Exhibit 4.1
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AGREEMENT
by and between
UNITED STATIONERS INC.
and
BANKBOSTON, N.A.,
as Rights Agent
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Dated as of
July 27, 1999
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TABLE OF CONTENTS
SECTION PAGE
Section 1. Certain Definitions.................................................................. 2
Section 2. Appointment of Rights Agent.......................................................... 9
Section 3. Issuance of Right Certificates.......................................................10
Section 4. Form of Right Certificates...........................................................13
Section 5. Countersignature and Registration....................................................13
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates.......................................................................14
Section 7. Exercise of Rights; Exercise Price; Expiration Date of Rights........................16
Section 8. Cancellation and Destruction of Right Certificates...................................20
Section 9. Reservation and Availability of Shares of Preferred Stock............................21
Section 10. Preferred Stock Record Date..........................................................23
Section 11. Adjustment of Exercise Price or Number of Shares.....................................23
Section 12. Certification of Adjusted Exercise Price or Number of Shares.........................33
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power..............................................................................34
Section 14. Fractional Rights and Fractional Shares..............................................41
Section 15. Rights of Action.....................................................................42
Section 16. Agreement of Right Holders...........................................................43
Section 17. Right Certificate Holder Not Deemed a Stockholder....................................44
Section 18. Concerning the Rights Agent..........................................................45
Section 19. Merger or Consolidation of, or Change in Name of, the Rights
Agent..............................................................................45
Section 20. Duties of Rights Agent...............................................................47
Section 21. Change of Rights Agent...............................................................50
Section 22. Issuance of New Right Certificates...................................................52
Section 23. Redemption...........................................................................53
Section 24. Notice of Proposed Actions...........................................................54
Section 25. Notices..............................................................................55
Section 26. Supplements and Amendments...........................................................56
Section 27. Exchange.............................................................................57
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TABLE OF CONTENTS
(Continued)
SECTION PAGE
Section 28. Successors...........................................................................59
Section 29. Benefits of this Agreement...........................................................59
Section 30. Delaware Contract....................................................................60
Section 31. Counterparts.........................................................................60
Section 32. Descriptive Headings.................................................................60
Section 33. Severability.........................................................................60
Section 34. Determinations and Actions by the Board of Directors.................................60
Exhibit A -- Summary of Rights
Exhibit B -- Form of Right Certificate
Exhibit C -- Form of Certificate of Designations
of Series A Junior Preferred Stock
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AGREEMENT
Agreement, dated as of July 27, 1999, by and between United Stationers
Inc., a
Delaware corporation (the "Company"), and BANKBOSTON, N.A., a national
banking association (the "Rights Agent").
W I T N E S S E T H :
WHEREAS, on July 27, 1999, the Board of Directors of the Company authorized
the issuance of, and declared a dividend payable in, one right (a "Right") for
each share of Common Stock, $0.10 par value per share, of the Company
outstanding as of the close of business on August 16, 1999 (the "Record Date"),
each such Right representing the right to purchase one one-thousandth of a share
of Series A Junior Preferred Stock of the Company ("Preferred Stock") having the
rights and preferences set forth in the form of Certificate of Designations
attached hereto as Exhibit C authorized by the Board of Directors on July 27,
1999, upon the terms and subject to the conditions hereinafter set forth; and
WHEREAS, the Board of Directors of the Company further authorized the
issuance of one Right (subject to adjustment) with respect to each share of
Common Stock which may be issued between the Record Date and the earlier to
occur of the Distribution Date, the Expiration Date or the Final Expiration Date
(as such terms are hereinafter defined); PROVIDED, HOWEVER, that Rights may be
issued with respect to shares of Common Stock that shall become outstanding
after the Distribution Date and prior to the Expiration Date in accordance with
Section 22.
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 shall have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is hereinafter
defined) who or which, together with all Affiliates (as such term is hereinafter
defined) and Associates (as such term is hereinafter defined) of such Person,
shall be the Beneficial Owner (as such term is hereinafter defined) of 15% or
more of the Voting Stock (as such term is hereinafter defined) of the Company
then outstanding; provided, that, an Acquiring Person shall not include (i) an
Exempt Person (as such term is hereinafter defined) or (ii) any Person who or
which, together with all Affiliates and Associates of such Person, would be an
Acquiring Person solely by reason of (A) being the Beneficial Owner of shares of
Voting Stock of the Company, the Beneficial Ownership of which was acquired by
such Person (together with all Affiliates and Associates of such Person)
pursuant to any action or transaction or series of related actions or
transactions approved by the Board of Directors before such Person (together
with all Affiliates and Associates of such Person) otherwise became an Acquiring
Person or (B) a reduction in the number of issued and outstanding shares of
Voting Stock of the Company pursuant to a transaction or a series of related
transactions approved by the Board of Directors of the Company; provided,
further, that in the event such Person described in this clause (ii) does not
become an Acquiring Person by reason of subclause (A) or (B) of this clause
(ii), such Person nonetheless shall become an Acquiring Person in the event such
Person (together with all Affiliates and Associates of such Person) thereafter
acquires Beneficial Ownership
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of an additional 1% of the Voting Stock of the Company, unless the acquisition
of such additional Voting Stock would not result in such Person becoming an
Acquiring Person by reason of subclause (A) or (B) of this clause (ii).
Notwithstanding the foregoing, if the Board of Directors of the Company
determines in good faith that a Person who would otherwise be an "Acquiring
Person" as defined pursuant to the foregoing provisions of this paragraph (a)
has become such inadvertently, and such Person divests as promptly as
practicable (as determined in good faith by the Board of Directors) a sufficient
number of shares of Common Stock so that such Person would no longer be an
"Acquiring Person" as defined pursuant to the foregoing provisions of this
paragraph (a), then such Person shall not be deemed an "Acquiring Person" for
any purposes of this Agreement.
(b) "Affiliate" shall have the meaning ascribed to such term in Rule 12b-2
of the General Rules and Regulations under the Securities Exchange Act of 1934,
as amended ("Exchange Act"), as in effect on the date of this Agreement.
(c) "Associate" of a Person shall mean (i) with respect to a corporation,
any officer or director thereof or of any Subsidiary (as such term is
hereinafter defined) thereof, or any Beneficial Owner of 10% or more of any
class of equity security thereof, (ii) with respect to an association, any
officer or director thereof or of a Subsidiary thereof, (iii) with respect to a
partnership, any general partner thereof or any limited partner thereof who is,
directly or indirectly, the Beneficial Owner of a 10% ownership interest
therein, (iv) with respect to a business trust, any officer or trustee thereof
or of any Subsidiary thereof, (v) with respect to any other trust or an estate,
any trustee, executor or similar fiduciary or any Person who has a 15% or
greater interest as a beneficiary in the income from or principal of such trust
or estate, (vi) with respect to a natural person, any relative
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or spouse of such person, or any relative of such spouse, who has the same home
as such person, and (vii) any Affiliate of such Person.
(d) A person shall be deemed the "Beneficial Owner" of, or to "Beneficially
Own," any securities (and correlative terms shall have correlative meanings):
(i) which such Person or any of such Person's Affiliates or Associates
beneficially owns, directly or indirectly, for purposes of Section 13(d) of
the Exchange Act and Regulations 13D and 13G thereunder (or any comparable
or successor law or regulation), in each case as in effect on the date
hereof; or
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time or the fulfillment of a
condition or both) pursuant to any agreement, arrangement or understanding,
or upon the exercise of conversion rights, exchange rights, other rights
(other than the Rights), warrants or options, or otherwise; PROVIDED,
HOWEVER, that a Person shall not be deemed the "Beneficial Owner" of, or to
"Beneficially Own," securities tendered pursuant to a tender or exchange
offer made by such Person or any of such Person's Affiliates or Associates
until such tendered securities are accepted for purchase or exchange or (B)
the right to vote, alone or in concert with others, 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
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agreement, arrangement or understanding to vote such security (1) arises
solely from a revocable proxy or consent given in response to a proxy or
consent solicitation made pursuant to, and in accordance with, the
applicable rules and regulations under the Exchange Act and (2) is not at
the time reportable by such Person on a Schedule 13D or Schedule 13G report
under the Exchange Act (or any comparable or successor report), other than
by reference to a proxy or consent solicitation being conducted by such
Person; or
(iii) which are beneficially owned, directly or indirectly, by any
other Person with which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding (whether or not
in writing) for the purpose of acquiring, holding, voting (except as
described in clause (B) of subparagraph (ii) of this paragraph (d)) or
disposing of any securities of the Company; PROVIDED, HOWEVER, that for
purposes of determining Beneficial Ownership of securities under this
Agreement, officers and directors of the Company solely by reason of their
status as such shall not constitute a group (notwithstanding that they may
be Associates of one another or may be deemed to constitute a group for
purposes of Section 13(d) the Exchange Act) and shall not be deemed to own
shares owned by another officer or director of the Company.
Notwithstanding anything in this paragraph (d) to the contrary, a Person
engaged in the business of underwriting securities shall not be deemed the
"Beneficial Owner" of, or to "Beneficially Own," any securities acquired or
otherwise beneficially
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owned in good faith in a firm commitment underwriting until the expiration of
forty (40) days after the date of the sale of securities to the public pursuant
to such firm commitment underwriting.
(e) "Business Day" shall mean any day other than a Saturday, Sunday, or a
day on which banking institutions in The Commonwealth of Massachusetts are
authorized or obligated by law or executive order to close.
(f) "Close of Business" on any given date shall mean 5:00 P.M., Eastern
time, on such date; PROVIDED, HOWEVER, that if such date is not a Business Day
it shall mean 5:00 P.M., Eastern time, on the next succeeding Business Day.
(g) "Common Stock" when used with reference to the Company shall
collectively mean the Common Stock, $0.10 par value, of the Company. "Common
Stock" when used with reference to any Person other than the Company which shall
be organized in corporate form shall mean the capital stock or other equity
security with the greatest per share voting power of such Person. "Common Stock"
when used with reference to any Person other than the Company which shall not be
organized in corporate form shall mean units of beneficial interest which shall
represent the right to participate in profits, losses, deductions and credits of
such Person and which shall be entitled to exercise the greatest voting power
per unit of such Person.
(h) "Distribution Date" shall have the meaning set forth in Section 3(b)
hereof.
(i) "Exchange Act" shall have the meaning set forth in Section 1(b) hereof.
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(j) "Exchange Consideration" shall have the meaning set forth in Section 27
hereof.
(k) "Exempt Person" shall mean (i) the Company, (ii) any Subsidiary of the
Company, or (iii) any employee benefit plan or employee stock plan of the
Company or any Subsidiary of the Company, or any trust or other entity
organized, appointed, established or holding Voting Stock for or pursuant to the
terms of any such plan.
(l) "Exercise Price" shall have the meaning set forth in Section 4 hereof.
(m) "Expiration Date" shall have the meaning set forth in Section 7(a)
hereof.
(n) "Fair Market Value" of any property shall mean the fair market value of
such property as determined in accordance with Section 11(b) hereof.
(o) "Final Expiration Date" shall have the meaning set forth in Section
7(a) hereof.
(p) "Person" shall mean any individual, firm, corporation or other entity.
(q) "Principal Party" shall have the meaning set forth in Section 13(b)
hereof.
(r) "Redemption Price" shall have the meaning set forth in Section 23(a)
hereof.
(s) "Right Certificate" shall have the meaning set forth in Section 3(d)
hereof.
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(t) "Spread" shall mean the excess of (1) the value of the shares of
Preferred Stock issuable upon the exercise of a Right in accordance with Section
11(a)(ii) over (2) the Exercise Price in effect at the time of determination of
the Spread.
(u) "Stock Acquisition Date" shall mean the first date on which there shall
be a public announcement by the Company or an Acquiring Person that an Acquiring
Person has become such (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) of the Exchange
Act) or such earlier date as a majority of the Board of Directors of the Company
shall become aware of the existence of an Acquiring Person.
(v) "Subsidiary" of a Person shall mean any corporation or other entity of
which securities or other ownership interests having voting power sufficient to
elect a majority of the board of directors or other persons performing similar
functions are beneficially owned, directly or indirectly, by such Person or by
any corporation or other entity that is otherwise controlled by such Person.
(w) "Summary of Rights" shall have the meaning set forth in Section 3(a)
hereof.
(x) "Trading Day" shall have the meaning set forth in Section 11(b) hereof.
(y) "Transfer Tax" shall mean any tax or charge, including any documentary
stamp tax, imposed or collected by any governmental or regulatory authority in
respect of any transfer of any security, instrument or right, including the
Rights, shares of the Common Stock and shares of the Preferred Stock.
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(z) "Voting Stock" shall mean (i) the Common Stock of the Company and (ii)
any other shares of capital stock of the Company entitled to vote generally in
the election of directors or entitled to vote together with the Common Stock in
respect of any merger, consolidation, sale of all or substantially all of the
Company's assets, liquidation, dissolution or winding up. For purposes of this
Agreement, a stated percentage of the Voting Stock shall mean a number of shares
of the Voting Stock as shall equal in voting power that stated percentage of the
total voting power of the then outstanding shares of Voting Stock in the
election of a majority of the Board of Directors of the Company or in respect of
any merger, consolidation, sale of all or substantially all of the Company's
assets, liquidation, dissolution or winding up.
Any determination required to be made by the Board of Directors of the Company
for purposes of applying the definitions contained in this Section 1 shall be
made by a majority of the Board of Directors in its good faith judgment, which
determination shall be binding on the Rights Agent and the holders of the
Rights.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date be the
holders of Common Stock) in accordance with the terms and conditions hereof, and
the Rights Agent hereby accepts such appointment. The Company may from time to
time appoint such Co-Rights Agents as it may deem necessary or desirable, upon
ten (10) days' prior written notice to the Rights Agent. The Rights Agent shall
have no duty to supervise, and shall in no event be liable for, the acts or
omissions of any such co-Rights Agent.
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Section 3. ISSUANCE OF RIGHT CERTIFICATES.
(a) On the Record Date (or as soon as practicable thereafter), the Company
or the Rights Agent shall send a copy of a Summary of Rights, in substantially
the form attached hereto as Exhibit A (the "Summary of Rights"), by first class
mail, postage prepaid, to each record holder of the Common Stock as of the close
of business on the Record Date, at the address of such holder shown on the
records of the Company.
(b) Until the close of business on the day which is the earlier of (i) the
tenth day after the Stock Acquisition Date or (ii) the tenth Business Day (or
such later date as may be determined by action of the Board of Directors prior
to such time as any Person becomes an Acquiring Person) after the date of the
commencement by any Person (other than an Exempt Person) of, or the first public
announcement of the intent of any Person (other than an Exempt Person) to
commence, a tender or exchange offer upon the successful consummation of which
such Person would be the Beneficial Owner of 15% or more of the then outstanding
shares of Voting Stock of the Company (including any such date which is after
the date of this Agreement and prior to the issuance of the Rights; the earlier
of such dates being herein referred to as the "Distribution Date"), (x) the
Rights shall be evidenced by the certificates for Common Stock registered in the
name of the holders of Common Stock (together with, in the case of certificates
for Common Stock outstanding as of the Record Date, the Summary of Rights) and
not by separate Right certificates and the record holders of such certificates
for Common Stock shall be the record holders of the Rights represented thereby
and (y) each Right shall be transferable only simultaneously and together with
the transfer of a share of Common Stock (subject to adjustment as hereinafter
provided). Until the Distribution Date (or, if earlier, the
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Expiration Date or Final Expiration Date), the surrender for transfer of any
certificate for Common Stock shall constitute the surrender for transfer of the
Right or Rights associated with the Common Stock evidenced thereby, whether or
not accompanied by a copy of the Summary of Rights.
(c) Rights shall be issued in respect of all shares of Common Stock that
become outstanding after the Record Date but prior to the earlier of the
Distribution Date, the Expiration Date or the Final Expiration Date.
Certificates for Common Stock (including, without limitation, certificates
issued upon original issuance, disposition from the Company's treasury or
transfer or exchange of Common Stock) after the Record Date but prior to the
earliest of the Distribution Date, the Expiration Date, or the Final Expiration
Date shall have impressed, printed, written or stamped thereon or otherwise
affixed thereto the following legend:
This certificate also evidences and entitles the holder hereof to the
same number of Rights (subject to adjustment) as the number of shares of
Common Stock represented by this certificate, such Rights being on the
terms provided under the
Rights Agreement between United Stationers Inc.
and BANKBOSTON, N.A. (the "Rights Agent"), dated as of July 27, 1999, as it
may be amended from time to time (the "Agreement"), the terms of which are
incorporated herein by reference and a copy of which is on file at the
principal executive offices of United Stationers Inc. Under certain
circumstances, as set forth in the Agreement, such Rights shall be
evidenced by separate certificates and shall no longer be evidenced by this
certificate. United Stationers Inc. shall mail to the registered holder of
this certificate a copy of the Agreement without charge within five (5)
days after receipt of a written request therefor. AS PROVIDED IN SECTION
7(E) OF THE AGREEMENT, RIGHTS ISSUED TO OR BENEFICIALLY OWNED BY ACQUIRING
PERSONS OR THEIR AFFILIATES OR ASSOCIATES (AS SUCH TERMS ARE DEFINED IN THE
AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS SHALL BE NULL AND VOID
AND MAY NOT BE EXERCISED BY OR TRANSFERRED TO ANY PERSON.
With respect to such certificates containing the foregoing legend,
until the Distribution Date the Rights associated with the Common Stock
represented by such
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certificates shall be evidenced by such certificates alone, and the surrender
for transfer of any such certificate, except as otherwise provided herein, shall
also constitute the transfer of the Rights associated with the Common Stock
represented thereby. In the event that the Company purchases or otherwise
acquires any Common Stock after the Record Date but prior to the Distribution
Date, any Rights associated with such Common Stock shall be deemed canceled and
retired so that the Company shall not be entitled to exercise any Rights
associated with the Common Stock which are no longer outstanding.
Notwithstanding this paragraph (c), the omission of a legend shall not
affect the enforceability of any part of this Agreement or the rights of any
holder of the Rights.
(d) As soon as practicable after the Distribution Date, the Company will
prepare and execute, the Rights Agent will countersign, and the Company will
send or cause to be sent (and the Rights Agent will, if requested, send), by
first class mail, postage prepaid, to each record holder of the Common Stock as
of the close of business on the Distribution Date, as shown by the records of
the Company, at the address of such holder shown on such records, a certificate
in the form provided by Section 4 hereof (a "Right Certificate"), evidencing one
Right (subject to adjustment as provided herein) for each share of Common Stock
so held. As of and after the Distribution Date, the Rights shall be evidenced
solely by Right Certificates and may be transferred by the transfer of the Right
Certificate as permitted hereby, separately and apart from any transfer of one
or more shares of Common Stock.
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Section 4. FORM OF RIGHT CERTIFICATES. The Right Certificates (and the
forms of election to purchase shares, certificate and assignment to be printed
on the reverse thereof), when, as and if issued, shall be substantially in the
form set forth in Exhibit B hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as may
be required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Common
Stock or the Rights may from time to time be listed or as the Company may deem
appropriate to conform to usage or otherwise and as are not inconsistent with
the provisions of this Agreement. Subject to the provisions of Section 22
hereof, Right Certificates evidencing Rights whenever issued, (i) shall be dated
as of the date of issuance of the Rights they represent and (ii) subject to
adjustment from time to time as provided herein, on their face shall entitle the
holders thereof to purchase such number of one one-thousandths of a share
(including fractional shares which are integral multiples of one-thousandth of a
share) of Preferred Stock as shall be set forth thereon at the price per one
one-thousandth of a share of Preferred Stock payable upon exercise of a Right
provided by Section 7(b) hereof, as the same may from time to time be adjusted
as provided herein (the "Exercise Price").
Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) Each Right Certificate shall be executed on behalf of the Company by
its Chairman of the Board, President or any Vice President, either manually or
by facsimile signature, and have affixed thereto the Company's seal or a
facsimile thereof which shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile signature. Each Right
Certificate shall be countersigned by the
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Rights Agent either manually or by facsimile signature and shall not be valid
for any purpose unless so countersigned. In case any officer of the Company who
shall have signed any Right Certificate shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance and delivery of
the certificate by the Company, such Right Certificate, nevertheless, may be
countersigned by the Rights Agent and issued and delivered with the same force
and effect as though the person who signed such Right Certificates had not
ceased to be such officer of the Company. Any Right Certificate may be signed on
behalf of the Company by any person who, on the date of the execution of such
Right Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Agreement any such
person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at its principal office or one or more offices designated as the
appropriate place for surrender of Right Certificates upon exercise or transfer,
and in such other locations as may be required by law, 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; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.
(a) Subject to the provisions of Sections 7(e), 7(f) and 14 hereof, at any
time after the Close of Business on the Distribution Date, and at or prior to
the Close of Business on the earlier of the Expiration Date or the Final
Expiration Date, any Right
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Certificate may be (i) transferred or (ii) split up, combined or
exchanged for one or more other Right Certificates, entitling the registered
holder to purchase a like number of one one-thousandths of a share of Preferred
Stock as the Right Certificate or Right Certificates surrendered then entitled
such holder to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Right Certificate shall surrender the Right Certificate
at the office of the Rights Agent designated for the surrender of Right
Certificates with the form of certificate and assignment on the reverse side
thereof duly endorsed (or enclose with such Right Certificate a written
instrument of transfer in form satisfactory to the Company and the Rights
Agent), duly executed by the registered holder thereof or his attorney duly
authorized in writing, and with such signature duly guaranteed. Any registered
holder desiring to split up, combine or exchange any Right Certificate shall
make such request in writing delivered to the Rights Agent, and shall surrender
the Right Certificate to be split up, combined or exchanged at the office of the
Rights Agent designated therefor. Thereupon, the Rights Agent shall 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 of a sum sufficient to cover any Transfer Tax that may be imposed in
connection with any transfer, split up, combination or exchange of any Right
Certificates.
(b) Subject to the provisions of Sections 7(e), 7(f) and 14 hereof, at any
time after the Distribution Date and prior to the Expiration Date, upon receipt
by the Company and the Rights Agent of evidence reasonably satisfactory to them
of the loss, theft, destruction or mutilation of a Right Certificate, and, in
case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to them and, if requested by
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the Company, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, or upon surrender to the Rights Agent and
cancellation of the Right Certificate if mutilated, the Company shall cause a
new Right Certificate of like tenor to be issued and delivered to the registered
owner in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. EXERCISE OF RIGHTS; EXERCISE PRICE; EXPIRATION DATE OF RIGHTS.
(a) The Rights shall not be exercisable until, and shall become exercisable
on, the Distribution Date (unless otherwise provided herein, including, without
limitation, the restrictions on exercisability set forth in Sections 7(e) and
27(b) hereof). Except as otherwise provided herein, the Rights may be exercised,
in whole or in part, at any time commencing with the Distribution Date upon
surrender of the Right Certificate, with the form of election to purchase and
certificate on the reverse side thereof duly executed (with signatures duly
guaranteed), to the Rights Agent at the principal office of the Rights Agent in
New York, New York, together with payment of the Exercise Price for each Right
exercised, subject to adjustment as hereinafter provided, at or prior to the
Close of Business on the earlier of (i) July 26, 2009 (the "Final Expiration
Date") or (ii) the date on which the Rights are redeemed as provided in Section
23 hereof or the date on which the Rights are exchanged as provided in Section
27 hereof (such earlier date being herein referred to as the "Expiration Date").
(b) The Exercise Price shall initially be one hundred dollars ($100) for
each one one-thousandth (1/1,000) of a share of Preferred Stock issued pursuant
to the exercise of a Right. The Exercise Price and the number of one
one-thousandths of a
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share of Preferred Stock or other securities or property to be acquired upon
exercise of a Right shall be subject to adjustment from time to time as provided
in Sections 11 and 13 hereof. The Exercise Price shall be payable in lawful
money of the United States of America, in accordance with paragraph (c) below.
(c) Except as otherwise provided herein, upon receipt of a Right
Certificate representing exercisable Rights with the form of election to
purchase and certificate duly executed, accompanied by payment by certified
check, cashier's check, bank draft or money order payable to the Company or the
Rights Agent of the Exercise Price for the shares of Preferred Stock to be
purchased and an amount equal to any applicable Transfer Tax required to be paid
by the holder of the Right Certificate in accordance with Section 9(e) hereof,
the Rights Agent shall thereupon promptly (i) requisition from any transfer
agent of the Preferred Stock of the Company one or more certificates
representing the number of shares of Preferred Stock to be so purchased, and the
Company hereby authorizes and directs such transfer agent to comply with all
such requests, (ii) as provided in Section 14(b), at the election of the
Company, cause depositary receipts to be issued in lieu of fractional shares of
Preferred Stock, (iii) if the election provided for in the immediately preceding
clause (ii) has not been made, requisition from the Company the amount of cash
to be paid in lieu of the issuance of fractional shares (other than fractions
that are integral multiples of one one-thousandth of a share) in accordance with
Section 14(b) hereof, (iv) after receipt of such Preferred Stock certificates
and, if applicable, depositary receipts, cause the same to be delivered to or
upon the order of the registered holder of such Right Certificate, registered in
such name or names as may be designated by such holder and (v) when appropriate,
after receipt, promptly deliver such
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cash to or upon the order of the registered holder of such Right Certificate;
PROVIDED, HOWEVER, that in the case of a purchase of securities, other than
Preferred Stock, pursuant to Section 13 hereof, the Rights Agent shall promptly
take the appropriate actions corresponding in such case to that referred to in
the foregoing clauses (i) through (v) of this Section 7(c). Notwithstanding the
foregoing provisions of this Section 7(c), the Company may suspend the issuance
of shares of Preferred Stock and other securities upon exercise of a Right for a
reasonable period, not in excess of ninety (90) days, during which the Company
seeks to register under the Securities Act of 1933, as amended (the "Act"), and
any applicable securities law of any other jurisdiction, the shares of Preferred
Stock or other securities to be issued pursuant to the Rights; PROVIDED,
HOWEVER, that nothing contained in this Section 7(c) shall relieve the Company
of its obligations under Section 9(d) hereof. 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.
(d) In case the registered holder of any Right Certificate shall exercise
less than all the Rights evidenced thereby, a new Right Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent to the registered holder of such Right Certificate or his assign,
subject to the provisions of Section 14(b) hereof.
(e) Notwithstanding any provision of this Agreement to the contrary, from
and after the time (the "invalidation time") when any Person first becomes an
Acquiring Person, any Rights that are Beneficially Owned by (x) such Acquiring
Person (or any Associate or Affiliate of such Acquiring Person), (y) a
transferee of such Acquiring
18
Person (or any such Associate or Affiliate) who becomes a transferee after the
invalidation time or (z) a transferee of such Acquiring Person (or any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the invalidation time pursuant to either (I) a transfer from the Acquiring
Person (or any such Associate or Affiliate) to holders of its equity securities
or to any Person with whom it has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (II) a transfer which the
Board of Directors has determined is part of a plan, arrangement or
understanding which has the purpose or effect of avoiding the provisions of this
Section 7(e), and subsequent transferees of such Persons referred to in clause
(y) and (z) above, shall be null and void without any further action and any
holder of such Rights shall thereafter have no rights whatsoever with respect to
such Rights under any provision of this Agreement. The Company shall use all
reasonable efforts to ensure that the provisions of this Section 7(e) are
complied with, but shall have no liability to any holder of Right Certificates
or any other Person as a result of its failure to make any determination with
respect to an Acquiring Person or its Affiliates, Associates or transferees
hereunder. No Right Certificate shall be issued pursuant to Section 3 hereof
that represents Rights beneficially owned by an Acquiring Person or any
Affiliate or Associate thereof whose Rights would be null and void pursuant to
the provisions of this Section 7(e); no Right Certificate shall be issued at any
time upon the transfer of any Rights to an Acquiring Person (or an Affiliate or
Associate of such Acquiring Person) whose Rights would be null and void pursuant
to the provisions of this Section 7(e) or any Associate or Affiliate thereof or
to any nominee of such Acquiring Person, Associate or Affiliate; and any Right
Certificate
19
delivered to the Rights Agent for transfer to an Acquiring Person (or an
Associate or Affiliate of such Acquiring Person) whose Rights would be void
pursuant to the provisions of this Section 7(e) shall be cancelled.
(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)
completed and signed the certificate following 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.
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 cancel and
retire, any Right Certificate purchased or acquired by the Company otherwise
than upon the exercise thereof. The Rights Agent shall deliver all cancelled
Right Certificates to the Company, or shall, at the written request of the
Company, destroy such cancelled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
20
Section 9. RESERVATION AND AVAILABILITY OF SHARES OF PREFERRED STOCK.
(a) The Company covenants and agrees that it will cause to be reserved and
kept available out of its authorized and unissued shares of Preferred Stock or
out of authorized and issued shares of Preferred Stock held in its treasury,
such number of shares of Preferred Stock as will from time to time be sufficient
to permit the exercise in full of all outstanding Rights.
(b) The Company shall use its best efforts to cause, from and after such
time as the Rights become exercisable, all shares of Preferred Stock issued or
reserved for issuance in accordance with this Agreement to be listed, upon
official notice of issuance, upon the principal national securities exchange, if
any, upon which the Common Stock is listed or, if the principal market for the
Common Stock is not on any national securities exchange, to be eligible for
quotation in the National Association of Securities Dealers' Automated Quotation
System or any successor thereto or other comparable quotation system.
(c) The Company covenants and agrees that it will take all such action as
may be necessary to insure that all shares of Preferred Stock delivered upon
exercise of Rights shall, at the time of delivery of the certificates for such
shares (subject to payment of the Exercise Price in respect thereof), be duly
and validly authorized and issued and fully paid and nonassessable shares.
(d) The Company shall use its best efforts to (i) file, as soon as
practicable following the occurrence of the event described in Section
11(a)(ii), or as soon as is required by law following the Distribution Date, as
the case may be, a registration statement under the Act, with respect to the
shares of Preferred Stock purchasable upon
21
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 Preferred Stock, and
(b) the earlier of the Expiration Date and the Final Expiration Date. The
Company may temporarily suspend, for a period of time not to exceed ninety (90)
days, the issuance of shares of Preferred Stock upon exercise of a Right in
order to prepare and file a registration statement under the Act and permit it
to become effective. The Company will also take such action as may be
appropriate under, or to ensure compliance with, the securities or "blue sky"
laws of the various states in connection with the exercisability of the Rights.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction unless the requisite qualification
in such jurisdiction shall have been obtained and until a registration statement
under the Act (if required) shall have been declared effective.
(e) The Company covenants and agrees that it will pay when due and payable
any and all federal and state Transfer Taxes which may be payable in respect of
the issuance or delivery of the Right Certificates or of any shares of Preferred
Stock issued or delivered 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 a Right Certificate to a Person other than, or the
issuance or delivery of certificates for Preferred Stock upon exercise of Rights
in a name other than that of, the registered holder of the Right Certificate,
and the Company shall not be required to issue or deliver a Right Certificate or
certificate for Preferred Stock to a Person other than such registered holder
22
until any such Transfer Tax shall have been paid (any such Transfer 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
Transfer Tax is due.
Section 10. PREFERRED STOCK RECORD DATE. Each Person in whose name any
certificate for shares of Preferred Stock is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
Preferred Stock represented thereby on, and such certificate shall be dated as
of, the date upon which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Exercise Price (and any applicable Transfer
Taxes) was made; PROVIDED, HOWEVER, that, if the date of such surrender and
payment is a date upon which the Preferred Stock 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 as of, the next succeeding
Business Day on which the Preferred Stock 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 holder of Preferred
Stock for which the Rights shall be exercisable, including, without limitation,
the right to vote or to receive dividends or other distributions, and shall not
be entitled to receive any notice of any proceedings of the Company, except as
provided herein.
Section 11. ADJUSTMENT OF EXERCISE PRICE OR NUMBER OF SHARES. The Exercise
Price and the number of shares of Preferred Stock which may be purchased upon
exercise of a Right are subject to adjustment from time to time as provided in
this Section 11.
23
(a) (i) In the event the Company shall at any time after the date of
this Agreement (A) declare or pay any dividend on Common Stock payable in
shares of Common Stock, (B) subdivide or split the outstanding shares of
Common Stock into a greater number of shares or (C) combine or consolidate
the outstanding shares of Common Stock into a smaller number of shares or
effect a reverse split of the outstanding shares of Common Stock, then and
in each such event the number of one one-thousandth of a share of Preferred
Stock issuable upon the Exercise of a Right after the record date for such
event (if one shall have been established or, if not, after the date of
such event) shall be the number of one one-thousandth of a share of
Preferred Stock issuable immediately prior to such event multiplied by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately prior to such event and the denominator of which is
the number of shares of Common Stock outstanding immediately after such
event and the Exercise Price to be in effect after the record date for such
event (if one shall have been established or, if not, after the date of
such event) shall be determined by multiplying the Exercise Price in effect
immediately prior to such event by such fraction. If an event occurs which
would require an adjustment under both this Section 11(a)(i) and Section
11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i)
shall be in addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii).
24
(ii) Subject to Section 27 of this Agreement, in the event that any
Person shall become an Acquiring Person, then, except as otherwise provided
in this Section 11, each holder of a Right, except as provided in Section
7(e) hereof, shall thereafter have the right to receive upon exercise of
such Right in accordance with the terms of this Agreement and payment of
the Exercise Price, such number of one one-thousandth of a share of
Preferred Stock as shall equal the result obtained by (1) multiplying the
then current Exercise Price by the number of one one-thousandth of a share
of Preferred Stock for which a Right is then exercisable and dividing the
product by (2) 50% of the Fair Market Value of one one-thousandth of a
share of Preferred Stock (determined pursuant to Section 11(b) hereof) on
the date of such occurrence.
(iii) In the event that the Company does not have available sufficient
authorized but unissued Preferred Stock to permit the exercise in full of
the Rights in accordance with the foregoing subparagraph (ii), the Company
shall take all such action as may be necessary to authorize and reserve for
issuance such number of additional shares of Preferred Stock as may from
time to time be required to be issued upon the exercise in full of all
Rights from time to time outstanding and, if necessary, shall use its best
efforts to obtain stockholder approval thereof. In lieu of issuing shares
of Preferred Stock in accordance with the foregoing subparagraph (ii), the
Company may, if the Board of Directors determines that such action is
necessary or appropriate and not contrary to the interests of holders of
25
Rights, elect to issue or pay, upon the exercise of the Rights, cash,
property, shares of Preferred or Common Stock, or any combination thereof,
having an aggregate Fair Market Value equal to the Fair Market Value of the
shares of Preferred Stock which otherwise would have been issuable pursuant
to Section 11(a)(ii), which Fair Market Value shall be determined by an
investment banking firm selected by the Board of Directors. For purposes of
the preceding sentence, the Fair Market Value of the Preferred Stock shall
be as determined pursuant to Section 11(b). Subject to Section 23 hereof,
any such election by the Board of Directors of the Company must be made and
publicly announced within thirty (30) days after the date on which the
event described in Section 11(a)(ii) occurs.
(b) For the purpose of this Agreement, the "Fair Market Value" of any share
of Preferred Stock, Common Stock or any other stock or any Right or other
security or any other property on any date shall be determined as provided in
this Section 11(b). In the case of a publicly-traded stock or other security,
the Fair Market Value on any date shall be deemed to be the average of the daily
closing prices per share of such stock or per unit of such other security for
the thirty (30) consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date; PROVIDED, HOWEVER, that in the event that the
Fair Market Value per share of any share of Common Stock is determined during a
period which includes any date that is within thirty (30) Trading Days after (i)
the ex-dividend date for a dividend or distribution on such stock payable in
shares of Common Stock or securities convertible into shares of Common Stock, or
(ii) the effective date of any subdivision, split, combination, consolidation,
reverse stock split or reclassification of
26
such stock, then, and in each such case, the Fair Market Value shall be
appropriately adjusted by the Board of Directors of the Company to take into
account ex-dividend or post-effective date 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 applicable transaction reporting system with
respect to securities listed or admitted to trading on the Nasdaq National
Market), or, if the securities are not listed or admitted to trading on the
Nasdaq National Market, as reported in the applicable transaction reporting
system with respect to securities listed on the principal national securities
exchange or Nasdaq market on which such security is listed or admitted to
trading; or, if not listed or admitted to trading on any national securities
exchange or Nasdaq market, the last quoted price (or, if not so quoted, the
average of the high bid and low asked prices) in the over-the-counter market, as
reported by the National Association of Securities Dealers, Inc. Automated
Quotation System ("NASDAQ") or such other system then in use; or, if no bids for
such security are 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 such security selected by the Board of Directors of the Company. The term
"Trading Day" shall mean a day on which the principal national securities
exchange or Nasdaq market on which such security is listed or admitted to
trading is open for the transaction of business or, if such security is not
listed or admitted to trading on any national securities exchange or Nasdaq
market, a Business Day. If a security is not publicly held or not so listed or
traded, "Fair Market Value" shall mean the fair value per share of stock or per
other unit of such other security, as determined by an independent investment
banking firm experienced in the valuation of
27
securities selected in good faith by the Board of Directors of the Company, or,
if no such investment banking firm is, in the good faith judgment of the Board
of Directors, available to make such determination, in good faith by the Board
of Directors of the Company; PROVIDED, HOWEVER, that for purposes of making the
adjustment provided for by Section 11(a)(ii) hereof, the Fair Market Value of a
share of Preferred Stock shall not be less than 100% of the product of the Fair
Market Value of a share of Common Stock multiplied by the higher of the then
Dividend Multiple or Vote Multiple applicable to the Preferred Stock (as defined
in the Certificate of Designations relating to the Preferred Stock) and shall
not exceed 105% of the product of the then Fair Market Value of a share of
Common Stock multiplied by the higher of the then Dividend Multiple or Vote
Multiple applicable to the Preferred Stock. In the case of property other than
securities, the "Fair Market Value" thereof shall be determined in good faith by
the Board of Directors of the Company based upon such appraisals or valuation
reports of such independent experts as the Board of Directors of the Company
shall in good faith determine to be appropriate in accordance with good business
practices and the interests of the holders of Rights. Any such determination of
Fair Market Value shall be described in a statement filed with the Rights Agent
and shall be binding upon the Rights Agent.
(c) In 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 forty-five (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 (or having a conversion price per share, if a
security convertible into Common Stock) less than the then current per share
Fair Market Value of the Common Stock on such record
28
date, the Exercise Price to be in effect after such record date shall be
determined by multiplying the Exercise 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 Fair
Market Value 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 in a consideration part or all of which
shall be in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent.
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, options or warrants are not so issued, the Exercise Price
shall be adjusted to be the Exercise Price which would then be in effect if such
record date had not been fixed.
(d) In case the Company shall fix a record date for the making of a
distribution to all holders of the 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, cash (other
than a regular quarterly
29
cash dividend out of the earnings or retained earnings of the Company), assets
(other than a dividend payable in shares of Common Stock) or subscription rights
or warrants (excluding those referred to in Section 11(c) hereof), the Exercise
Price to be in effect after such record date shall be determined by multiplying
the Exercise Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the Fair Market Value of the shares of
Common Stock on such record date, less the fair market value (as determined in
good faith by the Board of Directors of the Company, whose determination shall
be described in a statement filed with the Rights Agent) of the portion of the
assets or evidences of indebtedness so to be distributed or of such subscription
rights or warrants and the denominator of which shall be such current Fair
Market Value of the shares of Common Stock. Such adjustment shall be made
successively whenever such a record date is fixed and in the event that such
distribution is not so made, the Exercise Price shall again be adjusted to be
the Exercise Price which would then be in effect if such record date had not
been fixed.
(e) Unless the Company shall have exercised its election as provided in
Section 11(f), upon each adjustment of the Exercise Price as a result of the
calculations made in Section (c) and (d), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Exercise Price, that number of one one-thousandths of
a share of Preferred Stock obtained by (i) multiplying (x) the number of one
one-thousandths of a share of Preferred Stock covered by a Right immediately
prior to the adjustment pursuant to this Section 11(e) by (y) the Exercise Price
in effect immediately prior to such adjustment of the Exercise Price and (ii)
30
dividing the product so obtained by the Exercise Price in effect immediately
after such adjustment of the Exercise Price.
(f) The Company may elect on or after the date of any adjustment of the
Exercise Price pursuant to Sections 11(c) and 11(d) to adjust the number of
Rights in substitution for any adjustment pursuant to Section 11(e) in the
number of one one-thousandths of a share of Preferred Stock purchasable upon the
exercise of a Right. Each of the Rights outstanding after such adjustment of the
number of Rights shall be exercisable for the number of one one-thousandths of a
share of Preferred Stock for which a Right was exercisable immediately prior to
such adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights obtained by dividing the
Exercise Price in effect immediately prior to adjustment of the Exercise Price
by the Exercise Price in effect immediately after adjustment of the Exercise
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 Exercise Price is adjusted or any day thereafter, but,
if the Right Certificates have been issued, shall be at least ten (10) days
later than the date of the public announcement. If the Right Certificates have
been issued, upon each adjustment of the number of Rights pursuant to this
Section 11(e), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such record date Right
Certificates evidencing, subject to Section 14 hereof, the additional Rights, if
any, 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
31
the Right Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein and shall be registered in
the names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(g) All calculations under this Section 11 shall be made to the nearest
cent or to the nearest one one-thousandth of a share, as the case may be.
(h) Irrespective of any adjustment or change in the Exercise Price or the
number of shares of Preferred Stock issuable upon the exercise of the Rights,
the Right Certificates theretofore and thereafter issued may continue to express
the Exercise Price and the number of shares to be issued upon exercise of the
Rights as in the initial Right Certificates issued hereunder but, nevertheless,
shall represent the Rights as so adjusted.
(i) Before taking any action that would cause an adjustment reducing the
purchase price per whole share of Preferred Stock upon exercise of the Rights
below the then par value, if any, of the shares of Preferred Stock, the Company
shall use its best efforts to take any corporate action which may, in the
opinion of its counsel, be necessary in order that the Company may validly and
legally issue fully paid and non-assessable shares of such Preferred Stock at
such adjusted purchase price per share.
(j) Anything in this Section 11 to the contrary notwithstanding, in the
event of any reclassification of stock of the Company or any recapitalization,
reorganization or partial liquidation of the Company or similar transaction, the
Company shall be entitled to make such further adjustments in the number of
shares of Preferred
32
Stock which may be acquired upon exercise of the Rights, and such adjustments in
the Exercise Price therefor, in addition to those adjustments expressly required
by the other paragraphs of this Section 11, as the Board of Directors of the
Company shall determine to be necessary or appropriate in order for the holders
of the Rights in such event to be treated equitably and in accordance with the
purpose and intent of this Agreement or in order that any such event shall not,
but for such adjustment, in the opinion of counsel to the Company, result in the
stockholders of the Company being subject to any United States federal income
tax liability by reason thereof.
(k) If as a result of an adjustment made pursuant to Section 11(a) hereof,
the holder of any Right thereafter exercised shall become entitled to receive
any shares of capital stock of the Company other than the Preferred Stock,
thereafter the Exercise Price and the number of such other shares so receivable
upon exercise of a Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Preferred Stock contained in Sections 11(a), 11(c), 11(d) 11(e),
11(f) and 11(j) hereof, as applicable, and the provisions of Sections 7, 9, 10,
13 and 14 hereof with respect to the Preferred Stock shall apply on like terms
to any such other shares.
Section 12. CERTIFICATION OF ADJUSTED EXERCISE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Section 11, 13, 23 or 27, the
Company shall (a) promptly prepare a certificate setting forth such adjustment,
and a brief statement of the facts giving rise to such adjustment, (b) promptly
file with the Rights Agent and with each transfer agent for the Preferred Stock
a copy of such certificate and (c) mail a brief summary thereof to each holder
of a Right Certificate in accordance with
33
Section 25. Notwithstanding the foregoing sentence, the failure of the Company
to make such certification or give such notice shall not affect the validity of
or the force or effect of the requirement for such adjustment. Any adjustment to
be made pursuant to Section 11, 13 or 23(c) of this Agreement shall be effective
as of the date of the event giving rise to such adjustment. The Rights Agent
shall be fully protected in relying on any such certificate and on any
adjustment therein contained and shall not be deemed to have knowledge of any
adjustment unless and until it shall have received such certificate.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
POWER.
(a) In the event that, at any time after the time that any Person becomes
an Acquiring Person, (x) the Company shall, directly or indirectly, consolidate
with, or merge with and into, any other Person or Persons (other than an Exempt
Person) and the Company shall not be the surviving or continuing corporation of
such consolidation or merger, or (y) any Person or Persons (other than an Exempt
Person) shall, directly or indirectly, consolidate with, or merge with and into,
the Company, and the Company shall be the continuing or surviving corporation of
such consolidation or merger and, in connection with such consolidation or
merger, all or part of the outstanding shares of Common Stock shall be changed
into or exchanged for stock or other securities of any other Person (other than
an Exempt Person) or of the Company or cash or any other property, or (z) the
Company or one or more of its Subsidiaries shall, directly or indirectly, sell
or otherwise transfer to any other Person, in one or more transactions, assets
or earning power aggregating more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole), then, on the first occurrence
of any such event, proper
34
provision shall be made so that (i) each holder of record of a Right, except as
provided in Section 7(e) hereof, shall thereafter have the right to receive,
upon the exercise thereof at a price equal to the then current Exercise Price
multiplied by the number of one one-thousandths of a share of Preferred Stock
for which a Right is then exercisable, in accordance with the terms of this
Agreement and in lieu of shares of Preferred Stock, such number of shares of
validly issued, fully paid, non-assessable and freely tradeable Common Stock of
the Principal Party (as defined herein), not subject to any liens, encumbrances,
rights of first refusal or other adverse claims, as shall equal the result
obtained by (1) multiplying the then current Exercise Price by the number of one
one-thousandths of a share of Preferred Stock for which a Right is then
exercisable and dividing that product by (2) 50% of the then per share Fair
Market Value of the Common Stock of the Principal Party on the date of the
consummation, merger, sale or transfer; PROVIDED, HOWEVER, that the Exercise
Price (as adjusted) and the number of shares of Common Stock of such Principal
Party so receivable upon exercise of a Right shall be subject to further
adjustment as appropriate in accordance with Section 11 hereof to reflect any
events occurring in respect of the Common Stock of such Principal Party after
the occurrence of such consolidation, merger, sale or transfer; (ii) such
Principal Party shall thereafter be liable for, and shall assume, by virtue of
such consolidation, merger, sale or transfer, all the obligations and duties of
the Company pursuant to this Agreement; (iii) the term "Company" for all
purposes of this Agreement shall thereafter be deemed to refer 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 the provisions of Section 9 hereof applicable to the
reservation of
35
Preferred Stock) in connection with such consummation as may be necessary to
assure that the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to its shares of Common Stock thereafter
deliverable upon the exercise of the Rights; PROVIDED, HOWEVER, that, upon the
subsequent occurrence of any merger, consolidation, sale of all or substantially
all of the assets, recapitalization, reclassification of shares, reorganization
or other extraordinary transaction in respect of such Principal Party, each
holder of a Right shall thereupon be entitled to receive, upon exercise of a
Right and payment of the Exercise Price, such cash, shares, rights, warrants and
other property which such holder would have been entitled to receive had it, at
the time of such transaction, owned the shares of Common Stock of the Principal
Party purchasable upon the exercise of a Right, and such Principal Party shall
take such steps (including, but not limited to, reservation of shares of stock)
as may be necessary to permit the subsequent exercise of the Rights in
accordance with the terms hereof for such cash, shares, rights, warrants and
other property and (v) the provisions of Section 11(a)(ii) hereof shall be of no
effect following the occurrence of any event described in clause (x), (y) or (z)
above of this Section 13(a).
(b) "Principal Party" shall mean
(i) in the case of any transaction described in (x) or (y) of the
first sentence of Section 13(a) hereof: (A) the Person that is the issuer
of the securities into which shares of Common Stock of the Company are
changed or otherwise exchanged or converted in such merger or
consolidation, or, if there is more than one such issuer, the issuer of the
Common Stock of which has the greatest market value or (B) if no
36
securities are so issued, (x) the Person that is the other party to the
merger or consolidation and that survives such merger or consolidation, or,
if there is more than one such Person, the Person the Common Stock of which
has the greatest market value or (y) if the Person that is the other party
to the merger or consolidation does not survive the merger or
consolidation, the Person that does survive the merger or consolidation
(including the Company if it survives); and
(ii) in the case of any transaction described in (z) of the first
sentence in Section 13(a), the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to
such transaction or transactions, or, if each Person that is a party to
such transaction or transactions receives the same portion of the assets or
earning power so transferred or if the Person receiving the greatest
portion of the assets or earning power cannot be determined, whichever of
such Persons as is the issuer of Common Stock having the greatest market
value of shares outstanding; PROVIDED, HOWEVER, that in any such case, 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, then (i) if such Person is a direct or indirect
Subsidiary of another Person the Common Stock of which is and has been so
registered, the term "Principal
37
Party" shall refer to such other Person, or (2) if such Person is a
Subsidiary, directly or indirectly, of more than one Person, the Common
Stocks of all of which are and have been so registered, the term "Principal
Party" shall refer to whichever of such Persons is the issuer of the Common
Stock having the greatest market value of shares outstanding, or (3) if
such Person is owned, directly or indirectly, by a joint venture formed by
two or more Persons that are not owned, directly or indirectly, by the same
Person, the rules set forth in clauses (1) and (2) above shall apply to
each of the owners having an interest in the venture as if the Person owned
by the joint venture was a Subsidiary of both or all of such joint
venturers, and the Principal Party in each such case shall bear the
obligations set forth in this Section 13 in the same ratio as its interest
in such Person bears to the total of such interests.
(c) The Company shall not consummate any consolidation, merger or sale or
transfer of assets or earning power referred to in Section 13(a) unless the
Principal Party shall have a sufficient number of authorized shares of its
Common Stock that have not been issued or reserved for issuance to permit
exercise in full of all Rights in accordance with this Section 13 and unless
prior thereto the Company and the Principal Party involved therein shall have
executed and delivered to the Rights Agent an agreement confirming that the
Principal Party shall, upon consummation of such consolidation, merger or sale
or transfer of assets or earning power, assume this Agreement in accordance with
Section 13(a) hereof and that all rights of first refusal or preemptive rights
in respect of the issuance of shares of Common Stock of the Principal Party upon
exercise of outstanding Rights have been waived and that such transaction shall
not result in a default by the Principal Party under this Agreement, and further
providing that, as soon as
38
practicable after the date of any consolidation, merger or sale or transfer of
assets or earning power referred to in Section 13(a) hereof, 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, use its best efforts to cause such
registration statement to become effective as soon as practicable after
such filing and use its best efforts to cause such registration statement
to remain effective (with a prospectus at all times meeting the
requirements of the Act) until the date of expiration of the Rights, and
similarly comply with applicable state securities laws;
(ii) use its best efforts to list (or continue the listing of) the
Rights and the securities purchasable upon exercise of the Rights on a
national securities exchange or to meet the eligibility requirements for
quotation on NASDAQ;
(iii) deliver to holders of the Rights historical financial statements
for the Principal Party which comply in all respects with the requirements
for registration on Form 10 (or any successor form) under the Exchange Act.
In the event that any of the transactions described in Section 13(a) hereof
shall occur at any time after the occurrence of a transaction described in
Section 11(a)(ii) hereof, the Rights which have not theretofore been
exercised shall, subject to the provisions of Section 7(e) hereof,
thereafter be exercisable in the manner described in Section 13(a); and
39
(iv) obtain waivers of any rights of first refusal or preemptive
rights in respect of the Common Stock of the Principal Party subject to
purchase upon exercise of outstanding Rights.
(d) In case the Principal Party which is to be a party to a transaction
referred to in this Section 13 has a provision in any of its authorized
securities or in its Certificate of Incorporation or By-laws or other instrument
governing its corporate affairs, which provision would have the effect of (i)
causing such Principal Party to issue, in connection with, or as a consequence
of, the consummation of a transaction referred to in this Section 13, shares of
Common Stock of such Principal Party at less than the then Fair Market Value per
share (determined pursuant to Section 11(b) hereof) or securities exercisable
for, or convertible into, Common Stock of such Principal Party at less than such
then Fair Market Value (other than to holders of Rights pursuant to this Section
13) or (ii) providing for any special tax or similar payment in connection with
the issuance to any holder of a Right of Common Stock of such Principal Party
pursuant to the provisions of this Section 13, then, in such event, the Company
shall not consummate any such transaction unless prior thereto the Company and
such Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing that the provision in question of such
Principal Party shall have been canceled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction.
(e) The Company covenants and agrees that it shall not, at any time after
any Person becomes an Acquiring Person, enter into any transaction of the type
described in clauses (x) through (z) of Section 13(a) hereof if (i) at the time
of or
40
immediately after such consolidation, merger, sale, transfer or other
transaction 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, (ii)
prior to, simultaneously with or immediately after such consolidation, merger,
sale, transfer or other transaction, the stockholders of the Person who
constitutes, or would constitute, the Principal Party for purposes of Section
13(a) hereof shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates or Associates or (iii) the form or nature
of organization of the Principal Party would preclude or limit the
exercisability of the Rights.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights or to
distribute Right Certificates which evidence fractional Rights (I.E., Rights to
acquire less than one one-thousandth of a share of Preferred Stock), unless such
fractional Rights result from a transaction referred to in Section 11(a)(i)
hereof. If the Company shall determine not to issue such fractional Rights,
then, in lieu of such fractional Rights, there shall be paid to the holders of
record of the Right Certificates with regard to which such fractional Rights
would otherwise be issuable, an amount in cash equal to the same fraction of the
Fair Market Value of a whole Right.
(b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions that are integral multiples of one
one-thousandth of a share) upon exercise of the Rights or to distribute
certificates which evidence fractional shares (other than fractions that are
integral multiples of one one-thousandth of a share). In lieu of issuing
fractions of shares of Preferred Stock, the Company may, at its election,
41
issue depositary receipts evidencing fractions of shares pursuant to an
appropriate agreement between the Company and a depositary selected by it,
PROVIDED, that such agreement shall provide that the holders of such depositary
receipts shall have all of the rights, privileges and preferences to which they
would be entitled as owners of the Preferred Stock. With respect to fractional
shares that are not integral multiples of one one-thousandth of a share, if the
Company does not issue such fractional shares or depositary receipts in lieu
thereof, there shall be paid to the holders of record of Right Certificates at
the time such Right Certificates are exercised as herein provided an amount in
cash equal to the same fraction of the Fair Market Value of a share of Preferred
Stock.
(c) The holder of a Right by the acceptance of a Right expressly waives his
right to receive any fractional Right or any fractional shares of Preferred
Stock (other than fractions which are integral multiples of one one-thousandth
of a share) upon exercise of a Right.
Section 15. RIGHTS OF ACTION. All rights of action in respect of this
Agreement, except the rights of action given to the Rights Agent in Section 18
hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the holders of record of the
Common Stock); and any holder of record of any Right Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Right Certificate in the manner provided
in such Right Certificate and
42
in this Agreement. Without limiting the foregoing or any remedies available to
the holders of Rights, it is specifically acknowledged that the holders of
Rights would not have an adequate remedy at law for any breach of this Agreement
and will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of, the obligations of
any Person subject to this Agreement.
Section 16. AGREEMENT OF RIGHT HOLDERS. Each holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights shall be evidenced by the
certificates for Common Stock registered in the name of the holders of Common
Stock (together, as applicable, with the Summary of Rights), which certificates
for Common Stock shall also constitute certificates for Rights, and not by
separate Right Certificates, and each Right shall be transferable only
simultaneously and together with the transfer of shares of Common Stock;
(b) after the Distribution Date, the Right Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the office of
the Rights Agent designated for such purpose, duly endorsed or accompanied by a
proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the Person in whose
name the Right Certificate (or, prior to the Distribution Date, the associated
Common Stock certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or writing
on the Right Certificates or the associated Common Stock certificate made by
anyone other than the
43
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.
Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No holder,
as such, of any Right Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of Preferred Stock or any other
securities 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 stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof (except as provided in Section 7(f) hereof), or to give or
withhold consent to any corporate action (except as provided in Section 7(f)
hereof), or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 24 hereof), 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 hereof.
Section 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent reasonable compensation
for all services rendered by it hereunder and, from time to time, on demand of
the Rights Agent, its reasonable expenses and counsel fees and 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
44
done or omitted to be done by the Rights Agent in connection with the acceptance
and administration of this Agreement, including the cost and expenses of
defending against any claim of liability relating to the Rights or this
Agreement.
(b) The Rights Agent shall be protected against, 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 Preferred Stock or for other securities of the
Company, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement or other
paper or document believed by it to be genuine and to be signed, executed and,
where necessary, verified or acknowledged, by the proper person or persons.
Section 19. MERGER OR CONSOLIDATION OF, OR CHANGE IN NAME OF, THE RIGHTS
AGENT.
(a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust or stock transfer business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, PROVIDED that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement any of the Right Certificates shall have been
45
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; 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; 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 by
their acceptance thereof shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.
46
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chairman of the Board, the President
or any Vice President and by the Treasurer or the Secretary or an Assistant
Secretary of the Company and delivered to the Rights Agent. Any such certificate
shall be full authorization to the Rights Agent for any action taken or suffered
in good faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder only for its own negligence,
bad faith or willful misconduct. Anything to the contrary notwithstanding, in no
event shall the Rights Agent be liable for special, indirect, consequential or
incidental loss or damage of any kind whatsoever (including but not limited to
lost profits), even if the Rights Agent has been advised of the likelihood of
such loss or damage.
(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 (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect of the validity or
execution of any 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
47
any Right Certificate; nor shall it be responsible for any adjustment required
under the provisions of Section 11 or 13 hereof or responsible for the manner,
method or amount of any such adjustment or the ascertaining of the existence of
facts that would require any such adjustment (except with respect to the
exercise of Rights evidenced by Right Certificates after receipt of a
certificate describing 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 Preferred Stock to be issued pursuant to this
Agreement or any Right Certificate or as to whether any shares of Preferred
Stock will, when issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of the Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the President or any Vice President or the Treasurer or
the Secretary of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer or for any delay in acting while waiting for
those instructions. Any application by the Rights Agent for written instructions
from the Company may, at the option of the Rights Agent, set forth in writing
any action proposed to be taken or omitted by the Rights Agent under this
Agreement and the date on
48
and/or after which such action shall be taken or such omission shall be
effective. The Rights Agent shall not be liable for any action taken by, or
omission of, the Rights Agent in accordance with a proposal included in any such
application on or after the date specified in such application (which date shall
not be less than five Business Days after the date any officer of the Company
actually receives such application unless any such officer shall have consented
in writing to an earlier date) unless, prior to taking any such action (or the
effective date in the case of an omission), the Rights Agent shall have received
written instructions in response to such application specifying the action to be
taken or omitted.
(h) The Rights Agent and any 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 may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not the Rights Agent under
this Agreement. Nothing herein shall preclude the Rights Agent from acting in
any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or through
its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
(j) If, with respect to any Right Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate contained in the form of
assignment or the
49
form of election to purchase set forth on the reverse thereof, as the case may
be, has not been completed to certify the holder is not an Acquiring Person (or
an Affiliate or Associate thereof), the Rights Agent shall not take any further
action with respect to such requested exercise or 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 thirty (30) days' notice in writing mailed to the Company and to each
transfer agent of the Common Stock and the Preferred Stock by registered or
certified mail. The Company may remove the Rights Agent or any successor Rights
Agent (with or without cause) upon thirty (30) days' notice in writing, mailed
to the Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Stock and the Preferred Stock by registered or
certified mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. Notwithstanding the foregoing provisions of this Section 21,
in no event shall the resignation or removal of a Rights Agent be effective
until a successor Rights Agent shall have been appointed and have accepted such
appointment. If the Company shall fail to make such appointment within a period
of thirty (30) days after such removal or after it has been notified in writing
of such resignation or incapacity by the resigning or incapacitated Rights Agent
or by the holder of a Right Certificate (who shall, with such notice, submit his
Right Certificate for inspection by the Company), then the incumbent Rights
Agent or the holder of record of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be (a)
a corporation
50
organized and doing business under the laws of the United States or of any state
thereof, in good standing, which is authorized under such laws to exercise
corporate trust or stock transfer powers and is subject to supervision or
examination in the conduct of its corporate trust or stock transfer business by
federal or state authorities and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $5,000,000 or (b) an
Affiliate controlled by a corporation described in clause (a) of this sentence.
After appointment, the successor Rights Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally named
as Rights Agent without further act or deed, but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Common Stock
and Preferred Stock, and mail a notice thereof in writing to the registered
holders of the Right Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be. Notwithstanding the foregoing
provisions, in the event of resignation, removal or incapacity of the Rights
Agent, the Company shall have the authority to act as the Rights Agent until a
successor Rights Agent shall have assumed the duties of the Rights Agent
hereunder.
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,
at its
51
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
Exercise Price per share and the number or kind or class of shares of stock or
other securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of Voting Stock following the Distribution Date and
prior to the Expiration Date, the Company may with respect to shares of Voting
Stock so issued or sold pursuant to (i) the exercise of stock options, (ii)
under any employee plan or arrangement, (iii) upon the exercise, conversion or
exchange of securities, notes or debentures issued by the Company or (iv) a
contractual obligation of the Company, in each case existing prior to the
Distribution Date, issue Right Certificates representing the appropriate number
of Rights in connection with such issuance or sale.
Section 23. REDEMPTION.
(a) The Company may, at its option, but only by the vote of a majority of
the Board of Directors, redeem all but not less than all of the then outstanding
Rights, at any time prior to the Stock Acquisition Date at a redemption price of
$.001 per Right, subject to adjustments as provided in subsection (c) below (the
"Redemption Price").
(b) Without any further action and without any notice, the right to
exercise the Rights will terminate effective at the time so designated by action
of the Board of Directors ordering the redemption of the Rights and the only
right thereafter of the holders of Rights shall be to receive the Redemption
Price. Within ten (10) days after the effective time of the action of the Board
of Directors ordering the redemption of the Rights, the Company shall give
notice of such redemption to the holders of the then outstanding Rights by
mailing such notice to all such holders at their last addresses as they
52
appear upon the registry books of the Rights Agent or, prior to the Distribution
Date, on the registry books of the transfer agent for the Common Stock. Any
notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each notice of redemption will
state the method by which the payment of the Redemption Price will be made. At
the option of the Board of Directors, the Redemption Price may be paid in cash
to each Rights holder or by the issuance of shares (and, at the Company's
election pursuant to Section 14(b) hereof, cash or depositary receipts in lieu
of fractions of shares other than fractions which are integral multiples of one
one-thousandth of a share) of Preferred Stock or Common Stock having a Fair
Market Value equal to such cash payment.
(c) In the event the Company shall at any time after the date of this
Agreement (A) pay any dividend on Common Stock in shares of Common Stock, (B)
subdivide or split the outstanding shares of Common Stock into a greater number
of shares or (C) combine or consolidate the outstanding shares of Common Stock
into a smaller number of shares or effect a reverse split of the outstanding
shares of Common Stock, then, and in each such event, the Redemption Price shall
be appropriately adjusted to reflect the foregoing.
Section 24. NOTICE OF PROPOSED ACTIONS.
(a) In case the Company, after the Distribution Date, shall propose (i) to
effect any of the transactions referred to in Section 11(a)(i) or to pay any
dividend to the holders of record of its shares of Common Stock payable in
shares of capital stock of any class or to make any other distribution to the
holders of record of its Common Stock (other than a regular periodic cash
dividend), or (ii) to offer to the holders of record of its
53
Common Stock options, warrants, or other rights to subscribe for or to purchase
shares of Common Stock (including any security convertible into or exchangeable
for Common Stock) or shares of stock of any class or any other securities,
options, warrants, convertible or exchangeable securities or other rights, or
(iii) to effect any reclassification of its Preferred Stock or Common Stock or
any recapitalization or reorganization of the Company, or (iv) to effect any
consolidation or merger with or into, or to effect any sale or other transfer
(or to permit one or more of its Subsidiaries to effect any sale or other
transfer), in one or more transactions, of more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to, any
other Person or Persons, or (v) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the Company shall give to
each holder of record of a Right Certificate, in accordance with Section 25,
notice of such proposed action, which shall specify the record date for the
purposes of such transaction referred to in Section 11(a)(i) or such dividend or
distribution, or the date on which such reclassification, recapitalization,
reorganization, consolidation, merger, sale or transfer of assets, liquidation,
dissolution, or winding up is to take place and the record date for determining
participation therein by the holders of record of Common Stock or Preferred
Stock, if any such date is to be fixed, and such notice shall be so given in the
case of any action covered by clause (i) or (ii) above at least ten (10) days
prior to the record date for determining holders of record of the Preferred
Stock for purposes of such action, and in the case of any such other action, at
least ten (10) days prior to the date of the taking of such proposed action or
the date of participation therein by the holders of record of Common Stock or
Preferred Stock, whichever shall be the earlier. The failure to give notice
required by this Section 24 or any defect therein shall not affect
54
the legality or validity of the action taken by the Company or the vote upon any
such action.
(b) In case the event referred to in Section 11(a)(ii) shall occur, then
the Company shall as soon as practicable thereafter, in accordance with Section
25 hereof, give to each holder of a Right notice of the occurrence of such
event, which notice shall describe the event and the consequences of the event
to holders of Rights under Section 11(a)(ii) hereof.
Section 25. NOTICES. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of record of any Right
Certificate or Right to or on the Company shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Rights Agent) as follows:
United Stationers Inc.
0000 Xxxx Xxxx Xxxx
Xxx Xxxxxxx, Xxxxxxxx 00000-0000
Attn: 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 record of any
Right Certificate or Right to or on the Rights Agent shall be sufficiently given
or made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
BANKBOSTON, N.A.
c/o Equiserve Limited Partnership
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of record of any Right Certificate or
Right shall be
55
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 26. SUPPLEMENTS AND AMENDMENTS. For as long as the Rights are then
redeemable and except as provided in the last sentence of this Section 26, the
Company may in its sole and absolute discretion, and the Rights Agent shall if
the Company so directs, supplement or amend any provision of this Agreement
without the approval of any holders of the Rights. At any time when the Rights
are not then redeemable and except as provided in the last sentence of this
Section 26, the Company may, and the Rights Agent shall if the Company so
directs, supplement or amend this Agreement without the approval of any holders
of Right Certificates (i) to cure any ambiguity, (ii) to correct or supplement
any provision contained herein which may be defective or inconsistent with any
other provisions herein or (iii) to change or supplement the provisions
hereunder in any manner which the Company may deem necessary or desirable,
PROVIDED, that no such supplement or amendment pursuant to this clause (iii)
shall materially adversely affect the interest of the holders of Right
Certificates. 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 26, the Rights Agent shall execute
such supplement or amendment. Notwithstanding anything contained in this
Agreement to the contrary, no supplement or amendment shall be made which
changes the Redemption Price.
Section 27. 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
56
have become null and void pursuant to the provisions of Section 7(e) hereof) by
exchanging for each such Right a number of shares of Common Stock having an
aggregate Fair Market Value on the date such Person becomes an Acquiring Person
equal to the Spread, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date such Person becomes an
Acquiring Person (such amount per Right being hereinafter referred to as the
"Exchange Consideration"). 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 Voting Stock
then outstanding. From and after the occurrence of an event specified in Section
13(a) hereof, any Rights that theretofore have not been exchanged pursuant to
this Section 27(a) shall thereafter be exercisable only in accordance with
Section 13 and may not be exchanged pursuant to this Section 27(a).
(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 27
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 the Exchange Consideration. 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
57
such notice of exchange will state the method by which the exchange of the
shares of Common Stock for Rights will be effected and, in the event of any
partial exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other than
Rights which have become null and void pursuant to the provisions of Section
7(e) hereof) 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 27, the Company shall
substitute to the extent of such insufficiency, for each share of Common Stock
that would otherwise be issuable upon exchange of a Right, a number of shares of
Preferred Stock or fractions thereof having an aggregate Fair Market Value equal
to the Fair Market Value of one share of Common Stock as of the date any Person
becomes an Acquiring Person.
(d) The Company shall not be required to issue fractions of shares of
Common Stock or to distribute certificates which evidence fractional shares. In
lieu of such fractional shares, the Company shall pay to the registered holders
of the Right Certificates with regard to which such fractional shares of Common
Stock would otherwise be issuable an amount in cash equal to the same fraction
of the current market value of a whole share of Common Stock. For the purposes
of this paragraph (d), the current market value of a whole share of Common Stock
shall be the closing price of a share of Common Stock for the Trading Day
immediately prior to the date of exchange pursuant to this Section 27.
58
Section 28. SUCCESSORS. All of 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 or corporation other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior to
the Distribution Date, the holders of Common Stock in their capacity as holders
of the Rights) 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 holders of record of the Right Certificates
(and, prior to the Distribution Date, the holders of Common Stock in their
capacity as holders of the Rights).
Section 30.
DELAWARE CONTRACT. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of
Delaware and for all purposes shall be governed by and construed and
enforced in accordance with the laws of such state applicable to contracts to be
made and performed entirely within such state.
Section 31. 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 32. 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.
59
Section 33. 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.
Section 34. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS. The Board
of Directors of the Company shall have the exclusive power and authority to
administer this Agreement and to exercise the rights and powers specifically
granted to the Board of Directors of the Company or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the provisions of this
Agreement and (ii) make all determinations deemed necessary or advisable for the
administration of this Agreement (including, without limitation, a determination
to redeem or not redeem the Rights or to amend this Agreement). All such
actions, calculations, interpretations and determinations (including for
purposes of clause (y) below, all omissions with respect to the foregoing) that
are done or made by the Board of Directors of the Company in good faith, shall
(x) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights, as such, and all other parties, and (y) not subject the
Board of Directors to any liability to the holders of the Rights.
60
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first above written.
UNITED STATIONERS INC.
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
BANKBOSTON, N.A.
By:
-------------------------------------
Name:
------------------------------------
Title:
------------------------------------
EXHIBIT A
AS PROVIDED IN THE
RIGHTS AGREEMENT (AS REFERRED
TO BELOW), RIGHTS ISSUED TO OR BENEFICIALLY OWNED
BY ACQUIRING PERSONS OR THEIR AFFILIATES OR
ASSOCIATES (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF
SUCH RIGHTS SHALL BE NULL AND VOID AND MAY NOT
BE EXERCISED OR TRANSFERRED TO ANY PERSON
UNITED STATIONERS INC.
SUMMARY OF RIGHTS TO PURCHASE
SERIES A JUNIOR PREFERRED STOCK
On July 27, 1999, the Board of Directors of United Stationers Inc. (the
"Company") declared a dividend distribution of one Preferred Stock Purchase
Right for each outstanding share of Common Stock, par value $.10 per share (the
"Common Stock"), of the Company. The distribution is payable as of August 16,
1999 to stockholders of record on that date. Each Right entitles the registered
holder to purchase from the Company one-thousandth (1/1,000) of a share of
preferred stock of the Company, designated as Series A Junior Preferred Stock
(the "Preferred Stock") at a price of one hundred dollars ($100) per
one-thousandth (1/1,000) of a share ("Exercise Price"). The description and
terms of the Rights are set forth in a
Rights Agreement (the "
Rights Agreement")
between the Company and BANKBOSTON, N.A., as Rights Agent (the "Rights Agent").
AS DISCUSSED BELOW, INITIALLY THE RIGHTS WILL NOT BE EXERCISABLE,
CERTIFICATES WILL NOT BE SENT TO STOCKHOLDERS AND THE RIGHTS AUTOMATICALLY WILL
TRADE WITH THE COMMON STOCK.
The Rights, unless earlier redeemed by the Board of Directors, become
exercisable upon the close of business on the day (the "Distribution Date")
which is the earlier of (i) the tenth day following a public announcement that a
person or group of affiliated or associated persons, with certain exceptions set
forth below, has acquired beneficial ownership of 15% or more of the outstanding
voting stock of the Company (an "Acquiring Person") and (ii) the tenth business
day (or such later date as may be determined by the Board of Directors prior to
such time as any person or group of affiliated or associated persons becomes an
Acquiring Person) after the date of the commencement or announcement of a
person's or group's intention to commence a tender or exchange offer the
consummation of which would result in the ownership of 15% or more of the
Company's outstanding voting stock (even if no shares are actually purchased
pursuant to such offer); prior thereto, the Rights would not be exercisable,
would not be represented by a separate certificate, and would not be
transferable apart from the Company's Common Stock, but will instead be
evidenced, with respect to any of the Common Stock certificates outstanding as
of August 16, 1999, by such Common Stock certificate with a copy of this Summary
of Rights attached thereto. An Acquiring
A-1
Person does not include (A) the Company, (B) any subsidiary of the Company, (C)
any employee benefit plan or employee stock plan of the Company or of any
subsidiary of the Company, or any trust or other entity organized, appointed,
established or holding voting stock for or pursuant to the terms of any such
plan, or (D) any person or group of affiliated or associated persons whose
ownership of 15% or more of the shares of voting stock of the Company then
outstanding results solely from (i) any action or transaction or transactions
approved by the Board of Directors before such person or group became an
Acquiring Person or (ii) a reduction in the number of issued and outstanding
shares of voting stock of the Company pursuant to a transaction or transactions
approved by the Board of Directors (provided that any person or group that does
not become an Acquiring Person by reason of clause (i) or (ii) above shall
become an Acquiring Person upon acquisition of an additional 1% of the Company's
voting stock unless such acquisition of additional voting stock will not result
in such person or group becoming an Acquiring Person by reason of such clause
(i) or (ii)).
Until the Distribution Date (or earlier redemption, exchange or expiration
of the Rights), new Common Stock certificates issued after August 16, 1999 will
contain a legend incorporating the
Rights Agreement by reference. Until the
Distribution Date (or earlier redemption, exchange or expiration of the Rights),
the surrender for transfer of any of the Common Stock certificates outstanding
as of August 16, 1999, with or without a copy of this Summary of Rights attached
thereto, will also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate. As soon as practicable following
the Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date and such separate certificates alone
will evidence the Rights from and after the Distribution Date.
The Rights are not exercisable until the Distribution Date. The Rights will
expire at the close of business on July 26, 2009, unless earlier redeemed or
exchanged by the Company as described below.
The Preferred Stock is nonredeemable and, unless otherwise provided in
connection with the creation of a subsequent series of preferred stock,
subordinate to any other series of the Company's preferred stock. The Preferred
Stock may not be issued except upon exercise of Rights. Each share of Preferred
Stock will be entitled to receive when, as and if declared, a quarterly dividend
in an amount equal to the greater of $0.001 per share or 1,000 times the cash
dividends declared on the Company's Common Stock. In addition, the holders of
the Preferred Stock are entitled to receive 1,000 times any non-cash dividends
(other than dividends payable in equity securities) declared on the Common
Stock, in like kind. In the event of the liquidation of the Company, the holders
of Preferred Stock will be entitled to receive, for each share of Preferred
Stock, a payment in an amount equal to the greater of $0.001 or 1,000 times the
payment made per share of Common Stock. Each share of Preferred Stock will have
1,000 votes, voting together with the Common Stock. In the event of any merger,
consolidation or other transaction in which Common Stock is exchanged, each
share of Preferred Stock will be entitled to receive 1,000 times the amount
received per share of Common Stock. The
A-2
rights of Preferred Stock as to dividends, liquidation and voting are protected
by anti-dilution provisions.
The number of shares of Preferred Stock issuable upon exercise of the
Rights and Exercise Price of the Rights are subject to certain adjustments from
time to time in the event of a stock dividend on, or a subdivision or
combination of, the Common Stock. The Exercise Price for the Rights also is
subject to adjustment in the event of extraordinary distributions of cash or
other property to holders of Common Stock.
Unless the Rights are earlier redeemed or exchanged, in the event that,
after the time that a Person becomes an Acquiring Person, the Company were to be
acquired in a merger or other business combination (in which any shares of
Common Stock are changed into or exchanged for other securities or assets) or
more than 50% of the assets or earning power of the Company and its subsidiaries
(taken as a whole) were to be sold or transferred in one or a series of related
transactions, the
Rights Agreement provides that proper provision will be made
so that each holder of record of a Right will from and after such date have the
right to receive, upon payment of the Exercise Price, that number of shares of
common stock of the acquiring company having a market value at the time of such
transaction equal to two times the Exercise Price.
In addition, unless the Rights are earlier redeemed or exchanged, in the
event that a person or group becomes an Acquiring Person, the
Rights Agreement
provides that proper provisions will be made so that each holder of record of a
Right, other than the Acquiring Person (whose Rights will thereupon become null
and void), will thereafter have the right to receive, upon payment of the
Exercise Price, that number of shares of the Preferred Stock having a market
value at the time of the transaction equal to two times the Exercise Price (such
market value to be determined with reference to the market value of the
Company's Common Stock as provided in the
Rights Agreement).
At any time after any person or group becomes an Acquiring Person and prior
to the acquisition by such person or group of 50% or more of the outstanding
voting stock, the Board of Directors of the Company may exchange the Rights
(other than Rights owned by such person or group which will have become void),
in whole or in part, for that number of shares of the Company's Common Stock
having a fair market value on the first date such person or group became an
Acquiring Person equal to the excess of (i) the value of the shares of Preferred
Stock issuable upon the exercise of the Rights in the event of such acquisition
over (ii) the exercise price of the Rights, in each case as adjusted.
Fractions of shares of Preferred Stock (other than fractions which are
integral multiples of one-thousandth of a share) may, at the election of the
Company, be evidenced by depositary receipts. The Company may also issue cash in
lieu of fractional shares which are not integral multiples of one-thousandth of
a share.
At any time prior to the time there has been a public announcement that a
person has become an Acquiring Person, the Company may redeem the Rights in
whole,
A-3
but not in part, at a price of $.001 per Right (the "Redemption Price").
Immediately upon the effective time of the action of the Board of Directors of
the Company authorizing redemption of the Rights, the right to exercise the
Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
For as long as the Rights are then redeemable, the Company may, except with
respect to the Redemption Price, amend the Rights in any manner, including an
amendment to extend the time period in which the Rights may be redeemed. At any
time when the Rights are not then redeemable, the Company may amend the Rights
in any manner that does not materially adversely affect the interests of holders
of the Rights as such.
Until a Right is exercised, the holder, as such, will have no rights as a
stockholder of the Company, including, without limitation, the right to vote or
to receive dividends.
A copy of the
Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Current Report on Form 8-K dated July 28,
1999. A copy of the Rights Agreement is available free of charge from the
Company. This summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights Agreement which is
incorporated in this summary description herein by reference.
A-4
EXHIBIT B
[Form of Right Certificate]
Certificate No. W- ______ Rights
NOT EXERCISABLE AFTER JULY 26, 2009 OR EARLIER IF EXCHANGED OR REDEEMED.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY AND
UNDER CERTAIN OTHER CIRCUMSTANCES, AT $.001 PER RIGHT (SUBJECT TO
ADJUSTMENT), ON THE TERMS SET FORTH OR REFERRED TO IN THE RIGHTS AGREEMENT.
AS PROVIDED IN THE RIGHTS AGREEMENT (AS REFERRED TO BELOW), RIGHTS ISSUED
TO OR BENEFICIALLY OWNED BY ACQUIRING PERSONS OR THEIR AFFILIATES OR
ASSOCIATES (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS SHALL BE NULL AND VOID AND MAY NOT BE
EXERCISED OR TRANSFERRED TO ANY PERSON.
Right Certificate
This certifies that __________________________, , or its registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement dated as of July 27, 1999 (the "Rights
Agreement") between United Stationers Inc., a
Delaware corporation (the
"Company"), and _____________________________, a banking corporation organized
under the laws of the State of ___________ (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. (New York time) on July
26, 2009 at the office of the Rights Agent designated in the Rights Agreement
for such purpose, or its successor as Rights Agent, in New York, New York, one
one-thousandth (1/1,000) of a fully paid nonassessable share of Series A Junior
Preferred Stock (the "Preferred Stock") of the Company at a purchase
B-1
price of one hundred dollars ($100), as the same may from time to time be
adjusted in accordance with the Rights Agreement (the "Exercise Price"), upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase attached hereto duly executed.
As provided in the Rights Agreement, the Exercise Price and the number of
shares of Preferred 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 and, upon the happening of certain events,
securities other than shares of Preferred Stock, or other property, may be
acquired upon exercise of the Rights evidenced by this Right Certificate, as
provided in the Rights Agreement.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
incorporated herein by reference and made a part hereof and to which Rights
Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities of the Rights Agent,
the Company and the holders of record of Right Certificates. Copies of the
Rights Agreement are on file at the principal executive office of the Company.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office of the Rights Agent designated in the Rights Agreement
for such purpose, may be exchanged for another Right Certificate or Right
Certificates of like tenor and date evidencing Rights entitling the holder of
record to purchase a like aggregate number of shares of Preferred Stock as the
Rights evidenced by the Right
B-2
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 Certificate may be redeemed by the Company at its option or under certain
other circumstances at a redemption price of $.001 per Right.
No fractional shares of Preferred Stock (other than fractions which are
integral multiples of one one-thousandth (1/1,000) of a share) are required to
be issued upon the exercise of any Right or Rights evidenced hereby, and in lieu
thereof the Company may cause depositary receipts to be issued and/or a cash
payment may be 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 Preferred Stock or
of any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at meeting thereof, or to give or
withhold consent to any corporate action or to receive notice of meetings or
other actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise,
B-3
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.
B-4
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal. Dated as of _____________, _____.
ATTEST:
By:
-------------------------------- -------------------------
Secretary Title:
-----------------------
Countersigned:
[Rights Agent]
By
-------------------------------
Authorized Signature
B-5
[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 Certificates.)
FOR VALUE RECEIVED ____________________________________ hereby sells,
assigns and transfers unto ____________________________________________________
(Please print name and address of transferee)
______________________________________________________________Rights evidenced
by 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. Dated: ___________, _____
-------------------------------------------
Signature
Signature Guaranteed:
B-6
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Right Certificate [ ] is [ ] is not being sold, assigned or
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Associate or an Affiliate thereof (as such terms are defined in the Rights
Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, it [ ]
did [ ] did not acquire the Rights evidenced by this Right Certificate from any
Person who is, was or subsequently became an Acquiring Person or an Affiliate or
Associate thereof (as such terms are defined in the Rights Agreement).
Dated:
--------------,------ -------------------------------------------
Signature
NOTICE
The signature to the foregoing Assignment and Certificate must correspond
to the name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change whatsoever.
B-7
FORM OF ELECTION TO PURCHASE
(To be executed if registered holder
desires to exercise the Right Certificate.)
TO _____________________:
The undersigned hereby irrevocably elects to exercise ______________ Rights
represented by this Right Certificate to purchase the shares of Preferred Stock
issuable upon the exercise of such Rights and requests that certificates for
such share(s) be issued in the following name:
Please insert social security
or other identifying number: __________________________________________________
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
B-8
Please insert social security
or other identifying number:
---------------------------------------------------
-------------------------------------------------------------------------------
(Please print name and address)
-------------------------------------------------------------------------------
Dated:
-----------------,------
-------------------------------------------
Signature
(Signature must conform in all respects to
name of holder as specified on the face of
this Right Certificate)
Signature Guaranteed:
B-9
EXHIBIT C
FORM OF
CERTIFICATE OF DESIGNATIONS
OF
SERIES A JUNIOR PREFERRED STOCK
OF
UNITED STATIONERS INC.
Pursuant to Section 151 of the
Delaware
General Corporation Law
I, Xxxxx Xxxxxxx Xxxxx, the Vice President, General Counsel and Secretary
of United Stationers Inc., a corporation organized and existing under the
Delaware General Corporation Law (the "Company"), in accordance with the
provisions of Section 151 of such law, DO HEREBY CERTIFY that pursuant to the
authority conferred upon the Board of Directors by the Certificate of
Incorporation of the Company, the Board of Directors on July 27, 1999 adopted
the following resolution which creates a series of shares of Preferred Stock
designated as Series A Junior Preferred Stock, as follows:
RESOLVED, that pursuant to Section 151(g) of the
Delaware General
Corporation Law and the authority vested in the Board of Directors of the
Company in accordance with the provisions of the Certificate of Incorporation of
the Company, a series of Preferred Stock of the Company be, and hereby is,
created, and the powers, designations, preferences and relative, participating,
optional or other special rights of the shares of such series, and the
qualifications, limitations or restrictions thereof, be, and hereby are, as
follows:
C-1
Section 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Series A Junior Preferred Stock" (the "Series A Preferred Stock")
and the number of shares constituting such series shall be 68,000.
Section 2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the provisions for adjustment hereinafter set forth, and
subject to the rights of the holders of any shares of any series of Preferred
Stock ranking prior and superior to the Series A Preferred Stock with respect to
dividends, the holders of shares of Series A Preferred Stock shall be entitled
to receive, when, as and if declared by the Board of Directors out of funds
legally available for the purpose, (i) cash dividends in an amount per share
(rounded to the nearest cent) equal to 1,000 times the aggregate per share
amount of all cash dividends declared or paid on the Common Stock, $0.10 par
value per share, of the Company (the "Common Stock") and (ii) a preferential
cash dividend (the "Preferential Dividends"), if any, in preference to the
holders of Common Stock, on the first day of each fiscal quarter of the Company
(each a "Quarterly Dividend Payment Date"), commencing on the first Quarterly
Dividend Payment Date after the first issuance of a share or fraction of a share
of Series A Preferred Stock, payable in an amount (except in the case of the
first Quarterly Dividend Payment if the date of the first issuance of Series A
Preferred Stock is a date other than a Quarterly Dividend Payment date, in which
case such payment shall be a prorated amount of such amount) equal to $0.001 per
share of Series A Preferred Stock less the per share amount of all cash
dividends declared on the Series A Preferred Stock pursuant to clause (i) of
this sentence since the immediately preceding Quarterly Dividend Payment Date
or, with
C-2
respect to the first Quarterly Dividend Payment Date, since the first issuance
of any share or fraction of a share of Series A Preferred Stock. In the event
the Company shall, at any time after the issuance of any share or fraction of a
share of Series A Preferred Stock, make any distribution on the shares of Common
Stock of the Company, whether by way of a dividend or a reclassification of
stock, a recapitalization, reorganization or partial liquidation of the Company
or otherwise, which is payable in cash or any debt security, debt instrument,
real or personal property or any other property (other than cash dividends
subject to the immediately preceding sentence, a distribution of shares of
Common Stock or other capital stock of the Company or a distribution of rights
or warrants to acquire any such share, including any debt security convertible
into or exchangeable for any such share, at a price less than the Fair Market
Value (as hereinafter defined) of such share), then, and in each such event, the
Company shall simultaneously pay on each then outstanding share of Series A
Preferred Stock of the Company a distribution, in like kind, of 1,000 times such
distribution paid on a share of Common Stock (subject to the provisions for
adjustment hereinafter set forth). The dividends and distributions on the Series
A Preferred Stock to which holders thereof are entitled pursuant to clause (i)
of the first sentence of this paragraph and pursuant to the second sentence of
this paragraph are hereinafter referred to as "Dividends" and the multiple of
such cash and non-cash dividends on the Common Stock applicable to the
determination of the Dividends, which shall be 1,000 initially but shall be
adjusted from time to time as hereinafter provided, is hereinafter referred to
as the "Dividend Multiple". In the event the Company shall at any time after
August 16, 1999 declare or pay any dividend or make any distribution on Common
Stock payable in shares of Common Stock, or effect a
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subdivision or split or a combination, consolidation or reverse split of the
outstanding shares of Common Stock into a greater or lesser number of shares of
Common Stock, then in each such case the Dividend Multiple thereafter applicable
to the determination of the amount of Dividends which holders of shares of
Series A Preferred Stock shall be entitled to receive shall be the Dividend
Multiple applicable immediately prior to such event multiplied by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) The Company shall declare each Dividend at the same time it declares
any cash or non-cash dividend or distribution on the Common Stock in respect of
which a Dividend is required to be paid. No cash or non-cash dividend or
distribution on the Common Stock in respect of which a Dividend is required to
be paid shall be paid or set aside for payment on the Common Stock unless a
Dividend in respect of such dividend or distribution on the Common Stock shall
be simultaneously paid, or set aside for payment, on the Series A Preferred
Stock.
(C) Preferential Dividends shall begin to accrue on outstanding shares of
Series A Preferred Stock from the Quarterly Dividend Payment Date next preceding
the date of issuance of any shares of Series A Preferred Stock. Accrued but
unpaid Preferential Dividends shall cumulate but shall not bear interest.
Preferential Dividends paid on the shares of Series A Preferred Stock in an
amount less than the total amount of
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such dividends at the time accrued and payable on such shares shall be allocated
pro rata on a share-by-share basis among all such shares at the time
outstanding.
Section 3. VOTING RIGHTS. The holders of shares of Series A Preferred Stock
shall have the following voting rights:
(A) Subject to the provisions for adjustment hereinafter set forth, each
share of Series A Preferred Stock shall entitle the holder thereof to 1,000
votes on all matters submitted to a vote of the holders of the Common Stock. The
number of votes which a holder of Series A Preferred Stock is entitled to cast,
as the same may be adjusted from time to time as hereinafter provided, is
hereinafter referred to as the "Vote Multiple". In the event the Company shall
at any time after August 16, 1999 declare or pay any dividend on Common Stock
payable in shares of Common Stock, or effect a subdivision or split or a
combination, consolidation or reverse split of the outstanding shares of Common
Stock into a greater or lesser number of shares of Common Stock, then in each
such case the Vote Multiple thereafter applicable to the determination of the
number of votes per share to which holders of shares of Series A Preferred Stock
shall be entitled after such event shall be the Vote Multiple immediately prior
to such event multiplied by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in the Certificate of
Incorporation or by law, the holders of shares of Series A Preferred Stock and
the holders
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of shares of Common Stock shall vote together as one class on all matters
submitted to a vote of stockholders of the Company.
(C) In the event that the Preferential Dividends accrued on the Series A
Preferred Stock for four or more quarterly dividend periods, whether consecutive
or not, shall not have been declared and paid or irrevocably set aside for
payment, the holders of record of Preferred Stock of the Company of all series
(including the Series A Preferred Stock), other than any series in respect of
which such right is expressly withheld by the Certificate of Incorporation or
the authorizing resolutions included in any Certificate of Designations
therefor, shall have the right, at the next meeting of stockholders called for
the election of directors, to elect two members to the Board of Directors, which
directors shall be in addition to the number required prior to such event, to
serve until the next Annual Meeting and until their successors are elected and
qualified or their earlier resignation, removal or incapacity or until such
earlier time as all accrued and unpaid Preferential Dividends upon the
outstanding shares of Series A Preferred Stock shall have been paid (or
irrevocably set aside for payment) in full. The holders of shares of Series A
Preferred Stock shall continue to have the right to elect directors as provided
by the immediately preceding sentence until all accrued and unpaid Preferential
Dividends upon the outstanding shares of Series A Preferred Stock shall have
been paid (or set aside for payment) in full. Such directors may be removed and
replaced by such stockholders, and vacancies in such directorships may be filled
only by such stockholders (or by the remaining director elected by such
stockholders, if there be one) in the manner permitted by law; provided,
however, that any such action by stockholders shall be taken at a meeting of
stockholders and shall not be taken by written consent thereto.
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(D) Except as otherwise required by the Certificate of Incorporation or by
law or set forth herein, holders of Series A Preferred Stock shall have no other
special voting rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Common Stock as set forth
herein) for the taking of any corporate action.
Section 4. CERTAIN RESTRICTIONS.
(A) Whenever Preferential Dividends or Dividends are in arrears or the
Company shall be in default of payment thereof, thereafter and until all accrued
and unpaid Preferential Dividends and Dividends, whether or not declared, on
shares of Series A Preferred Stock outstanding shall have been paid or set
irrevocably aside for payment in full, and in addition to any and all other
rights which any holder of shares of Series A Preferred Stock may have in such
circumstances, the Company shall not:
(i) declare or pay dividends on, make any other distributions on, or
redeem or purchase or otherwise acquire for consideration, any shares of
stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends on or make any other distributions on
any shares of stock ranking on a parity as to dividends with the Series A
Preferred Stock, unless dividends are paid ratably on the Series A
Preferred Stock and all such parity stock on which dividends are payable or
in arrears in proportion to the total amounts to which the holders of all
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such shares are then entitled if the full dividends accrued thereon were to
be paid;
(iii) except as permitted by subparagraph (iv) of this paragraph 4(A),
redeem or purchase or otherwise acquire for consideration shares of any
stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred Stock, provided that
the Company may at any time redeem, purchase or otherwise acquire shares of
any such parity stock in exchange for shares of any stock of the Company
ranking junior (both as to dividends and upon liquidation, dissolution or
winding up) to the Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares of
Series A Preferred Stock, or any shares of stock ranking on a parity with
the Series A Preferred Stock (either as to dividends or upon liquidation,
dissolution or winding up), except in accordance with a purchase offer made
to all holders of such shares upon such terms as the Board of Directors,
after consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable treatment among
the respective series or classes.
(B) The Company shall not permit any Subsidiary (as hereinafter defined) of
the Company to purchase or otherwise acquire for consideration any shares of
stock of the Company unless the Company could, under paragraph (A) of this
Section 4,
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purchase or otherwise acquire such shares at such time and in such manner. A
"Subsidiary" of the Company shall mean any corporation or other entity of which
securities or other ownership interests having ordinary voting power sufficient
to elect a majority of the board of directors of such corporation or other
entity or other persons performing similar functions are beneficially owned,
directly or indirectly, by the Company or by any corporation or other entity
that is otherwise controlled by the Company.
(C) The Company shall not issue any shares of Series A Preferred Stock
except upon exercise of Rights issued pursuant to that certain Rights Agreement
dated as of July 27, 1999 between the Company and BANKBOSTON, N.A. as Rights
Agent, as it may be amended from time to time, a copy of which is on file with
the Secretary of the Company at its principal executive office and shall be made
available to stockholders of record without charge upon written request therefor
addressed to said Secretary. Notwithstanding the foregoing sentence, nothing
contained in the provisions hereof shall prohibit or restrict the Company from
issuing for any purpose any series of Preferred Stock with rights and privileges
similar to, different from, or greater than, those of the Series A Preferred
Stock.
Section 5. REACQUIRED SHARES. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Company in any manner whatsoever shall be
retired and cancelled promptly after the acquisition thereof. All such shares
upon their retirement and cancellation shall become authorized but unissued
shares of Preferred Stock, without designation as to series, and such shares may
be reissued as part of a new
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series of Preferred Stock to be created by resolution or resolutions of the
Board of Directors.
Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any voluntary or
involuntary liquidation, dissolution or winding up of the Company, no
distribution shall be made (i) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock unless the holders of shares of Series A Preferred
Stock shall have received for each share of Series A Preferred Stock, subject to
adjustment as hereinafter provided, (A) $1,000 plus an amount equal to accrued
and unpaid dividends and distributions thereon, whether or not declared, to the
date of such payment or, (B) if greater than the amount specified in clause
(i)(A) of this sentence, an amount equal to 1,000 times the aggregate amount to
be distributed per share to holders of Common Stock, as the same may be adjusted
as hereinafter provided and (ii) to the holders of stock ranking on a parity
upon liquidation, dissolution or winding up with the Series A Preferred Stock,
unless simultaneously therewith distributions are made ratably on the Series A
Preferred Stock and all other shares of such parity stock in proportion to the
total amounts to which the holders of shares of Series A Preferred Stock are
entitled under clause (i)(A) of this sentence and to which the holders of such
parity shares are entitled, in each case upon such liquidation, dissolution or
winding up. The amount to which holders of Series A Preferred Stock may be
entitled upon liquidation, dissolution or winding up of the Company pursuant to
clause (i)(B) of the foregoing sentence is hereinafter referred to as the
"Participating Liquidation Amount" and the multiple of the amount to be
distributed to holders of shares of Common Stock upon the liquidation,
dissolution or winding up of
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the Company applicable pursuant to said clause to the determination of the
Participating Liquidation Amount, as said multiple may be adjusted from time to
time as hereinafter provided, is hereinafter referred to as the "Liquidation
Multiple". In the event the Company shall at any time after August 16, 1999
declare or pay any dividend on Common Stock payable in shares of Common Stock,
or effect a subdivision or split or a combination, consolidation or reverse
split of the outstanding shares of Common Stock into a greater or lesser number
of shares of Common Stock, then, in each such case, the Liquidation Multiple
thereafter applicable to the determination of the Participating Liquidation
Amount to which holders of Series A Preferred Stock shall be entitled after such
event shall be the Liquidation Multiple applicable immediately prior to such
event multiplied by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately
prior to such event.
Section 7. CERTAIN RECLASSIFICATIONS AND OTHER EVENTS.
(A) In the event that holders of shares of Common Stock of the Company
receive after August 16, 1999 in respect of their shares of Common Stock any
share of capital stock of the Company (other than any share of Common Stock of
the Company), whether by way of reclassification, recapitalization,
reorganization, dividend or other distribution or otherwise (a "Transaction"),
then, and in each such event, the dividend rights, voting rights and rights upon
the liquidation, dissolution or winding up of the Company of the shares of
Series A Preferred Stock shall be adjusted so that after such
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event the holders of Series A Preferred Stock shall be entitled, in respect of
each share of Series A Preferred Stock held, in addition to such rights in
respect thereof to which such holder was entitled immediately prior to such
adjustment, to (i) such additional dividends as equal the Dividend Multiple in
effect immediately prior to such Transaction multiplied by the additional
dividends which the holder of a share of Common Stock shall be entitled to
receive by virtue of the receipt in the Transaction of such capital stock, (ii)
such additional voting rights as equal the Vote Multiple in effect immediately
prior to such Transaction multiplied by the additional voting rights which the
holder of a share of Common Stock shall be entitled to receive by virtue of the
receipt in the Transaction of such capital stock and (iii) such additional
distributions upon liquidation, dissolution or winding up of the Company as
equal the Liquidation Multiple in effect immediately prior to such Transaction
multiplied by the additional amount which the holder of a share of Common Stock
shall be entitled to receive upon liquidation, dissolution or winding up of the
Company by virtue of the receipt in the Transaction of such capital stock, as
the case may be, all as provided by the terms of such capital stock.
(B) In the event that holders of shares of Common Stock of the Company
receive after August 16, 1999 in respect of their shares of Common Stock any
right or warrant to purchase Common Stock (including as such a right, for all
purposes of this paragraph, any security convertible into or exchangeable for
Common Stock) at a purchase price per share less than the Fair Market Value of a
share of Common Stock on the date of issuance of such right or warrant, then and
in each such event the dividend rights, voting rights and rights upon the
liquidation, dissolution or winding up of the Company of the shares of Series A
Preferred Stock shall each be adjusted so that after
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such event the Dividend Multiple, the Vote Multiple and the Liquidation Multiple
shall each be the product of the Dividend Multiple, the Vote Multiple and the
Liquidation Multiple, as the case may be, in effect immediately prior to such
event multiplied by a fraction the numerator of which shall be the number of
shares of Common Stock outstanding immediately before such issuance of rights or
warrants plus the maximum number of shares of Common Stock which could be
acquired upon exercise in full of all such rights or warrants and the
denominator of which shall be the number of shares of Common Stock outstanding
immediately before such issuance of rights or warrants plus the number of shares
of Common Stock which could be purchased, at the Fair Market Value of the Common
Stock at the time of such issuance, by the maximum aggregate consideration
payable upon exercise in full of all such rights or warrants.
(C) In the event that holders of shares of Common Stock of the Company
receive after August 16, 1999 in respect of their shares of Common Stock any
right or warrant to purchase capital stock of the Company (other than shares of
Common Stock), including as such a right, for all purposes of this paragraph,
any security convertible into or exchangeable for capital stock of the Company
(other than Common Stock), at a purchase price per share less than the Fair
Market Value of such shares of capital stock on the date of issuance of such
right or warrant, then and in each such event the dividend rights, voting rights
and rights upon liquidation, dissolution or winding up of the Company of the
shares of Series A Preferred Stock shall each be adjusted so that after such
event each holder of a share of Series A Preferred Stock shall be entitled, in
respect of each share of Series A Preferred Stock held, in addition to such
rights in respect thereof to which such holder was entitled immediately prior to
such event, to receive
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(i) such additional dividends as equal the Dividend Multiple in effect
immediately prior to such event multiplied, first, by the additional dividends
to which the holder of a share of Common Stock shall be entitled upon exercise
of such right or warrant by virtue of the capital stock which could be acquired
upon such exercise and multiplied again by the Discount Fraction (as hereinafter
defined) and (ii) such additional voting rights as equal the Vote Multiple in
effect immediately prior to such event multiplied, first, by the additional
voting rights to which the holder of a share of Common Stock shall be entitled
upon exercise of such right or warrant by virtue of the capital stock which
could be acquired upon such exercise and multiplied again by the Discount
Fraction and (iii) such additional distributions upon liquidation, dissolution
or winding up of the Company as equal the Liquidation Multiple in effect
immediately prior to such event multiplied, first, by the additional amount
which the holder of a share of Common Stock shall be entitled to receive upon
liquidation, dissolution or winding up of the Company upon exercise of such
right or warrant by virtue of the capital stock which could be acquired upon
such exercise and multiplied again by the Discount Fraction. For purposes of
this paragraph, the "Discount Fraction" shall be a fraction the numerator of
which shall be the difference between the Fair Market Value of a share of the
capital stock subject to a right or warrant distributed to holders of shares of
Common Stock of the Company as contemplated by this paragraph immediately after
the distribution thereof and the purchase price per share for such share of
capital stock pursuant to such right or warrant and the denominator of which
shall be the Fair Market Value of a share of such capital stock immediately
after the distribution of such right or warrant.
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(D) For purposes of this Certificate of Designations, the "Fair Market
Value" of a share of capital stock of the Company (including a share of Common
Stock) on any date shall be deemed to be the average of the daily closing price
per share thereof over the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date; PROVIDED, HOWEVER, that, in
the event that such Fair Market Value of any such share of capital stock is
determined during a period which includes any date that is within 30 Trading
Days after (i) the ex-dividend date for a dividend or distribution on stock
payable in shares of such stock or securities convertible into shares of such
stock, or (ii) the effective date of any subdivision, split, combination,
consolidation, reverse stock split or reclassification of such stock, then, and
in each such case, the Fair Market Value shall be appropriately adjusted by the
Board of Directors of the Company to take into account ex-dividend or
post-effective date 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 applicable transaction reporting system with respect to
securities listed or admitted to trading on the Nasdaq National Market), or, if
the shares are not listed or admitted to trading on the Nasdaq National Market,
as reported in the applicable transaction reporting system with respect to
securities listed on the principal national securities exchange or Nasdaq market
on which the shares are listed or admitted to trading or, if the shares are not
listed or admitted to trading on any national securities exchange or Nasdaq
market, the last quoted price or, if not so quoted, the average of the high bid
and low asked prices in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or
such other system then in
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use, or if on any such date the shares 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 shares selected by the Board of Directors of
the Company. The term "Trading Day" shall mean a day on which the principal
national securities exchange or Nasdaq market on which the shares are listed or
admitted to trading is open for the transaction of business or, if the shares
are not listed or admitted to trading on any national securities exchange or
Nasdaq market, on which the Nasdaq National Market or such other national
securities exchange as may be selected by the Board of Directors of the Company
is open. If the shares are not publicly held or not so listed or traded on any
day within the period of 30 Trading Days applicable to the determination of Fair
Market Value thereof as aforesaid, "Fair Market Value" shall mean the fair
market value thereof per share as determined in good faith by the Board of
Directors of the Company. In either case referred to in the foregoing sentence,
the determination of Fair Market Value shall be described in a statement filed
with the Secretary of the Company.
Section 8. CONSOLIDATION, MERGER, ETC. In case the Company shall enter into
any consolidation, merger, combination or other transaction in which the shares
of Common Stock are exchanged for or changed into other stock or securities,
cash and/or any other property, then in any such case each outstanding share of
Series A Preferred Stock shall at the same time be similarly exchanged for or
changed into the aggregate amount of stock, securities, cash and/or other
property (payable in like kind), as the case may be, for which or into which
each share of Common Stock is changed or exchanged multiplied by the highest of
the Vote Multiple, the Dividend Multiple or the Liquidation Multiple in effect
immediately prior to such event.
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Section 9. EFFECTIVE TIME OF ADJUSTMENTS.
(A) Adjustments to the Series A Preferred Stock required by the provisions
hereof shall be effective as of the time at which the event requiring such
adjustments occurs.
(B) The Company shall give prompt written notice to each holder of a share
of Series A Preferred Stock of the effect of any adjustment to the voting
rights, dividend rights or rights upon liquidation, dissolution or winding up of
the Company of such shares required by the provisions hereof. Notwithstanding
the foregoing sentence, the failure of the Company to give such notice shall not
affect the validity of or the force or effect of or the requirement for such
adjustment.
Section 10. NO REDEMPTION. The shares of Series A Preferred Stock shall not
be redeemable at the option of the Company or any holder thereof.
Notwithstanding the foregoing sentence of this Section, the Company may acquire
shares of Series A Preferred Stock in any other manner permitted by law, the
provisions hereof and the Certificate of Incorporation of the Company.
Section 11. RANKING. Unless otherwise provided in the Certificate of
Incorporation of the Company or a Certificate of Designations relating to a
subsequent series of preferred stock of the Company, the Series A Preferred
Stock shall rank junior to all other series of the Company's Preferred Stock as
to the payment of dividends and the distribution of assets on liquidation,
dissolution or winding up and senior to the Common Stock.
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Section 12. AMENDMENT. The provisions hereof and the Certificate of
Incorporation of the Company shall not be amended in any manner which would
adversely affect the rights, privileges or powers of the Series A Preferred
Stock without, in addition to any other vote of stockholders required by law,
the affirmative vote of the holders of two-thirds or more of the outstanding
shares of Series A Preferred Stock, voting together as a single class.
IN WITNESS WHEREOF, I have executed and subscribed this Certificate of
Designations and do affirm the foregoing as true under the penalties of perjury
this 27th day of July, 1999.
By:
-----------------------------------------
Name: Xxxxx Xxxxxxx Xxxxx
Title: Vice President, General Counsel and
Secretary
ATTEST:
By:
-----------------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
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