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Exhibit 4.1
AMENDED AND RESTATED
RIGHTS AGREEMENT
Amended and Restated Rights Agreement, dated as of September 16,
1999, between HPSC, Inc., a Delaware corporation (the "Company"), and
BankBoston, N.A., a national banking association (the "Rights Agent").
Effective August 3, 1993 (the "Rights Dividend Declaration Date") the
Board of Directors of the Company authorized and declared a dividend of one
preferred stock purchase right (a "Right") for each share of Common Stock (as
hereinafter defined) of the Company outstanding as of the Close of Business
(as defined below) on August 13, 1993 (the "Record Date"), each Right
representing the right to purchase one one-hundredth of a share of Series A
Preferred Stock, $1.00 par value ("Preferred Stock"), upon the terms and
subject to the conditions herein set forth, and further authorized and
directed the issuance of one Right with respect to each share of Common Stock
issued between the Record Date and the earlier of the Distribution Date, and
the Expiration Date (as such terms are hereinafter defined).
The Board of Directors of the Company has determined that it is in the
best interests of the Company and the stockholders to amend and restate the
Rights Agreement.
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and Associates
(as such terms are hereinafter defined) of such Person, shall be the
Beneficial Owner (as such term is hereinafter defined) of
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the Trigger Percentage or more of the shares of Common Stock of the Company
then outstanding but shall not include (i) the Company, (ii) any Subsidiary
(as such term is hereinafter defined) of the Company, (iii) any employee
benefit plan of the Company or any Subsidiary of the Company, or any entity or
trustee holding shares of Common Stock for or pursuant to the terms of any
such plan or for the purpose of funding any such plan or funding other
employee benefits for employees of the Company or of any Subsidiary of the
Company ((i), (ii) and (iii) as well as (iv) being "Exempt Persons"); or (iv)
any Grandfathered Stockholder. Notwithstanding the foregoing, no Person shall
become an "Acquiring Person" either (x) as the result of an acquisition of
Common Stock by the Company which, by reducing the number of shares
outstanding, increases the proportionate number of shares beneficially owned
by such Person to the Trigger Percentage or more of the shares of Common Stock
of the Company then outstanding; PROVIDED, HOWEVER, that if a Person shall
become the Beneficial Owner of the Trigger Percentage or more of the Common
Stock of the Company then outstanding by reason of share acquisitions by the
Company and shall, after such share acquisitions by the Company, become the
Beneficial Owner of any additional Common Stock of the Company (other than
pursuant to a dividend or distribution paid or made by the Company on the
outstanding Common Stock or pursuant to a split or subdivision of the
outstanding Common Stock), then such Person shall be deemed to be an
"Acquiring Person" unless upon becoming the Beneficial Owner of such
additional shares of Common Stock such Person does not beneficially own 15% or
more of the shares of Common Stock then outstanding; or (y) if the Board of
Directors of the Company determines in good faith that a Person who would
otherwise be an "Acquiring Person" became the Beneficial Owner of a number of
shares of Common Stock such that the Person would otherwise qualify as an
"Acquiring Person"
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inadvertently (including, without limitation, because (A) such Person was
unaware that it beneficially owned a percentage of 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, then such Person shall not be deemed to be or to have become an
"Acquiring Person" for any purposes of this Agreement unless and until such
Person shall have failed to divest itself, as soon as practicable (as
determined, in good faith, by the Board of Directors of the Company), of
Beneficial Ownership of a sufficient number of shares of Common Stock so that
such Person would no longer otherwise qualify as an "Acquiring Person."
(b) "Act" shall mean the Securities Act of 1933, as amended.
(c) "Adverse Person" shall mean any Person declared to be an
Adverse Person by the Board of Directors upon determination that the criteria
set forth in Section 11(a)(ii)(B) apply to such Person.
(d) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as in effect on the date of this Agreement.
(e) A Person shall be deemed the "Beneficial Owner" of and
shall be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or indirectly within the
meaning of Rule l3d-3 of the General Rules and Regulations under the Exchange
Act as in effect on the date hereof;
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(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding (other than customary agreements with
and between underwriters and selling group members with respect to a bona fide
public offering of securities), or upon the exercise of conversion rights,
exchange rights, rights, warrants or options, or otherwise; PROVIDED, HOWEVER,
that a Person shall not be deemed the Beneficial Owner of, or to beneficially
own, (x) securities tendered pursuant to a tender or exchange offer made by or
on behalf of such Person or any of such Person's Affiliates or Associates
until such tendered securities are accepted for purchase or exchange, (y)
securities which such Person has a right to acquire upon the exercise of
Rights at any time prior to the time that any Person becomes an Acquiring
Person, or (z) securities issuable upon the exercise of Rights from and after
the time that any Person becomes an Acquiring Person if such Rights were
acquired by such Person or any of such Person's Affiliates or Associates prior
to the Distribution Date or pursuant to Section 3(a) or Section 22 hereof
("Original Rights") or pursuant to Section 11(i) or Section 11(n) with respect
to an adjustment to Original Rights; or (B) the right to vote or dispose of or
has "beneficial ownership" of (as determined pursuant to Rule 13d-3 of the
General Rules and Regulations under the Exchange Act), including pursuant to
any agreement, arrangement or understanding; PROVIDED, HOWEVER, that a Person
shall not be deemed the Beneficial Owner of, or to beneficially own, any
security if the agreement, arrangement or understanding to vote such security
(1) arises solely from a revocable proxy or consent given to such Person in
response to a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations promulgated under the
Exchange
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Act and (2) is not also then reportable on Schedule 13D under the Exchange Act
(or any comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or understanding
(other than customary agreements with and between underwriters and selling
group members with respect to a bona fide public offering of securities) for
the purpose of acquiring, holding, voting (except to the extent contemplated
by the proviso to Section 1(e)(ii)(B)) or disposing of any securities of the
Company; PROVIDED, HOWEVER, that no Person who is an officer, director or
employee of an Exempt Person shall be deemed, solely by reason of such
Person's status or authority as such, to be the "Beneficial Owner" of, to have
"Beneficial Ownership" of or to "beneficially own" any securities that are
"beneficially owned" (as defined in this Section l(e)), including, without
limitation, in a fiduciary capacity, by an Exempt Person or by any other such
officer, director or employee of an Exempt Person.
Notwithstanding anything in this definition of
Beneficial Ownership to the contrary, the phrase "then outstanding," when used
with reference to a Person's Beneficial Ownership of securities of the
Company, shall mean the number of such securities then issued and outstanding
together with the number of such securities not then actually issued and
outstanding which such Person would be deemed to own beneficially hereunder.
(f) "Business Day" shall mean any day other than a Saturday, a
Sunday, or a day on which banking institutions in the Commonwealth of
Massachusetts are authorized or obligated by law or executive order to close.
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(g) "Close of Business" on any given date shall mean 5:00
P.M., New York City time, on such date; PROVIDED, HOWEVER, that if such date
is not a Business Day it shall mean 5:00 P.M., New York City time, on the next
succeeding Business Day.
(h) "Common Stock" when used with reference to the Company
shall mean the shares of common stock, par value $.01 per share, of the
Company. "Common Stock" when used with reference to any Person other than the
Company shall mean the capital stock (or, in the case of an unincorporated
entity, the equivalent equity interest) with the greatest voting power of such
other Person or, if such other Person is a Subsidiary of another Person, the
Person or Persons which ultimately control such first-mentioned Person.
(i) "Distribution Date" shall have the meaning set forth in
Section 3 hereof.
(j) "Exchange Act" shall have the meaning set forth in the
definitions of "Affiliate" and "Associate" above.
(k) "Exercise Price" shall have the meaning set forth in
Section 4(a) of this Agreement.
(l) "Final Expiration Date" shall have the meaning set forth
in Section 7 hereof.
(m) "Grandfathered Stockholder" shall mean ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
(including his Affiliates and Associates).
(n) "Interested Stockholder" shall mean any Acquiring Person,
any Adverse Person or any Affiliate or Associate of an Acquiring Person,
Adverse Person or any other Person in which such Acquiring Person, Adverse
Person, Affiliate or Associate has an interest, or any other Person acting
directly or indirectly on behalf of or in concert with any such Acquiring
Person, Adverse Person, Affiliate or Associate.
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(o) "Permitted Offer" shall mean a tender offer or exchange
offer which is for all outstanding Common Stock at a price and on terms
determined, prior to the purchase of shares under such tender or exchange
offer, by at least a majority of the members of the Board of Directors who are
not officers of the Company to be adequate (taking into account all factors
that such Directors deem relevant including, without limitation, prices that
could reasonably be achieved if the Company or its assets were sold on an
orderly basis designed to realize maximum value) and otherwise in the best
interests of the Company and its stockholders (other than the Person or any
Affiliate or Associate thereof on whose basis the offer is being made) taking
into account all factors that such directors may deem relevant.
(p) "Person" shall mean any individual, firm, corporation,
partnership, limited liability company, trust or other entity, and shall
include any successor (by merger or otherwise) of such entity.
(q) "Preferred Stock" shall mean shares of Series A Preferred
Stock, par value $1.00 per share, of the Company having the rights and
preferences set forth in the Form of Certificate of Designations attached to
this Agreement as Exhibit A.
(r) "Redemption Date" shall have the meaning set forth in
Section 7 hereof.
(s) "Rights" shall have the meaning set forth in the
introduction hereto.
(t) "Section 11(a)(ii) Event" shall mean any event described
in Section 11(a)(ii) hereof.
(u) "Section 13 Event" shall mean any event described in
clause (x), (y) or (z) of Section 13(a) hereof.
(v) "Share Acquisition Date" shall mean the first date of
public announcement (which, for purposes of this definition, includes a report
filed pursuant to Section 13(d) of the
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Exchange Act) by the Company or an Acquiring Person that an Acquiring Person
has become such or such earlier date as a majority of the Board of Directors
shall become aware of the existence of an Acquiring Person.
(w) "Subsidiary" of any Person shall mean any corporation or
other entity of which a majority of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by such Person
and any corporate or other entity that is otherwise controlled by such Person.
(x) "Trigger Percentage" shall mean 15%.
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 appoint such co-Rights Agents as it may deem
necessary or desirable.
Section 3. ISSUE OF RIGHT CERTIFICATES. (a) Until the earlier of (i)
the Close of Business on the tenth day after the Share Acquisition Date (or if
the tenth day after Share Acquisition Date occurs before the Record Date, the
Close of Business of the Record Date), (ii) the Close of Business on the tenth
Business Day (or such later date as may be determined by action of the Board
of Directors prior to such time as any Person becomes an Acquiring Person)
after the date of the commencement by any Person (other than an Exempt Person)
of, or of the first public announcement of the intention of any Person (other
than an Exempt Person) to commence, a tender or exchange offer, the
consummation of which would result in any Person (other than an Exempt Person)
becoming the Beneficial Owner of Common Stock (other than Common Stock
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of which such Person would be deemed, pursuant to the second proviso of the
second sentence of Section 1(a) hereof, not to be the Beneficial Owner)
aggregating 15% or more of the then outstanding Common Stock or (iii) the
Close of Business on the tenth Business Day after the Board of Directors of
the Company determine, pursuant to the criteria set forth in Section
11(a)(ii)(B) hereof, that a Person is an Adverse Person (including any such
date which is after the date of this Agreement and prior to the issuance of
the Rights; the earliest of such dates being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of Section 3(b) hereof) by the certificates for Common Stock
registered in the names of the holders thereof (which certificates shall also
be deemed to be Right Certificates) and not by separate Right Certificates,
and (y) the right to receive Rights will be transferable only in connection
with the transfer of shares of Common Stock. As soon as practicable after the
Distribution Date, the Company will prepare and execute, the Rights Agent will
countersign, and the Company will send or cause to be sent (and the Rights
Agent will, if requested, send) by first-class, insured, postage-prepaid mail,
to each record holder of Common Stock as of the Close of Business on the
Distribution Date (other than any Acquiring Person or any Associate or
Affiliate of an Acquiring Person), at the address of such holder shown on the
records of the Company, a Right Certificate, in substantially the form of
Exhibit B hereto (a "Right Certificate"), evidencing one Right (subject to
adjustment as provided herein) for each share of Common Stock so held. As of
the Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(b) On the Record Date, or as soon as practicable thereafter,
the Company will send a copy of a Summary of Rights to Purchase Preferred
Stock, in substantially the form of Exhibit C hereto (the "Summary of
Rights"), by first-class, postage-prepaid mail, to each record
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holder of Common Stock as of the Close of Business on the Record Date, at the
address of such holder shown on the records of the Company. With respect to
certificates for Common Stock outstanding as of the Record Date, until the
Distribution Date, the Rights will be evidenced by such certificates
registered in the names of the holders thereof together with a copy of the
Summary of Rights attached thereto. Until the Distribution Date (or, if
earlier the Expiration Date (as such terms are defined in Section 7 hereof)),
the surrender for transfer of any certificate for Common Stock outstanding on
the Record Date, with or without a copy of the Summary of Rights attached
thereto, shall also constitute the transfer of the Rights associated with the
Common Stock represented thereby.
(c) Rights shall be issued in respect of all shares of Common
Stock issued or disposed of (including, without limitation, upon disposition
of Common Stock out of treasury stock or issuance or reissuance of Common
Stock out of authorized but unissued shares) after the Record Date but prior
to the earlier of the Distribution Date and the Expiration Date, or in certain
circumstances provided in Section 22 hereof, after the Distribution Date.
Certificates for Common Stock which become outstanding (including, without
limitation, reacquired Common Stock referred to in the last sentence of this
paragraph (c)) after the Record Date but prior to the earlier of the
Distribution Date and the Expiration Date or in certain circumstances provided
in Section 22 hereof, after the Distribution Date shall have impressed on,
printed on, written on or otherwise affixed to them the following legend:
This certificate also evidences and entitles
the holder hereof to certain rights as set
forth in an Amended Restated Rights
Agreement between HPSC, Inc. and BankBoston,
N.A., dated as of September 16, 1999 (the
"Rights Agreement"), the terms of which are
hereby incorporated herein by reference and
a copy of which is on file at the principal
executive offices of HPSC, Inc. Under
certain circumstances, as set forth in the
Rights Agreement, such
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Rights will be evidenced by separate
certificates and will no longer be evidenced
by this certificate. HPSC, Inc. will mail to
the holder of this certificate a copy of the
Rights Agreement without charge after
receipt of a written request therefor. Under
certain circumstances, as set forth in the
Rights Agreement, Rights issued to any
Person who becomes an Acquiring Person, an
Adverse Person or any Affiliate or Associate
thereof (as defined in the Rights Agreement)
may become null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Stock represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Stock represented thereby.
In the event that the Company purchases or otherwise acquires any shares of
Common Stock after the Record Date but prior to the Distribution Date, any
Rights associated with such Common Stock shall be deemed canceled and retired
so that the Company shall not be entitled to exercise any Rights associated
with the Common Stock which are no longer outstanding. Notwithstanding this
paragraph (c), the omission of a legend shall not affect the enforceability of
any part of this Agreement or the rights of any holder of the Rights.
Section 4. FORM OF RIGHT CERTIFICATES.
(a) The Right Certificates (and the forms of election to
purchase Preferred Stock and of assignment to be printed on the reverse
thereof) shall be substantially the same as Exhibit B hereto and may have such
marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Agreement, or as may be required
to comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the
Rights may from time to time be listed, or to
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conform to usage. Subject to the provisions of Section 22 hereof, the Right
Certificates 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 price per one one-hundredth of a share of Preferred Stock set forth
therein (the "Exercise Price"), but the number of such one one-hundredths of a
share of Preferred Stock and the Exercise Price shall be subject to adjustment
as provided herein.
(b) Any Right Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights beneficially owned by any Person
known to be: (i) an Acquiring Person, an Adverse Person or any Associate or
Affiliate of an Acquiring Person or an Adverse Person, (ii) a transferee of an
Acquiring Person or an Adverse Person (or of any such Associate or Affiliate)
who becomes a transferee after the Acquiring Person or Adverse Person becomes
such, or (iii) a transferee of an Acquiring Person or an Adverse Person (or of
any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person or Adverse Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person or Adverse Person (or from any such
Associate or Affiliate) to holders of equity interests in such Acquiring
Person or Adverse Person (or in any such Associate or Affiliate) or to any
Person with whom such Acquiring Person or Adverse Person (or any such
Associate or Affiliate) has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer which the
Board of Directors of the Company has determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect
avoidance of Section 7(e) hereof, and any Right Certificate issued pursuant to
Section 6 or Section 11 hereof upon transfer, exchange, replacement or
adjustment of any other Right Certificate referred to in this sentence, shall
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contain (to the extent feasible) the following legend, modified as applicable
to apply to such Person:
The Rights represented by this Right
Certificate are or were beneficially owned
by a Person who was or became an [Acquiring]
[Adverse] Person or an Affiliate or
Associate of an [Acquiring] [Adverse] Person
(as such terms are defined in the Rights
Agreement). Accordingly, this Right
Certificate and the Rights represented
hereby are null and void.
Section 5. COUNTERSIGNATURE AND REGISTRATION. (a) The Right
Certificates shall be executed on behalf of the Company by the Chairman of the
Board of Directors, the President, any of the Vice Presidents, the Treasurer
or the Controller of the Company, either manually or by facsimile signature,
shall have affixed thereto the Company's seal or a facsimile thereof, and
shall be attested by the Secretary or an Assistant Secretary of the Company,
either manually or by facsimile signature. The Right Certificates shall be
manually countersigned by the Rights Agent and shall not be valid for any
purpose unless countersigned. In case any officer of the Company who shall
have signed any of the Right Certificates shall cease to be such officer of
the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Right Certificates, nevertheless, may be
countersigned by the Rights Agent and issued and delivered by the Company with
the same force and effect as though the Person who signed such Right
Certificates had not ceased to be such officer of the Company; and any Right
Certificate may be signed on behalf of the Company by any Person who, at the
actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Rights Agreement any such Person was not such an
officer.
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(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at an office or agency designated for such purpose,
books for registration and transfer of the Right Certificates issued
hereunder. Such books shall show the names and addresses of the respective
holders of the Right Certificates, the number of Rights evidenced on its face
by each of the Right Certificates and the date of each of the Right
Certificates.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES. (a)
Subject to the provisions of this Agreement, at any time after the
Distribution Date, and at or prior to the Expiration Date, any Right
Certificate or Right Certificates may be transferred, split up, combined or
exchanged for another Right Certificate or Right Certificates, entitling the
registered holder to purchase a like number of one one-hundredths of a share
of Preferred Stock as the Right Certificate or Right Certificates surrendered
then entitled such holder to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Right Certificate or Right
Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the office or agency of the
Rights Agent designated for such purpose. Thereupon the Rights Agent shall
countersign and deliver to the Person entitled thereto a Right Certificate or
Right Certificates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer, split up, combination or
exchange of Right Certificates.
(b) Subject to the provisions of this Agreement, at any time
after the Distribution Date and prior to the Expiration Date, upon receipt by
the Company and the Rights Agent of evidence reasonably satisfactory to them
of the loss, theft, destruction or mutilation of
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a Right Certificate, and, in case of loss, theft or destruction, of indemnity
or security reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will make and deliver a new
Right Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Right Certificate so lost, stolen, destroyed
or mutilated.
Section 7. EXERCISE OF RIGHTS; EXERCISE PRICE; EXPIRATION DATE OF
RIGHTS.
(a) Subject to Section 7(e) hereof, the registered holder of
any Right Certificate may exercise the Rights evidenced thereby (subject to
Section 11(a)(ii) hereof and except as otherwise provided herein) in whole or
in part, upon surrender of the Right Certificate, with the form of election to
purchase on the reverse side thereof duly executed, to the Rights Agent at the
office or agency of the Rights Agent designated for such purpose, together
with payment of the Exercise Price for each one one-hundredth of a share of
Preferred Stock (or other securities, cash or other assets, as the case may
be) as to which the Rights are exercised, at any time which is both after the
Distribution Date and prior to the time (the "Expiration Date") that is
earliest of (i) the Close of Business on August 13, 2003 (the "Final
Expiration Date"), (ii) the time at which the Rights are redeemed as provided
in Section 23 hereof (the "Redemption Date"), or (iii) the time at which such
Rights are exchanged as provided in Section 24 hereof.
(b) The Exercise Price for each one one-hundredth of a share
of Preferred Stock purchasable pursuant to the exercise of a Right shall
initially be $20.00, and shall be subject to adjustment from time to time as
provided in Sections 11 and 13 hereof and shall be payable in lawful money of
the United States of America in accordance with paragraph (c) of this Section
7.
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(c) Except as otherwise provided herein, upon receipt of a
Right Certificate representing exercisable rights, with the form of election
to purchase and the certificate duly executed, accompanied by payment of the
Exercise Price for the shares to be purchased and an amount equal to any
applicable transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof by certified check, cashier's
check or money order payable to the order of the Company, the Rights Agent
shall thereupon promptly (i) (A) requisition from any transfer agent of the
shares of Preferred Stock (or make available, if the Rights Agent is the
transfer agent for such shares) certificates for the number of shares of
Preferred Stock to be purchased and the Company hereby irrevocably authorizes
its transfer agent to comply with all such requests, or (B) requisition from a
depository agent appointed by the Company depository receipts representing
interests in such number of one one-hundredths of a share of Preferred Stock
as are to be purchased (in which case certificates for the shares of Preferred
Stock represented by such receipts shall be deposited by the transfer agent
with the depository agent) and the Company hereby directs the depository agent
to comply with such request, (ii) when appropriate, requisition from the
Company the amount of cash to be paid in lieu of issuance of fractional shares
in accordance with Section 14 hereof, (iii) after receipt of such certificates
or depository receipts, cause the same to be delivered to or upon the order of
the registered holder of such Right Certificate, registered in such name or
names as may be designated by such holder and (iv) when appropriate, after
receipt, deliver such cash to or upon the order of the registered holder of
such Right Certificate.
(d) Except as otherwise provided herein, in case the
registered holder of any Right Certificate shall exercise less than all the
Rights evidenced thereby, a new Right Certificate evidencing Rights equivalent
to the Rights remaining unexercised shall be issued by
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the Rights Agent to the registered holder of such Right Certificate or to his
duly authorized assigns, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section 11(a)(ii) Event,
any Rights beneficially owned by (i) an Acquiring Person, an Adverse Person or
an Associate or Affiliate of an Acquiring Person or any Adverse Person, (ii) a
transferee of an Acquiring Person or an Adverse Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person or
Adverse Person becomes such, or (iii) a transferee of an Acquiring Person or
Adverse Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person or Adverse
Person becoming such and receives such Rights pursuant to either (A) a
transfer (whether or not for consideration) from the Acquiring Person or
Adverse Person (or from any such Associate or Affiliate) to holders of equity
interests in such Acquiring Person or Adverse Person (or in any such Associate
or Affiliate) or to any Person with whom the Acquiring Person or Adverse
Person (or any such Associate or Affiliate) has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a
transfer which the Board of Directors of the Company has determined (whether
before or after such transfer) is part of a plan, arrangement or understanding
which has as a primary purpose or effect the avoidance of this Section 7(e),
shall become null and void without any further action and no holder of such
Rights shall have any rights whatsoever with respect to such Rights, whether
under any provision of this Agreement or otherwise. The Company shall use all
reasonable efforts to insure that the provisions of this Section 7(e) and
Section 4(b) hereof are complied with, but shall have no liability to any
holder of Right Certificates or other Person as a
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result of its failure to make any determinations with respect to an Acquiring
Person or Adverse Person or any of their respective Affiliates, Associates or
transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder of Rights upon the
occurrence of any purported transfer or exercise as set forth in Section 6
hereof or this Section 7 unless such registered holder shall have (i)
completed and signed the certificate contained in the form of assignment or
form of election to purchase set forth on the reverse side of the Right
Certificate surrendered for such transfer or exercise, and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All
Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered to the Rights Agent, shall be canceled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Rights Agreement. The Company shall
deliver to the Rights Agent for cancellation and retirement, and the Rights
Agent shall so cancel and retire, any other Right Certificate purchased or
acquired by the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all canceled Right Certificates to the Company, or shall,
at the written request of the Company, destroy such canceled Right
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
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Section 9. AVAILABILITY OF PREFERRED STOCK.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares of
Preferred Stock or any Preferred Stock held in its treasury, the number of
shares of Preferred Stock that will be sufficient to permit the exercise in
full of all outstanding Rights in accordance with Section 7 hereof.
(b) So long as the shares of Preferred Stock (and, following
the occurrence of a Section 11(a)(ii) Event or Section 13 Event, Common Stock
and/or other securities) issuable and deliverable upon the exercise of the
Rights may be listed on any national securities exchange, or quoted on NASDAQ,
the Company shall use its best efforts to cause, from and after such time as
the Rights become exercisable, all shares reserved for such issuance to be
listed on such exchange, or quoted on NASDAQ, upon official notice of issuance
upon such exercise.
(c) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all shares of Preferred Stock
(or Common Stock or other securities, as the case may be) delivered upon
exercise of Rights shall, at the time of delivery of the certificates for such
shares or securities (subject to payment of the Exercise Price), be duly and
validly authorized and issued and fully paid and nonassessable shares.
(d) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Right
Certificates or of any shares of Preferred Stock (or Common Stock and/or other
securities) upon the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax which may be payable in respect of any
transfer or delivery of Right Certificates to a Person other than, or the
issuance or delivery of certificates or
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depository receipts for the shares of Preferred Stock (or Common Stock and/or
other securities) in a name other than that of, the registered holder of the
Right Certificate evidencing Rights surrendered for exercise or to issue or to
deliver any certificates or depository receipts for shares of Preferred Stock
(or Common Stock and/or other securities) upon the exercise of any Rights
until any such tax shall have been paid (any such tax being payable by the
holder of such Right Certificate at the time of surrender) or until it has
been established to the Company's reasonable satisfaction that no such tax is
due.
(e) The Company shall use its best efforts to (i) file, as
soon as practicable following the Rights becoming exercisable, a registration
statement under the Act on an appropriate form, with respect to the securities
purchasable upon exercise of the Rights, (ii) cause such registration
statement to become effective as soon as practicable after such filing, and
(iii) cause such registration statement to remain effective (with a prospectus
at all times meeting the requirements of the Act) until the earlier of (A) the
date as of which the Rights are no longer exercisable for such securities, and
(B) the Expiration Date. The Company will also take such action as may be
appropriate under, or to ensure compliance with, the securities or "blue sky"
laws of the various states in connection with the exercisability of the
Rights. The 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 and 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, as well as 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 if the requisite
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qualification in such jurisdiction shall not have been obtained, the exercise
thereof shall not be permitted under applicable law or a registration
statement shall not have been declared effective.
Section 10. PREFERRED STOCK RECORD DATE. Each Person in whose name any
certificate for shares of Preferred Stock (or Common Stock and/or other
securities, as the case may be) is issued upon the exercise of Rights shall
for all purposes be deemed to have become the holder of record of the shares
of Preferred Stock represented thereby on, and such certificate shall be
dated, the date upon which the Right Certificate evidencing such Rights was
duly surrendered and payment of the Exercise Price (and any applicable
transfer taxes) was made; PROVIDED, HOWEVER, that if the date of such
surrender and payment is a date upon which the Preferred Stock (or Common
Stock and/or other securities, as the case may be) transfer books of the
Company are closed, such Person shall be deemed to have become the record
holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which the Preferred Stock (or Common Stock and/or
other securities, as the case may be) transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby, the holder of a Right
Certificate shall not be entitled to any rights of a holder of Preferred Stock
(or Common Stock and/or other securities, as the case may be) for which the
Rights shall be exercisable, including, without limitation, the right to vote,
to receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.
Section 11. ADJUSTMENT OF EXERCISE PRICE; NUMBER OF SHARES OR NUMBER OF
RIGHTS. The Exercise Price, the number and kind of shares or other securities
purchasable upon exercise of each Right and the number of Rights outstanding
are subject to adjustment from time to time as provided in this Section 11.
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(a) (i) In the event the Company shall at any time after the
date of this Agreement (A) declare and pay a dividend on the Preferred Stock
payable in Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C)
combine the outstanding Preferred Stock into a smaller number of shares of
Preferred Stock or (D) issue any shares of its capital stock in a
reclassification of the Preferred Stock (including any such reclassification
in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation), except as otherwise provided in this
Section 11(a) and Section 7(e) hereof, the number and kind of shares of
capital stock issuable upon exercise of a Right as of the record date for such
dividend or the effective date of such subdivision, combination or
reclassification shall be proportionately adjusted so that the holder of any
Right exercised after such time shall be entitled to receive the aggregate
number and kind of shares of capital stock which, if such Right had been
exercised immediately prior to such date and at a time when the Preferred
Stock transfer books of the Company were open, he would have owned upon such
exercise and been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification; PROVIDED, HOWEVER, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable
upon exercise of one Right. If an event occurs which would require an
adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the
adjustment provided for in this Section 11(a)(i) shall be in addition to, and
shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) Subject to Section 24 of this Agreement, in the
event:
(A) any Person shall, at any time after the Record
Date, become an Acquiring Person, or
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(B) subject to the penultimate sentence of this
Section 11(a)(ii), the Board of Directors of the Company shall declare any
Person to be an Adverse Person, upon (x) a determination that such Person,
alone or together with its Affiliates and Associates, is the Beneficial Owner
of 10% or more of the outstanding shares of Common Stock and (y) a
determination by at least a majority of the Directors who are not officers of
the Company, after reasonable inquiry and investigation, including
consultation with such persons as such directors shall deem appropriate, that
(a) such Beneficial Ownership by such Person is intended to cause, is
reasonably likely to cause or will cause the Company to repurchase the Common
Stock beneficially owned by such Person or to cause pressure on the Company to
take action or enter into a transaction or series of transactions which would
provide such Person with short-term financial gain under circumstances where
the Board of Directors determines that the best long-term interests of the
Company and its stockholders, but for the actions and possible actions of such
Person, would not be served by taking such action or entering into such
transactions or series of transactions at that time or (b) such Beneficial
Ownership is causing or reasonably likely to cause a material adverse impact
(including, but not limited to, impairment of relationships with customers or
impairment of the Company's ability to maintain its competitive position) on
the business or prospects of the Company; then, promptly following the
occurrence of any event described in this Section 11(a)(ii), proper provision
shall be made so that each holder of a Right (except as provided below and in
Section 7(e) hereof) shall thereafter have a right to receive, upon exercise
thereof at a price equal to the then current Exercise Price multiplied by the
number of one one-hundredths of a share of Preferred Stock for which a Right
is then exercisable, in accordance with the terms of this Agreement such
number of shares of Common Stock of the Company
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as shall equal the result obtained by (x) multiplying the then current
Exercise Price by the number of one one-hundredths of a share of Preferred
Stock for which a Right is then exercisable and dividing that product by (y)
50% of the then current per share market price of the Company's Common Stock
(determined pursuant to Section 11(d) hereof) on the date of the occurrence of
such event (such number of shares being referred to as the "Adjustment
Stock"), in each case subject to further adjustment as appropriate in
accordance with Section 11(f) hereof; PROVIDED, HOWEVER, that if the
transaction that would otherwise give rise to the foregoing adjustment is also
subject to the provisions of Section 13 hereof, then only the provisions of
Section 13 hereof shall apply and no adjustment shall be made pursuant to this
Section 11(a)(ii).
Notwithstanding the provisions of this Section 11(a)(ii)(B), the Board
of Directors of the Company may not declare a Person to be an Adverse Person
if, prior to the time that such Person acquired 10% or more of the shares of
Common Stock then outstanding such Person provided to the Board of Directors
in writing a statement of such Person's purpose and intentions in connection
with the proposed acquisition of Common Stock, together with any other
information reasonably requested of such Person by the Board of Directors, and
the Board of Directors, based on such statement and reasonable inquiry and
investigation, including consultation with such persons as such directors
shall deem appropriate, determines to notify and notifies such Person in
writing that it will not declare such Person to be an Adverse Person;
PROVIDED, HOWEVER, that the Board of Directors may expressly condition in any
manner a determination not to declare a Person an Adverse Person on such
conditions as the Board of Directors may select, including without limitation,
such Person's not acquiring more than a specified amount of stock and/or on
such Person's not taking actions inconsistent with the
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purposes and intentions disclosed by such Person in the statement provided to
the Board of Directors. In the event that the Board of Directors should at any
time determine, upon reasonable inquiry and investigation, including
consultation with such person as such directors shall deem appropriate, that
such Person has not met or complied with any condition specified by the Board
of Directors pursuant to the preceding sentence, the Board of Directors may at
any time thereafter declare such Person to be an Adverse Person pursuant to
the provisions of this Section 11(a)(ii).
(iii) The Company may at its option substitute for a
share of Common Stock issuable upon the exercise of Rights in accordance with
the foregoing subparagraph (ii) a number of shares of Preferred Stock or
fraction thereof such that the current per share market price of one share of
Preferred Stock multiplied by such number or fraction is equal to the current
per share market price of one share of Common Stock. In the event that there
shall not be sufficient shares of Common Stock issued but not outstanding or
authorized but unissued to permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii), the Board of Directors shall,
to the extent permitted by applicable law and any material agreements then in
effect to which the Company is a party (A) determine the excess (such excess,
the "Spread") of (1) the value of the shares of Common Stock issuable upon the
exercise of a Right in accordance with the foregoing subparagraph (ii) (the
"Current Value") over (2) the Exercise Price (as adjusted in accordance with
the foregoing subparagraph (ii)), and (B) with respect to each Right (other
than Rights which have become void), make adequate provision to substitute for
the shares of Common Stock issuable in accordance with the foregoing
subparagraph (ii) upon exercise of the Right and payment of the Exercise Price
(as adjusted in
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accordance therewith), (1) cash, (2) a reduction in such Exercise Price, (3)
shares of Preferred Stock or other equity securities of the Company
(including, without limitation, shares or fractions of shares of Preferred
Stock which, by virtue of having dividend, voting and liquidation rights
substantially comparable to those of the shares of Common Stock, are deemed in
good faith by the Board of Directors to have substantially the same value as
the shares of Common Stock (such shares of Preferred Stock and shares or
fractions of shares of preferred stock are hereinafter referred to as "Common
Stock Equivalents")), (4) debt securities of the Company, (5) other assets, or
(6) any combination of the foregoing, having a value which, when added to the
value of the shares of Common Stock issued upon exercise of such Right, shall
have an aggregate value equal to the Current Value (less the amount of any
reduction in such Exercise Price), where such aggregate value has been
determined by the Board of Directors upon the advice of a nationally
recognized investment banking firm selected in good faith by the Board of
Directors; PROVIDED, HOWEVER, that if the Company shall not make adequate
provision to deliver value pursuant to clause (B) above within thirty (30)
days following a Section 11(a)(ii) Event (the date of the Section 11(a)(ii)
Event being the "Section 11(a)(ii) Trigger Date"), then the Company shall be
obligated to deliver, to the extent permitted by applicable law and any
material agreements then in effect to which the Company is a party, upon the
surrender for exercise of a Right and without requiring payment of such
Exercise Price, shares of Common Stock (to the extent available), and then, if
necessary, such number or fractions of shares of Preferred Stock (to the
extent available) and then, if necessary, cash, which shares and/or cash have
an aggregate value equal to the Spread. If, upon the occurrence of the Section
11(a)(ii) Event, the Board of Directors shall determine in good faith that it
is likely that
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sufficient additional shares of Common Stock could be authorized for issuance
upon exercise in full of the Rights, then, if the Board of Directors so
elects, the thirty (30) day period set forth above may be extended to the
extent necessary, but not more than ninety (90) days after the Section
11(a)(ii) Trigger Date, in order that the Company may seek stockholder
approval for the authorization of such additional shares (such thirty (30) day
period, as it may be extended, is herein called the "Substitution Period"). To
the extent that the Company determines that some action need be taken pursuant
to the second and/or third sentence of this Section 11(a)(iii), the Company
(x) shall provide, subject to Section 11(a)(ii) hereof and the last sentence
of this Section 11(a)(iii) hereof, that such action shall apply uniformly to
all outstanding Rights 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 second sentence 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, as well as 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 shares of Common Stock shall be the current per share market
price (as determined pursuant to Section 11(d)(i)) on the Section 11(a)(ii)
Trigger Date and the per share or fractional value of any "Common Stock
Equivalent" shall be deemed to equal the current per share market price of the
Common Stock. The Board of Directors may, but shall not be required to,
establish procedures to allocate the right to receive Common Stock and capital
stock equivalents upon exercise of the Rights among holders of Rights.
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(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of shares of Preferred
Stock entitling them (for a period expiring within 45 calendar days after such
record date) to subscribe for or purchase shares of Preferred Stock (or shares
having the same rights, privileges and preferences as the Preferred Stock
("equivalent preferred shares")) or securities convertible into shares of
Preferred Stock or equivalent preferred shares at a price per share of
Preferred Stock or equivalent preferred share (or having a conversion price
per share, if a security convertible into shares of Preferred Stock or
equivalent preferred shares) less than the then current per share market price
of the shares of Preferred Stock (determined pursuant to Section 11(d) hereof)
on such record date, the Exercise Price to be in effect after such record date
shall be determined by multiplying the Exercise Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
number of shares of Preferred Stock and equivalent preferred shares
outstanding on such record date plus the number of shares of Preferred Stock
and equivalent preferred shares which the aggregate offering price of the
total number of shares of Preferred Stock and/or equivalent preferred shares
so to be offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such current market
price and the denominator of which shall be the number of shares of Preferred
Stock and equivalent preferred shares outstanding on such record date plus the
number of additional shares of Preferred Stock and/or equivalent preferred
shares to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible); PROVIDED,
HOWEVER, that in no event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the shares of capital
stock of the Company issuable upon exercise of one Right. In case such
subscription price may be paid in a consideration part or all of which shall
be in a
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form other than cash, the value of such consideration shall be as determined
in good faith by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent. Shares of
Preferred Stock and equivalent preferred shares owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such rights, options or warrants
are not issued, the Exercise Price shall be adjusted to be the Exercise Price
which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making
of a distribution to all holders of the shares of Preferred Stock (including
any such distribution made in connection with a consolidation or merger in
which the Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend or a
dividend payable in shares of Preferred Stock) or subscription rights or
warrants (excluding those referred to in Section 11(b) hereof), the Exercise
Price to be in effect after such record date shall be determined by
multiplying the Exercise Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the then current per share
market price of the shares of Preferred Stock (determined pursuant to Section
11(d) hereof) on such record date, less the fair market value (as determined
in good faith by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent) of the portion
of the assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to one share of Preferred Stock and
the denominator of which shall be such current per share market price
(determined pursuant to Section 11(d) hereof) of the shares of Preferred
Stock; PROVIDED, HOWEVER, that in no event shall the
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consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company to be issued
upon exercise of one Right. Such adjustments shall be made successively
whenever such a record date is fixed, and in the event that such distribution
is not so made, the Exercise Price shall again be adjusted to be the Exercise
Price which would then be in effect if such record date had not been fixed.
(d) (i) Except as otherwise provided here, for the purpose of
any computation hereunder, the "current per share market price" of any
security (a "Security" for the purpose of this Section 11(d)(i)) on any date
shall be deemed to be the average of the daily closing prices per share of
such Security for the 30 consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date; PROVIDED, HOWEVER, that in the event
that the current per share market price of the Security is determined during a
period following the announcement by the issuer of such Security of (A) a
dividend or distribution on such Security payable in shares of such Security
or securities convertible into such shares, or (B) any subdivision,
combination or reclassification of such Security and prior to the expiration
of 30 Trading Days after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the current per share market
price shall be appropriately adjusted to reflect the current market price per
share equivalent of such Security. The closing price for each day shall be the
last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system
with respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the Security is not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities
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listed on the principal national securities exchange on which the Security is
listed or admitted to trading or, if the Security is not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not
so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other system then in
use, or, if on any such date the Security is not quoted by any such
organization, the average of the closing bid and asked prices as furnished by
a professional market maker making a market in the Security selected by the
Board of Directors of the Company. The term "Trading Day" shall mean a day on
which the principal national securities exchange on which the Security is
listed or admitted to trading is open for the transaction of business or, if
the Security is not listed or admitted to trading on any national securities
exchange, a Business Day.
(ii) For the purpose of any computation hereunder,
the "current per share market price" of the Preferred Stock shall be
determined in accordance with the method set forth in Section 11(d)(i). If the
Preferred Stock is not publicly traded, the "current per share market price"
of the Preferred Stock shall be conclusively deemed to be the current per
share market price of the shares of Common Stock as determined pursuant to
Section 11(d)(i) (appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof), multiplied
by one hundred. If neither the Common Stock nor the Preferred Stock is
publicly held or so listed or traded, "current per share market price" shall
mean the fair value per share as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent.
(e) No adjustment in the Exercise Price shall be required
unless such adjustment would require an increase or decrease of at least 1% in
the Exercise Price; PROVIDED, HOWEVER, that any adjustments which by reason of
this Section 11(e) are not required to be made
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shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 11 shall be made to the nearest cent or to
the nearest one one-millionth of a share of Preferred Stock or one
ten-thousandth of any other share or security as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i)
three years from the date of the transaction which requires such adjustment or
(ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a) hereof or Section 13(a) hereof, 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 Exercise Price
thereof shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to
the shares of Preferred Stock contained in Sections 11(a) through (c),
inclusive, Sections 11(e), 11(h), 11(i) and 11(m), as applicable, and the
provisions of Sections 7, 9, 10, 13 and 14 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 Exercise Price hereunder shall evidence the right
to purchase, at the adjusted Exercise Price, the number of one one-hundredths
of a share of Preferred Stock purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Exercise Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such
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adjustment shall thereafter evidence the right to purchase, at the adjusted
Exercise Price, that number of one one-hundredths of a share of Preferred
Stock (calculated to the nearest one one-millionth of a share of Preferred
Stock) 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 Exercise Price in effect immediately prior to such
adjustment of the Exercise Price and (ii) dividing the product so obtained by
the Exercise Price in effect immediately after such adjustment of the Exercise
Price.
(i) The Company may elect on or after the date of any
adjustment of the Exercise 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 one ten-thousandth)
obtained by dividing the Exercise Price in effect immediately prior to
adjustment of the Exercise Price by the Exercise Price in effect immediately
after adjustment of the Exercise Price. The Company shall make a public
announcement of its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Exercise
Price is adjusted or any day thereafter, but, if the Right Certificates have
been issued, shall be at least 10 days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of
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Right Certificates on such record date Right 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 Right Certificates held by such holders prior to the date
of adjustment, and upon surrender thereof, if required by the Company, new
Right Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Right Certificates so to be distributed shall
be issued, executed and countersigned in the manner provided for herein and
shall be registered in the names of the holders of record of Right
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Exercise
Price or the number of one one-hundredths of a share of Preferred Stock
issuable upon the exercise of the Rights, the Right Certificates theretofore
and thereafter issued may continue to express the Exercise Price and the
number of one one-hundredths of a share of Preferred Stock which were
expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Exercise Price below the then par value, if any, of the shares of
Preferred Stock or other shares of capital 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 fully paid and non assessable shares of Preferred Stock or other such
shares at such adjusted Exercise Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Exercise 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
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after such record date the Preferred Stock, Common Stock or other capital
stock or securities of the Company, if any, issuable upon such exercise over
and above the Preferred Stock, Common Stock or other capital stock or
securities of the Company, if any, issuable upon such exercise on the basis of
the Exercise 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 shares
upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Exercise Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that it in its sole discretion shall
determine to be advisable in order that any consolidation or subdivision of
the Preferred Stock, issuance wholly for cash of any shares of Preferred Stock
at less than the current market price, issuance wholly for cash of shares of
Preferred Stock or securities which by their terms are convertible into or
exchangeable for shares of Preferred Stock, dividends on shares of Preferred
Stock payable in shares of Preferred Stock or issuance of rights, options or
warrants referred to hereinabove in Section 11(b), hereafter made by the
Company to holders of its shares of Preferred Stock shall not be taxable to
such stockholders.
(n) Anything in this Agreement to the contrary
notwithstanding, in the event that at any time after the date of this
Agreement and prior to the Distribution Date, the Company shall (i) declare
and pay any dividend on the shares of Common Stock payable in shares of Common
Stock or (ii) effect a subdivision, combination or consolidation of the shares
of Common Stock (by reclassification or otherwise than by payment of dividends
in Common Stock) into a greater or lesser number of shares of Common Stock,
then in any such case (A) the
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number of one one-hundredths of a share of Preferred Stock purchasable after
such event upon proper 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 is the number of shares of Common Stock outstanding immediately before
such event and the denominator of which is the number of shares Common Stock
outstanding immediately after such event, and (B) each share of Common Stock
outstanding immediately after such event shall have issued with respect to it
that number of Rights which each Common Share outstanding immediately prior to
such event had issued with respect to it. The adjustments provided for in this
Section 11(n) shall be made successively whenever such a dividend is declared
or paid or such a subdivision, combination or consolidation is effected.
(o) 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 which does not violate this
Section 11(o)), (ii) merge with or into any other Person (other than a
Subsidiary of the Company in a transaction which does not violate this Section
11(o), or (iii) sell or transfer (or permit any Subsidiary to sell or
transfer), in one transaction, or a series of related transactions, assets,
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to any other Person or Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which does not violate this
Section 11(o)), if (x) at the time of or immediately after such consolidation,
merger, sale or transfer there are any charter or by-law provisions or any
rights, warrants or other instruments or securities outstanding or agreements
in effect or other actions taken, which would materially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights or (y) prior
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to, simultaneously with or immediately after such consolidation, merger or
sale, the stockholders of the Person who constitutes, or would constitute, the
issuer for purposes of Section 13(a) hereof shall have received a distribution
of Rights previously owned by such Person or any of its Affiliates or
Associates. The Company shall not consummate any such consolidation, merger,
sale or transfer unless prior thereto the Company and such other Person shall
have executed and delivered to the Rights Agent a supplemental agreement
evidencing compliance with this Section 11(o).
(p) The Company covenants and agrees that, after the earlier of the
Share Acquisition Date or the Distribution Date, it will not, except as
permitted by Section 23, Section 24 or Section 27 hereof, take (or permit any
Subsidiary to take) any action the purpose of which is to, or if at the time
such action is taken it is reasonably foreseeable that the effect of such
action is to, materially diminish or otherwise eliminate the benefits intended
to be afforded by the Rights.
Section 12. CERTIFICATE OF ADJUSTED EXERCISE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Section 11 or 13 hereof, the
Company shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent for the shares of
Common Stock or the Preferred Stock a copy of such certificate and (c) mail a
brief summary thereof to each holder of a Right Certificate in accordance with
Section 25 hereof (if so required under Section 25 hereof). The Rights Agent
shall be fully protected in relying on any such certificate and on any
adjustment therein contained and shall not be deemed to have knowledge of any
such adjustment unless and until it shall have received such certificate.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.
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(a) In the event, directly or indirectly, at any time after
the occurrence of a Section 11(a)(ii) Event, (x) the Company shall consolidate
with, or merge with and into, any Interested Stockholder, or if in such merger
or consolidation all holders of Common Stock are not treated alike, any other
Person, (y) any Interested Stockholder, or if in such merger or consolidation
all holders of Common Stock are not treated alike, any other Person shall
merge with and into the Company and the Company shall be the continuing or
surviving corporation of such merger and, in connection with such merger, all
or part of the outstanding shares of Common Stock shall be changed into or
exchanged for stock or other securities of any other Person (or the Company)
or cash, or (z) the Company shall sell or otherwise transfer (or one or more
of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
Interested Stockholder or, if in such transaction all holders of Common Stock
are not treated alike, any other Person (other than the Company or one or more
of its wholly-owned Subsidiaries), then, and in each such case (except as
provided in Section 13(c) hereof), proper provision shall be made so that (i)
each holder of a Right (except as provided in Section 7(e) herein) shall
thereafter have the right to receive, upon the exercise thereof at a price
equal to the then current Exercise Price multiplied by the number of one
one-hundredths of a share of Preferred Stock for which a Right is then
exercisable, in accordance with the terms of this Agreement and in lieu of
shares of Preferred Stock or Common Stock of the Company, such number of
validly authorized and issued, fully paid, non-assessable and freely tradeable
shares of Common Stock of such other Person (including the Company as
successor thereto or as the surviving corporation) as shall equal
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the result obtained by (A) multiplying the then current Exercise Price by the
number of one one-hundredths of a share of Preferred Stock for which a Right
is then exercisable (without taking into account any adjustment previously
made pursuant to Section 11(a)(ii)) and dividing that product by (B) 50% of
the then current per share market price of the Common Stock of such other
Person, which may be the Company in the case of clause (a)(y)(ii) above,
(determined pursuant to Section 11(d) hereof) on the date of consummation of
such Section 13(a) Event; PROVIDED, HOWEVER, that the Purchase Price (as
theretofore adjusted in accordance with Section 11(a)(ii) hereof) and the
number of shares of Common Stock of such Other Party so receivable upon
exercise of a Right shall be subject to further adjustment as appropriate in
accordance with Section 11(f) hereof to reflect any events occurring in
respect of the Common Stock of such Other Party after the occurrence of such
consolidation, merger, sale or transfer; (ii) the issuer of such shares of
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 to refer to such issuer; and (iv) such issuer shall take
such steps (including, but not limited to, the reservation of a sufficient
number of its shares of Common Stock in accordance with Section 9 hereof) in
connection with such consummation as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably may
be, in relation to the shares of Common Stock thereafter deliverable upon the
exercise of the Rights. The Company shall not consummate any such
consolidation, merger, sale or transfer unless prior thereto the Company and
such issuer shall have executed and delivered to the Rights Agent a
supplemental agreement so providing.
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(b) The Company shall not enter into any transaction of the kind
referred to in this Section 13 if at the time of or immediately after such
transaction there are any rights, warrants, instruments or securities
outstanding or any agreements or arrangements which, as a result of the
consummation of such transaction, would eliminate or substantially diminish
the benefits intended to be afforded by the Rights. The provisions of this
Section 13 shall similarly apply to successive mergers or consolidations or
sales or other transfers. In the event that a Section 13 Event shall occur at
any time after the occurrence of a Section 11(a)(ii) Event, the Rights which
have not theretofore been exercised shall thereafter become exercisable in the
manner described in Section 13(a).
(c) Notwithstanding anything in this Agreement to the contrary, Section
13 shall not be applicable to a transaction described in subparagraphs (x) and
(y) of Section 13(a) if (i) such transaction is consummated with a Person or
Persons who acquired shares of Common Stock pursuant to a Permitted Offer,
(ii) the price per share of Common Stock offered in such transaction is not
less that the price per share of Common Stock paid to all holders of shares of
Common Stock whose shares were purchased pursuant to such Permitted Offer, and
(iii) the form of consideration being offered to the remaining holders of
shares of Common Stock pursuant to such transaction is the same as the form of
consideration paid pursuant to such Permitted Offer. Upon consummation of any
such transaction contemplated by this Section 13(c), all Rights hereunder
shall expire.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. (a) The Company
shall not be required to issue fractions of Rights or to distribute Right
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable, an
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amount in cash equal to the same fraction of the current market value of a
whole Right. For the purposes of this Section 14(a), the current market value
of a whole Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price for any day shall be the last sale
price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the Rights are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Rights are listed or admitted to trading or,
if the Rights are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by NASDAQ
or such other system then in use or, if on any such date the Rights are not
quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the
Rights selected by the Board of Directors of the Company. If on any such date
no such market maker is making a market in the Rights, the fair value of the
Rights on such date as determined in good faith by the Board of Directors of
the Company shall be used.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than fractions which are integral multiples
of one one-hundredth of a share of Preferred Stock) upon exercise of the
Rights or to distribute certificates which evidence fractional shares of
Preferred Stock (other than fractions which are integral multiples of one
one-hundredth of a share of Preferred Stock). Interests in fractions of shares
of Preferred Stock
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in integral multiples of one one-hundredth of a share of Preferred Stock may,
at the election of the Company, be evidenced by depository 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
depository receipts shall have all the rights, privileges and preferences to
which they are entitled as beneficial owners of the shares of Preferred Stock
represented by such depository receipts. In lieu of fractional shares of
Preferred Stock that are not integral multiples of one one-hundredth of a
share of Preferred Stock, the Company shall pay to the registered holders of
Right Certificates at the time such Rights are exercised or exchanged as
herein provided an amount in cash equal to the same fraction of the current
market value of one share of Preferred Stock. For the purposes of this Section
14(b), the current market value of a share of Preferred Stock shall be the
closing price of a share of Preferred Stock (as determined pursuant to the
second sentence of Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of such exercise or exchange.
(c) Following the occurrence of a Section 11(a)(ii) Event or Section 13
Event, the Company shall not be required to issue fractions of shares of
Common Stock upon exercise or exchange of the Rights or to distribute
certificates which evidence fractional shares of Common Stock. In lieu of
fractional shares of Common Stock, the Company shall pay to the registered
holders of Right Certificates at the time such Rights are exercised or
exchanged as herein provided an amount in cash equal to the same fraction of
the current market value of one (1) share of Common Stock. For purposes of
this Section 14(c), the current market value of one share of Common Stock
shall be the closing price of one share of Common Stock (as determined
pursuant to Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise or exchange.
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(d) The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Rights or any fractional
shares upon exercise or exchange of a Right (except as provided above).
Section 15. RIGHTS OF ACTION. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the
Right Certificates (and, prior to the Distribution Date, the registered
holders of the Common Stock); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Stock), without
the consent of the Rights Agent or of the holder of any other Right
Certificate (or, prior to the Distribution Date, of the Common Stock), in his
own behalf and for his own benefit, may enforce, and may institute and
maintain any suit, action or proceeding against the Company to enforce, and
may otherwise act in respect of, his right to exercise the Rights evidenced by
such Right Certificate (or, prior to the Distribution Date, such Common Stock)
in the manner provided in such Right Certificate and in this Agreement.
Without limiting the foregoing or any remedies available to the holders of
Rights, it is specifically acknowledged that the holders of Rights would not
have an adequate remedy at law for any breach of this Agreement and will be
entitled to specific performance of the obligations under, and injunctive
relief against actual or threatened violations of the obligations of any
Person subject to, this Agreement.
Section 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the shares of Common
Stock;
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(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office or agency of the Rights Agent designated for such purpose, duly
endorsed or accompanied by a proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the
Person in whose name the Right Certificate (or, prior to the Distribution
Date, the associated Common Stock certificate) is registered as the absolute
owner thereof and of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Right Certificates or the associated
Common Stock certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor the Rights
Agent shall be affected by any notice to the contrary.
Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED STOCKHOLDER.
No holder, as such, of any Right Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the shares of
Preferred Stock or any other securities of the Company which may at any time
be issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Right Certificate be construed to confer
upon the holder of any Right Certificate, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors
or upon any matter submitted to stockholders at any meeting thereof, or to
give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided in
Section 25 hereof), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such Right Certificate shall
have been exercised or exchanged in accordance with the provisions hereof.
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Section 18. CONCERNING THE RIGHTS AGENT. (a) The Company agrees to pay
to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify the
Rights Agent for, and to hold it harmless against, any loss, liability or
expense, incurred without gross negligence, bad faith or willful misconduct on
the part of the Rights Agent, for anything done or omitted by the Rights Agent
in connection with the acceptance and administration of this Agreement,
including the costs and expenses of defending against any claim of liability
arising therefrom, directly or indirectly.
(b) The Rights Agent shall be protected and shall incur no
liability for, or in respect of any action taken, suffered or omitted by it in
connection with, its administration of this Agreement in reliance upon any
Right Certificate or certificate for the shares of Preferred Stock or Common
Stock or for other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or Persons, or otherwise upon
the advice of counsel as set forth in Section 20 hereof.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF SAME OF RIGHTS AGENT.
(a) Any corporation or other entity into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the stock transfer or corporate trust powers of the Rights Agent
or any
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successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on
the part of any of the parties hereto; PROVIDED, that such corporation would
be eligible for appointment as a successor Rights Agent under the provisions
of Section 21 hereof. In case at the time such successor Rights Agent shall
succeed to the agency created by this Agreement, any of the Right Certificates
shall have been countersigned but not delivered, any such successor Rights
Agent may adopt the countersignature of the predecessor Rights Agent and
deliver such Right Certificates so countersigned; and in case at that time any
of the Right Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and in
all such cases such Right Certificates shall have the full force provided in
the Right Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall
not have been countersigned, the Rights Agent may countersign such Right
Certificates either in its prior name or in its changed name; and in all such
cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
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(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact
or matter be proved or established by the Company prior to taking or suffering
any action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by any one of the Chairman of
the Board of Directors, the President, any Vice President, the Treasurer, the
Controller or the Secretary of the Company and delivered to the Rights Agent;
and such certificate shall be full authorization to the Rights Agent for any
action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company
and any other Person only for its own gross negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in
the Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed
to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
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covenant or condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 7(e) hereof) or any
adjustment in the terms of the Rights (including the manner, method or amount
thereof) provided for in Sections 3, 11, 13, 23 and 24, or the ascertaining of
the existence of facts that would require any such change or adjustment
(except with respect to the exercise of Rights evidenced by Right Certificates
after receipt of a certificate furnished pursuant to Section 12, describing
such change or adjustment); nor shall it by any act hereunder be deemed to
make any representation or warranty as to the authorization or reservation of
any shares of Preferred Stock or other securities to be issued pursuant to
this Agreement or any Right Certificate or as to whether any shares of
Preferred Stock or other securities will, when issued, be validly authorized
and issued, fully paid and non assessable.
(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 reasonably believed by the Rights Agent to be one of the
Chairman of the Board of Directors, the President, any Vice President, the
Secretary, the Controller or the Treasurer of the Company, and to apply to
such officers for advice or instructions in connection with its duties, and it
shall not be liable for any action taken or suffered by it in good faith in
accordance with instructions of any such officer or for any delay in acting
while waiting for those instructions. Any application by the Rights Agent for
written instructions from the Company may, at the option of the Rights Agent,
set
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forth in writing any action proposed to be taken or omitted by the Rights
Agent under this Rights Agreement and the date on and/or after which such
action shall be taken or such omission shall be effective. The Rights Agent
shall not be liable for any action taken by, or omission of, the Rights Agent
in accordance with a proposal included in any such application on or after the
date specified in such application (which date shall not be less than five
Business Days after the date any officer of the Company actually receives such
application, unless any such officer shall have consented in writing to an
earlier date) unless, prior to taking any such action (or the effective date
in the case of an omission), the Rights Agent shall have received written
instructions in response to such application specifying the action to be taken
or omitted.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were
not Rights Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or for any
other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights Agent shall
not be answerable or accountable for any act, default, neglect or misconduct
of any such attorneys or agents or for any loss to the Company resulting from
any such act, default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
(j) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate contained in the
form of assignment or the form of
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election to purchase set forth on the reverse thereof, as the case may be, has
not been completed to certify the holder is not an Acquiring Person (or an
Affiliate or Associate thereof), the Rights Agent shall not take any further
action with respect to such requested exercise or transfer without first
consulting with the Company.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer
agent of the shares of Common Stock or Preferred Stock by registered or
certified mail, and, following the Distribution Date, to the holders of the
Right Certificates by first-class mail. The Company may remove the Rights
Agent or any successor Rights Agent upon 30 days' notice in writing, mailed to
the Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the shares of Common Stock or Preferred Stock by registered
or certified mail, and, following the Distribution Date, to the holders of the
Right Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make
such appointment within a period of 30 days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of
a Right Certificate (who shall, with such notice, submit his Right Certificate
for inspection by the Company), then the registered holder of any Right
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a corporation organized
and doing business under the laws of the United States or the Commonwealth of
Massachusetts (or of any other state of the United States so long as such
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corporation is authorized to do business as a banking institution in the
Commonwealth of Massachusetts), in good standing, having an office in the
Commonwealth of Massachusetts, which is authorized under such laws to exercise
corporate trust or stock transfer powers and is subject to supervision or
examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least $50
million. After appointment, the successor Rights Agent shall be vested with
the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment the Company shall file
notice thereof in writing with the predecessor Rights Agent and each transfer
agent of the shares of Common Stock or Preferred Stock, and, following the
Distribution Date, mail a notice thereof in writing to the registered holders
of the Right Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.
Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such
form as may be approved by its Board of Directors to reflect any adjustment or
change in the Exercise Price and the number or kind or class of shares or
other securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of Common Stock following the Distribution Date and
prior to the Expiration Date, the
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Company may with respect to shares of Common Stock so issued or sold pursuant
to (i) the exercise of stock options, (ii) under any employee plan or
arrangement, (iii) upon the exercise, conversion or exchange of securities,
notes or debentures issued by the Company or (iv) a contractual obligation of
the Company, in each case existing prior to the Distribution Date, issue
Rights Certificates representing the appropriate number of Rights in
connection with such issuance or sale.
Section 23. REDEMPTION. (a) The Board of Directors of the Company may,
at their option, by majority vote at any time prior to the earliest of (x) a
Section 11(a)(ii) Event, (y) the Close of Business on the tenth Business Day
after the declaration that a Person is an Adverse Person or (z) the Expiration
Date, redeem all but not less than all the then outstanding Rights at a
redemption price of $.01 per Right, appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof (such redemption price being hereinafter referred to as the "Redemption
Price").
(b) The redemption of the Rights by such Board of Directors
may be made effective at such time, on such basis and with such conditions as
such Board of Directors in its sole discretion may establish. The Redemption
Price shall be payable, at the option of the Company, in shares of Common
Stock, or such other form of consideration as the Board of Directors shall
determine.
(c) Immediately upon the action of the Board of Directors
ordering the redemption of the Rights pursuant to paragraph (a) of this
Section 23 (or at such later time as the Board of Directors may establish for
the effectiveness of such redemption), and without any further action and
without any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price. The Company
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shall promptly give public notice of any such redemption; provided, however,
that the failure to give, or any defect in, any such notice shall not affect
the validity of such redemption. Within 10 days after such action of the Board
of Directors ordering the redemption of the Rights (or such later time as the
Board of Directors may establish for the effectiveness of such redemption),
the Company shall mail a notice of redemption to all the holders of the then
outstanding Rights at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agent for the Common Stock. Any notice which is mailed
in the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption shall state the method by
which the payment of the Redemption Price will be made. Neither the Company
nor any of its Affiliates or Associates may redeem, acquire or Purchase for
value any Rights at any time except (i) in the manner specifically set forth
in this Section 23 or in Section 24 hereof or (ii) in connection with the
purchase of Common Stock prior to the Distribution Date.
Section 24. EXCHANGE. (a) The Board of Directors of the Company may, at
its option, at any time after the first occurrence of a Section 11(a)(ii)
Event, exchange all or part of the then outstanding and exercisable Rights
(which shall not include Rights that have become void pursuant to the
provisions of Section 7(e) hereof) for 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 being hereinafter referred to as the
"Exchange Ratio"). Notwithstanding the foregoing, the Board of Directors shall
not be empowered to effect such exchange at any time after any Acquiring
Person becomes the Beneficial Owner of shares of Common Stock (other than
shares of Common Stock of which such Person would be deemed, pursuant to the
second proviso of the
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second sentence of Section 1(a) hereof, not to be the Beneficial Owner)
aggregating 50% or more of the shares of Common Stock then outstanding. From
and after the occurrence of an event specified in Section 13(a) hereof, any
Rights that theretofore have not been exchanged pursuant to this Section 24(a)
shall thereafter be exercisable only in accordance with Section 13 and may not
be exchanged pursuant to this Section 24(a). The exchange of the Rights by the
Board of Directors may be made effective at such time, on such basis and with
such conditions as the Board of Directors in its sole discretion may
establish.
(b) Immediately upon the effectiveness of the action of the
Board of Directors of the Company ordering the exchange of any Rights pursuant
to paragraph (a) of this Section 24 and without any further action and without
any notice, the right to exercise such Rights shall terminate and the only
right thereafter of a holder of such Rights shall be to receive that number of
shares of Common Stock equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company shall promptly give public
notice of any such exchange; PROVIDED, HOWEVER, that the failure to give, or
any defect in, such notice shall not affect the validity of such exchange. The
Company promptly shall mail a notice of any such exchange to all of the
holders of such Rights at their last addresses as they appear upon the
registry books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the
exchange of the Common Stock for Rights will be effected and, in the event of
any partial exchange, the number of Rights which will be exchanged. Any
partial exchange shall be effected pro rata based on the number of Rights
(other than Rights which have become void pursuant to the provisions of
Section 7(e) hereof) held by each holder of Rights.
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(c) The Company may at its option substitute, and, in the
event that there shall not be sufficient shares of Common Stock issued but not
outstanding or authorized but unissued to permit any exchange of Rights as
contemplated in accordance with this Section 24, the Company shall substitute,
for each share of Common Stock that would otherwise be issuable upon exchange
of a Right, a number of shares of Preferred Stock or fraction thereof such
that the current per share market price of one share of Preferred Stock
(determined pursuant to Section 11(d) hereof) multiplied by such number or
fraction is equal to the current per share market price of one share of Common
Stock (determined pursuant to Section 11(d) hereof) as of the date of issuance
of such shares of Preferred Stock or fraction thereof.
Section 25. NOTICE OF CERTAIN EVENTS. (a) In case the Company shall at
any time after the earlier of the Distribution Date or the Stock Acquisition
Date propose (i) to pay any dividend payable in stock of any class to the
holders of its shares of Preferred Stock or to make any other distribution to
the holders of its shares of Preferred Stock (other than a regular quarterly
cash dividend), (ii) to offer to the holders of its shares of Preferred Stock
rights or warrants to subscribe for or to purchase any additional shares of
Preferred Stock or shares of stock of any class or any other securities,
rights or options, (iii) to effect any reclassification of its shares of
Preferred Stock (other than a reclassification involving only the subdivision
of outstanding share of Preferred Stock), (iv) to effect any consolidation or
merger into or with, or to effect any sale or other transfer (or to permit one
or more of its Subsidiaries to effect any sale or other transfer), in one or
more transactions, of 50% or more of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to, any other Person, (v) to
effect the liquidation, dissolution or winding up of the Company, or (vi) to
declare or pay any dividend on the Common Stock payable in Common Stock or to
effect a subdivision, combination or consolidation of the
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Common Stock (by reclassification or otherwise than by payment of dividends in
Common Stock), then, in each such case, the Company shall give to each holder
of a Right Certificate, 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, or distribution of rights or warrants, or the date on which
such reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution or winding up is to take place and the date of participation
therein by the holders of the shares of Common Stock and/or Preferred Stock,
if any such date is to be fixed, and such notice shall be so given in the case
of any action covered by clause (i) or (ii) above at least 10 days prior to
the record date for determining holders of the shares of Preferred Stock for
purposes of such action, and in the case of any such other action, at least 10
days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the shares of Common Stock and/or
Preferred Stock, whichever shall be the earlier.
(b) In case any event described in Section 11(a)(ii) or
Section 13 hereof shall occur, then the Company shall as soon as practicable
thereafter give to each holder of a Right Certificate (or if occurring prior
to the Distribution Date, the holders of the Common Stock), in accordance with
Section 26 hereof, a notice of the occurrence of such event, which notice
shall describe such event and the consequences of such event to holders of
Rights under Section 11(a)(ii) or Section 13 hereof, as the case may be.
Section 26. NOTICES. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until Another address is filed
in writing with the Rights Agent) as follows:
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HPSC, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Secretary
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Company or by the
holder of any Right Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
BankBoston, N.A.
c/o Equiserve Limited Partnership
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Client Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate 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. For so long as the Rights are
then redeemable and subject to the last sentence of this Section 27, the
Company may in its sole and absolute discretion, and the Rights Agent shall if
the Company so directs, supplement or amend any provision of this Agreement in
any respect without the approval of any holders of the Rights. At any time
when the Rights are no longer redeemable, and subject to the last sentence of
this Section 27, the Company, and the Rights Agent shall, if the Company so
directs, supplement or amend this Agreement without the approval of any
holders of Rights PROVIDED, HOWEVER, that no such supplement or amendment may
(a) adversely affect the interests of the
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holders of Rights as such (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person), (b) cause this Agreement again to become
amendable other than in accordance with this sentence or (c) cause the Rights
again to become redeemable. Upon the delivery of a certificate from an
appropriate officer of the Company stating that the proposed supplement or
amendment is in compliance with the terms of this Section 27, the Rights Agent
shall execute such supplement or amendment PROVIDED that any supplement or
amendment that does not amend Sections 18, 19, 20 or 21 hereof in a manner
adverse to the Rights Agent shall become effective immediately upon execution
by the Company, whether or not also executed by the Rights Agent.
Notwithstanding anything in this Agreement to the contrary, no
supplement or amendment shall be made which changes the Redemption Price.
Section 28. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent
and the registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common Stock) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders
of the Right Certificates (and, prior to the Distribution Date, the Common
Stock).
Section 30. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this
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Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
Section 31. GOVERNING LAW. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Delaware and of or all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State.
Section 32. 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 33. 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.
Section 34. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS. The
Board of Directors of the Company shall have the exclusive power and authority
to administer this Agreement and to exercise the rights and powers
specifically granted to the Board of Directors of the Company or to the
Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i) interpret
the provisions of this Agreement and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement (including,
without limitation, a determination to redeem or not redeem the Rights or to
amend or not amend this Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y)
below, all omissions with respect to the foregoing) that are done or made by
the Board of Directors of the Company in good faith, shall (x) be final,
conclusive and binding on the Company, the Rights
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Agent, the holders of the Rights, as such, and all other parties, and (y) not
subject the Board of Directors to any liability to the holders of the Rights.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.
Attest: HPSC, INC.
By:________________________ By:____________________________
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer Title: Chairman of the Board and
Chief Executive Officer
BANKBOSTON, N.A.
By:_____________________________
Attest:
By:____________________________
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EXHIBIT A
FORM
OF
CERTIFICATE OF DESIGNATIONS
OF
SERIES A PREFERRED STOCK
OF
HPSC, INC.
(Pursuant to Section 151 of the
Delaware General Corporation Law)
-----------------------------------
HPSC, Inc., a corporation organized and existing under the General
Corporation Law of the State of Delaware (hereinafter called the "Company"),
hereby certifies that the following resolution was adopted by the Board of
Directors of the Company as required by Section 151 of the General Corporation
Law at a meeting duly called and held on August 3, 1993:
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of the Company (hereinafter called the "Board of Directors"
or the "Board") in accordance with the provisions of the Restated Certificate
of Incorporation, as amended to date (hereinafter called the "Certificate of
Incorporation"), the Board of Directors hereby creates a series of Preferred
Stock, par value $1.00 per share (the "Preferred Stock"), of the Company and
62
hereby states the designation and number of shares, and fixes the relative
rights, preferences, and limitations thereof as follows:
Series A Preferred Stock:
Section 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Series A Preferred Stock" (the "Series A Preferred Stock") and
the number of shares constituting the Series A Preferred Stock shall be
150,000. Such number of shares may be increased or decreased by resolution of
the Board of Directors; PROVIDED, that no decrease shall reduce the number of
shares of Series A Preferred Stock to a number less than the number of shares
then outstanding plus the number of shares reserved for issuance upon the
exercise of outstanding options, rights or warrants or upon the conversion of
any outstanding securities issued by the Company convertible into Series A
Preferred Stock.
Section 2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the rights of the holders of any shares of any other
series of Preferred Stock, par value $1.00 per share, of the Company ranking
prior and superior to the Series A Preferred Stock with respect to dividends,
the holders of shares of Series A Preferred Stock, in preference to the
holders of Common Stock, par value $.01 per share (the "Common Stock"), of the
Company, and of any other junior stock, shall be entitled to receive, when, as
and if declared by the Board of Directors out of funds legally available for
the purpose, quarterly dividends payable in cash on the first day of March,
June, September and December in each year (each such date being referred to
herein as a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series A Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $1.00 or (b) subject
to the provision for adjustment hereinafter set forth, equal
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to 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 or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share
or fraction of a share of Series A Preferred Stock. In the event the Company
shall at any time declare or pay any dividend on the 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
amount to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding sentence
shall be adjusted by multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
(B) The Company shall declare a dividend or distribution on the Series
A Preferred Stock as provided in paragraph (A) of this Section immediately
after it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided, that, in the event no
dividend or distribution shall have been declared on the Common Stock during
the period between any Quarterly Dividend Payment Date and the next subsequent
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Quarterly Dividend Payment Date, a dividend of $1.00 per share on the Series A
Preferred Stock shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares, unless the date of issue of
such shares is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall begin to accrue
from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series A
Preferred Stock in an amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board
of Directors may fix a record date for the determination of holders of shares
of Series A Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be not more than 60
days prior to the date fixed for the payment thereof.
Section 3. VOTING RIGHTS. The holders of shares of Series A Preferred
Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each
share of Series A Preferred Stock shall entitle the holder thereof to 100
votes on all matters submitted to
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a vote of the stockholders of the Company. In the event the Company shall at
any time declare or pay any dividend on the 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 number of votes
per share to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such number
by a fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such event.
(B) Except as otherwise provided herein, in any other Certificate of
Designations creating a series of Preferred Stock or any similar stock, or by
law, the holders of shares of Series A Preferred Stock and the holders of
shares of Common Stock and any other capital stock of the Company having
general voting rights shall vote together as one class on all matters
submitted to a vote of stockholders of the Company.
(C) Except as set forth herein, or as otherwise provided by law,
holders of Series A Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled to
vote with holders of Common Stock as set forth herein) for taking any
corporate action.
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Section 4. CERTAIN RESTRICTIONS.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section 2 are in
arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, the Company shall not:
(i) declare or pay dividends, or make any other distributions,
on any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except dividends paid ratably on the Series A Preferred Stock
and all such parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such shares are
then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A Preferred Stock,
provided that the Company may at any time redeem, purchase or otherwise
acquire shares of any such junior stock in exchange for shares of any stock of
the Company ranking junior (as to dividends and upon dissolution, liquidation
and winding up) to the Series A Preferred Stock; or
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(iv) redeem or purchase or otherwise acquire for consideration
any shares of Series A Preferred Stock, or any shares of stock ranking on a
parity (either as to dividends or upon liquidation, dissolution or winding up)
with the Series A Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (is determined by the Board of Directors) to
all holders of such shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other relative
rights and preferences of the respective series and classes, shall determine
in good faith will result in fair and equitable treatment among the respective
series or classes.
(B) The Company shall not permit any subsidiary of the Company to
purchase or otherwise acquire for consideration any shares of stock of the
Company unless the Company could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. REACQUIRED STOCK. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Company in any manner whatsoever shall
be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
subject to the conditions and restrictions on issuance set forth herein, in
the Certificate of Incorporation, or in any other Certificate of Designations
creating a series of Preferred Stock or any similar stock or as otherwise
required by law.
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Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any
liquidation, dissolution or winding up of the Company, subject to the prior
and superior rights of holders of any shares of any series of Preferred Stock
ranking prior and superior to the shares of Series A Preferred Stock with
respect to rights upon liquidation, dissolution or winding up, no distribution
shall be made (A) to the holders of shares of stock ranking junior (either as
to dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment, provided that the holders of shares of
Series A Preferred Stock shall be entitled to receive an aggregate amount per
share, subject to the provision for adjustment hereinafter set forth, equal to
100 times the aggregate amount to be distributed per share to holders of
shares of Common Stock, or (B) to the holders of shares of stock ranking on a
parity (either as to dividends or upon liquidation, dissolution or winding up)
with the Series A Preferred Stock, except distributions made ratably on the
Series A Preferred Stock and all such parity stock in proportion to the total
amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event the Company shall at any
time declare or pay any dividend on the 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 aggregate amount
to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under the proviso in clause (A) of the
preceding sentence shall be adjusted by multiplying such amount by a fraction
the numerator of which is the number of
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shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 7. CONSOLIDATION, MERGER ETC. In case the Company shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each share
of Series A Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 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. In the event the Company shall at any time declare or pay any
dividend on the 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 amount set forth in the preceding sentence
with respect to the exchange or change of shares of Series A Preferred Stock
shall be adjusted by multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
Section 8. NO REDEMPTION. The shares of Series A Preferred Stock shall
not be redeemable.
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Section 9. RANKING. The Series A Preferred Stock shall rank junior to
all other series of the Company's Preferred Stock as to the payment of
dividends and the distribution of assets, unless the terms of any such series
shall provide otherwise.
Section 10. AMENDMENT. If any proposed amendment to the Certificate of
Incorporation would alter or change the preferences, special rights or powers
given to the Series A Preferred Stock so as to affect the Series A Preferred
Stock adversely, or would authorize the issuance of a class or classes of
stock having preferences or rights with respect to dividends or dissolutions
or the distribution of assets that would be superior to the preferences or
rights of the Series A Preferred Stock, then the holders of the Series A
Preferred Stock shall be entitled to vote as a series upon such amendment, and
the affirmative vote of two-thirds of the outstanding shares of Series A
Preferred Stock shall be necessary to the adoption thereof, in addition to
such other vote as may be required by the General Company Law of the State of
Delaware.
IN WITNESS WHEREOF, this Certificate of Designations is executed on
behalf of the Company by its Chairman of the Board of Directors and attested
by its Secretary this ____ day of August, 1993.
______________________________________
Chairman of the Board of Directors
Attest:
_____________________________
Secretary
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EXHIBIT B
Form of Right Certificate
Certificate No. R- _______ Rights
NOT EXERCISABLE AFTER AUGUST 13, 2003 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE
SUBJECT TO REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE
ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS OWNED
BY OR TRANSFERRED TO ANY PERSON WHO IS OR BECOMES AND ACQUIRING
PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES
THEREOF WILL BECOME NULL AND VOID.
Right Certificate
HPSC, INC.
This certifies that ____________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement, dated as of August 3, 1993, as the same may be amended
from time to time (the "Rights Agreement"), between HPSC, Inc., a Delaware
corporation (the "Company"), and The First National Bank of Boston (the
"Rights Agent"), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights Agreement) and prior
to 5:00 P.M., New York City time, on August 13, 2003 at the
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office or agency of the Rights Agent designated for such purpose, or of its
successor as Rights Agent, one one-hundredth of a fully paid non-assessable
share of Series A Preferred Stock, par value $1.00 per share (the "Preferred
Stock"), of the Company, at a purchase price of $20.00 per one one-hundredth
of a share of Preferred Stock (the "Exercise Price"), upon presentation and
surrender of this Right Certificate with the Form of Election to Purchase duly
executed. The number of Rights evidenced by this Right Certificate (and the
number of one one-hundredths of a share of Preferred Stock which may be
purchased upon exercise hereof) set forth above, and the Exercise Price set
forth above, are the number and Exercise Price as of August 13, 1993, based on
the shares of Preferred Stock as constituted at such date. As provided in the
Rights Agreement, the Exercise Price and the number of one one-hundredths of a
share of Preferred Stock (or other securities or property) which may be
purchased upon the exercise of the Rights evidenced by this Right Certificate
are subject to modification and adjustment upon the happening of certain
events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities hereunder of
the Rights Agent, the Company and the holders of the Right Certificates.
Copies of the Rights Agreement are on file at the principal executive offices
of the Company and the above-mentioned office or agency of the Rights Agent.
The Company will mail to the holder of this Right Certificate a copy of the
Rights Agreement without charge after receipt of a written request therefor.
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This Right Certificate, with or without other Right Certificates, upon
surrender at the office or agency of the Rights Agent designated for such
purpose, may be exchanged for another Right Certificate or Right Certificates
of like tenor and date evidencing Rights entitling the holder to purchase a
like aggregate number of shares of Preferred Stock as the Rights evidenced by
the Right Certificate or Right Certificates surrendered shall have entitled
such holder to purchase. If this Right Certificate shall be exercised in part,
the holder shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate (i) may be redeemed by the Company at a redemption price
of $.01 per Right or (ii) may be exchanged in whole or in part for shares of
the Company's Common Stock, par value $.01 per share, or shares of Preferred
Stock.
No fractional shares of Preferred Stock or Common Stock will be issued
upon the exercise or exchange of any Right or Rights evidenced hereby (other
than fractions of Preferred Stock which are integral multiples of one
one-hundredth of a share of Preferred Stock, which may, at the election of the
Company, be evidenced by depository receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of the shares of
Preferred Stock or of any other securities of the Company which may at any
time be issuable on the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the holder hereof, as
such, any of the rights of a stockholder of the Company or any right to vote
for the election of directors or upon any matter submitted to stockholders at
any meeting thereof, or to
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give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by this Right Certificate shall
have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of __________________.
ATTEST: HPSC, INC.
By____________________________ By________________________________
Countersigned:
BANKBOSTON, N.A.
as Rights Agent
By____________________________
Authorized Signature
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Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED ____________________________________________ hereby
sells, assigns and transfers unto __________________________
___________________________________________________________________ (Please
print name and address of transferee)
___________________________________________________________________ _____
Rights represented by this Right Certificate, together with all right, title
and interest therein, and does hereby irrevocably constitute and appoint
_____________________________ Attorney, to transfer said Rights on the books
of the within-named Company, with full power of substitution.
Dated: _____________________
__________________________________
Signature
Signature Guaranteed:
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Signatures must be guaranteed by a participant in a recognized
Signature Guaranty Medallion Program.
____________________________________________________________________
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by, were not acquired by the
undersigned from, and are not being assigned to an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
__________________________________
Signature
__________________________________________________________________________
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Form of Reverse Side of Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Right Certificate.)
To HPSC, INC.
The undersigned hereby irrevocably elects to exercise
_____________________ Rights represented by this Right Certificate to purchase
the shares of Preferred Stock or other securities or property issuable upon
the exercise of such Rights and requests that certificates for such shares of
Preferred Stock (or such other securities) 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 Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
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or other identifying number
___________________________________________________________________
(Please Print name and address)
___________________________________________________________________
Dated: ______________________
_________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a participant in a recognized Signature
Guaranty Medallion Program.
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Form of reverse Side of Right Certificate -- continued
____________________________________________________________________
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by, and were not acquired by the
undersigned from, an Acquiring Person, an Adverse Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).
_________________________________
Signature
NOTICE
The signature in the Form of Assignment or Form of Election to
Purchase, as the case may be, must conform to the name as written upon the
face of this Right Certificate in every particular, without alteration or
enlargement or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
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EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
SHARES OF PREFERRED STOCK
On August 3, 1993, the Board of Directors of HPSC, Inc. (the "Company")
declared a dividend of one preferred stock purchase right (a "Right") for each
outstanding share of common stock, par value $.01 per share (the "Common
Stock"), of the Company. The dividend is payable on August 13, 1993 (the
"Record Date") to the stockholders of record on that date. Each Right entitles
the registered holder to purchase from the Company one one-hundredth of a
share of Series A Preferred Stock, par value $1.00 per share (the "Preferred
Stock"), of the Company at a price of $20.00 per one one-hundredth of a share
of Preferred Stock (the "Exercise Price"), subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement dated
as of August 3, 1993 (the "Rights Agreement") between the Company and The
First National Bank of Boston, as Rights Agent (the "Rights Agent").
DISTRIBUTION DATE; TRANSFER OF RIGHTS.
Initially, the Rights will be evidenced, with respect to Common Stock
outstanding as of the Record Date, by the Common Stock certificates, and no
separate Right Certificates will be distributed. The Rights will separate from
the Common Stock upon the earliest to occur of (i) ten days following a public
announcement that a person has become an Acquiring Person (as hereinafter
defined), (ii) ten business days (or such later date as may be determined by
the Board of Directors) following the commencement of, or announcement of an
intention to make, a
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tender offer or exchange offer, the consummation of which would result in a
person or group becoming an Acquiring Person or (iii) ten days following a
determination by the members of the Board of Directors who are not affiliated
or associated with an Acquiring Person or Adverse Person (the "Continuing
Directors") and are not officers of the Company that ownership of Company
Common Stock by a particular 10% or greater stockholder is reasonably likely
to cause the Company to take actions which will be materially adverse to it or
is reasonably likely to have a material adverse impact on the Company (such
stockholder, an "Adverse Person"). The earliest of the three dates noted in
the previous sentence is called the "Distribution Date". An "Acquiring Person"
is a person or group of affiliated or associated persons who has acquired 15%
or more of the outstanding Common Stock (except pursuant to a Permitted Offer,
as hereinafter defined, and except for Healthco International, Inc. (provided
that Healthco does not undergo a change of control), currently an
approximately 40% stockholder, and certain of its transferees, provided that
such stockholder does not acquire an additional 1% of the outstanding shares
of Common Stock after the date of the Rights Agreement, in the case of
Healthco, or above the stock ownership it acquires from Healthco, in the case
of Healthco's transferees).
The Rights Agreement provides that, until the Distribution Date (or
earlier redemption or expiration of the Rights), the Rights will be
transferred with and only with the Common Stock. Until the Distribution Date
(or earlier redemption or expiration of the Rights), new Common Stock
certificates issued after the Record Date upon transfer or new issuance of
shares of Common Stock will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any certificates for
Common Stock outstanding as of the Record Date, even without
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such notation or a copy of this Summary of Rights being attached thereto, will
also constitute the transfer of the Rights associated with the Common Stock
represented by such certificate.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Stock as of the Close of Business on the
Distribution Date and such separate Right Certificates alone will evidence the
Rights. Each share of Common Stock issued by the Company after the
Distribution Date and prior to the earlier of the redemption or expiration of
the Rights shall also include the right to receive a Right (unless the Board
of Directors expressly provides to the contrary at the time of issuance of
such Common Stock or option, right or warrant exercisable for or security
convertible into Common Stock) and Right Certificates evidencing such Rights
shall be issued at the time of issuance of such Common Stock.
THE RIGHTS ARE NOT EXERCISABLE UNTIL THE DISTRIBUTION DATE. The Rights
will expire on August 13, 2003 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or unless the Rights are earlier redeemed or
exchanged by the Company, in each case as described below.
EXERCISE OF RIGHTS FOR COMMON STOCK OF THE COMPANY.
In the event that any person or group of affiliated or associated
persons becomes an Acquiring Person (except pursuant to a tender or exchange
offer which is for all outstanding Common Stock at a price and on terms which
a majority of the Continuing Directors who are not officers of the Company
determine to be adequate and in the best interests of the Company, its
stockholders and other relevant constituencies other than the Acquiring
Person, its affiliates and associates (a "Permitted Offer")) or the Board of
Directors declares a 10% stockholder an Adverse Person, proper provision shall
be made so that each holder of a Right, other than Rights
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beneficially owned by the Acquiring Person, Adverse Person or their respective
affiliates or associates, will thereafter have the right for a sixty-day
period (the "Flip-In Right") to receive upon exercise that number of shares of
Common Stock (or of one one-hundredths of a share of Preferred Stock, in the
discretion of the Board) having a then-current market value of two times the
exercise price of the Right. Rights beneficially owned by the Acquiring
Person, Adverse Person or their respective affiliates or associates will be
void upon the occurrence of these events.
EXERCISE OF RIGHTS FOR STOCK OF ACQUIROR.
In the event that, after a person or group has become an Acquiring
Person or been declared an Adverse Person, the Company is acquired in a merger
or other business combination transaction, it is the surviving corporation in
such a merger or business combination, or 50% or more of its consolidated
assets or earning power are sold, in any of these cases with or to (i) an
Acquiring Person, Adverse Person or affiliate or associate or any person
acting on behalf of or in concert with such Acquiring Person, Adverse Person,
affiliate or associate or (ii) any other person, if in such transaction all
holders of Common Stock are not treated alike, then proper provision will be
made so that each holder of a Right will thereafter have the right (the
"Flip-Over Right") to receive, upon the exercise thereof at the then current
exercise price of the Right, that number of shares of common stock of the
acquiring company (which may be the Company, if it is the surviving Company
and its Common Stock remains outstanding and unchanged) which at the time of
such transaction will have a market value of two times the exercise price of
the Right.
ADJUSTMENTS TO EXERCISE PRICE AND STOCK ISSUABLE UPON EXERCISE OF
RIGHTS.
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The Exercise Price payable, and the number of shares of Preferred
Stock, Common Stock or other securities or property issuable upon exercise of
the Rights are subject to adjustment from time to time to prevent dilution (i)
in the event of a stock dividend on, or a subdivision, combination or
reclassification of, the shares of Preferred Stock, (ii) upon the grant to
holders of the shares of Preferred Stock of certain rights or warrants to
subscribe for or purchase shares of Preferred Stock at a price, or securities
convertible into shares of Preferred Stock with a conversion price, less than
the then-current market price of the shares of Preferred Stock or (iii) upon
the distribution to holders of the shares of Preferred Stock of evidences of
indebtedness or assets (excluding regular periodic cash dividends paid out of
earnings or retained earnings or dividends payable in shares of Preferred
Stock) or of subscription rights or warrants (other than those referred to
above).
The number of outstanding Rights and the number of one one-hundredths
of a share of Preferred Stock issuable upon exercise of each Right are also
subject to adjustment in the event of a stock split of the Common Stock or a
stock dividend on the shares of Common Stock payable in Common Stock or
subdivisions, consolidations or combinations of the Common Stock occurring, in
any such case, prior to the Distribution Date.
With certain exceptions, no adjustment in the Exercise Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Exercise Price. No fractional shares of Preferred Stock will be issued
(other than fractions which are integral multiples of one one-hundredth of a
share of Preferred Stock, which may, at the election of the Company, be
evidenced by depository receipts) and in lieu thereof, an adjustment in cash
will be made based on the market price of the shares of Preferred Stock on the
last trading day prior to the date of exercise.
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TERMS OF PREFERRED STOCK.
Stock of Preferred Stock purchasable upon exercise of the Rights will
not be redeemable. Each share of Preferred Stock will be entitled to a minimum
quarterly dividend payment of $1.00 per share but will be entitled to an
aggregate dividend of 100 times the dividend declared per share of Common
Stock. In the event of liquidation, the holders of the Preferred Stock will be
entitled to a minimum preferential liquidation payment of $100 per share but
will be entitled to an aggregate payment of 100 times the payment made per
share of Common Stock. Each share of Preferred Stock will have 100 votes,
voting together with the Common Stock. Finally, in the event of any merger,
consolidation or other transaction in which shares of Common Stock are
exchanged, each share of Preferred Stock will be entitled to receive 100 times
the amount received per share of Common Stock. These rights are protected by
customary antidilution provisions.
Because of the nature of the dividend, liquidation and voting rights
accorded to the Preferred Stock, the value of the one one-hundredth interest
in a share of Preferred Stock purchasable upon exercise of each Right should
approximate the value of one share of Common Stock.
REDEMPTION OF RIGHTS.
At any time prior to the earlier of (i) ten days after an Acquiring
Person becomes such, (ii) ten business days after the declaration of an
Adverse Person, or (iii) the Final Expiration Date, the Board of Directors of
the Company may redeem the Rights in whole, but not in part, at a price of
$.01 per Right (the "Redemption Price"); PROVIDED, HOWEVER, that under certain
circumstances specified in the Rights Agreement, the Rights may not be
redeemed unless there are Continuing Directors in office and such redemption
is approved by a majority of such
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Continuing Directors. After the redemption period has expired, the Company's
right of redemption may be reinstated under the circumstances specified in the
Rights Agreement, which include the concurrence of a majority of the
Continuing Directors, (i) if an Acquiring Person shall have reduced to 10% or
less the number of outstanding shares of Common Stock beneficially owned in a
transaction or series of transactions not involving the Company and not
constituting specified transactions which result in Flip-Over Rights under the
Rights Agreement or (ii) in the event of a transaction of the kind triggering
a Flip-Over Right which does not involve an Acquiring Person or Adverse Person
or any affiliate or associate of such person or any person acting on behalf of
or in concert with an Acquiring Person or Adverse Person in which all holders
of Common Stock (other than the Acquiring Person, Adverse Person or its
affiliates or associates) are treated the same. Immediately upon any
redemption of the Rights, the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption
Price.
EXCHANGE OF RIGHTS.
At any time after any person or group becomes an Acquiring Person or
Adverse Person and prior to the acquisition by such person or group of 50% or
more of the outstanding Common Stock, the Board of Directors of the Company
may exchange the Rights (other than Rights owned by such person or group which
will have become void), in whole or in part, at an exchange ratio of one share
of Common Stock, or one one-hundredth of a share of Preferred Stock (or of a
share of a class or series of the Company's preference stock having equivalent
rights, preferences and privileges), per Right (subject to adjustment).
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AMENDMENT TO THE RIGHTS.
The terms of the Rights may be amended by the Board of Directors of the
Company without the consent of the holders of the Rights, except that from and
after the earlier of the Distribution Date or such time as any person or group
of affiliated or associated persons becomes an Acquiring Person, no such
amendment may adversely affect the interests of the holders of the Rights, any
amendment to lengthen any time periods must be approved by a majority of the
Continuing Directors and be for the purpose of protecting, enhancing or
clarifying the rights of the holders of the Rights and no amendment to
lengthen the redemption period may be made after the Rights are no longer
redeemable.
MISCELLANEOUS.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A
dated August , 1993. A copy of the Rights Agreement is available free of
charge from the Company. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, which is hereby incorporated herein by reference.
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