Exhibit 4.10
XEROX CORPORATION
and
THE FIRST NATIONAL BANK OF BOSTON,
Rights Agent
Rights Agreement
Dated as of April 7, 1997
Table of Contents
Section Page
Section 1. Certain Definitions 2
Section 2. Appointment of Rights Agent 7
Section 3. Issuance of Rights Certificates 7
Section 4. Form of Rights Certificates 9
Section 5. Countersignature and Registration 11
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates;Mutilated, Destroyed, Lost or Stolen Rights
Certificates 11
Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights 13
Section 8. Cancellation and Destruction of Rights Certificates 15
Section 9. Reservation and Availability of Capital Stock. 16
Section 10. Preferred Stock Record Date 18
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares of Number of Rights 19
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares 30
Section 13. Consolidation, Merger or Sale or Transfer of Assets,
Cash Flow or Earning Power 30
Section 14. Fractional Rights and Fractional Shares 34
Section 15. Rights of Action 35
Section 16. Agreement of Rights Holders 36
Section 17. Rights Certificate Holder Not Deemed a Shareholder 37
Section 18. Concerning the Rights Agent 37
Section 19. Merger or Consolidation or Change of Name of
Rights Agent 38
Section 20. Duties of Rights Agent 39
Section 21. Change of Rights Agent 42
Section 22. Issuance of New Rights Certificates 43
Section 23. Redemption and Termination 43
Section 24. Exchange 45
Section 25. Notice of Certain Events 46
Section 26. Notices 48
Section 27. Supplements and Amendments 48
Section 28. Successors 49
Section 29. Determinations and Actions by the Board of
Directors, etc 49
Section 30. Benefits of this Agreement 50
Section 31. Severability 50
Section 32. Governing Law 51
Section 33. Counterparts 51
Section 34. Descriptive Headings 51
Exhibit A -- Form of Rights Certificate
Exhibit B -- Form of Summary of Rights
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of April 7, 1997 (the "Agreement"), between
XEROX CORPORATION, a New York corporation (the "Company"), and THE FIRST
NATIONAL BANK OF BOSTON (the "Rights Agent").
W I T N E S S E T H
WHEREAS, on April 6, 1987 (the "1987 Rights Dividend Declaration
Date"), the Board of Directors of the Company authorized the Rights Agreement,
dated as of April 6, 1987, which was amended and restated as of February 6,
1989, between the Company and Chase Lincoln First Bank, N.A. as Rights Agent
(the "1987 Agreement"), declared a dividend distribution of one Right (a "1987
Right") for each share of common stock, par value $1.00 per share, of the
Company (the "Common Stock"), and Class B Stock, par value $1.00 per share, of
the Company (the "Class B Stock"), outstanding at the close of business on
April 16, 1987 (the "1987 Record Date"), and authorized the issuance of one
1987 Right for each share of Common Stock and Class B Stock issued (whether as
an original issuance or from the Company's treasury) between the 1987 Record
Date and the Distribution Date (as such term is defined in the 1987
Agreement), each 1987 Right representing the right to purchase one one-
hundredth of a share of Series A Cumulative Preferred Stock, par value $1.00
per share (the "Preferred Stock"), of the Company having the rights, powers
and preferences set forth in the Restated Certificate of Incorporation of the
Company, upon the terms, and subject to the conditions set forth in the 1987
Agreement;
WHEREAS, on April 7, 1997, the Board of Directors of the Company
determined it desirable and in the best interests of the Company and its
shareholders for the Company to extend the benefits afforded by the 1987
Agreement and to implement such extension by executing this Agreement;
WHEREAS, on April 7, 1997 (the "Rights Dividend Declaration Date"),
the Board of Directors of the Company authorized and declared a dividend
distribution of one Right (as hereinafter defined) for each share of Common
Stock outstanding upon the close of business on April 16, 1997 (the "Record
Date"), and has authorized the issuance of one Right (as such number may
hereinafter be adjusted pursuant to the provisions of Section 11(p) hereof)
for each share of Common Stock issued (whether as an original issuance or from
the Company's treasury) between the Record Date and the Distribution Date (as
hereinafter defined) and in certain other circumstances provided herein, each
Right initially representing the right to purchase one three-hundredth of a
share of Preferred Stock of the Company upon the terms and subject to the
conditions hereinafter set forth (the "Rights");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions.
For purposes of this Agreement, the following terms have the meanings
indicated:
(a) "Acquiring Person" shall mean any Person who constitutes an "Interested
Shareholder" as defined in Section 912 of the New York Business Corporation
Law, in effect from time to time (the "NYBCL"), but shall not include (i) the
Company, (ii) any Subsidiary of the Company, (iii) any employee benefit plan
of the Company or of any Subsidiary of the Company, (iv) any Person or entity
organized, appointed or established by the Company for or pursuant to the
terms of any such plan, (v) any Person who becomes an "Interested Shareholder"
as a result of a reduction in the number of shares of Common Stock outstanding
due to the repurchase of shares of Common Stock from time to time by the
Company unless and until such Person, after becoming aware that such Person
has become an "Interested Shareholder" acquires beneficial ownership of
additional shares of Common Stock representing one percent (1%) or more of the
shares of Common Stock then outstanding or (vi) any such Person who has
reported or is required to report such ownership on Schedule 13G under the
Securities Exchange Act of 1934, as amended from time to time (the "Exchange
Act") (or any comparable or successor report) or on Schedule 13D under the
Exchange Act (or any comparable or successor report) which Schedule 13D does
not state any intention to or reserve the right to control or influence the
management or policies of the Company or engage in any of the actions
specified in Item 4 (or any comparable or successor Item) of such Schedule
(other than the disposition of the Common Stock) and, within ten (10) business
days of being requested by the Company to advise it regarding the same,
certifies to the Company that such Person acquired shares of Common Stock
causing such Person to become an "Interested Shareholder" inadvertently or
without knowledge of the terms of the Rights and who, together with all
Affiliates and Associates, thereafter does not acquire additional shares of
Common Stock while such Person is an "Interested Shareholder"; provided,
however, that if the Person requested to so certify fails to do so within ten
(10) business days, then such Person shall become an Acquiring Person
immediately after such ten (10) business day period; provided, further,
however, that for purposes of determining whether such Person is an "Acquiring
Person," a Person engaged in business as an underwriter of securities shall
not be deemed to be an Acquiring Person as a result of such Person becoming
the "Beneficial Owner" of any securities acquired through such Person's
participation in good faith in a firm commitment underwriting unless such
Person is the "Beneficial Owner" of such securities upon the expiration of
forty (40) days after the date of such acquisition.
(b) "Adjustment Shares" shall have the meaning specified in Section 11(a)(ii)
hereof.
(c) "Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Section 912 of the NYBCL.
(d) A Person shall be deemed the "Beneficial Owner" of, and shall be deemed
to "beneficially own," any securities if such Person constitutes, with respect
to such securities, a "Beneficial Owner" as defined in Section 912 of the
NYBCL; provided, however, that for purposes of this Agreement (including for
purposes of determining whether a Person will be deemed an Interested
Shareholder under Section 912 of the NYBCL), a Person engaged in business as
an underwriter of securities shall not be deemed to be the "Beneficial Owner"
of, or to "beneficially own," (A) any securities acquired through such
Person's participation in good faith in a firm commitment underwriting until
the expiration of forty (40) days after the date of such acquisition, (B)
securities issuable upon exercise of Rights at any time prior to the
occurrence of a Triggering Event or (C) securities issuable 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(a) or Section 22 hereof (the
"Original Rights") or pursuant to Section 11(i) hereof in connection with an
adjustment made with respect to any Original Rights.
(e) "Business day" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in the State of New York are authorized or
obligated by law or executive order to close.
(f) "Close of business" on any given date shall mean 5:00 P.M., 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.
(g) "Closing Price" shall mean for each day the last sale price or, in case
no such sale takes place on such day, the average of the closing bid and asked
prices, in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading on
the New York Stock Exchange or, if the securities in question are not listed
or admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the securities
in question are listed or admitted to trading or, if the securities in
question 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 the
securities in question are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by
a professional market maker selected by the Board of Directors of the Company
and making a market in the securities in question. If on any such date no
market maker is making a market in the securities in question, the fair value
of such securities on such date as determined in good faith by the Board of
Directors of the Company shall be used. If the securities in question 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 the Board
of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all
purposes.
(h) "Common Stock" shall mean the common stock, par value $1.00 per share,
of the Company, except that "Common Stock" when used with reference to any
Person other than the Company shall mean the capital stock of such Person with
the greatest voting power, or the equity securities or other equity interest
having power to control or direct the management of such Person.
(i) "Common stock equivalents" shall have the meaning specified in Section
11(a)(iii) hereof.
(j) "Current Value" shall have the meaning set forth in Section 11(a)(iii)
hereof.
(k) "Distribution Date" shall mean the earlier of (i) the close of business
on the tenth business day after the Stock Acquisition Date, as hereinafter
defined (or, if the tenth business day after the Stock Acquisition Date occurs
before the Record Date, the close of business on the Record Date), or (ii) the
close of business on the tenth business day (or such later day as may be
determined by the Board of Directors) after the date of the commencement of,
or the first public announcement of the intent to commence (as determined
pursuant to Rule 14d-2(a) of the General Rules and Regulations under the
Exchange Act in effect on the date of this Agreement), a tender or exchange
offer by any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or of any Subsidiary of the Company
or any Person or entity organized, appointed or established by or for the
Company for or pursuant to the terms of any such plan), if upon consummation
thereof, such Person would be an Acquiring Person (including any such date
which is after the date of this Agreement and prior to the issuance of the
Rights).
(l) "Expiration Date" shall mean the earliest of (i) the close of business
on the tenth anniversary of the Record Date (the "Final Expiration Date"),
(ii) the time at which the Rights are redeemed as provided in Section 23
hereof or (iii) the time at which the Rights are exchanged pursuant to Section
24 hereof.
(m) "Person" shall mean any individual, firm, corporation, partnership or
other entity, and shall include any successor (by merger or otherwise) of such
entity.
(n) "Preferred Stock" shall mean shares of Series A Cumulative Preferred
Stock, par value $1.00 per share, of the Company and, to the extent necessary
to permit the full exercise of the then outstanding Rights, any other series
of Preferred Stock of the Company designated by the Board of Directors of the
Company for such purposes containing terms substantially similar to the Series
A Cumulative Preferred Stock.
(o) "Principal Party" shall have the meaning specified in Section 13(b)
hereof.
(p) "Purchase Price" shall have the meaning specified in Section 4(a) and
Section 7(b) hereof, as modified by Section 11(a)(ii) and Section 13(a)
hereof.
(q) "Redemption Price" shall have the meaning specified in Section 23(a)
hereof.
(r) "Rights Certificates" shall have the meaning specified in Section 3(a)
hereof.
(s) "Securities Act" shall have the meaning specified in Section 9(c)
hereof.
(t) "Section 11(a)(ii) Event" shall mean any event described in Section
11(a)(ii) hereof.
(u) "Section 11(a)(ii) Trigger Date" shall have the meaning specified in
Section 11(a)(iii) hereof.
(v) "Section 13 Event" shall mean any event described in clauses (x), (y)
or (z) of Section 13(a) hereof.
(w) "Spread" shall have the meaning specified in Section 11(a)(iii) hereof.
(x) "Stock Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed or amended pursuant to Section 13(d) under the
Exchange Act) by the Company or an Acquiring Person that an Acquiring Person
has become such.
(y) "Subsidiary" shall mean, with reference to any Person, any corporation
of which an amount of voting securities sufficient to elect at least a
majority of the directors of such corporation is beneficially owned, directly
or indirectly, by such Person or any corporation otherwise controlled by such
Person.
(z) "Substitution Period" shall have the meaning specified in Section
11(a)(iii) hereof.
(aa) "Summary of Rights" shall have the meaning specified in Section 3(b)
hereof.
(bb) "Trading Day" shall mean a day on which the principal national
securities exchange on which the securities in question are listed or admitted
to trading is open for the transaction of business or, if such securities are
not listed or admitted to trading on any national securities exchange, a
business day.
(cc) "Triggering Event" shall mean any Section 11(a)(ii) Event or any
Section 13 Event.
Section 2. Appointment of Rights Agent.
The Company hereby appoints the Rights Agent to act as agent for the Company
and the holders of the Rights (who, in accordance with Section 3 hereof,
shall, prior to the Distribution Date, also be the holders of the Common
Stock) in accordance with the terms and conditions hereof, and the Rights
Agent hereby accepts such appointment. The Company may from time to time
appoint such co-Rights Agents as it may deem necessary or desirable, upon ten
days prior written notice to the Rights Agent. The Rights Agent shall have no
duty to supervise, and shall in no event be liable for the acts or omissions
of, any co-Rights Agent so appointed.
Section 3. Issuance of Rights Certificates.
(a) Until the Distribution Date, the Rights will be evidenced by the
certificates for the Common Stock registered in the names of the holders of
the Common Stock (which certificates for Common Stock shall be deemed also to
be certificates for Rights) and not by separate certificates, and the Rights
will be transferred with and only with the transfer of the underlying shares
of Common Stock (including a transfer to the Company). As soon as practicable
after the Distribution Date, the Rights Agent will send by first-class mail,
insured, postage prepaid, to each record holder of the Common Stock as of the
close of business on the Distribution Date, at the address of such holder
shown on the records of the Company, one or more rights certificates, in
substantially the form of Exhibit A hereto (the "Rights Certificates"),
evidencing one Right for each share of Common Stock so held, subject to
adjustment as provided herein. In the event that an adjustment in the number
of Rights per share of Common Stock has been made pursuant to Section 11(p)
hereof, at the time of distribution of the Rights Certificates, the Company
shall 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) The Company will make available a copy of a Summary of Rights, in
substantially the form attached hereto as Exhibit B (the "Summary of Rights"),
to any holder of Rights who may so request from time to time. With respect to
certificates for the Common Stock outstanding as of the Record Date or issued
subsequent to the Record Date, until the Distribution Date, the Rights will be
evidenced by such certificates for the Common Stock and the registered holders
of the Common Stock shall also be the registered holders of the associated
Rights. Until the earlier of the Distribution Date or the Expiration Date,
the transfer of any certificates representing shares of Common Stock in
respect of which Rights have been issued shall also constitute the transfer of
the Rights associated with such shares of Common Stock.
(c) Subject to Section 22 hereof, Rights shall be issued in respect of all
shares of Common Stock which are outstanding on the Record Date and which are
issued (whether originally issued or from the Company's treasury) after the
Record Date but prior to the earlier of the Distribution Date or the
Expiration Date. Certificates representing such shares of Common Stock shall
also be deemed to be certificates for Rights, and shall bear the following
legend (or the legend required under the 1987 Agreement):
This certificate also evidences and entitles the holder hereof to certain
Rights as set forth in the Rights Agreement between Xerox Corporation (the
"Company") and the Rights Agent thereunder (the "Rights Agreement"), the terms
of which are hereby incorporated herein by reference and a copy of which is on
file at the principal offices of the Company. 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 of such Rights, shall become null and
void.
With respect to such certificates containing the foregoing legend (or the
legend required under the 1987 Agreement), until the earlier of (i) the
Distribution Date or (ii) the Expiration Date, the Rights associated with the
Common Stock represented by such certificates shall be evidenced by such
certificates alone and the registered holders of 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 Common Stock represented by such certificates. At the time of the
distribution of the Rights Certificates, the Board of Directors may, at its
discretion,
distribute Rights to the holders of any series of preferred stock which is
convertible into shares of the Company's Common Stock on the basis of the
number of shares of Common Stock into which such shares of preferred stock are
convertible.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to purchase and of
assignment 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 with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the
Rights may from time to time be listed, or to conform to usage. Subject to
the provisions of Section 11 and Section 22 hereof, 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 one three-
hundredths of a share of Preferred Stock as shall be set forth therein at the
price set forth therein (such exercise price per one three-hundredth of a
share, the "Purchase Price"), but the amount and type of securities
purchasable 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 to Section 3(a), Section 11(i)
or Section 22 hereof 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) who
becomes a transferee after the Acquiring Person becomes such, or (iii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring Person
becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom such
Acquiring Person has any agreement, arrangement or understanding (whether or
not in writing) regarding the transferred Rights or (B) a transfer which the
Board of Directors has determined is part of a plan, arrangement or
understanding (whether or not in writing) which has as a primary purpose or
effect avoidance of Section 7(e) hereof, and any Rights Certificate issued
pursuant to Section 6 or Section 11 hereof upon transfer, exchange,
replacement or adjustment of any other Rights Certificate referred to in this
sentence, shall (to the extent feasible) contain 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 shall become null
and void in the circumstances specified in Section 7(e) of the Rights
Agreement.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of the Company by
its Chairman of the Board or any President or any Vice President, either
manually or by facsimile signature, and shall have affixed thereto the
Company's seal or a facsimile thereof which shall be attested by the Secretary
or an Assistant Secretary or the Treasurer or an Assistant Treasurer of the
Company, either manually or by facsimile signature. The Rights Certificates
shall be countersigned by the Rights Agent, either manually or by facsimile
signature, and shall not be valid for any purpose unless so countersigned. In
case any officer of the Company who shall have signed any of the Rights
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Rights Certificates, nevertheless, may be countersigned by the Rights
Agent, and issued and delivered by the Company with the same force and effect
as though the person who so signed such Rights Certificates had not ceased to
be such officer of the Company; and any Rights Certificates may be signed on
behalf of the Company by any person who, at the actual date of the execution
of such Rights Certificate, shall be a proper officer of the Company to sign
such Rights Certificate, although at the date of the execution of this Rights
Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at its principal office or offices designated as the appropriate
place for the surrender of Rights Certificates upon exercise or transfer,
books for registration and transfer of the Rights Certificates issued
hereunder. Such books shall show the names and addresses of the respective
holders of the Rights Certificates, the number of Rights evidenced on its face
by each of the Rights Certificates and the date of each of the Rights
Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Section 4(b), Section 7(e) and Section 14
hereof, at any time after the close of business on the Distribution Date, and
at or prior to the close of business on the Expiration Date, any Rights
Certificate or Certificates (other than Rights Certificates representing
Rights that have been exchanged pursuant to Section 24 hereof), may be
transferred, split up, combined or exchanged for another Rights Certificate or
Certificates, entitling the registered holder to purchase a like number of one
three-hundredths of a share of Preferred Stock (or, following a Triggering
Event, Common Stock, other securities, cash or other assets, as the case may
be) as the
Rights Certificate or Certificates surrendered then entitled such holder (or
former holder in the case of a transfer) to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Rights Certificate 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 principal office or offices 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, split up, combination or exchange of any such surrendered Rights
Certificate until the registered holder thereof shall have completed and
signed the form of assignment and related certificate 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) or
Affiliates or Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to Section 4(b), Section 7(e),
Section 14 and Section 24 hereof, 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) Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Rights
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and reimbursement to the Company and
the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Rights Certificate if
mutilated, the Company will execute and deliver a new Rights Certificate of
like tenor to the Rights Agent for countersignature and delivery to the
registered owner in lieu of the Rights Certificate so lost, stolen, destroyed
or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) Subject to Section 7(e) hereof, the registered holder of any Rights
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section 11(a)(iii) and Section 23(a)
hereof) 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
related certificate on the reverse side thereof duly executed, to the Rights
Agent at the principal office or offices of the Rights Agent designated for
such purpose, together with payment of the aggregate Purchase Price for the
total number of one three-hundredths of a share of Preferred Stock (or other
securities, cash or other assets, as the case may be) as to which such
surrendered Rights are then exercisable, at or prior to the Expiration Date.
(b) The Purchase Price for each one three-hundredth of a share of Preferred
Stock pursuant to the exercise of a Right shall initially be $[ ], and
shall be subject to adjustment from time to time as provided in Section
11(a)(ii) and Section 13(a) hereof and shall be payable in lawful money of the
United States of America in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing 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 per one three-hundredth of a share of Preferred Stock (or other
shares, securities, cash or other assets, as the case may be) to be purchased
as set forth below and an amount equal to any applicable transfer tax, the
Rights Agent shall, subject to Section 20(k) hereof, thereupon promptly (i)
(A) requisition from any transfer agent of the shares of Preferred Stock (or
make available, if the Rights Agent is the transfer agent for such shares)
certificates for the total number of one three-hundredths of a share of
Preferred Stock to be purchased and the Company hereby irrevocably authorizes
its transfer agent to comply with all such requests, or (B) if the Company
shall have elected to deposit the total number of shares of Preferred Stock
issuable upon exercise of the Rights hereunder with a depositary agent,
requisition from the depositary agent depositary receipts representing such
number of one three-hundredths of a share of Preferred Stock as are to be
purchased (in which case certificates for the shares of Preferred Stock
represented by such receipts shall be deposited by the transfer agent with the
depositary agent) 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
hereof, (iii) after receipt of such certificates or 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. The
payment of the Purchase Price (as such amount may be reduced pursuant to
Section 11(a)(iii) hereof) shall be made in cash or by certified bank check or
bank draft payable to the order of the Company. In the event that the Company
is obligated to issue other securities (including Common Stock) of the
Company, pay cash and/or distribute other property pursuant to Section 11(a)
hereof, the Company will make all arrangements necessary so that such other
securities, cash and/or other property are available for distribution by the
Rights Agent, if and when appropriate. The Company reserves the right to
require, prior to the occurrence of a Triggering Event, that upon any exercise
of Rights, a number of Rights be exercised so that only whole shares of
Preferred Stock would be issued.
(d) In case the registered holder of any Rights Certificate shall exercise
less than all the Rights evidenced thereby, a new Rights Certificate
evidencing Rights equivalent to
the Rights remaining unexercised shall be 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 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from and
after the first occurrence of a Section 11(a)(ii) Event, any Rights
beneficially owned by: (i) an Acquiring Person or an Associate or Affiliate of
an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person with
whom the Acquiring Person has any agreement, arrangement or understanding
(whether or not in writing) regarding the transferred Rights or (B) a transfer
which the Board of Directors of the Company has determined is part of a plan,
arrangement or understanding (whether or not in writing) which has as a
primary purpose or effect the avoidance of this Section 7(e), shall become
null and void without any further action, and no holder of such Rights shall
thereupon have any rights whatsoever with respect to such Rights, whether
under any provision of this Agreement or otherwise from and after such
occurrence. The Company shall use all reasonable efforts to insure that the
provisions of this Section 7(e) and Section 4(b) hereof are complied with, but
shall have no liability to any holder of Rights Certificates or any other
Person as a result of its failure to make any determinations with respect to
an Acquiring Person or its Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary, neither the
Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder upon the occurrence of any purported exercise
as set forth in this Section 7 unless such registered holder shall have (i)
completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Rights Certificate surrendered
for such exercise, and (ii) provided such additional evidence of the identity
of the Beneficial Owner (or former Beneficial Owner) 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 cancelled form, or, if surrendered to the Rights Agent,
shall be cancelled by it, and no Rights Certificates shall be issued in
lieu thereof except as expressly permitted by any of the provisions of this
Agreement. The Company shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall so cancel and retire, any other Rights
Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all cancelled Rights
Certificates to the Company, or shall, at the written request of the Company,
destroy such cancelled 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 covenants and agrees that it will cause to be reserved and
kept available out of its authorized and unissued shares of Preferred Stock
(and, following the occurrence of a Triggering Event, out of its authorized
and unissued shares of Common Stock and/or other securities or out of its
authorized and issued shares held in its treasury), the number of shares of
Preferred Stock (and, following the occurrence of a Triggering Event, Common
Stock and/or other securities) that, as provided in this Agreement, will be
sufficient to permit the exercise in full of all outstanding Rights.
(b) So long as the shares of Preferred Stock (and, following the occurrence
of a Triggering Event, Common Stock and/or other securities) issuable and
deliverable upon the exercise of the Rights may be listed on any national
securities exchange, the Company shall use its best efforts to cause, from and
after such time as the Rights become exercisable, all shares reserved for such
issuance to be listed on such exchange upon official notice of issuance upon
such exercise; provided, however, that the Company shall have no obligation
hereunder to list the shares of Preferred Stock on any national securities
exchange.
(c) The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the first occurrence of a
Section 11(a)(ii) Event on which the consideration to be delivered by the
Company upon exercise of the Rights has been determined in accordance with
Section 11(a)(iii) hereof, or, if required by law, the Distribution Date, a
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the securities purchasable upon exercise of
the Rights on an appropriate form, (ii) cause such registration statement to
become effective as soon as practicable after such filing, and (iii) cause
such registration statement to remain effective (with a prospectus at all
times meeting the requirements of the Securities Act) until the earlier of (A)
the date as of which the Rights are no longer exercisable for such securities
and (B) the date of the expiration of the Rights. The Company will also take
such action as may be appropriate under, or to ensure compliance with, the
securities or "blue sky" laws of the various states in connection with the
exercisability of the Rights. The Company may temporarily suspend, for a
period of time not to exceed ninety (90) days after the date set forth in
clause (i) of the first sentence of this Section 9(c), the exercisability of
the Rights in order to prepare and file such registration statement and permit
it to become effective. Upon any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. In addition, if the Company shall
determine that a registration statement is required following the Distribution
Date, the Company may temporarily suspend the exercisability of the Rights
until such time as a registration statement has been declared effective.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction if the requisite qualification in
such jurisdiction has not been obtained, the exercise thereof is not permitted
under applicable law or a registration statement has not been declared
effective.
(d) The Company covenants and agrees that it will take all such action as
may be necessary to ensure that all one three-hundredths of a share of
Preferred Stock (and, following the occurrence of a Triggering Event, Common
Stock and/or other securities) delivered upon exercise of the Rights shall, at
the time of delivery of the certificates for such shares (subject to payment
of the Purchase Price), be duly and validly authorized and issued and fully
paid and nonassessable.
(e) The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Rights Certificates and
of any certificates for a number of one three-hundredths of a share of
Preferred Stock (or Common Stock and/or other securities, as the case may be)
upon the exercise of Rights. The Company shall not, however, be required to
pay any transfer tax which may be payable in respect of any transfer or
delivery of Rights Certificates to a Person other than, or the issuance or
delivery of a number of one three-hundredths of a share of Preferred Stock (or
Common Stock and/or other securities, as the case may be) in respect of a name
other than that of, the registered holder of the Rights Certificate evidencing
Rights surrendered for transfer or exercise, or to issue or deliver any
certificates for a number of one three-hundredths of a share of Preferred
Stock (or Common Stock and/or other securities, as the case may be) in a name
other than that of the registered holder upon the exercise of any Rights until
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 a number of one three-
hundredths of a share of Preferred Stock (or Common Stock and/or other
securities, as the case may be) is issued upon the exercise of Rights shall
for all purposes be deemed to have
become the holder of record of the shares of Preferred Stock (or Common Stock
and/or other securities, as the case may be) represented thereby on, and such
certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and all applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Preferred Stock
(or Common Stock and/or other securities, as the case may be) transfer books
of the Company are closed, such Person shall be deemed to have become the
record holder of such shares on, and such certificate shall be dated, the next
succeeding business day on which the Preferred Stock (or Common Stock and/or
other securities, as the case may be) transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby, the holder of a Rights
Certificate shall not be entitled to any rights of a shareholder of the
Company with respect to shares 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 shares 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 Preferred Stock, (C) combine
the outstanding 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) and Section 7(e) hereof,
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, 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 and
at a time when the Preferred Stock transfer books of the Company were open,
such holder would have owned upon such exercise and been entitled to receive
by virtue of such dividend, subdivision, combination or reclassification. If
an event occurs which would require an adjustment under both this Section
11(a)(i) and
Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i)
shall be in addition to, and shall be made prior to, any adjustment required
pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 24 of this Agreement, in the event any Person shall,
at any time after the Rights Dividend Declaration Date, becomes an Acquiring
Person, unless the event causing such Person to become an Acquiring Person is
a transaction set forth in Section 13(a) hereof, or is an acquisition of
shares of Common Stock pursuant to a tender offer or an exchange offer for all
outstanding shares of Common Stock at a price and on terms determined by at
least a majority of the members of the Board of Directors who are not officers
of the Company and who are not representatives, nominees, Affiliates or
Associates of an Acquiring Person, after receiving advice from one or more
investment banking firms, to be (a) at a price which is fair and adequate to
shareholders (taking into account all factors which such members of the Board
of Directors of the Company deem relevant including, without limitation,
prices which could reasonably be achieved if the Company or its assets were
sold on an orderly basis designed to realize maximum value) and (b) otherwise
in the best interests of the Company and its shareholders, then, promptly
following the occurrence of such 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 a number of one three-hundredths of a share of Preferred Stock, such number
of shares of Common Stock of the Company as shall equal the result obtained by
(x) multiplying the then current Purchase Price by the number of one three-
hundredths of a share of Preferred Stock for which a Right was exercisable
immediately prior to the first occurrence of a Section 11(a)(ii) Event, and
(y) dividing that product (which, following such first occurrence, shall
thereafter be referred to as the "Purchase Price" for each Right and for all
purposes of this Agreement) by fifty percent (50%) of the current market price
(determined pursuant to Section 11(d) hereof) per share of Common Stock on the
date of such first occurrence (such number of shares, the "Adjustment
Shares").
(iii) In the event that the number of shares of Common Stock which is
authorized by the Company's Restated 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 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, the "Spread"), and (B) with respect to each
Right (subject to Section 7(e) hereof), make adequate provision to substitute
for the Adjustment Shares, upon the exercise of a Right and payment of the
applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price,
(3) Common Stock or other equity securities of the Company (including, without
limitation, shares, or units of
shares, of preferred stock, such as the Preferred Stock, which the Board of
Directors of the Company has deemed to have essentially the same value or
economic rights as shares of Common Stock (such shares of preferred stock
referred to herein as "common 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 (less the amount of any reduction
in the Purchase Price), where such aggregate value has been determined by the
Board of Directors of the Company based upon the advice of a nationally
recognized investment banking firm selected by the Board of Directors of the
Company; provided, however, that if the Company shall not have made adequate
provision to deliver value pursuant to clause (B) above within thirty (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)(ii) 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, shares of Common Stock (to the extent
available) and then, if necessary, cash, which shares and/or cash have an
aggregate value equal to the Spread. If the Board of Directors of the Company
shall determine in good faith that it is likely that sufficient additional
shares of Common Stock could be authorized for issuance upon exercise in full
of the Rights, the thirty (30) day period set forth above may be extended to
the extent necessary, but not more than ninety (90) days after the Section
11(a) (ii) Trigger Date, in order that the Company may seek shareholder
approval for the authorization of such additional shares (such thirty (30) day
period, as it may be extended, referred to herein as the "Substitution
Period"). To the extent that the Company determines that some action need be
taken pursuant to the first and/or second sentences of this Section
11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof,
that such action shall apply uniformly to all outstanding Rights, and (y) may
suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek such shareholder approval for such
authorization of additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to determine the
value thereof. In the event of any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. For purposes of this Section 11(a)(iii),
the value of each Adjustment Share shall be the current market price (as
determined pursuant to Section 11(d) hereof) per share of the Common Stock on
the Section 11(a)(ii) Trigger Date and the per share or per unit value of any
"common stock equivalent" shall be deemed to equal the current market price
per share of the Common 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 forty-five (45)
calendar days after such record date)
Preferred Stock (or shares having the same rights, privileges and preferences
as the 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
number of shares of Preferred Stock outstanding on such record date, plus the
number of shares of Preferred Stock which 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 the Board of Directors of the Company, 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 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 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 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 the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent) of the portion
of the cash, assets or evidences of indebtedness so to be distributed or of
such subscription rights or warrants applicable to 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, other than
computations made pursuant to Section 11(a)(iii) hereof, the "current market
price" per share of Common Stock on any date shall be deemed to be the average
of the daily Closing Prices per share of such Common Stock for the thirty (30)
consecutive Trading Days immediately prior to such date, and for purposes of
computations made pursuant to Section 11(a)(iii) hereof, the "current market
price" per share of Common Stock on any date shall be deemed to be the average
of the daily Closing Prices per share of such Common Stock for the ten (10)
consecutive Trading Days immediately following such date; provided, however,
that in the event that the current market price per share of the Common Stock
is determined during a period following the announcement by the issuer of such
Common Stock of (A) a dividend or distribution on such Common Stock payable in
shares of such Common Stock or securities convertible into shares of such
Common Stock (other than the Rights), or (B) any subdivision, combination or
reclassification of such Common Stock, and prior to the expiration of the
requisite thirty (30) Trading Day or ten (10) Trading Day period, as set forth
above, after the ex-dividend date for such dividend or distribution, or the
record date for such subdivision, combination or reclassification, then, and
in each such case, the "current market price" shall be properly adjusted to
take into account ex-dividend trading.
(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 the Common Stock in Section 11(d)(i) hereof. 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 subsection (g) of Section 1 hereof, the
"current market price" per share of Preferred Stock shall be conclusively
deemed to be an amount equal to 300 (as such number may be appropriately
adjusted for such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock occurring after the date of
this Agreement) multiplied by the current market price per share of the Common
Stock. If neither the Common Stock nor the Preferred Stock is publicly held
or so listed or traded, "current market price" per share shall mean the fair
value per share as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes. For all purposes of
this Agreement, the "current market price" of one three-hundredth of a share
of Preferred
Stock shall be equal to the "current market price" of one share of Preferred
Stock divided by 300.
(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 one percent (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 ten-thousandth of a share of Common
Stock or other share or one-millionth 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 (3) years from the date of the transaction which mandates such
adjustment, or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a)(ii) or
Section 13(a) hereof, 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), (b), (c), (e), (g), (h), (i), (j), (k) and (m), and the provisions of
Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred Stock shall
apply on like terms to any such other shares; provided, however, that the
Company shall not be liable for its inability to reserve and keep available
for issuance upon exercise of the Rights pursuant to Section 11(a)(ii) a
number of shares of Common Stock greater than the number then authorized by
the Restated Certificate of Incorporation of the Company but not outstanding
or reserved for other purposes.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one three-hundredths
of a share of Preferred Stock purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the 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 one
three-hundredths of a share of Preferred Stock (calculated to the nearest one-
millionth) obtained by (i) multiplying (x) the number of one three-hundredths
of a share 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 one three-hundredths of a share of Preferred Stock purchasable
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 one
three-hundredths of a share of Preferred Stock for which a Right was
exercisable immediately prior to such adjustment, at the adjusted Purchase
Price. Each Right held of record prior to such adjustment of the number of
Rights shall become that number of Rights (calculated to the nearest ten-
thousandth) obtained by dividing the Purchase Price in effect immediately
prior to 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 ten (10) days later than the
date of the 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 hereof, the additional Rights
to which such holders shall be entitled as a result of such adjustment, or, at
the option of the Company, shall cause to be distributed to such holders of
record in substitution and replacement for the Rights Certificates held by
such holders prior to the date of adjustment, and upon surrender thereof, if
required by the Company, new Rights Certificates evidencing all the Rights to
which such holders shall be entitled after such adjustment. Rights
Certificates 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 one three-hundredths of a share 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 one three-hundredth of a
share and the number of one three-hundredths of a share which were expressed
in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then par value attributable to the number of one
three-hundredths of a share of Preferred Stock issuable upon exercise of the
Rights, the Company shall take any corporate action which may, in the opinion
of its counsel, be necessary in order that the Company may validly and legally
issue, fully paid and nonassessable, such number of one three-hundredths of a
share of Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event the
issuance to the holder of any Right exercised after such record date of the
number of one three-hundredths of a share of Preferred Stock and other capital
stock or securities of the Company, if any, issuable upon such exercise over
and above the number of one three-hundredths of a share of Preferred Stock and
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 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 the Board of Directors of the Company, in its good faith
judgment, 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 which 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 shareholders.
(n) The Company covenants and agrees that it shall not, at any time after
the Distribution Date, (i) consolidate with any other Person (other than a
consolidation with a Subsidiary of the Company in a transaction which does not
violate the provisions of Section 11(o) hereof), (ii) merge with or into any
other Person (other than a merger with a Subsidiary of the Company in a
transaction which does not violate the provisions of Section 11(o) hereof), or
(iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction or a series of related transactions, assets, earning power or cash
flow aggregating more than fifty percent (50%) of the assets, earning power or
cash flow of the Company and its Subsidiaries (taken as a whole) to any other
Person or Persons (other than a sale or transfer to the Company and/or any of
its Subsidiaries
in one or more transactions each of which does not violate the provisions of
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 which 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 shareholders of the Person who
constitutes, or would constitute, the "Principal Party" for purposes of
Section 13(a) hereof shall have received a distribution of Rights previously
owned by such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the earlier of the
Distribution Date or the Stock Acquisition Date, it will not, except as
permitted by Section 23 or Section 27 hereof, take (or permit any Subsidiary
to take) any action if at the time such action is taken it is reasonably
foreseeable that such action will diminish substantially or otherwise
eliminate the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time after the date of this Agreement and
prior to the Distribution Date (i) declare a dividend on the outstanding
shares of Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding shares of Common Stock, or (iii) combine the outstanding shares of
Common Stock into a smaller number of shares, the number of Rights associated
with each share of 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
Common Stock following any such event shall equal the result obtained by
multiplying the number of Rights associated with each share of Common Stock
immediately prior to such event by a fraction, the numerator which shall be
the total number of shares of Common Stock outstanding immediately prior to
the occurrence of the event and the denominator of which shall be the total
number of shares of Common Stock outstanding immediately following the
occurrence of such event.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or Section 13 hereof,
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 Common Stock a copy of such certificate and (c) if a
Distribution Date has occurred, mail a brief summary thereof to each holder of
a Rights Certificate in accordance with Section 26 hereof. The Rights Agent
shall be fully protected in relying on any such certificate and on any
adjustment therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of Assets, Cash Flow or
Earning Power.
(a) In the event that, following the Stock Acquisition Date, directly or
indirectly, (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 Common Stock shall be changed
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), in one
transaction or a series of related transactions, assets, earning power or cash
flow aggregating more than fifty percent (50%) of the assets, earning power or
cash flow of the Company and its Subsidiaries (taken as a whole) to any Person
or Persons (other than the Company or any Subsidiary of the Company in one or
more transactions each of which complies with Section 11(o) hereof), then, and
in each such case (except as may be contemplated by Section 13(d) hereof),
proper provision shall be made so that: (i) each holder of a Right (other than
Rights that heretofore became null and void pursuant to Section 7(e) hereof)
shall thereafter have the right to receive, upon the exercise thereof at the
then current Purchase Price in accordance with the terms of this Agreement
(or, if any Section 11(a)(ii) event has occurred prior to the first occurrence
of a Section 13(a) Event, at the Purchase Price in effect immediately prior to
the first occurrence of a Section 11(a)(ii) event), such number of validly
authorized and issued, fully paid, non-assessable and freely tradeable shares
of Common Stock of the Principal Party (as such term is hereinafter defined),
free and clear of any liens, encumbrances, rights of first refusal or other
adverse claims, as shall be equal to the result obtained by (1) multiplying
the then current Purchase Price by the number of one three-hundredths of a
share 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 one three-hundredths of a share of Preferred Stock for which a
Right was exercisable immediately prior to the first occurrence of a Section
11(a)(ii) Event by the Purchase Price in effect immediately prior to such
first occurrence), and (2) dividing that product (which, following the first
occurrence of a Section 13 Event, shall be referred to as the "Purchase Price"
for each Right and for all purposes of this Agreement) by fifty percent (50%)
of the current market price (determined pursuant to Section 11(d)(i) 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 hereof 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 assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably may
be, in relation to its shares of Common Stock thereafter deliverable upon the
exercise of the Rights; and (v) the provisions of Section 11(a) (ii) hereof
shall be of no effect following the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in clause (x) or (y)
of the first sentence of Section 13(a) hereof, the Person that is the issuer
of any securities into which shares of Common Stock of the Company are
converted in such merger or consolidation, and if no securities are so issued,
the Person that is the other party to such merger or consolidation; and
(ii) in the case of any transaction described in clause (z) of
the first sentence of Section 13(a) hereof, the Person that is the party
receiving the greatest portion of the assets, earning power or cash flow
transferred pursuant to such transaction or transactions;
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
twelve (12) month period, registered under Section 12 of the Exchange Act, and
such Person is a direct or indirect Subsidiary of another Person the Common
Stock of which is and has been so registered, "Principal Party" shall refer to
such other Person; and (2) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Stock of two or more of which
are and have been so registered, "Principal Party" shall refer to whichever of
such Persons is the issuer of the Common Stock having the greatest aggregate
market value.
(c) The Company shall not consummate any such consolidation, merger, sale
or transfer unless the Principal Party shall have sufficient authorized and
unissued shares of Common Stock not reserved for other purposes to permit the
full exercise 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, as soon as practicable after the date of any
consolidation, merger, sale or transfer of assets mentioned in paragraph (a)
of this Section 13, the Principal Party will:
(i) prepare and file a registration statement under the Securities Act with
respect to the Rights and the securities purchasable upon exercise of the
Rights on an appropriate form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as practicable after
such filing and (B) remain effective (with a prospectus at all times meeting
the requirements of the Securities Act) until the Expiration Date; 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.
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) hereof.
(d) Notwithstanding anything in this Agreement to the contrary, this
Section 13 shall not be applicable to a transaction described in subparagraphs
(x) and (y) of Section 13(a) hereof if (i) such transaction is consummated
with a Person or Persons who acquired shares of Common Stock pursuant to a
tender offer or exchange offer for all outstanding shares of Common Stock
which complies with the provisions of Section 11(a)(ii) hereof (or a wholly
owned subsidiary of any such Person or Persons), (ii) the price per share of
Common Stock offered in such transaction is not less than the price per share
of Common Stock paid to all holders of shares of Common Stock whose shares
were purchased pursuant to such tender offer or exchange offer and (iii) the
form of consideration being offered to the remaining holders of shares of
Common Stock pursuant to such transaction is the same as the form of
consideration paid pursuant to such tender offer or exchange offer. Upon
consummation of any such transaction contemplated by this Section 13(d), all
Rights hereunder shall expire.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights, except
prior to the Distribution Date as provided in Section 11(p) hereof, or to
distribute Rights Certificates which evidence fractional Rights. In lieu of
such fractional Rights, there shall be paid to the registered holders of the
Rights Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For purposes of this Section 14(a),
the
current market value of a whole Right shall be the Closing Price of the Rights
for the Trading Day immediately prior to the date on which such fractional
Rights would have been otherwise issuable. The Closing Price of the Rights
for any day shall be the last sale price, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, in either case
as reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the Rights are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Rights are listed or admitted to trading, or
if the Rights are not listed or admitted to trading on any national securities
exchange, the last quoted price, or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by NASDAQ
or such other system then in use or, if on any such date the Rights are not
quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the
Rights selected by the Board of Directors of the Company. If on any such date
no such market maker is making a market in the Rights, the fair value of the
Rights on such date as determined in good faith by the Board of Directors of
the Company shall be used.
(b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions which are integral multiples of one
three-hundredth of a share of Preferred Stock) upon exercise of the Rights or
to distribute certificates which evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one three-hundredth of a
share of Preferred Stock). In lieu of fractional shares of Preferred Stock
that are not integral multiples of one three-hundredth of a share of Preferred
Stock, 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 current market price of one three-hundredth of a
share of Preferred Stock. For purposes of this Section 14(b), the current
market price of one three-hundredth of a share of Preferred Stock shall be one
three-hundredth of the Closing Price of a share of Preferred Stock (as
determined pursuant to Section 11(d)(ii) hereof) for the Trading Day
immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event, the Company shall not
be required to issue fractions of shares of Common Stock upon exercise of the
Rights or to distribute certificates which evidence fractional shares of
Common Stock. In lieu of fractional shares of Common Stock, 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 current market price of one (1) share of Common Stock. For purposes of
this Section 14(c), the current market price of one (1) share of Common Stock
shall be the Closing Price of one (1) share of Common Stock
(as determined pursuant to Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of such exercise.
(d) The holder of a Right, by the acceptance of such Right, expressly
waives such holder's right to receive any fractional Rights or any fractional
shares (other than, in the case of Preferred Stock, fractions which are
integral multiples of one three-hundredths of a share of Preferred Stock) 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 are vested in the respective
registered holders of the Rights Certificates (and, prior to the Distribution
Date, the registered holders of the Common Stock); and any registered holder
of any Rights Certificate (or, prior to the Distribution Date, the registered
holders of the Common Stock), without the consent of the Rights Agent or of
the holder of any other Rights Certificate (or, prior to the Distribution
Date, the registered holders of the Common Stock), may, in such holder's
behalf and for such holder's benefit, enforce, and may institute and maintain
any suit, action or proceeding against the Company to enforce, or otherwise
act in respect of, such holder's right to exercise the Rights evidenced by
such Rights Certificate (or, prior to the Distribution Date, certificates for
Common Stock) 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 and agrees with the
Company and the Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable only in
connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the principal
office or offices of the Rights Agent designated for such purpose, duly
endorsed or accompanied by a proper instrument of transfer and with the
appropriate forms and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the Company and the
Rights Agent may deem and treat the person in whose name a Rights Certificate
(or, prior to the Distribution Date, the associated Common Stock certificate)
is registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on the Rights
Certificates or the associated Common Stock certificate made by anyone other
than the Company or the Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent, subject to the last sentence of Section 7(e)
hereof, shall be required to be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Rights Agent shall have any liability to any holder of a
Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use its
best efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a 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 one
three-hundredths of a share of Preferred Stock or any other securities of the
Company which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights evidenced by
either a certificate for Common Stock or by 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 to
receive notice of meetings or other actions affecting shareholders (except as
provided in Section 25 hereof), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by such certificate
for Common Stock or Rights Certificate, as the case may be, shall have been
exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable compensation
for all services rendered by it hereunder and, from time to time, on demand of
the Rights
Agent, its reasonable expenses and counsel fees and disbursements and other
disbursements incurred in the administration and execution of this Agreement
and the exercise and performance of its duties hereunder. The Company also
agrees to indemnify the Rights Agent for, and to hold it harmless against, any
loss, liability, or expense, incurred without gross negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done or
omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of
defending against any claim of liability in the premises.
(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 Common Stock or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement, or
other paper or document reasonably believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
Person or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights.
(a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust or stock transfer business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on
the part of any of the parties hereto; provided, however, that such
corporation would be eligible for appointment as a successor Rights Agent
under the provisions of Section 21 hereof. In case at the time such successor
Rights Agent shall succeed to the agency created by this Agreement, 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 or any
Affiliate or Associate thereof 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 herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by the Chairman of the Board,
the President, the Chairman of the Executive Committee, any Vice President,
the Treasurer, any Assistant Treasurer, the Secretary or any Assistant
Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any action
taken or suffered in good faith by it under the provisions of this Agreement
in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the 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 be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Rights Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Rights Certificate; nor shall it be responsible for any adjustment required
under the provisions of Section 11, Section 13 or Section 24 hereof or
responsible for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such adjustment
(except with respect to the exercise of Rights evidenced by Rights
Certificates after actual notice of any such adjustment); nor shall it by any
act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock or Preferred Stock
to be issued pursuant to this Agreement or any Rights Certificate or as to
whether any shares of Common Stock or Preferred Stock will, when so issued, be
validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the President, the Chairman of the Executive Committee,
any Vice President, the Treasurer, any Assistant Treasurer, the Secretary or
any Assistant Secretary of the Company, and to apply to such officers for
advice or instructions in connection with its duties, and it shall not be
liable for any action taken or suffered to be taken by it in good faith in
accordance with instructions of any such officer.
(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 Rights
Agent under this Agreement. Nothing herein shall preclude the Rights Agent
from acting in any other capacity for the Company or for any other legal
entity.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable
or accountable for any act, default, neglect or misconduct of any such
attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct; provided, however, reasonable care was
exercised in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds
or adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) If, with respect to any Rights Certificate surrendered to the Rights
Agent for exercise or transfer, split up, combination or exchange, the
certificate attached to the form of assignment or form of election to
purchase, as the case may be, has either not been completed or indicates an
affirmative response to clause 1 and/or 2 thereof, the Rights Agent shall not
take any further action with respect to such requested exercise or transfer
without first consulting with the Company.
Section 21. Change of Rights Agent.
The Rights Agent or any successor Rights Agent may resign and be discharged
from its duties under this Agreement upon thirty (30) days' notice in writing
mailed to the Company, and to each transfer agent of the Common Stock and
Preferred 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 thirty (30) days' notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the case may be, and
to each transfer agent of the Common Stock and Preferred 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 thirty (30) days after giving notice of such removal or after it has
been notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Rights Certificate (who
shall, with such notice, submit such holder's Rights Certificate for
inspection by the Company), then 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 or
other legal business entity organized and doing business under the laws of the
United States or of any State thereof, in good standing, which is authorized
under such laws to exercise corporate trust or stock transfer powers and is
subject to supervision or examination by federal or state authority and which
has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $50,000,000 or (b) an affiliate of a corporation or other
legal business entity described in clause (a) of this sentence. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as
Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor
Rights Agent any property at the time held by it hereunder, and execute and
deliver any further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such appointment, the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Stock and the Preferred Stock, and mail
a notice thereof in writing to the registered holders of the Rights
Certificates or, if prior to the Distribution Date, to the registered holders
of Common Stock. Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity of
the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights
Certificates to the contrary, the Company may, at its option, issue new Rights
Certificates evidencing Rights in such form as may be approved by the Board of
Directors to reflect any adjustment or change in the Purchase Price and the
number or kind or class of shares or other securities or property purchasable
under the Rights Certificates made in accordance with the provisions of this
Agreement. In addition, in connection with the issuance or sale of shares of
Common Stock following the Distribution Date and prior to the redemption or
expiration of the Rights, the Company (a) shall, with respect to shares of
Common Stock so issued or sold pursuant to the exercise of stock options or
under any employee plan or arrangement, granted or awarded as of the
Distribution Date, or upon the exercise, conversion or exchange of securities
issued by the Company hereinafter but prior to the Distribution Date, and (b)
may, in any other case, if deemed necessary or appropriate by the Board of
Directors of the Company, 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 27 hereof, the Board of Directors of the Company
may, at its option, at any time on or before the earlier of (i) the close of
business on the tenth business day following the Stock Acquisition Date (or,
if the Stock Acquisition Date shall have occurred prior to the Record Date,
the close of business on the tenth business day following the Record Date), or
(ii) the Final Expiration Date, redeem all but not less than all the then
outstanding Rights at a redemption price of $.01 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 hereinafter referred to as the "Redemption
Price"). Notwithstanding anything contained in this Agreement to the
contrary, the Rights shall not be exercisable after the first occurrence of a
Section 11(a)(ii) Event until such time as the Company's right of redemption
hereunder has expired. The Company may, at its option, pay the Redemption
Price in cash, shares of Common Stock (based on the "current market price," as
defined in Section 11(d)(i) hereof, of the Common Stock at the time of
redemption) or any other form of consideration, or any combination of any of
the foregoing, deemed appropriate by the Board of Directors of the Company.
(b) Immediately upon the action of the Board of Directors of the Company
ordering the redemption of the Rights, evidence of which shall have been filed
with the Rights Agent and without any further action and without any notice,
the right to exercise the Rights 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 the Board of 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 the Common Stock. Any
notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of redemption
will state the method by which the payment of the Redemption Price will be
made.
(c) Notwithstanding the provisions of Section 23(a) hereof, in the event
that a majority of the Board of Directors of the Company is elected by
shareholder action by written consent, or is comprised of persons elected at a
meeting of shareholders who were not nominated by the Board of Directors of
the Company in office immediately prior to such meeting, then for a period of
one hundred and twenty (120) days following the effectiveness of such
election, the Rights shall not be redeemed if such redemption is reasonably
likely to have the purpose or effect of allowing any Person to become an
Acquiring Person or otherwise facilitating the occurrence of a Triggering
Event or a transaction with an Acquiring Person.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its option, at any time
after any Person becomes an Acquiring Person, exchange all or part of the then
outstanding and exercisable Rights (which shall not include Rights that have
become void pursuant to the provisions of Section 7(e) hereof) for Common
Stock at an exchange ratio of one share of Common Stock per Right,
appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such
exchange ratio being hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors of the Company shall not
be empowered to effect such exchange at any time after any Person (other than
the Company, any Subsidiary of the Company, any employee benefit plan of the
Company or any such Subsidiary, or any entity holding Common Stock for or
pursuant to the terms of any such plan), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of fifty percent (50%)
or more of the Common Stock then outstanding.
(b) Immediately upon the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to subsection (a) of this Section
24 and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of shares of Common Stock equal
to the number of such Rights held by such holder multiplied by the Exchange
Ratio. The Company shall promptly give public notice of any such exchange;
provided, however, that the failure to give, or any defect in, such notice
shall not affect the validity of such exchange. The Company promptly shall
mail a notice of any such exchange to all of the holders of such Rights at
their last addresses as they appear upon the registry books of the Company.
Any notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such notice of
exchange will state the method by which the exchange of the Common Stock for
Rights will be effected and, in the event of any partial exchange, the number
of Rights which will be exchanged. Any partial exchange shall be effected pro
rata based on the number of Rights (other than Rights which have become void
pursuant to the provisions of Section 7(e) hereof) held by each holder of
Rights.
(c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute Preferred Stock (or equivalent preferred stock, as such
term is defined in paragraph (b) of Section 11 hereof) for Common Stock
exchangeable for Rights, at the initial rate of one three-hundredths of a
share of Preferred Stock (or equivalent preferred stock) for each share of
Common Stock, as appropriately adjusted to reflect stock splits, stock
dividends or other similar transactions effected after the date hereof.
(d) In the event that there shall not be sufficient Common Stock issued but
not outstanding or authorized but unissued to permit any exchange of Rights as
contemplated in accordance with this Section 24, the Company shall take all
such action as may be necessary to authorize additional shares of Common Stock
for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of shares of Common
Stock or to distribute certificates which evidence fractional shares of Common
Stock. In lieu
of such fractional shares of Common Stock, there shall be paid to the
registered holders of the Right Certificates with regard to which such
fractional shares of Common Stock would otherwise be issuable, an amount in
cash equal to the same fraction of the current market value of a whole share
of Common Stock. For the purposes of this subsection (e), the current market
value of a whole share of Common Stock shall be the closing price of a share
of Common Stock (as determined pursuant to Section 11(d)(i) hereof) for the
Trading Day immediately prior to the date of exchange pursuant to this Section
24.
Section 25. 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), or (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, or (iii) to effect any reclassification
of its Preferred Stock (other than a reclassification involving only the
subdivision of outstanding shares of Preferred Stock), or (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 transaction or a
series of related transactions, of more than fifty percent (50%) of the
assets, earning power or cash flow 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 26 hereof, a notice of such proposed action, which shall specify
the record date for the purposes of such stock dividend, distribution of
rights or warrants, or the date on which such reclassification, consolidation,
merger, sale, transfer, liquidation, dissolution, or winding up is to take
place and the date of participation therein by the holders of 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
twenty (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 twenty (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.
(b) In case any Section 11(a)(ii) Event 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 26 hereof, 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) hereof, and (ii) all references in the preceding paragraph
to Preferred Stock shall be deemed thereafter to refer to Common Stock and/or,
if appropriate, other securities issuable upon exercise of the Rights.
Section 26. Notices.
Notices or demands authorized by this Agreement to be given or made by the
Rights Agent or by the holder of any Rights Certificates to or on the Company
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Rights
Agent) as follows:
Xerox Corporation
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Secretary
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Company or by the
holder of any Rights Certificates to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
The First National Bank of Boston
c/o Boston EquiServe, Limited Partnership
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Client Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of 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 27. Supplements and Amendments.
Prior to the Distribution Date, 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 representing shares of
Common Stock. From and after the Distribution Date, 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 which 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 which the
Company may deem necessary or desirable and which shall not adversely affect
the interests of the holders of Rights Certificates; provided, from and after
the Distribution Date, this Agreement may not be supplemented or amended to
lengthen any time period hereunder pursuant to clause (iii) of this sentence
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 which
states that the proposed supplement or amendment is in compliance with the
terms of this Section 27, the Rights Agent shall execute such supplement or
amendment. Prior to the Distribution Date, the interests of the holders of
Rights shall be deemed coincident with the interests of the holders of Common
Stock. Notwithstanding anything contained herein to the contrary, this
Agreement may not be amended at a time when the Rights are not redeemable.
Section 28. Successors.
All the covenants and provisions of this Agreement by or for the benefit of
the Company or the Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board of Directors, etc.
For all purposes of this Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common
Stock of which any Person is the Beneficial Owner, shall be made in accordance
with Section 912 of the NYBCL. 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 of Directors
of the Company, or the Company, or as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the right and
power to (i) interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the Rights or to
amend the Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (ii) below, all omissions
with respect to the foregoing) which are done or made by the Board of
Directors of the Company in good faith, shall (i) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights and all
other parties, and (ii) not subject the Board of Directors of the Company to
any liability to the holders of the Rights.
Section 30. Benefits of this Agreement.
Nothing in this Agreement shall be construed to give to any Person other than
the Company, the Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, registered holders of the
Common Stock) any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of
the Company, the Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, registered holders of the
Common Stock).
Section 31. 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 the Board of Directors of the Company
determines in its good faith judgment that severing the invalid, void or
unenforceable language from this Agreement would adversely affect the purpose
or effect of this Agreement, the right of redemption set forth in Section 23
hereof shall be reinstated and shall not expire until the close of business on
the tenth day following the date of such determination by the Board of
Directors of the Company.
Without limiting the foregoing, if any provision of this Agreement
requiring that a determination be made by less than the entire Board of
Directors is held by a court of competent jurisdiction or other authority to
be invalid, void or unenforceable, such determination shall then be made by
the entire Board of Directors.
Section 32. Governing Law.
This Agreement, each Right and each Rights Certificate issued hereunder shall
be deemed to be a contract made under the laws of the State of New York and
for all
purposes shall be governed by and construed in accordance with the laws of
such State applicable to contracts made and to be performed entirely within
such State.
Section 33. Counterparts.
This Agreement may be executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same instrument.
Section 34. Descriptive Headings.
Descriptive headings of the several Sections of this Agreement are inserted
for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
XEROX CORPORATION
By ____________________
Name:
Title:
Attest: ______________________
Name:
Title:
THE FIRST NATIONAL BANK OF BOSTON
By _____________________
Name:
Title:
Attest: ______________________
Name:
Title:
Exhibit A
[Form of Rights Certificate]
Certificate No. R- _______________Rights
NOT EXERCISABLE AFTER APRIL 16, 2007 OR EARLIER IF REDEEMED OR EXCHANGED
BY THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON
OR ANY AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS SHALL 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). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY SHALL BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED
IN SECTION 7(e) OF SUCH AGREEMENT.]*
Rights Certificate
XEROX CORPORATION
This certifies that _____________________________, or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated as of April 7, 1997 (as from time to
time amended or supplemented, the "Rights Agreement"), between Xerox
Corporation, a New York corporation (the "Company"), and The First National
Bank of Boston (the "Rights Agent"), to purchase from the Company at any time
prior to 5:00 P.M. (New York City time) on April 16, 2007 (the
_________________________
* The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentences.
"Final Expiration Date"), unless earlier redeemed or exchanged by the Company,
at the office or offices of the Rights Agent designated for such purpose, or
its successors as Rights Agent, one three-hundredth of a fully paid, non-
assessable share of Series A Cumulative Preferred Stock (the "Preferred
Stock") of the Company, at a purchase price of $[ ] per one three-hundredth
of a share (the "Purchase Price"), upon presentation and surrender of this
Rights Certificate with the Form of Election to Purchase and related
Certificate duly executed. The number of Rights evidenced by this Rights
Certificate (and the number of shares which may be purchased upon exercise
thereof) set forth above, and the Purchase Price per share set forth above,
are the number and Purchase Price as of April 16, 1997, based on the Preferred
Stock as constituted at such date and may be adjusted in accordance with the
provisions of the Rights Agreement. The Company reserves the right to
require, prior to the occurrence of a Triggering Event (as such term is
defined in the Rights Agreement) that a number of Rights be exercised so that
only whole shares of Preferred Stock will be issued.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by this Rights
Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate
or Associate of any such Acquiring Person (as such terms are defined in the
Rights Agreement), (ii) a transferee of any such Acquiring Person, Affiliate
or Associate or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of a person who, after such transfer, became an
Acquiring Person, or an Affiliate or Associate of an Acquiring Person, 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.
As provided in the Rights Agreement, the Purchase Price and the number
and kind of shares of Preferred Stock or other securities which may be
purchased upon the exercise of the Rights evidenced by this Rights Certificate
are subject to modification and adjustment upon the happening of certain
events, including Triggering Events.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities hereunder of
the Rights Agent, the Company and the holders of the Rights Certificates,
which limitations of rights include the temporary suspension of the
exercisability of such Rights under the specific circumstances set forth in
the Rights Agreement. Copies of the Rights Agreement are on file at the
above-mentioned office of the Rights Agent and are also available upon written
request to the Rights Agent.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the principal office or offices of the Rights Agent
designated for such purpose, may be exchanged for another Rights Certificate
or Rights Certificates of like tenor and date evidencing Rights entitling the
holder to purchase a like aggregate number of one three-hundredths of a share
of Preferred Stock as the Rights evidenced by the Rights Certificate or Rights
Certificates surrendered shall have entitled such holder to purchase. The
Rights evidenced by this Rights Certificate may be transferred, in whole or in
part, upon surrender of this Rights Certificate at the principal office or
offices of the Rights Agent designated for such purpose, with the Form of
Assignment and related Certificate duly executed. If the Rights evidenced by
this Rights Certificate shall be transferred or exercised in part, the holder
shall be entitled to receive upon surrender hereof another Rights Certificate
or Rights Certificates for the number of whole Rights not transferred or
exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may generally be redeemed by the Company at its
option at a redemption price of $.01 per Right at any time on or before the
earlier of the close of business on (i) the tenth business day following the
Stock Acquisition Date (as such time period may be extended pursuant to the
Rights Agreement) and (ii) the Final Expiration Date. The foregoing
notwithstanding, the Rights generally may not be redeemed for one hundred and
twenty (120) days following a change in a majority of the Board as a result of
a proxy contest.
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 three-hundredth of a share of Preferred Stock,
which may, at the election of the Company, be evidenced by depositary
receipts), but in lieu thereof a cash payment will be made, as provided in the
Rights Agreement.
No holder of this Rights Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of shares of
Preferred Stock or of any other securities of the Company which may at any
time be issuable on the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the holder hereof, as
such, any of the rights of a 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 Right or 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 _________, ___
ATTEST: XEROX CORPORATION
_________________________ By ________________________
Secretary Title
Countersigned:
THE FIRST NATIONAL BANK OF BOSTON
By _______________________________
Authorized Signature
[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:______________, ____
______________________________
Signature
Signature Guaranteed:
______________________________
Signatures must be guaranteed by a member firm of a registered national stock
exchange, a member of the National Association of Securities Dealers, Inc. or
a commercial bank or trust company having an office or correspondent in the
United States.
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);
(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: __________, _____ ____________________________
Signature
Signature Guaranteed:
______________________________
Signatures must be guaranteed by a member firm of a registered national stock
exchange, a member of the National Association of Securities Dealers, Inc. or
a commercial bank or trust company having an office or correspondent in the
United States.
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights
represented by the Rights Certificate.)
To: XEROX CORPORATION:
The undersigned hereby irrevocably elects to exercise ______________
Rights represented by this Rights Certificate to purchase the shares of
Preferred Stock issuable upon the exercise of the Rights (or such other
securities of the Company or of any other person which may be issuable upon
the exercise of the Rights) and requests that certificates for such shares be
issued in the name of and deliverable to:
Please insert social security
or other identifying number
___________________________________________________________
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
____________________________________________________________
(Please print name and address)
____________________________________________________________
____________________________________________________________
Dated:__________, ____
____________________________
Signature
Signature Guaranteed:
______________________________
Signatures must be guaranteed by a member firm of a registered national stock
exchange, a member of the National Association of Securities Dealers, Inc. or
a commercial bank or trust company having an office or correspondent in the
United States.
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such
terms are defined pursuant to the Rights Agreement);
(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 became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: ___________, ____
___________________________
Signature
Signature Guaranteed:
______________________________
Signatures must be guaranteed by a member firm of a registered national stock
exchange, a member of the National Association of Securities Dealers, Inc. or
a commercial bank or trust company having an office or correspondent in the
United States.
NOTICE
The signature to the foregoing Election to Purchase 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.
Exhibit B
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
Dividend of Rights to Purchase Preferred Stock
On April 7, 1997, the Board of Directors of Xerox Corporation (the
"Company") declared a dividend distribution of one Right for each outstanding
share of common stock, par value $1.00 per share, of the Company (the "Common
Stock") to shareholders of record at the close of business on April 16, 1997
(the "Record Date"). Each Right entitles the registered holder to purchase
from the Company one three-hundredth of a share of a series of cumulative
preferred stock of the Company designated Series A Cumulative Preferred Stock
(the "Preferred Stock"), at a price of $[ ] (the "Purchase Price"), subject
to adjustment. The description and terms of the Rights are set forth in a
Rights Agreement (the "Rights Agreement") between the Company and The First
National Bank of Boston, as Rights Agent (the "Rights Agent").
Distribution of the Rights; Rights Certificates
Until the Distribution Date (or earlier redemption or expiration of
the Rights), which is defined below, the Rights will be evidenced, with
respect to any of the Common Stock certificates outstanding prior to the
Distribution Date, by such Common Stock certificates. Until the Distribution
Date, (or earlier redemption or expiration of the Rights), (i) the Rights will
be transferred with and only with the Common Stock, (ii) new Common Stock
certificates issued after the Record Date upon transfer, replacement or new
issuance of Common Stock will be deemed to be issued with Rights and will
contain a notation incorporating the Rights Agreement by reference and (iii)
the surrender for transfer of any certificate for Common Stock will also
constitute the transfer of the Rights associated with the Common Stock
represented by such certificate.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Rights Certificates") will be mailed to
holders of record of the Common Stock as of the close of business on the
Distribution Date. From and after the Distribution Date, such separate Rights
Certificates alone will evidence the Rights. Except as otherwise determined
by the Board of Directors, and except in connection with the exercise of
employee stock options, any other issuance of Common Stock with
respect to awards outstanding under employee benefit plans outstanding on the
Distribution Date and in connection with the conversion of convertible
securities issued after April 7, 1997, only Common Stock issued prior to the
Distribution Date will be issued with Rights.
Definition of Distribution Date
"Distribution Date" shall mean the earlier to occur of (i) 10 business
days following the date of a public announcement that a person, together with
persons affiliated or associated with it, has acquired beneficial ownership of
20% or more of the outstanding Common Stock or (ii) 10 business days following
the earlier of the commencement of, or the first public announcement of the
intent to commence, a tender offer or exchange offer by a person other than
the Company if, upon consummation of the offer, such person, together with
persons affiliated or associated with it, would be the beneficial owner of 20%
or more of the outstanding Common Stock.
Exercise and Expiration of the Rights
The Rights are not exercisable until the Distribution Date. The
Rights will expire at the close of business on April 16, 2007 (the "Final
Expiration Date"), unless earlier redeemed or exchanged by the Company as
described below.
Adjustment of the Purchase Price
The Purchase Price payable and the number of and kind of shares of
Preferred Stock or other securities or property issuable upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution (i) in
the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Stock, (ii) upon the grant to holders of
the Preferred Stock of certain rights, options or warrants to subscribe for
Preferred Stock (or shares having the same rights, privileges and preferences
as the shares of Preferred Stock) at less than the current market price of the
Preferred Stock or (iii) upon the distribution to holders of the Preferred
Stock of evidences of indebtedness, securities, cash or assets (excluding
regular periodic dividends out of earnings or retained earnings) 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 require an adjustment of at least 1% in the Purchase
Price. No fractional shares of Preferred Stock will be issued upon the
exercise of any Right or Rights (other than fractions which are integral
multiples of one three-hundredth of a share of Preferred Stock), and in lieu
thereof an
adjustment in cash will be made based on the current market price of the
Preferred Stock on the last trading day prior to the date of exercise.
Effect of a Triggering Event
Any of the events described in the succeeding second and fourth
paragraphs are defined as a "Triggering Event."
"Acquiring Person" shall mean any person who constitutes an
"Interested Shareholder" as defined in Section 912 of the New York Business
Corporation Law, in effect from time to time, (generally defined to include
any person who or which, together with all persons affiliated or associated
with it, shall be the beneficial owner of 20% or more of the shares of Common
Stock then outstanding), but shall not include the Company, any subsidiary of
the Company, any employee benefit plan of the Company or of any subsidiary of
the Company, or any person or entity organized, appointed or established by
the Company for or pursuant to the terms of any such plan.
In the event that a person, together with persons affiliated or
associated with it, becomes an Acquiring Person (except pursuant to an offer
for all outstanding shares of Common Stock that the independent directors
determine to be fair and adequate to shareholders and otherwise in the best
interests of the Company and its shareholders or as a result of repurchases of
stock by the Company or certain inadvertent actions by institutional or
certain other shareholders), proper provision shall be made so that each
holder of a Right, except as provided below, shall thereafter have the right
to receive, upon exercise thereof, Common Stock (or, in certain circumstances
as determined by the Company, other securities, cash, or other property)
having a value of two times the Purchase Price. Notwithstanding any of the
foregoing, following the occurrence of the event set forth in this paragraph,
all Rights that are, or (under certain circumstances set forth in the Rights
Agreement) were, beneficially owned by any Acquiring Person (or by certain
related parties and transferees) will be null and void. Rights are not
exercisable following the occurrence of the event set forth above until such
time as the Rights are no longer redeemable by the Company, as set forth
below.
For example, at an exercise price of $[X] per Right, each Right not
owned by an Acquiring Person (or by certain related parties and transferees)
following an event set forth in the preceding paragraph would entitle its
holder to purchase $[2X] worth of Common Stock (or other consideration, as
noted above) for $[X]. Assuming that the Common Stock had a per share value
of $[X/3] at such time, the holder of each valid Right would be entitled to
purchase 6 shares of Common Stock for $[X].
In the event that, at any time following the Stock Acquisition Date,
which is defined below, (i) the Company is acquired in a merger or other
business combination transaction in which the Company is not the surviving
corporation (other than a merger which follows an offer described in the
second preceding paragraph), or (ii) fifty percent (50%) or more of the
Company's assets, cash flow or earning power is sold or transferred, proper
provision shall be made so that each holder of a Right (other than Rights that
theretofore become null and void as described in the second preceding
paragraph) shall thereafter have the right to receive, upon exercise thereof,
common stock of the acquiring company having a value equal to two times the
exercise price of the Right.
Redemption of the Rights
At any time until the close of business on the tenth business day
following the date of a public announcement that a person has become an
Acquiring Person (the "Stock Acquisition Date"), the Company may redeem all,
but not less than all, the then outstanding Rights at a redemption price of
$.01 per Right (the "Redemption Price"). Immediately upon the action of the
Board of Directors of the Company ordering redemption of the Rights, the
Rights will terminate and the only right of the holder of Rights will be to
receive the Redemption Price. The foregoing notwithstanding, the Rights
generally may not be redeemed for one hundred and twenty (120) days following
a change in the majority of the Board of Directors of the Company as a result
of a proxy contest.
Exchange of the Rights
At any time after the acquisition by a person or group of affiliated
or associated persons of beneficial ownership of 20% or more of the
outstanding shares of Common Stock and prior to the acquisition by such person
or group of 50% or more of the outstanding shares of Common Stock, the Board
of Directors may exchange the Rights (other than Rights owned by such person
or group which have become void), in whole or in part, at an exchange ratio of
one share of Common Stock, or one three-hundredth of a share of Preferred
Stock (or of a share of a class or series of the Company's preferred stock
having equivalent rights, preferences and privileges), per Right (subject to
adjustment).
Amendment of the Rights Agreement
Any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company prior to the Distribution Date. Thereafter,
the provisions of the Rights Agreement may be amended by the Board of
Directors of the Company in
order to (i) cure any ambiguity, (ii) shorten or lengthen any time period
under the Rights Agreement, or (iii) make changes that will not adversely
affect the interests of the holders of Rights; provided such lengthening is
for the purpose of protecting, enhancing or clarifying the rights of, and/or
the benefits to, the holders of Rights, and further; provided, that no
amendment may be made at such time as the Rights are not redeemable.
Exercise of the Right entitles the Right holder to the rights of a shareholder
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 on the circumstances, recognize taxable income in the event that the
Rights become exercisable for Common Stock (or other consideration) of the
Company or for common stock of the acquiring company as set forth above.
Copy of the Rights Agreement available
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Current Report on Form 8-K. A copy of
the Rights Agreement will be available free of charge from the Company. This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is
incorporated herein by reference.