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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) December 16, 1999
Vestcom International, Inc.
(Exact name of registrant as specified in its charter)
New Jersey 333-23519 22-3477425
(State of (Commission File Number) (IRS Employer
incorporation) Identification No.)
5 Henderson Drive, West Caldwell, New Jersey 07006
(Address of principal executive offices) (Zip Code)
(973) 882-7000
(Registrant's telephone number,
including area code)
Not Applicable
(Former name or former address, if changed since last report)
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Item 5. Other Events.
On December 16, 1999, the Board of Directors of Vestcom
International, Inc., a New Jersey corporation (the "Company"), declared a
dividend of one right (a "Right") for each outstanding share of common stock,
par value $.01 per share ("Common Stock"), of the Company held of record at the
close of business on December 28, 1999 (the "Record Time"), or issued thereafter
and prior to the Separation Time (as hereinafter defined) and thereafter
pursuant to options and convertible securities outstanding at the Separation
Time. The Rights will be issued pursuant to a Shareholder Protection Rights
Agreement, dated as of December 16, 1999 (the "Rights Agreement"), between the
Company and American Stock Transfer & Trust Company, as Rights Agent (the
"Rights Agent"). Each Right entitles its registered holder to purchase from the
Company, after the Separation Time, one one-hundredth of a share of
Participating Preferred Stock, no par value ("Participating Preferred Stock"),
for $27.00 (the "Exercise Price"), subject to adjustment.
The Rights will be evidenced by the Common Stock certificates
until the close of business on the earlier of (either, referred to as the
"Separation Time") (i) the tenth business day after the date on which any Person
(as defined in the Rights Agreement) commences a tender or exchange offer which,
if consummated, would result in such Person becoming an Acquiring Person, as
defined below, and (ii) the date (the "Flip-in Date") on which a public
announcement is made by the Company or any Person that a Person has become an
Acquiring Person (the date of such public announcement being, the "Stock
Acquisition Date"); provided that if the foregoing results in the Separation
Time being prior to the Record Time, the Separation Time shall be the Record
Time; and provided further that if a tender or exchange offer referred to in
clause (i) is cancelled, terminated or otherwise withdrawn prior to the
Separation Time without the purchase of any shares of stock pursuant thereto,
such offer shall be deemed never to have been made. An Acquiring Person is any
Person having Beneficial Ownership (as defined in the Rights Agreement) of 10%
or more of the outstanding shares of Common Stock, which term shall not include
(i) a Person who is the Beneficial Owner of 10% or more of the outstanding
shares of Common Stock on the date of the Rights Agreement or who shall become
the Beneficial Owner of 10% or more of the outstanding shares of Common Stock
solely as a result of a purchase by the Company of shares of its Common Stock,
until such time thereafter as any of such Persons shall become the Beneficial
Owner (other than by means of a stock dividend or stock split) of additional
shares of Common Stock (other than shares of Common Stock acquired upon the
exercise of stock options granted to such Persons as employees, officers or
directors of the Company or any of its Subsidiaries) constituting two percent
(2%) or more of the then outstanding shares of Common Stock, (ii) who becomes
the Beneficial Owner of 10% or more of the outstanding shares of Common Stock
but who acquired Beneficial Ownership of shares of Common Stock without any plan
or intention to seek or affect control of the Company, if, upon notice by the
Company, such Person promptly enters into an irrevocable commitment with the
Company to divest, and thereafter promptly divests (without exercising or
retaining any power, including voting, with respect to such shares), sufficient
shares of Common Stock (or securities convertible into, exchangeable into or
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exercisable for Common Stock) so that such Person ceases to be the Beneficial
Owner of the greater of (x) 10% of the outstanding shares of Common Stock or (y)
the percentage of the outstanding Common Stock Beneficially Owned by such Person
on the date hereof or (iii) who Beneficially Owns shares of Common Stock
consisting solely of one or more of (A) shares of Common Stock Beneficially
Owned pursuant to the grant or exercise of an option granted to such Person (an
"Option Holder") by the Company in connection with an agreement to merge with,
or acquire, the Company that is (x) approved by the Board at a time (I) when
there are Independent Directors (as defined in the Rights Agreement) then in
office and such agreement is approved by a majority of the Independent Directors
then in office or (II) when (X) there are no Independent Directors then in
office, (Y) there are Continuing Directors (as defined in the Rights Agreement)
then in office and (Z) such agreement is approved by a majority of the
Continuing Directors then in office, and (y) entered into prior to a Flip-in
Date, (B) shares of Common Stock (or securities convertible into, exchangeable
into or exercisable for Common Stock) Beneficially Owned by such Option Holder
or its Affiliates or Associates at the time of grant of such option and (C)
shares of Common Stock (or securities convertible into, exchangeable into or
exercisable for Common Stock) acquired by Affiliates or Associates of such
Option Holder after the time of such grant which, in the aggregate, amount to
less than one percent (1%) of the outstanding shares of Common Stock. In
addition, the Company, any wholly-owned Subsidiary of the Company, any employee
stock ownership or other employee benefit plan of the Company or of a
wholly-owned Subsidiary of the Company and any Person or entity organized,
appointed or established by the Company or by a wholly-owned Subsidiary of the
Company for or pursuant to the terms of any such benefit plan will not
constitute an Acquiring Person.
The Rights Agreement provides that, until the Separation Time,
the Rights will be transferred with and only with the Common Stock. Common Stock
certificates issued after the Record Time but prior to the Separation Time shall
evidence one Right for each share of Common Stock represented thereby and shall
contain a legend incorporating by reference the terms of the Rights Agreement
(as such may be amended from time to time). Notwithstanding the absence of the
aforementioned legend, certificates evidencing shares of Common Stock
outstanding at the Record Time shall also evidence one Right for each share of
Common Stock evidenced thereby. Promptly following the Separation Time, separate
certificates evidencing the Rights ("Rights Certificates") will be mailed to
holders of record of Common Stock at the Separation Time.
The Rights will not be exercisable until the Business Day (as
defined in the Rights Agreement) following the Separation Time. The Rights will
expire on the earliest of (i) the Exchange Time (as defined below), (ii) the
close of business on December 28, 2009, (iii) the date on which the Rights are
redeemed as described below and (iv) upon the merger of the Company into another
corporation pursuant to an agreement that is (x) approved by the Board at a time
(I) when there are Independent Directors then in office and such agreement is
approved by a majority of the Independent Directors then in office or (II) when
(X) there are no Independent Directors then in office, (Y) there are Continuing
Directors then in office and (Z) such agreement is approved by a majority of the
Continuing Directors then in office, and (y) entered into prior to a Stock
Acquisition Date (in any such case, the "Expiration Time").
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The Exercise Price and the number of Rights outstanding, or in
certain circumstances the securities purchasable upon exercise of the Rights,
are subject to adjustment from time to time to prevent dilution in the event of
a Common Stock dividend on, or a subdivision or a combination into a smaller
number of shares of, Common Stock, or the issuance or distribution of any
securities or assets in respect of, in lieu of or in exchange for Common Stock.
In the event that prior to the Expiration Time a Flip-in Date
occurs, each Right (other than Rights Beneficially Owned by the Acquiring Person
or any Affiliate or Associate thereof, which Rights shall become void) shall
constitute the right to purchase from the Company, upon the exercise thereof in
accordance with the terms of the Rights Agreement, that number of shares of
Common Stock of the Company having an aggregate Market Price (as defined in the
Rights Agreement), on the Stock Acquisition Date that gave rise to the Flip-in
Date, equal to twice the Exercise Price for an amount in cash equal to the then
current Exercise Price. In addition, the Board of Directors of the Company may,
at its option, at any time after a Flip-in Date and prior to the time that an
Acquiring Person becomes the Beneficial Owner of more than 50% of the
outstanding shares of Common Stock, elect to exchange all (but not less than
all) of the then outstanding Rights (other than Rights Beneficially Owned by the
Acquiring Person or any Affiliate or Associate thereof, which Rights become
void) for shares of Common Stock at an exchange ratio of one share of Common
Stock per Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date of the Separation Time
(the "Exchange Ratio"). Immediately upon such action by the Board of Directors
(the "Exchange Time"), the right to exercise the Rights will terminate and each
Right will thereafter represent only the right to receive a number of shares of
Common Stock equal to the Exchange Ratio.
Whenever the Company shall become obligated, as described in
the preceding paragraph, to issue shares of Common Stock upon exercise of or in
exchange for Rights, the Company, at its option, may substitute therefor shares
of Participating Preferred Stock, at a ratio of one one-hundredth of a share of
Participating Preferred Stock for each share of Common Stock so issuable.
In the event that prior to the Expiration Time the Company
enters into, consummates or permits to occur a transaction or series of
transactions after the time an Acquiring Person has become such in which,
directly or indirectly, (i) the Company shall consolidate or merge or
participate in a binding share exchange with any other Person if, at the time of
the consolidation, merger or share exchange or at the time the Company enters
into an agreement with respect to such consolidation, merger or share exchange,
the Acquiring Person controls the Board of Directors of the Company and (A) any
term of or arrangement concerning the treatment of shares of capital stock in
such merger, consolidation or share exchange relating to the Acquiring Person is
not identical to the terms and arrangements relating to other holders of Common
Stock or (B) the Person with whom such transaction or series of transactions
occurs is the Acquiring Person or an Affiliate or Associate thereof or (ii) the
Company shall sell or otherwise transfer (or one or more of its subsidiaries
shall sell or otherwise transfer) assets (A) aggregating more than 50% of the
assets (measured by either book value or fair market value) or (B) generating
more than 50% of the operating income or cash flow, of the Company and its
subsidiaries (taken as a whole) to any other Person (other than the Company or
one or more of its wholly owned subsidiaries) or to two or more such Persons
which are Affiliates or Associates or are otherwise acting in concert, if, at
the time of such sale or transfer of assets or at the time the Company (or any
such subsidiary) enters into an agreement with respect to such sale or transfer,
the Acquiring Person controls the Board of Directors of the Company (each of (i)
and (ii) being referred to as a "Flip-over Transaction or Event"), the Company
shall take such action as shall be necessary to ensure, and shall not enter
into, consummate or permit to occur such Flip-over Transaction or Event until it
shall have entered into a supplemental agreement with the Person engaging in
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such Flip-over Transaction or Event or the parent corporation thereof (the
"Flip-over Entity"), for the benefit of the holders of the Rights, providing,
that upon consummation or occurrence of the Flip-over Transaction or Event (i)
each Right shall thereafter constitute the right to purchase from the Flip-over
Entity, upon exercise thereof in accordance with the terms of the Rights
Agreement, that number of shares of common stock of the Flip-over Entity having
an aggregate Market Price on the date of consummation or occurrence of such
Flip-over Transaction or Event equal to twice the Exercise Price for an amount
in cash equal to the then current Exercise Price and (ii) the Flip-over Entity
shall thereafter be liable for, and shall assume, by virtue of such Flip-over
Transaction or Event and such supplemental agreement, all the obligations and
duties of the Company pursuant to the Rights Agreement. For purposes of the
foregoing description, the term "Acquiring Person" shall include any Acquiring
Person and its Affiliates and Associates counted together as a single Person.
The Board of Directors of the Company may, at its option, at
any time prior to the Flip-in Date, redeem all (but not less than all) of the
then outstanding Rights at a price of $.01 per Right (the "Redemption Price"),
as provided in the Rights Agreement. Immediately upon the action of the Board of
Directors of the Company electing to redeem the Rights, without any further
action and without any notice, the right to exercise the Rights will terminate
and each Right will thereafter represent only the right to receive the
Redemption Price in cash for each Right so held. In the event that such election
is made by the Board other than in connection or contemporaneously with any
Business Combination (as defined in the Rights Agreement), such election shall
only be made if there are one or more Continuing Directors on the Board and such
election is approved by a majority of the Continuing Directors then in office
and (ii) in the event that such election is made by the Board in connection or
contemporaneously with a Business Combination, such election shall only be made
(i) if such election is approved by a majority of the Independent Directors then
in office, if any Independent Directors are then in office, or (ii) if (a) there
are no Independent Directors then in office, (b) there are Continuing Directors
then in office and (c) such election is approved by a majority of the Continuing
Directors then in office.
The Company and the Rights Agent may from time to time
supplement or amend the Rights Agreement without the approval of any holders of
Rights (i) at any time, to cure any ambiguity, (ii) prior to the Flip-in Date,
in any other respect, and (iii) on or after the Flip-in Date, (A) to correct or
supplement any provision contained in the Rights Agreement which may be
inconsistent with any other provisions therein or otherwise defective or (B) to
change or supplement the provisions of the Rights Agreement in any manner which
the Company may deem necessary or desirable and which shall not materially
adversely affect the interests of the holders of Rights (other than an Acquiring
Person or an Affiliate or Associate of an Acquiring Person); provided, however,
(x) in the event that any such amendment or supplement described in clauses (ii)
and (iii) above is made by the Board other than in connection or
contemporaneously with any Business Combination, such amendment or supplement
shall only be made if there are one or more Continuing Directors on the Board
and such amendment or supplement is approved by a majority of the Continuing
Directors then in office and (y) in the event that any such amendment or
supplement described in clauses (ii) and (iii) above is made by the Board in
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connection or contemporaneously with a Business Combination, such amendment or
supplement shall only be made (I) if such amendment or supplement is approved by
a majority of the Independent Directors then in office, if any Independent
Directors are then in office, or (II) if (X) there are no Independent Directors
then in office, (Y) there are Continuing Directors then in office and (Z) such
amendment or supplement is approved by a majority of the Continuing Directors
then in office.
The holders of Rights will, solely by reason of their
ownership of Rights, have no rights as stockholders of the Company, including,
without limitation, the right to vote or to receive dividends.
The Rights may cause substantial dilution to a person or group
that acquires 10% or more of the Common Stock unless the Rights are first
redeemed by the Board of Directors of the Company. Nevertheless, the Rights
should not interfere with a transaction that is in the best interests of the
Company and its stockholders because the Rights can be redeemed on or prior to
the Flip-in Date, before the consummation of such transaction.
As of December 16, 1999, there were 20,000,000 shares of
Common Stock authorized, of which 9,056,806 shares were issued and outstanding
and 1,318,000 shares were reserved for issuance pursuant to employee benefit
plans and convertible securities. As long as the Rights are attached to the
Common Stock, the Company will issue one Right with each new share of Common
Stock so that all such shares will have Rights attached.
The Rights Agreement (which includes, as Exhibit A, a
description of the terms of the Participating Preferred Stock and, as Exhibit B,
the forms of Rights Certificate and Election to Exercise) is attached hereto as
an exhibit and is incorporated herein by reference. The foregoing description of
the Rights is qualified in its entirety by reference to the Rights Agreement and
such exhibits thereto.
The Board of Directors of the Company has also adopted certain
amendments to the Company's By-laws. The By-laws have been amended to provide
that special meetings of the Company's shareholders may only be called by the
Chairman of the Board, the President or by a majority of the Board of Directors.
In addition, concurrent with the adoption of the Rights Agreement, the Board
amended the By-laws to establish (a) advance notification requirements
applicable to shareholder proposals and director nominations to be made at
annual and special meetings of shareholders and (b) specific procedures
regarding consent solicitations by shareholders. A copy of the Company's amended
and restated By-laws is attached hereto as an exhibit and is incorporated herein
by reference. The foregoing description of amendments to the Company's By-laws
is qualified in its entirety by reference to the Company's Amended and Restated
By-laws.
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Item 7. Exhibits.
4.1 Rights Agreement, which includes, as Exhibit A, a description of the
terms of the Company's Participating Preferred Stock and, as Exhibit
B, the forms of Rights Certificate and Election to Exercise
4.2 Amended and Restated By-laws
99.1 Press release, dated December 16, 1999, issued by the Company
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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 thereunto duly authorized.
VESTCOM INTERNATIONAL, INC.
By: /s/ Joel Cartun
---------------------------------
Name: Joel Cartun
Title: Chairman of the Board and
Chief Executive Officer
Date: December 16, 1999
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EXHIBIT INDEX
Exhibit No. Description
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4.1 Shareholder Protection Rights Agreement, dated
as of December 16, 1999 (the "Rights
Agreement"), between Vestcom International,
Inc. (the "Company") and American Stock
Transfer & Trust Company, as Rights Agent,
including, as Exhibit A, a description of the
terms of the Participating Preferred Stock and,
as Exhibit B, the forms of Rights Certificate
and Election to Exercise
4.2 Amended and Restated By-laws
99.1 Press release, dated December 16, 1999, issued
by the Company
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Exhibit 4.1
SHAREHOLDER PROTECTION RIGHTS AGREEMENT
dated as of
December 16, 1999
between
VESTCOM INTERNATIONAL, INC.
and
AMERICAN STOCK TRANSFER & TRUST COMPANY,
as Rights Agent
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SHAREHOLDER PROTECTION RIGHTS AGREEMENT
Table of Contents
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Page
Article I
DEFINITIONS
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Section 1.1 Definitions................................................................................1
Article II
THE RIGHTS
Section 2.1 Summary of Rights..........................................................................7
Section 2.2 Legend on Common Stock Certificates........................................................7
Section 2.3 Exercise of Rights; Separation of Rights...................................................8
Section 2.4 Adjustments to Exercise Price; Number of Rights...........................................10
Section 2.5 Effective Date of Exercise................................................................11
Section 2.6 Execution, Authentication, Delivery
and Dating of Rights Certificates.......................................................11
Section 2.7 Registration, Registration of Transfer and Exchange.......................................12
Section 2.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates.................................12
Section 2.9 Persons Deemed Owners.....................................................................13
Section 2.10 Delivery and Cancellation of Certificates.................................................13
Section 2.11 Agreement of Rights Holders...............................................................13
Article III
ADJUSTMENTS TO THE RIGHTS IN
CERTAIN TRANSACTIONS
Section 3.1 Flip-in...................................................................................14
Section 3.2 Flip-over.................................................................................16
Article IV
THE RIGHTS AGENT
Section 4.1 General...................................................................................17
Section 4.2 Merger or Consolidation or Change of Name of Rights Agent.................................17
Section 4.3 Duties of Rights Agent....................................................................18
Section 4.4 Change of Rights Agent....................................................................19
</TABLE>
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<TABLE>
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Article V
MISCELLANEOUS
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Section 5.1 Redemption................................................................................20
Section 5.2 Expiration................................................................................21
Section 5.3 Issuance of New Rights Certificates.......................................................21
Section 5.4 Supplements and Amendments................................................................21
Section 5.5 Fractional Shares.........................................................................22
Section 5.6 Rights of Action..........................................................................22
Section 5.7 Holder of Rights Not Deemed a Shareholder.................................................22
Section 5.8 Notice of Proposed Actions................................................................22
Section 5.9 Notices...................................................................................23
Section 5.10 Suspension of Exercisability..............................................................23
Section 5.11 Costs of Enforcement......................................................................24
Section 5.12 Successors................................................................................24
Section 5.13 Benefits of this Agreement................................................................24
Section 5.14 Determination and Actions by the Board of Directors, etc..................................24
Section 5.15 Descriptive Headings......................................................................24
Section 5.16 Governing Law.............................................................................24
Section 5.17 Counterparts..............................................................................24
Section 5.18 Severability..............................................................................25
EXHIBITS
Exhibit A Description of Terms of Participating Preferred Stock
Exhibit B Form of Rights Certificate (Together with Form of
Election to Exercise)
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SHAREHOLDER PROTECTION RIGHTS AGREEMENT
This SHAREHOLDER PROTECTION RIGHTS AGREEMENT (as amended from
time to time, this "Agreement"), dated as of December 16, 1999, between Vestcom
International, Inc., a New Jersey corporation (the "Company"), and American
Stock Transfer & Trust Company, a New York corporation, as Rights Agent (the
"Rights Agent", which term shall include any successor Rights Agent hereunder)
WITNESSETH:
WHEREAS, the Board has (a) authorized and declared a dividend
of one right ("Right") in respect of each share of Common Stock (as hereinafter
defined) held of record as of the close of business on December 28, 1999 (the
"Record Time") and (b) as provided in Section 2.4, authorized the issuance of
one Right in respect of each share of Common Stock newly issued after the Record
Time and prior to the Separation Time and, to the extent provided in Section
5.3, each share of Common Stock newly issued after the Separation Time;
WHEREAS, subject to the terms and conditions hereof, each
Right entitles the holder thereof, after the Separation Time, to purchase
securities or assets of the Company (or, in certain cases, securities of certain
other entities) pursuant to the terms and subject to the conditions set forth
herein; and
WHEREAS, the Company desires to appoint the Rights Agent to
act on behalf of the Company, and the Rights Agent is willing so to act, in
connection with the issuance, transfer, exchange and replacement of Rights
Certificates, the exercise of Rights and other matters referred to herein;
NOW THEREFORE, in consideration of the premises and the
respective agreements set forth herein, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. For purposes of this Agreement, the following
terms have the meanings indicated:
"Acquiring Person" shall mean any Person who is a Beneficial
Owner of 10% or more of the outstanding shares of Common Stock; provided,
however, that the term "Acquiring Person" shall not include any Person (i) who
is the Beneficial Owner of 10% or more of the outstanding shares of Common Stock
on the date of this Agreement or who shall become the Beneficial Owner of 10% or
more of the outstanding shares of Common Stock solely as a result of a purchase
by the Company of shares of its Common Stock, until such time hereafter or
thereafter as any of such Persons shall become the Beneficial Owner (other than
by means of a stock dividend or stock split) of additional shares of Common
Stock (other than shares of Common Stock acquired upon the exercise of stock
options granted to such Persons as employees, officers or directors of the
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Company or any of its Subsidiaries) constituting two percent (2%) or more of the
then outstanding shares of Common Stock, (ii) who becomes the Beneficial Owner
of 10% or more of the outstanding shares of Common Stock but who acquired
Beneficial Ownership of shares of Common Stock without any plan or intention to
seek or affect control of the Company, if, upon notice by the Company, such
Person promptly enters into an irrevocable commitment with the Company to
divest, and thereafter promptly divests (without exercising or retaining any
power, including voting, with respect to such shares), sufficient shares of
Common Stock (or securities convertible into, exchangeable into or exercisable
for Common Stock) so that such Person ceases to be the Beneficial Owner of the
greater of (x) 10% of the outstanding shares of Common Stock or (y) the
percentage of the outstanding Common Stock Beneficially Owned by such Person on
the date hereof or (iii) who Beneficially Owns shares of Common Stock consisting
solely of one or more of (A) shares of Common Stock Beneficially Owned pursuant
to the grant or exercise of an option granted to such Person (an "Option
Holder") by the Company in connection with an agreement to merge with, or
acquire, the Company that is (x) approved by the Board at a time (I) when there
are Independent Directors then in office and such agreement is approved by a
majority of the Independent Directors then in office or (II) when (X) there are
no Independent Directors then in office, (Y) there are Continuing Directors then
in office and (Z) such agreement is approved by a majority of the Continuing
Directors then in office, and (y) entered into prior to a Flip-in Date, (B)
shares of Common Stock (or securities convertible into, exchangeable into or
exercisable for Common Stock) Beneficially Owned by such Option Holder or its
Affiliates or Associates at the time of grant of such option and (C) shares of
Common Stock (or securities convertible into, exchangeable into or exercisable
for Common Stock) acquired by Affiliates or Associates of such Option Holder
after the time of such grant which, in the aggregate, amount to less than one
percent (1%) of the outstanding shares of Common Stock. In addition, the
Company, any wholly-owned Subsidiary of the Company, any employee stock
ownership or other employee benefit plan of the Company or of a wholly-owned
Subsidiary of the Company and any Person or entity organized, appointed or
established by the Company or by a wholly-owned Subsidiary of the Company for or
pursuant to the terms of any such benefit plan shall not be an Acquiring Person.
"Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 under the Exchange Act, as such Rule is in
effect on the date of this Agreement.
"Agreement" shall have the meaning set forth in the Preamble.
A Person shall be deemed the "Beneficial Owner", and to have
"Beneficial Ownership" of, and to "Beneficially Own", any securities as to which
such Person or any of such Person's Affiliates or Associates is or may be deemed
to be the beneficial owner of pursuant to Rule 13d-3 and 13d-5 under the
Exchange Act, as such Rules are in effect on the date of this Agreement, as well
as any securities as to which such Person or any of such Person's Affiliates or
Associates has the right to become Beneficial Owner (whether such right is
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exercisable immediately or only after the passage of time or the occurrence of
conditions) pursuant to any agreement, arrangement or understanding, or upon the
exercise of conversion rights, exchange rights, other rights (other than the
Rights), warrants or options, or otherwise; provided, however, that a Person
shall not be deemed the "Beneficial Owner", or to have "Beneficial Ownership"
of, or to "Beneficially Own", any security (i) solely because such security has
been tendered pursuant to a tender or exchange offer made by such Person or any
of such Person's Affiliates or Associates until such tendered security is
accepted for payment or exchange or (ii) solely because such Person or any of
such Person's Affiliates or Associates has or shares the power to vote or direct
the voting of such security pursuant to a revocable proxy given in response to a
public proxy or consent solicitation made to more than ten holders of shares of
a class of stock of the Company registered under Section 12 of the Exchange Act
and pursuant to, and in accordance with, the applicable rules and regulations
under the Exchange Act, except if such power (or the arrangements relating
thereto) is then reportable under Item 6 of Schedule 13D under the Exchange Act
(or any similar provision of a comparable or successor report). For purposes of
this Agreement, in determining the percentage of the outstanding shares of
Common Stock with respect to which a Person is the Beneficial Owner, all shares
as to which such Person is deemed the Beneficial Owner shall be deemed
outstanding.
"Board" means the Board of Directors of the Company.
"Business Combination" shall mean a transaction or series of
transactions pursuant to which (i) the Company will participate in a merger,
consolidation or share exchange resulting in a change in control of the Company
or (ii) the Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer) assets (A) aggregating more than
50% of the assets (measured by either book value or fair market value) or (B)
generating more than 50% of the operating income or cash flow, of the Company
and its Subsidiaries (taken as a whole).
"Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the State of New Jersey are
generally authorized or obligated by law or executive order to close.
"Close of business" on any given date shall mean 5:00 p.m.
eastern standard time on such date or, if such date is not a Business Day, 5:00
p.m. eastern standard time on the next succeeding Business Day.
"Common Stock" shall mean the shares of Common Stock, no par
value, of the Company.
"Company" shall have the meaning set forth in the Preamble.
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"Continuing Director" shall mean (i) any member of the Board
while such Person is a member of the Board, who is not an Acquiring Person, or
an Affiliate or Associate of an Acquiring Person, or an employee, director,
representative, nominee or designee of an Acquiring Person or of any such
Affiliate or Associate, and was a member of the Board prior to the date of this
Agreement, or (ii) any Person who subsequently becomes a member of the Board,
while such Person is a member of the Board, who is not an Acquiring Person, or
an Affiliate or Associate of an Acquiring Person, or an employee, director,
representative, nominee or designee of an Acquiring Person or of any such
Affiliate or Associate, if such person's nomination for election or election to
the Board is recommended or approved by a majority of the Continuing Directors.
"Election to Exercise" shall have the meaning set forth in
Section 2.3(d) hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Exchange Ratio" shall have the meaning set forth in Section
3.1(c) hereof.
"Exchange Time" shall mean the time at which the right to
exercise the Rights shall terminate pursuant to Section 3.1(c) hereof.
"Exercise Price" shall mean, as of any date, the price at
which a holder may purchase the securities issuable upon exercise of one whole
Right. Until adjustment thereof in accordance with the terms hereof, the
Exercise Price shall equal $27.00.
"Expansion Factor" shall have the meaning set forth in Section
2.4(a) hereof.
"Expiration Time" shall mean the earliest of (i) the Exchange
Time, (ii) the Redemption Time, (iii) the close of business on the tenth
anniversary of the Record Time and (iv) immediately prior to the effective time
of a consolidation, merger or share exchange of the Company (A) into another
corporation or (B) with another corporation in which the Company is the
surviving corporation but Common Stock is converted into cash and/or securities
of another corporation, in either case pursuant to an agreement that is (x)
approved by the Board at a time (I) when there are Independent Directors then in
office and such agreement is approved by a majority of the Independent Directors
then in office or (II) when (X) there are no Independent Directors then in
office, (Y) there are Continuing Directors then in office and (Z) such agreement
is approved by a majority of the Continuing Directors then in office, and (y)
entered into by the Company prior to a Stock Acquisition Date.
"Flip-in Date" shall mean any Stock Acquisition Date.
"Flip-over Entity," for purposes of Section 3.2, shall mean
(i) in the case of a Flip-over Transaction or Event described in clause (i) of
the definition thereof, the Person issuing any securities into which shares of
Common Stock are being converted or exchanged and, if no such securities are
being issued, the other party to such Flip-over Transaction or Event and (ii) in
the case of a Flip-over Transaction or Event referred to in clause (ii) of the
definition thereof, the Person receiving the greatest portion of the (A) assets
or (B) operating income or cash flow being transferred in such Flip-over
Transaction or Event, provided that in all cases if such Person is a subsidiary
of a corporation, the parent corporation shall be the Flip-over Entity.
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"Flip-over Stock" shall mean the capital stock (or similar
equity interest) with the greatest voting power in respect of the election of
directors (or other persons similarly responsible for direction of the business
and affairs) of the Flip-over Entity.
"Flip-over Transaction or Event" shall mean a transaction or
series of transactions after a Flip-in Date in which, directly or indirectly,
(i) the Company shall consolidate or merge or participate in a share exchange
with any other Person if, at the time of the consolidation, merger or share
exchange or at the time the Company enters into any agreement with respect to
any such consolidation, merger or share exchange, the Acquiring Person controls
the Board and either (A) any term of or arrangement concerning the treatment of
shares of capital stock in such consolidation, merger or share exchange relating
to the Acquiring Person is not identical to the terms and arrangements relating
to other holders of the Common Stock or (B) the Person with whom the transaction
or series of transactions occurs is the Acquiring Person or an Affiliate or
Associate of the Acquiring Person or (ii) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or otherwise transfer)
assets (A) aggregating more than 50% of the assets (measured by either book
value or fair market value) or (B) generating more than 50% of the operating
income or cash flow, of the Company and its Subsidiaries (taken as a whole) to
any Person (other than the Company or one or more of its wholly owned
Subsidiaries) or to two or more Persons which are Affiliates or Associates or
otherwise acting in concert, if, at the time of the entry by the Company (or any
such Subsidiary) into an agreement with respect to such sale or transfer of
assets, the Acquiring Person controls the Board.
"Independent Director" shall mean, with respect to any event
or transaction or series of events or transactions, a member of the Board other
than a director who (i) is an executive officer of the Company on, or was an
executive officer of the Company within five years immediately preceding, the
date on which the Board votes on a matter pertaining to such transaction or
series of transactions which matter, pursuant to the terms of this Agreement,
requires the concurrence of a majority of Independent Directors, (ii) is a party
to such event or transaction or series of events or transactions, (iii) is an
Affiliate or Associate of a party (other than the Company) to such event or
transaction or series of events or transactions, or was nominated for election
to the Board by a party (other than the Company) to such event or transaction or
series of events or transactions or by an Affiliate or Associate of such party,
or (iv) has (A) a relationship that would materially interfere with the exercise
of such director's independent judgment in carrying out the responsibilities of
a director with respect to such event or transaction or series of events or
transactions or (B) a financial interest (other than as a Beneficial Owner of
shares of Common Stock) in or with respect to such event or transaction or
series of events or transactions.
"Market Price" per share of any securities on any date shall
mean the average of the daily closing prices per share of such securities
(determined as described below) on each of the twenty (20) consecutive Trading
Days through and including the Trading Day immediately preceding such date;
provided, however, that if an event of a type analogous to any of the events
described in Section 2.4 hereof shall have caused the closing prices used to
determine the Market Price on any Trading Days during such period of twenty (20)
Trading Days not to be fully comparable with the closing price on such date,
each such closing price so used shall be appropriately adjusted in order to make
it fully comparable with the closing price on such date. The closing price per
share of any securities on any date shall be the last reported sale price,
regular way, or, in case no such sale takes place or is quoted on such date, the
average of the closing bid and asked prices, regular way, for each share of such
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securities, in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading on the
New York Stock Exchange, Inc. or, if the securities are not listed or admitted
to trading on the New York Stock Exchange, Inc., as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the securities are listed or
admitted to trading or, if the securities are not listed or admitted to trading
on any national securities exchange, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System or such other comparable
system then in use, or, if on any such date the securities are not listed or
admitted to trading on any national securities exchange or 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 securities selected by the
Board; provided, however, that if on any such date the securities are not listed
or admitted to trading on a national securities exchange or traded in the
over-the-counter market, the closing price per share of such securities on such
date shall mean the fair value per share of securities on such date as
determined in good faith by the Board, after consultation with a nationally
recognized investment banking firm, and set forth in a certificate delivered to
the Rights Agent.
"Option Holder" shall have the meaning set forth in the
definition of Acquiring Person.
"Person" shall mean any individual, firm, partnership,
association, limited liability company, group (as such term is used in Rule
13d-5 under the Securities Exchange Act of 1934, as such Rule is in effect on
the date of this Agreement), corporation or other entity.
"Preferred Stock" shall mean the series of Participating
Preferred Stock, no par value, of the Company created by resolution of the Board
containing substantially the same terms as set forth in Exhibit A hereto
(appropriately completed).
"Record Time" shall have the meaning set forth in the
Recitals.
"Redemption Price" shall mean an amount equal to one cent
($0.01).
"Redemption Time" shall mean the time at which the right to
exercise the Rights shall terminate pursuant to Section 5.1 hereof.
"Right" shall have the meaning set forth in the Recitals.
"Rights Agent" shall have the meaning set forth in the
Preamble.
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"Rights Certificate" shall have the meaning set forth in
Section 2.3(c) hereof.
"Rights Register" shall have the meaning set forth in Section
2.7(a) hereof.
"Separation Time" shall mean the close of business on the
earlier of (i) the tenth Business Day after the date on which any Person
commences a tender or exchange offer which, if consummated, would result in such
Person's becoming an Acquiring Person and (ii) the Flip-in Date; provided, that
if the foregoing results in the Separation Time being prior to the Record Time,
the Separation Time shall be the Record Time and provided further, that if any
tender or exchange offer referred to in clause (i) of this paragraph is
canceled, terminated or otherwise withdrawn prior to the Separation Time without
the purchase of any shares of Common Stock pursuant thereto, such offer shall be
deemed, for purposes of this paragraph, never to have been made.
"Stock Acquisition Date" shall mean the date of the first
public announcement by the Company (by any means) or by an Acquiring Person
(including by means of filing a Schedule 13D or Schedule 13G under the
Securities Exchange Act of 1934 (or any comparable or successor report or
schedule) or an amendment thereto) that a Person has become an Acquiring Person.
"Subsidiary" of any specified Person shall mean any
corporation or other entity of which a majority of the voting power of the
equity securities or a majority of the equity interest is Beneficially Owned,
directly or indirectly, by such Person.
"Trading Day," when used with respect to any securities, shall
mean a day on which the New York Stock Exchange, Inc. is open for the
transaction of business or, if such securities are not listed or admitted to
trading on the New York Stock Exchange, Inc., a day on which the principal
national securities exchange on which such securities are listed or admitted to
trading is open for the transaction of business or, if such securities are not
listed or admitted to trading on any national securities exchange, a Business
Day.
ARTICLE II
THE RIGHTS
2.1 Summary of Rights. As soon as practicable after the Record
Time, the Company will mail a letter summarizing the terms of the Rights to each
holder of record of Common Stock as of the Record Time, at such holder's address
as shown by the records of the Company.
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2.2 Legend on Common Stock Certificates. Certificates for the
Common Stock issued after the Record Time but prior to the Separation Time shall
evidence one Right for each share of Common Stock represented thereby and shall
have impressed on, printed on, written on or otherwise affixed to them the
following legend:
Until the Separation Time (as defined in the Rights Agreement
referred to below), this certificate also evidences and
entitles the holder hereof to certain Rights as set forth in a
Rights Agreement, dated as of December 16, 1999 (as such may
be amended from time to time, the "Rights Agreement"), between
Vestcom International, Inc. (the "Company") and American Stock
Transfer & Trust Company, as Rights Agent, the terms of which
are hereby incorporated herein by reference and a copy of
which is on file at the principal executive offices of the
Company. Under certain circumstances, as set forth in the
Rights Agreement, such Rights may be redeemed, may become
exercisable for securities or assets of the Company or
securities of another entity, may be exchanged for shares of
Common Stock or other securities or assets of the Company, may
expire, may become void (if they are "Beneficially Owned" by
an "Acquiring Person" or an Affiliate or Associate thereof, as
such terms are defined in the Rights Agreement, or by any
transferee of any of the foregoing) or may be evidenced by
separate certificates and may no longer be evidenced by this
certificate. The Company will mail or arrange for the mailing
of a copy of the Rights Agreement to the holder of this
certificate without charge after the receipt of a written
request therefor.
Certificates representing shares of Common Stock that are issued and outstanding
at the Record Time shall evidence one Right for each share of Common Stock
evidenced thereby notwithstanding the absence of the foregoing legend.
2.3 Exercise of Rights; Separation of Rights.
(a) Subject to Sections 3.1, 5.1 and 5.10 and subject to
adjustment as herein set forth, each Right will entitle the holder thereof,
after the Separation Time and prior to the Expiration Time, to purchase, for the
Exercise Price, one one-hundredth of a share of Preferred Stock.
(b) Until the Separation Time, (i) no Right may be exercised
and (ii) each Right will be evidenced by the certificate for the associated
share of Common Stock (together, in the case of certificates issued prior to the
Record Time, with the letter mailed to the record holder thereof pursuant to
Section 2.1) and will be transferable only together with, and will be
transferred by a transfer (whether with or without such letter) of, such
associated share.
(c) Subject to the terms and conditions hereof, after the
Separation Time and prior to the Expiration Time, the Rights (i) may be
exercised and (ii) may be transferred independent of shares of Common Stock.
Promptly following the Separation Time, the Rights Agent will mail to each
holder of record of Common Stock as of the Separation Time (other than any
Person whose Rights have become void pursuant to Section 3.1(b)), at such
holder's address as shown by the records of the Company (the Company hereby
agreeing to furnish copies of such records to the Rights Agent for this
purpose), (x) a certificate (a "Rights Certificate") in substantially the form
of Exhibit B hereto appropriately completed, representing the number of Rights
held by such holder at the Separation Time and having 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
law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any national securities exchange or quotation system on which the
Rights may from time to time be listed or traded, or to conform to usage, and
(y) a disclosure statement describing the Rights.
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(d) Subject to the terms and conditions hereof, Rights may be
exercised on any Business Day after the Separation Time and prior to the
Expiration Time by submitting to the Rights Agent the Rights Certificate
evidencing such Rights with an election to exercise (an "Election to Exercise")
substantially in the form attached to the Rights Certificate duly completed,
accompanied by payment in cash, or by certified or official bank check or money
order payable to the order of the Company, of a sum equal to the Exercise Price
multiplied by the number of Rights being exercised and a sum sufficient to cover
any transfer tax or charge which may be payable in respect of any transfer
involved in the transfer or delivery of Rights Certificates or the issuance or
delivery of certificates for shares or depositary receipts (or both) in a name
other than that of the holder of the Rights being exercised.
(e) Upon receipt of a Rights Certificate, with an Election to
Exercise accompanied by payment as set forth in Section 2.3(d), and subject to
the terms and conditions hereof, the Rights Agent will thereupon promptly (i)(A)
requisition from a transfer agent (which may, but need not, be the Rights Agent)
stock certificates evidencing such number of shares or other securities to be
purchased (the Company hereby irrevocably authorizing its transfer agents to
comply with all such requisitions) and (B) if the Company elects pursuant to
Section 5.5 not to issue certificates representing fractional shares,
requisition from the depositary selected by the Company depositary receipts
representing the fractional shares to be purchased or requisition from the
Company the amount of cash to be paid in lieu of fractional shares in accordance
with Section 5.5 and (ii) after receipt of such certificates, depositary
receipts and/or cash, deliver the same to or upon the order of the registered
holder of such Rights Certificate, registered (in the case of certificates or
depositary receipts) in such name or names as may be designated by such holder.
(f) In case the holder of any Rights shall exercise less than
all the Rights evidenced by such holder's Rights Certificate, a new Rights
Certificate evidencing the Rights remaining unexercised will be issued by the
Rights Agent to such holder or to such holder's duly authorized assigns.
(g) The Company covenants and agrees that it will (i) take all
such action as may be necessary to ensure that all shares delivered upon
exercise of Rights shall, at the time of delivery of the certificates for such
shares (subject to payment of the Exercise Price), be duly and validly
authorized, executed, issued and delivered and fully paid and nonassessable;
(ii) take all such action as may be necessary to comply with any applicable
requirements of the Securities Act of 1933 or the Exchange Act, and the rules
and regulations promulgated thereunder, and any other applicable law, rule or
regulation, in connection with the issuance of any shares upon exercise of
Rights; and (iii) pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of the original
issuance or delivery of the Rights Certificates or of any shares issued upon the
exercise of Rights, provided, that the Company shall not be required to pay any
transfer tax or charge which may be payable in respect of any transfer involved
in the transfer or delivery of Rights Certificates or the issuance or delivery
of certificates for shares in a name other than that of the holder of the Rights
being transferred or exercised.
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2.4 Adjustments to Exercise Price; Number of Rights.
(a) In the event the Company shall at any time after the
Record Time and prior to the Separation Time (i) declare or pay a dividend on
Common Stock payable in Common Stock, (ii) subdivide the outstanding Common
Stock or (iii) combine the outstanding Common Stock into a smaller number of
shares of Common Stock, (x) the Exercise Price in effect after such adjustment
will be equal to the Exercise Price in effect immediately prior to such
adjustment divided by the number of shares of Common Stock (the "Expansion
Factor") that a holder of one share of Common Stock immediately prior to such
dividend, subdivision or combination would hold thereafter as a result thereof
and (y) each Right held prior to such adjustment will become that number of
Rights equal to the Expansion Factor, and the adjusted number of Rights will be
deemed to be distributed among the shares of Common Stock with respect to which
the original Rights were associated (if they remain outstanding) and the shares
issued in respect of such dividend, subdivision or combination, so that each
such share of Common Stock will have exactly one Right associated with it. Each
adjustment made pursuant to this paragraph shall be made as of the payment or
effective date for the applicable dividend, subdivision or combination.
In the event the Company shall at any time after the Record
Time and prior to the Separation Time issue any shares of Common Stock otherwise
than in a transaction referred to in the preceding paragraph, each such share of
Common Stock so issued shall automatically have one new Right associated with
it, which Right shall be evidenced by the certificate representing such share.
To the extent provided in Section 5.3, Rights shall be issued by the Company in
respect of shares of Common Stock that are issued or sold by the Company after
the Separation Time.
(b) In the event the Company shall at any time after the
Record Time and prior to the Separation Time issue or distribute any securities
or assets in respect of, in lieu of or in exchange for Common Stock (other than
pursuant to a dividend intended by the Board to represent a regular periodic
cash dividend or a dividend paid solely in Common Stock), whether by dividend,
in a reclassification or recapitalization (including any such transaction
involving a merger, consolidation or share exchange), or otherwise, the Company
shall make such adjustments, if any, in the Exercise Price, number of Rights
and/or securities or other property purchasable upon exercise of Rights as the
Board, in its sole discretion, may deem to be appropriate under the
circumstances in order to adequately protect the interests of the holders of
Rights generally, and the Company and the Rights Agent shall amend this
Agreement as necessary to provide for such adjustments.
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(c) Each adjustment to the Exercise Price made pursuant to
this Section 2.4 shall be calculated to the nearest cent. Whenever an adjustment
to the Exercise Price is made pursuant to this Section 2.4, the Company shall
(i) promptly prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment and (ii) promptly file
with the Rights Agent and with each transfer agent for the Common Stock a copy
of such certificate.
(d) Rights Certificates shall represent the securities
purchasable under the terms of this Agreement, including any adjustment or
change in the securities purchasable upon exercise of the Rights, even though
such certificates may continue to express the securities purchasable at the time
of issuance of the initial Rights Certificates.
2.5 Effective Date of Exercise. Each person in whose name any
certificate for shares is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of the shares represented
thereby on the date upon which the Rights Certificate evidencing such Rights was
duly surrendered and payment of the Exercise Price for such Rights (and any
applicable taxes and other governmental charges payable by the exercising holder
hereunder) was made; provided, however, that if the date of such surrender and
payment is a date upon which the stock transfer books of the Company are closed,
such person shall be deemed to have become the record holder of such shares on,
and such certificate shall be dated, the next succeeding Business Day on which
the stock transfer books of the Company are open.
2.6 Execution, Authentication, Delivery and Dating of Rights
Certificates.
(a) The 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 of these
officers on the Rights Certificates may be manual or facsimile.
Rights Certificates bearing the manual or facsimile signatures
of individuals who were at any time the proper officers of the Company shall
bind the Company, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the countersignature and delivery of such
Rights Certificates.
Promptly after the Company learns of the Separation Time, the
Company will notify the Rights Agent of such Separation Time and will deliver
Rights Certificates executed by the Company to the Rights Agent for
counter-signature, and, subject to Section 3.1(b), the Rights Agent shall
manually countersign and deliver such Rights Certificates to the holders of the
Rights pursuant to Section 2.3(c) hereof. No Rights Certificate shall be valid
for any purpose unless manually countersigned by the Rights Agent.
(b) Each Rights Certificate shall be dated the date of
countersignature thereof.
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2.7 Registration, Registration of Transfer and Exchange.
(a) After the Separation Time, the Company will cause to be
kept a register (the "Rights Register") in which, subject to such reasonable
regulations as it may prescribe, the Company will provide for the registration
and transfer of Rights. The Rights Agent is hereby appointed "Rights Registrar"
for the purpose of maintaining the Rights Register for the Company and
registering Rights and transfers of Rights after the Separation Time as herein
provided. In the event that the Rights Agent shall cease to be the Rights
Registrar, the Rights Agent will have the right to examine the Rights Register
at all reasonable times after the Separation Time.
After the Separation Time and prior to the Expiration Time,
upon surrender for registration of transfer or exchange of any Rights
Certificate, and subject to the provisions of Section 2.7(c) and (d), the
Company will execute, and the Rights Agent will countersign and deliver, in the
name of the holder or the designated transferee or transferees, as required
pursuant to the holder's instructions, one or more new Rights Certificates
evidencing the same aggregate number of Rights as did the Rights Certificate so
surrendered.
(b) Except as otherwise provided in Section 3.1(b), all Rights
issued upon any registration of transfer or exchange of Rights Certificates
shall be the valid obligations of the Company, and such Rights shall be entitled
to the same benefits under this Agreement as the Rights surrendered upon such
registration of transfer or exchange.
(c) Every Rights Certificate surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company or the Rights Agent,
as the case may be, duly executed by the holder thereof or such holder's
attorney duly authorized in writing. As a condition to the issuance of any new
Rights Certificate under this Section 2.7, the Company may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto.
(d) The Company shall not be required to register the transfer
or exchange of any Rights after such Rights have become void under Section
3.1(b), been exchanged under Section 3.1(c) or been redeemed under Section 5.1.
2.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates.
(a) If any mutilated Rights Certificate is surrendered to the
Rights Agent prior to the Expiration Time, then, subject to Sections 3.1(b),
3.1(c) and 5.1, the Company shall execute and the Rights Agent shall countersign
and deliver in exchange therefor a new Rights Certificate evidencing the same
number of Rights as did the Rights Certificate so surrendered.
(b) If there shall be delivered to the Company and the Rights
Agent prior to the Expiration Time (i) evidence to their satisfaction of the
destruction, loss or theft of any Rights Certificate and (ii) such security or
indemnity as may be required by them to save each of them and any of their
agents harmless, then, subject to Sections 3.1(b), 3.1(c) and 5.1 and in the
absence of notice to the Company or the Rights Agent that such Rights
Certificate has been acquired by a bona fide purchaser, the Company shall
execute and upon its request the Rights Agent shall countersign and deliver, in
lieu of any such destroyed, lost or stolen Rights Certificate, a new Rights
Certificate evidencing the same number of Rights as did the Rights Certificate
so destroyed, lost or stolen.
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(c) As a condition to the issuance of any new Rights
Certificate under this Section 2.8, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Rights Agent) connected therewith.
(d) Every new Rights Certificate issued pursuant to this
Section 2.8 in lieu of any destroyed, lost or stolen Rights Certificate shall
evidence an original additional contractual obligation of the Company, whether
or not the destroyed, lost or stolen Rights Certificate shall be at any time
enforceable by anyone, and, subject to Section 3.1(b), shall be entitled to all
the benefits of this Agreement equally and proportionately with any and all
other Rights duly issued hereunder.
2.9 Persons Deemed Owners. Prior to due presentment of a
Rights Certificate (or, prior to the Separation Time, the associated Common
Stock certificate) for registration of transfer, the Company, the Rights Agent
and any agent of the Company or the Rights Agent may deem and treat the person
in whose name such Rights Certificate (or, prior to the Separation Time, such
Common Stock certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby for all purposes whatsoever, including the payment of
the Redemption Price and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary. As used in this Agreement, unless the
context otherwise requires, the term "holder" of any Rights shall mean the
registered holder of such Rights (or, prior to the Separation Time, the
associated shares of Common Stock).
2.10 Delivery and Cancellation of Certificates. All Rights
Certificates surrendered upon exercise or for registration of transfer or
exchange shall, if surrendered to any person other than the Rights Agent, be
delivered to the Rights Agent and, in any case, shall be promptly canceled by
the Rights Agent. The Company may at any time deliver to the Rights Agent for
cancellation any Rights Certificates previously countersigned and delivered
hereunder which the Company may have acquired in any manner whatsoever, and all
Rights Certificates so delivered shall be promptly canceled by the Rights Agent.
No Rights Certificates shall be countersigned in lieu of or in exchange for any
Rights Certificates canceled as provided in this Section 2.10, except as
expressly permitted by this Agreement. The Rights Agent shall destroy all
canceled Rights Certificates and deliver a certificate of destruction to the
Company.
2.11 Agreement of Rights Holders. Every holder of Rights by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of Rights that:
(a) prior to the Separation Time, each Right will be
transferable only together with, and will be transferred by a transfer of, the
associated share of Common Stock;
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(b) after the Separation Time, the Rights Certificates will be
transferable only on the Rights Register as provided herein;
(c) prior to due presentment of a Rights Certificate (or,
prior to the Separation Time, the associated Common Stock certificate) for
registration of transfer, the Company, the Rights Agent and any agent of the
Company or the Rights Agent may deem and treat the person in whose name the
Rights Certificate (or, prior to the Separation Time, the associated Common
Stock certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby for all purposes whatsoever, and neither the Company nor the
Rights Agent nor any agent of the Company or the Rights Agent shall be affected
by any notice to the contrary;
(d) Rights Beneficially Owned by certain Persons will, under
the circumstances set forth in Section 3.1(b), become void; and
(e) this Agreement may be supplemented or amended from time to
time pursuant to Section 2.4(b) or 5.4 hereof.
ARTICLE III
ADJUSTMENTS TO THE RIGHTS IN
CERTAIN TRANSACTIONS
3.1 Flip-in.
(a) In the event that prior to the Expiration Time a Flip-in
Date shall occur, except as provided in this Section 3.1, each Right shall
constitute the right to purchase from the Company, upon exercise thereof in
accordance with the terms hereof (but subject to Section 5.10), that number of
shares of Common Stock having an aggregate Market Price on the Stock Acquisition
Date equal to twice the Exercise Price for an amount in cash equal to the
Exercise Price (such right to be appropriately adjusted in order to protect the
interests of the holders of Rights generally in the event that on or after such
Stock Acquisition Date an event of a type analogous to any of the events
described in Section 2.4(a) or (b) shall have occurred with respect to the
Common Stock).
(b) Notwithstanding the foregoing, any Rights that are or were
Beneficially Owned on or after the Stock Acquisition Date by an Acquiring Person
or an Affiliate or Associate thereof or by any transferee, direct or indirect,
of any of the foregoing shall become void and any holder of such Rights
(including transferees) shall thereafter have no right to exercise or transfer
such Rights under any provision of this Agreement. If any Rights Certificate is
presented for assignment or exercise and the Person presenting the same will not
complete the certification set forth at the end of the form of assignment or
notice of election to exercise and provide such additional evidence of the
identity of the Beneficial Owner and its Affiliates and Associates (or former
Beneficial Owners and their Affiliates and Associates) as the Company shall
reasonably request, then the Company shall be entitled conclusively to deem the
Beneficial Owner thereof to be an Acquiring Person or an Affiliate or Associate
thereof or a transferee of any of the foregoing and accordingly will deem the
Rights evidenced thereby to be void and not transferable or exercisable.
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(c) The Board may, at its option, at any time after a Flip-in
Date and prior to the time that an Acquiring Person becomes the Beneficial Owner
of more than 50% of the outstanding shares of Common Stock elect to exchange all
(but not less than all) of the then outstanding Rights (which shall not include
Rights that have become void pursuant to the provisions of Section 3.1(b)) for
shares of Common Stock at an exchange ratio of one share of Common Stock per
Right, appropriately adjusted in order to protect the interests of holders of
Rights generally in the event that after the Separation Time an event of a type
analogous to any of the events described in Section 2.4(a) or (b) shall have
occurred with respect to the Common Stock (such exchange ratio, as adjusted from
time to time, being hereinafter referred to as the "Exchange Ratio").
Immediately upon the action of the Board electing to exchange
the Rights, without any further action and without any notice, the right to
exercise the Rights will terminate and each Right (other than Rights that have
become void pursuant to Section 3.1(b)) will thereafter represent only the right
to receive a number of shares of Common Stock equal to the Exchange Ratio.
Promptly after the action of the Board electing to exchange the Rights, the
Company shall give notice thereof (specifying the steps to be taken to receive
shares of Common Stock in exchange for Rights) to the Rights Agent and the
holders of the Rights (other than Rights that have become void pursuant to
Section 3.1(b)) outstanding immediately prior thereto by mailing such notice in
accordance with Section 5.9.
Each Person in whose name any certificate for shares is issued
upon the exchange of Rights pursuant to this Section 3.1(c) or Section 3.1(d)
shall for all purposes be deemed to have become the holder of record of the
shares 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 any applicable taxes and other governmental charges payable by
the holder was made; provided, however, that if the date of such surrender and
payment is a date upon which the stock transfer books of the Company are closed,
such Person shall be deemed to have become the record holder of such shares on,
and such certificate shall be dated, the next succeeding Business Day on which
the stock transfer books of the Company are open.
(d) Whenever the Company shall become obligated under Section
3.1(a) or (c) to issue shares of Common Stock upon exercise of or in exchange
for Rights, the Company, at its option, may substitute therefor shares of
Preferred Stock, at a ratio of one one-hundredth of a share of Preferred Stock
for each share of Common Stock so issuable.
(e) In the event that there shall not be sufficient treasury
shares and authorized but unissued shares of Common Stock or Preferred Stock of
the Company to permit the exercise or exchange in full of the Rights in
accordance with Section 3.1(a) or (c), and the Company elects not to, or is
otherwise unable to, make the exchange referred to in Section 3.1(c), the
Company shall either (i) call a meeting of shareholders seeking approval to
cause sufficient additional shares to be authorized (provided that if such
approval is not obtained the Company will take the action specified in clause
(ii) of this sentence) or (ii) take such action as shall be necessary to ensure
and provide, to the extent permitted by applicable law and any agreements or
instruments in effect on the Stock Acquisition Date to which it is a party, that
each Right shall thereafter constitute the right to receive, (x) at the
Company's option, either (A) in return for the Exercise Price, debt or equity
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securities or other assets (or a combination thereof) having a fair value equal
to twice the Exercise Price, or (B) without payment of consideration (except as
otherwise required by applicable law), debt or equity securities or other assets
(or a combination thereof) having a fair value equal to the Exercise Price, or
(y) if the Board elects to exchange the Rights in accordance with Section
3.1(c), debt or equity securities or other assets (or a combination thereof)
having a fair value equal to the product of the Market Price of a share of
Common Stock on the Flip-in Date times the Exchange Ratio in effect on the
Flip-in Date, where in any case set forth in (x) or (y) above the fair value of
such debt or equity securities or other assets shall be as determined in good
faith by the Board, after consultation with a nationally recognized investment
banking firm.
3.2 Flip-over.
(a) Prior to the Expiration Time, the Company shall not enter
into any agreement with respect to, consummate or permit to occur any Flip-over
Transaction or Event unless and until it shall have entered into a supplemental
agreement with the Flip-over Entity, for the benefit of the holders of the
Rights, providing that, upon consummation or occurrence of the Flip-over
Transaction or Event (i) each Right shall thereafter constitute the right to
purchase from the Flip-over Entity, upon exercise thereof in accordance with the
terms hereof, that number of shares of Flip-over Stock of the Flip-over Entity
having an aggregate Market Price on the date of consummation or occurrence of
such Flip-over Transaction or Event equal to twice the Exercise Price for an
amount in cash equal to the Exercise Price (such right to be appropriately
adjusted in order to protect the interests of the holders of Rights generally in
the event that after such date of consummation or occurrence an event of a type
analogous to any of the events described in Section 2.4(a) or (b) shall have
occurred with respect to the Flip-over Stock) and (ii) the Flip-over Entity
shall thereafter be liable for, and shall assume, by virtue of such Flip-over
Transaction or Event and such supplemental agreement, all the obligations and
duties of the Company pursuant to this Agreement. The provisions of this Section
3.2 shall apply to successive Flip-over Transactions or Events.
(b) Prior to the Expiration Time, unless the Rights will be
redeemed pursuant to Section 5.1 hereof in connection therewith, the Company
shall not enter into any agreement with respect to, consummate or permit to
occur any Flip-over Transaction or Event if at the time thereof there are any
rights, warrants or securities outstanding or any other arrangements, agreements
or instruments that would eliminate or otherwise diminish in any material
respect the benefits intended to be afforded by this Rights Agreement to the
holders of Rights upon consummation of such transaction.
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ARTICLE IV
THE RIGHTS AGENT
4.1 General.
(a) 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. The Company agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted to be done 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.
(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
certificate for securities purchasable upon exercise of Rights, Rights
Certificate, certificate for other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper person or persons.
4.2 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 is a party, or any corporation succeeding to
the shareholder services business of the Rights Agent or any successor Rights
Agent, will be the successor to the Rights Agent under this Agreement without
the execution or filing of any paper or any further act on the part of any of
the parties hereto, provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 4.4
hereof. In case at the time such successor Rights Agent succeeds to the agency
created by this Agreement any of the Rights Certificates have been countersigned
but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates have not been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all such cases
such Rights Certificates will have the full force provided in the Rights
Certificates and in this Agreement.
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(b) In case at any time the name of the Rights Agent is
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.
4.3 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 will 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 deems it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by a person believed by the Rights Agent to
be the Chairman of the Board, the President or any Vice President and by the
Treasurer or any Assistant Treasurer or the Secretary or any Assistant Secretary
of the Company and delivered to the Rights Agent; and such certificate will be
full authorization to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent will be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent will not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in the
certificates for securities purchasable upon exercise of Rights or the Rights
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and will be deemed to have been
made by the Company only.
(e) The Rights Agent will not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due authorization, execution and delivery hereof by the Rights
Agent) or in respect of the validity or execution of any certificate for
securities purchasable upon exercise of Rights or Rights Certificate (except its
countersignature thereof); nor will it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Rights Certificate; nor will it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void pursuant to
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Section 3.1(b) hereof) or any adjustment required under the provisions of
Section 2.4, 3.1 or 3.2 hereof or be responsible for the manner, method or
amount of any such adjustment or the ascertaining of the existence of facts that
would require any such adjustment (except with respect to the exercise of Rights
after receipt of the certificate contemplated by Section 2.4 describing any such
adjustment); nor will it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
securities purchasable upon exercise of Rights or any Rights or as to whether
any securities purchasable upon exercise of Rights will, when issued, be duly
and validly authorized, executed, issued and delivered and fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
any person believed by the Rights Agent to be the Chairman of the Board, the
President or any Vice President or the Secretary or any Assistant Secretary or
the Treasurer or any Assistant Treasurer of the Company, and to apply to such
persons for advice or instructions in connection with its duties, and it shall
not be liable for any action taken or suffered by it in good faith in accordance
with instructions of any such person.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in Common Stock, Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
the Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other legal
entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent will not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct, provided reasonable care was exercised in
the selection and continued employment thereof.
4.4 Change of Rights Agent. The Rights Agent may resign and be
discharged from its duties under this Agreement upon 90 days' notice (or such
lesser notice as is acceptable to the Company) in writing mailed to the Company
and to each transfer agent of Common Stock by registered or certified mail, and
to the holders of the Rights in accordance with Section 5.9. The Company may
remove the Rights Agent upon 30 days' notice in writing, mailed to the Rights
Agent and to each transfer agent of the Common Stock by registered or certified
mail, and to the holders of the Rights in accordance with Section 5.9. If the
Rights Agent should resign or be removed or otherwise become incapable of
acting, the Company will appoint a successor to the Rights Agent. If the Company
fails to make such appointment within a period of 30 days after 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 any Rights (which
holder shall, with such notice, submit such holder's Rights Certificate for
inspection by the Company), then the holder of any Rights may apply to any court
of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be a corporation organized and doing business under the laws of the United
States or any state of the United States, in good standing, which is authorized
under such laws to exercise the powers of the Rights Agent contemplated by this
Agreement and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a
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combined capital and surplus of at least $50,000,000. After appointment, the
successor Rights Agent will 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 will file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Stock, and mail a notice thereof in
writing to the holders of the Rights. Failure to give any notice provided for in
this Section 4.4, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.
ARTICLE V
MISCELLANEOUS
5.1 Redemption.
(a) The Board may, at its option, at any time prior to the
Flip-in Date, elect to redeem all (but not less than all) of the then
outstanding Rights at the Redemption Price, and the Company, at its option, may
pay the Redemption Price either in cash or shares of Common Stock or other
securities of the Company deemed by the Board, in the exercise of its sole
discretion, to be at least equivalent in value to the Redemption Price,
provided, however, (i) in the event that such election is made by the Board
other than in connection or contemporaneously with any Business Combination,
such election shall only be made if there are one or more Continuing Directors
on the Board and such election is approved by a majority of the Continuing
Directors then in office and (ii) in the event that such election is made by the
Board in connection or contemporaneously with a Business Combination, such
election shall only be made (i) if such election is approved by a majority of
the Independent Directors then in office, if any Independent Directors are then
in office, or (ii) if (a) there are no Independent Directors then in office, (b)
there are Continuing Directors then in office and (c) such election is approved
by a majority of the Continuing Directors then in office.
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(b) Immediately upon the action of the Board electing to
redeem the Rights (or, if the resolution of the Board electing to redeem the
Rights states that the redemption will not be effective until the occurrence of
a specified future time or event, upon the occurrence of such future time or
event), without any further action and without any notice, the right to exercise
the Rights will terminate and each Right will thereafter represent only the
right to receive the Redemption Price in cash or securities, as determined by
the Board. Promptly after the Rights are redeemed, the Company shall give notice
of such redemption to the Rights Agent and the holders of the then outstanding
Rights by mailing such notice in accordance with Section 5.9.
5.2 Expiration. The Rights and this Agreement shall expire at
the Expiration Time and no Person shall have any rights pursuant to this
Agreement or any Right after the Expiration Time, except, if the Rights are
exchanged or redeemed, as provided in Section 3.1 or 5.1 hereof, respectively.
5.3 Issuance of New Rights Certificates. Notwithstanding any
of the provisions of this Agreement or of 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 to reflect any adjustment or change in
the number or kind or class of shares of stock purchasable upon exercise of
Rights made in accordance with the provisions of this Agreement. In addition, in
connection with the issuance or sale of shares of Common Stock by the Company
following the Separation Time and prior to the Expiration Time pursuant to the
terms of securities convertible or redeemable into shares of Common Stock or to
options, in each case issued or granted prior to, and outstanding at, the
Separation Time, the Company shall issue to the holders of such shares of Common
Stock, Rights Certificates representing the appropriate number of Rights in
connection with the issuance or sale of such shares of Common Stock; provided,
however, in each case, (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 to the Person to whom such Rights Certificates would be issued, (ii)
no such Rights Certificates shall be issued if, and to the extent that,
appropriate adjustment shall have otherwise been made in lieu of the issuance
thereof, and (iii) the Company shall have no obligation to distribute Rights
Certificates to any Acquiring Person or Affiliate or Associate of an Acquiring
Person or any transferee of any of the foregoing.
5.4 Supplements and Amendments. The Company and the Rights
Agent may from time to time supplement or amend this Agreement without the
approval of any holders of Rights (i) at any time, to cure any ambiguity, (ii)
prior to the Flip-in Date, in any other respect, and (iii) on or after the
Flip-in Date, (A) to correct or supplement any provision contained herein which
may be inconsistent with any other provisions herein or otherwise defective or
(B) to change or supplement the provisions hereunder in any manner which the
Company may deem necessary or desirable and which shall not materially adversely
affect the interests of the holders of Rights (other than an Acquiring Person or
an Affiliate or Associate of an Acquiring Person); provided, however, (x) in the
event that any such amendment or supplement described in clauses (ii) and (iii)
of this Section 5.4 is made by the Board other than in connection or
contemporaneously with any Business Combination, such amendment or supplement
shall only be made if there are one or more Continuing Directors on the Board
and such amendment or supplement is approved by a majority of the Continuing
Directors then in office and (y) in the event that any such amendment or
supplement described in clauses (ii) and (iii) of this Section 5.4 is made by
the Board in connection or contemporaneously with a Business Combination, such
amendment or supplement shall only be made (I) if such amendment or supplement
is approved by a majority of the Independent Directors then in office, if any
Independent Directors are then in office, or (II) if (X) there are no
Independent Directors then in office, (Y) there are Continuing Directors then in
office and (Z) such amendment or supplement is approved by a majority of the
Continuing Directors then in office. The Rights Agent will duly execute and
deliver any supplement or amendment hereto requested by the Company which
satisfies the terms of the preceding sentence.
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5.5 Fractional Shares. If the Company elects not to issue
certificates representing fractional shares upon exercise or redemption of
Rights, the Company shall, in lieu thereof, in the sole discretion of the Board,
either (a) evidence such fractional shares by depositary receipts issued
pursuant to an appropriate agreement between the Company and a depositary
selected by it, providing that each holder of a depositary receipt shall have
all of the rights, privileges and preferences to which such holder would be
entitled as a beneficial owner of such fractional share, or (b) pay to the
registered holder of such Rights the appropriate fraction of the Market Price
per share in cash.
5.6 Rights of Action. Subject to the terms of this Agreement
(including Sections 3.1(b) and 5.14), rights of action in respect of this
Agreement, other than rights of action vested solely in the Rights Agent, are
vested in the respective holders of the Rights; and any holder of any Rights,
without the consent of the Rights Agent or of the holder of any other Rights,
may, on such holder's own behalf and for such holder's own benefit and the
benefit of other holders of Rights, enforce, and may institute and maintain any
suit, action or proceeding against the Company to enforce, or otherwise act in
respect of, such holder's right to exercise such holder's Rights in the manner
provided in such holder's 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 will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of, the obligations of any Person subject to this
Agreement.
5.7 Holder of Rights Not Deemed a Shareholder. No holder, as
such, of any Rights shall be entitled to vote, receive dividends or be deemed
for any purpose the holder of shares or any other securities which may at any
time be issuable on the exercise of such Rights, nor shall anything contained
herein or in any Rights Certificate be construed to confer upon the holder of
any Rights, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 5.8 hereof), or to receive dividends
or subscription rights, or otherwise, until such Rights shall have been
exercised or exchanged in accordance with the provisions hereof.
5.8 Notice of Proposed Actions. In case the Company shall
propose after the Separation Time and prior to the Expiration Time (i) to effect
or permit a Flip-over Transaction or Event or (ii) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the Company
shall give to each holder of a Right, in accordance with Section 5.9 hereof, a
notice of such proposed action, which shall specify the date on which such
Flip-over Transaction or Event, liquidation, dissolution, or winding up is to
take place, and such notice shall be so given at least twenty (20) Business Days
prior to the date of the taking of such proposed action.
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5.9 Notices. Notices or demands authorized or required by this
Agreement to be given or made by the Rights Agent or by the holder of any Rights
to or on the Company shall be sufficiently given or made if delivered or sent by
registered or certified mail, postage prepaid, addressed (until another address
is filed in writing with the Rights Agent) as follows:
Vestcom International, Inc.
5 Henderson Drive
West Caldwell, New Jersey 07006
Attention: Secretary
Any notice or demand authorized or required by this Agreement to be given or
made by the Company or by the holder of any Rights to or on the Rights Agent
shall be sufficiently given or made if delivered or sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing with the
Company) as follows:
American Stock Transfer & Trust Company
6201 15th Avenue
Brooklyn, NY 11219
Attention: Mr. Joseph Wolf
Notices or demands authorized or required by this Agreement to be given or made
by the Company or the Rights Agent to or on the holder of any Rights shall be
sufficiently given or made if delivered or sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as it appears
upon the registry books of the Rights Agent or, prior to the Separation Time, on
the registry books of the transfer agent for the Common Stock. Any notice which
is mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice.
5.10 Suspension of Exercisability. To the extent that the
Company determines in good faith that some action will or needs to be taken
pursuant to Section 3.1 or to comply with federal or state securities laws, the
Company may suspend the exercisability of the Rights for a reasonable period in
order to take such action or comply with such laws. In the event of any such
suspension, the Company shall issue as promptly as practicable a public
announcement stating that the exercisability or exchangeability of the Rights
has been temporarily suspended. Notice thereof pursuant to Section 5.9 shall not
be required. Failure to give a notice pursuant to the provisions of this
Agreement shall not affect the validity of any action taken hereunder.
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5.11 Costs of Enforcement. The Company agrees that if the
Company or any other Person the securities of which are purchasable upon
exercise of Rights fails to fulfill any of its obligations pursuant to this
Agreement, then the Company or such Person will reimburse the holder of any
Rights for the costs and expenses (including legal fees) incurred by such holder
in actions to enforce such holder's rights pursuant to any Rights or this
Agreement.
5.12 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.
5.13 Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the holders of the Rights any legal or equitable right, remedy or
claim under this Agreement and this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the holders of the
Rights.
5.14 Determination and Actions by the Board of Directors, etc.
The Board (with, where specifically provided for herein, the concurrence of the
Independent Directors or Continuing Directors) shall have the exclusive power
and authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board (with, where specifically provided for herein,
the concurrence of the Independent Directors or Continuing Directors) or to the
Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i) interpret
the provisions of this Agreement and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement. 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 (with, where specifically provided for herein, the
concurrence of the Independent Directors or Continuing Directors) 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 or
the Independent Directors or the Continuing Directors to any liability to the
holders of the Rights.
5.15 Descriptive Headings. Descriptive headings appear herein
for convenience only and shall not control or affect the meaning or construction
of any of the provisions hereof.
5.16 Governing Law. THIS AGREEMENT AND EACH RIGHT ISSUED
HEREUNDER SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF
NEW JERSEY AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF SUCH STATE APPLICABLE TO CONTRACTS TO BE MADE AND PERFORMED
ENTIRELY WITHIN SUCH STATE.
5.17 Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
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5.18 Severability. If any term or provision hereof or the
application thereof to any circumstance shall, in any jurisdiction and to any
extent, be invalid or unenforceable, such term or provision shall be ineffective
as to such jurisdiction to the extent of such invalidity or unenforceability
without invalidating or rendering unenforceable the remaining terms and
provisions hereof or the application of such term or provision to circumstances
other than those as to which it is held invalid or unenforceable.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
VESTCOM INTERNATIONAL, INC.
By: /s/ Joel Cartun
-----------------------------
Name: Joel Cartun
Title: Chairman of the Board and
Chief Executive Officer
AMERICAN STOCK TRANSFER & TRUST
COMPANY
By: /s/ Joseph Wolf
-----------------------------
Name: Joseph Wolf
Title: Vice President
-25-
<PAGE>
EXHIBIT A
Description of Terms of Participating Preferred Stock
RESOLVED, that there is hereby established a series of
Preferred Stock, no par value, of the Corporation, and the designation and
certain terms, powers, preferences and other rights of the shares of such
series, and certain qualifications, limitations and restrictions thereon, are
hereby fixed as follows:
(i) The distinctive serial designation of this series
shall be "Participating Preferred Stock" (hereinafter called "this Series").
Each share of this Series shall be identical in all respects with the other
shares of this Series except as to the dates from and after which dividends
thereon shall be cumulative.
(ii) The number of shares in this Series shall initially
be _______,* which number may from time to time be increased or decreased (but
not below the number then outstanding) by the Board of Directors. Shares of this
Series purchased by the Corporation shall be canceled and shall revert to
authorized but unissued shares of Preferred Stock undesignated as to series.
Shares of this Series may be issued in fractional shares, which fractional
shares shall entitle the holder, in proportion to such holder's fractional
share, to all rights of a holder of a whole share of this Series.
(iii) The holders of full or fractional shares of this
Series shall be entitled to receive, when and as declared by the Board of
Directors, but only out of funds legally available therefor, dividends, (A) on
each date that dividends or other distributions (other than dividends or
distributions payable in Common Stock of the Corporation) are payable on or in
respect of Common Stock comprising part of the Reference Package (as defined
below), in an amount per whole share of this Series equal to the aggregate
amount of dividends or other distributions (other than dividends or
distributions payable in Common Stock of the Corporation) that would be payable
on such date to a holder of the Reference Package and (B) on the last day of
March, June, September and December in each year, in an amount per whole share
of this Series equal to the excess (if any) of $____** over the aggregate
dividends paid per whole share of this Series during the three month period
ending on such last day. Each such dividend shall be paid to the holders of
record of shares of this Series on the date, not exceeding sixty days preceding
such dividend or distribution payment date, fixed for the purpose by the Board
of Directors in advance of payment of each particular dividend or distribution.
Dividends on each full and each fractional share of this Series shall be
cumulative from the date such full or fractional share is originally issued;
provided that any such full or fractional share originally issued after a
dividend record date and on or prior to the dividend payment date to which such
record date relates shall not be entitled to receive the dividend payable on
such dividend payment date or any amount in respect of the period from such
original issuance to such dividend payment date.
- ---------------
* Insert a number equivalent to 1/100 of the sum of the number of outstanding
shares of Common Stock, reserved conversion shares (if any), and stock
options, rounded up to a round number.
** Insert an amount equal to 1/4 of 1% of the Exercise price divided by the
number of shares of Preferred Stock purchasable upon exercise of one Right.
<PAGE>
The term "Reference Package" shall initially mean 100 shares
of Common Stock, no par value ("Common Stock"), of the Corporation. In the event
the Corporation shall at any time after the close of business on ________,
____* (A) declare or pay a dividend on any Common Stock payable in Common
Stock, (B) subdivide any Common Stock or (C) combine any Common Stock into a
smaller number of shares, then and in each such case the Reference Package after
such event shall be the Common Stock that a holder of the Reference Package
immediately prior to such event would hold thereafter as a result thereof.
Holders of shares of this Series shall not be entitled to any
dividends, whether payable in cash, property or stock, in excess of full
cumulative dividends, as herein provided on this Series.
So long as any shares of this Series are outstanding, no
dividend (other than a dividend in Common Stock or in any other stock ranking
junior to this Series as to dividends and upon liquidation) shall be declared or
paid or set aside for payment or other distribution declared or made upon the
Common Stock or upon any other stock ranking junior to this Series as to
dividends or upon liquidation, nor shall any Common Stock nor any other stock of
the Corporation ranking junior to or on a parity with this Series as to
dividends or upon liquidation be redeemed, purchased or otherwise acquired for
any consideration (or any moneys be paid to or made available for a sinking fund
for the redemption of any shares of any such stock) by the Corporation (except
by conversion into or exchange for stock of the Corporation ranking junior to
this Series as to dividends and upon liquidation), unless, in each case, the
full cumulative dividends (including the dividend to be due upon payment of such
dividend, distribution, redemption, purchase or other acquisition) on all
outstanding shares of this Series shall have been, or shall contemporaneously
be, paid.
(iv) In the event of any merger, consolidation,
reclassification or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash and/or any other
property, then in any such case the shares of this Series shall at the same time
be similarly exchanged or changed into an amount per whole share equal to the
aggregate amount of stock, securities, cash and/or any other property (payable
in kind), as the case may be, that a holder of the Reference Package would be
entitled to receive as a result of such transaction.
- ----------------
* For a resolution relating to shares to be issued pursuant to Section 2.3 of
the Rights Agreement, insert the Separation Time. For a resolution
relating to shares to be issued pursuant to Section 3.1(d) of the Rights
Agreement, insert the Flip-in Date.
-2-
<PAGE>
(v) In the event of any liquidation, dissolution or
winding up of the affairs of the Corporation, whether voluntary or involuntary,
the holders of full and fractional shares of this Series shall be entitled,
before any distribution or payment is made on any date to the holders of the
Common Stock or any other stock of the Corporation ranking junior to this Series
upon liquidation, to be paid in full an amount per whole share of this Series
equal to the greater of (A) $__________* or (B) the aggregate amount distributed
or to be distributed prior to such date in connection with such liquidation,
dissolution or winding up to a holder of the Reference Package (such greater
amount being hereinafter referred to as the "Liquidation Preference"), together
with accrued dividends to such distribution or payment date, whether or not
earned or declared. If such payment shall have been made in full to all holders
of shares of this Series, the holders of shares of this Series as such shall
have no right or claim to any of the remaining assets of the Corporation.
In the event the assets of the Corporation available for
distribution to the holders of shares of this Series upon any liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
shall be insufficient to pay in full all amounts to which such holders are
entitled pursuant to the first paragraph of this Section (v), no such
distribution shall be made on account of any shares of any other class or series
of Preferred Stock ranking on a parity with the shares of this Series upon such
liquidation, dissolution or winding up unless proportionate distributive amounts
shall be paid on account of the shares of this Series, ratably in proportion to
the full distributable amounts for which holders of all such parity shares are
respectively entitled upon such liquidation, dissolution or winding up.
Upon the liquidation, dissolution or winding up of the
Corporation, the holders of shares of this Series then outstanding shall be
entitled to be paid out of assets of the Corporation available for distribution
to its shareholders all amounts to which such holders are entitled pursuant to
the first paragraph of this Section (v) before any payment shall be made to the
holders of Common Stock or any other stock of the Corporation ranking junior
upon liquidation to this Series.
For the purposes of this Section (v), the consolidation or
merger of, or binding share exchange by, the Corporation with any other
corporation shall not be deemed to constitute a liquidation, dissolution or
winding up of the Corporation.
(vi) The shares of this Series shall not be
redeemable.
(vii) In addition to any other vote or consent of
shareholders required by law or by the Certificate of Incorporation, as amended,
of the Corporation, each whole share of this Series shall, on any matter, vote
as a class with any other capital stock comprising part of the Reference Package
and voting on such matter and shall have the number of votes thereon that a
holder of the Reference Package would have.
- --------------
* Insert an amount equal to 100 times the Exercise Price in effect as of the
Separation Time.
-3-
<PAGE>
EXHIBIT B
[Form of Rights Certificate]
Certificate No. W- _______ Rights
THE RIGHTS ARE SUBJECT TO REDEMPTION OR MANDATORY EXCHANGE, AT
THE OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. RIGHTS BENEFICIALLY OWNED BY ACQUIRING
PERSONS OR AFFILIATES OR ASSOCIATES THEREOF (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT) OR TRANSFEREES OF ANY OF THE
FOREGOING WILL BE VOID.
Rights Certificate
VESTCOM INTERNATIONAL, INC.
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,
provisions and conditions of the Shareholder Protection Rights Agreement, dated
as of December 16, 1999 (as amended from time to time, the "Rights Agreement"),
between Vestcom International, Inc., a New Jersey corporation (the "Company"),
and American Stock Transfer & Trust Company, a New York corporation, as Rights
Agent (the "Rights Agent", which term shall include any successor Rights Agent
under the Rights Agreement), to purchase from the Company at any time after the
Separation Time (as such term is defined in the Rights Agreement) and prior to
the close of business on December 28, 2009, one one-hundredth of a fully paid
share of Participating Preferred Stock, no par value (the "Preferred Stock"), of
the Company (subject to adjustment as provided in the Rights Agreement) at the
Exercise Price referred to below, upon presentation and surrender of this Rights
Certificate with the Form of Election to Exercise duly executed at the principal
office of the Rights Agent in New York, New York. The Exercise Price shall
initially be $27.00 per Right and shall be subject to adjustment in certain
events as provided in the Rights Agreement.
In certain circumstances described in the Rights Agreement,
the Rights evidenced hereby may entitle the registered holder thereof to
purchase securities of an entity other than the Company or securities of the
Company other than Preferred Stock or assets of the Company, all as provided in
the Rights Agreement.
<PAGE>
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Rights Certificates.
Copies of the Rights Agreement are on file at the principal office of the
Company and are available without cost 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 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, each Right
evidenced by this Certificate may be (a) redeemed by the Company under certain
circumstances, at its option, at a redemption price of $0.01 per Right or (b)
exchanged by the Company under certain circumstances, at its option, for one
share of Common Stock or one one-hundredth of a share of Preferred Stock per
Right (or, in certain cases, other securities or assets of the Company), subject
in each case to adjustment in certain events 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
any securities which may at any time be issuable on the exercise hereof, nor
shall anything contained in the Rights Agreement or herein be construed to
confer upon the holder hereof, as such, any of the rights of a shareholder of
the Company or any right to vote for the election of directors or upon any
matter submitted to shareholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting shareholders (except as provided in the Rights Agreement), or
to receive dividends or subscription rights, or otherwise, until the Rights
evidenced by this Rights Certificate shall have been exercised or exchanged 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.
-2-
<PAGE>
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Date: ____________
ATTEST: VESTCOM INTERNATIONAL, INC.
___________________________ By_____________________________
Secretary
Countersigned:
By____________________________
Authorized Signature
-3-
<PAGE>
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer this Rights Certificate.)
FOR VALUE RECEIVED ___________________________________ hereby
sells, assigns and transfers unto _____________________________________________
(Please print name
_______________________________________________________________________________
and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _______________ Attorney, to
transfer the within Rights Certificate on the books of the within-named Company,
with full power of substitution.
Dated: _______________, ____
Signature Guaranteed: _________________________
Signature (Signature must correspond
to 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 eligible guarantor
institution (banks, stockbrokers, savings and loan associations and credit
unions with membership in an approved signature guarantee Medallion program),
pursuant to SEC Rule 17Ad-15.
- -------------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of Rights and
shares of Common Stock, that the Rights evidenced by this Rights Certificate are
not, and, to the knowledge of the undersigned, have never been, Beneficially
Owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in
the Rights Agreement).
---------------------------------
Signature
<PAGE>
- -------------------------------------------------------------------------------
NOTICE
In the event the certification set forth above is not
completed in connection with a purported assignment, the Company will deem the
Beneficial Owner of the Rights evidenced by the enclosed Rights Certificate to
be an Acquiring Person or an Affiliate or Associate thereof (as defined in the
Rights Agreement) or a transferee of any of the foregoing and accordingly will
deem the Rights evidenced by such Rights Certificate to be void and not
transferable or exercisable.
-2-
<PAGE>
[To be attached to each Rights Certificate]
FORM OF ELECTION TO EXERCISE
(To be executed if holder desires to
exercise the Rights Certificate.)
TO: VESTCOM INTERNATIONAL, INC.
The undersigned hereby irrevocably elects to exercise _____
whole Rights represented by the attached Rights Certificate to purchase the
shares of Participating Preferred Stock issuable upon the exercise of such
Rights and requests that certificates for such shares be issued in the name of
and delivered to:
-----------------------------------
Name
Address:
-----------------------------------
Social Security or Other Taxpayer
Identification 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:
-----------------------------------
Name
Address:
-----------------------------------
Social Security or Other Taxpayer
Identification Number:
Dated: _______________, ____
Signature Guaranteed: _________________________
Signature (Signature must correspond
to name as written upon the face of
the attached Rights Certificate in
every particular, without alteration
or enlargement or any change
whatsoever)
-3-
<PAGE>
Signatures must be guaranteed by an eligible guarantor
institution (banks, stockbrokers, savings and loan associations and credit
unions with membership in an approved signature guarantee Medallion program),
pursuant to SEC Rule 17Ad-15.
- -------------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all
holders of Rights and shares of Common Stock, that the Rights evidenced by the
attached Rights Certificate are not, and, to the knowledge of the undersigned,
have never been, Beneficially Owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).
-------------------------
Signature
- -------------------------------------------------------------------------------
NOTICE
In the event the certification set forth above is not
completed in connection with a purported exercise, the Company will deem the
Beneficial Owner of the Rights evidenced by the attached Rights Certificate to
be an Acquiring Person or an Affiliate or Associate thereof (as defined in the
Rights Agreement) or a transferee of any of the foregoing and accordingly will
deem the Rights evidenced by such Rights Certificate to be void and not
transferable or exercisable.
-4-
<PAGE>
Exhibit 4.2
AMENDED AND RESTATED
BY-LAWS
OF
VESTCOM INTERNATIONAL, INC.
(adopted December 16, 1999)
ARTICLE I
OFFICES
1.1. Registered Office and Agent.--The registered office of
the Corporation in the State of New Jersey is 5 Henderson Drive, West Caldwell,
New Jersey, 07006. The registered agent of the Corporation at that office is
Sheryl B. Cilenti, Esq.
1.2. Principal Place of Business.--The principal place of
business of the Corporation is located at 5 Henderson Drive, West Caldwell, New
Jersey 07006.
1.3. Other Places of Business.--Branch or subordinate places
of business or offices may be established at any time by the board of directors
(the board) at any place or places where the Corporation is qualified to do
business or where qualification is not required.
ARTICLE II
MEETINGS OF SHAREHOLDERS
2.1. Place of Meetings.--All meetings of shareholders shall be
held at the principal business office of the Corporation or at whatever other
place is designated by the board and stated in the notice of the meeting.
2.2. Annual Meeting.--The annual meeting of shareholders shall
be held at whatever time may be determined by the board, but not more than
thirteen months after the last annual meeting. If the scheduled date for the
meeting is a legal holiday, the meeting shall be held at the same hour on the
next succeeding business day.
<PAGE>
2.3. Special Meetings.--Special meetings of the shareholders
may be called for any purpose and at any time only by the chairman of the board,
the president or the board.
2.4. Record Date.--The board shall fix in advance a record
date for determination of shareholders entitled to notice of and to vote at any
meeting of shareholders. Except as provided in Section 2.15, the record date
shall not be more than sixty days nor less than ten days before the date of the
meeting.
2.5. Voting List.--The secretary or stock transfer agent or
registrar of the Corporation shall prepare a complete list of the shareholders
entitled to vote at each shareholders' meeting or any adjournment thereof. The
list may consist of cards arranged alphabetically or any equipment which permits
the visual display of the information required by this section. The list shall
be
(a) arranged alphabetically within each class, series, or
group of shareholders maintained by the Corporation for convenience of
reference, with the address of, and the number of shares held by, each
shareholder;
(b) produced (or available by means of a visual display) at
the time and place of the meeting;
(c) subject to the inspection of any shareholder for
reasonable periods during the meeting; and
(d) prima facie evidence as to who are the shareholders
entitled to examine such list or to vote at any meeting.
2.6. Inspectors.--The board may, in advance of any
shareholders' meeting, appoint one or more inspectors to act at the meeting or
any adjournment thereof. If the board does not appoint an inspector or
inspectors, the presiding officer at the shareholders' meeting may, and on the
request of any shareholder entitled to vote at the meeting shall, appoint one or
more persons to act in that capacity. Each inspector shall take and sign an oath
to execute faithfully the duties of inspector at the meeting with strict
impartiality and to the best of his or her ability. No person shall be elected a
director at a meeting at which that person has served as an inspector.
-2-
<PAGE>
2.7. Notice of Meetings.--Written notice of the time, place
and purposes of each shareholders' meetings shall be given to each shareholder
entitled to vote at the meeting at least ten and not more than sixty days before
the date of the meeting. The notice may be given personally, by first class
United States mail or by courier service, charges prepaid, by facsimile
transmission, or any other reasonable means of delivery. The notice may be sent
to the shareholder at his or her address appearing on the books of the
Corporation or to any other business or residence address of the shareholder
known to the Corporation. The notice shall be deemed given at the time it is
delivered personally, delivered to the courier service, deposited in the United
States mail, transmitted by facsimile (and there is no reason to believe it was
not received), or delivered by any other method (provided that method is
reasonably believed to be at least as quick and reliable as first class United
States mail).
2.8. Voting Rights.--Shareholders shall be entitled to vote
their stock in the manner provided by law or as modified by the certificate of
incorporation as amended from time to time.
2.9. Proxies.
2.9.1. Every shareholder entitled to vote at a
shareholder meeting may authorize another person or persons to act for
him or her by proxy. Every proxy shall be executed by the shareholder
or his or her agent, but a proxy may be given by telegram, cable, or
any other means of electronic communication that results in a writing.
2.9.2. No proxy shall be valid after eleven months
from the date of its execution unless a longer time is expressly
provided therein. A proxy shall be revocable at will unless it states
that it is irrevocable and is coupled with an interest either in the
stock itself or in the Corporation. A proxy shall not be revoked by the
death or incapacity of the shareholder, but the proxy shall continue in
force until revoked by the personal representative or guardian of the
shareholder.
-3-
<PAGE>
2.9.3. The presence at a meeting of any shareholder
who has given a proxy shall not revoke the proxy unless the shareholder
(i) files written notice of the revocation with the secretary of the
meeting prior to the voting of the proxy or (ii) votes the shares
subject to the proxy by written ballot. A person named as proxy of a
shareholder may, if the proxy so provides, substitute another person to
act in his or her place, including any other person named as proxy in
the same proxy. The substitution shall not be effective until an
instrument effecting it is filed with the secretary of the meeting.
2.9.4. Each person holding a proxy shall either file
the proxy with the secretary of the meeting or the inspectors at the
start of the meeting or shall submit the proxy to the inspectors
together with his or her ballot, as determined by the presiding
officer. No proxy shall be counted or acted upon that is submitted to
the secretary of the meeting or the inspectors any later than the first
time during the meeting a vote is taken by ballot.
2.10. Closing the Polls.
2.10.1. After the polls are closed as provided
herein, no additional votes nor any changes of votes shall be received
or recognized, regardless of whether the votes have been tabulated and
the results reported to the meeting.
2.10.2. If a vote is taken by any method other than
by ballot, the voting shall be completed and the polls closed upon the
announcement of the result of the vote by the presiding officer.
2.10.3. If a vote is taken by ballot, ballots shall
be distributed to each shareholder or proxyholder requesting one, and
they shall complete the ballots and return them to the inspectors. The
polls shall be closed by a ruling by the presiding officer within a
reasonable period of time after the ballots are distributed and, in any
event, no sooner than ten minutes after the distribution of ballots.
-4-
<PAGE>
2.11. Quorum.--The presence in person or by proxy of the
holders of shares entitled to cast a majority of the votes of each class or
series entitled to vote as a class at the meeting and a majority of any two or
more classes voting together as a class at such meeting shall constitute a
quorum for the transaction of business. If any matter to come before the meeting
requires a vote of less than all the outstanding classes, then the presence in
person or by proxy of the holders of a majority of the class or classes or
series having the right to vote on that matter or matters shall constitute a
quorum for the transaction of that business. The shareholders present at a duly
organized meeting may continue to do business until adjournment, notwithstanding
the withdrawal of enough shareholders to leave less than a quorum.
2.12. Officers of Meetings.--The chairman shall preside at all
meetings of shareholders. In the absence of the chairman, the president shall
preside. In the absence of both, the most senior vice president shall preside
unless the board has provided for someone else to preside. The secretary shall
act as secretary of all meetings of shareholders. In the absence of the
secretary, any assistant secretary who is present shall act as secretary of the
meeting. If no assistant secretary is present, the presiding officer shall
designate a secretary of the meeting.
2.13. Order of Business.--The order of business at all
shareholder meetings shall be as follows:
(a) call to order;
(b) proof of mailing of notice of meeting, proxy and proxy
statement;
(c) appointment of inspectors, if not previously appointed by
board and if demanded by any shareholder;
(d) report on presence of a quorum;
(e) reading or waiver of reading of minutes of preceding
meeting;
(f) election of directors, if an annual meeting;
(g) consideration of other matters contained in the notice of
meeting or properly brought before the meeting;
(h) balloting;
-5-
<PAGE>
(i) reports of officers;
(j) question and answer period;
(k) report of inspectors;
(l) adjournment.
2.14. Adjourned Meetings.
2.14.1. Any shareholder meeting may be adjourned to
another time or place, whether or not a quorum is present. In the
absence of a quorum no other business may be transacted at a meeting.
2.14.2. If a shareholder meeting is adjourned for
more than thirty days or if the board establishes a new record date for
the adjourned meeting, notice of the adjourned meeting shall be given
as in the case of an original meeting. No notice of an adjourned
meeting need be given if (i) the meeting is adjourned for thirty days
or less; (ii) the record date is unchanged; (iii) the time and place of
the adjourned meeting is announced at the meeting at which the
adjournment is taken; and (iv) the only business transacted at the
adjourned meeting is business which might have been transacted at the
original meeting.
2.15. Action by Shareholders Without Meeting.
2.15.1 Subject to Sections 2.15.2 and 2.15.3, any
action required or permitted to be taken at a meeting of shareholders
by the New Jersey Business Corporation Act or the certificate of
incorporation may be taken without a meeting by a written consent or
consents pursuant to N.J.S. 14A:5-6.
-6-
<PAGE>
2.15.2 In order that the Corporation may determine
the shareholders entitled to consent to corporate action in writing
without a meeting, the Board of Directors may fix a record date, which
record date shall not precede the date upon which the resolution fixing
the record date is adopted by the Board of Directors, and which date
shall not be more than ten (10) days after the date upon which the
resolution fixing the record date is adopted by the Board of Directors.
Any shareholder of record seeking to have the shareholders authorize or
take corporate action by written consent, shall by written notice to
the Secretary, request the Board of Directors to fix a record date. The
Board of Directors shall promptly, but in all events within ten (10)
days after the date on which such a request is timely received, adopt a
resolution fixing the record date. If no record date has been fixed by
the Board of Directors within ten (10) days after the date on which
such a request is timely received, the record date for determining
shareholders entitled to consent to corporate action in writing without
a meeting, when no prior action by the Board of Directors is required
by applicable law, shall be the first date on which a signed written
consent setting forth the action taken or proposed to be taken is
delivered to the Corporation by delivery to its registered office in
the State of New Jersey, its principal place of business or an officer
or agent of the Corporation having custody of the book in which
proceedings of meetings of shareholders are recorded, to the attention
of the Secretary of the Corporation. Delivery shall be by hand or by
certified or registered mail, return receipt requested. If no record
date has been fixed by the Board of Directors and prior action by the
Board of Directors is required by applicable law, the record date for
determining shareholders entitled to consent to corporate action in
writing without a meeting shall be at the close of business on the date
on which the Board of Directors adopts the resolution taking such prior
action.
2.15.3 In the event of the delivery to the
Corporation of a written consent or consents purporting to authorize or
take corporate action and/or related revocations (each such written
consent and any revocation thereof is referred to in this Section
2.15.3 as a "Consent"), the Secretary of the Corporation shall provide
for the safekeeping of such Consents and shall as soon as practicable
thereafter conduct such reasonable investigation as he/she deems
necessary or appropriate for the purpose of ascertaining the validity
of such Consents and all matters incident thereto, including, without
limitation, whether the holders of shares having the requisite voting
power to authorize or take the action specified in the Consents have
given consent; provided, however, that if the corporate action to which
the Consents relate is the removal or election of one or more members
of the Board of Directors, the Secretary of the Corporation shall
designate an independent, qualified inspector with respect to such
Consents and such inspector shall discharge the functions of the
-7-
<PAGE>
Secretary of the Corporation under this Section 2.15.3. If after such
investigation the Secretary or the inspector (as the case may be) shall
determine that any action purportedly taken by such Consents has been
validly taken, the fact shall be certified on the records of the
Corporation kept for the purpose of recording the proceedings of
meetings of the shareholders and the Consents shall be filed with such
records. In conducting the investigation required by this Section
2.15.3, the Secretary or the inspector may, at the expense of the
Corporation, retain to assist them special legal counsel, any other
necessary or appropriate professional advisors, and such other
personnel as they deem necessary or appropriate.
2.16. Submission of Nominations and Shareholder Proposals.
2.16.1 Annual Meetings of Shareholders
2.16.1.1. Nominations of persons for
election to the Board of Directors and the proposal of business to be considered
by the shareholders may be made at an annual meeting of shareholders only (a)
pursuant to the corporation's notice of meeting, (b) by or at the direction of
the Board of Directors or (c) by any shareholder of the corporation who was a
shareholder of record at the time of giving of notice provided for in this
Section 2.16, who is entitled to vote at the meeting and who complies with the
notice procedures set forth in this Section 2.16.
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2.16.1.2 For nominations or other business
to be properly brought before an annual meeting by a shareholder pursuant to
clause (c) of Section 2.16.1.1, the shareholder must have given timely notice
thereof in writing to the Secretary of the corporation and such other business
must otherwise be a proper matter for shareholder action. To be timely, a
shareholder's notice shall be delivered to the Secretary at the principal
executive offices of the corporation not later than the close of business on the
ninetieth (90th) day nor earlier than the close of business on the one hundred
twentieth (120th) day prior to the first anniversary of the preceding year's
annual meeting; provided, however, that if the date of the annual meeting is
more than thirty (30) days before or more than sixty (60) days after such
anniversary date, notice by the shareholder to be timely must be so delivered
not earlier than the close of business on the one hundred twentieth (120th) day
prior to such annual meeting and not later than the close of business on the
later of (x) the ninetieth (90th) day prior to such annual meeting and (y) the
close of business on the tenth (10th) day following the day on which public
announcement of the date of such meeting is first made by the corporation. In no
event shall the public announcement of an adjournment or postponement of an
annual meeting commence a new time period (or extend any time period) for the
giving of a shareholder's notice as described above. Such shareholder's notice
shall set forth (a) as to each person whom the shareholder proposes to nominate
for election or reelection as a director, all information relating to such
person that is required to be disclosed in solicitations of proxies for election
of directors in an election contest, or is otherwise required, in each case
pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended
(the "Exchange Act") and Rule 14a-11 thereunder (including such person's written
consent to being named in the proxy statement as a nominee and to serving as a
director if elected); (b) as to any other business that the shareholder proposes
to bring before the meeting, a brief description of the business desired to be
brought before the meeting, the text of the proposal or business (including the
text of any resolutions proposed for consideration and in the event that such
business includes a proposal to amend the By-laws of the corporation, the
language of the proposed amendment), the reasons for conducting such business at
the meeting and any material interest in such business of such shareholder and
the beneficial owner, if any, on whose behalf the proposal is made; and (c) as
to the shareholder giving the notice and the beneficial owner, if any, on whose
behalf the nomination or proposal is made (i) the name and address of such
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shareholder, as they appear on the corporation's books, and of such beneficial
owner, (ii) the class and number of shares of capital stock of the corporation
that are owned beneficially and held of record by such shareholder and such
beneficial owner, (iii) a representation that the shareholder is a holder of
record of stock of the corporation entitled to vote at such meeting and intends
to appear in person or by proxy at the meeting to propose such business or
nomination, and (iv) a representation as to whether the shareholder or the
beneficial owner, if any, intends or is part of a group which intends (a) to
deliver a proxy statement and/or form of proxy to holders of at least the
percentage of the corporation's outstanding capital stock required to approve or
adopt the proposal or elect the nominee and/or (b) otherwise to solicit proxies
from shareholders in support of such proposal or nomination. The corporation may
require any proposed nominee to furnish such other information as it may
reasonably require to determine the eligibility of such proposed nominee to
serve as a director of the corporation.
2.16.1.3. Notwithstanding anything in the
second sentence of Section 2.16.1.2 to the contrary, in the event that the
number of directors to be elected to the Board of Directors of the corporation
at an annual meeting is increased and there is no public announcement by the
corporation naming the nominees for additional directorships at least seventy
(70) days prior to the first anniversary of the preceding year's annual meeting
(or, if the annual meeting is held more than thirty (30) days before or sixty
(60) days after such anniversary date, at least seventy (70) days prior to such
annual meeting), a shareholder's notice required by this Section 2.16 shall also
be considered timely, but only with respect to nominees for the additional
directorships, if it shall be delivered to the Secretary of the Corporation at
the principal executive office of the corporation not later than the close of
business on the tenth (10th) day following the day on which such public
announcement is first made by the corporation.
2.16.2 Special Meetings of Shareholders. Only such
business shall be conducted at a special meeting of shareholders as shall have
been brought before the meeting pursuant to the corporation's notice of meeting.
Nominations of persons for election to the Board of Directors may be made at a
special meeting of shareholders at which directors are to be elected pursuant to
the corporation's notice of meeting (a) by or at the direction of the Board of
Directors or (b) provided that the Board of Directors has determined that
directors shall be elected at such meeting, by any shareholder of the
corporation who is a shareholder of record at the time of giving of notice
provided for in this Section 2.16.2, who shall be entitled to vote at the
meeting and who complies with the notice procedures set forth in this Section
2.16. If the corporation calls a special meeting of shareholders for the purpose
of electing one or more directors to the Board of Directors, any such
shareholder entitled to vote in such election of directors may nominate a person
or persons (as the case may be) for election to such position(s) as specified in
the corporation's notice of meeting, if the shareholder's notice required by
Section 2.16.1.2 shall be delivered to the Secretary at the principal executive
offices of the corporation not earlier than the one hundred twentieth (120th)
day prior to such special meeting and not later than the later of (x) the close
of business on the ninetieth (90th) day prior to such special meeting or (y) the
close of business on the tenth (10th) day following the day on which public
announcement is first made of the date of such special meeting and of the
nominees proposed by the Board of Directors to be elected at such meeting. In no
event shall the public announcement of an adjournment or postponement of a
special meeting commence a new time period (or extend any time period) for the
giving of a shareholder's notice as described above.
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2.16.3. General.
2.16.3.1. Only such persons who are
nominated in accordance with the procedures set forth in this Section 2.16 shall
be eligible to be elected at an annual or special meeting of shareholders of the
Corporation to serve as directors and only such business shall be conducted at
an annual or special meeting of shareholders as shall have been brought before
the meeting in accordance with the procedures set forth in this Section 2.16.
Except as otherwise provided by law, the certificate of incorporation or these
By-Laws, the chairperson of the meeting shall have the power and duty (a) to
determine whether a nomination or any business proposed to be brought before the
meeting was made or proposed, as the case may be, in accordance with the
procedures set forth in this Section 2.16 (including whether the shareholder or
beneficial owner, if any, on whose behalf the nomination or proposal is made
solicited (or is part of a group which solicited) or did not so solicit, as the
case may be, proxies in support of such shareholder's nominee or proposal in
compliance with such shareholder's representation as required by Section
2.16.1.2(c)(iv)) and (b) if any proposed nomination or business is not in
compliance herewith, to declare that such nomination shall be disregarded or
that such proposed business shall not be transacted.
2.16.3.2 For purposes of this Section 2.16,
"public announcement" shall include disclosure in a press release reported by PR
Newswire, the Dow Jones News Service, Associated Press or comparable national
news service or in a document publicly filed by the corporation with the
Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the
Exchange Act.
2.16.3.3. Notwithstanding the foregoing
provisions of this Section 2.16, a shareholder shall also comply with all
applicable requirements of the Exchange Act and the rules and regulations
thereunder with respect to the matters set forth herein. Nothing in this Section
2.16 shall be deemed to affect any rights (i) of shareholders to request
inclusion of proposals in the corporation's proxy statement pursuant to Rule
14a-8 under the Exchange Act or (ii) of the holders of any series of Preferred
Stock to elect directors pursuant to any applicable provisions of the
certificate of incorporation.
ARTICLE III
BOARD OF DIRECTORS
3.1. Management Authority.--The business and affairs of the
Corporation shall be managed under the direction of its board of directors (the
board), subject only to the limitations imposed by law and by the Corporation's
certificate of incorporation.
3.2. Number of Directors.--The board shall consist of not less
than one nor more than twenty-one members, the actual number to be determined by
the board from time to time.
3.3. Qualification of Directors.--Each director must be a
United States citizen. No person shall be eligible to be elected a director who
is under the age of 21 or over the age of 75 on the date of the election.
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3.4. Election.--At each election of directors, each
shareholder entitled to vote at the election shall have the right to vote the
number of shares owned by that shareholder for as many persons as there are
directors to be elected and for whose election the shareholder has a right to
vote.
3.5. Term of Office.--Each director shall hold office until
the next annual meeting of shareholders and until the director's successor shall
have been elected and qualified.
3.6. Resignation, Removal, and Suspension.--
3.6.1. Resignation.--Any director may resign at any
time by giving a written notice of resignation to the corporation.
3.6.2. Removal by Shareholders.--Any director may be
removed, with or without cause, by the affirmative vote of the majority
of votes cast by the holders of shares entitled to vote for the
election of directors.
3.6.3. Removal or Suspension by Board.--The board
shall have the power (i) to remove any director for cause or (ii) to
suspend any director, pending a final determination that cause exists
for removal, if the board determines in its sole discretion there is a
reasonable possibility that cause for removal may exist. The
determination of whether cause exists shall be made by the board in its
sole discretion and shall not be set aside unless it is unreasonable,
arbitrary, or capricious. Conduct constituting cause for removal
includes, but is not limited to,
(a) Repeated failure to attend meetings or to
maintain a reasonable degree of familiarity with the business conducted
by the board;
(b) Any conduct as a board member or individually
which is disloyal or contrary to the interests of the Corporation, such
as seeking or obtaining an improper personal benefit on account of the
director's position, exploiting for personal benefit information
obtained as a director, or engaging in activities in competition with
the Corporation; or
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(c) Engaging in any action that reasonably would be
viewed as likely to cause the director's continued membership on the
board to cause embarrassment or ignominy to the board or the
Corporation.
3.7. Vacancies.--Any vacancy in the board, however caused,
including an increase in the number of directors, may be filled by the
affirmative vote of a majority of the votes of the remaining directors, even if
less than a quorum. Each director so elected shall hold office until the next
succeeding annual meeting of the shareholders. A vacancy in the board shall be
deemed to exist in the case of death, resignation or removal of any director, or
if the number of directors is increased. No reduction of the number of directors
shall have the effect of removing any director prior to the expiration of his or
her term of office.
3.8. Place of Meeting.--All meetings of the board shall be
held at the principal business office of the Corporation or at such place or
places as the board may from time to time determine.
3.9. Use of Communications Equipment.--Any director may
participate in a meeting of the board by means of conference telephone or any
other means of communication by which all persons participating in the meeting
are able to hear each other.
3.10. Regular Meetings.--A regular meeting of the board shall
be held without notice immediately following and at the same place as the annual
shareholders' meeting for the purpose of electing officers and conducting any
other business as may come before the meeting. The board may decide to have
additional regular meetings which may be held without notice.
3.11. Special Meetings.--A special meeting of the board may be
called for any purpose at any time by the president or by two directors. The
meeting shall be held upon not less than two days notice if given by telegram,
orally (either by telephone or in person), or by facsimile transmission, upon
not less than three days notice if given by overnight courier delivery service,
or upon not less than five days notice if given by depositing the notice in the
United States mails, first class postage prepaid. The notice shall be deemed
given at the time it is given orally, the facsimile transmission is originated
(and there is no reason to believe it was not received), it is delivered to the
overnight courier service, or it is deposited in the United States mails. The
notice shall specify the time and place, and may, but need not, specify the
purposes, of the meeting.
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3.12. Waivers of Notice.--Any action taken at any meeting of
the board, however called and noticed or wherever held, shall be as valid as
though the meeting had been duly held after a regular call and notice if a
quorum was present and if, before or after the meeting, each of the directors
not present signs a written waiver of notice. All written waivers shall be filed
with the corporate records or made a part of the minutes of the meeting. The
attendance of any director at a meeting without protesting prior to the
conclusion of the meeting the lack of notice shall constitute a waiver of notice
by the director. The fact of attendance without protest shall be recorded in the
minutes of the meeting.
3.13. Action Without Meeting.--Any action required or
permitted to be taken by the board by law, the certificate of incorporation, or
these by-laws may be taken without a meeting, if, prior or subsequent to the
action, each member of the board consents in writing to the action. A consent
may be given by cable or telegram or by facsimile. Each written consent shall be
filed with the minutes of the proceedings of the board. Action by the board by
written consent shall have the same force and effect as a unanimous vote of the
directors for all purposes. Any certificate or other document which relates to
action taken by consent may state that the action was taken by unanimous written
consent of the board of directors without a meeting.
3.14. Quorum.--The presence at a meeting of persons entitled
to cast a majority of the votes of the entire board shall constitute a quorum
for the transaction of business.
3.15. Votes Required.--Any action approved by a majority of
the votes of directors present at a meeting at which a quorum is present shall
be the act of the board.
3.16. Presiding Officer.--The chairman shall preside at all
meetings of the board at which he or she is present. In the absence of the
chairman, the president shall preside. The secretary or, in the absence of the
secretary, an assistant secretary, shall record the minutes of the meeting. If
neither of them is present, the presiding officer shall designate a secretary to
record the minutes of the meeting.
3.17. Adjournment.--Any meeting of the board at which a quorum
is present may be adjourned to meet again at a time and place specified by the
board when it adjourns the meeting. No notice of the time and place of the
adjourned meeting need be given if it is to be held within three days of the
date fixed for the adjourned meeting.
3.18. Presumption of Assent.--A director who is present at a
meeting of the board or any committee thereof of which the director is a member
at which action on any corporate matter is taken shall be presumed to have
concurred in the action taken unless the director's dissent is entered in the
minutes of the meeting or unless the director files a written dissent to the
action with the person acting as the secretary of the meeting before or promptly
after the adjournment thereof. The right to dissent shall not apply to a
director who voted in favor of the action. A director who is absent from a
meeting of the board, or any committee thereof of which he or she is a member,
at which any action is taken shall be presumed to have concurred in the action
unless the director files a dissent with the secretary of the corporation within
a reasonable time after learning of the action.
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3.19. Expenses and Compensation of Directors.--Members of the
board shall be reimbursed for all reasonable expenses incurred by them in
connection with attending board or committee meetings. The board may determine
from time to time fees to be paid to each member for service on the board and
any committee of the board. The fees may be based upon a specified amount per
annum or a specified amount per meeting attended, a combination of both, or any
other reasonable method. Directors who are compensated officers of the
Corporation shall not be paid directors' fees.
ARTICLE IV
COMMITTEES
4.1. Establishment of Committees; Executive Committee.--The
board may, by action taken by a majority of the entire board, designate from
among its members an executive committee, consisting of not less than three
directors, and may at any time designate additional committees, each of which
shall consist of three or more persons. The chief executive officer shall be an
ex officio member of each committee. Subject to the limitations contained in
Section 4.8, the executive committee shall have and may exercise all of the
authority of the board. Each other committee shall have whatever authority, not
exceeding the authority of the executive committee, as is specifically provided
by the board. Each committee that is delegated the power to act on behalf of the
Corporation (a board committee) shall consist exclusively of directors. A
majority of the members of each other committee (advisory committees) shall be
directors. The other members may be officers or other employees of the
Corporation or other persons who have experience, expertise, or a special
background of value to the areas of responsibility of the committee.
4.2. Presiding Officer and Secretary.--The chairman shall be
chairman of the executive committee. The board shall designate the chairman of
each committee. Each committee shall from time to time designate a secretary of
the committee who shall keep a record of its proceedings.
4.3. Vacancies.--Vacancies occurring from time to time in the
membership of any committee may be filled by the board for the unexpired term of
the member whose death, resignation, removal or disability causes the vacancy,
and shall be so filled if, as the result of the vacancy, there shall be less
than three directors on the committee, or, in the case of the executive
committee, if the chairman shall be the person whose death, resignation,
removal, or disability causes the vacancy.
4.4. Meetings.--Each committee shall adopt its own rules of
procedure and shall meet at whatever times it may determine and shall also meet
whenever a meeting is called by the president or the chairman of the committee.
Members of committees may attend meetings through the medium of communications
equipment (in the same manner as may members of the board), and any committee
may act by unanimous written consent in lieu of a meeting (in the same manner as
may the board).
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4.5. Notice of Meetings.--If the committee establishes regular
meeting dates, it shall not be necessary to give notice of a regular meeting.
Notice of every special meeting shall be given in the manner and within the time
periods specified in these by-laws with respect to notices of special meetings
of the board. Notice of any special meeting may be waived in writing by all the
absent members of the committee either before or after the meeting.
4.6. Quorum.--A quorum at any meeting of a committee shall be
the presence of one-half of the members of the entire committee. In the case of
the executive committee, however, a quorum shall be not less than three members.
Every act or decision done or made by a majority of the directors present at a
committee meeting duly held at which a quorum is present shall be regarded as
the act of the committee.
4.7. Reports.--Actions taken at a meeting of any committee
shall be reported to the board at its next meeting following the committee
meeting, except that when the meeting of the board is held within two days after
the committee meeting, the report shall, if not made at the first meeting, be
made to the board at the second meeting following the committee meeting.
4.8. Limitations of Powers.--No committee of the board shall
have authority to do any of the following:
(a) make, alter or repeal any by-law of the corporation;
(b) elect or remove any director, or remove any officer who
may be elected or appointed only by the board;
(c) submit to shareholders any action that requires
shareholders' approval;
(d) amend or repeal any resolution theretofore adopted by the
board which, by its terms, is amendable or repealable only by the
board;
(e) fix the compensation of any officer who is a member of the
committee for serving as an officer of the Corporation.
4.9. Powers of the Board.--The board shall have the power to
(a) fill any vacancy in any committee;
(b) appoint one or more directors to serve as alternate
members of any committee to act in the absence or disability of any
member of that committee with all the powers of the absent or disabled
members;
(c) abolish any committee at its pleasure; and
(d) remove any director from membership on any committee at
any time, with or without cause.
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ARTICLE V
OFFICERS
5.1. Officers Enumerated.--The board shall elect a president,
one or more vice presidents, including executive vice presidents and senior vice
presidents, a treasurer, and a secretary. Any two or more offices may be held by
the same person, except that the same person may not hold the offices of
president and secretary. The board may elect a chairman of the board. The
chairman of the board and the president shall be directors.
5.2. Additional Officers.--The board may from time to time
elect any other officers it deems necessary, who shall hold their offices for
the terms and have the powers and perform the duties that shall be prescribed
from time to time by the board.
5.3. Election and Term of Office.--Each officer shall hold
office until the next annual election of officers, and until his or her
successor has been elected and has qualified, unless he or she is earlier
removed. All officers of the Corporation shall hold office at the pleasure of
the board.
5.4. Vacancies.--Any vacancy in any office may be filled by
the board.
5.5. Removal and Resignation.--Any officer may be removed,
either with or without cause, by the board or by any officer upon whom the power
of removal has been conferred by the board. Removal of an officer shall be
without prejudice to the officer's contract rights, if any. Election or
appointment of an officer shall not of itself create contract rights. Any
officer may resign at any time by giving written notice to the board or to the
president. A resignation shall take effect on the date of the receipt of the
notice or at any later time specified therein and, unless otherwise specified
therein, the acceptance of the resignation shall not be necessary to make it
effective.
5.6. Powers and Duties.--The officers shall each have such
authority and perform such duties in the management of the Corporation as from
time to time may be prescribed by the board and as may be delegated by the
chairman or president. Without limiting the foregoing, the following officers
shall have the following authority:
(a) Chief Executive Officer. The chief executive officer
shall, subject only to the direction and control of the board and
executive committee, have general charge and supervision over and
responsibility for the business and affairs of the Corporation and the
authority to instruct, direct, and control its other officers,
employees, and agents. The chief executive officer may enter into and
execute in the name of the corporation, contracts or other instruments
in the regular course of business or contracts or other instruments not
in the regular course of business that are authorized, either generally
or specifically, by the board. The chief executive officer shall have
the power to appoint, fix the compensation of, and suspend or remove
all employees of the corporation, including officers, except for the
chairman, the president, the executive vice presidents, the treasurer,
and the secretary. The appointment, suspension, removal and fixing the
compensation of officers by the chief executive officer shall be
subject to whatever guidelines are adopted from time to time by the
board and to the approval of the executive committee and the board. The
chief executive officer shall have the general powers and duties of
management usually vested in the office of chief executive officer of a
corporation and shall have such other powers and duties as may be
prescribed by the board.
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(b) Chairman of the Board. If a chairman is elected, he shall
be chosen from among the members of the board. Unless the board
determines otherwise, the chairman shall be chief executive officer of
the corporation.
(c) President.--If there is no chairman, or in the event of
the chairman's absence or inability to act, or if the board has so
designated, the president shall be chief executive officer. If there is
a chairman who is chief executive officer, the president shall be chief
operating officer and shall be responsible only to the chairman and to
the board for those areas of operation of the business and affairs of
the corporation as shall be delegated to the president by the board or
by the chairman. Unless otherwise specified by the board or the
chairman, all other officers of the corporation (except the chairman)
shall be subject to the authority and supervision of the president. The
president may enter into and execute in the name of the corporation
contracts or other instruments in the regular course of business or
contracts or other instruments not in the regular course of business
that are authorized, either generally or specifically, by the board.
(d) Vice Presidents. Each vice president shall perform the
duties that may, from time to time, be assigned to him or her by the
chief executive officer, the president, or the board. Vice presidents
shall report and be subject to the supervision of the chief executive
officer or the president in the performance of their duties unless
otherwise specified by the board. In the absence of the chief executive
officer and the president or in the event of the death, inability, or
refusal to act of both of them, the vice presidents in the order
designated at the time of their election by the board (or in the
absence of any designation, then in the order of seniority) shall
perform the duties of the chief executive officer. For these purposes,
an executive vice president shall be deemed senior to a senior vice
president.
(e) Secretary. The secretary, or any assistant secretary,
shall cause notices of all meetings to be served as prescribed in these
by-laws and shall keep the minutes of all meetings and written consents
of the shareholders and board. The secretary shall have charge of the
seal of the Corporation and shall perform whatever other duties and
possess whatever other powers as are incident to the office or as are
assigned by the chief executive officer, president, or the board.
(f) Treasurer. The treasurer shall have custody of the funds
and securities of the Corporation and shall keep or cause to be kept
regular books of account for the Corporation. The treasurer shall
account to the chief executive officer, the president, or the board,
whenever they may require, concerning all the treasurer's transactions
and concerning the financial condition of the Corporation. The
treasurer shall perform the duties and possess whatever other powers
are incident to the office or are assigned by the chief executive
officer, the president, or the board.
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ARTICLE VI
CAPITAL STOCK AND OTHER SECURITIES
6.1. Issuance of Stock and Other Securities.--Certificates of
any class of capital stock of the Corporation and certificates representing any
other securities of the Corporation shall be signed by the chairman, the
president, or any vice president and countersigned by the secretary, any
assistant secretary, the treasurer or any assistant treasurer. The signature of
each officer may be an engraved or printed facsimile. If an officer or transfer
agent or registrar whose facsimile signature has been placed upon certificates
ceases to hold the official capacity in which he or she signed, the certificates
may continue to be used. The certificates may, but need not, be sealed with the
seal of the Corporation, or a facsimile of the seal. The certificates shall be
countersigned and registered in whatever manner the board may prescribe.
6.2. Lost, Stolen and Destroyed Certificates.--In case of
lost, stolen or destroyed certificates, new certificates may be issued to take
their place upon receipt by the Corporation of a bond of indemnity and under
whatever regulations may be prescribed by the board. The giving of a bond of
indemnity may be waived.
6.3. Transfer of Securities.--The shares of the capital stock
or any other registered securities of the Corporation shall be transferable on
the books of the Corporation by the holder thereof in person or by that person's
authorized agent, or by the transferee, upon surrender for cancellation to the
transfer agent of an outstanding certificate or certificates for the same number
of shares or other security with an assignment and authorization to transfer
endorsed thereon or attached thereto, duly executed, together with such proof of
the authenticity of the signature and of the power of the assignor to transfer
the securities as the Corporation or its agents may require.
6.4. Record Date for Dividends or Rights.--The board may fix a
record date in advance as of which shares of stock shall be held of record to
entitle a shareholder to the payment of any dividend, to the allotment of
rights, or to exercise rights in respect to any change, conversion or exchange
of capital stock of the Corporation. The record date shall not precede by more
than sixty (60) days the date of the dividend payment, or the allotment of
rights, or the date when the change, conversion or exchange of capital stock
shall take effect. Only shareholders of record on the record date shall be
entitled to receive or exercise the rights or benefits when they shall accrue,
notwithstanding any transfer of any stock on the books of the Corporation
subsequent to the record date.
6.5. Issuance of Shares.--Shares of the capital stock of the
Corporation which have been authorized but not issued may be sold or issued from
time to time for such consideration as may be determined by the board.
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ARTICLE VII
CORPORATE SEAL
The corporate seal shall have inscribed thereon the name of
the Corporation, the year of its incorporation, and the words "Corporate Seal,
New Jersey". The seal may be used by causing it or a facsimile thereof to be
impressed or reproduced on a document or instrument, or affixed thereto.
ARTICLE VIII
FISCAL YEAR
The fiscal year of the Corporation shall end on December 31 of
each calendar year.
ARTICLE IX
AMENDMENTS
These by-laws may be altered, amended or repealed by the
shareholders or the board. Any by-law adopted, amended, or repealed by the
shareholders may be amended or repealed by the board unless the resolution of
the shareholders adopting the by-law expressly reserves the right to amend or
repeal it to the shareholders.
ARTICLE X
MISCELLANEOUS
10.1. Inspection of Corporate Records.--The share register, or
duplicate share register, and minutes of proceedings of the shareholders shall
be open to inspection for any proper purpose upon the written demand of any
person who has been a shareholder of record or holder of a voting trust
certificate for at least six months immediately preceding that person's demand,
or any person holding, or so authorized in writing by the holders of, at least
five percent of the outstanding shares of any class. The inspection may be made
at any reasonable time not less than five days after the person has given
written notice of the demand to the Corporation. The inspection may be made in
person or by an agent or attorney and shall include the right to make extracts.
Demand for inspection shall be made in writing upon the president or secretary
of the Corporation.
10.2. Checks, Drafts, Etc.--All checks, drafts or other orders
for the payment of money, notes or other evidences of indebtedness, issued in
the name of or payable to the Corporation, shall be signed or endorsed by the
person or persons and in such manner, manually or by facsimile signature, as
shall be determined from time to time by the board.
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<PAGE>
10.3. Execution of Contracts.--The board may authorize any
officer or officers, agent or agents, to enter into any contract or execute any
instrument in the name of and on behalf of the Corporation. The authority may be
general or confined to specific instances. No officer, agent or employee shall
have any power or authority to bind the Corporation by any contract or
engagement or to pledge its credit or to render it liable for any purpose or for
any amount unless so authorized by the board or these by-laws.
10.4. Voting Shares of Other Corporations.--The chairman, the
president, or any vice president are each authorized to vote, represent and
exercise on behalf of this Corporation all rights incident to any and all shares
of stock of any other corporation or corporations standing in the name of this
Corporation. The authority herein granted may be exercised by those officers
either in person or by proxy or by power of attorney duly executed by the
officer.
10.5. Force and Effect of By-Laws.--These by-laws are subject
to the provisions of the New Jersey Business Corporation Act and the
Corporation's certificate of incorporation, as it may be amended from time to
time. If any provision in these by-laws is inconsistent with a provision in that
Act or the certificate of incorporation, the provision of the Act or the
certificate of incorporation shall govern to the extent of such inconsistency.
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<PAGE>
Exhibit 99.1
Five Henderson Drive, [GRAPHIC OMITTED]
West Caldwell, NJ 07006
(973)-882-7000
www.vestcomintl.com
NASDAQ:VESC
NEWS ANNOUNCEMENT
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FOR MORE INFORMATION, CONTACT
<TABLE>
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<S> <C>
Vestcom International, Inc. Joseph N. Jaffoni, Robert L. Rinderman
Michael D. Helfand, Executive VP/Chief Financial Officer Jaffoni & Collins
973.882.8440 (Ext 3780) 212.835.8500
</TABLE>
VESTCOM INTERNATIONAL, INC.
ADOPTS SHAREHOLDER PROTECTION RIGHTS AGREEMENT
AND BY-LAW AMENDMENTS
West Caldwell, NJ, December 16, 1999 -- The Board of Directors
of Vestcom International, Inc. (NASDAQ: VESC) today adopted a Shareholder
Protection Rights Agreement and declared a dividend of one Right on each
outstanding share of Vestcom Common Stock. The record date for the dividend will
be December 28, 1999.
The Rights Agreement was adopted to assure that the Company's
shareholders receive fair and equal treatment in the event of any proposed
takeover of the Company, and to guard against partial tender offers,
squeeze-outs, open market accumulation and other actions intended to gain
control of the Company without paying all shareholders a fair price.
Until the earlier of the date on which it is announced that a
person or group has acquired 10% or more of Vestcom's Common Stock (an
"Acquiring Person") or the tenth business day after a person commences a tender
offer that will result in such person or group owning 10% or more of Vestcom's
Common Stock, the Rights will be evidenced by the Common Stock certificates,
will automatically trade with the Common Stock and will not be exercisable.
Thereafter, separate Rights certificates will be distributed and each Right will
entitle its holder to purchase Participating Preferred Stock having economic and
voting terms similar to those of one share of Common Stock for an exercise price
of $27.
Upon announcement that any person or group has become an
Acquiring Person, each Right (other than Rights beneficially owned by any
Acquiring Person or transferees thereof, which Rights become void) will entitle
its holder to purchase, for the exercise price, a number of shares of Vestcom
Common Stock (or Participating Preferred Stock) having a market value equal to
twice the exercise price. Under certain circumstances, the Rights will entitle
shareholders (other than the Acquiring Person) to purchase shares in an
acquiring company at a similar discount. If any person or group acquires between
10% and 50% of Vestcom's Common Stock, Vestcom's Board of Directors may, at its
option, require each Right to be exchanged for one share of Vestcom Common Stock
(or one one-hundredth of a share of Participating Preferred Stock). This
exchange feature would not apply to Rights held by an Acquiring Person.
<PAGE>
In general, the Rights may be redeemed by the Board of
Directors for $0.01 per Right at any time before the Rights become exercisable.
The Rights will expire on December 28, 2009, unless redeemed, exchanged or
amended by the Board of Directors.
Chairman and Chief Executive Officer Joel Cartun of Vestcom
stated that "The Rights are intended to enable all shareholders to realize the
long-term value of their investment in our Company. They will not prevent an
appropriate transaction that is in the best interests of shareholders, but
should encourage anyone seeking to acquire Vestcom to negotiate with the Board
prior to attempting a takeover."
Brendan Keating, the President and Chief Operating Officer of
Vestcom added: "The Rights Agreement does not in any way adversely affect
Vestcom's financial strength or interfere with its business plans. The issuance
of the Rights will not affect reported earnings per share, is not taxable to
Vestcom or its shareholders and will not change the way in which Vestcom shares
are traded."
A letter to stockholders regarding the Rights Agreement and a
summary of certain terms of the Rights Agreement will be mailed to shareholders
promptly after the record date.
The Board of Directors of Vestcom has also adopted certain
amendments to Vestcom's By-laws. The By-laws have been amended to provide that
special meetings of Vestcom shareholders may only be called by the Chairman of
the Board, the President or by a majority of the Board of Directors. In
addition, concurrent with the adoption of the Rights Agreement, the Board
amended the By-laws to establish (a) advance notification requirements
applicable to shareholder proposals and director nominations to be made at
annual and special meetings of shareholders and (b) specific procedures
regarding consent solicitations by shareholders.
Vestcom International, Inc., is a leading provider of
solutions for the creation, management and distribution of business critical
documents, including (i) statements, invoices and confirms; (ii) product pricing
and usage information; and (iii) sales generation and product fulfillment
materials. Vestcom employs over 1,000 individuals and serves customers in over
30 production facilities throughout the US and Canada. More information about
Vestcom and its services can be found on the World Wide Web at
www.vestcomintl.com.
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