DYNAMICS RESEARCH CORPORATION and AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC as Rights Agent Amended and Restated Rights Agreement Dated as of July 23, 2008
Exhibit
4.1
DYNAMICS
RESEARCH CORPORATION
and
AMERICAN
STOCK TRANSFER & TRUST COMPANY, LLC
as
Rights
Agent
Amended
and Restated Rights Agreement
Dated
as
of July 23, 2008
TABLE
OF
CONTENTS
Page
|
Section
1.
|
Certain
Definitions
|
1
|
|
Section
2.
|
Appointment
of Rights Agent
|
5
|
|
Section
3.
|
Issue
of Rights Certificates.
|
5
|
|
Section
4.
|
Form
of Rights Certificates
|
7
|
|
Section
5.
|
Countersignature
and Registration
|
7
|
|
Section
6.
|
Transfer,
Split Up, Combination and Exchange of Rights Certificates; Mutilated,
Destroyed, Lost or Stolen Rights Certificates
|
8
|
|
Section
7.
|
Exercise
of Rights; Purchase Price; Expiration Date of Rights
|
8
|
|
Section
8.
|
Cancellation
and Destruction of Rights Certificates
|
10
|
|
Section
9.
|
Reservation
and Availability of Shares of Preferred Stock; Other
Covenants
|
10
|
|
Section
10.
|
Preferred
Stock Record Date; Etc
|
11
|
|
Section
11.
|
Antidilution
Adjustments
|
12
|
|
Section
12.
|
Certificate
of Adjustments
|
19
|
|
Section
13.
|
Consolidation,
Merger or Sale or Transfer of Assets or Earning Power
|
19
|
|
Section
14.
|
Fractional
Rights and Fractional Shares
|
21
|
|
Section
15.
|
Rights
of Action
|
21
|
|
Section
16.
|
Agreement
of Rights Holders
|
21
|
|
Section
17.
|
Rights
Certificate Holder Not Deemed a Stockholder
|
22
|
|
Section
18.
|
Concerning
the Rights Agent
|
22
|
|
Section
19.
|
Merger
or Consolidation or Change of Name of Rights Agent
|
23
|
|
Section
20.
|
Duties
of Rights Agent
|
23
|
|
Section
21.
|
Change
of Rights Agent
|
25
|
|
Section
22.
|
Issuance
of New Rights Certificates
|
26
|
|
Section
23.
|
Redemption
and Termination
|
26
|
|
Section
24.
|
Exchange
|
26
|
|
Section
25.
|
Notice
of Proposed Actions
|
27
|
|
Section
26.
|
Notices
|
28
|
|
Section
27.
|
Supplements
and Amendments
|
29
|
|
Section
28.
|
Successors
|
29
|
|
Section
29.
|
Determinations
and Actions by the Board; etc
|
29
|
|
Section
30.
|
Benefits
of this Agreement
|
29
|
|
Section
31.
|
Severability
|
30
|
|
Section
32.
|
Governing
Law
|
30
|
|
Section
33.
|
Counterparts
|
30
|
|
Section
34.
|
Descriptive
Headings
|
30
|
i
This
Amended and Restated Rights
Agreement dated as of July 23, 2008 (this “Agreement”) is between Dynamics
Research Corporation, a Massachusetts corporation (the "Company") and American Stock
Transfer & Trust Company, a limited liability trust company (the "Rights Agent").
W
I T N E S S E T
H:
WHEREAS,
on February 17, 1998, the
Board of Directors of the Company (the "Board") authorized the
issuance of rights to purchase, on the terms and subject to the provisions
of
the Rights Agreement dated February 17, 1998 (the "1998 Agreement"), one
one-tenth of a share of the Company's Series B Preferred Stock; and
WHEREAS,
on February, 17 1998, the
Board authorized and declared a dividend distribution of one right for every
share of Common Stock of the Company outstanding on July 27, 1998, and
authorized the issuance of one right (subject to certain adjustments) for each
share of Common Stock of the Company issued between July 27, 1998 and the "Distribution Date" under the
1988 Agreement; and
WHEREAS,
on July 23, 2008, the Board
determined it desirable and in the best interests of the Company and its
stockholders for the Company to adopt this Agreement, containing substantially
similar terms to the 1998 Agreement, and to replace the 1998 Agreement upon
its
expiration by executing this Agreement; and
WHEREAS,
on July 27, 2008 (the "Declaration Date"), the Board
authorized and declared a dividend distribution of one Right (each Right being
a
right to purchase, on the terms and subject to the provisions of this Agreement,
one one-hundredth of a share of the Company's Series B Preferred Stock, each
a
"Right", collectively
the "Rights") for each
share of Common Stock of the Company outstanding on July 27,
2008, the "Expiration Date" under the
1998 Agreement, as amended (the "Dividend Record Date") and
authorized the issuance of one Right (as such number may hereafter be adjusted
pursuant to the provisions of Section 11(i) or Section 11(p) hereof) for each
share of Common Stock of the Company issued between the Dividend Record Date
(whether originally issued or delivered from the Company's treasury) and the
Distribution Date (as defined herein), and under certain circumstances
thereafter, each Right initially representing the right to purchase one
one-hundredth of a share of Preferred Stock (as hereinafter defined), upon
the
terms and subject to the conditions hereinafter set forth (the "Rights");
NOW,
THEREFORE, in consideration of the
premises and the mutual agreements herein set forth, the parties hereto hereby
agree as follows:
Section
1. Certain
Definitions. For
purposes of this Agreement, the following terms have the meanings
indicated:
(a) "Acquiring
Person" shall mean
any Person who or which, together with all Affiliates of such Person, shall
be
the Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding, but shall not include (i) the Company, (ii) any Subsidiary of
the
Company, (iii) any employee benefit plan of the Company or of any Subsidiary
of
the Company, (iv) any Person organized, appointed, or established by the Company
or a Subsidiary of the Company pursuant to the terms of any plan described
in
clause (iii) above or (v) any such Person who has reported or is required to
report such ownership (but less than 15%) on Schedule 13G under the Exchange
Act
(or any comparable or successor report) or on Schedule 13D under the Exchange
Act (or any comparable or successor report) which Schedule 13D does not state
any intention to or reserve the right to control or influence the management
or
policies of the Company or engage in any of the actions specified in Item 4
of
such Schedule (other than the disposition
of
the
Common Stock) and, within 10 Business Days of being requested by the Company
to
advise it regarding the same, certifies to the Company that such Person acquired
shares of Common Stock in excess of 14.9% inadvertently or without knowledge
of
the terms of the Rights and who, together with all of such Person's Affiliates,
thereafter does not acquire additional shares of Common Stock while the
Beneficial Owner of 15% or more of the shares of Common Stock then outstanding,
provided,
however, that if the Person requested to so certify fails to do so within
10 Business Days, then such Person shall become an Acquiring Person immediately
after such 10 Business Day Period. Notwithstanding the foregoing, if
the Board of Directors of the Company determines in good faith that a Person
who
would otherwise be an “Acquiring Person,” as defined in this Section 1(a), has
become such inadvertently (including, without limitation, because (A) such
Person was unaware that it Beneficially Owned a percentage of the Common Stock
that would otherwise cause such Person to be an “Acquiring Person” or (B) such
Person was aware of the extent of its Beneficial Ownership of Common Stock
but
had no actual knowledge of the consequences of such Beneficial Ownership under
this Agreement), and without any intention of changing or influencing control
of
the Company, and such Person divests as promptly as practicable a sufficient
number of Common Stock so that such Person would no longer be an Acquiring
Person, as defined pursuant to the foregoing provisions of this Section 1(a)
(or, in the case solely of Derivative Common Shares (as such term is hereinafter
defined), such Person terminates the subject derivative transaction or
transactions or disposes of the subject derivative security or securities,
or
establishes to the satisfaction of the Board of Directors that such Derivative
Common Shares are not held with any intention of changing or influencing control
of the Company), then such Person shall not be deemed to be or have become
an
“Acquiring Person” at any time for any purposes of this Agreement.
(b) "Act"
shall mean the Securities
Act of 1933 (or any successor act), as amended and as may from time to time
be
in effect.
(c) "Affiliate,"
with respect to
any Person, shall mean any other Person who is, or who would be deemed to be,
an
"affiliate" or an "associate" of such Person within the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act, as such Rule is in effect on the Declaration
Date.
(d) A
Person shall be deemed the "Beneficial Owner" of, and
shall be deemed
to
"beneficially own" or have
"Beneficial Ownership"
of, any securities:
(i) which
such Person or any of such Person's Affiliates has "beneficial ownership" of
within the meaning of Rule 13d-3 of the General Rules and Regulations under
the
Exchange Act, as such Rule is in effect on the Declaration Date;
(ii) which
such Person or any of such Person's Affiliates has, directly or indirectly,
the
right to acquire (whether such right is exercisable immediately or after the
passage of time) pursuant to any agreement, arrangement or understanding
(whether or not in writing) or upon the exercise of conversion, exchange or
other rights, warrants or options, or otherwise;
(iii) which
such Person or any of such Person's Affiliates has, directly or indirectly,
the
right to vote or dispose of, including pursuant to any agreement, arrangement
or
understanding (whether or not in writing); provided,
however, that a
Person shall not be deemed the "Beneficial Owner" of, or to "beneficially own,"
or to have "Beneficial Ownership" of any security for purposes of this Section 1(d)(iii) as
a result of an agreement, arrangement or understanding to vote such security
if
such agreement, arrangement or understanding: (A) arises solely from
a revocable proxy given in response to a public proxy or consent solicitation
made pursuant to, and in accordance with, the applicable proxy solicitation
rules and regulations promulgated under the Exchange Act or (B) is
made
in
connection with, or is to otherwise participate in, a proxy or consent
solicitation made, or to
2
be
made,
pursuant to, and in accordance with, the applicable proxy solicitation rules
and
regulations promulgated under the Exchange Act, in either case described in
clause (A) or (B) above, when such agreement, arrangement or understanding
is
also then not reportable by such Person on Schedule 13D under the Exchange
Act
(or any comparable or successor report);
(iv) which
are beneficially owned, directly or indirectly, by any other Person or any
Affiliate thereof with which such Person or any of such Person's Affiliates
has
any agreement, arrangement or understanding (whether or not in writing), for
the
purpose of acquiring, holding, voting (except pursuant to a revocable proxy
or
in connection with a proxy or consent solicitation described in clause (A)
or
(B) of the proviso to Section 1(d)(iii)
hereof) or disposing of any securities of the Company; or
(v) that
are the subject of a derivative transaction entered into by such Person or
any
of such Person’s Affiliates, or derivative security acquired by such Person or
such Person’s Affiliates, which gives such Person or any Affiliate thereof the
economic equivalent of ownership of an amount of such securities due to the
fact
that the value of the derivative is explicitly determined by reference to the
price or value of such securities, without regard to whether (A) such derivative
conveys any voting rights in such securities to such Person or any Affiliate
thereof, (B) the derivative is required to be, or capable of being, settled
through delivery of such securities, or (C) such Person or any Affiliate thereof
may have entered into other transactions that hedge the economic effect of
such
derivative. In determining the amount of Common Stock deemed
Beneficially Owned by virtue of the operation of this Section 1(d)(v), the
subject Person shall be deemed to Beneficially Own (without duplication) the
amount of Common Stock that is synthetically owned pursuant to such derivative
transactions or such derivative securities. Such amount of Common Stock that
is
deemed so Beneficially Owned pursuant to the operation of this Section 1(d)(v)
shall be referred to herein as "Derivative Common
Shares."
provided,
however,
that for purposes of this Section 1(d) a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," or to have "Beneficial
Ownership" of (A) securities tendered pursuant to a tender or exchange offer
made by such Person or any of such Person's Affiliates until such tendered
securities are accepted for purchase or exchange, (B) securities issuable upon
exercise of Rights at any time prior to the occurrence of a Common Stock Event,
or (C) securities issuable upon exercise of Rights which were held by a Person
or its Affiliates prior to the Distribution Date as long as such Person is
not
responsible for the occurrence of the Common Stock Event giving rise to the
Distribution Date; and provided,
further, however,
that
nothing in this Section 1(d) shall
cause a Person engaged in business as an underwriter of securities to be the
"Beneficial Owner" of, or to "beneficially own," or to have "Beneficial
Ownership" of any securities acquired through such Person's participation in
good faith in a firm commitment underwriting until the expiration of 40 days
after the date of such acquisition.
(e) "Board"
shall have the meaning
set forth in the preamble to this Agreement.
(f) "Business
Day" shall mean any
day other than a Saturday, Sunday or a day on which banking institutions in
The
Commonwealth of Massachusetts or the city in which the principal office of
the
Rights Agent is located are authorized or obligated by law or executive order
to
close.
(g) "Close
of Business" on any
given date shall mean 5:00 P.M., Boston, Massachusetts time, on such date;
provided, however,
that if such date is not a Business Day it shall mean 5:00 P.M., Boston,
Massachusetts time, on the next succeeding Business Day.
(h) "Closing
Price" shall have the
meaning set forth in Section 11(d)
hereof.
3
(i) "Common
Stock" shall mean the
Common Stock, with a par value of $.10 per share, of the Company, except that
"Common Stock" when used with respect to any Person other than the Company
shall
mean either (i) the common stock (or other capital stock or shares of beneficial
interest) of such Person with the greatest voting power, or (ii) the equity
securities or other equity interests having power to control or direct the
management and affairs of such Person, or (iii) if such Person is a Subsidiary
of another Person, the Person (A) who ultimately controls such Person that
is
the Subsidiary and (B) which has outstanding such common stock (or such other
capital stock, equity securities or interests).
(j) "Common
Stock Equivalents"
shall have the meaning set forth in Section 11(a)(iii)
hereof.
(k) "Common
Stock Event" shall mean
the occurrence of any event described in (i) Section 11(a)(ii)
hereof or (ii) clause (a), (b) or (c) of the first sentence of Section 13
hereof.
(l) "Company"
shall have the
meaning set forth in the preamble to this Agreement.
(m) "Current
Market Price" shall
have the meaning set forth in Section 11(d)
hereof.
(n) "Current
Value" shall have the
meaning set forth in Section 11(a)(iii)
hereof.
(o) "Declaration
Date" shall have
the meaning set forth in the preamble to this Agreement.
(p) "Directors"
shall mean the
members of the Board.
(q) "Disqualified
Transferee" shall
mean any Person who is a direct or indirect transferee of any Right from an
Acquiring Person or an Affiliate of an Acquiring Person and became such a
transferee (x) after the occurrence of a Common Stock Event or (y) prior to
or
concurrently with the Acquiring Person
becoming
such and received such Right pursuant to a transfer (whether or not for value)
(A) from the Acquiring Person to holders of its Common Stock or other equity
securities or to any Person with whom the Acquiring Person has any continuing
agreement, arrangement, or understanding (whether or not in writing) regarding
the transferred Right, or (B) which a majority of the Board reasonably
determines is part of a plan, arrangement, or understanding (whether or not
in
writing) which has as a primary purpose or effect, the avoidance of Section 7(e)
hereof.
(r) "Distribution
Date" shall mean
the date which is the later of (A) the earlier of (x) the 10th Business Day
following the Stock Acquisition Date (or, if the 10th Business Day following
the
Stock Acquisition Date occurs before the Dividend Record Date, at the close
of
business on the Dividend Record Date) or (y) the 10th Business Day following
the
Offer Commencement Date (or, if the 10th
Business Day following the Offer Commencement Date occurs before the Dividend
Record Date, at the close of business on the Dividend Record Date) or (B) such
specified or unspecified date thereafter which is on or after the Dividend
Record Date, as may be determined by a majority of the Board.
(s) "Dividend
Record Date" shall
have the meaning set forth in the preamble to this Agreement.
(t) "Equivalent
Preferred Stock"
shall have the meaning set forth in Section 11(b)
hereof.
(u) "Excess
Amount" shall have the
meaning set forth in Section 11(a)(iii)
hereof.
(v) "Exchange
Act" shall mean the
Securities Exchange Act of 1934 (or any successor act), as in effect on the
Declaration Date.
(w) "Exchange
Ratio" shall have the
meaning set forth in Section 24(a)
hereof.
4
(x) "Expiration
Date" shall have
the meaning set forth in Section 7(a)
hereof.
(y) "Offer
Commencement Date" shall
mean the date of the commencement by any Person, other than (i) the Company,
(ii) a Subsidiary of the Company, (iii) any employee benefit plan of the Company
or of any Subsidiary of the Company or (iv) any Person organized, appointed,
or
established by the Company or such Subsidiary pursuant to the terms of any
such
plan, of a tender or exchange offer (including when such offer is first
published or sent or given within the meaning of Rule 14d-2(a) of the General
Rules and Regulations under the Exchange Act) if upon consummation thereof
the
Person and Affiliates thereof would be the Beneficial Owner of 15% or more
of
the then outstanding shares of Common Stock (including any such date which
is
after the date of this Agreement and prior to the issuance of the Rights on
the
Dividend Record Date or thereafter).
(z) "Officers'
Certificate" has the
meaning set forth in Section 20(b)
hereof.
(aa) "Other
Consideration" has the
meaning set forth in Section 6(a)
hereof.
(bb) "Person"
shall mean a company,
corporation, association, partnership, joint venture, trust, estate,
organization, business, entity or individual.
(cc) "Preferred
Stock" shall mean
the Series B Preferred Stock, $.10 par value, of the Company, having the rights
and preferences set forth in the form of Certificate of Designation attached
hereto as Exhibit
A.
(dd) "Purchase
Price" shall have the
meaning set forth in Section 7(b)
hereof.
(ee) Redemption
Price" shall have
the meaning set forth in Section 23
hereof.
(ff) "Rights"
shall have the meaning
set forth in the preamble to this Agreement.
(gg) "Rights
Agent" shall have the
meaning set forth in the preamble of this Agreement subject to the appointment
of a successor Rights Agent pursuant to Section 21
hereof.
(hh) "Rights
Certificates" shall
have the meaning set forth in Section 3(a)
hereof.
(ii) "Stock
Acquisition Date" shall
mean the later of (i) the date of the first public announcement by an Acquiring
Person or the Company that an Acquiring Person has become such (including the
first date on which any filing with any governmental authority disclosing that
an Acquiring Person has become such becomes available to the public), or (ii)
the date on which an executive officer of the Company has actual knowledge
that
an Acquiring Person has become such.
(jj) "Subsidiary"
shall mean, as of
any date, any Person of which the Company (or other specified Person) owns
directly, or indirectly through a Subsidiary or Subsidiaries, at least a
majority of the outstanding capital stock (or other shares of beneficial
interest) entitled to vote generally, or holds directly, or indirectly through
a
Subsidiary or Subsidiaries, at least a majority of partnership or similar
interests, or is a general partner, or of which the Company (or other specified
Person) owns voting securities sufficient to elect at least a majority of the
directors of such Person.
(kk) "Substitution
Period" shall
have the meaning set forth in Section 11(a)(iii)
hereof.
(ll) "Summary
of Rights" shall have
the meaning set forth in Section 3(b)
hereof.
5
(mm) "Trading
Day" shall mean a day
on which the principal national securities exchange on which such security
is
listed or admitted to trading is open for the transaction of business or, if
such security is not listed or admitted to trading on any national securities
exchange, a day which is a
Business
Day.
Section
2. Appointment of
Rights Agent. The
Company hereby appoints the Rights Agent to act as agent for the Company and
the
holders of the Rights (who, in accordance with Section 3 hereof, shall prior
to
the Distribution Date also be the holders of the Common Stock) in accordance
with the terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time, upon prior written
notice to the Rights Agent, appoint such Co-Rights Agents as it may deem
necessary or desirable.
Section
3. Issue of Rights
Certificates.
(a) Until
the Distribution Date, (i) the Rights will be evidenced (subject to the
provisions of Section 3(b) hereof) by the certificates representing shares
of
Common Stock registered in the names of the holders of the Common Stock (which
certificates shall be deemed also to be certificates for the associated Rights)
and not by separate rights certificates, and (ii) the Rights will be
transferable only in connection with the transfer of the associated shares
of
Common Stock. As soon as practicable after the Distribution Date, the
Rights Agent will send by first-class, insured, postage prepaid mail, to each
record holder of the Common Stock as of the Close of Business on the
Distribution Date, at the address of such holder shown on the stock transfer
records of the Company, one or more rights certificates, in substantially the
form of Exhibit
B hereto (the "Rights
Certificates"), evidencing in the aggregate that number of Rights to
which such holder is entitled in accordance with the provisions of this
Agreement. As of and after the Distribution Date, the Rights will be
evidenced solely by such Rights Certificates. The Rights are
exercisable only in accordance with the provisions of Section 7 hereof and
are redeemable only in accordance with Section 23
hereof.
(b) As
soon as practicable after the Dividend Record Date, the Company will cause
a
copy of a Summary of Rights, in substantially the form attached hereto as Exhibit C (the "Summary
of Rights"), to be
sent by first-class, postage prepaid mail, to each record holder of the Common
Stock as of the Close of Business on the Dividend Record Date, at the address
of
such holder shown on the stock transfer records of the Company. With
respect to certificates for the Common Stock outstanding as of the Dividend
Record Date, until the Distribution Date, the Rights associated with the shares
of Common Stock represented by such certificates will be evidenced by such
certificates for the Common Stock and the registered holders of the Common
Stock
shall also be the registered holders of the associated Rights. Until
the Distribution Date (or the earlier redemption, expiration or termination
of
the Rights), the surrender for transfer of any of the certificates representing
shares of the Common Stock outstanding on the Dividend Record Date, with or
without a copy of the Summary of Rights, shall also constitute the transfer
of
the Rights associated with the Common Stock represented by such
certificate.
(c) Rights
shall be issued in respect of all shares of Common Stock issued (whether
originally issued or delivered from the Company's treasury) after the Dividend
Record Date but prior to the earliest of (i) the Distribution Date, (ii) the
Expiration Date, or (iii) the redemption of the Rights. Certificates
representing such shares of Common Stock and certificates issued on transfer
of
such shares of Common Stock, with or without a copy of the Summary of Rights,
prior to the Distribution Date (or earlier expiration or redemption of the
Rights) shall be deemed also to be certificates for the associated Rights,
and
commencing as soon as reasonably practicable following the Dividend Record
Date
shall bear the following legend (or a legend substantially in the form
thereof):
6
“This
certificate also evidences and entitles the holder to Rights set forth in a
Rights Agreement between the issuer and American Stock Transfer & Trust
Company, as Rights Agent (the "Rights Agent") (as amended and restated from
time
to time, the "Rights Agreement"), the terms of which are incorporated herein
by
reference and a copy of which is on file at the principal offices of both the
issuer and the Rights Agent. The Rights Agent will mail to the
registered holder of this certificate a copy of the Rights Agreement, as in
effect on the date of mailing, without charge upon written request. Under
certain circumstances set forth in the Rights Agreement, such Rights will be
evidenced by separate certificates and will no longer be evidenced by this
certificate. Under certain circumstances set forth in the Rights Agreement,
Rights issued to, or held by any Person who is, was or becomes, or acquires
shares from, an Acquiring Person or any Affiliate of an Acquiring Person (as
each such term is defined in the Rights Agreement and generally relating to
the
ownership or purchase of large shareholdings), whether currently held by or
on
behalf of such Person or Affiliate or by certain subsequent holders, may become
null and void.”
Until
the
Distribution Date or the earlier redemption, expiration or termination of the
Rights, the Rights associated with the Common Stock shall be evidenced by the
Common Stock certificates alone and the registered holders of Common Stock
shall
also be the registered holders of the associated Rights, and the surrender
for
transfer of any of such certificates shall also constitute the transfer of
the
Rights associated with the Common Stock represented by such
certificate.
Section
4. Form of Rights
Certificates.
(a) The
Rights Certificates (and the form of assignment and the form of exercise notice
and certificate to be printed on the reverse thereof) shall each be
substantially in the form set forth in Exhibit B hereto and
may have such marks of identification or designation and such legends, summaries
or endorsements printed thereon as the Company may deem appropriate and as
are
not inconsistent with the provisions of this Agreement, or as may
be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed or traded, or
to
conform to usage. Subject to the provisions of Sections 11 and 22 hereof, the
Rights Certificates, whenever distributed, shall be dated as of the Dividend
Record Date (or, if the shares pursuant to which the Rights are attached are
issued thereafter, such date of issuance), shall include the date of
countersignature and on their face shall entitle the holders thereof to purchase
such number of one one-hundredths of a share of Preferred Stock as shall be
set
forth therein at the Purchase Price (as hereinafter defined), but the amount
and
type of securities issuable upon the exercise of each Right and the Purchase
Price shall be subject to adjustment as provided herein.
(b) Any
Rights Certificate issued pursuant to Section 3(a) or 22
hereof that
represents Rights beneficially owned by (i) any Acquiring Person or any
Affiliate of an Acquiring Person, or (ii) any Disqualified Transferee, and
any
other Rights Certificate issued pursuant to Section 6 or 11
hereof upon the
transfer, exchange, replacement, or adjustment of any such Rights Certificate,
shall contain (to the extent feasible) the following legend:
“The
Rights represented by this Rights Certificate are or were beneficially owned
by
a Person who was or became an Acquiring Person or an Affiliate (which includes
both affiliates and associates) of an Acquiring Person (as each such term is
defined in the Rights Agreement
7
between
the issuer and American Stock Transfer & Trust Company, as Rights Agent,
(the "Rights Agreement")). Accordingly, this Rights Certificate and the Rights
represented hereby may become null and void in the circumstances specified
in
Section 7(e) of the Rights Agreement. The Rights Agent will mail to
the registered holder of this certificate a copy of the Rights Agreement, as
in
effect on the date of such mailing, without charge upon written
request.”
Section
5. Countersignature
and Registration. The
Rights Certificates shall be executed on behalf of the Company by its Chairman
of the Board, the President or the Vice President of Finance, and by the
Treasurer or an Assistant Treasurer of the Company, either manually or by
facsimile signature, and shall have affixed thereto the Company's seal or
facsimile thereof. The Rights Certificates shall be countersigned,
either manually or by facsimile signature, by the Rights Agent and shall not
be
valid for any purpose unless so countersigned. In case any officer of
the Company who shall have signed any of the Rights Certificates shall cease
to
be such officer of the Company before countersignature by the Rights Agent
and
issuance and delivery by the Company, such Rights Certificates, nevertheless,
may be countersigned by the Rights Agent, issued, and delivered with the same
force and effect as though the person who signed such Rights Certificates had
not ceased to be such officer of the Company. Any Rights Certificate
may be signed on behalf of the Company by any person who, at the actual date
of
the execution of such Rights Certificate, shall be a proper officer of the
Company to sign such Rights Certificate, although at the date of the execution
of this Agreement any such person was not such an officer.
Following
the Distribution Date, the Rights Agent shall keep or cause to be kept, at
the
office of the Rights Agent designated for such purpose, books for registration
and transfer of the Rights Certificates issued hereunder. Such books
shall show the names and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced on its face by each of the Rights
Certificates, and the date of countersignature thereof by the Rights
Agent.
Section
6. Transfer, Split
Up,
Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost
or
Stolen Rights Certificates.
(a) Subject
to the provisions of Sections 4(b), 7(e),
and 14 hereof,
at any
time after the Close of Business on the Distribution Date, and at or prior
to
the earlier of the Close of Business on the Expiration Date or the redemption
of
the Rights, any Rights Certificate may be transferred, split up, combined or
exchanged for another Rights Certificate or Rights Certificates, entitling
the
registered holder to purchase a like number of one one-hundredths of a share
of
Preferred Stock (or, following a Common Stock Event, Common Stock and/or such
other securities, cash, or other assets as shall be issuable in respect of
the
Rights in accordance with the terms of this Agreement (such other securities,
cash or other assets being referred to herein as "Other Consideration")) as the
Rights Certificate surrendered then entitled such holder (or former holder
in
the case of a transfer) to purchase. Any registered holder desiring
to transfer, split up, combine or exchange any Rights Certificate shall make
such request in writing delivered to the Rights Agent, and shall surrender
the
Rights Certificate to be transferred, split up, combined, or exchanged at the
office of the Rights Agent designated for such purpose, accompanied by a
signature guarantee and such other documentation as the Rights Agent may
reasonably request. Neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the transfer of any
such
surrendered Rights Certificate until the registered holder shall have completed
and signed the certificate contained in the form of assignment on the reverse
side of such Rights Certificate and shall have provided such additional evidence
of the identity of the Beneficial Owner from whom the Rights evidenced by such
Rights Certificate are to be transferred (or the Beneficial Owner to whom such
Rights
8
are
to be
transferred) or Affiliates thereof as the Company shall reasonably
request. Thereupon, subject to Sections 4(b), 7(e)
and 14 hereof,
the
Company shall execute and the Rights Agent shall countersign and deliver to the
Person entitled thereto a Rights Certificate or Rights Certificates, as the
case
may be, as so requested. The Company may require payment by the
holders of Rights of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer, split up, combination
or
exchange of Rights Certificates which the Company is not required to pay in
accordance with Section 9(d)
hereof.
(b) Upon
receipt by the Company and the Rights Agent of evidence reasonably satisfactory
to them of the loss, theft, destruction or mutilation of a Rights Certificate,
and, in case of loss, theft or destruction, the receipt of indemnity or security
satisfactory to them, and upon reimbursement to the Company and the Rights
Agent
of all reasonable expenses incidental thereto, and upon surrender to the Rights
Agent and cancellation of the Rights Certificate, if mutilated, accompanied
by a
signature guarantee and such other documentation as the Rights Agent may
reasonably request, the Company will execute and deliver a new Rights
Certificate of like tenor to the Rights Agent for countersignature and delivery
to the registered owner in lieu of the Rights Certificate so lost, stolen,
destroyed, or mutilated.
Section
7. Exercise of Rights;
Purchase Price; Expiration Date of Rights.
(a) Except
as otherwise provided herein, the registered holder of any Rights Certificate
may exercise the Rights evidenced thereby in whole or in part at any time from
and after the Distribution Date and at or prior to the Close of Business on
July
27, 2018 (the "Expiration Date") or the earlier redemption of the
Rights. At the Expiration Date (or the earlier redemption of the
Rights), all Rights shall be extinguished and all Rights Certificates shall
become null and void. To exercise Rights, the registered holder of
the Rights Certificate evidencing such Rights shall surrender such Rights
Certificate, with the form of election to purchase on the reverse side thereof
and the certificate contained therein duly executed, to the Rights Agent at
the
office of the Rights Agent designated for such purpose, accompanied by a
signature guarantee and such other documentation as the Rights Agent may
reasonably request, together with payment in cash, only if by electronic or
wire
transfer, or by certified check or bank check, of the Purchase Price with
respect to the total number of one one-hundredths of a share of Preferred Stock
(or, after a Common Stock Event, shares and/or similar units of Common Stock
or
Other Consideration) as to which the Rights are exercised (which payment shall
include any additional amount payable by such Person in accordance with Section
9(d) hereof). The Rights Agent shall promptly deliver to the Company all
payments of the Purchase Price received in respect of Rights Certificates
accepted for exercise.
(b) The
purchase price for each one one-one hundredth of a share of Preferred Stock
issuable pursuant to the exercise of a Right (the "Purchase Price") shall
initially be $59.09, shall be subject to adjustment as provided in Section 11 hereof,
and shall be payable in lawful money of the United States of
America.
(c) Upon
receipt of a Rights Certificate representing the Rights, with the form of
election to purchase set forth on the reverse side thereof and the certificate
contained therein duly executed, accompanied by payment of the Purchase Price,
with respect to each Right so exercised, the Rights Agent, subject to Sections 7(e), 11(a)(iii)
and 20(k) hereof,
shall
thereupon promptly (i) requisition from any transfer agent of the Preferred
Stock (or Common Stock, as the case may be) (or from the Company if there shall
be no such transfer agent, or make available if the Rights Agent is such
transfer agent) certificates for the total number of one one-hundredths of
a
share of Preferred Stock (or Common Stock, as the case may be) to be purchased
and the Company hereby irrevocably authorizes such transfer agent to comply
with
any such request, (ii) after receipt of such certificates, cause the same to
be
delivered to or upon
the
order of the registered holder of such Rights Certificate, registered in such
name or names as may be designated in writing by such holder, and (iii) when
appropriate, requisition from the Company
9
the
amount of cash to be paid in lieu of issuance of a fractional share in
accordance with Section 14 hereof and after receipt promptly deliver such cash
to or upon the order of the registered holder of such Rights Certificate. After
the occurrence of the later of a Common Stock Event or the Dividend Record
Date
the Company shall make all necessary arrangements so that any Other
Consideration then deliverable or which may be deliverable in respect of the
Rights is available for distribution by the Rights Agent. For purposes of this
Section 7, the
Rights Agent shall be entitled to rely, and shall be protected in relying,
on an
Officers' Certificate from the Company to the effect that the Distribution
Date
has occurred.
(d) Subject
to Sections
4(b), 7(e) and
14
hereof, in case
the registered holder of any Rights Certificate shall exercise less than all
the
Rights evidenced thereby, a new Rights Certificate evidencing Rights equivalent
to the Rights remaining unexercised shall be executed and delivered by the
Company to the Rights Agent and countersigned and delivered by the Rights Agent
to the registered holder of such Rights Certificate or to such holder's duly
authorized assigns.
(e) Notwithstanding
anything in this Agreement to the contrary, from and after the first occurrence
of the later of a Common Stock Event or the Dividend Record Date any Rights
beneficially owned by (i) an Acquiring Person or an Affiliate of an Acquiring
Person, or (ii) a Disqualified Transferee shall become null and void without
any
further action, and no holder of such Rights shall have any rights whatsoever
with respect to such Rights, whether under any provision of this Agreement
or
otherwise. The Company shall use all reasonable efforts to ensure
that the provisions of this Section 7(e) and Section 4(b) hereof are complied
with, but the Company shall have no liability to any holder of Rights
Certificates or other Person and none of the terms of this Agreement or the
Rights shall be deemed to be waived with respect to such holder or other Person
as a result of any failure by the Company to make any determinations with
respect to an Acquiring Person or any Affiliate of an Acquiring Person or
Disqualified Transferees hereunder or any failure to have a legend placed on
any
Rights Certificate in accordance with Section 4(b) hereof or on any Common
Stock
certificate in accordance with Section 3(c) hereof.
(f) Notwithstanding
anything in this Agreement to the contrary, neither the Rights Agent nor the
Company shall be obligated to undertake any action with respect to a holder
of
any Rights Certificate upon the occurrence of any purported exercise thereof
unless such holder shall have (i) completed and signed the certificate contained
in the form of election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such exercise, and (ii) provided such additional
evidence of the identity of the Beneficial Owner from whom the Rights evidenced
by such Rights Certificate are to be transferred (or the Beneficial Owner to
whom such Rights are to be transferred) or Affiliates thereof as the Company
shall reasonably request.
Section
8. Cancellation and
Destruction of Rights Certificates. All
Rights Certificates surrendered for the purpose of and accepted for exercise,
or
surrendered for the purpose of redemption, transfer, split up, combination
or
exchange shall, if surrendered to the Company or to any of its agents (other
than the Rights Agent), be delivered to the Rights Agent for cancellation or
in
canceled form, or, if surrendered to the Rights Agent, shall be canceled by
it,
and no Rights Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Agreement. The Company
shall deliver to the Rights Agent for cancellation and retirement, and the
Rights Agent shall so cancel and retire, any other Rights Certificates purchased
or retired by the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all canceled Rights Certificates to the Company, or may,
at
the written request of the Company, but shall not be required to, destroy such
canceled Rights Certificates, and in such case shall deliver a certificate
of
destruction thereof to the Company.
10
Section
9. Reservation and Availability of
Shares of Preferred Stock; Other Covenants.
(a) The
Company covenants and agrees that on and after the Distribution Date, it shall
use reasonable efforts to cause to be reserved and kept available out of its
authorized and unissued shares of Preferred Stock (or, following the occurrence
of a Common Stock Event, out of its authorized and unissued shares of Common
Stock and/or Other Consideration, or out of its authorized and issued shares
held in its treasury), the number of shares of Preferred Stock (or, following
a
Common Stock Event, shares of Common Stock and/or Other Consideration) that,
except as provided in Section 11(a)(iii)
hereof, would then be sufficient to permit the exercise in full of all
outstanding Rights; provided, however,
that the
reservation of such shares shall be subject and subordinate to any other
reservation of such shares made by the Company at any time for any lawful
purpose; provided,
further, however,
that in no
event shall such failure to so reserve shares affect the rights of any holder
of
Rights hereunder.
(b) The
Company covenants and agrees that on and after the Distribution Date so long
as
the Preferred Stock (or, following a Common Stock Event, shares and/or similar
units of Common Stock and/or Other Consideration) issuable upon the exercise
of
Rights may be listed on any national securities exchange, the Company shall
use
its best efforts to cause all shares (or similar units) reserved for such
issuance to be listed on such exchange upon official notice of issuance upon
such exercise.
(c) The
Company covenants and agrees that it shall take all such action as may be
necessary to ensure that each one one-hundredth of a share of Preferred Stock
(or, following a Common Stock Event, each share and/or similar unit of Common
Stock or Other Consideration) delivered upon exercise of Rights shall, at the
time of delivery of the certificates for such shares (or units), subject to
payment in full of the Purchase Price, be duly and validly authorized and issued
and fully paid and nonassessable.
(d) The
Company covenants and agrees that it shall pay when due and payable any and
all
federal and state transfer taxes and similar charges which may be payable in
respect of the issuance or delivery of the Rights Certificates or of any shares
of Preferred Stock (or, following the occurrence of a Common Stock Event, each
share and/or similar unit of Common Stock or Other Consideration) upon the
exercise of Rights; provided, however,
that the
Company shall not be required to pay any transfer tax which may be payable
in
respect of any transfer involved in the transfer or delivery of Rights
Certificates or in the issuance or delivery of certificates for any shares
of
Preferred Stock (or, following the occurrence of a Common Stock Event, each
share and/or similar unit of Common Stock or Other Consideration) in a name
other than that of the registered holder of the Rights Certificate evidencing
Rights surrendered for exercise or to issue or deliver any certificates for
any
shares of Preferred Stock (and, following the occurrence of a Common Stock
Event, any shares and/or similar units of Common Stock or Other Consideration)
upon the exercise of any Rights until any such tax shall have been paid (any
such tax being payable by the holder of such Rights Certificate at the time
of
surrender thereof) or until it has been established to the Company's
satisfaction that no such tax is due.
(e) The
Company shall use its best efforts (i) to file, as soon as practicable following
the earliest date after the first occurrence of a Common Stock Event on which
the consideration to be delivered by the Company upon exercise of the Rights
has
been determined in accordance with this Agreement, or as soon as is required
by
law following the Distribution Date, as the case may be, a registration
statement under the Act, with respect to the securities issuable upon exercise
of the Rights on an appropriate form, (ii) to cause such registration statement
to become effective as soon as practicable after such filing, and (iii) to
cause
such registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Act) until the earlier of (A) the date as of
which the Rights are no longer exercisable for such securities, or (B) the
Expiration Date or earlier redemption of the Rights. The Company will
also take such action as may be appropriate under, or to ensure compliance
with,
the securities or "blue sky" laws of the various states of the United States
in
connection with the exercisability of the
Rights. The
11
Company
may temporarily suspend, for a period of time not to exceed ninety (90) days
after the date set forth in clause (i) of the first sentence of this Section 9(e), the
exercisability of the Rights in order to prepare and file such registration
statement or to permit it to become effective. Upon any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended. The
Company shall thereafter issue a public announcement at such time as the
suspension is no longer in effect. Notwithstanding any provision of
this Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification in such jurisdiction shall
have
been obtained.
Section
10. Preferred Stock
Record Date; Etc. Each
Person in whose name any certificate for any shares of Preferred Stock (or,
following the occurrence of a Common Stock Event, shares and/or similar units
of
Common Stock or Other Consideration) is issued upon the exercise of Rights
shall
for all purposes be deemed to have become the holder of record of such shares
of
Preferred Stock (or such shares and similar units of Common Stock and/or Other
Consideration, as the case may be) represented thereby, and such certificate
shall be dated the date which is the later of (i) the date upon which the Rights
Certificate evidencing such Rights was duly surrendered, or (ii) the date upon
which payment of the Purchase Price (and any applicable transfer taxes) in
respect thereof was made; provided, however, that if such date is a date upon
which the relevant transfer books of the Company are closed, such Person shall
be deemed to have become the record holder of such shares (or Other
Consideration) on, and such certificate shall be dated, the next succeeding
Business Day on which such transfer books of the Company are open; provided,
further, that the Company covenants and agrees that it shall not close such
transfer books for a period exceeding ten consecutive days. Prior to
the exercise of the Rights evidenced thereby (which shall be deemed to have
occurred on the date such certificate for shares and/or similar units of
Preferred Stock, Common Stock or Other Consideration shall be dated in
accordance with this Section 10), the
holder of a Rights Certificate, as such, shall not be entitled to any rights
of
a security holder of the Company with respect to the shares of Preferred Stock
or Common Stock (and/or such shares or similar units of Common Stock or Other
Consideration) for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions,
or
to exercise any preemptive rights, and shall not be entitled to receive any
notice of any proceedings of the Company, except as expressly provided
herein.
Section
11. Antidilution
Adjustments. The
Purchase Price and the number and kind of securities covered by each Right
and
the number of Rights outstanding are subject to adjustment from time to time
as
provided in this Section 11.
(a) (i) In
the event that the Company shall at
any time after the Declaration Date (A) declare and pay a dividend on the
Preferred Stock payable in shares of Preferred Stock, (B) subdivide the
outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into
a
smaller number of shares, or (D) issue, change, or alter any of its shares
of
capital stock in a reclassification or recapitalization (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving Person), except as otherwise provided
in
this Section
11(a) and Section 7(e) hereof,
then, and in each such case, the Purchase Price in effect at the time of the
record date for such dividend or the effective time of such subdivision,
combination, reclassification or recapitalization, and the number and kind
of
shares of capital stock issuable at such time, shall be proportionately adjusted
so that the holder of any Right exercised after such time shall be entitled
to
receive the aggregate number and kind of shares of Preferred Stock or other
capital stock which, if such Right had been exercisable and was exercised
immediately prior to such time at the Purchase Price then in effect and at
a
time when the transfer books for the Preferred Stock (or other capital stock)
of
the Company were open, such holder would have owned upon such exercise and
been
entitled to receive by virtue of such dividend, subdivision, combination,
reclassification or recapitalization. If an event occurs which would
require an adjustment under both this Section 11(a)(i) and
Section
11(a)(ii) hereof, the adjustment provided in this
12
Section
11(a)(i)
shall be in addition to, and shall be made prior to, any adjustment required
pursuant to Section
11(a)(ii) hereof.
(ii) Other
than (x) pursuant to an offer for all outstanding shares of the Common Stock
at
a price and on terms determined by a least a majority of the Board of Directors
who are not officers of the Company and who are not representatives, nominees,
Affiliates or Associates of an Acquiring Person, determines to be in the best
interests of, and is fair to, the Company and its stockholders, other than
such
Acquiring Person, its Affiliates and its Associates, or (y) a transaction or
transactions to which the provisions of Section 13(a) apply, then in the
event
(A) any
Person shall at any time after the Declaration Date become an Acquiring Person;
or
(B) any
Acquiring Person or any Affiliate of any Acquiring Person, at any time after
the
Declaration Date, directly or indirectly, shall (1) merge into the Company
or
otherwise combine with the Company, and the Company shall be the continuing
or
surviving corporation of such merger or combination and the Common Stock of
the
Company shall remain outstanding and no shares thereof shall be changed or
otherwise transformed into stock or other securities of any other Person or
the
Company or cash or any other property, (2) in one or more transactions, transfer
any assets to the Company in exchange (in whole or in part) for shares of any
class of its equity securities or for securities exercisable for or convertible
into shares of any such class or otherwise obtain from the Company, with or
without consideration, any additional shares of any such class or securities
exercisable for or convertible into shares of any such class (other than as
part
of a pro rata distribution to all holders of such class), (3) sell, purchase,
lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one
transaction or a series of transactions) to, from or with the Company or any
of
the Company's Subsidiaries, assets with an aggregate fair market value in excess
of 50% of the assets of the Company and its Subsidiaries determined on a
consolidated basis on terms and conditions less favorable to the Company than
the Company would be able to obtain through arm's-length negotiation with an
unaffiliated third party, (4) receive any compensation from the Company or
any
of the Company's Subsidiaries other than compensation as a director of the
Company or for full-time employment as a regular employee at rates in accordance
with the Company's (or such Subsidiary's) past practices, (5) receive the
benefit (except proportionately as a stockholder), of any loans, advances,
guarantees, pledges or other financial assistance provided by the Company or
any
of its Subsidiaries on terms and conditions less favorable to the Company (or
such Subsidiary) than the Company would be able to obtain through arm's-length
negotiation with an unaffiliated third party or (6) commence a tender or
exchange offer for securities of the Company; or
(C) during
such time as there is an Acquiring Person at any time after the Declaration
Date, there shall be any reclassification of securities (including any
combination thereof), or recapitalization of the Company, or any merger or
consolidation of the Company with any of its Subsidiaries, (whether or not
with
or into or otherwise involving an Acquiring Person or any Affiliate of an
Acquiring Person), or any repurchase by the Company or any of its Subsidiaries
of shares of the Common Stock of the Company, or any other class or series
of
securities issued by the Company, which reclassification, recapitalization,
merger, consolidation or repurchase is effected at a time when a majority of
the
Board consists of persons who are the Acquiring Person or its Affiliates, or
nominees or designees of any thereof, which has the effect, directly or
indirectly, of increasing by more than 1% the proportionate share of the
outstanding shares of any class of equity securities or securities exercisable
for or convertible into any class of equity
securities
of the Company or any of its Subsidiaries which is directly or indirectly owned
by an Acquiring Person or any Affiliate of an Acquiring Person
13
then,
in
each such case, upon the Close of Business on the tenth Business Day after
the
occurrence of such event or if such tenth Business Day following the occurrence
of such event occurs before the Dividend Record Date, upon the Dividend Record
Date, proper provision shall be made so that each holder of a Right, except
as
provided in Section 7(e) hereof, shall thereafter have the right to receive,
upon exercise thereof at the Purchase Price in effect at the time of exercise
in
accordance with the terms of this Agreement, in lieu of a number of one
one-hundredths of a share of Preferred Stock, such number of shares of Common
Stock of the Company as shall equal the result obtained by (x) multiplying
an
amount equal to the then current Purchase Price by an amount equal to the number
of one one-hundredths of a share of Preferred Stock for which a Right was or
would have been exercisable immediately prior to the first occurrence of any
such event whether or not such Right was then exercisable, and (y) dividing
that
product by 50% of the Current Market Price per share of the Common Stock of
the
Company (as defined in Section 11(d) hereof) determined as of the date of such
first occurrence.
(iii) In
lieu of issuing whole or fractional shares of Common Stock in accordance with
Section 7(c) hereof, the Company shall (i) in the event that the number of
shares of Common Stock which are authorized by the Company's charter but not
outstanding or reserved for issuance for purposes other than upon exercise
of
the Rights are not sufficient to permit the exercise in full of the Rights
in
accordance with Section 7(c) hereof, or (ii) if a majority of the Board
determines that it would be appropriate and not contrary to the interests of
the
holders of Rights (other than any Acquiring Person or Disqualified Transferee
or
any Affiliate of the Acquiring Person or Disqualified Transferee), (A) determine
an amount, if any, (the "Excess Amount") equal to the excess of (1) the value
(the "Current Value") of the whole or fractional shares of Preferred Stock
(or
Common Stock) issuable upon the exercise of a Right in accordance with Section
7(c) hereof, over (2) the Purchase Price, and (B) with respect to each Right,
(subject to Section 7(e) hereof) make adequate provision to substitute for
such
whole or fractional shares of Preferred Stock (or Common Stock), upon payment
of
the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price,
(3) Common Stock or other equity securities of the Company (including, without
limitation, shares or units of Preferred Stock or preferred stock which the
Board has deemed in good faith to have the same value as a share of Common
Stock
(such shares of preferred stock being referred to herein as "Common Stock
Equivalents")), (4) debt securities of the Company, (5) other assets, or (6)
any
combination of the foregoing (which would include the additional consideration
provided to any holder by reducing the Purchase Price) having an aggregate
value
equal to the Current Value, where such aggregate value has been determined
by
the Board; provided,
however, subject to the provisions of Section 9(e) hereof, that if the
Company shall not have made adequate provision to deliver value pursuant to
clause (B) above within 30 days following the Close of Business on the tenth
Business Day after the first occurrence of a Common Stock Event described in
Section 11(a)(ii) hereof or, if such tenth Business Day occurs before the
Dividend Record Date, upon the Dividend Record Date, then the Company shall
be
obligated to deliver, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, whole or fractional shares of Preferred
Stock (or Common Stock) (to the extent available) and then, if necessary, cash,
securities, and/or assets which in the aggregate are equal to the Excess Amount.
If the Board shall determine in good faith that it is likely that sufficient
additional shares of Common Stock or Common Stock Equivalents could be
authorized for issuance upon exercise in full of the Rights, the 30-day period
set forth above may be extended to the extent necessary, but not more than
90
days following the Close of Business on the tenth Business Day after the first
occurrence of such a Common Stock Event or, if such tenth Business Day occurs
before the Dividend Record Date, upon the Dividend Record Date (such 30 day
period, as it may be extended to 90 days, is referred to herein as the
"Substitution Period"). To the extent that the Company determines that some
action is to be taken pursuant to the preceding provisions of this Section
11(a)(iii), the Company (x) shall provide, subject to Section 7(e)
hereof,
14
that
(except as to the form of consideration which shall be determined as appropriate
by a majority of the Board) such action shall apply uniformly to all outstanding
Rights which shall not have become null and void, and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution Period
in
order to seek any authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such provisions and
to
determine the value thereof. In the event of any such suspension, the Company
shall issue a public announcement stating that the exercisability of the Rights
has been temporarily suspended. The Company shall thereafter issue a public
announcement at such time as the suspension is no longer in effect. For purposes
of this Section 11(a)(iii), the value of the Common Stock issuable upon exercise
of a Right in accordance with Section 7(c) hereof shall be the Current Market
Price per share of the Common Stock (as determined pursuant to Section 11(d)
hereof) on the Close of Business on the tenth Business Day after the date of
the
first occurrence of such a Common Stock Event or, if such tenth Business Day
occurs before the Dividend Record Date, upon the Dividend Record Date, and
the
value of any Common Stock Equivalent shall be deemed to be equal to the Current
Market Price per share of the Common Stock on such date.
(b) In
the event the Company shall, after the Dividend Record Date, fix a record date
for the issuance of any options, warrants, or other rights to all holders of
Preferred Stock entitling them (for a period expiring within 45 calendar days
after such record date) to subscribe for or purchase (i) Preferred Stock or
(ii)
shares having the same rights, privileges and preferences as the shares of
any
number of one one-hundredths of a share of Preferred Stock ("Equivalent Preferred Stock")
or (iii) securities convertible into Preferred Stock or Equivalent Preferred
Stock at a price per share of Preferred Stock or Equivalent Preferred Stock
(or
having a conversion price per share of Common Stock, if a security is
convertible into Preferred Stock or Equivalent Preferred Stock) less than the
Current Market Price per share of Preferred Stock (determined in accordance
with
Section 11(d)
hereof) determined as of such record date, the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase Price
in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the number of shares of Preferred Stock outstanding on such
record date plus the number of shares of Preferred Stock and/or Equivalent
Preferred Stock which the aggregate minimum offering price of the total number
of shares of one one-hundredths of a share of Preferred Stock and/or Equivalent
Preferred Stock so to be offered (and/or the aggregate minimum conversion price
of such convertible securities so to be offered) would purchase at such Current
Market Price, and the denominator of which shall be the number of shares of
Preferred Stock outstanding on such record date plus the maximum number of
additional shares of Preferred Stock and/or Equivalent Preferred Stock to be
offered for subscription or purchase (or the maximum number of shares into
which
such convertible securities so to be offered are convertible). In
case such subscription price may be paid by delivery of consideration part
or
all of which shall be in a form other than cash, for purposes of this Section
11(b) the value of such consideration shall be the fair market value thereof
as
determined in good faith by the Board (which determination shall be described
in
an Officers' Certificate filed with the Rights Agent). Shares of
Preferred Stock owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date is fixed;
and
in the event that such options, warrants or other rights are not so issued,
the
Purchase Price shall be adjusted to be the Purchase Price which would then
be in
effect if such record date had not been fixed (subject, however, to such other
adjustments as are provided herein).
(c) In
the event that the Company shall, after the Dividend Record Date, fix a record
date for the making of a distribution to all holders of Preferred Stock
(including any such distribution made in connection with a consolidation or
merger in which the Company is the surviving or continuing Person) of evidences
of indebtedness, cash (other than cash dividends paid out of the earnings or
retained earnings of the Company and its Subsidiaries determined on a
consolidated basis in accordance with generally accepted accounting principles
consistently applied), other property (other than a dividend payable in
a
15
number
of
one one-hundredths of a share of Preferred Stock, but including any dividend
payable in capital stock other than Preferred Stock), or subscription rights
or
warrants (excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to
such
record date by a fraction, of which the numerator shall be (i) the Current
Market Price per share of Preferred Stock (as defined in Section 11(d) hereof)
determined as of such record date, less (ii) the sum of (A) that portion of
cash
plus (B) the fair-market value, as determined in good faith by the Board (which
determination shall be described in an Officers' Certificate filed with the
Rights Agent) of that portion of such evidences of indebtedness, such other
property, and/or such subscription rights or warrants applicable to one share
of
Common Stock and of which the denominator shall be such Current Market Price
per
share of the Preferred Stock. Such adjustments shall be made successively
whenever such a record date is fixed; and in the event such distribution is
not
so made, the Purchase Price shall again be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed (subject,
however, to such other adjustments as are provided herein).
(d) For
purposes of any computation pursuant to Section 11(a)(iii)
hereof, the "Current Market
Price" per share (or unit) of any security on any date shall be deemed to
be the average of the daily Closing Price of such security for the 10
consecutive Trading Days immediately after such date, and for the purpose of
any
other computation hereunder, the "Current Market Price" per share (or unit)
of
any security on any date shall be deemed to be the average of the daily Closing
Price of such security for the 20 consecutive Trading Days immediately prior
to
such date; provided, however,
that in the
event that the Current Market Price per share of such security is determined
during a period following the announcement by the issuer of such security of
(i)
a dividend or distribution on such security payable in shares (or units) of
such
security or securities convertible into shares (or units) of such security,
or
(ii) any subdivision, combination or reclassification of such security, and
prior to the expiration of such 10 Trading Days or 20 Trading Days after (A)
the
ex-dividend date for such dividend or distribution, or (B) the record date
for
such subdivision, combination or reclassification, as the case may be, then,
and
in each such case, the "Current Market Price" shall be the Closing Price of
such
security on the last day of such respective 10 Trading Day or 20 Trading Day
period. For purposes of this Agreement, the "Closing Price" of any security
on any day shall be the last sale price, regular way, with respect to shares
(or
units) of such security, or, in case no such sale takes place on such day,
the
average of the closing bid and asked prices, regular way, with respect to such
security, in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which such security is listed or admitted to trading;
or,
if such security is not so listed or admitted to trading, the last quoted sale
price with respect to shares (or units) of such security, or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter market
with respect to shares (or units) of such security, as reported by the National
Association of Securities Dealers, Inc. Automated Quotation System or such
other
similar system then in use; or, if on any such date such security is not quoted
by any such organization, the average of the closing bid and asked prices with
respect to shares (or units) of such security, as furnished by a professional
market maker making a market in such security selected by the Board; or, if
no
such market maker is available, the fair market value of shares (or units)
of
such security as of such day as determined in good faith by the Board (which
determination shall be described in an Officers' Certificate filed with the
Rights Agent); provided, however, that the "Closing Price" of one
one-hundredth of a share of Preferred Stock as of any Trading Day shall be
equal
to the Closing Price of a whole share of Preferred Stock on such Trading Day
divided by 10; provided, further,
that if the
Closing Price of such a share of Preferred Stock as of any Trading Day cannot
be
reasonably determined by the foregoing provisions, the "Closing Price" of one
one-hundredth of a share of Preferred Stock on such Trading Date shall be the
Closing Price of a share of Common Stock on such Trading Day.
(e) No
adjustment in the Purchase Price shall be required unless adjustment would
require an increase or decrease of at least 1% in such price; provided, however,
that any
adjustments which by
16
reason
of
this Section
11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest (x)
ten-thousandth of a share (or similar unit) of Common Stock or securities other
than Preferred Stock or Equivalent Preferred Stock or (y) one-millionth of
a
share of Preferred Stock or Equivalent Preferred Stock. Notwithstanding the
first sentence of this Section 11(e), any adjustment required by this Section 11 shall be
made no later than the earlier of (i) three years from the date of the
transaction which mandates the adjustment or (ii) the Expiration
Date. Anything in this Section 11 to the
contrary notwithstanding, the Company shall be entitled to make such reductions
in the Purchase Price, in addition to those required by this Section 11, as it in
its discretion shall determine to be advisable in order that any dividends,
subdivision of shares, distribution of rights to purchase shares of beneficial
interest or other stock or securities, or distribution of securities convertible
into or exchangeable for stock hereafter made by the Company to its stockholders
shall not be taxable.
(f) In
the event that at any time, as a result of an adjustment made in respect of
a
Common Stock Event, the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of the Company other than shares
of Preferred Stock, thereafter the number of such other shares so receivable
upon exercise of any Right and the Purchase Price thereof shall be subject
to
adjustment from time to time in a manner and on terms as nearly equivalent
as
practicable to the provisions with respect to such other shares contained in
Sections 11(a),
(b),
(c), (e), (g), (h), (i), (j), (k), (m) and (p) hereof,
and the
provisions of Sections
7, 9, 10, 11(d), 13 and 14 hereof
with
respect to the shares of Preferred Stock shall apply on like terms to any such
other shares.
(g) All
Rights originally issued by the Company subsequent to any adjustment made to
the
Purchase Price hereunder shall evidence the right to purchase, at the adjusted
Purchase Price, the number of one one-hundredths of a share of Preferred Stock
purchasable from time to time hereunder upon exercise of the Rights represented
thereby, all subject to further adjustment as provided herein.
(h) Unless
the Company shall have exercised its election as provided in Section 11(i) hereof,
upon each adjustment of the Purchase Price as a result of the calculations
made
pursuant to Sections
11(b) and 11(c) hereof,
each
Right outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price,
that
number of one one-hundredths of a share of Preferred Stock (calculated to the
nearest one-millionth of a share) obtained by (i) multiplying (x) the number
of
one one-hundredths of a share of Preferred Stock covered by a Right immediately
prior to this adjustment, by (y) the Purchase Price in effect immediately prior
to such adjustment of the Purchase Price, and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such adjustment
of
the Purchase Price.
(i) Assuming
that no other adjustment pursuant to this Section 11 has been
made, the Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights in substitution for any adjustment
in the number of one one-hundredths of a share of Preferred Stock purchasable
upon the exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights shall be exercisable for the number
of
one one-hundredths of a share of Preferred Stock for which a Right was
exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that number
of Rights (calculated to the nearest ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to such adjustment of the Purchase
Price by the Purchase Price in effect immediately after such adjustment of
the
Purchase Price. The Company shall make a public announcement of its election
to
adjust the number of Rights, indicating the record date for the adjustment,
and,
if known at the time, the amount of the adjustment to be made. This
record date may be the date on which the Purchase Price is adjusted or any
day
thereafter, but, if the Rights Certificates have been issued, shall be at least
10 days later than the date of the public announcement. If Rights
Certificates have been issued, upon each adjustment of the number of
Rights
17
pursuant
to this Section 11(i) the Company shall, as promptly as practicable, cause
to be
distributed to holders of record of Rights Certificates on such record date
Rights Certificates evidencing, subject to Section 14 hereof,
the additional Rights to which such holders shall be entitled as a result of
such adjustment, or, at the option of the Company, shall cause to be distributed
to such holders of record in substitution and replacement for the Rights
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Rights Certificates so to be distributed shall be issued,
executed, and countersigned in the manner provided for herein (and may bear,
at
the option of the Company, the adjusted Purchase Price) and shall be registered
in the names of the holders of record of Rights Certificates on the record
date
specified in the public announcement.
(j) Irrespective
of any adjustment or change in the Purchase Price or the number of whole or
fractional shares of Preferred Stock issuable upon exercise of such Rights,
the
Rights Certificates theretofore and thereafter issued may continue to express
the Purchase Price per share and the number of one one-hundredths of a share
of
Preferred Stock which were expressed in the initial Rights Certificates issued
hereunder.
(k) Before
taking any action that would cause an adjustment reducing the Purchase Price
below the then par value, if any, of the number of one one-hundredths of a
share
of Preferred Stock issuable upon exercise of the Rights, the Company shall
take
any corporate action which may, in the opinion of its counsel, be necessary
in
order that the Company may validly and legally issue such number of fully paid
and nonassessable one one-hundredths of a share of Preferred Stock at such
adjusted Purchase Price.
(l) In
any case in which this Section 11 shall
require that an adjustment in the Purchase Price be made effective as of a
record date for a specified event, the Company may elect to defer until the
occurrence of such event the issuing to the holder of any Right exercised after
such record date of the number of one one-hundredths of a share of Preferred
Stock or other capital stock or securities of the Company, if any, issuable
upon
such exercise over and above the number of one one-hundredths of a share of
Preferred Stock or other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price in effect prior
to such adjustment; provided, however,
that the
Company shall deliver to such holder a due ▇▇▇▇ or other appropriate instrument
evidencing such holder's right to receive such additional securities upon the
occurrence of the event requiring such adjustment.
(m) Anything
in this Section
11 to the contrary notwithstanding, the Company shall be entitled to make
such reductions in the Purchase Price, in addition to those adjustments
expressly required by this Section 11, as and
to
the extent that it, by means of a vote of the Board acting in good faith, shall
determine to be advisable in order that any consolidation or subdivision of
the
Common Stock, issuance wholly for cash of any Common Stock at less than the
Current Market Price thereof, issuance wholly for cash of Common Stock (or
other
securities which by their terms are convertible into or exchangeable for Common
Stock), dividends payable in shares of Common Stock or other capital stock
or
shares of beneficial interest, or issuance of rights, options, or warrants
referred to hereinabove in this Section 11, hereafter made or declared by the
Company to the holders of its Common Stock, shall not be taxable to such
holders.
(n) The
Company covenants and agrees that it shall not, at any time after the
Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction that complies with Section 11(o)
hereof), (ii) merge with or into any other Person (other than a Subsidiary
of
the Company in a transaction which complies with Section 11(o) hereof), or
(iii)
sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction or a series of related transactions, more than 50% of (A) the assets
(taken at net asset value as stated on the books of the Company and determined
on a consolidated basis in accordance with generally accepted accounting
principles consistently applied) or
18
(B)
the
earning power of the Company and its Subsidiaries (determined on a consolidated
basis in accordance with generally accepted accounting principles consistently
applied) to any other Person or Persons (other than the Company or any of its
Subsidiaries in one or more transactions each of which complies with Section 11(o)
hereof), if (x) at the time of or immediately after such consolidation, merger
or sale, there are any rights, warrants or other instruments or securities
outstanding or agreements (whether or not in writing) in effect that would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately
after
such consolidation, merger or sale, the stockholders of such other Person shall
have received a distribution of Rights previously owned by such Person or any
of
its Affiliates.
(o) The
Company covenants and agrees that, after the Distribution Date, it will not,
except as permitted by Section 23 or 27 hereof, take (or permit any Subsidiary
to take) any action if at the time such action is taken it is reasonably
foreseeable that such action will diminish substantially or otherwise eliminate
the benefits intended to be afforded by the Rights.
(p) Anything
in this Agreement to the contrary notwithstanding, in the event that the Company
shall at any time after the Declaration Date and prior to the Distribution
Date
(i) declare or pay a dividend on the outstanding shares of Common Stock payable
in shares of Common Stock, or (ii) effect a subdivision, combination or
consolidation of the outstanding Common Stock (by reclassification or otherwise
than by payment of dividends in shares of Common Stock) into a greater or
smaller number of shares, then in any such case, (i) the number of one
one-hundredths of a share of Preferred Stock purchasable after such event upon
exercise of each Right shall be determined by multiplying the number of one
one-hundredths of a share of Preferred Stock so purchasable immediately prior
to
such event by a fraction the numerator of which shall be the total number of
shares of Common Stock outstanding immediately prior to the occurrence of the
event and the denominator of which shall be the total number of shares of Common
Stock outstanding immediately following the occurrence of such event; and (ii)
each share of Common Stock outstanding immediately after such event shall have
issued with respect to it that number of Rights which each share of Common
Stock
outstanding immediately prior to such event had issued with respect to
it. The adjustments provided for in this Section 11(p) shall be made
successively whenever such a dividend is declared or paid or such a subdivision,
combination or consolidation is effected.
Section
12. Certificate of
Adjustments. Whenever
an adjustment is made as provided in Section 11 or 13 hereof, the Company shall
(a) promptly prepare an Officers' Certificate setting forth such adjustment,
including any adjustment in Purchase Price, the number of shares or Other
Consideration payable, and a brief statement of the facts accounting for such
adjustment, (b) promptly file with the Rights Agent and with each transfer
agent
for the Preferred Stock and Common Stock a copy of such Officers' Certificate,
and (c) mail a brief summary thereof to each registered holder of a Rights
Certificate in accordance with Section 26 hereof. The Rights Agent
shall be fully protected in relying on any such Officers' Certificate and on
any
adjustment therein contained, and shall not be deemed to have knowledge of
any
such adjustment unless and until it shall have received such an Officers'
Certificate.
Section
13. Consolidation,
Merger or Sale or Transfer of Assets or Earning Power. In
the event that, following the Stock Acquisition Date, directly or indirectly,
(a) the Company shall consolidate with, or merge with and into, any other Person
(other than a Subsidiary of the Company in a transaction that complies with
Section 11(o) hereof) and the Company shall not be the continuing or surviving
Person of such consolidation or merger, (b) any Person (other than a Subsidiary
of the Company in a transaction that complies with Section 11(o) hereof) shall
consolidate with, or merge with and into, the Company, the Company shall be
the
continuing or surviving Person of such consolidation or merger and, in
connection with such consolidation or merger, all or part of the Common Stock
of
the Company shall be changed or otherwise transformed into other stock or other
securities of any other Person or the Company or cash or
19
any
other
property, or (c) the Company shall sell or otherwise transfer (or one or more
of
its Subsidiaries shall sell or otherwise transfer), in one transaction or a
series of related transactions, more than 50% of (A) the assets (taken at net
asset value as stated on the books of the Company and determined on a
consolidated basis in accordance with generally accepted accounting principles
consistently applied) or (B) the earning power of the Company and its
Subsidiaries (determined on a consolidated basis in accordance with generally
accepted accounting principles consistently applied) to any Person (other than
the Company or any Subsidiary of the Company in one or more transactions each
of
which complies with Section 11(o) hereof) then, from and after such event,
or if
such event occurs before the Dividend Record Date, from and after the Dividend
Record Date, proper provision shall be made so that (i) each holder of a Right,
except as provided in Section 7(e) hereof, shall thereafter have the right
to
receive, upon the exercise thereof at the Purchase Price in effect at the time
of such exercise in accordance with the terms of this Agreement, such number
of
whole or fractional shares of validly authorized and issued, fully paid,
non-assessable, and freely tradeable Common Stock of such other Person (or
in
the case of a transaction or series of transactions described in clause (c)
above, the Person receiving the greatest amount of the assets or earning power
of the Company, or if the Common Stock of such other Person is not and has
not
been continuously registered under Section 12 of the Exchange Act for the
preceding 12-month period and such Person is a direct or indirect Subsidiary
of
another Person, that other Person, or if such other Person is a direct or
indirect Subsidiary of more than one other Person, the Common Stock of two
or
more of which are and have been so registered, such other Person whose
outstanding Common Stock has the greatest aggregate value), free and clear
of
any liens, encumbrances, rights of first refusal, or other adverse claims,
as
shall be equal to the result obtained by (x) multiplying the Purchase Price
in
effect immediately prior to the first occurrence of any Common Stock Event
described in this Section 13, or if
such Common Stock Event occurs before the Dividend Record Date, upon the
Dividend Record Date, by the number of one one-hundredths of a share of
Preferred Stock for which a Right is exercisable immediately prior to such
first
occurrence (and without taking into account any prior adjustment made pursuant
to Section
11(a)(ii) hereof) and (y) dividing that product by 50% of the Current
Market Price per share (as defined in Section 11(d) hereof) of the Common Stock
of such other Person determined as of the date of consummation of such
consolidation, merger, sale, or transfer; (ii) the issuer of such Common Stock
shall thereafter be liable for, and shall assume, by virtue of such
consolidation, merger, sale, or transfer, all the obligations and duties of
the
Company pursuant to this Agreement; (iii) the term "Company" shall thereafter
be
deemed, for all purposes of this Agreement, to refer to such issuer, it being
specifically intended that the provisions of Section 11 hereof
(other than Section
11(a)(ii) hereof) shall apply only to such issuer following the first
occurrence of a Common Stock Event described in this Section 13; (iv) such
issuer shall take such steps (including, but not limited to, the reservation
of
a sufficient number of shares of its Common Stock) in connection with such
consummation as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to the
whole or fractional shares of its Common Stock thereafter deliverable upon
the
exercise of the Rights; and (v) the provisions of Section 11(a)(ii)
hereof shall be of no effect following the first occurrence of any Common Stock
Event described in clauses (a), (b) or (c) of this Section 13. The
Company shall not consummate any such consolidation, merger, sale or transfer
unless (i) such issuer shall have a sufficient number of authorized shares
of
its Common Stock which have not been issued or reserved for issuance as will
permit the exercise in full of the Rights in accordance with this Section 13, and (ii)
prior thereto the Company and such issuer shall have executed and delivered
to
the Rights Agent a supplemental agreement so providing and further providing
that as soon as practicable after the date of any Common Stock Event described
above in this Section
13, or if such Common Stock Event occurs before the Dividend Record Date,
upon the Dividend Record Date, such issuer shall (A) prepare and file a
registration statement under the Act, with respect to the Rights and the
securities purchasable upon exercise of the Rights on an appropriate form,
and
will use its best efforts to cause such registration statement to (I) become
effective as soon as practicable after such filing and (II) remain effective
(with a prospectus at all times meeting the requirements of the Act) until
the
Expiration Date, and (B) will deliver to holders of the Rights historical
financial statements of such issuer and each of its Affiliates
which
20
comply
in
all respects with the requirements for registration on Form 10 under the
Exchange Act. Furthermore, in case the Person which is to be party to a
transaction referred to in this Section 13 has any
provision in any of its authorized securities or in its charter or by-laws
or
other agreement or instrument governing its affairs, which provision would
have
the effect of causing such Person to issue, in connection with, or as a
consequence of, the consummation of a Common Stock Event described in clauses
(a), (b), or (c) of this Section 13, whole or
fractional shares of Common Stock of such Person at less than the then Current
Market Price per share thereof (as defined in Section 11(d) hereof), or to
issue
securities exercisable for, or convertible into, Common Stock of such Person
at
less than such then Current Market Price, then, in such event, the Company
hereby agrees with each holder of the Rights that it shall not consummate any
such transaction unless prior thereto the Company and such Person shall have
executed and delivered to the Rights Agent a supplemental agreement providing
that such provision in question shall have been canceled, waived, or amended
so
that it will have no effect in connection with, or as a consequence of, the
consummation of the proposed transaction. The provisions of this
Section 13
shall similarly apply to successive mergers or consolidations or sales or other
transfers. In the event that the later of a Common Stock Event or a
Dividend Record Date as described in this Section 13 shall
occur at any time after the occurrence of the later of a Common Stock Event
or a
Dividend Record Date as described in Section 11(a)(ii)
hereof, the Rights which have not theretofore been exercised shall thereafter
become exercisable, except as provided in Section 7(e) hereof,
in the manner described in this Section
13.
Section
14. Fractional Rights
and Fractional Shares.
(a) The
Company shall not be required to issue fractions of Rights or to distribute
fractions of Rights, except prior to the Distribution Date as provided in
Section 11(i) hereof, or to distribute Rights Certificates which evidence
fractional Rights. In lieu of issuing such fractional Rights, at the
election of the Company, there shall be paid to the registered holders of the
Rights with regard to which such fractional Rights would otherwise be issuable,
an amount in cash equal to the same fraction of the current market value of
a
whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the Closing Price of the Rights for
the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable.
(b) The
Company shall not be required to issue fractions of shares of its capital stock
upon exercise of the Rights or to distribute certificates which evidence
fractional shares (other than, in each case with respect to Preferred Stock
or
Equivalent Preferred Stock, fractions which are integral multiples of one
one-hundredth of a share of Preferred Stock or Equivalent Preferred Stock,
as
the case may be). Fractions of shares of Preferred Stock or
Equivalent Preferred Stock, as the case may be, in integral multiples of one
one-hundredth of a share of Preferred Stock or Equivalent Preferred Stock may,
at the election of the Company, be evidenced by depositary receipts, pursuant
to
an appropriate agreement between the Company and a depository selected by it,
provided that such agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences to which they
are
entitled as beneficial owners of the Preferred Stock or the Equivalent Preferred
Stock represented by such depositary receipts. In lieu of fractional
shares, at the election of the Company, there shall be paid to the registered
holders of Rights at the time such Rights are exercised as herein provided
an
amount in cash equal to the same fraction of the current market value of a
share
of such capital stock. For purposes of this Section 14(b), the
current market value of a share of such capital stock shall be the Closing
Price
of such capital stock for the Trading Day immediately prior to the date of
such
exercise.
(c) The
holder of a Right, by the acceptance of the Right, expressly waives such
holder's right to receive any fractional Rights or (except as provided in Section 14(b) hereof)
any fractional share upon exercise of a Right.
21
Section
15. Rights of Action. Excepting
the rights of action given the Rights Agent under Section 18 hereof and except
as set forth in Section 20(1) hereof, all rights of action in respect of this
Agreement are vested in the registered holder of each Right; and any registered
holder of any Right, without the consent of the Rights Agent or of the holder
of
any other Right, may, in its own behalf and for its own benefit, enforce, and
may institute and maintain any suit, action, or proceeding against the Company
to enforce, or otherwise act in respect of, such registered holder's right
to
exercise the rights evidenced by such Right in the manner provided in such
Rights Certificate and in this Agreement, and the Company hereby agrees to
reimburse such registered holder for all expenses (including reasonable
attorneys' fees) incurred by such registered holder in connection
therewith. 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 the
obligations hereunder, and shall be entitled to injunctive relief against actual
or threatened violations of the obligations hereunder of any Person subject
to
this Agreement.
Section
16. Agreement of
Rights Holders. Every
holder of a Right by accepting the same consents and agrees with the Company
and
the Rights Agent and with every other holder of a Right that:
(a) prior
to the Distribution Date, the Rights will be transferable only in connection
with the transfer of Common Stock;
(b) from
and after the Distribution Date, the Rights Certificates are transferable only
on the registry books of the Rights Agent if surrendered at the principal office
of the Rights Agent, duly endorsed or accompanied by a proper instrument of
transfer with a form of assignment and certificate set forth on the reverse
side
thereof duly executed, accompanied by a signature guarantee and such other
documentation as the Rights Agent may reasonably request;
(c) subject
to Sections
6(a) and 7(f) hereof,
the
Company and the Rights Agent may deem and treat the person in whose name a
Rights Certificate (or, prior to the Distribution Date, the associated Common
Stock certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on
the
Rights Certificate or, prior to the Distribution Date, the associated Common
Stock certificate, made by anyone other than the Company or the Rights Agent)
for all purposes whatsoever, and neither the Company nor the Rights Agent shall
be affected by any notice to the contrary; and
(d) notwithstanding
anything in this Agreement to the contrary, neither the Company nor the Rights
Agent shall have any liability to any holder of a Right or other Person as
a
result of its inability to perform any of its obligations under this Agreement
by reason of any preliminary or permanent injunction or other order, decree
or
ruling issued by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by any governmental
authority prohibiting or otherwise restraining performance of such obligation;
provided, however,
the Company
agrees to use its best efforts to have any such order, decree or ruling lifted
or otherwise overturned as soon as possible.
Section
17. Rights Certificate
Holder Not Deemed a Stockholder. No
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends, or otherwise be deemed for any purpose the holder of any securities
of the Company which may be issuable on the exercise of the Rights represented
thereby, nor shall anything contained herein or in any Rights Certificate be
construed to confer upon the holder of any Rights Certificate, as such, any
of
the rights of a stockholder of the Company or any right to vote in the election
of directors or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any action by the Company, or to
receive notice of meetings or other actions
22
affecting
stockholders (except as provided in Section 25 hereof), or to receive dividends
or preemptive rights, or otherwise, until the time specified in Section 10
hereof.
Section
18. Concerning the
Rights Agent. The
Company agrees to pay to the Rights Agent such reasonable compensation as shall
be agreed to in writing between the Company and the Rights Agent for all
services rendered by it hereunder and, from time to time, on demand of the
Rights Agent, its reasonable expenses and counsel fees and disbursements and
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for,
and to hold it harmless against, any and all loss, liability, damages, claims
or
expense, incurred without negligence, bad faith or willful misconduct on the
part of the Rights Agent, for anything done or omitted by the Rights Agent
in
connection with the acceptance and administration of this Agreement, including
the costs and expenses (including reasonable attorneys' fees and expenses)
of
defending against any claim of liability for any of the foregoing.
The
Rights Agent shall be protected and shall incur no liability for or in respect
of any action taken, suffered, or omitted by it in connection with its
administration of this Agreement in reliance upon any Rights Certificate or
certificate for any number of one one-hundredths of a share of Preferred Stock,
or for shares of Common Stock or for other securities of the Company, instrument
of assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, instruction, direction, consent, certificate, statement, or other paper
or document believed by it to be genuine and to be signed and executed by the
proper Person or Persons, and verified or acknowledged as required by this
Agreement.
Section
19. Merger or
Consolidation or Change of Name of Rights Agent. Any
corporation into which the 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 shall be a party, or any corporation succeeding to the
shareholder services business of the Rights Agent, shall be the successor to
the
Rights Agent under this Agreement without the execution or filing of any paper
or any further act on the part of any of the parties hereto; provided, however,
that such corporation would be eligible for appointment as a successor Rights
Agent under the provisions of Section 21 hereof. In case at the time
such successor Rights Agent shall succeed to the agency created by this
Agreement and any of the Rights Certificates shall have been countersigned
but
not delivered, any such successor Rights Agent may adopt the countersignature
of
the predecessor Rights Agent and deliver such Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates shall
not
have been countersigned, any successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Rights Certificates
shall have the full force provided in the Rights Certificates and in this
Agreement.
In
case
at any time the name of the Rights Agent shall be changed and at such time
any
of the Rights Certificates shall have been countersigned but not delivered,
the
Rights Agent may adopt the countersignature under its prior name and deliver
such Rights Certificates so countersigned; and in case at that time any of
the
Rights Certificates shall not have been countersigned, the Rights Agent may
countersign such Rights Certificates either in its prior name or in its changed
name; and in all such cases such Rights Certificates shall have the full force
provided in the Rights Certificates and in this Agreement.
Section
20. Duties of Rights
Agent. The
Rights Agent undertakes only the duties and obligations expressly imposed upon
it by this Agreement and no implied duties or obligations shall be read into
this Agreement against the Rights Agent. The Rights Agent shall
perform its duties and obligations hereunder upon the following terms and
conditions:
23
(a) The
Rights Agent may consult with legal counsel of its selection (who may be legal
counsel to the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action
taken
or omitted by it in good faith and in accordance with such opinion.
(b) Whenever
in the performance of its duties under this Agreement the Rights Agent shall
deem it necessary or desirable that any fact or matter (including, without
limitation, the identity of any Acquiring Person) be proved or established
by
the Company prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate (an "Officers' 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
of
the Company and delivered to the Rights Agent; and such Officers' Certificate
shall be full authorization to the Rights Agent for any action taken or suffered
in good faith by it under the provisions of this Agreement in reliance upon
such
Officers' Certificate.
(c) The
Rights Agent shall be liable hereunder only for its own negligence, bad faith,
or willful misconduct.
(d) The
Rights Agent shall not be liable for or by reason of any of the statements
of
fact or recitals contained in this Agreement or in the Rights Certificates
(except its countersignature on such Rights Certificate) or be required to
verify the same, but all such statements and recitals are and shall be deemed
to
have been made by the Company only.
(e) The
Rights Agent shall not be under any responsibility in respect of the validity
of
this Agreement or the execution and delivery hereof (except the due execution
hereof by the Rights Agent) or in respect of the validity or execution of any
Rights Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or condition contained
in this Agreement or in any Rights Certificate; nor shall it be responsible
for
any adjustment required under the provisions of Sections 11 or 13
hereof or be
responsible for the manner, method or amount of any such adjustment or
procedures or the ascertaining of the existence of facts that would require
any
such adjustment or procedure (except with respect to the exercise of Rights
evidenced by Rights Certificates after receipt of a certificate delivered
pursuant to Section
12 hereof, describing any such adjustment or procedures); nor shall it
by
any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Preferred Stock, Common Stock or other
securities to be issued pursuant to this Agreement or any Rights Certificate
or
as to whether any shares of Common Stock, or any shares or similar units of
other securities, will, when issued, be validly authorized and issued, fully
paid, and nonassessable.
(f) The
Company agrees that it will perform, execute, acknowledge and deliver, or cause
to be performed, executed, acknowledged and delivered, all such further and
other acts, instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights Agent of the
provisions of this Agreement.
(g) The
Rights Agent is hereby authorized and directed to accept instructions with
respect to the performance of its duties hereunder from any person believed
by
the Rights Agent to be the Chairman of the Board, the President or any Vice
President, or the Treasurer or any Assistant Treasurer of the Company, and
to
apply to such officers for advice or instructions in connection with its duties,
and it shall not be liable for any action taken or suffered to be taken by
it in
good faith in accordance with instructions of any such officer. Any
application by the Rights Agent for written instructions from the Company may,
at the option of the Rights Agent, set forth in writing any action proposed
to
be taken or omitted by the
24
Rights
Agent with respect to its duties or obligations under this Agreement and the
date on and/or after which such action shall be taken or omitted and the Rights
Agent shall not be liable for any action taken or omitted in accordance with
a
proposal included in any such application on or after the date specified therein
(which date shall not be less than three Business Days after the date any such
officer actually receives such application, unless any such officer shall have
consented in writing to an earlier date) unless, prior to taking or omitting
any
such action, the Rights Agent has received written instructions from the Company
in response to such application specifying the action to be taken or
omitted.
(h) The
Rights Agent and any stockholder, director, officer, or employee of the Rights
Agent may buy, sell, or deal in any of the Rights or other securities of the
Company or become pecuniarily interested in any transaction in which the Company
may be interested, or contract with or lend money to the Company or otherwise
act as fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other entity.
(i) The
Rights Agent may execute and exercise any of the rights or powers hereby vested
in it or perform any duty hereunder either itself or by or through its attorneys
or agents, and the Rights Agent shall not be answerable or accountable for
any
act, default, neglect or misconduct of any such attorneys or agents or for
any
loss to the Company resulting from any such act, default, neglect or misconduct;
provided, however,
that
reasonable care was exercised in the selection and continued employment
thereof.
(j) No
provision of this Agreement shall require the Rights Agent to expend or risk
its
own funds or otherwise incur any financial liability in the performance of
any
of its duties hereunder or in the exercise of its rights if there shall be
reasonable grounds for believing that repayment of such funds or adequate
indemnification against such risk or liability is not reasonably assured to
it.
(k) If,
with respect to any Rights Certificate surrendered to the Rights Agent for
exercise or transfer, the certification appearing on the reverse side thereof
following the form of election to purchase has either not been completed or
indicates an affirmative response to clause 1 and/or 2 thereof, the Rights
Agent
shall not take any further action with respect to such requested exercise of
transfer without first consulting with the Company.
(l) The
provisions of this Section 20 are solely for the benefit of the Rights Agent
or
the Company and any failure or omission under this Section 20 shall not
affect the rights of the Company under this Agreement and neither the Rights
Agent nor the Company shall have any liability to any holder of Rights or other
Person on account of such failure or omission.
Section
21. Change of Rights
Agent. The
Rights Agent or any successor Rights Agent may resign and be discharged from
its
duties under this Agreement upon 30 days' notice in writing mailed to the
Company and to each transfer agent of the Common Stock by registered or
certified mail, and, subsequent to the Distribution Date, to the holders of
the
Rights Certificates by first-class mail. The Company may remove the
Rights Agent or any successor Rights Agent upon 30 days' notice in writing,
mailed to the Rights Agent, to each transfer agent of the Common Stock by
registered or certified mail, and, subsequent to the Distribution Date, to
the
holders of the Rights Certificates by first-class mail. If the Rights
Agent shall resign or be removed or shall otherwise become incapable of acting,
the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of 30 days after
giving notice of such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or
by
the holder of a Rights Certificate (who shall, with such notice, submit such
holder's Rights Certificate for inspection by the Company), then the registered
holder of any Rights Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or
25
by
such a
court, shall be a corporation organized and doing business under the laws of
the
United States, the State of New York or The Commonwealth of Massachusetts (or
of
any other State of the United States so long as such corporation is authorized
to do business as a banking institution in the State of New York or The
Commonwealth of Massachusetts), in good standing, having an office designated
for such purpose in the State of New York or The Commonwealth of Massachusetts,
which is authorized under such laws to exercise corporate trust powers and
is
subject to supervision or examination by federal or state authority and which
has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $50,000,000. After appointment, the successor
Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder,
and
execute and deliver any further assurance, conveyance, act or deed necessary
for
the purpose; and, except as the context herein otherwise requires, such
successor Rights Agent shall be deemed to be the "Rights Agent" for all purposes
of this Agreement. Not later than the effective date of any such
appointment the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Stock, and mail
a
notice thereof in writing to the registered holders of the Rights Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation
or
removal of the Rights Agent or the appointment of the successor Rights Agent,
as
the case may be.
Section
22. Issuance of New
Rights Certificates. Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights
in
such form as may be approved by the Board to reflect any adjustment or change
in
the Purchase Price per share and the number or kind or class of shares of stock
or other securities or property purchasable under the Rights Certificates made
in accordance with the provisions of this Agreement. In addition, in
connection with the issuance or sale by the Company of shares of Common Stock
following the Distribution Date and prior to the redemption or expiration of
the
Rights, the Company (a) shall, with respect to shares of Common Stock so issued
or sold pursuant to the exercise of stock options or under any employee plan
or
arrangement, or upon the exercise, conversion or exchange of securities
hereinafter issued by the Company, and (b) may, in any other case, if deemed
necessary or appropriate by the Board, issue Rights Certificates representing
the appropriate number of Rights in connection with such issuance or sale;
provided, however,
that (i) no
such Rights evidenced by a 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
the Person to whom such Rights would be issued, and (ii) no such Rights
Certificate shall be issued if, and to the extent that, appropriate adjustment
shall otherwise have been made in lieu of the issuance thereof.
Section
23. Redemption and
Termination. The
Board, by majority vote, may, at its option, at any time prior to the earlier
of
(i) the occurrence of Common Stock Event described in Section 11(a)(ii), or
(ii) the Expiration Date, redeem all (but not less than all) of the then
outstanding Rights at a redemption price of $.01 per Right, appropriately
adjusted to reflect any stock split, stock dividend, combination of shares,
or
similar transaction occurring after the date hereof (such redemption price
being
hereinafter referred to as the "Redemption
Price"). Immediately upon the taking of such action ordering
the redemption of all of the Rights, evidence of which shall have been filed
with the Rights Agent, and without any further action and without any notice,
the right to exercise the Rights so redeemed will terminate and the only right
thereafter of the holders of such Rights so redeemed shall be to receive the
Redemption Price (without the payment of any interest
thereon). Within 10 days after such action ordering the redemption of
all of the Rights, the Company shall give notice of such redemption to the
holders of the then outstanding Rights by mailing such notice to all such
holders at their last addresses as they appear upon the registry books of the
Rights Agent or, prior to the Distribution Date, on the registry books of the
transfer agent for the Common Stock. Any notice which is mailed in
the manner herein provided shall be deemed given,
26
whether
or not the holder receives the notice. Each such notice of redemption
shall state the method by which the payment of the Redemption Price shall be
made.
Section
24. Exchange.
(a) The
Board, by majority vote, may, at its option, at any time after any Person
becomes an Acquiring Person, exchange all or part of the then outstanding and
exercisable Rights for shares of Common Stock at an exchange ratio of one share
of Common Stock per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such
exchange ratio, as the same may be so adjusted from time to time, being
hereinafter referred to as the "Exchange
Ratio"). Notwithstanding the foregoing, the Board shall not be
empowered to effect such exchange at any time after any Person (other than
(i)
the Company, (ii) any Subsidiary of the Company, (iii) any employee benefit
plan
of the Company or of any such Subsidiary, or (iv) any entity holding Common
Stock for or pursuant to the terms of any such plan), together with all
Affiliates of such Person, becomes the Beneficial Owner of 50% or more of the
Common Stock then outstanding.
(b) Immediately
upon the action of the Board ordering the exchange of any Rights pursuant to
subsection (a) of this Section 24 and without any further action and without
any
notice, the right to exercise such Rights shall terminate and the only right
thereafter of a holder of such Rights shall be to receive that number of shares
of Common Stock equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company shall promptly give
public notice of any such exchange; provided, however,
that the
failure to give, or any defect in, such notice shall not affect the validity
of
such exchange. The Company promptly shall mail a notice of any such
exchange to all of the holders of such Rights at their last addresses as they
appear upon the registry books of the Rights Agent. Any notice which
is mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice. Each such notice of exchange shall
state the method by which the exchange of the Common Stock for Rights shall
be
effected and, in the event of any partial exchange, the number of Rights which
will be exchanged. Any partial exchange shall be effected pro rata
based on the number of Rights (other than Rights which have become void pursuant
to the provisions of Section 7(e) hereof) held by each holder of
Rights.
(c) In
any exchange pursuant to this Section 24, the
Company, at its option, may substitute shares of Preferred Stock (or shares
of
Equivalent Preferred Stock) for shares of Common Stock exchangeable for Rights,
at the initial rate of one one-hundredth of a share of Preferred Stock (or
share
of Equivalent Preferred Stock) for each share of Common Stock, as appropriately
adjusted to reflect adjustments in the voting rights of shares of Preferred
Stock pursuant to the terms thereof, so that the fraction of a share of
Preferred Stock delivered in lieu of each share of Common Stock shall have
the
same voting rights as one share of Common Stock.
(d) In
the event that there shall not be sufficient shares of Common Stock or Preferred
Stock issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 24, the
Company shall take all such action as may be necessary to authorize additional
Common Stock or Preferred Stock for issuance upon exchange of the
Rights.
(e) The
Company shall not be required to issue fractions of shares of Common Stock
or to
distribute certificates which evidence fractional shares of Common
Stock. In lieu of such fractional shares of Common Stock, the Company
shall pay to each registered holder of a Right Certificate with regard to which
a fractional share of Common Stock would otherwise be issuable an amount in
cash
equal to the same fraction of the current market value of a whole share of
Common Stock. For the purposes of this paragraph (e), the current
market value of a whole share of Common Stock shall be the Closing
Price
27
of
a
share of Common Stock (as determined pursuant to Section 11(d) hereof)
for the Trading Day immediately prior to the date of exchange pursuant to this
Section
24.
Section
25. Notice of Proposed
Actions. In
case the Company shall after the Distribution Date propose (a) to pay any
dividend payable in stock of any class to the holders of its Preferred Stock
or
to make any other distribution to the holders of its Preferred Stock (other
than
a cash dividend out of earnings or the retained earnings of the Company), or
(b)
to offer to the holders of its Preferred Stock rights or warrants to subscribe
for or to purchase any additional shares of Preferred Stock, Common Stock or
shares of stock of any other class or any other securities, rights, or options,
or (c) to effect any reclassification of the Preferred Stock (other than a
reclassification involving only the subdivision of outstanding shares of
Preferred Stock), or (d) to effect any consolidation or merger into or with,
or
to effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one transaction or a
series of related transactions, of more than 50% of (i) the assets of the
Company and its Subsidiaries (taken at net asset value as stated on the books
of
the Company and determined on a consolidated basis in accordance with generally
accepted accounting principles consistently applied) or (ii) the earning power
of the Company and its Subsidiaries (determined on a consolidated basis in
accordance with generally accepted accounting principles consistently applied)
to any other Person or Persons, or (e) to effect the liquidation, dissolution
or
winding up of the Company, then, in each such case, the Company shall give
to
the Rights Agent and each holder of a Right, in accordance with Section 26
hereof, a notice of such proposed action, which shall specify the record date
for the purposes of such stock dividend, distribution of rights or warrants,
or
the date on which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of Preferred Stock, if any such date is
to
be fixed, and such notice shall be so given in the case of any action covered
by
clause (a) or (b) above at least 20 days prior to the record date for
determining holders of the Preferred Stock for purposes of such action, and
in
the case of any such other action, at least 20 days prior to the date of the
taking of such proposed action or the date of participation therein by the
holders of Common Stock whichever shall be the earlier. The failure to give
notice required by this Section 25 or any defect therein shall not affect the
legality or validity of the action taken by the Company or the vote upon any
such action.
In
case
any Common Stock Event described in Section 11(a)(ii)
hereof shall occur, then, in any such case, the Company shall as soon as
practicable thereafter give to the Rights Agent and each holder of a Rights
Certificate, in accordance with Section 26 hereof, a notice of the occurrence
of
such Common Stock Event, which shall specify such event and the consequences
of
the event to holders of Rights under Section 11(a)(ii)
hereof.
Notwithstanding
anything in this Agreement to the contrary, prior to the Distribution Date
a
filing by the Company with the Securities and Exchange Commission shall
constitute sufficient notice to the holders of securities of the Company,
including the Rights, for purposes of this Agreement and no other
notice
need be given.
Section
26. Notices. Notices
or demands authorized by this Agreement to be given or made by the Rights Agent
or by the holder of any Rights Certificate to the Company shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Rights Agent) as
follows:
Dynamics
Research Corporation
▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Vice
President and Treasurer
28
|
Copy
to:
|
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇
|
|
|
▇▇▇▇▇
Peabody LLP
|
||
|
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
|
||
|
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇
|
Subject
to the provisions of Sections 19 and 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Rights Certificate to or on the Rights Agent shall be sufficiently given or
made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
American
Stock
Transfer & Trust Company LLC
▇▇
▇▇▇▇▇▇
▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention: Executive
Vice President
(Dynamics
Research Corporation Rights Agreement)
Notices
or demands authorized by this Agreement to be given or made by the Company
or
the Rights Agent to the holder of any Rights Certificate shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed to such
holder at the address of such holder as shown on the registry books of the
Company.
Section
27. Supplements and
Amendments. Prior
to the Distribution Date, the Board, upon the vote of a majority of the Board,
may from time to time supplement or amend this Agreement without the approval
of
any holders of the Rights. From and after the Distribution Date, the
Board may, upon the vote of a majority of the Board, from time to time amend
this Agreement without the approval of any holders of the Rights in order (i)
to
cure any ambiguity, (ii) to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provisions herein, (iii)
to change any time period governing redemption of the Rights or any other time
period or (iv) to make any other provisions in regard to matters or questions
arising hereunder which the Board, upon the vote of a majority of the Board,
may
deem necessary or desirable and which shall not adversely affect the interests
of the holders of the Rights (other than any Acquiring Person or Disqualified
Transferee or any Affiliate of an Acquiring Person or Disqualified
Transferee).
Any
amendment made pursuant to this Section 27 after a
Stock Acquisition Date shall require the approval of a majority of the
Board. The Rights Agent shall join with the Company in the execution
and delivery of any such supplement or amendment, unless such supplement or
amendment affects any of the rights, duties, or obligations of the Rights Agent
hereunder, in which case the Rights Agent may, but shall not be required to,
join in such execution and delivery.
Section
28. Successors. All
the covenants and provisions of this Agreement by or for the benefit of the
Company or the Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
Section
29. Determinations and
Actions by the Board; etc. The
Board shall have the exclusive power and authority to administer this Agreement
and to exercise all rights and powers specifically granted to the Board, 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 of Directors in good faith and with the
concurrence of a majority of the Board then in office shall (x) be final,
conclusive and
29
binding
on the Company, the Rights Agent, the holders of the Rights and all other
parties and (y) not subject any Director to any liability to the holders of
the
Rights.
Section
30. Benefits of this
Agreement. Nothing
in this Agreement shall be construed to give to any Person other than the
Company, the Rights Agent, and the registered holders of the Rights (and, prior
to the Distribution Date, the associated shares of Common Stock) any legal
or
equitable right, remedy, or claim under this Agreement or the Rights; but this
Agreement shall be for the sole and exclusive benefit of the Company, the Rights
Agent, and the registered holders of the Rights (and, prior to the Distribution
Date, the associated Common Stock).
Section
31. Severability. The
invalidity or unenforceability of any term or provision hereof shall not affect
the validity or enforceability of any other term or provision
hereof. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or other authority to
be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated; provided,
however, that notwithstanding anything in this Agreement to the contrary, if
any
such term, provision, covenant or restriction is held by such court or authority
to be invalid, void or unenforceable and the Board determines in its good faith
judgment that severing the invalid language from this Agreement would adversely
affect the purpose or effect of this Agreement, the right of redemption set
forth in Section 23 hereof shall be reinstated and shall not expire until the
Close of Business on the tenth day following the date of such determination
by
the Board.
Section
32. Governing
Law. This
Agreement and each Rights Certificate issued hereunder shall be deemed to be
a
contract made under the laws of The Commonwealth of Massachusetts and for all
purposes shall be governed by and construed in accordance with the laws of
said
State applicable to contracts to be made and performed entirely within said
State.
Section
33. Counterparts. This
Agreement may be executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same
instrument.
Section
34. Descriptive
Headings. Descriptive
headings of the several Sections of this Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of any of
the
provisions hereof.
30
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and set their respective hands and seals, all as of the day and year
first above written.
| DYNAMICS RESEARCH CORPORATION | ||
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By: |
/s/
▇▇▇▇▇
▇▇▇▇▇▇▇
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Title:
|
Senior
Vice President, Chief Financial Officer and
Treasurer
|
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|
AMERICAN
STOCK TRANSFER & TRUST COMPANY LLC
AS
RIGHTS AGENT
|
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By: |
/s/ ▇▇▇▇▇▇▇
▇.
▇▇▇▇▇▇
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Title:
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Vice President | |
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31
EXHIBIT
A
AMENDED
FORM
OF
CERTIFICATE OF DESIGNATION, PREFERENCES AND
RIGHTS
OF
SERIES B
PREFERRED
STOCK
of
DYNAMICS
RESEARCH CORPORATION
Pursuant
to Chapter 156B Section 26 of the
Massachusetts
Business Corporation Law
A-1
We,
▇▇▇▇▇
▇. ▇▇▇▇▇, President, and ▇▇▇▇▇▇▇ ▇▇▇▇▇, Secretary, of Dynamics Research
Corporation, a corporation organized and existing under the Massachusetts
Business Corporation Law, (the “Corporation”) in accordance with the provisions
of Chapter 156B Section 26 thereof, DO HEREBY CERTIFY:
That
pursuant to the authority conferred upon the Board of Directors (the “Board of
Directors”) by the Restated Articles of Organization of the Corporation, as
amended, the Board of Directors on July 23, 2008, adopted a vote amending its
authorized Series B Preferred Stock, as follows:
VOTED,
that pursuant to the authority vested in the Board of Directors of this
Corporation in accordance with the provisions of its Restated Articles of
Organization, as amended, the terms of the Corporation’s Series B Preferred
Stock are hereby amended and restated, and that the designation and amount
thereof and the voting powers, preferences and relative, participating, optional
and other special rights of the shares of such series, and the qualifications,
limitations or restrictions thereof are as follows:
Section
1. Designation
and Amount. The
shares of such Series shall be designated as “Series B Preferred
Stock” (the “Series B Stock”) and the number of shares constituting such
Series shall be 3,000,000. The number of shares of Series B
Stock may be increased or decreased by a vote duly adopted by the Board of
Directors, but may not be decreased below the number of shares of Series B
Stock then outstanding plus the number of shares reserved for issuance upon
the
exercise of outstanding options, rights or warrants or upon conversion of any
outstanding securities convertible into Series B Stock.
Section
2. Dividends
and Distributions.
(a) Subject
to the prior and superior rights of the holders of any shares of any
Series of preferred stock ranking prior and superior to the shares of
Series B Stock with respect to dividends, the holders of shares of
Series B Stock shall be entitled to receive, when, as and if declared by
the Board of Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the last day of March, June, September and December
in each year (each such date being referred to herein as a “Quarterly Dividend
Payment Date”), commencing on the first Quarterly Dividend Payment Date after
the first issuance of a share or fraction of a share of Series B Stock, in
an amount per share (rounded to the nearest cent) equal to the greater of (a)
$1.00 or (b) subject to the provision for adjustment set forth in Section 8
hereof, 100 times the aggregate per share amount of all cash dividends, and
100
times the aggregate per share amount (payable in kind) of all non-cash dividends
or other distributions other than a dividend payable in shares of Common Stock,
par value $.10 per share, of the Corporation (the “Common Stock”) or a
subdivision of the outstanding shares of Common Stock (by reclassification
or
otherwise), declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a share
of
Series B Stock.
(b) The
Corporation shall declare a dividend or distribution on the Series B Stock
as provided in paragraph (a) of this Section 2 immediately after it
declares a dividend or distribution on the Common Stock (other than a dividend
payable in shares of or a subdivision with respect to Common Stock); provided,
however, that, in the event no dividend or distribution shall have been declared
on the Common Stock during the period between any Quarterly Dividend Payment
Date, a dividend of $1.00 per share on the Series B Stock shall
nevertheless be payable on such subsequent Quarterly Dividend Payment
Date.
A-2
(c) Dividends
shall begin to accrue and be cumulative on outstanding shares of Series B
Stock from the Quarterly Dividend Payment Date next preceding the date of issue
of such shares of Series B Stock, unless the date of issue of such shares
is prior to the record date for the first Quarterly Dividend Payment Date,
in
which case dividends on such shares shall begin to accrue from the date of
issue
of such shares, or unless the date of issue is a Quarterly Dividend Payment
Date
or is a date after the record date for the determination of holders of shares
of
Series B Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend Payment
Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series B Stock in an
amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors
may fix a record date for the determination of holders of shares of
Series B Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be no more than 60 days prior to
the
date fixed for the payment thereof.
Section
3. Voting
Rights. The
holders of shares of Series B Stock shall have the following voting
rights:
(a) Each
share of Series B Stock shall entitle the holder thereof to one-hundred
votes on all matters submitted to a vote of the stockholders of the
Corporation.
(b) Except
as otherwise provided herein or required by applicable law, the holders of
shares of Series B Stock and the holders of shares of Common Stock shall
vote together as one class on all matters submitted to a vote of stockholders
of
the Corporation.
(c) Except
as set forth herein or required by applicable law, holders of Series B
Stock shall have no special voting rights and their consent shall not be
required (except to the extent they are entitled to vote with holders of Common
Stock as set forth herein) for taking any corporate action.
Section
4. Certain
Restrictions.
(a) Whenever
quarterly dividends or other dividends or distributions payable on the
Series B Stock as provided in Section 2 are in arrears, thereafter and
until all accrued and unpaid dividends and distributions, whether or not
declared, on shares of Series B Stock outstanding shall have been paid in
full, the Corporation shall not:
(i) declare
or pay dividends on, make any other distributions on, or redeem or purchase
or
otherwise acquire for consideration any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding up) to the
Series B Stock;
(ii) declare
or pay dividends on or make any other distributions on any shares of stock
ranking on a parity (either as to dividends or upon liquidation, dissolution
or
winding up) with the Series B Stock, except dividends paid ratably on the
Series B Stock and all such parity stock on which dividends are payable or
in arrears in proportion to the total amounts to which the holders of all such
shares are then entitled;
(iii) redeem
or purchase or otherwise acquire for consideration shares of any stock ranking
on a parity (either as to dividends or upon liquidation, dissolution or winding
up) with the Series B Stock, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such parity stock (A) in
exchange for shares of any stock of the
A-3
Corporation
ranking junior (either as to dividends or upon dissolution, liquidation or
winding up) to the Series B Stock or (B) in accordance with subparagraph
(iv) of this Section 4(a); or
(iv) redeem
or purchase or otherwise acquire for consideration any shares of Series B
Stock, or any shares of stock ranking on a parity with the Series B Stock,
except in accordance with a purchase offer made in writing or by publication
(as
determined by the Board of Directors) to all holders of the outstanding shares
of such stock upon such terms as the Board of Directors, after consideration
of
the respective annual dividend rates and other relative rights and preferences
of the respective Series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective Series or
classes.
(b) The
Corporation shall not permit any subsidiary of the Corporation to purchase
or
otherwise acquire for consideration any shares of stock of the Corporation
unless the Corporation could, under paragraph (a) of this Section 4,
purchase or otherwise acquire such shares at such time and in such
manner.
Section
5. Reacquired
Shares. Any shares of Series B Stock redeemed, purchased or
otherwise acquired by the Corporation in any manner whatsoever shall be retired
and canceled promptly after the acquisition thereof. All such shares
shall upon their cancellation become authorized but unissued shares of Preferred
Stock and may be reissued as part of a new Series of preferred stock to be
created by vote or votes of the Board of Directors, subject to the conditions
and restrictions on issuance set forth herein.
Section
6. Liquidation,
Dissolution or Winding Up.
(a) Upon
any liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of Common
Stock or any other stock of the Corporation ranking junior (upon liquidation,
dissolution or winding up) to the Series B Stock unless, prior thereto, the
holders of shares of Series B Stock shall have received $100.00 per share
plus an amount equal to all accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such distribution (the
“Series B Liquidation Preference”). Following the payment of the
full amount of the Series B Liquidation Preference, no additional
distributions shall be made to the holders of shares of Series B Stock
unless, prior thereto, the holders of shares of Common Stock (which term shall
include, for the purposes only of this Section 6, any Series of the
Corporation’s Preferred Stock ranking on a parity with the Common Stock upon
liquidation, dissolution or winding up) shall have received an amount per share
(the “Common Adjustment”) equal to the quotient obtained by dividing
(i) the Series B Liquidation Preference by (ii) 100 (as appropriately
adjusted as set forth in Section 8 hereof to reflect such events as stock
splits, stock dividends and recapitalizations with respect to the Common Stock;
such number in this clause (ii), as the same may be adjusted from time to time,
is hereinafter referred to as the “Adjustment Number”. In the event,
however, that there are not sufficient assets available to permit payment in
full of the Common Adjustment, then any remaining assets shall be distributed
ratably to the holders of Common Stock. Following the payment of the
full amount of the Series B Liquidation Preference and the Common
Adjustment in respect of all outstanding shares of Series B Stock and
Common Stock, respectively, holders of shares of Series B Stock and holders
of shares of Common Stock shall receive their ratable and proportionate share
of
any remaining assets to be distributed in the ratio of the Adjustment Number
to
one (1) with respect to such Series B Stock and Common Stock, on a per
share basis, respectively.
(b) In
the event, however, that there are not sufficient assets available to permit
payment in full of the Series B Liquidation Preference and the liquidation
preferences of all other Series of preferred stock, if any, which rank on a
parity with the Series B Stock, then any remaining assets
A-4
shall
be
distributed ratably to the holders of the Series B Stock and the holders of
such parity stock in proportion to their respective liquidation
preferences.
(c) None
of the merger or consolidation of the Corporation into or with any other entity,
the sale of all or substantially all of the property and assets of the
Corporation or the distribution to the stockholders of the Corporation of all
or
substantially all of the consideration for such sale, unless such consideration
(apart from the assumption of liabilities) or the net proceeds thereof consists
substantially entirely of cash, shall be deemed to be a liquidation, dissolution
or winding up within the meaning of this Section 6.
(d) Each
share of Series B Stock shall stand on a parity with each share of
Series B Stock or any other Series of the same class of preferred
stock upon voluntary or involuntary liquidation, dissolution or distribution
of
assets or winding up of the Corporation.
Section
7. Consolidation,
Merger, etc. In case the Corporation shall enter into any
consolidation, merger, combination or other transaction in which the outstanding
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
outstanding shares of Series B Stock shall at the same time be similarly
exchanged or changed in an amount per share (subject to the provision for
adjustment set forth in Section 8 hereof) equal to 100 times the aggregate
amount of stock, securities, cash and/or any other property (payable in kind),
as the case may be, into which or for which each share of Common Stock is
changed or exchanged.
Section
8. Certain
Adjustments. In the event the Corporation shall at any time declare
or pay any dividend on Common Stock payable in shares of Common Stock, or effect
a subdivision or combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise than by payment of a dividend
in
shares of Common Stock) into a greater or lesser number of shares of Common
Stock, then, in each such case, the amounts set forth in Sections 2(a) and
(b),
6(a) and 7 hereof with respect to the multiple of cash and non-cash dividends,
the Series B Liquidation Preference and an aggregate amount of stock,
securities, cash and/or other property referred to in Section 7 hereof,
shall be adjusted by multiplying such amount by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after
such
event and the denominator of which is the number of shares of Common Stock
that
were outstanding immediately prior to such event.
Section
9. Ranking. The
Series B Stock shall rank pari passu with (or if determined by the Board of
Directors in any vote establishing any other series of preferred stock, either
senior and prior in preference to, or junior and subordinate to, as the case
may
be) each other Series of preferred stock with respect to dividends and/or
preference upon liquidation, dissolution or winding up.
Section
10. Redemption. The
shares of Series B Stock may be purchased by the Corporation at such times
and on such terms as may be agreed to between the Corporation and the redeeming
stockholder, subject to any limitations which may be imposed by law or the
Restated Articles of Organization of the Corporation, as amended.
Section
11. Amendment. The
Restated Articles of Organization of the Corporation, as amended, shall not
be
amended in any manner which would materially alter or change the powers,
preferences or special rights of the Series B Stock so as to affect them
adversely without the affirmative vote of the holders of two-thirds or more
of
the outstanding shares of Series B Stock, voting together as a single
class.
A-5
Section
12. Fractional
Shares. Series B Stock may be issued in fractions of a share
which shall entitle the holder, in proportion to such holder’s fractional
shares, to exercise voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights of holders of
Series B Stock.
IN
WITNESS WHEREOF, this Amended Certificate of Designation was executed on behalf
of the Corporation by its President and attested by its Secretary on July 23,
2008.
By_____________________________
President
Attest:
By___________________
Secretary
[SEAL]
A-6
EXHIBIT
B
FORM
OF
RIGHTS CERTIFICATE
Certificate
No. R- ______ Rights
NOT
EXERCISABLE AFTER JULY 27, 2018 OR EARLIER IF ORDER OF REDEMPTION IS
GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY
AN ACQUIRING PERSON OR AN AFFILIATE (WHICH INCLUDES AFFILIATES AND ASSOCIATES)
OF AN ACQUIRING PERSON (AS EACH SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT)
AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND
VOID. THE RIGHTS SHALL NOT BE EXERCISABLE, AND SHALL BE VOID SO LONG
AS HELD, BY A HOLDER IN ANY JURISDICTION WHERE THE REQUISITE QUALIFICATION
TO
THE ISSUANCE TO SUCH HOLDER, OR THE EXERCISE BY SUCH HOLDER, OF THE RIGHTS
IN
SUCH JURISDICTION SHALL NOT HAVE BEEN OBTAINED OR BE OBTAINABLE. [THE
RIGHTS REPRESENTED BY THIS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A
PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE (WHICH INCLUDES
AFFILIATES AND ASSOCIATES) OF AN ACQUIRING PERSON (AS EACH SUCH TERM IS DEFINED
IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND
THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT.]*
Rights
Certificate
DYNAMICS
RESEARCH CORPORATION
This
certifies that ______________________, or registered assigns, is the registered
owner of the number of Rights set forth above, each of which entitles the owner
thereof, subject to the terms, provisions, and conditions of the Rights
Agreement dated as of July 23, 2008 (the “Rights Agreement”) between Dynamics
Research Corporation (the “Company”), and American Stock Transfer & Trust
Company (the “Rights Agent”), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights Agreement) and prior
to
5:00 P.M. (Boston, Massachusetts time) on July 27, 2008 (the “Expiration Date”)
at the office of the Rights Agent designated for such purpose, or its successors
as Rights Agent, one one-tenth of a share of the Series B Preferred Stock,
with
a par value of $.10 per share (“Series B Preferred Stock”), of the Company per
each Right represented hereby, at a purchase price of $59.09 per share (the
“Purchase Price’) upon presentation and surrender of this Rights Certificate
with the Form of Election to Purchase set forth on the reverse side hereof
and
the certificate contained therein duly completed and executed, accompanied
by a
signature guarantee and such other documentation as the Rights Agent may
reasonably request. The number of Rights evidenced by this Rights
Certificate (and the number of shares which may be purchased upon exercise
thereof) set forth above, and the Purchase Price per share set forth above,
are
the number and Purchase Price as of July 27, 2008, based on the shares of Common
Stock of the Company as constituted at such date.
As
more
fully set forth in the Rights Agreement, upon the occurrence of a Common Stock
Event (as such term is defined in the Rights Agreement), if the Rights evidenced
by this Rights Certificate are beneficially owned by (i) an Acquiring Person
or
an Affiliate of an Acquiring Person (as each such term is defined in the Rights
Agreement) or (ii) a Disqualified Transferee (as defined in the Rights
Agreement), such Rights shall automatically become null and void .and no holder
hereof shall have any right with respect to such Rights from and after the
occurrence of such Common Stock Event.
B-1
The
Rights evidenced by this Rights Certificate shall not be exercisable, and shall
be void so long as held, by a holder in any jurisdiction where the requisite
qualification to the issuance to such holder, or the exercise by such holder,
of
the Rights in such jurisdiction shall not have been obtained or be
obtainable.
As
provided in the Rights Agreement, the Purchase Price and the number of whole
or
fractional shares of Series B Preferred Stock which may be purchased upon the
exercise of the Rights evidenced by this Rights Certificate are subject to
modification and adjustment upon the happening of certain events.
In
the
circumstances described in Section 13 of the Rights Agreement, the securities
issuable upon the exercise of the Rights evidenced hereby shall be the common
stock or similar equity securities or equity interests of an entity other than
the Company.
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, which
limitations of rights include the temporary suspension of the exercisability
of
such Rights under the specific circumstances set forth in the Rights
Agreement. Copies of the Rights Agreement are on file at the office
of the Rights Agent designated for such purpose and may be obtained by the
holder of any Rights upon written request to the Rights Agent.
This
Rights Certificate, with or without other Rights Certificates, upon surrender
at
the office of the Rights Agent designated for such purpose, accompanied by
a
signature guarantee and such other documentation as the Rights Agent may
reasonably request, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights entitling the holder
to
purchase a like aggregate number of whole or fractional shares of Common Stock
as the Rights evidenced by the Rights Certificate or Rights Certificates
surrendered shall have entitled such holder to purchase. If this
Rights Certificate shall be exercised in part, the holder shall be entitled
to
receive, upon surrender hereof, another Rights Certificate or Rights
Certificates for the number of whole Rights not exercised.
Subject
to the provisions of the Rights Agreement, the Rights evidenced by this Rights
Certificate may be redeemed by the Company by a majority vote of the Board
(as
defined in the Rights Agreement) then in office at any time prior to the
Expiration Date, at a redemption price of $.01 per Right (which amount is
subject to adjustment as provided in the Rights Agreement).
The
Company is not obligated to issue whole or fractional shares of Series B
Preferred Stock (or other securities) upon the exercise of any Right or Rights
evidenced hereby, but in lieu thereof a cash payment may be made at the election
of the Company, 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 Series B Preferred Stock
or
of any other securities of the Company which may at any time be issuable on
the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of
a
stockholder of the Company or any right to vote for the election of directors
or
upon any matter submitted to stockholders at any meeting thereof, or to give
or
withhold consent to any action by the Company, or to receive notice of meetings
or other actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Rights Certificate shall have been
exercised as provided in the Rights Agreement.
B-2
This
Rights Certificate shall not be valid or obligatory for any purpose until it
shall have been countersigned by the Rights Agent.
WITNESS
the facsimile signature of the proper officers and the seal of the
Company. Dated as of
DYNAMICS
RESEARCH CORPORATION
By:
Title:
ATTEST:
Title:
Countersigned:
AMERICAN
STOCK TRANSFER
&
TRUST COMPANY
By:
Authorized
Signatory
Date
of
Countersignature:
B-3
[Form
of
Reverse Side of Rights Certificate]
FORM
OF
ASSIGNMENT
____________
(To
be
executed by the registered holder if such
holder
desires to transfer the Rights Certificate)
FOR
VALUE
RECEIVED ____________ hereby sells, assigns and transfers unto
________________________________________________________________________
(Please
print name and address of transferee)
____________________________________________________________________whose
social
security or tax identification number is: _______________________ the Rights
evidenced by this
Rights
Certificate, together with all right, title and interest herein, 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
Signature
Guaranteed:*
-
--------------------------
* Signature
must be guaranteed by an “Eligible Guarantor Institution” (with membership in an
approved signature guarantee medallion program) pursuant to Rule 17Ad-15 of
the
Securities Exchange Act of 1934.
B-4
CERTIFICATE
____________
The
undersigned hereby certifies by checking the appropriate boxes
that:
(1)
the
Rights evidenced by this Rights Certificate [ ] are [ ] are not an Acquiring
Person or an Affiliate of an Acquiring Person (as each such term is defined
in
the Rights Agreement); and
(2)
after
due inquiry and to the best knowledge of the undersigned, it [ ] did [ ] did
not
acquire the Rights evidenced by this Rights Certificate after the occurrence
of
a Common Stock Event from any Person who is, was or subsequently became an
Acquiring Person or an Affiliate of an Acquiring Person.
Dated:
Signature
Signature
Guaranteed:*
_______________________________
NOTICE
____________
The
signature to the foregoing Assignment and Certificate must correspond to the
name as written upon the face of this Rights Certificate in every particular,
without alteration or enlargement or any change whatsoever.
FORM
OF
ELECTION TO PURCHASE
____________
(To
be
executed if holder desires to exercise the Rights Certificate)
To
Dynamics Research Corporation
The
undersigned hereby irrevocably elects to exercise Rights represented by this
Rights Certificate to purchase the number of one one-hundredths of a share
of
Preferred Stock (or other securities) issuable upon the exercise of such Rights
and requests that certificates for such shares be issued in the name
of:
Please
insert social security
or
other
identifying number___________________________________________
__________________________________________________________________
(Please
print name and address)
If
such
number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please
insert social security
or
other
identifying number____________________________________________
___________________________________________________________________
(Please
print name and address)
Dated:
______________________, ____
B-5
__________________________________
Signature
(Signature
must conform in all respects to name of holder as specified on the face of
this
Rights Certificate)
Signature
Guaranteed:**
-
--------------------------
**
Signature must be guaranteed by an “Eligible Guarantor Institution” (with
membership in an approved signature guarantee medallion program) pursuant to
Rule 17Ad-15 of the Securities Exchange Act of 1934.
CERTIFICATE
____________
The
undersigned hereby certifies by checking the appropriate boxes
that:
(1) the
Rights evidenced by this Rights Certificate[ ] are [ ] are not being exercised
by or on behalf of a Person who is or was an Acquiring Person or an Affiliate
of
any such Acquiring Person (as each such term is defined in the Rights
Agreement); and
(2) after
due inquiry and to the best knowledge of the undersigned, it [ ] did [ ] did
not
acquire the Rights evidenced by this Rights Certificate after the occurrence
of
a Common Stock Event (as such term is defined in the Rights Agreement) from
any
Person who is, was, or subsequently became an Acquiring Person or an Affiliate
of an Acquiring Person.
Dated:_______________,____
Signature
Signature
Guaranteed:***
_________________________
***
Signature must be guaranteed by an “Eligible Guarantor Institution” (with
membership in an approved signature guarantee medallion program) pursuant to
Rule 17Ad-15 of the Securities Exchange Act of 1934.
B-6
EXHIBIT
C
DYNAMICS
RESEARCH CORPORATION
SUMMARY
OF PURCHASE RIGHTS
On
July
27, 2008, Dynamics Research Corporation declared a dividend distribution of
one
preferred stock purchase right for each share of Common Stock. These
New Rights replace and have the same practical effect as the Rights that were
in
existence prior to July 27, 2008. Each New Right entitles the
registered holder to purchase from the Company after the Distribution Date
described below one one-hundredth of a share of its Series B Preferred
Stock. The exercise price is $59.09 for each one one-hundredth share
of Preferred Stock. The distribution of New Rights is payable on July
27, 2008 to the record holders of Common Stock at the close of business on
that
date. One New Right will also be issued for each share of Common
Stock issued between July 27, 2008 and the Distribution Date.
Exercisability
of the New
Rights; Distribution Date. The New Rights are not exercisable
until the Distribution Date. The Distribution Date would occur, if
ever, ten business days after either of the following events:
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A
public announcement that a person or group (an “Acquiring Person”) has
acquired, or obtained the right to acquire, beneficial ownership
of 15% or
more of the Company’s outstanding Common Stock (which includes common
stock referenced in derivative transactions and securities) (the
“Stock
Acquisition Date”) or
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The
commencement or announcement of an intention to make a tender offer
or
exchange offer that would result in a person or group owning 15%
or more
of the Company’s outstanding Common
Stock.
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Mergers,
Asset Sales and
Self-Dealing Transactions. If after the Stock Acquisition Date
the Company is acquired in a merger or other business combination, or 50% or
more of its assets or earning power is sold, proper provision is to be made
so
that each holder of a New Right would have the right to receive, upon exercise
of the New Right, that number of shares of common stock of the acquiring company
which at the time has a market value of two times the exercise price of the
New
Right.
In
the
event that:
(1) the
Company is the surviving corporation in a merger with an Acquiring Person and
its Common Stock is not changed or exchanged, or
(2) an
Acquiring Person engages in one of a number of self-dealing transactions
specified in the Rights Agreement described below, or
(3) during
such time as there is an Acquiring Person any recapitalization, reorganization
or other transaction involving the Company occurs which result in such Acquiring
Person’s ownership interest being increased by more than 1%, then each holder of
a New Right would have the right to receive, upon exercise of the New Right,
that number of shares of Common Stock (or, in certain circumstances, cash,
property or other securities of the Company) having a market value of two times
the exercise price of the New Right.
Following
the occurrence of any of the events described in this section, any New Rights
beneficially owned by any Acquiring Person would immediately become null and
void.
C-1
Exchange
Option. The Board may, at its option, at any time after any
person becomes an Acquiring Person, exchange all or part of the then outstanding
and exercisable New Rights for shares of Common Stock at an exchange ratio
of
one share of Common Stock per New Right. The Board, however, may not
effect an exchange at any time after any person (other than (i) the Company,
(ii) any subsidiary of the Company, (iii) any employee benefit plan of the
Company or any such subsidiary or any entity holding Common Stock for or
pursuant to the terms of any such plan), together with all affiliates of such
person, becomes the beneficial owner of 50% or more of the Common Stock then
outstanding. Immediately upon the action of the Board ordering the
exchange of any New Rights and without any further action and without any
notice, the right to exercise such New Rights will terminate and the only right
thereafter of a holder of such New Rights will be to receive that number of
shares of Common Stock equal to the number of such New Rights held by the
holder.
Transferability
of New
Rights. Until the Distribution Date, the Common Stock
Certificates will evidence the New Rights, and the transfer of the Common Stock
certificates will constitute a transfer of the New Rights. After the
Distribution Date, separate certificates evidencing the New Rights would be
mailed to holders of record of the Company’s Common Stock as of the close of
business on the Distribution Date, and such separate New Rights Certificates
alone would evidence the New Rights.
Redemption. The
Board of Directors, by a majority vote, may redeem the New Rights at any time
at
a redemption price of $.01 per New Right. Immediately upon such
redemption, the right to exercise the New Rights will terminate, and the New
Rights Holders will become entitled only to receive the Redemption
Price.
Expiration
of New
Rights. If not previously exercised or redeemed, the New
Rights will expire on July 27, 2018.
Anti-Dilution
Adjustment. The exercise price, the redemption price, the
exchange ratio and the number of shares of the Preferred Stock or other
securities or property issuable upon exercise of the New Rights are subject
to
adjustment from time to time to prevent dilution under the following
circumstances:
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in
the event of a stock dividend on, or a subdivision, combination or
reclassification of the Preferred Stock,
or
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upon
the grant to holders of the Preferred Stock of certain rights or
warrants
to subscribe for shares of the Preferred Stock or convertible securities
at less than the current market price,
or
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upon
the distribution to holders of the Preferred Stock of evidences of
indebtedness or assets (excluding regular quarterly cash dividends
out of
the earnings or retained earnings of the Company and dividends payable
in
shares of Preferred Stock) or of subscription rights or warrants
(other
than those referred to above).
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With
certain exceptions, no adjustment in the exercise price will be required until
cumulative adjustments require an adjustment of at least 1% in such
price. At the Company’s option, cash (based on the market price on
the last trading date prior to the date of the exercise) will be paid instead
of
issuing fractional shares of any securities (other than fractional shares of
Preferred Stock in integral multiples of one one-hundredth of a
share).
No
Shareholder
Rights. A New Right holder, as such, has no rights as a
shareholder of the Company, including, without limitation, the right to vote
or
receive dividends.
C-2
Amendments. Any
of the provisions of the Rights Agreement may be amended by the Board of
Directors prior to the Distribution Date without the approval of any holders
of
the New Rights. After the Distribution Date, the Board of Directors
may amend the Rights Agreement to cure any ambiguity, to make changes which
do
not adversely affect the interests of holders of New Rights (excluding the
interests of any Acquiring Person) or to shorten or lengthen any time period
under the Rights Agreement. A majority vote of the Board of Directors
is required.
Tax
Consequences. Although the Company believes that neither the
distribution of the New Rights nor the subsequent separation of the New Rights
on the Distribution Date should be taxable to the stockholders or the Company,
stockholders may, depending upon the circumstances, realize taxable income
upon
the occurrence of an event described under “Mergers, Asset Sales and Self-
Dealing Transactions.”
Rights
Agreement. The terms of the New Rights are set forth in an
Amended and Restated Rights Agreement (the “Rights Agreement”) dated July 23,
2008 between the Company and American Stock Transfer & Trust Company, as
Rights Agent. A copy of the Rights Agreement is an Exhibit to Form
8-A/A
filed with the Securities and Exchange Commission. A copy of the
Rights Agreement is available free of charge from the Rights Agent at the
following address:
American
Stock Transfer & Trust Company LLC
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▇▇▇▇,
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Attention: Executive
Vice President
(Dynamics
Research Corporation Rights Agreement)
This
summary does not purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, which is incorporated in this summary by
reference.
C-3