Exhibit 4.1
INTELLIGENT ELECTRONICS, INC.
and
CHEMICAL MELLON SHAREHOLDER SERVICES L.L.C.,
Rights Agent
______________
Rights Agreement
Dated as of March 22, 1996
TABLE OF CONTENTS
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Page
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SECTION 1. Certain Definitions. . . . . . . . . . . . . . . . 1
SECTION 2. Appointment of Rights Agent. . . . . . . . . . . . 5
SECTION 3. Issue of Rights Certificates . . . . . . . . . . . 5
SECTION 4. Form of Rights Certificates. . . . . . . . . . . . 7
SECTION 5. Countersignature and Registration. . . . . . . . . 8
SECTION 6. Transfer, Split Up, Combination and Exchange of
Rights Certificates: Mutilated, Destroyed, Lost or
Stolen Rights Certificates . . . . . . . . . . . . 9
SECTION 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights . . . . . . . . . . . . . . . . . . 10
SECTION 8. Cancellation and Destruction of Rights
Certificates . . . . . . . . . . . . . . . . . . . 12
SECTION 9. Reservation and Availability of Capital Stock. . . 13
SECTION 10. Preferred Stock Record Date . . . . . . . . . . . 14
SECTION 11. Adjustment of Purchase Price, Number and Kind
of Shares or Number of Rights . . . . . . . . . . 15
SECTION 12. Certificate of Adjusted Purchase Price or
Number of Shares. . . . . . . . . . . . . . . . . 25
SECTION 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power . . . . . . . . . . . . . 26
SECTION 14. Fractional Rights and Fractional Shares . . . . . 29
SECTION 15. Rights of Action. . . . . . . . . . . . . . . . . 30
SECTION 16. Agreement of Rights Holders . . . . . . . . . . . 31
SECTION 17. Rights Certificate Holder Not Deemed a
Shareholder . . . . . . . . . . . . . . . . . . . 32
SECTION 18. Concerning the Rights Agent . . . . . . . . . . . 32
SECTION 19. Merger or Consolidation or Change of Name of
Rights Agent. . . . . . . . . . . . . . . . . . . 32
SECTION 20. Duties of Rights Agent. . . . . . . . . . . . . . 33
SECTION 21. Change of Rights Agent. . . . . . . . . . . . . . 36
SECTION 22. Issuance of New Rights Certificates . . . . . . . 37
SECTION 23. Redemption and Termination. . . . . . . . . . . . 38
SECTION 24. Notice of Certain Events. . . . . . . . . . . . . 38
SECTION 25. Notices . . . . . . . . . . . . . . . . . . . . . 39
SECTION 26. Supplements and Amendments. . . . . . . . . . . . 40
SECTION 27. Successors. . . . . . . . . . . . . . . . . . . . 41
SECTION 28. Determinations and Actions by the Board of
Directors, etc. . . . . . . . . . . . . . . . . . 41
SECTION 29. Benefits of this Agreement. . . . . . . . . . . . 41
SECTION 30. Severability. . . . . . . . . . . . . . . . . . . 42
SECTION 31. Governing Law . . . . . . . . . . . . . . . . . . 42
SECTION 32. Counterparts. . . . . . . . . . . . . . . . . . . 42
SECTION 33. Descriptive Headings. . . . . . . . . . . . . . . 42
SECTION 34. Exchange. . . . . . . . . . . . . . . . . . . . . 42
RIGHTS AGREEMENT
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RIGHTS AGREEMENT dated as of March 22, 1996 (the "Agreement"),
between INTELLIGENT ELECTRONICS, INC., a Pennsylvania corporation (the
"Company") and CHEMICAL MELLON SHAREHOLDER SERVICES L.L.C. (the "Rights
Agent").
WHEREAS, effective March 8, 1996 (the "Rights Dividend
Declaration Date"), the Board of Directors of the Company authorized and
declared a distribution of one right ("Right") for each share of common
stock, par value $.01 per share, of the Company (the "Company Common
Stock") outstanding at the Close of Business (as hereinafter defined) on
March 25, 1996 (the "Record Date"), and has authorized the issuance of one
right (as such number may hereinafter be adjusted pursuant hereto) for each
share of Company Common Stock issued between the Record Date (whether
originally issued or otherwise) and, except as otherwise provided in
Section 22, the Distribution Date (as hereinafter defined), each right
issued in respect of a share of Company Common Stock initially representing
the right to purchase, upon the terms and subject to the conditions
hereinafter set forth, one Unit of Series A Junior Participating Preferred
Stock;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
SECTION 1. Certain Definitions.
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For purposes of this Agreement, the following terms have the
meanings indicated:
(a) "Acquiring Person" means any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan
maintained by the Company or any of its Subsidiaries or any trustee or
fiduciary with respect to such plan acting in such capacity) that shall be
the Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding; provided, however, that the term "Acquiring Person" shall not
include an Exempt Person.
(b) "Affiliate" and "Associate" 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 hereof.
(c) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own," any securities:
(i) of which such Person or any of such Person's
Affiliates or Associates is considered to be a "beneficial owner" under
Rule 13d-3 of the General Rules and Regulations under the Exchange Act (the
"Exchange Act Regulations") as in effect on the date hereof; provided,
however, that a Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own", any securities under this subparagraph (i) as a result
of an agreement, arrangement or understanding to vote such securities if
such agreement, arrangement or understanding (A) arises solely from a
revocable proxy given in response to a proxy or consent solicitation made
pursuant to, and in accordance with, the applicable provisions of the
Exchange Act and the Exchange Act Regulations, and (B) is not reportable by
such Person on Schedule 13D under the Exchange Act (or any comparable or
successor report);
(ii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate of such
other Person) with which such Person (or any of such Person's Affiliates or
Associates) has any agreement, arrangement or understanding (whether or not
in writing), for the purpose of acquiring, holding, voting (except pursuant
to a revocable proxy as described in the proviso to subparagraph (i) of
this paragraph (c) of Section 1) or disposing of such securities; or
(iii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right to acquire
(whether such right is exercisable immediately or only after the passage of
time or upon the satisfaction of conditions) pursuant to any agreement,
arrangement or understanding (whether or not in writing) or upon the
exercise of conversion rights, exchange rights, rights, warrants or
options, or otherwise; provided, however, that under this paragraph (c) a
Person shall not be deemed the "Beneficial Owner" of, or to "beneficially
own", (A) securities tendered pursuant to a tender or exchange offer made
in accordance with Exchange Act Regulations by such Person or any of such
Person's Affiliates or Associates until such tendered securities are
accepted for purchase or exchange, (B) securities that may be issued upon
exercise of Rights at any time prior to the occurrence of a Triggering
Event, or (C) securities that may be issued upon exercise of Rights from
and after the occurrence of a Triggering Event, which 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(c) or Section 22 (the
"Original Rights") or pursuant to Section 11(i) in connection with an
adjustment made with respect to any Original Rights.
(d) "Business Day" means any day other than a Saturday,
Sunday or a day on which banking institutions in New York City are
authorized or obligated by law or executive order to be closed.
(e) "Close of Business" on any given date means 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.
(f) "Common Stock" of any Person other than the Company
means the capital stock of such Person with the greatest voting power, or,
if such Person shall have no capital stock, the equity securities or other
equity interest having power to control or direct the management of such
Person.
(g) "Company Common Stock" has the meaning set forth in the
Recital.
(h) "Distribution Date" has the meaning set forth in
Section 3(a).
(i) "Exempt Person" means:
(1) Company, any Subsidiary of the Company, any
employee benefit plan or employee stock plan of the Company or of any
Subsidiary of the Company, or any person or entity organized, appointed,
established or holding Company Common Stock for or pursuant to the terms of
any such plan; and
(2) any Person who would otherwise become an Acquiring
Person solely by virtue of a reduction in the number of outstanding shares
of Company Common Stock; provided, however, that such Person shall not be
an Exempt Person if, subsequent to such reduction, such Person shall become
the Beneficial Owner of any additional shares of Company Common Stock.
(j) "Expiration Date" has the meaning set forth in Section
7(a).
(k) "Independent Director" means a member of the Board of
Directors of the Company who is not an officer or employee of the Company,
who is not an Acquiring Person or an Affiliate or Associate of an Acquiring
Person or a representative or nominee of an Acquiring Person or of any such
Affiliate or Associate, and who either (i) was a member of the Board of
Directors of the Company prior to the date hereof or (ii) subsequently
became a director of the Company and whose election or nomination for
election is approved or recommended by a vote of a majority of the Board of
Directors of the Company, which majority includes a majority of the
Independent Directors then on the Board of Directors.
(l) "Person" means any individual, partnership, firm,
corporation, association, trust, unincorporated organization or other
entity, as well as any syndicate or group deemed to be a person under
Section 14(d)(2) of the Exchange Act.
(m) "Preferred Stock" the Series A Junior Participating
Preferred Stock, par value $.01 per share, of the Company having the voting
powers, designation, preferences and relative, participating, optional or
other special rights and qualifications, limitations and restrictions
described in the Certificate of Designation set forth as Exhibit B.
(n) "Purchase Price" has the meaning set forth in Section
7(b).
(o) "Record Date" has the meaning set forth in the Recital.
(p) "Right" has the meaning set forth in the Recital.
(q) "Rights Certificate" has the meaning set forth in
Section 3(a).
(r) "Rights Dividend Declaration Date" has the meaning set
forth in the Recital.
(s) "Section 11(a)(ii) Event" means any event described in
Section 11(a)(ii)(A), (B) or (C).
(t) "Section 13 Event" means any event described in clause
(x), (y) or (z) of Section 13(a).
(u) "Stock Acquisition Date" means the first date of public
announcement (including, without limitation, the filing of any report
pursuant to Section 13(d) of the Exchange Act) by the Company or an
Acquiring Person that an Acquiring Person has become such.
(v) "Subsidiary" means, with reference to any Person, any
other Person of which an amount of voting securities or equity interests
sufficient to elect at least a majority of the directors or equivalent
governing body of such other Person is beneficially owned, directly or
indirectly, by such Person, or otherwise controlled by such first-mentioned
Person.
(w) "Summary of Rights" has the meaning set forth in
Section 3(b).
(x) "Triggering Event" means any Section 11(a)(ii) Event or
any Section 13 Event.
(y) "Unit" has the meaning set forth in Section 7(b).
SECTION 2. Appointment of Rights Agent.
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The Company hereby appoints the Rights Agent to act as agent for
the Company in accordance with the terms and conditions hereof, and the
Rights Agent hereby accepts such appointment. With the consent of the
Rights Agent, the Company may from time to time appoint such Co-Rights
Agents as it may deem necessary or desirable.
SECTION 3. Issue of Rights Certificates.
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(a) Until the earlier of (i) the Close of Business on the
tenth Business Day after the Stock Acquisition Date, and (ii) the Close of
Business on the tenth Business Day (or such later date as may be determined
by action of a majority of the Independent Directors prior to such time and
of which the Company will give the Rights Agent prompt written notice)
after the date that a tender or exchange offer by any Person (other than
the Company, any Subsidiary of the Company, any employee benefit plan
maintained by the Company or any of its Subsidiaries or any trustee or
fiduciary with respect to such plan acting in such capacity) is first
published or sent or given within the meaning of Rule 14d-4(a) of the
Exchange Act Regulations or any successor rule, if upon consummation
thereof such Person would be the Beneficial Owner of 15% or more of the
shares of Company Common Stock then outstanding (the earlier of (i) and
(ii) above being the "Distribution Date"), (x) the Rights will be evidenced
(subject to the provisions of paragraph (b) of this Section 3) by the
certificates for shares of Company Common Stock registered in the names of
the holders of shares of Company Common Stock as of and subsequent to the
Record Date (which certificates for shares of Company Common Stock shall be
deemed also to be certificates for Rights) and not by separate
certificates, and (y) the Rights will be transferable only in connection
with the transfer of the underlying shares of Company Common Stock
(including a transfer to the Company). As soon as practicable after the
Distribution Date, the Rights Agent will send by first-class, insured,
postage prepaid mail, to each record holder of shares of Company Common
Stock as of the Close of Business on the Distribution Date, at the address
of such holder shown on the records of the Company, one or more rights
certificates, in substantially the form of Exhibit A (the "Rights
Certificates"), evidencing one Right for each share of Company Common Stock
so held, subject to adjustment as provided herein. In the event that an
adjustment in the number of Rights per share of Company Common Stock has
been made pursuant to Section 11(p), at the time of distribution of the
Rights Certificates, the Company may make the necessary and appropriate
rounding adjustments (in accordance with Section 14(a) hereof) so that
Rights Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Rights. As of and
after the Distribution Date, the Rights will be evidenced solely by such
Rights Certificates.
(b) As promptly as practicable following the Record Date,
the Company will send a copy of a Summary of Rights to Purchase Preferred
Stock; in substantially the form attached hereto as Exhibit C (the "Summary
of Rights"), by first-class, postage prepaid mail, to each record holder of
shares of Company 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.
(c) Rights shall, without any further action, be issued in
respect of all shares of Company Common Stock that are issued (including
any shares of Company Common Stock held in treasury) after the Record Date
(but prior to the earlier of the Distribution Date and the Expiration
Date), and certificates evidencing such shares of Company Common Stock
issued after the Record Date shall bear the following legend:
"This certificate also evidences and entitles the
holder hereof to certain Rights as set forth in the
Rights Agreement between Intelligent Electronics, Inc.
(the "Company") and Chemical Mellon Shareholder
Services L.L.C. (the "Rights Agent") dated as of March
22, 1996 (the "Rights Agreement), the terms of which
are hereby incorporated herein by reference and a copy
of which is on file at the principal office of the
stock transfer administration office of the Rights
Agent. Under certain circumstances, as set forth in
the Rights Agreement, such Rights will be evidenced by
separate certificates and will no longer be evidenced
by this certificate. The Company will mail to the
holder of this certificate a copy of the Rights
Agreement, as in effect on the date of mailing, without
charge promptly after receipt of a written request
therefor. Under certain circumstances set forth in the
Rights Agreement, Rights issued to, or held by, any
Person who is, was or becomes an Acquiring Person or
any Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement), whether currently
held by or on behalf of such Person or by any
subsequent holder, may become null and void."
With respect to certificates evidencing shares of Company Common Stock
(whether or not such certificates include the foregoing legend or have
appended to them the Summary of Rights), until the earlier of the
Distribution Date and the Expiration Date, the Rights associated with the
shares of Company Common Stock evidenced by such certificates shall be
evidenced by such certificates alone and registered holders of the shares
of Company Common Stock shall also be the registered holders of the
associated Rights, and the transfer of any of such certificates shall also
constitute the transfer of the Rights associated with the shares of Company
Common Stock evidenced by such certificates.
SECTION 4. Form of Rights Certificates.
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(a) The Rights Certificates (and the forms of election to
purchase, assignment and certificate to be printed on the reverse thereof)
shall each be substantially in the form set forth in Exhibit A 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 any
rule or regulation thereunder or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed or to conform
to usage. Subject to the provisions of Section 11 and Section 22, the
Rights Certificates, whenever distributed, shall be dated as of the Record
Date and on their face shall entitle the holders thereof to purchase such
number of Units of Preferred Stock as shall be set forth therein at the
price set forth therein, but the amount and type of securities, cash or
other assets that may be acquired upon the exercise of each Right and the
Purchase Price thereof shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant hereto that
represents Rights beneficially owned by: (i) an Acquiring Person or any
Associate or Affiliate of an Acquiring Person, (ii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) that becomes a
transferee after the Acquiring Person becomes such, or (iii) a transferee
of an Acquiring Person (or of any such Associate or Affiliate) that becomes
a transferee prior to or concurrently with the Acquiring Person becoming
such and that receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person (or any such
Associate or Affiliate) to holders of equity interests in such Acquiring
Person (or such Associate or Affiliate) or to any Person with whom such
Acquiring Person (or such Associate or Affiliate) has any continuing
agreement, arrangement or understanding regarding either the transferred
Rights, shares of Company Common Stock or the Company or (B) a transfer
that a majority of the Independent Directors has determined to be part of a
plan, arrangement or understanding that has as a primary purpose or effect
the avoidance of Section 7(e) shall, upon the written direction of a
majority of the Independent Directors, contain (to the extent feasible) the
following legend:
"The Rights represented by this Rights Certificate
are or were beneficially owned by a Person who was or
became an Acquiring Person or an Affiliate or Associate
of an Acquiring Person (as such terms are defined in
the Rights Agreement). Accordingly, this Rights
Certificate and the Rights represented hereby may
become null and void in the circumstances specified in
Section 7(e) of such Agreement."
SECTION 5. Countersignature and Registration.
---------------------------------
(a) Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board, the President or one of its Vice
Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of
these officers on the Rights Certificates may be manual or facsimile.
Rights Certificates bearing the manual or facsimile signatures of the
individuals who were at any time the proper officers of the Company shall
bind the Company, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the countersignature of such Rights
Certificates or did not hold such offices at the date of such Rights
Certificates. No Rights Certificate shall be entitled to any benefit under
this Agreement or be valid for any purpose unless there appears on such
Rights Certificate a countersignature duly executed by the Rights Agent by
manual signature of an authorized signatory, and such countersignature upon
any Rights Certificate shall be conclusive evidence, and the only evidence,
that such Rights Certificate has been duly countersigned as required
hereunder.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its office designated for surrender of Rights
Certificates upon exercise or transfer, books for registration and
registration of transfer of the Rights Certificates issued hereunder. Such
books shall show the name and address of each holder of the Rights
Certificates, the number of Rights evidenced on its face by each Rights
Certificate and the date of each Rights Certificate.
SECTION 6. Transfer, Split Up, Combination and Exchange of
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Rights Certificates: Mutilated, Destroyed, Lost or Stolen Rights
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Certificates.
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(a) Subject to the provisions of Sections 4(b), 7(e) and
14, at any time after the Close of Business on the Distribution Date, and
at or prior to the Close of Business on the Expiration Date, any Rights
Certificate or Certificates may be transferred, split up, combined or
exchanged for another Rights Certificate or Certificates, entitling the
registered holder to purchase a like number of Units of Preferred Stock
(or, following a Triggering Event, other securities, cash or other assets,
as the case may be) as the Rights Certificate or Certificates surrendered
then entitled such holder to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Rights Certificate or
Certificates shall make such request in writing delivered to the Rights
Agent, and shall surrender the Rights Certificate or Certificates to be
transferred, split up, combined or exchanged at the office of the Rights
Agent designated for such purpose. Neither the Rights Agent nor the
Company shall be obligated to take any action whatsoever with respect to
the transfer of any such surrendered Rights Certificate until the
registered holder shall have completed and executed the certificate set
forth in the form of assignment on the reverse side of such Rights
Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) of the Rights
represented by such Rights Certificate or Affiliates or Associates thereof
as the Company shall reasonably request; whereupon the Rights Agent shall,
subject to the provisions of Section 4(b), Section 7(e) and Section 14,
countersign and deliver to the Person entitled thereto, a Rights
Certificate or Rights Certificates, as the case may be, as so requested.
The Company may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer,
split up, combination or exchange of Rights Certificates.
(b) If a Rights Certificate shall be mutilated, lost,
stolen or destroyed, upon request by the registered holder of the Rights
represented thereby and upon payment to the Company and the Rights Agent of
all reasonable expenses incident thereto, there shall be issued, in
exchange for and upon cancellation of the mutilated Rights Certificate, or
in substitution for the lost, stolen or destroyed Rights Certificate, a new
Rights Certificate, in substantially the form of the prior Rights
Certificate, of like tenor and evidencing the equivalent number of Rights,
but, in the case of loss, theft or destruction, only upon receipt of
evidence satisfactory to the Company and the Rights Agent of such loss,
theft or destruction of such Rights Certificate and, if requested by the
Company or the Rights Agent, indemnity also satisfactory to it.
SECTION 7. Exercise of Rights; Purchase Price; Expiration Date
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of Rights.
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(a) Prior to the earlier of (i) the Close of Business on
the tenth anniversary hereof (the "Final Expiration Date"), and (ii) the
time at which the Rights are redeemed as provided in Section 23 (the
earlier of (i) and (ii) being the "Expiration Date"), the registered holder
of any Rights Certificate may, subject to the provisions of Sections 7(e)
and 9(c), exercise the Rights evidenced thereby in whole or in part at any
time after the Distribution Date upon surrender of the Rights Certificate,
with the form of election to purchase and the certificate on the reverse
side thereof duly executed, to the Rights Agent at the office of the Rights
Agent designated for such purpose, together with payment of the aggregate
Purchase Price (as hereinafter defined) for the number of Units of
Preferred Stock (or, following a Triggering Event, other securities, cash
or other assets, as the case may be) for which such surrendered Rights are
then exercisable.
(b) The purchase price for each one one-thousandth of a
share (each such one one-thousandth of a share being a "Unit") of Preferred
Stock upon exercise of Rights shall be $28.00, subject to adjustment from
time to time as provided in Sections 11 and 13(a) (such purchase price, as
so adjusted, being the "Purchase Price"), and shall be payable in
accordance with paragraph (c) below.
(c) As promptly as practicable following the occurrence of
the Distribution Date, the Company shall deposit with a corporation in good
standing organized under the laws of the United States or any State of the
United States, 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 (such institution being the "Depositary
Agent") certificates evidencing the shares of Preferred Stock that may be
acquired upon exercise of the Rights and shall cause such Depositary Agent
to enter into an agreement pursuant to which the Depositary Agent shall
issue receipts evidencing interests in the shares of Preferred Stock so
deposited. Upon receipt of a Rights Certificate evidencing exercisable
Rights, with the form of election to purchase and the certificate duly
executed, accompanied by payment, with respect to each Right so exercised,
of the Purchase Price for the Units of Preferred Stock (or, following a
Triggering Event, other securities, cash or other assets, as the case may
be) to be purchased thereby as set forth below and an amount equal to any
applicable transfer tax or evidence satisfactory to the Company of payment
of such tax, the Rights Agent shall, subject to Section 20(k), thereupon
promptly (i) requisition from the Depositary Agent depositary receipts
evidencing such number of Units of Preferred Stock as are to be purchased
and the Company will direct the Depositary Agent to comply with such
request, (ii) requisition from the Company the amount of cash, if any, to
be paid in lieu of fractional shares in accordance with Section 14,
(iii) after receipt of such depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such
holder, and (iv) after receipt thereof, deliver such cash, if any, to or
upon the order of the registered holder of such Rights Certificate. In the
event that the Company is obligated to issue Company Common Stock, other
securities of the Company, pay cash and/or distribute other property
pursuant to Section 11(a), the Company will make all arrangements necessary
so that such Company Common Stock, other securities, cash and/or other
property are available for distribution by the Rights Agent, if and when
appropriate. The payment of the Purchase Price (as such amount may be
reduced pursuant to Section 11(a)(iii) hereof) may be made in cash or by
certified or bank check or money order payable to the order of the Company.
(d) In case the registered holder of any Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing the Rights remaining unexercised shall be issued by
the Rights Agent and delivered to, or upon the order of, the registered
holder of such Rights Certificate, registered in such name or names as may
be designated by such holder, subject to the provisions of Section 14.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of any Section 11(a)(ii)
Event, any Rights beneficially owned by (i) an Acquiring Person or any
Associate or Affiliate of an Acquiring Person, (ii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) that becomes a
transferee after the Acquiring Person becomes such, or (iii) a transferee
of an Acquiring Person (or of any such Associate or Affiliate) that becomes
a transferee prior to or concurrently with the Acquiring Person becoming
such and that receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person (or any such
Associate or Affiliate) to holders of equity interests in such Acquiring
Person (or any such Associate or Affiliate) or to any Person with whom the
Acquiring Person (or such Associate or Affiliate) has any continuing
agreement, arrangement or understanding regarding the transferred Rights,
shares of Company Common Stock or the Company or (B) a transfer that a
majority of the Independent Directors has determined to be part of a plan,
arrangement or understanding that has as a primary purpose or effect the
avoidance of this Section 7(e), shall be null and void without any further
action, and no holder of such Rights shall have any rights whatsoever with
respect to such Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to ensure that the
provisions of this Section 7(e) and Section 4(b) are complied with, but
shall have no liability to any holder of Rights or any other Person as a
result of its failure to make any determination under this Section 7(e) or
such Section 4(b) with respect to an Acquiring Person or its Affiliates,
Associates or transferees.
(f) Notwithstanding anything in this Agreement or any
Rights Certificate to the contrary, neither the Rights Agent nor the
Company shall be obligated to undertake any action with respect to a
registered holder upon the occurrence of any purported exercise by such
registered holder unless such registered holder shall have (i) completed
and executed the certificate following the form of election to purchase set
forth on the reverse side of the Rights Certificate surrendered for such
exercise, and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) of the Rights evidenced by
such Rights Certificate or Affiliates or Associates thereof as the Company
shall reasonably request.
SECTION 8. Cancellation and Destruction of Rights Certificates.
---------------------------------------------------
All Rights Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the
Company or 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 Rights Certificates shall be issued in lieu
thereof except as expressly permitted by this Agreement. The Company shall
deliver to the Rights Agent for cancellation and retirement, and the Rights
Agent shall so cancel and retire, any Rights Certificates acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall
deliver all canceled Rights Certificates to the Company, or shall, at the
written request of the Company, destroy such canceled Rights Certificates,
and in such case shall deliver a certificate of destruction thereof to the
Company.
SECTION 9. Reservation and Availability of Capital Stock.
---------------------------------------------
(a) The Company shall at all times prior to the Expiration
Date cause to be reserved and kept available, out of its authorized and
unissued shares of Preferred Stock, the number of shares of Preferred Stock
that, as provided in this Agreement, will be sufficient to permit the
exercise in full of all outstanding Rights. Upon the occurrence of any
events resulting in an increase in the aggregate number of shares of
Preferred Stock (or other equity securities of the Company) issuable upon
exercise of all outstanding Rights above the number then reserved, the
Company shall make appropriate increases in the number of shares so
reserved.
(b) If the shares of Preferred Stock to be issued and
delivered upon the exercise of the Rights may be listed on any national
securities exchange, the Company shall during the period from the
Distribution Date through the Expiration Date use its best efforts to cause
all securities reserved for such issuance to be listed on such exchange
upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts (i) as soon as
practicable following the occurrence of a Section 11 (a)(ii) Event and a
determination by the Company in accordance with Section 11(a)(iii) of the
consideration to be delivered by the Company upon exercise of the Rights
or, if so required by law, as soon as practicable following the
Distribution Date (such date being the "Registration Date"), to file a
registration statement on an appropriate form under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the securities
that may be acquired upon exercise of the Rights (the "Registration
Statement"), (ii) to cause the Registration Statement to become effective
as soon as practicable after such filing, (iii) to cause the Registration
Statement to continue to be effective (and to include a prospectus
complying with the requirements of the Securities Act) until the earlier of
(A) the date as of which the Rights are no longer exercisable for the
securities covered by the Registration Statement, and (B) the Expiration
Date and (iv) to take as soon as practicable following the Registration
Date such action as may be required to ensure that any acquisition of
securities upon exercise of the Rights complies with any applicable state
securities or "blue sky" laws.
(d) The Company shall take such action as may be necessary
to ensure that all shares of Preferred Stock (and, following the occurrence
of a Triggering Event, any other securities that may be delivered upon
exercise of Rights) shall be, at the time of delivery of the certificates
or depositary receipts for such securities, duly and validly authorized and
issued and fully paid and non-assessable.
(e) The Company shall pay any documentary, stamp or
transfer tax imposed in connection with the issuance or delivery of the
Rights Certificates or upon the exercise of Rights; provided, however, that
the Company shall not be required to pay any such tax imposed in connection
with the issuance or delivery of Units of Preferred Stock, or any
certificates or depositary receipts for such Units of Preferred Stock (or,
following the occurrence of a Triggering Event, any other securities, cash
or assets, as the case may be) to any person other than the registered
holder of the Rights Certificates evidencing the Rights surrendered for
exercise. The Company shall not be required to issue or deliver any
certificates or depositary receipts for Units of Preferred Stock (or,
following the occurrence of a Triggering Event, any other securities, cash
or assets, as the case may be) to, or in a name other than that of, the
registered holder upon the exercise of any Rights until any such tax shall
have been paid (any such tax being payable by the holder of such Rights
Certificate at the time of surrender) or until it has been established to
the Company's satisfaction that no such tax is due.
SECTION 10. Preferred Stock Record Date.
---------------------------
Each Person in whose name any certificate for Units of Preferred
Stock (or, following the occurrence of a Triggering Event, other
securities) is issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of the Units of Preferred Stock
(or, following the occurrence of a Triggering Event, other securities)
evidenced thereby on, and such certificate shall be dated, the date upon
which the Rights Certificate evidencing such Rights was duly surrendered
and payment of the Purchase 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, following the occurrence of a
Triggering Event, other securities) transfer books of the Company are
closed, such Person shall be deemed to have become the record holder of
such securities on, and such certificate shall be dated, the next
succeeding Business Day on which the Preferred Stock (or, following the
occurrence of a Triggering Event, other securities) transfer books of the
Company are open and, further provided, however, that if delivery of Units
of Preferred Stock is delayed pursuant to Section 9(c), such Persons shall
be deemed to have become the record holders of such Units of Preferred
Stock only when such Units first become deliverable. Prior to the exercise
of the Rights evidenced thereby, the holder of a Rights Certificate shall
not be entitled to any rights of a shareholder of the Company with respect
to securities for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions
or to exercise any preemptive rights, and shall not be entitled to receive
any notice of any proceedings of the Company, except as provided herein.
SECTION 11. Adjustment of Purchase Price, Number and Kind of
------------------------------------------------
Shares or Number of Rights.
--------------------------
The Purchase Price, the number and kind of securities covered by
each Right and the number of Rights outstanding are subject to adjustment
from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after
the date of this Agreement (A) declare a dividend on the Preferred Stock
payable in shares of Preferred Stock, (B) subdivide the outstanding shares
of Preferred Stock, (C) combine the outstanding shares of Preferred Stock
into a smaller number of shares, 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), the Purchase Price in effect at the time of
the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of
shares of Preferred Stock or capital stock, as the case may be, issuable on
such date upon exercise of the Rights, shall be proportionately adjusted so
that the holder of any Right exercised after such time shall be entitled to
receive, upon payment of the Purchase Price then in effect, the aggregate
number and kind of shares of Preferred Stock or capital stock, as the case
may be, which, if such Right had been exercised immediately prior to such
date, such holder would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs that would require an adjustment
under both this Section 11(a)(i) and Section 11(a)(ii), the adjustment
provided for in this Section 11(a)(i) shall be in addition to, and shall be
made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) In the event:
(A) any Acquiring Person or any Associate or
Affiliate of any Acquiring Person, at any time after the date hereof,
directly or indirectly, (1) shall merge into the Company or otherwise
combine with the Company and the Company shall be the continuing or
surviving corporation of such merger or combination and Company Common
Stock shall remain outstanding and unchanged, (2) shall, in one transaction
or a series of transactions, transfer any assets to the Company or to any
of its Subsidiaries in exchange (in whole or in part) for shares of Company
Common Stock, for other equity securities of the Company or any such
Subsidiary, or for securities exercisable for or convertible into shares of
equity securities of the Company or any of its Subsidiaries (whether
Company Common Stock or otherwise) or otherwise obtain from the Company or
any of its Subsidiaries, with or without consideration, any additional
shares of such equity securities or securities exercisable for or
convertible into such equity securities (other than pursuant to a pro rata
distribution to all holders of Company Common Stock), (3) shall sell,
purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire
or dispose of, in one transaction or a series of transactions, to, from or
with the Company or any of its Subsidiaries or any employee benefit plan
maintained by the Company or any of its Subsidiaries or any trustee or
fiduciary with respect to such plan acting in such capacity, assets
(including securities) on terms and conditions less favorable to the
Company or such Subsidiary or plan than those that could have been obtained
in arm's-length negotiations with an unaffiliated third party, other than
pursuant to a transaction set forth in Section 13(a), (4) shall sell,
purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire
or dispose of, in one transaction or a series of transactions, to, from or
with the Company or any of the Company's Subsidiaries or any employee
benefit plan maintained by the Company or any of its Subsidiaries or any
trustee or fiduciary with respect to such plan acting in such capacity
(other than transactions, if any, consistent with those engaged in, as of
the date hereof, by the Company and such Acquiring Person or such Associate
or Affiliate), assets (including securities) having an aggregate fair
market value of more than $5 million, other than pursuant to a transaction
set forth in Section 13(a), (5) shall sell, purchase, lease, exchange,
mortgage, pledge, transfer or otherwise acquire or dispose of, in one
transaction or a series of transactions, to, from or with the Company or
any of its Subsidiaries or any employee benefit plan maintained by the
Company or any of its Subsidiaries or any trustee or fiduciary with respect
to such plan acting in such capacity, any material trademark or material
service ▇▇▇▇, other than pursuant to a transaction set forth in Section
13(a), (6) shall receive, or any designee, agent or representative of such
Acquiring Person or any Affiliate or Associate of such Acquiring Person
shall receive, any compensation from the Company or any of its Subsidiaries
other than compensation for full-time employment as a regular employee at
rates in accordance with the Company's (or its Subsidiaries') past
practices, or (7) shall receive the benefit, directly or indirectly (except
proportionately as a holder of Company Common Stock or as required by law
or governmental regulation), of any loans, advances, guarantees, pledges or
other financial assistance or any tax credits or other tax advantage
provided by the Company or any of its Subsidiaries or any employee benefit
plan maintained by the Company or any of its Subsidiaries or any trustee or
fiduciary with respect to such plan acting in such capacity; or
(B) any Person shall become an Acquiring Person,
other than pursuant to any transaction set forth in Section 13(a); or
(C) during such time as there is an Acquiring
Person, there shall be any reclassification of securities (including any
reverse stock split), or recapitalization of the Company, or any merger or
consolidation of the Company with any of its Subsidiaries or any other
transaction or series of transactions involving the Company or any of its
Subsidiaries, other than a transaction or transactions to which the
provisions of Section 13(a) apply (whether or not with or into or otherwise
involving an Acquiring Person), which has the effect, directly or
indirectly, of increasing by more than 1% the proportionate share of the
outstanding shares of any class of equity securities of the Company or any
of its Subsidiaries that is directly or indirectly beneficially owned by
any Acquiring Person or any Associate or Affiliate of any Acquiring Person;
then, immediately upon the date of the occurrence of an event described in
Section 11 (a)(ii)(A)-(C) (a "Section 11(a)(ii) Event"), 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 the right to receive, upon
exercise thereof at the then current Purchase Price in accordance with the
terms of this Agreement, in lieu of the number of Units of Preferred Stock
for which a Right was exercisable immediately prior to the first occurrence
of a Section 11 (a)(ii) Event, such number of Units of Preferred Stock as
shall equal the result obtained by (x) multiplying the then current
Purchase Price by the then number of Units of Preferred Stock for which a
Right was exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event (such product thereafter being, for all purposes of
this Agreement other than Section 13, the "Purchase Price"), and (y)
dividing that product by 50% of the then current market price (determined
pursuant to Section 11(d) hereof) per Unit of Preferred Stock on the date
of such first occurrence (such Units of Preferred Stock being the
"Adjustment Shares").
(iii) In the event that the number of shares of
Preferred Stock that are authorized by the Company's Certificate of
Incorporation but not outstanding or reserved for issuance for purposes
other than upon exercise of the Rights is not sufficient to permit the
exercise in full of the Rights in accordance with the foregoing
subparagraph (ii) of this Section 11(a), the Company, by the vote of a
majority of the Independent Directors, shall: (A) determine the excess of
(1) the value of the Adjustment Shares issuable upon the exercise of a
Right (the "Current Value") over (2) the Purchase Price (such excess being
the "Spread"), and (B) with respect to each Right, make adequate provision
to substitute for such Adjustment Shares, upon payment of the applicable
Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3)
Company Common Stock or other equity securities of the Company (including,
without limitation, shares, or units of shares, of preferred stock (such
other shares being "preferred stock equivalents")), (4) debt securities of
the Company, (5) other assets, or (6) any combination of the foregoing,
having an aggregate value equal to the Current Value, where such aggregate
value has been determined by a majority of the Independent Directors, after
receiving advice from a nationally recognized investment banking firm;
provided, however, that if the Company shall not have made adequate
provision to deliver value pursuant to clause (B) above within 30 days
following the later of (x) the first occurrence of a Section 11(a)(ii)
Event and (y) the date on which the Company's right of redemption pursuant
to Section 23(a) expires (the later of (x) and (y) being referred to herein
as the "Section 11(a)(iii) Trigger Date"), then the Company shall be
obligated to deliver, upon the surrender for exercise of a Right and
without requiring payment of the Purchase Price, Units of Preferred Stock
(to the extent available) and then, if necessary, cash, which Units of
Preferred Stock and/or cash shall have an aggregate value equal to the
Spread. To the extent that the Company determines that some action need be
taken pursuant to the first sentence of this Section 11(a)(iii), the
Company shall provide, subject to Section 7(e), that such action shall
apply uniformly to all outstanding Rights. For purposes of this Section
11(a)(iii), the value of a Unit of Preferred Stock shall be the current
market price (as determined pursuant to Section 11(d) hereof) per Unit of
Preferred Stock on the Section 11(a)(iii) Trigger Date and the value of any
preferred stock equivalent shall be deemed to have the same value as the
Preferred Stock on such date.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Stock
entitling them to subscribe for or purchase (for a period expiring within
45 days after such record date) shares of Preferred Stock (or shares having
substantially the same rights, privileges and preferences as shares of
Preferred Stock ("Equivalent Preferred Stock")) or securities convertible
into Preferred Stock or Equivalent Preferred Stock at a price per share of
Preferred Stock or per share of Equivalent Preferred Stock (or having a
conversion price per share, if a security convertible into Preferred Stock
or Equivalent Preferred Stock) less than the current market price (as
determined pursuant to Section 11(d) hereof) per share of Preferred Stock
on such record date, the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the sum of the number of shares of Preferred Stock outstanding on
such record date plus the number of shares of Preferred Stock that the
aggregate offering price of the total number of shares of Preferred Stock
and/or Equivalent Preferred Stock so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be offered)
would purchase at such current market price, and the denominator of which
shall be the number of shares of Preferred Stock outstanding on such record
date plus the number of additional shares of Preferred Stock and/or
Equivalent Preferred Stock to be offered for subscription or purchase (or
into which the convertible securities so to be offered are initially
convertible). In case such subscription price may be paid by delivery of
consideration part or all of which may be in a form other than cash, the
value of such consideration shall be as determined in good faith by a
majority of the Independent Directors, whose determination shall be
described in a statement filed with the Rights Agent and shall be binding
on the Rights Agent and the holders of the Rights, shares of Preferred
Stock owned by or held for the account of the Company or any Subsidiary
shall not be deemed outstanding for the purpose of any such computation.
Such adjustment shall be made successively whenever such a record date is
fixed, and in the event that such rights or warrants are not so issued the
Purchase Price shall be adjusted to be the Purchase Price which would then
be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of shares of Preferred Stock (including any
such distribution made in connection with a consolidation or merger in
which the Company is the continuing corporation) of evidences of
indebtedness, cash (other than a regular quarterly cash dividend out of the
earnings or retained earnings of the Company), assets (other than a
dividend payable in shares of Preferred Stock, but including any dividend
payable in stock other than Preferred Stock) or subscription rights or
warrants (excluding those referred to in Section 11(b) hereof), the
Purchase Price to be in effect after such record date shall be determined
by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the current
market price (as determined pursuant to Section 11(d) hereof) per share of
Preferred Stock on such record date less the fair market value (as
determined in good faith by a majority of the Independent Directors, whose
determination shall be described in a statement filed with the Rights Agent
and shall be binding on the Rights Agent and the holder of the Rights) of
the cash, assets or evidences of indebtedness so to be distributed or of
such subscription rights or warrants distributable in respect of a share of
Preferred Stock and the denominator of which shall be such current market
price (as determined pursuant to Section 11(d) hereof) per share of
Preferred Stock. Such adjustments shall be made successively whenever such
a record date is fixed, and in the event that such distribution is not so
made, the Purchase Price shall be adjusted to be the Purchase Price which
would have been in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the
"current market price" per share of Company Common Stock or Common Stock on
any date shall be deemed to be the average of the daily closing prices per
share of such shares for the 10 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date; provided, however,
that if prior to the expiration of such requisite ten Trading Day-period
the issuer announces either (A) a dividend or distribution on such shares
payable in such shares or securities convertible into such shares (other
than the Rights), or (B) any subdivision, combination or reclassification
of such shares, then, following the ex-dividend date for such dividend or
the record date for such subdivision, as the case may be, the "current
market price" shall be properly adjusted to take into account such event.
The closing price for each day shall be, if the shares are listed and
admitted to trading on a national securities exchange, as reported in the
principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which
such shares are listed or admitted to trading or, if such shares 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 the National
Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") or such other system then in use, or, if on any such date such
shares are not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a
market in such shares selected by a majority of the Independent Directors.
If on any such date no market maker is making a market in such shares, the
fair value of such shares on such date as determined in good faith by a
majority of the Independent Directors shall be used. If such shares are
not publicly held or not so listed or traded, "current market price" per
share shall mean the fair value per share as determined in good faith by a
majority of the Independent Directors, whose determination shall be
described in a statement filed with the Rights Agent and shall be
conclusive for all purposes. The term "Trading Day" shall mean, if such
shares are listed or admitted to trading on any national securities
exchange, a day on which the principal national securities exchange on
which such shares are listed or admitted to trading is open for the
transaction of business or, if such shares are not so listed or admitted, a
Business Day.
(ii) For the purpose of any computation hereunder, the
"current market price" per share of Preferred Stock shall be determined in
the same manner as set forth above for Company Common Stock in clause (i)
of this Section 11(d) (other than the fourth sentence thereof). If the
current market price per share of Preferred Stock cannot be determined in
the manner provided above or if the Preferred Stock is not publicly held or
listed or traded in a manner described in clause (i) of this Section 11(d),
the "current market price" per share of Preferred Stock shall be
conclusively deemed to be an amount equal to 1,000 (as such amount may be
appropriately adjusted for such events as stock splits, stock dividends and
recapitalizations with respect to Company Common Stock occurring after the
date of this Agreement) multiplied by the current market price per share of
Company Common Stock. If neither Company Common Stock nor Preferred Stock
is publicly held or so listed or traded, "current market price" per share
of the Preferred Stock shall mean the fair value per share as determined in
good faith by a majority of the Independent Directors, whose determination
shall be described in a statement filed with the Rights Agent and shall be
binding on the Rights Agent and the holders of the Rights. For all
purposes of this Agreement, the "current market price" of a Unit of
Preferred Stock shall be equal to the "current market price" of one share
of Preferred Stock divided by 1,000.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment
would require an increase or decrease of at least 1% in the Purchase Price;
provided, however, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section
11 shall be made to the nearest cent or to the nearest one-thousandth of a
share of Company Common Stock or Common Stock or other share or hundred-
thousandth of a share of Preferred Stock, 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 that mandates such adjustment
and (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a)(ii) or 13(a) the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock other than
Preferred Stock, thereafter the number of such other shares so receivable
upon exercise of any Right and the Purchase Price thereof shall be subject
to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Preferred
Stock contained in Sections 11(a) through and including (e), and (g)
through and including (m), and the provisions of Sections 7, 9, 10, 13 and
14 with respect to the Preferred Stock shall apply on like terms to any
such other shares.
(g) All Rights originally issued by the Company subsequent
to any adjustment made to the Purchase Price hereunder shall evidence the
right to purchase, at the adjusted Purchase Price, the number of Units of
Preferred Stock (or other securities or amount of cash or combination
thereof) that may be acquired from time to time hereunder upon exercise of
the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price,
that number of Units of Preferred Stock (calculated to the nearest hundred-
thousandth of a Unit) obtained by (i) multiplying (x) the number of Units
of Preferred Stock covered by a Right immediately prior to this adjustment
by (y) the Purchase Price in effect immediately prior to such adjustment of
the Purchase Price and (ii) dividing the product so obtained by the
Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in lieu of
any adjustment in the number of Units of Preferred Stock that may be
acquired upon the exercise of a Right. Each of the Rights outstanding
after the adjustment in the number of Rights shall be exercisable for the
number of Units 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 hundred-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase
Price by the Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement of its
election to adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to be
made. This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Rights Certificates have been
issued, shall be at least 10 days later than the date of such public
announcement. If Rights 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 Rights Certificates on such record date Rights
Certificates evidencing, subject to Section 14, the additional Rights to
which such holders shall be entitled as a result of such adjustment, or, at
the option of the Company, shall cause to be distributed to such holders of
record in substitution and replacement for the Rights Certificates held by
such holders prior to the date of adjustment, and upon surrender thereof,
if required by the Company, new Rights Certificates evidencing all the
Rights to which such holders shall be entitled after such adjustment.
Rights Certificates to be so distributed shall be issued, executed and
countersigned in the manner provided for herein (and may bear, at the
option of the Company, the adjusted Purchase Price) and shall be registered
in the names of the holders of record of Rights Certificates on the record
date specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of Units of Preferred Stock issuable upon the
exercise of the Rights, the Rights Certificates theretofore and thereafter
issued may continue to express the Purchase Price per Unit and the number
of Units of Preferred Stock that were expressed in the initial Rights
Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value of the number of Units
of Preferred Stock issuable upon exercise of the Rights, the Company shall
take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue such
fully paid and nonassessable number of Units of Preferred Stock at such
adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that
an adjustment in the Purchase Price be made effective as of a record date
for a specified event, the Company may elect to defer until the occurrence
of such event the issuance to the holder of any Right exercised after such
record date of that number of Units of Preferred Stock and shares of other
capital stock or securities of the Company, if any, issuable upon such
exercise over and above the number of Units of Preferred Stock and shares
of other capital stock or securities of the Company, if any, issuable upon
such exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to such
holder a due ▇▇▇▇ or other appropriate instrument evidencing such holder's
right to receive such additional shares (fractional or otherwise) or
securities upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in
the Purchase Price, in addition to those adjustments expressly required by
this Section 11, as and to the extent that in their good faith judgment a
majority of the Independent Directors shall determine to be advisable in
order that any (i) consolidation or subdivision of the Preferred Stock,
(ii) issuance wholly for cash of any shares of Preferred Stock at less than
the current market price, (iii) issuance wholly for cash of shares of
Preferred Stock or securities that by their terms are convertible into or
exchangeable for shares of Preferred Stock, (iv) stock dividends or (v)
issuance of rights, options or warrants referred to in this Section 11,
hereafter made by the Company to holders of its Preferred Stock, shall not
be taxable to such holders or shall reduce the taxes payable by such
holders.
(n) The Company shall not, at any time after the
Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction that complies with Section 11(o)
hereof), (ii) merge with or into any other Person (other than a Subsidiary
of the Company in a transaction which complies with Section 11(o) hereof),
or (iii) sell or transfer (or permit any) Subsidiary to sell or transfer),
in one transaction, or a series of transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to any other Person or Persons (other
than the Company and/or any of its Subsidiaries in one or more transactions
each of which complies with Section 11(o) hereof), if (x) at the time of or
immediately after such consolidation, merger or sale there are any rights,
warrants or other instruments or securities outstanding or agreements in
effect that would substantially diminish or otherwise eliminate the
benefits intended to be afforded by the Rights or (y) prior to,
simultaneously with or immediately after such consolidation, merger or
sale, the Person which constitutes, or would constitute, the "Principal
Party" for purposes of Section 13(a) shall have distributed or otherwise
transferred to its shareholders or other persons holding an equity interest
in such Person, Rights previously owned by such Person or any of its
Affiliates and Associates; provided, however, that this Section 11(n) shall
not affect the ability of any Subsidiary of the Company to consolidate
with, merge with or into, or sell or transfer assets or earning power to,
any other Subsidiary of the Company.
(o) After the Distribution Date, the Company shall not,
except as permitted by Section 23 or Section 26, take (or permit any
Subsidiary to take) any action if at the time such action is taken it is
reasonably foreseeable that such action will diminish substantially or
otherwise eliminate the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after the
Rights Dividend Declaration Date and prior to the Distribution Date (i)
declare a dividend on the outstanding shares of Company Common Stock
payable in shares of Company Common Stock, (ii) subdivide the outstanding
shares of Company Common Stock, (iii) combine the outstanding shares of
Company Common Stock into a smaller number of shares, or (iv) issue any
shares of its capital stock in a reclassification of Company Common Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation),
the number of Rights associated with each share of Company Common Stock
then outstanding, or issued or delivered thereafter but prior to the
Distribution Date, shall be proportionately adjusted so that the number of
Rights thereafter associated with each share of Company Common Stock
following any such event shall equal the result obtained by multiplying the
number of Rights associated with each share of Company Common Stock
immediately prior to such event by a fraction, the numerator of which shall
be the total number of shares of Company Common Stock outstanding
immediately prior to the occurrence of the event and the denominator of
which shall be the total number of shares of Company Common Stock
outstanding immediately following the occurrence of such event.
SECTION 12. Certificate of Adjusted Purchase Price or Number of
---------------------------------------------------
Shares.
------
Whenever an adjustment is made as provided in Section 11 or
Section 13, the Company shall (a) promptly prepare a certificate setting
forth such adjustment and a brief statement of the facts accounting for
such adjustment, (b) promptly file with the Rights Agent, and with each
transfer agent for the Preferred Stock and the Company Common Stock, a copy
of such certificate, and (c) mail a brief summary thereof to each holder of
a Rights Certificate (or, if prior to the Distribution Date, to each holder
of a certificate evidencing shares of Company Common Stock) in accordance
with Section 25. 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.
----------------
(a) In the event that, following the Stock Acquisition
Date, directly or indirectly, either (x) the Company shall consolidate
with, or merge with and into, any other Person (other than a Subsidiary of
the Company in a transaction which complies with Section 11(o) hereof), and
the Company shall not be the continuing or surviving corporation of such
consolidation or merger, (y) any Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o) hereof) shall
consolidate with, or merge with or into, the Company, and the Company shall
be the continuing or surviving corporation of such consolidation or merger
and, in connection with such consolidation or merger, all or part of the
outstanding shares of Company Common Stock shall be converted into or
exchanged for stock or other securities of any other Person or cash or any
other property, or (z) the Company shall sell or otherwise transfer (or one
or more of its Subsidiaries shall sell or otherwise transfer) to any Person
or Persons (other than the Company or any of its Subsidiaries in one or
more transactions each of which complies with Section 11(o) hereof), in one
or more transactions assets or earning power aggregating more than 50% of
the assets or earning power of the Company and its Subsidiaries (taken as a
whole) (any such event being a "Section 13 Event"), then, and in each such
case, proper provision shall be made so that: (i) each holder of a Right,
except as provided in Section 7(e), shall thereafter have the right to
receive, upon the exercise thereof at the then current Purchase Price, such
number of validly authorized and issued, fully paid and nonassessable
shares of Common Stock of the Principal Party (as such term is hereinafter
defined), which shares shall not be subject to any liens, encumbrances,
rights of first refusal, transfer restrictions or other adverse claims, as
shall be equal to the result obtained by (1) multiplying the then current
Purchase Price by the number of Units of Preferred Stock for which a Right
is exercisable immediately prior to the first occurrence of a Section 13
Event (or, if a Section 11(a)(ii) Event has occurred prior to the first
occurrence of a Section 13 Event, multiplying the number of such Units for
which a Right would be exercisable hereunder but for the occurrence of such
Section 11(a)(ii) Event by the Purchase Price which would be in effect
hereunder but for such first occurrence) and (2) dividing that product
(which, following the first occurrence of a Section 13 Event, shall be the
"Purchase Price" for all purposes of this Agreement) by 50% of the current
market price (determined pursuant to Section 11(d) hereof) per share of the
Common Stock of such Principal Party on the date of consummation of such
Section 13 Event; (ii) such Principal Party shall thereafter be liable for,
and shall assume, by virtue of such Section 13 Event, all the obligations
and duties of the Company pursuant to this Agreement; (iii) the term
"Company" shall thereafter be deemed to refer to such Principal Party, it
being specifically intended that the provisions of Section 11 shall apply
only to such Principal Party following the first occurrence of a Section 13
Event; (iv) such Principal Party shall take such steps (including, but not
limited to the reservation of a sufficient number of shares of its Common
Stock) in connection with the consummation of any such transaction as may
be necessary to ensure that the provisions of this Agreement shall
thereafter be applicable to its shares of Common Stock thereafter
deliverable upon the exercise of the Rights; and (v) the provisions of
Section 11(a)(ii) shall be of no further effect following the first
occurrence of any Section 13 Event.
(b) "Principal Party" means:
(i) in the case of any transaction described in clause
(x) or (y) of the first sentence of Section 13(a), (A) the Person that is
the issuer of any securities into which shares of Company Common Stock are
converted in such merger or consolidation, or, if there is more than one
such issuer, the issuer of Common Stock that has the highest aggregate
current market price (determined pursuant to Section 11(d) hereof) and (B)
if no securities are so issued, the Person that is the other party to such
merger or consolidation, or, if there is more than one such Person, the
Person the Common Stock of which has the highest aggregate current market
price (determined pursuant to Section 11(d) hereof); and
(ii) in the case of any transaction described in clause
(z) of the first sentence of Section 13(a), the Person that is the party
receiving the largest portion of the assets or earning power transferred
pursuant to such transaction or transactions, or, if each Person that is a
party to such transaction or transactions receives the same portion of the
assets or earning power transferred pursuant to such transaction or
transactions or if the Person receiving the largest portion of the assets
or earning power cannot be determined, whichever Person the Common Stock of
which has the highest aggregate current market price (determined pursuant
to Section 11(d) hereof); provided, however, that in any such case, (1) if
the Common Stock of such Person is not at such time and has not been
continuously over the preceding 12-month period registered under Section 12
of the Exchange Act ("Registered Common Stock"), or such Person is not a
corporation, and such Person is a direct or indirect Subsidiary of another
Person that has Registered Common Stock outstanding, "Principal Party"
shall refer to such other Person: (2) if the Common Stock of such Person is
not Registered Common Stock or such Person is not a corporation, and such
Person is a direct or indirect Subsidiary of another Person but is not a
direct or indirect Subsidiary of another Person which has Registered Common
Stock outstanding, "Principal Party" shall refer to the ultimate parent
entity of such first-mentioned Person; (3) if the Common Stock of such
Person is not Registered Common Stock or such Person is not a corporation,
and such Person is directly or indirectly controlled by more than one
Person, and one or more of such other Persons has Registered Common Stock
outstanding, "Principal Party" shall refer to whichever of such other
Persons is the issuer of the Registered Common Stock having the highest
aggregate current market price (determined pursuant to Section 11(d)
hereof); and (4) if the Common Stock of such Person is not Registered
Common Stock or such Person is not a corporation, and such Person is
directly or indirectly controlled by more than one Person, and none of such
other Persons have Registered Common Stock outstanding, "Principal Party"
shall refer to whichever ultimate parent entity is the corporation having
the greatest shareholders equity or, if no such ultimate parent entity is a
corporation, shall refer to whichever ultimate parent entity is the entity
having the greatest net assets.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless the Principal Party shall
have a sufficient number of authorized shares of its Common Stock that have
not been issued or reserved for issuance to permit the exercise in full of
the Rights in accordance with this Section 13, and unless prior thereto the
Company and such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement providing for the terms set forth in
paragraphs (a) and (b) of this Section 13 and further providing that the
Principal Party will:
(i) (A) file on an appropriate form, as soon as
practicable following the execution of such agreement, a registration
statement under the Securities Act with respect to the Common Stock that
may be acquired upon exercise of the Rights, (B) cause such registration
statement to remain effective (and to include a prospectus complying with
the requirements of the Securities Act) until the Expiration Date, and (C)
as soon as practicable following the execution of such agreement, take such
action as may be required to ensure that any acquisition of such Common
Stock upon the exercise of the Rights complies with any applicable state
security or "blue sky" laws; and
(ii) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its Affiliates
which comply in all respects with the requirements for registration on Form
10 under the Exchange Act.
(d) In case the Principal Party that is to be a party to a
transaction referred to in this Section 13 has a provision in any of its
authorized securities or in its Certificate of Incorporation or By-laws or
other instrument governing its corporate affairs, which provision would
have the effect of (i) causing such Principal Party to issue, in connection
with, or as a consequence of, the consummation of a transaction referred to
in this Section 13, shares of Common Stock of such Principal Party at less
than the then current market price per share (determined pursuant to
Section 11(d) hereof) or securities exercisable for, or convertible into
Common Stock of such Principal Party at less than such then current market
price (other than to holders of Rights pursuant to this Section 13) or (ii)
providing for any special payment, tax or similar provisions in connection
with the issuance of the Common Stock of such Principal Party pursuant to
the provisions of this Section 13; then, in such event, the Company shall
not consummate any such transaction unless prior thereto the Company and
such Principal Party shall have executed and delivered to the Rights Agent
a supplemental agreement providing that the provision in question of such
Principal Party shall have been canceled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision
will have no effect in connection with, or as a consequence of, the
consummation of the proposed transaction.
(e) The 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).
SECTION 14. Fractional Rights and Fractional Shares.
---------------------------------------
(a) The Company shall not be required to issue fractions of
Rights or to distribute Rights Certificates that evidence fractional
Rights. In lieu of such fractional Rights, there shall be paid to the
Persons to which such fractional Rights would otherwise be issuable, an
amount in cash equal to such fraction of the market value of a whole Right.
For purposes of this Section 14(a), the 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 of the Rights for any day shall be, if the
Rights are listed or admitted to trading on a national securities 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 a majority of the Independent Directors. 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 a majority of the
Independent Directors shall be used and such determination shall be
described in a statement filed with the Rights Agent and the holders of the
Rights.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than fractions that are integral multiples
of one one-thousandth of a share of Preferred Stock) upon exercise of the
Rights or to distribute certificates that evidence such fractional shares
of Preferred Stock (other than fractions which are integral multiples of
one one-thousandth of a share of Preferred Stock). In lieu of such
fractional shares of Preferred Stock that are not integral multiples of one
one-thousandth of a share, the Company may pay to the registered holders of
Rights Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the then current
market price of a share of Preferred Stock on the day of exercise,
determined in accordance with Section 11(d).
(c) The holder of a Right by the acceptance of the Rights
expressly waives his or her right to receive any fractional Rights or any
fractional shares upon exercise of a Right, except as permitted by this
Section 14.
SECTION 15. Rights of Action.
----------------
All rights of action in respect of this Agreement, other than
rights of action vested in the Rights Agent pursuant to Section 18, are
vested in the respective registered holders of the Rights Certificates
(and, prior to the Distribution Date, the registered holders of
certificates evidencing shares of Company Common Stock); and any registered
holder of a Rights Certificate (or, prior to the Distribution Date, of a
certificate evidencing shares of Company Common Stock), without the consent
of the Rights Agent or of the holder of any other Rights Certificate (or,
prior to the Distribution Date, of a certificate evidencing shares of
Company Common Stock), may, in his or her own behalf and for his or her own
benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company or any other Person to enforce, or otherwise
act in respect of, his or her right to exercise the Rights evidenced by
such Rights Certificate in the manner provided in such Rights Certificate
and in this Agreement. Without limiting the foregoing or any remedies
available to the holders of Rights, it is specifically acknowledged that
the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and shall be entitled to specific performance of
the obligations hereunder and injunctive relief against actual or
threatened violations of the obligations hereunder of any Person subject to
this Agreement.
SECTION 16. Agreement of Rights Holders.
---------------------------
Every holder of a Right by accepting the same consents to 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 Company Common Stock;
(b) after the Distribution Date, the Rights Certificates
are transferable only on the registry books of the Rights Agent if
surrendered at the office of the Rights Agent designated for such purposes
duly endorsed or accompanied by a proper instrument of transfer and with
the appropriate forms and certificates duly executed;
(c) subject to Section 6(a) and Section 7(f), the Company
and the Rights Agent may deem and treat the person in whose name a Rights
Certificate (or, prior to the Distribution Date, the associated Company
Common Stock certificate) is registered as the absolute owner thereof and
of the Rights evidenced thereby (notwithstanding any notations of ownership
or writing on the Rights Certificates or the associated Company 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, subject to the last sentence of Section 7(e), shall be affected by
any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability
to any holder of a Right or any other Person as a result of its inability
to perform any of its obligations under this Agreement by reason of any
preliminary or permanent injunction or other order, decree or ruling issued
by a court of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligation;
provided, however, the Company must use its best efforts to have any such
order, decree or ruling lifted or otherwise overturned as promptly as
practicable.
SECTION 17. Rights Certificate Holder Not Deemed a Shareholder.
--------------------------------------------------
No holder, as such, of any Rights Certificate shall be entitled
to vote, receive dividends or be deemed for any purpose the holder of the
number of shares of Preferred Stock or any other securities of the Company
that may at any time be issuable on the exercise of the Rights evidenced
thereby, nor shall anything contained herein or in any Rights Certificate
be construed to confer upon the holder of any Rights Certificate, as such,
any of the rights of a shareholder of the Company or any right to vote for
the election of directors or upon any matter submitted to shareholders at
any meeting thereof, or to give or withhold consent to any corporate
action, or, except as provided in Section 24, to receive notice of meetings
or other actions affecting shareholders, or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by
such Rights Certificate shall have been exercised in accordance with the
provisions hereof.
SECTION 18. Concerning the Rights Agent.
---------------------------
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder and, from
time to time, on demand of the Rights Agent, its reasonable expenses,
including reasonable fees and disbursements of its counsel, incurred in
connection with the execution and administration of this Agreement and the
exercise and performance of its duties hereunder. The Company shall
indemnify the Rights Agent for, and hold it harmless against, any loss,
liability, or expense, incurred without negligence, bad faith or wilful
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 hereunder.
(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 Rights Certificate or certificate for Preferred Stock or for other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document believed by it to be
genuine and to have been signed and/or executed or made by the proper
Person or Persons.
SECTION 19. Merger or Consolidation or Change of Name of Rights
---------------------------------------------------
Agent.
-----
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated,
or any corporation resulting from any merger or consolidation to which the
Rights Agent or any successor Rights Agent shall be a party, or any
corporation succeeding to the corporate trust or shareholder services
businesses of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the execution or
filing of any document or any further act on the part of any of the parties
hereto; provided, however, that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21.
In case at the time such successor Rights Agent shall succeed to the agency
created by this Agreement, any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt
the countersignature of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent
may countersign such Rights Certificates either in the name of the
predecessor or in the name of the successor Rights Agent; and in all such
cases such Rights Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall
be changed and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates
shall not have been countersigned, the Rights Agent may countersign such
Rights Certificates either in its prior name or in its changed name; and in
all such cases such Rights Certificates shall have the full force provided
in the Rights Certificates and in this Agreement.
SECTION 20. Duties of Rights Agent.
----------------------
The Rights Agent undertakes the duties and obligations imposed by
this Agreement upon the following terms and conditions, by all of which the
Company and the holders of Rights Certificates, by their acceptance
thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who
may be legal counsel for the Company), and the opinion of such counsel
shall be full and complete authorization and protection to the Rights Agent
as to any action taken or omitted by it in good faith and in accordance
with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any
fact or matter (including, without limitation, the identity of any
Acquiring Person and the determination of "current market price") be proved
or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
specified herein) may be deemed to be conclusively proved and established
by a certificate signed by the Chairman of the Board, the Chief Executive
Officer, the President, any Vice President, the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary of the Company and
delivered to the Rights Agent; provided, however, that so long as any
Person is an Acquiring Person hereunder, such certificate shall be signed
and delivered by a majority of the Independent Directors; 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 only for its
own negligence, bad faith or wilful misconduct.
(d) The Rights Agent shall not be liable for or by reason
of any of the statements of fact or recitals contained in this Agreement or
in the Rights Certificates or be required to verify the same (except as to
its countersignature on such Rights Certificates), 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 have any responsibility for
the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or for the validity or
execution of any Rights Certificate (except its countersignature thereof);
nor shall it be responsible for any breach by the Company of any covenant
or failure by the Company to satisfy conditions contained in this Agreement
or in any Rights Certificate; nor shall it be responsible for any
adjustment required under the provisions of Section 11 or Section 13 or for
the manner, method or amount of any such adjustment or the ascertaining of
the existence of facts that would require any such adjustment (except with
respect to the exercise of Rights evidenced by Rights Certificates after
receipt by the Rights Agent of the certificate describing any such
adjustment contemplated by Section 12); 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 any other securities to be
issued pursuant to this Agreement or any Rights Certificate or as to
whether any shares of Preferred Stock or any other securities will, when so
issued, be validly authorized and issued, fully paid and nonassessable.
(f) The Company shall perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all
such further acts, instruments and assurances as may reasonably be required
by the Rights Agent for the performance by the Rights Agent of its duties
under this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder
from the Chairman of the Board, the Chief Executive Officer, the President,
any Vice President, the Secretary, any Assistant Secretary, the Treasurer
or any Assistant Treasurer of the Company, and to apply to such officers
for advice or instructions in connection with its duties, and it shall not
be liable for any action taken or suffered to be taken by it in good faith
in accordance with instructions of any such officer; provided, however,
that so long as any Person is an Acquiring Person hereunder, the Rights
Agent shall accept such instructions and advice only from a majority of the
Independent Directors and shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with such
instructions of the majority of the Independent Directors. Any application
by the Rights Agent for written instructions from the Company may, at the
option of the Rights Agent, set forth in writing any action proposed to be
taken or omitted by the Rights Agent under this 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 such officer of the Company actually receives such application,
unless any such officer shall have consented in writing to an earlier date)
unless, prior to taking any such action (or the effective date in the case
of an omission), the Rights Agent shall have received written instructions
in response to such application specifying the action to be taken or
omitted.
(h) The Rights Agent and any shareholder, director, officer
or employee of the Rights Agent may buy, sell or deal in any of the Rights
or other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though it
were not the Rights Agent under this Agreement. Nothing herein shall
preclude the Rights Agent from acting in any other capacity for the Company
or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties or in the exercise of its
rights hereunder if the Rights Agent shall have reasonable grounds for
believing that repayment of such funds or adequate indemnification against
such risk or liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered
to the Rights Agent for exercise or transfer, the certificate attached to
the form of assignment or form of election to purchase, as the case may be,
has either not been completed, not signed or indicates an affirmative
response to clause 1 and/or 2 thereof, the Rights Agent shall not take any
further action with respect to such requested exercise or transfer without
first consulting with the Company. If such certificate has been completed
and signed and shows a negative response to clauses 1 and 2 of such
certificate, unless previously instructed otherwise in writing by the
Company (which instructions may impose on the Rights Agent additional
ministerial responsibilities, but no discretionary responsibilities), the
Rights Agent may assume without further inquiry that the Rights Certificate
is not owned by a person described in Section 4(b) or Section 7(e) and
shall not be charged with any knowledge to the contrary.
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' prior notice
in writing mailed to the Company, and to each transfer agent of the
Preferred Stock and the Company Common Stock, by registered or certified
mail, and to the holders of the Rights Certificates by first-class mail.
The Company may remove the Rights Agent or any successor Rights Agent upon
30 days' prior notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of the
Preferred Stock and the Company Common Stock, by registered or certified
mail, and to the holders of the Rights Certificates by first-class mail.
If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights
Agent. If the Company shall fail to make such appointment within a period
of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Rights Certificate (who
shall, with such notice, submit his or her Rights Certificate for
inspection by the Company), then any registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (a) a corporation
organized and doing business under the laws of the United States or any
state of the United States in good standing, shall be authorized to do
business as a banking institution in the State of New York or the
Commonwealth of Pennsylvania, shall be authorized under such laws to
exercise corporate trust or stock transfer powers, shall be subject to
supervision or examination by federal or state authorities and shall have
at the time of its appointment as Rights Agent a combined capital and
surplus of at least $100,000,000 or (b) an Affiliate of a corporation
described in clause (a). 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 Preferred Stock and
the Company Common Stock, and mail a notice thereof in writing to the
registered holders of the Rights Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent.
SECTION 22. Issuance of New Rights Certificates.
-----------------------------------
Notwithstanding any of the provisions of this Agreement or the
Rights to the contrary, the Company may, at its option, issue new Rights
Certificates evidencing Rights in such form as may be approved by a
majority of the Independent Directors to reflect any adjustment or change
made in accordance with the provisions of this Agreement in the Purchase
Price or the number or kind or class of shares or other securities or
property that may be acquired under the Rights Certificates. In addition,
in connection with the issuance or sale of shares of Company Common Stock
following the Distribution Date and prior to the Expiration Date, the
Company (a) shall with respect to shares of Company Common Stock so issued
or sold pursuant to the exercise of stock options or under any employee
plan or arrangement, or upon the exercise, conversion or exchange of
securities hereinafter issued by the Company, and (b) may, in any other
case, if deemed necessary or appropriate by a majority of the Independent
Directors, issue Rights Certificates representing the appropriate number of
Rights in connection with such issuance or sale; provided, however, that
(i) no such Rights Certificate shall be issued if, and to the extent that,
the Company shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Company or the
person to whom such Rights Certificate would be issued, and (ii) no such
Rights Certificate shall be issued if, and to the extent that, appropriate
adjustment shall otherwise have been made in lieu of the issuance thereof.
SECTION 23. Redemption and Termination.
--------------------------
(a) Subject to Section 30, the Company may, at its option,
by action of a majority of the Independent Directors, at any time prior to
the earlier of (i) the Close of Business on the tenth Business Day
following the Stock Acquisition Date or (ii) the Final Expiration Date,
redeem all but not less than all the then outstanding Rights at a
redemption price of $.001 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being the
"Redemption Price"), and the Company may, at its option, by action of a
majority of the Independent Directors, pay the Redemption Price either in
shares of Company Common Stock (based on the "current market price" as
defined in Section 11(d), of the shares of Company Common Stock at the time
of redemption) or cash.
(b) Immediately upon the action of a majority of the
Independent Directors ordering the redemption of the Rights, evidence of
which shall be filed with the Rights Agent, and without any further action
and without any notice, the right to exercise the Rights will terminate and
the only right thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right so held. Promptly after the action of a
majority of the Independent Directors ordering the redemption of the
Rights, the Company shall give notice of such redemption to the Rights
Agent and the holders of the then outstanding Rights by mailing such notice
to all such holders at each holder's last address as it appears upon the
registry books of the Rights Agent or, prior to the Distribution Date, on
the registry books of the transfer agent for Company Common Stock. Any
notice that is mailed in the manner herein provided shall be deemed given
whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption
Price will be made.
SECTION 24. Notice of Certain Events.
------------------------
(a) In case the Company shall propose, at any time after
the Distribution Date, (i) to pay any dividend payable in stock of any
class to the holders of Preferred Stock or to make any other distribution
to the holders of Preferred Stock (other than a regular quarterly cash
dividend out of earnings or retained earnings of the Company), (ii) to
offer to the holders 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 Preferred Stock (other than a reclassification
involving only the subdivision of outstanding shares of Preferred Stock),
(iv) to effect any consolidation or merger into or with any other Person
(other than a Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof), or to effect any sale or other transfer (or to
permit one or more of its Subsidiaries to effect any sale or other
transfer), in one or more transactions, of more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person or Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which complies with
Section 11(o) hereof), or (v) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the Company shall give
to each holder of a Rights Certificate, to the extent feasible and in
accordance with Section 25, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend,
distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the shares of Preferred Stock, if any such date
is to be fixed, and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least 20 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 20 days
prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the shares of Preferred Stock
whichever shall be the earlier; provided, however, that no such notice
shall be required pursuant to this Section 24, if any Subsidiary of the
Company effects a consolidation or merger with or into, or effects a sale
or other transfer of assets or earnings power to, any other Subsidiary of
the Company.
(b) In case any of the events set forth in Section
11(a)(ii) shall occur, then, in any such case, (i) the Company shall as
soon as practicable thereafter give to each holder of a Rights Certificate,
to the extent feasible and in accordance with Section 25, a notice of the
occurrence of such event, which shall specify the event and the
consequences of the event to holders of Rights under Section 11(a)(ii).
SECTION 25. Notices.
-------
All notices and other communications provided for hereunder
shall, unless otherwise stated herein, be in writing (including by telex,
telegram or cable) and mailed or sent or delivered, if to the Company, at
its address at:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and if to the Rights Agent, at its address at:
Chemical Mellon Shareholder Services, L.L.C.
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Company Common Stock) 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 26. Supplements and Amendments.
--------------------------
Prior to the Distribution Date and subject to the penultimate
sentence of this Section 26, the Company and the Rights Agent shall, if the
Company so directs, supplement or amend any provision of this Agreement
without the approval of any holders of certificates evidencing shares of
Company Common Stock. From and after the Distribution Date and subject to
the penultimate sentence of this Section 26, 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 Certificates in order (i) to
cure any ambiguity, (ii) to correct or supplement any provision contained
herein that may be defective or inconsistent with any other provisions
herein, (iii) to shorten or lengthen any time period hereunder, or (iv) to
change or supplement the provisions hereunder in any manner that the
Company may deem necessary or desirable and that shall not adversely affect
the interests of the holders of Rights Certificates (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring Person);
provided, however, that this Agreement may not be supplemented or amended
to lengthen, pursuant to clause (iii) of this sentence, (A) subject to
Section 30, a time period relating to when the Rights may be redeemed at
such time as the Rights are not then redeemable, or (B) any other time
period unless such lengthening is for the purpose of protecting, enhancing
or clarifying the rights of, and/or the benefits to the holders of Rights.
Upon the delivery of a certificate from an appropriate officer of the
Company or, so long as any Person is an Acquiring Person hereunder, from
the majority of the Independent Directors that states that the proposed
supplement or amendment is in compliance with the terms of this Section 26,
the Rights Agent shall execute such supplement or amendment, subject to the
Right Agent's right to apply to counsel chosen by the Right Agent and the
Right Agent being reasonably assured that such supplement or amendment is
in no way detrimental to the Right Agent's right or interest.
Notwithstanding anything contained in this Agreement to the contrary, no
supplement or amendment shall be made that changes the Redemption Price,
the Purchase Price, the Expiration Date or the number of Units of Preferred
Stock for which a Right is exercisable without the approval of a majority
of the Independent Directors. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident with the
interests of the holders of Company Common Stock.
SECTION 27. 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 28. Determinations and Actions by the Board of
------------------------------------------
Directors, etc.
--------------
For all purposes of this Agreement, any calculation of the number
of shares of Company Common Stock outstanding at any particular time,
including for purposes of determining the particular percentage of such
outstanding shares of Company Common Stock of which any Person is the
Beneficial Owner, shall be made in accordance with the last sentence of
Rule 13d-3(d)(1)(i) of the Exchange Act Regulations as in effect on the
date hereof. Except as otherwise specifically provided herein, the Board
of Directors of the Company shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers
specifically granted to the Board or to the Company, or as may be necessary
or advisable in the administration of this Agreement, including, without
limitation, the right and power (i) to interpret the provisions of this
Agreement, and (ii) to make all determinations deemed necessary or
advisable for the administration of this Agreement. All such actions,
calculations, interpretations and determinations (including, for purposes
of clause (y) below, all omissions with respect to the foregoing) which are
done or made by the Board or by a majority of the Independent Directors in
good faith shall (x) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights and all other parties, and (y) not
subject the Board or any member thereof to any liability to the holders of
the Rights.
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 Rights Certificates (and, prior to the Distribution Date, registered
holders of shares of Company 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 Rights Certificates (and, prior to the
Distribution Date, registered holders of shares of Company 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 Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated; provided,
however, that notwithstanding anything in this Agreement to the contrary,
if any such term, provision, covenant or restriction is held by such court
or authority to be invalid, void or unenforceable and a majority of the
Independent Directors determines in its good faith judgment that severing
the invalid language from this Agreement would adversely affect the purpose
or effect of this Agreement and the Rights shall not then be redeemable,
the right of redemption set forth in Section 23 hereof shall be reinstated
and shall not expire until the Close of Business on the tenth Business Day
following the date of such determination by a majority of the Independent
Directors.
SECTION 31. Governing Law.
-------------
This Agreement each Right and each Rights Certificate issued
hereunder shall be governed by, and construed in accordance with, the laws
of the Commonwealth of Pennsylvania applicable to contracts executed in and
to be performed entirely in such Commonwealth.
SECTION 32. Counterparts.
------------
This Agreement may be executed (including by facsimile) in one or
more counterparts and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an
original, but all of which taken together shall constitute one and the same
instrument.
SECTION 33. Descriptive Headings.
--------------------
The headings contained in this Agreement are for descriptive
purposes only and shall not affect in any way the meaning or interpretation
of this Agreement.
SECTION 34. Exchange.
--------
(a) The Company may at any time prior to the Distribution
Date, upon resolution of a majority of the Independent Directors, exchange
all or part of the then outstanding and exercisable Rights (which shall not
include Rights that have become void pursuant to Section 7(e) hereof) for
Units of Preferred Stock at an exchange ratio specified in the following
sentence, as appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof. Subject
to such adjustment, upon such resolution each Right may be exchanged for
that number of Units of Preferred Stock obtained by dividing the Adjustment
Spread (as defined below) by the then current market price (determined
pursuant to Section 11(d) hereof) per Unit of Preferred Stock on the
earlier of (i) the date on which any Person becomes an Acquiring Person and
(ii) the date on which a tender or exchange offer by any Person (other than
the Company, any Subsidiary of the Company, any employee benefit plan
maintained by the Company or any of its Subsidiaries or any trustee or
fiduciary with respect to such plan acting in such capacity) is first
published or sent or given within the meaning of Rule 14d-4(a) of the
Exchange Act Regulations or any successor rule, if upon consummation
thereof such Person would be the Beneficial Owner of 10% or more of the
shares of Company Common Stock then outstanding (such exchange ratio being
the "Exchange Ratio"). The "Adjustment Spread" shall equal (x) the
aggregate market price on the date of such event of the number of
Adjustment Shares determined pursuant to Section 11(a)(ii), minus (y) the
Purchase Price.
(b) Immediately upon the action of a majority of the
Independent Directors ordering the exchange of any Rights pursuant to
Section 34(a) 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 Units of
Preferred 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 the holders of such Rights at their last addresses as they appear upon
the registry books of the Rights Agent. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange shall state the method
by which the exchange of Units of Preferred 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.
(c) In the event that the number of shares of Preferred
Stock that are authorized by the Company's Certificate of Incorporation but
not outstanding or reserved for issuance for purposes other than upon
exercise of the Rights are not sufficient to permit any exchange of Rights
as contemplated in accordance with this Section 34, the Company shall take
all such action as may be necessary to authorize additional shares of
Preferred Stock for issuance upon exchange of the Rights or make adequate
provision to substitute (1) cash, (2) Company Common Stock or other equity
securities of the Company, (3) debt securities of the Company, (4) other
assets, or (5) any combination of the foregoing, having an aggregate value
equal to the Adjustment Spread, where such aggregate value has been
determined by a majority of the Independent Directors.
(d) The Company shall not be required to issue fractions of
Units of Preferred Stock or to distribute certificates that evidence
fractional Units. In lieu of fractional Units, the Company may pay to the
registered holders of Rights Certificates at the time such Rights are
exchanged as herein provided an amount in cash equal to the same fraction
of the current market price (determined pursuant to Section 11(d) hereof)
of one Unit of Preferred Stock.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed, all as of the date first above written.
ATTEST: INTELLIGENT ELECTRONICS, INC.
By ________________________ By _____________________________
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Secretary Title: Chairman and Chief
Executive Officer
ATTEST: CHEMICAL MELLON SHAREHOLDER
SERVICES L.L.C.
By ________________________ By ___________________________
Name: Name:
Title: Title:
Exhibit A
Form of Series A Rights Certificate
Certificate No. A-__ ___________ Rights
NOT EXERCISABLE AFTER THE EXPIRATION DATE (AS DEFINED IN THE RIGHTS AGREEMENT
REFERRED TO BELOW). THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF
THE COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES (SPECIFIED IN THE RIGHTS AGREEMENT), RIGHTS BENEFICIALLY OWNED
BY ACQUIRING PERSONS (AS DEFINED IN THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT
HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY
THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR
BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING
PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT REFERRED TO BELOW).
ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY
BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE
RIGHTS AGREEMENT.]*
__________________
* The portion of the legend in brackets shall be inserted only if applicable
and shall replace the preceding sentence.
Series A Rights Certificate
INTELLIGENT ELECTRONICS, INC.
This certifies that _____________, or registered assigns, is the
registered holder of the number of Rights set forth above, each of which
entitles the registered holder thereof, subject to the terms and conditions
of the Rights Agreement dated as of March 22, 1996 (the "Rights Agreement";
terms defined therein are used herein with the same meaning unless otherwise
defined herein) between INTELLIGENT ELECTRONICS, INC., a Pennsylvania
corporation (the "Company"), and CHEMICAL MELLON SHAREHOLDER SERVICES L.L.C.,
as Rights Agent (which term shall include any successor Rights Agent under
the Rights Agreement), to purchase from the Company at any time after the
Distribution Date and prior to the Expiration Date at the office of the
Rights Agent, one one-thousandth of one fully paid and nonassessable share of
Series A Junior Participating Preferred Stock, par value $.001 per share (the
"Preferred Stock"), of the Company at the Purchase Price initially of $28.00
per one one-thousandth share (each such one one-thousandth of a share being
a "Unit") of Preferred Stock, upon presentation and surrender of this Rights
Certificate with the Election to Purchase and related certificate duly
executed. The number of Rights evidenced by this Rights Certificate (and the
number of Units that may be purchased upon exercise thereof) set forth above,
and the Purchase Price per Unit set forth above shall be subject to
adjustment in certain events as provided in the Rights Agreement.
Upon the occurrence of a Section 11(a)(ii) Event, if the Rights
evidenced by this Rights Certificate are beneficially owned by an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person or, under
certain circumstances described in the Rights Agreement, a transferee of any
such Acquiring Person, Associate or Affiliate, such Rights shall become null
and void and no holder hereof shall have any right with respect to such
Rights from and after the occurrence of such Section 11(a)(ii) Event.
In certain circumstances described in the Rights Agreement, the
rights evidenced hereby may entitle the registered holder thereof to purchase
capital stock of an entity other than the Company or receive common stock,
cash or other assets, all as provided in the Rights Agreement.
This Rights Certificate is subject to all the terms and conditions
of the Rights Agreement, which terms and conditions are hereby incorporated
herein by reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights, limitations of
rights, obligations, duties and immunities hereunder of the Rights Agent, the
Company and the holders of the Rights Certificates. Copies of the Rights
Agreement are on file at the principal office of the Company and are
available from the Company upon written request.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the office of the Rights Agent designated for such purpose,
may be exchanged for another Rights Certificate or Rights Certificates of
like tenor and date evidencing an aggregate number of Rights equal to the
aggregate number of Rights evidenced by the Rights Certificate or Rights
Certificates surrendered. If this Rights Certificate shall be exercised in
part, the registered holder shall be entitled to receive, upon surrender
hereof, another Rights Certificate or Rights Certificates for the number of
whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company under certain
circumstances at its option at a redemption price of $.001 per Right, payable
at the Company's option in cash or in common stock of the Company, subject to
adjustment in certain events as provided in the Rights Agreement.
No fractional shares of Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions which
are integral multiples of one one-thousandth of a share of Preferred Stock),
but in lieu thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Rights Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of
Preferred Stock or of any other securities which may at any time be issuable
on the exercise hereof, nor shall anything contained in the Rights Agreement
or herein be constituted to confer upon the holder hereof, as such, any of
the rights of a shareholder of the Company or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting shareholders (except
as provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Rights evidenced by this Rights Certificate
shall have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of _____ __, 199_/200_.
ATTEST: INTELLIGENT ELECTRONICS, INC.
By _________________________ By ______________________________
Name: Name:
Title: Title:
Countersigned:
CHEMICAL MELLON SHAREHOLDER SERVICES L.L.C.,
as Rights Agent
By_________________________
Name:
Title:
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if
such holder desires to transfer the
Rights Certificate)
FOR VALUE RECEIVED _______________________ hereby sells, assigns and
transfers unto _____________________________________________
________________________________________________________________
(Please print name and address of transferee)
________________________________________________________________,
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint __________ Attorney, to
transfer the within Rights Certificate on the books of the within-named
Company, with full power of substitution.
Dated: _________ __, 199_/200_
______________________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights Certificate __/ is __/ is not being sold,
assigned and transferred by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Acquiring Person
(as such terms are defined pursuant to the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, it __/ did __/ did not acquire the Rights evidenced by this
Rights Certificate from any Person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated: _____________ __, 199_/200_ ____________________
Signature
Signature Guaranteed:
______________________________
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
Signatures must be guaranteed by a member in the Securities
Transfer Agents Medallion Program, the Stock Exchange Medallion Program or
the New York Stock Exchange Medallion Program.
In the event the certification set forth above is not completed,
the Company will deem the beneficial owner of the Rights evidenced by this
Rights Certificate to be an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement) and, in the case of an
Assignment, will affix a legend. to that effect on any Rights Certificates
issued in exchange for this Rights Certificate.
FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder
desires to exercise Rights represented
by the Rights Certificate.)
To: INTELLIGENT ELECTRONICS, INC.
The undersigned hereby irrevocably elects to exercise ________
Rights represented by this Rights Certificate to purchase the Units of
Preferred Stock issuable upon the exercise of the Rights (or such other
securities of the Company or of any other person or other property which may
be issuable upon the exercise of the Rights) and requests that certificates
for such Units be issued in the name of and delivered to:
______________________________
(Please print name and address)
______________________________
Please insert social security
or other identifying number: __________________
If such number of Rights shall not be all the Rights evidenced by
this Rights Certificate, a new Rights Certificate for the balance of such
Rights shall he registered in the name of and delivered to:
______________________________
(Please print name and address)
______________________________
Please insert social security
or other identifying number: _________________
Dated: ______ __, 199_/200_
______________________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate __/are
__/are not beneficially owned by an Acquiring Person or an Affiliate or an
Associate thereof (as defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned __/did __/did not acquire the Rights evidenced
by this Rights Certificate from any person who is, was or subsequently became
an Acquiring Person or an Affiliate or Associate thereof.
Dated: _____ ___, 199_/200_ __________________________
Signature
Signature Guaranteed:
______________________________
NOTICE
The signature in the foregoing Election to Purchase and Certificate
must conform to the name as written upon the face of this Rights Certificate
in every particular, without alteration or enlargement or any change
whatsoever.
Signatures must be guaranteed by a member in the Securities
Transfer Agents Medallion Program, the Stock Exchange Medallion Program or
the New York Stock Exchange Medallion Program.
In the event the certification set forth above is not completed,
the Company will deem the beneficial owner of the Rights evidenced by this
Rights Certificate to be an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement) and, in the case of an
Assignment, will affix a legend to that effect on any Rights Certificates
issued in exchange for this Rights Certificate.
Exhibit B
DESIGNATION OF THE VOTING POWERS, DESIGNATIONS
PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL OR OTHER SPECIAL RIGHTS AND QUALIFICATIONS,
LIMITATIONS AND RESTRICTIONS OF THE
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
________________________________
Pursuant to Section 1522 of the
Business Corporation Law of
the Commonwealth of Pennsylvania
________________________________
I, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chairman and Chief Executive Officer of
Intelligent Electronics, Inc., a corporation organized and existing under the
Business Corporation Law of the Commonwealth of Pennsylvania (the
"Corporation"), DO HEREBY CERTIFY:
that, pursuant to authority conferred upon the Board of Directors
of the Corporation by its Articles of Incorporation (the "Articles"), and,
pursuant to the provisions of Section 1522 of the Business Corporation Law of
the Commonwealth of Pennsylvania, such Board of Directors, at a duly called
meeting held on March 8, 1996, at which a quorum was present and acted
throughout, adopted the following resolutions, which resolutions remain in
full force and effect on the date hereof creating a series of 200,000 shares
of Preferred Stock having a par value of $.01 per share, designated as
Series A Junior Participating Preferred Stock (the "Series A Preferred
Stock") out of the class shares of preferred stock of the par value of $.01
per share (the "Preferred Stock"):
RESOLVED, that pursuant to the authority vested in the Board of
Directors in accordance with the provisions of the Articles, the Board of
Directors does hereby create, authorize and provide for the issuance of the
Series A Preferred Stock having the voting powers, designation, relative,
participating, optional and other special rights, preferences, and
qualifications, limitations and restrictions thereof that are set forth as
follows:
Section 1. Designation and Amount.
----------------------
The shares of such series shall be designated as "Series A Junior
Participating Preferred Stock" and the number of shares constituting such
series shall be 200,000.
Section 2. Dividends and Distributions.
---------------------------
(A) Subject to the prior and superior rights of the holders
of any shares of any other series of Preferred Stock or any other shares of
preferred stock of the Corporation ranking prior and superior to the shares
of Series A Preferred Stock with respect to dividends, each holder of one
one-thousandth (1/1000) of a share (a "Unit") of Series A Preferred Stock
shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for that purpose, (i) dividends
payable in cash when and if declared by the Board of Directors of the
Corporation in respect of the common stock (each such date being a "Dividend
Payment Date") commencing on the first Dividend Payment Date after the first
issuance of such Unit of Series A Preferred Stock, in an amount per Unit
(rounded to the nearest cent) equal to, subject to the provision for
adjustment hereinafter set forth, the aggregate per share amount of all cash
dividends declared on shares of the common stock since the immediately
preceding Dividend Payment Date, or, with respect to the first Dividend
Payment Date, since the first issuance of a Unit of Series A Preferred Stock,
and (ii) subject to the provision for adjustment hereinafter set forth,
distributions (payable in kind) on each Dividend Payment Date in an amount
per Unit equal to the aggregate per share amount of all noncash 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 shares of common stock since the
immediately preceding Dividend Payment Date, or with respect to the first
Dividend Payment Date, since the first issuance of a Unit of Series A
Preferred Stock. In the event that the Corporation shall at any time after
March 8, 1996 (the "Rights Declaration Date"), (i) declare any dividend on
outstanding shares of common stock payable in shares of common stock, (ii)
subdivide outstanding shares of common stock or (iii) combine outstanding
shares of common stock into a smaller number of shares, then in each such
case the amount to which the holder of a Unit of Series A Preferred Stock was
entitled immediately prior to such event pursuant to the next preceding
sentence shall be adjusted by multiplying such amount by a fraction the
numerator of which shall be the number of shares of common stock that are
outstanding immediately after such event and the denominator of which shall
be the number of shares of common stock that were outstanding immediately
prior to such event.
(B) The Corporation shall declare a dividend or distribution
on Units of Series A Preferred Stock as provided in paragraph (A) above
immediately after it declares a dividend or distribution on the shares of
common stock (other than a dividend payable in shares of common stock).
Section 3. Voting Rights.
-------------
The holders of Units of Series A Preferred Stock shall have the
following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each Unit of Series A Preferred Stock shall entitle the holder thereof
to one vote on all matters submitted to a vote of the holders of Common Stock
of the Corporation. In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on outstanding shares of
Common Stock payable in shares of Common Stock, (ii) subdivide outstanding
shares of Common Stock or (iii) combine the outstanding shares of Common
Stock into a smaller number of shares, then in each such case the number of
votes per Unit to which holders of Units 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 shall be the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which shall be the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the
holders of Units of Series A Preferred Stock and the holders of shares of
Common Stock shall vote together as one class on all matters submitted to a
vote of holders of Common Stock of the Corporation.
(C) Except as set forth herein, holders of Units of Series A
Preferred Stock shall have no special voting rights and their consents shall
not be required (except to the extent they are entitled to vote with holders
of shares of Common Stock as set forth herein) for taking any corporate
action.
Section 4. Certain Restrictions.
--------------------
(A) Whenever any dividends or distributions payable, on Units
of Series A Preferred Stock as provided in Section 2 have not been paid in
full, thereafter and until all such accrued and unpaid dividends and
distributions, whether or not declared, on outstanding Units of Series A
Preferred Stock shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or repurchase or otherwise acquire for
consideration, any shares of junior stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of parity stock, except dividends paid ratably on
Units of Series A Preferred Stock and shares of all such parity stock on
which dividends are payable or in arrears in proportion to the total amounts
to which the holders of such Units and all such shares are then entitled;
(iii) redeem or repurchase or otherwise acquire for
consideration shares of any parity stock; provided, however, that the
Corporation may at any time redeem, repurchase or otherwise acquire shares of
any such parity stock in exchange for shares of any junior stock;
(iv) repurchase or otherwise acquire for consideration
(other than shares of junior stock) any Units of Series A Preferred Stock,
except in accordance with a repurchase offer made in writing or by
publication (as determined by the Board of Directors) to all holders of such
Units on the same terms.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this ▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇▇ or otherwise acquire such shares at such time and
in such manner.
Section 5. Reacquired Shares.
-----------------
Any Units of Series A Preferred Stock purchased or otherwise
acquired by the Corporation in any manner whatsoever shall be retired and
canceled promptly after the acquisition thereof. All such Units shall, upon
their cancellation, become authorized but unissued Units of Preferred Stock
and may be reissued as part of a new series of Preferred Stock to be created
by resolution or resolutions of the Board of Directors, subject to the
conditions and restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up.
--------------------------------------
(A) Upon any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, no distribution shall be made
(i) to the holders of shares of junior stock unless the holders of Units of
Series A Preferred Stock shall have received, subject to adjustment as
hereinafter provided in paragraph (B), the amount, per Unit, equal to the
aggregate per share amount to be distributed to holders of shares of common
stock, or (ii) to the holders of shares of parity stock, unless
simultaneously therewith distributions are made ratably on Units of Series A
Preferred Stock and all other shares of such parity stock in proportion to
the total amounts to which the holders of Units of Series A Preferred Stock
are entitled under clause (i) of this sentence and to which the holders of
shares of such parity stock are entitled, in each case upon such liquidation,
dissolution or winding up.
(B) In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on outstanding shares of
common stock payable in shares of common stock, (ii) subdivide outstanding
shares of common stock, or (iii) combine outstanding shares of common stock
into a smaller number of shares, then in each such case the aggregate amount
to which holders of Units of Series A Preferred Stock were entitled
immediately prior to such event pursuant to clause (i)(b) of paragraph (A) of
this Section 6 shall be adjusted by multiplying such amount by a fraction the
numerator of which shall be the number of shares of common stock that are
outstanding immediately after such event and the denominator of which shall
be the number of shares of common stock that were outstanding immediately
prior to such event.
Section 7. Consolidation, Merger, etc.
--------------------------
In case the Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of common stock are
exchanged for or converted into other stock or securities, cash and/or any
other property, then in any such case Units of Series A Preferred Stock shall
at the same time be similarly exchanged for or converted into an amount per
Unit (subject to the provision for adjustment hereinafter set forth) equal to
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 converted or exchanged. In the event the Corporation shall at
any time after the Rights Declaration Date (i) declare any dividend on
outstanding shares of common stock payable in shares of common stock, (ii)
subdivide outstanding shares of common stock, or (iii) combine outstanding
common stock into a smaller number of shares, then in each such case the
amount set forth in the immediately preceding sentence with respect to the
exchange or conversion of Units of Series A Preferred Stock shall be adjusted
by multiplying such amount by a fraction the numerator of which shall be the
number of shares of common stock that are outstanding immediately after such
event and the denominator of which shall be the number of shares of common
stock that were outstanding immediately prior to such event.
Section 8. Redemption.
----------
The Units of Series A Preferred Stock shall not be redeemable.
Section 9. Ranking.
-------
The Units of Series A Preferred Stock shall rank junior to all
other series of the Preferred Stock and to any other class of preferred stock
that hereafter may be issued by the Corporation as to the payment of
dividends and the distribution of assets, unless the terms of any such series
or class shall provide otherwise.
Section 10. Amendment.
---------
The Articles, including, without limitation, this resolution, shall
not hereafter be amended, either directly or indirectly, or through merger or
consolidation with another corporation in any manner that would alter or
change the powers, preferences or special rights of the Series A Preferred
Stock so as to affect them adversely without the affirmative vote of the
holders of a majority or more of the outstanding Units of Series A Preferred
Stock, voting separately as a class.
Section 11. Fractional Shares.
-----------------
The Series A Preferred Stock may be issued in Units or other
fractions of a share, which Units or fractions shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of
all other rights of holders of Series A Preferred Stock.
Section 12. Certain Definitions.
-------------------
As used herein with respect to the Series A Preferred Stock, the
following terms shall have the following meanings:
(A) The term "Common Stock" means the class of common stock
designated as the Common Stock, par value $.01 per share, of the Corporation
at the date hereof or any other class of stock resulting from successive
changes or reclassification of the common stock.
(B) The term "junior stock" (i) as used in Section 4 means
the common stock and any other class or series of capital stock of the
Corporation hereafter authorized or issued over which the Series A Preferred
Stock has preference or priority as to the payment of dividends and (ii) as
used in Section 6, shall mean the common stock and any other class or series
of capital stock of the Corporation over which the Series A Preferred Stock
has preference or priority in the distribution of assets on any liquidation,
dissolution or winding up of the Corporation.
(C) The term "parity stock" (i) as used in Section 4, means
any class or series of stock of the Corporation hereafter authorized or
issued ranking pari passu with the Series A Preferred Stock as to dividends
and (ii) as used in Section 6, shall mean any class or series of capital
stock ranking pari passu with the Series A Preferred Stock in the
distribution of assets on any liquidation, dissolution or winding up.
IN WITNESS WHEREOF, Intelligent Electronics, Inc. has caused this
Designation to be signed by its Chairman and Chief Executive Officer, and
attested by its Secretary this 20th day of March, 1996.
INTELLIGENT ELECTRONICS, INC.
By: ___________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chairman and Chief Executive Officer
Attest:
By: _______________________
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Secretary
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On March 8, 1996, the Board of Directors of Intelligent
Electronics, Inc., a Pennsylvania corporation (the "Company"), declared a
distribution of one Right (as defined below) for each outstanding share of
Common Stock, par value $.01 per share (the "Company Common Stock"), to
shareholders of record at the close of business on March 25, 1996 (the
"Record Date") and for each share of Company Common Stock issued by the
Company thereafter and prior to the Distribution Date. Each Right entitles
the registered holder, subject to the terms of the Rights Agreement (as
defined below), to purchase from the Company one one-thousandth of a share (a
"Unit") of Series A Preferred Stock, par value $.01 per share (the "Preferred
Stock"), at a Purchase Price of $28.00 per Unit, subject to adjustment (the
"Right"). The Purchase Price is payable in cash or by certified or bank
check or money order payable to the order of the Company. The description
and terms of the Rights are set forth in a Rights Agreement between the
Company and Chemical Mellon Shareholder Services L.L.C., as Rights Agent (the
"Rights Agreement").
Copies of the Rights Agreement and the Certificate of Designation for the
Preferred Stock have been filed with the Securities and Exchange Commission
as exhibits to a Registration Statement on Form 8-A dated March 20, 1996 (the
"Form 8-A"). Copies of the Rights Agreement and the Certificate of
Designation are available free of charge from the Company. This summary
description of the Rights and the Preferred Stock does not purport to be
complete and is qualified in its entirety by reference to all the provisions
of the Rights Agreement and the Certificate of Designation, including the
definitions therein of certain terms, which Rights Agreement and Certificate
of Designation are incorporated herein by reference.
The Rights Agreement
--------------------
Initially, the Rights will attach to all certificates representing
shares of outstanding Company Common Stock, and no separate Rights
Certificates will be distributed. The Rights will separate from the Company
Common Stock and the "Distribution Date" will occur upon the earlier of (i)
10 business days following a public announcement (the date of such
announcement being the "Stock Acquisition Date") that a person or group of
affiliated or associated persons (other than the Company, any subsidiary of
the Company or any employee benefit plan of the Company or such subsidiary)
(an "Acquiring Person") has acquired, obtained the right to acquire, or
otherwise obtained beneficial ownership of 15% or more of the then
outstanding shares of Company Common Stock, and (ii) 10 business days (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) following the
commencement of a tender offer or exchange offer that would result in a
person or group beneficially owning 15% or more of the then outstanding
shares of Company Common Stock. Until the Distribution Date, (i) the Rights
will be evidenced by Company Common Stock certificates and will be
transferred with and only with such Company Common Stock certificates, (ii)
new Company Common Stock certificates issued after the Record Date (also
including shares distributed from Treasury) will contain a notation
incorporating the Rights Agreement by reference and (iii) the surrender for
transfer of any certificates representing outstanding Company Common Stock
will also constitute the transfer of the Rights associated with the Company
Common Stock represented by such certificates.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on the tenth anniversary of the Rights
Agreement unless earlier redeemed by the Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of Company Common Stock as
of the close of business on the Distribution Date and, thereafter, the
separate Rights Certificates alone will represent the Rights.
In the event that (i) the Company is the surviving corporation in
a merger with an Acquiring Person and shares of Company Common Stock shall
remain outstanding, (ii) a Person becomes the beneficial owner of 15% or more
of the then outstanding shares of Company Common Stock, (iii) an Acquiring
Person engages in one or more "self-dealing" transactions as set forth in the
Rights Agreement, or (iv) during such time as there is an Acquiring Person,
an event occurs which results in such Acquiring Person's ownership interest
being increased by more than 1% (e.g., by means of a reverse stock split or
recapitalization), then, in each such case, each holder of a Right will
thereafter have the right to receive, upon exercise, Units of Preferred Stock
(or, in certain circumstances, Company Common Stock, cash, property or other
securities of the Company) having a current market value equal to two times
the exercise price of the Right. The exercise price is the Purchase Price
multiplied by the number of Units of Preferred Stock issuable upon exercise
of a Right prior to the events described in this paragraph. Notwithstanding
any of the foregoing, following the occurrence of any of the events set forth
in this paragraph, all Rights that are, or (under certain circumstances
specified in the Rights Agreement) were, beneficially owned by any Acquiring
Person will be null and void.
In the event that, at any time following the Stock Acquisition
Date, (i) the Company is acquired in a merger or other business combination
transaction and the Company is not the surviving corporation (other than a
merger described in the preceding paragraph), (ii) any Person consolidates or
merges with the Company and all or part of the Company Common Stock is
converted or exchanged for securities, cash or property of any other Person
or (iii) 50% or more of the Company's assets or earning power is sold or
transferred, each holder of a Right (except Rights which previously have been
voided as described above) shall thereafter have the right to receive, upon
exercise, common stock of the Acquiring Person having a current market value
equal to two times the exercise price of the Right.
The Purchase Price payable, and the number of Units of Preferred
Stock 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 Preferred Stock, (ii)
if holders of the Preferred Stock are granted certain rights or warrants to
subscribe for Preferred Stock or convertible securities at less than the
current market price of the Preferred Stock, or (iii) upon the distribution
to the holders of the Preferred Stock of evidences of indebtedness, cash or
assets (excluding regular quarterly cash dividends) or of subscription rights
or warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will
be required until cumulative adjustments amount to at least 1% of the
Purchase Price. The Company is not required to issue fractional Units. In
lieu thereof, an adjustment in cash may be made based on the market price of
the Preferred Stock prior to the date of exercise.
At any time until ten business days following the Stock Acquisition
Date, a majority of the Independent Directors may redeem the Rights in whole,
but not in part, at a price of $.001 per Right (subject to adjustment in
certain events) (the "Redemption Price"), payable, at the election of such
majority of the Independent Directors, in cash or shares of Company Common
Stock. Immediately upon the action of a majority of the Independent
Directors ordering the redemption of the Rights, the Rights will terminate
and the only right of the holders of Rights will be to receive the Redemption
Price.
At any time prior to the Distribution Date, the Company (by action
of a majority of the Independent Directors) may exchange all or part of the
outstanding Rights for that number of Units of Preferred Stock at an exchange
ratio determined pursuant to the Rights Agreement and reflective as of the
then current market price.
Until a Right is exercised, the holder thereof, as such, will have
no rights as a shareholder of the Company, including, without limitation, the
right to vote or to receive dividends. While the distribution of the Rights
will not be taxable to shareholders or to the Company, shareholders may,
depending upon the circumstances, recognize taxable income in the event that
the Rights become exercisable for Units of Preferred Stock (or other
consideration).
Any of the provisions of the Rights Agreement may be amended
without the approval of the holders of Company Common Stock at any time prior
to the Distribution Date. After the Distribution Date, the provisions of the
Rights Agreement may be amended in order to cure any ambiguity, defect or
inconsistency, to make changes which do not adversely affect the interests of
holders of Rights (excluding the interests of any Acquiring Person), or to
shorten or lengthen any time period under the Rights Agreement; provided,
however, that, except under certain circumstances, no amendment to adjust the
time period governing redemption shall be made at such time as the Rights are
not redeemable.
Description of Preferred Stock
------------------------------
The Units of Preferred Stock that may be acquired upon exercise of
the Rights will be nonredeemable and subordinate to any other shares of
preferred stock that may be issued by the Company.
Each Unit of Preferred Stock will be entitled to dividends at the
same rate per share as dividends declared on the Company Common Stock and
shall be entitled to payment of dividends to the extent dividends are
declared on the Company Common Stock. In the event of liquidation, the
holder of a Unit of Preferred Stock will receive the per share amount paid in
respect of a share of Company Common Stock.
In the event of any merger, consolidation or other transaction in
which shares of Company Common Stock are exchanged, each Unit of Preferred
Stock will be entitled to receive the per share amount paid in respect of
each share of Company Common Stock. Each Unit of Preferred Stock will have
one vote, voting together with the Company Common Stock. The rights of
holders of the Preferred Stock to dividends, liquidation and voting, and in
the event of mergers and consolidations, are protected by customary
antidilution provisions.
Because of the nature of the Preferred Stock's dividend,
liquidation and voting rights, the economic value of one Unit of Preferred
Stock that may be acquired upon the exercise of each Right should approximate
the economic value of one share of the Company Common Stock.
Exhibit 4.2
The specimen stock certificate is identical to that which has been previously
filed except that the back of the stock certificate shall bear the following
legend:
"This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in the Rights
Agreement between Intelligent Electronics, Inc. (the
"Company") and Chemical Mellon Shareholder Services
L.L.C. (the "Rights Agent") dated as of March 22, 1996
(the "Rights Agreement), the terms of which are hereby
incorporated herein by reference and a copy of which is
on file at the principal office of the stock transfer
administration office of the Rights Agent. Under certain
circumstances, as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and
will no longer be evidenced by this certificate. The
Company will mail to the holder of this certificate a
copy of the Rights Agreement, as in effect on the date of
mailing, without charge promptly after receipt of a
written request therefor. Under certain circumstances
set forth in the Rights Agreement, Rights issued to, or
held by, any Person who is, was or becomes an Acquiring
Person or any Affiliate or Associate thereof (as such
terms are defined in the Rights Agreement), whether
currently held by or on behalf of such Person or by any
subsequent holder, may become null and void."