FORM 8-A/A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATA GENERAL CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 04-2436397
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(State of incorporation or organization) (I.R.S. Employer
Identification No.)
4400 Computer Drive
Westboro, Massachusetts 01580
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(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
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Preferred Stock Purchase Rights New York Stock Exchange
London Stock Exchange
If this Form relates to the registration of a class of debt securities
and is effective upon filing pursuant to General Instruction A.(c)(1),
please check the following box.[]
If this Form relates to the registration of a class of debt securities and
is to become effective simultaneously with the effectiveness of a concurrent
registration statement under the Securities Act of 1933 pursuant to General
Instruction A.(c)(2), please check the following box.[]
Securities to be registered pursuant to Section 12(g) of the Act:
None
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(Title of Class)
Item 1. Description of Registrant's Securities to be Registered
On October 3, 1986, the Board of Directors of Data General Corporation (the
"Company") declared a dividend distribution of one Right for each
outstanding share of the Company's Common Stock, $.01 par value per share
(the "Common Stock"), to stockholders of record at the close of business
on October 20,1986. Each Right entitles the registered holder to purchase
from the Company one one-hundredth of a share of Series A Junior
Participating Preferred Stock, par value $.01 per share (the "Preferred
Stock"), at a Purchase Price of $100 per one one-hundredth of a share of
Preferred Stock ("Purchase Price"), subject to adjustment. The Purchase
Price may be paid, at the option of the holder, in cash or shares of Common
Stock having a value at the time of exercise equal to the Purchase Price.
The description and terms of the Rights are set forth in a Rights Agreement,
renewed and restated as of October 19, 1996 (the "Rights Agreement"), between
the Company and The Bank of New York (as successor to Morgan Shareholder
Services Trust Company), as Rights Agent.
Initially, the Rights will be represented by the certificates evidencing
the Common Stock and no separate Right Certificates will be distributed.
Upon the earlier of the following dates (the "Distribution Date"), the Rights
will separate from the Common Stock: (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired, or obtained the right to acquire, beneficial
ownership of 20% or more of the outstanding shares of Common Stock (the
"Stock Acquisition Date"), (ii) 10 days following the commencement of, or
first announcement of the intent of any person or persons to commence, a
tender offer or exchange offer that would result in a person or group
beneficially owning 20% or more of the outstanding shares of Common Stock,
or (iii) 10 days after a majority of the Continuing Directors (as defined
below) of the Company shall declare any person to be an "Adverse Person,"
upon a determination that such person, together with its affiliates and
associates, has become the beneficial owner of an amount of Common Stock
which a majority of the Continuing Directors determines to be substantial
(but in no event less than 15% of the shares of Common Stock then outstanding)
and a determination by a majority of the Continuing Directors that (a) such
beneficial ownership by such person is intended to cause the Company to
repurchase the Common Stock beneficially owned by such person or to cause
pressure on the Company to take action or enter into a transaction or series
of transactions intended to provide such person with short-term financial
gain under circumstances where a majority of the Continuing Directors
determines that the best long-term interests of the Company and its
stockholders would not be served by taking such action or entering into such
transactions or series of transactions at that time or (b) such beneficial
ownership is causing or reasonably likely to cause a material adverse impact
(including, impairment of relationships with customers or impairment of the
Company's ability to maintain its competitive position) on the business or
prospects of the Company.
Until the Distribution Date, (i) the Rights will be evidenced by the Common
Stock certificates and will be transferred with and only with such Common
Stock certificates, (ii) new Common Stock certificates issued after October
20, 1986 will contain a notation incorporating the Rights Agreement by
reference and (iii) the surrender for transfer of any certificates for Common
Stock outstanding will also constitute the transfer of the Rights associated
with the Common Stock represented by such certificate.
The Rights are not exercisable until the Distribution Date and will expire at
5:00 P.M. New York City time, on October 19, 2001 (the "Final Expiration Date"),
unless earlier redeemed by the Company as described below.
As soon as practicable after the Distribution Date, Right Certificates will
be mailed to the holders of record of the Common Stock as of the close of
business on the Distribution Date and, thereafter, the separate Right
Certificates alone will represent the Rights. Only shares of Common Stock
issued prior to the Distribution Date will be issued with Rights.
In the event that the Board of Directors determines that a person is an
Adverse Person or, at any time following the Distribution Date, (i) the
Company is the surviving corporation in a merger or other business combination
with an Acquiring Person and its Common Stock is not changed or exchanged,
(ii) a Person becomes the beneficial owner of more than 25% of the then
outstanding shares of Common Stock (except pursuant to an offer for all
outstanding shares of Common Stock which a majority of the Continuing
Directors determines to be fair to and otherwise in the best interests of
the Company and its stockholders), (iii) an Acquiring Person engages in one
or more "self-dealing" transactions as set forth in the Rights Agreement, or
(iv) during such time as there is an Acquiring Person, an event occurs which
results in such Acquiring Person's ownership interest being increased by more
than 1% (e.g., a reverse stock split), each holder of a Right promptly
thereafter (but in the case of (ii) above, 5 days thereafter) will have the
right to receive, upon exercise, Common Stock (or, in certain circumstances,
cash, property or other securities of the Company) having a value equal to
two times the exercise price of the Right. Notwithstanding any of the
foregoing, following the occurrence of any of the events set forth in this
paragraph, all Rights that are, or (under certain circumstances specified
in the Rights Agreement) were, beneficially owned by any Acquiring Person or
an Adverse Person will be null and void. However, Rights are not exercisable
following the occurrence of any of the events set forth above until such time
as the Rights are no longer redeemable by the Company as set forth below.
For example, at an exercise price of $100 per Right, each Right not owned by
an Acquiring Person (or by certain related parties) following an event set
forth in the preceding paragraph would entitle its holder to purchase $200
worth of Common Stock (or other consideration, as noted above) for $100.
Assuming that the Common Stock had a per share value of $50 at such time,
the holder of each valid Right would be entitled to purchase four shares of
Common Stock for $100.
Unless the Rights are earlier redeemed, in the event that, at any time
following the Stock Acquisition Date, (i) the Company is acquired in a merger
or other business combination transaction in which the Company is not the
surviving corporation (other than a merger which follows an offer described
in the second preceding paragraph and is at the same price), or (ii) 50% or
more of the Company's assets or earning power is sold or transferred, each
holder of a Right (except rights which previously have been voided as set forth
above) shall thereafter have the right to receive, upon exercise of such
holder's Right, common stock of the acquiring company having a value equal to
two times the exercise price of the Right.
The events set forth in the third preceding paragraph, and the events set
forth in subsections (i) and (ii) of the first preceding paragraph shall
collectively be termed "Triggering Events" and each a "Triggering Event."
The Purchase Price payable, and the number of one one-hundredths of a share
of Preferred Stock or other securities or property issuable, upon exercise
of the Rights are subject to adjustment from time to time to prevent dilution
(i) in the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Stock, (ii) if holders of the Preferred
Stock are granted certain rights or warrants to subscribe for Preferred Stock
or convertible securities at less than the current market price of the
Preferred Stock, or (iii) upon the distribution to holders of the Preferred
Stock of evidences of indebtedness or assets (excluding regular quarterly cash
dividends) or of subscription rights or warrants (other than those referred to
above).
With certain exceptions, no adjustment in the Purchase Price will be required
until cumulative adjustments amount to at least 1% of the Purchase Price.
At any time on or prior to the close of business on the tenth day following
the Stock Acquisition Date, the Company may redeem the Rights in whole, but
not in part, at a price of $.01 per Right, payable in cash or stock (the
"Redemption Price"). The Company may not redeem the Rights if a majority
of the Continuing Directors has previously determined a person to be an
Adverse Person. After the redemption period has expired, the Company's right
of redemption may be reinstated if an Acquiring Person reduces his beneficial
ownership to 10% or less of the outstanding shares of Common Stock in a
transaction or series of transactions not involving the Company. Immediately
upon the action of the Board of Directors ordering redemption of the Rights
with, where required, the concurrence of a majority of the Continuing
Directors, the Rights will terminate and the only right of the holders of
Rights will be to receive the $.01 Redemption Price.
The shares of Preferred Stock purchasable upon exercise of the Rights will
have a minimum preferential quarterly dividend of $2.50 per share, but will
be entitled to receive, in the aggregate, a dividend of 100 times the dividend
declared on the shares of Common Stock. In the event of liquidation, the
holders of the shares of Preferred Stock will be entitled to receive a
minimum liquidation payment of $100 per share, but will be entitled to
receive an aggregate liquidation payment equal to 100 times the payment made
per share of Common Stock. Each share of Preferred Stock will have one hundred
votes, voting together with the shares of Common Stock. In the event of any
merger, consolidation or other transaction in which shares of Common Stock
are exchanged, each share of Preferred Stock will be entitled to receive 100
times the amount and type of consideration received per share of Common Stock.
The rights of the shares of Preferred Stock as to dividends and liquidation,
and in the event of mergers and consolidation, are protected by customary
anti-dilution provisions.
The term "Continuing Directors" means any member of the Board of Directors of
the Company who was a member of the Board prior to the date of the Rights
Agreement, and any person who is subsequently elected to the Board if such
person is recommended or approved by a majority of the Continuing Directors,
but shall not include an Acquiring Person or an Adverse Person, or an
affiliate or associate of an Acquiring Person or an Adverse Person, or any
representative of the foregoing entities.
Until a Right is exercised, 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 shares of Common Stock, including, without limitation,
the right to vote or to receive dividends. While the distribution of the
Rights will not be taxable to stockholders or to the Company, stockholders
may, depending upon the circumstances, recognize taxable income in the event
that the Rights become exercisable for Common Stock (or other consideration)
of the Company or for common stock of the acquiring company as set forth above.
In general, other than those provisions relating to the principal economic
terms of the Rights, the provisions of the Rights Agreement may be amended
by the Board of Directors of the Company prior to the Distribution Date.
After the Distribution Date, the provisions of the Rights Agreement may be
amended by the Board (with the concurrence of a majority of the Continuing
Directors) in order to cure any ambiguity, to make changes which do not
adversely affect the interests of holders of Rights (excluding the interests
of any Acquiring Person), or to shorten or lengthen any time period under the
Rights Agreement; provided, however, that no amendment to adjust the time
period governing redemption shall be made at such time as the Rights are not
redeemable.
A copy of the Rights Agreement has been filed with the Securities and Exchange
Commission as an Exhibit to a Registration Statement on Form 8-A/A. A copy of
the Rights Agreement is available free of charge from the Company. This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is
incorporated herein by reference.
Item 2. Exhibits
Exhibit 1. Renewed and Restated Rights Agreement, dated as of October
16, 1996, by and between Data General Corporation and The
Bank of New York as Rights Agent, which includes the form of
Certificate of Designations setting forth the terms of the Series
A Junior Participating Cumulative Preferred Stock as Exhibit A,
the form of Right Certificate as Exhibit B and the Summary of
Rights to Purchase Preferred Shares as Exhibit C.
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the Registrant has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereto duly authorized.
DATA GENERAL CORPORATION
By: /s/ Carl E. Kaplan
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Carl E. Kaplan, Secretary
Dated: June 11, 1996
DATA GENERAL CORPORATION
and
THE BANK OF NEW YORK
as Rights Agent
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Rights Agreement
Dated as of October 3, 1986
Renewed and Restated as of October 19, 1996
INDEX
Page
Section 1. Certain Definitions 2
Section 2. Appointment of Rights Agent 7
Section 3. Issue of Right Certificates 7
Section 4 Form of Right Certificates 11
Section 5. Countersignature and Registration 12
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates 13
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights 15
Section 8. Cancellation and Destruction of Right Certificates 19
Section 9. Reservation and Availability of Capital Stock 19
Section 10. Preferred Stock Record Date 22
Section 11. Adjustment of Purchase Price, Number of Shares or Number
of Rights 23
Section 12. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power 42
Section 13. Certificate of Adjusted Purchase Price or Number of Shares 48
Section 14. Fractional Rights and Fractional Shares 48
Section 15. Rights of Action 51
Section 16. Agreement of Right Holders 52
Section 17. Right Holder and Right Certificate Holder Not Deemed a
Stockholder 53
Section 18. Concerning the Rights Agent 53
Section 19. Merger or Consolidation or Change of Name of Rights Agent 54
Section 20. Duties of Rights Agent 56
Section 21. Change of Rights Agent 59
Section 22. Issuance of New Right Certificates 60
Section 23. Redemption 61
Section 24. Notice of Certain Events 62
Section 25. Notices 64
Section 26. Supplements and Amendments 65
Section 27. Successors 66
Section 28. Determinations and Actions by the Board of Directors, etc. 66
Section 29. Benefits of this Agreement 67
Section 30. Severability 67
Section 31. Force Majeure 68
Section 32. Governing Law 69
Section 33. Counterparts 69
Section 34. Descriptive Headings 69
Testimonium and Signatures 70
Exhibit A - Certificate of Designations
Exhibit B - Form of Right Certificate
Exhibit C - Summary of Rights to Purchase
Series A Junior Participating Preferred
Stock
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of October 3, 1986, and renewed and restated as of
October 19, 1996 (the "Agreement"), between Data General Corporation, a
Delaware corporation (the "Company"), and The Bank of New York, a New York
corporation (the "Rights Agent").
W I T N E S S E T H:
WHEREAS, on October 3, 1986, the Board of Directors of the Company authorized
and declared a dividend distribution of one Right for each share of common
stock, par value $.01 per share (the "Common Stock"), of the Company
outstanding as of the close of business on October 20, 1986 (the "Record
Date"), and authorized the issuance of one Right in respect of each share of
Common Stock of the Company issued between the Record Date (whether originally
issued or delivered from the Company's treasury) and the Distribution Date
(as such term is defined in Section 3 hereof), each Right representing the
right to purchase one one-hundredth of a share of Series A Junior Participating
Preferred Stock, par value $.01 per share, of the Company, having the rights,
preferences and limitations set forth in the form of Certificate of Designation
attached hereto as Exhibit A, upon the terms and subject to the conditions
hereinafter set forth (the "Rights");
WHEREAS, on May 19, 1988 and December 7, 1995, the Board of Directors, in
accordance with Section 26 hereof, determined it desirable and in the best
interests of the Company and its stockholders for the Company to amend certain
provisions of the Agreement; and
WHEREAS, on December 7, 1995, the Board of Directors determined it desirable
and in the best interests of the Company and its stockholders for the Company
to renew this Agreement and to implement such renewal by executing this
Agreement as renewed and restated;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the following
terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is hereinafter
defined) who or which, together with all Affiliates and Associates (as such
terms are hereinafter defined) of such Person, shall be the Beneficial Owner
(as such term is hereinafter defined) of 20% or more of the shares of Common
Stock of the Company then outstanding, but shall not include the Company, any
Subsidiary (as such term is defined herein) of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company ("Plan"), or
any Person or entity holding Common Stock for or pursuant to the terms of any
such Plan. For all purposes of this Agreement, any calculation of the number
of shares of Common Stock outstanding at any time, including for purposes of
determining the percentage of such outstanding shares of Common Stock of
which any Person is the Beneficial Owner, shall be made in accordance with
the provisions of Rule 13d-3(d)(1)(i), as in effect on the date hereof, of
the General Rules and Regulations under the Securities Exchange Act of 1934,
as amended (the "Exchange Act").
(b) "Adverse Person" shall mean any Person declared to be an Adverse Person by
a majority of the Continuing Directors upon determination that the criteria
set forth in Section 11(a)(ii)(D) apply to such person.
(c) "Affiliate" and "Associate" shall have the respective meanings ascribed to
such terms in Rule 12b-2 of the General Rules and Regulations promulgated
under the Exchange Act, as in effect on the date hereof.
(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
beneficially owns, directly or indirectly, for purposes of Section 13(d) of
the Exchange Act and Regulation 13D-G thereunder (or any comparable or
successor law or regulation), in each case as in effect on the date hereof;
or
(ii) which such Person or any of such Person's Affiliates or Associates,
directly or indirectly, has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time or the fulfillment
of a condition or both) pursuant to any agreement, arrangement or
understanding (whether or not in writing), or upon the exercise of conversion
rights, exchange rights, rights (other than these Rights), warrants or options,
or otherwise; provided, however, that a person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," securities tendered pursuant
to a tender offer or exchange offer made by or on behalf of such Person or any
of such Person's Affiliates or Associates until such tendered securities are
accepted for purchase or exchange; or (B) the right to vote or dispose of,
alone or in consent with others, or the "beneficial ownership" of, as
determined pursuant to Rule 13d-3, as in effect on the date hereof, of the
General Rules and Regulations under the Exchange Act, including such right
or such "beneficial ownership" 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 clause (B) as a result of an agreement, arrangement or
understanding to vote such security if such agreement, arrangement or
understanding (1) arises solely from a revocable proxy given in response to
a public proxy or consent solicitation made pursuant to, and in accordance
with, the applicable rules and regulations under the Exchange Act and (2) is
not also then reportable 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 the Person whose beneficial
ownership is being determined 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 clause (B) of subparagraph (ii) of this
paragraph (d) or disposing of any voting securities of the Company.
(e) "Business Day" shall mean any day other than a Saturday, Sunday, or a day
on which banking institutions in the State of New York 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., New York City
time, on such date; provided, however, that if such date is not a Business Day
it shall mean 5:00 P.M., New York City time, on the next succeeding Business
Day.
(g) "Common Stock" shall mean the common stock, $.01 par value per share, of
the Company, except that "Common Stock" when used with reference to any Person
other than the Company shall mean the capital stock (or equity interest) with
the greatest voting power of such other Person or if such other Person is a
Subsidiary of another Person, the Person or Persons which ultimately control
such first-mentioned 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 of Directors, who
is not an Acquiring Person, Adverse Person or an Affiliate or Associate of an
Acquiring Person, Adverse Person or a representative or nominee of an Acquiring
Person, Adverse Person or of any such Affiliate or Associate thereof and who
was a member of the Board of Directors prior to the date of this Agreement,
and (ii) any person who subsequently becomes a member of the Board of Directors,
who is not an Acquiring Person, Adverse Person or an Affiliate or Associate
of an Acquiring Person, Adverse Person or a representative or nominee of an
Acquiring Person, Adverse Person or of any such Affiliate or Associate and is
recommended, approved or elected by a majority of the then Continuing Directors.
(i) The "current market price" shall have the meaning set forth in Section
11(d) hereof.
(j) "Expiration Date" shall mean the earlier of the Final Expiration Date or
the date on which the Rights are redeemed as provided in Section 23 hereof.
(k) "Final Expiration Date" shall mean October 19, 2001.
(l) "Person" shall mean any individual, firm, corporation, partnership,
association, group (as such term is used in Rule 13d-5 under the Exchange Act)
or other entity, and shall include any successor (by merger or otherwise) of
such entity.
(m) "Preferred Stock" shall mean shares of Series A Junior Participating
Preferred Stock, $.01 par value per share, of the Company, having the rights,
preferences and limitations set forth in the form of Certificate of Designation
attached to this Agreement as Exhibit A, and, to the extent there are not a
sufficient number of shares of Series A Junior Participating Preferred Stock
authorized to permit the full exercise of the then outstanding Rights, any
other series of preferred stock of the Company designated for such purpose by
the Board of Directors of the Company containing terms substantially similar
to the terms of the Series A Junior Participating Preferred Stock.
(n) "Principal Party" shall have the meaning set forth in Section 12(c) hereof.
(o) "Right Certificates" shall have the meaning set forth in Section 3(a)
hereof.
(p) "Section 11(a)(ii) Event" shall mean any event described in Section
11(a)(ii)(A), (B), (C) or (D) hereof.
(q) "Section 12(a) Event" shall mean any event described in clauses (x), (y)
or (z) of Section 12(a) hereof.
(r) "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) of the Exchange Act or the rules and
regulations thereunder) by the Company or an Acquiring Person that an
Acquiring Person has become such.
(s) "Subsidiary" of any Person shall mean any corporation or other entity of
which a majority of the voting power of the voting equity securities or equity
interests is owned, directly or indirectly, by such Person.
(t) "Summary of Rights" shall have the meaning set forth in Section 3(b)
hereof.
(u) "Triggering Event" shall mean any Section 11(a)(ii) Event or any Section
12 Event.
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 Right Certificates. (a) Until the earlier of (i) the
Close of business on the tenth day after the Stock Acquisition Date, (ii) the
Close of business on the tenth day after the date of the commencement of, or
first public announcement of the intent of, any Person (other than the Company,
any Subsidiary of the Company or a Plan (as defined in Section 1(a) hereof)
of the Company or of any Subsidiary of the Company or any entity holding Common
Stock for or pursuant to the terms of any such Plan) to commence a tender or
exchange offer the consummation of which would result in a Person being the
Beneficial Owner of 20% or more of the shares of Common Stock then outstanding
(including any such date which is after the date of this Agreement and prior
to the issuance of the Rights), or (iii) the close of business on the tenth day
after a majority of the Continuing Directors determines, pursuant to the
criteria set forth in Section 11(a)(ii)(D) hereof, that a Person is an Adverse
Person (the earliest of (i), (ii) and (iii) 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 Common
Stock registered in the names of the holders thereof (which certificates for
Common Stock shall also be deemed to be Right Certificates (as defined below))
and not by separate Right Certificates, and (y) the right to receive Right
Certificates will be transferable only simultaneously with and together with
the transfer of the underlying shares of Common Stock. Until the earlier of
the Distribution Date or the Expiration Date, the surrender for transfer of
such certificates for shares of Common Stock shall also constitute the
surrender for transfer of the Rights associated with the shares of Common
Stock represented thereby. As soon as practicable after the Distribution Date,
the Company will prepare and execute, the Rights Agent will countersign, and
the Company will send or cause to be sent (and the Rights Agent will, if
requested, 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 right certificates, in substantially the form attached
hereto as Exhibit B (the "Right 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 11(p) hereof, at the time of distribution of
the Right Certificates, the Company shall make the necessary and appropriate
rounding adjustments (in accordance with Section 14(a) hereof) so that Right
Certificates representing only whole numbers of Rights are distributed and
cash is paid in lieu of any fractional Rights. As of and after the
Distribution Date, the Rights will be evidenced solely by such Right
Certificates and may be transferred by the transfer of the Right Certificates
as permitted hereby, separately and apart from any transfer of one or more
shares of Common Stock, and the holders of such Right Certificates as listed
in the records of the Company or any transfer agent or registrar for the
Rights shall be the record holders thereof.
(b) The Company sent a copy of a Summary of Rights, in substantially the form
as initially attached to this Agreement 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 then shown in the records of the Company. The Summary of Rights
attached hereto as Exhibit C is revised to reflect all amendments effected as
of October 19, 1996. With respect to certificates for the Common Stock
outstanding as of the Record Date or issued pursuant to Section 3(c) hereof,
until the earlier of the Distribution Date or the Expiration Date, the Rights
will be evidenced by such certificates for the Common Stock registered in the
names of the holders of the Common Stock and the registered holders of the
Common Stock shall also be registered holders of the associated Rights. Until
the earlier of the Distribution Date or the Expiration Date, the surrender for
transfer of any of the certificates for the Common Stock outstanding on the
Record Date or issued pursuant to Section 3(c) hereof shall also constitute the
surrender for transfer of the Rights associated with the Common Stock
represented by such certificates.
(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. After October 19, 1986,
certificates representing shares of Common Stock bore a legend as initially
set forth in this Agreement and, commencing as soon as reasonably practicable
following the date of this renewed and restated Agreement, shall bear the
following legend:
This certificate also evidences and entitles the holder hereof to certain
Rights as set forth in a Rights Agreement between Data General Corporation and
The Bank of New York (as successor to Morgan Shareholder Services Trust
Company), as renewed and restated as of October 19, 1996, the terms of which
are incorporated herein by reference and a copy of which is on file at the
principal executive offices of Data General Corporation. Under certain
circumstances, as set forth in the Rights Agreement, such Rights may be
redeemed, may expire, or may be evidenced by separate certificates and no
longer be evidenced by this certificate. Data General Corporation 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 an Adverse Person or any Affiliate or Associate of an
Acquiring Person or an Adverse Person (as such terms are defined in the Rights
Agreement), whether currently held by or on behalf of such Person or by any
subsequent holder, will 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 surrender for transfer
of any of such certificates shall also constitute the transfer of the Rights
associated with the Common Stock represented by such certificates.
(d) The Company shall cause to be maintained a sufficient supply of Right
Certificates at all times.
Section 4. Form of Right Certificates. (a) The Right Certificates (and the
forms of election to purchase shares and of assignment to be printed on the
reverse thereof) shall be substantially the same as Exhibit B to this Agreement
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, rule or regulation 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 Right 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 one one-hundredths of a share of Preferred
Stock as shall be set forth therein at the price per one one-hundredth of a
share of Preferred Stock set forth therein (the "Purchase Price"), but the
amount and type of securities purchasable upon the exercise of each Right and
the Purchase Price shall be subject to adjustment as provided herein.
(b) Any Right Certificate issued pursuant to Section 3(a) or Section 22 hereof
that represents Rights beneficially owned by: (i) an Acquiring Person, an
Adverse Person or any Associate or Affiliate of an Acquiring Person or an
Adverse Person, (ii) a transferee of an Acquiring Person or an Adverse Person
(or of any such Associate or Affiliate) who becomes a transferee after the
Acquiring Person or an Adverse Person becomes such, or (iii) a transferee of
an Acquiring Person or an Adverse Person (or of any such Associate or Affiliate)
who becomes a transferee prior to or concurrently with the Acquiring Person or
the Adverse Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person or
the Adverse Person to holders of equity interests in such Acquiring Person or
the Adverse Person or to any Person with whom the Acquiring Person or Adverse
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
Right Certificate issued pursuant to Section 6 or Section 11 hereof upon
transfer, exchange, replacement or adjustment of any other Right Certificate
referred to in this sentence, shall contain (to the extent feasible) the
following legend:
The Rights represented by this Right Certificate are or were beneficially
owned by a Person who was or became an Acquiring Person or an Adverse Person
or an Affiliate or Associate of an Acquiring Person or an Adverse Person (as
such terms are defined in the Rights Agreement). Accordingly, this Right
Certificate and the Rights represented hereby may become null and void in the
circumstances specified in Section 7(e) of such Agreement.
Section 5. Countersignature and Registration. The Right Certificates shall be
executed on behalf of the Company by its President or any Vice President,
either manually or by facsimile signature, and 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 Right Certificates shall be manually countersigned by the
Rights Agent and shall not be valid for any purpose unless so countersigned.
In case any officer of the Company whose manual or facsimile signature
is affixed to the Right Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance and delivery
by the Company, such Right Certificates may nevertheless be countersigned by
the Rights Agent, issued and delivered with the same force and effect as though
the person who signed such Right Certificates had not ceased to be such officer
of the Company. Any Right Certificate may be signed on behalf of the Company
by any person who, at the actual date of the execution of such Right
Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Rights Agreement
any such person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or cause to be
kept, at its principal office or offices designated as the appropriate place
for surrender of Right Certificates upon exercise or transfer, books for
registration and transfer of the Right Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the
Right Certificates, the number of Rights evidenced on the face of each of the
Right Certificates, the date of each of the Right Certificates and the Right
Certificate number.
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates. Subject to the
provisions of Section 4(b), Section 7(e) 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 Right Certificate or Right
Certificates may be transferred, split up, combined or exchanged for another
Right Certificate or Right Certificates, entitling the registered holder to
purchase a like number of one one-hundredths of a share of Preferred
Stock (or following a Triggering Event, Common Stock, other securities, cash
or other assets, as the case may be as the Right Certificate or Right
Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any
Right Certificate shall make such request in writing delivered to the Rights
Agent, and shall surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the principal office
of the Rights Agent as set forth in Section 25 hereof. Neither the Rights
Agent nor the Company shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Right Certificates until the
registered holder shall have completed and signed the certificate contained
in the form of assignment on the reverse side of such Right 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 countersign
and deliver to the person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge that may
be imposed in connection with any transfer, split up, combination or exchange
of Right Certificates.
Upon (i) receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them (a) of the loss, theft, destruction or mutilation of a
Right Certificate, and, (b) in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, (ii) reimbursement to
the Company and the Rights Agent of all reasonable expenses incidental thereto,
and (iii) in case of mutilation of a Right Certificate, surrender to the
Rights Agent and cancellation of such Right Certificate, the Company will
issue and deliver a new Right Certificate of like tenor to the Rights Agent
for delivery to the registered owner in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) Subject to Section 7(e) hereof, the registered holder of any Right
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or in part at any time after the Distribution Date
upon surrender of the Right Certificate, with the form of election to purchase
on the reverse side thereof duly executed to the Rights Agent at its principal
office as set forth in Section 25 hereof, together with payment of the Purchase
Price with respect to one one-hundredths of a share of Preferred Stock as to
which the Rights are exercised, at or prior to the Close of business on the
Expiration Date.
(b) The Purchase Price for each one one-hundredth of a share of Preferred
Stock pursuant to the exercise of a Right shall initially be $100, shall be
subject to adjustment from time to time as provided in Sections 11 and 12
hereof and shall be payable in lawful money of the United States of America
in accordance with paragraph (c) of this Section 7, except to the extent
otherwise provided in Section 12(f).
(c) Upon receipt of a Right Certificate representing exercisable Rights, with
the form of election to purchase duly executed, accompanied by payment, with
respect to each Right so exercised, of the Purchase Price per one one-hundredth
of a share of Preferred Stock (or other shares, 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 required to be paid by the holder of such
Right Certificate in accordance with Section 9 of this Agreement, in cash, or
by certified check or money order payable to the order of the Company, the
Rights Agent shall thereupon promptly (i)(A) requisition from any transfer
agent of the Preferred Stock (or make available, if the Rights Agent is the
transfer agent) certificates for the number of shares of Preferred Stock to
be purchased and the Company hereby irrevocably authorizes its transfer agent
to comply with all such requests, or, (B) requisition from the depositary
agent depositary receipts representing such number of one one-hundredths of
a share of Preferred Stock as are to be purchased (in which case certificates
for the shares of Preferred Stock represented by such receipts shall be
deposited by the transfer agent with the depositary agent) and the Company
hereby directs the depositary agent to comply with such request, (ii)
requisition from the Company, when appropriate, the amount of cash to be paid
in lieu of issuance of fractional shares in accordance with Section 14 hereof,
(iii) after receipt of such requisitioned Preferred Stock certificates,
promptly cause the certificates to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name or names
as may be designated by such holder, and (iv) when appropriate, after receipt
of such cash, promptly deliver that cash to or upon the order of the registered
holder of such Right Certificate. The payment of the Purchase Price (as such
amount may be reduced pursuant to Section 11(a)(iii) hereof) may be made (x) in
cash or by certified bank check or money order payable to the order of the
Company, or (y) by delivery of a certificate or certificates (with appropriate
stock powers executed in blank attached thereto) evidencing a number of shares
of Common Stock equal to the then Purchase Price divided by the closing price
(as determined pursuant to Section 11(d) hereof) per share of Common Stock
on the Trading Day (as hereinafter defined) immediately preceding the date
of such exercise. 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 11(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 Right Certificate shall exercise
fewer than all the Rights evidenced thereby, a new Right Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent to the Registered holder of such Right Certificate or to his duly
authorized assigns, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from and
after the first occurrence of a Section 11(a)(ii) Event, any Rights
beneficially owned by (i) an Acquiring Person, an Adverse Person or an
Associate or Affiliate of an Acquiring Person or an Adverse Person, (ii) a
transferee of an Acquiring Person or an Adverse Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
or the Adverse Person becomes such, or (iii) a transferee of an Acquiring Person
or an Adverse Person (or of any such Associate or Affiliate) who becomes
a transferee prior to or concurrently with the Acquiring Person or the Adverse
Person becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person or the Adverse
Person to holders of equity interests in such Acquiring Person or Adverse
Person or to any Person with whom the Acquiring Person or the Adverse 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 an Adverse
Person or any of their respective 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 contained in the form of election to
purchase set forth on the reverse side of the Right Certificate surrendered
for such exercise, and (ii) provided such additional evidence of the identity
of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Agreement. The Company shall
deliver to the Rights Agent for cancellation and retirement, and the Rights
Agent shall so cancel and retire, any other Right Certificate purchased or
acquired by the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all cancelled Right Certificates to the Company or shall,
at the written request of the Company, destroy such cancelled Right
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
Section 9. Reservation and Availability of Capital Stock. (a) The Company
covenants and agrees that it will cause to be reserved and kept available out
of its authorized and unissued shares of Preferred Stock (and, will use its
best efforts, following the occurrence of a Triggering Event, out of its
authorized and unissued shares of Common Stock 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 Triggering Event,
Common Stock and/or other securities) that will be sufficient to permit the
exercise in full of all outstanding Rights.
(b) So long as the Preferred Stock (and, following the occurrence of a
Triggering Event, Common Stock or other securities) issuable and deliverable
upon the exercise of Rights may be listed on any national securities exchange,
the Company shall use its best efforts to cause, from and after such time as
the Rights become exercisable, all shares reserved for such issuance to be
listed on such exchange upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as soon as practicable
following the earliest date after the first occurrence of a Section 11(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 11(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 Securities Act of 1933, as amended
(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 take such
action as may be appropriate under, or to ensure compliance with, the
securities or "blue sky" laws of the various states in connection with the
exercisability of the Rights. The Company may, acting by resolution of its
Board of Directors (which resolution shall be effective only if it is approved
by a majority of the Continuing Directors) 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 at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction unless the requisite qualification
in such jurisdiction shall have been obtained.
(d) The Company covenants and agrees that it will take all such action as may
be necessary to insure that all one one-hundredths of a share of Preferred
Stock (and, following the occurrence of a Triggering Event, Common Stock or
other securities) delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such shares (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully paid and
nonassessable shares.
(e) The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Right Certificates for a
number of one one-hundredths of a share of Preferred Stock (or shares of
Common Stock and/or other securities, as the case may be) upon the exercise of
Rights. The Company shall not, however, be required to pay any transfer tax
which may be payable in respect to any transfer or delivery of Right
Certificates to a person other than, or the issuance or delivery of
certificates or depositary receipts for a number of one one-hundredths of a
share of Preferred Stock (or shares of Common Stock and/or other securities,
as the case may be) in a name other than that of, the registered holder of the
Right Certificate evidencing Rights surrendered for exercise or to issue or
deliver any certificates for a number of one one-hundredths of a share of
Preferred Stock (or shares of Common Stock and/or other securities, as the
case may be) upon the exercise of any Rights until any such tax has been paid
(any such tax being payable by the holder of such Right Certificate at the time
of surrender) or until it has been established to the Company's satisfaction
that no such tax is due.
Section 10. Preferred Stock Record Date. Each person in whose name any
certificate for a number of one one-hundredths of a share of Preferred Stock
(or shares of Common Stock and/or other securities, as the case may be) is
issued upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of the Preferred Stock (or Common Stock or other
securities, as the case may be) represented thereby on, and such certificate
shall be dated, the date upon which the Right Certificate evidencing such
Rights was duly surrendered and payment of the Purchase Price (and any
applicable transfer taxes) was made; provided, however, that if the date of
such surrender and payment is a date upon which the Preferred Stock (or Common
Stock and/or other securities, as the case may be) transfer books of the
Company are closed, such person shall be deemed to have become the record
holder of such shares (fractional or otherwise) on, and such certificate shall
be dated, the next succeeding Business Day on which the Preferred Stock (or
Common Stock and/or other securities, as the case may be) transfer books of
the Company are open. Prior to the exercise of the Rights evidenced thereby,
the holder of a Right Certificate shall not be entitled to any rights of a
stockholder of the Company with respect to shares for which the Rights shall
be exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and
shall not be entitled to receive any notice of any proceedings of the Company,
except as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or Number of
Rights. The Purchase Price, the number of shares, or fractions thereof,
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 that the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Preferred Stock payable in shares
of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine
the outstanding Preferred Stock into a smaller number of shares, or (D) issue
any shares of its capital stock in a reclassification of the Preferred Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation),
except as otherwise provided under this Section 11(a) and Section 7(e) hereof,
the Purchase Price in effect at the time of the record date for such dividend
or of the effective date of such subdivision, combination or reclassification,
and the number and kind of shares of Preferred Stock or capital stock, as the
case may be, issuable on such date, shall be proportionately adjusted so that
the holder of any Right exercised after such time shall be entitled to receive
the aggregate number and kind of shares of preferred stock or capital stock,
as the case may be, which, if such Right had been exercised immediately prior
to such date and at a time when the Preferred Stock transfer books of the
Company were open, he would have owned upon such exercise and been entitled
to receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs which would require an adjustment under
both the Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment
provided for in this Section 11(a)(i) shall be in addition to, and shall be
made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) In the event:
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person,
at any time after the date of this Agreement, directly or indirectly, (1)
shall merge into the Company or otherwise combine with the Company and the
Company shall be the continuing or surviving corporation of such merger or
combination and the Common Stock of the Company shall remain outstanding and
unchanged, (2) shall, in one transaction or a series of transactions, transfer
any assets to the Company or to any of its Subsidiaries in exchange (in whole
or in part) for shares of Common Stock, for shares of other equity securities
of the Company, or for securities exercisable for or convertible into shares of
equity securities of the Company (Common Stock or otherwise) or otherwise obtain
from the Company, with or without consideration, any additional shares of such
equity securities or securities exercisable for or convertible into shares of
such equity securities (other than pursuant to a pro rata distribution to all
holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage,
pledge, transfer or otherwise acquire or dispose of, in one transaction or a
series of transactions, to, from or with (as the case may be) the Company or
any of its Subsidiaries, assets on terms and conditions less favorable to the
Company than the Company would be able to obtain in arm's-length negotiation
with an unaffiliated third party, other than pursuant to a transaction set
forth in Section 12(a) hereof, (4) shall sell, purchase, lease, exchange,
mortgage, pledge, transfer or otherwise acquire or dispose of in one
transaction or a series of transactions, to, from or with (as the case may be)
the Company or any of the Company's Subsidiaries (other than incidental to the
lines of business, if any, engaged in as of the date hereof between the Company
and such Acquiring Person or Associate or Affiliate) assets having an aggregate
fair market value of more than $5,000,000, other than pursuant to a transaction
set forth in Section 12(a), hereof, (5) shall receive any compensation from
the Company or any of the Company's Subsidiaries other than compensation for
full-time employment as a regular employee at rates in accordance with the
Company's (or its Subsidiaries') past practices, or (6) shall receive the
benefit, directly or indirectly (except proportionately as a stockholder and
except if resulting from a requirement of law or governmental regulation), of
any loans, advances, guarantees, pledges or other financial assistance or any
tax credits or other tax advantage provided by the Company or any of its
Subsidiaries, or
(B) any Person (other than the Company, any Plan of the Company, or any
Person or entity organized, appointed or established by the Company for or
pursuant to the terms of any such Plan), alone or together with its Affiliates
and Associates, shall, at any time after the Record Date, become the Beneficial
Owner of 25% or more of the shares of Common Stock then outstanding, unless the
event causing the 25% threshold to be crossed is a transaction set forth in
Section 12(a) hereof or is an acquisition of shares of Common Stock pursuant to
a tender offer or an exchange offer for all outstanding shares of Common Stock
at a price and on terms determined by a majority of the Continuing Directors
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 the Company's stockholders (taking into account
all factors which such members of the Board of Directors deem relevant
including, without limitation, prices which could rationally 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, or
(C) during such time as there is an Acquiring Person, there shall be any
reclassification of securities (including any reverse stock split), or
recapitalization of the Company or any merger or consolidation of the Company
with any of its Subsidiaries, or any other transaction or series of transactions
involving the Company or any of its Subsidiaries, other than a transaction or
transactions to which the provisions of Section 12(a) apply (whether or not with
or into or otherwise involving an Acquiring Person) which has the effect,
directly or indirectly, of increasing by more than 1% the proportionate share
of the outstanding shares of any class of equity securities of the Company or
any of its Subsidiaries which is directly or indirectly beneficially owned by
any Acquiring Person or any Associate or Affiliate of any Acquiring Person, or
(D) a majority of the Continuing Directors shall declare any Person to be
an Adverse Person, upon a determination that such Person, alone or together
with its Affiliates and Associates, has, at any time after the Rights Dividend
Declaration Date, become the Beneficial Owner of an amount of Common Stock
which a majority of the Continuing Directors determines to be substantial
(which amount shall in no event be less than 15% of the shares of Common Stock
then outstanding) and a determination by a majority of the Continuing Directors
after reasonable inquiry and investigation, including consultation with such
persons as such directors shall deem appropriate, that (a) such Beneficial
Ownership by such Person is intended to cause the Company to repurchase the
Common Stock beneficially owned by such person or to cause pressure on the
Company to take action or enter into a transaction or series of transactions
intended to provide such Person with short-term financial gain under
circumstances where such directors determine that the best long-term interests
of the Company and its stockholders would not be served by taking such action
or entering into such transaction or series of transactions at that time or (b)
such Beneficial Ownership is causing or reasonably likely to cause a material
adverse impact (including, but not limited to, impairment of relationships with
customers or impairment of the Company's ability to maintain its competitive
position) on the business or prospects of the Company,
then, promptly following five (5) days after the date of occurrence of an event
described in Section 11(a)(ii)(B) hereof and promptly following the occurrence
of any event described in Section 11(a)(ii)(A), (C) or (D) hereof, 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 at the then-current Purchase Price in accordance with
the terms of this Agreement, in lieu of a number of one one-hundredths of a
share of Preferred Stock, such number of shares of Common Stock of the Company
as shall equal the result obtained by (x) multiplying the then-current Purchase
Price by the then number of one one-hundredths of a share of Preferred Stock
for which a Right was exercisable immediately prior to the first occurrence of
such Section 11(a)(ii) Event, and (y) dividing that product (which, following
such first occurrence, shall thereafter be referred to as the "Purchase Price"
for each Right and for all purposes of this Agreement) by 50% of the current
market price per share of the Common Stock of the Company (determined pursuant
to Section 11(d) hereof) on the date of such first occurrence (such number of
shares being hereinafter referred to as the "Adjustment Shares"). The Company
shall notify the Rights Agent as to any Persons who are deemed by the Company
to be Acquiring Persons, Adverse Persons or any Associates or Affiliates of
the Acquiring Persons or Adverse Persons and shall identify any Rights
pertaining thereto. The Rights Agent shall have no responsibility to itself
identify an Acquiring Person or any Associate or Affiliate of the Acquiring
Person, but shall rely solely on the Company's identification.
(iii) In lieu of issuing shares of Common Stock in accordance with Section
11(a)(ii) hereof, the Company may, acting by resolution of its Board of
Directors (which resolution shall be effective only if it is approved by a
majority of the Continuing Directors), determine that such action is necessary
or appropriate and not contrary to the interest of holders of Rights (and, in
the event that the number of shares of Common Stock which are authorized by
the Company's Restated Certificate of Incorporation, as amended, but not
outstanding or reserved for issuance for purposes other than upon exercise of
the Rights are not sufficient to permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii) of this Section 11(a),) the
Company 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 attributable to each Right (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, (1) cash, (2)
a reduction in the Purchase Price, (3) Common Stock or other equity securities
of the Company (including, without limitation, shares, or units of shares, of
preferred stock which the Board of Directors of the Company (with the
concurrence of a majority of the Continuing Directors) has deemed to have
the same value as shares of Common Stock (such shares of preferred stock,
"common stock equivalent")), (4) debt securities of the Company, (5) other
assets, or (6) any combination of the foregoing having an aggregate value
equal to the Current Value, where such aggregate value has been determined by
action of the Board of Directors of the Company (with the concurrence of a
majority of the Continuing Directors); 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 11(a)(ii) Event and (y) the date that the right to redeem the Rights
pursuant to Section 23 hereof, as such date may be amended pursuant to Section
26 hereof, shall expire (the later of (x) and (y) being referred to herein as
the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to
deliver, upon the surrender for exercise of a Right Certificate and without
requiring payment of the Purchase Price, shares of Common Stock (to the extent
available) and then, if necessary, cash, securities and/or assets that in the
aggregate are equal to the Spread. If the Company, acting by resolution of
its Board of Directors (which resolution shall be effective only if it is
approved by a majority of the Continuing Directors) 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 11(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 is to be taken pursuant to the terms of this Section 11(a)(iii)
contained above, 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 11(a)(iii), the value of the Common Stock shall
be the current per share market price of Common Stock (as determined pursuant
to Section 11(d) hereof) on the date of the first occurrence of the event
described in Section 11(a)(ii) hereof, and the value of any "common stock
equivalents" shall be deemed to have the same value as the Common Stock on
such date.
(b) In the event the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Stock entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Preferred Stock (or shares having the same rights,
privileges or preferences as the shares of Preferred Stock ("equivalent
preferred stock") or securities convertible into Preferred Stock or equivalent
preferred stock) at a price per share of Preferred Stock or per share of
equivalent preferred stock (or having a conversion or exercise price per share,
if a security convertible into or exercisable for Preferred Stock or
equivalent preferred stock) less than the "current market price" per share of
Preferred Stock (as defined in Section 11(d) hereof) 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 in a consideration, part or all of which shall be in a form other than
cash, the value of such consideration shall be as determined in good faith
by the Company, acting by resolution of its Board of Directors (which
resolution shall be effective only if it is approved by a majority of the
Continuing Directors), whose determination shall be described in a statement
filed with the Rights Agent. Shares of Preferred Stock owned by or held for
the account of the Company shall not be deemed outstanding for the purpose of
any such computation. Such adjustment shall be made successively whenever
such a record date is fixed; and if 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 the event the Company shall fix a record date for the making of a
distribution to all holders of Preferred Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing corporation) of evidences of indebtedness, cash, assets (other than
a regular quarterly cash dividend or a dividend payable in Preferred Stock, but
including any dividend payable on stock other than Preferred Stock) or
convertible securities, subscription rights or warrants (excluding those
referred to in Section 11(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, of which the
numerator shall be the current market price per share of Preferred Stock (as
defined in Section 11(d) hereof) on such record date, less the fair market
value (as determined in good faith by the Company, acting by resolution of its
Board of Directors (which resolution shall be effective only if it is approved
by a majority of the Continuing Directors), whose determination shall be
described in a statement filed with the Rights Agent) of the portion of the
assets or evidences of indebtedness so to be distributed or of such
convertible securities, subscription rights or warrants applicable to one
share of Preferred Stock and the denominator of which shall be such current
market price (as determined pursuant to Section 11(d) hereof) per share of
Preferred Stock. Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such distribution is not so made,
the Purchase Price shall again be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.
(d)(i) For the purpose of any computation hereunder, other than computations
made pursuant to Section 11(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 30 consecutive
Trading Days (as such term is hereinafter defined) immediately prior to such
date and, for purposes of computations made pursuant to Section 11(a)(iii)
hereof, the "current market price" per share of Common Stock 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 if the current market price per share of Common Stock
is determined during a period following the announcement by the issuer of such
Common Stock of (x) 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 which are the subject of this Agreement)
or (y) 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 appropriately adjusted to take into account ex-dividend
trading. The closing price for each day shall be the last sale price, regular
way, or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the shares
of Common Stock are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national securities
exchange on which the Common Stock is 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 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 market maker making
a market in the Common Stock selected by the Company, acting by resolution of
the Board of Directors (which resolution shall be effective only if it is
approved by a majority of the Continuing Directors). If on any such date no
market maker is making a market in the Common Stock, the fair value of such
shares on such date as determined in good faith by the Company, acting by
resolution of its Board of Directors (which resolution shall be effective only
if it is approved by a majority of the Continuing Directors), 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 Company, acting by resolution of its Board of
Directors (which resolution shall be effective only if it is approved by a
majority of the Continuing Directors), whose determination shall be described
in a statement filed with the Rights Agent and shall be conclusive for all
purposes. If on any such date 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 Company, acting by
resolution of its Board of Directors (which resolution shall be effective
only if it is approved by a majority of the Continuing Directors), whose
determination shall be described in a statement filed with the Rights Agent
and shall be conclusive for all purposes.
(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 for the Common Stock in Section 11(d)(i) hereof (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
Section 11(d)(i) hereof, the "current market price" per share of Preferred
Stock shall be conclusively deemed to be an amount equal to 100 (as such
number may be appropriately adjusted for such events as stock splits, stock
dividends and recapitalizations with respect to the Common Stock occurring
after the date of this Agreement) multiplied by the current market price per
share of the Common Stock. If neither the Common Stock nor the Preferred
Stock is publicly held or so listed or traded, "current market price" per
share of the Preferred Stock shall mean the fair value per share as determined
in good faith by the Company, acting by resolution of its Board of Directors
(which resolution shall be effective only if it is approved by a majority of
the Continuing Directors), whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all
purposes. For all purposes of this Agreement, the "current market price"
of one one-hundredth of a share of Preferred Stock shall be equal to the
"current market price" of one share of Preferred Stock divided by 100.
(e) Anything herein to the contrary notwithstanding, no adjustment in the
Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in such price; provided, however, that
any adjustments which by reason of this Section 11(e) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the
nearest cent or to the nearest ten-thousandth of a share of Common Stock or
other share or one-millionth of a share of Preferred Stock, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i)
three years from the date of the transaction which mandates such adjustment
or (ii) the Expiration Date.
(f) If, as a result of an adjustment made pursuant to Section 11(a)(ii) or
Section 12(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 Purchase Price and the number of such other shares so
receivable upon exercise of any Right and the number of Rights outstanding
shall be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with respect to the
Preferred Stock contained in Section 11(a), (b), (c), (e), (g), (h), (i),
(j), (k) and (m) and the provisions of Sections 7, 9, 10, 12 and 14 hereof
with respect to the Preferred Stock shall apply on like terms to any such
other shares; provided, however, that the Company shall not be liable for
its inability to reserve and keep available for issuance upon exercise of
the Rights pursuant to Section 11(a)(ii) a number of shares of Common Stock
greater than the number then authorized by the Restated Certificate of
Incorporation, as amended, of the Company but not outstanding or reserved
for other purposes.
(g) All Rights originally issued by the Company subsequent to any adjustment
made to the Purchase Price hereunder shall evidence the right to purchase, at
the adjusted Purchase Price, the number of one one-hundredths of a share of
Preferred Stock purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of
the calculations made in Section 11(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence
the right to purchase, at the adjusted Purchase Price, that number of one
one-hundredths of a share of Preferred Stock (calculated to the nearest
one-millionth) obtained by (i) multiplying (x) the number of one
one-hundredths of a share covered by a Right immediately prior to such
adjustment to the Purchase Price by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii) dividing
the product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect, on or after the date of any adjustment of the
Purchase Price, to adjust the number of Rights, in substitution for any
adjustment in the number of shares of Preferred Stock purchasable upon the
exercise of a Right. Each of the Rights outstanding after such adjustment of
the number of Rights shall be exercisable for the number of one one-hundredths
of a share of Preferred Stock for which such 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 ten-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase Price
in effect immediately after adjustment of the Purchase Price. The Company
shall make a public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment and, if known at the
time, the amount of the adjustment to be made. This record date may be the
date on which the Purchase Price is adjusted or any day thereafter but, if the
Right Certificates have been issued, shall be at least ten days later than the
date of the public announcement. If Right Certificates have been issued, upon
each adjustment of the number of Rights pursuant to this Section 11(i) the
Company shall, as promptly as practicable, cause to be distributed to holders
of record of Right Certificates on such record date Right 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 Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by
the Company, new Right Certificates evidencing all the Rights to which such
holders shall be entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein (and may bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the holders of record of Right
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or the
number of shares of Preferred Stock, or fraction thereof, issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price and the number of one
one-hundredths of a share which were expressed in the initial Right
Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then par value, if any, of the one one-hundredths
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 one one-hundredths 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
issuing to the holder of any Right exercised after such record date the shares
of Preferred Stock, or fraction thereof, and any other capital stock or
securities of the Company, if any, issuable upon such exercise over and above
the shares of Preferred Stock, or fraction thereof, 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.
(m) Anything in this Section 11 to the contrary notwithstanding, the Company,
acting by resolution of its Board of Directors (which resolution shall be
effective only if it is approved by a majority of the Continuing Directors),
shall be entitled to make such reductions in the Purchase Price, in addition
to those adjustments expressly required by this Section 11, as and to the
extent that it in its sole discretion shall determine to be advisable in order
that any consolidation or subdivision of the Preferred Stock, issuance wholly
for cash of any Preferred Stock at less than the current market price,
issuance wholly for cash of Preferred Stock or securities which by their
terms are convertible into or exchangeable for Preferred Stock, stock
dividends or issuance of rights, options or warrants referred to herein-above
in this Section 11, hereafter made by the Company to the 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 11(o)
hereof), (ii) merge with or into any other Person (other than a Subsidiary of
the Company in a transaction which complies with Section 11(o) hereof), or
(iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one
or more transactions, assets or earning power aggregating more than 50% of
the assets or earning power of the Company and its Subsidiaries (taken as a
whole), to any other Person or Persons (other than the Company and/or any of
its Subsidiaries in one or more transactions each of which complies with
Section 11(o) hereof), if at the time of or immediately after such
consolidation, merger or sale there are any rights, warrants or other
instruments or securities outstanding which would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights or
prior to, simultaneously with or immediately after such consolidation, merger
or sale, the stockholders of the Person who constitutes, or would constitute,
the "Principal Party" for purposes of Section 12(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 Record 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 number of Rights associated with each share of
common stock then outstanding, or issued or delivered thereafter but prior to
the Distribution Date, shall be proportionately adjusted so that the number of
Rights thereafter associated with each share of Common Stock following any such
event shall equal the result obtained by multiplying the number of Rights
associated with each share of Common Stock immediately prior to such event by
a fraction the numerator of which shall be the total number of shares of
Common Stock outstanding immediately prior to the occurrence of the event and
the denominator of which shall be the total number of shares of Common Stock
outstanding immediately following the occurrence of such event.
(q) The failure by the Directors to declare a Person to be an Adverse Person
following such Person becoming the Beneficial Owner of 15% or more of the
outstanding Common Stock shall not imply that such person is not an Adverse
Person or limit the Directors' right at any time in the future to declare such
Person to be an Adverse Person.
Section 12. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power. (a) In the 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 any Plan of the Company or a Subsidiary of the
Company, or any person holding shares of Common Stock for or pursuant to the
terms of any such Plan, in a transaction which complies with Section 11(o)
hereof), and the Company shall not be the continuing or surviving corporation
of such consolidation or merger, (y) any Person (other than any Plan of the
Company or a Subsidiary of the Company, or any person holding shares of Common
Stock for or pursuant to the terms of any such Plan), shall consolidate with
the Company or merge with and 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 the Company) or cash or any other property,
or (z) the Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one transaction or series
of related transactions, assets or earning power aggregating 50% or more 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 or any
Subsidiary of the Company in one or more transactions each of which complies
with Section 11(o) hereof), then, and in each such case (except as set forth
in Section 12(d) hereof), proper provision shall be made so that (i) each
holder of a Right, except as provided in Section 7(e) hereof, shall thereafter
have the right to receive, upon the exercise thereof at the then-current
Purchase Price in accordance with the terms of this Agreement, such number of
shares of validly authorized and issued, fully paid and non-assessable
shares of Common Stock of the Principal Party (as defined below), not subject
to any liens, encumbrances, rights of call or first refusal on other adverse
claims, as shall be equal to the result obtained by (1) multiplying the
then-current Purchase Price by the then number of one one-hundredths of a
share of Preferred Stock for which a Right is exercisable immediately prior
to the first occurrence of a Section 12(a) Event (or, if a Section 11(a)(ii)
Event has occurred prior to the Section 12(a) Event, multiplying the number
of such one one-hundredths of a share of Preferred Stock for which a Right
was exercisable immediately prior to the first occurrence of such Section
11(a)(ii) Event by the Purchase Price in effect immediately prior to such
first occurrence), and dividing that product by (2) 50% of the current market
price per share of the common stock of such Principal Party (determined in the
manner described in Section 11(d)(i) on the date of consummation of such
Section 12(a) Event); (ii) the Principal Party shall thereafter be liable for,
and shall assume, by virtue of such consolidation, merger, sale or transfer,
all the obligations and duties of the Company pursuant to this Agreement; (iii)
the term "Company" shall thereafter be deemed to refer to such Principal Party,
it being specifically intended that the provisions of Section 11 hereof shall
apply to such Principal Party following the occurrence of a Section 12(a)
Event; and (iv) such Principal Party shall take such steps (including, but
not limited to, the reservation of a sufficient number of shares of its common
stock in accordance with Section 9 hereof) in connection with such consummation
as may be necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to the shares of its
common stock thereafter deliverable upon the exercise of the Right; and (v)
the provisions of Section 11(a)(ii) hereof shall be of no effect following
the first occurrence of any Section 12(a) Event.
(b) Notwithstanding the foregoing, if the event referred to in the preceding
sentence is the sale or transfer of assets or earning power in one or more
transactions aggregating more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole), but less than 100% thereof,
then each Person acquiring all or a portion thereof shall assume the
obligations of the Company as to a fraction of the Rights held by each holder
thereof equal to the fraction of the assets of the Company and its Subsidiaries
(taken as a whole) acquired by such Person, and the remaining fraction of the
Rights shall continue in full force and effect as obligations of the Company.
(c) "Principal Party" shall mean
(1) in the case of any transaction described in (x) or (y) of the first
sentence of Section 12(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, and if no securities are so issued, the Person that is the
other party to such merger or consolidation; and
(2) in the case of any transaction described in (z) of the first sentence of
this Section 12, the Person that is the party receiving the greatest portion
of the assets or earning power transferred pursuant to such transaction or
transactions;
provided, however, that in any such case, (x) if the Common Stock of such
Person is not at such time and has not been continuously over the preceding
12-month period registered under Section 12 of the 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; (y) in case such Person is a Subsidiary, directly or indirectly,
of more than one Person, the Common Stock of all 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 market value of shares held by
the public; and (z) in case such Person is owned, directly or indirectly, by a
joint venture formed by two or more Persons that are not owned, directly or
indirectly, by the same Person, the rules set forth in (x) and (y) above shall
apply to each of the chains of ownership having an interest in such joint
venture as if such party were a "Subsidiary" of both or all of such joint
venturers and the Principal Parties in each such chain shall bear the
obligations set forth in this Section 12 in the same ratio as their direct or
indirect interests in such Person bear the total of such interests.
(d) The Company shall not consummate any such consolidation, merger, sale or
transfer unless prior thereto the Company and such Principal Party shall have
executed and delivered to the Rights Agent a supplemental agreement confirming
that such issues shall, upon consummation of such consolidation, merger or
sale or transfer of assets or earning power, assume the Rights Agreement in
accordance with Sections 12(a) and (b) hereof and that all rights of first
refusal or preemptive rights in respect of the issuance of shares of Common
Stock of such Principal Party upon exercise of outstanding Rights have been
waived and that such transactions shall not result in a default by such
Principal Party under the Rights Agreement and further providing that, as
soon as practicable after the date of any consolidation, merger or sale or
transfer of assets or earning power referred to in Section 12(a) hereof, such
Principal Party will:
(i) prepare and file a registration statement under the Securities Act of
1933, as amended (the "Act"), with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form; use its best
efforts to cause such registration statement to become effective as soon as
practicable after such filing; and use its best efforts to cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Act) until the date of expiration of the
Rights, and similarly comply with applicable state securities laws;
(ii) use its best efforts to list (or continue the listing of) the Rights
and the securities purchasable upon exercise of the Rights on a national
securities exchange or to meet the eligibility requirements for quotation on
NASDAQ; and
(iii) deliver to holders of the Rights historical financial statements for
the Principal Party and each of its Affiliates which comply in all respects
with the requirements for registration on Form 10 (or any successor form)
under the Exchange Act.
(e) In the event that a Section 12(a) Event shall occur at any time after a
Section 11(a)(ii) Event, the Rights which have not theretofore been exercised
shall thereafter be exercisable in the manner described in Section 12(a)
(without taking into account any prior adjustment required by Section 11(a)
(ii)).
(f) Upon the exercise of a Right following a Section 11(a)(ii) Event or
Section 12(a) Event, the Purchase Price may be paid, to the extent permitted
by the charter of the Principal Party, in cash, or tangible or intangible
property, or any combination of the foregoing. The provisions of this Section
12 shall similarly apply to successive mergers or consolidations or sales or
other transfers.
(g) Notwithstanding anything in this Agreement to the contrary, Section 12
shall not be applicable to a transaction described in subparagraphs (x) and (y)
of Section 12(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 Section 11(a)(ii)(B) hereof (or a wholly owned subsidiary of
any such Person or Persons), (ii) the price per share of Common Stock offered
in such transaction is not less than the price per share of Common Stock paid
to all holders of shares of Common Stock whose shares were purchased pursuant
to such tender 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 12(g), all Rights hereunder shall expire.
Section 13. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or Section 12 of
this Agreement, 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 Common Stock and Preferred Stock, a copy of such certificate
and (c) mail a brief summary thereof to each holder of a Right Certificate
(or if prior to the Distribution Date, to each holder of a certificate
representing shares of Common Stock in accordance with Section 25 of this
Agreement). Notwithstanding the foregoing sentence, the failure of the
Company to make such certificates or give such notice shall not affect the
validity or the force or effect of 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 12 of this Agreement shall be effective as of the date of the
event giving rise to such adjustment.
Section 14. Fractional Rights and Fractional Shares. (a) The Company shall
not be required to issue fractions of Rights or to distribute Right
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Right Certificates
with regard to which such fractions of Rights would otherwise be issuable,
an amount in cash equal to the same fraction of the current market value of a
whole Right. For the purposes of this Section 14(a), the current mark
et value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price for any day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the Rights are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Rights are listed or admitted to trading or,
if the Rights are not listed or admitted to trading on any national securities
exchange, the last quoted price, or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by NASDAQ
or such other system then in use or, if on any such date the Rights are not
quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker (selected by the Company,
acting by resolution of its Board of Directors (which resolution shall be
effective only if it is approved by a majority of the Continuing Directors))
making a market in the Rights. 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 Company, acting by resolution of its Board of
Directors (which resolution shall be effective only if it is approved by a
majority of the Continuing Directors), 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 one-hundredth
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 which are integral multiples of one one-hundredth of a share of
Preferred Stock). Fractions of shares of Preferred Stock in integral multiples
of one one-hundredth of a share of Preferred Stock may, at the election of
the Company, be evidenced by depositary receipts, pursuant to an appropriate
agreement between the Company and a depositary selected by it, provided that
such agreement shall provide that the holders of such depositary receipts
shall have all the rights, privileges and preferences to which they are
entitled as beneficial owners of the shares of Preferred Stock. With respect
to fractional shares of Preferred Stock that are not integral multiples of one
one-hundredth of a share of Preferred Stock, if the Company does not issue
fractional shares of depositary receipts in lieu thereof, the Company shall
pay to the registered holders of Right Certificates at the time such Right
Certificates are exercised as herein provided an amount in cash equal to the
same fraction of the current market value of one one-hundredth of a share of
Preferred Stock. For purposes of this Section 14(b), the current market value
of one one-hundredth of a share of Preferred Stock shall be one one-hundredth
of the closing price of a share of Preferred Stock (as determined pursuant to
Section 11(d)(ii)) for the Trading Day immediately prior to the date of such
exercise.
(c) The Company shall not be required to issue fractions of shares of Common
Stock upon exercise of the Rights pursuant to Sections 11(a)(ii) or 12(a)
hereof 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 Right Certificates at the time such Rights
are exercised as herein provided an amount in cash equal to the same fraction
of the current market price of one share of Common Stock. For the purposes of
this Section 14(c), the current market price of one share of Common Stock shall
be the closing price of a share of Common Stock (as determined pursuant to
Section 11(d)(i) hereof) for the Trading Day immediately prior to the date
of such exercise.
(d) The holder of a Right, by the acceptance of such Right, 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 are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of
Common Stock); and any registered holder of any Right Certificate (or, prior
to the Distribution Date, of the Common Stock), without the consent of the
Rights Agent or of the holder of any other Right Certificate (or, prior to
the Distribution Date, of the Common Stock), may, in his own behalf and for
his own benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of, his
right to exercise the rights evidenced by such Right Certificate in the manner
provided in such Right Certificate and in this Agreement. 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 of any Person
subject to this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right, by accepting
such Right, consents and agrees with the Company and the Rights Agent and with
every other holder of a Right that:
(a) prior to the Distribution Date, the Rights shall be evidenced by the
certificates for shares of Common Stock registered in the name of the holders
of such shares (which certificates for shares of Common Stock shall also
constitute certificates for Rights) and each Right will be transferable only
in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Right Certificates are transferable only
on the registry books of the Rights Agent if surrendered at the principal
office of the Rights Agent, duly endorsed or accompanied by a proper instrument
of transfer and with the appropriate form 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 the Right Certificate
(or, prior to the Distribution Date, the associated certificate for Common
Stock) is registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on the Right
Certificate or the associated certificate for Common Stock made by anyone
other than the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent, subject to the last sentence of
Section 7(e) hereof, shall be affected by any notice to the contrary; 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
Section 17. Right Holder and Right Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Right or Right Certificate shall be entitled to
vote, receive dividends or be deemed or any purpose the holder of one
one-hundredth share of Preferred Stock or any other securities of the Company
which may at any time be issuable on the exercise of the Rights represented
thereby, nor shall anything contained herein or in any Right Certificate be
construed to confer upon the holder of any Right or Right 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 (except as
provided in Section 24), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such Right Certificate shall
have been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. (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 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.
(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 Right Certificate or
certificate for Preferred Stock or 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 or
otherwise upon the advice of counsel as set forth in Section 20 hereof.
In no event shall the Rights Agent be responsible or liable to anyone for
consequential damages, lost profits, interest or other special or consequential
damages, even if informed of the possibility thereof.
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 form 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 that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof. The purchase of all or substantially all of the Rights Agent's assets
employed in the performance of transfer agent activities shall be deemed a
merger or consolidation for purposes of this Section 19. In case at the time
such successor Rights Agent shall succeed to the agency created by this
Agreement, any of the Rights Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the counter signature of
the predecessor Rights Agent and deliver such Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall
not have been countersigned, any successor Rights Agent may countersign such
Right Certificate either in the name of the predecessor Rights Agent or in the
name of the successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and
in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed and at
such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the counter signature under its prior
name and deliver Right Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior name or in
its changed name; and in all such cases such Right Certificates shall have
the full force provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (which 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 or Adverse 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 proven and established by a certificate signed
or reasonably believed by the Rights Agent to be signed by the President or
any Vice President and by the Treasurer or any Assistant Treasurer or the
Secretary or any Assistant Secretary of the Company and delivered to the Rights
Agent; and such certificate 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 any of the
statements of fact or recitals contained in this Agreement or in the Rights
Certificate (except its countersignature thereof) or be required to verify the
same, and all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect of the
validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right Certificate; nor shall
it be responsible for any change in the exercisability of the Rights or any
adjustment required under the provisions of Sections 11 or 12 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 adjustments (except with
respect to the exercise of Rights evidenced by Right Certificates after actual
notice of 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 Right Certificate or as to whether any shares of Common Stock
or Preferred Stock will, when issued, be validly authorized and issued, fully
paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
President or any Vice President or the Secretary or any Assistant Secretary or
the Treasurer or any Assistant Treasurer of the Company, and to apply to such
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 or for any delay in acting
while waiting for those instructions.
(h) The Rights Agent and any shareholder, director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other securities
of the Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not the Rights Agent under
this Agreement. Nothing herein shall preclude the Rights Agent from acting in
any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys, or agents, and the Rights Agent shall not be answerable
or accountable for any act, default, neglect or misconduct of any such
attorneys, or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct, provided reasonable care was exercised in
the selection and continued employment thereof.
Section 21. Change of Rights Agent. The Rights Agent or any successor Rights
Agent may resign and be discharged from its duties under this Agreement upon
30 days' notice in writing mailed to the Company and to each transfer agent
of the Common Stock or Preferred Stock by registered or certified mail, and
to the holders of the Right Certificates by first-class mail. The Company
may remove the Rights Agent or any successor Rights Agent upon 30 days' notice
in writing, mailed to the Rights Agent or successor Rights Agent, as the case
may be, and to each transfer agent of the Common Stock or Preferred Stock by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor
to the Rights Agent. If the Company shall fail to make such appointment within
a period of 30 days after such removal or after it has been notified in writing
of such resignation or incapacity by the resigning or incapacitated Rights
Agent or by the holder of a Right Certificate (who shall, with such notice,
submit his Right Certificate for inspection by the Company), then the
registered holder of any Right Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court, (a) shall be a
corporation organized and doing business under the laws of the United States
or one of the States thereof, in good standing, which is authorized under such
laws to exercise corporate trust or stock transfer powers and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent, a combined capital and surplus of at
least $50 million 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 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 or Preferred Stock, and mail a notice thereof in
writing to the registered holders of the Right Certificates. Failure to give
any notice provided for in this Section 21, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal of the
Rights Agent or the appointment of the successor Rights Agent, as the case may
be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Right Certificates evidencing rights in such form as
may be approved by resolution of its Board of Directors (which resolution shall
be effective only if it is approved by a majority of the Continuing Directors),
to reflect any adjustment or change in the purchase price and the number or
kind of class of shares of stock or other securities or property purchasable
under the Right Certificates made in accordance with the provisions of this
Agreement.
Section 23. Redemption. (a) The Company may, at its option, by resolution of
its Board of Directors (which resolution shall be effective only if it is
approved by a majority of the Continuing Directors), at any time prior to the
Close of business on the earlier of (i) the tenth day following the Stock
Acquisition Date, or (ii) the Final Expiration Date, redeem all, but not less
than all, the then outstanding Rights at a redemption price of $.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").
Notwithstanding the foregoing, the Board of Directors may not redeem any
Rights following a determination pursuant to Section 11(a)(ii)(D) that any
Person is an Adverse Person.
(b) In the event that, following the occurrence of a Stock Acquisition Date
and following the expiration of the right of redemption under subparagraph (a)
of this Section 23, but prior to any Triggering Event, (i) a person who is an
Acquiring Person shall have transferred or otherwise disposed of a number of
shares of Common Stock in one transaction, or a series of transactions (not
directly or indirectly involving a purchase by the Company or any of its
Subsidiaries), which did not result in the occurrence of a Triggering Event,
such that such person is thereafter a Beneficial Owner of 10% or less of the
outstanding Common Stock of the Company, and (ii) there are no other Persons,
immediately following the occurrence of the event described in clause (i), who
are Acquiring Persons, then the right of redemption provided in subparagraph
(a) of this Section 23 shall be reinstated and thereafter all outstanding
Rights shall again be subject to the provisions of this Section 23.
Notwithstanding anything contained in this Agreement to the contrary, the
Rights shall not be exercisable after the first occurrence of a Section 11(a)
(ii) Event until such time as the Company's right of redemption hereunder has
expired.
(c) Immediately upon the action of the Company, acting by resolution of its
Board of Directors (which resolution shall be effective only if approved by a
majority of the Continuing Directors) electing to redeem the Rights, evidence
of which shall have been filed with the Rights Agent, and without any further
action and without any notice, the right to exercise the Rights will terminate
and the only right thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right so held. Promptly after the action of the
Company ordering the redemption of the Rights, the Company shall give notice
of such redemption to the holders of the then outstanding Rights by mailing
such notice to all such holders at their last addresses as they appear upon
the registry books of the Rights Agent or, prior to the Distribution Date, on
the registry books of the transfer agent for the Common Stock. Any notice
which is mailed in the manner herein provided shall be deemed given, whether
or not the holder receives the notice. Each such notice of redemption will
state the method by which the payment of the Redemption Price will be made.
Section 24. Notice of Certain Events. (a) In case the Company shall propose,
at any time after the Distribution Date, (i) to declare or pay any dividend
payable in stock of any class to the holders of its Preferred Stock or to make
any other distribution to the holders of its Preferred Stock (other than a
regular quarterly cash dividend out of earnings on retained earnings of the
Company) or (ii) to offer to the holders of its Preferred Stock options,
rights or warrants to subscribe for or to purchase any additional 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 with or
into any other Person (other than a Subsidiary of the Company in a transaction
which complies with Section 11(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 11(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 Right 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, or
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 record
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 twenty (20) days prior to the record date for determining
holders of the shares of Preferred Stock for purposes of such action, and in
the case of any such other action, at least twenty (20) days prior to the
date of the taking of such proposed action or the date of participation
therein by the holders of the Preferred Stock, whichever shall be the earlier.
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 Section 11(a)(ii) Event shall occur, then, in any such case,
(i) the Company shall as soon as practicable thereafter give to each holder of
a Right 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 thereof to holders of Rights under Section 11(a)(ii)
hereof, and (ii) all references in Section 24(a) hereof 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 Right Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing
with the Rights Agent) as follows:
Attention: Treasurer
Data General Corporation
4400 Computer Drive
Westboro, Massachusetts 01580
with a copy to:
Carl E. Kaplan, Esq.
Fulbright & Jaworski L.L.P.
666 Fifth Avenue
New York, NY 10103
Subject to the provisions of Section 21, any notice or demand authorized by
this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be 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:
Attention: Receive and Deliver Department
The Bank of New York
101 Barclay Street, 11th Floor West
New York, New York 10286
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the
registry books of the Company.
Section 26. Supplements and Amendments. Prior to the Distribution Date and
subject to the penultimate sentence of this Section 26, the Company and the
Rights Agent shall, if the Company so directs, supplement or amend any
provision of this Agreement without the approval of any holders of certificates
representing shares of Common Stock. From and after the Distribution Date and
subject to the penultimate sentence of this Section 26, the Company and the
Rights Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Right Certificates
in order (i) to cure any ambiguity, (ii) to correct or supplement any
provision contained herein which may be defective or inconsistent with any
other provisions herein, (iii) to shorten or lengthen any time period
hereunder (which lengthening or shortening, following the first occurrence of
an event set forth in clauses (i) and (ii) of the first proviso to Section
23(a) hereof, shall be effective only if there are Continuing Direct
ors and shall require the concurrence of a majority of such Continuing
Directors) or (iv) to change or supplement the provisions hereunder in any
manner which the Company may deem necessary or desirable and which shall not
adversely affect the interests of the holders of Right Certificates (other
than an Acquiring Person, an Adverse Person, or an Affiliate or Associate of
an Acquiring Person or an Adverse Person); provided, this Agreement may not be
supplemented or amended to lengthen, pursuant to clause (iii) of this sentence,
(A) a time period relating to when the Rights may be redeemed at such time as
the Rights are not then redeemable, or (B) any other time period unless such
lengthening is for the purpose of protecting, enhancing or clarifying the
rights of, and/or the benefits to, the holders of Rights. 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,
the Final Expiration Date, the Purchase Price or the number of one
one-hundredths of a share of Preferred Stock for which a Right is exercisable.
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. Determinations and Actions by the Board of Directors, etc. The
Board of Directors of the Company (and, where specifically provided for
herein, the Board of Directors and a majority of the Continuing Directors)
shall have the exclusive power and authority to administer this Agreement and
to exercise all rights and powers specifically granted to the Board (or, as
expressly provided, the Board of Directors and a majority of the Continuing
Directors) or to the Company, or as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the right
and power to (i) interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the Rights or to
amend the Agreement). All such actions, calculations, interpretations and
determinations (including, for purpose of clause (ii) below, all omissions
with respect to the foregoing) which are done or made by the Board (or, as
provided for, by the Board of Directors and a majority of the Continuing
Directors), in good faith, (i) shall be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Right Certificates and all other
parties, and (ii) shall not subject the Board or the Continuing Directors to
any liability to the holders of the Right Certificates.
Section 29. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior
to the Distribution Date, 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 Right 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 (with the concurrence of a majority of the
Continuing Directors) determines in its good faith judgment that severing the
invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23
hereof shall be reinstated and shall not expire until the Close of business on
the tenth day following the date of such determination by the Board of
Directors.
Section 31. Force Majeure. If the Rights Agent shall be delayed in its
performance of services or prevented entirely or in part from performing
services due to causes and events beyond its control, including and without
limitation, acts of God, interruption of power or other utilities, failure,
lack of certificates, transportation or communication services, acts of civil
or military authority, national agencies, war, explosion, flood, earthquake
or other catastrophe, fire, strike or other labor problem, inside or without
New York, present or future law, governmental order, rule or regulation,
or shortages of suitable parts, materials, or transportation, such delay or
nonperformance shall be excused and the reasonable time for performance in
connection with this Agreement shall be extended to include the period of such
delay or nonperformance. It is understood that in the event that any of the
conditions set forth in this paragraph does take place, the Rights Agent will
use its best efforts to cause any work in progress which has been sent to
it at the time of such condition to be processed in a proper manner as quickly
as reasonably possible.
Section 32. Governing Law. This Agreement and each Right certificate issued
hereunder shall be deemed to be a contract made under the laws of the State of
Delaware and for all purposes shall be governed by and construed in accordance
with the laws of the State of Delaware applicable to contracts to be made and
performed entirely within the State of Delaware.
Section 33. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one
and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed, all as of October 19, 1996.
Attested: DATA GENERAL CORPORATION
By: /s/ James K. Jacobs By: /s/ John J. Gavin, Jr.
------------------- ----------------------
Name: James K. Jacobs Name: John J. Gavin, Jr.
Title: Assistant Secretary Title: Treasurer
Attest: THE BANK OF NEW YORK
By: /s/ Kathleen A. Flaherty By: /s/ Raymond Romanski
------------------------ --------------------
Name: Kathleen A. Flaherty Name: Raymond Romanski
Title: Assistant Treasurer Title: Vice President
Exhibit A
FORM OF CERTIFICATE OF DESIGNATIONS OF SERIES A JUNIOR
PARTICIPATING PREFERRED STOCK
$.01 Par Value
of
DATA GENERAL CORPORATION
Pursuant to Section 151 of the General Corporation
Law of the State of Delaware
We, Edson D. de Castro, President, and Carl E. Kaplan, Secretary, of Data
General Corporation, a corporation organized and existing under the General
Corporation Law of the State of Delaware, in accordance with the provisions of
Section 103 thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by the
Restated Certificate of Incorporation of the said Corporation, the said Board
of Directors on October 3, 1986 adopted the following resolution creating a
series of four hundred thousand (400,000) shares of Preferred Stock designated
as Series A Junior Participating Cumulative Preferred Stock, $.01 Par Value:
RESOLVED, that pursuant to the authority vested in the Board of Directors of
this Corporation in accordance with the provisions of its Restated Certificate
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:
Section 1. Designation and Amount. The shares of such series shall be
designated as Series A Junior Participating Preferred Stock, $.01 Par Value
(the "Series A Preferred Stock") and the number of shares constituting such
series shall be 400,000. Such number of shares may be increased or decreased
by resolution of the Board of Directors; provided, that no decrease shall
reduce the number of shares of Series A Preferred Stock to a number less than
the number of shares then outstanding plus the number of shares reserved for
issuance upon the exercise of outstanding options, rights or warrants or upon
the conversion of any outstanding securities issued by the Corporation
convertible into Series A Preferred Stock.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of any series of
Preferred Stock (or any similar stock) ranking prior and superior to the
Series A Preferred Stock with respect to dividends, the holders of shares of
Series A Preferred Stock, in preference to the holders of Common Stock, $.01
par value, of the Corporation (the "Common Stock") and of any other junior
stock which 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 first day of January,
April, July and October in each year (each such date being referred to herein
as a "Quarterly Dividend Payment Date"), commencing on the first Quarterly
Dividend Payment Date after the first issuance of a share or fraction of a
share of Series A Preferred Stock, in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $2.50 per share ($10.00 per annum),
or (b) subject to the provision for adjustment hereinafter set forth, 100 times
the aggregate per share amount of all cash dividends, and 10 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 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 in each such case the amount to which
holders of shares of Series A Preferred Stock were entitled immediately prior
to such event under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the Series A
Preferred Stock as provided in paragraph (A) of this Section immediately after
it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided that, in the event no
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 $2.50 per share ($10.00 per
annum) 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 begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall accumulate but shall not bear interest. Dividends paid on the
shares of Series A Preferred Stock in an amount less than the total amount of
such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon, which record
date shall be not 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) Subject to the provisions for adjustment as hereinafter set forth, each
share of Series A Preferred Stock shall entitle the holder thereof to 100
votes (and each one one-hundredth of a share of Series A Preferred Stock shall
entitle the holder thereof to one vote) on all matters submitted to a vote of
the stockholders of the Corporation. In the event the Corporation shall at
any time 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 in each such case the number of votes
per share to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such number
by a fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such event.
(B) Except as otherwise provided herein, in the Restated Certificate of
Incorporation, in any other certificate of designation creating a series of
preferred stock or any similar stock, or by law, the holders of shares of
Series A Preferred Stock and the holders of shares of Common Stock and any
other capital stock of the Corporation having general voting rights shall vote
together as one class on all matters submitted to a vote of stockholders of
the Corporation.
(C) In addition, the holders of shares of Series A Preferred Stock shall have
the following special voting rights:
If and whenever accrued dividends on Series A Preferred Stock shall not have
been paid or declared and a sum sufficient for the payment thereof set aside,
in an amount equivalent to six (6) quarterly dividends on all shares of Series
A Preferred Stock at the time outstanding, then and in each such event:
(i) the holders of Series A Preferred Stock and each other series of preferred
stock now or hereafter issued which shall be accorded such class voting right
by the Board of Directors and which shall have the right to elect two (2)
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 (2) directors, in addition to
the directors to be elected by the holders of all shares of this Corporation
entitled to vote for the election of directors, and (ii) 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. Such special voting right of the
holders 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 Series A Preferred Stock shall
cease, but subject always to the same provisions for the vesting of such
special voting rights in the case of any such future dividend default or
defaults. At any time after such special voting rights shall have so vested
in the holders of Series A Preferred Stock, the Secretary of the Corporation
may, and upon the written request of the holders of record of ten percent
(10%) or more in number of shares of Series A Preferred Stock and each Other
Series of Preferred Stock then outstanding addressed to him at the principal
executive office of the Corporation shall, call a special meeting of the
holders 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 fifty
(50) 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 ninety (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 Preferred Stock so entitled to
vote shall be entitled to exercise the special voting rights provided in this
paragraph at such annual meeting. If any such special meeting required to be
called as above provided shall not be called by the Secretary within thirty
(30) days after receipt of any such request, then the holders of record of ten
percent (10%) or more in number of 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 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 sixty (60) days before the annual meeting
of the stockholders or a special meeting held in place thereof next succeeding
the time when the holders of Series A Preferred Stock become entitled to elect
directors as above provided. 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 forty percent (40%) of the then outstanding shares of Series A Preferred
Stock and each Other Series of Preferred Stock 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 (2), as of
the time of such special meeting or the time of the first such annual meeting
held while such holders have said special voting rights and such quorum is
present, and the holders of the 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 Certificate of
Incorporation or the bylaws, the two (2) 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. Upon the
election at such meeting by the holders of the shares of Series A Preferred
Stock and each Other Series of Preferred Stock, voting as a class, of the
two (2) directors they are entitled so to elect, the persons so elected,
together with such persons as may be or 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 this Corporation. The additional directors so elected by holders 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 as aforesaid,
each such director shall serve until the annual meeting at which the term of
office of his class shall expire or until his 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 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
voting rights shall apply in the re-election of such director or in the
election of his successor provided, however, that whenever the holders of
Series A Preferred Stock and each Other Series of Preferred Stock shall be
divested of the special rights to elect two (2) directors as above provided,
the terms of office of all persons elected as directors by the holders 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 Series A Preferred Stock
and each Other Series of Preferred Stock, shall forthwith terminate and the
authorized 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 Series A Preferred Stock and each Other Series of
Preferred Stock have elected additional directors as provided above, and while
the holders of Series A Preferred Stock and each Other Series of Preferred
Stock shall be entitled to elect two (2) directors, the number of directors
who have been elected by the holders 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 be reason of
resignation, death or removals be less than two (2) but at least one (1), the
vacancy in the directors elected by the holders 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 failing such election within thirty (30)
days after such vacancy arises, or if there shall not be incumbent at least one
(1) director elected by such holders, the Secretary of the Corporation may,
and upon the written request of the holders of record of ten percent (10%) or
more in number of shares of Series A Preferred Stock and each Other Series of
Preferred Stock then outstanding addressed to him at the principal office of
the Corporation shall, call a special meeting of the holders of Preferred Stock
so entitled to vote, for an election to fill such vacancy or vacancies, to be
held within fifty (50) 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
shareholders; provided, however, that the Secretary shall not be required to
call such special meeting in the case of any such request received less than
ninety (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
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 thirty
(30) days after receipt of any such request, then the holders of record of ten
percent (10%) or more in number of 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 above provided, and for that purpose shall have access to the stock
books of the Corporation and no such special meeting and no adjournment thereof
shall be held on a date later than sixty (60) days before the annual meeting of
the stockholders or a special meeting held in place thereof next succeeding the
time when the holders of Series A Preferred Stock and each Other Series of
Preferred Stock became entitled to elect directors as above provided.
(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, 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 this
Corporation as authorized by the Certificate of In corporation now, or as it
may hereafter be amended.
(E) Except as set forth herein, holders of Series A Preferred Stock shall
have no special voting rights and their consent shall not be required (except
to the extent they are entitled to vote as set forth in the Restated
Certificate of Incorporation or herein or by law) for taking any corporate
action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions payable
on the Series A Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions,
whether or not declared, on shares of Series A Preferred Stock outstanding
shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any other distributions on any shares
of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends, or make any other distributions, on or make
any other distributions on any shares of stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except dividends paid ratably on the Series A Preferred Stock
and all such parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such shares are
then entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares of any
stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred Stock, provided that
the Corporation may at any time redeem, purchase or otherwise acquire shares
of any such parity stock in exchange for shares of any stock of the Corporation
ranking junior (either as to dividends or upon dissolution, liquidation or
winding up) to the Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares of Series A
Preferred Stock, or 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 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. All
such shares shall upon their cancellation become authorized but unissued
shares of preferred stock, without designation as to series, and may be
reissued as part of a new series of preferred stock to be created by resolution
or resolutions of the Board of Directors, subject to the conditions and
restrictions on issuance set forth herein, in the Restated Certificate of
Incorporation, in any other certificate of designation creating a series of
preferred stock or any similar stock or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (A) to the holders of shares of stock ranking
junior (either as to dividends or upon liquidation, dissolution or winding up)
to the Series A Preferred Stock unless, prior thereto, the holders of shares of
Series A Preferred Stock shall have received the higher of (i) $10,000 per
share ($100 per one one-hundredth 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 100 times the
aggregate amount to be distributed per share to holders of Common Stock; nor
shall any distribution be made (B) to the holders of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with
the Series A Preferred Stock, except distributions made ratably on the Series
A Preferred Stock and all other such parity stock in proportion to the total
amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event 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 in each such case the aggregate amount
to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under the proviso in clause (A) 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.
Section 7. Consolidation, Merger, etc. In case the Corporation shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, or otherwise changed, then in any
such case each share of Series A Preferred Stock shall at the same time be
similarly exchanged or changed into an amount per share (subject to the
provision for adjustment hereinafter set forth) equal to 100 times the
aggregate amount of stock, securities, cash and/or any other property (payable
in kind), as the case may be, into which or for which each share of Common
Stock is changed or exchanged. In the event the Corporation shall at any
time 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 in each such case the amount set forth
in the preceding sentence with respect to the exchange or change of shares of
Series A Preferred Stock shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such event.
Section 8. No Redemption. The shares of Series A Preferred Stock shall not
be redeemable.
Section 9. Rank. Unless otherwise provided in the Restated Certificate of
Incorporation of the Corporation or a Certificate of Designation relating to a
subsequent series of preferred stock of the Corporation, the Series A Preferred
Stock shall rank junior to all other series of the Corporation's preferred
stock as to the payment of dividends and the distribution of assets on
liquidation, dissolution or winding up, and senior to the Common Stock of this
Corporation.
Section 10. Amendment. The Restated Certificate of Incorporation of the
Corporation, as amended, shall not be amended in any manner which would
materially alter or change the powers, preferences or special rights of the
Series A Preferred Stock so as to affect them adversely without the affirmative
vote of the holders of at least two-thirds of the outstanding shares of Series
A Preferred Stock, voting together as a single series.
Section 11. Fractional Shares. Series A Preferred Stock may be issued in
fractions of a share (in one one-hundredths (1/100) of a share and integral
multiples thereof) which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, received dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.
IN WITNESS WHEREOF, this Certificate of Designation is executed on behalf of
the Corporation by its President and attested by its Secretary this ___ day of
____________, 1986.
__________________________
President
ATTEST:
________________________
Secretary
Exhibit B
[Form of Right Certificate]
Certificate No. R-_______ _____Rights
NOT EXERCISABLE AFTER OCTOBER 19, 2001, OR EARLIER IF REDEEMED BY THE COMPANY.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.01
PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN ADVERSE
PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT
HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY
THIS RIGHT CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR
BECAME AN ACQUIRING PERSON OR ADVERSE PERSON OR AN AFFILIATE OR AN ASSOCIATE
OF AN ACQUIRING PERSON OR ADVERSE PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHT CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY WILL BECOME VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION
7(e) OF THE RIGHTS AGREEMENT.]1/
1/ The portion of the legend in brackets shall be inserted only if applicable
RIGHT CERTIFICATE
DATE GENERAL 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, provisions and conditions of
the Rights Agreement, as renewed and restated as of October 19, 1996 (the
"Rights Agreement"), between Data General Corporation, a Delaware corporation
(the "Company"), and The Bank of New York, as successor to Morgan Shareholder
Services Trust Company (the "Rights Agent"), to purchase from the Company at
any time after the Distribution Date (as defined in the Rights Agreement) and
prior to 5:00 P.M., New York City time, on October 19, 2001 (the "Final
Expiration Date") at the principal office of the Rights Agent designated for
such purpose, or its successors as Rights Agent, one one-hundredth of a fully
paid, nonassessable share of the Series A Junior Participating Preferred Stock,
with par value of $.01 (the "Preferred Stock"), of the Company, at a purchase
price of $100 per one one-hundredth of a share of Preferred Stock (the
"Purchase Price") upon presentation and surrender of this Right Certificate
with the Form of Election to Purchase and related Certificate duly executed."
The Purchase Price shall be paid, at the election of the holder, in cash or
shares of Common Stock of the Company having an equivalent value. The number
of Rights evidenced by this Right Certificate (including the number of one
one-hundredths of a share which may be purchased upon exercise of each Right)
set forth above and the Purchase Price per share set forth above, are the
number and Purchase Price as of October 20, 1986, based on the shares of
Preferred Stock of the Company as constituted on such date.
Upon the occurrence of a Section 11(a)(ii) Event (as set forth in the Rights
Agreement), if the Rights evidenced by this Right Certificate are beneficially
owned by (i) an Acquiring person or Adverse Person or an Affiliate or Associate
of any such Acquiring Person or Adverse Person (as such terms are defined in
the Rights Agreement), (ii) a transferee of any such Acquiring Person, Adverse
Person, Associate or Affiliate, or (iii) under certain circumstances specified
in the Rights Agreement, a transferee of a person who, after such transfer,
became an Acquiring Person or Adverse Person or an Affiliate or Associate of
an Acquiring Person or Adverse Person, such Rights shall become null and void
and no holder thereof shall have any right with respect to such Rights from
and after the occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and the number of one
one-hundredths of a share of Preferred Stock or other securities which may be
purchased upon the exercise of each of the Rights evidenced by this Right
Certificate are subject to modification and adjustment upon the occurrence of
certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates, which
limitations of Rights include the temporary suspension of the exercisability
of such Rights under the specific circumstances set forth in the Rights
Agreement. Copies of the Rights Agreement are on file at the above-mentioned
office of the Rights Agent and are also available upon written request to the
Company.
Upon surrender at the principal office of the Rights Agent, this Right
Certificate, with or without other Right Certificates, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
one one-hundredths of a share of Preferred Stock, as the Rights evidenced by
the Right Certificate or Right Certificates surrendered shall have entitled
such holder to purchase. If this Right Certificate shall be exercised in part,
the holder shall be entitled to receive, upon surrender hereof, another Right
Certificate or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Right Certificate may, but are not required to, be redeemed by the Company
at its option at a redemption price of $.01 per Right at any time prior to the
earliest of the close of business on (i) the tenth day following the Stock
Acquisition Date (as defined in the Rights Agreement), or (ii) 5:00 P.M., New
York time, on the Final Expiration Date. Notwithstanding the foregoing, the
Board of Directors may not redeem any Rights following a determination that
any person is an Adverse Person. Under certain circumstances set forth in the
Rights Agreement, the decision to redeem shall require the concurrence of a
majority of the Continuing Directors (as such term is defined in the Rights
Agreement). After the expiration of the redemption period, the Company's
right of redemption may be reinstated if an Acquiring Person reduces his
beneficial ownership to 10% or less of the outstanding shares of Common Stock
in a transaction or series of transactions not involving the Company.
No fractional shares of Preferred Stock will be issued upon the exercise of
any Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-hundredth of a share of Preferred Stock, which may, at
the election of the Company, be evidenced by depositary receipts); but in lieu
thereof, a cash payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate as such shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Preferred Stock
or of any other securities of the Company which may at any time be issuable
upon the exercise hereof, nor shall anything contained in the Rights Agreement
or herein be construed to confer upon the holder hereof, as such, any of the
rights of a stockholder of the Company or any right to vote for the election
of directors upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or
otherwise, until the Rights evidenced by this Right Certificate have been
exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose until
it has 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: DATA GENERAL CORPORATION
By:______________________ By:______________________
Secretary Title:
Countersigned:
THE BANK OF NEW YORK
By:________________________
Authorized Signature
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED
___________________________________hereby sells, assigns
and transfers unto________________________________________
__________________________________________________________
(Please print name and address of transferee)
___________________________________________________________
this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _____________________
Attorney, to transfer the Right Certificate on the books of the Company named
within, with full power of substitution.
Dated:_________________________
_________________________
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Right Certificate [ ] is [ ] is not being sold, assigned
and transferred by or on behalf of a Person who is or was an Acquiring
Person or Adverse Person or an Affiliate or Associate of any such Acquiring
Person or Adverse Person (as such terms are defined pursuant to the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or subsequently became an Acquiring
Person or Adverse Person or an Affiliate or Associate of any Acquiring
Person or Adverse Person.
Dated:_______________________
________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment must correspond to the name as
written upon the face of this Right Certificate in every particular, without
alteration or enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise Rights represented by
the Right Certificate.)
To DATA GENERAL CORPORATION:
The undersigned hereby irrevocably elects to exercise ___________________
Rights represented by this Right Certificate to purchase the one one-hundredths
of a share of Preferred Stock (or such other securities of the Company or of
any other person which may be issuable upon the exercise of such Rights) and
requests that certificates for such shares be issued in the name of:
Please insert social security
or other identifying number
____________________________________________________________
(Please print name and address)
_____________________________________________________________
Should the number of Rights being exercised hereunder not be all the Rights
evidenced by this Right Certificate, a new Right Certificate for the balance
remaining of such Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
_____________________________________________________________
(Please print name and address)
_____________________________________________________________
Dated: __________________________
_______________________________
Signature
(Signature must conform in all
respects to the name of the holder
as specified on the face of this
Right Certificate)
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate
[ ] are [ ] are not being exercised by or on behalf of a Person who is or
was an Acquiring Person or an Adverse Person or an Affiliate or Associate of
any such Acquiring Person or Adverse Person (as such terms are defined pursuant
to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate
from any Person who is, was or subsequently became an Acquiring Person or an
Adverse Person or an Affiliate or Associate of any Acquiring Person or Adverse
Person.
Dated:__________________
__________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment must correspond to the name as
written upon the face of this Right Certificate in every particular, without
alteration or enlargement or any change whatsoever.
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK
On October 3, 1986, the Board of Directors of Data General Corporation (the
"Company") declared a dividend distribution of one Right for each outstanding
share of the Company's Common Stock, $.01 par value per share (the "Common
Stock"), to stockholders of record at the close of business on October 20,
1986. Each Right entitles the registered holder to purchase from the Company
one one-hundredth of a share of Series A Junior Participating Preferred Stock,
par value $.01 per share (the "Preferred Stock"), at a Purchase Price of $100
per one one-hundredth of a share of Preferred Stock ("Purchase Price"),
subject to adjustment. The Purchase Price may be paid, at the option of the
holder, in cash or shares of Common Stock having a value at the time of
exercise equal to the Purchase Price. The description and terms of the Rights
are set forth in a Rights Agreement, renewed and restated as of October 19,
1996 (the "Rights Agreement"), between the Company and The Bank of New York
(as successor to Morgan Shareholder Services Trust Company), as Rights Agent.
Initially, the Rights will be represented by the certificates evidencing the
Common Stock and no separate Right Certificates will be distributed. Upon the
earlier of the following dates (the "Distribution Date"), the Rights will
separate from the Common Stock: (i) 10 days following a public announcement
that a person or group of affiliated or associated persons (an "Acquiring
Person") has acquired, or obtained the right to acquire, beneficial ownership
of 20% or more of the outstanding shares of Common Stock (the "Stock
Acquisition Date"), (ii) 10 days following the commencement of, or first
announcement of the intent of any person or persons to commence, a tender
offer or exchange offer that would result in a person or group beneficially
owning 20% or more of the outstanding shares of Common Stock, or (iii) 10 days
after a majority of the Continuing Directors (as defined below) of the Company
shall declare any person to be an "Adverse Person," upon a determination that
such person, together with its affiliates and associates, has become the
beneficial owner of an amount of Common Stock which a majority of the
Continuing Directors determines to be substantial (but in no event less than
15% of the shares of Common Stock then outstanding) and a determination by a
majority of the Continuing Directors that (a) such beneficial ownership by
such person is intended to cause the Company to repurchase the Common Stock
beneficially owned by such person or to cause pressure on the Company to take
action or enter into a transaction or series of transactions intended to
provide such person with short-term financial gain under circumstances where a
majority of the Continuing Directors determines that the best long-term
interests of the Company and its stockholders would not be served by taking
such action or entering into such transactions or series of transactions at
that time or (b) such beneficial ownership is causing or reasonably likely to
cause a material adverse impact (including, impairment of relationships with
customers or impairment of the Company's ability to maintain its competitive
position) on the business or prospects of the Company.
Until the Distribution Date, (i) the Rights will be evidenced by the Common
Stock certificates and will be transferred with and only with such Common
Stock certificates, (ii) new Common Stock certificates issued after October
20, 1986 will contain a notation incorporating the Rights Agreement by
reference and (iii) the surrender for transfer of any certificates for Common
Stock outstanding will also constitute the transfer of the Rights associated
with the Common Stock represented by such certificate.
The Rights are not exercisable until the Distribution Date and will expire at
5:00 P.M. New York City time, on October 19, 2001 (the "Final Expiration
Date"), unless earlier redeemed by the Company as described below.
As soon as practicable after the Distribution Date, Right Certificates will
be mailed to the holders of record of the Common Stock as of the close of
business on the Distribution Date and, thereafter, the separate Right
Certificates alone will represent the Rights. Only shares of Common Stock
issued prior to the Distribution Date will be issued with Rights.
In the event that the Board of Directors determines that a person is an
Adverse Person or, at any time following the Distribution Date, (i) the
Company is the surviving corporation in a merger or other business combination
with an Acquiring Person and its Common Stock is not changed or exchanged, (ii)
a Person becomes the beneficial owner of more than 25% of the then outstanding
shares of Common Stock (except pursuant to an offer for all outstanding shares
of Common Stock which a majority of the Continuing Directors determines to be
fair to and otherwise in the best interests of the Company and its
stockholders), (iii) an Acquiring Person engages in one or more "self-dealing"
transactions as set forth in the Rights Agreement, or (iv) during such time as
there is an Acquiring Person, an event occurs which results in such Acquiring
Person's ownership interest being increased by more than 1% (e.g., a reverse
stock split), each holder of a Right promptly thereafter (but in the case of
(ii) above, 5 days thereafter) will have the right to receive, upon exercise,
Common Stock (or, in certain circumstances, cash, property or other securities
of the Company) having a value equal to two times the exercise price of the
Right. Notwithstanding any of the foregoing, following the occurrence of any
of the events set forth in this paragraph, all Rights that are, or (under
certain circumstances specified in the Rights Agreement) were, beneficially
owned by any Acquiring Person or an Adverse Person will be null and void.
However, Rights are not exercisable following the occurrence of any of the
events set forth above until such time as the Rights are no longer redeemable
by the Company as set forth below.
For example, at an exercise price of $100 per Right, each Right not owned by
an Acquiring Person (or by certain related parties) following an event set
forth in the preceding paragraph would entitle its holder to purchase $200
worth of Common Stock (or other consideration, as noted above) for $100.
Assuming that the Common Stock had a per share value of $50 at such time, the
holder of each valid Right would be entitled to purchase four shares of Common
Stock for $100.
Unless the Rights are earlier redeemed, in the event that, at any time
following the Stock Acquisition Date, (i) the Company is acquired in a merger
or other business combination transaction in which the Company is not the
surviving corporation (other than a merger which follows an offer described in
the second preceding paragraph and is at the same price), or (ii) 50% or more
of the Company's assets or earning power is sold or transferred, each holder
of a Right (except rights which previously have been voided as set forth above)
shall thereafter have the right to receive, upon exercise of such holder's
Right, common stock of the acquiring company having a value equal to two times
the exercise price of the Right.
The events set forth in the third preceding paragraph, and the events set
forth in subsections (i) and (ii) of the first preceding paragraph shall
collectively be termed "Triggering Events" and each a "Triggering Event."
The Purchase Price payable, and the number of one one-hundredths of a share of
Preferred Stock or other securities or property issuable, upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution (i) in
the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Stock, (ii) if holders of the Preferred
Stock are granted certain rights or warrants to subscribe for Preferred Stock
or convertible securities at less than the current market price of the
Preferred Stock, or (iii) upon the distribution to holders of the Preferred
Stock of evidences of indebtedness or assets (excluding regular quarterly cash
dividends) or of subscription rights or warrants (other than those referred to
above).
With certain exceptions, no adjustment in the Purchase Price will be required
until cumulative adjustments amount to at least 1% of the Purchase Price.
At any time on or prior to the close of business on the tenth day following
the Stock Acquisition Date, the Company may redeem the Rights in whole, but
not in part, at a price of $.01 per Right, payable in cash or stock (the
"Redemption Price"). The Company may not redeem the Rights if a majority of
the Continuing Directors has previously determined a person to be an Adverse
Person. After the redemption period has expired, the Company's right of
redemption may be reinstated if an Acquiring Person reduces his beneficial
ownership to 10% or less of the outstanding shares of Common Stock in a
transaction or series of transactions not involving the Company. Immediately
upon the action of the Board of Directors ordering redemption of the Rights
with, where required, the concurrence of a majority of the Continuing
Directors, the Rights will terminate and the only right of the holders of
Rights will be to receive the $.01 Redemption Price.
The shares of Preferred Stock purchasable upon exercise of the Rights will
have a minimum preferential quarterly dividend of $2.50 per share, but will
be entitled to receive, in the aggregate, a dividend of 100 times the dividend
declared on the shares of Common Stock. In the event of liquidation, the
holders of the shares of Preferred Stock will be entitled to receive a minimum
liquidation payment of $100 per share, but will be entitled to receive an
aggregate liquidation payment equal to 100 times the payment made per share of
Common Stock. Each share of Preferred Stock will have one hundred votes,
voting together with the shares of Common Stock. In the event of any merger,
consolidation or other transaction in which shares of Common Stock are
exchanged, each share of Preferred Stock will be entitled to receive 100 times
the amount and type of consideration received per share of Common Stock. The
rights of the shares of Preferred Stock as to dividends and liquidation, and
in the event of mergers and consolidation, are protected by customary
anti-dilution provisions.
The term "Continuing Directors" means any member of the Board of Directors of
the Company who was a member of the Board prior to the date of the Rights
Agreement, and any person who is subsequently elected to the Board if such
person is recommended or approved by a majority of the Continuing Directors,
but shall not include an Acquiring Person or an Adverse Person, or an affiliate
or associate of an Acquiring Person or an Adverse Person, or any representative
of the foregoing entities.
Until a Right is exercised, 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 shares of Common Stock, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to stockholders or to the Company, stockholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Stock (or other consideration) of the Company or for
common stock of the acquiring company as set forth above.
In general, other than those provisions relating to the principal economic
terms of the Rights, the provisions of the Rights Agreement may be amended by
the Board of Directors of the Company prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement may be amended by the
Board (with the concurrence of a majority of the Continuing Directors) in order
to cure any ambiguity, to make changes which do not adversely affect the
interests of holders of Rights (excluding the interests of any Acquiring
Person), or to shorten or lengthen any time period under the Rights Agreement;
provided, however, that no amendment to adjust the time period governing
redemption shall be made at such time as the Rights are not redeemable.
A copy of the Rights Agreement has been filed with the Securities and Exchange
Commission as an Exhibit to a Registration Statement on Form 8-A/A. A copy of
the Rights Agreement is available free of charge from the Company. This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is
incorporated herein by reference.
