EXHIBIT 4.1
BANCTEC, INC.
and
AMERICAN STOCK TRANSFER AND TRUST COMPANY,
Rights Agent
First Amended and Restated Rights Agreement Dated as of May 26, 1998
TABLE OF CONTENTS
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Page
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Section 1. Certain Definitions......................................................................1
Section 2. Appointment of Rights Agent..............................................................4
Section 3. Issue of Right Certificates..............................................................4
Section 4. Form of Right Certificates...............................................................6
Section 5. Countersignature and Registration........................................................7
Section 6. Transfer. Split-up, Combination, and Exchange of Right Certificates; Mutilated,
Destroyed, Lost, or Stolen Certificates..................................................7
Section 7. Exercise of Rights, Purchase Price, Expiration Date of Rights............................8
Section 8. Cancellation and Destruction of Right Certificates......................................10
Section 9. Reservation, Registration, and Listing..................................................10
Section 10. Common Stock Record Date................................................................11
Section 11. Adjustment of Purchase Price. Number of Shares, or Number of Rights.....................11
Section 12. Certificate of Adjusted Purchase Price or Number of Shares..............................18
Section 13. Consolidation, Merger. or Sale or Transfer of Assets or Earning Power...................18
Section 14. Fractional Rights and Fractional Shares.................................................20
Section 15. Rights of Action........................................................................21
Section 16. Agreement of Right Holders..............................................................21
Section 17. Right Certificate Holder Not Deemed a Stockholder.......................................22
Section 18. Concerning the Rights Agent.............................................................22
Section 19. Merger or Consolidation or Change of Name of Rights Agent...............................22
Section 20. Duties of Rights Agent..................................................................23
Section 21. Change of Rights Agent..................................................................24
Section 22. Issuance of New Right Certificates......................................................25
Section 23. Redemption and Termination..............................................................25
Section 24. Notice of Certain Events................................................................26
Section 25. Notices.................................................................................27
Section 26. Supplements and Amendments..............................................................27
Section 27. Successors..............................................................................28
Section 28. Determinations and Actions by the Board of Directors etc................................28
Section 29. Benefits of this Agreement..............................................................28
Section 30. Severability............................................................................28
Section 31. Governing Law...........................................................................29
Section 32. Counterparts............................................................................29
Section 33. Descriptive Headings....................................................................29
Section 34. Entire Agreement........................................................................29
ii
FIRST AMENDED AND RESTATED RIGHTS AGREEMENT
This First Amended and Restated Rights Agreement, dated as of May 26, 1998
(the "Agreement"), is entered into between BancTec, Inc., a Delaware corporation
(the "Company") and American Stock Transfer & Trust Company (the "Rights
Agent").
WHEREAS, on May 21, 1998 (the "Rights Dividend Declaration Date"), the
Board of Directors of the Company authorized and declared a dividend
distribution of one Right (as hereinafter defined) for each share of Common
Stock (as hereinafter defined) of the Company outstanding at the close of
business on May 26, 1998 (the "Record Date"), each Right representing the right
to purchase one share of Common Stock, upon the terms and subject to the
conditions herein set forth, and has further authorized and directed the
issuance of one Right with respect to each share of Common Stock that shall
become outstanding between the Record Date and the earliest of the Distribution
Date, the Redemption Date and the Final Expiration Date (as such terms are
hereinafter defined);
WHEREAS, the Rights are governed by a Rights Agreement, dated as of May 26,
1998 (the "Prior Agreement"), between the Company and the Rights Agent;
WHEREAS, the Company and the Rights Agent desire to amend and restate the
Prior Agreement as provided in this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
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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 and Associates
(as such terms are hereinafter defined) of such Person, shall be the Beneficial
Owner (as such term is hereinafter defined) of 20% or more of the shares of
Common Stock then outstanding, but shall not include the Company, any Subsidiary
(as such term is hereinafter defined) of the Company, any employee benefit plan
of the Company or any Subsidiary of the Company, or any Person or entity holding
shares of Common Stock for or pursuant to the terms of any such plan.
Notwithstanding the foregoing, no person shall become an "Acquiring Person" as
the result of an acquisition of shares of Common Stock by the Company which, by
reducing the number of shares outstanding, increases the proportionate number of
shares beneficially owned by such person to 20% or more of the shares of Common
Stock of the Company then outstanding; provided, however, that if a person
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becomes the Beneficial Owner of 20% or more of the shares of Common Stock of the
Company then outstanding by reason of share purchases by the Company and shall,
after such share purchases by the Company, become the Beneficial Owner of any
additional shares of Common Stock of the Company, then such person shall be
deemed to be an "Acquiring Person." Notwithstanding the foregoing, if the Board
of Directors of the Company determines in good faith that a Person who would
otherwise be an "Acquiring
Person," as defined pursuant to the foregoing provisions of this paragraph (a),
has become such inadvertently, and such Person divests as promptly as
practicable a sufficient number of shares of Common Stock so that such Person
would no longer be an "Acquiring Person," as defined pursuant to the foregoing
provisions of this paragraph (a), then such Person shall not be deemed to be an
"Acquiring Person" for any purposes of this Agreement.
(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, as in effect on the date of
this Agreement (the "Exchange Act" ).
(c) A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own" any securities (without duplication):
(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 the right to acquire (whether such right is exercisable
immediately or only after the passage of time, compliance with regulatory
requirements, the fulfillment of a condition or otherwise) pursuant to any
agreement, arrangement, or understanding (whether or not in writing) (other
than customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities or in
connection with a placement of securities pursuant to Rule144A under the
Securities Act), or upon the exercise of conversion rights, exchange
rights, rights (other than these Rights), warrants or options, or
otherwise; provided, however, that a Person shall not be deemed the
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Beneficial Owner of, or to beneficially own (A) securities tendered
pursuant to a tender or exchange offer made by or on behalf of such Person
or any of such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange, or (B) securities
issuable upon exercise of Rights at any time prior to any Person becoming
an Acquiring Person;
(iii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of or
has "beneficial ownership" of (as determined pursuant to Rule 13d-3 of the
Exchange Act), including pursuant to any agreement, arrangement or
understanding, whether or not in writing; provided, however, that a Person
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shall not be deemed the Beneficial Owner of, or to "beneficially own," any
security under this subparagraph (iii) as a result of an agreement,
arrangement, or understanding to vote such security (a) which arises solely
from a revocable proxy or consent given to such Person in response to a
public proxy or consent solicitation made pursuant to, and in accordance
with, the applicable rules and regulations of the Exchange Act and (b) is
not also then reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iv) which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's Affiliates
or Associates has any agreement, arrangement, or understanding, whether or
not in writing (other than customary
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agreements with and between underwriters and selling group members with
respect to a bona fide public offering of securities or in connection with
a placement of securities pursuant to Rule 144A under the Securities Act),
for the purpose of acquiring, holding, voting (except to the extent
contemplated by the proviso to subparagraph (iii) of this paragraph) of
disposing of any securities of the Company.
(d) "Business Day" shall mean any day other than a Saturday, a
Sunday, or a day on which banking institutions in the State of Texas are
authorized or obligated by law or executive order to close.
(e) "Close of business" on any given date shall mean 5:00 P. M.,
Dallas, Texas time, on such date; provided, however, that if such date is not a
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Business Day it shall mean 5:00 P.M., Dallas, Texas time, on the next succeeding
Business Day.
(f) "Common Stock," when used with reference to the Company, shall
mean the shares of common stock, presently $0.01 per value, of the Company.
"Common Stock," when used with reference to any Person other than the Company,
shall, if used with reference to a corporation, mean the capital stock (or
equity interest) with the greatest voting power of such other Person or, if such
other Person is a Subsidiary of another Person, the Person or Persons which
ultimately control such first-mentioned Person and, if used with reference to
any other Person, mean the equity interest in such Person (or, if the net worth
determined in accordance with generally accepted accounting principles of
another Person (other than an individual) which controls such first-mentioned
Person is greater than such first-mentioned Person, then such other Person) with
the greatest voting power or managerial power with respect to the business and
affairs of such Person.
(g) "Distribution Date" shall have the meaning set forth in Section 3
hereof.
(h) "Final Expiration Date" shall have the meaning set forth in
Section 7 hereof.
(i) "Person" shall mean any individual, firm, corporation,
partnership, limited partnership, limited liability company, trust or other
entity, and shall include any successor (by merger or otherwise) of such entity.
(j) "Redemption Date" shall have the meaning set forth in Section 7
hereof.
(k) "Securities Act" shall mean the Securities Act of 1933, as
amended, and any successor statute thereto.
(l) "Shares Acquisition Date" shall mean the first date of public
announcement (which for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) or Section 16(a) of the
Exchange Act) by the Company or an Acquiring Person that an Acquiring Person has
become such.
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(m) "Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity securities
or equity interest is owned, directly or indirectly, by such Person.
(n) "Voting Shares" shall mean (a) the Common Stock of the Company
and (b) any other shares of capital stock of the Company entitled to vote
generally in the election of directors or entitled to vote together with the
Common Stock in respect of any merger or consolidation of the Company, any sale
of all or substantially all of the Company's assets or any liquidation,
dissolution or winding up of the Company. Whenever any provision of this
Agreement requires a determination of whether a number of Voting Shares
comprising a specified percentage of such Voting Shares is, was or will be
beneficially owned or has been voted, tendered, acquired, sold or otherwise
disposed of or a determination of whether a Person has offered or proposed to
acquire a number of Voting Shares comprising such specified percentage, the
number of Voting Shares comprising such specified percentage of Voting Shares
shall in every such case be deemed to be the number of Voting Shares comprising
the specified percentage of all the Company's then outstanding Voting Shares.
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the
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Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Common Stock) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Company may
from time to time appoint such co-Rights Agents as it may deem necessary or
desirable.
SECTION 3. ISSUE OF RIGHT CERTIFICATES.
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(a) Until the earlier of (i) the tenth Business Day after the
Shares Acquisition Date (or, if the tenth Business Day after the Shares
Acquisition Date occurs before the Record Date, the close of business on the
Record Date) or (ii) the tenth Business Day (or such later date as may be
determined by action of the Board of Directors of the Company prior to such time
as any Person becomes an Acquiring Person) after the date of a tender or
exchange offer by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of the
Company, or any entity holding shares of Common Stock for or pursuant to the
terms of any such plan) is first published or sent or given within the meaning
of Rule 14d-2(a) of the Exchange Act, the consummation of which would result in
any Person becoming the Beneficial Owner of Common Stock aggregating 20% or more
of the then outstanding Voting Shares of the Company (the earlier of (i) and
(ii) being herein referred to as the "Distribution Date"); provided, however,
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that an occurrence described in clause (ii) above shall not cause the occurrence
of the Distribution Date if the Board of Directors of the Company shall, prior
to such tenth Business Day (or such later date as described in clause (ii)
above), determine that such tender or exchange offer is spurious, unless,
thereafter, the Board of Directors of the Company shall make a contrary
determination, in which event the Distribution Date shall occur on the later to
occur of such tenth Business Day (or such later date as described in clause (ii)
above) and the date of such latter determination, (x) the Rights will be
evidenced (subject to the provisions of Section 3(b) hereof) by the certificates
evidencing the Common Stock registered in the names of the holders thereof
(which certificates for Common Stock shall also be deemed to be Right
Certificates) and not by separate
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Right Certificates, and (y) the right to receive Right Certificates will be
transferable only in connection with the transfer of the underlying shares of
Common Stock. As soon as practicable after the Distribution Date, the Company
will prepare and execute, the Rights Agent will countersign, and the Company
will send or cause to be sent (and the Rights Agent will, if requested, send) by
first-class, 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 Right Certificate, in substantially the
form of Exhibit A hereto (a "Right Certificate"), evidencing one Right for each
share of Common Stock so held, subject to adjustments as provided herein. From
and after the Distribution Date, the Rights will be evidenced solely by such
Right Certificates.
(b) On the Record Date, or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights, in substantially the form of
Exhibit B hereto (the "Summary of Rights"), by first-class, postage-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 Common Stock outstanding as of the
Record Date, until the Distribution Date, the Rights will be evidenced by such
certificates registered in the names of the holders thereof together with a copy
of the Summary of Rights attached thereto. Until the Distribution Date (or the
earlier of the Redemption Date or Final Expiration Date), the surrender for
transfer of any certificate for shares of Common Stock outstanding on the Record
Date, with or without a copy of the Summary of Rights attached thereto, shall
also constitute the transfer of the Rights associated with the Common Stock
represented thereby.
(c) Certificates of Common Stock which become outstanding (including,
without limitation, reacquired Common Stock referred to in the last sentence of
this subparagraph (c)) after the Record Date but prior to the earliest of the
Distribution Date, the Redemption Date, or the Final Expiration Date shall have
impressed on, printed on, written on, or otherwise affixed to them to the extent
practicable the following legend:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in the First
Amended and Restated Rights Agreement between BancTec,
Inc. and American Stock Transfer & Trust Company, dated
as of May 26, 1998 (the "Rights Agreement"), the terms
of which are hereby incorporated herein by reference
and a copy of which is on file at the principal
executive offices of BancTec, Inc. Under certain
circumstances, as set forth in the Rights Agreement,
such Rights will be evidenced by separate certificates
and will no longer be evidenced by this certificate.
BancTec, Inc. will mail to the holder of this
certificate a copy of the Rights Agreement without
charge after receipt of a written request therefor. As
described in the Rights Agreement, Rights issued to any
Person who becomes an Acquiring Person or any Affiliate
or Associate thereof (each as defined in the Rights
Agreement) shall become null and void.
With respect to such certificates containing the foregoing legend, until the
earlier of the Distribution Date or the Final Expiration Date, the Rights
associated with the Common Stock represented by such
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certificates shall be evidenced by such certificates alone, and the surrender
for transfer of any such certificate shall also constitute the transfer of the
Rights associated with the Common Stock represented thereby. In the event that
the Company purchases or acquires any shares of Common Stock after the Record
Date but prior to the Distribution Date, any Rights associated with Common Stock
shall be deemed cancelled and retired so that the Company shall not be entitled
to exercise any Rights associated with the Common Stock which are no longer
outstanding.
(d) The Company agrees that, at any time after the Record Date and
prior to the Distribution Date (or, if earlier, the Redemption Date or Final
Expiration Date) at which it issues any of its Common Stock upon original issue
or out of treasury, it will concurrently distribute to the holder of such Common
Stock one Right for each such Common Stock, which Right shall be subject to the
terms and provisions of this Agreement and will evidence the right to purchase
the same number of shares of Common Stock at the same Purchase Price as the
Rights then outstanding.
SECTION 4. FORM OF RIGHT CERTIFICATES.
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(a) The Right Certificates (and the forms of election to purchase
Common Stock and of assignment to be printed on the reverse thereof) shall be
substantially the same as Exhibit A hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Rights may from time to
time be listed, or to conform to usage. Subject to the provisions of Section 11,
Section 13 and Section 23 hereof, the Right Certificates shall entitle the
holders thereof to purchase such number of shares of Common Stock as shall be
set forth therein at the price set forth therein (such exercise price per one
share of Common Stock, the "Purchase Price"), subject to adjustment as provided
herein.
(b) Any Right Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights beneficially owned by:
(i) an Acquiring Person or any Associate or Affiliate of an
Acquiring Person;
(ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such; or
(iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently
with the Acquiring Person becoming such and receives such Rights pursuant
to either (1) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or
to any Person with whom such Acquiring Person has any continuing agreement,
arrangement, or understanding regarding the transferred Rights or (2) a
transfer which the Board of Directors of the Company has determined is part
of a plan, arrangement, or understanding which has as a primary purpose or
effect avoidance of Section 7(e) hereof,
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and any Right Certificate hereunder, upon transfer, exchange, replacement, or
adjustment of any other Right Certificate referred to in this sentence, shall
contain (to the extent feasible) the following legend:
The Rights represented by this Right Certificate are or
were beneficially owned by a Person who was or became an
Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights
Agreement). Accordingly, this Right Certificate and the
Rights represented hereby may become null and void in the
circumstances specified in Section 7(e) of such
Agreement.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION. The Right Certificates
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shall be executed on behalf of the Company by its Chairman of the Board,
President, or any Vice President, either manually or by facsimile signature,
shall have affixed thereto the Company's seal or a facsimile thereof, and shall
be attested by the Secretary or an Assistant Secretary of the Company, either
manually or by facsimile signature. The Right Certificates shall be manually
countersigned by the Rights Agent and shall not be valid for any purpose unless
countersigned. In case any officer of the Company who shall have signed any of
the Right Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights Agent
and issued and delivered by the Company with the same force and effect as though
the person who signed such Right Certificates had not ceased to be such officer
of the Company; and any Right Certificate may be signed on behalf of the Company
by any person who, at the actual date of the execution of such Right
Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Rights Agreement any
such person was not such an officer.
Following the Distribution Date and prior to the earlier of the Redemption
Date and the Final Expiration Date, the Rights Agent will keep or cause to be
kept, at its principal office, books for registration and transfer of the Right
Certificates issued hereunder. Such books shall show the names and addresses of
the respective holders of the Right Certificates, the number of Rights evidenced
on its face by each of the Right Certificates and the date of each of the Right
Certificates.
SECTION 6. TRANSFER. SPLIT-UP, COMBINATION, AND EXCHANGE OF RIGHT
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CERTIFICATES; MUTILATED, DESTROYED, LOST, OR STOLEN
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CERTIFICATES.
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(a) Subject to the provisions of Section 4(b), Section 7(e), and
Section 14 hereof, at any time after the close of business on the Distribution
Date, and at or prior to the close of business on the earlier of the Redemption
Date or the Final Expiration Date, any Right Certificate or Right Certificates
may be transferred, split up, combined or exchanged for another Right
Certificate or Right Certificates, entitling the registered holder to purchase a
like number of shares of Common Stock as the Right Certificate or Right
Certificates surrendered then entitled such holder to purchase. Any registered
holder desiring to transfer, split up, combine, or exchange any Right
Certificate or Right Certificates shall make such request in writing delivered
to the Rights Agent, and shall surrender the Right Certificate or Right
Certificates to be transferred, split up, combined,
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or exchanged at the principal office of the Rights Agent. Neither the Rights
Agent nor the Company shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Right Certificate until the
registered holder shall have completed and signed the certificate contained in
the form of assignment on the reverse side of such Right Certificate and shall
have provided such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request. Thereupon the Rights Agent shall, subject to Section
4(b), Section 7(e), and Section 14 hereof, countersign and deliver to the Person
entitled thereto a Right Certificate or Right Certificates, as the case may be,
as so requested. The Company may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any
transfer, split up, combination, or exchange of a Right Certificate.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction, or mutilation
of a Right Certificate, and, in case of loss, theft, or destruction, of
indemnity or security reasonably satisfactory to them, and, at the Company's
request, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate if mutilated, the Company will make and
deliver a new Right Certificate of like tenor to the Rights Agent for delivery
to the registered holder in lieu of the Right Certificate so lost, stolen,
destroyed, or mutilated.
SECTION 7. EXERCISE OF RIGHTS, PURCHASE PRICE, EXPIRATION DATE OF RIGHTS.
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(a) Subject to Section 7(e) hereof, the registered holder of any
Right Certificate may exercise the Rights evidenced thereby in whole or in part
at any time after the Distribution Date upon surrender of the Right Certificate,
with the form of election to purchase on the reverse side thereof duly executed,
to the Rights Agent at the principal office of the Rights Agent, together with
payment of the aggregate Purchase Price with respect to the total number of
shares of Common Stock (or other securities, cash, or other assets, as the case
may be) as to which the Rights are exercised, at or prior to the earliest of (i)
the close of business on May 20, 2008 (the "Final Expiration Date") or (ii) the
time at which the Rights are redeemed as provided in Section 23 hereof (the
"Redemption Date").
(b) The Purchase Price for each share of Common Stock pursuant to
the exercise of a Right shall initially be $85.00 and shall be subject to
adjustment from time to time as provided in Sections 11 and 13(a) hereof and
shall be payable in lawful money of the United States of America in accordance
with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the shares of Common Stock (or other shares,
securities, cash, or other assets, as the case may be) to be purchased and an
amount equal to any applicable transfer tax required to be paid by the holder of
such Right Certificate by certified check, cashier's check, bank draft, or money
order payable to the order of the Company, the Rights Agent shall thereupon
promptly (i)requisition from any transfer agent of the Common Stock certificates
(or make available if the Rights Agent is the transfer agent
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for such shares) for the number of shares of Common Stock to be purchased, and
the Company hereby irrevocably authorizes its transfer agent to comply with all
such requests, (ii) when appropriate, requisition from the Company the amount of
cash to be paid in lieu of issuance of fractional shares in accordance with
Section 14 hereof, (iii) after receipt of such certificates, cause the same to
be delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder, and iv. when appropriate, after receipt, deliver such cash to or upon
the order of the registered holder of such Right Certificate. In the event that
the Company is obligated to issue other securities (including Common Stock) of
the Company, pay cash and/or distribute other property pursuant to Section 11(a)
hereof, the Company will make all arrangements necessary so that other
securities, cash, and/or other property are available for distribution by the
Rights Agent, if and when appropriate.
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent to the registered holder of such Right Certificate or to his
duly authorized assigns, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, if
any Person shall become an Acquiring Person, thereafter any Rights beneficially
owned by
(i) such Acquiring Person or an Associate or Affiliate of
such Acquiring Person;
(ii) a transferee of such Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such; or
(iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently
with the Acquiring Person becoming such and receives such Rights pursuant
to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or
to any Person with whom the Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a
transfer which the Board of Directors of the Company has determined is part
of a plan, arrangement, or understanding which has a primary purpose or
effect the avoidance of this Section 7(e),
shall become null and void without any further action, and no holder of such
Rights shall have any rights whatsoever with respect to such Rights, whether
under any provision of this Agreement or otherwise. The Company shall use all
reasonable efforts to insure that the provisions of this Section 7(e) and
Section 4(b) hereof are complied with but shall have no liability to any holder
of Right Certificates or other Person as a result of its failure to make any
determinations with respect to any Acquiring Person or its Affiliates,
Associates, or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered
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holder shall have (i) completed and signed the certificate contained in the form
of election to purchase set forth on the reverse side of the Right Certificate
surrendered for such exercise and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All Right
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Certificates surrendered for the purpose of exercise, transfer, split up,
combination, or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all cancelled Right Certificates to the Company, or shall, at the written
request of the Company, destroy such cancelled Right Certificates and, in such
case, shall deliver a certificate of destruction thereof to the Company.
SECTION 9. RESERVATION, REGISTRATION, AND LISTING.
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(a) Following the Distribution Date, the Company covenants and
agrees that it will cause to be reserved and kept available out of its
authorized and unissued shares of Common Stock or out of its authorized and
issued shares held in its treasury, the number of shares of Common Stock that
will be sufficient to permit the exercise in full of all outstanding Rights.
(b) Following the Distribution Date, the Company covenants and
agrees that it will take all such action as may be necessary to ensure that all
Common Stock delivered upon exercise of Rights shall, at the time of delivery of
the certificates for such Common Stock (subject to payment of the Purchase
Price), be duly and validly authorized and issued and fully paid and non-
assessable shares.
(c) So long as the Common Stock issuable and deliverable upon the
exercise of the Rights may be listed on any national securities exchange, the
Company shall use its best efforts to promptly cause, from and after such time
as the Rights become exercisable, all shares of Common Stock and other
securities reserved for such issuance to be listed on such exchange upon
official notice of issuance upon such exercise.
(d) The Company shall use its best efforts to (i) file, as soon as
is required by law following the Distribution Date, a registration statement
under the Securities Act, with respect to the securities purchasable upon
exercise of the Rights on an appropriate form, (ii) cause such registration
statement to become effective as soon as practicable after the filing, and (iii)
cause such registration statement to remain effective (with a prospectus at all
times meeting the requirements of the Securities Act) until the earlier of (A)
the date as of which the Rights are no longer exercisable for such securities
and (B) the Final Expiration Date. The Company will also take all action
necessary to ensure compliance with the securities laws of the various states in
connection with the exercisability of the Rights. The Company may temporarily
suspend, for a period of time not to
10
exceed ninety (90) days after the date set forth in clause (i) of the first
sentence of this Section 9(d), the exercisability of the Rights in order to
prepare and file such registration statements. Upon any suspension, the Company
shall issue a public announcement stating that the exercisability of the Rights
has been temporarily suspended, as well as a public announcement at such time as
the suspension is no longer in effect. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification in that jurisdiction shall have
been obtained.
(e) The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and charges which
may be payable in respect of the issuance or delivery of the Right Certificates
or of any shares of Common Stock upon the exercise of Rights. The Company shall
not, however, be required to pay any transfer tax which may be payable in
respect of any transfer or delivery of Right Certificates to a Person other
than, or the issuance or delivery of certificates for the Common Stock in a name
other than that of, the registered holder of the Right Certificate evidencing
Rights surrendered for exercise or to issue or to deliver any certificates for
Common Stock upon the exercise of any Rights until any such tax shall have been
paid (any such tax being payable by the holder of such Right Certificate at the
time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
SECTION 10. COMMON STOCK RECORD DATE. Each person in whose name any
------------------------
certificate for shares of Common Stock is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
Common Stock represented thereon, and such certificate shall be dated the date
upon which the Right Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (and any applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date upon
- -----------------
which the Common Stock 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 Common
Stock transfer books of the Company are open. Prior to the exercise of the
Rights evidenced thereby, the holder of a Right Certificate shall not be
entitled to any rights of a stockholder of the Company with respect to shares
for which the Rights shall be exercisable, including, without limitations, the
right to vote, to receive dividends or other distributions, or to exercise any
rights, and shall not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.
SECTION 11. ADJUSTMENT OF PURCHASE PRICE. NUMBER OF SHARES, OR NUMBER OF
------------------------------------------------------------
RIGHTS. The Purchase Price, the number of shares of Common Stock 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 Common Stock payable in
shares of Common Stock, (B) subdivide the outstanding Common Stock, (C)
combine the outstanding Common Stock into a smaller number of shares of
Common Stock, or (D) issue any shares of its capital stock in a
reclassification of Common Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the
continuing or surviving corporation), except as otherwise provided in this
Section 11(a) and Section 7(e)
11
hereof, the Purchase Price in effect the time of the record date for such
dividend or of the effective date of such subdivision, combination, or
reclassification, and the number of kind of shares of Common Stock or
capital stock, as the case may be, issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after
such time shall be entitled to receive, upon payment of the Purchase Price,
the aggregate number and kind of shares of Common Stock or capital stock,
as the case may be, which, if such Right had been exercised immediately
prior to such date and at a time when the Common Stock transfer books of
the Company were open, he would have owned upon such date and been entitled
to receive by virtue of such dividend, subdivision, combination, or
reclassification; provided, however, that in no event shall the
-----------------
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable
upon exercise of one Right. If an event occurs which would require an
adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof,
the adjustment provided for in this Section 11(a)(i) shall be in addition
to, and shall be made prior to, any adjustment required pursuant to Section
11(a)(ii) hereof.
(ii) Subject to any action of the Board of Directors of the
Company pursuant to Section 23 of this Agreement, if any Person shall
become an Acquiring Person, proper provision shall be made so that each
holder of a Right (except as provided below) shall thereafter have the
right to receive, upon exercise thereof at the then current Purchase Price
in accordance with the terms of this Agreement, such number of shares of
Common Stock of the Company as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the number of shares of
Common Stock for which a Right is then exercisable, and (y) dividing that
product by 50% of the current market price (determined pursuant to Section
11(d) hereof) per share of Common Stock on the date (such number of shares,
the "Adjustment Shares").
(iii) In the event that the number of shares of Common Stock
authorized by the Company's certificate of incorporation but not
outstanding or reserved for issuance for purposes other than upon exercise
of the Rights is not sufficient to permit the exercise in full of the
Rights in accordance with the foregoing subparagraph (ii) of this Section
11(a), the Company shall: (A) determine the excess of (a) the value of the
Adjustment Shares issuable upon the exercise of a Right (the "Current
Value") over (b) the Purchase Price (such excess, the "Spread"), and (B)
with respect to each Right, make adequate provision to substitute for the
Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash,
(2) a reduction in the Purchase Price, (3) Common Stock or other equity
securities of the Company (including, without limitation, shares, or units
of shares, of preferred stock which the Board of Directors of the Company
has deemed to have the same value as shares of Common Stock (such shares of
preferred stock, "common stock equivalents")), (4) debt securities of the
Company, (5) other assets, or (6) any combination of the foregoing, having
an aggregate value equal to the Current Value, where such aggregate value
has been determined by the Board of Directors of the Company based upon the
advice of a nationally recognized investment banking firm selected by the
Board of Directors of the Company; provided, however, if the Company shall
-----------------
not have made adequate provision to deliver value pursuant to clause (B)
above within thirty (30) days following the date on which the
12
Company's right of redemption pursuant to Section 23(a) expires, then the
Company shall be obligated to deliver, upon the surrender for exercise of a
Right and without requiring payment of the Purchase Price, shares of Common
Stock (to the extent available) and then, if necessary, cash, which shares
and/or cash have an aggregate value equal to the Spread. If the Board of
Directors of the Company shall determine in good faith that it is likely
that sufficient additional shares of Common Stock could be authorized for
issuance upon exercise in full of the Rights, the thirty (30) day period
set forth above may be extended to the extent necessary, but not more than
ninety (90) days after the Distribution Date, in order that the Company may
seek stockholder approval for the authorization of such additional shares
(such period, as it may be extended, the "Substitution Period"). To the
extent that the Company determines that some action need be taken pursuant
to the first and/or second sentences of this Section 11(a)(iii), the
Company (x) shall provide, subject to Section 7(e) hereof, that such action
shall apply uniformly to all outstanding Rights, and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution
Period in order to seek any authorization of additional shares and/or to
decide the appropriate form of distribution to be made pursuant to such
first sentence and to determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no longer in effect.
For purposes of this Section 11(a)(iii), the value of the Common Stock
shall be the current market price (as determined pursuant to Section 11(d)
hereof) per share of the Common Stock on the Distribution Date, and the
value of any "common stock equivalent" shall be deemed to have the same
value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of
rights, options, or warrants to all holders of Common Stock entitling them (for
a period expiring within 45 calendar days after such record date) to subscribe
for or purchase shares of Common Stock (or shares having the same rights,
privileges and preferences as the Common Stock ("common stock equivalents")) or
securities convertible into Common Stock or common stock equivalents at a price
per share of Common Stock or common stock equivalents (or having a conversion
price per share, if a security convertible into Common Stock or common stock
equivalents) less than the then current market price per share of the Common
Stock (as defined in Section 11(d) hereof) 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 Common Stock
outstanding on such record date plus the number of shares of Common Stock which
the aggregate offering price of the total number of Common Stock and/or common
stock equivalents so to be offered (and/or the aggregate initial conversion
price of the convertible securities so to be offered) would purchase at such
current market price and the denominator of which shall be the number of shares
of Common Stock outstanding on such record date plus number of additional shares
of Common Stock and/or common stock equivalents 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 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. Common Stock owned by or held for the account of
the
13
Company shall not be deemed outstanding for the purpose of any computation. Such
adjustment shall be made successively whenever such a record date is fixed; and
in the event that such rights or warrants are not so issued, the Purchase Price
shall be adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of the Common Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation) of evidences of indebtedness or assets
(other than a regular quarterly cash dividend or a dividend payable in Common
Stock) or subscription rights or warrants (excluding those referred to in
Section 11(b)), 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 then current
market price per share of the Common Stock (as defined in Section 11(d) hereof)
such record date, less the fair market value (as determined in good faith by the
Board of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent) of the portion of the assets or evidences
of indebtedness so to be distributed or of such subscription rights or warrants
applicable to one share of Common Stock and the denominator of which shall be
such current per share market price of the Common 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 then be in effect if such record date had not
been fixed.
(d) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) hereof, the "current market
price" of any security (a "Security" for the purpose of this Section 11(d)) on
any date shall be deemed to be the average of the daily closing prices per share
of such Security for the thirty (30) consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date; and for purposes of
computations made pursuant to Section 11(a)(iii) hereof, the "current market
price" per share of Common Stock on any date shall be deemed to be the average
of the daily closing prices per share of such Common Stock for the ten (10)
consecutive Trading Days immediately following such date, provided, however,
-----------------
that in the event that the current market price per share of the Security is
determined during a period following the announcement by the issuer of such
Security of (1) a dividend or distribution on such Security payable in shares of
such Security of securities convertible into such shares (other than the
Rights), or (2) any subdivision, combination, or reclassification of such
Security and prior to the expiration of the requisite thirty (30) Trading Days
or ten (10) Trading Days, as set forth above, or 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 appropriately adjusted to reflect the 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 such day, the average of the
closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange ("NYSE") or, if the
Security is not listed or admitted to trading on the NYSE, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the Security is
listed or admitted to trading or, if the Security is not listed or admitted to
trading on any national securities exchange, the last closing price or, if
14
no such sale takes place on such day, 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 Quotations System ("NASDAQ") or such other
system then in use, or, if on any such date the Security is not quoted by any
such organization, the average of the closing bid and asked prices as furnished
by a professional market maker making a market in the Security selected by the
Board of Directors of the Company. If on such date no market maker is making a
market in the Security, the fair value of each share of such on such date as
determined in good faith by the Board of Directors of the issuer of such
Security shall be used. The term "Trading Day" shall mean a day on which the
principal national securities exchange on which the Security is listed or
admitted to trading is open for the transaction of business or, if the Security
is not listed or admitted to trading on any national securities exchange, a
Business Day.
If shares of Common Stock are not 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) No such adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in the
Purchase Price; provided, however, that any adjustments which by reason of this
-----------------
Section 11(e) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section
11 shall be made to the nearest cent or to the nearest one ten-thousandth of a
share of Common Stock or any other share or security as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
(3) years from the date of the transaction which requires such adjustment or
(ii) the date of the expiration of the right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to Section 11(a) or
Section 13(a), the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of the Company other than Common
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
Common Stock contained in Subsections 11 (a), (b), (c), (e), (g), (h), (i), (j),
(k), and (m), and the provisions of Sections 7, 9, 10, 13, and 14 with respect
to the shares of Common 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 Common 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 Section 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 shares of
15
Common Stock (calculated to the nearest one ten-thousandth) obtained by (i)
multiplying (x) the number of shares 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 Common Stock purchasable upon the exercise
of a Right. Each of the Rights outstanding after such adjustment of the number
of Rights shall be exercisable for the number of shares of Common Stock for
which a Right was exercisable immediately prior to such adjustment. Each Right
held of record prior to such adjustment of the number of Rights shall become
that number of Rights (calculated to the nearest one ten-thousandth) obtained by
dividing the 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 date
thereafter, but, if the Right Certificates have been issued, shall be at least
ten (10) days later than the date of the public announcement. If Right
Certificates have been issued, upon each adjustment of the number of Rights
pursuant to this Section 11(i), the Company shall, as promptly as practicable,
cause to be distributed to holders of record of Right Certificates on such
record date Right Certificates evidencing, subject to Section 14 hereof, the
additional Rights to which such holders shall be entitled as a result of such
adjustment, or at the option of the Company, shall cause to be distributed to
such holders of record in substitution and replacement for the Right
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Right Certificates evidencing
all the Rights to which such holders shall be entitled after such adjustment.
Right Certificates so to be distributed shall be issued, executed and
countersigned in the manner provided for herein and shall be registered in the
names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of shares of Common Stock issuable upon the exercise of the Rights,
the Right Certificates theretofore and thereafter issued may continue to express
the Purchase Price and the number of shares of Common Stock which were expressed
in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par value, if any, of the shares of Common
Stock issuable upon exercise of the Rights, the Company shall take any corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue fully paid and non-assessable shares of
Common Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date of
the shares of Common Stock and other capital stock or securities of the Company,
if any, issuable upon such exercise over and above the shares of Common Stock
and other capital stock or securities of the Company, if
16
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 in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any consolidation or subdivision of the Common Stock, issuance wholly
for cash of any Common Stock at less than the current market price, issuance
wholly for cash of Common Stock or securities which by their terms are
convertible into or exchangeable for Common Stock, stock dividends or issuance
of rights, options or warrants referred to in this Section 11, hereafter made by
the Company to holders of its Common Stock shall not be taxable to such
stockholders.
(n) The Company covenants and agrees that it shall not, at any time
after the Distribution Date, (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, any other Person (other than a Subsidiary of the
Company in a transaction that complies with Section 11(o) hereof) if (x) at the
time of or immediately after such consolidation, merger, or sale there are any
rights, warrants or other instruments outstanding or agreements in effect which
would substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) the shareholders of the Person who constitutes, or
would constitute the "Principal Party" for purposes of Section 13(a) hereof
shall have received a distribution of Rights previously owned by such Person or
any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the Shares
Acquisition Date, it will not, except as permitted by Section 23 or Section 26
hereof, take any action the purpose or effect of which is to substantially
diminish or otherwise eliminate the benefits intended to be afforded by the
Rights, unless such action is approved by a majority of the Continuing
Directors.
(p) Anything in this Agreement to the contrary notwithstanding, in
the event that the Company shall at any time prior to the Distribution Date (i)
declare a dividend on the outstanding shares of Common Stock payable in shares
of Common Stock, (ii) subdivide the outstanding shares of Common Stock, or (iii)
combine the outstanding shares of Common Stock into a smaller number of shares,
the number of Rights associated with each share of Common Stock then
outstanding, or issued or delivered thereafter but prior to the Distribution
Date, shall be proportionately adjusted so that the number of Rights thereafter
associated with each share of Common Stock following any 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.
17
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
----------------------------------------------------------
Whenever an adjustment is made as provided in Section 11 and Section 13 hereof,
the Company shall promptly a. prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment, b.
file with the Rights Agent and with each transfer agent for the Common Stock a
copy of such certificate, and c. mail a brief summary thereof to each holder of
a Right Certificate in accordance with Section 25 hereof.
SECTION 13. CONSOLIDATION, MERGER. OR SALE OR TRANSFER OF ASSETS OR
-------------------------------------------------------
EARNING POWER.
- -------------
(a) In the event that, directly or indirectly, (x) the Company
shall consolidate with, or merge with and into, any other Person (other than a
Subsidiary of the Company), (y) any Person (other than a Subsidiary of the
Company) shall consolidate with, or merge with or into, the Company, and the
Company shall be the continuing or surviving corporation and, in connection with
such consolidation or merger, all or part of the outstanding shares of Common
Stock shall be changed into or exchanged for stock or other securities of any
other Person or cash or any other property, or (z) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer), in one transaction or a series of related transactions, assets 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 Person or Persons (other
than the Company or any Subsidiary of the Company in one or more transactions),
then, and in each such case, proper provision shall be made so that:
(i) each holder of a Right, except as provided in Section
7(e) hereof, shall thereafter have the right to receive, upon the exercise
thereof at the then current Purchase Price in accordance with the terms of
this Agreement, such number of validly authorized and issued, fully paid,
non-assessable and freely tradeable shares of Common Stock of the Principal
Party (as such term is hereinafter defined), not subject to any liens,
encumbrances, rights of first refusal, or other adverse claims, as shall be
equal to the result obtained by (A) multiplying the then current Purchase
Price by the number of shares of Common Stock for which a Right is then
exercisable (without taking into account any adjustment previously made
pursuant to Section 11(a)(ii)) and dividing that product by (B) 50% of the
current market price (determined pursuant to Section 11(d) hereof) per
share of the Common Stock or other securities of such Principal Party on
the date of consummation of such consolidation, merger, sale or transfer;
(ii) such Principal Party shall thereafter be liable for, and
shall automatically 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; 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 connection with the consummation of any such transaction
as may be necessary to assure that the provisions
18
hereof shall thereafter be applicable, as nearly as reasonably may be, in
relation to its shares of Common Stock or other securities thereafter
deliverable upon the exercise of the Rights.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (x) or
(y) of the first sentence of Section 13(a), the Person that is the issuer
of any securities into which shares of Common Stock of the Company are
converted in such merger or consolidation, and if no securities are so
issued, the Person that is the other party to such merger or consolidation;
and
(ii) in the case of any transaction described in clause (z) of
the first sentence of Section 13(a), 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, (a) if the Common Stock or other
- -----------------
securities of such Person is not at such time and has not been continuously over
the preceding twelve (12) month period registered under Section 12 of the
Exchange Act, and such Person is a direct or indirect Subsidiary of another
Person the Common Stock of which is and has been so registered, "Principal
Party" shall refer to such other Person; and (b) in case such Person is a
Subsidiary, directly or indirectly, of more than one Person, the Common Stocks
of two or more of which are and have been so registered, "Principal Party" shall
refer to whichever of such Persons is the issuer of the Common Stock having the
greatest aggregate market value.
(c) The Company shall not consummate any such consolidation, merger,
sale, or transfer unless the Principal Party shall have a sufficient number of
authorized shares of its Common Stock which have not been issued or reserved for
issuance to permit the exercise in full of the Rights in accordance with this
Section 13 and unless prior thereto the Company and such Principal Party shall
have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in paragraphs (a) and (b) of this Section 13
and further providing that, as soon as practicable after the date of any
consolidation, merger, or sale of assets mentioned in paragraph (a) of this
Section 13, the Principal Party will
(i) prepare and file a registration statement under the
Securities Act, with respect to the Rights and the securities purchasable
upon exercise of the Rights on an appropriate form, and will use its best
efforts to cause such registration statement to (A) become effective as
soon as practicable after such filing and (B) remain effective (with a
prospectus at all times meeting the requirements of the Securities Act)
until the Final Expiration Date; and
(ii) will deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which comply
in all respects with the requirements for registration on Form 10 under the
Exchange Act.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations, or sales or other transfers.
19
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
---------------------------------------
(a) The Company shall not be required to issue fractions of
Rights, except prior to the Distribution Date as provided in Section 11(p)
hereof, or to distribute Right Certificates which evidence fractional Rights. In
lieu of such fractional Rights, there shall be paid to the registered holders of
the Right Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For the purposes of this Section 14(a),
the current market value of a whole Right shall be the closing price of the
Rights for the Trading Date immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price for any
day shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular way,
in either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the NYSE or,
if the Rights are not listed or admitted to trading on the NYSE, as reported in
the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other system then in use
or, if on any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board of Directors of
the Company. If on any such date no such market maker is making a market in the
Rights, the fair value of the Rights on such date as determined in good faith by
the Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions of shares of
Common Stock upon exercise of the Rights or to distribute certificates which
evidence fractional shares of Common Stock and, in lieu thereof, the Company
shall pay to the registered holders of Right 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 share of Common Stock. For purposes
of this Section 14(b), the current market value of one share of Common Stock
shall be the closing price of one share of Common Stock (as determined pursuant
to Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of
such exercise.
(c) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right.
(d) Should any adjustment contemplated by Section 11(a)(ii) occur,
the Company shall not be required to issue fractions of shares of Common Stock
upon exercise of the Rights or to distribute certificates which evidence
fractional shares of Common Stock. If after any such adjustment a Person would
otherwise be entitled to receive a fractional share of Common Stock of the
Company upon exercise of any Right Certificate, the Company shall, in lieu
thereof, pay to such Person at the time such Right is exercised as herein
provided an amount in cash equal to the same fraction of the current market
value of one share of Common Stock. For purposes of this Section 14(d), the
current market value of a share of Common Stock shall be the closing price of a
share of Common Stock for the Trading Day immediately prior to the date of such
exercise.
20
SECTION 15. RIGHTS OF ACTION. All rights of action in respect of this
----------------
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any Right 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 preceding against
the Company to enforce, or otherwise act in respect of, his right to exercise
the Rights evidenced by such Right Certificate in the manner provided in such
Right Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened violations
of the obligations of any Person subject to, this Agreement.
SECTION 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right, by
--------------------------
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of shares of Common Stock;
(b) after the Distribution Date, the Right Certificate is
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;
(c) subject to Section 7(e) hereof, the Company and the Rights
Agent may deem and treat the person in whose name the Right Certificate (or,
prior to the Distribution Date, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Right Certificates
or the associated Common Stock certificate made by anyone other than the Company
or the Rights Agent) for all purposes whatsoever, and neither the Company nor
the Rights Agent shall be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree, or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory, or administrative agency or
commission, or any statute, rule, regulation, or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use its best
-----------------
efforts to have any such order, decree or ruling lifted or otherwise overturned
as soon as possible.
21
SECTION 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No
-------------------------------------------------
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends, or be deemed for any purpose the holder of a share of 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 Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 24 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
SECTION 18. CONCERNING THE RIGHTS AGENT.
---------------------------
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability, or expense, incurred without negligence, bad faith, or
willful misconduct on the part of the Rights Agent, for anything done or omitted
by the Rights Agent in connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against any claim of
liability in the premises.
(b) The Rights Agent shall be protected and shall incur no
liability for, or in respect of any action taken, suffered or omitted by it in
connection with, its administration of this Agreement in reliance upon any Right
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, or
otherwise upon the advice of counsel as set forth in Section 20 hereof.
SECTION 19. 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 stock transfer or
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 21 hereof. In case
at the time such successor Rights Agent shall succeed to the agency created by
this Agreement, any of the Right Certificates shall have been countersigned but
not delivered, any such successor Rights Agent may adopt the countersignature of
the predecessor Rights Agent and deliver such Right Certificates so
countersigned; and in case at that time any of the Right
22
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.
In case at any time the name of the Rights Agent shall be changed and at
such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
SECTION 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
----------------------
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) The Rights Agent shall not be deemed to have knowledge of any
fact or matter pertaining to the performance of its duties under this Agreement,
except such facts or matters as are evidenced by records which are required to
be created and maintained by it hereunder, until it shall have been advised
thereof in writing by the Company or by a holder of Rights. Whenever in the
performance of its duties under this Agreement the Rights Agent shall deem it
necessary or desirable that any fact or matter be proved or established by the
Company prior to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed) may
be deemed to be conclusively proved and established by a certificate signed by
any one of the Chairman of the Board, the President, any Vice President, the
Treasurer, or the Secretary of the Company and delivered to the Rights Agent;
and such certificate shall be full authorization to the Rights Agent for any
action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and
any other Person only for its own negligence, bad faith, or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by
23
the Rights Agent) or in respect of the validity of execution of any Right
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 Right Certificate; nor shall it be responsible for any
change in the exercisability of the Rights (including the Rights becoming void
pursuant to Section 11(a)(ii) hereof) or any adjustment in the terms of the
Rights (including the manner, method, or amount thereof) provided for in Section
11 or Section 13 hereof or the ascertaining of the existence of facts that would
require any such change or adjustment (except with respect to the exercise of
Rights evidenced by Right Certificates after actual notice that such change or
adjustment is required); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Common Stock to be issued pursuant to this Agreement or any Right Certificate
or as to whether any shares of Common Stock will, when issued, be validly
authorized and issued, fully paid, and non-assessable.
(f) The Company agrees that it will perform, execute, acknowledge,
and deliver or cause to be performed, executed, acknowledged, and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the President, any Vice President, the
Treasurer, or the Secretary of the Company, and to apply to such officers for
advice or instructions in connection with its duties, and it shall not be liable
for any action taken or suffered by it in good faith in accordance with
instructions of any such officer or for any delay in acting while waiting for
those instructions.
(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
the Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other legal
entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect, or misconduct of any such attorneys
or agents or for any loss to the Company resulting from any such act, default,
neglect, or misconduct, provided, reasonable care was exercised in the selection
--------
and continued employment thereof.
SECTION 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
----------------------
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty (30) days' notice in writing mailed to the Company and to each
transfer agent of the Common Stock by registered or certified mail, and to the
holders of the Right Certificates by first-class mail. The Company may remove
the Rights Agent or any successor Rights Agent upon thirty (30) days' notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent
24
of the Common Stock by registered or certified mail, and to the holders of the
Right Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of thirty (30) days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Right Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Company), then the registered holder of any Right Certificate
may apply to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Company or by
such a court, shall be a corporation organized and doing business under the laws
of the United States or of the States of New York or Texas (or of any other
state in the United States so long as such corporation is authorized to do
business as a banking institution in the States of New York or Texas), in good
standing, having an office in the States of New York or Texas) which is
authorized under such laws to exercise corporate trust or stock transfer powers
and is subject to supervision or examination by federal or state authority and
which has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $10 million. After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties, and responsibilities as if
it had been originally named as Rights Agent without further act or deed; but
the predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act, or deed necessary for the purpose. Not later
than the effective date of any such appointment the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock, and mail a notice thereof in writing to the registered holders
of the Right Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any of
----------------------------------
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement.
SECTION 23. REDEMPTION AND TERMINATION.
--------------------------
(a) The Board of Directors of the Company may, at its option, at
any time prior to the time any Person becomes an Acquiring Person, redeem all
but not less than all the then outstanding Rights at a redemption price of $.05
per Right, subject to appropriate adjustment 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"). Any such
redemption of the Rights by the Board of Directors may be made effective at such
time, on such basis and with such conditions as the Board of Directors in its
sole discretion may establish.
(b) Immediately upon the 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
25
and without any further action and without any notice, the right to exercise the
Rights will terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price for each Right so held. Promptly after
the action of the Board of Directors ordering the redemption of the Rights, the
Company shall give notice of such redemption to the Rights Agent and the holders
of the then outstanding Rights by mailing such notice to all such holders at
each holder's last address as it appears upon the registry books of the Rights
Agent or, prior to the Distribution Date, on the registry books of the Transfer
Agent for the Common Stock. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice.
Each such notice of redemption will state the method by which the payment of the
Redemption Price will be made.
SECTION 24. NOTICE OF CERTAIN EVENTS.
------------------------
(a) In case the Company shall propose at any time after the
Distribution Date (i) to pay any dividend payable in stock of any class to the
holders of its Common Stock or to make any other distribution to the holders of
its Common Stock (other than a regular quarterly cash dividend),(ii) to offer
all of the holders of its outstanding shares of Common Stock rights or warrants
to subscribe for or to purchase any additional shares of Common Stock or shares
of stock of any class or any other securities, rights, or options, (iii) to
effect any reclassification of its Common Stock (other than a reclassification
involving only the subdivision of outstanding shares of Common Stock), (iv) to
effect any consolidation or merger into or with, or to effect any sale or other
transfer (or to permit one or more of its Subsidiaries to effect any sale or
other transfer), in one or more transactions, of 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to, any
other Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), (v) to effect the liquidation, dissolution,
or winding up of the Company, or (vi) to declare or pay any dividend on the
Common Stock payable in shares of Common Stock or to effect a subdivision,
combination, or consolidation of the Common Stock (by reclassification or
otherwise that by payment of dividends in Common Stock), then, in each such
case, the Company shall give to each holder of a Right Certificate, in
accordance with Section 25 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend, or distribution
of rights or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, or winding up
is to take place and the date of participation therein by the holders of the
Common Stock, if any such date is to be fixed, and such notice shall be so given
in the case of any action covered by clause (i) or (ii) above at least twenty
(20) days prior to the record date for determining holders of the Common Stock
for purposes of such action, and in the case of any such other action, at least
twenty (20) days prior to the date of the taking of such proposed action or the
date of participation therein by the holders of the Common Stock, whichever
shall be the earlier.
(b) If any Person shall become an Acquiring Person, then the
Company shall as soon as practicable thereafter give to each holder of a Right
Certificate, in accordance with Section 25 hereof, a notice of the occurrence of
such event, which notice shall describe the event and the consequences of the
event to holders of Rights under Section 11(a)(ii) hereof.
26
SECTION 25. NOTICES. Notices or demand authorized by this Agreement to
-------
be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
BancTec, Inc.
4851 LBJ Freeway
Suite 1100
Dallas, Texas 75244
Attention: Corporate Secretary
With a copy to:
Vinson & Elkins, L.L.C.
2100 Ross Avenue
Dallas, Texas 75201
Attention: Jim Watson
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
American Stock Transfer & Trust Company
40 Wall Street
New York, New York 10005
Notices or demand authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
SECTION 26. SUPPLEMENTS AND AMENDMENTS. Prior to the Distribution Date
--------------------------
and subject to the penultimate sentence of this Section 26, the Company and the
Rights Agent shall, if the Company so directs, supplement or amend any provision
of this Agreement without the approval of any holders of certificates
representing shares of Common Stock. From and after the Distribution Date and
subject to the penultimate sentence of this Section 26, the Company and the
Rights Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Right Certificates in order (i)
to cure any ambiguity, (ii) to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provisions herein,
(iii) to shorten or lengthen any time period hereunder, or (iv) to change or
supplement the provisions hereunder in any manner which the Company may deem
necessary or desirable and which shall not adversely affect the interests of the
holders of Right Certificates; provided, this Agreement may not be supplemented
--------
or amended to lengthen, pursuant to clause (iii) of this sentence, (A) a time
period relating to when the Rights may be redeemed at such time as the Rights
are not then redeemable, or
27
(B) any other time period unless such lengthening is for the purpose of
protecting, enhancing or clarifying the rights of, and/or the benefits to, the
holders of Rights. Upon the delivery of a certificate from an appropriate
officer of the Company which states that the proposed supplement or amendment is
in compliance with the terms of this Section 26, the Rights Agent shall execute
such supplement or amendment. Notwithstanding anything contained in this
Agreement to the contrary, no supplement or amendment shall be made which
changes the Redemption Price, the Final Expiration Date, the Purchase Price or
the number of shares of Common Stock for which a Right is exercisable. Prior to
the Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Stock.
SECTION 27. SUCCESSORS. All the covenants and provisions of this
----------
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
SECTION 28. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS ETC.
--------------------------------------------------------
For all purposes of this Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial Owner, shall be made in accordance with
the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations
under the Exchange Act. The Board of Directors of the Company shall have the
exclusive power and authority to administer this Agreement and to exercise all
rights and powers specifically granted to the Board or to the Company, or as may
be necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power 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 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 in good faith, shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights, and all other parties, and
(y) not subject the Board to any liability to the holders of the Rights.
SECTION 29. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall
--------------------------
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Right Certificates (and, prior to the Distribution
Date, registered holders of the Common Stock) any legal or equitable right,
remedy or claim under this Agreement; but this Agreement shall be for the sole
exclusive benefit of the Company, the Rights Agent, and the registered holders
of the Right Certificates (and, prior to the Distribution Date, registered
holders of the Common Stock).
SECTION 30. SEVERABILITY. Whenever possible, each provision of this
------------
Agreement will be interpreted in such manner as to be effective and valid under
applicable present or future laws, but if any provision of this Agreement is
held by a court of competent jurisdiction or other authority to be invalid,
illegal, or unenforceable, in any respect under any such applicable law, such
invalidity, illegality, or unenforceability will not affect the remaining
provisions of this Agreement, but this Agreement will be reformed, construed,
and enforced in such jurisdiction or by such authority as if such invalid,
illegal, or unenforceable provision had never been contained herein.
28
SECTION 31. GOVERNING LAW. This Agreement and each Right Certificate
-------------
issued hereunder shall be deemed to be a contract made under the laws of the
State of Delaware and for all purposes shall be governed by and construed in
accordance with the laws of such state applicable to contracts to be made and
performed entirely within such state.
SECTION 32. COUNTERPARTS. This Agreement may be executed in any number
------------
of counterparts, and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
SECTION 33. DESCRIPTIVE HEADINGS. Descriptive headings of the several
--------------------
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
SECTION 34. ENTIRE AGREEMENT. This Agreement contains the entire
----------------
understanding of the parties with respect to the subject matter hereof. This
Agreement supersedes the Prior Agreement and any other prior agreements with
respect to the subject matter hereof.
[Remainder of page intentionally left blank.]
29
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed on the 5th day of April, 1999, to be effective as of the date and year
first above written.
BANCTEC, INC.
By: /s/ Tod V. Mongan
--------------------------------
Name: Tod V. Mongan
------------------------------
Title: Senior Vice President
-----------------------------
AMERICAN STOCK TRANSFER & TRUST COMPANY
By: /s/ Herbert Lemmer
--------------------------------
Herbert Lemmer
Vice President
30
EXHIBIT A
---------
Form of Right Certificate
Certificate No. R- ________ Rights
NOT EXERCISABLE AFTER MAY 20, 2008 OR EARLIER IF REDEEMED BY
THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF THE COMPANY, AT $.05 PER RIGHT ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES,
RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH
TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT
HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
Right Certificate
BANCTEC, 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 First Amended and Restated Rights Agreement, dated as of May
26, 1998 (the "Rights Agreement"), between BancTec, Inc., a Delaware corporation
(the "Company"); and American Stock Transfer & Trust Company (the "Rights
Agent"), to purchase from the Company at any time after the Distribution Date
(as such term is defined in the Rights Agreement) and prior to 5:00 P.M., New
York time, on May 20, 2008 at the principal office of the Rights Agent or at the
office of its successor as Rights Agent, one fully paid non-assessable share of
Common Stock ("Common Stock") of the Company, at a purchase price of $85.00 per
share of Common Stock (the "Purchase Price"), upon presentation and surrender of
this Right Certificate with the Form of Election to Purchase duly executed. The
number of Rights evidenced by this Right Certificate (and the number of shares
of Common Stock which may be purchased upon exercise hereof) set forth above,
and the Purchase Price set forth above, are the number and Purchase Price as of
May 26, 1998, based on the Common Stock as constituted at such date. As provided
in the Rights Agreement, the Purchase Price and the number of shares of Common
Stock which may be purchased upon the exercise of the Rights evidenced by this
Right Certificate are subject to modification and adjustment upon the happening
of certain events.
This Right Certificate is subject to all of the terms, provisions, and
conditions of the Rights Agreement, which terms, provisions, and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties, and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the above-mentioned offices of the Rights Agent.
A-1
The Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase like aggregate number of
shares of Common Stock as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
If any person shall become an Acquiring Person (as such term is defined in
the Rights Agreement), thereafter if the Rights evidenced by this Rights
Certificate are beneficially owned by (i) such Acquiring Person or an Affiliate
or Associate of such Acquiring Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of such Acquiring Person, Associate, or Affiliate,
or (iii) under certain circumstances specified in the Rights Agreement, a
transferee of a person who, after such transfer, became an Acquiring Person, or
an Affiliate or Associate of an Acquiring Person, such Rights shall become null
and void, and no holder hereof shall have any right with respect to such Rights.
No fractional shares of Common Stock will be issued upon the exercise of
any Right or Rights evidenced hereby, but in lieu thereof a cash payment may be
made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of shares of Common 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 Right Certificate shall have been
exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
[Remainder of page intentionally left blank.]
A-2
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal. Dated as of __________________, 19__.
ATTEST: BANCTEC, INC.
_______________________________ By: ___________________________
Secretary Its: ___________________________
Countersigned:
By: ___________________________
Authorized Signature
A-3
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer Right Certificate)
FOR VALUE RECEIVED ________________________________________________ hereby
sells, assigns, and transfers unto ____________________________________________
_______________________________________________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title, and interest therein,
and does hereby irrevocably constitute and appoint __________________________
Attorney, to transfer the within Right Certificate on the books of the within-
named Company, with full power of substitution.
Dated: ________________, 19___
_____________________________
Signature
Signature Guaranteed:
- -------------------------------------------------------------------------------
Certificate
-----------
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Right Certificate [_] is [_] is not being sold, assigned, and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[_] did [_] did not acquire the Right evidenced by this Right Certificate from
any Person who is, was, or subsequently became an Acquiring Person or an
Associate or Affiliate of an Acquiring Person.
Dated: ________________, 19___
_____________________________
Signature
Signature Guaranteed:
A-4
NOTICE
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
A-5
Form of Reverse Side of Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to
exercise the Right represented
by the Right Certificate.
To: BANCTEC, INC.
The undersigned hereby irrevocably elects to exercise ___________________
Rights represented by this Right Certificate to purchase the shares of Common
Stock issuable upon the exercise of such Rights and requests that certificates
for such shares of Common Stock be issued in the name of:
Please insert social security or other identifying number
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security or other identifying number
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
Dated: ________________, 19___
_____________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
A-6
Form of Reverse Side of Right Certificate - continued
- --------------------------------------------------------------------------------
Certificate
-----------
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Right Certificate [_] is [_] is not being sold, assigned, and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it [_]
did [_] did not acquire the Right evidenced by this Right Certificate from any
Person who is, was, or subsequently became an Acquiring Person or an Associate
or Affiliate of an Acquiring Person.
Dated: ________________, 19___
___________________________
Signature
Signature Guaranteed:
- --------------------------------------------------------------------------------
NOTICE
The signature in the foregoing Forms of Assignment and Election must
conform to the name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of Assignment or
the Form of Election to Purchase, as the case may be, is not completed, the
Company and the Rights Agent will deem the beneficial owner of the Rights
evidenced by this Right Certificate to be an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement) and such Assignment or
Election to Purchase will not be honored.
A-7
EXHIBIT B
---------
SUMMARY OF RIGHTS TO PURCHASE
COMMON STOCK
On May 21, 1998, the Board of Directors of BancTec, Inc. (the "Company")
declared a dividend distribution of one Right for each outstanding share of
Common Stock, $.01 par value, of the Company to stockholders of record at the
close of business on May 26, 1998. Each Right entitles the registered holder to
purchase from the Company one share of Common Stock of the Company, at a
Purchase Price of $85.00 per share of Common Stock, subject to adjustment. The
description and terms of the Rights are set forth in the First Amended and
Restated Rights Agreement (the "Rights Agreement") between the Company and
American Stock Transfer & Trust Company, as Rights Agent.
Initially, the Rights will be attached to all Common Stock certificates
representing shares then outstanding, and no separate Right Certificates will be
distributed. The Rights will separate from the Common Stock and a Distribution
Date will occur upon the earlier of (i) ten (10) days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired, or obtained the right to acquire, beneficial
ownership of 20% or more of the outstanding shares of Common Stock (the "Shares
Acquisition Date"), or (ii) ten (10) business days following the commencement of
a tender offer or exchange offer that would result in a person or group
beneficially owning 20% or more of such outstanding shares of Common Stock.
Until the Distribution Date, (i) the Rights will be evidenced by the Common
Stock certificates and will be transferred with and only with such Common Stock
certificates, (ii) new Common Stock certificates issued after the Record Date
will contain a notation incorporating the Rights Agreement by reference and
(iii) the surrender for transfer of any certificates for Common Stock
outstanding will also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on May 20, 2008, unless earlier redeemed by the Company
as described below.
As soon as practicable after the Distribution Date, Right Certificates will
be mailed to holders of record of the Common Stock as of the close of business
on the Distribution Date and, thereafter, the separate Right Certificates alone
will represent the Rights. Except as otherwise determined by the Board of
Directors, and except in certain circumstances described in the Rights
Agreement, only shares of Common Stock issued prior to the Distribution Date
will be issued with Rights.
In the event that any Person shall become an Acquiring Person, each holder
of a Right will thereafter have the right to receive, upon exercise, Common
Stock (or, in certain circumstances, cash, property, or other securities of the
Company) having a value equal to two times the exercise price of the Right.
Notwithstanding any of the foregoing, following the occurrence of any Person
becoming an Acquiring Person, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned by an
Acquiring Person will be null and void.
B-1
In the event that (i) the Company is acquired in a merger or other business
combination transaction in which the Company is not the surviving corporation
(other than a merger described in the preceding paragraph or a merger which
follows an offer described in the preceding paragraph), or (ii) 50% or more of
the Company's assets or earning power is sold or transferred, each holder of a
Right (except Rights which previously have been voided as set forth above) shall
thereafter have the right to receive, upon exercise, common stock of the
acquiring company having a value equal to two times the exercise price of the
Right.
The Purchase Price payable, and the number of shares of Common Stock or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination, or reclassification of, the Common
Stock, (ii) if holders of the Common Stock are granted certain rights or
warrants to subscribe for Common Stock or convertible securities at less than
the current market price of the Common Stock, or (iii) upon the distribution to
holders of the Common Stock of evidences of indebtedness or assets (excluding
regular quarterly cash dividends) or of subscription rights or warrants (other
than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fractional shares of Common Stock will be issued and, in lieu thereof,
an adjustment in cash may 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 until fifteen days following the Shares Acquisition Date, the
Company may redeem the Rights in whole, but not in part, at a price of $.05 per
Right, payable in cash. Immediately upon the action of the Board of Directors
ordering redemption of the Rights, the Rights will terminate and the only right
of the holders of Rights will be to receive the $.05 redemption price.
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. While the distribution of the Rights will not
be taxable to stockholders or to the Company, stockholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Stock (or other consideration) of the Company or for
common stock of the acquiring company as set forth above.
Other than those provisions relating to the principal economic terms of the
Rights, any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement may be amended by the
Board in order to cure any ambiguity, to make changes which do not adversely
affect the interests of holders of Rights (excluding the interests of any
Acquiring Person), or to shorten or lengthen any time period under the Rights
Agreement; provided, however, that no amendment to adjust the time period
--------
governing redemption shall be made at such time as the Rights are not
redeemable.
A copy of the Rights Agreement is being filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A. A
copy of the Rights Agreement is available
B-2
free of charge from the Company. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, which is incorporated herein by reference.
B-3