SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM 8-A/A
(AMENDMENT NO. 2)
FOR REGISTRATION OF CERTAIN CLASSES
OF SECURITIES PURSUANT TO SECTION 12(b) OR 12(g)
OF THE SECURITIES EXCHANGE ACT OF 1934
COMPUTER SCIENCES CORPORATION
(Exact name of Registrant as specified in its charter)
NEVADA 95-2043126
(State of incorporation or organization) (I.R.S. Employer
Identification No.)
2100 East Grand Avenue
El Segundo, California 90245
(Address of principal executive offices) (zip code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each Class Name of each Exchange on which
to be so registered each class is to be registered
------------------- ------------------------------
Preferred Stock Purchase Rights New York Stock Exchange
Pacific Stock Exchange
Securities to be registered pursuant to Section 12(g) of the Act: None
<PAGE>
Item 1. Description of Registrant's Securities to be Registered.
On June 17, 1996, the Board of Directors of the Registrant authorized and
approved an amendment, effective as of August 1, 1996, to the Rights Agreement
dated as of December 21, 1988 by and between the Registrant and American
Transtech, as amended, in order to provide that: (i) upon the occurrence of
certain events, each preferred stock purchase right would become exercisable
to purchase one four-thousandth (1/4000), rather than one four-hundredth
(1/400), of a share of Series A Junior Participating Preferred Stock, $1.00
par value, of the Registrant (the "Preferred Stock") and (ii) each four-
thousandth, rather than each four-hundredth, of a share of Preferred Stock
would have the same dividend and liquidation rights as one share of Common
Stock, $1.00 par value, of the Registrant. The amendment was effected
pursuant to an Amended and Restated Rights Agreement dated as of August 1,
1996 by and between the Registrant and ChaseMellon Shareholder Services,
L.L.C., as successor Rights Agent.
Item 2. Exhibits
The exhibit listed below is filed as a part of this registration statement:
4.1 Amended and Restated Rights Agreement dated as of August 1, 1996 by
and between the Registrant and ChaseMellon Shareholder Services, L.L.C.
<PAGE>
SIGNATURES
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 thereto duly authorized.
COMPUTER SCIENCES CORPORATION
Dated: August 1, 1996 By /s/Hayward D. Fisk
__________________________
Hayward D. Fisk
Vice President
<PAGE>
EXHIBIT INDEX
-------------
Exhibit
- -------
4.1 Amended and Restated Rights Agreement dated as of August 1, 1996 by and
between the Registrant and ChaseMellon Shareholder Services, L.L.C.
<PAGE>
Exhibit 4.1
-----------
______________________________________________________________________________
COMPUTER SCIENCES CORPORATION
AND
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
AMENDED AND RESTATED RIGHTS AGREEMENT
DATED AS OF DECEMBER 21, 1988
AMENDED AND RESTATED AS OF AUGUST 1, 1996
______________________________________________________________________________
<PAGE>
<TABLE>
TABLE OF CONTENTS
-----------------
<CAPTION>
Section Page
- ------- ----
<S> <C> <C>
l Certain Definitions ........................................... 1
2 Appointment of Rights Agent ................................... 6
3 Issue of Rights Certificates .................................. 6
4 Form of Rights Certificates ................................... 8
5 Countersignature and Registration ............................. 9
6 Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates ................................................. 9
7 Exercise of Rights; Purchase Price; Expiration Date of Rights .. 10
8 Cancellation and Destruction of Rights Certificates ............ 12
9 Reservation and Availability of Stock .......................... 13
10 Preferred Stock Record Date .................................... 14
11 Adjustment of Purchase Price, Number and Kind of Shares
or Number of Rights .......................................... 15
12 Certificate of Adjusted Purchase Price or Number of Shares ..... 24
13 Consolidation, Merger or Sale or Transfer of Assets or
Earning Power ................................................ 24
14 Fractional Rights and Fractional Shares ........................ 28
15 Rights of Action ............................................... 29
16 Agreement of Rights Holders .................................... 30
17 Rights Certificate Holder Not Deemed a Stockholder ............. 30
18 Concerning the Rights Agent .................................... 31
19 Merger or Consolidation or Change of Name of Rights Agent ...... 31
20 Duties of Rights Agent ......................................... 32
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Section Page
- ------- ----
<S> <C> <C>
21 Change of Rights Agent ........................................ 34
22 Issuance of New Rights Certificates ........................... 35
23 Redemption and Termination .................................... 35
24 Notice of Certain Events ...................................... 36
25 Notices ....................................................... 37
26 Supplements and Amendments .................................... 37
27 Successors .................................................... 38
28 Determination and Actions by the Board of Directors, etc. ..... 38
29 Benefits of this Agreement .................................... 39
30 Severability .................................................. 39
31 Governing Law ................................................. 39
32 Counterparts .................................................. 39
33 Descriptive Headings .......................................... 40
</TABLE>
Exhibit A -- Form of Certificate of Amendment of Certificate of Designations
Exhibit B -- Form of Rights Certificate
Exhibit C -- Form of Summary of Rights
<PAGE>
AMENDED AND RESTATED RIGHTS AGREEMENT
-------------------------------------
RIGHTS AGREEMENT, dated as of December 21, 1988, amended and restated as
of August 1, 1996 (the "Agreement"), between COMPUTER SCIENCES CORPORATION, a
Nevada corporation (the "Company"), and CHASEMELLON SHAREHOLDER SERVICES,
L.L.C. (the "Rights Agent").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, on December 21, 1988 (the "Rights Dividend Declaration Date"),
the Board of Directors of the Company authorized and declared a dividend
distribution of one preferred stock purchase right (a "Right") for each share
of common stock, $1.00 par value, of the Company (the "Common Stock")
outstanding at the close of business on January 3, 1989 (the "Record Date"),
and authorized the issuance of one Right for each share of Common Stock issued
between the Record Date (whether originally issued or delivered from the
Company's treasury) and the Distribution Date (as hereinafter defined), each
Right initially representing the right to purchase one four-thousandth
(l/4000th) of a share of Series A Junior Participating Preferred Stock of the
Company having the rights, powers and preferences set forth in the form of
Certificate of Amendment of Certificate of Designations attached hereto as
Exhibit A, upon the terms and subject to the conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
-------------------
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which, together with
all Affiliates and Associates of such Person, shall be the Beneficial Owner of
20% or more of the shares of Common Stock then outstanding; provided, however
that (i) the term "Acquiring Person" shall not include the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company, or any Person or entity organized, appointed or
established by the Company for or pursuant to the terms of any such plan, (ii)
a person who becomes the Beneficial Owner of at least twenty percent (20%) of
such outstanding shares of Common Stock as the result of a stock repurchase
plan or self-tender offer of the Company shall not be deemed an Acquiring
Person, and the Stock Acquisition Date shall not be deemed to occur, until
such Person, together with all Affiliates and Associates of such Person,
thereafter becomes the Beneficial Owner of, in the aggregate, a number of
additional shares of Common Stock equal to one percent (1%) or more of the
then outstanding shares (and, at that time, owns at least twenty percent (20%)
of such outstanding shares), and (iii) the term "Acquiring
<PAGE>
Person shall not include a person who becomes the Beneficial Owner of at least
twenty percent (20%) of such outstanding shares of Common Stock as the result
of an acquisition of shares of Common Stock pursuant to a tender offer or an
exchange offer for all outstanding shares of Common Stock at a price and on
terms determined by at least a majority of the members of the Board of
Directors who are not officers of the Company and who are not representatives,
nominees, Affiliates or Associates of an Acquiring Person, after receiving
advice from one or more investment banking firms, to be (a) at a price which
is fair to stockholders of the Company (taking into account all factors which
such members of the Board deem relevant including, without limitation, prices
which could reasonably be achieved if the Company or its assets were sold on
an orderly basis designed to realize maximum value) and (b) otherwise in the
best interests of the Company and its stockholders.
(b) "Act" shall mean the Securities Act of 1933, as amended.
(c) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended and in effect on the
date of this Agreement (the "Exchange Act)".
(d) A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether such
right is exercisable immediately or only after the passage of time) pursuant
to any agreement, arrangement or understanding (whether or not in writing) or
upon the exercise of conversion rights, exchange rights, rights, warrants or
options, or otherwise; provided, however, that a Person shall not be deemed
the "Beneficial Owner" of, or to "beneficially own," (A) securities tendered
pursuant to a tender or exchange offer made by such Person or any of such
Person's Affiliates or Associates until such tendered securities are accepted
for purchase or exchange, or (B) securities issuable upon exercise of Rights
at any time prior to the occurrence of a Triggering Event, or (C) securities
issuable upon exercise of Rights from and after the occurrence of a Triggering
Event which Rights were acquired by such Person or any of such Person's
Affiliates or Associates prior to the Distribution Date or pursuant to Section
3(a)) or Section 22 hereof (the "Original Rights") or pursuant to Section
ll(i) hereof in connection with an adjustment made with respect to any
Original Rights;
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of or has
2
<PAGE>
"beneficial ownership" of (as determined pursuant to Rule 13d-3 of the General
Rules and Regulations under the Exchange Act), including pursuant to any
agreement, arrangement or understanding, whether or not in writing; provided,
however, that a Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," any security under this subparagraph (ii) as a result of
an agreement, arrangement or understanding to vote such security if such
agreement, arrangement or understanding: (A) arises solely from a revocable
proxy given in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable provisions of the General
Rules and Regulations under the Exchange Act, and (B) is not also then
reportable by such Person on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) with which such Person
(or any of such Person's Affiliates or Associates) has any agreement,
arrangement or understanding (whether or not in writing), for the purpose of
acquiring, holding, voting (except pursuant to a revocable proxy as described
in the proviso to subparagraph (ii) of this paragraph (d)) or disposing of any
voting securities of the Company; provided, however, that nothing in this
paragraph (d) shall cause a person engaged in business as an underwriter of
securities to be the "Beneficial Owner" of, or to "beneficially own," any
securities acquired through such person's participation in good faith in a
firm commitment underwriting until the expiration of forty days after the date
of such acquisition.
(e) "Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in the State of California are authorized or
obligated by law or executive order to close.
(f) "Close of business" on any given date shall mean 5:00 P.M.,
California time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., California time, on the next succeeding
Business Day.
(g) "Common Stock" shall mean the common stock, $1.00 par value, of the
Company, except that "Common Stock" when used with reference to any Person
other than the Company shall mean the capital stock (or units of beneficial
interest which represent the right to participate in profits, losses,
deductions and credits) of such Person with the greatest voting power, or the
equity securities or other equity interest having power to control or direct
the management, of such Person.
(h) "Continuing Director" shall mean (i) any member of the Board of
Directors of the Company, while such Person is a member of the Board, who is
not
3
<PAGE>
an Acquiring Person or an Affiliate or Associate of an Acquiring Person, or a
representative of an Acquiring Person or of any such Affiliate or Associate,
and who was a member of the Board prior to the date of this Agreement, or (ii)
any Person who subsequently becomes a member of the Board, while such Person
is a member of the Board, who is not an Acquiring Person or an Affiliate or
Associate of an Acquiring Person or a representative of an Acquiring Person or
of any such Affiliate or Associate, if such Person's nomination for election
or election to the Board is recommended or approved by a majority of the
Continuing Directors.
(i) "Current market price" shall have the meaning set forth in Section
ll(d) hereof.
(j) "Current Value" shall have the meaning set forth in Section
ll(a)(iii) hereof.
(k) "Distribution Date" shall have the meaning set forth in Section 3(a)
hereof.
(l) "Equivalent Preferred Stock" shall have the meaning set forth in
Section ll(b) hereof.
(m) "Exchange Act" shall have the meaning set forth in Section l(c)
hereof.
(n) "Expiration Date" shall have the meaning set forth in Section 7(a)
hereof.
(o) "Final Expiration Date" shall have the meaning set forth in Section
7(a) hereof.
(p) "Person" shall mean any individual, firm, corporation, partnership,
association, trust or other entity.
(q) "Preferred Stock" shall mean shares of Series A Junior Participating
Preferred Stock, $1.00 par value, of the Company and, to the extent that there
is not a sufficient number of shares of Series A Junior Participating
Preferred Stock authorized to permit the full exercise of the Rights, any
other series of Preferred Stock, $1.00 par value, of the Company designated
for such purpose containing terms substantially similar to the terms of the
Series A Junior Participating Preferred Stock.
(r) "Principal Party" shall have the meaning set forth in Section 13(b)
hereof.
(s) "Purchase Price" shall have the meaning set forth in Section 4(a)
hereof.
4
<PAGE>
(t) "Record Date" shall have the meaning set forth in the WHEREAS clause
at the beginning of this Agreement.
(u) "Redemption Price" shall have the meaning set forth in Section 23(a)
hereof.
(v) "Rights" shall have the meaning set forth in the WHEREAS clause at
the beginning of this Agreement.
(w) "Rights Certificates" shall have the meaning set forth in Section
3(a) hereof.
(x) "Section ll(a)(ii) Event" shall mean any event described in Section
ll(a)(ii) hereof.
(y) "Section ll(a)(ii) Trigger Date" shall have the meaning set forth in
Section ll(a)(iii) hereof.
(z) "Section 13 Event" shall mean any event described in clauses (x), (y)
or (z) of Section 13(a) hereof.
(aa) "Spread" shall have the meaning set forth in Section ll(a)(iii)
hereof.
(bb) "Stock Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) under the Exchange Act)
by the Company or an Acquiring Person that an Acquiring Person has become such
or such earlier date as a majority of the directors shall become aware of the
existence of an Acquiring Person.
(cc) "Subsidiary" shall mean, with reference to any Person, any
corporation of which an amount of voting securities sufficient to elect at
least a majority of the directors of such corporation is beneficially owned,
directly or indirectly, by such Person, or which is otherwise controlled by
such Person.
(dd) "Substitution Period" shall have the meaning set forth in Section
ll(a)(iii) hereof.
(ee) "Trading Day" shall have the meaning set forth in Section ll(d)
hereof.
(ff) "Triggering Event" shall mean any Section ll(a)(ii) Event or any
Section 13 Event.
Any determination required by the definitions contained in this Section 1
shall be made by the Board of Directors of the Company in its good faith
judgment,
5
<PAGE>
which determination shall be binding on the Rights Agent and the holders of
the Rights.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
---------------------------
Rights Agent to act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3 hereof, shall, prior to the Distribution
Date, also be the holders of the Common Stock) in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment.
The Company may from time to time appoint such Co-Rights Agents as it may deem
necessary or desirable.
Section 3. Issue of Rights Certificates.
----------------------------
(a) Until the earlier of (i) the close of business on the tenth business
day after the Stock Acquisition Date or, if the tenth business day after the
Stock Acquisition Date occurs before the Record Date, the close of business on
the Record Date), or (ii) the close of business on the tenth business day
after the date that a tender or exchange offer by any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company, or any Person or entity
organized, appointed or established by the Company for or pursuant to the
terms of any such plan) is first published or sent or given within the meaning
of Rule 14d-2(a) of the General Rules and Regulations under the Exchange Act,
if upon consummation thereof, such Person would be the Beneficial Owner of 30%
or more of the shares of Common Stock then outstanding (irrespective of
whether any shares are actually purchased pursuant to any such offer) (the
earlier of (i) or (ii) being herein referred to as the "Distribution Date"),
(x) the Rights will be evidenced (subject to the provisions of paragraph (b)
of this Section 3) by the certificates for the Common Stock registered in the
names of the holders of the Common Stock (which certificates for Common Stock
shall be deemed also to be certificates for Rights and not by separate
certificates, and (y) the Rights will be transferable only in connection with
the transfer of the underlying shares of Common Stock (including a transfer to
the Company). As soon as practicable after the Distribution Date, the Rights
Agent will send by first-class, insured, postage prepaid mail, to each record
holder of the Common Stock as of the close of business on the Distribution
Date, at the address of such holder shown on the records of the Company, one
or more rights certificates, in substantially the form of Exhibit B hereto
(the "Rights Certificates"), evidencing one Right for each share of Common
Stock so held, subject to adjustment as provided herein. In the event that an
adjustment in the number of Rights per share of Common Stock has been made
pursuant to Section ll(p) hereof, at the time of distribution of the Rights
Certificates, the Company shall make the necessary and appropriate rounding
adjustments (in accordance with Section 14(a) hereof) so that Rights
certificates representing only whole numbers of Rights are
6
<PAGE>
distributed and cash is paid in lieu of any fractional Rights. As of and
after the Distribution Date, the Rights will be evidenced solely by such
Rights Certificates.
(b) As promptly as practicable following the Record Date, the Company
will send a copy of a Summary of Rights, in substantially the form attached
hereto as Exhibit C (the "Summary of Rights"), by first-class, postage prepaid
mail, to each record holder of the Common Stock as of the close of business on
the Record Date, at the address of such holder shown on the records of the
Company. With respect to certificates for the Common Stock outstanding as of
the Record Date, until the Distribution Date, the Rights will be evidenced by
such certificates for the Common Stock and the registered holders of the
Common Stock shall also be the registered holders of the associated Rights.
Until the earlier of the Distribution Date or the Expiration Date, the
transfer of any certificates representing shares of Common Stock in respect of
which Rights have been issued shall also constitute the transfer of the Rights
associated with such shares of Common Stock.
(c) Rights shall be issued in respect of all shares of Common Stock which
are issued after the Record Date but prior to the earlier of the Distribution
Date or the Expiration Date. Certificates representing such shares of Common
Stock shall also be deemed to be certificates for Rights, and shall bear the
following legend:
"This certificate also evidences and entitles the holder hereof to certain
rights as set forth in the Rights Agreement between Computer Sciences
Corporation (the "Company") and American Transtech (the "Rights Agent") dated
as of December 21, 1988 (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 will be evidenced by separate
certificates and will no longer be evidenced by this certificate. The Rights
Agent will mail to the holder of this certificate a copy of the Rights
Agreement, as in effect on the date of mailing, without charge promptly after
receipt of a written request therefor. Under certain circumstances set forth
in the Rights Agreement, Rights issued to, or held by, any person who is, was
or becomes an Acquiring Person or any Affiliate or Associate thereof (as such
terms are defined in the Rights Agreement), whether currently held by or on
behalf of such Person or by any subsequent holder, may become null and void."
With respect to such certificates containing the foregoing legend, until
the earlier of the Distribution Date or the Expiration Date, the Rights
associated with the Common Stock represented by such certificates shall be
evidenced by such certificates alone and registered holders of Common Stock
shall also be the registered holders of the associated Rights, and the
transfer of any of such
7
<PAGE>
certificates shall also constitute the transfer of the Rights associated with
the Common Stock represented by such certificates.
Section 4. Form of Rights Certificates.
---------------------------
(a) The Rights Certificates (and the forms of election to purchase and of
assignment to be printed on the reverse thereof) shall each be substantially
in the form set forth in Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the
Rights may from time to time be listed, or to conform to usage. Subject to
the provisions of Section 11 and Section 22 hereof, the Rights Certificates,
whenever distributed, shall be dated as of the Record Date and on their face
shall entitle the holders thereof to purchase such number of four-thousandths
of a share of Preferred Stock as shall be set forth therein at the price set
forth therein (such exercise price per one four-thousandth of a share, the
"Purchase Price"), but the amount and type of securities purchasable upon the
exercise of each Right and the Purchase Price thereof shall be subject to
adjustment as provided herein.
(b) Notwithstanding any other provision of this Agreement, any Rights
Certificate issued pursuant to Section 3(a) or Section 22 hereof that
represents Rights beneficially owned by any Person known to be: (i) an
Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person becomes such, or (iii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring Person
becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom such
Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board of
Directors of the Company has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect avoidance of Section
7(e) hereof, and any Rights Certificate issued pursuant to Section 6 or
Section 11 hereof upon transfer, exchange, replacement or adjustment of any
other Rights Certificate referred to in this sentence, shall contain (to the
extent feasible) the following legend:
"The Rights represented by this Rights Certificate are or were beneficially
owned by a Person who was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (as such
8
<PAGE>
terms are defined in the Rights Agreement). Accordingly, this Rights
Certificate and the Rights represented hereby may become null and void in the
circumstances specified in Section 7(e) of such Agreement."
Section 5. Countersignature and Registration.
---------------------------------
(a) The Rights Certificates shall be executed on behalf of the Company by
its Chairman of the Board, its President or any Vice President, either
manually or by facsimile signature, and shall have affixed thereto the
Company's seal or a facsimile thereof which shall be attested by the Secretary
or an Assistant Secretary of the Company, either manually or by facsimile
signature. The Rights Certificates shall be manually countersigned by the
Rights Agent and shall not be valid for any purpose unless so countersigned.
In case any officer of the Company who shall have signed any of the Rights
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Rights Certificates, nevertheless, may be countersigned by the Rights
Agent and issued and delivered by the Company with the same force and effect
as though the person who signed such Rights Certificates had not ceased to be
such officer of the Company; and any Rights Certificate may be signed on
behalf of the Company by any person who, at the actual date of the execution
of such Rights Certificate, shall be a proper officer of the Company to sign
such Rights Certificate, although at the date of the execution of this Rights
Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or cause
to be kept, at its principal office or offices designated as the appropriate
place for surrender of Rights Certificates upon exercise or transfer, books
for registration and transfer of the Rights Certificates issued hereunder.
Such books shall show the names and addresses of the respective holders of the
Rights Certificates, the number of Rights evidenced on its face by each of the
Rights Certificates and the Date of each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Rights
------------------------------------------------------
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
- ----------------------------------------------------------------------
(a) Subject to the provisions of Section 4(b), Section 7(e) and Section
14 hereof, at any time after the close of business on the Distribution Date,
and at or prior to the close of business on the Expiration Date, any Rights
Certificate or Certificates may be transferred, split up, combined or
exchanged for another Rights Certificate or Certificates, entitling the
registered holder to purchase a like number of four-thousandths of a share of
Preferred Stock (or, following a Triggering Event, Common Stock, other
securities, cash or other assets, as the case may be) as the Rights
Certificate or Certificates surrendered then entitled such holder (or former
9
<PAGE>
holder in the case of a transfer) to purchase. Any registered holder desiring
to transfer, split up, combine or exchange any Rights Certificate or
Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender the Rights Certificate or Certificates to be transferred,
split up, combined or exchanged at the principal office or offices of the
Rights Agent designated for such purpose. Neither the Rights Agent nor the
Company shall be obligated to take any action whatsoever with respect to the
transfer of any such surrendered Rights Certificate until the registered
holder shall have completed and signed the certificate contained in the form
of assignment on the reverse side of such Rights Certificate and shall have
provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request. Thereupon the Rights Agent shall, subject to
Section 4(b), Section 7(e) and Section 14 hereof, countersign and deliver to
the Person entitled thereto a Rights Certificate or Rights Certificates, as
the case may be, as so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Rights
Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation
of a Rights Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and reimbursement to
the Company and the Rights Agent of all reasonable expenses incidental
thereto, and upon surrender to the Rights Agent and cancellation of the Rights
Certificate if mutilated, the Company will execute and deliver a new Rights
Certificate of like tenor to the Rights Agent for countersignature and
delivery to the registered owner in lieu of the Rights Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
-------------------------------------------------------------
(a) Subject to Section 7(e) hereof, the registered holder of any Rights
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section ll(a)(iii) and Section 23(a)
hereof) in whole or in part at any time after the Distribution Date upon
surrender of the Rights Certificate, with the form of election to purchase and
the certificate on the reverse side thereof duly executed, to the Rights Agent
at the principal office or offices of the Rights Agent of the Rights Agent
designated for such purpose, together with payment of the aggregate Purchase
Price with respect to the total number of four-thousandths of a share of
Preferred Stock (or Common Stock or other securities, cash or other assets, as
the case may be) as to which such surrendered Rights are then exercisable, at
or prior to the earlier of (i) the close of business on December 21, 1998 (the
"Final Expiration Date"), or (ii) the time at which the
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Rights are redeemed as provided in Section 23 hereof (the earlier of (i) and
(ii) being herein referred to as the ("Expiration Date").
(b) The Purchase Price for each one four-thousandth of a share of
Preferred Stock pursuant to the exercise of a Right shall initially be
$235.00, and shall be subject to adjustment from time to time as provided in
Sections 11 and 13(a) hereof and shall be payable in accordance with paragraph
(c) below.
(c) Upon receipt of a Rights Certificate representing exercisable Rights,
with the form of election to purchase and the certificate duly executed,
accompanied by payment, with respect to each Right so exercised, of the
Purchase Price per one four-thousandth of a share of Preferred Stock (or
Common Stock or other securities, cash or other assets, as the case may be) to
be purchased as set forth below and an amount equal to any applicable transfer
tax, the Rights Agent shall, subject to Section 20(k) hereof, thereupon
promptly (i) (A) requisition from any transfer agent of the shares of
Preferred Stock (or make available, if the Rights Agent is the transfer agent
for such shares) certificates for the total number of four-thousandths of a
share of Preferred Stock to be purchased and the Company hereby authorizes its
transfer agent to comply with all such requests, or (B) if the Company shall
have elected to deposit the total number of shares of Preferred Stock issuable
upon exercise of the Rights hereunder with a depositary agent, requisition
from the depositary agent depositary receipts representing such number of
four-thousandths of a share of Preferred Stock as are to be purchased (in
which case certificates for the shares of Preferred Stock represented by such
receipts shall be deposited by the transfer agent with the depositary agent)
and the Company will direct the depositary agent to comply with such request,
(ii) requisition from the Company an amount of cash, if any, to be paid in
lieu of fractional shares in accordance with Section 14 hereof, (iii) after
receipt of such certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such
holder, and (iv) after receipt thereof, deliver such cash, if any, to or upon
the order of the registered holder of such Rights Certificate. The payment of
the Purchase Price (as such amount may be reduced pursuant to Section
ll(a)(iii) hereof) may be made in cash or by certified bank check or money
order payable to the order of the Company. In the event that the Company is
obligated to issue other securities (including Common Stock) of the Company,
pay cash and/or distribute other property pursuant to Section ll(a) hereof,
the Company will make all arrangements necessary so that such other
securities, cash and/or other property are available for distribution by the
Rights Agent, if and when appropriate.
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be
issued by the Rights
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Agent and delivered to, or upon the order of, the registered holder of such
Rights Certificate, registered in such name or names as may be designated by
such holder, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from and
after the first occurrence of a Section ll(a)(ii) Event, any Rights
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of
an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person with
whom the Acquiring Person has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer which the
Board of Directors of the Company has determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect the
avoidance of this Section 7(e), shall become null and void without any further
action and no holder of such Rights shall have any rights whatsoever with
respect to such Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to insure that the
provisions of this Section 7(e) and Section 4(b) hereof are complied with, but
shall have no liability to any holder of Rights Certificates or other Person
as a result of its failure to make any determinations with respect to an
Acquiring Person or its Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company shall be obligated to undertake any action
with respect to a registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered holder shall
have (i) completed and signed the certificate continued in the form of
election to purchase set forth on the reverse side of the Rights Certificate
surrendered for such exercise, and (ii) provided such additional evidence of
the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates. All
---------------------------------------------------
Rights Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no
Rights Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Agreement. The Company shall
deliver to the Rights Agent for cancellation and retirement, and the Rights
Agent shall so cancel and retire, any other Rights
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<PAGE>
Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all cancelled Rights
Certificates to the Company, or shall, at the written request of the Company,
destroy such cancelled Rights Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Stock.
-------------------------------------
(a) The Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued shares of Preferred
Stock (and, following the occurrence of a Section ll(a)(ii) Event, out of its
authorized and unissued shares of Common Stock and/or other securities or out
of its authorized and issued shares held in its treasury), the number of
shares of Preferred Stock (and, following the occurrence of a Section
ll(a)(ii) Event, Common Stock and, or other securities) that, as provided in
this Agreement including Section ll(a)(iii) hereof, will be sufficient to
permit the exercise in full of all outstanding Rights, provided, however, that
the Company shall not be required to reserve and keep available shares of
Preferred Stock, Common Stock or other securities sufficient to permit the
exercise in full of all outstanding Rights pursuant to the adjustments set
forth in Section ll(a)(ii), Section ll(a)(iii) or Section 13 hereof unless,
and only to the extent that, the Rights become exercisable pursuant to such
adjustments.
(b) So long as the shares of Preferred Stock (and, following the
occurrence of a Section ll(a)(ii) Event, Common Stock and/or other securities)
issuable and deliverable upon the exercise of Rights may be listed on any
national securities exchange, the Company shall use its best efforts to cause,
from and after such time as the Rights become exercisable, all shares reserved
for such issuance to be listed on such exchange upon official notice of
issuance upon such exercise.
(c) If necessary to permit the offer and issuance of Preferred Stock
(and, following the occurrence of a Section ll(a)(ii) Event, Common Stock
and/or other securities) issuable and deliverable upon the exercise of Rights,
the Company shall use its best efforts to (i) file, as soon as practicable
following the earliest date after the first occurrence of a Section ll(a)(ii)
Event on which the consideration to be delivered by the Company upon exercise
of the Rights has been determined in accordance with Section ll(a)(iii)
hereof, or as soon as is required by law following the Distribution Date, as
the case may be, a registration statement under the Act, with respect to the
securities purchasable upon exercise of the Rights on an appropriate form,
(ii) cause such registration statement to become effective as soon as
practicable after such filing, and (iii) cause such registration statement to
remain effective (with a prospectus at all times meeting the requirements of
the Act) until the earlier of (A) the date as of which the Rights are no
longer exercisable for such securities, and (B) the date of the expiration of
the Rights. The Company will also use reasonable efforts to take such action
as may be appropriate under, or to
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<PAGE>
ensure compliance with, the securities or "blue sky" laws of the various
states in connection with the exercisability of the Rights. The Company may
temporarily suspend, for a period of time not to exceed ninety (90) days after
the date set forth in clause (i) of the first sentence of this Section 9(c),
the exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. Upon any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction unless the requisite
qualification in such jurisdiction shall have been obtained or an exemption
therefrom shall have been obtained or be available and until a registration
statement (if required) has been declared effective.
(d) The Company covenants and agrees that it will take all such action as
may be necessary to ensure that all four-thousandths of a share of Preferred
Stock (and, following the occurrence of a Section ll(a)(ii) Event, Common
Stock and/or other securities) delivered upon exercise of Rights shall, at the
time of delivery of the certificates for such shares (subject to payment of
the Purchase Price), be duly and validly authorized and issued and fully paid
and non assessable.
(e) The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges which may
be payable in respect of the issuance or delivery of the Rights Certificates
and of any certificates for a number of four-thousandths of a share of
Preferred Stock (or Common Stock and/or other securities, as the case may be)
upon the exercise of Rights. The Company shall not, however, be required to
pay any transfer tax which may be payable in respect of any transfer or
delivery of Rights Certificates to a Person other than, or the issuance or
delivery of a number of four-thousandths of a share of Preferred Stock (or
Common Stock and/or other securities, as the case may be) in respect of a name
other than that of, the registered holder of the Rights Certificates
evidencing Rights surrendered for exercise or to issue or deliver any
certificates for a number of four-thousandths of shares of Preferred Stock (or
Common Stock and/or other securities, as the case may be) in a name other than
that of the registered holder upon the exercise of any Rights until such tax
shall have been paid (any such tax being payable by the holder of such Rights
Certificate at the time of surrender) or until it has been established to the
Company's satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each person in whose name any
---------------------------
certificate for a number of four-thousandths of a share of Preferred Stock (or
Common Stock and/or other securities, as the case may be) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder
of record of such fractional shares of Preferred Stock (or Common Stock and/or
other
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<PAGE>
securities, as the case may be) represented thereby on, and such certificate
shall be dated, the date upon which the Rights Certificate evidencing such
Rights was duly surrendered and payment of the Purchase Price (and all
applicable transfer taxes) was made; provided, however, that if the date of
such surrender and payment is a date upon which the Preferred Stock (or Common
Stock and/or other securities, as the case may be) transfer books of the
Company are closed, such Person shall be deemed to have become the record
holder of such shares (fractional or otherwise) on, and such certificate shall
be dated, the next succeeding Business Day on which the Preferred Stock (or
Common Stock and/or other securities, as the case may be) transfer books of
the Company are open. Prior to the exercise of the Rights evidenced thereby,
the holder of a Rights Certificate shall not be entitled to any rights of a
stockholder of the Company with respect to shares for which the Rights shall
be exercisable, including, without limitation, the right to vote or to receive
dividends or other distributions, and shall not be entitled to receive any
notice of any proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
----------------------------------------------------------
Number of Rights. The Purchase Price, the number and kind of shares covered
- ----------------
by each Right and the number of Rights outstanding are subject to adjustment
from time to time as provided in this Section 11.
(a)(i) In the event the Company shall at any time after the date of this
Agreement (A) declare a dividend on the Preferred Stock payable in shares of
Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine
the outstanding Preferred Stock into a smaller number of shares, or (D) issue
any shares of its capital stock in a reclassification of the Preferred Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation and the
Company's capital stock is not converted into securities or property
(including cash) of another Person), except as otherwise provided in this
Section ll(a) and Section 7(e) hereof, the Purchase Price in effect at the
time of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of
shares of Preferred Stock or other capital stock issuable on such date, shall
be proportionately adjusted so that the holder of any Right exercised after
such time shall be entitled to receive, upon payment of the Purchase Price
then in effect, the aggregate number and kind of shares of Preferred Stock or
such capital stock which, if such Right had been exercised immediately prior
to such date and at a time when the Preferred Stock transfer books of the
Company were open, he would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs which would require an adjustment under
both this Section ll(a)(i) and Section ll(a)(ii) hereof, the adjustment
provided
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<PAGE>
for in this Section ll(a)(i) shall be in addition to, and shall be made prior
to, any adjustment required pursuant to Section ll(a)(ii) hereof.
(ii) In the event ("Section ll(a)(ii) Event") that the Stock
Acquisition Date shall have occurred, then promptly following the close of
business on the tenth business day after such Section ll(a)(ii) Event (or, if
the tenth business day after such Section ll(a)(ii) Event occurs before the
Record Date, the close of business on the Record Date), proper provision shall
be made so that each holder of a Right (except as provided below and in
Section 7(e) hereof) shall thereafter have the right to receive, upon exercise
thereof, in lieu of a number of four-thousandths of a share of Preferred
Stock, one share of Common Stock (as constituted on the date of this
Agreement) of the Company for each Right which was exercisable immediately
prior to the occurrence of such Section ll(a)(ii) Event (such number of
shares, the "Adjustment Shares") at an adjusted Purchase Price (the "Section
11 Price") equal to the product obtained by multiplying the Adjustment Shares
by 10% of the current market price (as determined pursuant to Section ll(d)
hereof) per share of the Common Stock on the date of the occurrence of Such
Section ll(a)(ii) Event; and, following the occurrence of such Section
ll(a)(ii) Event, the Section 11 Price shall be the "Purchase Price" for all
purposes of this Agreement provided that the Purchase Price and the number of
Adjustment Shares shall be further adjusted as provided in this Agreement to
reflect any events occurring after the date of such first occurrence; and
provided, further, that if the transaction that would otherwise give rise to
the foregoing adjustment is also subject to the provisions of Section 13
hereof, then only the provisions of Section 13 hereof shall apply and no
adjustment shall be made pursuant to this Section ll(a)(ii).
(iii) In the event that the number of shares of Common Stock which are
authorized by the Company's articles of incorporation but not outstanding or
reserved for issuance for purposes other than upon exercise of the Rights is
not sufficient to permit the exercise in full of the Rights in accordance with
the foregoing subparagraph (ii) of this Section ll(a) and the Rights shall
become so exercisable, to the extent permitted by applicable law and any
agreements in effect on the date hereof to which the Company is a party, the
Company shall: (A) determine the excess of (1) the value of the Adjustment
Shares issuable upon the exercise of a Right (the "Current Value") over (2)
the Purchase Price (such excess, the "Spread"), and (B) with respect to each
Right, make adequate provision to substitute for the Adjustment Shares, upon
payment of the applicable Purchase Price, (l) cash, (2) a reduction in the
Purchase Price, (3) Common Stock or shares or units of shares of Preferred
Stock or other equity securities of the Company, (4) debt securities of the
Company, (5) other assets, or (6) any combination of the foregoing, having an
aggregate value equal to the Current Value, where such
16
<PAGE>
aggregate value has been determined by the Board of Directors of the Company
based upon the advice of a nationally recognized investment banking firm
selected by the Board of Directors of the Company; provided, however, if the
Company shall not have made adequate provision to deliver value pursuant to
clause (B) above within thirty (30) days following the later of (x) the first
occurrence of a Section ll(a)(ii) Event and (y) the date on which the
Company's right of redemption pursuant to Section 23(a) expires (the later of
(x) and (y) being referred to herein as the "Section ll(a)(ii) Trigger Date"),
then the Company shall be obligated to deliver, upon the surrender for
exercise of a Right and without requiring payment of the Purchase Price,
shares of Common Stock (to the extent available) and then, if necessary, cash,
which shares and/or cash have an aggregate value equal to the Spread. If the
Board of Directors of the Company shall determine in good faith that it is
likely that sufficient additional shares of Common Stock could be authorized
for issuance upon exercise in full of the Rights, the thirty (30) day period
set forth above may be extended to the extent necessary, but not more than
ninety (90) days after the Section ll(a)(ii) Trigger Date, in order that the
Company may seek stockholder approval for the authorization of such additional
shares (such period, as it may be extended, the "Substitution Period"). To
the extent that the Company determines that some action need be taken pursuant
to the first and/or second sentences of this Section ll(a)(iii), the Company
(x) shall provide, subject to Section 7(e) hereof, that such action shall
apply uniformly to all outstanding Rights, and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution Period
in order to seek any authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such first sentence
and to determine the value thereof. In the event of any such suspension, the
Company shall issue a public announcement stating that the exercisability of
the Rights has been temporarily suspended, as well as a public announcement at
such time as the suspension is no longer in effect. For purposes of this
Section ll(a)(iii), the value of the Common Stock shall be the current market
price (as determined pursuant to Section ll(d) hereof) per share of the Common
Stock on the Section ll(a)(ii) Trigger Date and the value of the Series A
Junior Participating Preferred Stock shall be deemed to be the fair value on
such day as determined in good faith by the Board of Directors. The Board of
Directors may, but shall not be required to, establish procedures to allocate
the right to receive Common Stock upon the exercise of Rights pursuant to this
Section ll(a)(iii).
(b) In case the Company shall fix a record date for the issuance of
rights (other than the Rights), options or warrants to all holders of
Preferred Stock entitling them to subscribe for or purchase (for a period
expiring within forty-five (45) calendar days after such record date)
Preferred Stock (or shares having the same rights, privileges and preferences
as the shares of Preferred Stock
17
<PAGE>
("Equivalent Preferred Stock")) or securities convertible into Preferred Stock
or Equivalent Preferred Stock at a price per share of Preferred Stock or per
share of Equivalent Preferred Stock (or having a conversion price per share,
if a security convertible into Preferred Stock or Equivalent Preferred Stock)
less than the current market price (as determined pursuant to Section ll(d)
hereof) per share of Preferred Stock on such record date, the Purchase Price
to be in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the number of shares of Preferred Stock
outstanding on such record date, plus the number of shares of Preferred Stock
which the aggregate offering price of the total number of shares of Preferred
Stock (and/or Equivalent Preferred Stock so to be offered and/or the aggregate
initial conversion price of the convertible securities so to be offered) would
purchase at such current market price, and the denominator of which shall be
the number of shares of Preferred Stock outstanding on such record date, plus
the number of additional shares of Preferred Stock and/or Equivalent Preferred
Stock to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible). In case
such subscription price may be paid by delivery of consideration part or all
of which may be in a form other than cash, the value of such consideration
shall be as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agent and the holders of the Rights.
Shares of Preferred Stock owned by or held for the account of the Company
shall not be deemed outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date is fixed,
and in the event that such rights or warrants are not so issued, the Purchase
Price shall be adjusted to be the Purchase Price which would then be in effect
if such record date had not been fixed.
(c) In case the Company shall fix a record date for a distribution to all
holders of Preferred Stock (including any such distribution made in connection
with a consolidation or merger in which the Company is the continuing
corporation) of evidences of indebtedness, cash (other than a regular
quarterly cash dividend out of the earnings or retained earnings of the
Company), assets (other than a dividend payable in Preferred Stock, but
including any dividend payable in stock other than Preferred Stock) or
subscription rights or warrants (excluding those referred to in Section ll(b)
hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the current
market price (as determined pursuant to Section ll(d) hereof) per share of
Preferred Stock on such record date, less the fair market value (as determined
in good faith by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent) of the portion
of the cash, assets or evidences of indebtedness so to be distributed or of
such subscription rights or warrants applicable to a share of Preferred Stock
and the denominator of which
18
<PAGE>
shall be such current market price (as determined pursuant to Section ll(d)
hereof) per share of Preferred Stock. Such adjustments shall be made
successively whenever such a record date is fixed, and in the event that such
distribution is not so made, the Purchase Price shall be adjusted to be the
Purchase Price which would have been in effect if such record date had not
been fixed.
(d)(i) For the purpose of any computation hereunder, other than
computations made pursuant to Section ll(a)(iii) hereof, the "current market
price" per share of Common Stock on any date shall be deemed to be the average
of the daily closing prices per share of such Common Stock for the thirty (30)
consecutive Trading Days (as such term is hereinafter defined) immediately
prior to such date, and for purposes of computations made pursuant to Section
ll(a) (iii) hereof, the "current market price" per share of Common Stock on
any date shall be deemed to be the average of the daily closing prices per
share of such Common Stock for the ten (10) consecutive Trading Days
immediately following such date; provided, however, that in the event that the
current market price per share of the Common Stock is determined during a
period following the announcement by the issuer of such Common Stock of (A) a
dividend or distribution on such Common Stock payable in shares of such Common
Stock or securities convertible into shares of such Common Stock (other than
the Rights), or (B) any subdivision, combination or reclassification of such
Common Stock, and prior to the expiration of the requisite thirty (30) Trading
Day or ten (10) Trading Day period, as set forth above, after the ex-dividend
date for such dividend or distribution, or the record date for such
subdivision, combination or reclassification, then, and in each such case, the
"current market price" shall be properly adjusted to take into account ex-
dividend trading. The closing price for each day shall be the last sale
price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or the Pacific Stock Exchange or, if the shares of Common Stock are
not listed or admitted to trading on the New York Stock Exchange or the
Pacific Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the shares of Common Stock are listed or admitted
to trading or, if the shares of Common Stock are not listed or admitted to
trading on any national securities exchange the last quoted price or, if not
so quoted, the average of the high bid and low asked prices in the over-the-
counter market, as reported by the National Association of Securities Dealers,
Inc. Automated Quotation System ("NASDAQ") or such other system then in use,
or, if on any such date the shares of Common Stock are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by
a professional
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<PAGE>
market maker making a market in the Common Stock selected by the Board of
Directors of the Company. If on any such date no market maker is making a
market in the Common Stock, the fair value of such shares on such date as
determined in good faith by the Board of Directors of the Company shall be
used. The term "Trading Day" shall mean a day on which the principal national
securities exchange on which the shares of Common Stock are listed or admitted
to trading is open for the transaction of business or, if the shares of Common
Stock are not listed or admitted to trading on any national securities
exchange, a Business Day. If the Common Stock is not publicly held or not so
listed or traded, "current market price" per share shall mean the fair value
per share as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the "current market
price" per share of Preferred Stock shall be determined in the same manner as
set forth above for the Common Stock in clause (i) of this Section ll(d)
(other than the last sentence thereof). If the current market price per share
of Preferred Stock cannot be determined in the manner provided above or if the
Preferred Stock is not publicly held or listed or traded in a manner described
in clause (i) of this Section ll(d), the "current market price" per share of
Preferred Stock shall be conclusively deemed to be an amount equal to 4,000
(as such number may be appropriately adjusted for such events as stock splits,
stock dividends and recapitalizations with respect to the Common Stock
occurring after the date of this Agreement) multiplied by the current market
price per share of the Common Stock. If neither the Common Stock nor the
Preferred Stock is publicly held or so listed or traded, "current market
price" per share of the Preferred Stock shall mean the fair value per share as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent
and shall be conclusive for all purposes. For all purposes of this Agreement,
the "current market price" of one four-thousandth of a share of Preferred
Stock shall be equal to the "current market price" of one share of Preferred
Stock divided by 4,000.
(e) Anything herein to the contrary notwithstanding, no adjustment in the
Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least one percent (1%) in the Purchase Price;
provided, however, that any adjustments which by reason of this Section ll(e)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 11 shall be
made to the nearest cent or to the nearest one-thousandth of a share of Common
Stock or other share or one forty-millionth of a share of Preferred Stock, as
the case may be. Notwithstanding the first sentence of this Section ll(e), an
adjustment required by this Section 11
20
<PAGE>
shall be made no later than the earlier of (i) three (3) years from the date
of the transaction which mandates such adjustments, or (ii) the Expiration
Date.
(f) If as a result of an adjustment made pursuant to Section ll(a)(ii) or
Section 13(a) hereof, the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock other than Preferred
Stock, thereafter the number of such other shares so receivable upon exercise
of any Right and the Purchase Price thereof shall be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as practicable
to the provisions with respect to the Preferred Stock contained in Sections
ll(a), (b), (c), (e), (g), (h), (i), (j), (k), and (m), and the provisions of
Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred Stock shall
apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of four-thousandths of a
share of Preferred Stock purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
section ll(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections ll(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence
the right to purchase, at the adjusted Purchase Price, that number of four-
thousandths of a share of Preferred Stock (calculated to the nearest one
forty-thousandth) obtained by (i) multiplying (x) the number of four-
thousandths of a share covered by a Right immediately prior to this
adjustment, by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price, and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in lieu of any adjustment in
the number of four-thousandths of a share of Preferred Stock purchasable upon
the exercise of a Right. Each of the Rights outstanding after the adjustment
in the number of Rights shall be exercisable for the number of four-
thousandths of a share of Preferred Stock for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one forty-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment to be
made. This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Rights Certificates have been
21
<PAGE>
issued, shall be at least ten (10) days later than the date of the public
announcement. If Rights Certificates have been issued, upon each adjustment
of the number of Rights pursuant to this Section ll(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of
Rights Certificates on such record date Rights Certificates evidencing,
subject to Section 14 hereof, the additional Rights to which such holders
shall be entitled as a result of such adjustment, or, at the option of the
Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by
the Company, new Rights Certificates evidencing all the Rights to which such
holders shall be entitled after such adjustment. Rights Certificates so to be
distributed shall be issued executed and countersigned in the manner provided
for herein (and may bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or the
number of four-thousandths of a share of Preferred Stock issuable upon the
exercise of the Rights, the Rights Certificates theretofore and thereafter
issued may continue to express the Purchase Price per one four-thousandth of a
share and the number of four-thousandths of a share which were expressed in
the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then stated value, if any, of the number of four-
thousandths of a share of Preferred Stock issuable upon exercise of the
Rights, the Company shall take any corporate action which may, in the opinion
of its counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable such number of four-thousandths of a share
of Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event the
issuance to the holder of any Right exercised after such record date the
number of four-thousandths of a share of Preferred Stock and other capital
stock or securities of the Company, if any, issuable upon such exercise over
and above the number of four-thousandths of a share of Preferred Stock and
other capital stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to such holder a
due bill or other appropriate instrument evidencing such holder's right to
receive such additional shares (fractional or otherwise) or securities upon
the occurrence of the event requiring such adjustment.
22
<PAGE>
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that in their good faith judgment the Board of Directors of the
Company shall determine to be advisable in order that any (i) consolidation or
subdivision of the Preferred Stock, (ii) issuance wholly for cash of any
shares of Preferred Stock at less than the current market price, (iii)
issuance wholly for cash of shares of Preferred Stock or securities which by
their terms are convertible into or exchangeable for shares of Preferred
Stock, (iv) stock dividends or (v) issuance of rights, options or warrants
referred to in this Section 11, hereafter made by the Company to holders of
its Preferred Stock shall not be taxable to such stockholders.
(n) The Company covenants and agrees that it shall not, at any time after
the Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section ll(o)
hereof), (ii) merge with or into any other Person (other than a Subsidiary of
the Company in a transaction which complies with Section ll(o) hereof), or
(iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction, or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to any other Person or Persons (other than
the Company and/or any of its Subsidiaries in one or more transactions each of
which complies with Section ll(o) hereof), if (x) at the time of or
immediately after such consolidation, merger, sale or transfer there are any
rights, warrants or other instruments or securities outstanding or agreements
in effect which would substantially diminish or otherwise eliminate the
benefits intended to be afforded by the Rights or (y) prior to, simultaneously
with or immediately after such consolidation, merger, sale or transfer, the
stockholders of the Person who constitutes, or would constitute, the
"Principal Party" for purposes of Section 13(a) hereof shall have received a
distribution of Rights previously owned by such Person or any of its
Affiliates and Associates.
(o) The Company covenants and agrees that, after the Distribution Date,
it will not, except as permitted by Section 23 or Section 26 hereof, take (or
permit any Subsidiary to take) any action if at the time such action is taken
it is reasonably foreseeable that such action will diminish substantially or
otherwise eliminate the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time after the Rights Dividend Declaration
Date and prior to the Distribution Date (i) declare a dividend on the
outstanding shares of Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding shares of Common Stock, or (iii) combine the
outstanding shares of Common Stock into a smaller number of shares, the
Purchase Price per Right immediately following such event shall be equal to
the product of the Purchase Price per Right immediately
23
<PAGE>
prior to such event multiplied by a fraction, the numerator which shall be the
total number of Rights outstanding immediately prior to such event and the
denominator of which shall be the total number of Rights outstanding
immediately following such event.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
----------------------------------------------------------
Whenever an adjustment is made as provided in Section 11 and Section 13
hereof, the Company shall (a) promptly prepare a certificate setting forth
such adjustment and a brief statement of the facts accounting for such
adjustment, (b) promptly file with the Rights Agent, and with each transfer
agent for the Preferred Stock and the Common Stock, a copy of such
certificate, and (c) mail a brief summary thereof to each holder of a Rights
Certificate (or, if prior to the Distribution Date, to each holder of a
certificate representing shares of Common Stock) in accordance with Section 25
hereof. Notwithstanding the foregoing sentence, the failure of the Company to
give such notice shall not affect the validity of or the force or effect of or
the requirement for such adjustment. The Rights Agent shall be fully
protected in relying on any such certificate and on any adjustment therein
contained. Any adjustment to be made pursuant to Sections 11 and 13 of this
Agreement shall be effective as of the date of the event giving rise to such
adjustment.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
------------------------------------------------------
Earning Power.
- -------------
(a) In the event ("Section 13(a) Event") that, following the Stock
Acquisition Date, directly or indirectly, (x) the Company shall consolidate
with, or merge with and into, any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section ll(o) hereof), and the
Company shall not be the continuing or surviving corporation of such
consolidation or merger, (y) any Person (other than a Subsidiary of the
Company in a transaction which complies with Section ll(o) hereof) shall
consolidate with, or merge with or into, the Company, and the Company shall be
the continuing or surviving corporation of such consolidation or merger, and,
in connection with such consolidation or merger, all or part of the
outstanding shares of Common Stock shall be changed into or exchanged for
stock or other securities of any other Person or cash or any other property,
or (z) the Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one transaction or a series
of related transactions, assets or earning power aggregating more than 50% of
the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any Person or Persons (other than the Company or any Subsidiary of
the Company in one or more transactions each of which complies with Section
ll(o) hereof), then, and in each such case, proper provisions shall be made so
that: (i) each holder of a Right, except as provided in Section 7(e) hereof,
shall thereafter have the right to receive, upon the exercise thereof at the
then current Purchase Price in accordance with the terms of this Agreement,
such number of validly authorized and issued, fully paid,
24
<PAGE>
non-assessable and freely tradable shares of Common Stock of the Principal
Party (as such term is hereinafter defined), not subject to any liens,
encumbrances, rights of first refusal or other adverse claims, as shall be
equal to the result obtained by (1) multiplying the then current Purchase
Price by the number of four-thousandths of a share of Preferred Stock for
which a Right is exercisable immediately prior to the first occurrence of a
Section 13 Event (or, if a Section ll(a)(ii) Event has occurred prior to the
first occurrence of a Section 13 event, multiplying the number of such four-
thousandths of a share of Preferred Stock for which a Right was exercisable
immediately prior to the first occurrence of a Section ll(a)(ii) Event by the
Purchase Price in effect immediately prior to such first occurrence), and (2)
dividing that product (which, following the first occurrence of a Section 13
Event, shall be referred to as the "Purchase Price" for each Right and for all
purposes of this Agreement) by 50% of the current market price (determined
pursuant to Section ll(d)(i) hereof) per share of the Common Stock of such
Principal Party on the date of consummation of such Section 13 Event (or the
fair market value on such date of other securities or property of the
Principal Party, as provided for herein); provided that the Purchase Price and
the number of shares of common stock of such Principal Party issuable upon
exercise of each Right shall be further adjusted as provided in this Agreement
to reflect any events occurring after the date of the first occurrence of a
Section 13 event; (ii) such Principal Party shall thereafter be liable for,
and shall assume, by virtue of such Section 13 Event, all the obligations and
duties of the Company pursuant to this Agreement; (iii) the term "Company"
shall thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11 hereof shall apply
only to such Principal Party following the first occurrence of a Section 13
Event; (iv) such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of shares of its Common
Stock) in connection with the consummation of any such transaction as may be
necessary to assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to its shares of Common Stock
thereafter deliverable upon the exercise of the Rights; provided, however,
that upon the subsequent occurrence of any merger, consolidation, sale of all
or substantially all assets, recapitalization, reclassification of shares,
reorganization or other extraordinary transaction in respect of such Principal
Party, each holder of a Right shall thereupon be entitled to receive, upon
exercise of a Right and payment of the Purchase Price, such cash, shares,
rights, warrants and other property which such holder would have been entitled
to receive had he, at the time of such transaction, owned the shares of Common
Stock of the Principal Party purchasable upon the exercise of a Right, and
such Principal Party shall take such steps (including, but not limited to,
reservation of shares of stock) as may be necessary to permit the subsequent
exercise of the Rights in accordance with the terms hereof for such cash,
shares, rights, warrants and other property; and (v) the provisions of Section
ll(a)(ii) hereof shall be of no effect following the first occurrence of any
Section 13 Event.
25
<PAGE>
(b) Principal Party" shall mean:
(i) in the case of any transaction described in clause (x) or (y) of
the first sentence of Section 13(a): (A) the Person that is the issuer of any
securities into which shares of Common Stock of the Company are converted in
such merger or consolidation, or, if there is more than one such issuer, the
issuer whose Common Stock has the greatest market value or (B) if no
securities are so issued, (x) the Person that is the other party to such
merger or consolidation and survives said merger or consolidation, or, if
there is more than one such Person, the Person whose Common Stock has the
greatest market value or (y) if the Person that is the other party to the
merger or consolidation does not survive the merger or consolidation, the
Person that does survive the merger or consolidation (including the Company if
it survives); and
(ii) in the case of any transaction described in clause (z) of the first
sentence of Section 13(a), the Person that is the party receiving the greatest
portion of the assets or earning power transferred pursuant to such
transaction or transactions, or, if each Person that is a party to such
transaction or transactions receives the same portion of the assets or earning
power so transferred or if the Person receiving the greatest portion of the
assets or earning power cannot be determined, whichever of such Persons as is
the issuer of Common Stock having the greatest market value of shares
outstanding; provided, however, that in any such case, (1) if the Common Stock
of such Person is not at such time and has not been continuously over the
preceding twelve (12) month period registered under Section 12 of the Exchange
Act, and such Person is a direct or indirect subsidiary of another Person the
Common Stock of which is and has been so registered, "Principal Party" shall
refer to such other Person; and (2) if such Person is a Subsidiary, directly
or indirectly, of more than one Person, the Common Stocks of two or more of
which are and have been so registered, "Principal Party" shall refer to
whichever of such persons is the issuer of the Common Stock having the
greatest aggregate market value.
(c) If, for any reason, the Rights cannot be exercised for the Common
Stock of such Principal Party, then a holder of Rights will have the right to
exchange each Right for cash from such Principal Party in an amount equal to
twice the Purchase Price as calculated above. If, for any reason, the
foregoing formulation cannot be applied to determine the cash amount to which
the holder of Rights is entitled, then the Continuing Directors on the Board
of Directors of the Company shall determine such amount reasonably and in good
faith.
(d) The Company shall not consummate any such consolidation, merger, sale
or transfer unless the Principal Party shall have a sufficient number of
26
<PAGE>
authorized shares of its Common Stock which have not been issued or reserved
for issuance to permit the exercise in full of the Rights in accordance with
this Section 13 and unless prior thereto the Company and such Principal Party
shall have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in paragraphs (a), (b) and (c) of this
Section 13 and further providing that, as soon as practicable after the date
of any consolidation, merger, sale or transfer mentioned in paragraph (a) of
this Section 13, the Principal Party will:
(i) prepare and file a registration statement under the Act, with
respect to the Rights and the securities purchasable upon exercise of the
Rights on an appropriate form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as practicable after
such filing and (B) remain effective (with a prospectus at all times meeting
the requirements of the Act) until the Expiration Date and similarly comply
with applicable state securities laws;
(ii) will deliver to holders of the Rights historical financial
statements of the Principal Party and each of its Affiliates which comply in
all respects with the requirements for registration on Form 10 (or any
successor form) under the Exchange Act;
(iii) use its best efforts, if the Common Stock of the Principal Party
shall become listed on a national securities exchange, to list (or continue
the listing of) the Rights and the securities purchasable upon exercise of the
Rights on such securities exchange and, if the Common Stock of the Principal
Party shall not be listed on a national securities exchange, to cause the
Rights and the securities purchasable upon exercise of the Rights to be
reported by NASDAQ or such other system then in use; and
(iv) obtain waivers of any rights of first refusal or preemptive
rights in respect of the shares of Common Stock of the Principal Party subject
to purchase upon exercise of outstanding Rights.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or transfers. In the event that a Section
13 Event shall occur at any time after the occurrence of a Section ll(a)(ii)
Event, the Rights which have not theretofore been exercised shall thereafter
become exercisable in the manner described in Section 13(a).
(e) Notwithstanding anything in this Agreement to the contrary, Section
13 shall not be applicable to a transaction described in subparagraphs (x) and
(y) of Section 13(a) if (i) such transaction is consummated with a Person or
Persons who acquired shares of Common Stock pursuant to a tender offer or
exchange offer for all outstanding shares of Common Stock which complies with
the provisions of
27
<PAGE>
Section ll(a)(ii)(A) hereof (or a wholly owned subsidiary of any such Person
or Persons), (ii) the price per share of Common Stock offered in such
transaction is not less than the price per share of Common Stock paid to all
holders of shares of Common Stock whose shares were purchased pursuant to such
tender offer or exchange offer, and (iii) the form of consideration being
offered to the remaining holders of shares of Common Stock pursuant to such
transaction is the same as the form of consideration paid pursuant to such
tender offer or exchange offer. Upon consummation of any such transaction
contemplated by this Section 13(e), all Rights hereunder shall expire.
Section 14. Fractional Rights and Fractional Shares.
---------------------------------------
(a) The Company shall not be required to issue fractions of Rights,
except prior to the Distribution Date as provided in Section ll(p) hereof, or
to distribute Rights Certificates which evidence fractional Rights. In lieu
of such fractional Rights, there shall be paid to the registered holders of
the Rights Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For purposes of this Section 14(a),
the current market value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price of
the Rights for any day shall be the last sale price, regular way, or, in case
no such sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or Pacific Stock Exchange or, if the
Rights are not listed or admitted to trading on the New York Stock Exchange or
Pacific Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Rights are listed or admitted to trading, or
if the Rights are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by NASDAQ
or such other system then in use or, if on any such date the Rights are not
quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the
Rights selected by the Board of Directors of the Company. If on any such date
no such market maker is making a market in the Rights the fair value of the
Rights on such date as determined in good faith by the Board of Directors of
the Company shall be used.
(b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions which are integral multiples of one
four-thousandth of a share of Preferred Stock) upon exercise of the Rights or
to distribute certificates which evidence fractional shares of Preferred Stock
(other than fractions
28
<PAGE>
which are integral multiples of one four-thousandth of a share of Preferred
Stock). In lieu of fractional shares of Preferred Stock that are not integral
multiples of one four-thousandth of a share of Preferred Stock, the Company
may pay to the registered holders of Rights Certificates at the time such
Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one four-thousandth of a share of
Preferred Stock. For purposes of this Section 14(b), the current market value
of one four-thousandth of a share of Preferred Stock shall be one four-
thousandth of the current market value of a share of Preferred Stock (as
determined pursuant to Section ll(d)(ii) hereof) on the Trading Day
immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event, the Company shall not
be required to issue fractions of shares of Common Stock upon exercise of the
Rights or to distribute certificates which evidence fractional shares of
Common Stock. In lieu of fractional shares of Common Stock, the Company may
pay to the registered holders of Rights Certificates at the time such Rights
are exercised as herein provided an amount in cash equal to the same fraction
of the current market value of one (1) share of Common Stock. For purposes of
this Section 14(c), the current market value of one share of Common Stock
shall be the closing price of one share of Common Stock (as determined
pursuant to Section ll(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise.
(d) The holder of a Right by the acceptance of the Rights expressly
waives his right to receive any fractional Rights or any fractional shares
upon exercise of a Right, except as permitted by this Section 14.
Section 15. Rights of Action. All rights of action in respect of this
----------------
Agreement, other than rights of action vested in the Rights Agent pursuant to
Section 18 hereof, are vested in the respective registered holders of the
Rights Certificates (and, prior to the Distribution Date, the registered
holders of the Common Stock); and any registered holder of any Rights
Certificate (or, prior to the Distribution Date, of the Common Stock), without
the consent of the Rights Agent or of the holder of any other Rights
Certificate (or, prior to the Distribution Date, of the Common Stock), may, in
his own behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, his right to exercise the Rights evidenced by
such Rights Certificate in the manner provided in such Rights Certificate and
in this Agreement. Without limiting the foregoing or any remedies available
to the holders of Rights, it is specifically acknowledged that the holders of
Rights would not have an adequate remedy at law for any breach of this
Agreement and shall be entitled to specific performance of the obligations
hereunder and injunctive relief against actual or threatened violations of the
obligations hereunder of any Person subject to this Agreement.
29
<PAGE>
Section 16. Agreement of Rights Holders. Every holder of a Right, by
---------------------------
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable only
in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the office or
offices of the Rights Agent designated for such purposes, duly endorsed or
accompanied by a proper instrument of transfer and with the appropriate forms
and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the Company and the
Rights Agent may deem and treat the person in whose name a 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 (notwithstanding any notations of ownership or writing on the Rights
Certificates or the associated Common Stock certificate made by anyone other
than the Company or the Rights Agents) for all purposes whatsoever, and
neither the Company nor the Rights Agent, subject to the last sentence of
Section 7(e) hereof, shall be required to be affected by any notice to the
contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Rights Agent shall have any liability to any holder of a
Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining
Performance of such obligation; provided, however, the Company must use its
best efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a Stockholder. No
--------------------------------------------------
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purposes the holder of the number of four-
thousandths of a share of Preferred Stock or any other securities of the
Company which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights Certificate,
as such, any of the rights of a stockholder of the Company or any right to
vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders
30
<PAGE>
(except as provided in Section 24 hereof), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by such
Rights Certificate shall have been exercised in accordance with the provisions
hereof.
Section 18. Concerning the Rights Agent.
---------------------------
(a) The Company agrees to pay to the Rights Agent reasonable compensation
for all services rendered by it hereunder and, from time to time, on demand of
the Rights Agent, its reasonable expenses and counsel fees and disbursements
and other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability, or expense, incurred without negligence, bad
faith or willful misconduct on the part of the Rights Agent, for anything done
or omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of
defending against any claim of liability in the premises. Notwithstanding
anything in this Agreement to the contrary, in no event shall the Rights Agent
be liable for special, indirect or consequential loss or damage of any kind
whatsoever, even if the Rights Agent has been advised of the likelihood of
such loss or damage and regardless of the form of action.
(b) The Rights Agent shall be protected and shall incur no liability for
or in respect of any action taken, suffered or omitted by it in connection
with its administration of this Agreement in reliance upon any Rights
Certificate or certificate for Common Stock or for other securities of the
Company, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement, or
other paper or document believed by it to be genuine and to be signed,
executed and, where necessary, verified or acknowledged, by the proper Person
or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
---------------------------------------------------------
(a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust or stock transfer business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on
the part of any of the parties hereto; provided, however, that such
corporation would be eligible for appointment as a successor Rights Agent
under the provisions of Section 21 hereof. In case at the time such successor
Rights Agent shall succeed to the agency created by this Agreement, any of the
Rights Certificates shall have been
31
<PAGE>
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor or
in the name of the successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed and
at such time any of the Rights Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Rights Certificates so countersigned; and in case at that
time any of the Rights Certificates shall not have been countersigned, the
Rights Agent may countersign such Rights Certificates either in its prior name
or in its changed name; and in all such cases such Rights Certificates shall
have the full force Provided in the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
----------------------
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and the
determination of "current market price") be proved or established by the
Company prior to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a certificate
signed by the Chairman of the Board, the President, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary
of the Company and delivered to the Rights Agent; and such certificate shall
be full authorization to the Rights Agent for any action taken or suffered in
good faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of the
statements of fact or recitals contained in this Agreement or in the Rights
Certificates or be
32
<PAGE>
required to verify the same (except as to its countersignature on such Rights
Certificates), but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Rights Certificate (except its countersignature thereof); nor
shall it be responsible for any adjustment required under the provisions of
Section 11 or Section 13 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 evidenced by Rights Certificates after receipt of the certificate
described in Section 12 hereof setting forth any such adjustment); nor shall
it by any act hereunder be deemed to make any representation or warranty as to
the authorization or reservation of any shares of Common Stock or Preferred
Stock to be issued pursuant to this Agreement or any Rights Certificates or as
to whether any shares of Common Stock or Preferred Stock will, when so issued,
be validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the President, any Vice President, the Secretary, any
Assistant Secretary, the Treasurer or any Assistant Treasurer of the Company,
and to apply to such officers for advice or instructions in connection with
its duties, and it shall not be liable for any action taken or suffered to be
taken by it in good faith in accordance with instructions of any such officer.
(h) The Rights Agent and any stockholder, director, officer or employee
of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction
in which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights
Agent under this Agreement. Nothing herein shall preclude the Rights Agent
from acting in any other capacity for the Company or for any other legal
entity.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable
or accountable
33
<PAGE>
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, however, reasonable care was exercised in the selection
and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds
or adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) If, with respect to any Rights Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase as the case may be, has either not
been completed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to
such requested exercise of transfer without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
----------------------
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty (30) days' notice in writing mailed to the Company, and to each
transfer agent of the Common Stock and Preferred Stock by registered or
certified mail, and to the holders of the Rights Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent
(with or without cause) upon thirty (30) days' notice in writing, mailed to
the Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Stock and Preferred Stock, by registered or
certified mail, and to the holders of the Rights Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise
become incapable of acting, the Company shall appoint a successor to the
Rights Agent. If the Company shall fail to make such appointment within a
period of thirty (30) days after giving notice of such removal or after it has
been notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Rights Certificate (who
shall, with such notice, submit his Rights Certificate for inspection by the
Company), then the incumbent Rights Agent or any registered holder of any
Rights Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (a) a corporation
organized and doing business under the laws of the United States or of any
other state of the United States in good standing, which is authorized under
such laws to exercise corporate trust or stock transfer powers or (b) an
affiliate of a corporation described in clause (a) of this sentence. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as
Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver and
34
<PAGE>
transfer to the successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance, conveyance, act or
deed necessary for the purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Stock and the
Preferred Stock, and mail a notice thereof in writing to the registered
holders of the Rights Certificates. Failure to give any notice provided for
in this Section 21, however, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New 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 Purchase Price and the number or kind or class of shares or
other securities or property purchasable under the Rights Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of shares of Common Stock following the Distribution
Date and prior to the redemption or expiration of the Rights, the Company (a)
shall, with respect to shares of Common Stock so issued or sold pursuant to
the exercise of stock options or under any employee plan or arrangement, or
upon the exercise, conversion or exchange of securities hereinafter issued by
the Company, and (b) may, in any other case, if deemed necessary or
appropriate by the Board of Directors of the Company, issue Rights
Certificates representing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i) no such Rights Certificate
shall be issued if, and to the extent that, the Company shall be advised by
counsel that such issuance would create a significant risk of material adverse
tax consequences to the Company or the Person to whom such Rights Certificate
would be issued, and (ii) no such Rights Certificate shall be issued if, and
to the extent that, appropriate adjustment shall otherwise have been made in
lieu of the issuance thereof.
Section 23. Redemption and Termination.
--------------------------
(a) The Board of Directors of the Company may, at its option, at any time
prior to the close of business on the earliest of (i) the tenth business day
after the date of the first Section ll(a)(ii) Event, (ii) the date of the
first Section 13(a) event, or (iii) the Final Expiration Date, redeem all but
not less than all the then outstanding Rights at a redemption price of $0.01
per Right, as such amount may be appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date hereof
(such redemption price being hereinafter referred to as the "Redemption
Price"). The Company may, at its option, pay the Redemption Price in cash,
shares of Common Stock (based on the "current market price", as defined in
Section ll(d)(i) hereof, of the Common Stock at the time of redemption) or any
other form of consideration deemed appropriate by the Board of Directors.
35
<PAGE>
(b) Immediately upon the action of the Board of Directors of the Company
ordering the redemption of the Rights, and without any further action and
without any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right so held, without any interest thereon.
Promptly after the action of the Board of Directors ordering the redemption of
the Rights, the Company shall give notice of such redemption to the Rights
Agent and the holders of the then outstanding Rights by mailing such notice to
all such holders at each holder's last address as it appears upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the Transfer Agent for the Common Stock. Any notice which is mailed
in the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state the method by
which the payment of the Redemption Price will be made. The failure to give
notice required by this Section 23(b) or any defect therein shall not affect
the legality or validity of the action taken by the Company.
Section 24. Notice of Certain Events.
(a) In case the Company shall propose, at any time after the Distribution
Date, (i) to pay any dividend payable in stock of any class to the holders of
Preferred Stock or to make any other distribution to the holders of Preferred
Stock (other than a regular quarterly cash dividend out of earnings or
retained earnings of the Company), or (ii) to offer to the holders of
Preferred Stock rights or warrants to subscribe for or to purchase any
additional shares of Preferred Stock or shares of stock of any class or any
other securities, rights or options, or (iii) to effect any reclassification
of its Preferred Stock (other than a reclassification involving only the
subdivision of outstanding shares of Preferred Stock), or (iv) to effect any
consolidation or merger into or with any other Person (other than a Subsidiary
of the Company in a transaction which complies with Section ll(o) hereof), or
to effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one transaction or a
series of related transactions, of more than 50% of the assets or earning
power of the Company and its Subsidiaries (taken as a whole) to any other
Person or Persons (other than the Company and/or any of its Subsidiaries in
one or more transactions each of which complies with Section ll(o) hereof), or
(v) to effect the liquidation, dissolution or winding up of the Company, then,
in each such case, the Company shall give to each holder of a Rights
Certificate, to the extent feasible and in accordance with Section 25 hereof,
a notice of such proposed action, which shall specify the record date for the
purposes of such stock dividend, distribution of rights or warrants, or the
date on which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the shares of Preferred Stock, if any
such date is to be fixed, and such notice shall be so given in the case of any
action covered by clause (i) or (ii) above at least ten (10) days prior to the
record date for determining holders of the shares of Preferred Stock
36
<PAGE>
for purposes of such action, and in the case of any such other action, at
least ten (10) days prior to the date of the taking of such proposed action or
the date of participation therein by the holders of the shares of Preferred
Stock whichever shall be the earlier. The failure to give notice required by
this Section 24 or any defect therein shall not affect the legality or
validity of the action taken by the Company or the vote upon any such action.
(b) In case any of the events set forth in Section ll(a)(ii) hereof shall
occur, then, in any such case, (i) the Company shall as soon as practicable
thereafter give to each holder of a Rights Certificate, to the extent feasible
and in accordance with Section 25 hereof, a notice of the occurrence of such
event, which shall specify the event and the consequences of the event to
holders of Rights under Section ll(a)(ii) hereof, and (ii) all references in
the preceding paragraph to Preferred Stock shall be deemed thereafter to refer
to Common Stock and/or, if appropriate, other securities.
Section 25. Notices. Notices or demands authorized by this Agreement to
-------
be given or made by the Rights Agent or by the holder of any Rights
Certificate to or on the Company shall be sufficiently given or made if sent
by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Rights Agent) as follows:
Computer Sciences Corporation
2100 East Grand Avenue
El Segundo, California 90245
Attention: Hayward D. Fisk, Vice President,
General Counsel and Secretary
Subject to the provisions of Section 21, any notice or demand authorized by
this Agreement to be given or made by the Company or by the holder of any
Rights Certificate to or on the Rights Agent shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
ChaseMellon Shareholder Services, L.L.C.
85 Challenger Road
Overpeck Centre
Ridgefield Park, New Jersey 07660
Attention: Reorganization Department
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Common Stock) shall be sufficiently given or made if sent by first-
class mail, postage prepaid, addressed to such holder at the address of such
holder as shown on the registry books of the Transfer Agent.
37
<PAGE>
Section 26. Supplements and Amendments. Prior to the close of business
--------------------------
on the earliest of (i) the tenth business day after the date of the First
Section ll(a)(ii) Event, (ii) the date of the first Section 13(a) Event, or
(iii) the Final Expiration Date and, in each case subject to extension by the
Board of Directors by amendment hereof, and subject to the penultimate
sentence of this Section 26, the Company may, in its sole and absolute
discretion and the Rights Agent shall, if the Company so directs, supplement
or amend any provision of this Agreement without the approval of any holders
of certificates representing shares of Common Stock. Thereafter, subject to
the penultimate sentence of this Section 26, the Company may and the Rights
Agent shall, if the Company so directs, supplement or amend this Agreement
without the approval of any holders of Rights Certificates in order (i) to
cure any ambiguity, (ii) to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provisions
herein, or (iii) to change or supplement any provision hereunder in any manner
which the Company may deem necessary or desirable and which shall not
adversely affect the interests of the holders of Rights Certificates (other
than an Acquiring Person or an Affiliate or Associate of any such Person);
provided, this Agreement may not be supplemented or amended to lengthen,
pursuant to clauses (i) or (ii) of this sentence, (A) a time period relating
to when the Rights may be redeemed or this Agreement amended at the sole and
absolute discretion of the Company at such time as the Rights are not then
redeemable, or (B) any other time period unless such lengthening is for the
purpose of protecting, enhancing or clarifying the rights of, and/or the
benefits to, the holders of Rights (other than any Acquiring Person and its
Associates or Affiliates). Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed supplement
or amendment is in compliance with the terms of this Section 26, the Rights
Agent shall execute such supplement or amendment. Notwithstanding anything
contained in this Agreement to the contrary, no supplement or amendment shall
be made which changes the Redemption Price or the Final Expiration Date.
Prior to the Distribution Date, the interests of the holders of Rights shall
be deemed coincident with the interests of the holders of Common Stock.
Section 27. Successors. All the covenants and provisions of this
----------
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 28. Determination and Actions by the Board of Directors. etc.
--------------------------------------------------------
For all purposes of this Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common
Stock of which any Person is the Beneficial Owner, shall be made in accordance
with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and
Regulations under the Exchange Act. The Board of Directors of the Company
(or, as set forth herein, certain specified members thereof) shall have the
exclusive power and authority to administer this
38
<PAGE>
Agreement and to exercise all rights and powers specifically granted to the
Board of Directors of the Company or to the Company, or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including, but not limited to, a
determination to redeem or not redeem the Rights, or to amend 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 of Directors of the Company 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 any
member of the Board of Directors to any liability to the holders of the Rights
or to any other Person.
Section 29. Benefits of this Agreement. Nothing in this Agreement shall
--------------------------
be construed to give to any Person other than the Company, the Rights Agent
and the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the Rights Agent
and the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock).
Section 30. Severability. If any term, provision, covenant or
------------
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated; provided, however, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant or
restriction is held by such court or authority to be invalid, void or
unenforceable and the Board of Directors of the Company determines in its good
faith judgment that severing the invalid language from this Agreement would
adversely affect the purpose or effect of this Agreement, the right of
redemption set forth in Section 23 hereof shall be reinstated and shall not
expire until the close of business on the tenth business day following the
date of such determination by the Board of Directors of the Company.
Section 31. Governing Law. This Agreement, each Right and each Rights
-------------
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Nevada and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts
made and to be performed entirely within such State.
39
<PAGE>
Section 32. Counterparts. This Agreement may be executed in any number
------------
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
Section 33. Descriptive Headings. Descriptive headings of the several
--------------------
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
40
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
Attest: COMPUTER SCIENCES CORPORATION
By: /s/Hayward D. Fisk By: /s/Van B. Honeycutt
___________________________ ___________________________
Hayward D. Fisk Van B. Honeycutt
Secretary President
[ Seal ]
Attest: CHASEMELLON SHAREHOLDER
SERVICES, L.L.C.
By: /s/James E. Hagan By: /s/Barry S. Rosenthal
___________________________ ___________________________
James E. Hagan Barry S. Rosenthal
Team Leader Officer
[ Seal ]
41
<PAGE>
Exhibit A
---------
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF DESIGNATIONS
OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
$1.00 Par Value
OF
COMPUTER SCIENCES CORPORATION
Pursuant to Section 78.195 of the General Corporation
Law of the State of Nevada
We, Hayward D. Fisk, Vice President, and Stephen E. Johnson, Assistant
Secretary, of COMPUTER SCIENCES CORPORATION, a corporation organized and
existing under the General Corporation Law of the State of Nevada, in
accordance with the provisions of Section 78.195 thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by
the Restated Articles of Incorporation of the Corporation: (i) the Board on
December 21, 1988 adopted a resolution creating a series of Preferred Stock,
par value $1.00 per share, designated as Series A Junior Participating
Preferred Stock, and caused to be filed with the Nevada Secretary of State on
January 13, 1989 a Certificate of Designations with respect thereto; and (ii)
the Board on October 30, 1995 amended and restated such resolution in its
entirety and caused to be filed with the Nevada Secretary of State on November
3, 1995 a Certificate of Amendment of Certificate of Designations with respect
to the Series A Junior Participating Preferred Stock; and
That on June 17, 1996, prior to the issuance of any shares of Series A
Junior Participating Preferred Stock, the Board of Directors, pursuant to the
authority conferred upon the Board by the Restated Articles of Incorporation,
again amended and restated such resolution in its entirety, effective as of
August 1, 1996, as follows:
RESOLVED, that pursuant to the authority vested in the Board of Directors
of the Corporation in accordance with the provisions of its Restated Articles
of Incorporation, a series of Preferred Stock of the Corporation be, and it
hereby is, created, and that the designation and amount thereof and the voting
powers, preferences and relative, participating, optional and other special
rights of the shares of such series, and the qualifications, limitations or
restrictions thereof, are as follows:
<PAGE>
Section 1. Designation and Amount. The shares of such series shall be
----------------------
designated as Series A Junior Participating Preferred Stock, par value $1.00
per share (the "Series A Preferred Stock"), and the number of shares
constituting such series shall be Two Hundred Thousand (200,000).
Section 2. Dividends and Distributions.
---------------------------
(a) The holders of shares of Series A Preferred Stock, in preference to
the holders of shares of Common Stock, $1.00 per share, of the Corporation
(the "Common Stock") and of any other junior stock of the Corporation that may
be outstanding, shall be entitled to receive, when, as and if declared by the
Board of Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the fifteenth day of January, April, July and
October in each year (each such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend Payment
Date after the first issuance of a share or fraction of a share of Series A
Preferred Stock, in an amount per share (rounded to the nearest cent) equal to
the greater of (i) $1.00 per share ($4.00 per annum), or (ii) subject to the
provision for adjustment hereinafter set forth, 4,000 times the aggregate per
share amount of all cash dividends, and 4,000 times the aggregate per share
amount (payable in kind) of all non-cash dividends or other distributions,
other than a dividend payable in shares of Common Stock, or a subdivision of
the outstanding shares of Common Stock (by reclassification or otherwise),
declared on the Common Stock since the immediately preceding Quarterly
Dividend Payment Date or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of Series A
Preferred Stock. In the event that the Corporation shall at any time declare
or pay any dividend on 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) into a greater or lesser
number of shares of Common Stock, then and in each such event, the amount to
which holders of shares of Series A Preferred Stock were entitled immediately
prior to such event under clause (ii) 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) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph (a) of this Section 2
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided, however,
that in the event no dividend or distribution shall have been declared on the
Common Stock during the period between any Quarterly Dividend Payment Date and
the next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per
share ($4.00 per annum)
2
<PAGE>
on the Series A Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares of Series A Preferred Stock,
unless the date of issue of such shares is prior to the record date for the
first Quarterly Dividend Payment Date, in which case dividends on such shares
shall begin to accrue from the date of issue of such shares, or unless the
date of issue is a Quarterly Dividend Payment Date or is a date after the
record date for the determination of holders of shares of Series A Preferred
Stock entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall not bear
interest. Each share of Preferred Stock shall rank on a parity with each
other share of Preferred Stock, regardless of series, with respect to the
payment of dividends at the respectively designated rates. Dividends paid on
the shares of Series A Preferred Stock in an amount less than the total amount
of such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon, which record
date shall be no more than 60 days prior to the date fixed for the payment
thereof.
Section 3. Voting Rights. The holders of shares of Series A Preferred
-------------
Stock shall have the following voting rights:
(a) Each share of Series A Preferred Stock shall entitle the holder
thereof to 1 vote with the right to cumulate votes in certain instances in the
manner set forth in the Restated Articles of Incorporation of the Corporation
on all matters submitted to a vote of the stockholders of the Corporation. In
the event that the Corporation shall at any time declare or pay any dividend
on 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
and in each such event, the number of votes per share to which holders of
shares of Series A Preferred Stock are entitled shall be increased, in the
case of a subdivision, or in the case of such a dividend, or reduced, in the
case of a combination, in the same proportion as the subdivision, increase by
dividend, or combination of the Common Stock.
(b) Except as otherwise provided in the Restated Articles of
Incorporation of the Corporation or herein or by law, the holders of shares of
Series A Preferred
3
<PAGE>
Stock and the holders of shares of Common Stock shall vote together as one
class on all matters submitted to a vote of stockholders of the Corporation.
(c) In addition, the holders of shares of Series A Preferred Stock shall
have the following special voting rights:
In the event that at any time dividends on Series A Preferred Stock,
whenever accrued and whether or not consecutive, shall not have been paid or
declared and a sum sufficient for the payment thereof set aside, in an amount
equivalent to six quarterly dividends on all shares of Series A Preferred
Stock at the time outstanding, then and in each such event, the holders of
shares of Series A Preferred Stock and each other series of preferred stock
now or hereafter issued that shall be accorded such class voting right by the
Board of Directors and that shall have the right to elect two directors as the
result of a prior or subsequent default in payment of dividends on such series
(each such other series being hereinafter called "Other Series of Preferred
Stock"), voting separately as a class without regard to series, shall be
entitled to elect two directors at the next annual meeting of stockholders of
the Corporation, in addition to the directors to be elected by the holders of
all shares of the Corporation entitled to vote for the election of directors,
and the holders of all shares (including the Series A Preferred Stock)
otherwise entitled to vote for directors, voting separately as a class, shall
be entitled to elect the remaining members of the Board of Directors, provided
that the Series A Preferred Stock and each Other Series of Preferred Stock,
voting as a class, shall not have the right to elect more than two directors.
Such special voting right of the holders of shares of Series A Preferred Stock
may be exercised until all dividends in default on the Series A Preferred
Stock shall have been paid in full or declared and funds sufficient therefor
set aside, and when so paid or provided for, such special voting right of the
holders of shares of Series A Preferred Stock shall cease, but subject always
to the same provisions for the vesting of such special voting rights in the
event of any such future dividend default or defaults. At any time after such
special voting rights shall have so vested in the holders of shares of Series
A Preferred Stock, the Secretary of the Corporation may, and upon the written
request of the holders of record of 10% or more in number of the shares of
Series A Preferred Stock and each Other Series of Preferred Stock then
outstanding addressed to the Secretary at the principal executive office of
the Corporation shall, call a special meeting of the holders of shares of
Preferred Stock so entitled to vote, for the election of the directors to be
elected by them as herein provided, to be held within 60 days after such call
and at the place and upon the notice provided by law and in the Bylaws for the
holding of meetings of stockholders; provided, however, that the Secretary
shall not be required to call such special meeting in the case of any such
request received less than 90 days before the date fixed for any annual
meeting of stockholders, and if in such case such special meeting is not
called or held, the holders of shares of Preferred Stock so entitled to vote
shall be entitled to exercise the special voting rights provided in this
paragraph
4
<PAGE>
at such annual meeting. If any such special meeting required to be called as
above provided shall not be called by the Secretary within 30 days after
receipt of any such request, then the holders of record of 10% or more in
number of the shares of Series A Preferred Stock and each Other Series of
Preferred Stock then outstanding may designate in writing one of their number
to call such meeting, and the person so designated may, at the expense of the
Corporation, call such meeting to be held at the place and upon the notice
given by such person, and for that purpose shall have access to the stock
books of the Corporation. No such special meeting and no adjournment thereof
shall be held on a date later than 60 days before the annual meeting of
stockholders. If, at any meeting so called or at any annual meeting held
while the holders of shares of Series A Preferred Stock have the special
voting rights provided for in this paragraph, the holders of not less than 40%
of the shares of Series A Preferred Stock and each Other Series of Preferred
Stock then outstanding are present in person or by proxy, which percentage
shall be sufficient to constitute a quorum for the election of additional
directors as herein provided, the then authorized number of directors of the
Corporation shall be increased by two, as of the time of such special meeting
or the time of the first such annual meeting held while such holders have
special voting rights and such quorum is present, and the holders of shares of
Series A Preferred Stock and each Other Series of Preferred Stock, voting as a
class, shall be entitled to elect the additional directors so provided for.
If the directors of the Corporation are then divided into classes under
provisions of the Restated Articles of Incorporation of the Corporation or the
Bylaws, the two additional directors shall be members of those respective
classes of directors in which a vacancy is created as a result of such
increase in the authorized number of directors. If the foregoing expansion of
the size of the Board of Directors shall not be valid under applicable law,
then the holders of shares of Series A Preferred Stock and of each Other
Series of Preferred Stock, voting as a class, shall be entitled, at the
meeting of stockholders at which they would otherwise have voted, to elect
directors to fill any then existing vacancies on the Board of Directors, and
shall additionally be entitled, at such meeting and each subsequent meeting of
stockholders at which directors are elected, to elect all of the directors
then being elected until by such class vote two members of the Board of
Directors have been so elected. Upon the election at such meeting by the
holders of shares of Series A Preferred Stock and each Other Series of
Preferred Stock, voting as a class, of the directors they are entitled so to
elect, the persons so elected, together with such persons as may be directors
or as may have been elected as directors by the holders of all shares
(including Series A Preferred Stock) otherwise entitled to vote for directors,
shall constitute the duly elected directors of the Corporation. The
additional directors so elected by holders of shares of Series A Preferred
Stock and each Other Series of Preferred Stock, voting as a class, shall serve
until the next annual meeting or until their respective successors shall be
elected and qualified, or if any such director is a member of a class of
directors under provisions dividing the directors into classes, each such
director shall serve until the annual meeting at which the term of office of
such director's class shall
5
<PAGE>
expire or until such director's successor shall be elected and shall qualify,
and at each subsequent meeting of stockholders at which the directorship of
any director elected by the vote of holders of shares of Series A Preferred
Stock and each other Series of Preferred Stock under the special voting rights
set forth in this paragraph is up for election, said special class voting
rights shall apply in the reelection of such director or in the election of
such director's successor; provided, however, that whenever the holders of
shares of Series A Preferred Stock and each Other Series of Preferred Stock
shall be divested of the special rights to elect two directors as above
provided, the terms of office of all persons elected as directors by the
holders of shares of Series A Preferred Stock and each Other Series of
Preferred Stock, voting as a class, or elected to fill any vacancies resulting
from the death, resignation, or removal of directors so elected by the holders
of shares of Series A Preferred Stock and each Other Series of Preferred
Stock, shall forthwith terminate (and, if applicable, the number of directors
shall be reduced accordingly). If, at any time after a special meeting of
stockholders or an annual meeting of stockholders at which the holders of
shares of Series A Preferred Stock and each Other Series of Preferred Stock,
voting as a class, have elected directors as provided above, and while the
holders of shares of Series A Preferred Stock and each Other Series of
Preferred Stock shall be entitled so to elect two directors, the number of
directors who have been elected by the holders of shares of Series A Preferred
Stock and each Other Series of Preferred Stock (or who by reason of one or
more resignations, deaths or removals have succeeded any directors so elected)
shall by reason of resignation, death or removal be less than two but at least
one, the vacancy in the directors so elected by the holders of shares of the
Series A Preferred Stock and each Other Series of Preferred Stock may be
filled by the remaining director elected by such holders, and in the event
that such election shall not occur within 30 days after such vacancy arises,
or in the event that there shall not be incumbent at least one director so
elected by such holders, the Secretary of the Corporation may, and upon the
written request of the holders of record of 10% or more in number of the
shares of Series A Preferred Stock and each Other Series of Preferred Stock
then outstanding addressed to the Secretary at the principal office of the
Corporation shall, call a special meeting of the holders of shares of Series A
Preferred Stock and each Other Series of Preferred Stock so entitled to vote,
for an election to fill such vacancy or vacancies, to be held within 60 days
after such call and at the place and upon the notice provided by law and in
the Bylaws for the holding of meetings of stockholders; provided, however,
that the Secretary shall not be required to call such special meeting in the
case of any such request received less than 90 days before the date fixed for
any annual meeting of stockholders, and if in such case such special meeting
is not called, the holders of shares of Preferred Stock so entitled to vote
shall be entitled to fill such vacancy or vacancies at such annual meeting.
If any such special meeting required to be called as above provided shall not
be called by the Secretary within 30 days after receipt of any such request,
then the holders of record of 10% or more in number of the shares of Series A
Preferred Stock and each Other Series of Preferred Stock then
6
<PAGE>
outstanding may designate in writing one of their number to call such meeting,
and the person so designated may, at the expense of the Corporation, call such
meeting to be held at the place and upon the notice above provided, and for
that purpose shall have access to the stock books of the Corporation; no such
special meeting and no adjournment thereof shall be held on a date later than
60 days before the annual meeting of stockholders.
(d) Nothing herein shall prevent the directors or stockholders from
taking any action to increase the number of authorized shares of Series A
Preferred Stock, or increasing the number of authorized shares of Preferred
Stock of the same class as the Series A Preferred Stock or the number of
authorized shares of Common Stock, or changing the par value of the Common
Stock or Preferred Stock, or issuing options, warrants or rights to any class
of stock of the Corporation as authorized by the Restated Articles of
Incorporation of the Corporation, as it may hereafter be amended.
(e) Except as set forth herein, holders of shares of Series A Preferred
Stock shall have no special voting rights and their consent shall not be
required (except to the extent they are entitled to vote as set forth in the
Restated Articles of Incorporation of the Corporation or herein or by law) for
taking any corporate action.
Section 4. Certain Restrictions.
--------------------
(a) Whenever any dividends or other distributions payable on the Series A
Preferred Stock as provided in Section 2 hereof are in arrears, thereafter and
until all accrued and unpaid dividends and distributions, whether or not
declared, on shares of Series A Preferred Stock outstanding shall have been
paid in full, the Corporation shall not, directly or indirectly:
(i) declare or pay dividends on, or make any other distributions with
respect to, any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends on, or make any other distributions with
respect to any shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A Preferred
Stock, except dividends paid ratably on shares of the Series A Preferred Stock
and all such parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such shares are
then entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares
of any stock ranking junior (both as to dividends and upon liquidation,
dissolution or winding up) the Series A Preferred Stock, provided that the
7
<PAGE>
Corporation may at any time redeem, purchase or otherwise acquire shares of
any such junior stock in exchange for shares of any stock of the Corporation
ranking junior (both as to dividends and upon dissolution, liquidation or
winding up) to the Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares of
Series A Preferred Stock, or any shares of stock ranking on a parity with the
Series A Preferred Stock, except in accordance with a purchase offer made in
writing or by publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other relative
rights and preferences of the respective series and classes, shall determine
in good faith will result in fair and equitable treatment among the respective
series or classes.
(b) The Corporation shall not permit any subsidiary of the Corporation to
purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (a) of this Section
4, purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
-----------------
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. Such
shares may not be reissued as part of any series of preferred stock including
Series A Preferred Stock).
Section 6. Liquidation, Dissolution or Winding Up. Upon any liquidation,
--------------------------------------
dissolution or winding up of the Corporation, no distribution shall be made
to:
(a) the holders of shares of stock ranking junior (either as to dividends
or upon liquidation, dissolution or winding up) to the Series A Preferred
Stock unless, prior thereto, the holders of shares of Series A Preferred Stock
shall have received the greater of (i) $40.00 per share ($.01 per one four-
thousandth of a share), plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the date of such
payment, or (ii) an aggregate amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 4,000 times the aggregate amount to
be distributed per share to holders of shares of Common Stock (the "Series A
Liquidation Preference"); or
(b) the holders of shares of Preferred Stock regardless of series, except
distributions made ratably on the Series A Preferred Stock and all other
Preferred Stock in proportion to the total amounts to which the holders of all
such shares are entitled upon such liquidation, dissolution or winding up.
8
<PAGE>
In the event that the Corporation shall at any time declare or pay any
dividend on 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) into a greater or lesser
number of shares of Common Stock, then and in each such event, the amount to
which holders of shares of Series A Preferred Stock were entitled immediately
prior to such event under clause (ii) at paragraph (a) of this Section 6 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.
Section 7. Consolidation, Merger, etc. In the event that 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 any other property, or otherwise changed,
then and in each such event, the shares of Series A Preferred Stock shall at
the same time be similarly exchanged or changed in an amount per share
(subject to the provision for adjustment hereinafter set forth) equal to 4,000
times the aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, into which or for which each
share of Common Stock is changed or exchanged. In the event that the
Corporation shall at any time declare or pay any dividend on 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) into a greater or lesser number of shares of Common Stock, then
and in each such event, the amount set forth in the preceding sentence with
respect to the exchange or change of shares of Series A Preferred Stock shall
be adjusted by multiplying such amount by a fraction, the numerator of which
is the number of shares of Common Stock outstanding immediately after such
event, and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Series A Preferred Stock shall
-------------
not be redeemable. Notwithstanding the foregoing, the Corporation may acquire
shares of Series A Preferred Stock in any other manner permitted by law, the
Restated Articles of Incorporation of the Corporation or herein.
Section 9. Amendment. The Restated Articles of Incorporation of the
---------
Corporation shall not be amended in any manner that would materially and
adversely alter or change the powers, preferences or special rights of the
Series A Preferred Stock without the affirmative vote of the holders of at
least two-thirds of the outstanding shares of Series A Preferred Stock, voting
together as a single series.
9
<PAGE>
Section 10. Fractional Shares. Series A Preferred Stock may be issued in
-----------------
fractions of a share (in one four-thousandth (1/4000) of a share and integral
multiples thereof) that shall entitle the holder thereof, in proportion to
such holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and have the benefit of all other rights of
holders of shares of Series A Preferred Stock.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate of
Amendment and do affirm the foregoing as true under the penalties of perjury
this day of , 19 .
______________________________
Hayward D. Fisk
Vice President
______________________________
Stephen E. Johnson
Assistant Secretary
10
<PAGE>
Exhibit B
---------
FORM OF
RIGHTS CERTIFICATE
Certificate No. R-______ ______ Rights
NOT EXERCISABLE AFTER DECEMBER 21, 1998 OR EARLIER IF REDEEMED. THE RIGHTS
ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES SPECIFIED IN THE RIGHTS
AGREEMENT, RIGHTS BENEFICIALLY OWNED BY CERTAIN PERSONS OR ANY SUBSEQUENT
HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
Rights Certificate
COMPUTER SCIENCES CORPORATION
This certifies that ________________________________, or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms and conditions of a
Rights Agreement (the "Rights Agreement") dated as of December 21, 1988, as
amended and restated as of August 1, 1996, by and between COMPUTER SCIENCES
CORPORATION, a Nevada corporation (the "Company"), and CHASEMELLON SHAREHOLDER
SERVICES, L.L.C. (the "Rights Agent"), to purchase from the Company at any
time prior to 5:00 o'clock p.m., California time, on the earliest of (i) the
date of the action of a majority, but not less than three, of the Independent
Directors directing the Company to redeem the Rights pursuant to Section 23(a)
of the Rights Agreement, (ii) the date upon which the Rights are redeemed
pursuant to Section 25 of the Rights Agreement, or (iii) December 21, 1998, at
the office or agency of the Rights Agent at 85 Challenger Road, Overpeck
Centre, Ridgefield Park, New Jersey 07660, or at the office of its successor
as Rights Agent, one four-thousandth of a fully paid and nonassessable share
of Series A Junior Participating Cumulative Preferred Stock, par value $1.00
per share, of the Company (a "Preferred Share") or, in certain circumstances,
other securities or other property, at a purchase price of $235.00 per one
four-thousandth of a Preferred Share (the "Exercise Price"), upon presentation
and surrender of this Rights Certificate with the Form of Election to
Purchase, including Certificate, on the reverse side hereof completed and duly
executed, with signature guaranteed.
The number of Rights represented by this Rights Certificate and the
Exercise Price set forth above are the number of Rights and the Exercise Price
as of December 21, 1988, based upon the Preferred Shares as constituted on
such date. As provided in the Rights Agreement, the Exercise Price and the
number of
<PAGE>
Preferred Shares or other securities or other property that may be purchased
upon the exercise of the Rights represented by this Rights Certificate are
subject to modification and adjustment upon the occurrence of certain events.
The Rights Agreement contains a full description of the rights,
limitations of rights, obligations, duties and immunities of the Rights Agent,
the Company and the holders of Rights Certificates. This Rights Certificate
is subject to all the terms and conditions of the Rights Agreement, which
terms and conditions are hereby incorporated herein by reference and made a
part hereof. Copies of the Rights Agreement are on file at the principal
executive offices of the Company and the above-mentioned offices of the Rights
Agent.
This Rights Certificate, with or without other Rights Certificates, upon
presentation and surrender at the above-mentioned offices of the Rights Agent,
with the Form of Assignment, including Certificate, on the reverse side hereof
completed and duly executed, with signature guaranteed, may be exchanged for
another Rights Certificate or Rights Certificates of like tenor and date
representing Rights entitling the holder thereof to purchase a like aggregate
number of Preferred Shares or, in certain circumstances, other securities or
other property, as the Rights represented by the Rights Certificate or Rights
Certificates surrendered shall have entitled such holder to purchase. If this
Rights Certificate shall be exercised in part, the holder shall be entitled to
receive, upon the surrender hereof with the Form of Election to Purchase,
including Certificate, on the reverse side hereof completed and duly executed,
with signature guaranteed, another Rights Certificate or Rights Certificates
for the number of whole Rights not exercised. Subject to the provisions of
the Rights Agreement, the Rights represented by this Rights Certificate may be
redeemed by the Company, at its option, at a redemption price of $.01 per
Right.
No fractional securities shall be issued upon the exercise of any Right
or Rights represented hereby (other than fractions of Preferred Shares that
are integral multiples of one four-thousandth of a Preferred Share, that may,
at the option of the Company, be represented by depositary receipts), but in
lieu thereof, a cash payment shall be made, as provided in the Rights
Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of the Preferred
Shares or other securities or property that may at any time be issuable on the
exercise hereof, nor shall anything contained herein be construed to confer
upon the holder hereof, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in the Rights Agreement),
or to receive dividends or subscription rights,
2
<PAGE>
until the Right or Rights represented by this Rights Certificate shall have
been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal. Dated as of ____________, _____.
Attest: COMPUTER SCIENCES CORPORATION
a Nevada corporation
By______________________________ By______________________________
Name: Name:
Title: Title:
Countersigned:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.,
as Rights Agent
By______________________________
Name:
Title:
3
<PAGE>
Form of Reverse Side of Rights Certificate
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such holder
desires to transfer any or all of the Rights
represented by this Rights Certificate)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
_____________________________________________________________________________
_____________________________________________________________________________
(Name, address and social security or other identifying number of transferee)
______________________________ ( ) of the Rights represented by this
Rights Certificate, together with all right, title and interest in and to said
Rights, and hereby irrevocably constitutes and appoints _____________________
attorney to transfer said Rights on the books of Project First Corporation
with full power of substitution.
Dated:_______________, 19___ ____________________________
(Signature)
Signature Guaranteed:
Certificate
-----------
(to be completed, if true)
The undersigned hereby certifies that the Rights represented by this
Rights Certificate are not Beneficially owned by a 20% Stockholder or an
Affiliate or Associate of a 20% Stockholder (as such capitalized terms are
defined in the Rights Agreement).
Dated: _______________, 19___ ____________________________
(Signature)
Signature Guaranteed:
4
<PAGE>
Form of Reverse Side of Rights Certificate
(continued)
NOTICE
The signatures to the foregoing Assignment and the foregoing Certificate,
if applicable, must correspond to the name as written upon the face of this
Rights Certificate in every particular, without alteration or enlargement or
any change whatsoever, and must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an
office or correspondent in the United States.
In the event that the foregoing Certificate is not duly executed, with
signature guaranteed, the Company may deem the Rights represented by this
Rights Certificate to be Beneficially Owned by a 20% Stockholder or an
Affiliate or Associate of a 20% Stockholder (as such capitalized terms are
defined in the Rights Agreement), and not issue any Rights Certificate or
Rights Certificates in exchange for this Rights Certificate.
5
<PAGE>
Form of Reverse Side of Rights Certificate
(continued)
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed by the registered holder if such holder
desires to exercise any or all of the Rights
represented by this Rights Certificate)
To COMPUTER SCIENCES CORPORATION:
The undersigned hereby irrevocably elects to exercise ________________
Rights represented by this Rights Certificate to purchase the shares of
Preferred Stock issuable upon the exercise of the Rights (or such other
securities of the Company or of any other Person which may be issuable upon
the exercise of the Rights) and requests that certificates for such shares be
issued in the name of and delivered to:
Please insert social security _____________________________
or other identifying number
_____________________________________________________________________________
_____________________________________________________________________________
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
Please insert social security _____________________________
or other identifying number
_____________________________________________________________________________
_____________________________________________________________________________
(Please print name and address)
Dated: ______________, 19___ _____________________________
(Signature)
Signature Guaranteed:
6
<PAGE>
Form of Reverse Side of Rights Certificate
(continued)
Certificate
-----------
(to be completed, if true)
The undersigned hereby certifies that the Rights represented by this
Rights Certificate are not Beneficially Owned by a 20% Stockholder or an
Affiliate or Associate of a 20% Stockholder (as such capitalized terms are
defined in the Rights Agreement).
Dated: ______________ 19___ _____________________________
(Signature)
Signature Guaranteed:
NOTICE
The signatures to the foregoing Election and the foregoing Certificate,
if applicable, must correspond to the name as written upon the face of this
Rights Certificate in every particular, without alteration or enlargement or
any change whatsoever, and must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an
office or correspondent in the United States.
In the event that the foregoing Certificate is not duly executed, with
signature guaranteed, the Company may deem the Rights represented by this
Rights Certificate to be Beneficially Owned by a 20% Stockholder or an
Affiliate or Associate of a 20% Stockholder (as such capitalized terms are
defined in the Rights Agreement), and not issue any property or certificate
for securities upon the exercise of this Rights Certificate or issue any new
Rights Certificate for any remaining balance of unexercised Rights represented
by this Rights Certificate.
7
<PAGE>
Exhibit C
---------
SUMMARY OF THE RIGHTS
On December 21, 1988, the Board of Directors of Computer Sciences
Corporation (the "Company") authorized and declared a dividend distribution of
one preferred stock purchase right (a "Right") for each share of common stock,
$1.00 par value, of the Company (the "Common Stock") outstanding at the close
of business on January 3, 1989 (the "Record Date"), and authorized the
issuance of one Right for each share of Common Stock issued between the Record
Date (whether originally issued or delivered from the Company's treasury) and
the Distribution Date (as defined in Section 2 below).
The following is a brief description of the Rights. It is intended to
provide a general description only and is subject to the detailed terms and
conditions of a Rights Agreement (the "Rights Agreement") dated as of December
21, 1988, as amended and restated as of August 1, 1996, by and between the
Company and ChaseMellon Shareholder Services, L.L.C., as Rights Agent (the
"Rights Agent").
1. Common Share Certificates Representing Rights
---------------------------------------------
Until the Distribution Date, (a) the Rights are not exercisable, (b) the
Rights are attached to and trade only together with the Common Shares and (c)
Common Share certificates represent the Rights related thereto. Common Share
certificates issued after the Record Date and prior to the Distribution Date
will contain a notation incorporating the Rights Agreement by reference.
2. Distribution Date
-----------------
The "Distribution Date" is the earlier of (a) the tenth business day
following the date of the first public announcement that any person (other
than the Company or certain related entities) has become the beneficial owner
of 20% or more of the outstanding Common Shares (such person is a "20%
Stockholder" and the date of such public announcement is the "20% Ownership
Date") or (b) the tenth business day following the date of the commencement
of, or the announcement of an intention to make, a tender offer or exchange
offer by any Person (other than the Company or certain related entities), if
upon the consummation thereof such person would be the owner of at least 30%
of the Common Shares.
Upon the close of business on the Distribution Date, the Rights will
separate from the Common Shares, Right certificates will be issued and the
Rights will become exercisable to purchase Preferred Shares, Common Shares or
other securities as described in Section 4 below.
<PAGE>
3. Expiration of Rights
--------------------
The Rights will expire on December 21, 1998, unless earlier redeemed.
4. Exercise of Rights
------------------
Rights may be exercised, at the option of the holders, pursuant to
paragraphs (a), (b) or (c) below. No Right may be exercised more than once or
pursuant to more than one of such paragraphs. From and after the first event
of the type described in paragraphs (b) or (c) below, each Right that is
beneficially owned by a 20% Stockholder or that was attached to a Common Share
that is subject to an option beneficially owned by a 20% Stockholder will be
void.
(a) Right to Purchase Preferred Shares. Unless the Rights have
----------------------------------
previously expired or been redeemed, from and after the close of business on
the Distribution Date, each Right (other than a Right that has become void)
will be exercisable to purchase one four-thousandth of a share of Series A
Junior Participating Cumulative Preferred Stock, par value $1.00 per share, of
the Company (the "Preferred Shares"), at the exercise price calculated in
accordance with the terms of the Rights Agreement (as such price may be
adjusted from time to time to prevent dilution, the "Exercise Price"). The
Exercise Price as of August 1, 1996 was $78.33. Prior to the Distribution
Date, the Company may substitute for all or any portion of the Preferred
Shares that would otherwise be issuable upon exercise of the Rights, cash,
assets or other securities having the same aggregate value as such Preferred
Shares. The Preferred Shares are nonredeemable and may not be issued except
upon exercise of Rights. The holder of a Preferred Share is entitled to
receive when, as and if declared, the greater of (a) cash and non-cash
dividends in an amount equal to 4,000 times the dividends declared on each
Common Share or (b) a preferential annual dividend of $4.00 per Preferred
Share ($.001 per one four-thousandth of a Preferred Share). In the event of
liquidation, the holders of Preferred Shares will be entitled to receive a
liquidation payment in an amount equal to the greater of (x) $40.00 per
Preferred Share ($.01 per one four-thousandth of a Preferred Share), plus all
accrued and unpaid dividends and distributions on the Preferred Shares, or (y)
an amount equal to 4,000 times the aggregate amount to be distributed per
Common Share. Each Preferred Share has one vote, voting together with the
Common Shares. In the event of any merger, consolidation or other transaction
in which Common Shares are exchanged, the holder of a Preferred Share will be
entitled to receive 4,000 times the amount received per Common Share. The
rights of the Preferred Shares as to dividends, voting and liquidation
preferences are protected by anti-dilution provisions.
(b) Right to Purchase Common Shares of the Company. Unless the Rights
----------------------------------------------
have previously expired or been redeemed, from and after the close of business
on the tenth business day following the 20% Ownership Date (or, if the tenth
business
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day after the 20% ownership Date occurs before the Record Date, the close of
business on the Record Date), each Right (other than a Right that has become
void) will be exercisable to purchase one Common Share at 10% of the then
current market value of the Common Shares. If the Company does not have
sufficient Common Shares available for all Rights to be exercised, the Company
will substitute for all or any portion of the Common Shares that would
otherwise be issuable upon the exercise of the Rights, cash, assets or other
securities or any combination of the foregoing having the same aggregate value
as such Common Shares.
(c) Right to Purchase Common Stock of a Successor Corporation. Unless
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the Rights have previously expired or been redeemed, if, on or after the 20%
Ownership Date, (a) the Company is acquired in a merger or other business
combination in which the Company is not the surviving corporation or in which
the outstanding Common Shares are changed into or exchanged for stock or
assets of another person or (b) 50% or more of the Company's consolidated
assets or earning power are sold (other than in transactions in the ordinary
course of business), then each Right (other than a Right that has become void)
will thereafter be exercisable to purchase, at the Exercise Price (initially
$235.00), shares of common stock of the surviving corporation or purchaser,
respectively, with an aggregate market value equal to two times the Exercise
Price. If the surviving corporation or purchaser does not have sufficient
common stock available or is not publicly held, then each Right can be put to
the surviving corporation or purchaser for a cash payment equal to the
Exercise Price.
5. Adjustments to Prevent Dilution. The Exercise Price, the number of
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outstanding Rights and the number of Preferred Shares or Common Shares
issuable upon exercise of the Rights are subject to adjustment from time to
time as set forth in the Rights Agreement in order to prevent dilution.
6. Cash Paid Instead of Issuing Fractional Securities. No fractional
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securities will be issued upon exercise of a Right (other than fractions of
Preferred Shares that are integral multiples of one four-thousandth of a
Preferred Share and that may, at the election of the Company, be evidenced by
depositary receipts) and in lieu thereof, an adjustment in cash will be made
based on the market price of such securities.
7. Redemption. At any time prior to the close of business on the
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earliest of (i) the tenth business day after the date of the first event of
the type described in Section 4(b) above, (ii) the date of the first event of
the type described in Section 4(c) above or (iii) the Rights' date of
expiration given in Section 3 above, the Board of Directors may direct the
Company to redeem the Rights in whole, but not in part, at a price of $.01 per
Right (the "Redemption Price"), and the Company
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will so redeem the Rights. Thereafter, the right to exercise Rights will
terminate and the only right of the holders of Rights will be to receive the
Redemption Price.
8. No Stockholder Rights Prior to Exercise. Until a Right is exercised,
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the holder thereof, as such, will have no rights as a stockholder of the
Company (other than rights resulting from such holder's ownership of Common
Shares), including, without limitation, the right to vote or receive
dividends.
9. Amendment of Rights Agreement. At any time prior to the close of
business on the earliest of (i) the tenth business day after the date of the
first event of the type described in Section 4(b) above, (ii) the date of the
first event of the type described in Section 4(c) above or (iii) the Rights'
date of expiration given in Section 3 above, the Board of Directors may,
without the approval of any holders of Rights, direct the Company and the
Rights Agent to amend the Rights Agreement in any manner, whether or not such
amendment is adverse to the holders of Rights. At any time thereafter the
first event of the type described in Section 4(b) or (c) above, the Board of
Directors may, without the approval of any holders of Rights, direct the
Company and the Rights Agent to amend the Rights Agreement in any manner so
long as such amendment does not materially and adversely affect the interests
of the holders of Rights.
