<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 18, 1997
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IKON OFFICE SOLUTIONS, INC.
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(Exact name of registrant specified in Charter)
Ohio 1-5964 23-0334400
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(State or other (Commission (IRS Employee
jurisdiction of File Number) Identification No.)
incorporation)
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P.O. Box 834
Valley Forge, Pennsylvania 19482
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(Address of principal executive offices) Zip Code
Registrant's telephone, including area code: (610) 296-8000
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(Former name and former address, if changed since last report)
<PAGE>
Item 5. Other Events.
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IKON Office Solutions, Inc. (the "Company") has amended its Rights
Agreement (the "Rights Plan") as of June 18, 1997. The Rights Plan, which was
scheduled to expire in accordance with its terms on February 10, 1998, was
extended for an additional ten year term expiring June 18, 2007.
The Rights Plan has also been amended to establish a new exercise price of
$204 per preferred stock purchase right (individually, a "Right," and
collectively, the "Rights"). A Right entitles holders thereof to buy 1/100 of a
share of Series 12 Preferred Stock of the Company (the "Preferred Shares").
The Rights Plan has been amended to provide that the Rights will be
exercisable and will trade separately from shares of the Company's Common Stock
only if a person or group (an "Acquiring Person") acquires beneficial ownership
of 15% or more (versus 20% or more under the terms of the Rights Plan prior to
the amendment) of the shares of the Company's Common Stock or commences a tender
or exchange offer that would result in such a person or group owning 15% or more
of the shares of the Company's Common Stock (a "Flip-in Event"). Only when one
or more of these events occur will shareholders receive certificates for the
Rights.
If any person actually acquires 15% or more of the shares of Common Stock
- -- other than through a tender or exchange offer for all shares of Common Stock
that provides a fair price and other terms for such shares -- or if a 15%-or-
more shareholder engages in certain "self-dealing" transactions or engages in a
merger or other business combination in which the Company survives and shares of
its Common Stock remain outstanding, the other shareholders will be able to
exercise the Rights and buy shares of Common Stock of the Company having twice
the value of the exercise price of the Rights. A provision has been added to
the Rights Plan that allows shareholders, upon action by a majority of the
Continuing Directors (as defined below), to exercise their Rights for 50% of
the shares of Common Stock otherwise purchasable upon surrender to the Company
of the Rights so exercised and without other payment of exercise price.
If the Company is involved in certain other mergers where its shares are
exchanged or certain major sales of its assets occur, shareholders will be able
to purchase shares of the other party's common stock in an amount equal to twice
the value of the exercise price of the Rights. Upon the occurrence of any of
these events, the Rights will no longer be exercisable into Preferred Shares.
The Rights Plan has also been amended to add a requirement that certain
decisions regarding the Rights Plan, such as amendment of the Rights Plan or
redemption of the Rights, must be made by the "Continuing Directors." Continuing
Directors are, in general, directors who were members of the Board of Directors
prior to a Flip-in Event.
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<PAGE>
The Rights Plan has also been amended to reduce the price at which the
Board of Directors can redeem the Rights to $.01 from $.05 per Right. The
Rights, in general, may be redeemed at any time prior to the tenth day following
public announcement that a person has acquired a 15% ownership position in
shares of Common Stock of the Company.
A copy of the Rights Agreement, as amended and restated, is being filed
with the Securities and Exchange Commission as an exhibit to this Current Report
on Form 8-K. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
as amended and restated, which is incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
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(c) Exhibits.
Exhibit No. Exhibit
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4.1 Amended and Restated Rights Agreement, dated as of
June 18, 1997, between IKON Office Solutions, Inc.
and National City Bank, as Rights Agent, which
includes, as Exhibit A thereto, the form of Rights
Certificate and as Exhibit B thereto the form of
Summary of Rights.
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<PAGE>
Signature
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
IKON OFFICE SOLUTIONS, INC.
By:___________________________________
Name:
Title:
Dated:
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<PAGE>
Exhibit No. Exhibit Page
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4.1 Amended and Restated Rights Agreement, dated as
of June 18, 1997, between IKON Office Solutions,
Inc. and National City Bank, as Rights Agent,
which includes, as Exhibit A thereto, the form
of Rights Certificate and as Exhibit B thereto the
form of Summary of Rights.
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<PAGE>
EXHIBIT 4.1
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AMENDED AND RESTATED
RIGHTS AGREEMENT
dated as of
June 18, 1997
between
IKON OFFICE SOLUTIONS, INC.
and
NATIONAL CITY BANK
as Rights Agent
================================================================================
<PAGE>
AMENDED AND RESTATED
RIGHTS AGREEMENT
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
Article I - Certain Definitions..........................................................2
1.1 Certain Definitions..........................................................2
Article II - The Rights...................................................................7
2.1 Legend on Common Stock Certificates..........................................7
2.2 Initial Exercise Price; Exercise of Rights; Detachment of Rights.............8
2.3 Adjustments to Exercise Price; Number of Rights.............................10
2.4 Date on Which Exercise is Effective.........................................13
2.5 Execution, Authentication, Delivery and Dating of Rights Certificates.......14
2.6 Registration, Registration of Transfer and Exchange.........................14
2.7 Mutilated, Destroyed, Lost and Stolen Rights Certificates...................15
2.8 Persons Deemed Owners.......................................................15
2.9 Delivery and Cancellation of Certificates...................................16
2.10 Agreement of Rights Holders.................................................16
Article III - Adjustments to the Rights in the Event of Certain Transactions..............17
3.1 Flip-over Transaction or Event..............................................17
3.2 Flip-in Transaction or Event................................................17
3.3 Obligations of the Company..................................................19
Article IV - The Rights Agent............................................................19
4.1 General.....................................................................19
4.2 Merger or Consolidation or Change of Name of Rights Agent...................20
4.3 Duties of Rights Agent......................................................20
4.4 Change of Rights Agent......................................................22
Article V - Miscellaneous...............................................................23
5.1 Redemption..................................................................23
5.2 Expiration..................................................................24
5.3 Issuance of New Rights Certificates.........................................25
5.4 Supplements and Amendments..................................................25
5.5 Fractional Rights and Fractional Shares.....................................25
5.6 Rights of Action............................................................26
5.7 Holder of Rights Not Deemed a Shareholder...................................26
5.8 Notice of Proposed Actions..................................................27
5.9 Notices.....................................................................27
5.10 Costs of Enforcement........................................................28
</TABLE>
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<TABLE>
<S> <C> <C>
5.11 Successors..................................................................28
5.12 Benefits of this Agreement..................................................28
5.13 Descriptive Headings........................................................28
5.14 Governing Law...............................................................28
5.15 Counterparts................................................................28
5.16 Severability................................................................28
</TABLE>
EXHIBITS
Exhibit A Summary of Terms
Exhibit B Forms of Rights Certificate and Election of Exercise
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<PAGE>
AMENDED AND RESTATED
RIGHTS AGREEMENT
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AMENDED AND RESTATED RIGHTS AGREEMENT (this "Agreement"), dated as of June
18, 1997, between IKON Office Solutions, Inc., an Ohio corporation (the
"Company"), and National City Bank, an Ohio corporation, as Rights Agent (the
"Rights Agent", which term shall include any successor Rights Agent hereunder).
WHEREAS, the Board of Directors of the Company has authorized and declared
a dividend of one preferred share purchase right (a "Right") in respect of each
share of Common Stock, no par value (the "Common Stock"), of the Company held of
record as of the close of business on February 22, 1988 (the "Record Date") or
issued thereafter and prior to the close of business on the Separation Date (as
hereinafter defined) in connection with the Rights Agreement dated as of
February 10, 1988 between the Company and the Rights Agent (the "Rights
Agreement");
WHEREAS, each Right entitles the holder thereof to purchase one one-
hundredth of a share of Series 12 Preferred Stock, no par value (the "Preferred
Stock"), of the Company having the rights and preferences set forth in the
Company's Amended and Restated Articles of Incorporation, pursuant to the terms
and subject to the conditions set forth herein;
WHEREAS, the Company has appointed the Rights Agent to act on behalf of the
Company, and the Rights Agent has been so acting in connection with the
issuance, transfer, exchange and replacement of Rights Certificates (as
hereinafter defined), the exercise of Rights and other matters referred to
herein;
WHEREAS, the Rights Agreement is set to expire on February 10, 1998 and the
protections afforded to the Company and the shareholders of the Company
thereunder will no longer be available after such date; and
WHEREAS, the Board of Directors has determined it is in the best interests
of the shareholders to amend the Rights Agreement to extend its term for a
period of ten years from the date hereof and to make certain changes to the
terms of the Rights Agreement as set forth herein.
NOW THEREFORE, in consideration of the premises and respective agreements
set forth herein, the parties hereby agree as follows:
<PAGE>
Article I - Certain Definitions
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1.1 Certain Definitions. For purposes of this Agreement, the
-------------------
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 15% or more of the outstanding shares of Common Stock;
provided, however, that the term "Acquiring Person" shall not include the
- -------- -------
Company, any wholly owned subsidiary of the Company, any employee benefit plan
established by any of them, or any trustee of, or fiduciary with respect to, any
such benefit plan, when acting in such capacity. Notwithstanding the foregoing,
if a majority of the Continuing Directors then in office determines in good
faith that a Person who would otherwise be an "Acquiring Person", as defined
pursuant to the foregoing provisions of this paragraph (a), has become such
inadvertently, and such Person divests as promptly as practicable a sufficient
number of shares of Common Stock so that such Person would no longer be an
Acquiring Person, then such Person shall not be deemed to be an "Acquiring
Person" for purposes of this Agreement.
(b) "Affiliate" shall have the meaning ascribed to it in Rule
12b-2 of the General Rules and Regulations under the Securities and Exchange Act
of 1934, as amended and in effect on the date hereof (the "Exchange Act").
(c) "Associate" shall have the meaning ascribed to it in Rule
12b-2 of the General Rules and Regulations under the Exchange Act.
(d) A Person shall be deemed the "Beneficial Owner", and to have
"Beneficial Ownership", of and to "beneficially own" any securities as to which
such Person or any of such Person's Affiliates or Associates is or may be deemed
to be the beneficial owner pursuant to Rule 13d-3 under the Exchange Act, as
well as any securities as to which such Person or any of such Person's
Affiliates or Associates has the right to become a "Beneficial Owner" (whether
such right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding, or upon the exercise of
conversion rights, exchange rights, rights (other than the Rights), warrants or
options, or otherwise, provided, however, that a Person shall not be deemed the
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"Beneficial Owner" or to have "Beneficial Ownership" of, or to "beneficially
own" any security (i) solely because such security has been tendered pursuant to
a tender or exchange offer made by such Person or any of such Person's
Affiliates or Associates until such tendered security is accepted for payment or
exchange, (ii) solely because such Person or any of such Person's Affiliates or
Associates has or shares the power to vote or direct the voting of such security
pursuant to a revocable proxy given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable rules and
regulations of the Exchange Act, except if such power (or arrangement relating
thereto) is then reportable under item 6 of Schedule 13D under the Exchange Act
or (iii) held for or pursuant to
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<PAGE>
the terms of any employee stock ownership or other employee benefit plan of the
Company or a wholly owned subsidiary of the Company.
(e) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in New York, New York are
generally authorized or obligated by law or executive order to close.
(f) "Close of business" on any given date shall mean 5:00 p.m.,
New York City time, on such date; provided, however, that if such date is not a
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Business Day it shall mean 5:00 p.m., New York City time, on the next succeeding
Business Day.
(g) "Common Stock" when used with reference to the Company shall
mean the shares of Common Stock, no par value, of the Company. "Common Stock"
when used with reference to any Person other than the Company shall mean the
capital stock (or similar equity interest) with the greatest-voting power of
such other Person or, if such other Person is a Subsidiary of another Person,
the Person or Persons which ultimately controls such first-mentioned Person.
(h) "Continuing Directors" 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 a representative of an Acquiring Person or of any such Affiliate or
Associate, and was a member of the Board prior to the date of this Agreement, or
(ii) any Person who subsequently becomes a member of the Board, while such
Person is a member of the Board, who is not an Acquiring Person, or an Affiliate
or Associate of an Acquiring Person, or a representative of an Acquiring Person
or of any such Affiliate or Associate, if such Person's nomination for election
or election to the Board is recommended or approved by a majority of the
Continuing Directors.
(i) "Exercise Price" shall mean, as of any date, the price at
which a holder may purchase the one one-hundredth of a share of Preferred Stock
issuable upon exercise of one whole Right.
(j) "Expiration Time" shall mean the earlier of the Redemption
Time or (ii) the close of business on June 18, 2007.
(k) A "Flip-in Transaction or Event" shall mean (A) a
transaction in which, directly or indirectly, any Acquiring Person or any
Affiliate or Associate of any such Acquiring Person (other than the Company or a
wholly owned Subsidiary of the Company), shall (i) consolidate or merge with the
Company and, in connection therewith, the Company shall be the surviving or
continuing corporation of such merger or consolidation and the Common Stock
shall remain outstanding and not changed or converted into or exchanged for
stock or other securities or cash or any other property, (ii) obtain from the
Company or any of its Subsidiaries after the Stock Acquisition Date, with or
without consideration, more than 2% of any shares of
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<PAGE>
any class of capital stock of the Company or any of its Subsidiaries or
securities exercisable or exchangeable for or convertible into more than 2% of
any shares of any class of capital stock of' the Company or any of its
Subsidiaries (other than as part of a pro rata distribution to all holders of
--- ----
such stock or in connection with the exercise or conversion of securities
Beneficially Owned by such Acquiring Person or any Affiliate or Associate of
such Acquiring Person prior to the Stock Acquisition Date), (iii) sell,
purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or
dispose of, to, from, or with, as the case may be, the Company or any of its
Subsidiaries, assets (including, without limitation, cash or cash equivalents)
(other than as part of a pro rata acquisition from or disposition to holders of
--------
securities of the Company and other than in connection with a Flip-over
Transaction or Event) on terms and conditions less favorable to the Company than
the Company would be able to obtain through arms-length negotiations with an
unaffiliated third party, (iv) receive any compensation from the Company or any
of its Subsidiaries, other than compensation for full-time employment as a
regular employee at rates in accordance with the Company's (or its
Subsidiaries') past practices, or (v) receive the benefit, directly or
indirectly (other than (x) in connection with a Flip-over Transaction or Event,
(y) proportionately as a shareholder or (z) resulting from a requirement of law
or government regulation), of any loans, advances, guarantees, pledges or other
financial assistance or any tax credits or other tax advantage provided by the
Company or any of its Subsidiaries; or (B) any of the following events if they
occur during such time as an Acquiring Person and its Affiliates and Associates
(or nominees of any thereof) constitute at least a majority of the Board of
Directors of the Company: (i) any failure to declare and pay at the regular
date therefor any full quarterly dividends (whether or not cumulative) on any
outstanding preferred stock of the Company (except to the extent such
declaration or payment would be prohibited under the laws of Ohio), (ii) any
reduction in the annual rate of dividends paid on the Common Stock (except as
necessary for valid business reasons or to reflect any subdivision of the Common
Stock or as required under the laws of Ohio), (iii) any failure to increase the
annual rate of dividends as necessary to, reflect any reclassification
(including any reverse stock split), recapitalization, reorganization or any
similar transaction which has the effect of reducing the number of outstanding
shares of Common Stock (except) to the extent such increase in the rate of
dividends would be prohibited under the laws of Ohio), or (iv) there shall be
effected any reclassification of securities (including any reverse stock split),
or recapitalization, of the Company, or any merger or consolidation of the
Company with any of its Subsidiaries or any other transaction or series of
transactions (whether or not with or into or otherwise involving an Acquiring
Person) involving the Company, which has the effect, directly or indirectly, of
increasing the Beneficial Ownership of any Acquiring Person (or any Affiliate or
Associate of any Acquiring Person) of the outstanding shares of any class of
equity or convertible securities of the Company (or, in the case of a
consolidation or merger, any successor entity) or any of its Subsidiaries (or,
in the case of a consolidation or merger, any successor entity) (other than in
connection with a Flip-over Transaction or Event) by more than 2%; or (C) the
date on which any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or of any Subsidiary of the Company, or
any Person or entity organized, appointed or established by the Company for or
pursuant to the terms of any such plan), alone or together with its Affiliates
and Associates, shall become the Beneficial Owner of 15% or more of the shares
of Common Stock
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<PAGE>
then outstanding, unless the event causing the 15% threshold to be crossed is a
Flip-Over Transaction or Event, or is an acquisition pursuant to a tender offer
or an exchange offer for all outstanding shares of Common Stock at a price and
on terms that provide fair value to all shareholders, as determined by at least
a majority of the Continuing Directors, after taking into consideration all
factors that such members of the Board of Directors deem relevant, including,
without limitation, the long-term prospects and value of the Company and the
prices and terms that such members of the Board of Directors believe, in good
faith, could reasonably be achieved if the Company or its assets were sold on an
orderly basis designed to realize maximum value (a "Qualifying Offer").
(l) "Flip-over Transaction or Event" shall mean (A) a
transaction in which, directly or indirectly, the Company shall consolidate
with, or merge with or into, any other Person (other than a wholly owned
Subsidiary of the Company), or any other Person (other than a wholly owned
Subsidiary of the Company) shall consolidate with, or merge with or into, the
Company, and, in connection therewith, all or part of the outstanding shares of
Common Stock shall be changed in any way or converted into or exchanged for
stock or other securities or cash or any other property, or (B) a transaction or
series of transactions in which, directly or indirectly, the Company shall sell
or otherwise transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer) assets (i) aggregating more than 50% of the assets (measured
by either book value or fair market value) or (ii) generating more than 50% of
the operating income or cash flow of the Company and its Subsidiaries (taken as
a whole) to any other Person (other than the Company or one or more of its
wholly owned Subsidiaries) or to two or more such Persons which are affiliated
or otherwise acting in concert. Notwithstanding anything in this Agreement to
the contrary, the term "Flip-over Transaction or Event" shall not include a
transaction described in clauses (A) or (B) of this subparagraph if (i) such
transaction is consummated with a Person or Persons who acquired shares of
Common Stock pursuant to a Qualifying Offer, (ii) the price per share of Common
Stock offered in such transaction is not less than the price paid per share of
Common Stock in the Qualifying Offer and (iii) the form of consideration being
offered to the remaining holders of Common Stock pursuant to such transaction is
the same as the form of consideration paid pursuant to the Qualifying Offer.
(m) "Market Price" per share of any securities on any date of
determination shall mean the average of the daily closing prices per share of
such securities (determined as described below) on each of the 20 consecutive
Trading Days through and including the Trading Day immediately preceding such
date; provided, however, that if an event of a type analogous to any of the
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events described in the first sentence of Section 2.4(b) hereof shall have
caused the closing prices used to determine the Market Price on any Trading Days
not to be fully comparable with the closing price on such date of determination,
each such closing price so shall be appropriately adjusted in a manner analogous
to the applicable adjustment provided for in Section 2.4(b) hereof in order to
make it fully comparable with the closing price on such date of determination.
The closing price per share of any securities on any date shall be the last sale
price, regular way, or, in case no such sale take place on such date, the
average of the closing bid and asked prices, regular way, for each share of such
securities, in either case as
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<PAGE>
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 securities 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 securities are listed or admitted to trading or, if the securities
are not listed or admitted to trading on any national securities exchange, the
average of the high bid and low asked prices for each share of such securities
in the over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or such other
system then in use, or, if on any such date the securities 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 securities selected by the
Board of Directors of the Company; provided, however, that if on any such date
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the securities are not listed or admitted for trading on a national securities
exchange or traded in the-over-the-counter market, the closing price per share
of such securities on such date shall mean the fair value per share of
securities on such date as determined in good faith by the Board of Directors of
the Company, after consultation with a nationally recognized investment banking
firm with respect to the fair value per share of such securities, and set forth
in a certificate delivered to the Rights Agent.
(n) "Person" shall mean any individual, firm, partnership,
association, group (as such term is used in Rule 13d-5 under the Exchange Act),
corporation or other entity.
(o) "Redemption Time" shall mean the time at which the right to
exercise the Rights shall terminate pursuant to Section 5.1(b) hereof.
(p) "Redemption Price" shall mean, as of any date, the price at
which the Company may redeem each Right pursuant to Section 5.1 hereof.
(q) "Separation Date" shall mean the tenth day (or such later
date, not beyond the thirtieth day, as may be fixed by the Board of Directors of
the Company by notice to the Rights Agent and publicly announced by the Company)
after the earlier of (i) the Stock Acquisition Date and (ii) the date of the
commencement of, or first public announcement of the intent of any Person (other
than the Company, any wholly owned Subsidiary of the Company, or any employee
stock ownership or other employee benefit plan of the Company or any wholly
owned subsidiary of the Company) to commence, a tender or exchange offer to
acquire (when added to any shares as to which such Person is the Beneficial
owner immediately prior to such tender or exchange offer) Beneficial Ownership
of 15% or more of the outstanding shares of Common Stock, provided that if the
foregoing results in the Separation Date being prior to the Record Date, the
Separation Date shall be the Record Date.
(r) "Stock Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) under the Exchange Act) by
the Company or an Acquiring Person
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<PAGE>
that an Acquiring Person has become such.
(s) "Subsidiary" of any specified Person shall mean any
corporation or other entity of which a majority of the voting power of the
equity securities or equity interest is Beneficially Owned, directly or
indirectly, by such Person.
(t) "Trading Day", when used with respect to any securities,
shall mean a day on which the principal national securities exchange on which
such securities are listed or admitted to trading is open for the transaction of
business, or, if the securities are not listed or admitted to trading on any
national securities exchange, a Business Day.
Article II - The Rights
----------
2.1 Legend on Common Stock Certificates. Certificates for the Common
-----------------------------------
Stock issued after the Record Date but prior to the earlier of the Expiration
Time or the close of business on the Separation Date shall evidence one Right
for each share of Common Stock represented thereby and shall have impressed on,
printed on, written on or otherwise affixed to them the following legend:
Until the close of business on the Separation Date (as defined in the
Amended and Restated Rights Agreement referred to below), this
certificate also evidences and entitles the holder hereof to certain
Rights as set forth in an Amended and Restated Rights Agreement, dated
as of June 18, 1997 (the "Amended and Restated Rights Agreement"),
between IKON Office Solutions, Inc. and National City Bank, as Rights
Agent, the terms of which are hereby incorporated herein by reference
and a copy of which is on file at the principal executive offices of
IKON Office Solutions, Inc. Under certain circumstances, as set forth
in the Amended and Restated Rights Agreement, such Rights may be
redeemed, may expire, may become void or may be evidenced by separate
certificates and may no longer be evidenced by this certificate. IKON
Office Solutions, Inc. will mail or arrange for the mailing of a copy
of the Amended and Restated Rights Agreement to the holder of this
certificate without charge within five days after the receipt of a
written request therefor.
Certificates representing shares of Common Stock that are issued and outstanding
on the Record Date shall evidence one Right for each share of Common Stock
evidenced thereby notwithstanding the absence of the foregoing legend.
2.2 Initial Exercise Price; Exercise of Rights; Detachment of Rights.
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(a) Subject to adjustment as herein set forth, each Right will
entitle the holder thereof to purchase, for $204, one one-hundredth of a share
of Preferred Stock.
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<PAGE>
(b) Prior to the close of business on the Separation Date, (i)
no Right may be exercised and (ii) each Right will be evidenced by the
certificate for the associated share of Common Stock and will be transferable
only together with, and will be transferred by a transfer of, such associated
share. Notwithstanding any other provision of this Agreement, no Rights will
exist with respect to shares of Common Stock held by the Company as treasury
shares.
(c) After the close of business on the Separation Date and prior
to the Expiration Time, the Rights (i) may be exercised and (ii) will be
transferable independent of Common Stock. Promptly following the Separation
Date, the Rights Agent will mail to each holder of record of Common Stock as of
the close of business on the Separation Date, at such holder's address as shown
by the records of the Company (the Company hereby agreeing to furnish copies of
such records to the Rights Agent for this purpose), (x) a certificate (a "Rights
Certificate") in substantially the form of Exhibit b hereto appropriate
completed, representing the number of Rights held by such holder at the close of
business on the Separation Date and having such marks of identification or
designation and such legends, summaries or endorsements printed thereon as the
Company may deem appropriate and as are not inconsistent with the provisions of
this Agreement, or as may required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange or quotation system on which the Rights may from time to time be listed
or traded, or to conform to usage, and (y) a disclosure statement describing the
Rights.
(d) Rights may be exercised at any time after the close of
business on the Separation Date and prior to the Expiration Time by submitting
to the Rights Agent on any Business Day the Rights Certificate evidencing such
Rights with an Election to Exercise ("Election to Exercise") substantially in
the form attached to the Rights Certificate duly completed, accompanied by
payment in cash, or by certified check or money order payable to the order of
the Company, of a sum equal to the Exercise Price multiplied by the number of
Rights being exercised and a sum sufficient to cover any transfer tax or charge
which may be payable in respect of the transfer involved in the transfer or
delivery of Rights Certificates or the issuance or delivery of certificates for
Common Stock in a name other than that of the holder of the Rights being
exercised.
(e) Upon receipt of a Rights Certificate, with an Election to
Exercise accompanied by payment as set forth in Section 2.3(d) above, the Rights
Agent will thereupon promptly (i) (A) requisition from any transfer agent of the
Preferred Stock, certificates for the number of shares of Preferred Stock to be
purchased and the Company hereby irrevocably authorizes its transfer agent to
comply with all such requests or (B) requisition from the depository agent,
depositary receipts ("Depository Receipts") representing such number of one one-
hundredths of a share of Preferred Stock as are to be purchased (in which case
certificates for the Preferred Stock represented by such receipts shall be
deposited by the transfer agent with the depository 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
-8-
<PAGE>
lieu of issuance of fractional shares in accordance with Section 5.5, (iii)
after receipt of such certificates or Depositary Receipts, cause the same to be
delivered to or in accordance with the order of the registered holder of such
Rights Certificate, registered in such name or names as may be designated by
such holder and (iv) when appropriate, after receipt, deliver such cash to or
upon the order of the registered holder of such Rights Certificate.
(f) In case the holder of any Rights shall exercise less than
all the Rights evidenced by such holder's Rights Certificate, a new Rights
Certificate evidencing the Rights remaining unexercised will be issued by the
Rights Agent to such holder or to such holder's duly authorized assigns.
(g) The Company covenants and agrees that it will (i) use its
best efforts to cause to be reserved and kept available until the Expiration
Time out of its authorized and unissued shares of capital stock a number of
shares of stock that will be sufficient to permit the exercise in full of all
outstanding Rights; (ii) take all such action as may be necessary to ensure that
all shares delivered upon exercise of Rights shall, at the time of delivery of
the certificates for such shares (subject to payment of the Exercise Price for
such Rights), be duly and validly authorized, executed, issued and delivered;
(iii) take all such action as may be necessary to comply with any applicable
requirements of the Securities Act of 1933, as amended, or the Exchange Act, or
the rules and regulations thereunder, or any other applicable law, rule or
regulation, in connection with the issuance of any shares upon exercise of
Rights; (iv) use its best efforts to cause all shares or Preferred Stock issued
upon exercise of Rights to be listed on any national securities exchange upon
issuance; and (v) pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of the original
issuance or delivery of the Rights Certificates or of any shares issued upon the
exercise of rights, provided that the Company shall not be required to pay any
transfer tax or charge that may be payable in respect of any transfer involved
in the transfer or delivery of Rights Certificates or the issuance or delivery
of certificates for shares in a name other than that of the holder of the Rights
being transferred or exercised.
2.3 Adjustments to Exercise Price; Number of Rights. (a) In the
-----------------------------------------------
event the Company shall at any time after the date of this Agreement (i) declare
a dividend on the Preferred Stock payable in Preferred Stock, (ii) subdivide the
outstanding Preferred Stock,(iii) combine the outstanding Preferred Stock into a
smaller number of shares of Preferred Stock or (iv) issue any shares of its
capital stock in a reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), the Exercise 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 of 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 Stock transfer books of the Company were open, he would have owned
upon such exercise and been entitled to receive by
-9-
<PAGE>
virtue of such dividend, subdivision, combination or reclassification.
(b) In the event the Company shall at any time after the date of
this Agreement and prior to the date on which any share of Preferred Stock is
issued and outstanding (i) declare or pay a dividend on Common Stock payable in
Common Stock, (ii) subdivide the outstanding Common Stock, (iii) combine the
outstanding Common Stock into a smaller number of shares of Common Stock or (iv)
issue, in a reclassification of the Common Stock (including any such
reclassification in connection with the consolidation or merger in which the
Company is the continuing or surviving corporation) or as a dividend or other
distribution to shareholders, any shares of capital stock (or rights, warrants,
options or securities convertible or exchangeable for shares of capital stock)
or evidence of indebtedness or assets (other than regular quarterly cash
dividends), in respect of or in lieu of existing Common Stock, the Exercise
Price, the number of Rights outstanding and the Redemption Price shall be
adjusted in the manner set forth below. In the case of clauses (i), (ii) and
(iii) above, each right outstanding after such adjustment will be exercisable at
an Exercise Price equal to the Exercise Price in effect immediately prior to
such adjustment dividend by the number of shares of Common Stock (the "Expansion
Factor") that a holder of one share of Common Stock prior to such dividend,
subdivision or combination would hold thereafter as a result thereof. Each
Right held prior to such adjustment will become that number of Rights equal to
the Expansion Factor; provided, however, that no such adjustment in the number
-------- -------
of Rights shall be made if the events described in clauses (i) or (ii) occur
prior to the Separation Date and any certificates evidencing additional shares
of Common Stock, with Rights attached, are issued by the Company in connection
therewith. Furthermore, the Redemption Price shall be adjusted to equal the
Redemption Price in effect immediately prior to such dividend, subdivision or
combination divided by the Expansion Factor. In the case of any action referred
to in clause (iv), to the extent the provisions of Section 2.4(c) or Article III
are not applicable and the Board of Directors deems it necessary or desirable in
order to protect the interests of the holders of Rights, the Company and the
Rights Agent shall amend this Agreement in order to provide for an appropriate
adjustment of the Exercise Price, the number of Rights outstanding and/or the
Redemption Price, and to such other amendments as may be necessary or desirable,
including provisions treating any other shares of capital stock issued in lieu
of, or in respect of, the Common Stock as nearly equivalent to shares of Common
Stock as may be practicable and appropriate under the circumstances. In
addition to the foregoing, if no shares of Preferred Stock are outstanding, the
Board may make appropriate adjustments to the terms of the Preferred Stock to
take into account the actions referred to in this Section 2.4(b) and to keep the
number of whole shares of Preferred Stock issuable upon the exercise of the
Rights the same as prior to the taking of such actions. Each adjustment made
pursuant to this Section 2.4(b) shall be made as of the payment or effective
date for the applicable dividend, distribution, subdivision, combination or
reclassification.
(c) In case the Company shall, at any time after the date of
this Agreement and prior to the date on which any share of Preferred Stock is
issued and outstanding, fix a record date for the making of a distribution to
all holders of the Common Stock (including any such distribution made in
connection with a consolidation or merger in which the Company
-10-
<PAGE>
is the surviving or continuing corporation) of evidence of indebtedness of
assets (other than a regular quarterly cash dividend or a dividend payable in
Common Stock) or rights or warrants (excluding such rights or warrants issued to
all holders of Common Stock entitling them for a period expiring within 45
calendar days after such record date to subscribe for or purchase Common Stock
or securities convertible into Common Stock at a price per share of Common Stock
(or having a conversion price per share, if a security convertible into Common
Stock) less than the Market Price of the Common Stock on such record date), the
Exercise Price to be in effect after such record date shall be determined by
multiplying the Exercise Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the Market Price of the Common
Stock on such record date, less the fair market value (as determined in good
faith by the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent) of the portion of the
assets or evidences of indebtedness so to be distributed or of such subscription
rights or warrants applicable to one share of Common Stock and the denominator
of which shall be such Market Price of the Common Stock. Such adjustments shall
be made successively whenever such a record date is fixed; and in the event that
such distribution is not so made, the Exercise Price shall again be adjusted to
be the Exercise Price which would then be in effect if such record date had not
been fixed.
(d) No adjustment in the Exercise Price pursuant to any of the
provisions of this Section 2.4 shall be required unless such adjustment would
require an increase or decrease of at least 1% in the Exercise Price; provided,
--------
however, that any adjustments which by reason of this Section 2.4(d) are not
- -------
required to be made shall be carried forward, aggregated and taken into account
in any subsequent adjustment. All calculations under this Section 2.4(d) shall
be made to the nearest cent or the nearest ten-thousandth of a share of Common
Stock or one-millionth of a share of Preferred Stock, as the case may be.
(e) If, as a result of an adjustment made pursuant to Section
2.4, the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock of the Company other than Preferred Stock,
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 contained in Section
2.4(a) through (c), inclusive.
(f) After the date of any adjustment of the Exercise Price
pursuant to Section 2.4(b) or (c), the Company shall, unless otherwise provided
in this Section 2.4, adjust the number of Rights. Each of the Rights outstanding
after such adjustment of the number of Rights shall be exercisable for the
number of one one-hundredths of a share of Preferred Stock for which 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
Exercise Price in effect immediately prior to adjustment of the Exercise Price
by the Exercise Price in effect immediately after adjustment of the Exercise
Price.
-11-
<PAGE>
(g) Irrespective of any adjustment or change in the Exercise
Price or the number of one-hundredths of a share of Preferred Stock issuable
upon the exercise of the Rights, the Rights Certificates theretofore and
thereafter issued may continue to express the Exercise Price per one one-
hundredth of a share and the number of shares which were expressed in the
initial Rights Certificates issued hereunder.
(h) Whenever an adjustment is made pursuant to this Section 2.4,
the Company shall (i) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(ii) promptly file with the Rights Agent a copy of such certificate and (iii)
mail a brief summary thereof to each holder of Rights in accordance with Section
5.9, which notice may be sent in advance of the taking of the action which will
require the adjustment; provided, however, that whenever the Company shall make
-------- -------
an adjustment to the number or Rights pursuant to Section 2.4(b) or (f), the
Company shall make a public announcement of such adjustment to 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 Exercise Price is adjusted or any day thereafter, but, if the
Rights Certificates have been issued, shall be at least 10 days later than the
date of the public announcement of the Company's election to so adjust the
number of Rights. If the Rights Certificates have been issued, upon each
adjustment of the number of Rights pursuant to Section 2.4(f), 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 the
additional Rights (including fractional Rights created by such adjustments) to
which such holders shall be entitled as a result of such adjustment, or, at the
option of the Company, shall cause to be distributed to such holders of record
in substitution and replacement for the Rights Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Rights Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein and shall be registered in the manner of the holders of record of
Rights Certificates on the record date specified in the public announcement. The
Rights Agent shall be fully protected in relying on any certificate prepared
pursuant to this Section 2.4(h) and shall not be deemed to have knowledge of any
such adjustment unless and until it shall have received such certificate.
(i) In the event the Company shall at any time after the Record
Date and prior to the close of business on the Separation Date issue any shares
of Common Stock, including shares previously held by the Company as treasury
shares and shares issued in a transaction referred to in clauses (i) and (ii) of
the first paragraph of Section 2.4(b) hereof, each such share of Common Stock so
issued shall automatically have one new Right associated with it, which right
shall be evidenced by the certificate representing such share.
2.4 Date on Which Exercise is Effective. Each person in whose name
-----------------------------------
any certificate for shares of Preferred Stock is issued upon the exercise of
Rights shall for all purposes be deemed to have become the holder of record of
the shares of Preferred Stock
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<PAGE>
represented thereby on, and such certificate shall be dated, the date upon which
the Rights Certificate evidencing such Rights was duly surrendered and payment
of the Exercise Price for such Rights (and any applicable taxes and other
governmental charges payable by the exercising holder hereunder) was made;
provided, however, that if the date of such surrender and payment is a date
- -------- -------
upon which the Preferred Stock transfer books of the Company are closed, such
person shall be deemed to have become the record holder of such shares on, and
such certificate shall be dated, the next succeeding Business Day on which the
Preferred Stock transfer books of the Company are open.
2.5 Execution, Authentication, Delivery and Dating of Rights
---------------------------------------------------------
Certificates.
- ------------
(a) The Rights Certificates shall be executed on behalf of the Company
by its Chairman of the Board, President or one of its Vice Presidents, under its
corporate seal reproduced thereon attested by its Secretary one of its Assistant
Secretaries, Treasurer or one of its Assistant Treasurers. The signature of any
of these officers on the Rights Certificates may be manual or facsimile.
Rights Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the countersignature and delivery of such Rights
Certificates.
Promptly after the Company learns of the Separation Date, the Company
will notify the Rights Agent of such Separation Date and will deliver Rights
Certificates executed by the Company to the Rights Agent for countersignature,
and the Rights Agent shall manually countersign and deliver such Rights
Certificates to the holders of the Rights pursuant to Section 2.3(c) hereof. No
Rights Certificate shall be valid for any purpose until manually countersigned
by the Rights Agent.
(b) Each Rights Certificate shall be dated the Record Date.
2.6 Registration of Transfer and Exchange. (a) The Company will
-------------------------------------
cause to be kept a register (the "Rights Register") in which, subject to such
reasonable regulations as it may prescribe, the Company will provide for the
registration and transfer of Rights. The Rights Agent is hereby appointed
"Rights Registrar" for the purpose of maintaining the Rights Register for the
Company and registering Rights and transfers of Rights as herein provided. In
the event that the Rights Agent shall cease to be the Rights Registrar, the
Rights Agent will have the right to examine the Rights Register at all
reasonable times.
After the Separation Date and prior to the Expiration Time, upon
surrender for registration of transfer or exchange of any Rights Certificate,
and subject to the provisions of Section 2.7(c) below, the Company will execute,
and the Rights Agent will countersign and deliver, in the name of the holder or
the designated transferee or transferees, as required pursuant
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<PAGE>
to the holder's instructions, one or more new Rights Certificates evidencing the
same aggregate number of Rights as did the Rights Certificate so surrendered.
(b) All Rights issued upon any registration of transfer or exchange of
Rights Certificates shall be the valid obligations of the Company, and such
Rights shall be entitled to the same benefits under this Agreement as the Rights
surrendered upon such registration of transfer or exchange.
(c) Every Rights Certificate surrendered for registration of transfer
or exchange shall be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company or the Rights Agent, as the case
may be, duly executed by the holder thereof or such holder's attorney duly
authorized in writing. As a condition to the issuance of any new Rights
Certificate under this Section 2.6, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto.
(d) The Company shall not be required to register the transfer or
exchange of any Rights after the Rights have been redeemed under Section 5.1
hereof.
2.7 Mutilated, Destroyed, Lost and Stolen Rights Certificates. (a)
---------------------------------------------------------
If any mutilated Rights Certificate is surrendered to the Rights Agent prior to
the Expiration Time, the Company shall execute and the Rights Agent shall
countersign and deliver in exchange therefor a new Rights Certificate evidencing
the same number of Rights as did the Rights Certificate so Surrendered.
(b) If there shall be delivered to the Company and the Rights Agent
prior to the Expiration Time (i) evidence to their satisfaction of the
destruction, loss or theft of any Rights Certificate and (ii) such security or
indemnity as may be required by them to save each of them and any of their
agents harmless, then, in the absence of notice to the Company or the Rights
Agent that such Rights Certificate has been acquired by a bona fide purchaser,
---- ----
the Company shall execute and upon its request the Rights Agent shall
countersign and deliver in lieu of any such destroyed, lost or stolen Rights
Certificate, a new Rights Certificate evidencing the same number of Rights as
did the Rights Certificate so destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights Certificate under
this Section 2.7, the Company may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Rights
Agent) connected therewith.
(d) Every new Rights Certificate issued pursuant to this Section 2.7
in lieu of any destroyed, lost or stolen Rights Certificate shall evidence an
original additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Rights Certificate shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of
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<PAGE>
this Agreement equally and proportionately with any and all other Rights duly
issued hereunder.
2.8 Persons Deemed Owners. Prior to due presentment of a Rights
---------------------
Certificate (or, prior to the close of business on the Separation Date, the
associated Common Stock certificate) for registration of transfer, the Company,
the Rights Agent and any agent of the Company or the Rights Agent may deem and
treat the person in whose name such Rights Certificate (or, prior to the close
of business on the Separation Date, such Common Stock certificate) is registered
as the absolute owner thereof and of the Rights evidenced thereby for all
purposes whatsoever. As used in this Agreement, unless the context otherwise
requires, the term "holder" of any Rights shall mean the registered holder of
such Rights (or, prior to the close of business on the Separation Date, the
associated shares of Common Stock).
2.9 Delivery and Cancellation of Certificates. All Rights
-----------------------------------------
Certificates surrendered for redemption, registration of transfer or exchange
shall, if surrendered to any person other than the Rights Agent, be delivered to
the Rights Agent and, in any case, shall be promptly canceled by the Rights
Agent. The Company may at any time deliver to the Rights Agent for cancellation
any Rights Certificates previously countersigned and delivered hereunder which
the Company may have acquired in any manner whatsoever, and all Rights
Certificates so delivered shall be promptly canceled by the Rights Agent. No
Rights Certificates shall be countersigned in lieu of or in exchange for any
Rights Certificates canceled as provided in this Section 2.9, except as
expressly permitted by this Agreement. The Rights Agent shall destroy all
canceled Rights Certificates and deliver a certificate of destruction to the
Company.
2.10 Agreement of Rights Holders. Every holder of Rights by accepting
---------------------------
the same consents and agrees with the Company and the Rights Agent and with
every other holder of Rights that:
(a) prior to the close of business on the Separation Date, each
Right will be transferable only together with, and will be transferred by a
transfer of, the associated share of Common Stock;
(b) after the Separation Date, the Rights Certificates will be
transferable only on the Rights Register as provided herein;
(c) prior to due presentment of a Rights Certificate (or, prior
to the close of business on the Separation Date, the associated Common Stock
certificate) for registration of transfer, the Company, the Rights Agent and any
agent of the Company or the Rights Agent may deem and treat the person in whose
name the Rights Certificate (or, prior to the close of business on the
Separation Date, the associated Common Stock certificate) is registered as the
absolute owner thereof and of the Rights evidence thereby (notwithstanding any
notations of ownership or writing on such Rights Certificate or the associated
Common Stock 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
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<PAGE>
contrary; and
(d) this Agreement may be supplemented or amended from time to
time pursuant to Section 5.4 or the fifth and sixth sentences of the first
paragraph of Section 2.3(b) hereof.
Article III - Adjustments to the Rights in the Event of Certain
----------- -------------------------------------------------
Transactions
- ------------
3.1 Flip-over Transaction or Event. (a) Subject to Section 3.3(a),
------------------------------
in the event that prior to the Expiration Time, the Company enters into,
consummates or permits to occur any Flip-over Transaction or Event, the Company
shall take such action as shall be necessary to ensure, and shall have entered
into a supplemental agreement with the Person engaging in the Flip-over
Transaction or Event, for the benefit of the holders of the Rights, to provide
that, upon consummation of the Flip-over Transaction or Event (i) each Right
shall thereafter constitute the right to purchase from such Person (the "Flip-
over Entity"), upon exercise thereof in accordance with the terms hereof, such
number of shares of Common Stock of such Flip-over Entity as is equal to two
times the Exercise Price divided by the Market Price of such Common Stock of
such Flip-over Entity on the date of consummation or occurrence of such Flip-
over Transaction or Event (such number of shares to be appropriately adjusted in
a manner analogous to the applicable adjustment to the number of Rights provided
for in Section 2.3(b) in the event that after such date of consummation or
occurrence an event of a type analogous to any of the events described in the
first sentence of Section 2.3(b) shall have occurred with respect to such Common
Stock) for an amount in cash equal to the Exercise Price; (ii) the Flip-over
Entity shall thereafter be liable for, and shall assume, by virtue of such Flip-
over Transaction or Event, all the obligations and duties of the Company
pursuant to this Agreement; (iii) the term "Company" shall thereafter be deemed
to refer to such Flip-over Entity; and (iv) such Flip-over Entity shall take
such steps (including, but not limited to, the reservation of a sufficient
number of shares of its Common Stock) in connection with such consummation as
may be necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to the shares of its
Common Stock thereafter deliverable upon the exercise of the Rights.
3.2 Flip-in Transaction or Event. (a) Subject to Section 3.3, in
----------------------------
the event that prior to the Expiration Time, a Flip-in Transaction or Event
shall occur, the Company shall take such action as shall be necessary to ensure
and provide, within ten (10) Business Days of such occurrence, that each holder
of a Right (except as provided below) shall thereafter have the right to
purchase such number of shares of Common Stock of the Company (such number of
shares being referred to herein as the "Adjustment Shares") as is equal to two
times the Exercise Price divided by the Market Price of such Common Stock of the
Company on the date of consummation or occurrence of such Flip-in Transaction or
Event (such number of shares to be appropriately adjusted in a manner analogous
to the applicable adjustment provided for in Section 2.4(b) in the event that
after such date of consummation or occurrence an event of a type analogous to
any of the events described in the first sentence of Section 2.3(b) shall have
occurred with respect to such Common Stock) for an amount in cash equal to the
Exercise Price.
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<PAGE>
In the event that the Rights become exercisable following a Flip-in Transaction
or Event, the Company may, by action of a majority of the Continuing Directors
in office at the time, permit the Rights, subject to Section 3.2(b) hereof, to
be exercised for 50% of the shares of Common Stock that would otherwise be
purchasable under this subsection, in consideration of the surrender to the
Company of the Rights so exercised and without other payment of Exercise Price.
(b) Notwithstanding the foregoing, upon the occurrence of any Flip-in
Transaction or Event, any Rights that are or were Beneficially Owned on or after
the earlier of the Separation Date or the Stock Acquisition Date by (i) an
Acquiring Person (or any Associate or Affiliate of such Acquiring Person) or
(ii) a transferee, direct or indirect, of an Acquiring Person (or any Associate
of Affiliate of such Acquiring Person) in a transfer, whether or not for
consideration, that the Board of Directors of the Company has determined is part
of a plan arrangement or scheme of the Acquiring Person (or any Associate or
Affiliate of such Acquiring Person) that has the purpose or effect of avoiding
clause (i) of this Section 3.2(b), shall become void and any holder of such
Rights shall thereafter have no right to exercise such Rights under any
provision of this Agreement.
(c) Any Rights Certificate issued pursuant to Section 2.2 that
represents Rights Beneficially owned by an Acquiring Person or any Associate or
Affiliate thereof and any Rights Certificate issued at any time upon the
transfer of any Rights to an Acquiring Person or any Associate or Affiliate
thereof or to any nominee of such Accruing Person, Associate or Affiliate, and
any Rights Certificate issued upon transfer, exchange, replacement or adjustment
of any other Rights Certificate referred to in this sentence, shall contain the
following legend:
The Rights represented by this Rights Certificate were issued to a
Person who was an Acquiring Person or an Affiliate or an Associate of
an Acquiring Person (as such terms are defined in the Amended and
Restated Rights Agreement). This Rights Certificate and the Rights
represented hereby may become void in the circumstances specified in
Section 3.2 of the Amended and Restated Rights Agreement.
provided that the Rights Agent shall not be under any responsibility to
- -------- ----
ascertain the existence of facts that would require the imposition of such
legend but shall be required to impose such legend only if instructed to do so
by the Company or if a holder fails to certify upon transfer or exchange in the
space provided on the Rights Certificate that such holder is not an Acquiring
Person or an Affiliate or Associate thereof.
3.3 Obligations of the Company. (a) The Company shall not enter
--------------------------
into or engage in any transaction of the kind referred to in this Article III if
at the time of such transaction there are any rights, warrants or securities
outstanding or any other arrangements,
-17-
<PAGE>
agreements or instruments which would eliminate or otherwise diminish in any
respect the benefits intended to be afforded the holders of Rights upon
consummation of such transaction. The provisions of this Article III shall apply
to successive mergers or consolidations or sales or other transfers.
(b) In the event that there shall not be sufficient issued but not
outstanding or authorized but unissued shares of Common Stock of the Company to
permit the exercise in full of the Rights in accordance with Section 3.2, the
Company, with respect to each Right and to the extent necessary, as permitted by
applicable law and any agreement or instruments in effect on the Stock
Acquisition Date to which it is a party, shall, upon the exercise of any such
Right, make adequate provision to: (A) issue debt or equity securities having a
value equal to the product of (x) the number of Adjustment Shares (as defined in
Section 3.2), multiplied by (y) the Market Price of such Common Stock of the
Company on the date of consummation or occurrence of the relevant Flip-in
Transaction or Event, where the value of such debt or equity securities shall be
determined by a nationally recognized investment banking firm selected by the
Board of Directors of the Company, and requiring the payment of the Exercise
Price, or (B) deliver any combination of cash, property, debt or equity
securities having the requisite value to confer the benefits intended to be
afforded the holders of the Rights pursuant to Section 3.2, as determined by a
nationally recognized investment banking firm selected by the Board of Directors
of the Company, and requiring the payment of all or any requisite portion of the
Exercise Price. To the extent that the Company determines that some action need
be taken pursuant to this Section 3.3(b), the Company, upon the concurrence of a
majority of the Continuing Directors then in office, may suspend the
exercisability of the Rights for a period of up to ninety (90) days following
the date of the occurrence of the relevant Flip-in Transaction or Event in order
to decide the appropriate form of distribution to be made pursuant to such
proviso and to determine the value thereof. In the event of any such
suspension, the Company shall issue as promptly as practicably a public
announcement stating that the exercisability of the Rights has been temporarily
suspended.
Article IV - The Rights Agent
----------- ----------------
4.1 General. (a) The Company hereby appoints the Rights Agent to act as
-------
agent for the Company and the holders of Rights in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company agrees to pay to the Rights Agent reasonable compensation for all
services rendered by it hereunder and, from time to time, on demand of the
Rights Agent, its reasonable expenses and counsel fees and other disbursements
incurred in the administration and execution of this Agreement and the exercise
and performance of its duties hereunder. The Company also agrees to indemnify
the Rights Agent for, and to hold it harmless against, any loss, liability, or
expense, incurred without gross negligence, bad faith or willful misconduct on
the part of the Rights Agent, for anything done or omitted by the Rights Agent
in connection with the acceptance and administration of this Agreement,
including the costs and expenses of defending against any claim of liability.
-18-
<PAGE>
(b) The Rights Agent shall be protected and shall incur no liability
for or in respect of any action taken, suffered or omitted by it in connection
with its administration of this Agreement in reliance upon any certificate for
Preferred Stock, Rights Certificate, certificate for or other securities of the
Company, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement, or other
paper or document believed by it to be genuine and to be signed, executed and,
where necessary, verified or acknowledged, by the proper person or persons.
4.2 Merger or Consolidation or Change of Name of Rights Agent.
--------------------------------------------------------
(a) Any corporation into which the Rights Agent or any successor Rights Agent
may be merged or with which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Rights Agent or any successor
Rights Agent is a party, or any cooperation succeeding to the shareholder
services business of the Rights Agent or any successor Rights Agent, will be the
successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 4.4 hereof. In case at the time
such successor Rights Agent succeeds to the agency created by this Agreement any
of the Rights Certificates have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the predecessor Rights
Agent and deliver such Rights Certificates so countersigned; and in case at that
time any of the Rights Certificates have not been countersigned, any successor
Rights Agent may countersign such Rights Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and in
all such cases such Rights Certificates will have the full force provided in the
Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent is changed and at
such time any of the Rights Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Rights Certificates so countersigned; and, in case at that time any
of the Rights Certificates shall not have been Countersigned, the Rights Agent
may countersign such Rights Certificates either in its prior name or in its
changed name; and in all such cases such Rights Certificates shall have the full
force provided in the Rights Certificates and in this Agreement.
4.3 Duties of Rights Agent. The Rights Agent undertakes the duties
----------------------
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel will be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
-19-
<PAGE>
Rights Agent deems it necessary or desirable that any fact or matter be proved
or established by the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved and established
by a certificate signed by a person believed by the Rights Agent to be the
Chairman of the Board, the President or any Vice President and by the Treasurer
or any Assistant Treasurer or the Secretary or any Assistant Secretary of the
Company and delivered to the Rights Agent; and such certificate will be full
authorization to the Rights Agent for any action taken or suffered in good faith
by it under the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent will be liable hereunder only for its own
gross negligence, bad faith or willful misconduct.
(d) The Rights Agent will not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the
certificates for Preferred Stock or the Rights Certificates (except its
countersignature thereof) or be required to verify the same, but all such
statement and recitals are and will be deemed to have been made by the Company
only.
(e) The Rights Agent will not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due authorization, execution and delivery hereof by the Right Agent or in
respect of the validity or execution of any certificate for Preferred Stock or
Rights Certificate (except its countersignature thereof); nor will it be
responsible for any breach by the Company of any covenant or condition contained
in this Agreement or in any Rights Certificate; nor will it be responsible for
any change in the exercisability of the Rights (including the Rights becoming
void pursuant to Section 3.2(b) hereof) or any adjustment required under the
provisions of Section 2.3 hereof or responsible for the manner, method or amount
of any such adjustment or the ascertaining of the existence of facts that would
require any such adjustment (except with respect to the exercise of Rights after
receipt of the certificate contemplated by Section 2.3 describing any such
adjustment); nor will it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Preferred Stock to be issued pursuant to this Agreement or any Rights or as
to whether any shares of Preferred Stock will, when issued, be duly and validly
authorized, executed, issued and delivered and fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
person believed by the Rights Agent to be the Chairman of the Board, the
President or any Vice President or the
-20-
<PAGE>
Secretary or any Assistant Secretary or the Treasurer or any Assistant Treasurer
of the Company, and to apply to such persons for advice or instructions in
connection with its duties, and it shall not be liable for any action taken or
suffered by it in good faith in accordance with instructions of any such person.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in Common Stock, Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other legal
entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent will not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
4.4 Change of Rights Agent. The Rights Agent may resign and be discharged
----------------------
from its duties under this Agreement upon 90 days' notice (or such lesser notice
as is acceptable to, the Company) in writing mailed to the Company and to each
transfer agent of Common Stock or Preferred Stock by registered or certified
mail, and to the holders of the Rights in accordance with Section 5.9. The
Company may remove the Rights Agent upon 30 days' notice in writing, mailed to
the Rights Agent and to each transfer agent of the Common Stock or Preferred
Stock by registered or certified mail, and to the holders of the Rights in
accordance with Section 5.9. If the Rights Agent should resign or be removed or
otherwise become incapable of acting, the Company will appoint a successor to
the Rights Agent. If Company fails to make such appointment within a period of
30 days after such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by
the holder of any Rights (which holder shall, with such notice, submit such
holder's Rights Certificate for inspection by the Company), then the registered
holder of any Rights may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be either (A) a corporation organized
and doing business under the laws of the United States or of the State of New
York or Ohio, in good standing, having its principal office in the State of New
York or Ohio, which is authorized under such laws to exercise the powers of the
Rights Agent contemplated by this Agreement and is subject to supervision or
examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$50,000,000 or (B) an affiliate of a corporation described in clause (A) of this
sentence which is a corporation organized and doing business under the laws of
the United States or of the State of New York or Ohio, in good standing, having
its principal office in the State of New York or Ohio, which is authorized under
such laws to exercise the powers of the Rights
-21-
<PAGE>
Agent contemplated by this agreement and is subject to supervision or
examination by federal or state authority. After appointment, the successor
Rights Agent will be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment, the
Company will file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Stock or Preferred Stock, and mail a
notice thereof in writing to the holders of the Rights. Failure to give any
notice provided for in this Section 4.4, however, or any defect therein, shall
not affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Article V - Miscellaneous
--------- -------------
5.1 Redemption. (a) The Board of Directors of the Company may, at its
----------
option, at any time prior to the earlier of (i) the close of business on the
tenth day (or such later date, not beyond the day, as may be fixed by the Board
of Directors of the Company by notice to the Rights Agent and publicly announced
by the Company) following the Stock Acquisition Date (or, if the Stock
Acquisition Date shall have occurred prior to the Record Date, the close of
business on the twentieth day following the Record Date) and (ii) June 18, 2007,
redeem all but not less than all the then outstanding Rights at a redemption
price of $.01 the Right, as such amount may be appropriately adjusted as
provided in Section 2.3 hereof, and the Company may, at its option, pay the
Redemption Price either in shares of Common Stock (based on the Market Price of
the shares of Common Stock at the Redemption Time) or cash; provided, however,
if the Board of Directors of the Company authorizes redemption of the Rights in
either of the circumstances set forth in clauses (x) and (y) of this proviso,
then there must be Continuing Directors then in office and such authorization
will require the concurrence of a majority of such Continuing Directors: (x)
such authorization occurs on or after the time a Person becomes an Acquiring
Person or (y) such authorization occurs on or after the date of a change
(resulting from a proxy or consent solicitation) in a majority of the directors
then in office at the commencement of such solicitation if any Person who is a
participant in such solicitation has stated (or, if upon the commencement of
such solicitation, a majority of the Board of Directors of the Company has
determined in good faith) that such Person (or any of its Affiliates or
Associates) intends to take, or may consider taking, any action that would
result in such Person becoming an Acquiring Person or that would cause the
occurrence of a Flip-in Transaction or Event or a Flip-over Transaction or Event
unless, concurrent with such solicitation, such Person (or one or more of its
Affiliates or Associates) is making a cash tender offer pursuant to a Schedule
14D-1 (or any successor form) filed with the Securities and Exchange Commission
for all outstanding shares of Common Stock not beneficially owned by such Person
(or by its Affiliates or Associates); provided further, however, that if,
following the occurrence of a Stock Acquisition Date and following the
expiration of the right of redemption hereunder but prior to any Flip-in
Transaction or Event or Flip-over Transaction or Event, (i) an Acquiring Person
shall
-22-
<PAGE>
have transferred or otherwise disposed of a number of shares of Common Stock in
one transaction or series of transactions, not directly or indirectly involving
the Company or any of its Subsidiaries, that did not result in the occurrence of
a Flip-in Transaction or Event or a Flip-over Transaction or Event or the
Company (with the approval of a majority of Continuing Directors) shall have
issued additional equity securities, in either instance such that such Person is
thereafter a Beneficial Owner of 15% or less of the outstanding shares of Common
Stock, and (ii) there is no other Acquiring Person immediately following the
occurrence of the event described in clause (i), then the right of redemption
shall be reinstated and thereafter be subject to the provisions of this Section
5.1.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights and without any other action and
without any notice, the rights to exercise the rights will terminate and the
only right thereafter of the holders' of Rights shall be the right to receive
the Redemption Price for each Right so held. Promptly after the action of the
Board of Directors ordering the redemption of, and thereby redeeming, the
Rights, the Company shall give notice of such redemption to the Rights Agent and
the holder so the then outstanding Rights by mailing such notice in accordance
with Section 5.9. Each such notice of redemption will state the method by which
the payment of the Redemption Price will be made.
5.2 Expiration. No Person shall have any rights pursuant to this
----------
Agreement or any Right after the Expiration Time, except, if the rights are
redeemed, as provided in Section 5.1 hereof.
5.3 Issuance of New Rights Certificates. Notwithstanding any of the
-----------------------------------
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Rights Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the number or kind or class of shares of stock purchasable upon exercise of
Rights made in accordance with the provisions of this Agreement.
5.4 Supplements and Amendments. The Company and the Rights Agent may
--------------------------
from time to time supplement or amend this Agreement, including any Exhibits
hereto, without the approval of any holders of Rights (i) to make any changes
which the Company and the Rights Agent may deem necessary or desirable and which
shall not materially adversely affect the interests of the holders of Rights
generally or (ii) in order to cure any ambiguity or to correct or supplement any
provision contained herein which may be inconsistent with any other provisions
herein or otherwise defective. Any such supplement or amendment shall be
effective only if there are Continuing Directors then in office and shall
require the concurrence of a majority of such Continuing Directors if: (x) such
supplement or amendment occurs on or after the time a Person becomes an
Acquiring Person or (y) such supplement or amendment occurs on or after the date
of a change (resulting from a proxy or consent solicitation) in a majority of
the directors then in office at the commencement of such solicitation if any
Person who is a participant in such solicitation has stated (or, if upon the
commencement of such solicitation, a
-23-
<PAGE>
majority of the Board of Directors of the Company has determined in good faith)
that such Person (or any of its Affiliates or Associates) intends to take, or
may consider taking, any action that would result in such Person becoming an
Acquiring Person or that would cause the occurrence of a Flip-in Transaction or
Event or a Flip-over Transaction or Event unless, concurrent with such
solicitation, such Person (or one or more of its Affiliates or Associates) is
making a cash tender offer pursuant to a Schedule 14D-1 (or any successor form)
filed with the Securities and Exchange Commission for all outstanding shares of
Common Stock not beneficially owned by such Person (or by its Affiliates or
Associates).
5.5 Fractional Rights and Fractional Shares. (a) Subject to Section
---------------------------------------
2.3(h), the Company shall not be required to issue fractions of Rights or to
Distribute Rights Certificates which evidence fractional Rights. In lieu of
such fractional Rights, there shall be paid to the registered holders of the
Rights Certificates with regard to which such fractional Rights would otherwise
be issuable, an amount in cash equal to the same fraction of the Market Price of
a whole Right on the date immediately prior to the date on which such fractional
Rights would have been otherwise issuable.
(b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions which are integral multiples of one one-
hundredth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates which evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one-hundredth of a share
of Preferred Stock). Fractions of shares of Preferred Stock in integral
multiples of one one-hundredth of a share of Preferred Stock may, at the
election of the company, be evidenced by Depositary Receipts, pursuant to an
appropriate agreement between the Company and a depositary selected by it,
provided that such agreement shall provide that the holders of such Depositary
Receipts shall have all the rights, privileges and preferences to which they are
entitled as beneficial owners of the shares of Preferred Stock. In lieu of
fractional shares of Preferred Stock. In lieu of fractional shares of Preferred
Stock that are not integral multiples of one one-hundredth of a share of
Preferred Stock, the Company shall pay to the registered holders of Rights
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the Market Price of one share of Preferred
Stock 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.
5.6 Rights of Action. Subject to the terms of this Agreement, rights
----------------
of action in respect of this Agreement, other than rights of action vested
solely in the Rights Agent, are vested in the respective holders of the Rights;
and any holder of any Rights, without the consent of the Rights Agent or of the
holder of any other Rights, may, on such holder's own behalf and for such
holder's own benefit and the and the benefit of other holders of Rights,
enforce, and may institute and maintain any suit, action or proceeding against
the Company to enforce, or otherwise act in respect of, such holder's right to
exercise such holder's Rights in the manner
-24-
<PAGE>
provided in such holder's Rights Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of, the obligation of any Person subject to this
Agreement.
5.7 Holder of Rights Not Deemed a Shareholder No holder, as such,
-----------------------------------------
of any Rights shall be entitled to vote, receive dividends or be deemed for any
purpose the holder of Preferred Stock or any other securities which may at any
time be issuable on the exercise of such Rights, nor shall anything contained
herein or in any Rights Certificate be construed to confer upon the holder of
any Rights, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 5.8 or 5.9 hereof), or to receive
dividends or subscription rights, or otherwise, until such Rights shall have
been exercised in accordance with the provisions hereof.
5.8 Notice of Proposed Actions. In case the Company shall propose
--------------------------
after the Separation Date and prior to the Expiration Time (i) to effect or
permit (in cases where the Company's permission is required) any Flip-in
Transaction or Event or Flip-over Transaction or Event or (ii) to effect the
liquidation, dissolution or winding up of the Company, then, in each such case,
the Company shall give to each holder of a Right, in accordance with Section 5.9
hereof, a notice of such proposed action, which shall specify the date on which
such Flip-over Transaction or Event or Flip-in Transaction or Event,
liquidation, dissolution, or winding up is to take place, and such notice shall
be so given at least twenty (20) Business Days prior to the date of the taking
of such proposed action.
5.9 Notices. Notices or demands authorized or required by this
-------
Agreement to be given or made by the Rights Agent or by the holder of any Rights
to or on the Company shall be sufficiently given or made if delivered or sent by
first-class mail, postage prepaid addressed (until another address is filed in
writing with the Rights Agent) as follows:
IKON Office Solutions, Inc.
70 Valley Stream Parkway
Malvern, Pennsylvania 19355
Attention: Corporate Secretary
Any notice or demand authorized or required by this Agreement to be given or
made by the Company or by the holder of any Rights to or on the Rights Agent
shall be sufficiently given or made if delivered or sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing with the
Company) as follows:
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<PAGE>
National City Bank
Corporate Trust Administration
1900 East Ninth Street
Cleveland, Ohio 44114
Attention: Sherry L. Damore
Notices or demands authorized or required by this Agreement to be given or made
by the Company or the Rights Agent to or on the holder of any Rights shall be
sufficiently given or made if delivered or sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as it appears
upon the registry books of the Rights Agent or, prior to the Separation Date, on
the registry books of the transfer agent for the Common Stock. Any notice which
is mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice.
5.10 Costs of Enforcement. The Company agrees (and, if a Flip-over
--------------------
Transaction or Event or a Flip-in Transaction or Event occurs, the Company shall
use its best efforts to obtain the agreement of the Person engaging in the
transaction) that if the Company (or such Person) fails to fulfill any of its
obligations pursuant to this Agreement, then the Company (or such Person) will
reimburse the holder of any Rights for the costs and expenses (including legal
fees) incurred by such holder in actions to enforce his rights pursuant to any
Rights or this Agreement.
5.11 Successors. All the covenants and provisions of this Agreement
----------
by or for the benefit of the Company or the Rights Agent shall bind and inure to
the benefit of their respective successors and assigns hereunder, including
successors by virtue of any merger or consolidation.
5.12 Benefits of this Agreement. Nothing in this Agreement shall be
--------------------------
construed to give to any Person other than the Company, the Rights Agent and the
holders of the Rights any legal or equitable right, remedy or claim under this
Agreement but this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the holders of the Rights.
5.13 Descriptive Headings. Descriptive headings appear herein for
--------------------
convenience and shall not control or affect the meaning or construction of any
of the provisions hereof.
5.14 Governing Law. This Agreement and each Right issued hereunder
-------------
shall be deemed to be a contract made under the laws of the State of Ohio 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.
-26-
<PAGE>
5.15 Counterparts. This Agreement may be executed in any number of
------------
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
5.16 Severability. If any term, provision, covenant or restriction of
------------
this Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable for any purpose or under any set of
circumstances or as applied to any Person, such invalid, void or unenforceable
term, provision, covenant or restriction shall continue in effect to the maximum
extent possible for all other purposes, under all other circumstances and as
applied to all other Persons; and the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated; provided,
however, that notwithstanding anything in this Agreement to the contrary, if any
such term, provision, covenant or restriction is held by such court or authority
to be invalid, void or unenforceable and the Board of Directors of the Company
determines in its good faith judgment that severing the invalid language from
this Agreement would adversely affect the purpose or effect of this Agreement,
the right of redemption set forth in Section 5.1 hereof shall be reinstated and
shall not expire until the close of business on the tenth day following the date
of such determination by the Board of Directors. Without limiting the foregoing,
if any provisions requiring that a determination be made by less than the entire
Board (or with the concurrence of a group of directors consisting of less than
the entire Board) is held by a court of competent jurisdiction or authority to
be invalid, void or unenforceable, such determination shall then be made by the
Board in accordance with applicable law and the Company's articles of
incorporation and code of regulations.
-27-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
IKON OFFICE SOLUTIONS, INC.
By
--------------------------------
NATIONAL CITY BANK
By
--------------------------------
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<PAGE>
Exhibit A
---------
IKON OFFICE SOLUTIONS, INC.
PREFERRED SHARE PURCHASE RIGHTS PLAN
------------------------------------
The following summary is not
complete and is qualified in its
entirety by the Amended and Restated Rights Agreement,
a copy of which can be obtained
from the Company.
Summary of Terms
----------------
Initial Exercise Date of the Rights initially become exercisable on the tenth
Rights: day (on such later date, not beyond the thirtieth
- ------ day as may be fixed by the Board of Directors)
after the earlier of: (a) the date a person
(a broadly defined term) makes a public
announcement that it has acquired beneficial
ownership (a broadly defined term) of 15% or more
of Company's Common Stock (the "Stock Acquisition
Date") and (b) the date a person commences, or a
public announcement is made of the intent of any
person to commence, a tender or exchange offer to
acquire (when added to any shares of Common Stock
as to which such person is then the beneficial
owner) beneficial ownership of 15% or more of the
Company's Common Stock. Upon the occurrence of
such initial exercise date, the Company will mail
certificates evidencing the Rights, together with
an information statement containing information
about the Preferred Stock (as hereinafter
defined), instructions regarding exercise of the
Rights and other appropriate information, to the
Company's shareholders.
Preferred Stock Purchasable Each Right entitles the holder after the initial
pursuant to the Rights: exercise date to purchase, for $204, one
- ---------------------- one-hundredth of a share of Series 12 Preferred
Stock (the "Preferred Stock") of the Company.
<PAGE>
Special Terms of the Rights Each Right entitles the holder after the initial
upon Merger or Certain Other exercise date to purchase, for $204, one one-
Transactions or Events: hundredth of a share of Series 12 Preferred
- ---------------------- Stock (the "Preferred Stock") of the Company.
Special Terms of the Rights 1. Flip-over Transaction or Event.
upon Merger or Certain Other ------------------------------
Transactions or Events:
- ---------------------- In the event, directly or indirectly:
a. The Company effects a consolidation
or merger with any other person
(other than a wholly owned
subsidiary of the Company) in which
all or part of the Company's Common
Stock is changed in any way or
converted into or exchanged for
stock, other securities, cash or
other property; or
b. The Company or a subsidiary sells or
otherwise transfers, in one or more
transactions, assets (i) aggregating
more than 50% of the assets
(measured by book value or fair
market value), or (ii) generating
more than 50% of the operating
income of cash flow, of the Company
and its subsidiaries (taken as a
whole) to any other person (other
than the Company or any of its
wholly owned subsidiaries) or to two
or more such persons which are
affiliated;
then, each Rights holder will have the
right to purchase, for $204 per share,
a number of shares of common stock of
the person engaging in such Flip-over
Transaction or Event having a then
current market value of $408, equal to
twice the exercise price.
-2-
<PAGE>
2. Flip-in Transaction or Event.
----------------------------
In the event, directly or indirectly:
(a) a person beneficially owning 15% or
more of the Company's Common Stock
(an "Acquiring Person"), or any
affiliate or associate of such
Acquiring Person (other than the
Company or any of its wholly owned
subsidiaries), (i) consolidates or
merges into the Company; (ii)
obtains from the Company or any of
its subsidiaries, with or without
consideration, more than 2% of the
shares of capital stock of the
Company or a subsidiary (other than
as part of a pro rata distribution
--- ----
to shareholders), (iii) acquires or
disposes of assets in a transaction
involving the Company or any of its
subsidiaries on terms less
favorable than obtainable through
arms length negotiations or (iv)
receives unusual compensation from
the Company or the benefit of any
loans, credits or other financial
assistance or tax advantages;
(b) At any time when an Acquiring
Person and its affiliates and
associates constitute at least a
majority of the Board of Directors,
(i) the Company fails to pay or
reduces regular quarterly dividends
(except in certain specified
cases), or (ii) there occurs any
reclassification, recapitalization,
merger or other transactions which
increases by more than 2% an
Acquiring Person's proportionate
share of the Company's outstanding
Common Stock; or
(c) any person shall become the
beneficial owner of 15% or more of
the shares of Common Stock;
-3-
<PAGE>
then, each Rights holders, other than the
Acquiring Person or, in certain circumstances,
transferees of an Acquiring Person (whose Rights
become void), will have the right to purchase,
for $204 per share, a number of shares of common
stock of the Company having a then current
market value of $408, equal to twice the
exercise price.
Transferability of the Rights: Until the initial exercise date, Rights are
- ----------------------------- transferable only with the transfer of Common
Stock. After the initial exercise date, Rights
will be separately transferable, but only on the
registry books of the Rights Agents.
Redemption of the Rights: Rights are redeemable at the Company's option
- ------------------------ for $0.01 per Right, payable either in cash or
Common Stock of the Company at the Company's
option. The Rights will not be redeemable at any
time following the close of business on the
tenth day (or such later date, not beyond the
thirtieth day, as may be fixed by the Board of
Directors) after public announcement that a
person has acquired beneficial ownership of 15%
or more of the Company's Common Stock. Under
certain circumstances set forth in the Amended
and Restated Rights Agreement, the decision to
redeem will require the concurrence of a
majority of the Continuing Directors. The term
"Continuing Directors" means any member of the
Board of Directors of the Company who was a
member of the Board prior to the date of the
Amended and Restated Rights Agreement, and any
person who is subsequently elected to the Board
if such person is recommended or approved by a
majority of the Continuing Directors, but shall
not include an Acquiring Person, or an affiliate
or associate of an Acquiring Person, or any
representative of the foregoing entities.
Expiration of the Rights: The Rights will expire on June 18, 2007.
- ------------------------
-4-
<PAGE>
Amendment of Terms of Rights: The terms of the Rights and the Amended and
- ---------------------------- Restated Rights Agreement may be amended without
the consent of the holders in order to cure any
ambiguities or to make changes which changes
which do not materially adversely affect the
interest of those holders. Under certain
circumstances set forth in the Amended and
Restated Rights Agreement, amendments will
require the concurrence of a majority of the
Continuing Directors.
Voting Rights: Rights will not having any voting rights.
- -------------
Antidilution Provisions: Rights will have the benefit of certain
- ----------------------- customary antidilution provisions. In addition,
if no shares of Preferred Stock are outstanding,
the Board may make appropriate adjustments to
the terms of the Preferred Stock to take into
account any stock dividends or distribution made
in respect of the Common Stock and to keep the
aggregate number of whole shares of Preferred
Stock issuable upon exercise of the Rights the
same.
Taxes: Shareholders should consult with their own tax
- ----- advisors regarding the consequences of holding
and exercising Rights.
-5-
<PAGE>
EXHIBIT B
---------
[Form of Rights Certificate]
Certificate No. W - _________ Rights
NOT EXERCISABLE AFTER THE EXPIRATION TIME (AS DEFINED IN ARTICLE I OF
THE AMENDED AND RESTATED RIGHTS AGREEMENT). THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE
AMENDED AND RESTATED RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES
(SPECIFIED IN SECTION 3.2(b) OF THE AMENDED AND RESTATED RIGHTS
AGREEMENT), RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS OR ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS RIGHTS CERTIFICATE WERE ISSUED TO A PERSON WHO WAS
AN ACQUIRING PERSON OR AN AFFILIATE OR AN ASSOCIATE O AN ACQUIRING
PERSON (AS SUCH TERMS ARE DEFINED IN THE AMENDED AND RESTATED RIGHTS
AGREEMENT). THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY
MAY BECOME VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 3.2(b) OF THE
Amended and Restated Rights Agreement.]/*//
IKON OFFICE SOLUTIONS, INC.
This certifies that ________________________, or registered assigns,
is the registered holder of the number of Rights set forth above, each of which
entitles the registered holder thereof, subject to the terms, provisions and
conditions of the Amended and Restated Rights Agreement, between IKON Office
Solutions, Inc., an Ohio corporation (the "Company"), National City Bank, an
Ohio corporation, as Rights Agent (the "Rights Agents", which term shall include
any successors Rights Agent under the Amended and Restated Rights Agreement), to
purchase from the Company at any time after the Separation Date (as such term is
defined in the Amended and Restated Rights Agreement) and prior to the
Expiration Time (as such term is defined in the Amended and Restated Rights
Agreement) at the office of the Rights Agent or its successor designated for
such purpose, one one-hundredth of a fully paid share of Series 12 Preferred
Stock, no par value (the "Preferred Stock"), of the Company at the Exercise
Price referred to below, upon presentation and surrender of this Rights
Certificate with the Form of Election to Exercise duly executed. The Exercise
Price shall initially be $204 per Right and shall be subject to adjustment in
certain events as provided in the Amended and Restated Rights Agreement.
In certain circumstances described in the Amended and Restated Rights
Agreement,
- ----------------------------
/*// The portion of the legend in brackets shall be inserted only if
applicable.
<PAGE>
the Rights evidenced hereby may entitle the registered holder thereof to
purchase capital stock of an entity other than the Company or shares of capital
stock of the Company other than Preferred Stock, all as provided in the Amended
and Restated Rights Agreement.
This Rights Certificate is subject to all of the terms, provisions
and conditions of the Amended and Restated Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by reference and made a
part hereof and to which reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities hereunder of
the Rights Agent, the Company and the holders of the Rights Certificates. Copies
of the Amended and Restated Rights Agreement are on file at the principal office
of the Company and are available upon written request.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the office of the Rights Agent designated for such purpose,
may be exchanged for another Rights Certificates or Rights Certificates of like
tenor and date evidencing Rights entitling the holder to purchase an aggregate
number of shares of Preferred Stock as the Rights evidenced by the Rights
Certificate. If the Rights Certificate shall be exercised in part, the
registered holder shall be entitled to receive, upon surrender thereof, another
Rights Certificate or Rights Certificate for the number of whole Rights not
exercised.
Subject to the provisions of the Amended and Restated Rights
Agreement, the Rights evidenced by this Certificate may, but are not required
to, be redeemed by the Company under certain circumstances at its option at a
redemption price of $.01 per Right, payable in cash or in Common Stock of the
Company at the Company's option, subject to adjustment in certain events as
provided in the Amended and Restated Rights Agreement.
No fractional interests in Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractional
interests which are integral multiples of one one-hundredth of a share of
Preferred Stock, which may, at the election of the Company, be evidenced by
depositary receipts), but in lieu thereof a cash payment will be made, as
provided in the Amended and Restated Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of Common
Stock or of any other securities which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Amended and Restated Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a shareholder of the Company or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in the Amended and Restated Rights Agreement), or to receive dividends
or subscription rights, or otherwise, until the Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Amended and Restated
Rights Agreement.
<PAGE>
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of ________, 19__.
ATTEST: IKON OFFICE SOLUTIONS, INC.
_________________________ By_____________________________
Secretary
Countersigned:
NATIONAL CITY BANK
By_______________________
Authorized Signature
-2-
<PAGE>
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such holder desires to transfer the
Rights Certificates.)
FOR VALUE RECEIVED _____________________ hereby sells, assigns and
transfers unto _________________________________________________________________
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ______________________
Attorney, to transfer the within Rights Certificate on the books of the within-
named Company, with full power of substitution.
Dated: __________________, 19__
Signature Guaranteed:
---------------------------------------
Signature
(Signature must correspond to name as
written upon the face of this Rights
Certificate in every particular,
without alteration or enlargement or
any change whatsoever)
Signature Guaranteed:
Signatures must be guaranteed by a number firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
<PAGE>
- --------------------------------------------------------------------------------
(To be completed if applicable)
The undersigned hereby certifies that the Rights evidenced by this Rights
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Amended and Restated Rights Agreement).
-----------------------------------
Signature
- --------------------------------------------------------------------------------
