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EXHIBIT 2
RIGHTS AGREEMENT
This Agreement, dated as of September 16, 1996, is between
Comshare, Incorporated, a Michigan corporation (the "Company"), and
KeyBank National Association (the "Rights Agent").
W I T N E S S E T H
WHEREAS, the Board of Directors of the Company has authorized and
declared a dividend distribution (the "Distribution") of one Right for each
outstanding share of the Common Stock, $1.00 par value, of the Company
outstanding on September 30, 1996 (the "Record Date") and has authorized the
issuance of one Right in respect of each share of Common Stock of the Company
issued between September 30, 1996 and the earlier of the Distribution Date,
the Expiration Date or the Final Expiration Date (as such terms are
hereinafter defined), and under certain other circumstances, each Right
initially representing the right to purchase one one-hundredth of a share of
Series A Preferred Stock of the Company having the rights, powers and
preferences set forth in the Articles of Amendment attached hereto as Exhibit
A, upon the terms and subject to the conditions hereinafter set forth (the
"Rights");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates
(as such term is hereinafter defined) and Associates (as such term
is hereinafter defined) of such Person, shall be the Beneficial
Owner (as such term is hereinafter defined) of securities of the
Company constituting a Substantial Block (as such term is hereinafter
defined), but shall not include the Company or any subsidiary of
the Company, or any employee benefit plan of the Company or of any
subsidiary of the Company, or any Person or entity organized, appointed
or established by the Company for or pursuant to the terms of any
such plan; provided, further, if the Board of Directors (with the
concurrence of a majority of the Continuing Directors) determines in
good faith that a Person who would otherwise be an "Acquiring
Person" has become such inadvertently (including, without
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limitation, because (A) such Person was unaware that he or it
beneficially owned a percentage of Common Stock that would otherwise cause
such Person to be an "Acquiring Person" or (B) such Person was aware of
the extent of his or its Beneficial Ownership but had no actual
knowledge of the consequences of such Beneficial Ownership under this
Agreement) and without any intention of changing or influencing
control of the Company, and if such Person as promptly as practicable
has divested or divests himself or itself of Beneficial Ownership
of a sufficient number of shares of Common Stock so that such Person
would no longer be an "Acquiring Person," then such Person shall not be
deemed to be or to have become an "Acquiring Person" for any
purposes of this Agreement; and provided, further, that no Person
shall be deemed to be an "Acquiring Person" on account of Common Stock
of the Company beneficially owned by such Person as of the time the
adoption of this Agreement is first publicly announced unless after
such announcement such Person shall become the Beneficial Owner of
any additional shares of Common Stock. Notwithstanding the foregoing, no
Person shall become an "Acquiring Person" as the result of an
acquisition of Common Stock by the Company which, by reducing the
number of shares outstanding, increases the proportionate number of
shares beneficially owned by such Person to 15% or more of the Common
Stock then outstanding; provided, however, that if a Person shall become
the Beneficial Owner of 15% or more of the Common Stock 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, then such Person shall
be deemed to be an "Acquiring Person."
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") as in effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of, shall
have "Beneficial Ownership" of and shall be deemed to "beneficially
own" any securities:
(i) which such Person, or any of such Person's Affiliates or
Associates, beneficially owns, directly or indirectly;
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(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has (A) the right to acquire
(whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or
understanding (whether or not in writing), or upon the exercise
of conversion rights, exchange rights, rights, warrants or
options, or otherwise; provided, however, that a Person shall not
be deemed the "Beneficial Owner" of, to have "Beneficial
Ownership" of, or to "beneficially own," (1) 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 (2) securities issuable upon exercise of Rights at
any time prior to the occurrence of a Triggering Event or (3)
securities issuable upon exercise of Rights from and after the
occurrence of a Triggering Event, which Rights were acquired by
such Person or any of such Person's Affiliates or Associates
prior to the Distribution Date or pursuant to Section 3(a) hereof
("Original Rights") or pursuant to Section 11(i) or Section 22
hereof in connection with an adjustment made with respect to
Original Rights; or (B) the right to vote or dispose of, pursuant
to any agreement, arrangement or understanding (whether or not in
writing); provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, to have "Beneficial Ownership" of, or to
"beneficially own," any security under this clause (B) if the
agreement, arrangement or understanding to vote such security (1)
arises solely from a revocable proxy given in response to a
public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations of the
Exchange Act and (2) is not then reportable by such Person on
Schedule 13D under the Exchange Act (or any comparable or successor
report); or
(iii) which are beneficially owned, directly or indirectly, by any
other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (whether or not in writing) for the purpose of
acquiring, holding, voting (except pursuant to a revocable proxy as
described in clause (B) of subparagraph (ii) of
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this paragraph (c)) or disposing of any securities of the
Company; provided, however, that nothing in this paragraph (c) shall
cause a person engaged in business as an underwriter of securities
to be the "Beneficial Owner" of, to have "Beneficial Ownership"
of, or to "beneficially own," any securities acquired through such
person's participation in good faith in a firm commitment
underwriting until the expiration of forty days after the date of
such acquisition.
Notwithstanding anything in this definition to the contrary, the
phrase "then outstanding," when used with reference hereto, shall
mean the number of such securities then issued and outstanding
together with the number of such securities not then actually
issued and outstanding which such Person would be deemed to own
beneficially hereunder.
(d) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of Michigan
or the State of Ohio 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., Ann Arbor, Michigan time, on such date; provided, however, that if
such date is not a Business Day it shall mean 5:00 P.M., Ann Arbor,
Michigan time, on the next succeeding Business Day.
(f) "Common Stock" when used with reference to the Company shall
mean the Common Stock, $1.00 par value, of the Company, and when used
with reference to any Person other than the Company shall mean the
capital stock (or equity interest) with the greatest voting power, or
the equity securities or other equity interest having power to
control or direct the management, of such Person or, if such other
Person is a subsidiary of another Person, the Person or Persons which
ultimately control such first-mentioned Person.
(g) "Continuing Director" shall mean any member of the Board of
Directors of the Company, while such person is a member of the Board,
who is not an Acquiring Person, or an Affiliate or Associate of an
Acquiring Person, or a director, officer, representative or nominee of
an Acquiring Person or of any such Affili
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ate or Associate and who either (i) was a member of the Board prior
to the Shares Acquisition Date, or (ii) subsequently became a member of
the Board and whose nomination for election or election thereto was
recommended or approved by a majority of the Continuing Directors then on
the Board.
(h) "Continuing Directors" shall mean two or more Continuing
Directors. All approvals or concurrences by the Continuing Directors
shall require the approval or concurrence of two or more Continuing
Directors.
(i) "Distribution Date" shall have the meaning set forth in
Section 3 hereof.
(j) "Expiration Date" shall have the meaning set forth in
Section 7 hereof.
(k) "Final Expiration Date" shall have the meaning set forth in
Section 7 hereof.
(l) "Person" shall mean any individual, firm, corporation or other
entity and shall include any successor (by merger or otherwise) of such
entity.
(m) "Preferred Stock" shall mean shares of Series A Preferred
Stock, no par value, of the Company.
(n) "Shares Acquisition Date" shall mean the first date of
public announcement by the Company or an Acquiring Person that an
Acquiring Person has become such.
(o) "Subsidiary" or "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.
(p) "Substantial Block" shall mean a number of shares of the Common
Stock which equals or exceeds 15% of the number of shares of the
Common Stock then outstanding.
(q) "Triggering Event" shall mean any event described in
Section 11(a)(ii)(A), (B) or (C) or Section 13(a).
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders of
the Rights (who, in accordance with
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Section 3 hereof shall prior to the Distribution Date also be the holders
of the Common Stock) in accordance with the terms and conditions hereof,
and the Rights Agent hereby accepts such appointment. The Company may from
time to time appoint such Co-Rights Agents as it may deem necessary or
desirable.
SECTION 3. ISSUE OF RIGHT CERTIFICATES. (a) Until the earlier of
(i) the tenth business day after the Shares Acquisition Date or (ii) the
tenth business day (or such later date as may be determined by action of the
Board of Directors, with the concurrence of a majority of the Continuing
Directors, prior to such time as any Person becomes an Acquiring Person) after
the date of the commencement of, or first public announcement of the intent
to commence, by any Person (other than the Company, any subsidiary of the
Company, or any employee benefit plan of the Company or of any subsidiary of
the Company or any Person or entity organized, appointed or established by
the Company for or pursuant to the terms of any such plan), a tender or
exchange offer if, upon consummation thereof, such Person would be an
Acquiring Person (including any such date which is after the date of this
Agreement and prior to the issuance of the Rights; the earlier of the dates
in subsections (i) and (ii) hereof being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of paragraph (b) of this Section 3) by the certificates for
the Common Stock registered in the names of the holders of the Common
Stock (which certificates for the Common Stock shall be deemed also to be
Right Certificates) and not by separate Right Certificates, and (y) the
right to receive Right Certificates will be transferable only in connection
with the transfer of the Common Stock. As soon as practicable after the
Distribution Date, the Rights Agent will send, by first-class, insured,
postage prepaid mail, to each record holder of 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 B hereto, evidencing one Right for each share of the
Common Stock so held. As of the Distribution Date, the Rights will be
evidenced solely by such Right Certificates. The Company will notify the
Rights Agent promptly of the Distribution Date.
(b) On the Record Date, or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights to Purchase Preferred Stock,
in substantially the form attached hereto as Exhibit C (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 the Common Stock outstanding as of the Record Date,
until the Distribution Date, the Rights will be evidenced by such
certificates for the Common Stock regis
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tered in the names of the holders of the Common Stock. Until the
Distribution Date (or earlier redemption, exchange or expiration of the
Rights), the surrender for transfer of any of the certificates for the
Common Stock outstanding on the Record Date, shall also constitute the
transfer of the Rights associated with the Common Stock represented by such
certificate.
(c) Rights shall be issued in respect of all shares of Common Stock
issued after the Record Date but prior to the earlier of the
Distribution Date, the Expiration Date or the Final Expiration Date (as
such terms are defined in Section 7). Certificates representing such shares
of Common Stock shall have impressed on, printed on, written on or otherwise
affixed to them the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between Comshare,
Incorporated and KeyBank National Association, Rights Agent, dated as of
September 16, 1996 (the "Rights Agreement"), the terms of which are
hereby incorporated herein by reference and a copy of which is on file
at the principal executive offices of Comshare, Incorporated. 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. Comshare, Incorporated will mail to the
holder of this certificate a copy of the Rights Agreement (as in effect
on the date of mailing) without charge promptly after receipt of a
written request therefor. Under certain circumstances, Rights which
are or were beneficially owned by Acquiring Persons or their Affiliates
or Associates (as such terms are defined in the Rights Agreement) and
any subsequent holder of such Rights may become null and void.
With respect to such certificates containing the foregoing legend,
until the Distribution Date, the Rights associated with the Common Stock
represented by such certificates shall be evidenced by such certificates
alone, and the surrender for transfer of any of such certificates shall
also constitute the transfer of the Rights associated with the Common
Stock represented by such certificate. In the event that the Company
purchases or acquires any shares of the Common Stock after the Record Date
but prior to the Distribution Date, any Rights associated with such shares of
the 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 is no longer outstanding.
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SECTION 4. FORM OF RIGHT CERTIFICATES. (a) The Right Certificates
(and the forms of election to purchase shares and of assignment to be printed
on the reverse thereof) shall be substantially the same as Exhibit B hereto and
may have such marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this Agreement, or as
may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
stock exchange on which the Rights may from time to time be listed, or to
conform to usage. Subject to the provisions of Section 22 hereof, the Right
Certificates, whenever issued, shall be dated as of the Record Date, and on
their face shall entitle the holders thereof to purchase such number
of one one-hundredths of a share of the Preferred Stock as shall be set
forth therein at the price per share set forth therein (the "Purchase
Price"), but the amount and type of securities and the Purchase Price
thereof shall be subject to adjustment as provided herein.
(b) Notwithstanding any other provision of this Agreement, 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 thereof, (ii) on or after the Distribution Date by
any Person who subsequently becomes an Acquiring Person (or an Affiliate or
Associate of an Acquiring Person), (iii) by a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee after
the Acquiring Person becomes such, or (iv) by a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such
and receives such Rights pursuant to either (A) a transfer (whether or not
for consideration) from the Acquiring Person to holders of equity
interests in such Acquiring Person or to any Person with whom such Acquiring
Person has any continuing agreement, arrangement or understanding regarding
the transferred Rights or (B) a transfer which the Board of Directors of
the Company (with the concurrence of a majority of the Continuing
Directors) has determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect avoidance of Section 7(e) hereof,
any Right Certificate issued at any time to any nominee of such Acquiring
Person, Associate or Affiliate, and any Right Certificate issued pursuant to
Section 6 or Section 11 upon transfer, exchange, replacement or adjustment
of any other Right Certificate referred to in this sentence, shall contain 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
an
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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 the Rights Agreement.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION. The Right Certificates
shall be executed on behalf of the Company in the manner provided in the
By-Laws of the Company for Common Stock Certificates. The Right
Certificates shall be manually countersigned by the Rights Agent and shall
not be valid for any purpose unless so countersigned. In case any officer of
the Company who shall have signed any of the 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 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, 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 CERTIFICATES, MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.
Subject to the provisions of Section 4(b), Section 7(e), Section 14 and
Section 27 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 Expiration Date or the Final Expiration Date, any Right Certificate
or Certificates (other than Rights Certificates representing Rights that
have become void pursuant to Section 7(e) hereof or that have been
exchanged pursuant to Section 27 hereof) may be transferred, split up,
combined or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of one
one-hundredths of a share of Preferred Stock (or, following a Triggering
Event, Common Stock, other securities, cash or other assets, as the case
may be) as the Right Certificate or Right Certificates surrendered then
entitled such holder (or former holder in the
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case of a transfer) to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Right Certificate shall make such request
in writing delivered to the Rights Agent, and shall surrender the Right
Certificate or Right Certificates to be transferred, split up, combined or
exchanged at the principal office of the Rights Agent for such purpose.
Neither the Rights Agent nor the Company shall be obligated to take any
action whatsoever with respect to the transfer of any such surrendered
Rights Certificate until the registered holder shall have completed and
signed the certificate contained in the form of assignment on the reverse
side of such Rights Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial
Owner) or Affiliates or Associates thereof as the Company shall reasonably
request. Thereupon the Rights Agent shall, subject to Section 4(b), Section
7(e), Section 14 and Section 27 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 Right
Certificates.
Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a 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 owner in lieu of the
Right Certificate so lost, stolen, destroyed or mutilated.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS. (a) Subject to Section 7(e) and Section 27 hereof, the registered
holder of any Right Certificate may exercise the Rights evidenced thereby
(except as otherwise provided herein) in whole or in part at any time after
the Distribution Date upon 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
one one-hundredths of a share of Preferred Stock (or other securities or
property, as the case may be) as to which such surrendered Rights are then
exercisable, at or prior to the close of business on the earlier of (i)
September 16, 2006 (the "Final Expiration Date"), (ii) the date on which the
Rights are redeemed as provided in Section 23, (iii) the time at which
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such Rights are exchanged as provided in Section 27 hereof or (iv) the time at
which the Rights expire pursuant to Section 13(d) hereof (the earliest of
(ii), (iii) or (iv) being herein referred to as the "Expiration Date").
(b) The Purchase Price for each one one-hundredth of a share of
Preferred Stock pursuant to the exercise of a Right shall initially be
$110.00, shall be subject to adjustment from time to time as provided in
Sections 11 and 13 hereof and shall be payable in lawful money of the
United States of America in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly
executed, accompanied by payment of the Purchase Price per one one-hundredth
of a share of Preferred Stock (or other shares, securities or property, as
the case may be) to be purchased and an amount equal to any applicable
transfer tax in cash, or by certified check or bank draft payable to the
order of the Company, the Rights Agent shall, subject to Section 20(k)
hereof, thereupon promptly (i) requisition from any transfer agent of the
Preferred Stock of the Company certificates for the total number of
one one-hundredths of a share of Preferred Stock to be purchased and the
Company hereby irrevocably authorizes its transfer agent to comply with all
such requests, (ii) if the Company shall have elected to deposit the total
number of shares of Preferred Stock issuable upon exercise of the Rights
hereunder with a depositary agent, requisition from the depositary agent
depositary receipts representing such number of one one-hundredths of a share
of Preferred Stock as are to be purchased (in which case certificates for the
shares of Preferred Stock represented by such receipts shall be deposited by
the transfer agent with the depositary agent) and the Company will direct
the depositary agent to comply with such request, (iii) when
appropriate, requisition from any transfer agent of the Common Stock of the
Company certificates for the total number of shares of Common Stock to be paid
in accordance with Section 11(a)(ii), 11(a)(iii) and Section 27, (iv)
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, (v)
promptly after receipt of such certificates or depositary receipts, cause the
same to be delivered to or upon the order of the registered holder of such
Right Certificate, registered in such name or names as may be designated by
such holder and (vi) when appropriate, after receipt, promptly 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 securities,
distribute property or pay cash pursuant to Section 11(a)(iii) hereof, the
Company will make all arrangements necessary so that cash, property or
securities are available for issuance, distribution or payment by the
Rights Agent, if and when appropriate.
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(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,
any Rights that are or were at any time on or after the earlier of the
Distribution Date or the Shares Acquisition Date beneficially owned by (i)
an Acquiring Person or any Associate or Affiliate of an Acquiring Person,
(ii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person becomes such,
or (iii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with the
Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring
Person to holders of equity interests in such Acquiring Person or to any
Person with whom 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 (with the concurrence
of a majority of the Continuing Directors) has determined is part of a
plan, arrangement or understanding which has as a primary purpose or effect
the avoidance of this Section 7(e), shall become null and void upon the
occurrence of a Triggering Event and no holder of such Rights shall have any
right with respect to such Rights under any provision of this Agreement from
and after the occurrence of a Triggering Event. No Rights Certificate shall
be issued pursuant to Section 3 that represents Rights beneficially owned
by an Acquiring Person whose Rights would be void pursuant to the
preceding sentence or any Associate, Affiliate or transferee thereof whose
rights would be void pursuant to the preceding sentence; no Rights Certificate
shall be issued at any time upon the transfer of any Rights to an Acquiring
Person whose Rights would be void pursuant to the preceding sentence or any
Associate, Affiliate or transferee thereof whose rights would be void pursuant
to the preceding sentence or to any nominee of such Acquiring Person,
Associate, Affiliate or transferee; and any Rights Certificate delivered to
the Rights Agent for transfer to an Acquiring Person whose Rights would be
void pursuant to the preceding sentence shall be cancelled. The Company
shall use all reasonable efforts to insure that the provisions of this Section
7(e) and Section 4(b) hereof are complied with, but shall have no liability to
any holder of Rights Certificates or other Person as a result of its failure
to make any determinations with respect to an Acquiring Person or its
Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered
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holder upon the occurrence of any purported exercise as set forth in this
Section 7 unless such registered holder shall have (i) completed and signed
the certificate contained in the form of election to purchase set forth on
the reverse side of the Rights Certificate surrendered for such exercise, and
(ii) provided such additional evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the
Company shall reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All
Right Certificates surrendered for the purpose of exercise, transfer,
split up, combination or exchange shall, if surrendered to the Company or
to any of its agents, be delivered to the Rights Agent for cancellation or
in 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 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 AND AVAILABILITY OF SHARES OF CAPITAL STOCK.
(a) The Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued shares of Preferred
Stock (and will use its best efforts, following the occurrence of a
Triggering Event, out of its authorized and unissued shares of Common Stock
or its authorized and issued Common Stock held in its treasury and/or
other securities), the number of shares of Preferred Stock (and,
following the occurrence of a Triggering Event, Common Stock and/or other
securities) that, as provided in this Agreement, will be sufficient to permit
the exercise in full of all outstanding Rights.
(b) So long as the shares of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other securities)
issuable and deliverable upon the exercise of Rights may be listed on any
national securities exchange, the Company shall use its best efforts to cause,
from and after such time as the Rights become exercisable, all shares
reserved for such issuance to be listed on such exchange upon official
notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as soon as
practicable following the first occurrence of a Triggering Event, a
registration statement under the Securi
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ties Act of 1933 (the "Act"), with respect to the Rights and the
securities purchasable upon exercise of the Rights on an appropriate form,
(ii) cause such registration statement to become effective as soon as
practicable after such filing, and (iii) cause such registration statement to
remain effective (with a prospectus at all times meeting the requirements of
the Act) until the date of the expiration of the Rights. The Company will
also take such action as may be appropriate under the blue sky laws of the
various states. The Company, by resolution of its Board of Directors (which
resolution shall be effective only with the concurrence of a majority of
the Continuing Directors), may temporarily suspend, for a period of time not
to exceed ninety (90) days, the exercisability of the Rights in order to
prepare and file such registration statement. Upon any such suspension, the
Company shall issue a public announcement stating that the exercisability of
the Rights has been temporarily suspended, as well as a public announcement
and notice to the Rights Agent 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 such jurisdiction shall have been obtained.
(d) The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all one one-hundredths of a share of
Preferred Stock (and, following the occurrence of a Triggering Event,
Common Stock and/or other securities) delivered upon exercise of Rights
shall, at the time of delivery of the certificates for such shares (subject to
payment of the Purchase Price), be duly and validly authorized and issued and
fully paid and nonassessable.
(e) The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Right
Certificates or of any one one-hundredths of a share of Preferred Stock
(or Common Stock and/or other securities, as the case may be) upon the
exercise of Rights. The Company shall not, however, be required (a) to pay
any transfer tax which may be payable in respect of any transfer involved in
the transfer or delivery of Right Certificates or the issuance or
delivery of certificates for the one one-hundredths of a share of
Preferred Stock (or Common Stock and/or other securities, as the case may
be) in a name other than that of the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or (b) to issue or
deliver any certificates for a number of one one-hundredths of a share of
Preferred 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.
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SECTION 10. PREFERRED STOCK RECORD DATE. Each person in whose
name any certificate for a number of one one-hundredths of a share of
Preferred Stock (or shares of Common Stock and/or other securities, as the
case may be) is issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of such fractional shares of
Preferred Stock (or shares of Common Stock and/or other securities, as
the case may be) represented thereby on, and such certificate shall be
dated, the date upon which the 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 Preferred Stock (or
Common Stock and/or other securities, as the case may be) transfer books
of the Company are closed, such person shall be deemed to have become the
record holder of such shares (fractional or otherwise) on, and such
certificate shall be dated, the next succeeding Business Day on which the
Preferred Stock (or Common Stock and/or other securities, as the case may
be) transfer books of the Company are open. Prior to the exercise of the
Rights evidenced thereby, the holder of a Right Certificate shall not be
entitled to any rights of a shareholder of the Company with respect to shares
for which the Rights shall be exercisable, including, without limitation, the
right to vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to receive
any notice of any proceedings of the Company, except as provided herein.
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR
NUMBER OF RIGHTS. The Purchase Price, the number of shares covered by
each Right and the number of Rights outstanding are subject to adjustment
from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred Stock
payable in shares of the Preferred Stock, (B) subdivide the
outstanding Preferred Stock, (C) combine the outstanding Preferred Stock
into a smaller number of shares or (D) issue any shares of its capital
stock in a reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which
the Company is the continuing corporation), except as otherwise
provided in this Section 11(a) and Section 7(e) hereof, the Purchase
Price in effect at the time of the record date for such dividend or
of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of Preferred Stock
or capital stock, as the case may be, issuable on
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such date, shall be proportionately adjusted so that the holder of any
Right exercised after such time shall be entitled to receive the
aggregate number and kind of shares of Preferred Stock or capital stock,
as the case may be, which, if such Right had been exercised immediately
prior to such date and at a time when the Preferred Stock transfer books
of the Company were open, he would have owned upon such exercise and
been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification. If an event occurs which would
require an adjustment under both Section 11(a)(i) and Section
11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall
be in addition to, and shall be made prior to any adjustment required
pursuant to Section 11(a)(ii).
(ii) Subject to Section 27 of this Agreement, in the event:
(A) any Acquiring Person or any Associate or Affiliate
of any Acquiring Person, at any time after the date of this
Agreement, directly or indirectly, (1) shall merge into the Company
or otherwise combine with the Company (including a "plan of share
exchange" as defined in the Michigan Business Corporation Act) the
Company shall be the continuing or surviving corporation of such
merger or combination, and the Common Stock of the Company shall
remain outstanding, (2) shall merge, consolidate or otherwise
combine with any Subsidiary of the Company (including a "plan of
share exchange" as defined in the Michigan Business Corporation Act)
(except in a transaction complying with the conditions of Section
13(d) of this Agreement), (3) shall, in one or more transactions,
transfer any assets to the Company or any of its Subsidiaries
in exchange (in whole or in part) for shares of the capital stock
of the Company or any of its Subsidiaries or for securities
exercisable for or convertible into shares of the capital stock
of the Company or any of its Subsidiaries or otherwise obtain from
the Company or any of its Subsidiaries, with or without
consideration, any additional shares of the capital stock of the
Company or any of its Subsidiaries or securities exercisable for
or convertible into shares of the capital stock of the Company or
any of its Subsidiaries (other than as part of a pro rata
distribution to all holders of the Common Stock of the Company or
any of its Subsidiaries), (4) shall sell, purchase, lease, exchange,
mortgage, pledge, transfer or otherwise dispose (in one transaction
or a series of transactions), to, from or
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17
with the Company or any of the Company's Subsidiaries, assets on
terms and conditions less favorable to the Company than the Company
would be able to obtain through arm's-length negotiation with an
unaffiliated third party, other than a transaction set forth in
Section 13(a) hereof, (5) shall receive any compensation from
the Company or any of the Company's Subsidiaries other than
compensation for full-time employment as a regular employee at rates
in accordance with the Company's (or its subsidiaries') past
practices, or (6) shall receive a direct or indirect benefit (except
proportionately as a stockholder), of any loans, advances,
guarantees, pledges or other financial assistance or any tax
credits or other tax advantage provided by the Company or any of
its Subsidiaries, or
(B) any Person (other than the Company, any Subsidiary
of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company, or any Person or entity organized,
appointed or established by the Company for or pursuant to the
terms of any such plan), alone or together with its Affiliates and
Associates, shall become the Beneficial Owner of 15% or more of
the shares of Common Stock then outstanding, unless the event
causing the 15% threshold to be crossed is a transaction set forth
in Section 13(a) hereof, or is an acquisition of shares of
Common Stock pursuant to a tender offer or an exchange offer
for all outstanding shares of Common Stock at a price and on terms
determined by a majority of the Continuing Directors, after
receiving advice from one or more investment banking firms
selected by a majority of the Continuing Directors, to be (a) at
a price that is fair to shareholders (taking into account all
factors that the Continuing Directors deem relevant including,
without limitation, prices that could reasonably be achieved
if the Company or its assets were sold on an orderly basis
designed to realize maximum value) and (b) otherwise in the best
interests of the Company and its shareholders (other than the
Person or any Affiliate or Associate thereof on whose behalf the
offer is being made), or
(C) during such time as there is an Acquiring Person, (1)
there shall be any failure to declare and pay at the regular date
therefor any
25
18
dividends (whether or not cumulative) on any outstanding Preferred
Stock of the Company (except to the extent such declaration or
payment would be prohibited under the laws of the Company's
jurisdiction of incorporation), (2) there shall be any reduction in
the annual rate of dividends paid on the Common Stock (except to
reflect any subdivision of the Common Stock or as required under the
laws of the Company's jurisdiction of incorporation or as approved
by a majority of the Continuing Directors and the Continuing
Directors constitute a majority of the Board of Directors or by the
holders of 66-2/3% percent or more of the then outstanding shares
of Common Stock beneficially owned by Persons other than the
Acquiring Person or its Affiliates or Associates), (3) there shall
be a failure to increase the annual rate of dividends as necessary
to reflect any reclassification (including any reverse stock
split), recapitalization, reorganization or any similar transaction
which has the effect of reducing the number of outstanding shares
of the Common Stock (except to the extent such increase in the rate
of dividends would be prohibited under the laws of the
Company's jurisdiction of incorporation), or (4) there shall
be any reclassification of securities (including any reverse
stock split), or recapitalization of the Company, or any merger
or consolidation of the Company with any of its Subsidiaries or
any other transaction or series of transactions to which the Company
or any of its Subsidiaries is a party (whether or not with or
into or otherwise involving an Acquiring Person) which has the
effect, directly or indirectly, of increasing by more than 1% the
proportionate share of the outstanding shares of any class of
equity or convertible securities of the Company or any of its
Subsidiaries which is directly or indirectly owned by any
Acquiring Person or any Associate or Affiliate of any Acquiring
Person,
then, within five (5) days after the date of the occurrence of an
event described in Section 11(a)(ii)(B) hereof and promptly following
the occurrence of any event described in Section 11(a)(ii)(A) or (C)
hereof, proper provision shall be made so that each holder of a Right
(except as provided in Section 7(e) hereof) shall thereafter have a
right to receive, upon exercise thereof at the then current Purchase
Price in accordance with the
26
19
terms of this Agreement, in lieu of a number of one one-hundredths of a
share of Preferred Stock, such number of shares of the Common Stock of
the Company as shall equal the result obtained by (x) multiplying the
then current Purchase Price by the then number of one one-hundredths of
a share of Preferred Stock for which a Right is then exercisable and
dividing that product by (y) 50% of the current market price per
share of the Common Stock of the Company (determined pursuant to
Section 11(d)) on the date on which the first of the events listed
above in this subparagraph (ii) occurs (such number of shares are
hereinafter referred to as the "Adjustment Shares").
(iii) In the event that there shall not be sufficient
authorized but unissued Common Stock to permit the exercise in
full of the Rights in accordance with the foregoing subparagraph
(ii), the Company shall take all such action as may be necessary to
authorize additional shares of Common Stock for issuance upon exercise
of the Rights; provided, however, if the Company is unable to cause the
authorization of a sufficient number of additional shares of Common
Stock, then, in the event the Rights become so exercisable, the
Company, with respect to each Right and to the extent necessary and
permitted by applicable law and any agreements or instruments in
effect on the date hereof to which it is a party, shall, upon the
exercise of such Rights, (A) pay cash in an amount equal to the
Purchase Price, in lieu of issuing shares of Common Stock and
requiring payment therefor, or (B) issue debt or equity securities,
or a combination thereof, having a value equal to the Current Value (as
defined hereinafter) of the Common Stock (including, without
limitation, shares, or units of shares, of preferred stock, which may
include the Preferred Stock), where the value of such securities shall be
determined by a nationally recognized investment banking firm selected
by the Board of Directors of the Company (with the concurrence of a
majority of the Continuing Directors), and require the payment of the
Purchase Price, or (C) deliver any combination of cash, property, Common
Stock and/or other securities having a value equal to the Current
Value, and require payment of all or any requisite portions of the
Purchase Price. The Current Value shall be the product of the current
market price per share of Common Stock (determined pursuant to Section
11(d) on the date of the occurrence of any of the events listed above
in subparagraph (ii)) multiplied by the number of shares of Common
Stock for which the Right otherwise would be exercisable if there were
27
20
sufficient shares available. To the extent that the Company determines
that some action need be taken pursuant to clauses (A), (B) or (C) of the
proviso of this Section 11(a)(iii), a majority of the Continuing
Directors may suspend the exercisability of the Rights for a period of
up to 45 days following the date on which the first of the events
listed in Section 11(a)(ii)(A), (B) or (C) shall have occurred, in order
to decide the appropriate form of distribution to be made pursuant to
the above proviso 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.
(b) In the case the Company shall fix a record date for the issuance of
rights or warrants to all holders of Preferred Stock entitling them (for a
period expiring within 45 calendar days after such record date) to
subscribe for or purchase Preferred Stock (or shares having the same rights,
privileges and preferences as the shares of Preferred Stock ("equivalent
preferred stock") or securities convertible into Preferred Stock or
equivalent preferred stock) at a price per share of Preferred Stock or
per share of equivalent preferred stock (or having a conversion price per
share, if a security convertible into Preferred Stock or equivalent
preferred stock) less than the current market price (as defined in Section
11(d)) per share of Preferred Stock on such record date, the Purchase Price to
be in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a
fraction, of which the numerator shall be the number of shares of Preferred
Stock outstanding on such record date plus the number of shares of Preferred
Stock which the aggregate offering price of the total number of shares of
Preferred Stock and/or equivalent preferred stock so to be offered (and/or
the aggregate initial conversion price of the convertible securities so to
be offered) would purchase at such current market price and of which the
denominator shall be the number of shares of Preferred Stock outstanding on
such record date plus the number of additional shares of Preferred Stock
and/or equivalent preferred stock to be offered for subscription or purchase
(or into which the convertible securities so to be offered are initially
convertible); provided, however, that in no event shall the consideration
to be paid upon the exercise of one Right be less than the aggregate par value
of the shares of capital stock of the Company issuable upon exercise of one
Right. In case such subscription price may be paid in a consideration part or
all of which shall be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board
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21
of Directors of the Company (with the concurrence of a majority of the
Continuing Directors), whose determination shall be described in a
statement filed with the Rights Agent. Shares of Preferred Stock owned by
or held for the account of the Company shall not be deemed outstanding for
the purpose of any such computation. Such adjustment shall be made
successively whenever such a record date is fixed; and in the event that
such rights or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such
record date has not been fixed.
(c) In case the Company shall fix a record date for the making
of a distribution to all holders of Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation) of evidences of indebtedness or
assets (other than a regular periodic cash dividend at a rate not in excess
of 125% of the rate of the last cash dividend theretofore paid or a
dividend payable in Preferred Stock, but including any dividend payable
in stock other than Preferred Stock) or subscription rights or warrants
(excluding those referred to in Section 11(b)), 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,
of which the numerator shall be the current market price (as defined in
Section 11(d)) per share of Preferred Stock on such record date, less the fair
market value (as determined in good faith by the Board of Directors of the
Company (with the concurrence of a majority of the Continuing Directors),
whose determination shall be described in a statement filed with the Rights
Agent) of the portion of the assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable to one
share of Preferred Stock and of which the denominator shall be such current
market price per share of Preferred Stock; 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 to be issued upon exercise of one Right. Such adjustments shall
be made successively whenever such a record date is fixed; and in the event
that such distribution is not so made, the 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) (i) For the purpose of any computation under Section
11(b) or (c) hereof, the "current market price" per, or "value" of a,
share of the Common Stock on any date of determination shall be deemed
to be the average of the daily closing prices per share of such Common
Stock for the 30 consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date, and for the purpose
29
22
of any computation in Section 11(a)(ii) and Section 13, the "current
market price" per, or "value" of a, 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 20 consecutive Trading Days immediately
following such date; provided, however, that in the event that the
current market price (or value) per share of the Common Stock is
determined during the period following the announcement by the issuer of
such Common Stock of (A) a dividend or distribution on such Common
Stock payable in shares of such Common Stock or securities convertible
into shares of such Common Stock, or (B) any sub-division,
combination or reclassification of such Common Stock, and prior to
the expiration of 30 Trading Days or 20 Trading Days, as the case may
be, after the ex-dividend date for such dividend or distribution, or the
record date for such sub-division, combination or reclassification,
then, and in each such case, the "current market price" or "value"
shall be appropriately adjusted to take into account ex-dividend
trading. The closing price for each day shall be the last sale
price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the shares of the
Common Stock are not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the
principal national securities exchange on which the shares of the
Common Stock are listed or admitted to trading or, if the shares of the
Common Stock are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter
market, as reported by the National Association of Securities
Dealers, Inc. Automated Quotation System ("NASDAQ") or such other
system then in use, or, if on any such date the shares of the Common
Stock are not quoted by such organization, the average of the closing
bid and asked prices as furnished by a professional market maker
making a market in the Common Stock selected by the Board of Directors
of the Company (with the concurrence of a majority of the Continuing
Directors). If on any such date no market maker is making a market
in the Common Stock, the fair value of such shares on such date shall be
as determined in good
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23
faith by the Board of Directors, with the concurrence of a majority
of the Continuing Directors, if the Continuing Directors constitute a
majority of the Board of Directors, or, in the event the Continuing
Directors do not constitute a majority of the Board of Directors, by an
independent investment banking firm selected by the Board of Directors.
The term "Trading Day" shall mean a day on which the principal national
securities exchange on which the shares of Common Stock are listed or
admitted to trading is open for the transaction of business or, if the
shares of the Common Stock are not listed or admitted to trading on any
national securities exchange, a Monday, Tuesday, Wednesday, Thursday
or Friday on which banking institutions in the State of Michigan
are not authorized or obligated by law or executive order to close.
If the Common Stock is not publicly held or not so listed or traded,
"current market price" per share shall mean the fair value per share
as determined in good faith by the Board of Directors, with the
concurrence of a majority of the Continuing Directors, if the
Continuing Directors constitute a majority of the Board of Directors,
or, in the event the Continuing Directors do not constitute a
majority of the Board of Directors, by an independent investment banking
firm selected by the Board of Directors, whose determination shall be
described in a statement filed with the Rights Agent and shall be
conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the "current
market price" per share of Preferred Stock shall be determined in the
same manner as set forth above for the Common Stock in clause (i) of this
Section 11(d) (other than the last sentence thereof). If the current
market price per share of Preferred Stock cannot be determined in the
manner provided above or if the Preferred Stock is not publicly held or
listed or traded in a manner described in clause (i) of this Section
11(d), the "current market price" per share of Preferred Stock shall
be conclusively deemed to be an amount equal to 100 (as such number may
be appropriately adjusted for such events as stock splits, stock
dividends and recapitalizations with respect to the Common Stock
occurring after the date of this Agreement) multiplied by the current
market price per share of the Common Stock. If neither the Common
Stock nor the Preferred Stock is publicly held or so listed or traded,
"current market price" per share of the Preferred Stock shall mean
the fair value per share as determined in good faith by the Board of
Directors
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24
of the Company (with the concurrence of a majority of the
Continuing Directors), whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all
purposes. For all purposes of this Agreement, the "current market price"
of one one-hundredth of a share of Preferred Stock shall mean the
"current market price" per share of Preferred Stock divided by 100.
(e) No adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in
such price; provided, however, that any adjustments which by reason of this
Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest cent or to the nearest
ten-thousandth of a share as the case may be. Notwithstanding the first
sentence of this Section 11(e), any adjustment required by this Section 11
shall be made no later than the earlier of (i) three years from the date of
the transaction which mandates such adjustment or (ii) the 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), the
holder of any Right thereafter exercised shall become entitled to receive
any shares of capital stock of the Company other than Preferred Stock,
thereafter the number of such other shares so receivable upon exercise of
any Right shall be subject to adjustment from time to time in a manner
and on terms as nearly equivalent as practicable to the provisions with
respect to the Preferred Stock contained in Section 11(a) through (p),
inclusive, and the provisions of Section 7, Section 9, Section 10, Section
13, Section 14 and Section 27 with respect to the Preferred Stock shall
apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths
of a share of Preferred Stock purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the 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 one one-hundredths of a share of Preferred Stock (calculated
to the nearest one-millionth) obtained by (i) multiplying (x)
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25
the number of one one-hundredths of a share covered by a Right immediately
prior to such 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 one one-hundredths of a share of Preferred Stock
purchasable upon the exercise of a Right. Each of the Rights outstanding
after such adjustment of the number of Rights shall be exercisable for the
number of one one-hundredths of a share of Preferred Stock for which a Right
was exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that
number of Rights (calculated to the nearest 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 the
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 to be made. This record date may be the date
on which the Purchase Price is adjusted or any day thereafter, but, if the
Right Certificates have been issued, shall be at least 10 days later than
the date of the public announcement. If Right Certificates have been issued,
upon each adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of Right Certificates on such record date Right
Certificates evidencing, subject to Section 14, the additional Rights to which
such holders shall be entitled as a result of such adjustment, or, at the
option of the Company, shall cause to be distributed to such holders of
record in substitution and replacement for the 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 may bear, at the option
of the Company, the adjusted Purchase Price) and shall be registered in the
names of the holders of record of 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 one one-hundredths of a share of Preferred Stock
issuable upon the exercise of the Rights, the Right Certificates theretofore
and thereafter issued may continue to express the Purchase Price per one
one-hundredth of
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a share and the number of one one-hundredths of a share 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 one one-hundredth of the then par value,
if any, of a share of Preferred Stock issuable upon exercise of the Rights,
the Company shall take any corporate action which may, in the opinion of
its counsel, be necessary in order that the Company may validly and
legally issue fully paid and nonassessable one one-hundredths of a share of
such Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of
such event the issuing to the holder of any Right exercised after such
record date the number of one one-hundredths of a share of Preferred
Stock and other capital stock or securities of the Company, if any, issuable
upon such exercise over and above the number of one one-hundredths of a share
of Preferred Stock and other capital stock or securities of the Company, if
any, issuable upon such exercise on the basis of the Purchase Price in
effect prior to such adjustment; provided, however, that the Company shall
deliver to such holder a due 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, acting by resolution of its Board of Directors (which resolution
shall be effective only with the concurrence of a majority of the
Continuing Directors), 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
Preferred Stock, issuance wholly for cash of any of the shares of Preferred
Stock at less than the current market price, issuance wholly for cash of the
Preferred Stock or securities which by their terms are convertible into
or exchangeable for Preferred Stock, stock dividends or issuance of rights,
options or warrants referred to hereinabove in this Section 11, hereafter
made by the Company to holders of its Preferred Stock shall not be taxable to
such shareholders.
(n) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Sections 23 and 26 hereof, take (nor
will it permit any of its subsidiaries to take) any action if at the time
such is taken it is reasonably foreseeable that such action will diminish
substan
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tially or otherwise eliminate the benefits intended to be afforded by the
Rights, unless such action is approved by a majority of the Continuing
Directors and the Continuing Directors constitute a majority of the Board of
Directors. Consolidation and Merger as used in this Section 11(o) shall include
other forms of business combinations, including a ""plan of share exchange as
such other term is used in the Michigan Business Corporation Act.
(o) The Company covenants and agrees that it shall not, at any time
after the Distribution Date, (i) consolidate with any other Person (other than
a Subsidiary of the Company in a transaction which complies with Section
11(q) hereof), (ii) merge with or into any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section
11(q) hereof), or (iii) sell or transfer (or permit any of its subsidiaries
to sell or transfer), in one or more transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to, any other Person (other than the
Company and/or any of its Subsidiaries in one or more transactions each of
which complies with Section 11(q) hereof), if (x) at the time of or immediately
after such consolidation, merger or sale there are any rights, warrants or
other instruments or securities outstanding or agreements in effect which
would substantially diminish or otherwise eliminate the benefits intended to
be afforded by the Rights or (y) prior to, simultaneously with or immediately
after such consolidation, merger or sale, the shareholders of the Person who
constitutes, or would constitute, the "Principal Party" for purposes of
Section 13(a) hereof shall have received a distribution of Rights previously
owned by such Person or any of its Affiliates and Associates. The Company
shall not consummate any such consolidation, merger, sale or transfer unless
prior thereto the Company and such other Person shall have executed and
delivered to the Rights Agent a supplemental agreement evidencing compliance
with this Section 11(o). Consolidation and Merger as used in this Section
11(o) shall include other forms of business combinations, including a "plan of
share exchange" as such term is used in the Michigan Business Corporation Act.
(p) Anything in this Agreement to the contrary notwithstanding, in the
event the Company shall at any time after the date of this Agreement and
prior to the Distribution Date (i) declare or pay any dividend on the Common
Stock of the Company payable in such Common Stock or (ii) subdivide the
outstanding Common Stock of the Company into a greater number of shares (by
reclassification or otherwise than by payment of dividends in such Common
Stock) or (iii) combine or consolidate the outstanding Common Stock of the
Company into a smaller number of shares, then in any such case, (x) the
number of one one-hundredths of a share of Preferred Stock purchasable
after such event upon proper exercise of each Right shall be determined by
multiplying the number of one one-hundredths of a share of Preferred Stock
so purchasable immediately prior to such event by a fraction, the numerator of
which is the number of shares of Common Stock of the Company outstanding
immediately before such event and the denominator of which is the number of
shares of such Common Stock outstanding immediately after
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such event and (y) action shall be taken such that each share of Common Stock
of the Company outstanding immediately after such event shall have issued
with respect to it that number of Rights which each share of such
Common Stock outstanding immediately prior to such event had issued with
respect to it. The Company may elect on or after the date of any
adjustment of the number of one one-hundredths of a share of Preferred Stock
purchasable upon proper exercise of each Right pursuant to this Section
11(p), to adjust the Purchase Price. The adjustments provided for in this
Section 11(p) shall be made successively whenever such a dividend is
declared or paid or such a subdivision, combination or consolidation is
effected. If an event occurs which would require an adjustment under
Section 11(a)(ii) and this Section 11(p), the adjustments provided for in
this Section 11(p) shall be in addition and prior to any adjustment required
pursuant to Section 11(a)(ii).
(q) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23, Section 26 or Section
27 hereof, take (or permit any Subsidiary to take) any action if at the time
such action is taken it is reasonably foreseeable that such action will
diminish substantially or otherwise eliminate the benefits intended to be
afforded by the Rights.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF
SHARES. Whenever an adjustment is made as provided in Sections 11 and 13,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such
adjustment, (b) promptly file with the Rights Agent and with each transfer
agent for the Preferred Stock and the Common Stock a copy of such certificate
and (c) mail a brief summary thereof to each holder of a Right Certificate
(or, if prior to the Distribution Date, to each holder of a certificate
representing shares of Common Stock) in accordance with Section 25. The
Rights Agent shall be fully protected in relying on any such certificate and
on any adjustment therein contained. Notwithstanding the foregoing sentence,
the failure of the Company to make such certificate or give such notice
shall not affect the validity or the force or effect of the requirement
for such adjustment. Any adjustment to be made pursuant to Sections 11
and 13 shall be effective as of the date of the event giving rise to such
adjustment.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER. (a) In the event that, following the Distribution
Date, directly or indirectly, (x) the Company shall consolidate with, or
merge with and into, any other Person (other than a Subsidiary of the
Company in a transaction that complies with Section 11(q) hereof) and the
Company shall not be the continuing or surviving corporation of such
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consolidation or merger, (y) any Person (other than a Subsidiary of the
Company in a transaction that complies with Section 11(q) hereof) shall
consolidate with or merge with and into the Company, the Company shall be the
continuing or surviving corporation of such merger and, in connection with
such merger, all or part of the Common Stock shall be changed into or
exchanged for stock or other securities of any other Person (or the Company)
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 or more transactions, assets or earning power aggregating
more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person (other than the Company
or any Subsidiary of the Company in one or more transactions each of
which complies with Section 11(q) hereof), 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 shares of
validly issued, fully paid, non-assessable and freely tradable Common Stock
of the Principal Party (as hereinafter defined), not subject to any rights of
call or first refusal, as shall be equal to the result obtained by (1)
multiplying the then current Purchase Price by the then number of one
one-hundredths of a share of Preferred Stock for which a Right is then
exercisable (or, if a Triggering Event has occurred prior to the first
occurrence of an event set forth in this Section 13(a), multiplying the number
of such one one-thousandths of a share for which a Right was exercisable
immediately prior to the first occurrence of a Triggering Event by the
Purchase Price in effect immediately prior to such first occurrence), and
dividing that product by (2) 50% of the current market price per share of the
Common Stock of such Principal Party (determined in the manner described in
Section 11(d)) on the date of consummation of such consolidation, merger,
sale or transfer; (ii) the Principal Party shall thereafter be liable for,
and shall assume, by virtue of such consolidation, merger, sale or transfer,
all the obligations and duties of the Company pursuant to this Agreement;
(iii) the term "Company" shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply to such Principal Party; (iv) such
Principal Party shall take such steps (including, but not limited
to, the reservation of a sufficient number of shares of its Common Stock in
accordance with Section 9) in connection with such consummation as may be
necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to the shares of
its Common Stock thereafter deliverable upon the exercise of the Rights; and
(v) the provisions of Section 11(a)(ii) hereof shall be of no effect
following the first occurrence of any of the transactions described in
Section 13(a) hereof.
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(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), (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, or, if there is
more than one such issuer, the issuer the Common Stock of which has the
greatest aggregate market value, or (B) if no securities are so
issued, (1) the Person that survives such consolidation or is the
other party to the merger and survives such merger, or, if there is more
than one such Person, the Person the Common Stock of which has the
greatest aggregate market value or (2) if the Person that is the
other party to the merger does not survive the merger, the Person that
does survive the merger (including the Company if it survives); 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, or, if each Person that is a
party to such transaction or transactions receives the same portion
of the assets or earning power so transferred, or if the Person
receiving the greatest portion of the assets or earning power cannot be
determined, the Person the Common Stock of which has the greatest
aggregate market value;
provided, however, that in any such case, (x) if the Common Stock of such
Person is not at such time and has not been continuously over the
preceding 12-month period registered under Section 12 of the Securities
Exchange Act of 1934, 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; (y) in case such Person
is a subsidiary, directly or indirectly, of more than one Person, the
Common Stocks of all of which are and have been so registered,
"Principal Party" shall refer to whichever of such Person is the issuer
of the Common Stock having the greatest market value of shares held by the
public, and (z) in case such Person is owned, directly or indirectly, by a
joint venture formed by two or more Persons that are not owned, directly or
indirectly, by the same Person, the rules set forth in (x) and (y) above
shall apply to each of the chains of ownership having an interest in
such joint venture as if such party were a "subsidiary" of both or all
of such joint venturers and the Principal Parties in each such chain shall
38
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bear the obligations set forth in this Section 13 in the same ratio as their
direct or indirect interests in such Person bear to the total of such
interests.
(c) The Company shall not consummate any such consolidation, merger,
sale or transfer unless the Principal Party shall have a sufficient number
of authorized shares of its Common Stock 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 of 1933, as amended (the "Act") with respect to the Rights and
the securities purchasable upon exercise of the Rights on an
appropriate form, will use its best efforts to cause such registration
statement to become effective as soon as practicable after such filing
and will use its best efforts to cause such registration statement to
remain effective (with a prospectus at all times meeting the
requirements of the Act) until the date of expiration of the
Rights; 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 Securities Exchange Act of 1934 (whether or not the Principal Party
would otherwise be required to file such Form).
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. In the event
that one of the transactions described in Section 13(a) hereof shall
occur at any time after the occurrence of a transaction described in Section
11(a)(ii) hereof, the Rights which have not theretofore been exercised
shall thereafter become exercisable in the manner described in Section
13(a).
(d) Notwithstanding anything in this Agreement to the contrary,
Section 13 shall not be applicable to a transaction described in
subparagraphs (x) and (y) of Section 13(a) if (i) such transaction is
consummated with a Person or Persons who acquired shares of Common Stock
pursuant to a tender or exchange offer for all outstanding shares of Common
Stock which
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complies with the provisions of Section 11(a)(ii)(B) hereof (or a wholly
owned subsidiary of any such Person or Persons), (ii) the price per share of
Common Stock offered in such transaction is not less than the price per
share of Common Stock paid to all holders of shares of Common Stock whose
shares were purchased pursuant to such tender or exchange offer and (iii)
the form of consideration being offered to the remaining holders of shares of
Common Stock pursuant to such transaction is the same as the form of
consideration paid pursuant to such tender or exchange offer. Upon
consummation of any transaction contemplated by this Section 13(d), all Rights
hereunder shall expire.
(e) Consolidation and Merger as used in this Section 13 shall include
other forms of business combinations, including a "plan of share exchange" as
such term is used in the Michigan Business Corporation Act.
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. (a) The Company
shall not be required to issue fractions of Rights or to distribute Right
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the
current market value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price for
any day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted
to trading on the New York Stock Exchange or, if the Rights are not listed
or admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted
price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not quoted by any
such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Rights
selected by the Board of Directors of the Company (with the concurrence of
a majority of the Continuing Directors). If on any such date no such market
maker is making a market in the Rights the fair value of the Rights on such
date as determined in good faith by the Board of Directors of the Company
(with the concurrence of a majority of the Continuing Directors) shall be
used.
(b) The Company shall not be required to issue fractions of shares
(other than fractions which are integral multiples of one one-hundredths of a
share of Preferred Stock)
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upon exercise of the Rights or to distribute certificates which evidence
fractional shares (other than fractions which are integral multiples of one
one-hundredth of a share of Preferred Stock). Fractions of shares of
Preferred Stock in integral multiples of one one-hundredth of a share may,
at the election of the Company, be evidenced by depositary receipts,
pursuant to an appropriate agreement between the Company and a depositary
selected by it; provided, however, that such agreement shall provide that
the holders of such depositary receipts shall have all the rights,
privileges and preferences to which they are entitled as beneficial owners
of the shares of Preferred Stock represented by such depositary receipts.
In lieu of fractional shares that are not integral multiples of one
one-hundredth of a share of Preferred Stock, the Company may pay to the
registered holders of Right Certificates at the time such Right
Certificates are exercised as herein provided an amount in cash equal to the
same fraction of the current market value of one one-hundredth of a share
of Preferred Stock. For purposes of this Section 14(b), the current market
value of one one-hundredth of a share of Preferred Stock shall be one
one-hundredth of the closing price of a share of Preferred Stock (as
determined pursuant to Section 11(d)(ii)) for the Trading Day immediately
prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event, the Company shall
not be required to issue fractions of shares of Common Stock upon exercise of
the Rights or to distribute certificates which evidence fractional shares
of Common Stock. In lieu of fractional shares of Common Stock, the
Company may pay to the registered holders of Rights Certificates at the
time such Rights are exercised as herein provided an amount in cash equal to
the same fraction of the current market value of one (1) share of Common
Stock. For purposes of this Section 14(c), the current market value of
one share of Common Stock shall be the closing price of one share of Common
Stock (as determined pursuant to Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the Rights expressly
waives his right to receive any fractional Rights or any fractional shares
upon exercise of a Right.
SECTION 15. RIGHTS OF ACTION. All rights of action in respect
of this Agreement, except for the rights of actions given to the Rights Agent
under Section 18 hereof, are vested in the respective registered holders of the
Right Certificates (and, prior to the Distribution Date, the registered
holders of the Common Stock); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Stock), without
the consent of the Rights Agent or of the holder of any other Right
Certificate (or, prior to the Distribution Date, of the Common Stock), may,
in his own behalf and
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for his own benefit, enforce, and may institute and maintain any suit,
action or proceeding against the Company to enforce, or otherwise act in
respect of, his right to exercise the Rights evidenced by such Right
Certificate in the manner provided in such Right Certificate and in this
Agreement and subject to the limitations set forth in such Right
Certificates 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 shall be evidenced
by the certificates for shares of the Common Stock registered in the
name of the holders of such shares (which certificates shall also
constitute Rights Certificates) and will be transferable only in
connection with the transfer of the Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the principal office of the Rights Agent, duly endorsed
or accompanied by a proper instrument of transfer and with the appropriate
forms and certificates fully executed; and
(c) subject to Section 6, Section 7(e) and Section 7(f)
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, subject to the last
sentence of Section 7(e) hereof, shall be affected by any notice to the
contrary.
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(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability
to perform any of its obligations under this Agreement by reason of
any preliminary or permanent injunction or other order, decree or
ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, or any
statute, rule, regulation or executive order promulgated or enacted by
any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must
use its best efforts to have any such order, decree or ruling lifted
or otherwise overturned as soon as possible.
SECTION 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of one
one-hundredths of a share of Preferred Stock or any other securities of the
Company which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Right
Certificate be construed to confer upon the holder of any Right Certificate,
as such, any of the rights of a shareholder of the Company or any right to
vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions
affecting shareholders (except as provided in Section 24), 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. 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 (including reasonable expenses of the Rights
Agent's legal counsel), incurred without gross negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done or
omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of
defending against any claim of liability in the premises, or by reason of or
as a result of the Rights Agent's
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compliance with the instructions set forth in this Agreement or with any
written or oral instructions delivered to the Rights Agent pursuant hereto.
The costs and expenses incurred in enforcing this right of indemnification
shall be paid by the Company.
The Rights Agent shall be protected and shall incur no liability for
or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon
any Right Certificate or certificate for the Common Stock or for other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be
genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper person or persons.
SECTION 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 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. 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 so
countersigned; and in case at that time any of the Right Certificates shall
not have been countersigned, any successor Rights Agent may countersign such
Right Certificates either in the name of the predecessor Rights Agent or in
the name of the successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and
in the 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.
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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) 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 only for its own
gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or
in the Right Certificates (except its countersignature thereof) or be
required to verify the same, but all such statements and recitals are and
shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Right Certificate (except
its countersignature thereof); nor shall it be responsible for any
breach by the Company of any 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
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becoming void pursuant to any provision of this Agreement); nor shall
it be responsible for any adjustment required under the provisions of
Sections 11 or 13 or responsible for the manner, method or amount of
any such adjustment or the ascertaining of the existence of facts
that would require any such adjustment (except with respect to the
exercise of Rights evidenced by Right Certificates after actual notice
of any such change or adjustment); nor shall it by any act hereunder be
deemed to make any representation or warranty as to the authorization
or reservation of any shares of the Common Stock to be issued pursuant to
this Agreement or any Right Certificate or as to whether any shares of
the Common Stock will, when issued, be validly authorized and issued,
fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged
and delivered all such further and other acts, instruments and
assurances as may reasonably be required by the Rights Agent for the
carrying out or performing by the Rights Agent of the provisions of this
Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from any one of the Chairman of the Board, the President,
any Vice-President, the Secretary or the Treasurer of the Company, and
to apply to such officers for advice or instructions in connection
with its duties, and it shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with
instructions of any such officer.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested,
or contract with or lend money to the Company or otherwise act as fully
and freely as though it were not Rights Agent under this Agreement.
Nothing herein shall preclude the Rights Agent from acting in any
other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights Agent
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shall not be answerable or accountable for any act, default,
neglect or misconduct of any such attorneys or agents or for any
loss to the Company resulting from any such act, default, neglect
or misconduct, provided reasonable care was exercised in the
selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of its rights if there shall be reasonable grounds for believing
that repayment of such funds or adequate indemnification against such
risk or liability is not reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to
the form of assignment or form of election to purchase, as the case
may be, has either not been completed or indicates an affirmative
response to clause l and/or 2 thereof, the Rights Agent shall not
take any further action with respect to such requested exercise or
transfer without first consulting with the Company.
SECTION 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under
this Agreement upon 30 days' notice in writing mailed to the Company and to
each transfer agent of the Preferred Stock and Common Stock by registered or
certified mail, and the Company will mail said notice to the holders of the
Right Certificates by first class mail. The Company may remove the Rights
Agent or any successor Rights Agent upon 30 days' notice in writing, mailed to
the Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Preferred Stock and 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 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
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corporation organized and doing business under the laws of the United States
or of any state of the United States, so long as such corporation is
authorized to do business as a transfer agent or banking institution in the
State of Michigan, in good standing under the laws of its jurisdiction
of incorporation, which is authorized under such laws to exercise
corporate trust powers and is subject to supervision or examination by
federal or state authority or which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $50 million.
After appointment, the successor Rights Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent any property at
the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the
effective date of any such appointment the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent
of the Preferred Stock and 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 per share and the number or
kind or class of shares or other securities or property purchasable under
the Right Certificates made in accordance with the provisions of this
Agreement. In addition, in connection with the issuance or sale of shares of
Common Stock following the Distribution Date and prior to the redemption or
expiration of the Rights, the Company (a) shall, with respect to shares
of Common Stock so issued or sold pursuant to the exercise of stock options
or under any employee plan or arrangement outstanding, granted or awarded as
of the Distribution Date, or upon the exercise, conversion or exchange
of securities hereinafter issued by the Company, and (b) may, in any
other case, if deemed necessary or appropriate by the Board of Directors
of the Company, issue Rights Certificates representing the appropriate
number of Rights in connection with such issuance or sale; provided,
however, that (i) no such Rights Certificate shall be issued if, and to the
extent that, the Company shall be advised by counsel that such issuance would
create a significant risk of material adverse tax consequences to the Company
or the person to whom such Rights
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Certificate would be issued, and (ii) no such Rights Certificate shall be
issued, if and to the extent that, appropriate adjustment shall otherwise
have been made in lieu of the issuance thereof.
SECTION 23. REDEMPTION. (a) The Board of Directors of the Company
may, at its option, at any time prior to 5:00 P.M., Ann Arbor time, on the
earlier of (x) the tenth business day following the Shares Acquisition
Date, or (y) the Final Expiration Date, redeem all but not less than all of
the then outstanding Rights at a redemption price of $.0025 per Right
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"), provided, however, that if
such redemption occurs on or after the Shares Acquisition Date the Board of
Directors of the Company shall be entitled to so redeem the Rights only if
Continuing Directors constitute a majority of the Board of Directors at the
time of such redemption and such redemption is approved by a majority of
the Continuing Directors; provided, further, that if such redemption occurs on
or after the date of a change (resulting from a proxy or consent solicitation
effected in compliance with applicable law and the requirements of any
national securities exchange on which the Common Stock of the Company is
listed) in a majority of the directors in office at the commencement of such
solicitation if any Person who is a participant in such solicitation has
stated (or, if upon the commencement of such solicitation, a majority of
the Board of Directors has determined in good faith) that such Person (or
any of its Affiliates or Associates) intends to take, or may consider
taking, any action which would result in such Person becoming an Acquiring
Person or which would cause the occurrence of a Triggering Event, the Board
of Directors of the Company shall be entitled to so redeem the Rights only
if Continuing Directors who were members of the Board of Directors prior to
the proxy or consent solicitation referred to above (or subsequently became
a member of the Board of Directors and whose nomination for election or
election thereto was recommended or approved by a majority of the Redemption
Continuing Directors) (the "Redemption Continuing Directors") constitute a
majority of the Board of Directors at the time of such redemption and such
redemption is approved by a majority of the Redemption Continuing
Directors; provided, further, however, that if, following the occurrence of a
Shares Acquisition Date and following the expiration of the right of
redemption hereunder but prior to any Triggering Event, each of the following
shall have occurred and remain in effect: (i) a Person who is an Acquiring
Person shall have
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transferred or otherwise disposed of a number of shares of Common Stock
in a transaction, or series of transactions, which did not result in the
occurrence of a Triggering Event such that such Person is thereafter a
Beneficial Owner of 5% or less of the outstanding shares of Common Stock,
(ii) there are no other Persons, immediately following the occurrence of the
event described in clause (i), who are Acquiring Persons, and (iii) the
transfer or other disposition described in clause (i) above was other than
pursuant to a transaction, or series of transactions, which directly or
indirectly involved the Company or any of its Subsidiaries; then the right
of redemption shall be reinstated and thereafter be subject to the provisions
of this Section 23. Notwithstanding anything contained in this Agreement
to the contrary, the Rights shall not be exercisable pursuant to Section
11(a)(ii) prior to the expiration of the Company's right of redemption
pursuant to this Section 23(a) without regard to the last proviso.
(b) During the period commencing at the close of business on the
tenth business day following the Shares Acquisition Date and terminating on the
earlier of (x) the occurrence of a Triggering Event and (y) the Final
Expiration Date, the Board of Directors of the Company may, at its option,
redeem all but not less than all of the then outstanding Rights at the
Redemption Price, provided that (i) such redemption is in connection with the
consummation of an event set forth in clause (x) or (y) of Section 13(a),
(ii) no Acquiring Person, and no Affiliate or Associate of an Acquiring
Person (other than the Company or its subsidiaries) is a constituent
corporation to such event; and (iii) such redemption is approved either
by a majority of the Continuing Directors as being in their judgment in the
best interest of the Company and its stockholders and the Continuing
Directors constitute a majority of the Board of Directors at the time of such
redemption.
(c) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, and without any further
action and without any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of Rights shall be
to receive the Redemption Price. The Company shall promptly give public
notice of any such redemption; provided, however, that the failure to give,
or any defect in, any such notice shall not affect the validity of such
redemption. Within 10 days after the action of the Board of Directors
ordering the redemption of the Rights, the Company shall give notice of
such redemption to the holders of the then outstanding Rights by mailing such
notice to all such holders at their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the Transfer Agent for the Common Stock. Any notice which
is mailed in the
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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. Neither the Company
nor any of its Affiliates or Associates may redeem, acquire or purchase for
value any Rights at any time in any manner other than that specifically set
forth in this Section 23, and other than in connection with the repurchase of
Common Stock prior to the Distribution Date.
SECTION 24. NOTICE OF CERTAIN EVENTS. In case the Company shall
propose at any time following the Distribution Date (a) to pay any dividend
payable in stock of any class to the holders of Preferred Stock or to make any
other distribution to the holders of Preferred Stock (other than a regular
periodic cash dividend at a rate not in excess of 125% of the rate of the
last cash dividend theretofore paid), or (b) to offer to the holders of
Preferred Stock rights or warrants to subscribe for or to purchase any
additional shares of Preferred Stock or shares of stock of any class or
any other securities, rights or options, or (c) to effect any
reclassification of its Preferred Stock (other than a reclassification
involving only the subdivision of outstanding Preferred Stock), or (d)
to effect any consolidation, merger or other business combination into or
with, or to effect any sale or other transfer (or to permit one or more of its
subsidiaries to effect any sale or other transfer), in one or more
transactions, of more than 50% of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to, any other Person, or (e) to
effect the liquidation, dissolution or winding up of the Company, then, in
each such case, the Company shall give to each holder of a Right, in
accordance with Section 25, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend, distribution
of rights or Rights, or the date on which such reclassification,
consolidation, merger, business combination, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the Preferred Stock, if any such date is to be
fixed, and such notice shall be so given in the case of any action covered by
clause (a) or (b) above at least twenty days prior to the record date for
determining holders of the Preferred Stock for purposes of such action, and
in the case of any such other action, at least twenty days prior to the
date of the taking of such proposed action or the date of participation
therein by the holders of the Preferred Stock, whichever shall be the
earlier.
In case any of the events set forth in Section 11(a)(ii) of this
Agreement shall occur, then, in any such case, the Company shall as soon
as practicable thereafter give to each holder of a Right, in accordance with
Section 25, a
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notice of the occurrence of such event, which shall specify the event
and the consequences of the event to holders of Rights under Section 11(a)(ii).
SECTION 25. NOTICES. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed
in writing with the Rights Agent) as follows:
Comshare, Incorporated
555 Briarwood Circle
Ann Arbor, MI 48108
Subject to the provisions of Section 21, 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 deemed given or made
upon receipt and shall be addressed (until another address is filed in
writing with the Company) as follows:
KeyBank National Association
15th Floor
127 Public Square
Cleveland, OH 44114
Notices or demands authorized by this Agreement to be given or made
by the Company or the Rights Agent to the holder of any Right
Certificate shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such holder as
shown on the registry books of the Company.
SECTION 26. SUPPLEMENTS AND AMENDMENTS. Prior to the Distribution
Date and subject to the penultimate sentence of this Section 26, the
Company may, by resolution of its Board of Directors (which resolution,
if adopted following the Shares Acquisition Date, shall be effective only
with the concurrence of a majority of the Continuing Directors and only if
the Continuing Directors constitute a majority of the directors then in
office) 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 may, by resolution of its Board of Directors (which
resolution shall be effective only with the concurrence of the Continuing
Directors and only if the Continuing Directors constitute a majority of the
directors then in office), and the Rights Agent shall, if the Company so
directs, supplement or amend this Agreement without the
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approval of any holders of Rights Certificates in order (i) to cure any
ambiguity, (ii) to correct or supplement any provisions contained herein which
may be defective or inconsistent with any other provisions herein, (iii) to
shorten or lengthen any time period hereunder, or (iv) to change or
supplement the provisions hereunder in any manner which the Company may deem
necessary or desirable and which shall not adversely affect the interests of
the holders of Rights (other than an Acquiring Person or an Affiliate or
Associate of any such Person); provided, however, this Agreement may not be
supplemented or amended to lengthen, pursuant to clause (iii) of this
sentence, (A) whether before or after the Distribution Date, a time period
relating to which the Rights may be redeemed at such time as the Rights are
not then redeemable, or (B) after the Distribution Date, 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
(other than an Acquiring Person or an Affiliate or Associate of any such
Person). 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. 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. EXCHANGE. (a) The Board of Directors of the Company
(with the concurrence of a majority of the Continuing Directors) may, at its
option, at any time after any Person becomes an Acquiring Person, exchange
all or part of the then outstanding and exercisable Rights (which shall not
include Rights that have become void pursuant to the provisions of Section
7(e) hereof) for shares of Common Stock at an exchange ratio of one share of
Common Stock per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such
exchange ratio being hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors of the Company shall not
be empowered to effect such exchange at any time after any Person (other
than the Company, any Subsidiary of the Company, any employee benefit plan of
the Company or of any Subsidiary of the Company or any Person or entity
organized, appointed or established by the Company for or pursuant to the
terms of any such plan), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of 50% or more of the shares of Common
Stock then outstanding.
(b) Immediately upon the action of the Board of Directors
ordering the exchange of any Rights pursuant to subsection (a) of this Section
27 and without any further
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action and without any notice, the right to exercise such Rights shall
terminate and the only right thereafter of a holder of such Rights shall be to
receive that number of shares of Common Stock equal to the number of such
Rights held by such holder multiplied by the Exchange Ratio. The Company
shall promptly give public notice of any such exchange; provided, however,
that the failure to give, or any defect in, such notice shall not affect
the validity of such exchange. The Company promptly shall mail a notice of
any such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent. Any
notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such notice of
exchange will state the method by which the exchange of the shares of Common
Stock for Rights will be effected and, in the event of any partial exchange,
the number of Rights which will be exchanged. Any partial exchange shall
be effected pro rata based on the number of Rights (other than Rights
which have become void pursuant to the provisions of Section 7(e) hereof)
held by each holder of Rights.
(c) In the event that there shall not be sufficient shares of Common
Stock issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 27, the
Company shall take all such action as may be necessary to authorize
additional shares of Common Stock for issuance upon exchange of the Rights.
In the event the Company shall, after good faith effort, be unable to
take all such action as may be necessary to authorize such additional
shares of Common Stock, the Company shall substitute, for each share of
Common Stock that would otherwise be issuable upon exchange of a Right,
a number of shares of Preferred Stock or fraction thereof such that the
current per share market price of one share of Preferred Stock multiplied by
such number or fraction is equal to the current per share market price of
one share of Common Stock as of the date of issuance of such shares of
Preferred Stock or fraction thereof.
(d) The Company shall not be required to issue fractions of shares of
Common Stock or to distribute certificates which evidence fractional
shares of Common Stock. In lieu of such fractional Common Shares, the
Company shall pay to the registered holders of the Rights Certificates with
regard to which such fractional shares of shares of Common Stock would
otherwise be issuable an amount in cash equal to the same fraction of the
current market value of a whole share of Common Stock. For the purposes of
this paragraph (d), the current market value of a whole share of Common Stock
shall be the closing price of a share of Common Stock (as determined
pursuant to the third sentence of Section 11(d)(i) hereof) for the
Trading Day immediately prior to the date of exchange pursuant to this Section
27.
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SECTION 28. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
SECTION 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS, ETC.
For all purposes of this Agreement, any calculation of the number of shares
of Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common
Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the provisions of Rule 13d-3(d)(1)(i) of the General Rules
and Regulations under the Exchange Act. The Board of Directors of the
Company (and, where specifically provided for herein, the Continuing
Directors) shall have the exclusive power and authority to administer this
Agreement and to exercise all rights and powers specifically granted to the
Board, or the Company (or, as expressly provided, the Continuing Directors),
or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i)
interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the Rights or
to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purpose of clause (ii)
below, all omissions with respect to the foregoing) which are done or made by
the Board (or, as provided for, by the Continuing Directors) in good
faith, shall (i) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Right Certificates and all other parties,
and (ii) not subject the Board or the Continuing Directors to any liability to
the holders of the Rights Certificates.
SECTION 30. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement
shall be construed to give to any person or corporation other than the
Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Stock) any
legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Right Certificates.
SECTION 31. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated; provided, however, that notwithstanding anything in this
Agreement to the contrary, if any such term,
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provision, covenant or restriction is held by such court or authority to be
invalid, void or unenforceable and the Board of Directors of the
Company (with the concurrence of a majority of the Continuing Directors)
determines in its good faith judgment that severing the invalid language
from this Agreement would adversely affect the purpose or effect of this
Agreement, the right of redemption set forth in Section 23 hereof shall be
reinstated and shall not expire until the close of business on the tenth
business day following the date of such determination by the Board of
Directors. Without limiting the foregoing, if any provision of this
Agreement requiring that a determination be made by a Board of Directors
composed of a majority of Continuing Directors or by the Board of Directors
with the concurrence of a majority of the Continuing Directors is held
by a court of competent jurisdiction or other authority to be
invalid, void or unenforceable, such determination shall then be made
by the Board of Directors in accordance with applicable law and the
Company's Articles of Incorporation and Bylaws.
SECTION 32. 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 Michigan 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 33. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
SECTION 34. DESCRIPTIVE HEADINGS. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
Attest: COMSHARE, INCORPORATED,
The Company
By /s/ Janet L. Neary By /s/ Kathryn A. Jehle
--------------------- ---------------------------------
Title: Secretary Title: Senior Vice President, Chief
Financial Officer, Treasurer and
Assistant Secretary
Attest: KEYBANK NATIONAL ASSOCIATION,
Rights Agent
By /s/ Laura Krebs By /s/ Kathryn A. Gallagher
----------------------------- ----------------------------
Title: Assistant Vice President Title: Assistant Vice President
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EXHIBIT A
FORM OF CERTIFICATE OF AMENDMENT TO
ARTICLES OF INCORPORATION DETERMINING
THE TERMS OF THE SERIES A PREFERRED STOCK
of
COMSHARE, INCORPORATED
It is certified that:
FIRST: That the name of the corporation is Comshare, Incorporated
(the "Corporation").
SECOND: The Corporation identification number (CID) assigned by the
Bureau is: 085-703.
THIRD: The location of its registered office is: 30600 Telegraph Road,
Bingham Farms, Michigan 48025.
FOURTH: That pursuant to the authority conferred upon the Board of
Directors by the Articles of Incorporation of said Corporation, the Board of
Directors of the Corporation on September 12, 1996, duly adopted the
following resolution creating a series of 200,000 shares of Preferred Stock,
no par value, designated as Series A Preferred Stock:
RESOLVED, That it is hereby declared to be in the best interests
of the Corporation that the Articles of Incorporation of the Corporation,
as amended to date, be further amended to create a new series of Preferred
Stock to consist of 200,000 shares and to be designated as Series A
Preferred Stock, no par value, and to determine the preferences, limitations
and relative rights of the Series A Preferred Stock by adding the
following to Article V of such Articles of Incorporation to read as
follows:
SERIES A PREFERRED STOCK, NO PAR VALUE
A. Designation and Amount. The shares of such series shall be
designated as "Series A Preferred Stock, no par value," and the number of
shares constituting such series shall be 200,000. Such number of shares
may be increased or decreased by resolution of the Board of Directors of the
Corporation; provided, that no decrease shall reduce the number of shares of
Series A Preferred Stock to a number less than the number of shares then
outstanding plus the number of shares reserved for issuance upon the
exercise of outstanding options,
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rights or warrants or upon the conversion of any outstanding securities issued
by the Corporation convertible into Series A Preferred Stock.
B. Dividends and Distributions.
(1) Subject to any prior and superior rights of the holders
of any series of Preferred Stock ranking prior and superior to the shares
of Series A Preferred Stock with respect to dividends that may be authorized
by the Articles of Incorporation, the holders of shares of Series A
Preferred Stock shall be entitled prior to the payment of any dividends on
shares ranking junior to the Series A Preferred Stock to receive, when, as
and if declared by the Board of Directors out of funds legally available for
the purpose, quarterly dividends payable in cash on the last day of January,
April, July and October in each year (each such date being referred to herein
as a "Quarterly Dividend Payment Date"), commencing on the first Quarterly
Dividend Payment Date after the first issuance of a share or fraction of a
share of Series A Preferred Stock, in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $1.00 or (b) subject to the
provision for adjustment hereinafter set forth, 100 times the aggregate per
share amount of all cash dividends, and 100 times the aggregate per share
amount (payable in kind) of all non-cash dividends or other distributions
other than a dividend payable in shares of Common Stock or a subdivision
of the outstanding shares of Common Stock (by reclassification or otherwise),
declared on the Common Stock, par value $1.00 per share, of the Corporation
(the "Common Stock") since the immediately preceding Quarterly Dividend
Payment Date, or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of Series A
Preferred Stock. In the event the Corporation shall at any time after
September 12, 1996 (the "Rights Declaration Date") (i) declare any dividend
on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock into
a smaller number of shares, then in each such case the amount to which
holders of shares of Series A Preferred Stock were entitled immediately
prior to such event under clause (b) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
(2) The Corporation shall declare a dividend or distribution
on the Series A Preferred Stock as provided in paragraph (1) above
immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); provided
that, in the event no
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dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share on
the Series A Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(3) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series A
Preferred Stock, unless the date of issue of such shares is prior to the
record date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date of issue of such
shares, or unless the date of issue is a Quarterly Dividend Payment Date or
is a date after the record date for the determination of holders of shares
of Series A Preferred Stock entitled to receive a quarterly dividend and
before such Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such Quarterly
Dividend Payment Date. Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Series A Preferred Stock in an amount less
than the total amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by-share basis among all
such shares at the time outstanding. The Board of Directors may fix a record
date for the determination of holders of shares of Series A Preferred
Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be no more than 30 days prior to the
date fixed for the payment thereof.
(4) Dividends in full shall not be declared or paid or set
apart for payment on the Series A Preferred Stock for a dividend period
terminating on the Quarterly Dividend Payment Date unless dividends in full
have been declared or paid or set apart for payment on the Preferred Stock
of all series (other than series with respect to which dividends are not
cumulative from a date prior to such dividend date) for the respective
dividend periods terminating on such dividend date.
C. Voting Rights. The holders of shares of Series A Preferred Stock
shall have the following voting rights:
(1) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Preferred Stock shall entitle the holder
thereof to 100 votes on all matters voted on at a meeting of the
shareholders of the Corporation. In the event the Corporation shall at
any time after the Rights Declaration Date (i) declare any dividend
on Common Stock payable in shares of Common Stock, or (ii)
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subdivide the outstanding Common Stock, or (iii) combine the outstanding
Common Stock into a smaller number of shares, then in each such case
the number of votes per share to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to such event.
(2) Except as otherwise provided herein, in any other Amendment
to the Articles of Incorporation of the Corporation or by law, the
holders of shares of Series A Preferred Stock and the holders of
shares of Common Stock and any other capital stock of the Corporation
having general voting rights shall vote together as one voting group
on all matters voted on at a meeting of shareholders of the Corporation.
(3) Except as set forth herein or by law, holders of Series A
Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to
vote with holders of Common Stock as set forth herein) for taking any
corporate action.
D. Certain Restrictions.
(1) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in Section
B. are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, the Corporation shall not:
(a) declare or pay dividends on, or make any other distributions
on, any shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A Preferred
Stock;
(b) declare or pay dividends on or make any other distributions
on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, except dividends paid ratably on the Series
A Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
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(c) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A Preferred
Stock, provided that the Corporation may at any time redeem, purchase or
otherwise acquire shares of any such junior stock in exchange for
shares of any stock of the Corporation ranking junior (either as to
dividends or upon dissolution, liquidation or winding up) to the Series
A Preferred Stock;
(d) redeem or purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock or any shares of stock ranking on a
parity with the Series A Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares and the Series A
Preferred Stock upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other relative
rights and preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable treatment among
the respective series or classes.
(2) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any
shares of stock of the Corporation unless the Corporation could, under
paragraph (1) of this Section D, purchase or otherwise acquire such shares at
such time and in such manner.
E. Liquidation, Dissolution or Winding Up.
(1) Upon any liquidation, dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of
stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock unless, prior
thereto, the holders of shares of Series A Preferred Stock shall have
received $100.00 per share, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment (the "Series A Liquidation Preference"). Following the
payment of the full amount of the Series A Liquidation Preference, no
additional distributions shall be made to the holders of shares of Series A
Preferred Stock unless, prior thereto, the holders of shares of Common Stock
shall have received an amount per share (the "Common Adjustment") equal
to the quotient obtained by dividing (i) the Series A Liquidation
Preference by (ii) 100 (as appropriately adjusted as set forth in
subparagraph (3) below to reflect such events as stocks splits, stock
dividends and recapitalizations
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with respect to the Common Stock) (such number in clause (ii), the
"Adjustment Number"). Following the payment of the full amount of the
Series A Liquidation Preference and the Common Adjustment in respect of all
outstanding shares of Series A Preferred Stock and Common Stock,
respectively, holders of Series A Preferred Stock and holders of shares
of Common Stock shall receive their ratable and proportionate share of
the remaining assets to be distributed, with the holders of Series A
Preferred Stock entitled to receive an aggregate per share amount equal to 100
times (as appropriately adjusted as set forth in subparagraph (3) below
to reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) the aggregate amount to
be distributed per share to holders of shares of Common Stock.
(2) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation Preference and
the liquidation preferences of all other series of Preferred Stock, if any,
which rank on a parity with the Series A Preferred Stock, then such
remaining assets shall be distributed ratably to the holders of such parity
shares and the Series A Preferred Stock in proportion to their respective
liquidation preferences.
(3) In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on Common Stock payable
in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or
(iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the Adjustment Number in effect immediately prior to
such event shall be adjusted by multiplying such Adjustment Number by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such event.
F. Merger, Consolidation, etc. In case the Corporation shall enter
into any merger, consolidation, combination or other transaction in which
the shares of Common Stock are exchanged or changed into other stock or
securities, cash and/or any other property, then in any such case each
share of Series A Preferred Stock shall at the same time be similarly
exchanged or changed in an amount per share (subject to the provision for
adjustment hereinafter set forth) equal to 100 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the
case may be, into which or for which each share of Common Stock is changed
or exchanged. In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine
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the outstanding Common Stock into a smaller number of shares, then in each
such case the amount set forth in the preceding sentence with respect to
the exchange or change of shares of Series A Preferred Stock shall be
adjusted by multiplying such amount by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
G. Redemption. The shares of Series A Preferred Stock shall
not be redeemable.
H. Ranking. The Series A Preferred Stock shall rank junior to all
other series of the Corporation's Preferred Stock as to the payment of
dividends and other distribution of assets, unless, in accordance with
authorization in the Articles of Incorporation, the terms of any such series
shall provide otherwise.
I. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All
such shares shall upon their cancellation become authorized but unissued
shares of preferred stock and may be reissued as part of a new series of
preferred stock subject to the conditions and restrictions on issuance set
forth herein, in the Articles of Incorporation, or in any other Amendment to
the Articles of Incorporation creating a series of preferred stock or any
similar stock or as otherwise required by law.
J. Amendment. The Articles of Incorporation of the Corporation shall
not be further amended in any manner which would alter or change the powers,
preferences or special rights of the Series A Preferred Stock so as to
affect them adversely without the affirmative vote of the holders of a
majority of the outstanding shares of Series A Preferred Stock, voting
separately as one voting group.
K. Fractional Shares. Series A Preferred Stock may be issued in
fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.
FIFTH: That this Amendment to the Articles of Incorporation of the
Corporation was duly adopted by the Board of Directors of the Corporation on
September 12, 1996, without shareholder action, which shareholder action was
not required.
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IN WITNESS WHEREOF, we have executed and subscribed this Certificate
and do affirm the foregoing as true this 16th day of September, 1996.
COMSHARE, INCORPORATED
By: _____________________________
Kathryn A. Jehle
Senior Vice President,
Chief Financial Officer,
Treasurer and
Assistant Secretary
Attest:
___________________________
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EXHIBIT B
[Form of Rights Certificate]
Certificate No. R _________ __________ Rights
NOT EXERCISABLE AFTER SEPTEMBER 16, 2006 OR EARLIER IF NOTICE OF
REDEMPTION OR EXCHANGE IS GIVEN OR UPON THE CONSUMMATION OF
CERTAIN OTHER TRANSACTIONS SPECIFIED IN SECTION 13(d) OF THE RIGHTS
AGREEMENT. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $.0025 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. [THE RIGHTS REPRESENTED BY THIS CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR
AN ASSOCIATE OR AFFILIATE 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 THE RIGHTS AGREEMENT.]*
Right Certificate
COMSHARE, INCORPORATED
This certifies that __________________________, or registered assigns,
is the registered owner of the number of Rights set forth above, each of
which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement dated as of September 16, 1996 (the
"Rights Agreement") between Comshare, Incorporated, a Michigan corporation
(the "Company"), and KeyBank National Association (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. (Ann Arbor,
Michigan time) on September 16, 2006 at the office of the Rights Agent,
or its successors as Rights Agent, in Cleveland, Ohio, one
one-hundredth of a fully paid non-assessable share of the Series A Preferred
Stock, no par value (the "Preferred Stock"),
_______________
* The portion of the legend in brackets shall be inserted only if
applicable.
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of the Company, at a purchase price of $110.00 per one one-hundredth of a
share (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
which may be purchased upon exercise thereof) set forth above, and the
Purchase Price per share set forth above, are the number and Purchase Price
as of September 16, 1996 based on the Preferred Stock of the Company as
constituted at such date.
Upon the occurrence of a Triggering Event (as such term is defined
in the Rights Agreement), if the Rights evidenced by this Rights
Certificate are beneficially owned by (i) an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are
defined in the Rights Agreement), (ii) a transferee of any such Acquiring
Person, 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 from and after the
occurrence of such Triggering Event.
As provided in the Rights Agreement, the Purchase Price and the number
and kind of shares of Preferred Stock or other securities which may be
purchased upon the exercise of the Rights evidenced by this 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
above-mentioned office of the Rights Agent.
This 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 a like aggregate number of
one one-hundredths of a share of Preferred Stock as the Rights evidenced by
the Right Certificate or Right Certificates surrendered shall have entitled
such holder to purchase. If this Right Certificate shall be exercised in
part, the holder shall be entitled to receive upon surrender hereof another
Right Certificate or Right Certificates for the number of whole Rights not
exercised.
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Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Company at its option at a
redemption price of $.0025 per Right or may be called for exchange for
newly issued shares of Common Stock or Preferred Stock.
No fractional shares of Preferred Stock will be issued upon the exercise
of any Right or Rights evidenced hereby (other than fractions which are
integral multiples of one one-hundredth of a share of Preferred Stock which
may, at the election of the Company, be evidenced by depository receipts),
but in lieu thereof a cash payment will 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 the Preferred
Stock or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such,
any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any corporate action,
or, to receive notice of meetings or other actions affecting stockholders
(except as provided in the Rights Agreement), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by
this Right Certificate shall have been exercised as provided in the Rights
Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of __________________, 19__.
ATTEST: COMSHARE, INCORPORATED
____________________________ By __________________________
Secretary Title:
Countersigned:
By _________________________
Authorized Signature
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[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificates.)
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: ______________, ____
_____________________________
Signature
Signature Guaranteed:
__________________________________
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are
not being sold, assigned and transferred by or on behalf of a Person who is
or was an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned,
it [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
Dated: __________, ____ _____________________________
Signature
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NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate
in every particular, without alteration or enlargement or any change
whatsoever.
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FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Rights represented
by the Right Certificate.)
To Comshare, Incorporated:
The undersigned hereby irrevocably elects to exercise
_______________________ Rights represented by this Right Certificate to
purchase the shares of the one one-hundredths of a share of Series A
Preferred Stock (or, in certain circumstances, a combination of cash,
other property, Preferred Stock, Common Stock, and/or other securities)
upon the exercise of such Rights and requests that certificates for
such shares be issued in the name of:
Please insert social security
or other identifying number ____________________________________________________
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance remaining of such
Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number _________________________________________________
_______________________________________________________________________________
(Please print name and address)
______________________________________________________________________________
Dated: ________________, ____
______________________________
Signature
(Signature must conform in all
respects to name of holder as
specified on the face of this
Right Certificate)
Signature Guaranteed:
__________________________________
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CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person
or an Affiliate or Associate of any such Acquiring Person (as such terms are
defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: ____________, ____
______________________________
Signature
NOTICE
The signature to the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any
change whatsoever.
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EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On September 12, 1996, the Board of Directors of Comshare,
Incorporated (the "Company") declared a dividend distribution of one Right for
each outstanding share of Common Stock, $1.00 par value (the "Common
Stock"), of the Company. The distribution is payable to the Company's
shareholders of record on September 30, 1996. Each Right entitles the
registered holder to purchase from the Company one one-hundredth of a share
of Series A Preferred Stock, no par value (the "Preferred Stock") at a
price of $110.00 per one one-hundredth of a share (the "Purchase Price"),
subject to adjustment. The description and terms of the Rights are set
forth in a Rights Agreement (the "Rights Agreement") between the Company and
KeyBank National Association, as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) ten business days following a
public announcement that a person or group of affiliated or associated
persons (an "Acquiring Person") acquired, or obtained the right to acquire,
beneficial ownership of 15% or more of the outstanding shares of the Common
Stock or (ii) ten business days (or such later date as may be determined by
the Board of Directors, with the concurrence of a majority of the
Continuing Directors, prior to such time as any person becomes an Acquiring
Person) following the commencement or announcement of an intention to
commence a tender offer or exchange offer by any person if, upon
consummation thereof, such person would be an Acquiring Person (the earlier
of such dates being called the "Distribution Date"), the Rights will be
evidenced, with respect to any of the Common Stock certificates outstanding
as of September 30, 1996, by such Common Stock certificate. The Rights
Agreement provides that, until the Distribution Date, the Rights will be
transferred with and only with the Common Stock. Until the Distribution
Date (or earlier redemption, exchange or expiration of the Rights), new
Common Stock certificates issued after September 30, 1996 upon transfer or new
issuance of the Common Stock will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption,
exchange or expiration of the Rights), the surrender for transfer of any of
the Common Stock certificates outstanding as of September 30, 1996 or issued
thereafter will also constitute the transfer of the Rights associated with
the Common Stock represented by such certificate. As soon as practicable
following the Distribution
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Date, separate certificates evidencing the Rights ("Right Certificates")
will be mailed to holders of record of the Common Stock as of the close of
business on the Distribution Date and such separate Right Certificates
alone will evidence the Rights. Subject to certain adjustments as may be
required by the Rights Agreement, the Company will issue one Right with each
new share of Common Stock issued until the Distribution Date so that all
shares will have attached Rights. No person shall be deemed to be an
Acquiring Person on account of shares of Common Stock beneficially
owned by such person on September 16, 1996 unless thereafter they become
the beneficial owner of any additional shares of Common Stock. A "Continuing
Director" is a member of the Board of Directors of the Company who is
not an Acquiring Person or an affiliated or associated person of an
Acquiring Person and who was a member of the Board prior to the Share
Acquisition Date (as defined below) or subsequently became a member of the
Board and whose nomination for election or election to the Board was
recommended or approved by a majority of the Continuing Directors then on the
Board. At least two Continuing Directors must approve of, or concur on, any
action requiring the approval or concurrence of Continuing Directors.
The Rights are not exercisable until the Distribution Date, and, if
later, the expiration of the Company's right to redeem the Rights. The
Rights will expire on September 16, 2006, unless earlier redeemed or called
for exchange by the Company as described below or their earlier expiration
upon the consummation of certain transactions as described below.
The Preferred Stock will be nonredeemable and will be junior to any other
class of preferred stock. Each share of Preferred Stock will be entitled to
receive when, as and if declared, a quarterly dividend equal to the greater
of $1.00 or 100 times the per share value of any dividend (other than stock
dividends) declared on the Common Stock since the immediately preceding
quarterly dividend payment date. In the event of liquidation, the holders
of the Preferred Stock generally will be entitled to receive a liquidation
payment in an amount equal to $100.00 per share of Preferred Stock plus all
accrued and unpaid dividends thereon, and, after the holders of Common
Stock have received a liquidation payment in an amount equal to $1.00 per
share, holders of the Preferred Stock and the Common Stock shall receive
their ratable and proportionate share of the remaining assets to be
distributed, with the holders of Preferred Stock entitled to receive an
aggregate per share amount equal to 100 times the aggregate amount to be
distributed per share to holders of shares of Common Stock. Each share of
Preferred Stock will be entitled to 100 votes per share voting together with
the Common Stock. In the event of any merger, consolidation or other
transaction in which the Common Stock is exchanged, each share of Preferred
Stock will
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be entitled to receive 100 times the amount received per share of Common
Stock. The rights of the Preferred Stock as to dividends, voting and
liquidation preferences are protected by anti-dilution provisions.
The Purchase Price payable, and the number of shares of the Preferred
Stock or other securities or property issuable, upon exercise of the Rights
are subject to adjustment from time to time to prevent dilution (i) in
the event of a stock dividend on, or a subdivision, combination or
reclassification of the Preferred Stock; (ii) upon the grant to holders of
the Preferred Stock of certain rights or warrants to subscribe for shares of
the Preferred Stock or convertible securities at less than the current
market price of the Preferred Stock; or (iii) upon the distribution to
holders of the Preferred Stock of evidences of indebtedness or assets
(excluding regular periodic cash dividends out of earnings or retained
earnings at a rate not in excess of 125% of the rate of the last cash
dividend theretofore paid or a dividend paid in the Preferred Stock) or
of subscription rights or warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price.
Prior to a Triggering Event, fractional shares of the Preferred Stock
will not be issued (other than fractions which are integral multiples of one
one-hundredths of a share of Preferred Stock) and, in lieu thereof, an
adjustment in cash will be made equal to the same fraction of the current
market value of one one-hundredth of a share of Preferred Stock. Following
the occurrence of a Triggering Event, the Company shall not be required to
issue fractions of shares of Common Stock and, in lieu thereof, an adjustment
in cash will be made equal to the same fraction of the current market value
of one share of Common Stock.
In the event that (i) the Company were the surviving corporation in a
merger or other combination with an Acquiring Person or affiliated or
associated persons of an Acquiring Person and its Common Stock were not
changed or exchanged; or (ii) an Acquiring Person engages in one of a
number of self-dealing transactions specified in the Rights Agreement; or
(iii) in certain circumstances, an Acquiring Person becomes the beneficial
owner of 15% or more of the outstanding shares of Common Stock (except
pursuant to a tender or exchange offer for all outstanding shares at a price
and on terms determined by a majority of the Continuing Directors, after
receiving advice from an investment banking firm selected by a majority of
such Continuing Directors, to be a price that is fair to shareholders and
in the best interests of the Company and its shareholders (a "Permitted
Exception")), or (iv) during such
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time as there is an Acquiring Person, there shall occur certain failures to
pay, or reductions in, dividends on outstanding common or preferred stock of
the Company or a recapitalization of the Company which has the effect of
increasing the Acquiring Person's proportionate share of the outstanding
Common Stock by more than 1%, then proper provision shall be made so that
each holder of a Right, other than Rights that were or are beneficially
owned by the Acquiring Person (which will thereafter be void), shall
thereafter have the right to receive upon exercise that number of shares of
the Common Stock (or, in certain circumstances, a combination of cash,
other property, Preferred Stock, Common Stock and/or other securities)
having a market value of two times the exercise price of the Right.
Following the Distribution Date, in the event (i) that the Company were
acquired in a merger or other business combination transaction in connection
with which the Company is not the continuing or surviving corporation or in
which all or a part of the Common Stock shall be changed into or exchanged
for stock or other securities of any other Person or cash or any other
property (other than certain mergers and combinations with an Acquiring
Person who becomes such in a Permitted Exception if the price per share of
Common Stock offered in such transaction is no less than the price per
share of Common Stock paid to all holders in the Permitted Exception
tender or exchange offer and the form of consideration being offered in
such transaction is the same as the form of consideration paid in the
Permitted Exception tender or exchange offer (a "Permitted Combination"));
or (ii) that 50% or more of the Company's assets or earning power were
sold, then proper provision shall be made so that each holder of a Right,
other than Rights that were or are beneficially owned by the Acquiring
Person (which will thereafter be void), shall thereafter have the right to
receive, upon the exercise thereof at the then current exercise price of the
Right, that number of shares of common stock of the Acquiring Person which
at the time of such transaction would have a market value of two times the
exercise price of the Right. Upon the consummation of a Permitted
Combination, all rights shall expire. Each of the events described in
this paragraph constitutes a "Triggering Event" under the Rights Agreement.
At any time after any Person becomes an Acquiring Person but prior to
the time such Acquiring Person has acquired 50% or more of the outstanding
Common Stock, the Board (with the concurrence of a majority of the
Continuing Directors) may cause shareholders to exchange all or part of their
Rights for shares of Common Stock or Preferred Stock at a ratio of one
share of Common Stock or one one-hundredth of a share of Preferred Stock per
Right, subject to adjustment. As soon as the Board has determined to make
such exchange, the Rights may no longer be exercised.
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At any time prior to 5:00 P.M., Ann Arbor time, on the tenth
business day following the public announcement that a person or group of
affiliated or associated persons has acquired beneficial ownership of 15% or
more of the outstanding shares of the Common Stock of the Company (the
"Shares Acquisition Date"), the Board of Directors of the Company may redeem
the Rights in whole, but not in part, at a price of $.0025 per Right (the
"Redemption Price"); provided that if such redemption occurs on or after
the Shares Acquisition Date the Board shall be entitled to so redeem the
Rights only if such redemption is approved by a majority of the
Continuing Directors and the Continuing Directors constitute a majority of the
Board of Directors; provided, further, that if such redemption occurs on or
after the date of a change (resulting from a proxy or consent solicitation
effected in compliance with applicable law and the requirements of any
national securities exchange on which the Common Stock of the Company is
listed) in a majority of the directors in office at the commencement of such
solicitation if any person who is a participant in such solicitation has
stated (or, if upon the commencement of such solicitation, a majority of the
Board of Directors has determined in good faith) that such person (or any
affiliated or associated persons) intends to take, or may consider
taking, any action which would result in such person becoming an Acquiring
Person or which would cause the occurrence of a Triggering Event, the Board
shall be entitled to redeem the Rights only if such redemption is approved by
a majority of the Continuing Directors who were members of the Board of
Directors prior to the proxy or consent solicitation referred to above (or
subsequently became a member of the Board of Directors and whose nomination
for election or election thereto was recommended or approved by a majority of
the Redemption Continuing Directors) (the "Redemption Continuing Directors")
and the Redemption Continuing Directors constitute a majority of the Board of
Directors. Thereafter, the Company's right of redemption may be reinstated,
prior to a Triggering Event, (i) if an Acquiring Person reduces his beneficial
ownership to 5% or less of the outstanding shares of Common Stock in a
transaction or series of transactions not involving the Company; and (ii)
there are no other Persons, immediately following the event described in
clause (i), who are Acquiring Persons. Additionally, the Board of Directors
may at any time prior to the occurrence of a Triggering Event, redeem the
then outstanding Rights in whole, but not in part, at the Redemption Price,
if such redemption is in connection with the consummation of a merger or other
business combination involving the Company but not involving an Acquiring
Person or its Affiliates or Associates which is determined to be in the best
interests of the Company and its
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shareholders by a majority of the Continuing Directors. Immediately upon the
action of the Board of Directors of the Company electing to redeem the
Rights, the Company shall make announcement thereof, and upon such election,
the right to exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the
right to vote or to receive dividends.
The Rights Agreement may be amended without shareholder approval prior
to the Distribution Date at the Board of Directors' discretion (with the
concurrence of a majority of the Continuing Directors and only if the
Continuing Directors constitute a majority of the directors in their
office). After the Distribution Date, the Board of Directors (with the
concurrence of a majority of the Continuing Directors and only if the
Continuing Directors constitute a majority of the directors then in office)
generally may amend the Rights Agreement without the consent of the Rights
holders to cure any ambiguity, correct defects or inconsistencies,
shorten or lengthen time periods or supplement or change any other
provision which shall not adversely affect the Rights holders; provided
that the lengthening of any time period is for the purpose of protecting,
enhancing or clarifying the rights of, and/or for the benefit of the
holders of the Rights (other than the Acquiring Person and its affiliated and
associated persons). However, if the Rights are not then redeemable, the
Board may not lengthen a time period relating to when the Rights may be
redeemed.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A,
dated September 17, 1996. A copy of the Rights Agreement is available
free of charge from the Company. This summary description of the Rights
does not purport to be complete and is qualified in its entirety by reference
to the Rights Agreement, which is hereby incorporated herein by reference.
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