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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) October 20, 1994
New England Business Service, Inc.
(Exact name of registrant as specified in its charter)
Delaware 0-8564 04-2942374
(State of (Commission File Number) (IRS Employer
incorporation) Identification No.)
500 Main Street, Groton MA 01471
(Address of principal executive offices) (Zip Code)
(508) 448-6111
(Registrant's telephone number,
including area code)
N/A
(Former name or former address, if changed since last report)
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Items 1-4. Not Applicable.
Item 5. Description of Registrant's Securities to be Registered.
On October 27, 1989, the Board of Directors of New England
Business Service, Inc., a Delaware corporation (the "Company"), declared a
dividend of one right (a "Right") for each share of common stock, par value
$1.00 per share ("Common Stock"), of the Company held of record at the
close of business on November 10, 1989 (the "Record Date"), or issued
thereafter and prior to the Distribution Date (as hereinafter defined).
The Rights were issued pursuant to a Rights Agreement, dated as of
October 27, 1989 (the "Rights Agreement"), between the Company and The
First National Bank of Boston, National Association, as Rights Agent. On
October 20, 1994, the Company and the Rights Agent amended and restated the
Rights Agreement in its entirety (the "Restated Rights Agreement"). The
terms of the Rights, as so amended, are summarized herein.
Each Right entitles its registered holder to purchase from the
Company, after the Distribution Date, one one-hundredth of a share of
Series A Participating Preferred Stock, without par value (the
"Participatory Preferred Stock"), for $75 (the "Purchase Price"), subject
to adjustment. The Rights will be evidenced by the Common Stock
certificates until the close of business on the earlier of (either, the
"Distribution Date") (i) the tenth business day (or such later date as the
Board of Directors of the Company may from time to time fix by resolution
adopted prior to the Distribution Date that would otherwise have occurred)
after the date on which any Person (as defined in the Restated Rights
Agreement) commences a tender or exchange offer which, if consummated,
would result in such Person's becoming an Acquiring Person, as defined
below, and (ii) the tenth business day (or such earlier or later date as
the Board of Directors of the Company may from time to time fix by
resolution adopted prior to the Flip-in Date that would otherwise have
occurred) after the first date of public announcement by the Company that
such Person has become an Acquiring Person, other than as a result of a
Flip-over Transaction or Event (as defined below) (the "Flip-in Date");
provided that if a tender or exchange offer referred to in clause (i) is
cancelled, terminated or otherwise withdrawn prior to the Distribution Date
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
who first becomes the Beneficial Owner
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(as defined in the Restated Rights Agreement) of 15% or more of the
outstanding shares of Common Stock after the date of the Restated Rights
Agreement or who is, unbeknownst to the Company, the Beneficial Owner of
15% or more of the outstanding Common Stock as of such date, provided,
however, such term shall not include (i) the Company, any wholly-owned
subsidiary of the Company or any employee stock ownership or other employee
benefit plan of the Company, (ii) any person who is, unbeknownst to the
Company, the Beneficial Owner of 15% or more of the outstanding Common
Stock as of the date of the Restated Rights Agreement or who shall become
the Beneficial Owner of 15% or more of the outstanding Common Stock solely
as a result of an acquisition of Common Stock by the Company, until such
time as such Person acquires additional Common Stock, other than through a
dividend or stock split or pursuant to any employee benefit plan of the
Company, (iii) any Person who becomes an Acquiring Person without any plan
or intent to seek or affect control of the Company if such Person, promptly
divests sufficient securities such that such 15% or greater Beneficial
Ownership ceases or (iv) any Person who Beneficially Owns shares of Common
Stock consisting solely of (A) shares acquired pursuant to the grant or
exercise of an option granted by the Company in connection with an
agreement to merge with, or acquire, the Company prior to a Flip-in Date,
(B) shares owned by such Person and its Affiliates and Associates at the
time of such grant and (C) shares, amounting to less than 1% of the
outstanding Common Stock, acquired by Affiliates and Associates of such
Person after the time of such grant. The Restated Rights Agreement pro-
vides that, until the Distribution Date, the Rights will be transferred
with and only with the Common Stock. Common Stock certificates issued
prior to the Distribution Date shall evidence one Right for each share of
Common Stock represented thereby and shall contain a legend incorporating
by reference the terms of the Restated Rights Agreement (as such may be
amended from time to time). Notwithstanding the absence of the
aforementioned legend or the existence of an earlier form of legend,
certificates evidencing shares of Common Stock outstanding on or prior to
October 20, 1994 shall also evidence one Right for each share of Common
Stock evidenced thereby. Promptly following the Distribution Date,
separate certificates evidencing the Rights ("Rights Certificates") will be
mailed to holders of record of Common Stock at the Distribution Date.
The Rights will not be exercisable until the Business Day (as
defined in the Restated Rights Agreement) following the Distribution Date.
The Rights will expire on
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the earliest of (i) the Exchange Time (as defined below), (ii) the close of
business on October 20, 2004, (iii) the date on which the Rights are
redeemed as described below and (iv) upon the time of merger of the Company
into another corporation pursuant to an agreement entered into prior to a
Flip-in Date (in any such case, the "Expiration Time").
The Purchase 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, the Company shall take such action as shall be necessary to ensure
and provide that 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 Restated Rights
Agreement, that number of shares of Common Stock of the Company having an
aggregate Market Price (as defined in the Restated Rights Agreement), on
the date of the public announcement of an Acquiring Person's becoming such
(the "Stock Acquisition Date") that gave rise to the Flip-in Date, equal to
twice the Purchase Price for an amount in cash equal to the then current
Purchase 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 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) 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
Distribution Date (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.
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Whenever the Company shall become obligated under 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 either (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 the transaction or series of transactions occurs is the Acquiring
Person, an Affiliate or Associate of the Acquiring Person or acting in
concert with 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 other Person (other than the Company
or one or more of its wholly owned subsidiaries) or to two or more such
Persons which are affiliated or 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 (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 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
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constitute the right to purchase from the Flip-over Entity, upon exercise
thereof in accordance with the terms of the Restated 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 Purchase Price for an
amount in cash equal to the then current Purchase 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 Restated 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 close of business on the Flip-in Date, redeem all
(but not less than all) the then outstanding Rights at a price of $.01 per
Right) (the "Redemption Price"), as provided in the Restated 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.
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 Restated Rights Agreement (which includes 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 descrip-
tion of the Rights is qualified in its entirety by reference to the
Restated Rights Agreement and such exhibit thereto.
Item 6. Not Applicable.
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Item 7. Exhibits.
Exhibit No. Description
(4) Restated Rights Agreement, which
includes an amended Form of Rights
Certificate and of Election to
Exercise, included as Exhibit B
to the Restated Rights Agreement.
(99) Press release, dated October 20, 1994,
issued by the Company.
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SIGNATURE
Pursuant to the requirements of Section 12 of the
Securities Exchange Act of 1934, the registrant has duly caused this
registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized.
NEW ENGLAND BUSINESS SERVICE, INC.
By /s/ William C. Lowe
Name: William C. Lowe
Title: President and Chief
Executive Officer
Date: October 25, 1994
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EXHIBIT INDEX
Exhibit No.
Under Reg.
S-K, Item 601 Description
(4) Amended and Restated Rights Agreement,
dated as of October 27, 1989 as amended
as of October 20, 1994 (the "Rights
Agreement"), between New England
Business Service, Inc. and The First
National Bank of Boston, National
Association, as Rights Agent, including
as Exhibit B the forms of Rights
Certificate and Election to Exercise.
(99) Press release, dated October 20, 1994,
issued by the Company.
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EXHIBIT (4)
NEW ENGLAND BUSINESS SERVICE, INC.
and
THE FIRST NATIONAL BANK OF BOSTON
Rights Agent
________________
Amended and Restated Rights Agreement
Dated as of October 27, 1989
as amended as of October 20, 1994
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STOCKHOLDER PROTECTION RIGHTS AGREEMENT
Table of Contents
Page
Article I
CERTAIN DEFINITIONS
Section 1.1 Certain Definitions . . . . . . . . . . . . . . . . 2
Article II
THE RIGHTS
Section 2.1 Summary of Rights . . . . . . . . . . . . . . . . . 13
Section 2.2 Legend on Common Stock
Certificates . . . . . . . . . . . . . . . . . . 13
Section 2.3 Exercise of Rights;
Separation of Rights . . . . . . . . . . . . . . 14
Section 2.4 Adjustments to Purchase Price;
Number of Rights . . . . . . . . . . . . . . . . 18
Section 2.5 Date on Which Exercise is
Effective . . . . . . . . . . . . . . . . . . . . 21
Section 2.6 Execution, Authentication, Delivery
and Dating of Rights
Certificates . . . . . . . . . . . . . . . . . . 21
Section 2.7 Registration, Registration of
Transfer and Exchange . . . . . . . . . . . . . . 22
Section 2.8 Mutilated, Destroyed, Lost and
Stolen Rights Certificates . . . . . . . . . . . 24
Section 2.9 Persons Deemed Owners . . . . . . . . . . . . . . . 25
Section 2.10 Delivery and Cancellation of
Certificates . . . . . . . . . . . . . . . . . . 26
Section 2.11 Agreement of Rights Holders . . . . . . . . . . . . 26
Article III
ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF
CERTAIN TRANSACTIONS
Section 3.1 Flip-in . . . . . . . . . . . . . . . . . . . . . . 28
Section 3.2 Flip-over . . . . . . . . . . . . . . . . . . . . . 32
Article IV
THE RIGHTS AGENT
Section 4.1 General . . . . . . . . . . . . . . . . . . . . . . 32
Section 4.2 Merger or Consolidation or Change of
Name of Rights Agent . . . . . . . . . . . . . . 35
Section 4.3 Duties of Rights Agent . . . . . . . . . . . . . . 36
Section 4.4 Change of Rights Agent . . . . . . . . . . . . . . 40
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Article V
MISCELLANEOUS
Section 5.1 Redemption . . . . . . . . . . . . . . . . . . . . 42
Section 5.2 Expiration . . . . . . . . . . . . . . . . . . . . 43
Section 5.3 Issuance of New Rights
Certificates . . . . . . . . . . . . . . . . . . 43
Section 5.4 Supplements and Amendments . . . . . . . . . . . . 44
Section 5.5 Fractional Shares . . . . . . . . . . . . . . . . . 45
Section 5.6 Rights of Action . . . . . . . . . . . . . . . . . 46
Section 5.7 Holder of Rights Not Deemed a
Stockholder . . . . . . . . . . . . . . . . . . . 47
Section 5.8 Notice of Proposed Actions . . . . . . . . . . . . 47
Section 5.9 Notices . . . . . . . . . . . . . . . . . . . . . . 48
Section 5.10 Suspension of Exercisability . . . . . . . . . . . 49
Section 5.11 Costs of Enforcement . . . . . . . . . . . . . . . 50
Section 5.12 Successors . . . . . . . . . . . . . . . . . . . . 50
Section 5.13 Benefits of this Agreement . . . . . . . . . . . . 50
Section 5.14 Determination and Actions by
by the Board of Directors, etc. . . . . . . . . . 50
Section 5.15 Descriptive Headings . . . . . . . . . . . . . . . 51
Section 5.16 Governing Law . . . . . . . . . . . . . . . . . . . 51
Section 5.17 Counterparts . . . . . . . . . . . . . . . . . . . 52
Section 5.18 Severability . . . . . . . . . . . . . . . . . . . 52
EXHIBITS
Exhibit A Certificate of Designation,
Preferences and Rights of Series A
Participating Preferred Stock
Exhibit B Form of Rights Certificate
(Together with Form of
Election to Exercise)
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AMENDED AND RESTATED RIGHTS AGREEMENT
AMENDED AND RESTATED RIGHTS AGREEMENT (as amended from time to
time, this "Agreement"), dated as of October 20, 1994, between New England
Business Service, Inc., a Delaware corporation (the "Company"), and The
First National Bank of Boston, as Rights Agent (the "Rights Agent", which
term shall include any successor Rights Agent hereunder).
WITNESSETH:
WHEREAS, on October 27, 1989 (the "Rights Dividend Declaration
Date"), the Board of Directors of the Company entered into a Rights
Agreement (hereinafter referred to as the "Original Rights Agreement") with
respect to the authorization and declaration of a dividend distribution of
one Right for each share of common stock, par value $1.00 per share, of the
Company ("Common Stock") outstanding at the close of business on November
10, 1989 (the "Record Date"), and authorized the issuance of one Right (as
such number may thereinafter be adjusted pursuant to the provisions of
Section 11(k) of the Original Rights Agreement) for each share of Common
Stock of the Company issued between the Record Date (whether originally
issued or delivered from the Company's treasury) and the Distribution Date,
each Right initially representing the right of purchase one one-hundredth
of a share of Participating Preferred Stock of the
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Company having the rights, powers and preferences set forth in the form of
Certificate of Designation, Preferences and Rights attached to the Original
Rights Agreement as Exhibit A, upon the terms and subject to the conditions
set forth in the Original Rights Agreement (the "Rights");
WHEREAS, the Original Rights Agreement provides that prior to
the Distribution Date (as such term is defined in the Original Rights
Agreement), the Company and the Rights Agent may, if the Company so
directs, supplement or amend any provision of the Original Rights Agreement
without the approval of any holders of certificates representing shares of
Common Stock;
WHEREAS, the Distribution Date (as such term is defined in the
Original Rights Agreement) has not occurred;
WHEREAS, the Company and the Rights Agent wish to amend and
restate the Original Rights Agreement in its entirety as follows:
NOW THEREFORE, in consideration of the premises and the
respective agreements set forth herein, the parties hereby agree as
follows:
ARTICLE I
CERTAIN DEFINITIONS
1.1 Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
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"Acquiring Person" shall mean any Person who first becomes the
Beneficial Owner of 15% or more of the outstanding shares of Common Stock
after the date of this Amendment or who is, unbeknownst to the Company, the
Beneficial Owner of 15% or more of the outstanding Common Stock as of such
date; provided, however, that the term "Acquiring Person" shall not include
any Person (i) who is, unbeknownst to the Company, the Beneficial Owner of
15% or more of the outstanding shares of Common Stock on the date of this
Agreement or who shall become the Beneficial Owner of 15% or more of the
outstanding shares of Common Stock solely as a result of an acquisition by
the Company of shares of 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 or pursuant to any
employee benefit plan of the Company) of any additional shares of Common
Stock, (ii) who is the Beneficial Owner of 15% 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 such Person promptly enters into an irrevocable commitment
promptly 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 15% or more of the outstanding shares of Common Stock
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 by the Company in
connection with an agreement to merge with, or acquire, the Company 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 Person or its Affiliates or Associates at the time of grant
of such option or (C) shares of Common Stock (or securities convertible
into, exchangeable into or exercisable for Common Stock) acquired by
Affiliates or Associates of such Person after the time of such grant which,
in the aggregate, amount to less than 1% of the outstanding shares of
Common Stock. In addition, the Company, any wholly-owned Subsidiary of the
Company and any employee stock ownership or other employee benefit plan of
the Company or a wholly-owned Subsidiary of the Company shall not be an
Acquiring Person.
"Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 under the Securities Exchange Act of
1934, as such Rule is in effect on the date of this Agreement.
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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 pursuant to Rule 13d-3 and 13d-5
under the Securities 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 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, 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
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under Section 12 of the Securities Exchange Act of 1934 and pursuant to,
and in accordance with, the applicable rules and regulations under the
Securities Exchange Act of 1934, except if such power (or the arrangements
relating thereto) is then reportable under Item 6 of Schedule 13D under the
Securities Exchange Act of 1934 (or any similar provision of a comparable
or successor report). Notwithstanding the foregoing, no officer or
director of the Company shall be deemed to Beneficially Own any securities
of any other Person by virtue of any actions such officer or director takes
in such capacity. 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.
"Business Day" shall mean any day other than a Saturday, Sunday
or a day on which banking institutions in The Commonwealth of Massachusetts
or the city in which the principal office of the Rights Agent is located
are authorized or obligated by law or executive order to close.
"Close of Business" on any given date shall mean 5:00 P.M.,
Boston time, on such date; provided, however, that if such date is not a
Business Day, it shall mean 5:00 P.M., Boston time, on the next succeeding
Business Day.
"Distribution Date" shall mean the close of business on the
earlier of (i) the tenth business day (or
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such later date as the Board of Directors of the Company may from time to
time fix by resolution adopted prior to the Distribution Date that would
otherwise have occurred) 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 any tender or exchange offer referred to in clause (i) of this
paragraph is cancelled, terminated or otherwise withdrawn prior to the
Distribution Date 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.
"Exchange Time" shall mean the time at which the right to
exercise the Rights shall terminate pursuant to Section 3.1(c) hereof.
"Expiration Time" shall mean the earliest of (i) the Exchange
Time, (ii) the Redemption Time, (iii) the close of business on October 20,
2004 and (iv) upon the merger of the Company into another corporation
pursuant to an agreement entered into prior to a Flip-in Date.
"Flip-in Date" shall mean the tenth business day after any
Stock Acquisition Date which is not the result of a Flip-over Transaction
or Event or such earlier or later date as the Board of Directors of the
Company may from time to time fix by resolution adopted prior to the Flip-
in Date that would otherwise have occurred.
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"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 assets or earning power being transferred in such
Flip-over Transaction or Event, provided in all cases if such Person is a
subsidiary of a corporation, the parent corporation shall be the Flip-Over
Entity.
"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 the time when an Acquiring Person has become
such 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,
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the Acquiring Person controls the Board of Directors of the Company 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 transaction occurs is the Acquiring Person, an
Affiliate or Associate of the Acquiring Person or acting in concert with
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 such 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 of Directors of the Company. An Acquiring Person shall be deemed
to Control the Company's Board of Directors when, following a Flip-in Date,
the persons who were directors of the Company before the
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Flip-in Date shall cease to constitute a majority of the Company's Board of
Directors.
"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 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 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 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 trans-
action reporting system with respect to securities listed on the principal
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<PAGE> 11
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 system
then in use, or, if on any such date the securities are not listed or ad-
mitted 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 of Directors of the Company; 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 of Directors of the Company, after consultation with a nationally
recognized investment banking firm, and set forth in a certificate
delivered to the Rights Agent.
"Person" shall mean any individual, firm, partnership,
association, 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.
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<PAGE> 12
"Preferred Stock" shall mean the Series A Participating
Preferred Stock, without par value, of the Company created by a Certificate
of Designation, Preferences and Rights attached as Exhibit A hereto.
"Purchase 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
Purchase Price shall equal $75.00.
"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.
"Stock Acquisition Date" shall mean the first date of public
announcement by the Company (by any means) that an Acquiring Person has
become such.
"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
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<PAGE> 13
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 date
hereof, the Company will mail a letter summarizing the terms of this
Agreement to each holder of record of Common Stock as of the date hereof,
at such holder's address as shown by the records of the Company.
2.2 Legend on Common Stock Certificates. Certificates for the
Common Stock issued after the date hereof but prior to the Distribution
Date 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:
This certificate also evidences and entitles the holder to
certain Rights as set forth in the Rights Agreement between New
England Business Service, Inc. (the "Company") and The First
National Bank of Boston (the "Rights Agent") dated as of
October 27, 1989, as amended from time to time (the "Rights
Agreement") the terms of which are hereby incorporated herein
by reference and a copy of which is on file at the principal
offices of the Company. Under certain circumstances, as set
forth in the Rights Agreement, such Rights may
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<PAGE> 14
be redeemed, may be exchanged for other securities, may expire or may
be evidenced by separate certificates and may no longer be evidenced
by this certificate. The Company will mail to the holder of this
certificate a copy of the Rights Agreement, as in effect on the date
of mailing, without charge promptly after receipt of a written
request therefor. Under certain circumstances set forth in the
Rights Agreement, Rights issued to, or held by, any Person who is,
was or becomes an Acquiring Person or any Affiliate or Associate
thereof (as such terms are defined in the Rights Agreement) or a
transferee of the foregoing may become null and void.
Certificates representing shares of Common Stock that were issued and
outstanding at the Record Date shall evidence one Right for each share of
Common Stock evidenced thereby notwithstanding the absence of the foregoing
legend and certificates representing shares of Common Stock issued after
such time but prior to the date of this amendment bearing the form of
legend set forth in the Original Rights Agreement shall evidence one Right
for each share of Common Stock on the terms set forth in this Agreement.
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 Distribution
Date and prior to the Expiration Time, to purchase, for the Purchase Price,
one one-hundredth of a share of Preferred Stock.
(b) Until the Distribution Date, (i) no Right may be exercised
and (ii) each Right will be evidenced by the certificate for the associated
share of Common Stock and
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<PAGE> 15
will be transferable only together with, and will be transferred by a
transfer of, such associated share.
(c) Subject to the terms hereof, after the Distribution Date
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 Distribution Date, the Rights Agent will mail to each holder
of record of Common Stock as of the Distribution Date (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 A hereto appropriately completed, representing the number
of Rights held by such holder at the Distribution Date 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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<PAGE> 16
(d) Subject to the terms hereof, Rights may be exercised on
any Business Day after the Distribution Date 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 Purchase 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 hereof, the Rights Agent will thereupon promptly (i)(A)
requisition from a transfer 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
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<PAGE> 17
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 Purchase 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 Securities
Exchange Act of 1934, and the rules and regulations thereunder, and any
other applicable law, rule or regulation, in connection with
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<PAGE> 18
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.
2.4 Adjustments to Purchase Price; Number of Rights. (a) In
the event the Company shall at any time prior to the Distribution Date
(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 Purchase Price in effect after such adjustment will be equal to the
Purchase 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
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<PAGE> 19
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 prior to the
Distribution Date 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 Distribution Date.
(b) In the event the Company shall at any time prior to the
Distribution Date issue or distribute any securities or assets in respect
of, in lieu of or in exchange for Common Stock (other than pursuant to 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
<PAGE>
<PAGE> 20
merger, consolidation or share exchange), or otherwise, the Company shall
make such adjustments, if any, in the Purchase Price, number of Rights
and/or securities or other property purchasable upon exercise of Rights as
the Board of Directors of the Company, 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.
(c) Each adjustment to the Purchase Price made pursuant to
this Section 2.4 shall be calculated to the nearest cent. Whenever an
adjustment to the Purchase 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, (ii) promptly file with the Rights Agent and with each transfer
agent for the Common Stock a copy of such certificate and (iii) mail a
brief summary thereof to each holder of Rights.
(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.
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<PAGE> 21
2.5 Date on Which Exercise is Effective. 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 Purchase
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, 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
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<PAGE> 22
them have ceased to hold such offices prior to the countersignature and
delivery of such Rights Certificates.
Promptly after the Company learns of the Distribution Date, the
Company will notify the Rights Agent of such Distribution Date and will
deliver Rights Certificates executed by the Company to the Rights Agent for
countersignature, 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.
2.7 Registration, Registration of Transfer and Exchange. (a)
After the Distribution Date, 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
Distribution Date as herein provided. In the event that the Rights Agent
shall cease to be the Rights Registrar, the Rights Agent will have the
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<PAGE> 23
right to examine the Rights Register at all reasonable times after the
Distribution Date.
After the Distribution Date 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
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<PAGE> 24
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 or
terminated 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) 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) 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
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<PAGE> 25
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.
(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 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 Distribution Date, 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
Distribution Date, such Common Stock certificate) is registered as the
absolute owner thereof and of the Rights
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<PAGE> 26
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 Distribution Date,
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
cancelled by the Rights Agent. The Company may at any time deliver to the
Rights Agent for cancellation any Rights Certificates previously counter-
signed and delivered hereunder which the Company may have acquired in any
manner whatsoever, and all Rights Certificates so delivered shall be
promptly cancelled by the Rights Agent. No Rights Certificates shall be
countersigned in lieu of or in exchange for any Rights Certificates
cancelled as provided in this Section 2.10, except as expressly permitted
by this Agreement. The Rights Agent shall destroy all cancelled 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
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<PAGE> 27
Company and the Rights Agent and with every other holder of Rights that:
(a) prior to the Distribution Date, each Right will be
transferable only together with, and will be transferred by a transfer of,
the associated share of Common Stock;
(b) after the Distribution Date, 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 Distribution Date, 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 Distribution Date, 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 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.
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<PAGE> 28
ARTICLE III
ADJUSTMENTS TO THE RIGHTS IN
THE EVENT OF CERTAIN TRANSACTIONS
3.1 Flip-in. (a) In the event that prior to the Expiration
Time a Flip-in Date shall occur, the Company shall take such action as
shall be necessary to ensure and provide that, 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
Purchase Price for an amount in cash equal to the Purchase 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
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<PAGE> 29
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.
(c) 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) 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 Distribution 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 (such exchange ratio,
as adjusted from time to time, being hereinafter referred to as the
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<PAGE> 30
"Exchange Ratio").
Immediately upon the action of the Board of Directors of the
Company 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 of Directors 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
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<PAGE> 31
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 or 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), the Company shall either (i) call a
meeting of stockholders 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 Purchase Price, debt or
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<PAGE> 32
equity securities or other assets (or a combination thereof) having a
fair value equal to twice the Purchase 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 Purchase Price, or (y) if the Board of Directors of the
Company 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 of Directors of the Company, 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
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<PAGE> 33
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 Purchase Price for an
amount in cash equal to the Purchase 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
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<PAGE> 34
transaction.
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
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<PAGE> 35
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
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<PAGE> 36
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.
(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
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<PAGE> 37
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 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
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<PAGE> 38
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 Section 3.1(b) hereof) or any adjustment required under
the provisions of Section 2.4, 3.1 or 3.2 hereof or responsible for the
manner, method or amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment (except with
respect to the exercise of Rights 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
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<PAGE> 39
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 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 stockholder, 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 Rights Agent under this Agreement. Nothing herein shall preclude
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<PAGE> 40
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
<PAGE>
<PAGE> 41
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 of the Commonwealth of Massachusetts or any other 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 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
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<PAGE> 42
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 of Directors of the Company
may, at its option, at any time prior to the close of business on the Flip-
in Date, elect to redeem all (but not less than all) 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 of Directors, in the exercise
of its sole discretion, to be at least equivalent in value to the
Redemption Price.
(b) Immediately upon the action of the Board of Directors of
the Company electing to redeem the Rights (or, if the resolution of the
Board of Directors 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
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<PAGE> 43
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
of Directors. 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, 3.2 or 5.1 hereof.
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 its Board of Directors 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 Distribution Date and
prior to the Redemption Time or 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
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<PAGE> 44
Distribution Date, 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. Prior to the Distribution
Date the Company and the Rights Agent may, if the Company so directs,
supplement or amend any provision of this Agreement without the approval of
any holders of certificates representing shares of Common Stock. From and
after the Distribution Date, the Company and the Rights Agent may, if the
Company so directs, supplement or amend this Agreement without the approval
of any holders of Rights Certificates in order (i) to cure any ambiguity,
(ii) to correct or supplement any provision contained herein that may be
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<PAGE> 45
defective or inconsistent with any other provisions herein, (iii) to shorten
or lengthen any time period hereunder, or (iv) to change or supplement the
provisions hereunder in any manner that the Company may deem necessary or
desirable and which shall not adversely affect the interests of the holders
of the Rights Certificates; provided, this Agreement may not be
supplemented or amended to lengthen, pursuant to clause (iii) of this
sentence, (A) a time period relating to when the Rights may be redeemed at
such time as the Rights are not then redeemable, or (B) any other time
period unless such lengthening is for the purpose of protecting, enhancing
or clarifying the rights or benefits of the holders of Rights. Upon the
delivery of a certificate from an appropriate officer of the Company that
states that the proposed supplement or amendment is in compliance with the
terms of this Section 5.4, the Rights Agent shall execute such supplement
or amendment and the same shall thereupon become effective.
Notwithstanding anything contained in this Agreement to the contrary, no
supplement or amendment shall be made that changes the Redemption Price or
the number of one one-hundredths of a share of Preferred Stock for which a
Right is exercisable.
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
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<PAGE> 46
Board of Directors, 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) sell such shares on behalf of the holders of Right and pay to the
registered holder of such Rights the appropriate fraction of price per share
received upon such sale.
5.6 Rights of Action. Subject to the terms of this Agreement
(including Section 3.1(b)), 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
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<PAGE> 47
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 Stockholder. 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
stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except
as provided in Section 5.8 hereof), 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 Distribution Date and prior to the Expiration Time (i) to
effect or permit occurrence of any 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
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<PAGE> 48
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 20 Business Days prior to the date of the
taking of such proposed action.
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 first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Rights Agent) as follows:
New England Business Service, Inc.
500 Main Street
Groton, Massachusetts 01450
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:
The First National Bank of Boston
150 Royall Street; Mail Stop 45-02-16
Canton, Massachusetts 02021
Attention: Shareholder Services Division
(New England Business Service,
Inc. Rights Agreement)
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<PAGE> 49
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 Distribution Date, on the registry books of the transfer agent for
the Common Stock. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice.
5.10 Suspension of Exercisability. To the extent that the
Company determines in good faith that some action will or need be taken
pursuant to Section 3.1(a), (b), (d) or (e) or to comply with federal or
state securities laws, the Company may suspend the exercisability of the
Rights for a period of up to ninety (90) days following the date of the
occurrence of the Distribution Date or the Flip-in Date 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.
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<PAGE> 50
Failure to give a notice pursuant to the provisions of this
Agreement shall not affect the validity of any action taken hereunder.
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; but 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 of Directors of the Company shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and
powers specifically granted to the Board or to the Company, or as may be
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<PAGE> 51
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 in good faith, shall (x) be final, conclusive and binding on
the Company, the Rights Agent, the holders of the Rights and all other
parties, and (y) not subject the Board of Directors of the Company 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 DELAWARE AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF SUCH STATE APPLICABLE TO CONTRACTS TO BE MADE
AND PERFORMED ENTIRELY WITHIN SUCH STATE.
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
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<PAGE> 52
constitute but one and the same instrument.
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.
NEW ENGLAND BUSINESS SERVICE,
INC.
By: /s/ William C. Lowe
Name: William C. Lowe
Title: President and Chief
Executive Officer
THE FIRST NATIONAL BANK OF
BOSTON
By: /s/ Richard D. Hill, Jr.
Name: Richard D. Hill, Jr.
Title: Vice President
<PAGE>
<PAGE> 1
EXHIBIT A
CERTIFICATE OF DESIGNATION,
PREFERENCES AND RIGHTS OF SERIES A
PARTICIPATING PREFERRED STOCK
NEW ENGLAND BUSINESS SERVICE, INC.
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
We, Richard H. Rhoads, Chairman of the Board, and Paul F. Robinson,
Secretary of New England Business Service, Inc., a corporation organized
and existing under the General Corporation Law of the State of Delaware
(the "Corporation"), in accordance with the provisions of Section 103
thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors
by the Certificate of Incorporation of the said Corporation, the said Board
of Directors on October 27, 1989, adopted the following resolution creating
a series of 400,000 shares of Preferred Stock designated as Series A
Participating Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the provisions of its
Certificate of Incorporation, a series of Series A Participating Preferred
Stock of the Corporation of the par value of one dollar ($1.00) per share
be and it hereby is created, and that the amount thereof and the
designation, powers, preferences and rights of the shares of such series,
and the qualifications, limitations or restrictions thereof are as follows:
Section 1. Designation and Amount. The share of such series
shall be designated as "Series A Participating Preferred Stock" and the
initial number of shares constituting such series shall be 400,000.
Section 2. Dividends and Distributions.
(A) The "quarterly dividend periods" for purposes of accrual
and payment of dividends upon Series A Participating Preferred Stock
shall commence on the 28th day following the fourth Friday of
January, April, July and October in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"), or in the
case of original issuance, on the date of original issuance, and
shall end on and include the day next preceding the first date of the
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<PAGE> 2
next quarterly dividend period. The dividend rate per share on the
shares of Series A Participating Preferred Stock for each quarterly
dividend period shall be equal to the greater of (a) $5.00 or
(b) subject to adjustment as hereinafter provided, 100 times the
aggregate amount per share of all cash dividends and 100 times the
aggregate per share amount (payable in cash based upon the fair market
value as of the time of payment of distribution) of all non-cash
dividends or other distributions (other than stock dividends or stock
splits) declared on the common stock, par value $1.00 per share, of
this Corporation (the "Common Stock") during the immediately preceding
quarterly dividend period, or, with respect to the first quarterly
dividend period, since the first issuance of any share or fraction of
a share of Series A Participating Preferred Stock. In the event the
Corporation shall at any time after October 27, 1989 (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in
each such case the amount to which holders of shares of Series A
Participating Preferred Stock were entitled immediately prior to such
event under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
(B) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Participating Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of issue of
such shares of Series A Participating Preferred Stock, unless the
date of issue of such shares is prior to the record date for the
first Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue from the date of issue of such
shares, or unless the date of issue is a Quarterly Dividend Payment
Date or is a date after the record date for the determination of
holders of shares of Series A Participating Preferred Stock entitled
to receive a quarterly dividend and before such Quarterly Dividend
Payment Date, in either of which events such dividends shall begin to
accrue and be cumulative from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest. Dividends
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<PAGE> 3
paid on the shares of Series A Participating Preferred Stock in an
amount less than the total amount of such dividends at the time
accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding.
The Board of Directors may fix a record date for the determination of
holders of shares of Series A Participating Preferred Stock entitled
to receive payment of a dividend or distribution declared thereon,
which record date shall be no more than 45 days prior to the date
fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A
Participating Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Participating Preferred Stock shall
entitle the holder thereof to 100 votes on all matters submitted to a
vote of the stockholders of the Corporation. In the event the
Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise than by payment of
a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the number of votes
per share to which holders of shares of Series A Participating
Preferred Stock were entitled immediately prior to such event shall
be adjusted by multiplying such number by a fraction, the numerator
of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately
prior to such event.
(B) Except as otherwise provided herein, in the Certificate
of Incorporation, as from time to time amended, in any other
Certificate of Designation creating a series of Preferred Stock or
any similar stock, or by law, the holders of shares of Series A
Participating Preferred Stock and the holders of shares of Common
Stock and any other capital stock of the Corporation having general
voting rights shall vote together as one class on all matters
submitted to a vote of stockholders of the Corporation.
(C) Except as set forth in Section 11 below or as otherwise
provided by law, holders of Series A Participating Preferred Stock
shall have no
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<PAGE> 4
special voting rights and their consent shall not be required (except
to the extent they are entitled to vote with holders of Common Stock
as set forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Participating Preferred Stock
as provided in Section 2 are in arrears, thereafter and until all
accrued and unpaid dividends and distributions, whether or not
declared, on shares of Series A Participating Preferred Stock
outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of Common Stock or other stock
ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Participating
Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Participating Preferred Stock,
except dividends paid ratably on the Series A Participating
Preferred Stock and all such parity stock on which dividends
are payable or in arrears, in proportion to the total amounts
to which the holders of all such shares are then entitled; or
(iii) purchase or otherwise acquire for consideration any
shares of Series A Participating Preferred Stock, or any shares
of stock ranking on a parity with the Series A Participating
Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the Board
of Directors) to all holders of such shares upon such terms as
the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and preferences
of such shares, shall determine in good faith will result in
fair and equitable treatment among them.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any
shares of stock of the Corporation unless the Corporation could, under
<PAGE>
<PAGE> 5
paragraph (A) of this Section 4, purchase or otherwise acquire such
shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A
Participating Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and cancelled
promptly after the acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued shares of Preferred Stock and
may be reissued as shares of Series A Participating Preferred Stock or as
part of a new series of Preferred Stock subject to the conditions and
restrictions on issuance set forth in any other Certificate of Designation
creating a series of Preferred Stock or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up
(A) Upon any liquidation (voluntary or otherwise), dissolution or
winding up of the Corporation, no distribution shall be made to the holders
of shares of Common Stock or other stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Participating Preferred Stock unless, prior thereto, the holders of shares
of Series A Participating Preferred Stock shall have received $100 per
share, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment
(the "Series A Liquidation Preference"). Following the payment of the full
amount of the Series A Liquidation Preference, no additional distributions
shall be made to the holders of shares of Series A Participating Preferred
Stock unless, prior thereto, the holders of shares of Common Stock shall
have received an amount per share (the "Common Adjustment") equal to the
quotient obtained by dividing (i) the Series A Liquidation Preference by
(ii) 100 (as appropriately adjusted as set forth in Subparagraph C below to
reflect such events as stock splits, stock dividends and recapitalization
with respect to the Common Stock), hereinafter referred to as the
Adjustment Number. Following the payment of the full amount of the Series
A Liquidation Preference and the Common Adjustment in respect of all
outstanding shares of Series A Participating Preferred Stock and Common
Stock, respectively, holders of Series A Participating Preferred Stock and
holders of shares of Common Stock shall receive their ratable and propor-
tionate share of the remaining assets to be distributed in the ratio of the
Adjustment Number to 1 with respect to such Preferred Stock and Common
Stock, on a per share basis, respectively.
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<PAGE> 6
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation Preference
and the liquidation preferences of all other series of preferred stock, if
any, which rank on a parity with the Series A Participating Preferred
Stock, then such remaining assets shall be distributed ratably to the
holders of the Series A Participating Preferred Stock and such parity
shares in proportion to their respective liquidation preferences. In the
event that there are sufficient assets to pay in full the Series A
Liquidation Preference and all liquidation preferences ranking on a parity
with it, but not sufficient assets available to permit payment in full of
the Common Adjustment, then such remaining assets shall be distributed
ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time after the
October 27, 1989, (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or
(iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the Adjustment Number in effect immediately prior to
such event shall be adjusted by multiplying such Adjustment Number by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately
prior to such event.
Section 7. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger, combination or
other transaction in which the shares of Common Stock are exchanged for or
changed into other stock or securities, cash and/or other property, then in
any such case each share of Series A Participating Preferred Stock shall at
the same time be similarly exchanged or changed into such other stock or
securities, cash and/or other property having value equal to 100 times the
aggregate value of stock, securities, cash and/or any other property into
which or for which each share of Common Stock is changed or exchanged. In
the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a
subdivision, combination, consolidation or reclassification of the
outstanding shares of Common Stock into a greater or lesser number of
shares of Common Stock, then in each such case the exchange ratio of 100:1
provided for in the preceding sentence with respect to the exchange or
change of shares of Series A Participating Preferred Stock shall be
adjusted by multiplying such amount by a ratio, the numerator of which is
the number of shares of Common Stock outstanding immediately after such
<PAGE>
<PAGE> 7
event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Series A
Participating Preferred Stock shall not be redeemable.
Section 9. Designation of Additional Preferred Stock. Nothing
herein shall preclude the Board of Directors from increasing the number of
authorized shares of Preferred Stock of the Corporation designated as
Series A Participating Preferred Stock and having the voting powers,
preferences and relative, participating and other rights provided herein
for such series. Nothing herein shall preclude the Board of Directors from
designating other authorized shares of Preferred Stock as one or more other
series ranking on a parity with or prior to the Series A Participating
Preferred Stock as to the payment of dividends or the distribution of
assets or otherwise.
Section 10. Fractional Shares. Series A Participating
Preferred Stock may be issued in fractions of a share that shall entitle
the holder, in proportion to such holder's fractional shares, to exercise
voting rights, receive dividends, participate in distributions and to have
the benefit of all other rights of holders of Series A Participating
Preferred Stock.
Section 11. Amendment. The Certificate of Incorporation of
the Corporation shall not be amended in any manner which would materially
alter or change the powers, preferences or special rights of the holders of
the Series A Participating Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of at least two-thirds of the
outstanding shares of Series A Participating Preferred Stock, voting
together as a single class.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate
and do affirm the foregoing as true under the penalties of perjury as of
the 27th day of October, 1989.
/s/ Richard H. Rhoads
Richard H. Rhoads
Chairman of the Board
Attest:
/s/ Paul F. Robinson
Paul F. Robinson Secretary
<PAGE>
<PAGE> 1
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
NEW ENGLAND BUSINESS SERVICE, 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 Amended and Restated Rights Agreement,
dated as of October 20, 1994 (as amended from time to time, the "Rights
Agreement"), between New England Business Service, Inc., a Delaware
corporation (the "Company"), and The First National Bank of Boston, 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 Distribution Date (as such term is defined in the Rights
Agreement) and prior to the close of business on October 20, 2004, one one-
hundredth of a fully paid share of Series A Participating Preferred Stock,
without par value (the "Preferred Stock"), of the Company (subject to
adjustment as provided in the Rights Agreement) at the Purchase Price
<PAGE>
<PAGE> 2
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 Boston. The Purchase Price shall initially be $75.00
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 or
assets of the Company other than Preferred Stock, all as provided in the
Rights Agreement.
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
<PAGE>
<PAGE> 3
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
stockholder of the Company or any right to vote for the election of directors
<PAGE>
<PAGE> 4
or upon any matter submitted to stockholders at any meeting thereof, or to
give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or
otherwise, until the Rights evidenced by this Rights Certificate shall have
been exercised 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.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Date: ____________
ATTEST: NEW ENGLAND BUSINESS
SERVICE, INC.
___________________________ By______________________
Secretary
Countersigned:
THE FIRST NATIONAL BANK OF BOSTON
By____________________________
Authorized Signature
<PAGE>
<PAGE> 1
[To be attached to each Rights Certificate]
FORM OF ELECTION TO EXERCISE
(To be executed if holder desires to
exercise the Rights Certificate.)
TO: NEW ENGLAND BUSINESS SERVICE, 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:
___________________________________
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:
___________________________________
Address:___________________________
___________________________________
Social Security or Other Taxpayer
Identification Number:_____________
Dated: _______________, 19__
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)
<PAGE>
<PAGE> 2
Signatures must be guaranteed by a bank, broker, dealer, credit
union, national securities exchange, savings association or other eligible
guarantor institution as defined in Section 240.17Ad-15 of the rules and
regulations under the Securities and Exchange Act of 1934 participating in
an approved signature guarantee medallion program.
- - ---------------------------------------------------------------------------
(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.
<PAGE> 1
NEWS
October 20, 1994
FOR IMMEDIATE RELEASE FOR FURTHER INFORMATION CONTACT:
RUSSELL V. CORSINI, JR. OR.
JOHN F. FAIRBANKS AT (508) 448-6111
NEW ENGLAND BUSINESS SERVICE, INC.
ANNOUNCES STOCK REPURCHASE
AND AMENDMENT TO RIGHTS AGREEMENT
GROTON, MA -- October 20, 1994 -- New England Business Service, Inc (NASDAQ:
NEBS) today announced that its Board of Directors has authorized the
repurchase of its common stock in the open market at a cumulative cost not
to exceed $22 million. Unless renewed or earlier completed, the repurchase
will terminate June 30, 1995. The firm of Cleary, Gull, Reiland & McDevitt
has been appointed exclusive agent to repurchase these shares.
In an unrelated action, the Board of Directors voted to approve
an amendment to the Company's Rights Agreement. The amendment will serve
to conform the principal terms of the Rights Agreement to the provisions
currently being adopted by Delaware companies of comparable size. The
material changes in the Agreement include the deletion of the Adverse
Person provision, the lowering of the threshold at which an Acquiring
Person will trigger the Rights from 20% to 15%, and the inclusion of a one
Common Share per Right exchange feature. A letter summarizing the terms of
the amended Rights Agreement will be mailed to stockholders this week.
NEBS is the source of printed products, software and services
for over one million small businesses throughout the United States, Canada
and the United Kingdom.
