August 22, 1995
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: The Titan Corporation - Commission File No. 1-6035
Form 8-A Registration Statement
Gentlemen:
Enclosed herewith is a Registration Statement on Form 8-A dated
August 22, 1995 of The Titan Corporation ("Titan"). One copy of the
Registration Statement has been manually signed.
Pursuant to Rule 12b-7 promulgated under the Securities Exchange
Act of 1934, the required filing fee of $250 has been submitted by wire
transfer according to the current EDGAR instructions.
The enclosed Form 8-A covers certain Preferred Stock Purchase
Rights Titan proposes to issue pursuant to a Share Purchase Rights Plan
adopted by its Board of Directors on August 17, 1995. On that date, the
Board declared a dividend of one Preferred Stock Purchase Right with
respect to each outstanding share of Titan common stock, which dividend
is payable to stockholders of record on September 7, 1995.
In light of the dividend declaration schedule outlined above,
Titan wishes for the enclosed Registration Statement to be declared
effective at 9:30 a.m. on September 7, 1995, or as soon thereafter as
practicable.
I am also forwarding manually signed copies of Form 8-A to the New
York Stock Exchange.
As you will see in reviewing the Registration Statement, the Titan
Share Purchase Rights Plan is substantially similar to other plans
recently adopted by a number of companies with common equity securities
listed on national exchanges. Should you or any member of the staff
have questions regarding the Registration Statement or the Titan Plan
itself, please contact the undersigned at (619) 552-9491.
Thank you for your cooperation.
Very truly yours,
David A. Hahn
Senior Vice President
General Counsel and Secretary
Enclosures
cc: New York Stock Exchange
8A-12B
FORM 8-A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REGISTRATION OF CERTAIN CLASSES OF SECURITIES
Filed Pursuant to Section 12(b) of
The Securities Exchange Act of 1934
THE TITAN CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 95-2588754
(State or other jurisdiction of (I.R.S. Employer
incorporation of organization) Identification No.)
3033 Science Park Road
San Diego, California 92121
(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
Preferred Stock Purchase Rights New York Stock Exchang
Item 1. Description of Securities to be Registered
On August 17, 1995 the Board of Directors of The Titan
Corporation (the "Company") declared a dividend of one Right for each
share of common stock, $.01 par value (the "Common Shares"), of the
Company outstanding at the close of business on September 7, 1995 (the
"Record Date"). 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
Shares") at a price of $42.00 per one one-hundredth of a Preferred Share
(the "Purchase Price"), subject to adjustment. The description and
terms of the Rights are set forth in a Rights Agreement (the "Rights
Agreement") between the Company and American Stock Transfer and Trust
Company as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) ten (10) days following a
public announcement that a person or group of affiliated or associated
persons (an "Acquiring Person") acquired, or obtained the right to
acquire, beneficial ownership of 15% or more of the Common Shares or
(ii) ten (10) days following the commencement or announcement of an
intention to make a tender offer or exchange offer the consummation of
which would result in the beneficial ownership by a person or group of
15% or more of the Common Shares (the earlier of (i) or (ii) being
called the "Distribution Date"), the Rights will be evidenced, with
respect to any of the Common Share certificates outstanding as of the
Record Date, by such Common Share certificate with a copy of this
Summary of Rights attached thereto.
The Rights Agreement provides that the Board of Directors,
with the concurrence of a majority of the Continuing Directors (as
defined below), may postpone the Distribution Date and that, until the
Distribution Date, the Rights will be transferred with and only with the
Common Shares. Until the Distribution Date (or earlier redemption or
expiration of the Rights), new Common Share certificates issued after
the close of business on the Record Date upon transfer or new issuance
of the Common Shares will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier
redemption or expiration of the Rights), the surrender for transfer of
any certificates for Common Shares, even without a copy of this Summary
or Rights attached thereto, will also constitute the transfer of the
Rights associated with the Common Shares represented by such
certificate. As soon as practicable following the Distribution Date,
separate certificates evidencing the Rights ("Right Certificates") will
be mailed to holders of record of the Common Shares as of the close of
business on the Distribution Date and such separate Right Certificates
alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire on August 17, 2005 subject to the Company's right
to extend such date (the "Final Expiration Date"), unless earlier
redeemed or exchanged by the Company or terminated.
The Purchase Price payable, and the number of Preferred
Shares 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 Shares, (ii) upon the grant to
holders of the Preferred Shares of certain rights or warrants to
subscribe for or purchase Preferred Shares at a price, or securities
convertible into Preferred Shares with a conversion price less than the
current market price of the Preferred Shares or (iii) upon the
distribution to holders of the Preferred Shares of evidences of
indebtedness, securities or assets (excluding regular periodic cash
dividends at a rate not in excess of 125% of the rate of the last cash
dividend theretofore paid or, in the case regular periodic cash
dividends have not theretofore been paid, at a rate not in excess of 50%
of the average net income per share of the four quarters ended
immediately prior to the payment of such dividend, or dividends payable
in Preferred Shares) or of subscription rights or warrants (other than
those referred to above)
The number of outstanding Rights and the number of one one-
hundredths of a Preferred Share issuable upon exercise of each Right are
also subject to adjustment in the event of a stock split of the Common
Shares or a stock dividend on the Common Shares payable in Common Shares
or subdivisions, consolidations or combinations of the Common Shares
occurring, in any such case, prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights
will not be redeemable. Each Preferred Share will be entitled to a
minimum preferential quarterly dividend payment of $1 per share but will
be entitled to an aggregate dividend of 100 times the dividend declared
per Common Share. In the event of liquidation, the holders of the
Preferred Shares will be entitled to a minimum preferential liquidation
payment of $100 per share but will be entitled to an aggregate payment
of 100 times the payment made per Common Share. Each Preferred Share
will have 100 votes, voting together with the Common Shares. Finally,
in the event of any merger, consolidation, or other transaction in which
Common Shares are exchanged, each Preferred Share will be entitled to
receive 100 times the amount received per Common Share. These rights
are protected by customary antidilution provisions.
Because of the nature of the Preferred Shares dividend,
liquidation and voting rights, the value of the one one-hundredth
interest in a Preferred Share purchasable upon exercise of each Right
should approximate the value of one Common Share.
In the event that a Person becomes an Acquiring Person
(except pursuant to certain cash offers for all outstanding Common
Shares approved by the Board) or if the Company were the surviving
corporation in a merger with an Acquiring Person or any affiliate or
associate of an Acquiring Person and the Common Shares were not changed
or exchanged, each holder of a Right, other than Rights that are or were
acquired or beneficially owned by the 15% stockholder (which Rights will
thereafter be void), will thereafter have the right to receive upon
exercise that number of Common Shares having a market value of two times
the exercise price of the Right. With the certain exceptions, in the
event that the Company were acquired in a merger or other business
combination transaction or more than 50% of its assets or earning power
were sold, proper provision shall be made so that each holder of a Right
shall thereafter have the right to receive, upon the exercise thereof at
the then current exercise price of the Right, that number of shares of
common stock of the acquiring company which at the time of such
transaction would have a market value of two times the exercise price of
the Right.
At any time after a Person becomes an Acquiring Person and
prior to the acquisition by such Acquiring Person of 50% or more of the
outstanding Common Shares, the Board of Directors may cause the Company
to acquire the Rights (other than Rights owned by an Acquiring Person
which have become void), in whole or in part, in exchange for that
number of Common Shares having an aggregate value equal to the Spread
(the excess of the value of the Common Shares issuable upon exercise of
a Right after a Person becomes an Acquiring Person over the Purchase
Price) per Right (subject to adjustment).
No adjustment in the Purchase Price will be required until
cumulative adjustments require an adjustment of at least 1% in such
Purchase Price. No fractional shares will be issued (other than
fractions which are integral multiples of one one-hundredth of a
Preferred Share which may, at the election of the Company, be evidenced
by depositary receipts) and in lieu thereof, a payment in cash will be
made based on the market price of the Preferred Shares on the last
trading date prior to the date of exercise.
The Rights may be redeemed in whole, but not in part, at a
price of $0.01 per Right (the "Redemption Price") by the Board of
Directors at any time until ten (10) days following the public
announcement that a Person has become an Acquiring Person. The Board of
Directors, with the concurrence of a majority of the Continuing
Directors, may extend the period during which the Rights are redeemable
beyond the ten (10) days following the public announcement that a Person
has become an Acquiring 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 defined
below). Immediately upon the action of the Board of Directors of the
Company electing to redeem the Rights, the Company shall make
announcement thereof, and upon such election, the right to exercise the
Rights will terminate and the only right of the holders of Rights will
be to receive the Redemption Price.
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 time that any Person becomes an Acquiring Person, and any person who
is subsequently elected to the Board if such person is recommended or
approved by a majority of the Continuing Directors. Continuing
Directors do not include an Acquiring Person, or an affiliate or
associate of an Acquiring Person, or any representative of the
foregoing.
Until a Right is exercised, the holder thereof, as such,
will have no rights as a stockholder of the Company beyond those as an
existing stockholder, including, without limitation, the right to vote
or to receive dividends.
Any of 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 Company and the Rights Agent may amend
or supplement the Rights Agreement without the approval of any holder of
Right Certificates to cure any ambiguity, to correct or supplement any
provision contained therein which may be defective or inconsistent with
any other provisions therein, to shorten or lengthen any time period
under the Rights Agreement relating to when the Rights may be redeemed
(so long as, under certain circumstances, a majority of Continuing
Directors approve such shortening or lengthening) or so long as the
interests of the holder of Rights Certificates (other than an Acquiring
Person or an affiliate or associate of an Acquiring Person) are not
adversely affected thereby, and to make any other provisions in regard
to matters or questions arising thereunder which the Company and the
Rights Agent may deem necessary or desirable, including but not limited
to extending the Final Expiration Date. The Company may at any time
prior to such time as any Person becomes an Acquiring Person amend the
Rights Agreement to lower the thresholds described above to not less
than the greater of (i) any percentage greater than the largest
percentage of the outstanding Common Shares then known by the Company to
beneficially owned by any person or group of affiliated or associated
persons and (ii) 10%
Item 2. EXHIBITS
Rights Agreement, dated as of August 21, 1995, between The
Titan Corporation and American Stock Transfer and Trust Company, which
includes the form of Certificate of Designations of Series A Junior
Participating Preferred Stock as Exhibit A, 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, thereunto duly
authorized.
THE TITAN CORPORATION
Dated: August 21, 1995 By:
David A. Hahn
Senior Vice President
General Counsel and Secretary
EXHIBIT INDEX
1. Rights Agreement, dated as of August 21, 1995, between The Titan
Corporation and American Stock Transfer and Trust Company, which
includes the form of Certificate of Designations of Series A Junior
Participating Preferred Stock as Exhibit A, the form of Right
Certificate as Exhibit B and the Summary of Rights to Purchase Preferred
Shares as Exhibit
THE TITAN CORPORATION
and
AMERICAN STOCK TRANSFER AND TRUST COMPANY
Rights Agent
Rights Agreement
Dated as of August 21, 1995
RIGHTS AGREEMENT
Agreement, dated as of August 21, 1995 between The Titan
Corporation, a Delaware corporation (the "Company"), and American Stock
Transfer and Trust Company, a as Rights Agent (the "Rights Agent").
RECITALS
The Board of Directors of the Company has authorized and
declared a dividend of one preferred share purchase right (a "Right")
for each Common Share (as defined in Section 1(f)) of the Company
outstanding at the close of business on September 7, 1995 (the "Record
Date") and has authorized the issuance of one Right with respect to each
Common Share that shall become outstanding between the Record Date and
the earliest of the Distribution Date, the Redemption Date and the Final
Expiration Date (as such terms are defined in Section 1(m)) each Right
initially representing the right to purchase one one-hundredth of a
share of a new series of preferred stock upon the terms and conditions
set forth herein.
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 Rights
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 15% or
more of the Common Shares of the Company then outstanding but shall not
include the Company, any Subsidiary of the Company or any employee
benefit plan of the Company or of any Subsidiary of the Company or any
entity holding shares of capital stock of the Company for or pursuant to
the terms of any such plan, in its capacity as an agent or trustee for
any such plan. Notwithstanding the foregoing, no Person shall become an
"Acquiring Person" as a result of an acquisition of Common Shares by the
Company which, by reducing the number of shares outstanding, increases
the proportionate number of shares beneficially owned by such Person to
15% or more of the Common Shares of the Company then outstanding;
provided, however, that if a Person shall become the Beneficial Owner of
15% or more of the Common Shares of the Company then outstanding solely
by reason of share purchases by the Company and shall, after such share
purchases by the Company, become the Beneficial Owner of any additional
Common Shares of the Company, then such Person shall be deemed to be an
"Acquiring Person." Notwithstanding the foregoing, if the Board of
Directors of the Company determines in good faith that a Person who
would otherwise be an "Acquiring Person," as defined pursuant to the
foregoing provisions of this Section 1(a), has become such
inadvertently, and such Person divests as promptly as practicable a
sufficient number of Common Shares so that such Person would no longer
be an Acquiring Person, as defined pursuant to the foregoing provisions
of this Section 1(a), then such Person shall not be deemed to be an
"Acquiring Person" at any time for any purposes of this Agreement.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations, as in effect on the date of this Rights Agreement, under
the Securities Exchange Act of 1934, as amended (the "Exchange Act").
(c) 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 (as determined pursuant to Rule 13d-3 of the General
Rules and Regulations under the Exchange Act as in effect on the
date of this Agreement);
(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, compliance with regulatory
requirements, fulfillment of a condition or otherwise) pursuant
to any agreement, arrangement or understanding, whether or not
in writing (other than customary agreements with and between
underwriters and selling group members with respect to a bona
fide public offering of securities), or upon the exercise of
conversion rights, exchange rights, rights (other than the
Rights), warrants or options, or otherwise; provided, however,
that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, (1) securities tendered pursuant to a tender
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 (2)
securities which such Person or any of such Person's Affiliates
or Associates may acquire, does acquire or may be deemed to have
the right to acquire, pursuant to any merger or other
acquisition agreement between the Company and such Person (or
one or more of his Affiliates or Associates) if such agreement
has been approved by the Board of Directors of the Company prior
to such Person's becoming an Acquiring Person; or (B) the right
to vote 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) if the agreement,
arrangement or understanding to vote such security (1) arises
solely from a revocable proxy or consent given to such Person in
response to a public proxy or consent solicitation made pursuant
to, and in accordance with, the applicable rules and regulations
of 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 such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona
fide public offering of securities), whether or not in writing,
for the purpose of acquiring, holding, voting (except pursuant
to a revocable proxy as described in the proviso to Section
1(c)(ii)(B)) or disposing of any securities of the Company.
(d) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of
California are authorized or obligated by law or executive order to
close.
(e) "Close of business" on any given date shall mean 5:00
p.m., California time, on such date; provided, however, that if such
date is not a Business Day it shall mean 5:00 p.m., California time, on
the next succeeding Business Day.
(f) "Common Shares" when used with reference to the Company
shall mean the shares of common stock, par value $.01 per share, of the
Company. "Common Shares" when used with reference to any Person other
than the Company shall mean the capital stock with the greatest voting
power, or the equity securities or other equity interest having power to
control or direct the management, of such other Person or, if such
Person is a Subsidiary of another Person, the Person or Persons which
ultimately control such first-mentioned Person, and which has issued and
outstanding such capital stock, equity securities or equity interest.
(g) "Continuing Director" shall mean (i) any member of the
Board of Directors of the Company, while such Person is a member of the
Board, who is not an Acquiring Person, or an Affiliate or Associate of
an Acquiring Person, or an employee, director, representative, nominee
or designee of any Acquiring Person or of any such Affiliate of
Associate, and was a member of the Board prior to the time that any
Person becomes an Acquiring Person or (ii) any Person who, after the
time that any Person becomes an Acquiring Person, becomes a member of
the Board, while such Person is a member of the Board, who is not an
Acquiring Person, or an Affiliate or Associate of an Acquiring Person,
or an employee, director, representative, nominee or designee of an
Acquiring Person or of any such Affiliate or Associate, if such Person's
nomination for election or election to the Board is recommended or
approved by a majority of the Continuing Directors.
(h) "Person" shall mean any individual, partnership, firm,
corporation or other entity, and shall include any successor (by merger
or otherwise) of such entity.
(i) "Preferred Shares" shall mean shares of Series A Junior
Participating Preferred Stock, par value $.01 per share, of the Company
having the rights and preferences set forth in the form of Certificate
of Designations attached to this Agreement as Exhibit A.
(j) "Shares Acquisition Date" shall mean the first date of
public announcement (which, for purposes of this definition, shall
include, without limitation, the filing of a report pursuant to
Section 13(d) of the Exchange Act or pursuant to a comparable successor
statute) by the Company or an Acquiring Person that an Acquiring Person
has become such.
(k) "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, of record or
beneficially, directly or indirectly, by such Person.
(l) A "Trigger Event" shall be deemed to have occurred upon
any Person becoming an Acquiring Person. Notwithstanding the foregoing,
a Trigger Event shall not be deemed to have occurred if the event
causing the 15% ownership threshold to be crossed is an acquisition of
Common Shares made pursuant to a cash tender offer made pursuant to the
rules and regulations under the Exchange Act and filed with the
Securities and Exchange Commission on Schedule 14D-1 (or any successor
form) for all outstanding Common Shares not beneficially owned by the
Person making such offer (or by its Affiliates or Associates) so long as
the Board of Directors of the Company determines, after receiving advice
from one or more investment banking firms, that such offer is (a) at a
price and on terms which are fair to stockholders (taking into account
all factors which such members of the Board deem relevant, including
without limitation, prices which could reasonably be achieved if the
Company or its assets were sold on an orderly basis designed to realize
maximum value) and (b) otherwise in the best interests of the Company
and its stockholders; provided, however, there must be Continuing
Directors then in office and any such determination shall require the
concurrence of a majority of such Continuing Directors.
(m) The following terms shall have the meanings defined for
such terms in the Sections set forth below:
Term Section
Adjustment Shares 11(a)(ii)
common stock equivalent 11(a)(iii)
Company Recitals
current per share market price 11(d)
Current Value 11(a)(iii)
Distribution Date 3(a)
Exchange Act 1(b)
Exchange Consideration 27
Final Expiration Date 7(a)
NASDAQ 9
Purchase Price 4
Record Date Recitals
Redemption Date 7(a)
Redemption Price 23(a)
Right Recitals
Right Certificate 3(a)
Rights Agent Recitals
Spread 11(a)(iii)
Substitution Period 11(a)(iii)
Summary of Rights 3(b)
Trading Day 11(d)
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, shall prior to
the Distribution Date also be the holders of the Common Shares) 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. In
the event the Company appoints one or more co-Rights Agents the
respective duties of the Rights Agent and any co-Rights Agent shall be
as the Company shall determine. Contemporaneously with such
appointment, if any, the Company shall notify the Rights Agent thereof.
Section 3. Issue of Right Certificates.
(a) Until the earlier of (i) the tenth day after the
Shares Acquisition Date or (ii) 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, any
employee benefit plan of the Company or of any Subsidiary of the Company
or any entity holding shares of capital stock of the Company for or
pursuant to the terms of any such plan, in its capacity as an agent or
trustee for any such plan) to commence, a tender or exchange offer the
consummation of which would result in any Person becoming the Beneficial
Owner of Common Shares aggregating more than 15% or more of the then
outstanding Common Shares of the Company (the earlier of (i) and (ii)
being herein referred to as the "Distribution Date"), (x) the Rights
(unless earlier expired, redeemed or terminated) will be evidenced
(subject to the provisions of paragraph (b) of this Section 3) by the
certificates for Common Shares registered in the names of the holders
thereof (which certificates for Common Shares shall also be deemed to be
Right Certificates) and not by separate certificates, and (y) the Rights
(and the right to receive certificates therefor) will be transferable
only in connection with the transfer of the underlying Common Shares.
The preceding sentence notwithstanding, prior to the Distribution Date
specified therein (or such later Distribution Date as the Board of
Directors of the Company may select pursuant to this sentence), the
Board of Directors of the Company may postpone, one or more times, the
Distribution Date beyond the earlier of the dates set forth in such
preceding sentence; provided, however, there must be Continuing
Directors then in office and any such postponement shall require the
approval of at least a majority of such Continuing Directors. As soon
as practicable after the Distribution Date, the Rights Agent will send,
by first-class, postage-prepaid mail, to each record holder of Common
Shares as of the close of business on the Distribution Date, at the
address of such holder shown on the records of the Company, a
certificate for Rights, in substantially the form of Exhibit B hereto (a
"Right Certificate"), evidencing one Right for each Common Share so
held. As of the Distribution Date, the Rights will be evidenced solely
by such Right Certificates.
(b) On the Record Date or as soon as practicable
thereafter, the Company will send or cause to be sent a copy of a
Summary of Rights to Purchase Preferred Shares, in substantially the
form attached hereto as Exhibit C (the "Summary of Rights"), by first-
class, postage-prepaid mail, to each record holder of Common Shares as
of the close of business on the Record Date at the address of such
holder shown on the records of the Company. With respect to
certificates for Common Shares outstanding as of the close of business
on the Record Date, until the Distribution Date (or the earlier
Redemption Date or Final Expiration Date), the Rights will be evidenced
by such certificates for Common Shares registered in the names of the
holders thereof (together with a copy of the Summary of Rights) and the
registered holders of the Common Shares shall also be registered holders
of the associated Rights. Until the Distribution Date (or the earlier
Redemption Date or Final Expiration Date), the surrender for transfer of
any certificate for Common Shares outstanding at the close of business
on the Record Date, with or without a copy of the Summary of Rights
attached thereto, shall also constitute the transfer of the Rights
associated with the Common Shares represented thereby.
(c) Certificates for Common Shares which become
outstanding (whether upon issuance out of authorized but unissued Common
Shares, issuance out of treasury or transfer or exchange of outstanding
Common Shares) after the Record Date but prior to the earliest of the
Distribution Date, the Redemption Date or the Final Expiration Date,
shall be deemed also to be certificates for Rights, and shall have
impressed, printed, stamped, written or otherwise affixed onto them the
following legend:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Rights Agreement
between The Titan Corporation and American Stock Transfer
and Trust Company dated as of August 21, 1995 (the "Rights
Agreement"), the terms of which are hereby incorporated
herein by reference and a copy of which is on file at the
principal executive offices of The Titan Corporation. Under
certain circumstances, as set forth in the Rights Agreement,
such Rights will be evidenced by separate certificates and
will no longer be evidenced by this certificate. The Titan
Corporation will mail to the holder of this certificate a
copy of the Rights Agreement without charge after receipt of
a written request therefor. As described in the Rights
Agreement, Rights which are held by or have been held by
Acquiring Persons or Associates or Affiliates thereof (as
defined in the Rights Agreement) shall become null and void.
With respect to such certificates containing the foregoing legend, until
the Distribution Date (or the earlier Redemption Date or Final
Expiration Date), the Rights associated with the Common Shares
represented by such certificates shall be evidenced by such certificates
(together with a copy of the Summary of Rights) and the surrender for
transfer of any such certificates shall also constitute the transfer of
the Rights associated with the Common Shares represented thereby. In
the event that the Company purchases or acquires any Common Shares after
the Record Date but prior to the Distribution Date, any Rights
associated with such Common Shares shall be deemed canceled and retired
so that the Company shall not be entitled to exercise any Rights
associated with the Common Shares which are no longer outstanding.
Section 4. Form of Right Certificates. The Right
Certificates (and the forms of election to purchase Preferred Shares,
certification and assignment to be printed on the reverse thereof) shall
be substantially the same as Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as
are not inconsistent with the provisions of this Rights Agreement, or as
may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
stock exchange or trading system on which the Rights may from time to
time be listed or quoted, or to conform to usage. Subject to the terms
and conditions hereof, the Right Certificates, whenever issued, shall be
dated as of the Record Date, and shall show the date of countersignature
by the Rights Agent, and on their face shall entitle the holders thereof
to purchase such number of one one-hundredths of a Preferred Share as
shall be set forth therein at the price per one one-hundredth of a
Preferred Share set forth therein (the "Purchase Price"), but the number
and kind of such one one-hundredth of a Preferred Share and the Purchase
Price shall be subject to adjustment as provided herein.
Section 5. Countersignature and Registration. The Right
Certificates shall be executed on behalf of the Company by its Chairman
of the Board of Directors, the Chief Executive Officer, President or any
Vice President, either manually or by facsimile signature, and shall
have affixed thereto the Company's seal or a facsimile thereof which
shall be attested by the Secretary or any Assistant Secretary of the
Company, either manually or by facsimile signature. The Right
Certificates shall be manually countersigned by an authorized signatory
of the Rights Agent, but it shall not be necessary for the same
signatory to countersign all of the Right Certificates hereunder. No
Right Certificate shall be valid for any purpose unless so
countersigned. In case any officer of the Company who shall have signed
any of 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, nevertheless, may be
countersigned by the Rights Agent, and issued and delivered by the
Company with the same force and effect as though the person who signed
such Right Certificates had not ceased to be such officer of the
Company; and 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 one of its offices in New York, New York, 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 its face by each of the Right Certificates, the number of
the Right Certificates and the date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates. Subject to the provisions of Section 11(a)(ii) and
Section 14, at any time after the close of business on the Distribution
Date, and at or prior to the close of business on the earlier of the
Redemption Date or the Final Expiration Date, any Right Certificate or
Right Certificates (other than Right Certificates representing Rights
that have become void pursuant to Section 11(a)(ii) or that have been
exchanged pursuant to Section 27) may be transferred, split up or
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 Preferred Share as the Right Certificate or
Right Certificates surrendered then entitled such holder to purchase.
Any registered holder desiring to transfer, split up or combine or
exchange any Right Certificate shall make such request in writing
delivered to the Rights Agent, and shall surrender, together with any
required form of assignment and certificate duly completed, the Right
Certificate or Right Certificates to be transferred, split up or
combined or exchanged at the office of the Rights Agent designated for
such purpose. 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 from the holders of Right Certificates of a sum
sufficient to cover any tax or governmental charge that may be imposed
in connection with any transfer, split up or combination or exchange of
such Right Certificates.
Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them,
and, at the Company's request, reimbursement to the Company and the
Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Right Certificate
if mutilated, the Company will make and deliver a new Right Certificate
of like tenor to the Rights Agent for countersignature and 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 11(a)(iii), 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 and certification on the reverse
side thereof duly executed, to the Rights Agent at the office of the
Rights Agent designated for such purpose, together with payment of the
Purchase Price for each one one-hundredth of a Preferred Share as to
which the Rights are exercised, at or prior to the earliest of (i) the
close of business on August 17, 2005 (the "Final Expiration Date"), (ii)
the time at which the Rights are redeemed as provided in Section 23 (the
"Redemption Date"), (iii) the closing of any merger or other acquisition
transaction involving the Company pursuant to an agreement of the type
described in Section 1(c)(ii)(A)(2), at which time the Rights are deemed
terminated, or (iv) the time at which the Rights are exchanged as
provided in Section 27.
(b) The Purchase Price for each one one-hundredth of a
Preferred Share pursuant to the exercise of a Right shall initially be
$42.00 shall be subject to adjustment from time to time as provided in
Sections 11, 13 and 26 and shall be payable in lawful money of the
United States of America in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase and
certification duly executed, accompanied by payment of the Purchase
Price for the shares to be purchased 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, by certified or cashier's
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 Shares (or make available, if the Rights Agent is
the transfer agent) certificates for the number of Preferred Shares 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 Preferred Share as are to be purchased (in which
case certificates for the Preferred Shares 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) when appropriate, requisition from the Company the amount
of cash to be paid in lieu of issuance of fractional shares in
accordance with Section 14, (iii) promptly after receipt of such
certificates or depositary receipts, cause the same to be delivered to
or upon the order of the registered holder of such Right Certificate,
registered in such name or names as may be designated by such holder and
(iv) when appropriate, after receipt, promptly deliver such cash to or
upon the order of the registered holder of such Right Certificate. In
the event that the Company is obligated to issue other securities of the
Company, pay cash and/or distribute other property pursuant to Section
11(a)(iii), 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 less 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 and delivered to the
registered holder of such Right Certificate or to his duly authorized
assigns, subject to the provisions of Section 14.
(e) Notwithstanding anything in this Rights 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 the certificate contained in the form of election to
purchase set forth on the reverse side of the Right Certificate
surrendered for such exercise shall have been duly completed and signed
by the registered holder thereof and the Company shall have been
provided with 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 or 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 canceled form, or, if surrendered to
the Rights Agent, shall be canceled by it, and no Right Certificates
shall be issued in lieu thereof except as expressly permitted by any of
the provisions of this Rights 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 acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent
shall deliver all canceled Right Certificates to the Company, or shall,
at the written request of the Company, destroy such canceled Right
Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.
Section 9. Reservation and Availability of Preferred
Shares. The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued Preferred
Shares, or any authorized and issued Preferred Shares held in its
treasury, the number of Preferred Shares that will be sufficient to
permit the exercise in full of all outstanding Rights.
The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Preferred Shares delivered
upon exercise of Rights shall, at the time of delivery of the
certificates for such Preferred Shares (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully
paid and non assessable shares.
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 or of any Preferred Shares upon the exercise of
Rights. The Company shall not, however, be required to pay any transfer
tax which may be payable in respect of any transfer or delivery of Right
Certificates to a person other than, or the issuance or delivery of
certificates or depositary receipts for the Preferred Shares 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 or depositary receipts for Preferred Shares in a name other
than that of the registered holder upon the exercise of any Rights until
any such tax shall have 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 Shares Record Date. Each person in
whose name any certificate for Preferred Shares is issued upon the
exercise of Rights shall for all purposes be deemed to have become the
holder of record of the Preferred Shares 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 Shares transfer books of the Company are
closed, such person shall be deemed to have become the record holder of
such shares on, and such certificate shall be dated, the next succeeding
Business Day on which the Preferred Shares 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
holder of Preferred 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 Preferred Shares
covered by each Right and the number of Rights outstanding are subject
to adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after
the date of this Rights Agreement (A) declare a dividend on the
Preferred Shares payable in Preferred Shares, (B) subdivide the
outstanding Preferred Shares, (C) combine the outstanding
Preferred Shares into a smaller number of Preferred Shares or (D)
issue any shares of its capital stock in a reclassification of the
Preferred Shares (including any such reclassification in
connection with a consolidation or merger in which the Company is
the continuing or surviving corporation), except as otherwise
provided in this Section 11(a), the Purchase Price in effect at
the time of the record date for such dividend or of the effective
date of such subdivision, combination or reclassification, and the
number and kind of shares of capital stock issuable on such date,
shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive the
aggregate number and kind of shares of capital stock which, if
such Right had been exercised immediately prior to such date and
at a time when the Preferred Shares 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; provided, however, that in no
event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one Right.
If an event occurs which would require an adjustment under both
Section 11(a)(i) and Section 11(a)(ii), the adjustment provided
for in this Section 11(a)(i) shall be in addition to, and shall be
made prior to, the adjustment required pursuant to, Section
11(a)(ii).
(ii) Subject to Section 27 of this Agreement, in the
event
(A) any Acquiring Person or any Associate or
Affiliate of any Acquiring Person, at any time after the
date of this Rights Agreement, directly or indirectly, 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
Shares of the Company shall remain outstanding and not
changed into or exchanged for stock or other securities of
any other Person or the Company or cash or any other
property, or
(B) that a Trigger Event occurs, then,
promptly following the occurrence of each such event listed
in this Section 11(a)(ii), proper provision shall be made so
that each holder of a Right, except as provided below, shall
thereafter have a right to receive, upon exercise thereof,
at a price equal to the then current Purchase Price
multiplied by the number of one one-hundredths of a
Preferred Share for which a Right is then exercisable, in
accordance with the terms of this Rights Agreement, and in
lieu of Preferred Shares, such number of Common Shares as
shall equal the result obtained by (x) multiplying the then-
current Purchase Price by the then number of one one-
hundredths of a Preferred Share for which a Right is then
exercisable and (y) dividing that product by 50% of the
current per share market price of the Common Shares
(determined pursuant to Section 11(d)) on the first of the
date of the occurrence of, or the date of the first public
announcement of, one of the events listed above in this
Section 11(a)(ii) (the "Adjustment Shares"); provided,
however, that if the transaction that would otherwise give
rise to the foregoing adjustment is also subject to the
provisions of Section 13, then only the provisions of
Section 13 shall apply and no adjustment shall be made
pursuant to this Section 11(a)(ii); and provided further
that nothing contained in this Section 11(a)(ii) shall limit
or otherwise diminish the power of the Board of Directors
(or, if applicable, the Continuing Directors) to postpone
the Distribution Date pursuant to Section 3(a) or to extend
the period during which the Rights may be redeemed pursuant
to Section 23(a). Notwithstanding the foregoing, upon the
occurrence of either of the events listed above in this
Section 11(a)(ii), any Rights that are or were acquired or
beneficially owned by an Acquiring Person or any Associate
or Affiliate of the Acquiring Person shall become void and
any holder (whether or not such holder is an Acquiring
Person or an Associate or Affiliate of an Acquiring Person)
of such Rights shall thereafter have no right to exercise
such Rights under any provision of this Rights Agreement or
otherwise. The Company shall not enter into any transaction
of the type described in this Section 11(a)(ii) if at the
time of such transaction there are any rights, warrants,
instruments or securities outstanding or any arrangements
which, as a result of the consummation of such transaction,
would eliminate or substantially diminish the benefits
intended to be afforded by the Rights. Any Right
Certificate issued pursuant to Section 3 or 22 that
represents Rights beneficially owned by: (1) an Acquiring
Person or any Associate or Affiliate thereof, (2) a
transferee of an Acquiring Person (or of any such Associate
or Affiliate) who becomes a transferee after the Acquiring
Person becomes such, or (3) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to
either (A) a transfer (whether or not for consideration)
from the Acquiring Person to holders of equity interests in
such Acquiring Person or to any Person with whom the
Acquiring Person has any continuing agreement, arrangement
or understanding regarding the transferred Rights or (B) a
transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect of avoidance of
this Section 11(a)(ii) and any Right Certificate issued
pursuant to Section 6, 7(d) or 22 or this Section 11 upon
transfer, exchange, replacement or adjustment of any other
Right Certificate referred to in this sentence, shall
contain the following legend (provided, however, that the
Rights Agent shall not be responsible for affixing such
legend unless it has actual knowledge as to the foregoing
circumstances or the Company has notified the Rights Agent
in writing thereof):
The Rights represented by this Right Certificate are
held or have been held by a Person who was an
Acquiring Person or an Affiliate or an Associate of an
Acquiring Person or a nominee thereof. This Right Cer-
tificate and the Rights represented hereby have become
null and void as specified in Section 11(a)(ii) of the
Rights Agreement.
The Company shall use all reasonable efforts to insure that
the provisions of this Section 11(a)(ii) are complied with, but
shall have no liability to any holder of Right Certificates or
other Person as a result of its failure to make any determinations
with respect to any Acquiring Person or its Affiliates, Associates
or transferees hereunder.
(iii) In the event that upon the occurrence of one or
more of the events listed in Section 11(a)(ii) above there shall
not be sufficient Common Shares authorized but unissued, or held
by the Company as treasury shares, to permit the exercise in full
of the Rights in accordance with the foregoing Section 11(a)(ii),
the Company shall take all such action as may be necessary to
authorize additional Common Shares for issuance upon exercise of
the Rights, provided, however, that if the Company determines that
it is unable to cause the authorization of a sufficient number of
additional Common Shares, then, in the event the Rights become
exercisable, the Company, with respect to each Right and to the
extent necessary and permitted by applicable law and any
agreements or instruments in effect on the date hereof to which it
is a party, shall: (A) determine the excess of (1) the value of
the Adjustment Shares issuable upon the exercise of a Right (the
"Current Value"), over (2) the Purchase Price (such excess, the
"Spread") and (B) with respect to each Right, make adequate
provision to substitute for the Adjustment Shares, upon payment of
the applicable Purchase Price, (1) cash, (2) a reduction in the
Purchase Price, (3) Common Shares 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 has deemed to have the same value as Common Shares) (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 the Board
of Directors of the Company based upon the advice of a nationally
recognized investment banking firm selected by the Board of
Directors of the Company; provided, however, if the Company shall
not have made adequate provision to deliver value pursuant to
clause (B) above within thirty (30) days following the first
occurrence of one of the events listed in Section 11(a)(ii) above,
then the Company shall be obligated to deliver, upon the surrender
for exercise of a Right and without requiring payment of the
Purchase Price, Common Shares (to the extent available) and then,
if necessary, cash, which in the aggregate are equal to the
Spread. If the Board of Directors of the Company shall determine
in good faith that it is unlikely that sufficient additional
Common Shares could be authorized for issuance upon exercise in
full of the Rights, the thirty (30) day period set forth above may
be extended and re-extended to the extent necessary, but not more
than ninety (90) days following the first occurrence of one of the
events listed in Section 11(a)(ii) above, in order that the
Company may seek stockholder approval for the authorization of
such additional shares (such period as may be extended, the
"Substitution Period"). To the extent that the Company determines
that some action need be taken pursuant to the first and/or second
sentences of this Section 11(a)(iii), the Company (x) shall
provide 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 a Common Share shall be the current per
share market price (as determined pursuant to Section 11(d)) on
the date of the first occurrence of one of the events listed in
Section 11(a)(ii) above and the value of any "common stock
equivalent" shall be deemed to have the same value as the Common
Shares on such date.
(b) In case the Company shall fix a record date for the
issuance of rights or warrants to all holders of Preferred Shares
entitling them (for a period expiring within 45 calendar days after such
record date) to subscribe for or purchase Preferred Shares (or shares
having the same rights, privileges and preferences as the Preferred
Shares ("equivalent preferred shares")) or securities convertible into
Preferred Shares or equivalent preferred shares at a price per Preferred
Share or equivalent preferred share (or having a conversion price per
Preferred Share, if a security convertible into Preferred Shares or
equivalent preferred shares) less than the current per share market
price of the Preferred Shares (as defined in Section 11(d)) 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 Preferred Shares outstanding on such record
date plus the number of Preferred Shares and/or equivalent preferred
shares which the aggregate offering price of the total number of
Preferred Shares 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 Preferred Shares outstanding on such record date plus the
number of additional Preferred Shares to be offered for subscription or
purchase (or into which the convertible securities so to be offered are
initially convertible); provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right. 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 Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights
Agent. Preferred Shares owned by or held for the account of the Company
or any Subsidiary of the Company shall not be deemed outstanding for the
purpose of any such computation. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that
such rights or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(c) In case the Company shall fix a record date for the
making of a distribution to all holders of the Preferred Shares
(including any such distribution made in connection with a consolidation
or merger in which the Company is the continuing or surviving
corporation) of evidences of indebtedness, securities or assets (other
than a regular periodic cash dividend at a rate not in excess of 125% of
the rate of the last regular periodic cash dividend theretofore paid or,
in case regular periodic cash dividends have not theretofore been paid,
at a rate not in excess of 50% of the average net income per share of
the Company for the four quarters ended immediately prior to the payment
of such dividend, or a dividend payable in Preferred Shares) or
subscription rights or warrants (excluding those referred to in Section
11(b)), the Purchase Price to be in effect after such record date shall
be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be
the current per share market price of the Preferred Shares (as defined
in Section 11(d)) on such record date, less the fair market value (as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights
Agent) of the portion of the assets, securities or evidences of
indebtedness so to be distributed or of such subscription rights or
warrants applicable to one Preferred Share and the denominator of which
shall be such current per share market price of the Preferred Shares;
provided, however, that in no event shall the consideration be less than
the aggregate par value of the shares of capital stock of the Company to
be issued upon exercise of one Right. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that
such distribution is not so made, the Purchase Price shall 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,
the "current per share market price" of any Security (a "Security" for
the purpose of this Section 11(d)) on any date shall be deemed to be the
average of the daily closing prices per share of such Security for the
thirty (30) consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date; provided, however, that in the
event that the current per share market price of the Security is
determined during any period following the announcement by the issuer of
such Security of (A) a dividend or distribution on such Security payable
in such Security or securities convertible into such Security or (B) any
subdivision, combination or reclassification of such Security, and prior
to the expiration of thirty (30) Trading Days 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
reflect the current market price per share equivalent of such Security.
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 Security is 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
Security is listed or admitted to trading or, if the Security is 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 Security
is 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 Security selected by the Board of Directors of the
Company. If on any such date no such market maker is making a market in
the Security, the fair value of the Security on such date as determined
in good faith by the Board of Directors of the Company shall be used.
The term "Trading Day" shall mean a day on which the principal national
securities exchange on which the Security is listed or admitted to
trading is open for the transaction of business or, if the Security is
not listed or admitted to trading on any national securities exchange, a
Business Day. If a Security is not publicly held or not so listed or
traded, "current per share market price" shall mean the fair value per
share as determined in good faith by the Board of Directors of the
Company or, if at the time of such determination there is an Acquiring
Person, by a majority of the Continuing Directors then in office, or if
there are no Continuing Directors, by a nationally recognized investment
banking firm selected by the Board of Directors, whose determination
shall be described in a statement filed with the Rights Agent.
(ii) For the purpose of any computation hereunder,
the "current per share market price" of the Preferred Shares shall be
determined in accordance with the method set forth in Section 11(d)(i).
If the Preferred Shares are not publicly traded, the "current per share
market price" of the Preferred Shares shall be conclusively deemed to be
the current per share market price of the Common Shares as determined
pursuant to Section 11(d)(i) (appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the
date hereof), multiplied by one hundred. If neither the Common Shares
nor the Preferred Shares are publicly held or so listed or traded,
"current per share market price" shall mean the fair value per share as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights
Agent.
(e) 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. Any adjustments which by reason of this Section 11(e)
are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest one one-
millionth of a Preferred Share or one ten thousandth of any other share
or security, as the case may be.
(f) If as a result of an adjustment made pursuant to
Section 11(a), the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of the Company other
than Preferred Shares, thereafter the number of such other shares so
receivable upon exercise of any Right 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 Shares
contained in Section 11(a) through (c), inclusive, and the provisions of
Sections 7, 9, 10 and 13 with respect to the Preferred Shares shall
apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent
to any adjustment made to the Purchase Price hereunder shall evidence
the right to purchase, at the adjusted Purchase Price, the number of one
one-hundredths of a Preferred Share 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(a), (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 Preferred Share
(calculated to the nearest one-millionth of a Preferred Share) obtained
by (i) multiplying (x) the number of one one-hundredths of a Preferred
Share covered by a Right immediately prior to this adjustment by (y) the
Purchase Price in effect immediately prior to such adjustment of the
Purchase Price and (ii) dividing the product so obtained by the Purchase
Price in effect immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in
substitution for any adjustment in the number of one one-hundredths of a
Preferred Share purchasable upon the exercise of a Right. Each of the
Rights outstanding after such adjustment of the number of Rights shall
be exercised for the number of one one-hundredths of a Preferred Share
for which a Right was exercisable immediately prior to such adjustment.
Each Right held of record prior to such adjustment of the number of
Rights shall become that number of Rights (calculated to the nearest
ten-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase
Price in effect immediately after adjustment of the Purchase Price. The
Company shall make a public announcement of its election to adjust the
number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record
date may be the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Right Certificates have been issued, shall be at
least ten (10) 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, 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 one one-hundredths of a Preferred Share
issuable upon the exercise of the Rights, the Right Certificates
theretofore and thereafter issued may continue to express the Purchase
Price per share and the number of one one-hundredths of a Preferred
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 one one-hundredth of the
then par value, if any, of the Preferred Shares 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 non assessable Preferred Shares
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 Preferred Shares and other capital
stock or securities of the Company, if any, issuable upon such exercise
over and above the Preferred Shares 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 upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions
in the Purchase Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that it in its sole
discretion shall determine to be advisable in order that any
consolidation or subdivision of the Preferred Shares, issuance wholly
for cash of any of the Preferred Shares at less than the current market
price, issuance wholly for cash of Preferred Shares or securities which
by their terms are convertible into or exchangeable for Preferred
Shares, stock dividends or issuance of rights, options or warrants
referred to hereinabove in this Section 11, hereafter made by the
Company to holders of its Preferred Shares shall not be taxable to such
stockholders.
(n) In the event that at any time after the date of this
Agreement and prior to the Distribution Date, the Company shall (i)
declare or pay any dividend on the Common Shares payable in Common
Shares or (ii) effect a subdivision, combination or consolidation of the
Common Shares (by reclassification or otherwise than by payment of
dividends in Common Shares) into a greater or lesser number of Common
Shares, then in any such case (i) the number of one one-hundredths of a
Preferred Share purchasable after such event upon proper exercise of
each Right shall be determined by multiplying the number of one one-
hundredths of a Preferred Share so purchasable immediately prior to such
event by a fraction, the numerator which is the number of Common Shares
outstanding immediately before such event and the denominator of which
is the number of Common Shares outstanding immediately after such event,
and (ii) each Common Share outstanding immediately after such event
shall have issued with respect to it that number of Rights which each
Common Share outstanding immediately prior to such event had issued with
respect to it. The adjustments provided for in this Section 11(n) shall
be made successively whenever such a dividend is declared or paid or
such a subdivision, combination or consolidation is effected.
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares. Whenever an adjustment is made as provided in Sections 11
and 13, the Company shall (a) promptly prepare a certificate setting
forth such adjustment, and a brief statement of the facts accounting for
such adjustment, (b) promptly file with the Rights Agent and with each
transfer agent for the Common Shares or the Preferred Shares a copy of
such certificate and (c) mail a brief summary thereof to each holder of
a Right Certificate in accordance with Section 25. The Rights Agent
shall be fully protected in relying on any such certificate and on any
adjustment therein contained and shall not be deemed to have knowledge
of any such adjustment unless and until it shall have received such
certificate.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power.
(a) Except as provided in Section 13(b), in the event,
directly or indirectly, (A) the Company shall consolidate with, or merge
with and into, any other Person and the Company shall not be the
continuing or surviving corporation, (B) any Person shall consolidate
with the Company, or merge with and into the Company and the Company
shall be the continuing or surviving corporation of such merger and, in
connection with such merger, all or part of the Common Shares shall be
changed into or exchanged for stock or other securities of any other
Person or cash or any other property, or (C) the Company shall sell,
exchange, mortgage or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise 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, then, and in each such case,
proper provision shall be made so that (i) each holder of a Right
(except as otherwise provided herein) shall thereafter have the right to
receive, upon the exercise thereof at the then current Purchase Price
multiplied by the number of one one-hundredths of a Preferred Share for
which a Right is then exercisable in accordance with the terms of this
Rights Agreement, and in lieu of Preferred Shares, such number of Common
Shares of such other Person (including the Company as successor thereto
or as the surviving corporation) as shall be equal to the result
obtained by (x) multiplying the then-current Purchase Price by the then-
number of one one-hundredths of a Preferred Share for which a Right is
then exercisable (without taking into account any adjustment previously
made pursuant to Section 11(a)(ii)) and (y) dividing that product by 50%
of the current per share market price of the Common Shares of such other
Person (determined pursuant to Section 11(d)) on the date of
consummation of such consolidation, merger, sale or transfer; (ii) the
issuer of such Common Shares 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 Rights
Agreement; (iii) the term "Company" shall thereafter be deemed to refer
to such issuer; and (iv) such issuer shall take such steps (including,
but not limited to, the reservation of a sufficient number of its Common
Shares) 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 its Common Shares thereafter
deliverable upon the exercise of the Rights. The Company shall not
enter into any transaction of the kind referred to in this Section 13 if
at the time of such transaction there are any rights, warrants,
instruments or securities outstanding or any agreements or arrangements
which, as a result of the consummation of such transaction, would
eliminate or substantially diminish the benefits intended to be afforded
by the Rights. The Company shall not consummate any such consolidation,
merger, sale or transfer unless prior thereto the Company and such
issuer shall have executed and delivered to the Rights Agent a
supplemental agreement so providing. The provisions of this Section 13
shall similarly apply to successive mergers or consolidations or sales
or other transfers.
(b) In the event of any merger or other acquisition
transaction involving the Company pursuant to an agreement of the type
described in Section 1(c)(ii)(A)(2), the provisions of Section 13(a)
shall not be applicable to such transaction and this Rights Agreement
and the rights of holders of Rights hereunder shall be terminated in
accordance with Section 7(a).
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
fractional Rights would otherwise be issuable an amount in cash equal to
the same fraction of the current market value of a whole Right. For the
purposes of this Section 14(a), the current market value of a whole
Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have
been otherwise issuable. The closing price 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 making a market
in the Rights selected by the Board of Directors of the Company. If on
any such date no such market maker is making a market in the Rights, the
fair value of the Rights on such date as determined in good faith by the
Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions
of Preferred Shares (other than fractions which are integral multiples
of one one-hundredth of a Preferred Share) upon exercise of the Rights
or to distribute certificates which evidence fractional Preferred Shares
(other than fractions which are integral multiples of one one-hundredth
of a Preferred Share). Fractions of Preferred Shares in integral
multiples of one one-hundredth of a Preferred Share 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, however, 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 Preferred Shares represented by such depositary receipts.
In lieu of fractional Preferred Shares that are not integral multiples
of one one-hundredth of a Preferred Share, 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 value of one Preferred Share. For
purposes of this Section 14(b), the current market value of a Preferred
Share shall be the closing price of a Preferred Share (as determined
pursuant to Section 11(d)) for the Trading Day immediately prior to the
date of such exercise.
(c) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or any
fractional shares upon exercise of a Right.
Section 15. Rights of Action. All rights of action in
respect of this Rights Agreement, except the rights of action given to
the Rights Agent under Section 18, are vested in the respective
registered holders of the Right Certificates (and, prior to the
Distribution Date, the registered holders of the Common Shares); and any
registered holder of any Right Certificate (or, prior to the
Distribution Date, of the Common Shares), 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 Shares), may, in his own behalf
and for his own benefit, enforce this Rights Agreement, and may
institute and maintain any suit, action or proceeding against the
Company to enforce this Rights Agreement, or otherwise enforce or 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
Rights 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 Rights Agreement and shall be entitled to specific
performance of the obligations under, and injunctive relief against
actual or threatened violations of, the obligations of any Person
(including, without limitation, the Company) subject to this Rights
Agreement.
Section 16. Agreement of Right Holders. Every holder of a
Right by accepting the same consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares;
(b) as of and after the Distribution Date, the Right
Certificates are transferable only on the registry books of the Rights
Agent if surrendered at the office of the Rights Agent designated for
such purpose, duly endorsed or accompanied by a proper instrument of
transfer with all required certifications completed; and
(c) 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 Common Shares certificate) is
registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on the
Right Certificates or the associated Common Shares certificate made by
anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Right Certificate shall be
entitled to vote, receive dividends or be deemed for any purpose the
holder of the Preferred Shares 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
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. The Company
agrees to pay to the Rights Agent reasonable compensation for all
services rendered by it hereunder in accordance with a fee schedule to
be mutually agreed upon 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 Rights 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 Rights Agreement, including the
costs and expenses of defending against any claim of liability in the
premises.
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 Rights Agreement in
reliance upon any Right Certificate or certificate for the Preferred
Shares or Common Shares or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, instruction, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and
to be signed, executed and, where necessary, verified or acknowledged,
by the proper person or persons.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent. Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights Agent
shall be a party, or any corporation succeeding to the corporate trust
or stock transfer business of the Rights Agent or any successor Rights
Agent, shall be the successor to the Rights Agent under this Rights
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. In case at the time such
successor Rights Agent shall succeed to the agency created by this
Rights Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature 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 Certificates either in
the name of the predecessor Rights Agent or in the name of the successor
Rights Agent; and in all such cases such Right Certificates shall have
the full force provided in the Right Certificates and in this Rights
Agreement.
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
countersignature 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 Rights Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Rights 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
selected by it (who may be legal counsel for the Company), and the
opinion of such counsel shall be full and complete authorization and
protection to the Rights Agent as to any action taken or omitted by it
in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Rights Agreement the Rights Agent shall deem it necessary or desirable
that any fact or matter be proved or established by the Company prior to
taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed) may
be deemed to be conclusively proved and established by a certificate
signed by any one of the Chairman of the Board of Directors, the Chief
Executive Officer, the President, the Chief Financial Officer, any Vice
President, the Treasurer, the Secretary or any Assistant Treasurer or
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 Rights 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 Rights
Agreement or in the Right Certificates (except as to its
countersignature thereof) or be required to verify the same, but all
such statements and recitals are and shall be deemed to have been made
by the Company only.
(e) The Rights Agent shall not be under any responsibility
in respect of the validity of this Rights 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
Rights Agreement or in any Right Certificate; nor shall it be
responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 11(a)(ii)) or
any adjustment required under the provisions of Sections 3, 11, 13, 23
or 27 or responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that would
require any such adjustment (except with respect to the exercise of
Rights evidenced by 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
Preferred Shares to be issued pursuant to this Rights Agreement or any
Right Certificate or as to whether any Preferred Shares will, when so
issued, be validly authorized and issued, fully paid and non assessable.
(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
Rights Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from any one of the Chairman of the Board of Directors, the
Chief Executive Officer, the President, the Chief Financial Officer, any
Vice President, the Treasurer, the Secretary or any Assistant Treasurer
or Assistant Secretary of the Company, and to apply to such officers for
advice or instructions in connection with its duties under this Rights
Agreement, 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 these
instructions. Any application by the Rights Agent for written
instructions from the Company may, at the option of the Rights Agent,
set forth in writing any action proposed to be taken or omitted by the
Rights Agent with respect to its duties or obligations under this Rights
Agreement and the date on and/or after which such action shall be taken
or omitted. The Rights Agent shall not be liable to the Company for any
action taken or omitted in accordance with a proposal included in any
such application on or after the date specified therein (which date
shall not be less than three business days after the date any such
officer actually receives such application, unless any such officer
shall have consented in writing to an earlier date) unless, prior to
taking of any such action (or the effective date in the case of
omission), the Rights Agent shall have received written instructions in
response to such application specifying the action to be taken or
omitted.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal in any of
the Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested, or
contract with or lend money to the Company or otherwise act as fully and
freely as though it were not Rights Agent under this Rights 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, omission,
default, neglect or misconduct of any such attorneys or agents or for
any loss to the Company resulting from any such act, omission, default,
neglect or misconduct, provided reasonable care was exercised in the
selection and continued employment thereof.
(j) At any time and from time to time after the
Distribution Date, upon the request of the Company, the Rights Agent
shall promptly deliver to the Company a list, as of the most recent
practicable date (or as of such earlier date as may be specified by the
Company), of the holders of record of Rights.
Section 21. Change of Rights Agent. The Rights Agent or
any successor Rights Agent may resign and be discharged from its duties
under this Rights Agreement upon thirty (30) days' notice in writing
mailed to the Company and to each transfer agent of the Preferred Shares
or Common Shares by registered or certified mail. The Company shall
promptly notify the holders of the Right Certificates by first-class
mail of any such resignation. The Company may remove the Rights Agent
or any successor Rights Agent upon thirty (30) days' notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the Preferred Shares or Common Shares
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 resigning,
removed, or incapacitated Rights Agent shall remit to the Company, or to
any successor Rights Agent designated by the Company, all books,
records, funds, certificates or other documents or instruments of any
kind then in its possession which were acquired by such resigning,
removed or incapacitated Rights Agent in connection with its services as
Rights Agent hereunder, and shall thereafter be discharged from all
duties and obligations hereunder. Following notice of such removal,
resignation or incapacity, the Company shall appoint a successor to such
Rights Agent. If the Company shall fail to make such appointment within
a period of thirty (30) days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity
by the resigning or incapacitated Rights Agent or by the holder of a
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, shall
be a corporation organized and doing business under the laws of the
United States or of the State of California or the State of New York (or
any other state of the United States so long as such corporation is
authorized to do business as a banking institution in the State of
California or the State of New York) in good standing, having a
principal office in the State of California or the State of New York,
which is authorized under such laws to exercise corporate trust 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 $10 million. After
appointment, the successor Rights Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor
Rights Agent shall deliver and transfer to the successor Rights Agent
any property at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such appointment the
Company shall file notice thereof in writing with the predecessor Rights
Agent and each transfer agent of the Preferred Shares or Common Shares,
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 Rights 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 its
Board of Directors to reflect any adjustment or change in the Purchase
Price and the number or kind or class of shares or other securities or
property purchasable under the Right Certificates made in accordance
with the provisions of this Rights Agreement. In addition, in
connection with the issuance or sale of Common Shares following the
Distribution Date and prior to the redemption or expiration of the
Rights, the Company (a) shall, with respect to Common Shares so issued
or sold pursuant to the exercise of stock options or under any employee
plan or arrangement, granted or awarded as of the Distribution Date, or
upon exercise, conversion or exchange of the Company's $1.00 Cumulative
Convertible Preferred Stock and stock purchase warrants or securities
hereinafter issued by the Company, and (b) may, in any other case, if
deemed necessary or appropriate by the Board of Directors of the
Company, issue Right Certificates representing the appropriate number of
Rights in connection with such issuance or sale; provided, however, that
(i) no such Right Certificate shall be issued if, and to the extent
that, the Company shall be advised by counsel that such issuance would
create a significant risk of material adverse tax consequences to the
Company or the Person to whom such Right Certificate would be issued,
(ii) no such Right Certificate shall be issued if, and to the extent
that, appropriate adjustment shall otherwise have been made in lieu of
the issuance thereof and (iii) at the time of a determination by the
Board of Directors to cause the Company to issue a Right Certificate
under clause (b) above, there must be Continuing Directors then in
office and any such determination shall require the approval of at least
a majority of such Continuing Directors.
Section 23. Redemption.
(a) The Board of Directors of the Company may, at its
option, at any time prior to the close of business on the tenth day
following the Shares Acquisition Date, redeem all but not less than all
of the then outstanding Rights at a redemption price of $.01 per Right,
appropriately adjusted to reflect any stock split, stock dividend,
recapitalization or similar transaction occurring after the date hereof
(such redemption price being hereinafter referred to as the "Redemption
Price") provided, however, if the Board of Directors of the Company
authorizes redemption of the Rights after the time a person becomes an
Acquiring Person, then there must be Continuing Directors then in office
and such authorization shall require the approval of at least a majority
of such Continuing Directors. The preceding sentence notwithstanding,
prior to the expiration of the period during which the Rights may be
redeemed as specified therein (or such longer period as the Board of
Directors of the Company may select pursuant to this sentence), the
Board of Directors of the Company may extend, one or more times, the
period during which the Rights may be redeemed beyond the close of
business on the tenth day following the Shares Acquisition Date;
provided, however, there must be Continuing Directors then in office and
any such extension shall require the approval of at least a majority of
such Continuing Directors. Anything contained in this Rights Agreement
to the contrary notwithstanding, the Rights shall not be exercisable
following a transaction or event described in Section 11(a)(ii) prior to
the expiration of the Company's right of redemption hereunder.
(b) Immediately upon the action of the Board of Directors
of the Company ordering the redemption of the Rights, and without any
further action and without any notice, the right to exercise the Rights
will terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price. Within ten (10) days after
the action of the Board of Directors 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 Shares. 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. Neither the Company nor any of its Affiliates or Associates may
redeem, acquire or purchase for value any Rights at any time in any
manner other than that specifically set forth in this Section 23 or in
Section 27, and other than in connection with the purchase of Common
Shares prior to the Distribution Date.
Section 24. Notice of Certain Events. In case the Company
shall propose (a) to pay any dividend payable in stock of any class to
the holders of Preferred Shares or to make any other distribution to the
holders of Preferred Shares (other than a regular periodic cash dividend
at a rate not in excess of 125% of the rate of the last regular periodic
cash dividend theretofore paid or, in case regular periodic cash
dividends have not theretofore been paid, at a rate not in excess of 50%
of the average net income per share of the Company for the four quarters
ended immediately prior to the payment of such dividends, or a stock
dividend on, or a subdivision, combination or reclassification of the
Preferred Shares) or (b) to offer to the holders of Preferred Shares
rights or warrants to subscribe for or to purchase any additional
Preferred Shares or shares of stock of any class or any other
securities, rights or options, or (c) to effect any reclassification of
its Preferred Shares (other than a reclassification involving only the
subdivision of outstanding Preferred Shares), or (d) to effect any
consolidation or merger into or with, or to effect any sale or other
transfer (or to permit one or more of its subsidiaries to effect any
sale or other transfer), in one or more transactions, of more than 50%
of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to, any other Person (other than pursuant to a merger
or other acquisition agreement of the type described in Section
1(c)(ii)(A)(2)), or (e) to effect the liquidation, dissolution or
winding up of the Company, or (f) to declare or pay any dividend on the
Common Shares payable in Common Shares or to effect a subdivision,
combination or consolidation of the Common Shares (by reclassification
or otherwise than by payment of dividends in Common Shares) then, in
each such case, the Company shall give to the Rights Agent and to each
holder of a Right Certificate, in accordance with Section 25, a notice
of such proposed action, which shall specify the record date for the
purposes of such stock dividend, distribution of rights or warrants, or
the date on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, or winding up is to take place and
the date of participation therein by the holders of the Preferred Shares
and/or Common Shares, if any such date is to be fixed, and such notice
shall be so given in the case of any action covered by clause (a) or (b)
above at least ten (10) days prior to the record date for determining
holders of the Preferred Shares for purposes of such action, and in the
case of any such other action, at least ten (10) days prior to the date
of the taking of such proposed action or the date of participation
therein by the holders of the Preferred Shares and/or Common Shares,
whichever shall be the earlier.
In case any event set forth in Section 11(a)(ii) of this
Rights Agreement shall occur, then, in any such case, the Company shall
as soon as practicable thereafter give to the Rights Agent and to each
holder of a Right Certificate, in accordance with Section 25, a notice
of the occurrence of such event, which notice shall describe the event
and the consequences of the event to holders of Rights under Section
11(a)(ii).
Notwithstanding anything in this Rights Agreement to the
contrary, prior to the Distribution Date a filing by the Company with
the Securities and Exchange Commission shall constitute sufficient
notice to the holders of securities of the Company, including the
Rights, for purposes of this Rights Agreement and no other notice need
be given.
Section 25. Notices. Notices or demands authorized by this
Rights 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:
The Titan Corporation
3033 Science Park Road
San Diego, California 92121
Attention: Corporate Secretary
Subject to the provisions of Section 21, any notice or demand authorized
by this Rights 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:
American Stock Transfer and Trust Company
40 Wall Street
New York, New York 10005
Attention: General Counsel
Notices or demands authorized by this Rights 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, the Company and the Rights Agent shall, if the
Company so directs, supplement or amend any provision of this Rights
Agreement without the approval of any holders of certificates
representing Common Shares. From and after the Distribution Date and
subject to the last sentence of this Section 26, the Company and the
Rights Agent may from time to time supplement or amend this Rights
Agreement without the approval of any holders of Right Certificates (i)
to cure any ambiguity or to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provisions herein, (ii) to shorten or lengthen any time period hereunder
(which shortening or lengthening, following the Shares Acquisition Date,
shall be effective only if there are Continuing Directors and shall
require the approval of at least a majority of such Continuing
Directors) or (iii) so long as the interests of the holders of the Right
Certificates (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person) are not adversely affected thereby, to
make any other changes or provisions in regard to matters or questions
arising hereunder which the Company and the Rights Agent may deem
necessary or desirable, including but not limited to extending the Final
Expiration Date, provided, however, that the right of the Board of
Directors to extend the Distribution Date or Redemption Date shall not
require any amendment or supplement hereunder. 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. Prior to the Distribution Date, the interests of the holders
of Rights shall be deemed coincident with the interests of the holders
of Common Shares. Without limiting the foregoing, at any time prior to
such time as any Person becomes an Acquiring Person, the Company and the
Rights Agent may amend this Agreement to lower the thresholds set forth
in Sections 1(a) and 3(a) to not less than the greater of (i) any
percentage greater than the largest percentage of the outstanding Common
Shares then known by the Company to be beneficially owned by any Person
(other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any Subsidiary of the Company, or any
entity holding Common Shares for or pursuant to the terms of any such
plan) and (ii) 10%.
Section 27. Exchange.
(a) The Board of Directors of the Company may, at its
option, at any time after the occurrence of a Trigger Event, exchange
Common Shares for all or part of the then outstanding and exercisable
Rights (which shall not include Rights that have become void pursuant to
the provisions of Section 11(a)(ii)) by exchanging that number of Common
Shares having an aggregate value equal to the Spread (with such value
being based on the current per share market price (as determined
pursuant to Section 11(d)) on the date of the occurrence of a Trigger
Event) per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof
(such amount per Right being hereinafter referred to as the "Exchange
Consideration"). Notwithstanding the foregoing, (i) the Board of
Directors shall not be empowered to effect such exchange at any time
after any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or any such Subsidiary, or any
entity holding Common Shares for or pursuant to the terms of any such
plan), together with all Affiliates and Associates of such Person,
becomes the Beneficial Owner of 50% or more of the Common Shares then
outstanding and (ii) the Board shall not be empowered to effect an
exchange for more than that number of Rights for which there are
sufficient Common Shares authorized but unissued, or held by the Company
as treasury shares, to permit the exchange for Rights.
(b) Immediately upon the action of the Board of Directors
of the Company ordering the exchange for any Rights pursuant to Section
27(a) and without any further action and without any notice, the right
to exercise such Rights shall terminate and the only right thereafter of
a holder of such Rights shall be to receive that number of Common Shares
equal to the number of such Rights held by such holder multiplied by the
Exchange Consideration. The Company shall promptly give public notice
of any such exchange; provided, however, that the failure to give, or
any defect in, such notice shall not affect the validity of such
exchange. The Company promptly shall mail a notice of any such exchange
to all of the holders of such Rights at their last addresses as they
appear upon the registry books of the Rights Agent. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of exchange will
state the method by which the exchange of the Common Shares for Rights
will be effected and, in the event of any partial exchange, the number
of Rights which will be exchanged. Any partial exchange shall be
effected pro rata based on the number of Rights (other than the Rights
which have become void pursuant to the provisions of Section 11(a)(ii))
held by each holder of Rights.
(c) In any exchange pursuant to this Section 27, the
Company, at its option, may substitute Preferred Shares (or equivalent
preferred shares, as such term is defined in Section 11(b) hereof) for
Common Shares exchangeable for Rights, at the initial rate of one one-
hundredth of a Preferred Share (or equivalent preferred share) for each
Common Share, as appropriately adjusted to reflect adjustments in the
voting rights of the Preferred Shares pursuant to the terms thereof, so
that the fraction of a Preferred Share delivered in lieu of each Common
Share shall have the same voting rights as one Common Share.
(d) In the event that there shall not be sufficient Common
Shares or Preferred Shares issued but not outstanding or authorized but
unissued to permit any exchange of Rights as contemplated in accordance
with this Section 27, the Company shall take all such action as may be
necessary to authorize additional Common Shares or Preferred Shares for
issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of
Common Shares or to distribute certificates which evidence fractional
Common Shares. In lieu of such fractional Common Shares, the Company
shall pay to the registered holders of the Right Certificates with
regard to which such fractional Common Shares would otherwise be
issuable an amount in cash equal to the same fraction of the current
market value of a whole Common Share. For the purposes of this Section
27(e), the current market value of a whole Common Share shall be the
current per share market value (as determined pursuant to Section 11(d))
for the Trading Day immediately prior to the date of exchange pursuant
to this Section 27.
Section 28. Successors. All the covenants and provisions
of this Rights 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 29. Benefits of this Rights Agreement. Nothing in
this Rights 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,
the Common Shares) any legal or equitable right, remedy or claim under
this Rights Agreement; but this Rights 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, the Common Shares).
Section 30. Severability. If any term, provision, covenant
or restriction of this Rights 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 Rights Agreement shall remain in full force and effect and shall in
no way be affected, impaired or invalidated.
Section 31. Governing Law. This Rights 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 such State
applicable to contracts to be made and performed entirely within such
State.
Section 32. Counterparts. This Rights Agreement may be
executed in any number of counterparts and each of such counterparts
shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same instrument.
Section 33. Descriptive Heading. Descriptive headings of
the several Sections of this Rights 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 Rights Agreement
to be duly executed and their respective corporate seals to be hereunto
affixed, all as of the day and year first
above written.
IN WITNESS WHEREOF, the parties hereto have caused this
Rights Agreement to be duly executed and their respective corporate
seals to be hereunto affixed, all as of the day and year first above
written.
THE TITAN CORPORATION
By: /s/ David A.
Hahn
Name: David A. Hahn
Title: Senior Vice
President
General Counsel and
Secretary
AMERICAN STOCK TRANSFER AND
TRUST COMPANY
By: Joseph F. Wolf
Name: Joseph F. Wolf
Title: Vice President
Exhibit A
FORM
of
CERTIFICATE OF DESIGNATIONS
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
THE TITAN CORPORATION
(Pursuant to Section 151 of the
Delaware General Corporation Law)
_________________________
The Titan Corporation, a corporation organized and existing
under the General Corporation Law of the State of Delaware (hereinafter
called the "Corporation"), hereby certifies that the following
resolution was adopted by the Board of Directors of the Corporation as
required by Section 151 of the General Corporation Law at a meeting duly
called and held on August 17, 1995.
RESOLVED, that pursuant to the authority granted to and
vested in the Board of Directors of this Corporation (hereinafter called
the "Board of Directors" or the "Board") in accordance with the
provisions of the Restated Certificate of Incorporation, the Board of
Directors hereby creates a series of Preferred Stock, par value $.01 per
share (the "Preferred Stock"), of the Corporation and hereby states the
designation and number of shares, and fixes the relative rights,
preferences, and limitations thereof as follows:
Series A Junior Participating Preferred Stock:
Section 1. Designation and Amount. The shares of such
series shall be designated as "Series A Junior Participating Preferred
Stock" (the "Series A Preferred Stock") and the number of shares
constituting the Series A Preferred Stock shall be 250,000. 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, par value
$.01 per share (the "Common Stock"), of the Corporation, and of
any other junior stock, 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 March, June, September and December 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) $1 or (b) subject to the
provision for adjustment hereinafter set forth, 100 times the
aggregate per share amount of all cash dividends, and 100 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 the
Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such case
the 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 $1 per share 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, 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 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 provision for adjustment hereinafter
set forth, each share of Series A Preferred Stock shall entitle
the holder thereof to 100 votes on all matters submitted to a vote
of the stockholders of the Corporation. In the event the
Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such case
the number of votes per share to which holders of shares of Series
A 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 any other
Certificate of Designations 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) Except as set forth herein, or as otherwise provided
by law, 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 with holders of Common Stock
as set forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A 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, or 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 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 junior (either as
to dividends or upon liquidation, dissolution or winding up)
to the Series A Preferred Stock, provided that the
Corporation may at any time redeem, purchase or otherwise
acquire shares of any such junior stock in exchange for
shares of any stock of the Corporation ranking junior
(either as to dividends or upon dissolution, liquidation or
winding up) to the Series A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock, or any
shares of stock ranking on a parity with the Series A
Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such
terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights
and preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any
shares of stock of the Corporation unless the Corporation could,
under paragraph (A) of this Section 4, purchase or otherwise
acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A
Preferred Stock purchased or otherwise acquired by the Corporation in
any manner whatsoever shall be retired and canceled promptly after the
acquisition thereof. All such shares shall upon their cancellation
become authorized but unissued shares of Preferred Stock and may be
reissued as part of a new series of Preferred Stock subject to the
conditions and restrictions on issuance set forth herein, in the
Restated Certificate of Incorporation, or in any other Certificate of
Designations 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
liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (1) 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 $100
per share, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such
payment, provided that the holders of shares of Series A Preferred Stock
shall be entitled to receive 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 shares of
Common Stock, or (2) to the holders of 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 distributions made
ratably on the Series A Preferred Stock and all 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
the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then in each such case the aggregate amount to
which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under the proviso in clause (1) 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,
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 the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment
of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the 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. The Series A Preferred Stock shall rank, with
respect to the payment of dividends and the distribution of assets,
junior to all series of any other class of the Corporation's Preferred
Stock.
Section 10. Amendment. The Restated Certificate of Incorporation
of the Corporation shall not be amended in any manner which would
materially alter or change the powers, preferences or special rights of
the 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 class.
IN WITNESS WHEREOF, this Certificate of Designations is executed
on behalf of the Corporation by its Chairman of the Board and attested
by its Secretary this 17th day of August, 1995.
_________________________________
Chairman of the Board
Attest:
____________________________
Secretar
Exhibit B
Form of Right Certificate
Certificate No. R- _______ Rights
NOT EXERCISABLE AFTER AUGUST 17, 2005 OR EARLIER IF NOTICE OF
REDEMPTION IS GIVEN OR IF THE COMPANY IS MERGED OR ACQUIRED
PURSUANT TO AN AGREEMENT OF THE TYPE DESCRIBED IN SECTION
1(c)(ii)(A)(2) OF THE RIGHTS AGREEMENT. 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 (SPECIFIED IN SECTION 11(a)(ii) OF THE RIGHTS
AGREEMENT), RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON, OR
ITS AFFILIATES OR ASSOCIATES, OR ANY SUBSEQUENT HOLDER OF SUCH
RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS
CERTIFICATE ARE HELD OR HAVE BEEN HELD BY A PERSON WHO WAS AN
ACQUIRING PERSON OR AN ASSOCIATE OR AFFILIATE OF AN ACQUIRING
PERSON OR A NOMINEE THEREOF. THIS RIGHT CERTIFICATE AND THE
RIGHTS REPRESENTED HEREBY HAVE BECOME NULL AND VOID AS SPECIFIED
IN SECTION 11(a)(ii) OF THE RIGHTS AGREEMENT.]
Right Certificate
THE TITAN 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 dated as of
August 21, 1995 (the "Rights Agreement") between The Titan Corporation,
a Delaware corporation (the "Company"), and American Stock Transfer and
Trust Company, as Rights Agent (the "Rights Agent"), to purchase from
the Company at any time after the Distribution Date and prior to 5:00
P.M. (California time) on August 17, 2005, at the offices of the Rights
Agent, or its successors as Rights Agent, designated for such purpose,
one one-hundredth of a fully paid, non assessable share of Series A
Junior Participating Preferred Stock, par value $.01 per share (the
"Preferred Shares") of the Company, at a purchase price of $42.00 per
one one-hundredth of a Preferred Share (the "Purchase Price"), upon
presentation and surrender of this Right Certificate with the Form of
Election to Purchase and certification duly executed. The number of
Rights evidenced by this Right Certificate (and the number of one one-
hundredths of a Preferred Share which may be purchased upon exercise
thereof) set forth above, and the Purchase Price set forth above, are
the number and Purchase Price as of September 7, 1995 based on the
Preferred Shares as constituted at such date. Capitalized terms used in
this Right Certificate without definition shall have the meanings
ascribed to them in the Rights Agreement. As provided in the Rights
Agreement, the Purchase Price and the number of one one-hundredths of a
Preferred Share which may be purchased upon the exercise of the Rights
evidenced by this Right Certificate are subject to modification and
adjustment upon the happening 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. Copies of the Rights
Agreement are on file at the principal offices of the Company and the
Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the offices of the Rights Agent
designated for such purpose, 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
Preferred Shares 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 Board
of Directors may, at its option, (i) redeem the Rights evidenced by this
Right Certificate at a redemption price of $.01 per Right at any time
prior to ten (10) days after the Shares Acquisition Date or (ii)
exchange Preferred Shares or Common Shares for the Rights evidenced by
this Certificate, in whole or in part, after the occurrence of a
Trigger Event. The period during which redemption of the Rights is
permitted may be extended by the Board of Directors of the Company, but
such an extension shall require the concurrence of a majority of the
Continuing Directors. Under certain circumstances set forth in the
Rights Agreement, the decision to redeem shall require the concurrence
of a majority of the Continuing Directors.
No fractional Preferred Shares 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 Preferred Share
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 the Preferred Shares or of any other securities of the Company
which may at any time be issuable on the exercise hereof, nor shall
anything contained in the Rights Agreement or herein be construed to
confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders
(except as provided in the Rights Agreement), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced
by this Right Certificate shall have been exercised as provided in the
Rights Agreement.
If any term, provision, covenant or restriction of the
Rights 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 the Rights Agreement
shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
This Right Certificate shall not be valid or binding for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of
the Company and its corporate seal. Dated as of ___________, 19__.
Attest: THE TITAN CORPORATION
By ______________________ By ___________________________
Title: Secretary Title: President
Countersigned:
AMERICAN STOCK TRANSFER
AND TRUST COMPANY
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 and the Rights evidenced thereby, together with
all right, title and interest therein, and does hereby irrevocably
constitute and appoint ___________________ Attorney, to transfer the
within Right Certificate on the books of the within-named Company, with
full power of substitution.
Dated:
______________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by an eligible guarantor institution which
is a participant in a securities transfer association recognized
program.
Form of Reverse Side of Right Certificate...continued
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this
Right Certificate [ ] are [ ] are not beneficially owned by an
Acquiring Person or an Affiliate or an Associate thereof; and
(2) after due inquiry and to the
best knowledge of the undersigned, the undersigned [ ] 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 Affiliate
or Associate thereof.
Dated:
Signature
Form of Reverse Side of Right Certificate...continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To THE TITAN CORPORATION:
The undersigned hereby irrevocably elects to exercise
__________________ Rights represented by this Right Certificate to
purchase the Preferred Shares 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)
____________________________________________________________
If such number of Rights shall 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: ________________, 19__
______________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by an eligible guarantor
institution which is a participant in a securities transfer association
recognized program.
Form of Reverse Side of Right Certificate...continued
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [ ]
are [ ] are not beneficially owned by an Acquiring Person or an
Affiliate or an Associate thereof; and
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned [ ] 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 Affiliate or Associate
thereof.
Dated:___________, 19__
________________________
Signature
------------------------------------------------------------------------
------
NOTICE
The signature in the foregoing Form of Assignment and Form
of Election to Purchase must conform to the name as written upon the
face of this Right Certificate in every particular, without alteration
or enlargement or any change whatsoever.
In the event the certification set forth above in the Form
of Assignment or Form of Election to Purchase is not completed, the
Company will deem the beneficial owner of the Rights evidenced by this
Right Certificate to be an Acquiring Person or an Affiliate or Associate
hereof and, in the case of an Assignment, will affix a legend to that
effect on any Right Certificates issued in exchange for this Right
Certificate.
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On August 17, 1995 the Board of Directors of The Titan
Corporation (the "Company") declared a dividend of one Right for each
share of common stock, $.01 par value (the "Common Shares"), of the
Company outstanding at the close of business on September 7, 1995 (the
"Record Date"). 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
Shares") at a price of $42.00 per one one-hundredth of a Preferred Share
(the "Purchase Price"), subject to adjustment. The description and
terms of the Rights are set forth in a Rights Agreement (the "Rights
Agreement") between the Company and American Stock Transfer and Trust
Company as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) ten (10) days following a
public announcement that a person or group of affiliated or associated
persons (an "Acquiring Person") acquired, or obtained the right to
acquire, beneficial ownership of 15% or more of the Common Shares or
(ii) ten (10) days following the commencement or announcement of an
intention to make a tender offer or exchange offer the consummation of
which would result in the beneficial ownership by a person or group of
15% or more of the Common Shares (the earlier of (i) and (ii) being
called the "Distribution Date"), the Rights will be evidenced, with
respect to any of the Common Share certificates outstanding as of the
Record Date, by such Common Share certificate with a copy of this
Summary of Rights attached thereto.
The Rights Agreement provides that the Board of Directors,
with the concurrence of a majority of the Continuing Directors (as
defined below), may postpone the Distribution Date and that, until the
Distribution Date, the Rights will be transferred with and only with the
Common Shares. Until the Distribution Date (or earlier redemption or
expiration of the Rights), new Common Share certificates issued after
the close of business on the Record Date upon transfer or new issuance
of the Common Shares will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier
redemption or expiration of the Rights), the surrender for transfer of
any certificates for Common Shares, even without a copy of this Summary
of Rights attached thereto, will also constitute the transfer of the
Rights associated with the Common Shares represented by such
certificate. As soon as practicable following the Distribution Date,
separate certificates evidencing the Rights ("Right Certificates") will
be mailed to holders of record of the Common Shares as of the close of
business on the Distribution Date and such separate Right Certificates
alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire on August 17, 2005 subject to the Company's right
to extend such date (the "Final Expiration Date"), unless earlier
redeemed or exchanged by the Company or terminated.
The Purchase Price payable, and the number of Preferred
Shares 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 Shares, (ii) upon the grant to
holders of the Preferred Shares of certain rights or warrants to
subscribe for or purchase Preferred Shares at a price, or securities
convertible into Preferred Shares with a conversion price less than the
current market price of the Preferred Shares or (iii) upon the
distribution to holders of the Preferred Shares of evidences of
indebtedness, securities or assets (excluding regular periodic cash
dividends at a rate not in excess of 125% of the rate of the last cash
dividend theretofore paid or, in case regular periodic cash dividends
have not theretofore been paid, at a rate not in excess of 50% of the
average net income per share of the Company for the four quarters ended
immediately prior to the payment of such dividend, or dividends payable
in Preferred Shares) or of subscription rights or warrants (other than
those referred to above).
The number of outstanding Rights and the number of one one-
hundredths of a Preferred Share issuable upon exercise of each Right are
also subject to adjustment in the event of a stock split of the Common
Shares or a stock dividend on the Common Shares payable in Common Shares
or subdivisions, consolidations or combinations of the Common Shares
occurring, in any such case, prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights
will not be redeemable. Each Preferred Share will be entitled to a
minimum preferential quarterly dividend payment of $1 per share but will
be entitled to an aggregate dividend of 100 times the dividend declared
per Common Share. In the event of liquidation, the holders of the
Preferred Shares will be entitled to a minimum preferential liquidation
payment of $100 per share but will be entitled to an aggregate payment
of 100 times the payment made per Common Share. Each Preferred Share
will have 100 votes, voting together with the Common Shares. Finally,
in the event of any merger, consolidation or other transaction in which
Common Shares are exchanged, each Preferred Share will be entitled to
receive 100 times the amount received per Common Share. These rights
are protected by customary antidilution provisions.
Because of the nature of the Preferred Shares' dividend,
liquidation and voting rights, the value of the one one-hundredth
interest in a Preferred Share purchasable upon exercise of each Right
should approximate the value of one Common Share.
In the event that a Person becomes an Acquiring Person
(except pursuant to certain cash offers for all outstanding Common
Shares approved by the Board) or if the Company were the surviving
corporation in a merger with an Acquiring Person or any affiliate or
associate of an Acquiring Person and the Common Shares were not changed
or exchanged, each holder of a Right, other than Rights that are or were
acquired or beneficially owned by the 15% stockholder (which Rights will
thereafter be void), will thereafter have the right to receive upon
exercise that number of Common Shares having a market value of two times
the exercise price of the Right. With the certain exceptions, in the
event that the Company were acquired in a merger or other business
combination transaction or more than 50% of its assets or earning power
were sold, proper provision shall be made so that each holder of a Right
shall thereafter have the right to receive, upon the exercise thereof at
the then current exercise price of the Right, that number of shares of
common stock of the acquiring company which at the time of such
transaction would have a market value of two times the exercise price of
the Right.
At any time after a Person becomes an Acquiring Person and
prior to the acquisition by such Acquiring Person of 50% or more of the
outstanding Common Shares, the Board of Directors may cause the Company
to acquire the Rights (other than Rights owned by an Acquiring Person
which have become void), in whole or in part, in exchange for that
number of Common Shares having an aggregate value equal to the Spread
(the excess of the value of the Common Shares issuable upon exercise of
a Right after a Person becomes an Acquiring Person over the Purchase
Price) per Right (subject to adjustment).
No adjustment in the Purchase Price will be required until
cumulative adjustments require an adjustment of at least 1% in such
Purchase Price. No fractional shares will be issued (other than
fractions which are integral multiples of one one-hundredth of a
Preferred Share which may, at the election of the Company, be evidenced
by depositary receipts) and in lieu thereof, a payment in cash will be
made based on the market price of the Preferred Shares on the last
trading date prior to the date of exercise.
The Rights may be redeemed in whole, but not in part, at a
price of $.01 per Right (the "Redemption Price") by the Board of
Directors at any time until ten (10) days following the public
announcement that a Person has become an Acquiring Person. The Board of
Directors, with the concurrence of a majority of the Continuing
Directors, may extend the period during which the Rights are redeemable
beyond the ten (10) days following the public announcement that a Person
has become an Acquiring 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 defined
below). Immediately upon the action of the Board of Directors of the
Company electing to redeem the Rights, the Company shall make
announcement thereof, and upon such election, the right to exercise the
Rights will terminate and the only right of the holders of Rights will
be to receive the Redemption Price.
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 time that any Person becomes an Acquiring Person, and any person who
is subsequently elected to the Board if such person is recommended or
approved by a majority of the Continuing Directors. Continuing
Directors do not include an Acquiring Person, or an affiliate or
associate of an Acquiring Person, or any representative of the
foregoing.
Until a Right is exercised, the holder thereof, as such,
will have no rights as a stockholder of the Company beyond those as an
existing stockholder, including, without limitation, the right to vote
or to receive dividends.
Any of 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 Company and the Rights Agent may amend
or supplement the Rights Agreement without the approval of any holders
of Right Certificates to cure any ambiguity, to correct or supplement
any provision contained therein which may be defective or inconsistent
with any other provisions therein, to shorten or lengthen any time
period under the Rights Agreement relating to when the Rights may be
redeemed (so long as, under certain circumstances, a majority of
Continuing Directors approve such shortening or lengthening) or so long
as the interests of the holder of Right Certificates (other than an
Acquiring Person or an affiliate or associate of an Acquiring Person)
are not adversely affected thereby, and to make any other provisions in
regard to matters or questions arising thereunder which the Company and
the Rights Agent may deem necessary or desirable, including but not
limited to extending the Final Expiration Date. The Company may at any
time prior to such time as any Person becomes an Acquiring Person amend
the Rights Agreement to lower the thresholds described above to not less
than the greater of (i) any percentage greater than the largest
percentage of the outstanding Common Shares then known by the Company to
be beneficially owned by any person or group of affiliated or associated
persons and (ii) 10%.
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 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.
.
