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Exhibit 10.18
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XIONICS DOCUMENT TECHNOLOGIES, INC.
AND
BANKBOSTON, N.A.
AS RIGHTS AGENT
RIGHTS AGREEMENT
DATED AS OF APRIL 15, 1998
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TABLE OF CONTENTS
Page
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Section 1. Certain Definitions ...................................... 1
Section 2. Appointment of Rights Agent .............................. 5
Section 3. Issue of Rights Certificates ............................. 5
Section 4. Form of Rights Certificates .............................. 7
Section 5. Countersignature and Registration ........................ 8
Section 6. Transfer, Split-Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost or
Stolen Rights Certificates ........................... 9
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights ....................................... 9
Section 8. Cancellation and Destruction of Rights Certificates ...... 11
Section 9. Reservation and Availability of Preferred Shares ......... 12
Section 10. Preferred Shares Record Date ............................. 13
Section 11. Adjustment of Purchase Price, Number
and Kind of Shares or Number of Rights ............... 13
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares ............................................ 23
Section 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power of the Company ............ 23
Section 14. Additional Covenants ..................................... 26
Section 15. Fractional Rights and Fractional Shares .................. 26
Section 16. Rights of Action ......................................... 28
Section 17. Agreement of Rights Holders .............................. 28
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Section 18. Rights Certificate Holder Not Deemed a Stockholder....... 29
Section 19. Concerning the Rights Agent ............................. 29
Section 20. Merger or Consolidation or Change of
Name of Rights Agent ................................. 30
Section 21. Duties of Rights Agent .................................. 30
Section 22. Change of Rights Agent .................................. 32
Section 23. Issuance of New Rights Certificates ..................... 33
Section 24. Redemption .............................................. 33
Section 25. Exchange ................................................ 35
Section 26. Notice of Certain Events ................................ 36
Section 27. Notices ................................................. 37
Section 28. Supplements and Amendments .............................. 38
Section 29. Determination and Actions by the
Board of Directors, Etc ........................... 38
Section 30. Successors .............................................. 39
Section 31. Benefits of this Agreement .............................. 39
Section 32. Severability ............................................ 39
Section 33. Governing Law ........................................... 39
Section 34. Counterparts ............................................ 39
Section 35. Descriptive Headings .................................... 40
Signatures .......................................................... 41
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Exhibit A - Form of Certificate of Vote of Directors
Establishing a Series of a Class of Stock
Exhibit B - Form of Rights Certificate
Exhibit C - Summary of Rights to Purchase Preferred Shares
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Rights Agreement, dated as of April 15, 1998, between Xionics Documents
Technologies, Inc., a Delaware corporation (the "COMPANY"), and BankBoston, N.A,
a national banking association (the "RIGHTS AGENT").
WHEREAS, the Board of Directors of the Company has authorized and declared
a dividend distribution of one preferred share purchase right (a "RIGHT") for
each Common Share (as hereinafter defined) of the Company outstanding as of the
close of business on April 21, 1998 (the "RECORD DATE"), each Right representing
the right to purchase one one-thousandth of a Preferred Share (as hereinafter
defined), upon the terms and subject to the Conditions herein set forth, and in
addition has authorized and directed the issuance of one Right with respect to
each Common Share that shall become outstanding between the Record Date and the
earlier of the Distribution Date and the Expiration Date (as such terms are
hereinafter defined);
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereto hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
"ACQUIRING PERSON" shall mean any Person (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 15% or more of the Common Shares of the
Company then outstanding or who was such a Beneficial Owner at any time after
the date hereof, whether or not such Person continues to be the Beneficial Owner
of 15% or more of the Common Shares then outstanding, but shall not include any
Schedule 13G Investor, the Company, any Subsidiary (as such terms are
hereinafter defined) of the Company, any employee benefit plan of the Company or
any Subsidiary of the Company, or any entity holding securities of the Company
organized, appointed or established by the Company or any Subsidiary for or
pursuant to the terms of any such plan. Notwithstanding the foregoing, no Person
shall become an "Acquiring Person" solely as the result of 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 15% or more of the Common Shares of the Company then outstanding;
PROVIDED, HOWEVER, that if a Person shall become the Beneficial Owner of 15% or
more of the Common Shares of the Company then outstanding by reason of share
purchases by the Company and shall, after such share purchases by the Company,
become the Beneficial Owner of any additional Common Shares of the Company, then
such Person shall be deemed to be an "Acquiring Person".
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"ADJUSTED SHARES" shall have the meaning set forth in Section 1l(a).
"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.
A Person shall be deemed the "BENEFICIAL OWNER" of and shall be deemed to
"beneficially own" any securities:
(i) that such Person or any of such Person's Affiliates or Associates
beneficially owns, directly or indirectly;
(ii) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether such
right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (whether or not in
writing) or upon the exercise of conversion rights, exchange rights, rights
(other than the Rights), warrants or options, or otherwise; PROVIDED,
HOWEVER, that a Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own", (A) securities tendered pursuant to a tender or
exchange offer made by such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for payment,
purchase or exchange, or (B) securities issuable upon exercise of Rights at
any time prior to the occurrence of a Triggering Event, or (C) securities
issuable upon exercise of Rights from and after the occurrence of a
Triggering Event if such 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 23 hereof (the "Original Rights") or
pursuant to Section 1l(i) hereof in connection with an adjustment made
with respect to any Original Rights;
(iii) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of or
has "beneficial ownership" of (as determined pursuant to Rule 13d-3 of the
General Rules and Regulations under the Exchange Act), including without
limitation pursuant to any agreement, arrangement or understanding, whether
or not in writing; PROVIDED, HOWEVER, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own", any security under this
subparagraph (iii) as a result of an oral or written agreement, arrangement
or understanding to vote such security if such agreement, arrangement or
understanding: (A) arises solely from a revocable proxy given in response
to a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the General Rules and
Regulations under the
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Exchange Act, and (B) is not also then reportable by such Person on
Schedule 13D under the Exchange Act (or any comparable or successor
report); or
(iv) that are beneficially owned, directly or indirectly, by any other
Person (or any Affiliate or Associate thereof) with which such Person (or
any such Person's Affiliates or Associates) has any agreement, arrangement
or understanding (whether or not in writing), for the purpose of acquiring,
holding, voting (except pursuant to a revocable proxy as described in the
proviso to subparagraph (iii) of this paragraph (d)) or disposing of any
voting securities of the Company or any securities exercisable for or
convertible into voting securities of the Company;
PROVIDED, however, that nothing in this paragraph (d) shall cause a Person
engaged in business as an underwriter of securities to be the "Beneficial Owner"
of, or to "beneficially own", any securities acquired through such Person's
participation in good faith in a firm commitment underwriting until the
expiration of forty days after the date of such acquisition.
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 issued and outstanding which such Person would be deemed to
own beneficially hereunder.
"BUSINESS DAY" shall mean any day other than a Saturday, a Sunday, or a day
on which banking institutions in the State of the principal office of the Rights
Agent are authorized or obligated by law or executive order to close.
"CLOSE OF BUSINESS" on any given date shall mean 5:00 P.M., local time in
the State of the principal office of the Rights Agent, on such date; PROVIDED,
HOWEVER, that if such date is not a Business Day it shall mean 5:00 P.M., local
time in the State of the principal office of the Rights Agent, on the next
succeeding Business Day.
"COMMON SHARES" when used with reference to the Company shall mean the
shares of common stock, $.01 par value per share, of the Company. "COMMON
SHARES" when used with reference to any Person other than the Company shall mean
the capital stock with the greatest voting power, or the equity securities or
other equity interest having power to control or direct the management, of such
other Person or, if such other Person is a Subsidiary of another Person, of the
Person or Persons which ultimately control such first-mentioned Person and which
have issued and outstanding such capital stock, equity securities or equity
interests.
"CURRENT VALUE" shall have the meaning set forth in Section 11 (a).
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"DISTRIBUTION DATE" shall have the meaning set forth in Section 3 hereof.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE RATIO" shall have the meaning set forth in Section 25(a).
"EXPIRATION DATE" shall have the meaning set forth in Section 7 hereof.
"FINAL EXPIRATION DATE" shall have the meaning set forth in Section 7
hereof.
"PERSON" shall mean any individual, firm, corporation, partnership, limited
liability company, business trust or other entity, and shall include any
successor (by merger or otherwise) of such entity.
"PREFERRED SHARES" shall mean shares of Series A Junior Participating
Preferred Stock, par value $.01 per share, of the Company having the rights and
preferences set forth in the Certificate of Secretary attached to this Agreement
as EXHIBIT A.
"PRINCIPAL PARTY" shall have the meaning set forth in Section 13 hereof.
"PURCHASE PRICE" shall have the meaning set forth in Section 4, subject to
Section 11 (a) hereof.
"RECORD DATE" shall mean April 21, 1998.
"REDEMPTION DATE" shall have the meaning set forth in Section 7 hereof.
"REDEMPTION PRICE" shall have the meaning set forth in Section 24 hereof.
"RIGHTS CERTIFICATES" shall have the meaning set forth in Section 3(a)
hereof.
"SECTION 11(a)(ii) EVENT" shall mean any event described in Section
11(a)(ii) hereof.
"SECTION 13 EVENT" shall mean any event described in clauses (x), (y) or
(z) of Section 13(a) hereof.
"SECTION 11(a)(ii) TRIGGER DATE" shall have the meaning set forth in
Section 11 (a)(iii) hereof.
"SCHEDULE 13 INVESTOR" means any Person that (i) acquires beneficial
ownership of 15% or more of the Common Shares of the Company then outstanding,
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(ii) is eligible to, and does, report the beneficial ownership of such Common
Shares on SCHEDULE 13G pursuant to the provisions of Rule 13d-1 under the
Exchange Act, (iii) within sixty (60) days after acquiring beneficial ownership
of 15% or more of such Common Shares reduces its beneficial ownership to less
than 15% of the outstanding Common Shares and (iv) at no time acquires
beneficial ownership of 25% or more of the outstanding Common Shares of the
Company.
"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.
"SPREAD" shall have the meaning set forth in Section 11(a) hereof.
"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, or which is otherwise
controlled by such Person.
"SUBSTITUTION PERIOD" shall have the meaning set forth in Section 11(a)
hereof.
"SUMMARY OF RIGHTS" shall have the meaning set forth in Section 3(b)
hereof.
"TRADING DAY" shall have the meaning set forth in Section 11(d)(i) hereof.
"TRIGGERING EVENT" shall mean any Section 1l(a)(ii) Event or any Section
13 Event.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Common Shares) 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 upon ten (10) days' prior written notice to the Rights Agent. The
Rights Agent shall have no duty to supervise, and in no event be liable for, the
acts or omissions of any such Co-Rights Agent. In the event the Company appoints
one or more Co-Rights Agents, the respective duties of the Rights Agent and any
Co-Rights Agents shall be as the Company shall determine.
Section 3. ISSUE OF RIGHTS CERTIFICATES.
(a) Until the earliest of:
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(i) the Close of Business on the tenth Business Day after the Shares
Acquisition Date; or
(ii) the tenth Business Day (or such later date as may be determined
by action of the Board of Directors prior to such time as any Person
becomes an Acquiring Person) after the date of the commencement by any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company or any
entity holding Common Shares 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
entity holding Common Shares 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 15% 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 earliest of such dates being herein referred to
as the "DISTRIBUTION DATE"):
(x) no Right may be exercised;
(y) the Rights shall be evidenced (subject to the provisions of
Section 3(b) hereof) by the certificates for Common Shares registered in
the names of the holders thereof (which certificates shall also be deemed
to be certificates for Rights) and not by separate certificates; and
(z) the Rights (and the right to receive certificates therefor)
will be transferable only in connection with the transfer of the underlying
Common Shares. As soon as practicable after the Distribution Date, the
Company shall prepare and execute, the Rights Agent shall countersign, and
the Company shall send or cause to be sent (and the Rights Agent shall, 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 certificate for Rights, in substantially the form of EXHIBIT
B hereto (the "RIGHTS CERTIFICATES"), evidencing one Right for each Common
Share so held. As of and after the Distribution Date, the Rights shall be
evidenced solely by such Rights Certificates.
(b) On the Record Date, or as soon as practicable thereafter, the
Company shall 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
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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 (or earlier redemption, expiration
or termination of the Rights), the Rights shall be evidenced by such
certificates for Common Shares registered in the names of the holders thereof
together with a copy of the Summary of Rights attached thereto and the
registered holders of the Common Shares shall also be the registered holders of
the associated Rights. Until the Distribution Date (or earlier redemption,
expiration or termination of the Rights), the surrender for transfer of any
certificate for Common Shares outstanding on the Record Date, even without a
copy of the Summary of Rights attached thereto, shall also constitute the
transfer of the Rights associated with the Common Shares represented by such
certificate.
(c) Certificates issued for Common Shares (including, without
limitation, certificates issued upon transfer or exchange of Common Shares)
after the Record Date but prior to the earlier of the Distribution Date or the
Expiration Date shall be deemed also to be certificates for Rights and 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 Xionics Document
Technologies, Inc. and BankBoston, N.A., dated as of April 15, 1998 (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 Xionics Document Technologies, Inc. Under certain circumstances, as set
forth in the Rights Agreement, such Rights may be redeemed, may expire, or
may be evidenced by separate certificates and no longer be evidenced by
this certificate. Xionics Document Technologies, Inc. will mail to the
holder of this certificate a copy of the Rights Agreement without charge
after receipt of a written request therefor. As described in the Rights
Agreement, under certain circumstances, Rights issued to Acquiring Persons
(as defined in the Rights Agreement) or certain related persons and any
subsequent holder of such Rights may 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.
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Section 4. FORM OF RIGHTS CERTIFICATES.
(a) The Rights Certificates (and the forms of election to purchase
shares and of assignment to be printed on the reverse thereof) shall each 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 provisions of Section 11
and Section 23 hereof, the Rights Certificates shall entitle the holders thereof
to purchase such number of one one-thousands of a Preferred Share as shall be
set forth therein at the price per one one-thousandth of a Preferred Share set
forth therein (the "PURCHASE PRICE"), but the number of such one one-thousands
of a Preferred Share and the Purchase Price shall be subject to adjustment as
provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) or Section
23 hereof that represents Rights that the Company knows are 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 oral or written plan, agreement, arrangement
or understanding regarding the transferred Rights or (B) a transfer which the
Board of Directors of the Company determines is part of any oral or written
plan, agreement, arrangement or understanding that has as a primary purpose or
effect the avoidance of Section 7(e) hereof, and any Rights Certificate issued
pursuant to Section 6 or Section 11 hereof upon transfer, exchange, replacement
or adjustment of any other Rights Certificate referred to in this sentence,
shall contain (to the extent feasible) the following legend:
"The Rights represented by this Certificate were issued to a Person who was
or became an Acquiring Person or an Affiliate or an Associate of an
Acquiring Person. Accordingly, this Certificate and the Rights represented
hereby may be or become null and void in the circumstances specified in
Section 7(e) of the Rights Agreement."
The provisions of Section 7(e) of this Rights Agreement shall be operative
whether or not the foregoing legend is contained on any such Rights Certificate.
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Section 5. COUNTERSIGNATURE AND REGISTRATION. The Rights Certificates shall
be executed on behalf of the Company by the President, any Executive Vice
President, or the Treasurer of the Company, 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 office designated for such purpose, books for registration and
transfer of the Rights Certificates issued hereunder. Such books shall show the
names and addresses of the respective holders of the Rights Certificates, the
number of Rights evidenced on its face by each of the Rights Certificates and
the date of each of the Rights Certificates.
Section 6. TRANSFER, SPLIT-UP, COMBINATION AND EXCHANGE OF RIGHTS
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS CERTIFICATES. Subject
to the provisions of Sections 4(b), 7(e) and 15 hereof, at any time after the
close of business on the Distribution Date, and at or prior to the close of
business on the Expiration Date, any Rights Certificate or Rights Certificates
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-thousandths of a Preferred Share as the Rights
Certificate or Rights Certificates surrendered then entitled 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 office of the Rights Agent designated for such purpose.
Thereupon the Rights Agent shall 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.
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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 shall execute 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 subsection (e), the registered holder of any Rights
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or in part at any time after the Distribution Date
upon surrender of the Rights Certificate, with the form of election to purchase
on the reverse side thereof duly executed, to the Rights Agent at the office of
the Rights Agent designated for such purpose, together with payment of the
Purchase Price for each one one-thousandth of a Preferred Share (or such other
number of Preferred Shares or other securities) as to which the Rights are
exercised, at or prior to the earliest of (i) the close of business on April 21,
2008 (the "FINAL EXPIRATION DATE"), (ii) the time at which the Rights are
redeemed as provided in Section 24 hereof (the "REDEMPTION DATE"), or (iii) the
time at which such Rights are exchanged as provided in Section 25 hereof (such
earliest time being herein referred to as the "EXPIRATION DATE").
(b) The Purchase Price for each one one-thousandth of a Preferred
Share pursuant to the exercise of a Right shall initially be $85.00, shall be
subject to adjustment from time to time as provided in Sections 11 and 13 hereof
and shall be payable in lawful money of the United States of America in
accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the appropriate form of election to purchase duly executed,
accompanied by payment of the Purchase Price for the shares 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 in cash or by
certified check, cashier's check or money order or bank draft paid or payable to
the order of 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) 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) if the Company, in
its sole discretion, shall have elected to deposit the Preferred Shares issuable
upon conversion of the Rights hereunder into a depositary,
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requisition from the depositary agent depositary receipts representing such
number of one one-thousandths 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 shall direct the depositary agent to comply with such request, (ii) when
appropriate, requisition from the Company the amount of cash, if any, to be paid
in lieu of issuance of fractional shares in accordance with Section 15 hereof,
(iii) promptly 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, promptly deliver such
cash to or upon the order of the registered holder of such Rights Certificate.
In the event that the Company is obligated to issue other securities of the
Company pursuant to Section 11(a), the Company shall make all arrangements
necessary so that such other securities are available for distribution by the
Rights Agent, if and when appropriate.
(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 15
hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of a Section 11(a)(ii) Event, any 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 oral or written plan, agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer
which the Board of Directors of the Company determines is part of any oral or
written plan, agreement, arrangement or understanding that has as a primary
purpose or effect the avoidance of this Section 7(e), shall become null and void
without any further action, and no holder of such Rights shall have any rights
whatsoever with respect to such Rights, whether under this Agreement or
otherwise. The Company shall use all reasonable efforts to insure that the
provisions of this Section 7(e) and Section 4(b) are complied with, but shall
have no liability to any holder of Rights Certificates or other Person as a
result of its failure to make any determinations hereunder with respect to an
Acquiring Person or the Affiliates, Associates or transferees of an Acquiring
Person.
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(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless the certificate contained in the
form of election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such exercise shall have been properly completed and
duly executed by the registered holder thereof and the Company shall have been
provided with such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES. All Rights
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or 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. RESERVATION AND AVAILABILITY OF PREFERRED SHARES.
(a) The Company covenants and agrees that it shall cause to be
reserved and kept available out of its authorized and unissued Preferred Shares
or any Preferred Shares held in its treasury, the number of Preferred Shares (or
other securities) that will be sufficient to permit the exercise in full of all
outstanding Rights in accordance with Section 7 of this Agreement.
(b) The Company covenants and agrees that it shall take all such
action as may be necessary to ensure that all Preferred Shares or other
securities delivered upon exercise of Rights shall, at the time of delivery of
the certificates for such Preferred Shares or other securities (subject to
payment of the Purchase Price), be duly and validly authorized and issued and
fully paid and nonassessable.
(c) The Company further covenants and agrees that it shall 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 other securities 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
17
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issuance or delivery of certificates or depositary receipts for the Preferred
Shares or other securities 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
other securities 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) If then required by applicable law, the Company shall use its
best efforts to (i) file, as soon as practicable following the Distribution
Date, a registration statement under the Securities Act of 1933, as amended (the
"SECURITIES ACT"), with respect to the securities purchasable upon exercise of
the Rights on an appropriate form, (ii) cause such registration statement to
become effective as soon as practicable after such filing, and (iii) cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Securities Act and the rules and regulations
thereunder) until the earlier of (A) the date as of which the Rights are no
longer exercisable for such securities or (B) the Expiration Date. The Company
will also take such action as may be appropriate under the securities laws of
the various states. The Company may temporarily suspend the exercisability of
the Rights in order to prepare and file such registration statement. Upon any
such suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended. The Company shall
thereafter issue a public announcement at such time as the suspension is no
longer in effect. Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction unless the
requisite qualification in such jurisdiction shall have been obtained.
(e) If at the time the Rights become exercisable, the then
outstanding Common Shares are listed on any national or regional securities
exchange or are quoted on the National Association of Securities Dealers, Inc.
Automated Quotations System ("NASDAQ") or any successor thereto or other
comparable quotation system, the Company shall use its best efforts to cause,
from and after such time as the Rights become exercisable, all Preferred Shares
(and, following the occurrence of a Triggering Event, other securities) reserved
for issuance upon such exercise to be quoted on such system or listed on such
exchange, as the case may be.
Section 10. PREFERRED SHARES RECORD DATE. Each Person in whose name any
certificate for Preferred Shares (or other securities) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder of
record of the Preferred Shares represented thereby on, and such certificate
shall be dated, the date upon which the Rights Certificate evidencing such
Rights was duly surrendered and payment of the Purchase Price (and any
applicable transfer taxes) was made; provided, however, that if the date of such
surrender and payment is a date upon
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which the transfer books of the Company for such Preferred Shares (or other
securities) 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 transfer books of the Company for such
Preferred Shares (or other securities) 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 shareholder of the Company with respect to shares
for which the Rights shall be exercisable, including, without limitation, the
right to vote, to receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE. NUMBER AND KIND OF SHARES OR
NUMBER OF RIGHTS. The Purchase Price. the number and kind of shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the 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 otherwise provided in this Section 11(a)
and in Section 7(e), 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 transfer books of the Company for the Preferred Shares were open,
such holder 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 an
adjustment under both this 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 25 of this Agreement, in the event:
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(A) any Acquiring Person or any Associate or Affiliate of any
Acquiring Person, at any time after the Shares Acquisition Date, directly or
indirectly;
(1) shall merge into the Company or otherwise combine with the
Company and the Company shall be the continuing or surviving corporation of
such merger or combination and the Common Shares of the Company or other
equity securities of the Company shall remain outstanding;
(2) 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);
(3) 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 (as the case may be) the Company or any of
its Subsidiaries, on terms and conditions less favorable to the Company
than the Company would be able to obtain in arm's-length negotiation with
an unaffiliated third party, other than pursuant to a Section 13 Event:
(4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer
or otherwise acquire or dispose of assets having an aggregate fair market
value of more than $5,000,000 in one transaction or a series of
transactions, to, from or with (as the case may be) 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), other than pursuant to a
Section 13 Event;
(5) 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
20
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at rates in accordance with the Company's (or its Subsidiaries') past
practices; or
(6) 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 (other
than in the ordinary course of business), advances, guarantees,
pledges or other financial assistance or any tax credits or other tax
advantage provided by the Company or any of its Subsidiaries; or
(B) any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or any of its
Subsidiaries or any entity holding securities of the Company organized,
appointed or established by the Company or any of its Subsidiaries for or
pursuant to the terms of any such plan), alone or together with its
Affiliates and Associates, shall become an Acquiring Person; or
(c) during such time as there is an Acquiring Person, there
shall be any reclassification of securities (including any reverse stock
split), or recapitalization or reorganization of the Company or other
transaction or series of transactions involving the Company which has the
effect, directly or indirectly, of increasing by more than 1% the
proportionate share of the outstanding shares of any class of equity
securities of the Company or any of its Subsidiaries beneficially owned by
any Acquiring Person or any Affiliate or Associate thereof;
then, and in each such case, proper provision shall promptly be made so that,
following the Distribution Date, each holder of a Right, except as provided in
Section 7(e) hereof, shall 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-thousandths 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-thousandths of a Preferred Share for which a Right was exercisable
immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y)
dividing that product (which, following such first occurrence, shall thereafter
be referred to as the "PURCHASE PRICE" for each Right and for all purposes of
this Agreement) by 50% of the then current per share market price of the
Company's Common Shares (determined pursuant to Section 11 (d) hereof) on the
date of such first occurrence (such number of shares, the "ADJUSTMENT SHARES");
PROVIDED, HOWEVER, that if the transaction that would otherwise give rise to the
foregoing adjustment is also subject to the provisions of Section 13 hereof,
then only
21
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the provisions of Section 13 hereof shall apply and no adjustment shall be made
pursuant to this Section 11 (a)(ii).
(iii) In the event that the number of Common Shares that are
authorized by the Company's Restated Articles of Organization, but not
outstanding or reserved for issuance for purposes other than upon
exercise of the Rights are not sufficient to permit the exercise in
full of the Rights in accordance with the foregoing subparagraph (ii)
of this Section 11(a), the Company shall:
(A) determine the excess of the value of the Adjustment
Shares issuable upon the exercise of a Right (the "CURRENT
VALUE") over the Purchase Price (such excess, the "SPREAD"); and
(B) with respect to each Right, make adequate provision to
substitute for the Adjustment Shares, upon payment of the
applicable Purchase Price:
(1) cash;
(2) a reduction in the Purchase Price;
(3) Common Shares of the same or a different class or
other equity securities of the Company (including, without
limitation, preferred shares or units of preferred shares that
the Board of Directors of the Company has deemed (based, among
other things, on the dividend and liquidation rights of such
preferred shares) to have substantially the same economic value
as Common Shares (such preferred shares hereinafter referred to
as "COMMON SHARES EQUIVALENTS"));
(4) debt securities of the Company;
(5) other assets, or
(6) any combination of the foregoing, having an
aggregate value equal to the Current Value, where such aggregate
value has been determined by the Board of Directors of the
Company after considering the advice of a competent investment
banking firm selected by the Board of Directors of the Company;
PROVIDED, HOWEVER, if the Company shall have not made adequate
provision to deliver value pursuant to clause (B) above within
thirty (30) days following the later of (x) the first occurrence
of a
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Section 11 (a)(ii) Event and (y) the date on which the Company's
right of redemption pursuant to Section 24(b) expires (the later
of (x) and (y) being referred to herein as the "SECTION 11(a)(ii)
TRIGGER DATE"), then the Company shall be obligated to deliver,
upon the surrender for exercise of a Right and without requiring
payment of the Purchase Price, Common Shares (to the extent
available), and then, if necessary, cash, which shares and/or
cash have an aggregate value equal to the Spread. If the Board of
Directors of the Company shall determine in good faith that it is
likely that sufficient additional Common Shares could be
authorized for issuance upon exercise in full of Rights, the
thirty (30) day period set forth above may be extended to the
extent necessary, but not more than ninety (90) days after the
Section 11(a)(ii) Trigger Date, in order that the Company may
seek stockholder approval for the authorization of such
additional shares (such period, as it may be extended, the
"SUBSTITUTION PERIOD"). To the extent that the Company determines
that some action need be taken pursuant to the first and/or
second sentences of this Section 11 (a)(iii), the Company shall
provide, subject to Section 7(e) hereof, that such action shall
apply uniformly to all outstanding Rights, and may suspend the
exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of
additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to
determine the value thereof. The Company shall make a public
announcement when the exercisability of the Rights has been
temporarily suspended, and again when such suspension is no
longer in effect. For purposes of this Section 11 (a)(iii), the
value of the Common Shares shall be the current market price (as
determined pursuant to Section 11(d) hereof) per Common Share on
the Section 11(a)(ii) Trigger Date and the value of any "common
share equivalent" shall be deemed to have the same value as the
Common Shares on such date.
(b) If 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 or more
favorable 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
23
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the number of Preferred Shares outstanding on such record date plus the number
of Preferred Shares which 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) would purchase at such current market price 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) If 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, cash 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, cash or evidences of indebtedness so to be 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.
24
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(d) (i) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) hereof, 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 per share of such Security for the 30 consecutive Trading Days
(as such term is hereinafter defined) immediately prior to 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, 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. The closing price for each day shall be the
last sale price, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Security is not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Security is listed or admitted to trading or, if the Security is
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 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.
(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
25
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one thousand. 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 Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 1l(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 Section 11(a) through (c), (e), (h) through (k)
and (m) and the provisions of Sections 7, 9, 10, 13, 14 and 15 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-thousandths 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 (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-thousandths of
a Preferred Share (calculated to the nearest one one-millionth of a Preferred
Share) obtained by (i) multiplying (x) the number of one one-thousandths of a
share covered by a Right immediately prior to this adjustment by (y) the
Purchase Price in effect immediately prior to such adjustment of the Purchase
Price and (ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
26
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(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-thousandths 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-thousandths 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 15 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Rights Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein (and may bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of one one-thousandths of a 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-thousandths of a Preferred Share which were expressed in the initial Rights
Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below one one-thousandth 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 validly and legally issue fully paid and
nonassessable Preferred Shares at such adjusted Purchase Price.
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(1) 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, stock dividends or
issuance of rights, options or warrants referred to hereinabove in this Section
11, hereafter made by the Company to holders of its Preferred Shares shall not
be taxable to such stockholders.
(n) Anything in this Agreement to the contrary notwithstanding, in
the event that the Company shall at any time after the date of this Agreement
and prior to the Distribution Date (i) declare a dividend on the outstanding
Common Shares payable in Common Shares, (ii) subdivide the outstanding Common
Shares, (iii) combine the outstanding Common Shares into a smaller number of
shares or (iv) issue any of its shares of capital stock in a reclassification of
the outstanding Common Shares (including any such reclassification in connection
with a consolidation or merger in which the Company is the continuing or
surviving entity), then in any such case, (A) the number of Rights associated
with each Common Share or other such shares then outstanding, or issued or
delivered thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter associated with
each Common Share or other such shares following any such event shall equal the
result obtained by multiplying the number of Rights associated with each Common
Share immediately prior to such event by a fraction the numerator of which shall
be the total number of Common Shares outstanding immediately prior to the
occurrence of the event and the denominator of which shall be the total number
of Common Shares outstanding immediately following the occurrence of such event,
and (B) each Common Share outstanding immediately after such event shall have
issued with respect to it that number of Rights (which may be represented by the
certificate representing the underlying Common Shares in accordance with Section
3) which each Common Share outstanding immediately
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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 reclassification is
effected.
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Sections 11 and 13 hereof, the
Company shall promptly (a) 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 (or, if prior to the Distribution Date,
to each holder of a certificate representing Common Shares) in accordance with
Section 27 hereof. The Rights Agent may rely on such certificate without further
inquiry and may assume that no such adjustment has been made unless and until it
shall have received such certificate.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
POWER OF THE COMPANY.
(a) In the event that, following the Shares Acquisition Date,
directly or indirectly:
(x) the Company shall consolidate with, or merge with and into,
any other Person (other than a Subsidiary of the Company in a transaction
that complies with Section 14(b) hereof), and the Company shall not be the
continuing or surviving corporation of such consolidation or merger;
(y) any Person (other than a Subsidiary of the Company in a
transaction that complies with Section 14(b) hereof) 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, all or part of the Common Shares shall be changed into or
exchanged for stock or other securities of any other Person (or the
Company) or cash or any other property; or
(z) the Company shall sell or otherwise transfer (or one or more
of its Subsidiaries shall sell or otherwise transfer), in one 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 to the Company or one or more of its Subsidiaries in
one or more transactions, each of which complies with Section 14(b)
hereof), then, and in each such case, proper provision shall be made so
that:
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(i) following the Distribution Date, each holder of a Right, subject
to Section 7(e), shall have the right to receive, upon the exercise thereof at
the then current Purchase Price in accordance with the terms of this Agreement,
such number of freely tradable Common Shares of the Principal Party (as
hereinafter defined), free and clear of liens, rights of call or first refusal,
encumbrances or other adverse claims, as shall be equal to the result obtained
by:
(1) multiplying the then current Purchase Price by the number of
one one-thousandths of a Preferred Share for which a Right is exercisable
immediately prior to the first occurrence of a Section 13 Event (or, if a
Section 11(a)(ii) Event has occurred prior to the first occurrence of a
Section 13 Event, multiplying the number of such shares for which a Right
was exercisable immediately prior to the first occurrence of a Section
11(a)(ii) Event by the Purchase Price in effect immediately prior to such
first occurrence); and
(2) dividing that product (which, following the first occurrence
of a Section 13 Event, shall be referred to as the "PURCHASE PRICE" for
each Right and for all purposes of this Agreement) by 50% of the current
per share market price of the Common Shares of such Principal Party
(determined pursuant to Section 11(d) hereof) on the date of consummation
of such Section 13 Event;
(ii) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such 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, it being specifically intended that the provisions of Section
11 hereof shall apply 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
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(i) in the case of any transaction described in (x) or (y) of
the first sentence of paragraph (a) of this Section 13, the Person that is
the issuer of any securities into which Common Shares of the Company are
converted in such merger of consolidation, and if no securities are so
issued, the Person that is the other party to the merger or consolidation
(including, if applicable, the Company, if it is the surviving
corporation); and
(ii) in the case of any transaction described in (z) of the first
sentence of paragraph (a) of this Section 13, the Person that is the party
receiving the greatest portion of the assets or earning power transferred
pursuant to such transaction or transactions;
PROVIDED, HOWEVER, that in any such case (1) if the Common 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 or Affiliate of another Person, "Principal Party"
shall refer to such other Person; (2) in case such Person is a Subsidiary,
directly or indirectly, or Affiliate of more than one Person, the Common Shares
of two or more of which are and have been so registered, "Principal Party" shall
refer to whichever of such Persons is the issuer of the Common 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 a sufficient number of
authorized Common Shares that have not been issued or reserved for issuance to
permit the exercise in full of the Rights in accordance with this Section 13 and
unless prior thereto the Company and each Principal Party and each other Person
who may become a Principal Party as a result of such consolidation, merger, sale
or transfer shall have executed and delivered to the Rights Agent a supplemental
agreement providing for the terms set forth in paragraphs (a) and (b) of this
Section 13 and further providing that, as soon as practicable after the date of
any Section 13 Event, the Principal Party at its own expense shall:
(i) prepare and file a registration statement under the
Securities Act with respect to the Rights and the securities purchasable
upon the exercise of the Rights on an appropriate form, will use its best
efforts to cause such registration statement to become effective as soon as
practicable
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after such filing and will use its best efforts to cause such registration
statement to remain effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the Expiration Date;
(ii) use its best efforts to qualify or register the Rights and
the securities purchasable upon exercise of the Rights under the securities
laws of such jurisdictions as may be necessary or appropriate;
(iii) use its best efforts to list (or continue the listing of)
the Rights and the securities purchasable upon exercise of the Rights on a
national securities exchange or to meet the eligibility requirements for
quotation on NASDAQ; and
(iv) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which comply
in all material respects with the requirements for registration on Form 10
under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. If a Section 13 Event shall occur at
any time after the occurrence of a Section 11(a)(ii) Event, the Rights which
have not theretofore been exercised shall thereafter become exercisable solely
in the manner described in paragraph (a) of this Section 13.
Section 14. ADDITIONAL COVENANTS.
(a) The Company covenants and agrees that it shall not at any time
after the Distribution Date (i) consolidate with, (ii) merge with or into, or
(iii) sell or transfer to, in one or more transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries taken as a whole, any other Person if at the time of or after such
consolidation, merger or sale there are any charter or by-law provisions or any
rights, warrants or other instruments outstanding or any other action taken
which would diminish or otherwise eliminate the benefits intended to be afforded
by the Rights. The Company shall not consummate any such consolidation, merger
or sale unless prior thereto the Company and such other Person shall have
executed and delivered to the Rights Agent a supplemental agreement evidencing
compliance with this subsection.
(b) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 24, Section 25 or Section 28
hereof, take any action if at the time such action is taken it is reasonably
foreseeable that such action will substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights.
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Section 15. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights,
except prior to the Distribution Date as provided in Section 11(n), or to
distribute Rights Certificates which evidence fractional Rights. In lieu of such
fractional Rights, there shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 15(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 New York Stock Exchange or,
if the Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the 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-thousandth
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-thousandth of a Preferred Share). Fractions of
Preferred Shares in integral multiples of one one-thousandth 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-thousandth 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
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Preferred Share. For the purposes of this Section 15(b), the current market
value of a Preferred Share shall be the closing price of a Preferred Share (as
determined pursuant to Section 1l(d)(ii) hereof) for the Trading Day
immediately prior to the date of such exercise.
(c) Following the occurrence of one of the transactions or events
specified in Section 11 giving rise to the right to receive Common Shares upon
the exercise of a Right, the Company shall not be required to issue fractions of
Common Shares upon exercise of the Rights or to distribute certificates which
evidence fractional Common Shares. In lieu of fractional Common Shares, 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 a Common Share. For purposes of this
Section 15(c), the current market value shall be determined in the manner set
forth in Section 1l(d) 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 16. RIGHTS OF ACTION. Excepting the rights of action given to the
Rights Agent under Section 19 hereof, all rights of action in respect of this
Agreement 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), subject to Section 7(e),
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 17. 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;
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(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer;
(c) subject to Section 6 and Section 7(f) hereof, 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 Common Shares certificate)
is registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Rights
Certificates or the associated Common Shares certificate 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
(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 a beneficial interest in a Right or other Person as a result of
its inability to perform any of its obligations under this Agreement by reason
of any preliminary or permanent injunction or other order, decree or ruling
issued by a court of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligation.
Section 18. 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 26 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 19. 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
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Company also agrees to indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability, or expense, incurred without gross 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 therefrom, directly or indirectly.
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 Preferred Shares or other securities of the Company, instrument
of assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other paper or document
reasonably believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons.
Section 20. 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 22 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.
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Section 21. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the duties
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person) 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 President, any Executive Vice
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.
(c) The Rights Agent shall be liable hereunder to the Company and any
other Person only for its own gross 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 adjustment required under the provisions of Section 11 or
Section 13 hereof or for the manner, method or amount of any adjustment or the
ascertaining of the existence of facts that would require any such adjustment
(except with respect to the exercise of Rights evidenced by Rights Certificates
after receipt of a certificate furnished pursuant to Section 12 describing any
such adjustment); nor shall it be responsible for any determination by the Board
of Directors of the Company of the
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current market value of the Rights or Preferred Shares or Common Shares; 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 other
securities to be issued pursuant to this Agreement or any Rights Certificate or
as to whether any Preferred Shares or other securities 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
instructions with respect to the performance of its duties hereunder from any
one of the President, any Executive Vice 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. Any application by the Rights Agent for written instructions
from the Company may, at the option of the Rights Agent, set forth in writing
any action proposed to be taken or omitted by the Rights Agent under this
Rights Agreement and the date on and/or after which such action shall be taken
or such omission shall be effective. The Rights Agent shall not be liable for
any action taken by, or omission of, the Rights Agent in accordance with a
proposal included in any such application on or after the date specified in such
application (which date shall not be less than five Business Days after the date
any officer of the Company actually receives such application, unless any such
officer shall have consented in writing to an earlier date) unless, prior to
taking any such action (or the effective date in the case of an omission), the
Rights Agent shall have received written instructions in response to such
application specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
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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 22. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may resign and 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 at the expense of the
Company. 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 and
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 a corporation organized and doing business under the laws of the United
States or any state of the United States so long as such corporation is in good
standing, which is authorized under such laws to exercise corporate trust or
stock transfer powers and is subject to supervision or examination by federal or
state authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $100 million. 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 and 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 22, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as
the case may be.
Section 23. ISSUANCE OF NEW RIGHTS CERTIFICATES. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at
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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 24. REDEMPTION.
(a) The Rights may be redeemed by action of the Board of Directors
of the Company pursuant to paragraph (b) or (c) of this Section 24 and shall not
be redeemed in any other manner, except as provided by Section 32.
(b) The Board of Directors of the Company may, at its option, at any
time prior to the earlier of (x) the close of business on the tenth day
following a Shares Acquisition Date, or (y) 5:00 p.m., Boston local time, on the
Final Expiration Date, redeem all but not less than all the then outstanding
Rights at a redemption price of $.0001 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.
(c) In addition to the right of redemption reserved in Section 24(b),
the Board of Directors of the Company may redeem all but not less than all of
the then outstanding Rights at the Redemption Price following the occurrence of
a Shares Acquisition Date but prior to any event described in Section
1l(a)(ii)(A) or (C) or Section 13(a), at their option:
(i) if:
(A) an Acquiring Person shall have transferred or otherwise
disposed of a number of Common Shares in one transaction or series of
transactions, not directly or indirectly involving the Company or any
of its Subsidiaries, which did not result in the occurrence of a
Triggering Event, or the Company (with the approval of the Board of
Directors of the Company) shall have issued additional equity
securities, in either instance such that such Person is thereafter a
Beneficial Owner of less than 15% of the outstanding Common Shares;
and
(B) there is no other Acquiring Person immediately following
the occurrence of the event described in clause (A); or
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(ii) in connection with any Section 13(a) Event in which all holders
of Common Shares are treated alike and not involving (other than as a
holder of Common Shares being treated like all other such holders) an
Acquiring Person or an Affiliate or Associate of an Acquiring Person or any
other Person in which such Acquiring Person, Affiliate or Associate has any
interest, or any other Person acting directly or indirectly on behalf of or
in association with any Acquiring Person, Affiliate or Associate.
Any redemption of the Rights by the Board of Directors of the Company may
be made effective at such time, on such basis and with such conditions as
the Board of Directors of the Company in its sole discretion may establish.
(d) Immediately upon the action of the Board of Directors of the
Company, of the Company ordering the redemption of the Rights pursuant to
paragraph (b) or paragraph (c) of this Section 24, 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 ordering the redemption of the Rights pursuant to paragraph
(b) or (c), as the case may be, 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 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, pay the Redemption Price in cash, Common Shares
(based on the current per share market price of the Common Shares as of the time
of redemption) or any other form of consideration deemed appropriate by the
Board of Directors. Notwithstanding anything contained in this Agreement to the
contrary, the Rights shall not be exercisable after the first occurrence of a
Section 1l(a)(ii) Event until such time as the Company's right of redemption
under Section 24(b) has expired.
Section 25. EXCHANGE
(a) The Board of Directors of the Company may, at its option, at any
time after the occurrence of a Section 11 (a)(ii) Event, 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 7(e) 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 (such exchange ratio being hereinafter referred
to as the "EXCHANGE RATIO").
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Notwithstanding the foregoing, the Board of Directors of the Company 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 25 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 such Rights held by such holder multiplied by the Exchange Ratio. 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
number of Rights (other than Rights which have become void pursuant to the
provisions of Section 7(e) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 25, 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-thousandth 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 25, 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
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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 Section
11(d)(i) hereof) for the Trading Day immediately prior to the date of exchange
pursuant to this Section 25.
Section 26. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to the
holders of 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 than by payment of dividends in Common Shares),
then, in each such case, the Company shall give to each holder of a Rights
Certificate, in accordance with Section 27 hereof, a notice of such proposed
action, which shall specify the record date for the purposes of such stock
dividend, or distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding-up is to take place and the date of participation
therein by the holders of the 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 20 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 20 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 Section 11 (a)(ii) Event shall occur, (i) the Company
shall as soon as practicable thereafter give to each holder of a Rights
Certificate, in accordance with Section 27 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, and (ii) all
references in the preceding
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paragraph to Preferred Shares shall be deemed thereafter to refer to Common
Shares or, if appropriate, other securities.
Section 27. 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:
Xionics Document Technologies, Inc.
00 Xxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Subject to the provisions of Section 22 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 sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
BankBoston, N.A.
c/o Boston Equiserve
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate or
certificate representing Common Shares 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 28. SUPPLEMENTS AND AMENDMENTS. Prior to the Distribution Date and
subject to the penultimate sentence of this Section 28, the Company and the
Rights Agent shall, if the Company so directs, supplement or amend any provision
of this Agreement without the approval of any holders of certificates
representing Rights Certificates and/or Common Shares. From and after the
Distribution Date and subject to the penultimate sentence of this Section 28,
the Company and the Rights Agent shall, if the Company so directs, supplement or
amend this Agreement without the approval of any holders of Rights Certificates
in order (i) to cure any ambiguity, (ii) to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provisions herein, (iii) to shorten or lengthen any time period hereunder, or
(iv) to change or supplement the provisions hereunder in any manner that the
Company may deem necessary or desirable and that shall not adversely affect the
interests of the holders of Rights Certificates (other than an Acquiring Person
or any Affiliate or Associate of an Acquiring Person); PROVIDED,
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this Agreement may not be supplemented or amended to lengthen, pursuant to
clause (iii) of this sentence, (A) a time period relating to when the Rights may
be redeemed at such time as the Rights are not then redeemable, or (B) any other
time period unless such lengthening is for the purpose of protecting, enhancing
or clarifying the rights of, and/or the benefits to, the holders of Rights
(other than an Acquiring Person or any Affiliate or Associate of an Acquiring
Person). Upon the delivery of a certificate from an appropriate officer of the
Company which states that the proposed supplement or amendment is in compliance
with the terms of this Section 28, the Rights Agent shall execute such
supplement or amendment unless the Right Agent shall have determined in good
faith that such supplement or amendment would adversely affect its interests
under this Agreement. Notwithstanding anything contained in this Agreement to
the contrary, no supplement or amendment shall be made that changes the
Redemption Price, the Final Expiration Date, the Purchase Price or the number of
one-thousandths of a Preferred Share for which a Right is exercisable. Prior to
the Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Shares.
Section 29. DETERMINATION AND ACTIONS BY THE BOARD OF DIRECTORS. ETC. For
all purposes of this Agreement, any calculation of the number of Common Shares
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. 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, 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 a determination to redeem or not redeem the Rights or to
amend the Agreement).
Section 30. 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 31. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, of 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 the Rights
Certificates (and, prior to the Distribution Date, of the Common Shares).
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Section 32. SEVERABILITY. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated;
PROVIDED, HOWEVER, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that severing the
invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 24(b)
hereof shall be reinstated and shall not expire until the close of business on
the tenth day following the date of such determination by the Board of
Directors.
Section 33. 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 34. 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.
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Section 35. 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.
[Signature pages follow.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, as an instrument under seal, all as of the day and
year first above written.
XIONICS DOCUMENT
TECHNOLOGIES, INC.
Attest:
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxx
----------------------------- ---------------------------------------
Title: Assistant Secretary Title: Vice President & General Counsel
BANKBOSTON, N.A.
Attest:
By: /s/ Xxxxxxx Xxxxxxxxx By: /s/ Xxxxxxxx Xxxxxxxx
----------------------------- ---------------------------------------
Title: Account Manager Title: Director
48
EXHIBIT A TO
RIGHTS AGREEMENT
XIONICS DOCUMENT TECHNOLOGIES, INC.
CERTIFICATE OF SECRETARY
The undersigned Secretary of Xionics Document Technologies, Inc., a
Delaware corporation (the "Corporation") hereby certifies that the following
resolutions of the Board of Directors of the Corporation were duly adopted at a
meeting of the Board of Directors held on March 31, 1998:
1. APPROVAL OF RIGHTS AGREEMENT AND DECLARATION OF RIGHTS DIVIDEND.
RESOLVED: That the Board of Directors hereby declares that a dividend of
one preferred share purchase right (each a "RIGHT") for each
outstanding share of common stock (the "COMMON STOCK"), $.01 par
value per share, of the Corporation be paid on April 21, 1998
(the "RECORD DATE"), to holders of record of the shares of Common
Stock issued and outstanding at the close of business on the
Record Date, each Right representing the right to purchase one
one-thousandth (1/1000) of a share of the Corporation's Series A
Junior Participating Preferred Stock, par value $.01 per share
(or, under certain circumstances, certain other securities), all
upon the terms and subject to the conditions set forth in the
form of Rights Agreement between the Corporation and BankBoston,
N.A., as Rights Agent, attached as Exhibit A hereto (the "RIGHTS
AGREEMENT"), which agreement is hereby approved in all respects.
RESOLVED: That the exercise price of the Rights shall be $85.00 per Right,
subject to adjustment as set forth in the Rights Agreement.
RESOLVED: That the proper officers of the Corporation be, and each of them
hereby is, authorized in the name and on behalf of the
Corporation to execute the Rights Agreement, with such
modifications as the officers executing the same shall approve,
and to deliver the same to the Rights Agent thereunder, such
execution and delivery to be conclusive evidence of the due
authorization and approval thereof by the Corporation.
49
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2. RIGHTS CERTIFICATES.
RESOLVED: That certificates evidencing the Rights (the "RIGHTS
CERTIFICATES") shall be substantially in the form attached as
EXHIBIT B to the Rights Agreement and shall be issued and
delivered as provided in the Rights Agreement.
RESOLVED: That the Rights Certificates shall be signed by the President,
any Vice President or the Treasurer, and shall be attested by
the Secretary or any Assistant Secretary, of the Corporation
under its corporate seal (which may be in the form of a facsimile
of the seal of the Corporation), provided that the signature of
any of said officers of the Corporation may, but need not be, a
facsimile signature imprinted or otherwise reproduced on the
Rights Certificates, and that the Corporation hereby adopts for
such purpose the facsimile signature of the present or any future
President, Vice President, Secretary, Assistant Secretary, and
Treasurer of the Corporation, notwithstanding the fact that at
the time the Rights Certificates shall be authenticated and
delivered or disposed of he shall have ceased to be such officer.
RESOLVED: That the proper officers of the Corporation be, and each of them
hereby is, authorized to execute on behalf of the Corporation
and under its corporate seal (which may be in the form of a
facsimile of the seal of the Corporation) Rights Certificates
issued to replace lost, stolen, mutilated or destroyed Rights
Certificates, and such Rights Certificates as may be required for
exchange, substitution or transfer as provided in the Rights
Agreement in the manner and form to be required in or
contemplated by, the Rights Agreement.
RESOLVED: That the Rights Certificates shall be manually countersigned by
the Rights Agent and books for the registration and transfer of
the Rights Certificates shall be maintained by the Rights Agent
at its principal offices.
3. Appointment of Rights Agent.
RESOLVED: That BankBoston, N.A. (the "RIGHTS AGENT") be, and it hereby is,
appointed Rights Agent under the Rights Agreement, and that upon
presentation to it of Rights Certificates for exercise in
accordance with the Rights Agreement, the Rights Agent is
authorized, as Transfer Agent and Registrar for the Series A
Junior Participating Preferred Stock, to issue originally,
countersign, register and deliver the shares of Series A Junior
Participating Preferred Stock issuable
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upon such exercise.
4. CREATION AND RESERVATION OF PREFERRED STOCK.
RESOLVED: That pursuant to Article V B of the Certificate of Incorporation,
as amended, of the Corporation, the Board of Directors hereby
establishes a series of Preferred Stock, par value $.01 per share
(the "PREFERRED STOCK"), of the Corporation and hereby states the
designation and number of shares, and fixes the preferences,
voting powers, qualifications and special or relative rights or
privileges thereof, all as set forth on EXHIBIT B attached
hereto.
RESOLVED: That all authorized shares of such Series A Junior Participating
Preferred Stock be, and they hereby are, reserved for issuance
upon exercise of the Rights.
RESOLVED: That BankBoston, N.A. be, and it hereby is, appointed Transfer
Agent and Registrar for the Series A Junior Participating
Preferred Stock of the Corporation.
5. SUBSEQUENT ISSUANCE OF RIGHTS
RESOLVED: That so long as the Rights are attached to the shares of Common
Stock of the Corporation as provided in the Rights Agreement, one
additional Right shall be delivered with each share of Common
Stock of the Corporation that shall become outstanding after the
Record Date, including but not limited to shares of Common Stock
issued upon conversion of any convertible securities of the
Corporation and the exercise of options to purchase shares of
Common Stock granted by the Corporation.
6. SECURITIES LAW REGISTRATION.
RESOLVED: That the proper officers of the Corporation be, and each of them
hereby is, authorized, for and on behalf of the Corporation, to
execute personally or by attorney-in-fact and to cause to be
filed with the Securities and Exchange Commission a registration
statement under the Securities Act of 1933, as amended (the
"SECURITIES ACT"), for the registration of shares of Series A
Junior Participating Preferred Stock (or other securities)
issuable upon exercise of the Rights, and thereafter to execute
and cause to be filed any amended registration statement or
registration statements and amended prospectus or prospectuses,
or amendments or supplements to any of the foregoing, and to
cause such registration statement and any amendments thereto
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to become effective in accordance with the Securities Act and the
General Rules and Regulations of the Securities and Exchange
Commission thereunder.
RESOLVED: That the Secretary of the Corporation be, and he hereby is,
appointed as agent for service of the Corporation with respect to
said registration statement with all the powers and functions
specified in the General Rules and Regulations of the Securities
and Exchange Commission under the Securities Act.
RESOLVED: That the proper officers of the Corporation be, and each of them
hereby is, authorized, jointly and severally, in the name and on
behalf of the Corporation, to take all such actions and to
execute all such documents as they may deem necessary or
appropriate in connection with the issuance of the Rights and the
shares of Series A Junior Participating Preferred Stock (or other
securities) issuable upon exercise of the Rights in order to
comply with the Securities Act and the Securities Exchange Act of
1934, as amended (the "1934 Act"), including without limitation
registration of the Rights under Section 12 of the 1934 Act.
7. "BLUE SKY" QUALIFICATION.
RESOLVED: That the Board of Directors deems it desirable and in the best
interests of the Corporation that the shares of Series A Junior
Participating Preferred Stock (or other securities) issuable upon
exercise of the Rights be qualified or registered for sale in
various jurisdictions; that the President, any Vice President,
the Treasurer, the Secretary, or any Assistant Secretary be, and
each of them hereby is, authorized to determine the jurisdictions
in which appropriate action shall be taken to qualify or register
for sale all or such part of the securities issuable upon
exercise of the Rights as said officers may deem advisable; that
said officers are hereby authorized to perform on behalf of the
Corporation any and all such acts as they may deem necessary or
advisable in order to comply with the applicable laws of any such
jurisdictions, and in connection therewith to execute and file
all requisite papers and documents, including, but not limited
to, applications, reports, surety bonds, irrevocable consents and
appointments of attorneys for service of process; and the
execution by such officers of any such papers or documents or the
doing by them of any act in connection with the foregoing matters
shall conclusively establish their authority therefor and the
approval and ratification by the Corporation of the papers and
documents so executed and the action so taken.
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8. GENERAL RESOLUTIONS.
RESOLVED: That the Board of Directors hereby adopts, as if expressly set
forth herein, the form of any resolution required by any
authority to be filed in connection with any applications,
consents to service, issuer's covenants or other documents if (i)
in the opinion of the officers of the Corporation executing the
same, the adoption of such resolutions is necessary or desirable
and (ii)the Secretary or an Assistant Secretary of the
Corporation evidences such adoption by inserting in the minutes
of this meeting copies of such resolutions, which will thereupon
be deemed to be adopted by the Board of Directors with the same
force and effect as if presented at this meeting.
RESOLVED: That the proper officers of the Corporation be, and each of them
hereby is, authorized and directed, jointly and severally, for
and on behalf of the Corporation, to execute and deliver any and
all certificates, agreements and other documents, take any and
all steps and do any and all things which they may deem necessary
or advisable in order to effectuate the purposes of each and all
of the foregoing resolutions.
RESOLVED: That any actions taken by such officers prior to the date of this
meeting that are within the authority conferred hereby are hereby
ratified, confirmed and approved in all respects as the act and
deed of the Corporation.
53
EXHIBIT B
PREFERENCES, VOTING POWERS AND QUALIFICATIONS AND SPECIAL OR RELATIVE RIGHTS OR
PRIVILEGES OF THE 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 be 35,000. Such number of shares may be increased or decreased by
vote 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 issued by the Corporation.
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,
$.01 par value per share (the "COMMON STOCK"), of the Corporation, and of
any other junior stock, shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the first day of March,
June, September and December in each year (each such date being referred to
herein as a "QUARTERLY DIVIDEND PAYMENT DATE"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series A Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $1.00 or (b)
subject to the provision for adjustment hereinafter set forth, 1,000 times
the aggregate per share amount of all cash dividends, and 1,000 times the
aggregate per share amount (payable in kind) of all non-cash dividends or
other distributions, other than a dividend payable in shares of Common
Stock or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A Preferred Stock. In the event the
Corporation shall at any time (i) declare a dividend on the Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding shares of
Common Stock, (iii) combine the outstanding shares of Common Stock into a
smaller number of shares or (iv) issue any of its shares of capital stock
in a reclassification of the outstanding shares of Common Stock (including
any such reclassification in connection with a consolidation or merger in
which the Corporation is the continuing or surviving entity), then in each
such case the amount to which holders of shares of Series A Preferred Stock
were entitled immediately prior to
54
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such event under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); provided
that, in the event no dividend or distribution shall have been declared on
the Common Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date, a dividend of
$1.00 per share on the Series A Preferred Stock shall nevertheless be
payable on such subsequent Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares, unless the date of issue
of such shares is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall begin to accrue
from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment
Date, in either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series A
Preferred Stock in an amount less than the total amount of such dividends
at the time accrued and payable on such shares shall be allocated pro rata
on a share-by-share basis among all such shares at the time outstanding.
The Board of Directors may fix a record date for the determination of
holders of shares of Series A Preferred Stock entitled to receive payment
of a dividend or distribution declared thereon, which record date shall be
not more than 60 days prior to the date fixed for the payment thereof.
Section 3. VOTING RIGHTS. The holders of shares of Series A Preferred Stock
shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each
share of Series A Preferred Stock shall entitle the holder thereof to 1,000
votes on all matters submitted to a vote of the stockholders of the
Corporation. In the event the Corporation shall at any time (i) declare a
dividend on the Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding shares of Common Stock, (iii) combine the
outstanding shares of Common Stock into a
55
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smaller number of shares or (iv) issue any of its shares of capital stock
in a reclassification of the outstanding shares of Common Stock (including
any such reclassification in connection with a consolidation or merger in
which the Corporation is the continuing or surviving entity), then in each
such case the number of votes per share to which holders of shares of
Series A Preferred Stock were entitled immediately prior to such event
shall be adjusted by multiplying such number by a fraction, the numerator
of which is the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in any other Certificate of
Designation establishing 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
Corporation having general voting rights shall vote together as one class
on all matters submitted to a vote of stockholders of the Corporation.
(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 be required (except to the extent they are entitled to
vote with holders of Common Stock as set forth herein) for taking any
corporate action.
Section 4. CERTAIN RESTRICTIONS.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section 2 are in
arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred
Stock outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any other distributions on,
or redeem or purchase or otherwise acquire for consideration any
shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock;
(ii) declare or pay dividends, or make any other distributions,
on any shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except dividends paid ratably on the Series A
Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
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(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock, provided that the Corporation may at any time redeem, purchase
or otherwise acquire shares of any such junior stock in exchange for
shares of any stock of the Corporation ranking junior (either as to
dividends or upon dissolution, liquidation or winding up) to the
Series A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration
any shares of Series A Preferred Stock, or any shares of stock ranking
on a parity with the Series A Preferred Stock, except in accordance
with a purchase offer made in writing or by publication (as determined
by the Board of Directors) to all holders of such shares upon such
terms as the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series or
classes.
(B) The Corporation shall not permit any subsidiary of the Corporation to
purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (A) of this
Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. REACQUIRED SHARES. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
subject to the conditions and restrictions on issuance set forth herein, in the
Corporation's Certificate of Incorporation, as amended, or in any other
Certificate of Designation establishing a series of Preferred Stock or any
similar stock or as otherwise required by law.
Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any liquidation,
dissolution or winding up of the Corporation, 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 $10.00 per share, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment; PROVIDED THAT the holders of shares of Series A Preferred Stock
shall be entitled to receive an aggregate amount per share, subject to the
provision for adjustment hereinafter set forth, equal to 1,000 times the
aggregate amount to be distributed per share to holders of shares of Common
Stock, or (2) to the holders of shares of stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except distributions made ratably on
57
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the Series A Preferred Stock and all such parity stock in proportion to the
total amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event the Corporation shall at
any time (i) declare a dividend on the Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding shares of Common Stock, (iii) combine the
outstanding shares of Common Stock into a smaller number of shares or (iv) issue
any of its shares of capital stock in a reclassification of the outstanding
shares of Common Stock (including any such reclassification in connection with a
consolidation or merger in which the Corporation is the continuing or surviving
entity), 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 7. CONSOLIDATION, MERGER, etc. In case the Corporation shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case 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 1,000 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time (i) declare a dividend on the
Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding
shares of Common Stock, (iii) combine the outstanding shares of Common Stock
into a smaller number of shares or (iv) issue any of its shares of capital stock
in a reclassification of the outstanding shares of Common Stock (including any
such reclassification in connection with a consolidation or merger in which the
Corporation is the continuing or surviving entity), 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.
Section 8. NO REDEMPTION. The shares of Series A Preferred Stock shall not
be redeemable.
Section 9. RANK. The Series A Preferred Stock shall rank, with respect to
the payment of dividends and the distribution of assets, junior to all other
series of the Corporation's preferred stock, unless the terms of any such series
shall provide otherwise.
Section 10. AMENDMENT. The Certificate of Incorporation, as amended, of the
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Corporation 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; it being understood that nothing in this Section 10
shall be deemed to restrict the Corporation from designating additional shares
of Series A Preferred Stock if the Board of Directors determines that it is
necessary to do so in order to achieve the purposes of the Rights Agreement,
dated April 15, 1998 between the Corporation and BankBoston, N.A., as Rights
Agent.
Section 11. FRACTIONAL SHARES. Series A Preferred Stock may be issued in
fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.
59
EXHIBIT B TO
RIGHTS AGREEMENT
Form of Rights Certificate
Certificate No. R__________ __________Rights
NOT EXERCISABLE AFTER APRIL 21, 2008 OR AFTER EARLIER
REDEMPTION OR EXCHANGE BY THE COMPANY. THE RIGHTS ARE
SUBJECT, AT THE OPTION OF THE COMPANY, TO REDEMPTION AT
$.0001 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN
THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS
DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER
OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS CERTIFICATE WERE ISSUED TO A PERSON WHO
WAS OR BECAME AN ACQUIRING PERSON OR AN ASSOCIATE OR
AFFILIATE OF AN ACQUIRING PERSON. ACCORDINGLY, THIS
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BE OR
BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 7(e) OF THE RIGHTS AGREEMENT.](1)
Rights Certificate
XIONICS DOCUMENT TECHNOLOGIES, INC.
This certifies that ______________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of April 15, 1998 (the "RIGHTS AGREEMENT"), between Xionics
Document Technologies, Inc., a Delaware corporation (the "COMPANY"), and
BankBoston, N.A. (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., Boston time, on April 21, 2008 at the office of the
Rights Agent designated for such purpose, or at the office of its successor as
Rights Agent designated for such purpose, one one-thousandth 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
$85.00 per one one-thousandth of a
-----------------------
(1) The portion of the legend in brackets shall be inserted only if applicable.
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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-thousands 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 April 21, 1998, based on the Preferred Shares as
constituted at such date. As provided in the Rights Agreement, the Purchase
Price and the number of one one-thousandths 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 its option at a
redemption price of $.0001 per Right or (ii) may be exchanged in whole or in
part by the Company at its option for Preferred Shares or shares of the
Company's Common Stock, $.01 par value per share.
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-thousandth 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, as such, 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
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meetings or other actions affecting stockholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by this Rights Certificate shall have been
exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal. Dated as of ____________________, 19__.
ATTEST: XIONICS DOCUMENT
TECHNOLOGIES, INC.
By:
------------------------------ -------------------------------
Countersigned:
[_________________________]
By:
----------------------------
Authorized Signature
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Form of Reverse Side of Rights Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED ______________________________________________________
hereby sells, assigns and transfers unto _______________________________________
________________________________________________________________________________
(Please print name and address of transferee)
________________________________________________________________________________
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _______________ Attorney,
to transfer the within Rights Certificate on the books of the within-named
Company, with full power of substitution.
Dated:________________________, 19__
________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
--------------------------------------------------------------------------------
ASSIGNMENT CERTIFICATION
The undersigned hereby certifies by checking the appropriate boxes that:
(1) The Rights evidenced by this Rights Certificate [ ] are [ ] are 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 Acquiring Person
(as such terms are defined pursuant to the Rights Agreement);
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Form of Reverse Side of Rights Certificate -- continued
(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 an Acquiring Person.
Dated:________________________, 19 _____________________________
Signature
--------------------------------------------------------------------------------
NOTICE
The signatures to the foregoing Assignment and Certification 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.
--------------------------------------------------------------------------------
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Rights Certificate.)
To XIONICS DOCUMENT TECHNOLOGIES, INC.
The undersigned hereby irrevocably elects to exercise ______________ Rights
represented by this Rights Certificate to purchase the Preferred Shares (or such
other securities of the Company or of any other person) issuable upon the
exercise of such Rights and requests that certificates for such shares be issued
in the name of:
Please insert social security
or other identifying number: _________________________
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
If the above number of Rights shall not be all the Rights evidenced by this
Rights Certificate, then a new Rights Certificate for the balance remaining of
such Rights shall be registered and returned to the undersigned, unless the
undersigned requests that the Rights Certificate for the balance be registered
in the name of and delivered to:
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Form of Reverse Side of Rights Certificate -- continued
Please insert social security
or other identifying number: _____________________________
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
Dated: _______________________, 19__
___________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
--------------------------------------------------------------------------------
ELECTION CERTIFICATION
The undersigned hereby certifies by checking the appropriate boxes that:
(1) The Rights evidenced by this Rights Certificate [ ] are [ ] are not
being exercised, sold, assigned or transferred by or on behalf of a Person who
is or was an Acquiring Person or an Affiliate or Associate of any such Acquiring
Person (as such terms are defined pursuant to 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 an Acquiring Person.
Dated:_______________________, 19__ ______________________________
Signature
--------------------------------------------------------------------------------
65
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Form of Reverse Side of Rights Certificate -- continued
NOTICE
The signatures in the foregoing Election to Purchase and Certification must
conform to the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Assignment or the
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.
66
EXHIBIT C TO
RIGHTS AGREEMENT
XIONICS DOCUMENT TECHNOLOGIES, INC.
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
As of March 31, 1998, the Board of Directors of Xionics Document
Technologies, Inc., a Delaware corporation (the "COMPANY"), declared a dividend
distribution of one preferred share purchase right (a "RIGHT") for each
outstanding share of common stock, $.01 par value per share (the "COMMON
SHARES"), of the Company. The dividend is payable on April 21, 1998 (the "RECORD
DATE") to the stockholders of record on that date. Except as described below,
each Right, when exercisable, entitles the registered holder to purchase from
the Company one one-thousandth 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 $85.00 per one one-thousandth 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 BankBoston, N.A., as Rights Agent (the "RIGHTS AGENT").
Initially, the Rights will be attached to all certificates representing
Common Shares then outstanding, and no separate Rights certificates will be
distributed. Until the earlier to occur of (i) 10 business days following a
public announcement that a person or group of affiliated or associated persons
(an "ACQUIRING PERSON", which does not include certain institutional investors
which temporarily exceed the 15% threshold) have acquired beneficial ownership
of 15% or more of the outstanding Common Shares (the date of such an
announcement being a "SHARES ACQUISITION DATE"), or (ii) 10 business days (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 by a person or group of 15% or more of such outstanding Common Shares
(the earliest of such dates being called the "DISTRIBUTION DATE"), the Rights
will be evidenced, with respect to any of the Common Share certificates
outstanding as of the Record Date, by such Common Share certificate together
with a copy of this Summary of Rights.
The Rights Agreement provides that, until the Distribution Date, the Rights
will be transferred with and only with the Common Shares. 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 notation 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
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Record Date, even without such notation or a copy of this Summary of Rights
being attached thereto, 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 CERTIFICATION") will be mailed to holders of record of the
Common Shares as of the close of business on the Distribution Date, and the
separate Rights Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights will
expire on April 21, 2008 (the "FINAL EXPIRATION DATE"), unless the Rights are
earlier exercised or redeemed by the Company, as described below.
The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights
or warrants to subscribe for or purchase Preferred Shares at a price, or
securities convertible into Preferred Shares with a conversion price, less than
the then current market price of the Preferred Shares or (iii) upon the
distribution to holders of the Preferred Shares of evidences of indebtedness or
assets (excluding regular periodic cash dividends paid out of earnings or
retained earnings or dividends payable in Preferred Shares) or of subscription
rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of one one-thousandths of a
Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $1 per share but will be entitled to an aggregate
dividend of 1,000 times the dividend declared per Common Share. In the event of
liquidation, the holders of the Preferred Shares will be entitled to a minimum
preferential liquidation payment of $10.00 per share but will be entitled to an
aggregate payment of 1,000 times the payment made per Common Share. Each
Preferred Share will have 1,000 votes, voting together with the Common Shares.
Finally, in the event of any merger, consolidation or other transaction in which
Common Shares are exchanged, each Preferred Share will be entitled to receive
1,000 times the amount received per Common Share. These rights are protected by
customary antidilution provisions.
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Because of the nature of the Preferred Shares' dividend, liquidation and
voting rights, the value of the one one-thousandth interest in a Preferred Share
purchasable upon exercise of each Right is intended to approximate the value of
one Common Share.
In the event that, after the first date of public announcement by the
Company or an Acquiring Person that an Acquiring Person has become such, the
Company is involved in a merger or other business combination transaction in
which the Common Shares are exchanged or changed, or 50% or more of the
Company's consolidated assets or earning power are sold (in one transaction or a
series of transactions), proper provision will be made so that each holder of a
Right (other than an Acquiring Person) will thereafter have the right to
receive, upon the exercise thereof at the then current exercise price of the
Right, that number of shares of common stock of the acquiring company (or, in
the event there is more than one acquiring company, the acquiring company
receiving the greatest portion of the assets or earning power transferred) which
at the time of such transaction would have a market value of two times the
exercise price of the Right.
In the event that (i) any person becomes an Acquiring Person, (ii) an
Acquiring Person engages in one or more "self-dealing" transactions as set forth
in the Rights Agreement, or (iii) during such time as there is an Acquiring
Person, there shall be a reclassification of securities or a recapitalization
or reorganization of the Company or other transaction or series of transactions
involving the Company which has the effect of increasing by more than 1% the
proportionate share of the outstanding shares of any class of equity securities
of the Company or any of its subsidiaries beneficially owned by the Acquiring
Person, proper provision shall be made so that each holder of a Right, OTHER
THAN RIGHTS BENEFICIALLY OWNED BY ANY ACQUIRING PERSON, WILL THEREAFTER HAVE THE
RIGHT TO RECEIVE UPON EXERCISE THAT NUMBER OF COMMON SHARES HAVING A MARKET
VALUE OF TWO TIMES THE EXERCISE PRICE OF THE RIGHT. UPON OCCURRENCE OF ANY OF
THE EVENTS DESCRIBED IN THE IMMEDIATELY PRECEDING SENTENCE ANY RIGHTS THAT ARE,
OR (UNDER CERTAIN CIRCUMSTANCES SPECIFIED IN THE RIGHTS AGREEMENT) WERE,
BENEFICIALLY OWNED BY ANY ACQUIRING PERSON SHALL IMMEDIATELY BECOME NULL AND
VOID. At any time after the occurrence of any such event and prior to the
acquisition by any 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 an Acquiring Person and certain related persons which have
become void), in whole or in part, at an exchange ratio of one Common Share, or
one one-thousandth of a Preferred Share (or of a share of a class or series of
the Company's preferred stock having equivalent rights, preferences and
privileges), per Right (subject to adjustment).
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
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integral multiples of one one-thousandth 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 earlier of (i) the tenth day after a Shares
Acquisition Date, or (ii) the expiration of the Rights, the Board of Directors
may redeem the Rights in whole, but not in part, at a price of $.0001 per Right
(the "Redemption Price"). Thereafter, the Rights may only be redeemed by the
Board of Directors in whole, but not in part, at the Redemption Price, (a)under
certain circumstances described in the Rights Agreement involving a disposition
of Common Shares by the Acquiring Person such that the Acquiring Person's common
share ownership is reduced to 10% or less, or (b) if such redemption is
incidental to a merger or other business combination transaction or series of
transactions involving the Company but not involving an Acquiring Person and
satisfying certain other conditions. 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.
Other than those provisions relating to the principal economic terms of the
Rights, any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement may be amended by the
Board of Directors in order to cure any ambiguity, to make changes that do not
adversely affect the interests of holders of Rights (excluding the interests of
any Acquiring Person), or to shorten or lengthen any time period under the
Rights Agreement; provided, however, that no amendment to adjust the time period
governing redemption shall be made at such time as the Rights are not
redeemable.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.
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. 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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