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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 16, 1999
TransAct Technologies Incorporated
(Exact name of Registrant as specified in its charter)
Delaware 0-21121 06-1456680
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
7 Laser Lane, Wallingford, CT 06492
Address of principal executive offices) (Zip Code)
Registrants telephone number,
including area code: (203) 269-1198
(Former name or former address, if changed since last report.)
Exhibit Index on Page 5
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Item 5. Other Events.
On February 16, 1999, TransAct Technologies Incorporated (the
"Company") amended and restated its Rights Agreement, dated as of December 2,
1997 (the "Rights Agreement"), between the Company and American Stock Transfer &
Trust Company to eliminate those provisions that require that certain actions
may only be taken by "Continuing Directors" (as defined in the Rights
Agreement). A copy of the Rights Agreement, as amended and restated, is included
as Exhibit 4.1 to this Report and incorporated herein by reference.
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Item 7. Financial Statements and Exhibits
Exhibit 4.1 Form of Amended and Restated Rights Agreement dated
as of February 16, 1999, between TransAct
Technologies Incorporated and American Stock Transfer
& Trust Company, including Form of Rights Certificate
as Exhibit A, Summary of Rights to Purchase Preferred
Stock as Exhibit B and the Form of Certificate of
Designation for the Preferred Stock as Exhibit C.
Exhibit 99.a Press Release dated February 18, 1999.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TRANSACT TECHNOLOGIES INCORPORATED
By /s/ Richard L. Cote
-------------------------------
Name: Richard L. Cote
Title: Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary
Date: February 16, 1999
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Page
No. Description No.
- ------- ----------- ----
<S> <C> <C>
4.1 Form of Amended and Restated Rights [6]
Agreement dated as of February 16, 1999, between TransAct
Technologies Incorporated and American Stock Transfer
& Trust Company, including Form of Rights Certificate
as Exhibit A, Summary of Rights to Purchase Preferred
Stock as Exhibit B and Form of Certificate of
Designation for the Preferred Stock as Exhibit C.
99(a) Form of Press Release dated February [66]
18, 1999
</TABLE>
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Exhibit 4.1
TRANSACT TECHNOLOGIES INCORPORATED
and
AMERICAN STOCK TRANSFER & TRUST COMPANY
Rights Agent
Amended and Restated
Rights Agreement
Dated as of February 16, 1999
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
SECTION 1. Certain Definitions ...................................................................... 1
SECTION 2. Appointment of Rights Agent .............................................................. 6
SECTION 3. Issue of Rights Certificates ............................................................. 6
SECTION 4. Form of Rights Certificates .............................................................. 7
SECTION 5. Countersignature and Registration ........................................................ 8
SECTION 6. Transfer, Split Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates ................................. 8
SECTION 7. Exercise of Rights; Purchase Price; Expiration Date of Rights ............................ 9
SECTION 8. Cancellation and Destruction of Rights Certificates ...................................... 11
SECTION 9. Reservation and Availability of Capital Stock ............................................ 12
SECTION 10. Preferred Stock Record Date .............................................................. 13
SECTION 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights ......................................................................... 13
SECTION 12. Certificate of Adjusted Purchase Price or Number of Shares ............................... 22
SECTION 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power .................................................................................... 22
SECTION 14. Fractional Rights and Fractional Shares .................................................. 25
SECTION 15. Rights of Action ......................................................................... 26
SECTION 16. Agreement of Rights Holders .............................................................. 27
SECTION 17. Rights Certificate Holder Not Deemed a Shareholder ....................................... 27
SECTION 18. Concerning the Rights Agent .............................................................. 27
SECTION 19. Merger or Consolidation or Change of Name of Rights Agent ................................ 28
SECTION 20. Duties of Rights Agent ................................................................... 28
SECTION 21. Change of Rights Agent ................................................................... 31
SECTION 22. Issuance of New Rights Certificates ...................................................... 32
</TABLE>
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<TABLE>
<S> <C>
SECTION 23. Redemption and Termination ............................................................... 32
SECTION 24. Notice of Certain Events ................................................................. 33
SECTION 25. Notices .................................................................................. 34
SECTION 26. Supplements and Amendments ............................................................... 34
SECTION 27. Successors ............................................................................... 35
SECTION 28. Determinations and Actions by the Board of Directors, etc ................................ 35
SECTION 29. Benefits of this Agreement ............................................................... 35
SECTION 30. Severability ............................................................................. 35
SECTION 31. Governing law ............................................................................ 36
SECTION 32. Counterparts ............................................................................. 36
SECTION 33. Descriptive Headings ..................................................................... 36
SECTION 34. Exchange ................................................................................. 36
</TABLE>
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AMENDED AND RESTATED
RIGHTS AGREEMENT
AMENDED AND RESTATED RIGHTS AGREEMENT, dated as of February 16, 1999
(this "Agreement"), between TransAct Technologies Incorporated, a Delaware
corporation (the "Company"), and American Stock Transfer & Trust Company, a New
York corporation (the "Rights Agent").
WHEREAS, effective December 2, 1997 (the "Rights Dividend Declaration
Date"), the Board of Directors of the Company authorized and declared a
distribution of one Right (each, a "Right") for each share of Common Stock, par
value $.01 per share, of the Company (the "Company Common Stock") outstanding at
the Close of Business (as defined below) on December 15, 1997 (the "Record
Date"), and has authorized the issuance of one Right (as such number may
hereinafter be adjusted pursuant hereto) for each share of Company Common Stock
issued between the Record Date (whether originally issued or delivered from the
Company's treasury) and, except as otherwise provided in Section 22, the
Distribution Date, each Right initially representing the right to purchase upon
the terms and subject to the conditions hereinafter set forth one Unit (as
defined below) of Series A Preferred Stock (as defined below);
WHEREAS, the Company desires to set forth certain terms and conditions
governing the Rights; and
WHEREAS, the Company desires to appoint the Rights Agent to act as
rights agent hereunder, in accordance with the terms and conditions hereof;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
SECTION 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which,
alone or together with all Affiliates and Associates of such Person,
shall be the Beneficial Owner of 15% or more of the shares of Company
Common Stock then outstanding, but shall not include (x) the Company,
any Subsidiary of the Company, any employee benefit plan maintained by
the Company or any of its Subsidiaries or any trustee or fiduciary with
respect to such plan acting in such capacity or (y) any such Person who
has become and is such a Beneficial Owner solely because (A) of a
change in the aggregate number of shares of the Company Common Stock
since the last date on which such Person acquired Beneficial Ownership
of any shares of the Company Common Stock or (B) it acquired such
Beneficial Ownership in the good faith belief that such acquisition
would not (x) cause such Beneficial Ownership to exceed 15% of the
shares of the Company Common Stock then outstanding and such Person
relied in good faith in
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computing the percentage of its Beneficial Ownership on publicly filed
reports or documents of the Company which are inaccurate or out-of-date
or (y) otherwise cause a Distribution Date or the adjustment provided
for in Section 11(a)(ii) to occur. Notwithstanding clause (B) of the
prior sentence, if any Person that is not an Acquiring Person due to
such clause (B) does not reduce its percentage of Beneficial Ownership
of the Company Common Stock to 15% or less by the Close of Business on
the fifth Business Day after notice from the Company (the date of
notice being the first day) that such person's Beneficial Ownership of
the Company Common Stock so exceeds 15%, such Person shall at the end
of such five Business Day period, become an Acquiring Person (and such
clause (B) shall no longer apply to such Person). For purposes of this
definition, the determination whether any Person acted in "good faith"
shall be conclusively determined by the Board of Directors of the
Company, acting by a vote of those directors of the Company whose
approval would be required to redeem the rights under Section 23.
(b) "Adjustment Shares" has the meaning set forth in Section
11(a)(ii).
(c) "Adjustment Spread" has the meaning set forth in Section
34(a)(ii).
(d) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the Exchange Act
Regulations as in effect on the date hereof.
(e) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own", and shall be deemed to have
"Beneficial Ownership" of, any securities:
(i) of which such Person or any of such Person's
Affiliates or Associates is considered to be a "beneficial
owner" under Rule 13d-3 of the Exchange Act Regulations as in
effect on the date hereof; provided, however, that a Person
shall not be deemed the "Beneficial Owner" of, or to
"beneficially own", or to have "Beneficial Ownership" of, any
securities under this subparagraph (i) as a result of an
agreement, arrangement or understanding to vote such
securities if such agreement, arrangement or understanding (A)
arises solely from a revocable proxy given in response to a
proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the Exchange Act
and the Exchange Act Regulations, and (B) is not reportable by
such Person on Schedule 13D under the Exchange Act (or any
comparable or successor report);
(ii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate
of such other Person) with
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which such Person (or any of such Person's Affiliates or
Associates) has any agreement, arrangement or understanding
(whether or not in writing), for the purpose of acquiring,
holding, voting (except pursuant to a revocable proxy as
described in the proviso to subparagraph (i) of this paragraph
(c)) or disposing of such securities; or
(iii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the
right to acquire (whether such right is exercisable
immediately or only after the passage of time or upon the
satisfaction of conditions) pursuant to any agreement,
arrangement or understanding (whether or not in writing) or
upon the exercise of conversion rights, exchange rights,
rights, warrants or options, or otherwise;
provided, however, that under this paragraph (c) a Person shall not be
deemed the "Beneficial Owner" of, or to "beneficially own", or to have
"Beneficial Ownership" of, (A) securities tendered pursuant to a tender
or exchange offer made in accordance with Exchange Act Regulations by
such Person or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange, (B)
securities that may be issued upon exercise of Rights at any time prior
to the occurrence of a Triggering Event, or (c) securities that may be
issued upon exercise of Rights from and after the occurrence of a
Triggering Event, which Rights were acquired by such Person or any of
such Person's Affiliates or Associates prior to the Distribution Date
or pursuant to Section 3(c) or Section 22 or pursuant to Section 11(i)
in connection with an adjustment made with respect to any such Rights.
(f) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in The City of New York
are authorized or obligated by law or executive order to close.
(g) "Close of Business" on any given date shall mean 5:00
P.M., New York City time, on such date; provided, however, that if such
date is not a Business Day it shall mean 5:00 P.M., New York City time,
on the next succeeding Business Day.
(h) "Common Stock" of any Person other than the Company shall
mean the capital stock of such Person with the greatest voting power,
or, if such Person shall have no capital stock, the equity securities
or other equity interest having power to control or direct the
management of such Person.
(i) "Company" has the meaning set forth in the preamble to
this Agreement.
(j) "Company Common Stock" has the meaning set forth in the
recitals to this Agreement.
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(k) "Current Value" has the meaning set forth in Section
11(a)(iii).
(l) "Depositary Agent" has the meaning set forth in Section
7(c).
(m) "Distribution Date" has the meaning set forth in Section
3(a).
(n) "Equivalent Preferred Stock" has the meaning set forth in
Section 11(b).
(o) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(p) "Exchange Act Regulations" shall mean the General Rules
and Regulations under the Exchange Act.
(q) "Expiration Date" has the meaning set forth in Section
7(a).
(r) "Final Expiration Date" has the meaning set forth in
Section 7(a).
(s) "Person" shall mean any individual, partnership, limited
liability company, firm, corporation, association, trust,
unincorporated organization or other entity, as well as any syndicate
or group deemed to be a person under Section 14(d)(2) of the Exchange
Act.
(t) "Preferred Stock" shall mean the Series A Preferred Stock,
par value $.01 per share, of the Company having the voting powers,
designation, preferences and relative, participating, optional or other
special rights and qualifications, limitations and restrictions
described in the Certificate of Designations set forth as Exhibit C
hereto.
(u) "preferred stock equivalents" has the meaning specified in
Section 11(a)(iii).
(v) "Principal Party" has the meaning set forth in Section
13(b).
(w) "Purchase Price" has the meaning set forth in Section
7(b).
(x) "Record Date" has the meaning set forth in the recitals to
this Agreement.
(y) "Redemption Price" has the meaning set forth in Section
23(c).
(z) "Registered Common Stock" has the meaning set forth in
Section 13(b)(ii).
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(aa) "Registration Date" has the meaning set forth in
Section 9(c).
(bb) "Registration Statement" has the meaning set forth in
Section 9(a).
(cc) "Right" has the meaning set forth in the recitals to this
Agreement.
(dd) "Rights Agent" has the meaning set forth in the preamble
to this Agreement.
(ee) "Rights Certificate" has the meaning set forth in Section
3(a).
(ff) "Rights Dividend Declaration Date" has the meaning set
forth in the recitals to this Agreement.
(gg) "Section 11(a)(ii) Event" shall mean any event described
in Section 11 (a)(ii)(A), (B) or (C).
(hh) "Section 11(a)(iii) Trigger Date" has the meaning set
forth in Section 11 (a)(iii).
(ii) "Section 13 Event" shall mean any event described in
clause (x), (y) or (z) of Section 13(a) hereof.
(jj) "Section 34(a)(i) Exchange Ratio" has the meaning set
forth in Section 34(a)(i).
(kk) "Section 34(a)(ii) Exchange Ratio" has the meaning set
forth in Section 34(a)(ii).
(ll) "Securities Act" shall mean the Securities Act of 1933,
as amended.
(mm) "Spread" has the meaning set forth in Section 11(a)(iii).
(nn) "Stock Acquisition Date" shall mean the first date of
public announcement (including, without limitation, the filing of any
report pursuant to Section 13(d) of the Exchange Act) by the Company or
an Acquiring Person that an Acquiring Person has become such.
(oo) "Subsidiary" shall mean, with reference to any Person,
any other Person of which an amount of voting securities or equity
interests sufficient to elect at least a majority of the directors or
equivalent governing body of such other Person is beneficially owned,
directly or indirectly, by such Person, or otherwise controlled by such
first-mentioned Person.
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(pp) "Summary of Rights" has the meaning set forth in Section
3(b).
(qq) "Trading Day" has the meaning set forth in Section
11(d)(i).
(rr) "Triggering Event" shall mean any Section 11(a)(ii) Event
or any Section 13 Event.
(ss) "Unit" has the meaning set forth in Section 7(b).
SECTION 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. With
the consent of the Rights Agent, the Company may from time to time appoint such
Co-Rights Agents as it may deem necessary or desirable.
SECTION 3. Issue of Rights Certificates. (a) Until the earlier of (i)
the Close of Business on the tenth day after the Stock Acquisition Date and (ii)
the Close of Business on the tenth Business Day (or such later date as may be
determined by action of the Company's Board of Directors prior to such time as
any Person becomes an Acquiring Person, and of which the Company will give the
Rights Agent prompt written notice) after the date that a tender or exchange
offer by any Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan maintained by the Company or any of its Subsidiaries or
any trustee or fiduciary with respect to such plan acting in such capacity) is
first published or sent or given within the meaning of Rule 14d-4(a) of the
Exchange Act Regulations or any successor rule, if upon consummation thereof
such Person would be the Beneficial Owner of 15% or more of the shares of
Company Common Stock then outstanding (the earlier of (i) and (ii) above being
the "Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of paragraph (b) of this Section 3) by the certificates for shares of
Company Common Stock registered in the names of the holders of shares of Company
Common Stock as of and subsequent to the Record Date (which certificates for
shares of Company Common Stock shall be deemed also to be certificates for
Rights) and not by separate certificates, and (y) the Rights will be
transferable only in connection with the transfer of the underlying shares of
Company Common Stock (including a transfer to the Company). As soon as
practicable after the Distribution Date, the Rights Agent will send by
first-class, insured, postage prepaid mail, to each record holder of shares of
Company Common Stock as of the Close of Business on the Distribution Date, at
the address of such holder shown on the records of the Company, one or more
rights certificates, in substantially the form of Exhibit A hereto (the "Rights
Certificates"), evidencing one Right for each share of Company Common Stock so
held, subject to adjustment as provided herein. In the event that an adjustment
in the number of Rights per share of Company Common Stock has been made pursuant
to Section 11(p), at the time of distribution of the Rights Certificates, the
Company may make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a) hereof) so that Rights Certificates representing
only whole numbers of
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Rights are distributed and cash is paid in lieu of any fractional Rights. As of
and after the Distribution Date, the Rights will be evidenced solely by such
Rights Certificates.
(b) As promptly as practicable following the Record Date, the Company
will send a copy of a Summary of Rights to Purchase Preferred Stock, in a form
which may be appended to certificates that represent shares of Company Common
Stock, in substantially the form attached hereto as Exhibit B (the "Summary of
Rights"), by first-class, postage prepaid mail, to each record holder of shares
of Company Common Stock as of the Close of Business on the Record Date, at the
address of such holder shown on the records of the Company.
(c) Rights shall, without any further action, be issued in respect of
all shares of Company Common Stock which are issued (including any shares of
Company Common Stock held in treasury) after the Record Date but prior to the
earlier of the Distribution Date and the Expiration Date. Certificates,
representing such shares of Company Common Stock, issued after the Record Date
shall bear the following legend:
"This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in the Amended and Restated
Rights Agreement, dated as of February 16, 1999 (the "Rights
Agreement"), between TransAct Technologies Incorporated (the "Company")
and American Stock Transfer & Trust Company (the "Rights Agent"), the
terms of which are hereby incorporated herein by reference and a copy
of which is on file at the principal office of the stock transfer
administration office of the Rights Agent. Under certain circumstances,
as set forth in the Rights Agreement, such Rights will be evidenced by
separate certificates and will no longer be evidenced by this
certificate. The Company will mail to the holder of this certificate a
copy of the Rights Agreement, as in effect on the date of mailing,
without charge promptly after receipt of a written request therefor.
Under certain circumstances set forth in the Rights Agreement, Rights
issued to, or held by, any Person who is, was or becomes an Acquiring
Person or any Affiliate or Associate thereof (as such terms are defined
in the Rights Agreement), whether currently held by or on behalf of
such Person or by any subsequent holder, may become null and void."
With respect to certificates representing shares of Company Common
Stock (whether or not such certificates include the foregoing legend or have
appended to them the Summary of Rights), until the earlier of the Distribution
Date and the Expiration Date, the Rights associated with the shares of Company
Common Stock represented by such certificates shall be evidenced by such
certificates alone and registered holders of the shares of Company Common Stock
shall also be the registered holders of the associated Rights, and the transfer
of any of such certificates shall also constitute the transfer of the Rights
associated with the shares of Company Common Stock represented by such
certificates.
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SECTION 4. Form of Rights Certificates. (a) The Rights Certificates
(and the forms of election to purchase, assignment and certificate to be printed
on the reverse thereof) shall each be substantially in the form set forth in
Exhibit A hereto and may have such marks of identification or designation and
such legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or any rule or
regulation thereunder or with any rule or regulation of any stock exchange on
which the Rights may from time to time be listed or to conform to usage. Subject
to the provisions of Section 11 and Section 22, the Rights Certificates,
whenever distributed, shall be dated as of the Record Date and on their face
shall entitle the holders thereof to purchase such number of Units of Preferred
Stock as shall be set forth therein at the price set forth therein, but the
amount and type of securities, cash or other assets that may be acquired upon
the exercise of each Right and the Purchase Price thereof shall be subject to
adjustment as provided herein.
(b) Any Rights Certificate issued pursuant hereto that represents
Rights beneficially owned by: (i) an Acquiring Person or any Associate or
Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) which becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) which becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and which receives such
Rights pursuant to either (A) a transfer (whether or not for consideration) from
the Acquiring Person (or any such Associate or Affiliate) to holders of equity
interests in such Acquiring Person (or such Associate or Affiliate) or to any
Person with whom such Acquiring Person (or such Associate or Affiliate) has any
continuing agreement, arrangement or understanding regarding either the
transferred Rights, shares of Company Common Stock or the Company or (B) a
transfer which the Board of Directors has determined to be part of a plan,
arrangement or understanding which has as a primary purpose or effect the
avoidance of Section 7(e), shall, upon the written direction of the Board of
Directors, contain (to the extent feasible) the following legend:
"The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person or
an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly, this Rights Certificate
and the Rights represented hereby may become null and void in the
circumstances specified in Section 7(e) of such Agreement."
SECTION 5. Countersignature and Registration. (a) Rights Certificates
shall be executed on behalf of the Company by its Chairman of the Board, the
President or one of its Vice Presidents, under its corporate seal reproduced
thereon attested by its Secretary or one of its Assistant Secretaries. The
signature of any one or more of these officers on the Rights Certificates may be
manual or facsimile. Rights Certificates bearing the manual or facsimile
signatures of the individuals who were at any time the proper officers of the
Company shall bind the Company, notwithstanding that such individuals
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or any of them have ceased to hold such offices prior to the countersignature of
such Rights Certificates or did not hold such offices at the date of such Rights
Certificates. No Rights Certificate shall be entitled to any benefit under this
Agreement or be valid for any purpose unless there appears on such Rights
Certificate a countersignature duly executed by the Rights Agent by manual
signature of an authorized signatory, and such countersignature upon any Rights
Certificate shall be conclusive evidence, and the only evidence, that such
Rights Certificate has been duly countersigned as required hereunder.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its office designated for surrender of Rights
Certificates upon exercise or transfer, books for registration and transfer of
the Rights Certificates issued hereunder. Such books shall show the name and
address of each holder of the Rights Certificates, the number of Rights
evidenced on its face by each Rights Certificate and the date of each Rights
Certificate.
SECTION 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates. (a)
Subject to the provisions of Sections 4(b), 7(e) and 14, at any time after the
Close of Business on the Distribution Date, and at or prior to the Close of
Business on the Expiration Date, any Rights Certificate or Certificates may be
transferred, split up, combined or exchanged for another Rights Certificate or
Certificates, entitling the registered holder to purchase a like number of Units
of Preferred Stock (or, following a Triggering Event, other securities, cash or
other assets, as the case may be) as the Rights Certificate or Certificates
surrendered then entitled such holder to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Rights Certificate or
Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender the Rights Certificate or Certificates to be transferred,
split up, combined or exchanged at the office of the Rights Agent designated for
such purpose. Neither the Rights Agent nor the Company shall be obligated to
take any action whatsoever with respect to the transfer of any such surrendered
Rights Certificate until the registered holder shall have completed and executed
the certificate set forth in the form of assignment on the reverse side of such
Rights Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) of the Rights
represented by such Rights Certificate or Affiliates or Associates thereof as
the Company shall reasonably request; whereupon the Rights Agent shall, subject
to the provisions of Sections 4(b), 7(e) and 14, countersign and deliver to the
Person entitled thereto a Rights Certificate or Rights Certificates, as the case
may be, as so requested. The Company may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Rights Certificates.
(b) If a Rights Certificate shall be mutilated, destroyed, lost or
stolen, upon request by the registered holder of the Rights represented thereby
and upon payment to the Company and the Rights Agent of all reasonable expenses
incident thereto, there shall be issued, in exchange for and upon cancellation
of the mutilated Rights Certificate, or in
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substitution for the lost, stolen or destroyed Rights Certificate, a new Rights
Certificate, in substantially the form of the prior Rights Certificate, of like
tenor and representing the equivalent number of Rights, but, in the case of
loss, theft or destruction, only upon receipt of evidence satisfactory to the
Company and the Rights Agent of such loss, theft or destruction of such Rights
Certificate and, if requested by the Company or the Rights Agent, indemnity also
satisfactory to it.
SECTION 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights. (a) Prior to the earlier of (i) the Close of Business on the tenth
anniversary hereof (the "Final Expiration Date"), and (ii) the time at which the
Rights are redeemed as provided in Section 23 hereof (the earlier of (i) and
(ii) being the "Expiration Date"), the registered holder of any Rights
Certificate may, subject to the provisions of Sections 7(e) and 9(c) hereof,
exercise the Rights evidenced thereby in whole or in part at any time after the
Distribution Date upon surrender of the Rights Certificate, with the form of
election to purchase and the certificate on the reverse side thereof duly
executed, to the Rights Agent at the office of the Rights Agent designated for
such purpose, together with payment of the aggregate Purchase Price (as
hereinafter defined) for the number of Units of Preferred Stock (or, following a
Triggering Event, other securities, cash or other assets, as the case may be)
for which such surrendered Rights are then exercisable.
(b) The purchase price for each one one-thousandth of a share (each
such one-thousandth of a share being a "Unit") of Preferred Stock upon exercise
of Rights shall be $69, subject to adjustment from time to time as provided in
Sections 11 and 13(a) hereof (such purchase price, as so adjusted, being the
"Purchase Price"), and shall be payable in accordance with paragraph (c) below.
(c) As promptly as practicable following the occurrence of the
Distribution Date, the Company shall deposit with a corporation in good standing
organized under the laws of the United States or any State of the United States,
which is authorized under such laws to exercise corporate trust or stock
transfer powers and is subject to supervision or examination by federal or state
authority (such institution being the "Depositary Agent"), certificates
representing the shares of Preferred Stock that may be acquired upon exercise of
the Rights and shall cause such Depositary Agent to enter into an agreement
pursuant to which the Depositary Agent shall issue receipts representing
interests in the shares of Preferred Stock so deposited. Upon receipt of a
Rights Certificate representing exercisable Rights, with the form of election to
purchase and the certificate duly executed, accompanied by payment, with respect
to each Right so exercised, of the Purchase Price for the Units of Preferred
Stock (or, following a Triggering Event, other securities, cash or other assets,
as the case may be) to be purchased thereby as set forth below and an amount
equal to any applicable transfer tax or evidence satisfactory to the Company of
payment of such tax, the Rights Agent shall, subject to Section 20(k) hereof,
thereupon promptly (i) requisition from the Depositary Agent depositary receipts
representing such number of Units of Preferred Stock as are to be purchased and
the Company will direct the Depositary Agent to comply with such request, (ii)
requisition from the Company the amount of cash, if any, to be paid in lieu
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<PAGE> 14
of fractional shares in accordance with Section 14, (iii) after receipt of such
depositary receipts, cause the same to be delivered to or upon the order of the
registered holder of such Rights Certificate, registered in such name or names
as may be designated by such holder, and (iv) after receipt thereof, deliver
such cash, if any, to or upon the order of the registered holder of such Rights
Certificate. In the event that the Company is obligated to issue Company Common
Stock, other securities of the Company, pay cash and/or distribute other
property pursuant to Section 11(a), the Company will make all arrangements
necessary so that such Company Common Stock, other securities, cash and/or other
property are available for distribution by the Rights Agent, if and when
appropriate. The payment of the Purchase Price (as such amount may be reduced
pursuant to Section 11(a)(iii)) may be made in cash or by certified or bank
check payable to the order of the Company, or by wire transfer of immediately
available funds to the account of the Company (provided that notice of such wire
transfer shall be given by the holder of the related Right to the Rights Agent).
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing the Rights remaining unexercised shall be issued by the Rights Agent
and delivered to, or upon the order of, the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such
holder, subject to the provisions of Section 14.
(e) Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of any Section 11(a)(ii) Event or Section 13
Event, any Rights beneficially owned by (i) an Acquiring Person or an Associate
or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) which becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) which becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and which receives such
Rights pursuant to either (A) a transfer (whether or not for consideration) from
the Acquiring Person (or any such Associate or Affiliate) to holders of equity
interests in such Acquiring Person (or such Associate or Affiliate) or to any
Person with whom such Acquiring Person (or such Associate or Affiliate) has any
continuing agreement, arrangement or understanding regarding the transferred
Rights, shares of Company Common Stock or the Company or (B) a transfer which
the Board of Directors has determined to be part of a plan, arrangement or
understanding which has as a primary purpose or effect the avoidance of this
Section 7(e), shall be null and void without any further action, and no holder
of such Rights shall have any rights whatsoever with respect to such Rights,
whether under any provision of this Agreement or otherwise. The Company shall
use all reasonable efforts to ensure that the provisions of this Section 7(e)
and Section 4(b) are complied with, but shall have no liability to any holder of
Rights or any other Person as a result of its failure to make any determination
under this Section 7(e) or Section 4(b) with respect to an Acquiring Person or
its Affiliates, Associates or transferees.
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<PAGE> 15
(f) Notwithstanding anything in this Agreement or any Rights
Certificate to the contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a registered holder upon the
occurrence of any purported exercise by such registered holder unless such
registered holder shall have (i) completed and executed the certificate
following the form of election to purchase set forth on the reverse side of the
Rights Certificate surrendered for such exercise and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) of the Rights represented by such Rights Certificate or
Affiliates or Associates thereof as the Company shall reasonably request.
SECTION 8. Cancellation and Destruction of Rights Certificates. All
Rights Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
this Agreement. The Company shall deliver to the Rights Agent for cancellation
and retirement, and the Rights Agent shall so cancel and retire, any Rights
Certificates acquired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all cancelled Rights Certificates to the Company,
or shall, at the written request of the Company, destroy such cancelled Rights
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
SECTION 9. Reservation and Availability of Capital Stock. (a) The
Company shall at all times prior to the Expiration Date cause to be reserved and
kept available, out of its authorized and unissued shares of Preferred Stock,
the number of shares of Preferred Stock that, as provided in this Agreement,
will be sufficient to permit the exercise in full of all outstanding Rights.
Upon the occurrence of any events resulting in an increase in the aggregate
number of shares of Preferred Stock (or other equity securities of the Company)
issuable upon exercise of all outstanding Rights above the number then reserved,
the Company shall make appropriate increases in the number of shares so
reserved.
(b) If the shares of Preferred Stock to be issued and delivered upon
the exercise of the Rights will be listed on any national securities exchange,
the Company shall during the period from the Distribution Date through the
Expiration Date use its best efforts to cause all securities reserved for such
issuance to be listed on such exchange upon official notice of issuance upon
such exercise.
(c) The Company shall use its best efforts (i) as soon as practicable
following the occurrence of a Section 11(a)(ii) Event and a determination by the
Company in accordance with Section 11(a)(iii) of the consideration to be
delivered by the Company upon exercise of the Rights or, if so required by law,
as soon as practicable following the Distribution Date (such date being the
"Registration Date"), to file a registration statement on an appropriate form
under the Securities Act with respect to the securities
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<PAGE> 16
that may be acquired upon exercise of the Rights (the "Registration Statement"),
(ii) to cause the Registration Statement to become effective as soon as
practicable after such filing, (iii) to cause the Registration Statement to
continue to be effective (and to include a prospectus complying with the
requirements of the Securities Act) until the earlier of (A) the date as of
which the Rights are no longer exercisable for the securities covered by the
Registration Statement and (B) the Expiration Date and (iv) to take as soon as
practicable following the Registration Date such action as may be required to
ensure that any acquisition of securities upon exercise of the Rights complies
with any applicable state securities or "blue sky" laws.
(d) The Company shall take such action as may be necessary to ensure
that all shares of Preferred Stock (and, following the occurrence of a
Triggering Event, any other securities that may be delivered upon exercise of
Rights) shall be, at the time of delivery of the certificates or depositary
receipts for such securities, duly and validly authorized and issued and fully
paid and non-assessable.
(e) The Company shall pay any documentary, stamp or transfer tax
imposed in connection with the issuance or delivery of the Rights Certificates
or upon the exercise of Rights; provided, however, the Company shall not be
required to pay any such tax imposed in connection with the issuance or delivery
of Units of Preferred Stock, or any certificates or depositary receipts for such
Units of Preferred Stock (or, following the occurrence of a Triggering Event,
any other securities, cash or assets, as the case may be) to any person other
than the registered holder of the Rights Certificates evidencing the Rights
surrendered for exercise. The Company shall not be required to issue or deliver
any certificates or depositary receipts for Units of Preferred Stock (or,
following the occurrence of a Triggering Event, any other securities, cash or
assets, as the case may be) to, or in a name other than that of, the registered
holder of the Rights Certificate upon the exercise of any Rights represented
thereby until any such tax shall have been paid (any such tax being payable by
the holder of such Rights Certificate at the time of surrender) or until it has
been established to the Company's satisfaction that no such tax is due.
SECTION 10. Preferred Stock Record Date. Each Person in whose name any
certificate for Units of Preferred Stock (or, following the occurrence of a
Triggering Event, other securities) is issued upon the exercise of Rights shall
for all purposes be deemed to have become the holder of record of the Units of
Preferred Stock (or, following the occurrence of a Triggering Event, other
securities) represented thereby on, and such certificate shall be dated, the
date upon which the Rights Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable transfer
taxes) was made; provided, however, that if the date of such surrender and
payment is a date upon which the Preferred Stock (or, following the occurrence
of a Triggering Event, other securities) transfer books of the Company are
closed, such Person shall be deemed to have become the record holder of such
securities on, and such certificate shall be dated, the next succeeding Business
Day on which the Preferred Stock (or, following the occurrence of a Triggering
Event, other securities) transfer books of
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<PAGE> 17
the Company are open; and further provided, however, that if delivery of Units
of Preferred Stock is delayed pursuant to Section 9(c), such Persons shall be
deemed to have become the record holders of such Units of Preferred Stock only
when such Units first become deliverable. Prior to the exercise of the Rights
evidenced thereby, the holder of a Rights Certificate shall not be entitled to
any rights of a shareholder of the Company with respect to securities for which
the Rights shall be exercisable, including, without limitation, the right to
vote, to receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.
SECTION 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. The Purchase Price, the number and kind of securities covered
by each Right and the number of Rights outstanding are subject to adjustment
from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred Stock
payable in shares of Preferred Stock, (B) subdivide the outstanding
Preferred Stock, (C) combine the outstanding Preferred Stock into a
smaller number of shares or (D) issue any shares of its capital stock
in a reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), except as
otherwise provided in this Section 11(a), the Purchase Price in effect
at the time of the record date for such dividend or of the effective
date of such subdivision, combination or reclassification, and the
number and kind of shares of Preferred Stock or capital stock, as the
case may be, issuable on such date upon exercise of the Rights, shall
be proportionately adjusted so that the holder of any Right exercised
after such time shall be entitled to receive, upon payment of the
Purchase Price then in effect, the aggregate number and kind of shares
of Preferred Stock or capital stock, as the case may be, which, if such
Right had been exercised immediately prior to such date, such holder
would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination or reclassification.
If an event occurs which would require an adjustment under both this
Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in
this Section 11(a)(i) shall be in addition to, and shall be made prior
to, any adjustment required pursuant to Section 11(a)(ii).
(ii) In the event:
(A) any Acquiring Person or any Associate or
Affiliate of any Acquiring Person, at any time after the date
of this Agreement, directly or indirectly, shall (1) merge
into the Company or otherwise combine with the Company and the
Company shall be the continuing or surviving corporation of
such merger or combination and Company Common Stock shall
remain outstanding and unchanged, (2) in one transaction or a
series
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<PAGE> 18
of transactions, transfer any assets to the Company or to any
of its Subsidiaries in exchange (in whole or in part) for
shares of Company Common Stock, for other equity securities of
the Company or any such Subsidiary, or for securities
exercisable for or convertible into shares of equity
securities of the Company or any of its Subsidiaries (whether
Company Common Stock or otherwise) or otherwise obtain from
the Company or any of its Subsidiaries, with or without
consideration, any additional shares of such equity securities
or securities exercisable for or convertible into such equity
securities (other than pursuant to a pro rata distribution to
all holders of Company Common Stock), (3) sell, purchase,
lease, exchange, mortgage, pledge, transfer or otherwise
acquire or dispose of, in one transaction or a series of
transactions, to, from or with the Company or any of its
Subsidiaries or any employee benefit plan maintained by the
Company or any of its Subsidiaries or any trustee or fiduciary
with respect to such plan acting in such capacity, assets
(including securities) on terms and conditions less favorable
to the Company or such Subsidiary or plan than those that
could have been obtained in arm's-length negotiations with an
unaffiliated third party, other than pursuant to a transaction
set forth in Section 13(a), (4) sell, purchase, lease,
exchange, mortgage, pledge, transfer or otherwise acquire or
dispose of, in one transaction or a series of transactions,
to, from or with the Company or any of the Company's
Subsidiaries or any employee benefit plan maintained by the
Company or any of its Subsidiaries or any trustee or fiduciary
with respect to such plan acting in such capacity (other than
transactions, if any, consistent with those engaged in, as of
the date hereof, by the Company and such Acquiring Person or
such Associate or Affiliate), assets (including securities)
having an aggregate fair market value of more than $5,000,000,
other than pursuant to a transaction set forth in Section
13(a), (5) sell, purchase, lease, exchange, mortgage, pledge,
transfer or otherwise acquire or dispose of, in one
transaction or a series of transactions, to, from or with the
Company or any of its Subsidiaries or any employee benefit
plan maintained by the Company or any of its Subsidiaries or
any trustee or fiduciary with respect to such plan acting in
such capacity, any material trademark or material service
mark, other than pursuant to a transaction set forth in
Section 13(a), (6) receive, or any designee, agent or
representative of such Acquiring Person or any Affiliate or
Associate of such Acquiring Person shall receive, any
compensation from the Company or any of its Subsidiaries other
than compensation for full-time employment as a regular
employee at rates in accordance with the Company's (or its
Subsidiaries') past practices, or (7) receive the benefit,
directly or indirectly (except proportionately as a holder of
Company Common Stock or as required by law or governmental
regulation), of any loans, advances, guarantees, pledges or
other financial assistance or any tax credits or other tax
advantage provided by the Company or any of its Subsidiaries
or any employee benefit plan
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<PAGE> 19
maintained by the Company or any of its Subsidiaries or any
trustee or fiduciary with respect to such plan acting in such
capacity; or
(B) any Person shall become an Acquiring Person,
unless the event causing such Person to become an Acquiring
Person is a transaction set forth in Section 13(a); or
(C) during such time as there is an Acquiring Person,
there shall be any reclassification of securities (including
any reverse stock split), or recapitalization of the Company,
or any merger or consolidation of the Company with any of its
Subsidiaries or any other transaction or series of
transactions involving the Company or any of its Subsidiaries,
other than a transaction or transactions to which the
provisions of Section 13(a) apply (whether or not with or into
or otherwise involving an Acquiring Person), which has the
effect, directly or indirectly, of increasing by more than 1%
the proportionate share of the outstanding shares of any class
of equity securities of the Company or any of its Subsidiaries
that is directly or indirectly beneficially owned by any
Acquiring Person or any Associate or Affiliate of any
Acquiring Person;
then, immediately upon the date of the occurrence of an event described
in Section 11(a)(ii)(A), (B) or (C) (a "Section 11(a)(ii) Event"),
proper provision shall be made so that each holder of a Right (except
as provided below and in Section 7(e)) shall thereafter have the right
to receive, upon exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, in lieu of the number of
Units of Preferred Stock for which a Right was exercisable immediately
prior to the first occurrence of a Section 11(a)(ii) Event, such number
of Units of Preferred Stock as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the then number of Units
of Preferred Stock for which a Right was exercisable immediately prior
to the first occurrence of a Section 11(a)(ii) Event (such product
thereafter being, for all purposes of this Agreement other than Section
13, the "Purchase Price"), and (y) dividing that product by 50% of the
then current market price (determined pursuant to Section 11(d)) per
Unit of Preferred Stock on the date of such first occurrence (such
Units of Preferred Stock being the "Adjustment Shares").
(iii) In the event that the number of shares of Preferred
Stock which are authorized by the Company's Certificate of
Incorporation but not outstanding or reserved for issuance for purposes
other than upon exercise of the Rights is not sufficient to permit the
exercise in full of the Rights in accordance with the foregoing
subparagraph (ii) of this Section 11(a), the Company, by the vote of
the Board of Directors, shall: (A) determine the excess of (1) the
value of the Adjustment Shares issuable upon the exercise of a Right
(the "Current Value") over (2) the Purchase Price (such excess being
the "Spread"), and (B) with respect to each Right, make adequate
provision to substitute for such Adjustment
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<PAGE> 20
Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a
reduction in the Purchase Price, (3) Company Common Stock or other
equity securities of the Company (including, without limitation,
shares, or units of shares, of preferred stock (such other shares being
"preferred stock equivalents")), (4) debt securities of the Company,
(5) other assets or (6) any combination of the foregoing, having an
aggregate value equal to the Current Value, where such aggregate value
has been determined by the Board of Directors, after receiving advice
from a nationally recognized investment banking firm; provided,
however, that if the Company shall not have made adequate provision to
deliver value pursuant to clause (B) above within thirty days following
the later of (x) the first occurrence of a Section 11(a)(ii) Event and
(y) the date on which the Company's right of redemption pursuant to
Section 23(a) expires (the later of (x) and (y) being referred to
herein as the "Section 11(a)(iii) Trigger Date"), then the Company
shall be obligated to deliver, upon the surrender for exercise of a
Right and without requiring payment of the Purchase Price, Units of
Preferred Stock (to the extent available) and then, if necessary, cash,
which Units of Preferred Stock and/or cash shall have an aggregate
value equal to the Spread. To the extent that the Company determines
that some action need be taken pursuant to the first sentence of this
Section 11(a)(iii), the Company shall provide, subject to Section 7(e),
that such action shall apply uniformly to all outstanding Rights. For
purposes of this Section 11(a)(iii), the value of a Unit of Preferred
Stock shall be the current market price (as determined pursuant to
Section 11(d)) per Unit of Preferred Stock on the Section 11(a)(iii)
Trigger Date and the value of any preferred stock equivalent shall be
deemed to have the same value as the Preferred Stock on such date.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred
Stock entitling them to subscribe for or purchase (for a period
expiring within forty-five calendar days after such record date) shares
of Preferred Stock (or shares having substantially the same rights,
privileges and preferences as shares of Preferred Stock ("Equivalent
Preferred Stock")) or securities convertible into Preferred Stock or
Equivalent Preferred Stock at a price per share of Preferred Stock or
per share of Equivalent Preferred Stock (or having a conversion price
per share, if a security convertible into Preferred Stock or Equivalent
Preferred Stock) less than the current market price (as determined
pursuant to Section 11(d)) per share of Preferred Stock on such record
date, the Purchase Price to be in effect after such record date shall
be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall
be the sum of the number of shares of Preferred Stock outstanding on
such record date plus the number of shares of Preferred Stock which the
aggregate offering price of the total number of shares of Preferred
Stock and/or Equivalent Preferred Stock so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to
be offered) would purchase at such current market price, and the
denominator of which shall be the number of shares of Preferred
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<PAGE> 21
Stock outstanding on such record date plus the number of additional
shares of Preferred Stock and/or Equivalent Preferred Stock to be
offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible). In case such
subscription price may be paid by delivery of consideration part or all
of which may be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board of
Directors, whose determination shall be described in a statement filed
with the Rights Agent and shall be binding on the Rights Agent and the
holders of the Rights. Shares of Preferred Stock owned by or held for
the account of the Company or any Subsidiary shall not be deemed
outstanding for the purpose of any such computation. Such adjustment
shall be made successively whenever such a record date is fixed, and in
the event that such rights or warrants are not so issued, the Purchase
Price shall be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of shares of Preferred Stock (including any
such distribution made in connection with a consolidation or merger in
which the Company is the continuing corporation) of evidences of
indebtedness, cash (other than a regular quarterly cash dividend form
of the earnings or retained earnings of the Company), assets (other
than a dividend payable in shares of Preferred Stock, but including any
dividend payable in stock other than Preferred Stock) or subscription
rights or warrants (excluding those referred to in Section 11(b)), the
Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall
be the current market price (as determined pursuant to Section 11(d))
per share of Preferred Stock on such record date less the fair market
value (as determined in good faith by the Board of Directors, whose
determination shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agent and the holder of the
Rights) of the cash, assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants distributable in
respect of a share of Preferred Stock and the denominator of which
shall be such current market price (as determined pursuant to Section
11(d)) per share of Preferred Stock. Such adjustments shall be made
successively whenever such a record date is fixed, and in the event
that such distribution is not so made, the Purchase Price shall be
adjusted to be the Purchase Price which would have been in effect if
such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the
"current market price" per share of Company Common Stock or Common
Stock on any date shall be deemed to be the average of the daily
closing prices per share of such shares for the ten consecutive Trading
Days immediately prior to such date; provided, however, if prior to the
expiration of such requisite ten Trading Day period the issuer
announces either (A) a dividend or distribution on such shares
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<PAGE> 22
payable in such shares or securities convertible into such shares
(other than the Rights) or (B) any subdivision, combination or
reclassification of such shares, then, following the ex-dividend date
for such dividend or the record date for such subdivision, as the case
may be, the "current market price" shall be properly adjusted to take
into account such event. The closing price for each day shall be, if
the shares are listed and admitted to trading on a national securities
exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal
national securities exchange on which such shares are listed or
admitted to trading or, if such shares are not listed or admitted to
trading on any national securities exchange, the last quoted price or,
if not so quoted, the average of the high bid and low asked prices in
the over-the-counter market, as reported by the NASDAQ National Market
System or such other system then in use, or, if on any such date such
shares are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market
maker making a market in such shares selected by the Board of
Directors. If on any such date no market maker is making a market in
such shares, the fair value of such shares on such date as determined
in good faith by the Board of Directors shall be used. If such shares
are not publicly held or not so listed or traded, "current market
price" per share shall mean the fair value per share as determined in
good faith by the Board of Directors, whose determination shall be
described in a statement filed with the Rights Agent and shall be
conclusive for all purposes. The term "Trading Day" shall mean, if such
shares are listed or admitted to trading on any national securities
exchange, a day on which the principal national securities exchange on
which such shares are listed or admitted to trading is open for the
transaction of business or, if such shares are not so listed or
admitted, a Business Day.
(ii) For the purpose of any computation hereunder, the
"current market price" per share of Preferred Stock shall be determined
in the same manner as set forth above for Company Common Stock in
clause (i) of this Section 11(d) (other than the fourth sentence
thereof). If the current market price per share of Preferred Stock
cannot be determined in the manner provided above or if the Preferred
Stock is not publicly held or listed or traded in a manner described in
clause (i) of this Section 11(d), the "current market price" per share
of Preferred Stock shall be conclusively deemed to be an amount equal
to 1,000 (as such amount may be appropriately adjusted for such events
as stock splits, stock dividends and recapitalizations with respect to
Company Common Stock occurring after the date of this Agreement)
multiplied by the current market price per share of Company Common
Stock. If neither Company Common Stock nor Preferred Stock is publicly
held or so listed or traded, "current market price" per share of the
Preferred Stock shall mean the fair value per share as determined in
good faith by the Board of Directors, whose determination shall be
described in a statement filed with the Rights Agent and shall be
binding on the Rights Agent and the holders of the Rights. For all
purposes of this Agreement, the "current
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<PAGE> 23
market price" of a Unit of Preferred Stock shall be equal to the
"current market price" of one share of Preferred Stock divided by
1,000.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the
Purchase Price; provided, however, that any adjustments which by reason
of this Section 11(e) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All
calculations under this Section 11 shall be made to the nearest cent or
to the nearest one-hundredth of a share of Company Common Stock or
Common Stock or other share or ten-thousandth of a share of Preferred
Stock, as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall be made
no later than the earlier of (i) three years from the date of the
transaction which mandates such adjustment and (ii) the Expiration
Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or 13(a), the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock other than
Preferred Stock, thereafter the number of such other shares so
receivable upon exercise of any Right and the Purchase Price thereof
shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with
respect to the Preferred Stock contained in Sections 11(a), (b), (c),
(d), (e), (g), (h), (i), (j), (k), (l) and (m), and the provisions of
Sections 7, 9, 10, 13 and 14 with respect to the Preferred Stock shall
apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the
right to purchase, at the adjusted Purchase Price, the number of Units
of Preferred Stock (or other securities or amount of cash or
combination thereof) that may be acquired from time to time hereunder
upon exercise of the Rights, all subject to further adjustment as
provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price
as a result of the calculations made in Sections 11(b) and (c), each
Right outstanding immediately prior to the making of such adjustment
shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of Units of Preferred Stock (calculated to
the nearest one ten-thousandth of a Unit) obtained by (i) multiplying
(x) the number of Units of Preferred Stock covered by a Right
immediately prior to this adjustment by (y) the Purchase Price in
effect immediately prior to such adjustment of the Purchase Price and
(ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
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(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in
lieu of any adjustment in the number of Units of Preferred Stock that
may be acquired upon the exercise of a Right. Each of the Rights
outstanding after the adjustment in the number of Rights shall be
exercisable for the number of Units of Preferred Stock for which a
Right was exercisable immediately prior to such adjustment. Each Right
held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest ten-thousandth)
obtained by dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Company shall
make a public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if known at
the time, the amount of the adjustment to be made. This record date may
be the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Rights Certificates have been issued, shall be
at least ten days later than the date of such public announcement. If
Rights Certificates have been issued, upon each adjustment of the
number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record
of Rights Certificates on such record date Rights Certificates
evidencing, subject to Section 14, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the
option of the Company, shall cause to be distributed to such holders of
record in substitution and replacement for the Rights Certificates held
by such holders prior to the date of adjustment, and upon surrender
thereof, if required by the Company, new Rights Certificates evidencing
all the Rights to which such holders shall be entitled after such
adjustment. Rights Certificates to be so distributed shall be issued,
executed and countersigned in the manner provided for herein (and may
bear, at the option of the Company, the adjusted Purchase Price) and
shall be registered in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of Units of Preferred Stock issuable upon the
exercise of the Rights, the Rights Certificates theretofore and
thereafter issued may continue to express the Purchase Price per Unit
and the number of Units of Preferred Stock which were expressed in the
Initial Rights Certificates issued hereunder without prejudice to any
such adjustment or change.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value of the number of
Units of Preferred Stock issuable upon exercise of the Rights, the
Company shall take any corporate action which may, in the opinion of
its counsel, be necessary in order that the Company may validly and
legally issue such fully paid and non-assessable number of Units of
Preferred Stock at such adjusted Purchase Price.
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(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date
for a specified event, the Company may elect to defer until the
occurrence of such event the issuance to the holder of any Right
exercised after such record date of that number of Units of Preferred
Stock and shares of other capital stock or securities of the Company,
if any, issuable upon such exercise over and above the number of Units
of Preferred Stock and shares of other capital stock or securities of
the Company, if any, issuable upon such exercise on the basis of the
Purchase Price in effect prior to such adjustment; provided, however,
that the Company shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive such
additional shares (fractional or otherwise) or securities upon the
occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions
in the Purchase Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that in their good
faith judgment the Board of Directors shall determine to be advisable
in order that any (i) consolidation or subdivision of the Preferred
Stock, (ii) issuance wholly for cash of any shares of Preferred Stock
at less than the current market price, (ii) issuance wholly for cash of
shares of Preferred Stock or securities which by their terms are
convertible into or exchangeable for shares of Preferred Stock, (iv)
stock dividends or (v) issuance of rights, options or warrants referred
to in this Section 11, hereafter made by the Company to holders of its
Preferred Stock, shall not be taxable to such holders or shall reduce
the taxes payable by such holders.
(n) The Company shall not, at any time after the Distribution
Date, (i) consolidate with any other Person (other than a Subsidiary of
the Company in a transaction which complies with Section 11(o)), (ii)
merge with or into any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o)), or (iii)
sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction, or a series of transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to any other Person or Persons
(other than the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o)), 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 Person which constitutes, or would constitute, the
"Principal Party" for purposes of Section 13(a) shall have distributed
or otherwise transferred to its shareholders or other persons holding
an equity interest in such Person Rights previously owned by such
Person or any of its Affiliates and Associates; provided, however, this
Section 11(n) shall not affect the ability of
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any Subsidiary of the Company to consolidate with, merge with or into,
or sell or transfer assets or earning power to, any other Subsidiary of
the Company.
(o) After the Distribution Date, the Company shall not, except
as permitted by Section 23 or Section 26, take (or permit any
Subsidiary to take) any action if at the time such action is taken it
is reasonably foreseeable that such action will diminish substantially
or otherwise eliminate the benefits intended to be afforded by the
Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after
the Rights Dividend Declaration Date and prior to the Distribution Date
(i) declare a dividend on the outstanding shares of Company Common
Stock payable in shares of Company Common Stock, (ii) subdivide the
outstanding shares of Company Common Stock, (iii) combine the
outstanding shares of Company Common Stock into a smaller number of
shares, or (iv) issue any shares of its capital stock in a
reclassification of Company Common Stock (including any such
reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), the number of
Rights associated with each share of Company Common Stock then
outstanding, or issued or delivered thereafter but prior to the
Distribution Date, shall be proportionately adjusted so that the number
of Rights thereafter associated with each share of Company Common Stock
following any such event shall equal the result obtained by multiplying
the number of Rights associated with each share of Company Common Stock
immediately prior to such event by a fraction the numerator of which
shall be the total number of shares of Company Common Stock outstanding
immediately prior to the occurrence of the event and the denominator of
which shall be the total number of shares of Company Common Stock
outstanding immediately following the occurrence of such event.
SECTION 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or Section 13, the
Company shall (a) promptly prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent, and with each transfer agent for the Preferred Stock
and the Company Common Stock, a copy of such certificate, and (c) mail a brief
summary thereof to each holder of a Rights Certificate (or, if prior to the
Distribution Date, to each holder of a certificate representing shares of
Company Common Stock) in accordance with Section 25. The Rights Agent shall be
fully protected in relying on any such certificate and on any adjustment therein
contained and shall not be deemed to have knowledge of any such adjustment
unless and until it shall have received such Certificate.
SECTION 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. (a) In the event that, following the Stock Acquisition Date,
directly or indirectly, either (x) the Company shall consolidate with, or merge
with and into, any other Person
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<PAGE> 27
(other than a Subsidiary of the Company in a transaction which complies with
Section 11(o)), and the Company shall not be the continuing or surviving
corporation of such consolidation or merger, (y) any Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o))
shall consolidate with, or merge with or into, the Company, and the Company
shall be the continuing or surviving corporation of such consolidation or merger
and, in connection with such consolidation or merger, all or part of the
outstanding shares of Company Common Stock shall be converted into or exchanged
for stock or other securities of any other Person or cash or any other property,
or (z) the Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer) to any Person or Persons (other
than the Company or any of its Subsidiaries in one or more transactions each of
which complies with Section 11(o)), in one or more transactions, assets or
earning power aggregating more than 50% of the assets or earning power of the
Company and its Subsidiaries, taken as a whole (any such event being a "Section
13 Event"), then, and in each such case, proper provision shall be made so that:
(i) each holder of a Right, except as provided in Section 7(e), shall thereafter
have the right to receive, upon the exercise thereof at the then current
Purchase Price, such number of validly authorized and issued, fully paid and
non-assessable shares of Common Stock of the Principal Party, which shares shall
not be subject to any liens, encumbrances, rights of first refusal, transfer
restrictions or other adverse claims, as shall be equal to the result obtained
by (1) multiplying the then current Purchase Price by the number of Units of
Preferred Stock for which a Right is exercisable immediately prior to the first
occurrence of a Section 13 Event (or, if a Section 11 (a)(ii) Event has occurred
prior to the first occurrence of a Section 13 Event, multiplying the number of
such Units for which a Right would be exercisable hereunder but for the
occurrence of such Section 11 (a)(ii) Event by the Purchase Price which would be
in effect hereunder but for such first occurrence) and (2) dividing that product
(which, following the fast occurrence of a Section 13 Event, shall be the
"Purchase Price" for all purposes of this Agreement) by 50% of the current
market price (determined pursuant to Section 11(d)) per share of the Common
Stock of such Principal Party on the date of consummation of such Section 13
Event; (ii) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such Section 13 Event, all the obligations and duties of
the Company pursuant to this Agreement; (iii) the term "Company" shall, for all
purposes of this Agreement, thereafter be deemed to refer to such Principal
Party, it being specifically intended that the provisions of Section 11 shall
apply only to such Principal Party following the first occurrence of a Section
13 Event; (iv) such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of shares of its Common
Stock) in connection with the consummation of any such transaction as may be
necessary to ensure that the provisions of this Agreement shall thereafter be
applicable to its shares of Common Stock thereafter deliverable upon the
exercise of the Rights; and (v) the provisions of Section 11(a)(ii) shall be of
no further effect following the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean:
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<PAGE> 28
(i) in the case of any transaction described in
clause (x) or (y) of the first sentence of Section 13(a), (A)
the Person that is the issuer of any securities into which
shares of Company Common Stock are converted in such merger or
consolidation, or, if there is more than one such issuer, the
issuer of Common Stock that has the highest aggregate current
market price (determined pursuant to Section 11(d)) and (B) if
no securities are so issued, the Person that is the other
party to such merger or consolidation, or, if there is more
than one such Person, the Person the Common Stock of which has
the highest aggregate current market price (determined
pursuant to Section 11 (d)); and
(ii) in the case of any transaction described in
clause (z) of the first sentence of Section 13(a), the Person
that is the party receiving the largest portion of the assets
or earning power transferred pursuant to such transaction or
transactions, or, if each Person that is a party to such
transaction or transactions receives the same portion of the
assets or earning power transferred pursuant to such
transaction or transactions or if the Person receiving the
largest portion of the assets or earning power cannot be
determined, whichever Person the Common Stock of which has the
highest aggregate current market price (determined pursuant to
Section 11(d)); provided, however, that in any such case, (1)
if the Common Stock of such Person is not at such time and has
not been continuously over the preceding twelve-month period
registered under Section 12 of the Exchange Act ("Registered
Common Stock"), or such Person is not a corporation, and such
Person is a direct or indirect Subsidiary of another Person
that has Registered Common Stock outstanding, "Principal
Party" shall refer to such other Person; (2) if the Common
Stock of such Person is not Registered Common Stock or such
Person is not a corporation, and such Person is a direct or
indirect Subsidiary of another Person but is not a direct or
indirect Subsidiary of another Person which has Registered
Common Stock outstanding, "Principal Party" shall refer to the
ultimate parent entity of such first- mentioned Person; (3) if
the Common Stock of such Person is not Registered Common Stock
or such Person is not a corporation, and such Person is
directly or indirectly controlled by more than one Person, and
one or more of such other Persons has Registered Common Stock
outstanding, "Principal Party" shall refer to whichever of
such other Persons is the issuer of the Registered Common
Stock having the highest aggregate current market price
(determined pursuant to Section 11(d)); and (4) if the Common
Stock of such Person is not Registered Common Stock or such
Person is not a corporation, and such Person is directly or
indirectly controlled by more than one Person, and none of
such other Persons have Registered Common Stock outstanding,
"Principal Party" shall refer to whichever ultimate parent
entity is the corporation having the greatest shareholders'
equity or, if no such ultimate
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<PAGE> 29
parent entity is a corporation, shall refer to whichever
ultimate parent entity is the entity having the greatest net
assets.
(c) The Company shall not consummate any such consolidation, merger,
sale or transfer unless the Principal Party shall have a sufficient number of
authorized shares of its Common Stock 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 the Principal Party will:
(i) (A) file on an appropriate form, as soon as
practicable following the execution of such agreement, a
registration statement under the Securities Act with respect
to the Common Stock that may be acquired upon exercise of the
Rights, (B) cause such registration statement to remain
effective (and to include a prospectus complying with the
requirements of the Securities Act until the Expiration Date,
and (c) as soon as practicable following the execution of such
agreement take such action as may be required to ensure that
any acquisition of such Common Stock upon the exercise of the
Rights complies with any applicable state securities or "blue
sky" laws; and
(ii) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates which comply in all respects with the requirements
for registration on Form 10 under the Exchange Act.
(d) In case the Principal Party which is to be a party to a transaction
referred to in this Section 13 has a provision in any of its authorized
securities or in its Certificate of Incorporation or By-laws or other instrument
governing its corporate affairs, which provision would have the effect of (i)
causing such Principal Party to issue, in connection with, or as a consequence
of, the consummation of a transaction referred to in this Section 13, shares of
Common Stock of such Principal Party at less than the then current market price
per share (determined pursuant to Section 11(d)) or securities exercisable for,
or convertible into, Common Stock of such Principal Party at less than such then
current market price (other than to holders of Rights pursuant to this Section
13) or (ii) providing for any special payment, tax or similar provisions in
connection with the issuance of the Common Stock of such Principal Party
pursuant to the provisions of this Section 13, then, in such event, the Company
shall not consummate any such transaction unless prior thereto the Company and
such Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing that the provision in question of such
Principal Party shall have been cancelled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of the consummation of
the proposed transaction.
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<PAGE> 30
(e) The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. In the event
that a Section 13 Event shall occur at any time after the occurrence of a
Section 11(a)(ii) Event, the Rights which have not theretofore been exercised
shall thereafter become exercisable in the manner described in Section 13(a).
SECTION 14. Fractional Rights and Fractional Shares. (a) The Company
shall not be required to issue fractions of Rights or to distribute Rights
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the Persons to which such fractional Rights would
otherwise be issuable, an amount in cash equal to such fraction of the market
value of a whole Right. For purposes of this Section 14(a), the market value of
a whole Right shall be the closing price of the Rights for the Tracking Day
immediately prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price of the Rights for any day shall be, if the
Rights are listed or admitted to trading on a national securities exchange, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other system then in use
or, if on any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board of 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 shall be used and such determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all purposes.
(b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions which are integral multiples of one
one-thousandth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates which evidence such fractional shares of Preferred Stock
(other than fractions which are integral multiples of one one-thousandth of a
share of Preferred Stock). In lieu of such fractional shares of Preferred Stock
that are not integral multiples of one one-thousandth of a share, the Company
may pay to the registered holders of Rights Certificates at the time such Rights
are exercised as herein provided an amount in cash equal to the same fraction of
the then current market price of a share of Preferred Stock on the day of
exercise, determined in accordance with Section 11(d).
(c) The holder of a Right by the acceptance of such Right expressly
waives his fight to receive any fractional Rights or any fractional shares upon
exercise of a Right, except as permitted by this Section 14.
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<PAGE> 31
SECTION 15. Rights of Action. All rights of action in respect of this
Agreement, other than rights of action vested in the Rights Agent pursuant to
Section 18 hereof, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of
certificates representing shares of Company Common Stock); and any registered
holder of a Rights Certificate (or, prior to the Distribution Date, of a
certificate representing shares of Company Common Stock), without the consent of
the Rights Agent or of the holder of any other Rights Certificate (or, prior to
the Distribution Date, of a certificate representing shares of Company Common
Stock), may, in such registered holder's own behalf and for such registered
holder's own benefit, enforce, and may institute and maintain any suit, action
or proceeding against the Company or any other Person to enforce, or otherwise
act in respect of, such registered holder's right to exercise the Rights
evidenced by such Rights Certificate in the manner provided in such Rights
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and shall be entitled to specific performance of the
obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this Agreement.
SECTION 16. Agreement of Rights Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of Company Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purposes, duly endorsed or
accompanied by a proper instrument of transfer and with the appropriate forms
and certificates duly executed;
(c) subject to Section 6(a) and Section 7(f), the Company and the
Rights Agent may deem and treat the person in whose name a Rights Certificates
(or, prior to the Distribution Date, the associated Company Common Stock
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Company Common Stock certificate made by
anyone other than the Company or the Rights Agent) for all purposes whatsoever,
and neither the Company nor the Rights Agent, subject to the last sentence of
Section 7(e), shall be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Rights Agent shall have any liability to any holder of a
Right or any other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or
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<PAGE> 32
administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligation; provided,
however, the Company must use its best efforts to have any such order, decree or
ruling lifted or otherwise overturned as promptly as practicable.
SECTION 17. Rights Certificate Holder Not Deemed a Shareholder. No
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of shares of
Preferred Stock or any other securities of the Company which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall anything
contained herein or in any Rights Certificate be construed to confer upon the
holder of any Rights Certificate, as such, any of the rights of a shareholder of
the Company or any right to vote for the election of directors or upon any
matter submitted to shareholders at any meeting thereof, or to give or withhold
consent to any corporate action, or, except as provided in Section 24, to
receive notice of meetings or other actions affecting shareholders, or to
receive dividends or subscription rights, or otherwise.
SECTION 18. Concerning the Rights Agent. (a) The Company agrees to pay
to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses, including reasonable fees and disbursements of its counsel, incurred
in connection with the execution and administration of this Agreement and the
exercise and performance of its duties hereunder. The Company shall indemnify
the Rights Agent for, and hold it harmless against, any loss, liability, or
expense, incurred without negligence, bad faith or 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 hereunder.
(b) The Rights Agent shall be protected and shall incur no liability
for or in respect of any action taken, suffered or omitted by it in connection
with its administration of this Agreement in reliance upon any Rights
Certificate or certificate for Preferred Stock or for other securities of the
Company, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement or other
paper or document believed by it to be genuine and to have been signed, 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.
(a) Any corporation into which the Rights Agent or any successor Rights Agent
may be merged or with which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Rights Agent or any successor
Rights Agent shall be a party, or any corporation succeeding to the corporate
trust or shareholder services businesses of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any document
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<PAGE> 33
or any further act on the pan 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 Rights
Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of a predecessor Rights Agent and
deliver such Rights Certificates so countersigned; and in case at that time any
of the Rights Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Rights Certificates either in the name of the
predecessor or in the name of the successor Rights Agent; and in all such cases
such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Rights Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Rights Certificates so countersigned; and in case at that
time any of the Rights Certificates shall not have been countersigned, the
Rights Agent may countersign such Rights Certificates either in its prior name
or in its changed name; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this Agreement.
SECTION 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and the
determination of "current market price") be proved or established by the Company
prior to taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof he specified herein) may he deemed to he
conclusively proved and established by a certificate signed by the Chairman of
the Board, the President, any Vice President, the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary of the Company and delivered
to the Rights Agent; provided, however, that so long as any Person is an
Acquiring Person hereunder, such certificate shall be signed and delivered by
the Board of Directors; and such certificate shall be full authorization to the
Rights Agent for any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
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<PAGE> 34
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Rights
Certificates or be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not have any responsibility for the validity
of this Agreement or the execution and delivery hereof (except the due execution
and delivery hereof by the Rights Agent) or for the validity or execution of any
Rights Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or failure by the
Company to satisfy conditions contained in this Agreement or in any Rights
Certificate; nor shall it be responsible for any adjustment required under the
provisions of Section 11 or Section 13 or for the manner, method or amount of
any such adjustment or the ascertaining of the existence of facts that would
require any such adjustment (except with respect to the exercise of Rights
evidenced by Rights Certificates after receipt by the Rights Agent of the
certificate describing any such adjustment contemplated by Section 12); nor
shall it by any act hereunder be deemed to make any representation or warranty
as to the authorization or reservation of any shares of Preferred Stock or any
other securities to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any shares of Preferred Stock or any other
securities will, when so issued, be validly authorized and issued, fully paid
and non-assessable.
(f) The Company shall perform, execute, acknowledge and deliver or
cause to be performed, executed, acknowledged and delivered all such further
acts, instruments and assurances as may reasonably be required by the Rights
Agent for the performance by the Rights Agent of its duties under this
Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the President, any Vice President, the Secretary, any
Assistant Secretary, the Treasurer or any Assistant Treasurer of the Company,
and to apply to such officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or suffered to be taken
by it in good faith in accordance with instructions of any such officer;
provided, however, that so long as any Person is an Acquiring Person hereunder,
the Rights Agent shall accept such instructions and advice only from the Board
of Directors and shall not be liable for any action taken or suffered to be
taken by it in good faith in accordance with such instructions of the Board of
Directors. Any application by the Rights Agent for written instructions from the
Company may, at the option of the Rights Agent, set forth in writing any action
proposed to be taken or omitted by the Rights Agent under this Rights Agreement
and the date on and/or after which such action
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<PAGE> 35
shall be taken or such omission shall be effective. The Rights Agent shall not
be liable for any action taken by, or omission of, the Rights Agent in
accordance with a proposal included in any such application on or after the date
specified in such application (which date shall not be less than five Business
Days after the date any such officer of the Company actually receives such
application, unless any such officer shall have consented in writing to an
earlier date) unless, prior to taking any such action (or the effective date in
the case of an omission), the Rights Agent shall have received written
instructions in response to such application specifying the action to be taken
or omitted.
(h) The Rights Agent and any shareholder, director, officer or employee
of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniary 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 Person.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties or in the exercise of its rights hereunder if
the Rights Agent shall have reasonable grounds for believing that repayment of
such funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed, not signed or indicates an affirmative response to clause 1
and/or 2 thereof, the Rights Agent shall not take any further action with
respect to such requested exercise or transfer without first consulting with the
Company. If such certificate has been completed and signed and shows a negative
response to clauses 1 and 2 of such certificate, unless previously instructed
otherwise in writing by the Company (which instructions may impose on the Rights
Agent additional ministerial responsibilities, but no discretionary
responsibilities), the Rights Agent may assume without further inquiry that the
Rights Certificate is not owned by a person described in Section 4(b) or Section
7(e) and shall not be charged with any knowledge to the contrary.
SECTION 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty days' prior notice in writing mailed to the Company, and to each
transfer agent of the Preferred Stock and the Company Common Stock, by
registered or certified mail, and to the holders of the Rights Certificates (or
certificates for the Company Common
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<PAGE> 36
Stock prior to the Distribution Date) by first class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon thirty days' prior
notice in writing, mailed to the Rights Agent or successor Rights Agent, as the
case may be, and to each transfer agent of the Preferred Stock and the Company
Common Stock, by registered or certified mail, and to the holders of the Rights
Certificates (or certificates for the Company Common Stock prior to the
Distribution Date) by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of thirty days after giving notice of such removal
or after it has been notified in writing of such resignation or incapacity by
the resigning or incapacitated Rights Agent or by the holder of a Rights
Certificate or, prior to the Distribution Date, the holder of a certificate for
the Company Common Stock (who shall, with such notice, submit such holder's
Rights Certificate or certificate for Company Common Stock, as the case may be,
for inspection by the Company), then any registered holder of any Rights
Certificate or, prior to the Distribution Date, the holder of a certificate for
the Company Common Stock may apply to any court of competent jurisdiction for
the appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (a) a corporation
organized and doing business under the laws of the United States or any state of
the United States in good standing, shall be authorized to do business as a
banking institution in the State of New York, shall be authorized under such
laws to exercise corporate trust or stock transfer powers, shall be subject to
supervision or examination by federal or state authorities and shall have at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $100,000,000 or (b) an Affiliate of a corporation described in clause (a).
After appointment, the successor Rights Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally named
as Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Preferred Stock
and the Company Common Stock, and a notice thereof in writing to the registered
holders of the Rights Certificates (or certificates for the Company Common Stock
prior to the Distribution Date). Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent.
SECTION 22. Issuance of New Rights Certificates. Notwithstanding any of
the provisions of this Agreement or the Rights to the contrary, the Company may,
at its option, issue new Rights Certificates evidencing Rights in such form as
may be approved by the Board of Directors to reflect any adjustment or change
made in accordance with the provisions of this Agreement in the Purchase Price
or the number or kind or class of shares or other securities or property that
may be acquired upon exercise of the Rights. In addition, in connection with the
issuance or sale of shares of Company Common Stock
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<PAGE> 37
following the Distribution Date and prior to the Expiration Date, the Company
(a) shall, with respect to shares of Company Common Stock so issued or sold
pursuant to the exercise of stock options or under any employee plan or
arrangement, or upon the exercise, conversion or exchange of securities
hereinafter issued by the Company, and (b) may, in any other case, if deemed
necessary or appropriate by the Board of Directors, issue Rights Certificates
representing the appropriate number of Rights in connection with such issuance
or sale; provided, however, that (i) no such Rights Certificate shall be issued
if, and to the extent that, the Company shall be advised by counsel that such
issuance would create a significant risk of material adverse tax consequences to
the Company or the person to whom such Rights Certificate would be issued and
(ii) no such Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.
SECTION 23. Redemption and Termination. (a) Subject to Section 28, the
Company may, at its option, by action of the Company's Board of Directors, at
any time prior to the earlier of (i) the Close of Business on the tenth day
following the Stock Acquisition Date or (ii) the Final Expiration Date, redeem
all but not less than all of the then outstanding Rights at a redemption price
of $.0001 per Right, as such amount may be appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof (such redemption price being the "Redemption Price"), and the Company
may, at its option, by action of the Company's Board of Directors, pay the
Redemption Price either in shares of Company Common Stock (based on the current
market price, determined in accordance with Section 11(d), of the shares of
Company Common Stock at the time of redemption) or cash. Subject to the
foregoing, the redemption of the Rights may be made effective at such time, on
such basis and with such conditions as the Board of Directors in its sole
discretion may establish.
(b) Immediately upon the action of the Board of Directors ordering the
redemption of the Rights, evidence of which shall be filed with the Rights
Agent, and without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter of the holders
of Rights shall be to receive the Redemption Price for each Right so held.
Promptly after the action of the Board of Directors ordering the redemption of
the Rights, the Company shall give notice of such redemption to the Rights Agent
and the holders of the then outstanding Rights by mailing such notice to all
such holders at each holder's last address as it appears upon the registry books
of the Rights Agent or, prior to the Distribution Date, on the registry books of
the transfer agent for Company Common Stock. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder receives
the notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made.
SECTION 24. Notice of Certain Events. (a) In case the Company shall
propose, at any time after the Distribution Date, (i) to pay any dividend
payable in stock of any class to the holders of Preferred Stock or to make any
other distribution to the holders of Preferred Stock (other than a regular
quarterly cash dividend out of earnings or retained
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<PAGE> 38
earnings of the Company), (ii) to offer to the holders of Preferred Stock rights
or warrants to subscribe for or to purchase any additional shares of Preferred
Stock or shares of stock of any class or any other securities, rights or
options, (iii) to effect any reclassification of its Preferred Stock (other than
a reclassification involving only the subdivision of outstanding shares of
Preferred Stock), (iv) to effect any consolidation or merger into or with any
other Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o)), or to effect any sale or other transfer (or to
permit one or more of its Subsidiaries to effect any sale or other transfer), in
one or more transactions, of more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any other Person or Persons
(other than the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o)) or (v) to effect the
liquidation, dissolution or winding up of the Company, then, in each such case,
the Company shall give to each holder of a Rights Certificate (or, prior to the
Distribution Date, to each holder of certificates for Company Common Stock), to
the extent feasible and in accordance with Section 25, a notice of such proposed
action, which shall specify the record date for the purposes of such stock
dividend, distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution or winding up is to take place and the date of participation therein
by the holders of the shares of Preferred Stock, if any such date is to be
fixed, and such notice shall be so given in the case of any action covered by
clause (i) or (ii) above at least 20 days prior to the record date for
determining holders of the shares of Preferred Stock for purposes of such
action, and in the case of any such other action, at least 20 days prior to the
date of the taking of such proposed action or the date of participation therein
by the holders of the shares of Preferred Stock, whichever shall be the earlier;
provided, however, no such notice shall be required pursuant to this Section 24
if any Subsidiary of the Company effects a consolidation or merger with or into,
or effects a sale or other transfer of assets or earnings power to, any other
Subsidiary of the Company.
(b) In case any of the events set forth in Section 11(a)(ii) shall
occur, then, in any such case, (i) the Company shall as soon as practicable
thereafter give to each holder of a Rights Certificate, to the extent feasible
and in accordance with Section 25, a notice of the occurrence of such event,
which shall specify the event and the consequences of the event to holders of
Rights under Section 11(a)(ii).
SECTION 25. Notices. All notices and other communications provided for
hereunder shall, unless otherwise stated herein, be in writing and mailed or
sent or delivered (including by facsimile transmission), if to the Company, at
its address at:
TransAct Technologies Incorporated
7 Laser Lane
Wallingford, CT 06492
Attention: Richard L. Cote
Telecopy No.: (203) 949-9048
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<PAGE> 39
and if to the Rights Agent, at its address at:
American Stock Transfer & Trust Company
40 Wall Street
New York, NY 10005
Attention: Corporate Trust
Telecopy No.: (718) 236-4588
Notices or demands authorized or required by this Agreement to be given or made
by the Company or the Rights Agent to the holder of any Rights Certificate (or,
if prior to the Distribution Date, to the holder of certificates representing
shares of Company Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent for the Company
Common Stock.
SECTION 26. Supplements and Amendments. Prior to the Distribution Date
and subject to the penultimate sentence of this Section 26, the Company and the
Rights Agent shall, if the Company so directs, supplement or amend any provision
of this Agreement without the approval of any holders of certificates
representing shares of Company Common Stock. From and after the Distribution
Date and subject to the penultimate sentence of this Section 26, the Company and
the Rights Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Rights Certificates in order
(i) to cure any ambiguity, (ii) to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provisions herein,
(iii) to shorten or lengthen any time period hereunder or (iv) to change or
supplement the provisions hereunder in any manner which the Company may deem
necessary or desirable and which shall not adversely affect the interests of the
holders of Rights Certificates (other than an Acquiring Person or an Affiliate
or Associate of an Acquiring Person); provided, however, that this Agreement may
not be supplemented or amended to lengthen, pursuant to clause (iii) of this
sentence, (A) subject to Section 28 hereof, a time period relating to when the
Rights may be redeemed at such time as the Rights are not then redeemable, or
(B) any other time period unless such lengthening is for the purpose of
protecting, enhancing or clarifying the rights of, and/or the benefits to, the
holders of Rights. Upon the delivery of a certificate from an appropriate
officer of the Company or, so long as any Person is an Acquiring Person
hereunder, from the Board of Directors, 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 Company Common Stock.
SECTION 27. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
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<PAGE> 40
SECTION 28. Determinations and Actions by the Board of Directors, etc.
For all purposes of this Agreement, any calculation of the number of shares of
Company Common Stock outstanding at any particular time, including for purposes
of determining the particular percentage of such outstanding shares of Company
Common Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the Exchange Act
Regulations as in effect on the date hereof. Except as otherwise specifically
provided herein, the Board of Directors of the Company shall have the exclusive
power and authority to administer this Agreement and to exercise all rights and
powers specifically granted to the Board of Directors of the Company or to the
Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation the right and power (i) to interpret
the provisions of this Agreement and (ii) to make all determinations deemed
necessary or advisable for the administration of this Agreement. All such
actions, calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the foregoing) which
are done or made by the Board in good faith shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights and all
other parties, and (y) not subject the Board of Directors of the Company or any
member thereof to any liability to the holders of the Rights.
SECTION 29. Benefits of this Agreement. Nothing in this Agreement shall
be consumed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of shares of Company Common Stock) any
legal or equitable right, remedy or claim under this Agreement. This Agreement
shall be for the sole and exclusive benefit of the Company, the Rights Agent and
the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of shares of Company Common Stock).
SECTION 30. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full form and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors determines in its good faith judgment that severing the invalid
language from this Agreement would adversely affect the purpose or effect of
this Agreement and the Rights shall not then be redeemable, the right of
redemption set forth in Section 23 hereof shall be reinstated and shall not
expire until the Close of Business on the tenth Business Day following the date
of such determination by the Board of Directors.
SECTION 31. Governing Law. This Agreement, each Right and each Rights
Certificate issued hereunder shall be governed by, and construed in accordance
with, the
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<PAGE> 41
laws of the State of Delaware applicable to contracts executed in and to be
performed entirely in such State.
SECTION 32. Counterparts. This Agreement may be executed (including by
facsimile) in one or more counterparts, and by the different parties hereto in
separate counterparts, each of which when executed shall be deemed to be an
original, but all of which taken together shall constitute one and the same
instrument.
SECTION 33. Descriptive Headings. The headings contained in this
Agreement are for descriptive purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
SECTION 34. Exchange. (a) (i) The Company may, at its option, at any
time after any person becomes an Acquiring Person, upon resolution by the Board
of Directors of the Company, 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)) for Units of Preferred Stock at an
exchange ratio of one Unit of Preferred 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
Section 34(a)(i) Exchange Ratio"). Notwithstanding the foregoing, the Company
may not effect such exchange at any time after any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan maintained by
the Company or any of its Subsidiaries, or any trustee or fiduciary with respect
to such plan acting in such capacity), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or more of the
Common Shares then outstanding.
(ii) The Company may, at its option, at any time after any Person
becomes an Acquiring Person, upon resolution by the Board of Directors of the
Company, exchange all or part of the then outstanding and exercisable Rights
(which shall not include Rights that have become void pursuant to Section 7(e)
hereof) for Units of Preferred Stock at an exchange ratio specified in the
following sentence, as appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof. Subject to such
adjustment, each Right may be exchanged for that number of Units of Preferred
Stock obtained by dividing the Adjustment Spread (as defined below) by the then
current market price (determined pursuant to Section 11(d) hereof) per Unit of
Preferred Stock on the earlier of (i) the date on which any Person becomes an
Acquiring Person and (ii) the date on which a tender or exchange offer by any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan maintained by the Company or any of its Subsidiaries or any trustee
or fiduciary with respect to such plan acting in such capacity) is first
published or sent or given within the meaning of Rule 14d-4(a) of the Exchange
Act Regulations or any successor rule, if upon consummation thereof such Person
would be the Beneficial Owner of 15% or more of the shares of Company Common
Stock then outstanding (such exchange ratio being the "Section 34(a)(ii)
Exchange Ratio"). The "Adjustment Spread" shall equal (x) the
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<PAGE> 42
aggregate market price on the date of such event of the number of Adjustment
Shares determined pursuant to Section 11(a)(ii), minus (y) the Purchase Price.
Notwithstanding the foregoing, the Company may not effect such exchange at any
time after any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan maintained by the Company or any of its Subsidiaries,
or any trustee or fiduciary with respect to such plan acting in such capacity),
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Common Shares then outstanding.
(b) Immediately upon the action of the Board of Directors ordering the
exchange of any Rights pursuant to 43 Section 34(a) and without any further
action and without any notice, the right to exercise such Rights shall terminate
and the only right thereafter of a holder of such Rights shall be to receive
that number of Units of Preferred Stock equal to the number of such Rights held
by such holder multiplied by the Section 34(a)(i) Exchange Ratio or Section
34(a)(ii) Exchange Ratio, as the case may be. 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 shall state the method by which the exchange of
Units of Preferred Stock for Rights will be effected and, in the event of any
partial exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other than
Rights which have become void pursuant to the provisions of Section 7(e) hereof)
held by each holder of Rights.
(c) In the event that the number of shares of Preferred Stock which are
authorized by the Company's Certificate of Incorporation but not outstanding or
reserved for issuance for purposes other than upon exercise of the Rights are
not sufficient to permit any exchange of Rights as contemplated in accordance
with this Section 34, the Company shall take all such action as may be necessary
to authorize additional shares of Preferred Stock for is and upon exchange of
the Rights or make adequate provision to substitute (1) cash, (2) Company Common
Stock or other equity securities of the Company, (3) debt securities of the
Company, (4) other assets, or (5) any combination of the foregoing, having an
aggregate value equal to the Adjustment Spread, where such aggregate value has
been determined by the Board of Directors.
(d) The Company shall not be required to issue fractions of Units of
Preferred Stock or to distribute certificates which evidence fractional Units.
In lieu of fractional Units, the Company may pay to the registered holders of
Rights Certificates at the time such Rights are exchanged as herein provided an
amount in cash equal to the same fraction of the current market price
(determined pursuant to Section 11(d) hereof) of one Unit of Preferred Stock.
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<PAGE> 43
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed on their behalf as of the date first above written.
ATTEST: TRANSACT TECHNOLOGIES
INCORPORATED
By /s/ Richard L. Cote By /s/ Bart C. Shuldman
--------------------------------- -----------------------------------
Name: Richard L. Cote Name: Bart C. Shuldman
Title: Secretary Title: President and Chief
Executive Officer
ATTEST: AMERICAN STOCK TRANSFER
& TRUST COMPANY
By /s/ Susan Silber By /s/ Herbert J. Lemmer
--------------------------------- ------------------------------------
Name: Susan Silber Name: Herbert J. Lemmer
Title: Assistant Secretary Title: Vice President
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<PAGE> 44
EXHIBIT A
[Form of Rights Certificate]
Certificate No. ____ ___Rights
NOT EXERCISABLE AFTER THE EXPIRATION DATE (AS DEFINED IN THE AMENDED AND
RESTATED RIGHTS AGREEMENT REFERRED TO BELOW). THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE AMENDED
AND RESTATED RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES (SPECIFIED IN THE
AMENDED AND RESTATED RIGHTS AGREEMENT), RIGHTS BENEFICIALLY OWNED BY ACQUIRING
PERSONS (AS DEFINED IN THE AMENDED AND RESTATED RIGHTS AGREEMENT) OR ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A
PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE AMENDED AND RESTATED RIGHTS
AGREEMENT REFERRED TO BELOW). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE
RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF THE AMENDED AND RESTATED RIGHTS AGREEMENT.]*
RIGHTS CERTIFICATE
TRANSACT TECHNOLOGIES INCORPORATED
This certifies that _______________, or registered assigns, is the registered
holder of the number of Rights set forth above, each of which entitles the
registered holder thereof, subject to the terms and conditions of the Amended
and Restated Rights Agreement dated as of February 16, 1999 (the "Rights
Agreement"; terms defined therein are used herein with the same meaning unless
otherwise defined herein) between TransAct Technologies Incorporated, a Delaware
corporation (the "Company"), and American Stock Transfer & Trust Company, as
Rights Agent (which term shall include any successor Rights Agent under the
Rights Agreement), to purchase from the Company at any time after the
Distribution Date and prior to the Expiration Date at the office of the Rights
Agent, one one-thousandth of a fully paid and non-assessable share of Series A
Preferred Stock, par value $.01 per share (the "Preferred Stock"), of the
Company at the Purchase Price initially of $69 per one one-thousandth share
(each such one-thousandth of a share being a "Unit") of Preferred Stock, upon
presentation and surrender of this Rights Certificate with the Election to
Purchase and related certificate duly executed. The number of Rights evidenced
by this Rights Certificate (and the number of Units which may be purchased upon
exercise thereof) set forth above, and the Purchase Price per
- --------
* The portion of the legend in brackets shall be inserted only if applicable and
shall replace the preceding sentence.
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<PAGE> 45
Unit set forth above shall be subject to adjustment in certain events as
provided in the Rights Agreement.
Upon the occurrence of a Section 11(a)(ii) Event or Section 13 Event,
if the Rights evidenced by this Rights Certificate are beneficially owned by an
Acquiring Person or an Affiliate or Associate of any such Acquiring Person or,
under certain circumstances described in the Rights Agreement, a transferee of
any such Acquiring Person, Associate or Affiliate, such Rights shall become null
and void and no holder hereof shall have any right with respect to such Rights
from and after the occurrence of such Section 11(a)(ii) Event.
In certain circumstances described in the Rights Agreement, the Rights
evidenced hereby may entitle the registered holder thereof to purchase capital
stock of an entity other than the Company or receive common stock, cash or other
assets, all as provided in the Rights Agreement.
This Rights Certificate is subject to all of the terms and conditions
of the Rights Agreement, which terms and conditions are hereby incorporated
herein by reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights, limitations of
rights, obligations, duties and immunities hereunder of the Rights Agent, the
Company and the holders of the Rights Certificates. Copies of the Rights
Agreement are on file at the principal office of the Company and are available
from the Company upon written request.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the office of the Rights Agent designated for such purpose,
may be exchanged for another Rights Certificate or Rights Certificates of like
tenor and date evidencing an aggregate number of Rights equal to the aggregate
number of Rights evidenced by the Rights Certificate or Rights Certificates
surrendered. If this Rights Certificate shall be exercised in part, the
registered holder shall be entitled to receive, upon surrender hereof, another
Rights Certificate or Rights Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Company under certain circumstances
at its option at a redemption price of $.0001 per Right, payable at the
Company's option in cash or in common stock of the Company, subject to
adjustment in certain events as provided in the Rights Agreement.
No fractional shares of Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions which are
integral multiples of one one-thousandth of a share of Preferred Stock), but in
lieu thereof a cash payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of Preferred
Stock or of any other securities which may at any time be issuable on the
exercise hereof, nor shall anything
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<PAGE> 46
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 Rights evidenced by
this Rights Certificate shall have been exercised as provided in the Rights
Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of ____________ __, 199__.
ATTEST: TRANSACT TECHNOLOGIES
INCORPORATED
By: ___________________________ By: __________________________
Name: Name:
Title: Title:
Countersigned:
AMERICAN STOCK TRANSFER
& TRUST COMPANY,
as Rights Agent
By: _____________________________
Name:
Title:
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<PAGE> 47
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if
such holder desires to transfer the
Rights Certificate.)
FOR VALUE RECEIVED ______________________________________________
hereby sells, assigns and transfers unto ______________________________________
_______________________________________________________________________________
(Please print name and address of transferee)
_______________________________________________________________________________
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ________________________
Attorney, to transfer the within Rights Certificate on the books of the
within-named Company, with full power of substitution.
Dated: ______________ __, 199__
_________________________________
Signature
Signature Guaranteed:
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<PAGE> 48
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned
and transferred by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as such terms are
defined pursuant to the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned,
it [ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate
from any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: ____________ __, 199_
_________________________________
Signature
Signature Guaranteed:
__________________________________________________
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
Signatures must be guaranteed by an approved eligible financial
institution acceptable to the Rights Agent in its sole discretion or by a
participant in the Securities Transfer Agents Medallion Program, the Stock
Exchange Medallion Program or the New York Stock Exchange Medallion Program.
In the event the certification set forth above is not completed, the
Company will deem the beneficial owner of the Rights evidenced by this Rights
Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement) and, in the case of an Assignment, will affix a
legend to that effect on any Rights Certificates issued in exchange for this
Rights Certificate.
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<PAGE> 49
FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder
desires to exercise Rights represented
by the Rights Certificate.)
To: TRANSACT TECHNOLOGIES INCORPORATED
The undersigned hereby irrevocably elects to exercise
_____________________ Rights represented by this Rights Certificate to purchase
the Units of Preferred Stock issuable upon the exercise of the Rights (or such
other securities of the Company or of any other person or other property which
may be issuable upon the exercise of the Rights) and requests that certificates
for such Units be issued in the name of and delivered to:
____________________________________
(Please print name and address)
____________________________________
Please insert social security
or other identifying number: _____________
If such number of Rights shall not be all the Rights evidenced by
this Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
____________________________________
(Please print name and address)
____________________________________
Please insert social security
or other identifying number: _____________
Dated: ______________ __, 199_
_________________________________
Signature
Signature Guaranteed:
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<PAGE> 50
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are
not beneficially owned by an Acquiring Person or an Affiliate or an Associate
thereof (as defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned,
the undersigned [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate thereof.
__________________________________
Dated: ___________ __, 199_ Signature
Signature Guaranteed:
____________________________________________________
NOTICE
The signature in the foregoing Election to Purchase and Certificate
must conform to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
Signatures must be guaranteed by an approved eligible financial
institution acceptable to the Rights Agent in its sole discretion or by a
participant in the Securities Transfer Agents Medallion Program, the Stock
Exchange Medallion Program or the New York Stock Exchange Medallion Program.
In the event the certification set forth above is not completed, the
Company will deem the beneficial owner of the Rights evidenced by this Rights
Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement) and, in the case of an Assignment, will affix a
legend to that effect on any Rights Certificates issued in exchange for this
Rights Certificate.
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<PAGE> 51
EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On December 2, 1997, the Board of Directors of TransAct Technologies
Incorporated (the "Company") declared a distribution of one Right for each
outstanding share of Common Stock, par value $.01 per share (the "Company Common
Stock"), to stockholders of record at the close of business on December 15, 1997
(the "Record Date") and for each share of Company Common Stock issued (including
shares distributed from Treasury) by the Company thereafter and prior to the
Distribution Date. Each Right entitles the registered holder, subject to the
terms of the Rights Agreement (as defined below), to purchase from the Company
one one-thousandth of a share (a "Unit") of Series A Preferred Stock, par value
$.01 per share (the "Preferred Stock"), at a Purchase Price of $69 per Unit,
subject to adjustment. The Purchase Price is payable in cash or by certified or
bank check payable to the order of the Company or by wire transfer to the
account of the Company (provided a notice of such wire transfer is given by the
holder of the related Right to the Rights Agent). The description and terms of
the Rights are set forth in a Rights Agreement between the Company and American
Stock Transfer & Trust Company as Rights Agent (the "Rights Agreement"). The
Rights Agreement was amended and restated on February 16, 1999 to reflect a
change in Delaware corporate law (the "Amended Rights Agreement").
Copies of the Amended Rights Agreement and the Certificate of
Designation for the Preferred Stock have been filed with the Securities and
Exchange Commission as exhibits to a Current Report on Form 8-K dated February
16, 1999. Copies of the Amended Rights Agreement and the Certificate of
Designation are available free of charge from the Company. This summary
description of the Rights and the Preferred Stock does not purport to be
complete and is qualified in its entirety by reference to all the provisions of
the Amended Rights Agreement and the Certificate of Designation, including the
definitions therein of certain terms, which Amended Rights Agreement and
Certificate of Designation are incorporated herein by reference.
The Amended Rights Agreement
Initially, the Rights will attach to all certificates representing
shares of outstanding Company Common Stock, and no separate Rights Certificates
will be distributed. The Rights will separate from the Company Common Stock and
the "Distribution Date" will occur upon the earlier of (i) 10 days following a
public announcement (the date of such announcement being the "Stock Acquisition
Date") that a person or group of affiliated or associated persons (other than
the Company, any subsidiary of the Company or any employee benefit plan of the
Company or such subsidiary) (an "Acquiring Person") has acquired, obtained the
right to acquire, or otherwise obtained beneficial ownership of 15% or more of
the then outstanding shares of Company Common Stock, and (ii) 10 business days
(or such later date as may be determined by action of the Board of Directors
prior to such time as any person becomes an
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<PAGE> 52
Acquiring Person) following the commencement of a tender offer or exchange offer
that would result in a person or group beneficially owning 15% or more of the
then outstanding shares of Company Common Stock. Until the Distribution Date,
(i) the Rights will be evidenced by Company Common Stock certificates and will
be transferred with and only with such Company Common Stock certificates, (ii)
new Company Common Stock certificates issued after the Record Date (also
including shares distributed from Treasury) will contain a notation
incorporating the Amended Rights Agreement by reference and (iii) the surrender
for transfer of any certificates representing outstanding Company Common Stock
will also constitute the transfer of the Rights associated with the Company
Common Stock represented by such certificates.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on the tenth anniversary of the Amended Rights
Agreement unless earlier redeemed by the Company as described below.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of Company Common Stock as of the close of
business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights.
In the event that (i) the Company is the surviving corporation in a
merger with an Acquiring Person and shares of Company Common Stock shall remain
outstanding, (ii) a Person becomes an Acquiring Person, (iii) an Acquiring
Person engages in one or more "self-dealing" transactions as set forth in the
Amended Rights Agreement, or (iv) during such time as there is an Acquiring
Person, an event occurs which results in such Acquiring Person's ownership
interest being increased by more than 1% (e.g., by means of a recapitalization)
(each such event being a "Section 11(a)(ii) Event"), then, in each such case,
each holder of a Right will thereafter have the right to receive, upon exercise,
Units of Preferred Stock (or, in certain circumstances, Company Common Stock,
cash, property or other securities of the Company) having a value equal to two
times the exercise price of the Right. The exercise price is the Purchase Price
multiplied by the number of Units of Preferred Stock issuable upon exercise of a
Right prior to the events described in this paragraph. Notwithstanding any of
the foregoing, following the occurrence of any of the events set forth in this
paragraph, all Rights that are, or (under certain circumstances specified in the
Amended Rights Agreement) were, beneficially owned by any Acquiring Person will
be null and void.
In the event that, at any time following the Stock Acquisition Date,
(i) the Company is acquired in a merger or other business combination
transaction and the Company is not the surviving corporation (other than a
merger described in the preceding paragraph), (ii) any Person consolidates or
merges with the Company and all or part of the Company Common Stock is converted
or exchanged for securities, cash or property of any other Person or (iii) 50%
or more of the Company's assets or earning power is sold or transferred, each
holder of a Right (except Rights which previously have been voided as described
above) shall thereafter have the right to receive, upon exercise, common stock
of the ultimate parent of the Acquiring Person having a value equal to two times
the exercise price of the Right.
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<PAGE> 53
The Purchase Price payable, and the number of Units of Preferred Stock
issuable, upon exercise of the Rights are subject to adjustment from time to
time to prevent dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Preferred Stock, (ii) if
holders of the Preferred Stock are granted certain rights or warrants to
subscribe for Preferred Stock or convertible securities at less than the current
market price of the Preferred Stock, or (iii) upon the distribution to the
holders of the Preferred Stock of evidences of indebtedness, cash or assets
(excluding regular quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. The Company is not required to issue fractional Units. In lieu thereof,
an adjustment in cash may be made based on the market price of the Preferred
Stock prior to the date of exercise.
At any time until ten days following the Stock Acquisition Date, the
Board of Directors may redeem the Rights in whole, but not in part, at a price
of $.0001 per Right (subject to adjustment in certain events) (the "Redemption
Price"), payable, at the election of the Board of Directors, in cash or shares
of Company Common Stock. Immediately upon the action of the Board of Directors
ordering the redemption of the Rights, the Rights will terminate and the only
right of the holders of Rights will be to receive the Redemption Price.
The Board of Directors, at its option, may exchange each Right for (i)
one Unit of Preferred Stock or (ii) such number of Units of Preferred Stock as
will equal (x) the difference between the aggregate market price of the number
of Units of Preferred Stock to be received upon a Section 11(a)(ii) Event and
the purchase price set forth in the Amended Rights Agreement, divided by (y) the
market price per Unit of Preferred Stock upon a Section 11(a)(ii) Event.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to stockholders or to the Company, stockholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for Units of Preferred Stock (or other consideration).
Any of the provisions of the Amended Rights Agreement may be amended
without the approval of the holders of Company Common Stock at any time prior to
the Distribution Date. After the Distribution Date, the provisions of the
Amended Rights Agreement may be amended in order to cure any ambiguity, defect
or inconsistency, to make changes which do not adversely affect the interests of
holders of Rights (excluding the interests of any Acquiring Person), or to
shorten or lengthen any time period under the Amended Rights Agreement;
provided, however, that no amendment to adjust the time period governing
redemption shall be made at such time as the Rights are not redeemable.
Supplements or amendments to the Amended Rights Agreement may be made only if
approved by the Board of Directors.
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<PAGE> 54
Description of Preferred Stock
The Units of Preferred Stock that may be acquired upon exercise of the
Rights will be non redeemable and subordinate to any other shares of preferred
stock that may be issued by the Company.
Each Unit of Preferred Stock will have a minimum preferential quarterly
dividend of $.01 per Unit or any higher per share dividend declared on the
Company Common Stock.
In the event of liquidation, the holder of a Unit of Preferred Stock
will receive a preferred liquidation payment equal to the greater of $.01 per
Unit and the per share amount paid in respect of a share of Company Common
Stock.
Each Unit of Preferred Stock will have one vote, voting together with
the Company Common Stock. The holders of Units of Preferred Stock, voting as a
separate class, shall be entitled to elect two directors if dividends on the
Preferred Stock are in arrears for six fiscal quarters.
In the event of any merger, consolidation or other transaction in which
shares of Company Common Stock are exchanged, each Unit of Preferred Stock will
be entitled to receive the per share amount paid in respect of each share of
Company Common Stock.
The rights of holders of the Preferred Stock to dividends, liquidation
and voting, and in the event of mergers and consolidations, are protected by
customary antidilution provisions.
Because of the nature of the Preferred Stock's dividend, liquidation
and voting rights, the economic value of one Unit of Preferred Stock that may be
acquired upon the exercise of each Right is expected to approximate the economic
value of one share of Company Common Stock.
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<PAGE> 55
EXHIBIT C
CERTIFICATE OF DESIGNATION
OF THE VOTING POWERS, DESIGNATION,
PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL OR OTHER SPECIAL RIGHTS AND QUALIFICATIONS,
LIMITATIONS AND RESTRICTIONS OF THE
SERIES A PREFERRED STOCK
----------------------------------
Pursuant to Section 151 of the
General Corporation Law of
the State of Delaware
------------------------------------
I, Bart C. Shuldman, President and Chief Executive Officer of TransAct
Technologies Incorporated, a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"), DO HEREBY
CERTIFY:
that, pursuant to authority conferred upon the Board of Directors of
the Corporation by its Certificate of Incorporation (the "Certificate"), and,
pursuant to the provisions of Section 151 of the General Corporation Law of the
State of Delaware, said Board of Directors, at a duly called meeting held on
December 2, 1997, at which a quorum was present and acted throughout, adopted
the following resolutions, which resolutions remain in full force and effect on
the date hereof creating a series of 200,000 shares of Preferred Stock having a
par value of $.01 per share, designated as Series A Preferred Stock (the "Series
A Preferred Stock") out of the class of 5,000,000 shares of preferred stock (the
"Preferred Stock"):
RESOLVED, that pursuant to the authority vested in the Board of
Directors in accordance with the provisions of the Certificate, the Board of
Directors does hereby create, authorize and provide for the issuance of the
Series of Preferred Stock having the voting powers, designation, relative,
participating, optional and other special rights, preferences, and
qualifications, limitations and restrictions thereof that are set forth as
follows:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Preferred Stock" and the number of shares constituting
such series shall be 200,000.
Section 2. Dividends and Distributions. (A) Subject to the prior and
superior rights of the holders of any shares of any other series of Preferred
Stock or any other shares of preferred stock of the Corporation ranking prior
and superior to the shares of Series A Preferred Stock with respect to
dividends, each holder of one one-thousandth (1/1,000) of a
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<PAGE> 56
share (a "Unit") of Series A Preferred Stock shall be entitled to receive, when,
as and if declared by the Board of Directors out of funds legally available for
that purpose, (i) quarterly dividends payable in cash on the last day of March,
June, September and December in each year (each such date being a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date
after the first issuance of such Unit of Series A Preferred Stock, in an amount
per Unit (rounded to the nearest cent) equal to the greater of (a) $.01 or (b)
subject to the provision for adjustment hereinafter set forth, the aggregate per
share amount of all cash dividends declared on shares of the Common Stock since
the immediately preceding Quarterly Dividend Payment Date, or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of a Unit of
Series A Preferred Stock, and (ii) subject to the provision for adjustment
hereinafter set forth, quarterly distributions (payable in kind) on each
Quarterly Dividend Payment Date in an amount per Unit equal to the aggregate per
share amount 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 shares of
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 a Unit of Series A Preferred Stock. In the event that the
Corporation shall at any time after December 2, 1997 (the "Rights Declaration
Date") (i) declare any dividend on outstanding shares of Common Stock payable in
shares of Common Stock, (ii) subdivide outstanding shares of Common Stock or
(iii) combine outstanding shares of Common Stock into a smaller number of
shares, then in each such case the amount to which the holder of a Unit of
Series A Preferred Stock was entitled immediately prior to such event pursuant
to the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which shall be the number of shares of Common Stock
that are outstanding immediately after such event and the denominator of which
shall be the number of shares of Common Stock that were outstanding immediately
prior to such event.
(B) The Corporation shall declare a dividend or distribution
on Units of Series A Preferred Stock as provided in paragraph (A) above
immediately after it declares a dividend or distribution on the shares of Common
Stock (other than a dividend payable in shares of Common Stock); provided,
however, that, in the event no dividend or distribution shall have been declared
on the Common Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $.01
per Unit on the Series A Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and shall be cumulative on
each outstanding Unit of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issuance of such Unit of Series A
Preferred Stock, unless the date of issuance of such Unit is prior to the record
date for the first Quarterly Dividend Payment Date, in which case dividends on
such Unit shall begin to accrue from the date of issuance of such Unit, or
unless the date of issuance is a Quarterly Dividend Payment Date or is a date
after the record date for the determination of holders of Units 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
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<PAGE> 57
Dividend Payment Date. Accrued but unpaid dividends shall not bear interest.
Dividends paid on Units of Series A Preferred Stock in an amount less than the
aggregate amount of all such dividends at the time accrued and payable on such
Units shall be allocated pro rata on a unit-by-unit basis among all Units of
Series A Preferred Stock at the time outstanding. The Board of Directors may fix
a record date for the determination of holders of Units 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.
Section 3. Voting Rights. The holders of Units of Series A Preferred
Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each
Unit of Series A Preferred Stock shall entitle the holder thereof to one vote on
all matters submitted to a vote of the stockholders of the Corporation. In the
event the Corporation shall at any time after the Rights Declaration Date (i)
declare any dividend on outstanding shares of Common Stock payable in shares of
Common Stock, (ii) subdivide outstanding shares of Common Stock or (iii) combine
the outstanding shares of Common Stock into a smaller number of shares, then in
each such case the number of votes per Unit to which holders of Units of Series
A Preferred Stock were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction the numerator of which shall
be the number of shares of Common Stock outstanding immediately after such event
and the denominator of which shall be the number of shares of Common Stock that
were outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the holders of Units
of Series A Preferred Stock and the holders of shares of Common Stock shall vote
together as one class on all matters submitted to a vote of stockholders of the
Corporation.
(C) (i) If at any time dividends on any Units of Series A Preferred
Stock shall be in arrears in an amount equal to six quarterly dividends thereon,
then during the period (a "default period") from the occurrence of such event
until such time as all accrued and unpaid dividends for all previous quarterly
dividend periods and for the current quarterly dividend period on all Units of
Series A Preferred Stock then outstanding shall have been declared and paid or
set apart for payment, all holders of Units of Series A Preferred Stock, voting
separately as a class, shall have the right to elect two Directors.
(ii) During any default period, such voting rights of the holders of
Units of Series A Preferred Stock may be exercised initially at a special
meeting called pursuant to subparagraph (iii) of this Section 3(C) or at any
annual meeting of stockholders, and thereafter at annual meetings of
stockholders, provided that neither such voting rights nor any right of the
holders of Units of Series A Preferred Stock to increase, in certain cases, the
authorized number of Directors may be exercised at any meeting unless one-third
of the outstanding Units of Preferred Stock shall be present at such meeting in
person or by proxy. The absence of a quorum of the holders of Common Stock shall
not affect the exercise by the holders of Units of Series A Preferred Stock of
such rights. At any meeting at which the holders of Units of
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<PAGE> 58
Series A Preferred Stock shall exercise such voting rights initially during an
existing default period, they shall have the right, voting separately as a
class, to elect Directors to fill up to two vacancies in the Board of Directors,
if any such vacancies may then exist, or, if such right is exercised at an
annual meeting, to elect two Directors. If the number which may be so elected at
any special meeting does not amount to the required number, the holders of the
Series A Preferred Stock shall have the right to make such increase in the
number of Directors as shall be necessary to permit the election by them of the
required number. After the holders of Units of Series A Preferred Stock shall
have exercised their right to elect Directors during any default period, the
number of Directors shall not be increased or decreased except as approved by a
vote of the holders of Units of Series A Preferred Stock as herein provided or
pursuant to the rights of any equity securities ranking senior to the Series A
Preferred Stock.
(iii) Unless the holders of Series A Preferred Stock shall, during an
existing default period, have previously exercised their right to elect
Directors, the Board of Directors may order, or any stockholder or stockholders
owning in the aggregate not less than 25% of the total number of the Units of
Series A Preferred Stock outstanding may request, the calling of a special
meeting of the holders of Units of Series A Preferred Stock, which meeting shall
thereupon be called by the Secretary of the Corporation. Notice of such meeting
and of any annual meeting at which holders of Units of Series A Preferred Stock
are entitled to vote pursuant to this paragraph (C)(iii) shall be given to each
holder of record of Units of Series A Preferred Stock by mailing a copy of such
notice to him at his last address as the same appears on the books of the
Corporation. Such meeting shall be called for a time not earlier than 20 days
and not later then 60 days after such order or request or in default of the
calling of such meeting within 60 days after such order or request, such meeting
may be called on similar notice by any stockholder or stockholders owning in the
aggregate not less than 25% of the total number of outstanding Units of Series A
Preferred Stock. Notwithstanding the provisions of this paragraph (C)(iii), no
such special meeting shall be called during the 60 days immediately preceding
the date fixed for the next annual meeting of the stockholders.
(iv) During any default period, the holders of shares of Common Stock
and Units of Series A Preferred Stock, and other classes or series of stock of
the Corporation, if applicable, shall continue to be entitled to elect all the
Directors until holders of the Units of Series A Preferred Stock shall have
exercised their right to elect two Directors voting as a separate class, after
the exercise of which right (x) the Directors so elected by the holders of Units
of Series A Preferred Stock shall continue in office until their successors
shall have been elected by such holders or until the expiration of the default
period, and (y) any vacancy in the Board of Directors may (except as provided in
paragraph (C)(ii) of this Section 3) be filled by vote of a majority of the
remaining Directors theretofore elected by the holders of the class of capital
stock which elected the Director whose office shall have become vacant.
References in this paragraph (C) to Directors elected by the holders of a
particular class of capital stock shall include Directors elected by such
Directors to fill vacancies as provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x) the right
of the holders of Units of Series A Preferred Stock as a separate class to elect
Directors shall cease, (y) the
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<PAGE> 59
term of any Directors elected by the holders of Units of Series A Preferred
Stock as a separate class shall terminate, and (z) the number of Directors shall
be such number as may be provided for in the Certificate or by-laws irrespective
of any increase made pursuant to the provisions of paragraph (C)(ii) of this
Section 3 (such number being subject, however, to change thereafter in any
manner provided by law or in the Certificate or by-laws). Any vacancies in the
Board of Directors effected by the provisions of clauses (y) and (z) in the
preceding sentence may be filled by a majority of the remaining Directors.
(vi) The provisions of this paragraph (C) shall govern the election of
Directors by holders of Units of Preferred Stock during any default period
notwithstanding any provisions of the Certificate to the contrary, including,
without limitation, the provisions of Article EIGHTH of the Certificate.
(D) Except as set forth herein, holders of Units of Series A Preferred
Stock shall have no special voting rights and their consents shall not be
required (except to the extent they are entitled to vote with holders of shares
of Common Stock as set forth herein) for taking any corporate action.
Section 4. Certain Restrictions. (A) Whenever quarterly dividends or
other dividends or distributions payable on Units of Series A Preferred Stock as
provided in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on outstanding
Units of Series A Preferred Stock shall have been paid in full, the Corporation
shall not
(i) declare or pay dividends on, make any other distributions on, or
redeem or purchase or otherwise acquire for consideration any shares of junior
stock;
(ii) declare or pay dividends on or make any other distributions on any
shares of parity stock, except dividends paid ratably on Units of Series A
Preferred Stock and shares of all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the holders of
such Units and all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares
of any parity stock, provided, however, that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such parity stock in
exchange for shares of any junior stock;
(iv) purchase or otherwise acquire for consideration any Units of
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 Units.
(B) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
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<PAGE> 60
Section 5. Reacquired Shares. Any Units of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
Units shall, upon their cancellation, become authorized but unissued Units of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
to be created by resolution or resolutions of the Board of Directors, subject to
the conditions and restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up. (A) Upon any
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, no distribution shall be made (i) to the holders of shares of
junior stock unless the holders of Units of Series A Preferred Stock shall have
received, subject to adjustment as hereinafter provided in paragraph (B), the
greater of either (a) $.01 per Unit plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not earned or declared, to the
date of such payment, or (b) the amount equal to the aggregate per share amount
to be distributed to holders of shares of Common Stock, or (ii) to the holders
of shares of parity stock, unless simultaneously therewith distributions are
made ratably on Units of Series A Preferred Stock and all other shares of such
parity stock in proportion to the total amounts to which the holders of Units of
Series A Preferred Stock are entitled under clause (i)(a) of this sentence and
to which the holders of shares of such parity stock are entitled, in each case
upon such liquidation, dissolution or winding up.
(B) In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide outstanding shares of Common
Stock, or (iii) combine outstanding shares of Common Stock into a smaller number
of shares, then in each such case the aggregate amount to which holders of Units
of Series A Preferred Stock were entitled immediately prior to such event
pursuant to clause (i)(b) of paragraph (A) of this Section 6 shall be adjusted
by multiplying such amount by a fraction the numerator of which shall be the
number of shares of Common Stock that are outstanding immediately after such
event and the denominator of which shall be the number of shares of Common Stock
that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or converted into other stock or
securities, cash and/or any other property, then in any such case Units of
Series A Preferred Stock shall at the same time be similarly exchanged for or
converted into an amount per Unit (subject to the provision for adjustment
hereinafter set forth) equal to the aggregate amount of stock, securities, cash
and/or any other property (payable in kind), as the case may be, into which or
for which each share of Common Stock is converted or exchanged. In the event the
Corporation shall at any time after the Rights Declaration Date (i) declare any
dividend on outstanding shares of Common Stock payable in shares of Common
Stock, (ii) subdivide outstanding shares of Common Stock, or (iii) combine
outstanding Common Stock into a smaller number of shares, then in each such case
the amount set forth in the immediately preceding sentence with respect to the
exchange or conversion of Units of Series A Preferred Stock shall be adjusted by
multiplying such amount by a fraction
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<PAGE> 61
the numerator of which shall be the number of shares of Common Stock that are
outstanding immediately after such event and the denominator of which shall be
the number of shares of Common Stock that were outstanding immediately prior to
such event.
Section 8. Redemption. The Units of Series A Preferred Stock shall not
be redeemable.
Section 9. Ranking. The Units of Series A Preferred Stock shall rank
junior to all other series of the Preferred Stock and to any other class of
preferred stock that hereafter may be issued by the Corporation as to the
payment of dividends and the distribution of assets, unless the terms of any
such series or class shall provide otherwise.
Section 10. Amendment. The Certificate, including, without limitation,
this resolution, shall not hereafter be amended, either directly or indirectly,
or through merger or consolidation with another corporation in any manner that
would alter or change the powers, preferences or special rights of the Series A
Preferred Stock so as to affect them adversely without the affirmative vote of
the holders of a majority or more of the outstanding Units of Series A Preferred
Stock, voting separately as a class.
Section 11. Fractional Shares. The Series A Preferred Stock may be
issued in Units or other fractions of a share, which Units or fractions shall
entitle the holder, in proportion to such holder's fractional shares, to
exercise voting rights, receive dividends, participate in distributions and to
have the benefit of all other rights of holders of Series A Preferred Stock.
Section 12. Certain Definitions. As used herein with respect to the
Series A Preferred Stock, the following terms shall have the following meanings:
(A) The term "Common Stock" shall mean the class of stock designated as
the common stock, par value $.01 per share, of the Corporation at the date
hereof or any other class of stock resulting from successive changes or
reclassification of such common stock.
(B) The term "junior stock" (i) as used in Section 4, shall mean the
Common Stock and any other class or series of capital stock of the Corporation
hereafter authorized or issued over which the Series A Preferred Stock has
preference or priority as to the payment of dividends and (ii) as used in
Section 6, shall mean the Common Stock and any other class or series of capital
stock of the Corporation over which the Series A Preferred Stock has preference
or priority in the distribution of assets on any liquidation, dissolution or
winding up of the Corporation.
(C) The term "parity stock" (i) as used in Section 4, shall mean any
class or series of stock of the Corporation hereafter authorized or issued
ranking pari passu with the Series A Preferred Stock as to the payment of
dividends and (ii) as used in Section 6, shall mean any class or series of
capital stock ranking pari passu with the Series A Preferred Stock in the
distribution of assets on any liquidation, dissolution or winding up of the
Corporation.
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<PAGE> 62
IN WITNESS WHEREOF, TransAct Technologies Incorporated has caused this
Certificate to be signed by its President and Chief Executive Officer and
attested by its Secretary this 2nd day of December, 1997.
TRANSACT TECHNOLOGIES
INCORPORATED
By _______________________________
Attest:
______________________________
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<PAGE> 1
EXHIBIT 99.a
FOR IMMEDIATE RELEASE CONTACT: _____________
TRANSACT TECHNOLOGIES INCORPORATED
AMENDS STOCKHOLDER RIGHTS PLAN AND BY-LAWS
Wallingford, CT, February 18, 1999 -- TransAct Technologies
Incorporated announced today that its Board of Directors adopted certain
amendments to its Stockholder Rights Plan that was originally adopted by the
Company in December, 1997. The amendments conform the Plan to a recent change in
Delaware corporate law concerning Stockholder Rights Plans. TransAct is a
Delaware corporation.
The amendments remove the so-called "dead hand" provision in
the Plan that stipulated that the Plan may be modified or redeemed only by those
members of the Board of Directors that are defined as "Continuing Directors." A
"Continuing Director" was generally defined under the Plan as a member of the
Board of Directors prior to the commencement of a hostile takeover of the
Company.
The amendments were necessitated by a decision of the Delaware
Supreme Court in December 1998 that declared that such "Continuing Directors"
provisions in Stockholder Rights Plans are invalid.
In a separate action, the TransAct Board of Directors made a
technical amendment to the Company's by-laws concerning shareholder approval of
corporate actions to conform the by-laws to the Company's Certificate of
Incorporation. In addition, the Board of Directors made a change in the by-laws
concerning the manner in which the number of seats on the Board is determined
that the Board considered prudent and in the best interests of the Company.
TransAct designs, develops, manufactures and markets
transaction-based printers and related products under the ITHACA and MAGNETEC
brand names. The Company's printers are used to provide transaction records such
as receipts, tickets, coupons, register journals and other documents. TransAct
serves four vertical markets: point-of-sale, gaming and lottery, financial
services and kiosk. The Company sells its products directly to end users,
original equipment manufacturers, value-added resellers and selected
distributors. Please visit TransAct's website located at
http://TransAct-tech.com to receive more information about the Company's
products and selected financial data.
Contact:
Investor:
TransAct Technologies
Richard L. Cote
203/269-1198
Fax: 203/949-9048
or
Investor Access Corp.
Michael Seely
212/679-0652
Fax: 212/686-3924
