--------------------------------------------------------------------------------
AMENDED AND RESTATED
SHAREHOLDER PROTECTION RIGHTS AGREEMENT
dated as of
April 19, 2000
between
VESTCOM INTERNATIONAL, INC.
and
AMERICAN STOCK TRANSFER & TRUST COMPANY,
as Rights Agent
--------------------------------------------------------------------------------
SHAREHOLDER PROTECTION RIGHTS AGREEMENT
Table of Contents
Page
----
Article I
DEFINITIONS
Section 1.1 Definitions.....................................................2
Article II
THE RIGHTS
Section 2.1 Summary of Rights...............................................8
Section 2.2 Legend on Common Stock Certificates.............................8
Section 2.3 Exercise of Rights; Separation of Rights........................8
Section 2.4 Adjustments to Exercise Price; Number of Rights................10
Section 2.5 Effective Date of Exercise.....................................11
Section 2.6 Execution, Authentication, Delivery
and Dating of Rights Certificates............................11
Section 2.7 Registration, Registration of Transfer and Exchange............13
Section 2.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates......13
Section 2.9 Persons Deemed Owners..........................................14
Section 2.10 Delivery and Cancellation of Certificates......................14
Section 2.11 Agreement of Rights Holders....................................14
Article III
ADJUSTMENTS TO THE RIGHTS IN
CERTAIN TRANSACTIONS
Section 3.1 Flip-in........................................................15
Section 3.2 Flip-over......................................................17
Article IV
THE RIGHTS AGENT
Section 4.1 General........................................................18
Section 4.2 Merger or Consolidation or Change of Name of Rights Agent......18
Section 4.3 Duties of Rights Agent.........................................19
Section 4.4 Change of Rights Agent.........................................20
Article V
MISCELLANEOUS
Section 5.1 Redemption.....................................................21
Section 5.2 Expiration.....................................................22
Section 5.3 Issuance of New Rights Certificates............................22
Section 5.4 Supplements and Amendments.....................................22
Section 5.5 Fractional Shares..............................................22
Section 5.6 Rights of Action...............................................23
Section 5.7 Holder of Rights Not Deemed a Shareholder......................23
Section 5.8 Notice of Proposed Actions.....................................23
Section 5.9 Notices........................................................23
Section 5.10 Suspension of Exercisability...................................24
Section 5.11 Costs of Enforcement...........................................24
Section 5.12 Successors.....................................................24
Section 5.13 Benefits of this Agreement.....................................24
Section 5.14 Determination and Actions by the Board of Directors, etc.......25
Section 5.15 Descriptive Headings...........................................25
Section 5.16 Governing Law..................................................25
Section 5.17 Counterparts...................................................25
Section 5.18 Severability...................................................25
EXHIBITS
Exhibit A Description of Terms of Participating Preferred Stock
Exhibit B Form of Rights Certificate (Together with Form of
Election to Exercise)
AMENDED AND RESTATED SHAREHOLDER PROTECTION RIGHTS AGREEMENT
This AMENDED AND RESTATED SHAREHOLDER PROTECTION RIGHTS
AGREEMENT (as amended from time to time, this "Agreement"), dated as of April
19, 2000, between Vestcom International, Inc., a New Jersey corporation (the
"Company"), and American Stock Transfer & Trust Company, a New York corporation,
as Rights Agent (the "Rights Agent", which term shall include any successor
Rights Agent hereunder).
WITNESSETH:
WHEREAS, pursuant to the Company's Shareholder Protection
Rights Agreement, dated December 16, 1999 (the "Initial Agreement"), the Board
(a) authorized and declared a dividend of one right ("Right") in respect of each
share of Common Stock (as hereinafter defined) held of record as of the close of
business on December 28, 1999 (the "Record Time") and (b) as provided in Section
2.4, authorized the issuance of one Right in respect of each share of Common
Stock newly issued after the Record Time and prior to the Separation Time and,
to the extent provided in Section 5.3, each share of Common Stock newly issued
after the Separation Time;
WHEREAS, subject to the terms and conditions hereof, each
Right entitles the holder thereof, after the Separation Time, to purchase
securities or assets of the Company (or, in certain cases, securities of certain
other entities) pursuant to the terms and subject to the conditions set forth
herein;
WHEREAS, the Company has appointed the Rights Agent to act on
behalf of the Company, and the Rights Agent is willing so to act, in connection
with the issuance, transfer, exchange and replacement of Rights Certificates,
the exercise of Rights and other matters referred to herein; and
WHEREAS, the Company desires to amend the Initial Agreement in
certain respects and then incorporate such changes into an amended and restated
agreement;
NOW THEREFORE, in consideration of the premises and the
respective agreements set forth herein, the parties hereby agree that the
Initial Agreement shall be amended and restated in its entirety to provide as
follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. For purposes of this Agreement, the following
terms have the meanings indicated:
"Acquiring Person" shall mean any Person who is a Beneficial
Owner of 10% or more of the outstanding shares of Common Stock; provided,
however, that the term "Acquiring Person" shall not include any Person (i) who
is the Beneficial Owner of 10% or more of the outstanding shares of Common Stock
on December 16, 1999 or who shall become the Beneficial Owner of 10% or more of
the outstanding shares of Common Stock solely as a result of a purchase by the
Company of shares of its Common Stock, until such time after December 16, 1999
as any of such Persons shall become the Beneficial Owner (other than by means of
a stock dividend or stock split) of additional shares of Common Stock (other
than shares of Common Stock acquired upon the exercise of stock options granted
to such Persons as employees, officers or directors of the Company or any of its
Subsidiaries) constituting two percent (2%) or more of the then outstanding
shares of Common Stock, (ii) who becomes the Beneficial Owner of 10% or more of
the outstanding shares of Common Stock but who acquired Beneficial Ownership of
shares of Common Stock without any plan or intention to seek or affect control
of the Company, if, upon notice by the Company, such Person promptly enters into
an irrevocable commitment with the Company to divest, and thereafter promptly
divests (without exercising or retaining any power, including voting, with
respect to such shares), sufficient shares of Common Stock (or securities
convertible into, exchangeable into or exercisable for Common Stock) so that
such Person ceases to be the Beneficial Owner of the greater of (x) 10% of the
outstanding shares of Common Stock or (y) the percentage of the outstanding
Common Stock Beneficially Owned by such Person on the date hereof or (iii) who
Beneficially Owns shares of Common Stock consisting solely of one or more of (A)
shares of Common Stock Beneficially Owned pursuant to the grant or exercise of
an option granted to such Person (an "Option Holder") by the Company in
connection with an agreement to merge with, or acquire, the Company that is (x)
approved by the Board at a time when there are Independent Directors then in
office and such agreement is approved by a majority of the Independent Directors
then in office and (y) entered into prior to a Flip-in Date, (B) shares of
Common Stock (or securities convertible into, exchangeable into or exercisable
for Common Stock) Beneficially Owned by such Option Holder or its Affiliates or
Associates at the time of grant of such option and (C) shares of Common Stock
(or securities convertible into, exchangeable into or exercisable for Common
Stock) acquired by Affiliates or Associates of such Option Holder after the time
of such grant which, in the aggregate, amount to less than one percent (1%) of
the outstanding shares of Common Stock. In addition, the Company, any
wholly-owned Subsidiary of the Company, any employee stock ownership or other
employee benefit plan of the Company or of a wholly-owned Subsidiary of the
Company and any Person or entity organized, appointed or established by the
Company or by a wholly-owned Subsidiary of the Company for or pursuant to the
terms of any such benefit plan shall not be an Acquiring Person.
"Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 under the Exchange Act, as such Rule was in
effect on December 16, 1999.
"Agreement" shall have the meaning set forth in the Preamble.
-2-
A Person shall be deemed the "Beneficial Owner", and to have
"Beneficial Ownership" of, and to "Beneficially Own", any securities as to which
such Person or any of such Person's Affiliates or Associates is or may be deemed
to be the beneficial owner of pursuant to Rule 13d-3 and 13d-5 under the
Exchange Act, as such Rules are in effect on the date of this Agreement, as well
as any securities as to which such Person or any of such Person's Affiliates or
Associates has the right to become Beneficial Owner (whether such right is
exercisable immediately or only after the passage of time or the occurrence of
conditions) 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", or to have "Beneficial Ownership"
of, or to "Beneficially Own", any security (i) solely because such security has
been tendered pursuant to a tender or exchange offer made by such Person or any
of such Person's Affiliates or Associates until such tendered security is
accepted for payment or exchange or (ii) solely because such Person or any of
such Person's Affiliates or Associates has or shares the power to vote or direct
the voting of such security pursuant to a revocable proxy given in response to a
public proxy or consent solicitation made to more than ten holders of shares of
a class of stock of the Company registered under Section 12 of the Exchange Act
and pursuant to, and in accordance with, the applicable rules and regulations
under the Exchange Act, except if such power (or the arrangements relating
thereto) is then reportable under Item 6 of Schedule 13D under the Exchange Act
(or any similar provision of a comparable or successor report). For purposes of
this Agreement, in determining the percentage of the outstanding shares of
Common Stock with respect to which a Person is the Beneficial Owner, all shares
as to which such Person is deemed the Beneficial Owner shall be deemed
outstanding. Notwithstanding any provision herein to the contrary, one or more
Persons shall not be deemed to be the Beneficial Owner of any other Person's
shares merely by reason of the fact that all such Persons jointly apply to the
Board or to the Superior Court of the State of New Jersey to compel the Company
to conduct a special meeting of its shareholders.
"Board" means the Board of Directors of the Company.
"Business Combination" shall mean a transaction or series of
transactions pursuant to which (i) the Company will participate in a merger,
consolidation or share exchange resulting in a change in control of the Company
or (ii) the Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer) assets (A) aggregating more than
50% of the assets (measured by either book value or fair market value) or (B)
generating more than 50% of the operating income or cash flow, of the Company
and its Subsidiaries (taken as a whole).
"Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the State of New Jersey are
generally authorized or obligated by law or executive order to close.
"Close of business" on any given date shall mean 5:00 p.m.
eastern standard time on such date or, if such date is not a Business Day, 5:00
p.m. eastern standard time on the next succeeding Business Day.
-3-
"Common Stock" shall mean the shares of Common Stock, no par
value, of the Company.
"Company" shall have the meaning set forth in the Preamble.
"Election to Exercise" shall have the meaning set forth in
Section 2.3(d) hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Exchange Ratio" shall have the meaning set forth in Section
3.1(c) hereof.
"Exchange Time" shall mean the time at which the right to
exercise the Rights shall terminate pursuant to Section 3.1(c) hereof.
"Exercise Price" shall mean, as of any date, the price at
which a holder may purchase the securities issuable upon exercise of one whole
Right. Until adjustment thereof in accordance with the terms hereof, the
Exercise Price shall equal $27.00.
"Expansion Factor" shall have the meaning set forth in Section
2.4(a) hereof.
"Expiration Time" shall mean the earliest of (i) the Exchange
Time, (ii) the Redemption Time, (iii) the close of business on the Sunset Date
and (iv) immediately prior to the effective time of a consolidation, merger or
share exchange of the Company (A) into another corporation or (B) with another
corporation in which the Company is the surviving corporation but Common Stock
is converted into cash and/or securities of another corporation, in either case
pursuant to an agreement that is (x) approved by the Board at a time when there
are Independent Directors then in office and such agreement is approved by a
majority of the Independent Directors then in office and (y) entered into by the
Company prior to a Stock Acquisition Date.
"Flip-in Date" shall mean any Stock Acquisition Date.
"Flip-over Entity," for purposes of Section 3.2, shall mean
(i) in the case of a Flip-over Transaction or Event described in clause (i) of
the definition thereof, the Person issuing any securities into which shares of
Common Stock are being converted or exchanged and, if no such securities are
being issued, the other party to such Flip-over Transaction or Event and (ii) in
the case of a Flip-over Transaction or Event referred to in clause (ii) of the
definition thereof, the Person receiving the greatest portion of the (A) assets
or (B) operating income or cash flow being transferred in such Flip-over
Transaction or Event, provided that in all cases if such Person is a subsidiary
of a corporation, the parent corporation shall be the Flip-over Entity.
"Flip-over Stock" shall mean the capital stock (or similar
equity interest) with the greatest voting power in respect of the election of
directors (or other persons similarly responsible for direction of the business
and affairs) of the Flip-over Entity.
-4-
"Flip-over Transaction or Event" shall mean a transaction or
series of transactions after a Flip-in Date in which, directly or indirectly,
(i) the Company shall consolidate or merge or participate in a share exchange
with any other Person if, at the time of the consolidation, merger or share
exchange or at the time the Company enters into any agreement with respect to
any such consolidation, merger or share exchange, the Acquiring Person controls
the Board and either (A) any term of or arrangement concerning the treatment of
shares of capital stock in such consolidation, merger or share exchange relating
to the Acquiring Person is not identical to the terms and arrangements relating
to other holders of the Common Stock or (B) the Person with whom the transaction
or series of transactions occurs is the Acquiring Person or an Affiliate or
Associate of the Acquiring Person or (ii) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or otherwise transfer)
assets (A) aggregating more than 50% of the assets (measured by either book
value or fair market value) or (B) generating more than 50% of the operating
income or cash flow, of the Company and its Subsidiaries (taken as a whole) to
any Person (other than the Company or one or more of its wholly owned
Subsidiaries) or to two or more Persons which are Affiliates or Associates or
otherwise acting in concert, if, at the time of the entry by the Company (or any
such Subsidiary) into an agreement with respect to such sale or transfer of
assets, the Acquiring Person controls the Board.
"Independent Director" shall mean, with respect to any event
or transaction or series of events or transactions, a member of the Board other
than a director who (i) is an officer of the Company or any of its Subsidiaries
on, or was an officer of the Company or any of its Subsidiaries within five
years immediately preceding, the date on which the Board votes on a matter
pertaining to such transaction or series of transactions which matter, pursuant
to the terms of this Agreement, requires the concurrence of a majority of
Independent Directors, (ii) is a party to such event or transaction or series of
events or transactions, (iii) is an Affiliate or Associate of a party (other
than the Company) to such event or transaction or series of events or
transactions, or (iv) has (A) a relationship that would materially interfere
with the exercise of such director's independent judgment in carrying out the
responsibilities of a director with respect to such event or transaction or
series of events or transactions or (B) a financial interest (other than as a
Beneficial Owner of shares of Common Stock) in or with respect to such event or
transaction or series of events or transactions.
"Market Price" per share of any securities on any date shall
mean the average of the daily closing prices per share of such securities
(determined as described below) on each of the twenty (20) consecutive Trading
Days through and including the Trading Day immediately preceding such date;
provided, however, that if an event of a type analogous to any of the events
described in Section 2.4 hereof shall have caused the closing prices used to
determine the Market Price on any Trading Days during such period of twenty (20)
Trading Days not to be fully comparable with the closing price on such date,
each such closing price so used shall be appropriately adjusted in order to make
it fully comparable with the closing price on such date. The closing price per
share of any securities on any date shall be the last reported sale price,
regular way, or, in case no such sale takes place or is quoted on such date, the
average of the closing bid and asked prices, regular way, for each share of such
securities, in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading on the
New York Stock Exchange, Inc. or, if the securities are not listed or admitted
-5-
to trading on the New York Stock Exchange, Inc., as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the securities are listed or
admitted to trading or, if the securities are not listed or admitted to trading
on any national securities exchange, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System or such other comparable
system then in use, or, if on any such date the securities are not listed or
admitted to trading on any national securities exchange or 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 securities selected by the
Board; provided, however, that if on any such date the securities are not listed
or admitted to trading on a national securities exchange or traded in the
over-the-counter market, the closing price per share of such securities on such
date shall mean the fair value per share of securities on such date as
determined in good faith by the Board, after consultation with a nationally
recognized investment banking firm, and set forth in a certificate delivered to
the Rights Agent.
"Option Holder" shall have the meaning set forth in the
definition of Acquiring Person.
"Person" shall mean any individual, firm, partnership,
association, limited liability company, group (as such term is used in Rule
13d-5 under the Securities Exchange Act of 1934, as such Rule is in effect on
the date of this Agreement), corporation or other entity.
"Preferred Stock" shall mean the series of Participating
Preferred Stock, no par value, of the Company created by resolution of the Board
containing substantially the same terms as set forth in Exhibit A hereto
(appropriately completed).
"Record Time" shall have the meaning set forth in the
Recitals.
"Redemption Price" shall mean an amount equal to one cent
($0.01).
"Redemption Time" shall mean the time at which the right to
exercise the Rights shall terminate pursuant to Section 5.1 hereof.
"Right" shall have the meaning set forth in the Recitals.
"Rights Agent" shall have the meaning set forth in the
Preamble.
"Rights Certificate" shall have the meaning set forth in
Section 2.3(c) hereof.
"Rights Register" shall have the meaning set forth in Section
2.7(a) hereof.
"Separation Time" shall mean the close of business on the
earlier of (i) the tenth Business Day after the date on which any Person
commences a tender or exchange offer which, if consummated, would result in such
-6-
Person's becoming an Acquiring Person and (ii) the Flip-in Date; provided, that
if the foregoing results in the Separation Time being prior to the Record Time,
the Separation Time shall be the Record Time and provided further, that if any
tender or exchange offer referred to in clause (i) of this paragraph is
canceled, terminated or otherwise withdrawn prior to the Separation Time without
the purchase of any shares of Common Stock pursuant thereto, such offer shall be
deemed, for purposes of this paragraph, never to have been made.
"Stock Acquisition Date" shall mean the date of the first
public announcement by the Company (by any means) or by an Acquiring Person
(including by means of filing a Schedule 13D or Schedule 13G under the
Securities Exchange Act of 1934 (or any comparable or successor report or
schedule) or an amendment thereto) that a Person has become an Acquiring Person.
"Subsidiary" of any specified Person shall mean any
corporation or other entity of which a majority of the voting power of the
equity securities or a majority of the equity interest is Beneficially Owned,
directly or indirectly, by such Person.
"Sunset Date" shall mean December 16, 2002, unless the Board
determines, within twelve months prior to such date, that December 16, 2002
shall not be the Sunset Date. If the Board so determines that December 16, 2002
shall not be the Sunset Date, then "Sunset Date" shall mean December 16, 2005,
unless the Board determines, within twelve months prior to December 16, 2005,
that December 16, 2005 shall not be the Sunset Date. If the Board so determines
that December 16, 2002 and December 16, 2005 shall not be the Sunset Date, then
"Sunset Date" shall mean December 16, 2008, unless the Board determines, within
twelve months prior to December 16, 2008, that December 16, 2008 shall not be
the Sunset Date. If the Board so determines that December 16, 2002, December 16,
2005 and December 16, 2008 shall not be the Sunset Date, then "Sunset Date"
shall mean the close of business on the tenth anniversary of the Record Time.
Any determination by the Board that a date shall not constitute a "Sunset Date"
shall require the approval of a majority of the Independent Directors then on
the Board.
"Trading Day," when used with respect to any securities, shall
mean a day on which the New York Stock Exchange, Inc. is open for the
transaction of business or, if such securities are not listed or admitted to
trading on the New York Stock Exchange, Inc., a day on which the principal
national securities exchange on which such securities are listed or admitted to
trading is open for the transaction of business or, if such securities are not
listed or admitted to trading on any national securities exchange, a Business
Day.
-7-
ARTICLE II
THE RIGHTS
2.1 Summary of Rights. As soon as practicable after the Record
Time, the Company will mail a letter summarizing the terms of the Rights to each
holder of record of Common Stock as of the Record Time, at such holder's address
as shown by the records of the Company.
2.2 Legend on Common Stock Certificates. Certificates for the
Common Stock issued after the Record Time but prior to the Separation Time shall
evidence one Right for each share of Common Stock represented thereby and shall
have impressed on, printed on, written on or otherwise affixed to them the
following legend:
Until the Separation Time (as defined in the Rights Agreement
referred to below), this certificate also evidences and
entitles the holder hereof to certain Rights as set forth in a
Rights Agreement, dated as of December 16, 1999 (as such may
be amended from time to time, the "Rights Agreement"), between
Vestcom International, Inc. (the "Company") and American Stock
Transfer & Trust Company, as Rights Agent, the terms of which
are hereby incorporated herein by reference and a copy of
which is on file at the principal executive offices of the
Company. Under certain circumstances, as set forth in the
Rights Agreement, such Rights may be redeemed, may become
exercisable for securities or assets of the Company or
securities of another entity, may be exchanged for shares of
Common Stock or other securities or assets of the Company, may
expire, may become void (if they are "Beneficially Owned" by
an "Acquiring Person" or an Affiliate or Associate thereof, as
such terms are defined in the Rights Agreement, or by any
transferee of any of the foregoing) or may be evidenced by
separate certificates and may no longer be evidenced by this
certificate. The Company will mail or arrange for the mailing
of a copy of the Rights Agreement to the holder of this
certificate without charge after the receipt of a written
request therefor.
Certificates representing shares of Common Stock that are issued and outstanding
at the Record Time shall evidence one Right for each share of Common Stock
evidenced thereby notwithstanding the absence of the legend required by this
Agreement.
2.3 Exercise of Rights; Separation of Rights.
(a) Subject to Sections 3.1, 5.1 and 5.10 and subject to
adjustment as herein set forth, each Right will entitle the holder thereof,
after the Separation Time and prior to the Expiration Time, to purchase, for the
Exercise Price, one one-hundredth of a share of Preferred Stock.
-8-
(b) Until the Separation Time, (i) no Right may be exercised
and (ii) each Right will be evidenced by the certificate for the associated
share of Common Stock (together, in the case of certificates issued prior to the
Record Time, with the letter mailed to the record holder thereof pursuant to
Section 2.1) and will be transferable only together with, and will be
transferred by a transfer (whether with or without such letter) of, such
associated share.
(c) Subject to the terms and conditions hereof, after the
Separation Time and prior to the Expiration Time, the Rights (i) may be
exercised and (ii) may be transferred independent of shares of Common Stock.
Promptly following the Separation Time, the Rights Agent will mail to each
holder of record of Common Stock as of the Separation Time (other than any
Person whose Rights have become void pursuant to Section 3.1(b)), at such
holder's address as shown by the records of the Company (the Company hereby
agreeing to furnish copies of such records to the Rights Agent for this
purpose), (x) a certificate (a "Rights Certificate") in substantially the form
of Exhibit B hereto appropriately completed, representing the number of Rights
held by such holder at the Separation Time and having such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any national securities exchange or quotation system on which the
Rights may from time to time be listed or traded, or to conform to usage, and
(y) a disclosure statement describing the Rights.
(d) Subject to the terms and conditions hereof, Rights may be
exercised on any Business Day after the Separation Time and prior to the
Expiration Time by submitting to the Rights Agent the Rights Certificate
evidencing such Rights with an election to exercise (an "Election to Exercise")
substantially in the form attached to the Rights Certificate duly completed,
accompanied by payment in cash, or by certified or official bank check or money
order payable to the order of the Company, of a sum equal to the Exercise Price
multiplied by the number of Rights being exercised and a sum sufficient to cover
any transfer tax or charge which may be payable in respect of any transfer
involved in the transfer or delivery of Rights Certificates or the issuance or
delivery of certificates for shares or depositary receipts (or both) in a name
other than that of the holder of the Rights being exercised.
(e) Upon receipt of a Rights Certificate, with an Election to
Exercise accompanied by payment as set forth in Section 2.3(d), and subject to
the terms and conditions hereof, the Rights Agent will thereupon promptly (i)(A)
requisition from a transfer agent (which may, but need not, be the Rights Agent)
stock certificates evidencing such number of shares or other securities to be
purchased (the Company hereby irrevocably authorizing its transfer agents to
comply with all such requisitions) and (B) if the Company elects pursuant to
Section 5.5 not to issue certificates representing fractional shares,
requisition from the depositary selected by the Company depositary receipts
representing the fractional shares to be purchased or requisition from the
Company the amount of cash to be paid in lieu of fractional shares in accordance
with Section 5.5 and (ii) after receipt of such certificates, depositary
receipts and/or cash, deliver the same to or upon the order of the registered
-9-
holder of such Rights Certificate, registered (in the case of certificates or
depositary receipts) in such name or names as may be designated by such holder.
(f) In case the holder of any Rights shall exercise less than
all the Rights evidenced by such holder's Rights Certificate, a new Rights
Certificate evidencing the Rights remaining unexercised will be issued by the
Rights Agent to such holder or to such holder's duly authorized assigns.
(g) The Company covenants and agrees that it will (i) take all
such action as may be necessary to ensure that all shares delivered upon
exercise of Rights shall, at the time of delivery of the certificates for such
shares (subject to payment of the Exercise Price), be duly and validly
authorized, executed, issued and delivered and fully paid and nonassessable;
(ii) take all such action as may be necessary to comply with any applicable
requirements of the Securities Act of 1933 or the Exchange Act, and the rules
and regulations promulgated thereunder, and any other applicable law, rule or
regulation, in connection with the issuance of any shares upon exercise of
Rights; and (iii) pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of the original
issuance or delivery of the Rights Certificates or of any shares issued upon the
exercise of Rights, provided, that the Company shall not be required to pay any
transfer tax or charge which may be payable in respect of any transfer involved
in the transfer or delivery of Rights Certificates or the issuance or delivery
of certificates for shares in a name other than that of the holder of the Rights
being transferred or exercised.
2.4 Adjustments to Exercise Price; Number of Rights.
(a) In the event the Company shall at any time after the
Record Time and prior to the Separation Time (i) declare or pay a dividend on
Common Stock payable in Common Stock, (ii) subdivide the outstanding Common
Stock or (iii) combine the outstanding Common Stock into a smaller number of
shares of Common Stock, (x) the Exercise Price in effect after such adjustment
will be equal to the Exercise Price in effect immediately prior to such
adjustment divided by the number of shares of Common Stock (the "Expansion
Factor") that a holder of one share of Common Stock immediately prior to such
dividend, subdivision or combination would hold thereafter as a result thereof
and (y) each Right held prior to such adjustment will become that number of
Rights equal to the Expansion Factor, and the adjusted number of Rights will be
deemed to be distributed among the shares of Common Stock with respect to which
the original Rights were associated (if they remain outstanding) and the shares
issued in respect of such dividend, subdivision or combination, so that each
such share of Common Stock will have exactly one Right associated with it. Each
adjustment made pursuant to this paragraph shall be made as of the payment or
effective date for the applicable dividend, subdivision or combination.
In the event the Company shall at any time after the Record
Time and prior to the Separation Time issue any shares of Common Stock otherwise
than in a transaction referred to in the preceding paragraph, each such share of
Common Stock so issued shall automatically have one new Right associated with
it, which Right shall be evidenced by the certificate representing such share.
To the extent provided in Section 5.3, Rights shall be issued by the Company in
-10-
respect of shares of Common Stock that are issued or sold by the Company after
the Separation Time.
(b) In the event the Company shall at any time after the
Record Time and prior to the Separation Time issue or distribute any securities
or assets in respect of, in lieu of or in exchange for Common Stock (other than
pursuant to a dividend intended by the Board to represent a regular periodic
cash dividend or a dividend paid solely in Common Stock), whether by dividend,
in a reclassification or recapitalization (including any such transaction
involving a merger, consolidation or share exchange), or otherwise, the Company
shall make such adjustments, if any, in the Exercise Price, number of Rights
and/or securities or other property purchasable upon exercise of Rights as the
Board, in its sole discretion, may deem to be appropriate under the
circumstances in order to adequately protect the interests of the holders of
Rights generally, and the Company and the Rights Agent shall amend this
Agreement as necessary to provide for such adjustments.
(c) Each adjustment to the Exercise Price made pursuant to
this Section 2.4 shall be calculated to the nearest cent. Whenever an adjustment
to the Exercise Price is made pursuant to this Section 2.4, the Company shall
(i) promptly prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment and (ii) promptly file
with the Rights Agent and with each transfer agent for the Common Stock a copy
of such certificate.
(d) Rights Certificates shall represent the securities
purchasable under the terms of this Agreement, including any adjustment or
change in the securities purchasable upon exercise of the Rights, even though
such certificates may continue to express the securities purchasable at the time
of issuance of the initial Rights Certificates.
2.5 Effective Date of Exercise. Each person in whose name any
certificate for shares is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of the shares represented
thereby on the date upon which the Rights Certificate evidencing such Rights was
duly surrendered and payment of the Exercise Price for such Rights (and any
applicable taxes and other governmental charges payable by the exercising holder
hereunder) was made; provided, however, that if the date of such surrender and
payment is a date upon which the 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, the next succeeding Business Day on which
the stock transfer books of the Company are open.
2.6 Execution, Authentication, Delivery and Dating of Rights
Certificates.
(a) The Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board, the President or one of its Vice
Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Rights Certificates may be manual or facsimile.
-11-
Rights Certificates bearing the manual or facsimile signatures
of individuals who were at any time the proper officers of the Company shall
bind the Company, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the countersignature and delivery of such
Rights Certificates.
Promptly after the Company learns of the Separation Time, the
Company will notify the Rights Agent of such Separation Time and will deliver
Rights Certificates executed by the Company to the Rights Agent for
counter-signature, and, subject to Section 3.1(b), the Rights Agent shall
manually countersign and deliver such Rights Certificates to the holders of the
Rights pursuant to Section 2.3(c) hereof. No Rights Certificate shall be valid
for any purpose unless manually countersigned by the Rights Agent.
(b) Each Rights Certificate shall be dated the date of
countersignature thereof.
-12-
2.7 Registration, Registration of Transfer and Exchange.
(a) After the Separation Time, the Company will cause to be
kept a register (the "Rights Register") in which, subject to such reasonable
regulations as it may prescribe, the Company will provide for the registration
and transfer of Rights. The Rights Agent is hereby appointed "Rights Registrar"
for the purpose of maintaining the Rights Register for the Company and
registering Rights and transfers of Rights after the Separation Time as herein
provided. In the event that the Rights Agent shall cease to be the Rights
Registrar, the Rights Agent will have the right to examine the Rights Register
at all reasonable times after the Separation Time.
After the Separation Time and prior to the Expiration Time,
upon surrender for registration of transfer or exchange of any Rights
Certificate, and subject to the provisions of Section 2.7(c) and (d), the
Company will execute, and the Rights Agent will countersign and deliver, in the
name of the holder or the designated transferee or transferees, as required
pursuant to the holder's instructions, one or more new Rights Certificates
evidencing the same aggregate number of Rights as did the Rights Certificate so
surrendered.
(b) Except as otherwise provided in Section 3.1(b), all Rights
issued upon any registration of transfer or exchange of Rights Certificates
shall be the valid obligations of the Company, and such Rights shall be entitled
to the same benefits under this Agreement as the Rights surrendered upon such
registration of transfer or exchange.
(c) Every Rights Certificate surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company or the Rights Agent,
as the case may be, duly executed by the holder thereof or such holder's
attorney duly authorized in writing. As a condition to the issuance of any new
Rights Certificate under this Section 2.7, the Company may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto.
(d) The Company shall not be required to register the transfer
or exchange of any Rights after such Rights have become void under Section
3.1(b), been exchanged under Section 3.1(c) or been redeemed under Section 5.1.
2.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates.
(a) If any mutilated Rights Certificate is surrendered to the
Rights Agent prior to the Expiration Time, then, subject to Sections 3.1(b),
3.1(c) and 5.1, the Company shall execute and the Rights Agent shall countersign
and deliver in exchange therefor a new Rights Certificate evidencing the same
number of Rights as did the Rights Certificate so surrendered.
(b) If there shall be delivered to the Company and the Rights
Agent prior to the Expiration Time (i) evidence to their satisfaction of the
destruction, loss or theft of any Rights Certificate and (ii) such security or
indemnity as may be required by them to save each of them and any of their
-13-
agents harmless, then, subject to Sections 3.1(b), 3.1(c) and 5.1 and in the
absence of notice to the Company or the Rights Agent that such Rights
Certificate has been acquired by a bona fide purchaser, the Company shall
execute and upon its request the Rights Agent shall countersign and deliver, in
lieu of any such destroyed, lost or stolen Rights Certificate, a new Rights
Certificate evidencing the same number of Rights as did the Rights Certificate
so destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights
Certificate under this Section 2.8, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Rights Agent) connected therewith.
(d) Every new Rights Certificate issued pursuant to this
Section 2.8 in lieu of any destroyed, lost or stolen Rights Certificate shall
evidence an original additional contractual obligation of the Company, whether
or not the destroyed, lost or stolen Rights Certificate shall be at any time
enforceable by anyone, and, subject to Section 3.1(b), shall be entitled to all
the benefits of this Agreement equally and proportionately with any and all
other Rights duly issued hereunder.
2.9 Persons Deemed Owners. Prior to due presentment of a
Rights Certificate (or, prior to the Separation Time, the associated Common
Stock certificate) for registration of transfer, the Company, the Rights Agent
and any agent of the Company or the Rights Agent may deem and treat the person
in whose name such Rights Certificate (or, prior to the Separation Time, such
Common Stock certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby for all purposes whatsoever, including the payment of
the Redemption Price and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary. As used in this Agreement, unless the
context otherwise requires, the term "holder" of any Rights shall mean the
registered holder of such Rights (or, prior to the Separation Time, the
associated shares of Common Stock).
2.10 Delivery and Cancellation of Certificates. All Rights
Certificates surrendered upon exercise or for registration of transfer or
exchange shall, if surrendered to any person other than the Rights Agent, be
delivered to the Rights Agent and, in any case, shall be promptly canceled by
the Rights Agent. The Company may at any time deliver to the Rights Agent for
cancellation any Rights Certificates previously countersigned and delivered
hereunder which the Company may have acquired in any manner whatsoever, and all
Rights Certificates so delivered shall be promptly canceled by the Rights Agent.
No Rights Certificates shall be countersigned in lieu of or in exchange for any
Rights Certificates canceled as provided in this Section 2.10, except as
expressly permitted by this Agreement. The Rights Agent shall destroy all
canceled Rights Certificates and deliver a certificate of destruction to the
Company.
2.11 Agreement of Rights Holders. Every holder of Rights by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of Rights that:
-14-
(a) prior to the Separation Time, each Right will be
transferable only together with, and will be transferred by a transfer of, the
associated share of Common Stock;
(b) after the Separation Time, the Rights Certificates will be
transferable only on the Rights Register as provided herein;
(c) prior to due presentment of a Rights Certificate (or,
prior to the Separation Time, the associated Common Stock certificate) for
registration of transfer, the Company, the Rights Agent and any agent of the
Company or the Rights Agent may deem and treat the person in whose name the
Rights Certificate (or, prior to the Separation Time, the associated Common
Stock certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby for all purposes whatsoever, and neither the Company nor the
Rights Agent nor any agent of the Company or the Rights Agent shall be affected
by any notice to the contrary;
(d) Rights Beneficially Owned by certain Persons will, under
the circumstances set forth in Section 3.1(b), become void; and
(e) this Agreement may be supplemented or amended from time to
time pursuant to Section 2.4(b) or 5.4 hereof.
ARTICLE III
ADJUSTMENTS TO THE RIGHTS IN
CERTAIN TRANSACTIONS
3.1 Flip-in.
(a) In the event that prior to the Expiration Time a Flip-in
Date shall occur, except as provided in this Section 3.1, each Right shall
constitute the right to purchase from the Company, upon exercise thereof in
accordance with the terms hereof (but subject to Section 5.10), that number of
shares of Common Stock having an aggregate Market Price on the Stock Acquisition
Date equal to twice the Exercise Price for an amount in cash equal to the
Exercise Price (such right to be appropriately adjusted in order to protect the
interests of the holders of Rights generally in the event that on or after such
Stock Acquisition Date an event of a type analogous to any of the events
described in Section 2.4(a) or (b) shall have occurred with respect to the
Common Stock).
(b) Notwithstanding the foregoing, any Rights that are or were
Beneficially Owned on or after the Stock Acquisition Date by an Acquiring Person
or an Affiliate or Associate thereof or by any transferee, direct or indirect,
of any of the foregoing shall become void and any holder of such Rights
(including transferees) shall thereafter have no right to exercise or transfer
such Rights under any provision of this Agreement. If any Rights Certificate is
presented for assignment or exercise and the Person presenting the same will not
complete the certification set forth at the end of the form of assignment or
notice of election to exercise and provide such additional evidence of the
identity of the Beneficial Owner and its Affiliates and Associates (or former
Beneficial Owners and their Affiliates and Associates) as the Company shall
-15-
reasonably request, then the Company shall be entitled conclusively to deem the
Beneficial Owner thereof to be an Acquiring Person or an Affiliate or Associate
thereof or a transferee of any of the foregoing and accordingly will deem the
Rights evidenced thereby to be void and not transferable or exercisable.
(c) The Board may, at its option, at any time after a Flip-in
Date and prior to the time that an Acquiring Person becomes the Beneficial Owner
of more than 50% of the outstanding shares of Common Stock elect to exchange all
(but not less than all) of the then outstanding Rights (which shall not include
Rights that have become void pursuant to the provisions of Section 3.1(b)) for
shares of Common Stock at an exchange ratio of one share of Common Stock per
Right, appropriately adjusted in order to protect the interests of holders of
Rights generally in the event that after the Separation Time an event of a type
analogous to any of the events described in Section 2.4(a) or (b) shall have
occurred with respect to the Common Stock (such exchange ratio, as adjusted from
time to time, being hereinafter referred to as the "Exchange Ratio").
Immediately upon the action of the Board electing to exchange
the Rights, without any further action and without any notice, the right to
exercise the Rights will terminate and each Right (other than Rights that have
become void pursuant to Section 3.1(b)) will thereafter represent only the right
to receive a number of shares of Common Stock equal to the Exchange Ratio.
Promptly after the action of the Board electing to exchange the Rights, the
Company shall give notice thereof (specifying the steps to be taken to receive
shares of Common Stock in exchange for Rights) to the Rights Agent and the
holders of the Rights (other than Rights that have become void pursuant to
Section 3.1(b)) outstanding immediately prior thereto by mailing such notice in
accordance with Section 5.9.
Each Person in whose name any certificate for shares is issued
upon the exchange of Rights pursuant to this Section 3.1(c) or Section 3.1(d)
shall for all purposes be deemed to have become the holder of record of the
shares represented thereby on, and such certificate shall be dated, the date
upon which the Rights Certificate evidencing such Rights was duly surrendered
and payment of any applicable taxes and other governmental charges payable by
the holder was made; provided, however, that if the date of such surrender and
payment is a date upon which the 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, the next succeeding Business Day on which
the stock transfer books of the Company are open.
(d) Whenever the Company shall become obligated under Section
3.1(a) or (c) to issue shares of Common Stock upon exercise of or in exchange
for Rights, the Company, at its option, may substitute therefor shares of
Preferred Stock, at a ratio of one one-hundredth of a share of Preferred Stock
for each share of Common Stock so issuable.
(e) In the event that there shall not be sufficient treasury
shares and authorized but unissued shares of Common Stock or Preferred Stock of
the Company to permit the exercise or exchange in full of the Rights in
accordance with Section 3.1(a) or (c), and the Company elects not to, or is
-16-
otherwise unable to, make the exchange referred to in Section 3.1(c), the
Company shall either (i) call a meeting of shareholders seeking approval to
cause sufficient additional shares to be authorized (provided that if such
approval is not obtained the Company will take the action specified in clause
(ii) of this sentence) or (ii) take such action as shall be necessary to ensure
and provide, to the extent permitted by applicable law and any agreements or
instruments in effect on the Stock Acquisition Date to which it is a party, that
each Right shall thereafter constitute the right to receive, (x) at the
Company's option, either (A) in return for the Exercise Price, debt or equity
securities or other assets (or a combination thereof) having a fair value equal
to twice the Exercise Price, or (B) without payment of consideration (except as
otherwise required by applicable law), debt or equity securities or other assets
(or a combination thereof) having a fair value equal to the Exercise Price, or
(y) if the Board elects to exchange the Rights in accordance with Section
3.1(c), debt or equity securities or other assets (or a combination thereof)
having a fair value equal to the product of the Market Price of a share of
Common Stock on the Flip-in Date times the Exchange Ratio in effect on the
Flip-in Date, where in any case set forth in (x) or (y) above the fair value of
such debt or equity securities or other assets shall be as determined in good
faith by the Board, after consultation with a nationally recognized investment
banking firm.
3.2 Flip-over.
(a) Prior to the Expiration Time, the Company shall not enter
into any agreement with respect to, consummate or permit to occur any Flip-over
Transaction or Event unless and until it shall have entered into a supplemental
agreement with the Flip-over Entity, for the benefit of the holders of the
Rights, providing that, upon consummation or occurrence of the Flip-over
Transaction or Event (i) each Right shall thereafter constitute the right to
purchase from the Flip-over Entity, upon exercise thereof in accordance with the
terms hereof, that number of shares of Flip-over Stock of the Flip-over Entity
having an aggregate Market Price on the date of consummation or occurrence of
such Flip-over Transaction or Event equal to twice the Exercise Price for an
amount in cash equal to the Exercise Price (such right to be appropriately
adjusted in order to protect the interests of the holders of Rights generally in
the event that after such date of consummation or occurrence an event of a type
analogous to any of the events described in Section 2.4(a) or (b) shall have
occurred with respect to the Flip-over Stock) and (ii) the Flip-over Entity
shall thereafter be liable for, and shall assume, by virtue of such Flip-over
Transaction or Event and such supplemental agreement, all the obligations and
duties of the Company pursuant to this Agreement. The provisions of this Section
3.2 shall apply to successive Flip-over Transactions or Events.
(b) Prior to the Expiration Time, unless the Rights will be
redeemed pursuant to Section 5.1 hereof in connection therewith, the Company
shall not enter into any agreement with respect to, consummate or permit to
occur any Flip-over Transaction or Event if at the time thereof there are any
rights, warrants or securities outstanding or any other arrangements, agreements
or instruments that would eliminate or otherwise diminish in any material
respect the benefits intended to be afforded by this Rights Agreement to the
holders of Rights upon consummation of such transaction.
-17-
ARTICLE IV
THE RIGHTS AGENT
4.1 General.
(a) The Company hereby appoints the Rights Agent to act as
agent for the Company in accordance with the terms and conditions hereof, and
the Rights Agent hereby accepts such appointment. The Company agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted to be done by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any
certificate for securities purchasable upon exercise of Rights, Rights
Certificate, certificate 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.
4.2 Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent is a party, or any corporation succeeding to
the shareholder services business of the Rights Agent or any successor Rights
Agent, will 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 4.4
hereof. In case at the time such successor Rights Agent succeeds to the agency
created by this Agreement any of the Rights Certificates have been countersigned
but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates have not been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all such cases
such Rights Certificates will have the full force provided in the Rights
Certificates and in this Agreement.
-18-
(b) In case at any time the name of the Rights Agent is
changed and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
4.3 Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel will be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent deems 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 a person believed by the Rights Agent to
be the Chairman of the Board, the President or any Vice President and by the
Treasurer or any Assistant Treasurer or the Secretary or any Assistant Secretary
of the Company and delivered to the Rights Agent; and such certificate will 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 will be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent will not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in the
certificates for securities purchasable upon exercise of Rights or the Rights
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and will be deemed to have been
made by the Company only.
(e) The Rights Agent will not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due authorization, execution and delivery hereof by the Rights
Agent) or in respect of the validity or execution of any certificate for
securities purchasable upon exercise of Rights or Rights Certificate (except its
countersignature thereof); nor will it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Rights Certificate; nor will it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void pursuant to
Section 3.1(b) hereof) or any adjustment required under the provisions of
-19-
Section 2.4, 3.1 or 3.2 hereof or be 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
after receipt of the certificate contemplated by Section 2.4 describing any such
adjustment); nor will it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
securities purchasable upon exercise of Rights or any Rights or as to whether
any securities purchasable upon exercise of Rights will, when issued, be duly
and validly authorized, executed, issued and delivered and fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
any person believed by the Rights Agent to be the Chairman of the Board, the
President or any Vice President or the Secretary or any Assistant Secretary or
the Treasurer or any Assistant Treasurer of the Company, and to apply to such
persons for advice or instructions in connection with its duties, and it shall
not be liable for any action taken or suffered by it in good faith in accordance
with instructions of any such person.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in Common Stock, 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 will 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.
4.4 Change of Rights Agent. The Rights Agent may resign and be
discharged from its duties under this Agreement upon 90 days' notice (or such
lesser notice as is acceptable to the Company) in writing mailed to the Company
and to each transfer agent of Common Stock by registered or certified mail, and
to the holders of the Rights in accordance with Section 5.9. The Company may
remove the Rights Agent upon 30 days' notice in writing, mailed to the Rights
Agent and to each transfer agent of the Common Stock by registered or certified
mail, and to the holders of the Rights in accordance with Section 5.9. If the
Rights Agent should resign or be removed or otherwise become incapable of
-20-
acting, the Company will appoint a successor to the Rights Agent. If the Company
fails to make such appointment within a period of 30 days after such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of any Rights (which
holder shall, with such notice, submit such holder's Rights Certificate for
inspection by the Company), then the holder of any Rights may apply to any court
of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be a corporation organized and doing business under the laws of the United
States or any state of the United States, in good standing, which is authorized
under such laws to exercise the powers of the Rights Agent contemplated by this
Agreement and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50,000,000. After appointment, the
successor Rights Agent will 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 will file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Stock, and mail a notice thereof in
writing to the holders of the Rights. Failure to give any notice provided for in
this Section 4.4, 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.
ARTICLE V
MISCELLANEOUS
5.1 Redemption.
(a) The Board may, at its option, at any time prior to the
Flip-in Date, elect to redeem all (but not less than all) of the then
outstanding Rights at the Redemption Price, and the Company, at its option, may
pay the Redemption Price either in cash or shares of Common Stock or other
securities of the Company deemed by the Board, in the exercise of its sole
discretion, to be at least equivalent in value to the Redemption Price,
provided, however, in the event that such election is made by the Board in
connection or contemporaneously with a Business Combination, such election shall
only be made (i) if there are Independent Directors then in office and (ii) such
election is approved by a majority of the Independent Directors then in office.
(b) Immediately upon the action of the Board electing to
redeem the Rights (or, if the resolution of the Board electing to redeem the
Rights states that the redemption will not be effective until the occurrence of
a specified future time or event, upon the occurrence of such future time or
event), without any further action and without any notice, the right to exercise
the Rights will terminate and each Right will thereafter represent only the
right to receive the Redemption Price in cash or securities, as determined by
the Board. Promptly after the Rights are redeemed, the Company shall give notice
-21-
of such redemption to the Rights Agent and the holders of the then outstanding
Rights by mailing such notice in accordance with Section 5.9.
5.2 Expiration. The Rights and this Agreement shall expire at
the Expiration Time and no Person shall have any rights pursuant to this
Agreement or any Right after the Expiration Time, except, if the Rights are
exchanged or redeemed, as provided in Section 3.1 or 5.1 hereof, respectively.
5.3 Issuance of New Rights Certificates. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights in
such form as may be approved by the Board to reflect any adjustment or change in
the number or kind or class of shares of stock purchasable upon exercise of
Rights made in accordance with the provisions of this Agreement. In addition, in
connection with the issuance or sale of shares of Common Stock by the Company
following the Separation Time and prior to the Expiration Time pursuant to the
terms of securities convertible or redeemable into shares of Common Stock or to
options, in each case issued or granted prior to, and outstanding at, the
Separation Time, the Company shall issue to the holders of such shares of Common
Stock, Rights Certificates representing the appropriate number of Rights in
connection with the issuance or sale of such shares of Common Stock; provided,
however, in each case, (i) no such Rights Certificate shall be issued, if, and
to the extent that, the Company shall be advised by counsel that such issuance
would create a significant risk of material adverse tax consequences to the
Company or to the Person to whom such Rights Certificates would be issued, (ii)
no such Rights Certificates shall be issued if, and to the extent that,
appropriate adjustment shall have otherwise been made in lieu of the issuance
thereof, and (iii) the Company shall have no obligation to distribute Rights
Certificates to any Acquiring Person or Affiliate or Associate of an Acquiring
Person or any transferee of any of the foregoing.
5.4 Supplements and Amendments. The Company and the Rights
Agent may from time to time supplement or amend this Agreement without the
approval of any holders of Rights (i) at any time, to cure any ambiguity, (ii)
prior to the Flip-in Date, in any other respect, and (iii) on or after the
Flip-in Date, (A) to correct or supplement any provision contained herein which
may be inconsistent with any other provisions herein or otherwise defective or
(B) to change or supplement the provisions hereunder in any manner which the
Company may deem necessary or desirable and which shall not materially adversely
affect the interests of the holders of Rights (other than an Acquiring Person or
an Affiliate or Associate of an Acquiring Person); provided, however, in the
event that any such amendment or supplement described in clauses (ii) and (iii)
of this Section 5.4 is made by the Board in connection or contemporaneously with
a Business Combination, such amendment or supplement shall only be made if (I)
there are Independent Directors then in office and (II) such amendment or
supplement is approved by a majority of the Independent Directors then in
office. The Rights Agent will duly execute and deliver any supplement or
amendment hereto requested by the Company which satisfies the terms of the
preceding sentence.
5.5 Fractional Shares. If the Company elects not to issue
certificates representing fractional shares upon exercise or redemption of
-22-
Rights, the Company shall, in lieu thereof, in the sole discretion of the Board,
either (a) evidence such fractional shares by depositary receipts issued
pursuant to an appropriate agreement between the Company and a depositary
selected by it, providing that each holder of a depositary receipt shall have
all of the rights, privileges and preferences to which such holder would be
entitled as a beneficial owner of such fractional share, or (b) pay to the
registered holder of such Rights the appropriate fraction of the Market Price
per share in cash.
5.6 Rights of Action. Subject to the terms of this Agreement
(including Sections 3.1(b) and 5.14), rights of action in respect of this
Agreement, other than rights of action vested solely in the Rights Agent, are
vested in the respective holders of the Rights; and any holder of any Rights,
without the consent of the Rights Agent or of the holder of any other Rights,
may, on such holder's own behalf and for such holder's own benefit and the
benefit of other holders of Rights, enforce, and may institute and maintain any
suit, action or proceeding against the Company to enforce, or otherwise act in
respect of, such holder's right to exercise such holder's Rights in the manner
provided in such holder's Rights Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of, the obligations of any Person subject to this
Agreement.
5.7 Holder of Rights Not Deemed a Shareholder. No holder, as
such, of any Rights shall be entitled to vote, receive dividends or be deemed
for any purpose the holder of shares or any other securities which may at any
time be issuable on the exercise of such Rights, nor shall anything contained
herein or in any Rights Certificate be construed to confer upon the holder of
any Rights, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 5.8 hereof), or to receive dividends
or subscription rights, or otherwise, until such Rights shall have been
exercised or exchanged in accordance with the provisions hereof.
5.8 Notice of Proposed Actions. In case the Company shall
propose after the Separation Time and prior to the Expiration Time (i) to effect
or permit a Flip-over Transaction or Event or (ii) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the Company
shall give to each holder of a Right, in accordance with Section 5.9 hereof, a
notice of such proposed action, which shall specify the date on which such
Flip-over Transaction or Event, liquidation, dissolution, or winding up is to
take place, and such notice shall be so given at least twenty (20) Business Days
prior to the date of the taking of such proposed action.
5.9 Notices. Notices or demands authorized or required by this
Agreement to be given or made by the Rights Agent or by the holder of any Rights
to or on the Company shall be sufficiently given or made if delivered or sent by
registered or certified mail, postage prepaid, addressed (until another address
is filed in writing with the Rights Agent) as follows:
-ββ-
βββββββ βββββββββββββ, Inc.
β βββββββββ βββββ
ββββ ββββββββ, βββ ββββββ βββββ
Attention: Secretary
Any notice or demand authorized or required by this Agreement to be given or
made by the Company or by the holder of any Rights to or on the Rights Agent
shall be sufficiently given or made if delivered or sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing with the
Company) as follows:
American Stock Transfer & Trust Company
ββββ ββββ ββββββ
ββββββββ, ββ βββββ
Attention: Mr. ββββββ ββββ
Notices or demands authorized or required by this Agreement to be given or made
by the Company or the Rights Agent to or on the holder of any Rights shall be
sufficiently given or made if delivered or sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as it appears
upon the registry books of the Rights Agent or, prior to the Separation Time, 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.
5.10 Suspension of Exercisability. To the extent that the
Company determines in good faith that some action will or needs to be taken
pursuant to Section 3.1 or to comply with federal or state securities laws, the
Company may suspend the exercisability of the Rights for a reasonable period in
order to take such action or comply with such laws. In the event of any such
suspension, the Company shall issue as promptly as practicable a public
announcement stating that the exercisability or exchangeability of the Rights
has been temporarily suspended. Notice thereof pursuant to Section 5.9 shall not
be required. Failure to give a notice pursuant to the provisions of this
Agreement shall not affect the validity of any action taken hereunder.
5.11 Costs of Enforcement. The Company agrees that if the
Company or any other Person the securities of which are purchasable upon
exercise of Rights fails to fulfill any of its obligations pursuant to this
Agreement, then the Company or such Person will reimburse the holder of any
Rights for the costs and expenses (including legal fees) incurred by such holder
in actions to enforce such holder's rights pursuant to any Rights or this
Agreement.
5.12 Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
5.13 Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
-24-
Agent and the holders of the Rights any legal or equitable right, remedy or
claim under this Agreement and this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the holders of the
Rights.
5.14 Determination and Actions by the Board of Directors, etc.
The Board (with, where specifically provided for herein, the concurrence of the
Independent Directors) shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board (with, where specifically provided for herein, the
concurrence of the Independent Directors) or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the provisions of this
Agreement and (ii) make all determinations deemed necessary or advisable for the
administration of this Agreement. All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
(with, where specifically provided for herein, the concurrence of the
Independent Directors) in good faith, shall (x) be final, conclusive and binding
on the Company, the Rights Agent, the holders of the Rights and all other
parties, and (y) not subject the Board or the Independent Directors to any
liability to the holders of the Rights.
5.15 Descriptive Headings. Descriptive headings appear herein
for convenience only and shall not control or affect the meaning or construction
of any of the provisions hereof.
5.16 Governing Law. THIS AGREEMENT AND EACH RIGHT ISSUED
HEREUNDER SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF
NEW JERSEY AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF SUCH STATE APPLICABLE TO CONTRACTS TO BE MADE AND PERFORMED
ENTIRELY WITHIN SUCH STATE.
5.17 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.
5.18 Severability. If any term or provision hereof or the
application thereof to any circumstance shall, in any jurisdiction and to any
extent, be invalid or unenforceable, such term or provision shall be ineffective
as to such jurisdiction to the extent of such invalidity or unenforceability
without invalidating or rendering unenforceable the remaining terms and
provisions hereof or the application of such term or provision to circumstances
other than those as to which it is held invalid or unenforceable.
-25-
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
VESTCOM INTERNATIONAL, INC.
By: /s/ ββββ ββββββ
-----------------------------
Name: ββββ ββββββ
Title: Chairman of the Board and
Chief Executive Officer
AMERICAN STOCK TRANSFER & TRUST
COMPANY
By: /s/ ββββββ ββββ
----------------------------
Name: ββββββ ββββ
Title: Vice President
EXHIBIT A
Description of Terms of Participating Preferred Stock
RESOLVED, that there is hereby established a series of
Preferred Stock, no par value, of the Corporation, and the designation and
certain terms, powers, preferences and other rights of the shares of such
series, and certain qualifications, limitations and restrictions thereon, are
hereby fixed as follows:
(i) The distinctive serial designation of this series
shall be "Participating Preferred Stock" (hereinafter called "this Series").
Each share of this Series shall be identical in all respects with the other
shares of this Series except as to the dates from and after which dividends
thereon shall be cumulative.
(ii) The number of shares in this Series shall initially
be _______,* which number may from time to time be increased or decreased (but
not below the number then outstanding) by the Board of Directors. Shares of this
Series purchased by the Corporation shall be canceled and shall revert to
authorized but unissued shares of Preferred Stock undesignated as to series.
Shares of this Series may be issued in fractional shares, which fractional
shares shall entitle the holder, in proportion to such holder's fractional
share, to all rights of a holder of a whole share of this Series.
(iii) The holders of full or fractional shares of this
Series shall be entitled to receive, when and as declared by the Board of
Directors, but only out of funds legally available therefor, dividends, (A) on
each date that dividends or other distributions (other than dividends or
distributions payable in Common Stock of the Corporation) are payable on or in
respect of Common Stock comprising part of the Reference Package (as defined
below), in an amount per whole share of this Series equal to the aggregate
amount of dividends or other distributions (other than dividends or
distributions payable in Common Stock of the Corporation) that would be payable
on such date to a holder of the Reference Package and (B) on the last day of
March, June, September and December in each year, in an amount per whole share
of this Series equal to the excess (if any) of $____** over the aggregate
dividends paid per whole share of this Series during the three month period
ending on such last day. Each such dividend shall be paid to the holders of
record of shares of this Series on the date, not exceeding sixty days preceding
such dividend or distribution payment date, fixed for the purpose by the Board
of Directors in advance of payment of each particular dividend or distribution.
Dividends on each full and each fractional share of this Series shall be
cumulative from the date such full or fractional share is originally issued;
provided that any such full or fractional share originally issued after a
--------
* Insert a number equivalent to 1/100 of the sum of the number of outstanding
shares of Common Stock, reserved conversion shares (if any), and stock
options, rounded up to a round number.
** Insert an amount equal to 1/4 of 1% of the Exercise Price divided by the
number of shares of Preferred Stock purchasable upon exercise of one Right.
dividend record date and on or prior to the dividend payment date to which such
record date relates shall not be entitled to receive the dividend payable on
such dividend payment date or any amount in respect of the period from such
original issuance to such dividend payment date.
The term "Reference Package" shall initially mean 100 shares
of Common Stock, no par value ("Common Stock"), of the Corporation. In the event
the Corporation shall at any time after the close of business on ________, ____*
(A) declare or pay a dividend on any Common Stock payable in Common Stock, (B)
subdivide any Common Stock or (C) combine any Common Stock into a smaller number
of shares, then and in each such case the Reference Package after such event
shall be the Common Stock that a holder of the Reference Package immediately
prior to such event would hold thereafter as a result thereof.
Holders of shares of this Series shall not be entitled to any
dividends, whether payable in cash, property or stock, in excess of full
cumulative dividends, as herein provided on this Series.
So long as any shares of this Series are outstanding, no
dividend (other than a dividend in Common Stock or in any other stock ranking
junior to this Series as to dividends and upon liquidation) shall be declared or
paid or set aside for payment or other distribution declared or made upon the
Common Stock or upon any other stock ranking junior to this Series as to
dividends or upon liquidation, nor shall any Common Stock nor any other stock of
the Corporation ranking junior to or on a parity with this Series as to
dividends or upon liquidation be redeemed, purchased or otherwise acquired for
any consideration (or any moneys be paid to or made available for a sinking fund
for the redemption of any shares of any such stock) by the Corporation (except
by conversion into or exchange for stock of the Corporation ranking junior to
this Series as to dividends and upon liquidation), unless, in each case, the
full cumulative dividends (including the dividend to be due upon payment of such
dividend, distribution, redemption, purchase or other acquisition) on all
outstanding shares of this Series shall have been, or shall contemporaneously
be, paid.
(iv) In the event of any merger, consolidation,
reclassification 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 the shares of this Series shall at the same time
be similarly exchanged or changed into an amount per whole share equal to the
aggregate amount of stock, securities, cash and/or any other property (payable
in kind), as the case may be, that a holder of the Reference Package would be
entitled to receive as a result of such transaction.
----------
* For a resolution relating to shares to be issued pursuant to Section 2.3 of
the Rights Agreement, insert the Separation Time. For a resolution relating
to shares to be issued pursuant to Section 3.1(d) of the Rights Agreement,
insert the Flip-in Date.
-2-
(v) In the event of any liquidation, dissolution or
winding up of the affairs of the Corporation, whether voluntary or involuntary,
the holders of full and fractional shares of this Series shall be entitled,
before any distribution or payment is made on any date to the holders of the
Common Stock or any other stock of the Corporation ranking junior to this Series
upon liquidation, to be paid in full an amount per whole share of this Series
equal to the greater of (A) $__________* or (B) the aggregate amount distributed
or to be distributed prior to such date in connection with such liquidation,
dissolution or winding up to a holder of the Reference Package (such greater
amount being hereinafter referred to as the "Liquidation Preference"), together
with accrued dividends to such distribution or payment date, whether or not
earned or declared. If such payment shall have been made in full to all holders
of shares of this Series, the holders of shares of this Series as such shall
have no right or claim to any of the remaining assets of the Corporation.
In the event the assets of the Corporation available for
distribution to the holders of shares of this Series upon any liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
shall be insufficient to pay in full all amounts to which such holders are
entitled pursuant to the first paragraph of this Section (v), no such
distribution shall be made on account of any shares of any other class or series
of Preferred Stock ranking on a parity with the shares of this Series upon such
liquidation, dissolution or winding up unless proportionate distributive amounts
shall be paid on account of the shares of this Series, ratably in proportion to
the full distributable amounts for which holders of all such parity shares are
respectively entitled upon such liquidation, dissolution or winding up.
Upon the liquidation, dissolution or winding up of the
Corporation, the holders of shares of this Series then outstanding shall be
entitled to be paid out of assets of the Corporation available for distribution
to its shareholders all amounts to which such holders are entitled pursuant to
the first paragraph of this Section (v) before any payment shall be made to the
holders of Common Stock or any other stock of the Corporation ranking junior
upon liquidation to this Series.
For the purposes of this Section (v), the consolidation or
merger of, or binding share exchange by, the Corporation with any other
corporation shall not be deemed to constitute a liquidation, dissolution or
winding up of the Corporation.
(vi) The shares of this Series shall not be redeemable.
(vii) In addition to any other vote or consent of
shareholders required by law or by the Certificate of Incorporation, as amended,
of the Corporation, each whole share of this Series shall, on any matter, vote
as a class with any other capital stock comprising part of the Reference Package
and voting on such matter and shall have the number of votes thereon that a
holder of the Reference Package would have.
----------
* Insert an amount equal to 100 times the Exercise Price in effect as of the
Separation Time.
-3-
EXHIBIT B
[Form of Rights Certificate]
Certificate No. W- _______ Rights
THE RIGHTS ARE SUBJECT TO REDEMPTION OR MANDATORY EXCHANGE, AT
THE OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. RIGHTS BENEFICIALLY OWNED BY ACQUIRING
PERSONS OR AFFILIATES OR ASSOCIATES THEREOF (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT) OR TRANSFEREES OF ANY OF THE
FOREGOING WILL BE VOID.
Rights Certificate
VESTCOM INTERNATIONAL, INC.
This certifies that ____________________, or registered
assigns, is the registered holder of the number of Rights set forth above, each
of which entitles the registered holder thereof, subject to the terms,
provisions and conditions of the Amended and Restated Shareholder Protection
Rights Agreement, dated as of April 19, 2000 (as amended from time to time, the
"Rights Agreement"), between Vestcom International, Inc., a New Jersey
corporation (the "Company"), and American Stock Transfer & Trust Company, a New
York corporation, as Rights Agent (the "Rights Agent", which term shall include
any successor Rights Agent under the Rights Agreement), to purchase from the
Company at any time after the Separation Time (as such term is defined in the
Rights Agreement) and prior to the close of business on December 28, 2009, one
one-hundredth of a fully paid share of Participating Preferred Stock, no par
value (the "Preferred Stock"), of the Company (subject to adjustment as provided
in the Rights Agreement) at the Exercise Price referred to below, upon
presentation and surrender of this Rights Certificate with the Form of Election
to Exercise duly executed at the principal office of the Rights Agent in New
York, New York. The Exercise Price shall initially be $27.00 per Right and shall
be subject to adjustment in certain events as provided in the Rights Agreement.
In certain circumstances described in the Rights Agreement,
the Rights evidenced hereby may entitle the registered holder thereof to
purchase securities of an entity other than the Company or securities of the
Company other than Preferred Stock or assets of the Company, all as provided in
the Rights Agreement.
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Rights Certificates.
Copies of the Rights Agreement are on file at the principal office of the
Company and are available without cost upon written request.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office of the Rights Agent designated for
such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor evidencing an aggregate number of Rights equal to the
aggregate number of Rights evidenced by the Rights Certificate or Rights
Certificates surrendered. If this Rights Certificate shall be exercised in part,
the registered holder shall be entitled to receive, upon surrender hereof,
another Rights Certificate or Rights Certificates for the number of whole Rights
not exercised.
Subject to the provisions of the Rights Agreement, each Right
evidenced by this Certificate may be (a) redeemed by the Company under certain
circumstances, at its option, at a redemption price of $0.01 per Right or (b)
exchanged by the Company under certain circumstances, at its option, for one
share of Common Stock or one one-hundredth of a share of Preferred Stock per
Right (or, in certain cases, other securities or assets of the Company), subject
in each case to adjustment in certain events as provided in the Rights
Agreement.
No holder of this Rights Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder of
any securities which may at any time be issuable on the exercise hereof, nor
shall anything contained in the Rights Agreement or herein be construed to
confer upon the holder hereof, as such, any of the rights of a shareholder of
the Company or any right to vote for the election of directors or upon any
matter submitted to shareholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting shareholders (except as provided in the Rights Agreement), or
to receive dividends or subscription rights, or otherwise, until the Rights
evidenced by this Rights Certificate shall have been exercised or exchanged as
provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
-2-
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Date: _______________________
ATTEST: VESTCOM INTERNATIONAL, INC.
______________________________ By_________________________
Secretary
Countersigned:
______________________________
By____________________________
Authorized Signature
-3-
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if
such holder desires to transfer this Rights Certificate.)
FOR VALUE RECEIVED ____________________________________ hereby
sells, assigns and transfers unto ______________________________________________
(Please print name
________________________________________________________________________________
and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _______________ Attorney, to
transfer the within Rights Certificate on the books of the within-named Company,
with full power of substitution.
Dated: _______________, ____
Signature Guaranteed: ____________________________________________
Signature
Signature must correspond to name as written
upon the face of this Rights Certificate in
every particular, without alteration or
enlargement or any change whatsoever)
Signatures must be guaranteed by an eligible guarantor
institution (banks, stockbrokers, savings and loan associations and credit
unions with membership in an approved signature guarantee Medallion program),
pursuant to SEC Rule 17Ad-15.
--------------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of Rights and
shares of Common Stock, that the Rights evidenced by this Rights Certificate are
not, and, to the knowledge of the undersigned, have never been, Beneficially
Owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in
the Rights Agreement).
_________________________________
Signature
--------------------------------------------------------------------------------
NOTICE
In the event the certification set forth above is not
completed in connection with a purported assignment, the Company will deem the
Beneficial Owner of the Rights evidenced by the enclosed Rights Certificate to
be an Acquiring Person or an Affiliate or Associate thereof (as defined in the
Rights Agreement) or a transferee of any of the foregoing and accordingly will
deem the Rights evidenced by such Rights Certificate to be void and not
transferable or exercisable.
-v-
[To be attached to each Rights Certificate]
FORM OF ELECTION TO EXERCISE
(To be executed if holder desires to
exercise the Rights Certificate.)
TO: VESTCOM INTERNATIONAL, INC.
The undersigned hereby irrevocably elects to exercise _____
whole Rights represented by the attached Rights Certificate to purchase the
shares of Participating Preferred Stock issuable upon the exercise of such
Rights and requests that certificates for such shares be issued in the name of
and delivered to:
___________________________________
Name
Address:
___________________________________
Social Security or Other Taxpayer
Identification Number:
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
___________________________________
Name
Address:
___________________________________
Social Security or Other Taxpayer
Identification Number:
Dated: _______________, ____
Signature Guaranteed: ____________________________________________
Signature
(Signature must correspond to name as
written upon the face of the attached Rights
Certificate in every particular, without
alteration or enlargement or any change
whatsoever)
-iv-
Signatures must be guaranteed by an eligible guarantor
institution (banks, stockbrokers, savings and loan associations and credit
unions with membership in an approved signature guarantee Medallion program),
pursuant to SEC Rule 17Ad-15.
--------------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all
holders of Rights and shares of Common Stock, that the Rights evidenced by the
attached Rights Certificate are not, and, to the knowledge of the undersigned,
have never been, Beneficially Owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).
_________________________
Signature
--------------------------------------------------------------------------------
NOTICE
In the event the certification set forth above is not
completed in connection with a purported exercise, the Company will deem the
Beneficial Owner of the Rights evidenced by the attached Rights Certificate to
be an Acquiring Person or an Affiliate or Associate thereof (as defined in the
Rights Agreement) or a transferee of any of the foregoing and accordingly will
deem the Rights evidenced by such Rights Certificate to be void and not
transferable or exercisable.
-vii-