company shall not be amended in any manner which would materially alter
or change the powers, preferences or special rights of the Series A Preferred
Stock so as to affect them adversely without the affirmative vote of the
holders of at least two-thirds of the outstanding shares of Series A Preferred
Stock, voting together as a single class.
IN WITNESS WHEREOF, this Certificate of Designations is executed on
behalf of the Company by its Chairman of the Board on this ________ day of May,
1997.
-------------------------------------
President and Chief Executive Officer
A-4
43
EXHIBIT B
Form of Rights Certificate
Certificate No. ____ _____ Rights
NOT EXERCISABLE AFTER JUNE _______, 2007 OR EARLIER IF REDEMPTION OR
EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER
RIGHT, AND ARE VOIDABLE AND SUBJECT TO EXCHANGE ON THE TERMS SET FORTH
IN THE RIGHTS AGREEMENT. [THE RIGHTS REPRESENTED BY THIS RIGHTS
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR
BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT).
ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY
MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN THE SECOND
PARAGRAPH OF SECTION 11(A)(II) OF SUCH AGREEMENT.]*
Rights Certificate
Source Services Corporation
This certifies that ____________________, or registered assigns, is
the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement, dated as of May 30, 1997 (the "Rights Agreement") between
Source Services Corporation, a Delaware corporation (the "Company"), and
ChaseMellon Shareholder Services, L.L.C. (the "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., Dallas, Texas time on
June 18, 2007 at the principal office of the Rights Agent, or at the office of
its successor as Rights Agent, one one-hundredth of a fully paid nonassessable
share of Series A Junior Participating Preferred Stock, par value $.01 per
share (the "Preferred Shares"), of the Company, at a purchase price of $90 per
one one-hundredth of a Preferred Share (the "Purchase Price"), upon
presentation and surrender of this Rights Certificate with the Form of Election
to Purchase duly executed. The number of Rights evidenced by this Rights
Certificate (and the number of one one-hundredths of a Preferred Share which
may be purchased upon exercise hereof) set forth above, and the Purchase Price
set forth above, are the number and Purchase Price as of May 30, 1997, based on
the Preferred
__________________________________
* The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
B-1
44
Shares as constituted at such date. As provided in the Rights Agreement, the
Purchase Price and the number of one one-hundredths of a Preferred Share which
may be purchased upon the exercise of the Rights evidenced by this Rights
Certificate are subject to modification and adjustment upon the happening of
certain events.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates. Copies
of the Rights Agreement are on file at the principal executive offices of the
Company and the above-mentioned offices of the Rights Agent.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the principal office of the Rights Agent, may be exchanged
for another Rights Certificate or Rights Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Preferred Shares as the Rights evidenced by the Rights Certificate or Rights
Certificates surrendered shall have entitled such holder to purchase. If this
Rights Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Rights Certificate or Rights Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at a
redemption price of $.01 per Right or (ii) may be exchanged in whole or in part
for Preferred Shares or shares of the Company's Common Stock, par value $.02
per share, on the terms set forth in the Rights Agreement.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-hundredths of a Preferred Share, which may, at the
election of the Company, be evidenced by depositary receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Rights evidenced by this Rights Certificate
shall have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
B-2
45
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of _________________, 19__.
ATTEST: SOURCE SERVICES CORPORATION
By:
--------------------------------- -----------------------------------
Countersigned:
CHASEMELLON SHAREHOLDER SERVICES L.L.C.
By:
------------------------------------------
Authorized Signature
B-3
46
[FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED, ______________________________ hereby sells, assigns and
transfers unto _________________________________________________________________
--------------------------------------------------------------------------------
(Please print name and address of transferee)
-----------------------------------------------------------------------
(Please print social security or other identifying number of transferee)
this Rights Certificate, together with all interest therein, and
does hereby irrevocably constitute and appoint ___________________ Attorney, to
transfer the within Rights Certificate on the books of the within- named
Company, with full power of substitution.
Dated: _________________________, 19__
-----------------------------------------
Signature
Signature Guaranteed:
----------------------------------------------------------
Signature must be guaranteed by an Eligible Guarantor Institution as
defined by SEC Rule 17Ad-15 (17 C.F.R. 240.17-Ad-15).
B-4
47
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Person (as
such terms are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by
this Rights Certificate from any Person who is, was or subsequently
became an Acquiring Person or an Affiliate or Associate of any such
Person.
Dated: _________________________, 19__
-----------------------------------------
Signature
Signature Guaranteed:
----------------------------------------------------------
NOTICE
The signatures to the foregoing Assignment and Certificate
must correspond to the name as written upon the face of this Rights Certificate
in every particular, without alteration or enlargement or any change
whatsoever.
The signature must be guaranteed by an Eligible Guarantor
Institution as defined by SEC Rule 17Ad-15 (17 C.F.R. 240.17-Ad-15).
B-5
48
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Rights Certificate.)
To: Source Services Corporation
The undersigned hereby irrevocably elects to exercise _____________
Rights represented by this Rights Certificate to purchase the Preferred Shares
issuable upon the exercise of such Rights (or such other securities of the
Company or of any other person which may be issuable upon the exercise of the
Rights) and requests that certificates for such Preferred Shares be issued in
the name of:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------
(Please insert social security or other identifying number)
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance remaining of such
Rights shall be registered in the name of and delivered to:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------
(Please insert social security or other identifying number)
Dated: _________________________, 19__
-----------------------------------------
Signature
Signature Guaranteed:
----------------------------------------------------------
Signatures must be guaranteed by an Eligible Guarantor Institution as
defined by SEC Rule 17Ad-15 (17 C.F.R. 240.17-Ad-15).
B-6
49
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights 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
Person (as such terms are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by
this Rights Certificate from any Person who is, was or subsequently
became an Acquiring Person or an Affiliate or Associate of any such
Person.
Dated: _________________________, 19__
-----------------------------------------
Signature
Signature Guaranteed:
----------------------------------------------------------
NOTICE
The signatures to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of this Rights
Certificate in every particular, without alteration or enlargement or any
change whatsoever.
The signature must be guaranteed by an Eligible Guarantor
Institution as defined by SEC Rule 17Ad-15 (17 C.F.R. 240.17-Ad-15).
B-7
50
NOTICE
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Rights Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
B-8
51
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES UNDER PLAN ADOPTED BY
SOURCE SERVICES CORPORATION
On May 28, 1997, the Board of Directors of Source Services Corporation
(the "Company") declared a dividend of one Right for each outstanding common
share (a "Right"), par value $.02 per share (the "Common Shares"), of the
Company. The dividend is payable on June 18, 1997 (the "Record Date") to the
stockholders of record on that date. Each Right entitles the registered holder
to purchase from the Company one one-hundredth of a share of Series A Junior
Participating Preferred Stock, par value $.01 per share (the "Preferred
Shares"), of the Company at a price of $90 per one one-hundredth of a Preferred
Share (the "Purchase Price"), subject to adjustment. The description and terms
of the Rights are set forth in a Rights Agreement (the "Rights Agreement")
between the Company and ChaseMellon Shareholder Services L.L.C., as Rights
Agent (the "Rights Agent").
Until the earlier of (i) the close of business on the tenth day after
the first public announcement that a person or group of affiliated or
associated persons have acquired beneficial ownership of 20% or more of the
outstanding Common Shares (an "Acquiring Person"), or (ii) the close of
business on the tenth 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) following the commencement of, or announcement of an intention to make,
a tender offer or exchange offer the consummation of which would result in the
beneficial ownership of such person or group of 20% or more of such outstanding
Common Shares (the earlier of such dates being called the "Distribution Date"),
the Rights will be evidenced by the Common Share certificates, will be
transferable only by the transfer of the Common Shares associated with such
Rights and any transfer of the Common Shares (including a transfer to the
Company) will constitute a transfer of the Rights. As described below, after a
person or group becomes an Acquiring Person, the Rights may not be redeemed or
amended.
Until the Distribution Date (or earlier redemption or expiration of
the Rights), new Common Share certificates issued after the Record Date, upon
transfer or new issuance of Common Shares, will contain a legend incorporating
the Rights Agreement by reference. Until the Distribution Date (or earlier
redemption or expiration of the Rights), the surrender for transfer of any
certificates for Common Shares outstanding as of the Record Date, even without
such notation or a copy of this Summary of Rights being attached, will also
constitute the transfer of the Rights associated with the Common Shares
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Rights
Certificates") will be mailed to holders of record of the Common Shares as of
the close of business on the Distribution Date and such separate Rights
Certificates alone will evidence the Rights.
The Rights are not exercisable until a person, entity or group becomes
an Acquiring Person. The Rights will expire on June 18, 2007 (the "Final
Expiration Date"), unless the Final
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Expiration Date is extended or unless the Rights are redeemed earlier by the
Company, in each case, as described below.
If a person or group of affiliated or associated persons becomes an
"Acquiring Person" by obtaining beneficial ownership of more than 20% of the
then outstanding Common Shares, each holder of a Right (other than those
described in the next sentence) will thereafter have the right to receive, upon
exercise, Common Shares (or, in certain circumstances, cash, property or other
securities of the Company) having a value equal to two times the Purchase Price
of the Right. All Rights that are, or (under certain circumstances specified
in the Rights Agreement) were, beneficially owned by any Acquiring Person will
be void.
At any time after the first date of public announcement by the Company
or an Acquiring Person than an Acquiring Person has become such (a "Shares
Acquisition Date"), if (i) the Company is the surviving corporation in a merger
with any other company or entity, (ii) the Company is acquired in a merger or
other business combination transaction, (iii) 50% or more of the Company's
consolidated assets or earning power are sold, or (iv) an Acquiring Person
engages in certain "self-dealing" transactions with the Company, each holder of
a Right (other than those whose rights have become void) will thereafter have
the right to receive, upon the exercise thereof at the then current Purchase
Price of the Right, that number of shares of common stock of the surviving or
acquiring company which at the time of such transaction will have a market
value of two times the exercise price of such Right.
At any time after a person or group becomes an Acquiring Person and
prior to the acquisition by such person or group of 50% or more of the
outstanding Common Shares, the Board of Directors of the Company may exchange
the Rights (other than Rights owned by such person or group which have become
void), in whole or in part, without any additional payment, for Common Shares
at an exchange ratio of one Common Share (or of a share of a class or series of
the Company's preferred shares having equivalent rights, preferences and
privileges), per Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Preferred Shares will be issued (other than
fractions which are integral multiples of one one-hundredth of a Preferred
Share, which may, at the election of the Company, be evidenced by depositary
receipts) and in lieu thereof, an adjustment in cash will be made based on the
market price of the Preferred Shares on the last trading day prior to the date
of exercise.
At any time prior to the Shares Acquisition Date, the Board of
Directors of the Company may redeem all, but not less than all, of the Rights
at a price of $.01 per Right (the "Redemption Price"). The redemption of the
Rights may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
Immediately upon any redemption of the Rights, the right to exercise
the Rights will terminate and the only right of the holders of Rights will be
to receive the Redemption Price.
Any of the provisions of the Rights may be amended by the Board of
Directors of the Company prior to the Shares Acquisition Date. After the
Shares Acquisition Date, the
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provisions of the Rights Agreement may be amended by the Board in order to cure
any ambiguity or to make changes which do not adversely affect the interests of
holders of Rights (excluding the interests of any Acquiring Person).
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated
__________________, 1997. A copy of the Rights Agreement is available free of
charge from the Company. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, which is hereby incorporated herein by reference.
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