DELUXE CORPORATION
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
as Rights Agent
AMENDED AND RESTATED RIGHTS AGREEMENT
Amended and Restated as of January 31, 1997
TABLE OF CONTENTS
Page
Section 1. Certain Definitions ...................................... 1
Section 2. Appointment of Rights Agent .............................. 5
Section 3. Issue of Right Certificates .............................. 6
Section 4. Form of Right Certificates ............................... 7
Section 5. Countersignature and Registration ........................ 8
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates; Lost, Stolen,
Destroyed or Mutilated Right Certificates .......... 8
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights .......................... 9
Section 8. Cancellation and Destruction of Right Certificates ....... 11
Section 9. Reservation and Availability of Shares of
Common Stock ....................................... 12
Section 10. Common Stock 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 ................................... 20
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power ............................ 20
Section 14. Fractional Rights and Fractional Shares .................. 23
Section 15. Rights of Action ......................................... 24
Section 16. Agreement of Right Holders ............................... 24
Section 17. Right Certificate Holder Not Deemed a Shareholder ........ 25
Section 18. Concerning the Rights Agent .............................. 25
Section 19. Merger, Consolidation or Change of
Name of Rights Agent ............................... 26
Section 20. Duties of Rights Agent ................................... 27
Section 21. Change of Rights Agent ................................... 29
Section 22. Issuance of New Right Certificates ....................... 30
Section 23. Redemption ............................................... 30
Section 24. Exchange ................................................. 31
Section 25. Notice of Certain Events ................................. 32
Section 26. Notices .................................................. 33
Section 27. Supplements and Amendments ............................... 34
Section 28. Successors ............................................... 34
Section 29. Benefits of this Agreement ............................... 34
Section 30. Administration and Interpretation by Directors ........... 35
Section 31. Severability ............................................. 35
Section 32. Governing Law ............................................ 35
Section 33. Counterparts ............................................. 36
Section 34. Descriptive Headings ..................................... 36
Signatures .......................................................... 37
Exhibit A--Form of Right Certificate ....................................... A-1
RIGHTS AGREEMENT
Agreement between Deluxe Corporation (formerly Deluxe Check
Printers, Incorporated), a Minnesota corporation (the "Company"), and Norwest
Bank Minnesota, National Association (the "Rights Agent"), as successor to The
Bank of New York, a New York banking corporation (the "Prior Rights Agent"), as
amended and restated as of January 31, 1997.
W I T N E S S E T H
WHEREAS, on February 5, 1988, the Board of Directors of the
Company (as the composition of such Board of Directors may change from time to
time, the "Board of Directors") authorized and declared a dividend of one Right
(as hereinafter defined) for each share of Common Stock, par value $1.00 per
share, of the Company outstanding on February 22, 1988 and authorized the
issuance of one Right with respect to each share of Common Stock issued
thereafter and prior to the earlier of the Distribution Date and the Expiration
Date (as such terms are defined in Sections 3 and 7, respectively), each Right
(individually a "Right" and collectively the "Rights") initially representing
the right to purchase one share of Common Stock.
WHEREAS, on February 12, 1988, the Company and the Prior
Rights Agent entered into a Rights Agreement (the "Original Rights Agreement")
with respect to the Rights, which permitted its amendment and the appointment of
a successor to the Prior Rights Agent.
WHEREAS, on November 8, 1996, the Board of Directors
authorized the officers of the Company to amend and restate the Original Rights
Agreement and appoint a new rights agent.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall be
the Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding, but shall not include (i) an Exempt Person, (ii) any
Person acquiring beneficial ownership of Common Stock pursuant to a
Permitted Offer or (iii) or any Person who becomes the Beneficial Owner
of 15% or more of the shares of Common Stock then outstanding (but less
than 20%) and who (x) reported or is required to report such ownership
on Schedule 13G under the Exchange Act (or any comparable or successor
report) or on Schedule 13D under the Exchange Act (or any comparable or
successor report), which Schedule 13D does not state any intention to
or reserve the right to control or influence the management or policies
of the Company or engage in any of the actions specified in Item 4 of
such Schedule (other than the disposition of the Common Stock), (y),
within 10 Business Days of being requested by the Company to advise it
regarding the same, certifies to the Company that such Person acquired
shares of Common Stock in excess of 14.9% inadvertently or without
knowledge of the terms of the Rights and (z), together with all
Affiliates and Associates, does not acquire additional shares of Common
Stock after the date of the request by the Company referred to in
clause (y) and while the Beneficial Owner of 15% or more of the shares
of Common Stock then outstanding; provided, however, that if the Person
requested to so certify fails to do so within 10 Business Days, then
such Person shall become an Acquiring Person immediately after such
10-Business-Day Period. For purposes of this Agreement, any calculation
of the number of shares of Common Stock outstanding at any particular
time, including for purposes of determining the particular percentage
of such outstanding shares of Common Stock of which any Person is the
Beneficial Owner, shall be made in accordance with the last sentence of
Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the
Exchange Act.
(b) "Acquisition Event" shall mean any event described in
Section 11(a)(ii) or Section 13(a).
(c) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act.
(d) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has
(A) the right to acquire (whether such right
is exercisable immediately or only after the passage
of time) pursuant to any agreement, arrangement or
understanding (whether or not in writing), or upon
the exercise of conversion rights, exchange rights,
rights (other than the Rights at any time prior to
the occurrence of an Acquisition Event but thereafter
including Rights acquired by such Person from and
after the Distribution Date other than Rights
acquired by such Person directly from the Company
pursuant to Section 3(a) or Rights acquired by such
Person upon adjustments under Section 11 or 22 to
Rights that would not be deemed hereunder to be
beneficially owned by such Person), warrants or
options, or otherwise; provided, however, that a
Person shall not be deemed the Beneficial Owner of,
or to beneficially own, any securities tendered
pursuant to a tender or exchange offer made by or on
behalf of such Person or any of such Person's
Affiliates or Associates until such tendered
securities are accepted for purchase or exchange; or
(B) (1) the right to vote or dispose of or
(2) the "beneficial ownership" (as determined
pursuant to Rule 13d-3 of the General Rules and
Regulations under the Exchange Act) of (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 securities if the agreement, arrangement or
understanding to vote such securities (x) arises
solely from a revocable proxy or consent given to
such Person or any of such Person's Affiliates or
Associates in response to a public proxy solicitation
made pursuant to, and in accordance with, the
applicable rules and regulations under the Exchange
Act and (y) is not also then reportable by such
Person on Schedule 13D under the Exchange Act (or any
comparable or successor report) as being beneficially
owned by such Person; or
(ii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate
thereof) with which such Person (or any of such Person's
Affiliates or Associates) has any agreement, arrangement or
understanding (whether or not in writing) for the purpose of
acquiring, holding, voting (except pursuant to a revocable
proxy that does not, as a result of the proviso to clause
(i)(B) of this Section 1(d), cause the holder thereof to be
deemed to be the beneficial owner of such securities under
clause (i)(B) of this Section 1(d)) or disposing of any voting
securities of the Company.
(e) "Business Day" shall mean any day other than a Saturday, a
Sunday or a day on which banking institutions in the State of Minnesota
are authorized or obligated by law or executive order to close.
(f) "Change in Majority of Directors" means that a majority of
the Board of Directors of the Company are not Continuing Directors.
(g) "Close of Business" on any given date shall mean 5:00
P.M., Minneapolis, Minnesota time, on such date; provided, however,
that if such date is not a Business Day it shall mean 5:00 P.M.,
Minneapolis, Minnesota time, on the next succeeding Business Day.
(h) "Common Stock," unless used with reference to a Person
other than the Company, shall mean the shares of Common Stock, par
value $1.00 per share (as such par value may be changed from time to
time), of the Company. "Common Stock," when used with reference to any
Person other than the Company, shall mean the capital stock of such
Person with the greatest voting power, or the equity securities or
other equity interest having power to control or direct the management
of such Person or, if such Person is a Subsidiary of another Person,
the Person or Persons that ultimately control such first-mentioned
Person.
(i) "Continuing Director" shall mean any Person who is on the
date of this Agreement a member of the Board of Directors, who
continues to be a member of the Board of Directors and who is not an
Acquiring Person, or an Affiliate or Associate of an Acquiring Person,
or a representative of an Acquiring Person or of any such Affiliate or
Associate. A "Continuing Director" shall also mean any Person who
subsequently becomes a member of the Board of Directors, who continues
to be a member of the Board of Directors, whose initial nomination for
election or initial election to the Board of Directors is recommended
or approved by a majority of the Continuing Directors and who is not an
Acquiring Person, or an Affiliate or Associate of an Acquiring Person,
or a representative of an Acquiring Person or of any such Affiliate or
Associate.
(j) "Distribution Date" shall have the meaning set forth in
Section 3.
(k) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, as in effect on the date of this Agreement.
(l) "Exempt Person" shall mean 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 shares of Common Stock
organized, appointed or established for, or pursuant to the terms of,
any such plan.
(m) "Expiration Date" shall have the meaning set forth in
Section 7.
(n) "Final Expiration Date" shall have the meaning set forth
in Section 7.
(o) The terms "merger," "merge" and "consolidation" shall, if
such action involves the Company, include, without limitation, any
exchange, pursuant to a statutory exchange of voting stock under the
Minnesota Business Corporation Act, of shares of one or more classes or
series of voting stock of the Company (whether held by existing
shareholders of the Company or newly issued by the Company) for shares
of another corporation.
(p) "Permitted Offer" shall mean an acquisition of shares of
Common Stock pursuant to a tender offer or an exchange offer for all
outstanding shares of Common Stock determined, prior to a Change in
Majority of Directors, by a majority of the Continuing Directors who
are not officers of the Company, after receiving advice from one or
more investment or financial advisers and such other advisers as the
Board of Directors deems necessary or desirable to be (x) fair to the
Company's shareholders and (y), to the extent deemed appropriate,
otherwise in the best interests of the Company, its shareholders,
employees, customers, suppliers and creditors, and the communities in
which the Company does business.
(q) "Person" shall mean any individual, firm, corporation or
other entity, and shall include any successor (by merger or otherwise)
of such entity.
(r) "Redemption Price" shall have the meaning set forth in
Section 23.
(s) "Section 13 Event" shall mean any event described in
clauses (x), (y) or (z) of Section 13(a).
(t) "Stock Acquisition Date" shall mean the date of the first
public announcement (which, for purposes of this definition, shall
include, without limitation, a report filed pursuant to Section 13(d)
of the Exchange Act) by the Company or any Person that a Person has
become an Acquiring Person.
(u) "Subsidiary" shall have the meaning ascribed to such term
in Rule 12b-2 of the General Rules and Regulations under the Exchange
Act.
(v) "Trading Day" shall have the meaning set forth in Section
11(d).
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, shall, prior to the Distribution
Date, also be the holders of the Common Stock) in accordance with the terms and
conditions of this Agreement, 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, and shall give the Rights Agent 10 days
prior written notice of any such appointment. In no event shall the Rights Agent
be liable for or have any duty to supervise any such Co-Rights Agent.
Section 3. Issue of Right Certificates.
(a) Until the earliest of (i) the Close of Business on the
tenth day after the Stock Acquisition Date, (ii) the Close of Business on the
tenth day after the date that a tender or exchange offer by any Person is first
commenced (within the meaning of Rule 14d-2(a) of the General Rules and
Regulations under the Exchange Act), if, upon the consummation thereof, such
Person would be an Acquiring Person or (iii) a Section 13 Event (the earliest of
such dates described in clauses (i), (ii) and (iii) being herein referred to as
the "Distribution Date"), (x) the Rights will be evidenced by the certificates
for Common Stock registered in the names of the holders thereof (which
certificates for Common Stock shall also be deemed to be Right Certificates) and
not by separate Right Certificates, and (y) the right to receive Right
Certificates will be transferable only in connection with the transfer of the
underlying shares of Common Stock (including a transfer to the Company). The
Company shall give the Rights Agent prompt written notice of the Distribution
Date and as promptly as practicable following the Distribution Date, the Rights
Agent will send, by first-class, postage prepaid mail, to each record holder of
Common Stock as of the Close of Business on the Distribution Date, at the
address of such holder shown on the records of the Company, one or more Right
Certificates, in substantially the form attached hereto as Exhibit A (the "Right
Certificates"), evidencing one Right for each share of Common Stock so held. In
the event that an adjustment in the number of Rights per share of Common Stock
has been made pursuant to Section 11, at the time Right Certificates are
distributed, the Company may, to the extent provided in Section 14(a), make the
necessary and appropriate rounding adjustments (as set forth in Section 14(a))
so that Right Certificates are distributed representing only whole numbers of
Rights and cash is paid in lieu of fractional Rights pursuant to Section 14(a).
The Company shall give notice of such rounding adjustments to the Rights Agent
as promptly as possible. As of, and after the Distribution Date, the Rights will
be evidenced solely by such Right Certificates.
(b) Rights have been issued in respect of all shares of Common
Stock that are outstanding on the date of this Agreement and shall be issued in
respect of all shares of Common Stock that are issued after the date of this
Agreement and prior to the earlier of the Distribution Date and the Expiration
Date.
(c) Certificates for Common Stock issued after the date of
this Agreement but prior to the earlier of the Distribution Date and the
Expiration Date shall bear substantially the following legend:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in an Amended and Restated
Rights Agreement between Deluxe Corporation (the "Company")
and Norwest Bank Minnesota, National Association dated as of
January 31, 1997 (the "Rights Agreement"), the terms of which
(including restrictions on the transfer of such Rights) are
hereby incorporated herein by reference and a copy of which is
on file at the principal executive office of the Company.
Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this
certificate. The Company will mail to the holder of this
certificate a copy of the Rights Agreement, as in effect on
the date of mailing, without charge after receipt of a written
request therefor from such holder. Under certain circumstances
set forth in the Rights Agreement, Rights issued to or held by
any Person who is, was or becomes an Acquiring Person or any
Affiliate or Associate thereof (as such terms are defined in
the Rights Agreement) and any subsequent holder of such
Rights, whether currently held by or on behalf of such Person
or any subsequent holder, shall become null and void.
With respect to Common Stock certificates outstanding on the date of this
Agreement or subsequently becoming outstanding, until the earlier of the
Distribution Date and the Expiration Date, the Rights associated with the Common
Stock represented by such certificates shall be evidenced by such certificates
alone, the registered holders of Common Stock shall also be the registered
holders of the associated Rights, and the transfer of any such certificate shall
also constitute the transfer of the Rights associated with the Common Stock
represented by such certificates.
(d) Reference in this Agreement to certificates for Common
Stock include uncertificated shares of Common Stock.
Section 4. Form of Right Certificates. The Right Certificates
(and the forms of election to exercise and of assignment to be printed on the
reverse thereof) shall be in substantially the form attached hereto as Exhibit A
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. The Right
Certificates shall be in machine printable form and in a format reasonably
satisfactory to the Rights Agent. Subject to the provisions of Sections 11 and
22, the Right Certificates, whenever distributed shall show the date of
countersignature, and on their face shall entitle the holders thereof to
purchase such number of shares of Common Stock as shall be set forth therein at
the price per share set forth therein (the "Purchase Price"), but the number of
such shares and the Purchase Price thereof shall be subject to adjustment as
provided herein.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the
Company, unless otherwise determined by the Board of Directors (which other
determination shall be promptly transmitted to the Rights Agent), by its chief
executive officer, chief financial officer or any other officer of the Company,
either manually or by facsimile signature. The Right Certificates shall be
manually countersigned by an authorized signatory of the Rights Agent and shall
not be valid for any purpose unless so countersigned. In case any officer of the
Company who shall have signed or whose facsimile signature shall appear on any
of the Right Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates may, nevertheless, 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 Right Certificates had not ceased to be such officer
of the Company; and any Right Certificate may be signed on behalf of the Company
by any person who, at the actual date of the signing of such Right Certificate,
shall be a proper officer of the Company to sign such Right Certificate,
although at the date of the execution of this Agreement such person was not such
an officer. In case any authorized signatory of the Rights Agent who shall have
countersigned any of the Right Certificates shall cease to be such signatory
before delivery by the Company, such Right Certificates, nevertheless, may be
issued and delivered by the Company with the same force and effect as though the
person who countersigned such Right Certificates had not ceased to be such
signatory; and any Right Certificate may be countersigned on behalf of the
Rights Agent by any person who, at the actual date of the countersignature of
such Right Certificate, shall be a proper signatory of the Rights Agent to
countersign such Right Certificate, although at the date of the execution of
this Agreement any such person was not such a signatory.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its principal office or offices designated as the
appropriate place for surrender of Right Certificates upon exercise or transfer,
books for registration and transfer of the Right Certificates issued hereunder.
Such books shall show the names and addresses of the respective holders of the
Right Certificates, the number of Rights evidenced on its face by each of the
Right Certificates and the date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Lost, Stolen, Destroyed or Mutilated Right Certificates.
(a) Subject to the provisions of Section 7(e) and Section 14,
at any time after the Close of Business on the Distribution Date, and at or
prior to the Close of Business on the Expiration Date, any Right Certificate or
Right Certificates may be transferred, split up, combined or exchanged for
another Right Certificate or Right Certificates, evidencing a like number of
Rights and entitling the registered holder to purchase a like number of shares
of Common Stock or other securities, cash or assets, as the case may be, as the
Right Certificate or Right Certificates surrendered then evidenced and entitled
such holder (or former holder in the case of a transfer) to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any Right
Certificate or Right Certificates shall make such request in writing delivered
to the Rights Agent, and shall surrender the Right Certificate or Right
Certificates to be transferred, split up, combined or exchanged at the office or
offices of the Rights Agent designated for such purpose together with a
signature guarantee and such other and further documentation as the Rights Agent
may reasonably request. Neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the transfer of any such
surrendered Right Certificate until the registered holder shall have duly
completed and executed the form of assignment on the reverse side of such Right
Certificate and shall have provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request. The Company shall give the
Rights Agent instructions regarding the disposition of any Right Certificate the
Beneficial Owner or former Beneficial Owner of which is or was an Acquiring
Person or an Affiliate or Associate thereof. The Rights Agent shall not be
liable for issuing or refusing to issue a Right Certificate in accordance with
any instructions given to it by the Company pursuant to this Section 6. If the
Beneficial Owner or former Beneficial Owner of the Right Certificate is not or
was not an Acquiring Person or an Affiliate or Associate thereof, the Rights
Agent shall, subject to Section 7(e), countersign and deliver to the Person
entitled thereto a Right Certificate or Right Certificates, as the case may be,
as so requested. The Company may require payment from the Rights holder of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Right
Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them together with a
signature guarantee and such other and further documentation as the Rights Agent
may reasonably request, and, at the Company's or the Rights Agent'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 Right Certificate if mutilated, the Company will make and deliver a new
Right Certificate of like tenor to the Rights Agent for countersignature and
delivery to the registered owner in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights.
(a) Subject to Section 7(e), the registered holder of any
Right Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein, including, without limitation, the restrictions on
exercisability set forth in Sections 9(c) and 11(a)(iii)), in whole or in part,
at any time after the Distribution Date upon surrender of the Right Certificate,
with the form of election to exercise on the reverse side thereof duly completed
and executed, to the Rights Agent at the office or offices of the Rights Agent
designated for such purpose together with a signature guarantee and such other
and further documentation as the Rights Agent may reasonably request, and
together with payment of the Purchase Price for each share of Common Stock (or
other securities or property, as the case may be) as to which the Rights
evidenced by such Right Certificate are exercised, at or prior to the earlier of
(i) the Close of Business on January 31, 2007 (the "Final Expiration Date"), or
(ii) the time at which the Rights are redeemed as provided in Section 23 (such
earlier of the times provided in clauses (i) and (ii) being herein referred to
as the "Expiration Date").
(b) The Purchase Price for each share of Common Stock acquired
pursuant to the exercise of a Right shall initially be $150.00, shall be subject
to adjustment from time to time as provided in Sections 11 and 13 and shall be
payable in lawful money of the United States of America in accordance with
paragraph (c) below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to exercise duly completed and
executed, accompanied by payment, with respect to each Right so exercised, of
the Purchase Price for each share of Common Stock (or other securities or
property, as the case may be) to be purchased and an amount equal to any
applicable transfer tax in cash, or by certified check or bank draft payable to
the order of the Company, the Rights Agent shall, subject to Section 20(k),
thereupon promptly (i) requisition from any transfer agent of the shares of
Common Stock (or make available, if the Rights Agent is the transfer agent for
such shares) certificates for the number of shares of Common Stock to be
purchased and the Company hereby irrevocably authorizes its transfer agent to
comply with all such requests, (ii) requisition from the Company the amount of
cash to be paid in lieu of issuance of fractional shares in accordance with
Section 14, (iii) promptly after receipt of such certificates, cause the same to
be delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder in writing, and (iv) promptly after receipt thereof, deliver such cash
for fractional shares to or upon the order of the registered holder of such
Right Certificate.
(d) Subject to the provisions of Section 14, if the registered
holder of any Right Certificate shall exercise less than all the Rights
evidenced thereby, a new Right Certificate evidencing Rights equivalent to the
Rights remaining unexercised shall be issued by the Rights Agent and delivered
to the registered holder of such Right Certificate or to such holder's duly
authorized assigns.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the occurrence of an Acquisition Event, any Rights
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of an
Acquiring Person, (ii) a transferee of an Acquiring Person or an Associate or
Affiliate of an Acquiring Person who becomes a transferee after such Acquiring
Person becomes such, and (iii) a transferee of an Acquiring Person or an
Associate or Affiliate of an Acquiring Person who becomes a transferee prior to
or concurrently with such Acquiring Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether or not for consideration) from
such Acquiring Person or Associate or Affiliate to or on behalf of holders of
equity interests in such Acquiring Person or Associate or Affiliate or to any
Person with whom such Acquiring Person or Associate or Affiliate has any
continuing oral or written plan, agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which a majority of the
Continuing Directors (or, if there are no Continuing Directors, the Board of
Directors) concludes in good faith is a part of an oral or written plan,
agreement, arrangement or understanding which has as a primary purpose or effect
avoidance of this Section 7(e), shall become null and void without any further
action, and any holder of such Rights shall have no rights whatsoever with
respect to such Rights under any provision of this Agreement or otherwise. The
Company shall use all reasonable efforts to insure that the provisions of this
Section 7(e) are complied with, but shall have no liability to any holder of
Rights or other Person as a result of its failure to make any determinations
with respect to an Acquiring Person or its Affiliates or Associates or the
transferees thereof hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) duly completed and executed the form of election to
purchase set forth on the reverse side of the Right Certificate surrendered for
such exercise and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request together with a signature
guarantee and such other and further documentation as the Rights Agent may
reasonably request.
The Company shall give the Rights Agent instructions regarding
any action to be taken or omitted with respect to any Right Certificate the
Beneficial Owner or former Beneficial Owner of which is or was an Acquiring
Person or an Affiliate or Associate thereof. The Rights Agent shall not be
liable for any action taken or omitted by it in accordance with any instructions
given to it by the Company pursuant to this Section 7(f).
Section 8. Cancellation and Destruction of Right Certificates.
All Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
from time to time all cancelled Right Certificates to the Company.
Section 9. Reservation and Availability of Shares of Common
Stock.
(a) The Company will use its best efforts to cause to be
reserved and keep available, out of its authorized and unissued shares of Common
Stock, the number of shares of Common Stock that will be sufficient to permit
the exercise in full of all outstanding Rights.
(b) So long as the shares of Common Stock issuable upon the
exercise of Rights may be listed on any national securities exchange, the
Company will use its best efforts to cause, from and after such time as the
Rights become exercisable, all shares reserved for such issuance to be listed on
such exchange upon official notice of issuance upon such exercise.
(c) The Company will use its best efforts to (i) file, as soon
as practicable following the earliest date after the first occurrence of an
Acquisition Event or as soon as is required by law, as the case may be, a
registration statement under the Securities Act of 1933, as amended (the "Act"),
with respect to the Rights and the securities purchasable upon exercise of the
Rights on an appropriate form, (ii) cause such registration statement to become
effective as soon as practicable after such filing and (iii) cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Act) until 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 blue sky or securities laws of the various states. The Company may
temporarily suspend, for a period of time not to exceed 90 days, the
exercisability of the Rights in order to prepare and file any required
registration statement. Upon any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. The Company shall give written notice to the
Rights Agent of all public announcements made pursuant to the foregoing
sentence. 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.
(d) The Company will take all such action as may be necessary
to assure that all shares of Common Stock (or other securities, as the case may
be) delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such shares (subject to payment of the Purchase Price), be duly
and validly authorized and issued and fully paid and nonassessable.
(e) The Company will pay when due and payable any and all
federal and state transfer taxes and charges that may be payable in respect of
the issuance or delivery of the Right Certificates and of any certificates for
shares of Common Stock or other securities, as the case may be, upon the
exercise of Rights. The Company shall not, however, be required to pay any
transfer tax which may be payable in respect of any transfer or delivery of
Right Certificates to a Person other than, or the issuance or delivery of
certificates for shares of Common Stock or other securities, as the case may be,
in a name other than that of, the registered holder of the Right Certificate
evidencing Rights surrendered for exercise or to issue or deliver any
certificates for shares of Common Stock or other securities, as the case may be,
upon the exercise of any Right until any such tax shall have been paid (any such
tax being payable by the holder of such Right Certificate at the time of
surrender) or until it has been established to the Company's satisfaction that
no such tax is due.
Section 10. Common Stock Record Date. Each Person in whose
name any certificate for shares of Common Stock (or other securities, as the
case may be) is issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of the shares of Common Stock (or
other securities, as the case may be) represented thereby on, and such
certificate shall be dated, the date upon which the Right Certificate evidencing
such Rights was duly surrendered and payment of the applicable Purchase Price
(and any applicable transfer taxes) was made and shall show the date of
countersignature by the Rights Agent; provided, however, that if the date of
such surrender and payment is a date upon which the Common Stock (or other
securities, as the case may be) transfer books of the Company are closed, such
Person shall be deemed to have become the record holder of such shares on, and
such certificate shall be dated, the next succeeding Business Day on which such
transfer books of the Company are open. Prior to the exercise of the Rights
evidenced thereby, the holder of a Right 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 outstanding Common
Stock payable in shares of Common Stock, (B) subdivide the outstanding
Common Stock, (C) combine the outstanding Common Stock into a smaller
number of shares or (D) issue any shares of its capital stock in a
reclassification of the outstanding Common Stock (including any such
reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), except as
otherwise provided in this Section 11(a) and 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 Common Stock transfer books of the Company were open,
such holder would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs which would require an adjustment
under both this Section 11(a)(i) and Section 11(a)(ii), 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) In the event that any Person shall become an Acquiring
Person, subject to Section 7(e), proper provision shall be made so that
each holder of a Right shall thereafter have the right to receive, upon
exercise thereof at the then current Purchase Price in accordance with
the terms of this Agreement, in lieu of the number of shares of Common
Stock for which such Right was exercisable immediately prior to the
occurrence of such Acquisition Event, such number of shares of Common
Stock as shall be equal to the result obtained by (x) multiplying the
then current Purchase Price by the number of shares of Common Stock for
which a Right was exercisable immediately prior to the date that a
Person became an Acquiring Person, and dividing that product by (y) 50%
of the current market price of one share of the Common Stock
(determined pursuant to Section 11(d)) on the date of such occurrence.
(iii) In the event that there shall not be sufficient
authorized but unissued shares of Common Stock of the Company to permit
the exercise in full of the Rights, the Company shall use its best
efforts to have the shareholders of the Company take all such action as
may be necessary to authorize additional shares of Common Stock of the
Company for issuance upon exercise of the Rights. If a majority of the
Continuing Directors of the Company determine in good faith that it is
likely that sufficient additional shares of Common Stock could be
authorized for issuance upon exercise in full of the Rights, the
Company may suspend the exercisability of the Rights to the extent
necessary (but not more than 90 days for the Company to seek
shareholder approval for the authorization of such additional shares.
In the event of any suspension under this Section 11(a)(iii), the
Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as
a public announcement at the time such suspension is no longer in
effect.
(b) In the case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Common Stock entitling
them (for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Common Stock (or securities convertible into Common
Stock) at a price per share of Common Stock (or having a conversion price per
share of Common Stock, if a security convertible into Common Stock) less than
the current market price of one share of Common Stock on such record date (as
determined pursuant to Section 11(d)), the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the number of shares of Common Stock outstanding on such record date,
plus the number of shares of Common Stock which the aggregate offering price of
the total number of shares of Common Stock so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to be
offered) would purchase, at such current market price, and the denominator of
which shall be the number of shares of Common Stock outstanding on such record
date, plus the number of additional shares of Common Stock to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible). In case such subscription price may be paid
by delivery of consideration part or all of which shall be in a form other than
cash, the value of such consideration shall be as determined in good faith by a
majority of the Continuing Directors (or, if there are no Continuing Directors,
the Board of Directors), whose determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights Agent. Shares of
Common Stock owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall be
made successively whenever such a record date is fixed; and in the event that
such rights or warrants are not so issued, the Purchase Price shall be adjusted
to be the Purchase Price which would then be in effect if such record date had
not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Common Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation) of evidences of indebtedness or cash or
non-cash assets (other than (i) a regular periodic cash dividend or (ii) a
dividend payable in Common Stock, but including any dividend payable in stock
other than Common Stock) or subscription rights or warrants (excluding those
referred to in Section 11(b)), the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the current market price of one share of the Common Stock on such
record date (as determined pursuant to Section 11(d)), less the fair market
value (as determined in good faith by a majority of the Continuing Directors or,
if there are no Continuing Directors, the Board of Directors, whose
determination shall be described in a statement filed with the Rights Agent) of
the portion of the evidences of indebtedness or cash or non-cash assets so to be
distributed on, or of such subscription rights or warrants applicable to, one
share of the Common Stock, and the denominator of which shall be such current
market price of one share of the Common Stock. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be adjusted to be
the Purchase Price which would then be in effect if such record date had not
been fixed.
(d) For the purpose of any computation hereunder, the "current
market price" of one share of the Common Stock on any date shall be deemed to be
the average of the daily closing prices per share of such Common Stock for the
30 consecutive Trading Days (as such term is hereinafter defined) immediately
prior to such date; provided, however, that in the event that the current market
price of one share of the Common Stock is determined during a period following
the announcement by the issuer of such Common Stock of (i) a dividend or
distribution on such Common Stock payable in shares of such Common Stock or
securities convertible into shares of such Common Stock (other than the Rights),
or (ii) any subdivision, combination or reclassification of such Common Stock,
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
market price" per one share of such Common Stock shall be appropriately adjusted
to take into account ex-dividend trading. 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 shares of Common Stock are not listed or admitted to trading
on the New York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal
national securities exchange on which the shares of Common Stock are listed or
admitted to trading or, if the shares of Common Stock are not listed or admitted
to trading on last sale price or, if not so quoted, the average of the high bid
and low asked prices in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or
such other system then in use or, if on any such day the shares of Common Stock
are not quoted by any such organization, the average of the closing bid and
asked prices as furnished by a professional market maker making a market in the
Common Stock selected by a majority of the Continuing Directors (or, if there
are no Continuing Directors, the Board of Directors). If on any such day no
market maker is making a market in the Common Stock, the fair value of such
shares on such day as determined in good faith by a majority of the Continuing
Directors (or, if there are no Continuing Directors, the Board of Directors)
shall be used in lieu of the closing price for such day. The term "Trading Day"
shall mean a day on which the principal national securities exchange on which
the shares of Common Stock are listed or admitted to trading is open for the
transaction of business or, if the Common Stock is not listed or admitted to
trading on any national securities exchange, a Business Day. If the Common Stock
is not publicly held or not so listed or traded, the "current market price" of
one share of such Common Stock shall be deemed to be the fair value per share of
such Common Stock as determined in good faith by a majority of the Continuing
Directors (or, if there are no Continuing Directors, the Board of Directors),
whose determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes.
(e) Anything herein to the contrary notwithstanding, except
the last sentence of this Section 11(e), no adjustment in the Purchase Price
shall be required unless such adjustment would require an increase or decrease
of at least 1% in such price; provided, however, that any adjustments which by
reason of this Section 11(e) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 11 shall be made to the nearest cent or to the nearest
ten-thousandth of a share of Common Stock, as the case may be. Notwithstanding
the first sentence of this Section 11(e), any adjustment which would be required
by this Section 11, but for the first sentence of this Section 11(e), 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
11(a) or 13(a), the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of the Company other than Common
Stock, thereafter the number of such other shares so receivable upon exercise of
any Right and the Purchase Price thereof shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the shares of Common Stock contained in Sections
11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m), and the provisions of
Sections 7, 9, 10, 13 and 14 with respect to the Common Stock shall apply on
like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of shares of Common Stock
purchasable from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
shares (calculated to the nearest ten-thousandth) of Common Stock obtained by
(i) multiplying (x) the number of shares covered by a Right immediately prior to
such adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in lieu of any
adjustment in the number of shares of Common Stock issuable upon the exercise of
a Right. Each of the Rights outstanding after such adjustment in the number of
Rights shall be exercisable for the number of shares of Common Stock for which a
Right was exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that number
of rights (calculated to the nearest 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 Right Certificates have been issued, shall be at least ten days later
than the date of the public announcement. If Right Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be distributed to
holders of record of Right Certificates on such record date Right Certificates
evidencing, subject to Section 14, the additional Rights to which such holders
shall be entitled as a result of such adjustment, or, at the option of the
Company, shall cause to be distributed to such holders of record in substitution
and replacement for the Right Certificates held by such holders prior to the
date of adjustment, and upon surrender thereof, if required by the Company, new
Right djustment. Right Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein (and may bear, at
the option of the Company, the adjusted Purchase Price) and shall be registered
in the names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of shares of Common Stock issuable upon the exercise of the
Rights, the Right Certificates theretofore and thereafter issued may continue to
express the Purchase Price per share and the number of shares which were
expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the shares of
Common Stock issuable upon exercise of the Rights, the Company shall take all
corporate action, if any, which may, in the opinion of its counsel, be necessary
in order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon exercise of the Rights.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date of
the number of shares of Common Stock and other capital stock or securities of
the Company, if any, issuable upon such exercise over and above the number of
shares of Common Stock and other capital stock or securities of the Company, if
any, issuable upon such exercise on the basis of the Purchase Price in effect
prior to such adjustment; provided, however, that the Company shall deliver to
such holder a due xxxx or other appropriate instrument evidencing such holder's
right to receive such additional shares or securities (fractional or otherwise)
upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that in their sole discretion a majority of the
Continuing Directors (or, if there are no Continuing Directors, the Board of
Directors) shall determine to be advisable in order that any (i) combination or
subdivision of the Common Stock, (ii) issuance wholly for cash of any shares of
Common Stock at less than the current market price of one share of the Common
Stock, (iii) issuance wholly for cash of securities which by their terms are
convertible into or exchangeable for shares of Common Stock, (iv) stock
dividends or (v) issuance of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to holders of its Common Stock shall
not be taxable to such shareholders.
(n) The Company shall not, at any time after the Distribution
Date and prior to the Expiration Date, (i) consolidate with, (ii) merge with or
into or (iii) sell or transfer (or permit any Subsidiary to sell or transfer),
in one transaction or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or Persons (other than the Company
or its Subsidiaries) if at the time of or immediately after such consolidation,
merger or sale or transfer or such other transaction (x) there are any rights,
warrants or other instruments or securities outstanding or agreements in effect
which would substantially diminish or otherwise eliminate the benefits intended
to be afforded by the Rights or (y) with respect to a transaction of the kind
listed in Section 11(a)(ii), there are not sufficient unissued, unreserved
shares of Common Stock of the Company to permit the exercise in full of the
Rights.
(o) The Company shall not, after the Stock Acquisition Date,
except as permitted by Section 23 or 27, take (or permit any Subsidiary to take)
any action if at the time such action is taken it is reasonably foreseeable that
such action will diminish substantially or otherwise eliminate the benefits
intended to be afforded by the Rights unless such action is approved by a
majority of the Continuing Directors.
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares. Whenever an adjustment is made as provided in Sections 11 and 13, the
Company shall (a) promptly prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment and the
Purchase Price resulting from such adjustment, (b) promptly file with the Rights
Agent and with each transfer agent for the Common Stock a copy of such
certificate and (c) mail a brief summary thereof to each holder of record of a
Right Certificate (or, if prior to the Distribution Date, to each holder of
record of a certificate representing shares of Common Stock) in accordance with
Section 26. The Company shall also give prompt written notice of any suspension
of the exercisability of the Rights as well as the termination of any such
suspension to the Rights Agent. Any notice of suspension shall, if practicable,
specify the duration of such suspension. The Rights Agent shall be fully
protected in relying on the most recent of any such certificate and/or notice
which it has received and on any information therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power.
(a) In the event that, directly or indirectly,
(x) the Company shall consolidate with, or merge with
and into, any other Person (other than a Subsidiary of the
Company), 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) shall consolidate with the Company, or merge with and
into the Company, and the Company shall be the continuing or
surviving corporation of such consolidation or merger and, in
connection with such consolidation or merger, all or part of
the outstanding shares of Common Stock held by existing
shareholders of the Company 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 transaction or a series of related
transactions, assets or earning power aggregating more than
50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or Persons
(other than the Company or its Subsidiaries),
and following such event any Person is an Acquiring Person, then, and in each
such case, except as contemplated by Section 13(e), proper provision shall be
made so that: (i) each holder of a Right (except as otherwise provided herein),
shall thereafter have the right to receive, upon the exercise thereof at the
then current Purchase Price (without taking into account any adjustment
previously made pursuant to Section 11(a)(ii)) in accordance with the terms of
this Agreement, such number of validly authorized and issued, fully paid,
nonassessable and freely tradeable shares of Common Stock of the Principal Party
(as hereinafter defined), not subject to any liens, encumbrances, rights of
first refusal or other adverse claims, as shall be equal to the result obtained
by (1) multiplying the then current Purchase Price by the number of shares of
Common Stock for which a Right is exercisable (or would have been exercisable
had a Distribution Date occurred) immediately prior to the first occurrence of a
Section 13 Event and dividing that product by (2) 50% of the current market
price (determined in accordance with the method set forth in Section 11(d)) per
whole share of the Common Stock of such Principal Party on the date of
consummation of such consolidation, merger, sale or transfer; (ii) such
Principal Party shall thereafter be liable for, and shall assume, by virtue of
such consolidation, merger, sale or transfer, all the obligations and duties of
the Company pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such Principal Party, it being specifically
intended that the provisions of Section 11 shall apply to such Principal Party;
(iv) such Principal Party shall take such steps (including, but not limited to,
the reservation of a sufficient number of shares of its Common Stock in
accordance with Section 9) in connection with the consummation of any such
transaction as may be necessary to assure that the provisions of this Agreement
shall thereafter be applicable, as nearly as reasonably may be, in relation to
its shares of Common Stock thereafter deliverable upon the exercise of the
Rights; and (v) the provisions of Section 11(a)(ii) shall be of no effect
following the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in (x) or (y) of
the first sentence of Section 13(a), the Person that is the issuer of
any securities into which shares of Common Stock of the Company are
converted in such merger or consolidation, or if no securities are so
issued, the Person that is the other party to such merger or
consolidation; and
(ii) in the case of any transaction described in (z) of the
first sentence of Section 13(a), the Person that is the party receiving
the greatest portion of the assets or earning power transferred
pursuant to such transaction or transactions;
provided, however, that in any such case, (1) if the Common Stock of such Person
is not at such time and has not been continuously over the preceding 12-month
period registered under Section 12 of the Exchange Act, and such Person is a
direct or indirect Subsidiary of another Person the Common Stock of which is and
has been so registered, "Principal Party" shall refer to such other Person, and
(2) in case such Person is a Subsidiary, directly or indirectly, of more than
one Person, the Common Stocks of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest aggregate market value.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless the Principal Party shall have a sufficient
number of authorized shares of its Common Stock which have not been issued or
reserved for issuance to permit the exercise in full of the rights in accordance
with this Section 13 and unless prior thereto the Company and such Principal
Party shall have executed and delivered to the Rights Agent a supplemental
agreement providing for the terms set forth in paragraphs (a) and (b) of this
Section 13 and further providing that, as soon as practicable after the date of
any consolidation, merger, sale or transfer mentioned in paragraph (a) of this
Section 13, the Principal Party will:
(i) prepare and file a registration statement under the Act,
with respect to the Rights and the securities purchasable upon exercise
of the Rights, on an appropriate form, and use its best efforts to
cause such registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective (with a
prospectus at all times meeting the requirements of the Act) until the
earlier of (1) the date as of which the Rights are no longer
exercisable for such securities or (2) the Expiration Date; and
(ii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form
10 under the Exchange Act.
(d) The Company shall not enter into any transaction of the
kind referred to in this Section 13 if at the time of such transaction there are
any rights, warrants, instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such transaction, would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights.
(e) Notwithstanding anything in this Agreement to the
contrary, Section 13 shall not be applicable to a Section 13 Event if either (1)
(i) such Section 13 Event is consummated with a Person or Persons who acquired
Common Stock pursuant to a Permitted Offer (or a wholly owned Subsidiary of any
such Person or Persons), (ii) the price per share of Common Stock offered in
such Section 13 Event is not less than the price per share of Common Stock paid
to all holders of Common Stock whose shares were purchased pursuant to a
Permitted Offer and (iii) the form of consideration being offered to the
remaining holders of Common Stock pursuant to such Section 13 Event is the same
as the form of consideration paid pursuant to such Permitted Offer or (2) prior
to its occurrence such Section 13 Event is approved by a majority of the
Continuing Directors prior to a Change in Majority of Directors. Upon
consummation of any such transaction contemplated by this Section 13(e), all
Rights hereunder shall expire.
(f) The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. In the event
that any Section 13 Event shall occur at any time after the occurrence of a
transaction described in Section 11(a)(ii), the Rights which have not
theretofore been exercised shall thereafter become exercisable in the manner
described in Section 13(a) and shall no longer be exercisable in the manner
provided under Section 11(a)(ii).
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights, except prior to the Distribution Date, or to distribute Right
Certificates which evidence fractional Rights. The Company may, in lieu of such
fractional Rights, pay to the registered holders of the Right Certificates with
regard to which such fractional Rights would otherwise be issuable, an amount in
cash equal to the same fraction of the current market value of a whole Right.
For the purposes of this Section 14(a), the current market value of a whole
Right shall be the closing price of the Rights for the Trading Day immediately
prior to the date on which such fractional Rights would have been otherwise
issuable. The closing price for any day shall be the last sale price, regular
way, or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the 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 sale price or,
if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other system then in use
or, if on any such day 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 a majority of the
Continuing Directors (or, if there are no Continuing Directors, the Board of
Directors). If on any such day no market maker is making a market in the Rights,
the fair value of the Rights on such day as determined in good faith by a
majority of the Continuing Directors (or, if there are no Continuing Directors,
the Board of Directors) shall be used in lieu of the closing price for such day.
(b) The Company shall not be required to issue fractions of
shares of Common Stock or other capital stock upon exercise of the Rights or to
distribute certificates which evidence fractional shares. The Company may, in
lieu of such fractional shares, pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value per whole share
of such Common Stock or capital stock. For purposes of this Section 14(b), the
current market value per whole share of Common Stock or other capital stock
shall be the closing price of a share of such Common Stock or other capital
stock (as determined in accordance with the method set forth in Section 11(d))
for the Trading Day immediately prior to the date of such exercise.
(c) Every holder of Rights by accepting the Rights expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right, if cash payments are made to such holder as permitted by
this Section 14.
Section 15. Rights of Action. All rights of action in respect
of this Agreement are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, of the associated Common
Stock certificates); and any registered holder of any Right Certificate (or,
prior to the Distribution Date, of any associated Common Stock certificate),
without the consent of the Rights Agent or of any holder of a Right Certificate
(or, prior to the Distribution Date, of an associated Common Stock certificate),
may, in such holder's own behalf and for such holder's own benefit, enforce and
may institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, such holder's right to exercise the
Rights evidenced by such Right Certificate (or, prior to the Distribution Date,
the associated Common Stock certificate) in the manner provided in such Right
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of the
obligations hereunder and injunctive relief against actual or threatened
violations of the obligations of any Person subject to this Agreement.
Section 16. Agreement of Right Holders. Every holder of Rights
by accepting the Rights consents and agrees with the Company and the Rights
Agent and with every other holder of Rights that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Stock;
(b) on or after the Distribution Date, the Right Certificates
are transferable only on the registry books of the Rights Agent if
surrendered at the office or offices of the Rights Agent designated for
such purposes, duly endorsed or accompanied by a proper instrument of
transfer together with a signature guarantee and such other and further
documentation as the Rights Agent may reasonably request; and
(c) subject to Sections 6(a) and 7(f), the Company and the
Rights Agent may deem and treat the Person in whose name the Right
Certificate (or, prior to the Distribution Date, the associated Common
Stock certificate) is registered as the absolute owner thereof and of
the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated Common
Stock 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.
Notwithstanding anything in this Agreement or the Rights to the contrary, the
Company, the Rights Agent, the Board of Directors and the Continuing Directors
shall not have any liability to any holder of a Right or other Person as a
result of the inability of the Company or the Rights Agent to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority prohibiting or otherwise restraining
performance of such obligation; provided, however, that the Company shall use
its best efforts to have any such order, decree or ruling lifted, dissolved or
overturned at the earliest possible time.
Section 17. Right Certificate Holder Not Deemed a Shareholder.
No holder, as such, of any Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of shares of Common
Stock or any other securities of the Company which may at any time be issuable
on the exercise of the Rights represented thereby, nor shall anything contained
herein or in any Right Certificate be construed to confer upon the holder of any
Right Certificate, as such, any of the rights of a shareholder of the Company or
any right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 25), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by such
Right Certificate shall have been exercised in accordance with the provisions of
this Agreement.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
disbursements and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the acceptance
and administration of this Agreement, including, without limitation, attorneys'
fees and expenses and any other costs and expenses of defending against any
claim of such liability.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any Right
Certificate or certificate for Common Stock or for other securities of the
Company, instruction, adjustment or suspension notice, instrument of assignment
or transfer, power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement or other paper or document believed
by it to be genuine and to be signed, executed and, where necessary, verified or
acknowledged by the proper person or persons.
In addition to the foregoing, the Rights Agent shall be
protected and shall incur no liability for, or in respect of, any action taken
or omitted by it in connection with its administration of this Agreement in
reliance upon (i) the proper execution of the certification concerning
beneficial ownership contained in the Form of Assignment and in the Form of
Election to Exercise included as part of Exhibit A hereto (the "Certification"),
unless the Rights Agent shall have actual knowledge that, as executed, the
Certification is untrue or (ii) the non-execution or failure to complete the
Certification including, without limitation, any refusal to honor any otherwise
permissible assignment or election by reason of such non-execution or failure.
Section 19. Merger, Consolidation or Change of Name of Rights
Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto; provided, however, that such corporation would be
eligible for appointment as a successor Rights Agent under the provisions of
Section 21. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so countersigned; and in
case at that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right Certificates either
in its prior name or in its changed name; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in
this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Right Certificates (or, prior to the Distribution Date, the associated Common
Stock certificates), by their acceptance of the Rights, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel
shall be full and complete authorization and protection to the Rights
Agent as to any action taken or omitted by it in good faith and in
accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that
any fact or matter (including, without limitation, the identity of any
Acquiring Person and the determination of the "current per share market
price") be proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a certificate
signed by any one of the Chairman of the Board, the Chief Executive
Officer, the President, any Vice President, the Secretary or the
Treasurer of the Company and delivered to the Rights Agent; and such
certificate shall be full and complete authorization and protection to
the Rights Agent for any action taken or suffered in good faith by it
under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith or willful misconduct, and the issuance or
non-issuance of a Right Certificate in accordance with instructions
given to the Rights Agent by the Company pursuant to Section 6(a) or
Section 7(f) shall not constitute 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 Right Certificates or be required to verify the same (except
as to its countersignature thereof), 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 Right Certificate (except
its countersignature thereof); nor shall it be responsible for any
breach by the Company of any covenant or condition contained in this
Agreement or in any Right Certificate; nor shall it be responsible for
any adjustment required under the provisions of Section 11 or 13 or
responsible for the manner, method or amount of any such adjustment or
the ascertaining of the existence of facts that would require any such
adjustment (except with respect to the exercise of Rights evidenced by
Right Certificates after actual notice of any such adjustment); nor
shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of Common
Stock of the Company or any other Person to be issued pursuant to this
Agreement or any Right Certificate or as to whether any shares of
Common Stock of the Company or any other Person will, when so issued,
be validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts, instruments
and assurances as may reasonably be required by the Rights Agent for
the carrying out or performing by the Rights Agent of the provisions of
this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from any one of the Chairman of the Board, the Chief
Executive Officer, the President, any Vice President, the Secretary or
the Treasurer of the Company, and to apply to such officers for advice
or instructions in connection with its duties, and it shall not be
liable for any action taken or suffered in good faith by it in
accordance with instructions of any such officer. At any time the
Rights Agent may apply to the Company for written instructions with
respect to any matter arising in connection with the Rights Agent's
duties and obligations under this Agreement. Such application by the
Rights Agent may, at the Rights Agent's option, set forth in writing
any action proposed to be taken or omitted by the Rights Agent with
respect to its duties or obligations under this Agreement and the date
on and/or after which such action shall be taken or omitted in
accordance with a proposal included in any such application on or after
the date specified therein, which date shall not be less than (3)
business days after the Company receives such application, without
consent, unless, prior to taking or omitting any such action, the
Rights Agent has received written instructions in response to such
application specifying the action to be taken or omitted.
(h) The Rights Agent and any shareholder, 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 or its Subsidiaries may be
interested, or contract with or lend money to the Company or its
Subsidiaries 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 its
Subsidiaries or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the Rights
Agent shall not be answerable or accountable for any act, default,
neglect or misconduct of any such attorneys or agents or for any loss
to the Company resulting from any such act, default, neglect or
misconduct; provided, however, that reasonable care was exercised in
the selection thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of its rights or powers if there shall be reasonable grounds
for believing that repayment of such funds or adequate indemnification
against such risk or liability is not reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered to
the Rights Agent for exercise of transfer, the form of assignment or
form of election to purchase, as the case may be, has either not been
duly completed and executed or indicates an affirmative response to
enumerated clause 1 and/or 2 of such Right Certificate, the Rights
Agent shall not take any further action with respect to such requested
exercise of transfer without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Stock by registered or certified mail, and to the
registered holders of the Right Certificates (or, prior to the Distribution
Date, the associated Common Stock certificates) by first-class mail. The Company
may remove the Rights Agent or any successor Rights Agent upon 30 days' notice
in writing, mailed to the Rights Agent or successor Rights Agent, as the case
may be, and to each transfer agent of the Common Stock by registered or
certified mail, and if such removal occurs on or after the Distribution Date to
the registered holders of the Right Certificates by first-class mail. If the
Rights Agent shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights Agent. 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 registered holder of a Right Certificate (or, prior to the Distribution
Date, the associated Common Stock certificate) who shall, with such notice,
submit such holder's Right Certificate (or, prior to the Distribution Date, the
associated Common Stock certificate) for inspection by the Company, then the
Rights Agent or the registered holder 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
of the State of Minnesota or New York (or of any other state of the United
States so long as such corporation is authorized to do business as a banking
institution in the State of Minnesota or New York), in good standing, having an
office in the State of Minnesota or New York which is authorized under such laws
to exercise corporate trust 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 $5 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 all property at the time held
by it hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose of such delivery and transference. Not later
than the effective date of any such appointment the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock, and if such effective date is on or after the Distribution
Date, mail a notice thereof in writing to the registered holders of the Right
Certificates. Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights to the
contrary, the Company may: (a) at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the Purchase Price and the number or kind or
class of shares or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this Agreement; and (b)
if deemed necessary or appropriate by the Board of Directors, issue Right
Certificates representing the appropriate number of Rights in connection with
the sale or issuance (including upon exercise of any stock option or under any
employee plan or arrangement, or upon the exercise, conversion or exchange of
securities hereinafter issued by the Company) of shares of Common Stock
following the Distribution Date and prior to the Expiration Date; provided,
however, that (i) no such Right Certificate shall be issued if, and to the
extent that, the Company shall be advised by counsel that such issuance would
create a significant risk of material adverse tax consequences to the Company or
the Person to whom such Right Certificate would be issued, and (ii) no such
Right Certificate shall be issued if, and to the extent that, appropriate
adjustment shall otherwise have been made in lieu of the issuance thereof.
Section 23. Redemption.
(a) The Board of Directors may, at its option, at any time
prior to the earlier of the Close of Business (i) on the Stock Acquisition Date
or (ii) on the Final Expiration Date, redeem all but not less than all of the
then outstanding Rights at a redemption price of $.01 per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date of this Agreement (such redemption price being
hereinafter referred to as the "Redemption Price"); provided, however, that upon
a Change in Majority of Directors, no such redemption shall be made until 180
days after a Change in Majority of Directors. The Board of Directors and the
Company shall not have any liability to any Person as a result of the redemption
of Rights pursuant to the terms hereof.
(b) Immediately upon the action of the Board of Directors of
the Company redeeming the Rights pursuant to Section 23(a), evidence of which
shall have been filed with the Rights Agent, and without any further action and
without any notice, the right to exercise the Rights will terminate and the only
right thereafter of the holders of Rights shall be to receive the Redemption
Price for each Right so held. Promptly after the action of the Board of
Directors, redeeming the Rights pursuant to Section 23(a), the Company shall
give notice of such redemption to the Rights Agent and the registered holders of
the then outstanding Rights by mailing such notice to all such holders at their
last addresses as they appear upon the registry books of the Company maintained
by the Company, the Rights Agent or the transfer agent for the Common Stock, as
the case may be. 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.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its option,
at any time after any Person becomes an Acquiring Person, exchange all or part
of the then outstanding and exercisable Rights (which shall not include Rights
that have become void pursuant to the provisions of Section 11(a)(ii)) for
shares of Common Stock at an exchange ratio of one share of Common Stock per
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date of this Agreement (such exchange
ratio being hereinafter referred to as the "Exchange Ratio"). Notwithstanding
the foregoing, the Board of Directors shall not be empowered to effect such
exchange at any time after any Person (other than an Exempt Person), together
with all Affiliates and Associates of such Person, becomes the Beneficial Owner
of 50% or more of the shares of Common Stock then outstanding.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the exchange of any Rights pursuant to paragraph (a) of
this Section 24 and without any further action and without any notice, the right
to exercise such Rights shall terminate and the only right thereafter of a
holder of such Rights shall be to receive that number of shares of Common Stock
equal to the number of such Rights held by such holder multiplied by the
Exchange Ratio. The Company shall promptly give public notice of any such
exchange; 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 shares of Common Stock for Rights
will be effected and, in the event of any partial exchange, the number of Rights
which will be exchanged. Any partial exchange shall be effected pro rata based
on the number of Rights (other than Rights which have become void pursuant to
the provisions of Section 7(e)) held by each holder of Rights.
(c) In the event that there shall not be sufficient shares of
Common Stock issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 24, the
Company shall take all such action as may be necessary to authorize additional
shares of Common Stock for issuance upon exchange of the Rights.
(d) The Company shall not be required to issue fractions of
shares of Common Stock or to distribute certificates which evidence fractional
shares of Common Stock. In lieu of such fractional shares of Common Stock, the
Company shall pay to the registered holders of the Right Certificates with
regard to which such fractional shares of Common Stock would otherwise be
issuable an amount in cash equal to the same fraction of the current market
value of a whole Common Share. For the purposes of this paragraph (d), the
current market value of a share of Common Stock shall be the closing price of a
share of Common Stock (as determined pursuant to the second sentence of Section
11(d)(i)) for the Trading Day immediately prior to the date of exchange pursuant
to this Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class (other
than Common Stock) to the holders of Common Stock or to make any other
distribution to the holders of Common Stock (other than a regular periodic cash
dividend), (ii) to offer to the holders of Common Stock rights or warrants to
subscribe for or to purchase any additional Common Stock or shares of stock of
any class or any other securities, rights or options, (iii) to effect any
reclassification of its Common Stock (other than a reclassification involving
only the subdivision of outstanding shares of Common Stock), (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 a series of related transactions, of more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to, any other Person or Persons, other than a merger in which the Company is the
surviving corporation and no vote of shareholders of the Company is required to
consummate the merger or (v) to effect the liquidation, dissolution or winding
up of the Company, then, in each such case, the Company shall give to each
registered holder of a Right Certificate and the Rights Agent to the extent
feasible and in accordance with Section 26, a notice of such proposed action,
which shall specify the record date for the purposes of such stock dividend,
distribution of rights or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution or winding up is
to take place and the date of participation therein by the holders of shares of
the Common Stock, if any such date is to be fixed, and such notice shall be so
given in the case of any action covered by clause (i) or (ii) above at least 20
days prior to the record date for determining holders of the shares of Common
Stock 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 shares of Common Stock,
whichever shall be the earlier.
(b) In case any Acquisition Event shall occur, then, in any
such case, the Company shall as soon as practicable thereafter give to each
registered holder of a Right Certificate and the Rights Agent, to the extent
feasible and in accordance with Section 26, a notice of the occurrence of such
event, which shall specify the event and the consequences of the event to
holders of Rights under Section 11(a)(ii).
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any Right
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:
Deluxe Corporation
X.X. Xxx 00000
Xxxxx Xxxx, Xxxxxxxxx 00000-0000
Attention: General Counsel
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Right
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:
Norwest Bank Minnesota, National Association
Shareowner Services
000 Xxxxx Xxxxxxx Xxxxxxxx
Xxxxx Xx. Xxxx, Xxxxxxxxx 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 Right Certificate (or, prior to
the Distribution Date, the associated Common Stock certificate) shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company maintained by the Company, the Rights Agent or the transfer
agent for the Common Stock, as the case may be.
Section 27. Supplements and Amendments. The Company and the
Rights Agent shall from time to time, if the Company so directs, supplement or
amend this Agreement without the approval of any holders of Right Certificates
(or, prior to the Distribution Date, the associated Common Stock certificates)
in order (i) to cure any ambiguity herein, (ii) to correct or supplement any
provision herein which may be defective or inconsistent with any other provision
herein, (iii) to extend the period of redemption provided for in Section 23 or
the Final Expiration Date, notwithstanding anything to the contrary provided in
clause (v), (iv) prior to the Distribution Date, to otherwise amend or
supplement any provision herein in any manner which the Company may deem
necessary or desirable to effectuate the purposes of this Agreement or (v)
following the Distribution Date, to otherwise amend or supplement any provision
herein in any manner which the Company may deem necessary or desirable and which
shall not adversely affect the interests of the holders of Right Certificates
(other than an Acquiring Person or any Affiliate or Associate thereof);
provided, however, that this Agreement may not be supplemented or amended in any
way (other than pursuant to clauses (i) and (ii) above) at any time (x) after
there is an Acquisition Event or (y) during the period beginning on a Change in
Majority of Directors and ending 180 days thereafter, without the consent of a
majority of the Continuing Directors and provided, further, that this Agreement
may not be supplemented or amended to lengthen, pursuant to clause (iii) of this
sentence, a period relating to when the Rights may be redeemed if at the time of
such supplement or amendment, the Rights are not redeemable. Upon the delivery
of a certificate from an appropriate officer of the Company which states that
the proposed supplement or amendment is in compliance with the terms of this
Section 27, the Rights Agent shall execute such supplement or amendment unless
the Rights Agent shall have determined in good faith that such supplement or
amendment would adversely affect its interests under this Agreement. Prior to
the Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Stock.
Section 28. Successors. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 29. 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 Right Certificates (and, prior to
the Distribution Date, the associated Common Stock certificates) 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 Right Certificates (and, prior to the Distribution
Date, the associated Common Stock certificates).
Section 30. Administration and Interpretation by Directors.
The Board of Directors (and/or, as provided for herein, the Continuing
Directors) shall have the exclusive power and authority to administer this
Agreement and to exercise all rights and powers specifically granted to the
Board of Directors or the Company (and/or, as provided herein, a majority of the
Continuing Directors, as the case may be) or necessary or advisable in the
administration of this Agreement, including, without limitation, the right and
power to interpret this Agreement and to make all determinations deemed
necessary or advisable for the administration of this Agreement. Any action
which, pursuant to this Agreement, may not be taken without the consent,
approval or determination of a majority of Continuing Directors may not be taken
if the Company, at the time of the proposed action, has no Continuing Directors.
All such acts, interpretations and determinations done or made by the Board of
Directors and/or a majority of the Continuing Directors in good faith shall be
final, conclusive and binding on the Company, the Rights Agent and the holders
of the Rights. Accordingly, the Board of Directors and the Continuing Directors,
as the case may be, shall not be liable to the holders of the Rights or any
other party for any determination made, action taken or action omitted to be
taken pursuant to the terms of this Agreement, if such determination, action or
omitted action was made or taken or omitted in good faith.
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement or the Rights
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 (together with a majority of the Continuing Directors if at such time
the Company has, or at any time prior thereto had, an Acquiring Person)
determines in its, or their, good faith judgment that severing the invalid
language from this Agreement would adversely affect the purpose or effect of
this Agreement, the right of redemption set forth in Section 23 shall be
reinstated and shall not expire until the Close of Business on the fifteenth day
following the date of such determination.
Section 32. Governing Law. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Minnesota 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; provided, however, the rights
and obligations of the Rights Agent hereunder shall be governed by the laws of
the State of Minnesota.
Section 33. Counterparts. This Agreement may be executed in
any number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Amended and Restated Agreement to be duly executed as of the day and year first
above written.
DELUXE CORPORATION
By /s/Xxxx X. Xxxxxxxxx, III
--------------------------------------
Its Chief Executive Officer, President
and Chairman of the Board
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
AS RIGHTS AGENT
By /s/ Xxxxxxx X. Xxxxx
--------------------------------------
Its Assistant Vice President
Exhibit A
[Form of Right Certificate]
Certificate No. R- _________________ Rights
NOT EXERCISABLE AFTER JANUARY 31, 2007 OR EARLIER IF REDEEMED
BY THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF THE COMPANY, AT $.01 PER RIGHT ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES SET
FORTH IN THE RIGHTS AGREEMENT, RIGHTS ISSUED TO OR HELD BY ANY
ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING
PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT)
BECOME VOID.
Right Certificate
DELUXE CORPORATION
This certifies that ____________________, or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Amended and Restated Rights Agreement dated as of January 31,
1997 (the "Rights Agreement") between Deluxe Corporation, a Minnesota
corporation (the "Company"), and Norwest Bank Minnesota, National Association
(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. (Minneapolis, Minnesota time) on January 31, 2007, at the office or
offices of the Rights Agent designated for such purpose, or its successors as
Rights Agent, one fully paid, nonassessable share of the Common Stock (the
"Common Stock") of the Company, at a purchase price of $150.00 (the "Purchase
Price"), upon presentation and surrender of this Right Certificate with the Form
of Election to Exercise duly completed and executed. The number of Rights
evidenced by this Right Certificate (and the number of shares which may be
purchased upon exercise thereof) set forth above, and the Purchase Price per
share set forth above, are, except for adjustments required pursuant to the
Rights Agreement, the number and Purchase Price as of ____________ , based on
the Common Stock as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and
the number of shares of Common Stock which may be purchased upon the exercise of
the Rights evidenced by this Right Certificate are subject to modification and
adjustment upon the happening of certain events, including Acquisition Events.
This Right 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 Right Certificates.
Copies of the Rights Agreement are on file at the principal executive offices of
the Company and are also available upon written request to the Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the office or offices of the Rights Agent
designated for such purpose together with a signature guarantee and such other
and further documentation as the Rights Agent may reasonably request, may be
exchanged for another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder to purchase a like aggregate number
of shares of Common Stock as the Rights evidenced by the Right Certificate or
Right Certificates surrendered shall have entitled such holder to purchase. If
this Right Certificate shall be exercised in part, the holder shall be entitled
to receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Right Certificate may be redeemed by the Company at its option
at a redemption price of $.01 per Right (subject to adjustment in certain
circumstances).
No fractional shares of Common Stock will be issued upon the
exercise of any Right or Rights evidenced hereby, if in lieu thereof a cash
payment is made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder of
shares of the Common Stock or of any other securities of the Company which may
at any time be issuable on the exercise hereof, nor shall anything contained in
the Rights Agreement or herein be construed to confer upon the holder hereof, as
such, any of the rights of a shareholder of the Company or any right to vote for
the election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
WITNESS the manual or facsimile signature of the proper
officer of the Company.
Dated: ________________
ATTEST: DELUXE CORPORATION
___________________________________ By _____________________________________
Title Title:
Countersigned:
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
By _______________________________
Authorized Signature
Dated: ________________________________
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate)
FOR VALUE RECEIVED___________________________________________
hereby sells, assigns and transfers unto_______________________________________
_______________________________________________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint _______________ Attorney, to
transfer the within Right Certificate on the books of the within-named Company,
with full power of substitution.
The undersigned hereby certifies (after due inquiry and to the
best of its knowledge) by checking the appropriate boxes that:
(1) this Right Certificate
[ ] is
or
[ ] is not
being sold, assigned and transferred by or on behalf of a Person who is or was
an Acquiring Person or an Affiliate or Associate of an Acquiring Person (as such
terms are defined in the Rights Agreement); and
(2) the undersigned
[ ] did
or
[ ] did not
acquire the Rights evidenced by this Right Certificate from any Person who is,
was or subsequently became an Acquiring Person or an Affiliate or Associate of
an Acquiring Person.
Dated: ___________________ ___________________________________
Signature
Signature Guaranteed: (Signature must conform in all
Signatures must be guaranteed respects to name of holder as
by an eligible guarantor institution specified on the face of this
(banks, stockbrokers, savings and loan Right Certificate)
associations and credit unions with
membership in an approved signature
guarantee Medallion program), pursuant
to SEC Rule 17Ad-15.
FORM OF ELECTION TO EXERCISE
(To be executed if holder desires to exercise
Rights represented by the Right Certificate)
To DELUXE CORPORATION:
The undersigned hereby irrevocably elects to exercise ________
_____________________________ Rights represented by this Right Certificate
to purchase the shares of Common Stock issuable upon the exercise of such Rights
(or such other securities of the Company or of any other Person which may be
issuable upon exercise of the Rights) and requests that certificates for such
shares be issued in the name of:
Please insert social security
or other taxpayer identifying number: _______________________
________________________________________________________________________________
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other taxpayer identifying number: _______________________
________________________________________________________________________________
(Please print name and address)
The undersigned hereby certifies (after due inquiry and to the
best of its knowledge) by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate
[ ] are
or
[ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of an Acquiring Person (as such terms are defined in
the Rights Agreement); and
(2) the undersigned
[ ] did
or
[ ] did not
acquire the Rights evidenced by this Right Certificate from any Person who is,
was or subsequently became an Acquiring Person or an Affiliate or Associate of
an Acquiring Person.
Dated: ____________________
_______________________________________
Signature
(Signature must conform in all
respects to name of holder as specified
on the face of this Right Certificate)
Signature Guaranteed:
Signatures must be guaranteed
by an eligible guarantor institution
(banks, stockbrokers, savings and loan
associations and credit unions with
membership in an approved signature
guarantee Medallion program), pursuant
to SEC Rule 17Ad-15.
