FORM 8-A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES ACT OF 1934
QMS, INC.
________________________________________________________________________________
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 63-0737870
_______________________________________________________________________________
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
ONE MAGNUM PASS, MOBILE, ALABAMA 36618
________________________________________________________________________________
(Address of Principal Executive Offices) (Zip Code)
to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
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Rights to purchase shares of New York Stock Exchange, Inc.
Series A Participating
Preferred Stock
If this Form relates to the registration of a class of securities pursuant to
the Section 12(b) of the Exchange Act and is effective pursuant to the General
Instruction A.(c), check the following box. X
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If this Form relates to the registration of a class of securities pursuant to
the Section 12(g) of the Exchange Act and is effective pursuant to the General
Instruction A.(d), check the following box. --------------
Securities Act registration statement file number to which this form relates:
N /A (if applicable)
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Securities to be registered pursuant to Section 12(g) of the Act: NONE
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(Title of class)
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(Title of class)
ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
The Registrant is authorized by its Restated Certificate of Incorporation, as
amended, to issue up to 25,000,000 shares of common stock, $0.01 par value per
share ("Common Stock"). The holders of shares of Common Stock are entitled to
one vote per share on all matters on which stockholders are entitled or
permitted to vote. Stockholders are not entitled to cumulate their votes in the
election of directors, which means that the holders of a majority of the shares
voting for the election of directors can elect all of the directors then
standing for election if they choose to do so. The holders of shares of Common
Stock have no redemption or conversion rights, are entitled to receive such
dividends, if any, as may be declared from time to time by the Board of
Directors in its discretion from funds legally available therefor, participate
ratably in any distribution of assets to stockholders upon liquidation,
dissolution or winding up of the Registrant, and have no preemptive or other
subscription rights. All of the outstanding shares of Common Stock are fully
paid and non-assessable.
The Registrant is also authorized by its Restated Certificate of Incorporation
to issue up to 500,000 shares of preferred stock, no par value per share
("Preferred Stock"). The Restated Certificate of Incorporation authorizes the
Board of Directors to fix, with respect to any series of Preferred Stock, the
preferences, limitation and relative rights of the shares of such series. A
series of Preferred Stock, designated "Series A Participating Preferred Stock"
has been established by the Board of Directors, comprised of 250,000 shares,
having the rights, preferences and privileges set forth in the Certificate of
Designation referenced as Exhibit 2 hereto. The shares of Series A
Participating Preferred Stock are reserved for issuance upon certain specified
events as described in the Rights Agreement hereinafter described.
The Restated Certificate of Incorporation provides that the Board of Directors
of the Registrant shall be divided into three classes with staggered three-year
terms, with the exact number of directors fixed from time to time in accordance
with the Bylaws of the Registrant. The Bylaws of the Registrant provide that
the Board of Directors shall consist of not less than five and not more than ten
members.
The Restated Certificate of Incorporation of the Registrant requires that, in
addition to any affirmative vote required by law, the Restated Certificate of
Incorporation, or the By-laws, the affirmative vote of holders of at least 75%
of the voting power of all the outstanding shares of Common Stock and any series
of Preferred Stock entitled to vote generally in the election of directors,
voting together as a single class, will be required to approve any business
combination such as a merger, consolidation, liquidation or dissolution which is
proposed by or on behalf of a stockholder who beneficially owns 20% or more of
the outstanding voting stock of the Registrant unless such proposal either (i)
satisfies certain fair price and procedural requirements or (ii) receives the
approval of two-thirds of the directors not affiliated with such stockholder.
If either of such conditions is satisfied, the proposed business combination
would be subject to the majority vote requirement otherwise applicable under
Delaware law. This provision could have the effect of delaying, deferring or
preventing a change in control of the Registrant or the consummation of such a
business combination.
The Registrant, by dividend, has issued Rights pursuant to a Rights Agreement
referenced as Exhibit 1 hereto, which Rights are attached to the shares of
Common Stock outstanding as of March 13, 1999, the Record Date for such
dividend. The description and terms of the Rights are set forth therein, and a
Summary of Rights is included as Exhibit C thereto.
ITEM 2. EXHIBITS
Exhibit
Number Description
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1 Copy of Rights Agreement between the Registrant and
Rights Agent dated as of March 8, 1999, and Exhibits A,
B and C thereto.
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the registrant has duly caused this registration statement to be signed on
its behalf by the undersigned, thereto duly authorized.
QMS, Inc.
(Registrant)
Date: March 18, 1999 By: /s/ James A. Wallace
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James A. Wallace
Corporate Secretary and Chief Financial
Officer
EXHIBIT 1
QMS, INC.
AND
SOUTH ALABAMA TRUST COMMPANY, INC.
as
Rights Agent
RIGHTS AGREEMENT
Dated as of March 8, 1999
Table of Contents
Section Page
1. Certain Definitions...................................................1
2. Appointment of Rights Agent...........................................2
3. Issue of Rights Certificates..........................................3
4. Form of Rights Certificates...........................................4
5. Countersignature and Registration.....................................5
6. Transfer, Split Up, Combination and Exchange of Rights Certificates
Mutilated, Destroyed, Lost or Stolen Rights Certificates..............7
7. Exercise of Rights; Purchase Price; Expiration Date of Rights.........7
8. Cancellation and Destruction of Rights Certificates...................9
9. Reservation and Availability of Preferred Stock.......................9
10. Preferred Stock Record Date..........................................11
11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights.....................................................11
12. Certificate of Adjusted Purchase Price or Number of Shares...........19
13. Consideration, Merger or Sale or Transfer of Assets or Earning
Power................................................................19
14. Additional Covenants.................................................22
15. Fractional Rights and Fractional Shares..............................22
16. Rights of Action.....................................................24
17. Agreement of Rights Holders..........................................24
18. Rights Certificate Holder Not Deemed a Stockholder...................25
19. Concerning the Rights Agent..........................................25
20. Merger or Consolidation or Change of Name of Rights Agent............25
21. Duties of Rights Agent...............................................26
22. Change of Rights Agent...............................................28
23. Issuance of New Rights Certificates..................................29
24. Redemption and Termination...........................................29
25. Notice of Certain Events.............................................30
26. Notices..............................................................31
27. Supplements and Amendments...........................................31
28. Determination and Actions by the Board of Directors, etc.............32
29. Successors...........................................................32
30. Benefits of this Agreement...........................................32
31. Severability.........................................................32
32. Governing Law........................................................33
33. Counterparts.........................................................33
34. Descriptive Headings.................................................33
Exhibit A - Certificate of Designation, Preferences and Rights
Of Series A Participating Preferred Stock
Exhibit B - Form of Rights Certificate
Exhibit C - Form of Summary of Rights
RIGHTS AGREEMENT
This Agreement, dated as of March 8, 1999, between QMS, INC., a Delaware
corporation (the "Company"), and SOUTH ALABAMA TRUST COMPANY, INC., an Alabama
trust company (the "Rights Agent").
W I T N E S S E T H:
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WHEREAS, on March 8, 1999, 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 of the Company (as defined in Section 1 hereof)
outstanding on March 13, 1999 (the "Record Date"), and authorized and directed
the issuance of one Right (subject to adjustment as provided herein) for each
share of Common Stock of the Company issued between the Record Date and the
earliest of the Distribution Date or the Expiration Date (as such terms are
defined in Sections 3 and 7 hereof, respectively), each Right representing the
right to purchase one one-hundredth (1/100) of a share of Series A Participating
Preferred Stock, $1.00 stated value per share, of the Company (the "Preferred
Stock"), having the rights, powers and preferences set forth in the form of
Certificate of Designation attached hereto as Exhibit A, which Certificate of
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Designation was duly executed and became effective as of November 30, 1988,
and is still in full force and effect, upon the terms and subject to the
conditions hereinafter set forth (the "Rights"):
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereto hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
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following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates (as such
term is hereinafter defined) and Associates (as such term is hereinafter
defined) of such Person, without the prior approval of the Board of
Directors of the Company as hereinafter provided, shall be the Beneficial
Owner (as such term is hereinafter defined) of securities representing 20%
or more of the shares of Common Stock then outstanding or who was such a
Beneficial Owner at any time after the date hereof, whether or not such
Person continues to be the Beneficial Owner of securities representing 20%
or more of the outstanding shares of Common Stock, provided, however, that
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in no event shall a Person who or which, together with all Affiliates and
Associates of such Person, is the Beneficial Owner of less than 20% of the
Company's outstanding shares of Common Stock become an Acquiring Person
solely as a result of a reduction of the number of shares of outstanding
Common Stock, including repurchases of outstanding shares of Common Stock
by the Company, which reduction increases the percentage of outstanding
shares of Common stock beneficially owned by such Person, and provided
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further that Acquiring Person shall not mean (i) the Company, (ii) any
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subsidiary of the Company (as such term is hereinafter defined), (iii) any
employee benefit plan of the Company or any of its subsidiaries, (iv) any
entity holding securities of the Company organized, appointed or
established by the Company or any of its subsidiaries for or pursuant to
the terms of any such plan or (v) any underwriter in connection with an
underwritten offering of the Company's securities.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
as in effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right or obligation to acquire (whether such
right or obligation is exercisable or effective immediately or only
after the passage of time) pursuant to any agreement, arrangement or
understanding (whether or not in writing) or upon the exercise of
conversion rights, exchange rights, rights (other than the Rights),
warrants or options, or otherwise; provided, however, that a Person
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shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," securities tendered pursuant to a tender or
exchange offer made by such Person or any of such Person's Affiliates
or Associates until such tendered securities are accepted for payment
or exchange; or (B) the right to vote pursuant to any agreement,
arrangement or understanding (whether or not in writing); provided,
--------
however, that a Person shall not be deemed the "Beneficial Owner"
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of, or to "beneficially own," any security under this clause (B) if
the agreement, arrangement or understanding to vote such security (1)
arises solely from a revocable proxy given in response to a public
proxy or consent solicitation made pursuant to, and in accordance
with, the applicable rules and regulations of the Exchange Act and (2)
is not also then reportable by such person on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly,
by any other Person (or any Affiliate or Associate thereof) with which
such Person or any of such Person's Affiliates or Associates has any
agreement, arrangement or understanding (whether or not in writing),
or with which such Person or any of such Person's Affiliates have
otherwise formed a group, for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy as described in clause
(B) of subparagraph (ii) of this paragraph (c)) or disposing of any
securities of the Company.
(d) "Business Day" shall mean any day other than a Saturday, Sunday,
or a day on which banking institutions in the State of New York or the City
of Mobile, Alabama are authorized or obligated by law or executive order to
close.
(e) "close of business" on any given date shall mean 4:00 P.M., local
New York City, New York time on such date; provided, however, that if such
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date is not a Business Day it shall mean the next succeeding Business
Day.
(f) "Common Stock" shall mean the Common Stock, $.01 par value per
share, of the Company, except that "Common Stock" when used with reference
to stock issued by any Person other than the Company shall mean the capital
stock with the greatest voting power, or the equity securities or other
equity interest having power to control or direct the management, of such
person or, if such Person is a subsidiary of another Person, of the Person
which ultimately controls such subsidiary and which has issued and
outstanding such capital stock, equity securities or equity interests.
(g) "Person" shall mean any individual, firm, corporation,
partnership, joint venture, association, trust or other entity.
(h) "Stock Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person that an Acquiring Person
has become such.
(i) A "subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity
securities or voting interests is owned, directly or indirectly, by such
Person, or which is otherwise controlled by such Person.
(j) "Voting Power" shall mean the voting power of all securities of
the Company then outstanding and generally entitled to vote for the
election of directors of the Company.
Section 2. Appointment of Rights Agent. The Company hereby appoints
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the Rights Agent to act as agent for the Company and the holders of the
Rights (who shall, in accordance with Section 3 hereof, 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. In the event the Company appoints one or
more Co-Rights Agents, the respective duties of the Rights Agent and any Co-
Rights Agents shall be as the Company shall determine.
Section 3. Issue of Rights Certificates.
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(a) Until the earlier of (i) the Stock Acquisition Date or (ii) the
tenth day after the date of the commencement of, or first public
announcement of the intent of any Person (other than the Company, any
subsidiary of the Company, or any employee benefit plan of the Company or
any of its subsidiaries) to commence (which intention to commence remains
in effect for five business days after such announcement), a tender or
exchange offer which would result in such Person becoming an Acquiring
Person, unless such date under this clause (ii) is extended by the Board of
Directors of the Company (including any such date which is on or after the
date of this Agreement and prior to the issuance of the Rights) (the
earlier of such dates being herein referred to as the "Distribution Date"),
(x) the Rights shall be evidenced (subject to the provisions of paragraph
(b) of this Section 3) by the certificates for 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 (y) the Rights (and the right to receive
certificates therefor) shall be transferable only in connection with the
transfer of the underlying shares of Common Stock. As soon as practicable
after the Distribution Date, the Rights Agent shall send by first-class,
insured, postage prepaid mail, to each record holder of the Common Stock as
of the close of business on the Distribution Date, at the address of such
holder shown on the records of the Company, a certificate for Rights, in
substantially the form of Exhibit B appended hereto (the "Rights
---------
Certificates"), evidencing one Right for each share of Common Stock so
held. As of and after the Distribution Date, the Rights shall be evidenced
solely by such Rights Certificates.
As soon as practicable following the Record Date, the Company shall
send a copy of a Summary of Rights, in substantially the form appended
hereto as Exhibit C (the "Summary of Rights"), by first-class, postage
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prepaid mail, to each record holder of the Common Stock as of the close of
business on the Record Date, at the address of such holder shown on the
records of the Company. With respect to certificates for the Common Stock
outstanding as of the Record Date, until the Distribution Date (or earlier
redemption, expiration or termination of the Rights), the Rights shall be
evidenced by such certificates for the Common Stock together with the
Summary of Rights and the registered holders of the Common stock shall also
be the registered holders of the associated Rights. Until the Distribution
Date (or earlier redemption, expiration or termination of the Rights), the
surrender for transfer of any of the certificates for the Common Stock
outstanding on the Record Date, even without a copy of the Summary of
Rights attached thereto, shall also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate.
(b) Certificates issued for Common Stock (including, without
limitation, certificates issued upon transfer or exchange of Common Stock)
after the Record Date, but prior to the earlier of the Distribution Date or
the Expiration Date, shall be deemed also to be certificates for Rights,
and shall have impressed, printed, stamped, written or otherwise affixed
onto such certificates the following legend:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Rights Agreement
between QMS, Inc. and South Alabama Trust Company, Inc. (the
"Rights Agent") dated as of March 8, 1999 (the "Rights
Agreement"), the terms of which hereby are incorporated
herein by reference and a copy of which is on file at the
principal offices of QMS, Inc. Under certain circumstances,
as set forth in the Rights Agreement, such Rights may be
redeemed, may expire, or may be evidenced by separate
certificates and will no longer be evidenced by this
certificate. A copy of the Rights Agreement will be mailed
to the holder of this certificate without charge within
seven days after receipt of a written request therefor made
to the Rights Agent. Under certain circumstances, Rights
issued to Acquiring Persons (as defined in the Rights
Agreement) or certain related persons and any subsequent
holder of such Rights may become null and void with respect
to certain rights set forth in Section 11(a)(ii) and Section
13(a) of the Rights Agreement.
With respect to such certificates containing the foregoing legend, until
the Distribution Date, the Rights associated with the Common Stock
represented by such certificates shall be evidenced by such certificates
alone, and the surrender for transfer of any of such certificates shall
also constitute the transfer of the Rights associated with the Common Stock
represented by such certificate.
Section 4. Form of Rights Certificates.
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(a) The Rights Certificates (and the forms of Election to Purchase
shares and of Assignment to be printed on the reverse side thereof or
attached thereto) shall each be substantially in the forms set forth in
Exhibit B hereto and may have such marks of identification or designation
and such legends, summaries or endorsements printed thereon as the Company
may deem appropriate and as are not inconsistent with the provisions of
this Agreement, or as may be required to comply with any applicable law or
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
23 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 one-hundredths of a share of Preferred Stock as
shall be set forth therein at the price per one one-hundredths of a share
set forth therein (the "Purchase Price"), but the number of such shares and
the Purchase Price shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) hereof
that represents Rights beneficially owned by an Acquiring Person or any
Associate or Affiliate thereof and any Rights Certificate issued at any
time upon the transfer of any Rights to such an Acquiring Person or any
Associate or Affiliate thereof or to any nominee of such Acquiring Person,
Associate or Affiliate, 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 contain the following legend:
The Rights represented by this Rights Certificate were
issued to a Person who was an Acquiring Person or an
Affiliate or an Associate of an Acquiring Person. This
Rights Certificate and the Rights represented hereby may
become void to the extent provided by, and under certain
circumstances as specified in, Section 7(e) of the Rights
Agreement between QMS, Inc. and South Alabama Trust Company,
Inc., dated as of March 8, 1999.
The provisions of Section 7(e) of this Rights Agreement shall be operative
whether or not the foregoing legend is contained on any such Rights
Certificate.
Section 5. Countersignature and Registration. The Rights Certificates
---------------------------------
shall be executed on behalf of the Company by its President or any Vice
President, either manually or by facsimile signature, and shall be attested by
the Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Rights Certificates shall be manually countersigned by
the Rights Agent and shall not be valid for any purpose unless so countersigned.
In case any officer of the Company who shall have signed any of the Rights
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Rights Certificates, nevertheless, may be countersigned by the Rights
Agent, and issued and delivered by the Company with the same force and effect as
though the person who signed such Rights Certificates had not ceased to be such
officer of the Company; 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 Certificates, shall be a proper officer of the Company to sign such
Rights Certificates, although at the date of the execution of this Rights
Agreement any such person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or cause to be
kept, at its principal office in Mobile, Alabama, 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 the face of 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. Subject
to the provisions of Section 15 hereof, at any time after the close of
business on the Distribution Date, at or prior to the close of business on the
Expiration Date, any Rights Certificate or Certificates may be transferred,
split up, combined or exchanged for another Rights Certificate or Rights
Certificates entitling the registered holder to purchase a like number of shares
of Preferred Stock as the Rights Certificate or Rights Certificates surrendered
then entitle such holder to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Rights Certificate or Rights
Certificates shall make such request in writing delivered to the Rights Agent
and shall surrender the Rights Certificate or Rights Certificates to be
transferred, split up, combined or exchanged at the principal office of the
Rights Agent. Thereupon the Rights Agent shall countersign and deliver to the
Person entitled thereto a Rights Certificate or Rights Certificates, as the case
may be, as so requested. The Company may require payment 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.
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 shall 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
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Rights.
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(a) The registered holder of any Rights Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein) in whole or
in part at any time after the Distribution Date upon presentation of the
Rights Certificate, with the appropriate form of Election to Purchase on
the reverse side thereof or attached thereto, duly executed, to the Rights
Agent at the principal office of the Rights Agent, together with payment of
the Purchase Price for each one one-hundredth of a share of Preferred Stock
(or such other number of shares or other securities) as to which the Rights
are exercised, at or prior to the earlier of (i) the close of business on
February 28, 2009 (the "Final Expiration Date"), (ii) the time at which the
Rights are redeemed as provided in Section 24 hereof or (iii) the
consummation of a transaction contemplated by Section 13(d) hereof (such
earlier time being herein referred to as the "Expiration Date").
Notwithstanding any other provision of this Agreement, any Person who,
prior to the Distribution Date, becomes a record holder of shares of Common
Stock may exercise all of the rights of a registered holder of a Rights
Certificate with respect to the Rights associated with such shares of
Common Stock in accordance with and subject to the provisions of this
Agreement, including the provisions of Section 7(e) hereof, as of the date
such Person becomes a record holder of shares of Common Stock.
(b) The Purchase Price for each one one-hundredth share of Preferred
Stock pursuant to the exercise of a Right shall initially be $17.19, shall
be subject to adjustment from time to time as provided in Sections 11 and
13 hereof, and shall be payable in lawful money of the United States of
America in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the appropriate form of Election to Purchase duly executed,
accompanied by payment of the Purchase Price for the shares (or other
securities or property) to be purchased and an amount equal to any
applicable transfer tax (as determined by the Rights Agent), in cash, or by
certified check, official bank check, cashier's check or bank draft payable
to the order of the Company, the Rights Agent shall, subject to Section
21(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) certificates for the number of shares of
Preferred Stock to be purchased, and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, or (B) if
the Company, in its sole discretion, shall have elected to deposit the
shares of Preferred Stock issuable upon exercise of the Rights hereunder
into a depositary, requisition from the depositary agent depositary
receipts representing such number of one one-hundredths of a share of
Preferred Stock as are to be purchased (in which case certificates for the
shares of Preferred Stock represented by such receipts shall be deposited
by the transfer agent with the depositary agent) and the Company shall
direct the depositary agent to comply with such request, (ii) when
appropriate, requisition from the Company the amount of cash, if any, to be
paid in lieu of issuance of fractional shares in accordance with Section 15
hereof, (iii) promptly 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) when appropriate, after
receipt, promptly deliver such cash to or upon the order of the registered
holder of such Rights Certificate. In the event that the Company is
obligated to issue other securities of the Company pursuant to Section
11(a), the Company shall make all arrangements necessary so that such other
securities are available for distribution by the Rights Agent, if and when
appropriate. In addition, in the case of an exercise of the Rights by a
holder pursuant to Section 11(a)(ii), the Rights Agent shall return such
Rights Certificate to the registered holder thereof after imprinting,
stamping or otherwise indicating thereon that the rights represented by
such Rights Certificate no longer include the rights provided by Section
11(a)(ii) of the Rights Agreement and, if less than all the Rights
represented by such Rights Certificate were so exercised, the Rights Agent
shall indicate on the Rights Certificate the number of Rights represented
thereby which continue to include the rights provided by Section 11(a)(ii)
hereof.
(d) In case the registered holder of any Rights Certificate shall
exercise (except pursuant to Section 11(a)(ii)) 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 the registered holder of such Rights Certificate or to his
duly authorized assigns, subject to the provisions of Section 15 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, if
there occurs the transaction set forth in Section 11(a)(ii) or Section
13(a) hereof, then any Rights, that are or were, on or after the earlier of
the Distribution Date or the Stock Acquisition Date, beneficially owned by
an Acquiring Person or any Associate or Affiliate, shall become void with
respect to the rights provided under Section 11(a)(ii) and Section 13(a)
and any holder of such Rights shall thereafter have no right to exercise
such Rights under the provisions of Section 11(a)(ii) and Section 13(a).
(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 the certificate
contained in the appropriate form of Election to Purchase set forth on the
reverse side of or attached to the Rights Certificate surrendered for such
exercise shall have been properly completed and duly executed by the
registered holder thereof and the Company shall have been provided with
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 the provisions of this Rights Agreement. The Company shall deliver
to the Rights Agent for cancellation and retirement, and the Rights Agent shall
so cancel and retire, any other Rights Certificates 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 Preferred Stock.
-----------------------------------------------
(a) The Company covenants and agrees that it shall cause to be
reserved and kept available out of its authorized and unissued shares of
Preferred Stock and Common Stock, or any authorized and issued shares of
Preferred Stock and Common Stock held in its treasury, the number of shares
of Preferred Stock and Common Stock that will be sufficient to permit the
exercise, in full, of all outstanding Rights.
(b) So long as the shares of Preferred Stock (or other securities)
issuable 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 (or other
securities) reserved for such issuance to be listed on such exchange upon
official notice of issuance upon such exercise.
(c) The Company covenants and agrees that is shall take all such
action as may be necessary to ensure that all shares of Preferred Stock
and/or other securities delivered upon exercise of Rights shall, at the
time of delivery of its certificates for such shares or other securities
(subject to payment of the Purchase Price), be duly and validly authorized
and issued and fully paid and nonassessable shares or securities.
(d) The Company further covenants and agrees that it shall 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 or of any certificates for shares of Preferred Stock and/or
other securities upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax which may be payable in
respect of any transfer or delivery of Rights Certificates to a person
other than, or in respect of the issuance or delivery of the shares of
Preferred Stock and/or other securities in a name other than that of, the
registered holder of the Rights Certificates evidencing Rights surrendered
for exercise, or to issue or deliver any certificates for shares of
Preferred Stock and/or other securities 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.
(e) The Company shall use its best efforts to file, as soon as
practicable following 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, cause such registration statement to become effective as soon as
practicable after such filing, and cause such registration statement to
remain effective (with a prospectus at all times meeting the requirements
of the Securities Act and the rules and regulations thereunder) until the
date of the expiration of the rights provided by Section 11(a)(ii). The
Company will also take such action as may be appropriate under the blue sky
laws of the various states.
Section 10. Preferred Stock Record Date. Each person in whose name any
---------------------------
certificate for shares of Preferred Stock (or other securities) 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 other securities)
represented thereby on, and such certificate shall be dated, the date upon which
the Rights Certificate evidencing such Rights was duly presented and payment of
the Purchase Price (and any applicable transfer taxes) was made: provided,
--------
however, that if the date of such presentation and payment is a date upon
- -------
which the Preferred Stock (or other securities) 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 other securities) transfer books of the Company
are open. Prior to the exercise of the Rights evidenced thereby, the holder of
a Rights Certificate, as such, shall not be entitled to any rights of a
stockholder 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, if any,
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 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 in 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 capital stock
issuable on such date, shall be proportionately adjusted so that the
holder of any Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of capital stock and
other securities which, if such Right had been exercised immediately
prior to such date and at a time when the Preferred Stock transfer
books of the Company were open, he would have owned upon such exercise
and been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification. If an event occurs which would
require an adjustment under both Section 11(a)(i) and Section
11(a)(ii), the adjustment provided for in this Section 11(a)(ii) shall
be in addition to, and shall be made prior to, any adjustment required
pursuant to Section 11(a)(ii).
(ii) In the event that any Person (other than the Company, any
subsidiary of the Company, any employee benefit plan of the Company or
any of its subsidiaries or any entity holding securities of the
Company organized, appointed or established by the Company or any of
its subsidiaries for or pursuant to the terms of any such plan), alone
or together with his or its Affiliates and Associates, shall become an
Acquiring Person (except pursuant to a tender or 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 to be both adequate and
otherwise in the best interests of the Company and its stockholders,
other than the interests of the Person or an Affiliate or Associate
thereof on whose behalf the offer is being made (a "Permitted
Offer")), then proper provision shall be made so that each holder of a
Right, except as provided in Section 7(e) hereof, shall, for a period
of 60 days after the later of the occurrence of any such event and the
effective date of an appropriate registration statement pursuant to
Section 9 hereof, have a right to receive, upon exercise thereof at
the then current Purchase Price in accordance with the terms of this
Agreement, in lieu of shares 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 then number of
one one-hundredths of a share of Preferred Stock for which a Right is
then exercisable and (y) dividing that product by 50% of the current
market price per one share of Common Stock as determined pursuant to
Section 11(d) hereof, on the date of the occurrence of the event set
forth in this subparagraph (ii) (such number of shares being referred
to as the "number of Adjustment Shares"); provided, however, that if
the transaction that would otherwise give rise to the foregoing
adjustment is also subject to the provisions of Section 13 hereof,
then only the provisions of Section 13 hereof shall apply and no
adjustment shall be made pursuant to this section 11(a)(ii).
(iii) In the event that there shall not be sufficient
treasury shares or authorized but unissued shares of Common Stock to
permit the exercise in full of the Rights in accordance with the
foregoing subparagraph (ii) and the Rights become so exercisable,
notwithstanding any other provision of this Agreement, to the extent
necessary and permitted by applicable law and any agreements in effect
on the date hereof to which the Company is a party, each Right shall
thereafter represent the right to receive, upon exercise thereof at
the then current Purchase Price in accordance with the terms of this
Agreement, a number of shares, or units of shares, of (x) Common Stock
(up to the maximum number of shares of Common Stock which may
permissibly be issued using the allocation procedure specified in the
second sentence of Section 11(k) hereof) and (y) preferred stock (or
other equity securities) of the Company, including, but not limited
to, Preferred Stock equal in the aggregate to the number of Adjustment
Shares where the Board of Directors of the Company shall have deemed
such shares or units, other than the shares of Common Stock, to have
at least the same economic value and, to the extent permitted by the
Company's Restated Certificate of Incorporation, voting rights as the
Common Stock (a "common stock equivalent") (one one-hundredth of a
share of Preferred Stock shall be deemed to be a common stock
equivalent); provided, however, if sufficient shares (or fractions of
-------- -------
shares) of Common Stock and/or common stock equivalents are
unavailable, then the Company shall take all such action as may be
necessary to authorize additional shares of Common Stock or common
stock equivalents for issuance upon exercise of the Rights, including
the calling of a meeting of stockholders; and provided, further, that
--- -------- -------
the Company shall issue no common stock equivalent upon exercise
of the Rights until the Company has first issued all authorized and
unreserved shares of Common Stock (including treasury shares); and
---
provided, further, that if the Company is unable to cause
-------- -------
sufficient shares of Common Stock and/or common stock equivalents to
be available for issuance upon exercise in full of the Rights, then
each Right shall thereafter represent the right to receive the
Adjusted Number of Common Shares upon exercise at the Adjusted
Purchase Price (as such terms are hereinafter defined). As used
herein, the term Adjusted Number of Common Shares shall be equal to
that number of shares (or fractions of shares) of Common Stock (and/or
shares or units of common stock equivalents) equal to the produce of
(x) the number of Adjustment Shares and (y) a fraction, the numerator
of which is the number of shares of Common Stock (and/or shares or
units of common stock equivalents) available for issuance upon
exercise of the Rights and the denominator of which is the aggregate
number of Adjustment Shares otherwise issuable upon exercise in full
of all Rights (assuming there were sufficient shares of Common Stock
available) (such fraction being referred to as the "Proration
Factor"). The Adjusted Purchase Price shall mean the product of the
Purchase Price and the Proration Factor. The Board of Directors may,
but shall not be required to, establish procedures to allocate the
right to receive Common Stock and common stock equivalents upon
exercise of the Rights among holders of Rights.
(b) If the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Stock entitling
them (for a period expiring within 45 calendar days after such record date)
to subscribe for or purchase Preferred Stock (or shares having the same or
more favorable rights, privileges and preferences as the Preferred Stock
(the "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
defined in Section 11(d)) 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 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 in a consideration part or all of which
shall be in a form other than cash, the value of such consideration shall
be determined reasonably and with good faith to the holders of Rights 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. 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) If the Company shall fix a record date for the making of
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 defined in Section
11(d)) per share of Preferred Stock on such record date, less the fair
market value (as determined reasonably and with good faith to the holders
of Rights 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) of the portion of the cash, assets or
evidences of indebtedness so to be distributed or of such subscription
rights or warrants distributable in respect of one share of Preferred Stock
and the denominator of which shall be the current market price per share of
the Preferred Stock. Such adjustments shall be made successively whenever
such a record date is fixed and, in the event that such distribution is not
so made, the Purchase Price shall again be adjusted to be the Purchase
Price which would be in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder other than in
Section 11(a)(iii), 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 30 consecutive
Trading Days (as such term is hereinafter defined) immediately prior
to such date; provided, however, that in the event that the current
-------- -------
per share market price of the 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 or (B) any subdivision, combination or
reclassification of such Common Stock, and prior to the expiration of
30 Trading Days after the ex-dividend date for such dividend or
distribution or the record date for such subdivision, combination or
reclassification, then, and in each such case, the "current market
price" shall be properly adjusted to take into account ex-dividend
trading. The closing price for each day shall be the last sale price,
regular way or, in case no such sale takes place on that day, the
average of the closing bid and asked prices, regular way, in either
case, as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the
New York Stock Exchange or, if the shares of Common Stock are no
longer 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 shares of Common Stock are listed or admitted to
trading or, if the shares of common Stock 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 shares of
Common Stock 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 Common Stock selected by the Board of
Directors of the Company. If on any such date no market maker is
making a market in the Common Stock, the fair value of such shares of
such date as determined reasonably and with good faith by the Board of
Directors of the Company shall be used and shall be binding on the
Rights Agent. The term "Trading Day" shall mean a day on which the
principal national securities exchange on which the shares of Common
Stock are listed or admitted to trading is open for the transaction of
business or, if the shares of Common Stock are not listed or admitted
to trading on any national securities exchange, a Business Day. If
the Common Stock is not publicly held or not so listed or traded,
"current market price" per shall mean the fair value per share
determined reasonably and with good faith to the holders of Rights 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.
(ii) For the purpose of any computation hereunder, the "current
market price" per share (or one one-hundredth of a share) of Preferred
Stock shall be determined in the same manner as set forth above for
the Common Stock in clause (i) of this Section 11(d) (other than the
last sentence thereof). If the current market price per share (or one
one-hundredth of a share) of Preferred Stock cannot be determined in
the manner provided above, or if the Preferred Stock is not publicly
held or listed or traded in a manner described in clause (i) of this
Section 11(d), the "current market price" per share of Preferred Stock
shall be conclusively deemed to be an amount equal to 100 (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 and the "current market
price" per one one-hundredth of a share of Preferred Stock shall be
equal to the current market price per share of the Common Stock (as
appropriately adjusted). 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.
(e) Anything herein to the contrary notwithstanding, no adjustment in
the Purchase Price shall be required unless such adjustment would require
an increase or decrease of at least 1% in the Purchase Price; provided,
however, that any adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall be
made to the nearest cent or to the nearest ten-thousandth of a share of
Common Stock or other share or one-hundred-thousandth of a share of
Preferred Stock, as the case may be. Notwithstanding the first sentence of
this Section 11(e), any adjustment required by this Section 11 shall be
made no later than the earlier of (i) three years from the date of the
transaction which mandates such adjustment or (ii) the Expiration Date.
(f) If as a result of any provision of Section 11(a), the holder of
any Right thereafter exercised shall become entitled to receive any shares
of capital stock of the Company other than Preferred Stock, thereafter the
number of such other shares so receivable upon exercise of any Right shall
be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the
shares contained in subsections 11(a) through (c), inclusive, and the
provisions of Sections 7, 9, 10, 13 and 15 hereof with respect to the
Preferred Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of shares 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 subsections 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 one-hundredths of a share of Preferred Stock (calculated to the
nearest one-hundred-thousandth) obtained by (i) multiplying (x) the number
of one one-hundredths of a share of Preferred Stock covered by a Right
immediately prior to this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii)
dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights in substitution for any
adjustment in the number of shares 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 one-
hundredths of a share of Preferred Stock for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to
such adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase
Price by the Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement of its
election to adjust the number of Rights, indicating the record date for the
adjustment and, if known at the time, the amount of the adjustment to be
made. This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Rights Certificates have been
issued, shall be at least 10 days later than the date of the public
announcement. If Rights Certificates have been issued, upon each
adjustment of the number of Rights pursuant to his 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 15 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 shares 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 share and the number of shares
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 of the shares of Preferred
Stock, Common Stock or other securities issuable upon exercise of the
Rights, the Company shall take any corporate action which may, in the
opinion of its counsel, be necessary so that the Company may validly and
legally issue fully paid and nonassessable shares of Preferred Stock,
Common Stock or other securities at such adjusted Purchase Price. If upon
any exercise of the Rights, a holder is to receive a combination of Common
Stock and common stock equivalents, a portion of the consideration paid
upon such exercise, equal to at least the then par value of a share of
Common Stock of the Company, shall be allocated as the payment for each
share of Common Stock of the Company so received.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for
a specified event, the Company may elect to defer until the occurrence of
such event the issuing to the holder of any Right exercised after such
record date, the shares of preferred Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise over and
above the shares 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 bill or other appropriate
instrument evidencing such holder's right to receive such additional shares
upon the occurrence of the event requiring such adjustment.
(m) Anything to the contrary in this Section 11 notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and
to the extent that it, in its sole discretion, shall determine to be
advisable so that any (i) consolidation or subdivision of the Preferred
Stock, (ii) issuance of any shares of Preferred Stock wholly for cash 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
hereinabove in this Section 11, hereafter made by the Company to holders of
its Preferred Stock, shall not be taxable to such stockholders.
(n) 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 Common Stock, (iii) combine the outstanding
Common Stock into a smaller number of shares or (iv) issue any shares of
its capital stock in a reclassification of the outstanding Common Stock,
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 of which shall be the total number of
shares of Common Stock outstanding immediately prior to the occurrence of
the event and the denominator of which shall be the total number of shares
of Common Stock outstanding immediately following the occurrence of such
event.
(o) The exercise of Rights under Section 11(a)(ii) hereof shall only
result in the loss of rights under said Section to the extent so exercised
and shall not otherwise affect the rights represented by the Rights under
this Rights Agreement, including the Rights represented by Section 13
hereof.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
----------------------------------------------------------
Whenever an adjustment is made as provided in Sections 11 and 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) mail, or
cause to be mailed, 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. Consideration, Merger or Sale or Transfer of Assets 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, (y) any Person shall consolidate with the Company,
or merge with and into the Company and the Company shall be the continuing
or surviving corporation of such merger (other than, in the case of either
transaction described in (x) or (y), a merger or consolidation which would
result in all of the Voting Power represented by the securities of the
Company outstanding immediately prior thereto continuing to represent,
either by remaining outstanding or by being converted into securities of
the surviving entity, all of the Voting Power represented by the securities
of the Company or such surviving entity outstanding immediately after such
merger or consolidation and the holders of such securities not having
changed as a result of such merger or consolidation) or (z) the company
shall sell, mortgage or otherwise transfer (or one or more of its
subsidiaries shall sell, mortgage or otherwise transfer), in one or more
transactions, assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its subsidiaries (taken as a
whole) to any other Person, then, and in each such case (except as may be
contemplated by Section 13(d) hereof), proper provision shall be made so
that (i) following the Distribution Date, each holder of a Right shall have
the right to receive, upon the exercise thereof at the then current
Purchase Price in accordance with the terms of this Agreement, such number
of shares of freely tradeable Common Stock of the Principal party (as
hereinafter defined), free and clear of liens, rights of call or first
refusal, encumbrances or other adverse claims, as shall be equal to the
result obtained by (x) multiplying the then current Purchase Price by the
number of one one-hundredths of a share of Preferred Stock for which a
Right is then exercisable (without taking into account any adjustment
previously made pursuant to Section 11(a)(ii) hereof) and (y) dividing that
product by 50% of the current market price per share of the Common Stock of
such Principal Party (determined pursuant to Section 11(d) hereof) on the
date of consummation of such consolidation, merger, sale or transfer; (ii)
such principal Party shall thereafter be liable for, and shall assume, by
virtue of such consolidation, merger, sale or transfer, all the obligations
and duties of the Company pursuant to this Agreement; (iii) the term
"Company" shall thereafter be deemed to refer to such Principal party, it
being specifically intended that the provisions of Section 11 hereof shall
apply to such Principal Party; and (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 accordance with Section 9 hereof)
in connection with such consummation as may be necessary to assure that the
provisions hereof shall thereafter be applicable as nearly as reasonably
may be in relation to its shares of common stock thereafter deliverable
upon the exercise of the Rights.
(b) "Principal Party" shall mean
(i) In the case of any transaction described in (x) or (y) of
the first sentence of this Section 13, 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 the merger or
consolidation (including, if applicable, the Company, if it is the
surviving corporation); and
(ii) in the case of any transaction described in (z) of the first
sentence in this Section 13, the Person that is the party receiving
the greatest portion of the assets or earning power 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
12-month period registered under Section 12 of the Exchange Act and such
Person is a direct or indirect subsidiary or Affiliate of another Person,
"Principal Party" shall refer to such other Person; (2) in case such Person
is a subsidiary, directly or indirectly, or Affiliate 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;
and (3) in case such person is owned, directly or indirectly, by a joint
venture formed by two or more Persons that are not owned, directly or
indirectly, by the same Person, the rules set forth in (1) and (2) above
shall apply to each of the chains of ownership having an interest in such
joint venture as if such party were a "subsidiary" of both or all of such
joint venturers and the Principal parties in each such chain shall bear the
obligations set forth in this Section 13 in the same ratio as their direct
or indirect interests in such Person bear to the total of such interests.
(c) The Company shall not consummate any such consolidation, merger,
sale or transfer unless the Principal party shall have a sufficient number
of authorized shares of its Common Stock that have not been otherwise
issued or reserved for issuance to permit the exercise in full of the
Rights in accordance with this Section 13 and unless prior thereto the
Company and each Principal party and each other Person who may become a
Principal Party as a result of such consolidation, merger, sale or transfer
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 mention
in paragraph (a) of this Section 13, the Principal party at its own expense
shall:
(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, use
its best efforts to cause such registration statement to become
effective as soon as practicable after such filing and use its best
efforts to cause such registration statement to remain effective (with
a prospectus at all times meeting the requirements of the Securities
Act) until the Expiration Date;
(ii) use its best efforts to qualify or register the Rights and
the securities purchasable upon exercise of the Rights under the blue
sky laws of such jurisdictions as may be necessary or appropriate; and
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which
comply in all material 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. The rights under
this Section 13 shall be in addition to the rights to exercise Rights and
adjustments under Section 11(a)(ii) and shall survive any exercise
thereunder.
(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) if (i) such transaction is
consummated with a person or Persons who acquired shares of Common Stock
pursuant to a Permitted Offer (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 Common Share paid to all
holders of Common Stock whose shares were purchased pursuant to such
Permitted Offer, and (iii) the form of consideration being offered to the
remaining holders of Common Stock pursuant to such transaction is the same
as the form of consideration paid pursuant to such Permitted Offer. Upon
consummation of any such transaction contemplated by this subsection (d),
all Rights hereunder shall expire.
Section 14. Additional Covenants.
--------------------
(a) After the Stock Acquisition Date, the Company covenants and
agrees that it shall not (i) consolidate with, (ii) merge with or into or
(iii) sell or transfer to, in one or more transactions, assets or earning
power aggregating more than 50% of the assets or earning power of the
Company and its subsidiaries, taken as a whole to, any other Person if at
the time of or after such consolidation, merger or sale there are any
charter or by-law provisions or any rights, warrants or other instruments
or agreements outstanding or any other action taken which would diminish or
otherwise eliminate the benefits intended to be afforded by the Rights.
The Company shall not consummate any such consolidation, merger or sale
unless prior thereto the Company and such other Person shall have executed
and delivered to the Rights Agent a supplemental agreement evidencing
compliance with this subsection.
(b) the Company covenants and agrees that, after the Stock
Acquisition Date, it will not, except as permitted by Section 24 hereof,
take any action the purpose or effect of which is to diminish or otherwise
eliminate the benefits intended to be afforded by the Rights.
Section 15. 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(n), 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 the purposes of this Section
15(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 quoted price or, if not
so quoted, the average of the high bid and low asked prices in the market
as reported by the New York Stock Exchange 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 or, 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 reasonably and with good faith to the holders of
Rights by the Board of Directors of the Company shall be used and shall be
binding on the Rights Agent.
(b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions which are integral multiples of one
one-hundredth of a share of Preferred Stock) upon exercise of the Rights or
to distribute certificates which evidence fractional shares of Preferred
Stock (other than fractions which are integral multiples of one one-
hundredth of a share of Preferred Stock). Fractions of shares of Preferred
Stock in integral multiples of one one-hundredth of a share of Preferred
Stock may, at the election of the Company, be evidenced by depositary
receipts pursuant to an appropriate agreement between the Company and a
depositary selected by it, provided that such agreement shall provide that
the holders of such depositary receipts hall have all the rights,
privileges and preferences to which they are entitled as beneficial owners
of the shares of Preferred Stock represented by such depositary receipts.
In lieu of fractional shares of Preferred Stock that are not integral
multiples of one one-hundredth of a share of Preferred Stock, the Company
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 value of one one-hundredth of a share of
Preferred Stock. For purposes of this Section 15(b), the current market
value of one one-hundredth of a share of Preferred Stock shall be one one-
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 one of the transactions or events
specified in Section 11 giving rise to the right to receive common stock
equivalents (other than Preferred Stock) or other securities upon the
exercise of a Right, the Company shall not be required to issue fractions
of shares or units of such common stock equivalents or other securities
upon exercise of the Rights or to distribute certificates which evidence
fractional shares of such common stock equivalents or other securities. In
lieu of fractional shares or units of such common stock equivalents or
other securities, 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 value of a
share or unit of such common stock equivalent or other securities. For
purposes of this Section 15(c), the current market value shall be
determined in the manner set forth in Section 11(d) hereof for the Trading
Day immediately prior to the date of such exercise and, if such common
stock equivalent is not traded, each such common stock equivalent shall
have the value of one one-hundredth of a share of Preferred Stock.
(d) Except as otherwise expressly provided herein, the holder of a
Right by the acceptance of the Rights expressly waives his right to receive
any fractional Rights or any fractional shares upon exercise of a Right.
Section 16. 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, 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, of the Common Stock) may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Rights Certificate in the manner provided
in such Rights Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and shall be entitled to specific performance
of the obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to his Agreement.
Holders of Rights shall be entitled to recover the reasonable costs and
expenses, including attorneys' fees, incurred by them in any action to enforce
the provisions of this Agreement.
Section 17. 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 of the Rights Agent, duly endorsed or accompanied
by a proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the person in
whose name 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 shall be affected by any notice to the contrary.
Section 18. Rights Certificate Holder Not Deemed a Stockholder. 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 shares of
Preferred Stock, Common 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 Certificate, as such,
any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any corporate
actions or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to receive
subscription rights, or otherwise, until the Right or Rights evidenced by
such Rights Certificate shall have been exercised in accordance with the
provisions thereof.
Section 19. Concerning the Rights Agent. 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
negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with
the acceptance and administration of this Agreement, including the costs
and expenses of defending against any claim of liability arising therefrom,
directly or indirectly.
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
believed by it to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or Persons.
Section 20. Merger or Consolidation or Change of Name of Rights Agent.
---------------------------------------------------------
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 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 that such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 22 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 the
predecessor Rights Agent and deliver such Rights Certificates so countersigned;
and in case at that time any of the Rights Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor or in the name of the
successor Rights Agent; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be changed and at
such time any of the Rights Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver 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 21. 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 selected by it
(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) 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
President, any Vice President, Secretary or Chief Financial Officer 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
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the
Rights Certificates (except as to the fact that it has countersigned the
Rights Certificates) or be required to verify the same, but all such
statements and recitals are and shall be deemed to have been made by the
Company only.
(e) The Rights Agent shall not have any responsibility for the
validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Rights Certificate (except its countersignature thereof);
nor shall it be responsible for any breach by the Company of any covenant
or condition contained in this Agreement or in any Rights Certificate; nor
shall it be responsible for any adjustment required under the provisions of
Sections 11 or 13 hereof or 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 be responsible for the calculations of the market
value of the Rights, the Preferred Stock or the common Stock pursuant to
the provisions hereof; nor shall it by any act hereunder be deemed to make
any representation or warranty as to the authorization or reservation or
any shares of Preferred Stock or other securities to be issued pursuant to
this Agreement or any Rights Certificate or as to whether any shares of
Preferred Stock or other securities 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 and
certificates delivered pursuant to any provision hereof from the President,
any Vice President, Secretary or Chief Financial Officer of the Company,
and is authorized 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 stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though it
were not Rights Agent under this Agreement. Nothing herein shall preclude
the Rights Agent from acting in any other capacity for the Company or for
any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or
by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, omission, default, neglect or
misconduct of any such attorneys or agents or for any loss to the Company
or to the holders of the Rights resulting from any such act, omission,
default, neglect or misconduct, provided reasonable care was exercised in
the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of its
rights if there shall be reasonable grounds for believing that repayment of
such funds or adequate indemnification against such risk or liability is
not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the 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 of transfer without first consulting
with the Company.
Section 22. Change of Rights Agent. The Rights Agent or any successor
----------------------
Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days notice in writing, mailed to the Company and to each
transfer agent of the Common Stock and Preferred Stock by registered or
certified mail, and to holders of the Rights Certificates by first-class mail.
The company may remove the Rights Agent or any successor Rights Agent upon 30
days notice in writing, mailed to the Rights Agent 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 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Rights Certificate
(who shall, with such notice, submit his Rights Certificate for inspection by
the Company), then the registered holder of any Rights Certificate may apply to
any court of competent jurisdiction for the appointment of a new Rights Agent.
Any successor Rights Agent, whether appointed by the Company or by such a court,
shall be (a) a corporation or limited liability company organized and doing
business under the laws of the United States or of any state of the United
States in good standing, which is authorized under such laws to exercise
corporate trust powers and is subject to supervision or examination by federal
or state authority and which has at the time of its appointment as Rights Agent
a combined capital and surplus of at least $50,000,000 or (b) an affiliate of a
corporation or limited liability company 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 named
originally 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 Preferred Stock, and mail a notice thereof to the
registered holders of the Rights Certificates. Failure to give any notice
provided for in this Section 22, 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 23. 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 its Board of Directors to
reflect any adjustment or change in the Purchase Price per share and the number
of kind or class of shares or other securities on property purchasable under the
Rights Certificates made in accordance with the provisions of this Agreement.
Section 24. Redemption and Termination.
--------------------------
(a) (i) The Board of Directors of the Company may, at its option, at
any time prior to the earlier of (x) the time that any Person becomes
an Acquiring Person or (y) 4:00 P.M., local New York City, New York
time on the Final Expiration Date, redeem all but not less than all of
the then outstanding Rights at a redemption price of $.01 per Right,
appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such redemption
price being hereinafter referred to as the "Redemption Price").
(ii) In addition, the Board of Directors of the Company may
redeem all but not less than all of the then outstanding Rights at the
Redemption Price following the occurrence of a Stock Acquisition Date
but prior to any event described in Section 13(a) either (x) in
connection with any event specified in Section 13(a) in which all
holders of Common Stock are treated alike and not involving (other
than as a holder of Common Stock being treated like all other such
holders) an Acquiring Person or an Affiliate or Associate of an
Acquiring Person or any other Person in which such Acquiring Person,
Affiliate or such Associate has any interest, or any other Person
acting directly or indirectly on behalf of or in association with any
such Acquiring Person, Affiliate of or Associate or (y) following the
occurrence of an event set forth in, and the expiration of any period
during which the holder of Rights may exercise the rights under,
Section 11(a)(ii), if and for as long as the Acquiring Person is not
thereafter the Beneficial Owner of securities representing 20% or more
of the outstanding shares of the Voting Power and at the time of
redemption there are no other Persons who are Acquiring Persons.
(b) In the case of a redemption permitted under Section 24(a)(i),
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. In the case of a redemption permitted only under Section 24(a)(ii),
evidence of which shall have been filed with the Rights Agent, the right to
exercise the Rights will terminate and represent only the right to receive
the Redemption Price only after ten (10) Business Days following the giving
of notice of such redemption to the holders of such Rights if no event set
forth in Section 11(a)(ii) shall have occurred, and, if such event shall
have occurred, upon the later of ten Business Days following the giving of
such notice or the expiration of any period during which the rights under
Section 11(a)(ii) may be exercised. Within ten days after the action of
the Board of Directors ordering any such 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 the Rights
Agent and to all such holders at their last addresses as they appear upon
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) In the case of a redemption permitted under Section 24(a)(i) or
(ii), the Company may, at its option, discharge all of its obligations with
respect to the Rights by (i) issuing a press release announcing the manner
of redemption of the Rights and (ii) mailing payment of the Redemption
Price to the registered holders of the Rights at their last addresses as
they appear on the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent of the
Common Stock and, upon such action, all outstanding Rights Certificates
shall be null and void without any further action by the Company.
Section 25. Notice of Certain Events. In case the company shall propose
------------------------
(a) 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), (b) 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, (c) to effect any reclassification of its Preferred Stock (other than a
reclassification involving only the subdivision of outstanding shares of
Preferred Stock), (d) to effect any consolidation or merger into or with, or to
effect any sale or other transfer (or to permit one or more of its subsidiaries
to effect any sale or other transfer), in one or more transactions, of more than
50% of the assets or earning power of the Company and its subsidiaries (taken as
a whole), to any other Person or (e) 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, 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. Such notice shall be so given in the case of any
action covered by clause (a) or (b) above at least 20 days prior to the record
date for determining holders of the shares of Preferred Stock for purposes of
such action, and in the case of any such other action, at least 20 days prior to
the date of the taking of such proposed action or the date of participation
therein by the holders of the shares of Preferred Stock, whichever shall be the
earlier.
In case any of the events set forth in Section 11(a)(ii) of this Agreement
shall occur, then, in any such case, the Company shall as soon as practicable
thereafter give to each holder of a Rights Certificate, 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.
Section 26. Notices. Notices or demands authorized by this Agreement to
-------
be given or made by the Rights Agent or by the holder of any Rights
Certificate to the Company shall be sufficiently given or made if sent by first-
class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
QMS, Inc.
One Magnum Pass
Mobile, Alabama 36618
Attention: Secretary
Subject to the provisions of Section 22, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Rights
Certificate to 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:
South Alabama Trust Company, Inc.
100 St. Joseph Street
Mobile, Alabama 36602
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Rights Agent.
Section 27. Supplements and Amendments. The Company and the Rights Agent
--------------------------
may from time to time supplement or amend this Agreement without approval
of any holders of Rights Certificates (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) prior to the Distribution
Date, to change or supplement the provisions hereunder as the Company may deem
necessary or desirable or (iv) following the Distribution Date, 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. 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 unless the Rights Agent shall have
determined in good faith that such supplement or amendment would adversely
affect its interests under this Agreement. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident with the interest
of the holders of Common Stock.
Section 28. Determination 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
or any other securities of which any Person is the Beneficial Owner, shall be
made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General
Rules and Regulations under the Exchange Act as in effect on the date of this
Agreement. The Board of Directors of the Company shall have the exclusive power
and authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board or 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 (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
of Directors in good faith shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights Certificates and all other
parties and (y) not subject the Board to any liability to the holders of the
Rights Certificates.
Section 29. 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 30. Benefits of this Agreement. Nothing in this Agreement shall
--------------------------
be construed to give to any person or corporation other than the Company,
the Rights Agent and the registered holders of the Rights Certificates (and,
prior to the Distribution Date, the Common Stock) any legal or equitable right,
remedy or claim under this Agreement; but this Agreement shall be for the sole
and exclusive benefit of the company, the Rights Agent and the registered
holders of the Rights Certificates (and, prior to the Distribution Date, 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
thereby.
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 Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and 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 agreement.
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, all as of the day and year first above written.
COMPANY:
QMS, INC.
ATTEST:
By: /s/ James A. Wallace By: /s/ Edward E. Lucente
----------------------- -------------------------
James A. Wallace, Edward E. Lucente,
Secretary President
RIGHTS AGENT:
SOUTH ALABAMA TRUST COMPANY, INC.
By: /s/ Dan Britton
---------------------
Name: Dan Britton
Title: President and Chief Executive Officer
EXHIBIT A
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF SERIES A PARTICIPATING PREFERRED STOCK
of
QMS, INC.
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
We, James L. Busby and G. William Speer, President and Secretary,
respectively, of QMS, INC. (the "Corporation"), a corporation organized and
existing under the General Corporation Law of the State of Delaware, in
accordance with the provisions of Section 3 thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by the
Restated Certificate of Incorporation of the Corporation, the Board of
Directors, on November 30, 1988, adopted the following resolutions creating a
series of 250,000 shares no par value per share Preferred Stock designated as
Series A Participating Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board of Directors
of the Corporation in accordance with the provisions of its Restated Certificate
of Incorporation, a series of no par value per share Preferred Stock of the
Corporation hereby is created, and that the designation and amount thereof and
the powers, preferences and relative, participating, optional and other special
rights of the shares of such series, and the qualifications, limitations or
restrictions thereof are as follows:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Participating Preferred Stock", which shall have a
stated value of $1.00 per share, and the number of shares constituting such
series shall be 250,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided, that no decrease shall reduce
the number of shares of Series A Participating Preferred Stock to a number less
than that of the shares then outstanding plus the number of shares issuable upon
exercise of outstanding rights, options or warrants or upon conversion of
outstanding securities issued by the Corporation.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock ranking prior and superior to the shares
of Series A Participating Preferred Stock with respect to dividends, the holders
of shares of Series A Participating Preferred Stock, in preference to the
holders of shares of Common Stock, par value $.01 per share (the "Common
Stock"), of the Corporation and any other junior stock, shall be entitled to
receive, when, as and if declared by the Board of Directors out of funds legally
available for the purposes quarterly dividends payable in cash on the first day
of October, January, April and July in each year (each such date being referred
to herein as a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or fraction
of a share of Series A participating Preferred Stock in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $1.00, or (b) subject
to the provision for adjustment hereinafter set forth, 100 times the aggregate
per share amount of all cash dividends, and 100 times the aggregate per share
amount (payable in kind) of all non-cash dividends or other distributions other
than a dividend payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise), declared
on the Common Stock since the immediately preceding Quarterly Dividend Payment
Date or, with respect to the first Quarterly Dividend Payment Date, since the
first issuance of any share or fraction of a share of Series A Participating
Preferred Stock. In the event the Corporation shall at any time after November
30, 1998 (the "Rights Declaration Date") (i) declare any dividend on Common
Stock payable in shares of Common Stock (ii) subdivide the outstanding Common
Stock or (iii) combine the outstanding Common Stock into a smaller number of
shares, then in each such case the amount to which holders of shares of Series A
Participating Preferred Stock were entitled immediately prior to such event
under clause (b) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denomination of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
(B) The Corporation shall declare a dividend or distribution on the
Series A Participating Preferred Stock as provided in paragraph (A) above
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided that, in the
event no dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share on the
Series A Participating Preferred Stock shall nevertheless be payable on such
subsequent quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Participating Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series A
Participating Preferred Stock unless the date of issue of such shares is prior
to the record date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date of issue of such
shares or unless the date of issue is a Quarterly Dividend Payment Date or is a
date after the record date for the determination of holders of shares of Series
A Participating Preferred Stock entitled to receive a quarterly dividend and
before such Quarterly Dividend Payment Date in either of which events such
dividends shall begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends
paid on the shares of Series A Participating Preferred Stock in an amount less
than the total amount of such dividends at the time accrued and payable on such
shares shall be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may fix a record date
for the determination of holders of shares of Series A Participating Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be no more than 30 days prior to the date fixed
for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A
Participating Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Participating Preferred Stock shall entitled the holder
thereof to 100 votes on all matters submitted to a vote of the stockholders of
the Corporation; provided, however, that with regard to any election for the
Corporation's Board of Directors (except as provided for in paragraph (C) of
this Section 3), the maximum number of votes for the election of directors
exercised by holders of shares of the Series A Participating Preferred Stock,
together with holders of any other series of Preferred Stock, shall not exceed
the number of votes for the election of directors represented by authorized and
issued shares of Common Stock entitled to vote, less one, and the number of
votes for the election of directors exercised by holders of shares of Series A
Participating Preferred Stock and other Preferred Stock shall be reduced as
necessary on a pro rata basis to effectuate this result.
(B) Except as otherwise provided herein or by law, the holders of
shares of Series A Participating Preferred Stock and the holders of shares of
Common Stock shall vote together as one class on all matters submitted to a vote
of stockholders of the Corporation.
(C) (i) If at any time dividends on any Series A Participating
Preferred Stock shall be in arrears in an amount equal to six (6) quarterly
dividends thereon, the occurrence of such contingency shall mark the
beginning of a period (herein called a "default period") which shall extend
until such time as all accrued and unpaid dividends for all previous
quarterly dividend periods and for the current quarterly dividend period on
all shares of Series A Participating Preferred Stock then outstanding shall
have been declared and paid or set apart for payment. During each default
period, all holders of Series A Participating Preferred Stock then
outstanding shall have been declared and paid or set apart for payment.
During each default period, all holders of Series A Participating Preferred
Stock, together with holders of any other series of Preferred Stock, with
dividends in arrears in an amount equal to six (6) quarterly dividends
thereon, voting as a class, irrespective of series, shall have the right to
elect a number of directors equal to two-thirds of the then existing
members of the Board of Directors, rounded down, to the class or classes of
directors whose terms next expire, provided that such new directors agree
to resign from such position upon the expiration of the default period.
(ii) During any default period, such voting right of the holders
of Series A Participating Preferred Stock may be exercised initially at a
special meeting called pursuant to subparagraph (iii) of this Section 3(C)
or at any annual meeting of stockholders, and thereafter at annual meetings
of stockholders, provided that neither such voting right nor the right of
the holders of any other series of Preferred Stock, if any, to increase, in
certain cases, the authorized number of directors shall be exercised unless
the holders of ten percent (10%) in number of shares of all series of
Preferred Stock outstanding shall be present in person or by proxy. The
absence of a quorum of the holders of Common Stock shall not affect the
exercise by the holders of Preferred Stock of such voting right. At any
meeting at which the holders of Series A Participating Preferred Stock
shall exercise such voting rights initially during an existing default
period, they shall have the right, voting as a class with the holders of
all other series of Preferred Stock, to elect directors to fill such
vacancies, if any, in the Board of Directors as may then exist up to the
required number set forth herein or, if such right is exercised at an
annual meeting, to elect the required number. The holders of the Preferred
Stock shall have the right to make such increase in the number of directors
constituting the Board of Directors and to take such further action as
shall be necessary to permit the election by them of the required action as
shall be necessary to permit the election by them of the required number.
After the holders of the Preferred Stock shall have exercised their right
to elect directors in any default period and during the continuance of such
period, the number of directors shall not be increased or decreased except
by vote of the holders of Preferred Stock as herein provided or pursuant to
the rights of any equity securities ranking senior to or pari passu with
the Series A Participating Preferred Stock.
(iii) Unless the holders of Preferred Stock shall, during an
existing default period, have previously exercised their right to elect
directors, the Board of Directors may order, or any stockholder or
stockholders owning in the aggregate not less than ten percent (10%) of the
total number of shares of Preferred Stock outstanding, irrespective of
series, may request, the calling of a special meeting of the holders of
Preferred Stock, which meeting shall thereupon be called by the President,
a Vice-President or the Corporate Secretary of the Corporation. Notice of
such meeting and of any annual meeting at which holders of Preferred Stock
are entitled to vote pursuant to this paragraph (C)(iii) shall be given to
each holder of record of Preferred Stock by mailing a copy of such notice
to him at his last address as the same appears on the books of the
Corporation. Such meeting shall be called for a time not earlier than 10
days and not later than 60 days after such order or request, and such
meeting may be called on similar notice by any stockholder or stockholders
owning in the aggregate not less than ten percent (10%) of the total number
of shares of Preferred Stock outstanding. Notwithstanding the provisions
of this paragraph (C)(iii), no such special meeting shall be called during
the period within 60 days immediately preceding the date fixed for the next
annual meeting of the stockholders.
(iv) In any default period, the holders of Common Stock, and
other classes of stock of the Corporation if applicable, shall continue to
be entitled to elect the whole number of directors until the holders of
Preferred Stock shall have exercised their right to elect the required
number of directors, voting as a class, after the exercise of which right
(x) the directors so elected by the holders of Preferred Stock shall
continue in office until their successors shall have been elected by such
holders or until the expiration of the default period, and (y) any vacancy
in the Board of Directors may (except as provided in paragraph (C)(ii) of
this Section 3 be filled by vote of a majority of the remaining directors
theretofore elected by the holders of the class of stock which elected the
director whose office shall have become vacant. References in this
paragraph (C) to directors elected by the holders of a particular class of
stock shall include directors elected by such directors to fill vacancies
as provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x) the
right of the holders of Preferred Stock as a class to elect directors shall
cease, (y) the term of any directors elected by the holders of Preferred
Stock as a class shall terminate, and (z) the number of directors shall be
such number as may be provided for in, or pursuant to, the Restated
Certificate of Incorporation or By-Laws irrespective of any increase made
pursuant to the provisions of paragraph (C)(ii) of this Section 3 (such
number being subject, however, to change thereafter in any manner provided
by law or in the Restated Certificate of Incorporation or By-Laws). Any
vacancies in the Board of Directors created by the provisions of clauses
(y) and (z) in the preceding sentence may be filled by a majority of the
remaining directors, even though less than a quorum.
(D) Except as set forth herein, holders of Series A Participating
Preferred Stock shall have no special voting rights and their consent shall not
be required (except to the extent they are entitled to vote with holders of
Common Stock as set forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Participating Preferred Stock as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Participating
Preferred Stock outstanding shall have been paid in full, the Corporation shall
not
(i) declare or pay dividends on, make any distributions on, or
redeem or purchase or otherwise acquire for consideration any shares of
stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Participating Preferred Stock;
(ii) declare or pay dividends on or make any other distributions
on any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Participating
Preferred Stock except dividends paid ratably on the Series A Participating
Preferred Stock and all such parity stock on which dividends are payable or
in arrears in proportion to the total amounts to which the holders of all
such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Participating Preferred Stock provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such parity stock in
exchange for shares of any stock of the Corporation ranking junior (either
as to dividends or upon dissolution, liquidation or winding up) to the
Series A Participating Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares
of Series A Participating Preferred Stock or any shares of stock ranking on
a parity with the Series A Participating Preferred Stock except in
accordance with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such shares upon
such terms as the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will result in
fair and equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (a) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Conversion Rights.
(A) Subject to the provision for adjustment hereinafter set forth,
each one one-hundredth of a share of Series A Participating Preferred Stock
shall, for a period of 90 days after issuance, be convertible at the option of
the respective holders thereof, at the office of the Corporation and at such
other place or places, if any, as the Board of Directors may determine, without
the payment of further consideration, into one (1) share of Common Stock of the
Corporation.
(B) In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock (ii) subdivide the outstanding Common Stock or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the one (1) share of Common Stock into which each one one-hundredth of a share
of Series A Participating Preferred Stock shall be convertible shall be adjusted
by multiplying such share by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(C) At such times as the conversion rights are exercised for Series A
Participating Preferred Stock, the Corporation shall, to the extent that
unreserved authorized and unissued or treasury shares of Common Stock are
available, reserve sufficient shares of Common Stock to permit the conversion of
such Series a Participating Preferred Stock into Common Stock. In the even that
sufficient unreserved authorized and unissued or treasury shares of common Stock
are not available to permit such reservation and conversion, the Corporation
shall use reasonable efforts to obtain stockholder approval of an increase in
the number of authorized shares of Common Stock to permit the aforementioned
preservation and conversion of Series A Participating Preferred Stock into
Common Stock.
Section 6. Reacquired Shares. Any shares of Series A Participating
Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and
cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of
a new series of Preferred Stock to be created by resolution or
resolutions of the Board of Directors, subject to the conditions
and restrictions on issuance set forth herein.
Section 7. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation (voluntary or otherwise) dissolution or
winding up of the Corporation, no distribution shall be made to the holders of
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Participating Preferred Stock unless,
prior thereto, the holders of shares of Series A Participating Preferred Stock
shall have received, per share, the greater of 100 times the exercise price per
Right or 100 times the payment made per share of Common Stock, plus an amount
equal to accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment (the "Series A Liquidation Preference").
Following the payment of the full amount of the Series A Liquidation Preference
no additional distributions shall be made to the holders of shares of Series A
Participating Preferred Stock unless, prior thereto, the holders of shares of
Common Stock shall have received an amount per share (the "Common Adjustment")
equal to the quotient obtained by dividing (i) the Series A Liquidation
Preference by (ii) 100 (as appropriately adjusted as set forth in subparagraph
(C) below to reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such number in clause (ii),
being the "Adjustment Number"). Following the payment of the full amount of the
Series A Liquidation Preference and the Common Adjustment in respect of all
outstanding shares of Series A Participating Preferred Stock and Common Stock,
respectively, holders of Series A Participating Preferred Stock and holders of
shares of Common Stock shall receive their ratable and proportionate share of
the remaining assets to be distributed in the ratio of the Adjustment Number to
1 with respect to such Series A Participating Preferred Stock and Common Stock,
on a per share basis, respectively.
(B) In the event there are not sufficient assets available to permit
payment in full of the Series A Liquidation Preference and the liquidation
preferences of all other series of Preferred Stock, if any, which rank on a
parity with the Series A Participating Preferred Stock, then such remaining
assets shall be distributed ratably to the holders of such parity shares in
proportion to their respective liquidation preferences. In the event there are
not sufficient assets available to permit payment in full of the Common
Adjustment, then such remaining assets shall be distributed ratably to the
holders of Common Stock.
(C) In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the Adjustment Number in effect immediately prior to such event shall be
adjusted by multiplying such Adjustment Number by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
Section 8. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Series A Participating Preferred Stock shall at the same time be similarly
exchanged or changed in an amount per share (subject to the provision for
adjustment hereinafter set forth) equal to 100 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the case
may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series A Participating Preferred Stock shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that are
outstanding immediately prior to such event.
Section 9. Redemption. The shares of Series A Participating Preferred
Stock shall not be redeemable.
Section 10. Ranking. The Series A Participating Preferred Stock shall
rank junior to all other series of the Corporation's Preferred Stock as to the
payment of dividends and the distribution of assets, unless the terms of any
such series shall provide otherwise.
Section 11. Amendment. The Restated Certificate of Incorporation of the
Corporation shall not be further amended in any manner which would materially
alter or change the powers, preferences or special rights of the Series A
Participating Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of a majority or more of the outstanding shares
of Series A Participating Preferred Stock voting separately as a class.
Section 12. Fractional Shares. Series A Participating Preferred Stock
may be issued in fractions of a share which shall entitle the holders, in
proportion to such holders' fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of all
other rights of holders of Series A Participating Preferred Stock.
RESOLVED FURTHER, that the proper officers of the Corporation are
authorized to execute a Certificate of Designation with respect to the Series A
Participating Preferred Stock pursuant to Section 151 of the General Corporation
Law of the State of Delaware and to take all appropriate action to cause such
Certificate to become effective, including, but not limited to, the filing and
recording of such Certificate with and/or by the Secretary of State of the State
of Delaware.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate and do
affirm the foregoing as true under the penalties of perjury as of the 30th day
of November, 1988.
QMS, INC.
By: /s/ James L. Busby
James L. Busby
President
[Corporate Seal]
ATTEST:
By: /s/ G. William Speer
G. William Speer
Secretary
EXHIBIT B
[Form of Rights Certificate]
Certificate No. R- Rights
NOT EXERCISABLE AFTER FEBRUARY 28, 2009 OR EARLIER IF NOTICE OF
REDEMPTION IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF THE COMPANY, AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. [THE RIGHTS REPRESENTED BY THIS CERTIFICATE WERE
ISSUED TO A PERSON WHO WAS AN ACQUIRING PERSON OR AN ASSOCIATE OR
AFFILIATE OF AN ACQUIRING PERSON. THIS RIGHTS CERTIFICATE AND THE
RIGHTS REPRESENTED HEREBY MAY BECOME VOID TO THE EXTENT PROVIDED IN
AND UNDER THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS
AGREEMENT.]1/
RIGHTS CERTIFICATE
QMS, INC.
This certifies that , or
registered assigns, is the registered owner of the number of Rights set forth
above, each of which entitles the owner thereof, subject to the terms,
provisions and conditions of the Rights Agreement dated as of March 8, 1999 (the
"Rights Agreement") between QMS, Inc., a Delaware corporation (the "Company"),
and South Alabama Trust Company, Inc., an Alabama trust company (the "Rights
Agent"), to purchase from the Company at any time after the Distribution Date
(as such term is defined in the Rights Agreement) and prior to 4:00 P.M. (New
York City, New York time) on February 28, 2009 at the principal office of the
Rights Agent in Mobile, Alabama, one one-hundredth of a fully paid,
nonassessable share of Series A Participating Preferred Stock (the "Preferred
Stock") of the Company, at a purchase price of $17.19 per one one-hundredth of a
share (the "Purchase Price"), upon presentation and surrender of this Rights
Certificate with the appropriate Form of Election to Purchase duly executed.
The number of Rights evidenced by this Rights Certificate set forth above (and
the number of shares which may be purchased upon exercise thereof) and the
Purchase Price set forth above are the number and Purchase Price as of December
1, 1998, based on the Preferred Stock as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and the number 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.
1/ The portion of the legend in brackets shall be inserted only if
applicable.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates. Copies of
the Rights Agreement are on file at the principal office of the Company and are
also available upon written request to the Company.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the principal office of the Rights Agent, may be exercised for
another Rights Certificate or Rights Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
shares of Preferred Stock as the Rights evidenced by the Rights Certificate or
Rights Certificates surrendered shall have entitled such holder to purchase. If
this Rights Certificate shall be exercised (other than pursuant to Section
11(a)(ii) of the Rights Agreement) in part, the holder shall be entitled to
receive upon surrender hereof another Rights Certificate or Rights Certificates
for the number of whole Rights not exercised. If this Rights Certificate shall
be exercised in whole or in part pursuant to Section 11(a)(ii) of the Rights
Agreement, the holder shall be entitled to receive this Rights Certificate duly
marked to indicate that such exercise has occurred as set forth in the Rights
Agreement.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate may be redeemed by the company at its option at a redemption
price of $.01 per Right. Subject to the provisions of the Rights Agreement, the
Company, at its option, may elect to mail payment of the redemption price to the
registered holder of the Right at the time of redemption, in which event this
Certificate may become void without any further action by the Company.
No fractional shares of Preferred Stock will be issued upon the exercise of
any Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-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, as such, 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 stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in 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,
dated as of _________________________, _______.
ATTEST: QMS, INC.
By:
Name: Name:
Title: Title:
COUNTERSIGNED:
Authorized Signature
of Rights Agent
[Form of Reverse Side of or Attachment to Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate)
FOR VALUE RECEIVED
(Registered Holder) hereby sells assigns and transfers unto
(Name of Transferee) whose address is;
the Rights evidenced by this Rights Certificate, together with all right, title
and interest therein, and does hereby irrevocably constitute and appoint
Attorney-in-Fact, to transfer
the within Rights Certificate on the books of the within-named Company, with
full power of substitution.
Dated: , .
-------------------------------------- -------- --------------------
Signature of Registered Holder
Signature Guaranteed:
(signatures must be guaranteed by a commercial bank or trust company having an
office or correspondence in the United States)
Certificate to Assignment
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by the Rights Certificate [ _ ] are [ _ ]
are 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 in the Rights Agreement; and
(2) after due inquiry and to the best knowledge of the undersigned,
the undersigned [_____] did [_____] did not acquire the Rights evidenced by the
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
NOTICE
THE SIGNATURE TO THE FOREGOING ASSIGNMENT MUST CORRESPOND TO THE NAME AS
WRITTEN UPON THE FACE OF THE RIGHTS CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise the
Rights Certificate pursuant to Section 11(a)(ii)
of the Rights Agreement.)
To QMS, INC.:
The undersigned hereby irrevocably elects to exercise
_________________________ Rights represented by the Rights Certificate to
purchase the shares of Common Stock (or such other securities of the Company)
issuable under the exercise of the Rights and requests that certificates for
such shares be issued in the name of:
(Please print name and address)
(Please insert social security or other identifying number)
The Rights Certificate indicating the balance, if any, of such Rights which
may still be exercised pursuant to Section 11(a)(ii) of the Rights Agreement
shall be returned to the undersigned unless such person requests that the Rights
Certificate be registered in the name of and delivered to:
(Please print name and address - complete only if Rights Certificate
is to be registered in a name other than the undersigned)
(Please insert social security or other identifying number)
Dated: ________________, ________ ____________________________________________
Signature
Signature Guaranteed:
_________________________________
(signatures must be guaranteed by a commercial bank or trust company having an
office or correspondent in the United States)
Certificate to Election to Purchase
(pursuant to Section 11(a)(ii) of the Rights Agreement)
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by the 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 in the Rights Agreement);
(2) the 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; and
(3) after due inquiry and to the best knowledge of the undersigned, the
undersigned [___] did [___] did not acquire the Rights evidenced by the Rights
Certificate from any Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person.
Dated: _________________, _______ ___________________________________________
Signature
THE SIGNATURE TO THE FOREGOING ELECTION TO PURCHASE MUST CORRESPOND TO THE
NAME AS WRITTEN UPON THE FACE OF THE RIGHTS CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise the
Rights Certificate other than pursuant to
Section 11(a)(ii) of the Rights Agreement.)
To QMS, INC.:
The undersigned hereby irrevocably elects to exercise
_________________________ Rights represented by the Rights Certificate to
purchase the shares of Common Stock (or such other securities of the Company or
any other Person) issuable under the exercise of the Rights and requests that
certificates for such shares be issued in the name of:
(Please print name and address)
(Please insert social security or other identifying number)
The Rights Certificate indicating the balance, if any, of such Rights which
may still be exercised pursuant to Section 11(a)(ii) of the Rights Agreement
shall be returned to the undersigned unless such person requests that the Rights
Certificate be registered in the name of and delivered to:
(Please print name and address - complete only if Rights Certificate
is to be registered in a name other than the undersigned)
(Please insert social security or other identifying number)
Dated: ________________, ________ ____________________________________________
Signature
Signature Guaranteed:
_________________________________
(signatures must be guaranteed by a commercial bank or trust company having an
office or correspondent in the United States)
Certificate to Election to Purchase
(Other than pursuant to Section 11(a)(ii) of the Rights Agreement)
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by the 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 in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned [___] did [___] did not acquire the Rights evidenced by the Rights
Certificate from any Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person.
Dated: --------------,------ ----------------------------------------------
Signature
THE SIGNATURE TO THE FOREGOING ELECTION TO PURCHASE MUST CORRESPOND TO THE
NAME AS WRITTEN UPON THE FACE OF THE RIGHTS CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER.
EXHIBIT C
SUMMARY OF RIGHTS
On March 8, 1999, the Board of Directors of QMS, Inc. (the "Company")
declared a dividend distribution of one Right for each outstanding share of
common stock, $.01 par value (the "Common Stock"), of the Company payable on
March 20, 1999, to stockholders of record at the close of business on March 13,
1999 (the "Record Date"). Except as set forth below, each Right, when
exercisable, entitles the registered holder to purchase from the Company one
one-hundredth share of a series of convertible preferred stock designated as
Series A Participating Preferred Stock, $1.00 stated value per share (the
"Preferred Stock"), at a price of $17.19 (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 South Alabama Trust
Company, Inc., as Rights Agent, dated as of March 8, 1999.
Initially, the Rights will be attached to all Common Stock certificates
representing shares then outstanding and no separate Rights certificates will be
distributed. Until the earlier to occur of (i) a public announcement that,
without the prior consent of the Board of Directors of the Company, a person or
group of affiliated or associated persons (an "Acquiring Person") has acquired,
or obtained the right to acquire, beneficial ownership of securities having 20%
or more of the voting power of all outstanding voting securities of the Company
or (ii) the tenth day after (unless such date is extended by the Board of
Directors) the date of the commencement of (or a public announcement of an
intention to make) a tender offer or exchange offer which would result in any
person or group and related persons becoming an Acquiring Person, without the
prior consent of the Board of Directors of the Company (the earlier of such
dates being called the "Distribution Date"), the Rights will be evidenced, with
respect to any of the Common Stock certificates outstanding as of the Record
Date, by such Common Stock certificates together with this Summary of Rights.
The Rights Agreement provides that, until the Distribution Date, the Rights will
be transferred with and only with Common Stock certificates. From as soon as
practicable after the Record Date and until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Stock certificates issued
after the Record Date upon transfer or new issuance of the Common Stock will
contain a notation incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any certificates for Common Stock outstanding as of
the Record Date (with or without this Summary of Rights attached) will also
constitute the transfer of the Rights associated with the Common Stock
represented by such certificates. 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, and the separate Rights Certificates
alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on the earliest of (i) February 28, 2009, (ii) consummation of a
merger transaction with a person who or group that acquired Common Stock
pursuant to a Permitted Offer (as defined below), and who or that is offering in
the merger the same price per share and form of consideration paid in the
Permitted Offer or (iii) redemption by the Company as described below.
The Purchase Price payable and the number 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
or warrants to subscribe for Preferred Stock, certain convertible securities or
securities having the same or more favorable rights, privileges and preferences
as the 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 or assets (excluding regular quarterly cash dividends
out of earnings or retained earnings) or of subscription rights or warrants
(other than those referred to in clause (ii) above.
In the event that, after the first date of public announcement by the
Company or an Acquiring Person that an Acquiring Person has become such, the
Company is involved in a merger or other business combination transaction in
which the Common Stock is exchanged or changed, or 50% or more of the Company's
assets or earning power is sold (in one transaction or a series of
transactions), proper provision shall be made so that each holder of a Right
(other than such Acquiring Person) shall thereafter have the right to receive,
upon the exercise thereof at the then current exercise price of the Right, that
number of shares of common stock of the acquiring company (or, in the event
there is more than one acquiring company, the acquiring company receiving the
greatest portion of the assets or earning power transferred) which at the time
of such transaction would have a market value of two times the exercise price of
the Right (such right being called the "Merger Right"). In the event that a
person becomes the beneficial owner of securities having 20% or more of the
voting power of all then outstanding voting securities of the Company (unless
pursuant to a tender offer or 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 to be both
adequate and otherwise in the best interests of the Company and its stockholders
(a "Permitted Offer")), proper provision shall be made so that each holder of a
Right will for a 60-day period thereafter have the right to receive, upon
exercise, that number of shares of Common stock having a market value of two
times the exercise price of the Right, to the extent available, and then (after
all authorized and unreserved shares of Common Stock have been issued) a common
stock equivalent (such as Preferred Stock or another equity security with at
least the same economic value as the Common Stock) having a market value of two
times the exercise price of the Right, with Common Stock to the extent available
being issued first (such right being called the "Subscription Right"). The
holder of a Right will continue to have the Merger Right whether or not such
holder exercises the Subscription Right. Upon the occurrence of any of the
events giving rise to the exercisability of the Merger Right or the Subscription
Right, any Rights that are or were at any time owned by an Acquiring Person
engaging in any of such transactions or receiving the benefits thereof on or
after the time the Acquiring Person becomes such shall become void insofar as
they relate to the Merger Right or the Subscription Right.
With certain exceptions, no adjustments in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractions of shares will be issued and, in lieu
thereof, an adjustment in cash will be made based on the market price of the
Common Stock on the last trading date prior to the date of exercise.
At any time prior to the earlier to occur of (i) a person becoming an
Acquiring person or (ii) the expiration of the Rights, the Company may redeem
the Rights in whole, but not in part, at a price of $.01 per Right (the
"Redemption Price"), which redemption shall be effective upon the action of the
Board of Directors. Additionally, the Company may thereafter redeem the then
outstanding Rights in whole, but not in part, at the Redemption Price provided
that such redemption is incidental to a merger or other business combination
transaction or series of transactions involving the Company but not involving an
Acquiring Person or any person who was an Acquiring Person or following an event
giving rise to, and the expiration of the exercise period for, the Subscription
Right if and for as long as an Acquiring Person beneficially owns securities
representing less than 20% of the voting power of the Company's voting
securities. The redemption of Rights described in the preceding sentence shall
be effective only as of such time when the Subscription Right is not
exercisable, and in any event, only after ten (10) business days prior notice.
Upon the effective date of the redemption of the Rights, the right to exercise
the Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
The Preferred Stock purchasable upon exercise of the Rights will be
nonredeemable and junior to any other series of preferred stock the Company may
issue (unless otherwise provided in the terms of such other series of preferred
stock). Each share of Preferred Stock will have a preferential quarterly
dividend in an amount equal to 100 times the dividend declared on each share of
Common Stock, but in no event less than $1.00. In the event of liquidation, the
holders of Preferred Stock will receive a preferred liquidation payment equal to
the greater of 100 times the Purchase Price or 100 times the payment made per
each share of Common Stock. Subject to certain adjustments to reflect an
increase or decrease in the number of outstanding shares of Common stock, each
one one-hundredth of a share of Preferred Stock shall, for a period of 90 days
after issuance, be convertible into one share of Common Stock.
Each share of Preferred Stock will have 100 votes, voting together with the
shares of Common Stock. With regard to any election for the Company's Board of
Directors, however, the maximum number of votes for the election of directors
exercised by holders of shares of preferred stock (including the Preferred
Stock) shall not exceed the number of votes for the election of directors
represented by authorized and issued shares of Common Stock less one, and the
number of votes for the election of directors exercised by holders of shares of
preferred stock (including the Preferred Stock) shall be reduced as necessary on
a pro rata basis to effectuate this result. If the Company fails to pay
dividends on the Preferred Stock for a specified period (a "default period"),
the holders of Preferred Stock shall have the additional right to elect a number
of directors equal to two-thirds of the existing members of the Board of
Directors, rounded down, until such default period expires. The total number of
directors constituting the Board of Directors shall be increased accordingly for
only so long as the default period continues.
In the event of any merger, consolidation or other transaction in which
shares of Common Stock are exchanged, each share of Preferred Stock will be
entitled to receive 100 times the amount and type of consideration received per
share of Common Stock. The rights of the Preferred Stock as to dividends,
liquidation and voting, and in the event of mergers and consolidations, are
protected by customary anti-dilution provisions. Fractional shares of Preferred
Stock will be issuable; however, the Company may elect to distribute depositary
receipts in lieu of such fractional shares. In lieu of fractional shares other
than fractions that are multiples of one one-hundredth of a share, an adjustment
in cash will be made based on the market price of the Preferred Stock on the
last trading date prior to the date of exercise.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including without limitation, the right
to vote or to receive dividends.
A copy of the Rights Agreement is available free of charge from the Rights
Agent. 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.