[CAPTION]
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
AUTOINFO, INC.
(Exact name of registrant as specified in its charter)
[CAPTION]
Delaware 13-2867481
(State of incorporation or organization) (I.R.S. Employer
Identification No.)
1600 Route 208
Fair Lawn, New Jersey
07410
(Address of principal executive offices) (Zip Code)
[CAPTION]
Securities to be registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
[CAPTION]
Securities to be registered pursuant to Section 12(b) of
the Act:
[CAPTION]
Title of each class Name of each exchange
TO BE SO REGISTERED on which each class
IS TO BE REGISTERED
Common Stock Purchase Rights
National Association of
Securities Dealers
Automated Quotation System
<PAGE>
Item 1.DESCRIPTION OF SECURITIES TO BE REGISTERED.
On March 30, 1995, the Board of Directors of AutoInfo, Inc. (the
"Corporation") declared a dividend distribution of one right (a "RIGHT")
for each outstanding share of Common Stock, par value $.01 per share (the
"COMMON SHARES"), of the Corporation. The dividend is payable to the
stockholders of record on April 10, 1995 (the "RECORD DATE"), and with
respect to Common Shares issued thereafter until the Distribution Date (as
defined below) and, in certain circumstances, with respect to Common Shares
issued after the Distribution Date. Except as set forth below, each Right,
when it becomes exercisable, entitles the registered holder to purchase
from the Corporation one Common Share at a price of $15.00 per one Common
Share (the "PURCHASE PRICE"), subject to adjustment. The description and
terms of the Rights are set forth in a Rights Agreement (the "RIGHTS
AGREEMENT") between the Corporation and American Stock Transfer & Trust
Company, as Rights Agent (the "RIGHTS AGENT"), dated as of March 30, 1995.
Initially, the Rights will be attached to all certificates
representing Common Shares then outstanding, and no separate Right
Certificates (as hereinafter defined) will be distributed. The Rights will
separate from the Common Shares upon the earliest to occur of (i) a person
or group of affiliated or associated persons having acquired beneficial
ownership of 15% or more of the outstanding Common Shares (except pursuant
to a Permitted Offer, as hereinafter defined); or (ii) 10 days (or such
later date as the Board may determine) following the commencement of, or
announcement of an intention to make, a tender offer or exchange offer the
consummation of which would result in a person or group becoming an
Acquiring Person (as hereinafter defined) (the earliest of such dates being
called the "DISTRIBUTION DATE"). A person or group whose acquisition of
Common Shares causes a Distribution Date pursuant to clause (i) above is an
"ACQUIRING PERSON." The date that a person or group becomes an Acquiring
Person is the "SHARES ACQUISITION DATE."
The Rights Agreement provides that, until the Distribution Date,
the Rights will be transferred with and only with the Common Shares. Until
the Distribution Date (or earlier redemption or expiration of the Rights)
new Common Share certificates issued after the Record Date upon transfer or
new issuance of Common Shares will contain a notation incorporating the
Rights Agreement by reference. Until the Distribution Date (or earlier
redemption or expiration of the Rights), the surrender for transfer of any
certificates for Common Shares outstanding as of the Record Date, even
without such notation or a copy of this Summary of Rights being attached
thereto, will also constitute the transfer of the Rights associated with
the Common Shares represented by such certificate. As soon as practicable
following the Distribution Date, separate certificates evidencing the
Rights ("RIGHT CERTIFICATES") will be mailed to holders of record of the
Common Shares as of the close of business on the Distribution Date (and to
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each initial record holder of certain Common Shares issued after the
Distribution Date), and such separate Right Certificates alone will
evidence the Rights.
THE RIGHTS ARE NOT EXERCISABLE UNTIL THE DISTRIBUTION DATE and
will expire at the close of business on March 30, 2005, unless earlier
redeemed by the Corporation as described below.
In the event that any person becomes an Acquiring Person (except
pursuant to a tender or exchange offer which is for all outstanding Common
Shares at a price and on terms which a majority of the disinterested
directors (as hereinafter defined) and a majority of the entire Board
determines to be adequate and in the best interests of the Corporation, its
stockholders and other relevant constituencies, other than such Acquiring
Person, its affiliates and associates (a "PERMITTED OFFER")), each holder
of a Right will thereafter have the right (the "Flip-In Right) to receive
upon exercise the number of Common shares (or, in certain circumstances,
other securities of the Corporation) having a value (immediately prior to
such triggering event) equal to two times the exercise price of the Right.
Notwithstanding the foregoing, following the occurrence of the event
described above, all Rights that are, or (under certain circumstances
specified in the Rights Agreement) were, beneficially owned by any
Acquiring Person or any affiliate or associate thereof will be null and
void.
If the Corporation does not have sufficient treasury stock or
authorized and unissued Common Shares fully to honor the Rights, the rights
of holders to purchase Common Stock may be proportionately reduced and the
Board of Directors may, in its discretion issue other equity or debt
securities upon exercise of the Rights. With the approval of a majority of
the "disinterested directors" and a majority of the entire Board, the Board
may also issue Common Shares in exchange for all of the exercisable Rights
after the Distribution Date at the rate of one Share for each Right.
In the event that, at any time following the Shares Acquisition
Date, (i) the Corporation is acquired in a merger or other business
combination transaction in which the holders of all of the outstanding
Common Shares immediately prior to the consummation of the transaction are
not the holders of all of the surviving corporation's voting power, or (ii)
more than 50% of the Corporation's assets or earning power is sold or
transferred, in either case with or to an Acquiring Person or any affiliate
or associate or any other person in which such Acquiring Person, affiliate
or associate has an interest or any person acting on behalf of or in
concert with such Acquiring Person, affiliate or associate, or, if in such
transaction all holders of Common Shares are not treated alike, any other
person, then each holder of a Right (except Rights which previously have
been voided as set forth above) shall thereafter have the right (the "FLIP-
OVER RIGHT") to receive, upon exercise, common shares of the acquiring
company having a value equal to two times the exercise price of the Right.
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The holder of a Right will continue to have the Flip-Over Right whether or
not such holder exercises or surrenders the Flip-In Right.
The Purchase Price payable, and the number of Common Shares or
other securities issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a
stock dividend on, or a subdivision, combination or reclassification of,
the Common Shares, (ii) upon the grant to holders of the Common Shares of
certain rights or warrants to subscribe for or purchase Common Shares at a
price, or securities convertible into Common Shares with a conversion
price, less than the then current market price of the Common shares or
(iii) upon the distribution to holders of the Common Shares of evidences of
indebtedness or assets (excluding regular quarterly cash dividends) or of
subscription rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of Common Shares
issuable upon exercise of each Right are also subject to adjustment in the
event of a stock split of the Common Shares or a stock dividend on the
Common Shares payable in Common Shares or subdivisions, consolidations or
combinations of the Common Shares occurring, in any such case, prior to the
Distribution Date.
With certain exceptions, no adjustment in the Purchase Price will
be required until cumulative adjustments require an adjustment of at least
1% in such Purchase Price. No fractional Common Shares will be issued and
in lieu thereof, an adjustment in cash will be made based on the market
price of the Common Shares on the last trading day price to the date of
exercise.
At any time prior to the earlier to occur of (i) a person becoming
an Acquiring Person or (ii) the expiration of the Rights, and under certain
other circumstances, the Corporation may redeem the Rights in whole, but
not in part, at a price of $.01 per Right (the "Redemption Price") which
redemption shall be effective upon the approval by a majority of the
"disinterested directors" and a majority of the Board of Directors.
Additionally, following the Shares Acquisition Date, upon the approval of a
majority of the "disinterested directors" and a majority of the Board of
Directors, the Corporation may redeem the then outstanding Rights in whole,
but not in part, at the Redemption Price, PROVIDED that such redemption is
in connection with a merger or other business combination transaction or
series of transactions involving the Corporation in which all holders of
Common Shares are treated alike but not involving an Acquiring Person or
its affiliates or associates.
All of the provisions of the Rights Agreement may be amended by
the Board of Directors of the Corporation prior to the Distribution Date,
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upon the approval of a majority of the "disinterested directors" and a
majority of the Board of Directors. After the Distribution Date, the
provisions of the Rights Agreement may be amended, upon the approval of a
majority of the "disinterested directors" and a majority of the Board of
Directors, in order to cure any ambiguity, defect or inconsistency, to make
changes which do not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person), or, subject to certain
limitations, to shorten or lengthen any time period under the Rights
Agreement.
Any amendments of the Rights Agreement and/or any redemption of
the Rights permitted pursuant to the terms of the Rights Agreement under
certain specified circumstances must be approved by a majority of
"disinterested directors". The term "disinterested director" means any
director of the Company who is neither an officer or employee of the
Company nor a "significant stockholder" of the Company nor any
representative, Affiliate or Associate (as such terms are defined in the
Rights Agreement) of any "significant stockholder" nor any person
attempting to effect a business combination or similar transaction nor any
representative, Affiliate or Associate of any such person. The term "
significant stockholder" means any stockholder who at any time on and/or
subsequent to the date of the adoption of the Plan is the beneficial owner
of 10% of the outstanding Common Stock.
Until a Right is exercised, the holder thereof, as such, will have
no rights as a stockholder of the Corporation, including, without
limitation, the right to vote or to receive dividends. While the
distribution of the Rights will not be taxable to stockholders of the
Corporation, stockholders may, depending upon the circumstances, recognize
taxable income should the Rights become exercisable or upon the occurrence
of certain events thereafter.
As of February 27, 1995, there were 7,255,286 shares of Common
Shares issued and outstanding. Each outstanding Common Share on the Record
Date will receive one Right. As long as the Rights are attached to the
Common Shares, the Company will issue one Right with each new Common Share
so that all such shares will have attached rights. 7,500,000 Common Shares
have been reserved for issuance upon exercise of the Rights.
The Rights have certain anti-takeover effects. The Rights will
cause substantial dilution to a person or group that attempts to acquire
the Corporation without conditioning the offer on (i) the Rights being
redeemed, (ii) a substantial number of Rights being acquired or (iii) that
the offer will be deemed a "Permitted Offer" under the Rights Agreement.
However, the Rights should not interfere with any merger or other business
combination in connection with a Permitted Offer or that is approved by the
Corporation because the Rights are redeemable under certain circumstances.
Attached hereto as Exhibit 1 and incorporated herein by reference
are a copy of the Rights Agreement, dated March 30, 1995, between the
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Corporation and American Stock Transfer & Trust Company, as Rights Agent,
specifying the terms of the Rights, and the exhibits thereto, as follows:
Exhibit A -- The Form of Rights Certificate; and Exhibit B -- The Summary
of Rights to Purchase Common Shares. The foregoing description of the
Rights is qualified by reference to the Rights Agreement and the exhibits
thereto.
Item 2.EXHIBITS.
1.Rights Agreement, dated as of March 30, 1995, between
AutoInfo, Inc. and American Stock Transfer & Trust
Company, as Rights Agent, which includes, as
Exhibit A thereto, The Form of Rights Certificate,
and as Exhibit B thereto, The Summary of Rights to
Purchase Common Shares. Pursuant to the Rights
Agreement, Rights Certificates will not be mailed
until after a Shares Acquisition Date (as defined in
the Rights Agreement) or ten days after a person
commences or announces its intention to commence an
offer if, upon consummation thereof, such person
would become an Acquiring Person (as defined in the
Rights Agreement).
6
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to
be signed on its behalf by the undersigned, thereto duly authorized.
AUTOINFO, INC.
By: /S/ SCOTT ZECHER
Name: Scott Zecher
Title: President & Chief Operating
Officer
Dated: March 30, 1995
7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION PAGE
<S> <C> <C>
1 Rights Agreement, 10
dated as of March 30, 1995, between AutoInfo, Inc.
and American Stock Transfer & Trust Company, as
Rights Agent, which includes, as Exhibit A thereto,
The Form of Rights Certificate, and as Exhibit B
thereto, The Summary of Rights to Purchase Common
Shares. Pursuant to the Rights Agreement, Rights
Certificates will not be mailed until after a
Shares Acquisition Date (as defined in the Rights
Agreement) or ten days after a person commences or
announces its intention to commence an offer if,
upon consummation thereof, such person would become
an Acquiring Person (as defined in the Rights
Agreement).
</TABLE>
8
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EXHIBIT 1
<PAGE>
PRIVILEGED AND CONFIDENTIAL
________________________________________________________________
AUTOINFO, INC.
and
AMERICAN STOCK TRANSFER & TRUST COMPANY, as
Rights Agent
Rights Agreement
Dated as of March 30, 1995
________________________________________________________________
<PAGE>
TABLE OF CONTENTS
Page
Section 1. Certain Definitions. 1
Section 2. Appointment of Rights Agent 5
Section 3. Issue of Right Certificates 5
Section 4. Form of Right Certificate 7
Section 5. Countersignature and Registration 8
Section 6. Transfer, Split-Up, Combination and
Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificate 9
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights 10
Section 8. Cancellation and Destruction of Right
Certificates 12
Section 9. Reservation and Availability of Common Shares 12
Section 10. Common Shares Record Date 13
Section 11. Adjustment of Purchase Price, Number and Kind
of Shares or Number of Rights 13
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares 21
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power 22
Section 14. Fractional Rights and Fractional Shares 24
Section 15. Rights of Action 25
Section 16. Agreement of Right Holders 26
Section 17. Right Certificate Holder Not Deemed a
Stockholder 26
Section 18. Concerning the Rights Agent 27
- -i-
<PAGE>
Section 19. Merger or Consolidation or Change of Name
of Rights Agent 27
Section 20. Duties of Rights Agent 28
Section 21. Change of Rights Agent 30
Section 22. Issuance of New Right Certificates 31
Section 23. Redemption and Termination 32
Section 24. Exchange 33
Section 25. Notice of Certain Events 34
Section 26. Notices 35
Section 27. Supplements and Amendments 36
Section 28. Determination and Actions by the Board of
Directors, etc 37
Section 29. Successors 37
Section 30. Benefits of this Agreement 37
Section 31. Severability 38
Section 32. Governing Law 38
Section 33. Counterparts 38
Section 34. Descriptive Headings 38
Signatures 39
Exhibit A - Form of Right Certificate
Exhibit B - Summary of Rights to Purchase Common Shares
- -ii-
<PAGE>
TABLE OF CONTENTS
Page
DEFINED TERM CROSS REFERENCE SHEET
Acquiring Person Section 1(a)
Act Section 1(b)
Adjustment Shares Section 11(a)(ii)
Adjusted Number of Shares Section 11(a)(iii)
Adjusted Purchase Price Section 11(a)(iii)
Affiliate Section 1(c)
Agreement Preface
Associate Section 1 (c)
beneficial owner Section 1(d)
Beneficially Own Section 1(d)
Business Day Section 1(e)
capital stock equivalent Section 11(a)(iii)
Close of Business Section 1(f)
Common Shares Section 1(g)
Corporation Preface
Current Per Share Market Price Section 11(d)(i)
Disinterested Director Section 1(h)
Distribution Date Section 3(a)
equivalent common shares Section 11(b)
Exchange Act Section 1(c)
Exchange Ratio Section 24(a)
Final Expiration Date Section 7(a)
Grandfathered Percentage Section 1(k)
Grandfathered Person Section 1(l)
Interested Stockholder Section 1(j)
Permitted Offer Section 1(k)
Person Section 1(l)
Principal Party Section 13(b)
Proration Factor Section 11(a)(iii)
Purchase Price Section 4(a)
Record Date Preface
Redemption Date Section 7(a)
Redemption Price Section 23(a)(i)
Right Preface
Right Certificate Section 3
Rights Agent Preface
Rights Agreement Section 3
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Section 11(a)(ii) Event Section 11(a)(ii)
Section 13 Event Section 13
Security Section 11(d)
Shares Acquisition Date Section 1(p)
Significant Stockholder Section 1(t)
Subsidiary Section 1(q)
Summary of Rights Section 3(b)
Then Outstanding Section 1(d)(iii)
Trading Day Section 11(d)(i)
Triggering Event Section 1(r)
voting Securities Section 13(a)
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RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of March 30, 1995 (the
"AGREEMENT"), between AUTOINFO, INC., a Delaware corporation (the
"CORPORATION"), and American Stock Transfer & Trust Company (the
"RIGHTS AGENT").
The Board of Directors of the Corporation has authorized and
declared a dividend of one right (a "RIGHT") for each Common Share
(as hereinafter defined) of the Corporation outstanding at the close
of business on April 10, 1995 (the "RECORD DATE"), each Right
representing the right to purchase one Common Share (as hereinafter
defined), upon the terms and subject to the conditions herein set
forth, and has further authorized and directed the issuance of one
Right with respect to each Common Share that shall become outstanding
between the Record Date and the earliest of the Distribution Date,
the Redemption Date or the Final Expiration Date (as such terms are
hereinafter defined); PROVIDED, HOWEVER, that Rights may be issued
with respect to Common Shares that shall become outstanding after the
Distribution Date and prior to the earlier of the Redemption Date and
the Final Expiration Date in accordance with the provisions of
Section 22 of this Agreement.
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1.CERTAIN DEFINITIONS. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "ACQUIRING PERSON" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall be
the Beneficial Owner of 15% or more of the then outstanding Common
Shares (other than as a result of a Permitted Offer (as hereinafter
defined)) or was such a Beneficial owner at any time after the date
hereof, whether or not such person continues to be the Beneficial
Owner of 15% or more of the then outstanding Common Shares.
Notwithstanding the foregoing, (A) the term "Acquiring Person" shall
not include (i) the Corporation, (ii) any Subsidiary of the
Corporation, (iii) any employee benefit plan of the Corporation or of
any Subsidiary of the Corporation, or (iv) any Person or entity
organized, appointed or established by the Corporation for or
pursuant to the terms of any such plan or (v) any Grandfathered
Stockholder, unless such Grandfathered Stockholder subsequently
becomes the Beneficial Owner of more than the Grandfathered
Percentage of the Common Shares of the Corporation, and (B) no Person
(including, without limitation, any Grandfathered Stockholder) shall
<PAGE>
become an "Acquiring Person" (and no Grandfathered Stockholder shall
cease to be a Grandfathered Stockholder) (i) as a result of the
acquisition of Common Shares by the Corporation which, by reducing
the number of Common Shares outstanding, increases the proportional
number of shares beneficially owned by such Person together with all
Affiliates and Associates of such Person, PROVIDED, that if (1) a
Person (including, without limitation, any Grandfathered Stockholder)
would become an Acquiring Person (but for the operation of this
subclause (i)) as a result of the acquisition of Common Shares by the
Corporation, and (2) after such share acquisition by the Corporation,
such Person, or an Affiliate or Associate of such Person, becomes the
Beneficial Owner of any additional Common Shares, then such Person
shall be deemed an Acquiring Person or; (ii) if (1) within five
Business Days after such Person would otherwise have become an
Acquiring Person (but for the operation of this subclause (ii)), such
Person notifies the Board of Directors that such Person did so
inadvertently, and (2) within two Business Days after such
notification, such Person divests itself of a sufficient number of
Common Shares so that such Person is the Beneficial Owner of such
number of Common Shares that such Person no longer would be an
Acquiring Person.
(b) "ACT" shall mean the Securities Act of 1933, as amended
and as in effect on the date of this Agreement.
(c) "AFFILIATE" and "ASSOCIATE" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as amended
and in effect on the date of this Agreement (the "EXCHANGE ACT").
(d) A Person shall be deemed the "BENEFICIAL OWNER" of and
shall be deemed to "BENEFICIALLY OWN" any securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire (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 Beneficial Owner of, or to
beneficially own, securities tendered pursuant to a tender or
exchange offer made by or on behalf of such Person or any of such
Person's Affiliates or Associates until such tendered securities are
accepted for purchase or exchange; or (B) the right to vote pursuant
to any agreement, arrangement or understanding; PROVIDED, HOWEVER,
that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, any security if the agreement, arrangement or
understanding to vote such security (1) arises solely from a
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revocable proxy or consent given to such Person in response to a
public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations promulgated
under the Exchange Act and (2) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or successor
report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate
thereof) with which such Person (or any of such Person's Affiliates
or Associates) has any agreement, arrangement or understanding (other
than customary agreements with and between underwriters and selling
group members with respect to a bona fide public offering of
securities) relating to the acquisition, holding, voting (except to
the extent contemplated by the proviso to Section l(d)(ii)(B)) or
disposing of any securities of the Corporation.
Notwithstanding anything in this definition of Beneficial
Ownership to the contrary, the phrase "THEN OUTSTANDING," when used
with reference to a Person's Beneficial Ownership of securities of
the Corporation, shall mean the number of such securities then issued
and outstanding together with the number of such securities not then
actually issued and outstanding which such Person would be deemed to
own beneficially hereunder.
(e) "BUSINESS DAY" shall mean any day other than a
Saturday, Sunday or federal holiday.
(f) "CLOSE OF BUSINESS" on any given date shall mean 5:00
P.M., New York time, on such date; PROVIDED, HOWEVER, that if such
date is not a Business Day it shall mean 5:00 P.M., New York time, on
the next succeeding Business Day.
(g) "COMMON SHARES" when used with reference to the
Corporation shall mean the shares of Common Stock, par value $0.01
per share, of the Corporation or, in the event of a subdivision,
combination or consolidation with respect to such shares of Common
Stock, the shares of Common Stock resulting from such subdivision,
combination or consolidation. "COMMON SHARES" when used with
reference to any Person other than the Corporation shall mean the
capital stock (or equity interest) with the greatest voting power of
such other Person or, if such other Person is a Subsidiary of another
Person, the Person or Persons which ultimately control such first-
mentioned Person.
(h) "DISINTERESTED DIRECTOR" means any director of the
Board of Directors of the Corporation who is not (a) an officer or
employee of the Corporation, (b) a Person proposing or attempting to
effect a business combination or similar transaction with the
Corporation (including, without limitation, a merger, tender offer or
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exchange offer, sale of substantially all of the Corporation's
assets, or liquidation of the Corporation's assets) or any Affiliate
or Associate of such Person or Person acting directly or indirectly
on behalf of, or as a representative of, or in concert with, any such
Person, Affiliate or Associate or (c) a Significant Stockholder, an
Affiliate or Associate of a Significant Stockholder, or a Person
acting directly or indirectly on behalf of, or as a representative
of, or in concert with, a Significant Stockholder or an Affiliate or
Associate of a Significant Stockholder.
(i) "DISTRIBUTION DATE" shall have the meaning set forth in
Section 3 hereof.
(j) "FINAL EXPIRATION DATE" shall have the meaning set
forth in Section 7 hereof.
(k) "GRANDFATHERED PERCENTAGE" shall mean, with respect to
any Grandfathered Person, the percentage of the outstanding Common
Shares that such Grandfathered Person beneficially owned on March 30,
1995.
(l) "GRANDFATHERED PERSON" shall mean any Person who or
which was, on March 30, 1995, the Beneficial Owner of 15% or more of
the Common Shares of the Corporation outstanding on such date. Any
Grandfathered Person who subsequent to March 30, 1995 becomes the
Beneficial Owner of less than 15% of the Common Shares of the
Corporation shall cease to be a Grandfathered Person.
(m) "INTERESTED STOCKHOLDER" shall mean any Acquiring
Person or any Affiliate or Associate of an Acquiring Person or any
other Person in which any such Acquiring Person, Affiliate or
Associate has an interest, or any other Person acting directly or
indirectly on behalf of or in concert with any such Acquiring Person,
Affiliate or Associate.
(n) "PERMITTED OFFER" shall mean a tender or exchange offer
for all outstanding Common Shares which is at a price and on terms
determined, prior to the purchase of shares under such tender or
exchange offer, by at least (i) a majority of the Disinterested
Directors and (ii) a majority of all of the members of the Board of
Directors, to be adequate (taking into account all factors that such
Directors deem relevant) and otherwise in the best interests of the
Corporation, its stockholders and its other relevant constituencies
(other than the Person or any Affiliate or Associate thereof on whose
basis the offer is being made) taking into account all factors that
such directors may deem relevant.
(o) "PERSON" shall mean any individual, firm, partnership,
corporation, trust, association, joint venture or other entity, and
shall include any successor (by merger or otherwise) of such entity.
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(p) "REDEMPTION DATE" shall have the meaning set forth in
Section 7 hereof.
(q) "SECTION 11(A)(II) EVENT" shall mean any event
described in Section 11(a)(ii) hereof.
(r) "SECTION 13 EVENT" shall mean any event described in
clause (x), (y) or (z) of Section 13(a) hereof.
(s) "SHARES 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 the Exchange
Act) by the Corporation or an Acquiring Person that an Acquiring
Person has become such.
(t) "SIGNIFICANT STOCKHOLDER" shall mean any Person who or
which shall be the Beneficial Owner of 10% or more of the outstanding
Common Shares or was such a Beneficial Owner at any time on or after
the date hereof, whether or not such Person continues to be the
Beneficial Owner of 10% or more of the then outstanding Common
Shares. Notwithstanding the foregoing, the term "Significant
Stockholder" shall not include (i) the Corporation, (ii)any
Subsidiary of the Corporation, (iii) any employee benefit plan of the
Corporation or of any Subsidiary of the Corporation or (iv) any
Person or entity organized, appointed or established by the
Corporation for or pursuant to the terms of any such Plan.
(u) "SUBSIDIARY" of any Person shall mean any corporation
or other Person of which a majority of the voting power of the voting
equity securities or equity interest is owned, directly or
indirectly, by such Person.
(v) "TRIGGERING EVENT" shall mean any Section 11(a)(ii)
Event or any Section 13 Event.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Corporation
hereby appoints the Rights Agent to act as agent for the Corporation
and the holders of the Rights (who, in accordance with Section 3
hereof, shall prior to the Distribution Date also be the holders of
Common Shares) in accordance with the terms and conditions hereof,
and the Rights Agent hereby accepts such appointment. The
Corporation may from time to time appoint such co-Rights Agents as it
may deem necessary or desirable.
Section 3. ISSUE OF RIGHT CERTIFICATES. (a) Until the
earlier of (i) the Shares Acquisition Date or (ii) the close of
business on the tenth day (or such later date as may be determined by
action of the Corporation's Board of Directors) after the date of the
commencement by any Person (other than the Corporation, any
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Subsidiary of the Corporation, any employee benefit plan of the
Corporation or of any Subsidiary of the Corporation or any Person or
entity organized, appointed or established by the Corporation for or
pursuant to the terms of any such plan) of, or of the first public
announcement of the intention of any Person (other than the
Corporation, any Subsidiary of the Corporation, any employee benefit
plan of the Corporation or of any Subsidiary of the Corporation or
any Person or entity organized, appointed or established by the
Corporation for or pursuant to the terms of any such plan) to
commence (which intention to commence remains in effect for five
Business Days after such announcement), a tender or exchange offer
the consummation of which would result in any Person becoming an
Acquiring Person (including, in the case of both (i) and (ii), any
such date which is after the date of this Agreement and prior to the
issuance of the Rights), the earlier of such dates being herein
referred to as the "DISTRIBUTION DATE", (x) the Rights will be
evidenced (subject to the provisions of Section 3(b) hereof) by the
certificates for Common Shares registered in the names of the holders
thereof (which certificates shall also be deemed to be Right
Certificates) and not by separate Right Certificates, and (y) the
right to receive Right Certificates will be transferable only in
connection with the transfer of the underlying Common Shares
(including a transfer to the Corporation); PROVIDED, HOWEVER, that if
a tender offer prior to the occurrence of a Distribution Date is
terminated, then no Distribution Date shall occur as a result of such
tender offer. As soon as practicable after the Distribution Date,
the Corporation will prepare and execute, the Rights Agent will
countersign, and the Corporation will send or cause to be sent by
first-class, postage-prepaid mail, to each record holder of Common
Shares as of the close of business on the Distribution Date, at the
address of such holder shown on the records of the Corporation, a
Right Certificate, in substantially the form of Exhibit A hereto (a
"RIGHT CERTIFICATE"), evidencing one Right for each Common Share so
held. As of and after the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.
(b) As promptly as practicable following the Record Date,
the Corporation will send a copy of a Summary of Rights to Purchase
Common Shares, in substantially the form of Exhibit B hereto (the
"SUMMARY OF RIGHTS"), by first-class, postage-prepaid mail, to each
record holder of Common Shares as of the close of business on the
Record Date, at the address of such holder shown on the records of
the Corporation. With respect to certificates for Common Shares
outstanding as of the Record Date, until the Distribution Date, the
Rights will be evidenced by such certificates registered in the names
of the holders thereof together with a copy of the Summary of Rights
attached thereto. Until the Distribution Date (or the earlier of the
Redemption Date or the Final Expiration Date), the surrender for
transfer of any certificate for Common Shares outstanding on the
Record Date, with or without a copy of the Summary of Rights attached
thereto, shall also constitute the transfer of the Rights associated
with such Common Shares.
(c) Certificates for Common Shares which become outstanding
(including, without limitation, reacquired Common Shares referred to
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in the last sentence of this paragraph (c)) after the Record Date but
prior to the earliest of the Distribution Date, the Redemption Date
or the Final Expiration Date shall be deemed also to be certificates
for Rights and shall bear the following legend:
This certificate also evidences and entitles
the holder hereof to certain rights as set
forth in a Rights Agreement between Autoinfo,
Inc. and American Stock Transfer & Trust
Company, dated as of March 30, 1995 (the
"RIGHTS AGREEMENT"), the terms of which are
hereby incorporated herein by reference and a
copy of which is on file at the principal
executive offices of Autoinfo, Inc. Under
certain circumstances, as set forth in the
Rights Agreement, such Rights will be
evidenced by separate certificates and will no
longer be evidenced by this certificate.
Autoinfo, Inc. will mail to the holder of this
certificate a copy of the Rights Agreement
without charge after receipt of a written
request therefor. Under certain circumstances
set forth in the Rights Agreement, Rights
issued to, or held by, any Person who is, was
or becomes an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights
Agreement) and certain related persons,
whether currently held by or on behalf of such
Person or by any subsequent holder, may become
null and void.
With respect to such certificates containing the foregoing legend,
until the Distribution Date, the Rights associated with the Common
Shares represented by such certificates shall be evidenced by such
certificates alone, and the surrender for transfer of any such
certificate shall also constitute the transfer of the Rights
associated with the Common Shares represented thereby. In the event
that the Corporation purchases or acquires any Common Shares after
the Record Date but prior to the Distribution Date, any Rights
associated with such Common Shares shall be deemed cancelled and
retired so that the Corporation shall not be entitled to exercise any
Rights associated with the Common Shares which are no longer
outstanding.
Section 4. FORM OF RIGHT CERTIFICATE. (a) The Right
Certificates (and the forms of election to purchase and of assignment
to be printed on the reverse thereof) shall be substantially in the
form set forth in Exhibit A hereto and may have such marks of
identification or designation and such legends, summaries or
endorsements printed thereon as the Corporation may deem appropriate
and as are not inconsistent with the provisions of this Agreement, or
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as may be required to comply with any applicable law or with any rule
or regulation made pursuant thereto or with any rule or regulation of
any stock exchange on which the Rights may from time to time be
listed, or to conform to usage. Subject to the provisions of Section
11 and Section 22 hereof, the Right Certificates shall entitle the
holders thereof to purchase such number of Shares as shall be set
forth therein at the price per Common Share set forth therein (the
"PURCHASE PRICE"), but the amount and type of securities purchasable
upon the exercise of each Right and the Purchase Price thereof shall
be subject to adjustment as provided herein.
(b) Any Right Certificate issued pursuant to Section 3(a)
or Section 22 hereof that represents Rights which are null and void
pursuant to Section 7(e) of this Agreement and any Right Certificate
issued pursuant to Section 6 or Section 11 hereof upon transfer,
exchange, replacement or adjustment of any other Right Certificate
referred to in this sentence, shall contain (to the extent feasible)
the following legend:.
The Rights represented by this Right
Certificate are or were beneficially owned by
a Person who was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring
Person (as such terms are defined in the
Rights Agreement). Accordingly, this Right
Certificate and the Rights represented hereby
are null and void.
Provisions of Section 7(e) of this Rights Agreement shall be
operative whether or not the foregoing legend is contained on any
such Right Certificate.
Section 5. COUNTERSIGNATURE AND REGISTRATION. The Right
Certificates shall be executed on behalf of the Corporation by its
Chairman of the Board, its Chief Executive Officer, its President,
any of its Vice Presidents, or its Treasurer, either manually or by
facsimile signature, shall have affixed thereto the Corporation's
seal or a facsimile thereof, and shall be attested by the Secretary
or an Assistant Secretary of the Corporation, either manually or by
facsimile signature. The Right Certificates shall be countersigned
by the Rights Agent and shall not be valid for any purpose unless so
countersigned. In case any officer of the Corporation who shall have
signed any of the Right Certificates shall cease to be such officer
of the Corporation before countersignature by the Rights Agent and
issuance and delivery by the Corporation, such Right Certificates may
nevertheless be countersigned by the Rights Agent and issued and
delivered by the Corporation with the same force and effect as though
the person who signed such Right Certificates had not ceased to be
such officer of the Corporation; and any Right Certificate may be
signed on behalf of the Corporation by any person who, at the actual
date of the execution of such Right Certificate, shall be a proper
officer of the Corporation to sign such Right Certificate, although
at the date of the execution of this Rights Agreement any such person
was not such an officer.
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Following the Distribution Date, the Rights Agent will keep
or cause to be kept, at its office designated as the appropriate
place for surrender of such Right Certificate or transfer, books for
registration and transfer of the Right Certificates issued hereunder.
Such books shall show the names and addresses of the respective
holders of the Right Certificates, the number of Rights evidenced on
its face by each of the Right Certificates and the certificate number
and the date of each of the Right Certificates.
Section 6. TRANSFER, SPLIT-UP, COMBINATION AND EXCHANGE OF
RIGHT CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT
CERTIFICATE. Subject to the provisions of Section 4(b), Section 7(e)
and Section 14 hereof, at any time after the close of business on the
Distribution Date, and at or prior to the close of business on the
earlier of the Redemption Date or the Final Expiration Date, any
Right Certificate or Right Certificates may be transferred, split up,
combined or exchanged for another Right Certificate or Right
Certificates, entitling the registered holder to purchase a like
number of Common Shares as the Right Certificate or Right
Certificates surrendered then entitled such holder (or former holder
in the case of a transfer) to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Right
Certificate or Right Certificates shall make such request in writing
delivered to the Rights Agent, and shall surrender the Right
Certificate or Right Certificates to be transferred, split up,
combined or exchanged at the principal office or offices of the
Rights Agent designated for such purpose. Neither the Rights Agent
nor the Corporation shall be obligated to take any action whatsoever
with respect to the transfer of any such surrendered Right
Certificate until the registered holder shall have completed and
signed the certificate contained in the form of assignment on the
reverse side of such Right Certificate and shall have provided such
additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the
Corporation shall reasonably request. Thereupon the Rights Agent
shall, subject to Section 4(b), Section 7(e) and Section 14 hereof,
countersign and deliver to the Person entitled thereto a Right
Certificate or Right Certificates, as the case may be, as so
requested. The Corporation may require payment of a sum sufficient
to cover any tax or governmental charge that may be imposed in
connection with any transfer, split-up, combination or exchange of
Right Certificates.
Upon receipt by the Corporation and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Right Certificate, and, in case of
loss, theft or destruction, of indemnity or security reasonably
satisfactory to them, and, at the Corporation's request,
reimbursement to the Corporation and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Right Certificate if mutilated,
the Corporation will make and deliver a new Right Certificate of like
tenor to the Rights Agent for countersignature and delivery to the
registered holder in lieu of the Right Certificate so lost, stolen,
destroyed or mutilated.
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Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION
DATE OF RIGHTS. (a) Subject to Section 7(e) hereof, the registered
holder of any Right Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein) in whole or in part at
any time after the Distribution Date upon surrender of the Right
Certificate, with the form of election to purchase and the
certificate on the reverse side thereof duly executed, to the Rights
Agent at the principal office or offices of the Rights Agent
designated for such purpose, together with payment of the aggregate
Purchase Price for the total number of Common Shares (or other
securities, as the case may be) as to which such surrendered Rights
are exercised, at or prior to the earliest of (i) the close of
business on March 30, 2005 (the "FINAL EXPIRATION DATE"), (ii) the
time at which the Rights are redeemed as provided in Section 23
hereof (the "REDEMPTION DATE") or (iii) the consummation of a
transaction contemplated by Section 13(d) hereof.
(b) The Purchase Price for each Common Share pursuant to
the exercise of a Right shall initially be $15.00, shall be subject
to adjustment from time to time as provided in Sections 11 and 13(a)
hereof and shall be payable in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase and the
certificate duly executed, accompanied by payment of the Purchase
Price for the Shares (or other securities, as the case may be) to be
purchased and an amount equal to any applicable transfer tax required
to be paid by the holder of such Right Certificate in accordance with
Section 6 hereof by certified check, cashier's check or money order
payable to the order of the Corporation, the Rights Agent shall
thereupon promptly (i) (A) requisition from any transfer agent of the
Common Shares certificates for the number of Common Shares to be
purchased and the Corporation hereby irrevocably authorizes its
transfer agent to comply with all such requests, or (B) if the
Corporation, in its sole discretion, shall have elected to deposit
the Common Shares issuable upon exercise of the Rights hereunder into
a depositary, requisition from the depositary agent depositary
receipts representing such number of Common Shares as are to be
purchased (in which case certificates for the Common Shares
represented by such receipts shall be depositedby the transfer agent
with the depositary agent) and the Corporation will direct the
depositary agent to comply with such requests, (ii) when appropriate,
requisition from the Corporation the amount of cash to be paid in
lieu of issuance of fractional shares in accordance with Section 14
hereof, (iii) after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name
or names as may be designated by such holder, and (iv) when
appropriate, after receipt thereof, deliver such cash to or upon the
order of the registered holder of such Right Certificate. In the
event that the Corporation is obligated to issue other securities of
the Corporation pursuant to Section 11(a) hereof, the Corporation
will make all arrangements necessary so that such other securities
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are available for distribution by the Rights Agent, if and when
appropriate.
In addition, in the case of an exercise of the Rights by a
holder pursuant to Section 11(a)(ii), the Rights Agent shall return
such Right Certificate to the registered holder thereof after
imprinting, stamping or otherwise indicating thereon that the rights
represented by such Right Certificate no longer include the rights
provided by Section 11(a)(ii) of the Rights Agreement and if less
than all the Rights represented by such Right Certificate were so
exercised, the Rights Agent shall indicate on the Right Certificate
the number of Rights represented thereby which continue to include
the rights provided by Section 11(a)(ii).
(d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new
Right Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent to the
registered holder of such Right Certificate or to his duly authorized
assigns, subject to the provisions of Section 14 hereof, or the
Rights Agent shall place an appropriate notation on the Right
Certificate with respect to those rights exercised.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section 11(a)(ii)
Event, any Rights beneficially owned by (i) an Acquiring Person or an
Affiliate or Associate of an Acquiring Person, (ii) a transferee of
an Acquiring Person (or of any Affiliate or Associate thereof) who
becomes a transferee after the Acquiring Person becomes such, or
(iii) a transferee of an Acquiring Person (or of any Affiliate or
Associate thereof) who becomes a transferee prior to or concurrently
with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration)
from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom the Acquiring Person has
a continuing agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer which the Board of Directors of
the Corporation has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect the avoidance
of this Section 7(e), shall become null and void without any further
action and no holder of such Rights shall have any rights whatsoever
with respect to such Rights, whether under any provision of this
Agreement or otherwise. The Corporation shall use all reasonable
efforts to insure that the provisions of this Section 7(e) and
Section 4(b) hereof are complied with, but shall have no liability to
any holder of Right Certificates or other Person as a result of its
failure to make any determinations with respect to an Acquiring
Person or its Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Corporation shall be
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obligated to undertake any action with respect to a registered holder
upon the occurrence of any purported exercise as set forth in this
Section 7 unless such registered holder shall have (i) completed and
signed the certificate contained in the form of election to purchase
set forth on the reverse side of the Right Certificate surrendered
for such exercise, and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Corporation shall reasonably
request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT
CERTIFICATES. All Right Certificates surrendered for the purpose of
exercise, transfer, split up, combination or exchange shall, if
surrendered to the Corporation or to any of its agents, be delivered
to the Rights Agent for cancellation or in cancelled form, or, if
surrendered to the Rights Agent, shall be cancelled by it, and no
Right Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Rights
Agreement. The Corporation shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Right Certificate purchased or acquired by the
Corporation otherwise than upon the exercise thereof. The Rights
Agent shall deliver all cancelled Right Certificates to the
Corporation, or shall, at the written request of the Corporation,
destroy such cancelled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Corporation.
Section 9. RESERVATION AND AVAILABILITY OF COMMON SHARES.
The Corporation covenants and agrees that at all time prior to the
occurrence of a Section 11(a)(ii) Event it will cause to be reserved
and kept available out of its authorized and unissued Common Shares,
or any authorized and issued Common Shares held in its treasury, the
number of Common Shares that will be sufficient to permit the
exercise in full of all outstanding Rights and, after the occurrence
of a Section11(a)(ii) Event, shall, to the extent reasonably
practicable, so reserve and keep available a sufficient number of
Common Shares (and/or other securities) which may be required to
permit the exercise in full of the Rights pursuant to this Agreement.
So long as the Common Shares (or other securities, as the
case may be) issuable upon the exercise of the Rights may be listed
on any national securities exchange, the Corporation shall use its
best efforts to cause, from and after such time as the Rights become
exercisable, all shares reserved for such issuance to be listed on
such exchange upon official notice of issuance upon such exercise.
The Corporation covenants and agrees that it will take all
such action as may be necessary to ensure that all Common Shares (or
other securities, as the case may be) delivered upon exercise of
Rights shall, at the time of delivery of the certificates for such
shares or other securities (subject to payment of the Purchase
Price), be duly and validly authorized and issued and fully paid and
non-assessable shares or securities.
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The Corporation further covenants and agrees that it will
pay when due and payable any and all federal and state transfer taxes
and charges which may be payable in respect of the issuance or
delivery of the Right Certificates or of any Common Shares (or other
securities, as the case may be) upon the exercise of Rights. The
Corporation shall not, however, be required to pay any transfer tax
which may be payable in respect of any transfer or delivery of Right
Certificates to a person other than, or the issuance or delivery of
certificates or depositary receipts for the Common Shares (or other
securities, as the case may be) in a name other than that of, the
registered holder of the Right Certificate evidencing Rights
surrendered for exercise, or to issue or to deliver any certificates
or depositary receipts for Common Shares (or other securities, as the
case may be) upon the exercise of any Rights, until any such tax
shall have been paid (any such tax being payable by the holder of
such Right Certificate at the time of surrender) or until it has been
established to the Corporation's reasonable satisfaction that no such
tax is due.
The Corporation shall use its best efforts to (i) file, as
soon as practicable following the Shares Acquisition Date (or, if
required by law, at such earlier time following the Distribution Date
as so required), a registration statement under the Act, with respect
to the securities purchasable upon exercise of the Rights on an
appropriate form, (ii) cause such registration statement to become
effective as soon as practicable after such filing, and (iii) cause
such registration statement to remain effective (with a prospectus at
all times meeting the requirements of the Act and the rules and
regulations thereunder) until the date of the expiration of the
rights provided by Section 11(a)(ii). The Corporation will also take
such action as may be appropriate under the blue sky laws of the
various states.
Section 10. COMMON SHARES RECORD DATE. Each person in
whose name any certificate for Common Shares (or other securities, as
the case may be) is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of the Common
Shares (or other securities, as the case may be) represented thereby
on, and such certificate shall be dated, the date upon which the
Right Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (and any applicable transfer taxes) was
made; PROVIDED, HOWEVER, that, if the date of such surrender and
payment is a date upon which the Common Shares (or other securities,
as the case may be) transfer books of the Corporation 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 Common Shares (or other securities, as the
case may be) transfer books of the Corporation are open.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND
OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and
kind of shares covered by each Right and the number of Rights
outstanding are subject to adjustment from time to time as provided
in this Section 11.
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(a) (i) In the event the Corporation shall at any time
after the date of this Agreement (A) declare a dividend on the Common
Shares payable in Common Shares, (B) subdivide the outstanding Common
Shares or (C) combine the outstanding Common Shares into a smaller
number of Common Shares or (D) issue any shares of its capital stock
in a reclassification of the Common Shares (including any such
reclassification in connection with a consolidation or merger in
which the Corporation is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a) and Section 7(e)
hereof, the Purchase Price in effect at the time of the record date
for such dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of shares of
capital stock issuable on such date, shall be proportionately
adjusted so that the holder of any Right exercised after such time
shall be entitled to receive the aggregate number and kind of shares
of capital stock which, if such Right had been exercised immediately
prior to such date and at a time when the Shares transfer books of
the Corporation were open, such holder would have owned upon such
exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification; PROVIDED, HOWEVER, that
in no event shall the consideration to be paid upon the exercise of
one Right be less than the aggregate par value of the shares of
capital stock of the Corporation issuable upon exercise of one Right.
If an event occurs which would require an adjustment under both
Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for
in this Section 11(a)(i) shall be in addition to, and shall be made
prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) In the event any Person, alone or together with its
Affiliates and Associates, shall become an Acquiring Person, then
proper provision shall be made so that each holder of a Right (except
as provided below and in Section 7(e) hereof) shall, for a period of
60 days after the later of the occurrence of any such event or the
effective date of an appropriate registration statement under the Act
pursuant to Section 9 hereof, have a right to receive, upon exercise
thereof at a price equal to the then current Purchase Price, in
accordance with the terms of this Agreement, such number of Common
Shares as shall equal the result obtained by (x) multiplying the then
current Purchase Price by the then number of Common Shares for which
a Right was exercisable immediately prior to the first occurrence of
a Section 11(a)(ii) Event, and dividing that product by (y) 50% of
the then current per share market price of the Corporation's Common
Shares (determined pursuant to Section 11(d) hereof) on the date of
such first occurrence (such number of shares being referred to as the
"ADJUSTMENT SHARES"); PROVIDED, HOWEVER, that if the transaction that
would otherwise give rise to the foregoing adjustment is also subject
to the provisions of Section 13 hereof, then only the provisions of
Section 13 hereof shall apply and no adjustment shall be made
pursuant to this Section 11(a)(ii);
(iii)In the event that there shall not be sufficient
treasury shares or authorized but unissued (and unreserved) Common
Shares to permit the exercise in full of the Rights in accordance
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with the foregoing subparagraph (ii) and the Rights become so
exercisable, notwithstanding any other provision of this Agreement,
to the extent necessary and permitted by applicable law, each Right
shall thereafter represent the right to receive, upon exercise
thereof at the then current Purchase Price in accordance with the
terms of this Agreement, (x) a number of (or fractions of) Common
Shares (up to the maximum number of Common Shares which may
permissibly be issued) and (y) a number of (or fractions of) other
equity securities of the Corporation (or, in the discretion of the
Board of Directors, debt) which the Board of Directors of the
Corporation has determined to have the same aggregate current market
value (determined pursuant to Sections 11(d)(i) and (ii) hereof, to
the extent applicable) as one Common Share (such number of (or
fractions of) Common Shares (or other equity securities or debt of
the Corporation) being referred to as a "CAPITAL STOCK EQUIVALENT"),
equal in the aggregate to the number of Adjustment Shares; PROVIDED,
HOWEVER, if sufficient Common Shares and/or capital stock equivalents
are unavailable, then the Corporation shall, to the extent permitted
by applicable law, take all such action as may be necessary to
authorize additional Common Shares or capital stock equivalents for
issuance upon exercise of the Rights, including the calling of a
meeting of stockholders; and PROVIDED, FURTHER, that if the
Corporation is unable to cause sufficient Common Shares and/or
capital stock equivalents to be available for issuance upon exercise
in full of the Rights, then each Right shall thereafter represent the
right to receive the Adjusted Number of Shares upon exercise at the
Adjusted Purchase Price (as such terms are hereinafter defined). As
used herein, the term "ADJUSTED NUMBER OF SHARES" shall be equal to
that number of (or fractions of) Common Shares (and/or capital stock
equivalents) equal to the product of (x) the number of Adjustment
Shares and (y) a fraction, the numerator of which is the number of
Common Shares (and/or capital stock equivalents) available for
issuance upon exercise of the Rights and the denominator of which is
the aggregate number of Adjustment Shares otherwise issuable upon
exercise in full of all Rights (assuming there were a sufficient
number of Common Shares available) (such fraction being referred to
as the "PRORATION FACTOR"). The "ADJUSTED PURCHASE PRICE" shall mean
the product of the Purchase Price and the Proration Factor. The
Board of Directors may, but shall not be required to, establish
procedures to allocate the right to receive Common Shares and capital
stock equivalents upon exercise of the Rights among holders of
Rights.
(b) In case the Corporation shall fix a record date for the
issuance of rights (other than the Rights), options or warrants to
all holders of Common Shares entitling them (for a period expiring
within 45 calendar days after such record date) to subscribe for or
purchase Common Shares (or shares having the same rights and
privileges as the Common Shares ("EQUIVALENT COMMON SHARES")) or
securities convertible into Common Shares or equivalent common shares
at a price per Common Share or equivalent common share (or having a
conversion price per share, if a security convertible into Common
Shares or equivalent common shares (or having a conversion price per
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share, if a security convertible into Common Shares or equivalent
common shares) less than the then current per share market price of
the Common Shares (as determined pursuant to Section 11(d) hereof) on
such record date, the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of Common Shares outstanding
on such record date plus the number of Common Shares which the
aggregate offering price of the total number of Common Shares and/or
equivalent common shares so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be
offered) would purchase at such current per share market price, and
the denominator of which shall be the number of Common Shares
outstanding on such record date plus the number of additional Common
Shares and/or equivalent common shares to be offered for subscription
or purchase (or into which the convertible securities so to be
offered are initially convertible); PROVIDED, HOWEVER, that in no
event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of capital
stock of the Corporation issuable upon exercise of one Right. In
case such subscription price may be paid in a consideration part or
all of which shall be in a form other than cash, the value of such
consideration shall be determined in good faith by the Board of
Directors of the Corporation, whose determination shall be described
in a statement filed with the Rights Agent and shall be binding on
the Rights Agent. Common Shares owned by or held for the account of
the Corporation shall not be deemed outstanding for the purpose of
any such computation. Such adjustment shall be made successively
whenever such a record date is fixed; and in the event that such
rights, options or warrants are not so issued, the Purchase Price
shall be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(c) In case the Corporation shall fix a record date for the
making of a distribution to all holders of the Shares (including any
such distribution made in connection with a consolidation or merger
in which the Corporation is the continuing or surviving corporation)
of evidences of indebtedness or assets (other than a regular
quarterly cash dividend or a dividend payable in Shares) or
subscription rights or warrants (excluding those referred to in
Section 11(b) hereof), the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the
numerator of which shall be the then current per share market price
(as determined pursuant to Section 11(d) hereof) of the Shares on
such record date, less the fair market value (as determined in good
faith by the Board of Directors of the Corporation, whose
determination shall be described in a statement filed with the Rights
Agent and shall be binding on 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 Common Share and
the denominator of which shall be such current per share market price
of the Common Shares; PROVIDED, HOWEVER, that in no event shall the
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consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock of the
Corporation to be issued upon exercise of one Right. Such
adjustments shall be made successively whenever such a record date is
fixed; and in the event that such distribution is not so made, the
Purchase Price shall again be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the
"CURRENT PER SHARE MARKET PRICE" of any security (a "SECURITY" for
the purpose of this Section 11(d)(i)) on any date shall be deemed to
be the average of the daily closing prices per share of such Security
for the thirty (30) consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date; PROVIDED,
HOWEVER, that in the event that the current per share market price of
the Security is determined during a period following the announcement
by the issuer of such Security of (A) a dividend or distribution on
such Security payable in shares of such Security or securities
convertible into such shares, or (B) any subdivision, combination or
reclassification of such Security and prior to the expiration of
thirty (30) Trading Days after the ex-dividend date for such dividend
or distribution, or the record date for such subdivision, combination
or reclassification, then, and in each such case, the current per
share market price shall be appropriately adjusted to reflect the
current market price per share equivalent of such Security. The
closing price for each day shall be the last sale price, regular way,
or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported
in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York
Stock Exchange or, if the Security is not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the
Security is listed or admitted to trading or, if the Security is not
listed or admitted to trading on any national securities exchange,
the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported
by the National Association of Securities Dealers, Inc. Automated
Quotations System ("NASDAQ") or such other system then in use, or, if
on any such date the Security is not quoted by any such organization,
the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Security selected by
the Board of Directors of the Corporation. If on any such date no
such market maker is making a market in the Security, the fair value
of the Security on such date as determined in good faith by the Board
of Directors of the Corporation shall be used. The term "TRADING
DAY" shall mean a day on which the principal national securities
exchange on which the Security is listed or admitted to trading is
open for the transaction of business or, if the Security is not
listed or admitted to trading on any national securities exchange, a
Business Day.
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(ii) For the purpose of any computation hereunder, the
"CURRENT PER SHARE MARKET PRICE" of the Common Shares shall be
determined in accordance with the method set forth in Section
11(d)(i). If the Common Shares are not publicly traded, the "current
per share market price" of the Common Shares shall mean the fair
value per share as determine in good faith by the Board of Directors
of the Corporation, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the
Rights Agent.
(e) Notwithstanding anything herein to the contrary, no
adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in
the Purchase Price; PROVIDED, HOWEVER, that any adjustments which by
reason of this Section 11(e) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 11 shall be made to the nearest
cent or to the nearest hundred thousandth of a Common Share or
thousandth of any other share or security, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than
the earlier of (i) three (3) years from the date of the transaction
which mandates such adjustment or (ii) the Final Expiration Date.
(f) If, as a result of an adjustment made pursuant to
Section 11(a)(ii) or Section 13(a) hereof, the holder of any Right
thereafter exercised shall become entitled to receive any shares of
capital stock of the Corporation other than Shares, thereafter the
number of other shares so receivable upon exercise of any Right shall
be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with respect to
the Common Shares contained in Sections11(a) through (c), inclusive,
and the provisions of Sections 7, 9, 10, 13 and 14 with respect to
the Common Shares shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Corporation
subsequent to any adjustment made to the Purchase Price hereunder
shall evidence the right to purchase, at the adjusted Purchase Price,
the number of Shares purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided
herein.
(h) Unless the Corporation shall have exercised its
election as provided in Section 11(i), upon each adjustment of the
Purchase Price as a result of the calculations made in Sections 11(b)
and (c), each Right outstanding immediately prior to the making of
such adjustment shall thereafter evidence the right to purchase, at
the adjusted Purchase Price, that number of Common Shares (calculated
to the nearest thousandth of a Common Share) obtained by (i)
multiplying (x) the number of Common Shares covered by a Right
immediately prior to this adjustment of the Purchase Price by (y) the
Purchase Price in effect immediately prior to such adjustment of the
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Purchase Price and (ii) dividing the product so obtained by the
Purchase Price in effect immediately after such adjustment of the
Purchase Price.
(i) The Corporation may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in
lieu of any adjustment in the number of Common Shares purchasable
upon the exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights shall be exercisable for the
number of Common Shares for which a Right was exercisable immediately
prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after
adjustment of the Purchase Price. The Corporation shall make a
public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made. This record date may
be the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Right Certificates have been issued, shall be
at least ten (10) days later than the date of the public
announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i),
the Corporation shall, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such record
date Right Certificates evidencing, subject to Section 14 hereof, the
additional Rights to which such holders shall be entitled as a result
of such adjustment, or, at the option of the Corporation, shall cause
to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to
the date of adjustment, and upon surrender thereof, if required by
the Corporation, new Right Certificates evidencing all the Rights to
which such holders shall be entitled after such adjustment. Right
Certificates so to be distributed shall be issued, executed and
countersigned in the manner provided for herein and shall be
registered in the names of the holders of record of Right
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of Common Shares issuable upon the
exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the Purchase Price and the
number of Common Shares which were expressed in the initial Right
Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the
number of Common Shares or other securities issuable upon exercise of
the Rights, the Corporation shall take any corporate action which
may, in the opinion of its counsel, be necessary in order that the
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Corporation may validly and legally issue such number of fully paid
and nonassessable Common Shares or other securities at such adjusted
Purchase Price.
(1) In any case in which this Section 11 shall require that
an adjustment in the Purchase Price be made effective as of a record
date for a specified event, the Corporation may elect to defer until
the occurrence of such event the issuance to the holder of any Right
exercised after such record date the Common Shares or other
securities of the Corporation, if any, issuable upon such exercise
over and above the Common Shares or other securities of the
Corporation, if any, issuable upon exercise on the basis of the
Purchase Price in effect prior to such adjustment; PROVIDED, HOWEVER,
that the Corporation shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive such
additional shares upon the occurrence of the event requiring such
adjustment.
(m) Notwithstanding anything in this Section 11 to the
contrary, the Corporation shall be entitled to make such reductions
in the Purchase Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that it in its sole
discretion shall determine to be advisable in order that (i) any
consolidation or subdivision of the Shares, (ii) issuance wholly for
cash of Common Shares at less than the current market price, (iii)
issuance wholly for cash of Common Shares or securities which by
their terms are convertible into or exchangeable for Common Shares,
(iv) stock dividends or (v) issuance of rights; options or warrants
referred to in this Section 11, hereafter made by the Corporation to
holders of its hares shall not be taxable to such stockholders.
(n) The Corporation covenants and agrees that it shall not,
at any time after the Distribution Date, (i) consolidate with any
other Person (other than a Subsidiary of the Corporation in a
transaction which does not violate Section 11(o) hereof), (ii) merge
with or into any other Person (other than a Subsidiary of the
Corporation in a transaction which does not violate Section 11(o)
hereof), or (iii) sell or transfer (or permit any Subsidiary to sell
or transfer), in one transaction, or a series of related
transactions, assets or earning power aggregating more than 50% of
the assets or earning power of the Corporation and its Subsidiaries
(taken as a whole) to any other Person or Persons (other than the
Corporation and/or any of its Subsidiaries in one or more
transactions each of which does not violate Section 11(o) hereof), if
(x) at the time of or immediately after such consolidation, merger,
sale or transfer there are any charter or by-law provisions or any
rights, warrants or other instruments or securities outstanding or
agreements in effect or other actions taken, which would materially
diminish or otherwise eliminate the benefits intended to be afforded
by the Rights or (y) prior to, simultaneously with or immediately
after such consolidation, merger or sale, the stockholders of the
Person who constitutes, or would constitute, the "Principal Party"
for purposes of Section 13(a) hereof shall have received a
distribution of Rights previously owned by such Person or any of its
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Affiliates and Associates. The Corporation shall not consummate any
such consolidation, merger, sale or transfer unless prior thereto the
Corporation and such other Person shall have executed and delivered
to the Rights Agent a supplemental agreement evidencing compliance
with this Section 11(n).
(o) The Corporation covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23 or
Section 26 hereof, take (or permit any Subsidiary to take) any action
the purpose of which is to, or if at the time such action is taken it
is reasonably foreseeable that the effect of such action is to,
materially diminish or otherwise eliminate the benefits intended to
be afforded by the Rights.
(p) Notwithstanding anything in this Agreement to the
contrary, in the event that at any time after the date of this
Agreement and prior to the Distribution Date, the Corporation shall
(i) declare or pay any dividend on the Common Shares payable in
Common Shares or (ii) effect a subdivision, combination or
consolidation of the Common Shares (by reclassification or otherwise
than by payment of dividends in Common Shares) into a greater or
lesser number of Common Shares, then in any such case, the number of
Rights associated with each Common Share then outstanding, or issued
or delivered thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter
associated with each Common Share following any such event shall
equal the result obtained by multiplying the number of Rights
associated with each Common Share immediately prior to such event by
a fraction the numerator of which shall be the total number of Common
Shares outstanding immediately prior to the occurrence of the event
and the denominator of which shall be the total number of Common
Shares outstanding immediately following the occurrence of such
event. The adjustments provided for in this Section 11(p) shall be
made successively whenever such a dividend is declared or paid or
such a subdivision, combination or consolidation is effected.
(q) The exercise of Rights under Section 11(a)(ii) shall
only result in the loss of rights under Section 11(a)(ii) to the
extent so exercised and shall not otherwise affect the rights
represented by the Rights under this Rights Agreement, including the
rights represented by Section 13.
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR
NUMBER OF SHARES. Whenever an adjustment is made as provided in
Sections 11 or 13 hereof, the Corporation shall promptly (a) prepare
a certificate setting forth such adjustment, and a brief statement of
the facts accounting for such adjustment, (b) file with the Rights
Agent and with each transfer agent for the Common Shares a copy of
such certificate and (c) mail a brief summary thereof to each holder
of a Right Certificate in accordance with Section 26 hereof. The
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Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment therein contained and shall not be
deemed to have knowledge of such adjustment unless and until it shall
have received such certificate.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF
ASSETS OR EARNING POWER. (a) In the event that, on or following the
Shares Acquisition Date, directly or indirectly, (x) the Corporation
shall consolidate with, or merge with and into, any Interested
Stockholder or if in such merger or consolidation all holders of
Common Shares are not treated alike, any other Person, (y) the
Corporation shall consolidate with, or merge with, any Interested
Stockholder or, if in such merger or consolidation all holders of
Common Shares are not treated alike, any other Person, and the
Corporation shall be the continuing or surviving corporation of such
consolidation or merger (other than, in a case of any transaction
described in (x) or (y), a merger or consolidation which would result
in all of the securities generally entitled to vote in the election
of directors ("VOTING SECURITIES") of the Corporation outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into securities of the
surviving entity) all of the voting securities of the Corporation or
such surviving entity outstanding immediately after such merger or
consolidation and the holders of such securities not having changed
as a result of such merger or consolidation), or (z) the Corporation
shall sell or otherwise transfer (or one or more of its Subsidiaries
shall sell or otherwise transfer), in one transaction or a series of
related transactions, assets or earning power aggregating more than
50% of the assets or earning power of the Corporation and its
Subsidiaries (taken as a whole) to any Interested Stockholder or
Persons or, if in such transaction all holders of Common Shares are
not treated alike, any other Person, (other than the corporation or
any Subsidiary of the Corporation in one or more transactions each of
which does not violate Section 11(o) hereof), then, and in each such
case (except as provided in Section 13(d) hereof), proper provision
shall be made so that (i) each holder of a Right, except as provided
in Section 7(e) hereof, shall thereafter have the right to receive,
upon the exercise thereof at a price equal to the then current
Purchase Price, in accordance with the terms of this Agreement and in
lieu of Common Shares, such number of freely tradeable Common Shares
of the Principal Party (as hereinafter defined), not subject to any
liens, encumbrances, rights of first refusal or other adverse claims,
as shall equal the result obtained by (A) multiplying the then
current Purchase Price by the number of Common Shares for which a
Right is then exercisable (without taking into account any adjustment
previously made pursuant to Section 11(a)(ii)) and dividing that
product by (B) 50% of the then current per share market price of the
Common Shares of such Principal Party (determined pursuant to Section
11(d) hereof) on the date of consummation of such Section 13 Event;
(ii) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such Section 13 Event, all the obligations and
duties of the Corporation pursuant to this Agreement; (iii) the term
"Corporation" shall thereafter be deemed to refer to such Principal
Party, it being specifically intended that the provisions of Section
11 hereof shall apply only to such Principal Party following the
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first occurrence of a Section 13 Event; and (iv) such Principal Party
shall take such steps (including, but not limited to, the reservation
of a sufficient number of its Common Shares) in connection with the
consummation of any such transaction as may be necessary to assure
that the provisions hereof shall thereafter be applicable, as nearly
as reasonably may be, in relation to the Common Shares thereafter
deliverable upon the exercise of the Rights.
(b) "PRINCIPAL PARTY" shall mean
(i) in the case of any transaction described in clause
(x) or (y) of the first sentence of Section 13(a), the Person that is
the issuer of any securities into which Common Shares of the
Corporation are converted in such merger or consolidation, and if no
securities are so issued, the Person that is the other party to such
merger or consolidation (including, if applicable, the Corporation if
it is the surviving corporation); and
(ii) in the case of any transaction described in clause
(z) of the first sentence of Section 13(a), the Person that is the
party receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions;
PROVIDED, HOWEVER, that in any of the foregoing cases, (1) if the
Common Shares of such Person are not at such time and have not been
continuously over the preceding twelve (12) month period registered
under Section 12 of the Exchange Act, and such Person is a direct or
indirect Subsidiary of another Person the Common Shares of which are
and have been so registered, "Principal Party" shall refer to such
other Person; (2) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Shares of two or more
of which are and have been so registered, "Principal Party" shall
refer to whichever of such Persons is the issuer of the Common Shares
having the greatest aggregate market value; and (3) in case such
Person is owned, directly or indirectly, by a joint venture formed by
two or more Persons that are not owned, directly or indirectly, by
the same Person, the rules set forth in (1) and (2) above shall apply
to each of the chains of ownership having an interest in such joint
venture as if such party were a "Subsidiary" of both or all of such
joint venturers and the Principal Parties in each such chain shall
bear the obligations set forth in this Section 13 in the same ratio
as their direct or indirect interests in such Person bear to the
total of such interests.
(c) The Corporation shall not consummate any such
consolidation, merger, sale or transfer unless the Principal Party
shall have a sufficient number of its authorized Common Shares which
have not been issued or reserved for issuance to permit the exercise
in full of the Rights in accordance with this Section 13 and unless
prior thereto the Corporation and such Principal Party shall have
executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in paragraphs (a) and (b) of this
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Section 13 and further providing that, as soon as practicable after
the date of any consolidation, merger, sale or transfer mentioned in
paragraph (a) of this Section 13, the Principal Party at its own
expense shall:
(i) prepare and file a registration statement under the
Act with respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form, and use its best
efforts to cause such registration statement to (A) become effective
as soon as practicable after such filing and (B) remain effective
(with a prospectus at all times meeting the requirements of the Act)
until the Final Expiration Date;
(ii) use its best efforts to qualify or register the
Rights and the securities purchasable upon exercise of the Rights
under the blue sky laws of such jurisdictions as may be necessary or
appropriate; and
(iii) deliver to holders of the Rights historical
financial statements for the Principal Party which comply in all
respects with the requirements for registration on Form 10 under the
Exchange Act.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.
The rights under this Section 13 shall be in addition to the rights
to exercise Rights and adjustments under Section 11(a)(ii) and shall
survive any exercise thereof.
(d) Notwithstanding anything in this Agreement to the
contrary, Section 13 shall not be applicable to a transaction
described in subparagraphs (x) and (y) of Section 13(a) if: (i) such
transaction is consummated with a Person or Persons who acquired
Common Shares pursuant to a Permitted Offer (or a wholly owned
Subsidiary of any such Person or Persons); (ii) the price per Common
Share offered in such transaction is not less than the price per
Common Share paid to all holders of Common Shares whose shares were
purchased pursuant to such Permitted Offer; and (iii) the form of
consideration offered in such transaction is the same as the form of
consideration paid pursuant to such Permitted Offer. Upon
consummation of any such transaction contemplated by this Section
13(d), all Rights hereunder shall expire.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Corporation shall not be required to issue fractions of
Rights or to distribute Right Certificates which evidence fractional
Rights. In lieu of such fractional Rights, there shall be paid to
the registered holders of the Right Certificates with regard to which
such fractional Rights would otherwise be issuable, an amount in cash
equal to the same fraction of the current market value of a whole
Right. For the purposes of this Section 14(a), the current market
value of a whole Right shall be the closing price of the Rights for
the Trading Day immediately prior to the date on which such
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fractional Rights would have been otherwise issuable. The closing
price for any day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing
bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock
Exchange or, if the Rights are not listed or admitted to trading on
the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange,
the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported
by NASDAQ or such other system then in use or, if on any such date
the Rights are not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board of
Directors of the Corporation. If on any such date no such market
maker is making a market in the Rights, the fair value of the Rights
on such date as determined in good faith by the Board of Directors of
the Corporation shall be used.
(b) The Corporation shall not be required to issue
fractions of Common Shares upon exercise of the Rights or to
distribute certificates which evidence fractional Common Shares. In
lieu of fractional Shares, the Corporation shall pay to the
registered holders of Right Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one Share. For the purposes
of this Section 14(b), the current market value of a Common Share
shall be the closing price of a Common Share (as determined pursuant
to Section 11(d)(ii) hereof) for the Trading Day immediately prior o
the date of such exercise.
(c) The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Rights or any
fractional share upon exercise of a Right (except as provided above).
Section 15. RIGHTS OF ACTION. All rights of action in
respect of this Agreement, excepting the rights of action given to
the Rights Agent under Section 18 hereof, are vested in the
respective registered holders of the Right Certificates (and, prior
to the Distribution Date, the registered holders of the Common
Shares); and any registered holder of any Right Certificate (or,
prior to the Distribution Date, of the Common Shares), without the
consent of the Rights Agent or of the holder of any other Right
Certificate (or, prior to the Distribution Date, of the Common
Shares), may, in his own behalf and for his own benefit, enforce, and
may institute and maintain any suit, action or proceeding against the
Corporation to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Right Certificate in the manner
provided in such Right Certificate and in this Agreement. Without
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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 obligations of any Person subject to, this
Agreement.
Section 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a
Right, by accepting the same, consents and agrees with the
Corporation and the Rights Agent and with every other holder of a
Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common
Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the principal office or offices of the Rights Agent
designated for such purpose, duly endorsed or accompanied by a proper
instrument of transfer and with the appropriate form fully executed;
(c) subject to Section 6 and Section 7(f) hereof, the
Corporation and the Rights Agent may deem and treat the person in
whose name the Right Certificate (or, prior to the Distribution Date,
the associated Common Shares certificate) is registered as the
absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Right
Certificate or the associated Common Shares certificate made by
anyone other than the Corporation or the Rights Agent) for all
purposes whatsoever, and neither the Corporation nor the Rights
Agent, subject to the last sentence of Section 7(e) hereof, shall be
required to be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Corporation nor the Rights Agent shall have any
liability to any holder of a Right or a beneficial interest in a
Right or other Person as a result of its inability to perform any of
its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a
court of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule, regulation
or executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of such
obligation; PROVIDED, HOWEVER, the Corporation must use its best
efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as possible.
Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A
STOCKHOLDER. No holder, as such, of any Right Certificate shall be
entitled to vote, receive dividends or be deemed for any purpose the
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holder of the Common Shares or any other securities of the
Corporation which may at any time be issuable on the exercise of the
Rights represented thereby, nor shall anything contained herein or in
any Right Certificate be construed to confer upon the holder of any
Right Certificate, as such any of the rights of a stockholder of the
Corporation or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or
to give or withhold consent to any corporate action, or to receive
notice of meetings or other actions affecting stockholders (except as
provided in Section 25 hereof), or to receive dividends or other
distributions or to exercise any preemptive or subscription rights,
or otherwise, until the Right or Rights evidenced by such Right
Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. CONCERNING THE RIGHTS AGENT. The Corporation
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 Corporation also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, or
expense, incurred without negligence, bad faith or willful misconduct
on the part of the Rights Agent, for anything done or omitted by the
Rights Agent in connection with the acceptance and administration of
this Agreement, including the costs and expenses of defending against
any claim of liability in the premises. The indemnity provided for
herein shall survive the expiration of the Rights and the termination
of this Agreement.
The Rights Agent shall be protected and shall incur no
liability for, or in respect of any action taken, suffered or omitted
by it in connection with, its administration of this Agreement in
reliance upon any Right Certificate or certificate for Common Shares
or for other securities of the Corporation, instrument of assignment
or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other paper or
document believed by it to be genuine and to be signed, executed and,
where necessary, verified or acknowledged, by the proper Person or
Persons.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF
RIGHTS AGENT. Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights Agent
shall be a party, or any corporation succeeding to the stock transfer
or all or substantially all of the corporate trust business of the
Rights Agent or any successor Rights Agent, shall be the successor to
the Rights Agent under this Agreement without the execution or filing
of any paper or any further act on the part of any of the parties
hereto, provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of
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Section 21 hereof. In case at the time such successor Rights Agent
shall succeed to the agency created by this Agreement, any of the
Right Certificates shall have been countersigned but not delivered,
any such successor Rights Agent may adopt the countersignature of a
predecessor Rights Agent and deliver such Right Certificates so
countersigned; and in case at that time any of the Right Certificates
shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the
predecessor or in the name of the successor Rights Agent; and in all
such cases such Right Certificates shall have the full force provided
in the Right Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have
been countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates
so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in
its changed name; and in all such cases such Right Certificates shall
have the full force provided in the Right Certificates and in this
Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent
undertakes only those duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of which
the Corporation and the holders of Right Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who
may be legal counsel for the Corporation), and the opinion of such
counsel shall be full and complete authorization and protection to
the Rights Agent as to any action taken or omitted by it in good
faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that
any fact or matter (including, without limitation, the identity of an
Acquiring Person and the determination of the current market price of
any Security) be proved or established by the Corporation prior to
taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a
certificate signed by any one of the Chairman of the Board, the Chief
Executive Officer, the President, any Vice President, the Treasurer
or the Secretary of the Corporation and delivered to the Rights
Agent; and such certificate shall be full authorization to the Rights
Agent for any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
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(c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason
of any of the statements of fact or recitals contained in this
Agreement or in the Right Certificates (except its countersignature
on such Right Certificates) or be required to verify the same, but
all such statements and recitals are and shall be deemed to have been
made by the Corporation only.
(e) The Rights Agent shall not be under any responsibility
in respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights Agent)
or in respect of the validity or execution of any Right Certificate
(except its countersignature thereof); nor shall it be responsible
for any breach by the Corporation of any covenant or condition
contained in this Agreement or in any Rights Certificate; nor shall
it be responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 7(e) hereof)
or any adjustment required under the provisions of Section 11 or
Section 13 hereof or responsible for the manner, method or amount of
any such adjustment or the ascertaining of the existence of facts
that would require any such adjustment (except with respect to the
exercise of Rights evidenced by Right Certificates after receipt of
the certificate described in Section 12 hereof); nor shall it by any
act hereunder be deemed to make any representation or warranty as to
the authorization or reservation of any Common Shares to be issued
pursuant to this Agreement or any Right Certificate or as to whether
any Common Shares will, when issued, be validly authorized and
issued, fully paid and nonassessable.
(f) The Corporation 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 one of the Chairman of the Board, the Chief
Executive Officer, the President, any Vice President, the Treasurer
or the Secretary of the Corporation, and to apply to such officers
for advice or instructions in connection with its duties, and shall
not be liable for any action taken or suffered by it in good faith or
lack of action in accordance with instructions of any such officer or
for any delay in acting while waiting for those instructions. Any
application by the Rights Agent for written instructions from the
Corporation may, at the option of the Rights Agent, set forth in
writing any action proposed to be taken or omitted by the Rights
Agent under this Rights Agreement and the date on or after which such
action shall be taken or such omission shall be effective. The
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Rights Agent shall not be liable for any action taken by, or omission
of, the Rights Agent in accordance with a proposal included in any
such application on or after the date specified in such application
(which date shall not be less than five Business Days after the date
any officer of the Corporation actually receives such application,
unless any such officer shall have consented in writing to an earlier
date) unless, prior to taking any such action (or the effective date
in the case of an omission), the Rights Agent shall have received
written instruction in response to such application specifying the
action to be taken or omitted.
(h) The Rights Agent and any stockholder, director, officer
or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Corporation or become pecuniarily
interested in any transaction in which the Corporation may be
interested, or contract with or lend money to the Corporation 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 Corporation or for any
other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the
Rights Agent shall not be answerable or accountable for any act,
default, neglect or misconduct of any such attorneys or agents or for
any loss to the Corporation resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the
selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder
or in the exercise of its rights if there shall be reasonable grounds
for believing that repayment of such funds or adequate
indemnification against such risk or liability is not reasonably
assured to it.
(k) If, with respect to any Rights Certificate surrendered
to the Rights Agent for exercise or transfer, the certificate
attached to the form of assignment or form of election to purchase,
as the case may be, has not been completed, the Rights Agent shall
not take any further action with respect to such requested exercise
of transfer without first consulting with the Corporation.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or
any successor Rights Agent may resign and be discharged from its
duties under this Agreement upon thirty (30) days' notice in writing
mailed to the Corporation and to the transfer agent of the Common
Shares by registered or certified mail, and to the holders of the
Right Certificates by first-class mail. The Corporation may remove
the Rights Agent or any successor Rights Agent upon sixty (60) days'
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notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to the transfer agent of the Common
Shares by registered or certified mail, and to holders of the Right
Certificates by first-class mail. If the Rights Agent shall resign
or be removed or shall otherwise become incapable of acting, the
Corporation shall appoint a successor to the Rights Agent. if the
Corporation shall fail to make such appointment within a period of
sixty (60) days after giving notice of such removal or after it has
been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right
Certificate (who shall, with such notice, submit his Right
Certificate for inspection by the Corporation), then the registered
holder of any Right Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Corporation or by
such a court, shall be a corporation organized and doing business
under the laws of the United States or of the State of New York (or
of any other state of the United States so long as such corporation
is authorized to do business as a banking institution in the State of
New York), in good standing, having an office in the State of New
York, which is authorized under such laws to exercise corporate trust
or stock transfer powers and is subject to supervision or examination
by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at
least $100,000,000. After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent
without further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at
the time held by it hereunder, and execute and deliver any further
assurance, conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment the Corporation
shall file notice thereof in writing with the predecessor Rights
Agent and the transfer agent of the Common Shares and mail a notice
thereof in writing to the registered holders of the Right
Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case
may be.
Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Corporation may, at its option, issue new
Right Certificates evidencing Rights in such form as may be approved
by its Board of Directors to reflect any adjustment or change in the
Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Right certificates made
in accordance with the provisions of this Agreement.
In addition, in connection with the issuance or sale of
Common Shares following the Distribution Date and prior to the
earliest of the Redemption Date, the Final Expiration Date and the
consummation of a transaction contemplated by Section 13(d) hereof,
the Corporation (a) shall with respect to Common Shares so issued or
sold pursuant to the exercise of stock options or under any employee
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plan or arrangement, or upon the exercise, conversion or exchange of
securities, notes or debentures issued by the Corporation, and (b)
may, in any other case, if deemed necessary or appropriate by the
Board of Directors of the Corporation, issue Right Certificates
representing the appropriate number of Rights in connection with such
issuance or sale; PROVIDED, HOWEVER, that (i) the Corporation shall
not be obligated to issue any such Right Certificates if, and to the
extent that, the Corporation shall be advised by counsel that such
issuance would create a significant risk of material adverse tax
consequences to the Corporation or the Person to whom such Right
Certificate would be issued, and (ii) no Right Certificate shall be
issued if, and to the extent that, appropriate adjustment shall
otherwise have been made in lieu of the issuance thereof.
Section 23. REDEMPTION AND TERMINATION. (a)(i) Subject
to Section 23(a)(iii), the Board of Directors of the Corporation may,
at its option, redeem all but not less than all the then outstanding
Rights at a redemption price of $.01 per Right, as such amount may be
appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such redemption
price being hereinafter referred to as the "REDEMPTION PRICE"), at
any time prior to the earlier of (x) the time that any Person becomes
an Acquiring Person, or (y) the Final Expiration Date. The
Corporation may, at its option, pay the Redemption Price either in
Common Shares (based on the "current per share market price," as
defined in Section 11(d) hereof, of the Common Shares at the time of
redemption) or cash; PROVIDED that if the Corporation elects to pay
the Redemption Price in Common Shares, the Corporation shall not be
required to issue any fractional Common Shares and the number of
Common Shares issuable to each holder of Rights shall be rounded down
to the next whole share.
(ii) In addition, subject to Section 23(a)(iii), the Board
of Directors of the Corporation may, at its option, at any time
following a Shares Acquisition Date but prior to any Section 13 Event
redeem all but not less than all of the then outstanding Rights at
the Redemption Price in connection with any Section 13 Event in which
all holders of Common Shares are treated alike and not involving
(other than as a holder of Common Shares being treated like all other
such holders) an Interested Stockholder.
(iii) The Board of Directors of the Corporation may only
redeem Rights pursuant to Section 23(a)(i) or 23(a)(ii) hereof if (A)
a majority of the Disinterested Directors, and (B) a majority of all
of the directors of the Corporation authorize such redemption.
Notwithstanding anything in this Agreement to the contrary, the
Rights may not be redeemed pursuant to this Section 23 unless there
is at least one member of the Board of Directors of the Corporation
that is a Disinterested Director at the time of such redemption.
(b) In the case of a redemption permitted under Section
23(a)(i), immediately upon the date for redemption set forth (or
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determined in the manner specified in) in a resolution of the Board
of Directors of the Corporation ordering the redemption of the
Rights, evidence of which shall have been filed with the Rights
Agent, and without any further action and without any notice, the
right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right so held. In the case of a redemption
permitted only under Section 23(a)(ii), evidence of which shall have
been filed with the Rights Agent, the right to exercise the Rights
will terminate and represent only the right to receive the Redemption
Price upon the later of ten Business Days following the giving of
notice or the expiration of any period during which the rights under
Section 11(a)(ii) may be exercised. The Corporation shall promptly
give public notice of any such redemption; PROVIDED, HOWEVER, that
the failure to give, or any defect in, any such notice shall not
affect the validity of such redemption. Within ten (10) days after
such date for redemption set forth in a resolution of the Board of
Directors ordering the redemption of the Rights, the Corporation
shall mail a notice of redemption to all the holders of the then
outstanding Rights at their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the Distribution
Date, on the registry books of the transfer agent for the Common
Shares. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice.
Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made. Neither the
Corporation nor any of its Affiliates or Associates may redeem,
acquire or purchase for value any Rights at any time in any manner
other than that specifically set forth in this Section 23 and other
than in connection with the purchase of Common Shares prior to the
Distribution Date.
(c) The Corporation may, at its option, discharge all of
its obligations with respect to the Rights by (i) issuing a press
release announcing the manner of redemption of the Rights in
accordance with this Agreement and (ii) mailing payment of the
Redemption Price to the registered holders of the Rights at their
last addresses as they appear on the registry books of the Rights
Agent or, prior to the Distribution Date, on the registry books of
the Transfer Agent of the Common Shares, and upon such action, all
outstanding Rights and Right Certificates shall be null and void
without any further action by the Corporation.
Section 24. EXCHANGE. (a) Subject to Section 24(d), the
Board of Directors of the Corporation may, at its option, at any time
after the time that any Person becomes an Acquiring Person, exchange
all or part of the then outstanding and exercisable Rights (which
shall not include Rights that have become void pursuant to the
provisions of Section 7(e) and Section 11(a)(ii) hereof) for Common
Shares of the Corporation at an exchange ratio of one Common Share
per Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof (such
exchange ratio being hereinafter referred to as the
"EXCHANGE RATIO"). Notwithstanding the foregoing, the Board of
Directors shall not be empowered to effect such exchange at any time
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after any Person (other than the Corporation, any Subsidiary of the
Corporation, any employee benefit plan of the Corporation or any such
Subsidiary, any entity holding Common Shares for or pursuant to the
terms of any such plan or any trustee, administrator or fiduciary of
such a plan), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of 50% or more of the Common
Shares then outstanding.
(b) Immediately upon the action of the Board of Directors
of the Corporation ordering the exchange of any Rights pursuant to
subsection (a) of this Section 24 and without any further action and
without any notice, the right to exercise such rights shall terminate
and the only right thereafter of a holder of such Rights shall be to
receive that number of Common Shares equal to the number of such
rights held by such holder multiplied by the Exchange Ratio. The
Corporation shall promptly give public notice of any such exchange;
PROVIDED, HOWEVER, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. The
Corporation promptly shall mail a notice of any such exchange to all
of the holders of such Rights at their last addresses as they appear
upon the registry books of the Rights Agent. Any notice which is
mailed in the manner herein provided shall be deemed given, whether
or not the holder receives the notice. Each such notice of exchange
will state the method by which the exchange of the Common Shares for
Rights will be effected and, in the event of any partial exchange,
the number of Rights which will be exchanged. Any partial exchange
shall be effected pro rata based on the number of Rights (other than
Rights which have become void pursuant to the provisions of Section
7(e) and Section 11(a)(ii) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient Common
Shares issued but not outstanding or authorized but unissued to
permit any exchange of Rights as contemplated in accordance with this
Section 24, the Corporation shall take all such action as may be
necessary to authorize additional Common Shares for issuance upon
exchange of the Rights.
(d) The Board of Directors may only exchange Rights
pursuant to Section 24(a) hereof if (i) a majority of the
Disinterested Directors, and (ii) a majority of all of the directors
of the Corporation authorize such exchange. Notwithstanding anything
in this Agreement to the contrary, the Rights may not be exchanged
pursuant to this Section 24 unless there is at least one member of
the Board of Directors of the Corporation that is a Disinterested
Director at the time of such exchange.
Section 25. NOTICE OF CERTAIN EVENTS. (a) In case the
Corporation shall propose (i) to pay any dividend payable in stock of
any class to the holders of its Common Shares or to make any other
distribution to the holders of its Common Shares (other than a
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regularly quarterly cash dividend), (ii) to offer to the holders of
its Common Shares rights or warrants to subscribe for or to purchase
any additional Common Shares or shares of stock of any class or any
other securities, rights or options, (iii) to effect any
reclassification of its Common Shares (other than a reclassification
involving only the subdivision of outstanding Common Shares), (iv) to
effect any consolidation or merger into or with any other Person
(other than a Subsidiary of the Corporation in a transaction which
does not violate Section 11(o) hereof), or to effect any sale or
other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer) in one or more transactions, of
50% or more of the assets or earning power of the Corporation and its
Subsidiaries (taken as a whole) to any other Person or Persons (other
than the corporation and/or any of its Subsidiaries in one or more
transactions each of which does not violate Section 11(o) hereof), or
(v) to effect the liquidation, dissolution or winding up of the
Corporation, then, in each such case, the Corporation shall give to
each holder of a Right Certificate, in accordance with Section 26
hereof, a notice of such proposed action to the extent feasible and
file a certificate with the Rights Agent to that effect, which shall
specify the record date for the purposes of such stock dividend, or
distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of
participation therein by the holders of the Common Shares, if any
such date is to be fixed, and such notice shall be so given in the
case of any action covered by clause (i) or (ii) above at least
twenty (20) days prior to the record date for determining holders of
the Common Shares for purposes of such action, and in the case of any
such other action, at least twenty (20) days prior to the date of the
taking of such proposed action or the date of participation therein
by the holders of the Common Shares, whichever shall be the earlier.
(b) In case of a Section 11(a)(ii) Event, then (i) the
Corporation shall as soon as practicable thereafter give to each
holder of a Right Certificate, in accordance with Section 26 hereof,
a notice of the occurrence of such event, which notice shall describe
such event and the consequences of such event to holders of Rights
under Section 11(a)(ii) hereof and (ii) all references in the
preceding paragraph (a) to Common Shares shall be deemed thereafter
to refer also, if appropriate, to capital stock equivalents as
provided for in Section 11(a)(iii).
Section 26. NOTICES. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of
any Right Certificate to or on the Corporation shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed
(until another address is filed in writing with the Rights Agent) as
follows:
AutoInfo, Inc.
1600 Route 208
Fairlawn, New Jersey 07410
Attention: Scott Zecher, President and Chief Operating
Officer
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Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Corporation
or by the holder of any Right Certificate to or on the Rights Agent
shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing
with the Corporation) as follows:
American Stock Transfer & Trust Company
40 Wall Street
New York, New York 10005
Attention: George Karfunkel, Executive Vice President
Notices or demands authorized by this Agreement to be given or made
by the Corporation or the Rights Agent to the holder of any Right
Certificate or, if prior to the Distribution Date, to the holder of
certificates representing Common Shares shall be sufficiently given
or made if sent by first-class mail, postage prepaid, addressed to
such holder at the address of such holder as shown on the registry
books of the Corporation.
Section 27. SUPPLEMENTS AND AMENDMENTS. (a) Prior to the
Distribution Date, subject to Section 27(b) hereof, the Corporation
and the Rights Agent shall, if the Corporation so directs, supplement
or amend any provision of this Agreement without the approval of any
holders of certificates representing Common Shares. From and after
the Distribution Date, subject to Section 27(b) hereof, the
Corporation and the Rights Agent shall, if the Corporation so
directs, supplement or amend this Agreement without the approval of
any holders of Right Certificates in order (i) to cure any ambiguity,
(ii) to correct or supplement any provision contained herein which
may be defective or inconsistent with any other provisions herein,
(iii) to shorten or lengthen any time period hereunder or (iv) to
change or supplement the provisions hereunder in any manner which the
Corporation may deem necessary or desirable and which shall not
adversely affect the interests of the holders of Right Certificates
(other than an Acquiring Person or an Affiliate or Associate of an
Acquiring Person); PROVIDED, HOWEVER, that this Agreement may not be
supplemented or amended to lengthen, pursuant to clause (iii) of this
sentence, (A) a time period relating to when the Rights may be
redeemed at such time as the Rights are not then redeemable, or (B)
any other time period unless such lengthening is for the purpose of
protecting, enhancing or clarifying the rights of, and/or the
benefits to, the holders of Rights. Upon the delivery of a
certificate from an appropriate officer of the Corporation which
states that the proposed supplement or amendment is in compliance
with the terms of this Section 27, the Rights Agent shall execute
such supplement or amendment, provided that such supplement or
amendment does not adversely affect the rights or obligations of the
Rights Agent under Section 18 or Section 20 of this Agreement. Prior
to the Distribution Date, the interests of the holders of Rights
shall be deemed coincident with the interests of the holders of
Common Shares.
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(b) The Corporation shall not supplement or amend any
provision of this Agreement unless (i) a majority of the
Disinterested Directors and (ii) a majority of all of the directors
of the Corporation authorizes such supplement or amendment.
Notwithstanding anything in this Agreement to the contrary, this
Agreement may not be supplemented or amended pursuant to this Section
27 unless there is at least one member of the Board of Directors of
the Corporation that is a Disinterested Director at the time of such
supplement or amendment.
Section 28. DETERMINATION AND ACTIONS BY THE BOARD OF
DIRECTORS, ETC. Subject to Sections 1(n), 23(a)(iii), 24(d) and
27(b) hereof, the Board of Directors of the Corporation shall have
the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board, or
the Corporation, or as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the
right and power to (i) interpret the provisions of this Agreement,
and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including, without limitation,
a determination to redeem or not redeem the Rights or to amend the
Agreement and whether any proposed amendment adversely affects the
interests of the holders of Right Certificates). For all purposes of
this Agreement, any calculation of the number of Common Shares or
other securities outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding
Common Shares or any other securities of which any Person is the
Beneficial Owner, shall be made in accordance with the last sentence
of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the
Exchange Act as in effect on the date of this Agreement. All such
actions, calculations, interpretations and determinations (including,
for purposes of clause (y) below, all omissions with respect to the
foregoing) which are done or made by the Board in good faith, shall
(x) be final, conclusive and binding on the Corporation, the Rights
Agent, the holders of the Right Certificates and all other parties,
and (y) not subject the Board to any liability to the holders of the
Right Certificates.
Section 29. SUCCESSORS. All the covenants and provisions
of this Agreement by or for the benefit of the Corporation or the
Rights Agent shall bind and inure to the benefit of their respective
successors and assigns hereunder.
Section 30. BENEFITS OF THIS AGREEMENT. Nothing in this
Agreement shall be construed to give to any person or corporation
other than the Corporation, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution
Date, the Common Shares) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole
and exclusive benefit of the Corporation, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common Shares).
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Section 31. SEVERABILITY. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of
this Agreement shall remain in full force and effect and shall in no
way be affected, impaired or invalidated; PROVIDED, HOWEVER, that
notwithstanding anything in this Agreement to the contrary, if any
such term, provision, covenant or restriction is held by such court
or authority to be invalid, void or unenforceable and the Board of
Directors of the Corporation determines in its good faith judgment
that severing the invalid language from this Agreement would
adversely affect the purpose or effect of this Agreement, the right
of redemption set forth in Section 23 hereof shall be reinstated and
shall not expire until the close of business on the tenth day
following the date of such determination by the Board of Directors.
Section 32. GOVERNING LAW. This Agreement, each Right and
each Right Certificate issued hereunder shall be deemed to be a
contract made under the laws of the State of Delaware and for all
purposes shall be governed by and construed in accordance with the
laws of such State applicable to contracts to be made and performed
entirely within such State.
Section 33. COUNTERPARTS. This Agreement may be executed
in any number of counterparts and each of such counterparts shall for
all purposes be deemed to be an original, and all such counterparts
shall together constitute but one and the same instrument.
Section 34. DESCRIPTIVE HEADINGS. Descriptive headings of
the several Sections of this Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of
any of the provisions hereof.
38
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and attested, all as of the date and year first
above written.
<TABLE>
<CAPTION>
AUTOINFO, INC.
<S> <C>
By /S/ SCOTT ZECHER
Name: Scott Zecher
Title: President and
Chief Operating Officer
AMERICAN STOCK TRANSFER & TRUST COMPANY
By /S/ HERBERT J. LEMMER
Name: Herbert J. Lemmer
Title:Vice President
</TABLE>
39
<PAGE>
EXHIBIT A
Form of Right Certificate
Certificate No. R- ______ Rights
NOT EXERCISABLE AFTER MARCH 30, 2005, OR EARLIER IF REDEEMED
BY THE CORPORATION. THE RIGHTS ARE SUBJECT TO REDEMPTION AT
$.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS
AGREEMENT, RIGHTS ISSUED TO, OR HELD BY, ANY PERSON WHO IS,
WAS OR BECOMES AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE THEREOF (AS DEFINED IN THE RIGHTS AGREEMENT) AND
CERTAIN RELATED PERSONS, WHETHER CURRENTLY HELD BY OR ON
BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, SHALL
BECOME NULL AND VOID.
Right Certificate
AutoInfo, Inc.
This certifies that ___________, or registered assigns, is
the registered owner of the number of Rights set forth above, each of
which entitles the owner thereof, subject to the terms, provisions
and conditions of the Rights Agreement, dated as of March 30, 1995
(the "RIGHTS AGREEMENT"), between AutoInfo, Inc., a Delaware
corporation (the "CORPORATION"), and American Stock Transfer & Trust
Company (the "RIGHTS AGENT"), to purchase from the Corporation at any
time after the Distribution Date (as such term is defined in the
Rights Agreement) and prior to 5:00 P.M., New York time, on March 30,
2005, unless the Rights evidenced hereby shall have been previously
redeemed by the Corporation, at the principal office or offices of
the Rights Agent designated for such purpose, or at the office of its
successor as Rights Agent, one fully paid non-assessable share of
A-1
<PAGE>
Common Stock, with a par value of $.01 per share (the "COMMON
SHARES"), of the Corporation, at a purchase price of $15.00 per
Common Share (the "PURCHASE PRICE"), upon presentation and surrender
of this Right Certificate with the Form of Election to Purchase duly
executed. The number of Rights evidenced by this Right Certificate
(and the number of Common Shares which may be purchased upon exercise
hereof) set forth above, and the Purchase Price set forth above, are
the number and Purchase Price as of March 30, 1995 based on the
Common Shares as constituted at such date.
Upon the occurrence of a Section 11(a)(ii) Event (as such
term is defined in the Rights Agreement), if the Rights evidenced by
this Right Certificate are beneficially owned by (i) an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as
such terms are defined in the Rights Agreement), (ii) a transferee of
any such Acquiring Person, Associate or Affiliate who becomes a
transferee after the Acquiring Person becomes such, or (iii) under
certain circumstances specified in the Rights Agreement, a transferee
of any such Acquiring Person, Associate or Affiliate who becomes a
transferee prior to or concurrently with the Acquiring Person
becoming such, such Rights shall become null and void and no holder
hereof shall have any right with respect to such Rights from and
after the occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and
the number of Common Shares or other securities which may be
purchased upon the exercise of the Rights evidenced by this Right
Certificate are subject to modification and adjustment upon the
happening of certain events, including Triggering Events (as such
term is defined in the Rights Agreement).
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by reference
and made a part hereof and to which Rights Agreement reference is
hereby made for a full description of the rights, limitations of
rights, obligations, duties and immunities hereunder of the Rights
Agent, the Corporation and the holders of the Right Certificates,
which limitations of rights include the temporary suspension of the
exercisability of such Rights under the specific circumstances set
forth in the Rights Agreement. Copies of the Rights Agreement are on
file at the principal executive offices of the Corporation and the
principal office or offices of the Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office of the Rights
A-2
<PAGE>
Agent, may be exchanged for another Right Certificate or Right
Certificates of like tenor and date evidencing Rights entitling the
holder to purchase a like aggregate number of Common Shares or other
securities as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase.
If this Right Certificate shall be exercised in part, the holder
shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Certificate may be redeemed by the
Corporation at a redemption price of $.01 per Right (subject to
adjustment as provided in the Rights Agreement) payable in Common
Shares or cash.
No fractional Common Shares will be issued upon the exercise
of any Right or Rights evidenced hereby, but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of
the Common Shares or of any other securities of the Corporation which
may at any time be issuable on the exercise hereof, nor shall
anything contained in the Rights Agreement or herein be construed to
confer upon the holder hereof, as such, any of the rights of a
stockholder of the Corporation or any right to vote for the election
of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate
action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to
receive dividends or other distributions or to exercise any
preemptive or subscription rights, or otherwise, until the Right or
Rights evidenced by this Right Certificate shall have been exercised
as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights
Agent.
A-3
<PAGE>
WITNESS the facsimile signature of the proper officers of the
Corporation and its corporate seal. Dated as of _________, ______.
<TABLE>
<CAPTION>
[SEAL]
ATTEST: AUTOINFO, INC.
<S> <C>
Attest:
By______________________ By
Name: Name:
Title: Title:
Countersigned:
AMERICAN STOCK TRANSFER &
TRUST COMPANY,
By
Authorized Signatory
Name:
Title:
</TABLE>
A-4
<PAGE>
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED __________________________________________________
hereby sells, assigns and transfers unto
________________________________________
________________________________________________________________________
(Please print name and address of transferee)
________________________________________________________________________
this Right Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint _________
Attorney, to transfer the within Right Certificate on the books of
the within-named Corporation, with full power of substitution.
Dated: ____________, _____
___________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a
registered national securities exchange, a member of the National
Association of Securities Dealers, Inc., or a commercial bank,
savings association, credit union or trust company having an office
or correspondent in the United States or other eligible guarantor
institution which is a participant in a signature guarantee medallion
program.
- ---------------------------------------------------------------------
The undersigned hereby certifies that (1) the Rights
evidenced by this Right Certificate are not being sold, assigned or
transferred by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate thereof (as such terms are
defined in the Right Agreement) and (2) after due inquiry and to the
best knowledge of the undersigned, the undersigned did not acquire
the Rights evidenced by this Rights Certificate from any Person who
is or was an Acquiring Person or an Affiliate or Associate thereof
(as such terms are defined in the Rights Agreement).
___________________________
Signature
A-5
<PAGE>
Form of Reverse Side of Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder
if such holder desires to exercise Rights
represented by the Right Certificate.)
To the Rights Agent:
The undersigned hereby irrevocably elects to exercise
__________ Rights represented by this Right Certificate to purchase
the Common Shares or other securities issuable upon the exercise of
such Rights and requests that certificates for such Common Shares or
other securities be issued in the name of:
Please insert social security
or other indentifying number
________________________________________________
________________________________________________________________________
(Please print name and address of transferee)
________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by
this Right Certificate, a new Right Certificate for the balance
remaining of such Rights shall be registered in the name of and
delivered to:
Please insert social security
or other indentifying number
________________________________________________
________________________________________________________________________
(Please print name and address of transferee)
________________________________________________________________________
Dated: _________, 19__
___________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a
registered national securities exchange, a member of the National
Association of Securities Dealers, Inc., or a commercial bank,
savings association, credit union or trust company having an office
A-6
<PAGE>
or correspondent in the United States or other eligible guarantor
institution which is a participant in a signature guarantee medallion
program.
A-7
<PAGE>
Form of Reverse Side of Right Certificate -- continued.
- ---------------------------------------------------------------------
The undersigned hereby certifies that (1) the Rights
evidenced by this Right Certificate are not being exercised by or on
behalf of a Person who is or was an Acquiring Person or an Affiliate
or Associate thereof (as such terms are defined in the Rights
Agreement) and (2) after due inquiry and to the best knowledge of the
undersigned, the undersigned did not acquire the Rights evidenced by
this Rights Certificate from any Person who is or was an Acquiring
Person or an Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement).
___________________________
Signature
- ---------------------------------------------------------------------
NOTICE
The signature on the foregoing Forms of Assignment and
Election and certificates must conform to the name as written upon
the face of this Right Certificate in every particular, without
alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form
of Assignment or the Form of Election to Purchase, as the case may
be, is not completed, the Corporation and the Rights Agent will deem
the Beneficial Owner of the Rights evidenced by this Right
Certificate to be an Acquiring Person or an Affiliate or Associate
thereof (as such terms are defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
A-8
<PAGE>
EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE
COMMON SHARES
UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS
AGREEMENT, RIGHTS ISSUED TO, OR HELD BY, ANY PERSON WHO IS, WAS OR
BECOMES AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE THEREOF (AS
DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN RELATED PERSONS, WHETHER
CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT
HOLDER, SHALL BECOME NULL AND VOID.
On March 30, 1995, the Board of Directors of AutoInfo, Inc.
(the "Corporation") declared a dividend distribution of one right (a
"RIGHT") for each outstanding share of Common Stock, par value $.01
per share (the "COMMON SHARES"), of the Corporation. The dividend is
payable to the stockholders of record on April 10, 1995 (the "RECORD
DATE"), and with respect to Common Shares issued thereafter until the
Distribution Date (as defined below) and, in certain circumstances,
with respect to Common Shares issued after the Distribution Date.
Except as set forth below, each Right, when it becomes exercisable,
entitles the registered holder to purchase from the Corporation one
Common Share at a price of $15.00 per one Common Share (the "PURCHASE
PRICE"), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement (the "RIGHTS AGREEMENT")
between the Corporation and American Stock Transfer & Trust Company,
as Rights Agent (the "RIGHTS AGENT"), dated as of March 30, 1995.
Initially, the Rights will be attached to all certificates
representing Common Shares then outstanding, and no separate Right
Certificates (as hereinafter defined) will be distributed. The
Rights will separate from the Common Shares upon the earliest to
occur of (i) a person or group of affiliated or associated persons
having acquired beneficial ownership of 15% or more of the
outstanding Common Shares (except pursuant to a Permitted Offer, as
hereinafter defined); or (ii) 10 days (or such later date as the
Board may determine) following the commencement of, or announcement
of an intention to make, a tender offer or exchange offer the
consummation of which would result in a person or group becoming an
Acquiring Person (as hereinafter defined) (the earliest of such dates
being called the "DISTRIBUTION DATE"). A person or group whose
acquisition of Common Shares causes a Distribution Date pursuant to
clause (i) above is an "ACQUIRING PERSON." The date that a person or
group becomes an Acquiring Person is the "SHARES ACQUISITION DATE."
B-1
<PAGE>
The Rights Agreement provides that, until the Distribution
Date, the Rights will be transferred with and only with the Common
Shares. Until the Distribution Date (or earlier redemption or
expiration of the Rights) new Common Share certificates issued after
the Record Date upon transfer or new issuance of Common Shares will
contain a notation incorporating the Rights Agreement by reference.
Until the Distribution Date (or earlier redemption or expiration of
the Rights), the surrender for transfer of any certificates for
Common Shares outstanding as of the Record Date, even without such
notation or a copy of this Summary of Rights being attached thereto,
will also constitute the transfer of the Rights associated with the
Common Shares represented by such certificate. As soon as
practicable following the Distribution Date, separate certificates
evidencing the Rights ("RIGHT CERTIFICATES") will be mailed to
holders of record of the Common Shares as of the close of business on
the Distribution Date (and to each initial record holder of certain
Common Shares issued after the Distribution Date), and such separate
Right Certificates alone will evidence the Rights.
THE RIGHTS ARE NOT EXERCISABLE UNTIL THE DISTRIBUTION DATE
and will expire at the close of business on March 30, 2005, unless
earlier redeemed by the Corporation as described below.
In the event that any person becomes an Acquiring Person
(except pursuant to a tender or exchange offer which is for all
outstanding Common Shares at a price and on terms which a majority of
the disinterested directors (as hereinafter defined) and a majority
of the entire Board determines to be adequate and in the best
interests of the Corporation, its stockholders and other relevant
constituencies, other than such Acquiring Person, its affiliates and
associates (a "PERMITTED OFFER")), each holder of a Right will
thereafter have the right (the "Flip-In Right) to receive upon
exercise the number of Common shares (or, in certain circumstances,
other securities of the Corporation) having a value (immediately
prior to such triggering event) equal to two times the exercise price
of the Right. Notwithstanding the foregoing, following the
occurrence of the event described above, all Rights that are, or
(under certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person or any affiliate or
associate thereof will be null and void.
If the Corporation does not have sufficient treasury stock
or authorized and unissued Common Shares fully to honor the Rights,
the rights of holders to purchase Common Stock may be proportionately
reduced and the Board of Directors may, in its discretion issue other
equity or debt securities upon exercise of the Rights. With the
approval of a majority of the "disinterested directors" and a
majority of the entire Board, the Board may also issue Common Shares
in exchange for all of the exercisable Rights after the Distribution
Date at the rate of one Share for each Right.
B-2
<PAGE>
In the event that, at any time following the Shares
Acquisition Date, (i) the Corporation is acquired in a merger or
other business combination transaction in which the holders of all of
the outstanding Common Shares immediately prior to the consummation
of the transaction are not the holders of all of the surviving
corporation's voting power, or (ii) more than 50% of the
Corporation's assets or earning power is sold or transferred, in
either case with or to an Acquiring Person or any affiliate or
associate or any other person in which such Acquiring Person,
affiliate or associate has an interest or any person acting on behalf
of or in concert with such Acquiring Person, affiliate or associate,
or, if in such transaction all holders of Common Shares are not
treated alike, any other person, then each holder of a Right (except
Rights which previously have been voided as set forth above) shall
thereafter have the right (the "FLIP-OVER RIGHT") to receive, upon
exercise, common shares of the acquiring company having a value equal
to two times the exercise price of the Right. The holder of a Right
will continue to have the Flip-Over Right whether or not such holder
exercises or surrenders the Flip-In Right.
The Purchase Price payable, and the number of Common Shares
or other securities issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event
of a stock dividend on, or a subdivision, combination or
reclassification of, the Common Shares, (ii) upon the grant to
holders of the Common Shares of certain rights or warrants to
subscribe for or purchase Common Shares at a price, or securities
convertible into Common Shares with a conversion price, less than the
then current market price of the Common shares or (iii) upon the
distribution to holders of the Common Shares of evidences of
indebtedness or assets (excluding regular quarterly cash dividends)
or of subscription rights or warrants (other than those referred to
above).
The number of outstanding Rights and the number of Common
Shares issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a
stock dividend on the Common Shares payable in Common Shares or
subdivisions, consolidations or combinations of the Common Shares
occurring, in any such case, prior to the Distribution Date.
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an adjustment
of at least 1% in such Purchase Price. No fractional Common Shares
will be issued and in lieu thereof, an adjustment in cash will be
made based on the market price of the Common Shares on the last
trading day price to the date of exercise.
At any time prior to the earlier to occur of (i) a person
becoming an Acquiring Person or (ii) the expiration of the Rights,
and under certain other circumstances, the Corporation may redeem the
Rights in whole, but not in part, at a price of $.01 per Right (the
B-3
<PAGE>
"Redemption Price") which redemption shall be effective upon the
approval of a majority of the "disinterested directors" and a
majority of the Board of Directors. Additionally, following the
Shares Acquisition Date, upon the approval of a majority of the
"disinterested directors" and a majority of the Board of Directors,
the Corporation may redeem the then outstanding Rights in whole, but
not in part, at the Redemption Price, PROVIDED that such redemption
is in connection with a merger or other business combination
transaction or series of transactions involving the Corporation in
which all holders of Common Shares are treated alike but not
involving an Acquiring Person or its affiliates or associates.
All of the provisions of the Rights Agreement may be amended
by the Board of Directors of the Corporation prior to the
Distribution Date, upon the approval of a majority of the
"disinterested directors" and a majority of the Board of Directors.
After the Distribution Date, the provisions of the Rights Agreement
may be amended, upon the approval of a majority of the "disinterested
directors" and a majority of the Board of Directors in order to cure
any ambiguity, defect or inconsistency, to make changes which do not
adversely affect the interests of holders of Rights (excluding the
interests of any Acquiring Person), or, subject to certain
limitations, to shorten or lengthen any time period under the Rights
Agreement.
Any amendments of the Rights Agreement and/or any redemption
of the Rights permitted pursuant to the terms of the Rights Agreement
under certain specified circumstances must be approved by a majority
of "disinterested directors". The term "disinterested director"
means any director of the Company who is neither an officer or
employee of the Company nor a "significant stockholder" of the
Company nor, any representative, Associate or Affiliate (as such
terms are defined in the Rights Agreement) of any "significant
stockholder" nor any person attempting to effect a business
combination or similar transaction nor any representative, Associate
or Affiliate of any such person. The term " significant stockholder"
means any stockholder who at any time on and/or subsequent to the
date of the adoption of the Plan is the beneficial owner of 10% of
the outstanding Common Stock.
Until a Right is exercised, the holder thereof, as such,
will have no rights as a stockholder of the Corporation, including,
without limitation, the right to vote or to receive dividends. While
the distribution of the Rights will not be taxable to stockholders of
the Corporation, stockholders may, depending upon the circumstances,
recognize taxable income should the Rights become exercisable or upon
the occurrence of certain events thereafter.
B-4
<PAGE>
