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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(B) OR 12(G) OF THE
SECURITIES EXCHANGE ACT OF 1934
John H. Harland Company
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(Exact Name of Registrant as Specified in Its Charter)
Georgia 58-0278260
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(State of Incorporation or Organization) (IRS Employer Identification No.)
2939 Miller Road
Decatur, Georgia 30035
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(Address of Principal Executive Offices) (Zip Code)
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If this form relates to the If this form relates to the registration
registration of a class of securities of a class of securities pursuant to Section
pursuant to Section 12(b) of the Exchange 12(g) of the Exchange Act and is effective
Act and is effective pursuant to General pursuant to General Instruction A.(d), please
Instruction A.(c), please check the check the following box. [ ]
following box. [X]
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Securities Act registration statement file number to which this form
relates:_____________________
(If applicable)
Securities to be registered pursuant to Section 12(b) of the Act:
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Title of Each Class to Name of Each Exchange on Which
be so Registered Each Class is to be Registered___
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Common Stock Purchase Rights, New York Stock Exchange
expiring July 5, 2009
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Securities to be registered pursuant to Section 12(g) of the Act: None
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INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
On December 17, 1998, the Board of Directors of John H. Harland Company
(the "Company") adopted a Shareholder Rights Plan pursuant to a Rights Agreement
(the "Rights Agreement") and authorized and declared a dividend of one Common
Stock Purchase Right (a "Right") with respect to each outstanding share of
common stock, par value $1.00 per share ("Common Stock"), of the Company. The
dividend is payable on July 5, 1999 to the shareholders of record on that date
(the "Record Date"), and to each holder of Common Stock issued thereafter until
the Distribution Date (as hereinafter defined) or the expiration or earlier
redemption of the Rights. Except as set forth below, each Right entitles the
registered holder thereof to purchase from the Company at any time after the
Distribution Date one share of Common Stock at a Price of $90.00 per share,
subject to adjustment (the "Purchase Price"). The description and terms of the
Rights are set forth in the Rights Agreement.
Initially, the Rights will attach to all certificates of outstanding
shares of Common Stock, and no separate Right Certificates (as hereinafter
defined) will be distributed. The Rights will become exercisable and separate
from the shares of Common Stock upon the earlier to occur of (i) ten days after
the date (the "Stock Acquisition Date") of a public announcement that a person
or group of affiliated or associated persons has acquired beneficial ownership
of 15% or more of the outstanding Common Stock (such person or group being
hereinafter referred to as an "Acquiring Person"(1)); or (ii) ten business 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 the beneficial
owner of 30% or more of the outstanding Common Stock (the earlier of such dates
in clauses (i) and (ii) being called the "Distribution Date"). Shares of Common
Stock beneficially owned by the Company or any subsidiary of the Company will
not be considered outstanding for purposes of calculating the percentage
ownership of any person.
Until the Distribution Date (or earlier redemption or expiration of the
Rights), (i) the Rights will be evidenced by the certificates for the Common
Stock, (ii) the Rights will be transferred with, and only with, the shares of
Common Stock, (iii) new Common Stock certificates issued after the Record Date
upon transfer or new issuance of shares of Common Stock will contain a notation
incorporating the Rights Agreement by reference, and (iv) the surrender for
transfer of any certificates for shares of Common Stock outstanding as of the
Record Date, even without such notation, will also constitute the transfer of
the Rights associated
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(1) Each of the following persons will not be deemed to be an Acquiring
Person even if they have acquired, or obtained the right to acquire, beneficial
ownership of 15% or more of the outstanding Common Stock: (i) the Company, any
subsidiary of the Company, or any employee benefit plan of the Company or of any
subsidiary of the Company, and (ii) any person who would otherwise become an
Acquiring Person solely by virtue of a reduction in the number of outstanding
shares of Common Stock unless and until such person shall become the beneficial
owner of any additional shares of Common Stock. 3 Each of the following persons
will not be deemed to be an Acquiring Person even if they have acquired, or
obtained the right to acquire, beneficial ownership of 15% or more of the
outstanding Common Stock: (i) the Company, any subsidiary of the Company, or any
employee benefit plan of the Company or of any subsidiary of the Company, and
(ii) any person who would otherwise become an Acquiring Person solely by virtue
of a reduction in the number of outstanding shares of Common Stock unless and
until such person shall become the beneficial owner of any additional shares of
Common Stock.
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with the shares of Common Stock represented by such certificate. As soon as
practicable following the Distribution Date, separate certificates evidencing
the Rights (collectively, the "Right Certificates") will be mailed to holders of
record of the shares of Common Stock as of the close of business on the
Distribution Date, and such separate Right Certificates alone will evidence the
Rights. The Rights are not exercisable until the Distribution Date. The Rights
will expire at the close of business on July 5, 2009, unless earlier redeemed by
the Company as described below.
If any person becomes an Acquiring Person, each holder of a Right will
thereafter have the right (the "Flip-In Right") to receive upon payment of the
Purchase Price, shares of Common Stock (or in certain circumstances, cash,
property or other securities of the Company) having a value equal to two times
the Purchase Price of the Right. Notwithstanding the foregoing, all Rights that
are, or were, beneficially owned by an Acquiring Person or any affiliate or
associate thereof will be null and void and not exercisable.
If, at any time on or after the Stock Acquisition Date, (i) the Company
is acquired in a merger or other business combination transaction in which the
holders of all of the outstanding shares of Common Stock 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 Company's assets, cash
flow or earning Power is sold or transferred other than in the ordinary course
of the Company's business, then each holder of a Right (except Rights which have
previously been voided as set forth above) shall thereafter have the right (the
"Flip-Over Right") to receive, in lieu of shares of Common Stock and upon
exercise and payment of the Purchase Price, common shares of the acquiring
company having a value equal to two times the Purchase Price. If a transaction
would otherwise result in a holder's having a Flip-In as well as a Flip-Over
Right, then only the Flip-Over Right will be exercisable. If a transaction
results in a holder's having a Flip-Over Right subsequent to a transaction
resulting in a holder's having a Flip-In Right, a holder will have Flip-Over
Rights only to the extent such holder's Flip-In Rights have not been exercised.
The Purchase Price payable, and the number of shares of Common Stock or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Common
Stock, (ii) upon the grant to holders of the Common Stock of certain rights or
warrants to subscribe for Common Stock or convertible securities at less than
the current market price of the Common Stock or (iii) upon the distribution to
holders of the Common Stock of evidences of indebtedness or assets (excluding
dividends payable in Common Stock) or of subscription rights or warrants (other
than those referred to above). However, no adjustment in the Purchase Price will
be required until cumulative adjustments require an adjustment of at least 1%.
The number of outstanding Rights and the number of shares of Common
Stock issuable upon exercise of each Right are also subject to adjustment in the
event of a stock split of the Common Stock or a stock dividend on the Common
Stock payable in Common Stock or subdivisions, consolidations or combinations of
the Common Stock occurring, in any such case, prior to the Distribution Date.
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At any time after a Person becomes an Acquiring Person and before the
acquisition by a Person of 50% or more of the outstanding Common Stock of the
Company, the Board of Directors may, at its option, issue Common Stock or common
stock equivalents of the Company in mandatory redemption of, or in exchange for,
all or part of the then outstanding exercisable Rights (other than Rights owned
by such Acquiring Person which would become null and void) at an exchange ratio
of one share of Common Stock, or common stock equivalents equal to one share of
Common Stock, per Right, subject to adjustment.
To the extent that, after the triggering of Flip-In Rights,
insufficient shares of Common Stock are available for the exercise in full of
the Rights, holders of Rights will receive upon exercise shares of Common Stock
to the extent available and then cash, property or other securities of the
Company, in proportions determined by the Company, so that the aggregate value
received is equal to twice the Purchase Price.
The Company is not required to issue fractional shares of Common Stock
and in lieu thereof, a payment in cash will be made to the holder of such Rights
equal to the same fraction of the current value of share of Common Stock.
Following the triggering of the Flip-In Rights, the Company will not be required
to issue fractional shares of Common Stock upon exercise of the Rights and, in
lieu thereof, a payment in cash will be made to the holder of such Rights equal
to the same fraction of the current market value of a share of Common Stock.
At any time prior to the Distribution Date, the Board of Directors of
the Company may redeem all, but not less than all, of the then outstanding
Rights at a price of $.001 per Right (the "Redemption Price"). The redemption of
the Rights may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
Immediately upon the action of the Board of Directors ordering redemption of the
Rights, the right to exercise the Rights will terminate and the only right of
the holders of Rights will be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends.
The issuance of the Rights is not taxable to the Company or to
shareholders under presently existing federal income tax law, and will not
change the way in which shareholders can presently trade the Company's shares of
Common Stock. If the Rights should become exercisable, shareholders, depending
on then existing circumstances, may recognize taxable income.
Prior to the Stock Acquisition Date, the Rights Agreement generally may
be amended by the Company without the consent of the holders of the Rights or
the Common Stock. On or after the Stock Acquisition Date, the Company may amend
the Rights Agreement only to (i) cure any ambiguity, (ii) correct or supplement
any provision which may be defective or inconsistent with the other provisions
of the Rights Agreement, or (iii) change or supplement the Rights Agreement in
any other manner which the Company may deem necessary or desirable, provided
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that no amendment shall adversely affect the interests of the holders of Rights
(other than any interest of an Acquiring Person or an affiliate or associate of
an Acquiring Person).
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Company's Board of Directors. Accordingly, the
existence of the Rights may deter certain acquirors from making takeover
proposals or tender offers.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to this Registration Statement on Form 8-A
with respect to the Rights filed with the Securities and Exchange Commission. A
copy of the Rights Agreement is available free of charge from the Company. This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is
incorporated in this summary description by reference.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
Certain matters discussed herein may constitute Forward-looking
Statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended,
each as amended by the Private Securities Litigation Reform Act of 1995. Those
statements include statements regarding the intent, belief or current
expectations of the Company and members of its management team as well as the
assumptions on which such statements are based. Any such Forward-looking
Statements are not guarantees of future performance and the Company's actual
results could differ materially from those set forth in such Forward-looking
Statements. Factors currently known to management that could cause actual
results to differ materially from those set forth in such Forward-looking
Statements include risks detailed from time to time in the Company's filings
with the Securities and Exchange Commission, including Quarterly Reports on Form
10-Q, Current Reports on Form 8-K and Annual Reports on Form 10-K. The Company
undertakes no obligation to update or revise Forward-looking Statements to
reflect changed assumptions, the occurrence of unanticipated events or changes
to future operating results over time.
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ITEM 2. EXHIBITS.
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Exhibit No. Description of Exhibit
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4.1 Rights Agreement (the "Rights Agreement"), dated December 17, 1998,
as amended, between the Registrant and First Chicago Trust Company
of New York, as rights agent
4.2 Form of Rights Certificate
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SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereto duly authorized.
JOHN H. HARLAND COMPANY
Date: July 1, 1999 By: /s/ John C. Walters
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Name: John C. Walters
Title: Vice President, Secretary
and General Counsel
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INDEX TO EXHIBITS
ITEM 2. EXHIBITS.
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Exhibit No. Description of Exhibit
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4.1 Rights Agreement (the "Rights Agreement"), dated December 17, 1998,
as amended, between the Registrant and First Chicago Trust Company of
New York, as rights agent
4.2 Form of Rights Certificate
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EXHIBIT 4.1
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JOHN H. HARLAND COMPANY
and
FIRST CHICAGO TRUST COMPANY OF NEW YORK,
as Rights Agent
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Rights Agreement
Dated as of December 17, 1998
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TABLE OF CONTENTS
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Section 1. Certain Definitions............................................................................... 1
Section 2. Appointment of Rights Agent....................................................................... 7
Section 3. Issuance of Right Certificates.................................................................... 8
Section 4. Form of Right Certificates........................................................................ 10
Section 5. Countersignature and Registration................................................................. 11
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed,
Lost or Stolen Right Certificates................................................................. 12
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights..................................... 14
Section 8. Cancellation and Destruction of Right Certificates................................................ 16
Section 9. Reservation and Availability of Shares of Common Stock............................................ 17
Section 10. Common Stock Record Date.......................................................................... 19
Section 11. Adjustments to Number and Kind of Shares, Number of Rights or Purchase Price...................... 20
Section 12. Certification of Adjustments...................................................................... 32
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power.............................. 33
Section 14. Fractional Rights and Fractional Shares........................................................... 39
Section 15. Rights of Action.................................................................................. 40
Section 16. Agreement of Right Holders........................................................................ 40
Section 17. Right Certificate Holder Not Deemed a Shareholder................................................. 41
Section 18. Concerning the Rights Agent....................................................................... 42
Section 19. Merger or Consolidation or Change of Name of Rights Agent......................................... 43
Section 20. Duties of Rights Agent............................................................................ 44
Section 21. Change of Rights Agent............................................................................ 47
Section 22. Issuance of New Right Certificates................................................................ 48
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Section 23. Redemption........................................................................................ 49
Section 24. Exchange.......................................................................................... 50
Section 25. Notice of Proposed Actions........................................................................ 52
Section 26. Notices........................................................................................... 53
Section 27. Supplements and Amendments........................................................................ 55
Section 28. Determinations and Actions by the Board........................................................... 55
Section 29. Successors........................................................................................ 56
Section 30. Benefits of this Rights Agreement................................................................. 56
Section 31. Georgia Contract.................................................................................. 56
Section 32. Counterparts...................................................................................... 57
Section 33. Descriptive Headings.............................................................................. 57
Section 34. Severability...................................................................................... 57
Exhibit A -- Form of Right Certificate
Exhibit B -- Form of Summary of Rights
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RIGHTS AGREEMENT
This agreement ("Rights Agreement"), dated as of December 17, 1998,
between JOHN H. HARLAND COMPANY, a Georgia corporation (the "Company"), and
FIRST CHICAGO TRUST COMPANY OF NEW YORK, a New York corporation (the "Rights
Agent").
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company on December 17, 1998 (i)
authorized the issuance and declared a dividend of one right (a "Right") for
each share of the common stock, par value $1.00 per share ("Common Stock"), of
the Company outstanding as of the close of business on July 5, 1999 (the "Record
Date"), each Right representing the right to purchase one share of Common Stock
of the Company upon the terms and subject to the conditions hereafter set forth,
and (ii) further authorized the issuance of one Right with respect to each share
of Common Stock of the Company that shall become outstanding between July 5,
1999, and the earliest of the Distribution Date, the Expiration Date or the
Final Expiration Date (each such term as defined herein); and
WHEREAS, the Board of Directors does not believe that any Person (as
defined herein) is as of the date hereof the Beneficial Owner (as defined
herein) of 15% or more of the outstanding Common Stock;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms shall have the meanings indicated:
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a. "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates (as such term is
hereinafter defined) and Associates (as such term is hereinafter defined) of
such Person, shall be the Beneficial Owner (as such term is hereinafter defined)
of 15% or more of the outstanding Common Stock; provided, however, that (i) the
term "Acquiring Person" shall not include an Exempt Person (as such term is
hereinafter defined), (ii) a Person shall not be deemed to have become an
Acquiring Person for any purpose of this Agreement if the Board of Directors in
its good faith judgment determines that a Person has inadvertently become the
Beneficial Owner of 15% or more of the outstanding Common Stock of the Company
(or in the case of a Permitted Holder, has inadvertently acquired additional
shares of Common Stock of the Company so that it is no longer a Permitted
Holder) and within ten days after the date upon which the Company shall first
become aware of the occurrence of such an event, the Board of Directors in its
sole discretion provides such Person with a thirty day period to divest a
sufficient number of shares so that such Person no longer is the Beneficial
Owner of 15% or more of the outstanding Common Stock of the Company (or in the
case of a Permitted Holder, to divest all shares of Common Stock of the Company
which prevent such Person from being a Permitted Holder), and such Person has so
divested such shares of Common Stock of the Company at the end of any such
thirty day period and has not acquired any additional shares of Common Stock of
the Company prior to the end of such thirty day period; and (iii) shares of
Common Stock Beneficially Owned by the Company or any Subsidiary of the Company
shall not be considered outstanding for purposes of calculating any Person's
percentage ownership of the outstanding Common Stock of the Company.
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b. "Adjustment Shares" shall have the meaning set forth in Section
11(a)(ii) hereof.
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 ("Exchange Act"), as in effect
on the date of this Agreement.
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, directly or indirectly, 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 (whether or not in writing), or upon the exercise of
conversion rights, exchange rights, rights (other than these Rights),
warrants or options, or otherwise; provided, however, that a Person
shall not be deemed the "Beneficial Owner" of, or to "Beneficially
Own", securities tendered pursuant to a tender or exchange offer made
by or on behalf of such Person or any of such Person's Affiliates or
Associates pursuant to, and in accordance with the applicable rules and
regulations promulgated under the Exchange Act, until such tendered
securities are accepted for purchase or exchange; or (B) the right to
vote pursuant to any agreement, arrangement or understanding (whether
or not in writing); provided, however, that a Person shall not be
deemed the "Beneficial Owner" of, or to "Beneficially Own", any
securities if the agreement,
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arrangement or understanding to vote such security (1) arises solely
from a revocable proxy or consent given to such Person in response to a
public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations of the Exchange
Act and (2) is not also then reportable by such Person on Schedule 13D
or Schedule 13G under the Exchange Act (or any comparable or successor
report); or
iii. which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (whether or not in writing) for the purpose of acquiring,
holding, voting (except as described in the proviso to clause (B) of
subparagraph (ii) of this paragraph (d)) or disposing of any securities
of the Company; provided, -------- however, that nothing in this
paragraph (d) shall cause a Person engaged in business as an
underwriter ------- of securities to be the Beneficial Owner of, or to
Beneficially Own, any securities acquired through such Person's
participation in good faith in a firm commitment underwriting until the
expiration of forty days after the date of such acquisition.
e. "Business Day" shall mean any day other than a Saturday, Sunday, or
a day on which banking institutions in the State of Georgia are authorized or
obligated by law or executive order to close.
f. "Close of Business" on any given date shall mean 5:00 P.M., Atlanta,
Georgia time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Atlanta, Georgia time, on the next
succeeding Business Day.
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g. "Common Stock" when used with reference to the Company shall mean
the common stock (presently $1.00 par value per share) of the Company. "Common
Stock" when used with reference to any Person other than the Company shall mean
the capital stock or other equity interests with the greatest per share or per
unit voting power of such other Person or, if such other Person is a Subsidiary
of or is controlled by another Person, the Person or Persons which ultimately
controls such first-mentioned Person.
h. "Common Stock Equivalents" shall have the meaning set forth in
Section 11(a)(iii) hereof.
i. "Current Market Price" shall have the meaning set forth in Section
11(d) hereof.
j. "Current Value" shall have the meaning set forth in Section
11(a)(iii) hereof.
k. "Distribution Date" shall have the meaning set forth in Section 3(a)
hereof.
l. "Equivalent Common Stock" shall have the meaning set forth in
Section 11(b) hereof.
m. "Exchange Act" shall have the meaning set forth in Section l(c)
hereof.
n. "Exchange Ratio" shall have the meaning set forth in Section 24(a)
hereof.
o. "Exempt Person" shall mean:
i. the Company, any Subsidiary of the Company, any employee
benefit plan or employee stock plan of the Company or of any Subsidiary
of the Company, or any Person or entity organized, appointed,
established or holding Common Stock for or pursuant to the terms of any
such plan; and
ii. any Person who as of the date hereof was the Beneficial
Owner of 15% or more of the outstanding Common Stock; provided,
however, that such
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Person shall not be an Exempt Person if subsequent to the date hereof
such Person becomes the Beneficial Owner of any additional shares of
Common Stock.
p. "Expiration Date" shall have the meaning set forth in Section 7(a)
hereof.
q. "Final Expiration Date" shall have the meaning set forth in Section
7(a) hereof.
r. "NYSE" shall have the meaning set forth in Section 9(b) hereof.
s. "Permitted Holder" shall mean any Person who would otherwise become
an Acquiring Person solely by virtue of a reduction in the number of total
outstanding shares of Common Stock; provided, however, that such Person shall
not be a Permitted Holder if, subsequent to such reduction, such Person shall
become the Beneficial Owner of any additional shares of Common Stock.
t. "Person" shall mean any individual, firm, corporation, partnership,
joint venture, limited liability company, association or other entity, and shall
include any successor (by merger or otherwise) of such entity.
u. "Principal Party" shall have the meaning set forth in Section 13(b)
hereof.
v. "Purchase Price" shall have the meaning set forth in Section 4(a)
hereof.
w. "Record Date" shall have the meaning set forth in the recitals
clause at the beginning of this Rights Agreement.
x. "Redemption Price" shall have the meaning set forth in Section 23(a)
hereof.
y. "Right Certificate" shall have the meaning set forth in Section 3(a)
hereof.
z. "Section 11(a)(ii) Event" shall mean an event described in Section
11(a)(ii) hereof.
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aa. "Section 11(a)(ii) Trigger Date" shall have the meaning set forth
in Section 11(a)(iii) hereof.
bb. "Section 13 Event" shall mean any event described in clause (x),
(y) or (z) of Section 13(a) hereof.
cc. "Securities Act" shall mean the Securities Act of 1933, as amended.
dd. "Stock Acquisition Date" shall mean the first date of a public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) or (g) under the Exchange
Act) by the Company or an Acquiring Person that an Acquiring Person has become
such; provided, however, that if such Person is determined not to have become an
Acquiring Person pursuant to Section 1(a), then no Stock Acquisition Date shall
be deemed to have occurred.
ee. "Subsidiary" of a Person shall mean any corporation or other entity
of which securities or other ownership interests having ordinary voting power
sufficient to elect a majority of the board of directors or other persons
performing similar functions are Beneficially Owned, directly or indirectly, by
such Person.
ff. "Substitution Period" shall have the meaning set forth in Section
11(a)(iii) hereof.
gg. "Summary of Rights" shall have the meaning set forth in Section
3(b) hereof.
hh. "Trading Day" shall have the meaning set forth in Section 11(d)
hereof.
ii. "Triggering Event" shall mean any event described in Section
11(a)(ii) or Section 13 hereof.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance
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with Section 3, shall prior to the Distribution Date also be the holders of the
Common Stock) in accordance with the terms and conditions hereof, and the Rights
Agent hereby accepts such appointment. The Company may from time to time appoint
such co-Rights Agents as it may deem necessary or desirable. If the Company
appoints one or more co-Rights Agents, the respective duties of the Rights Agent
and any co-Rights Agents shall be as the Company shall determine.
Section 3. Issuance of Right Certificates.
a. Until the earlier of (i) the Close of Business on the tenth day
after the Stock Acquisition Date or (ii) the Close of Business on the tenth
Business Day (or such later date as may be determined by action of the Board of
Directors prior to such time as any Person becomes an Acquiring Person) after
the date of the commencement by any Person (other than an Exempt Person) of, or
the first public announcement of the intent of any Person (other than an Exempt
Person) to commence, a tender or exchange offer upon the successful consummation
of which such Person, together with its Affiliates and Associates, would be the
Beneficial owner of 30% or more of the outstanding Common Stock (irrespective of
whether any shares are actually purchased pursuant to such offer) (the earlier
of such dates described in clauses (i) and (ii) being referred to herein as the
"Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of Section 3(c) hereof) by the certificates for the Common Stock
registered in the names of the holders of the Common Stock (which certificates
for Common Stock shall be deemed also to be certificates for Rights) and not by
separate Right certificates, and (y) each Right (and the right to receive
separate Right Certificates) will be transferable only in connection with the
transfer of a share (subject to adjustment as hereinafter provided) of Common
Stock. As soon as practicable after the Distribution Date, the Company will
prepare and execute, and
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the Rights Agent will send, by first-class, insured, postage prepaid mail, to
each record holder of the Common Stock as of the Close of Business on the
Distribution Date, as shown by the records of the Company, at the address of
such holder shown on such records, a Right Certificate in substantially the form
of Exhibit A hereto ("Right Certificate") evidencing one Right for each share of
Common Stock so held, subject to adjustment as provided herein. As of and after
the Distribution Date, the Rights will be evidenced solely by such Right
Certificates and will be transferable separately from the Common Stock.
b. As promptly as practicable following the Record Date, the Company
will send a copy of a Summary of Rights to Purchase Common Stock, substantially
in the form attached hereto as Exhibit B ("Summary of Rights"), by first-class,
postage prepaid mail, to each record holder of Common Stock as of the Close of
Business on the Record Date, at the address of such holder shown on the records
of the Company.
c. With respect to certificates for Common Stock outstanding as of the
Record Date until the Distribution Date (or, if earlier, the Expiration Date or
the Final Expiration Date), the Rights will be evidenced by certificates for
Common Stock registered in the names of the holders thereof together with a copy
of the Summary of Rights. Until the Distribution Date (or, if earlier, the
Expiration Date or Final Expiration Date), the surrender for transfer of any
certificate for Common Stock outstanding on the Record Date, with or without a
copy of the Summary of Rights attached thereto, shall also constitute the
surrender for transfer of the Rights associated with the Common Stock
represented thereby.
d. Certificates issued for Common Stock (including, without limitation,
certificates issued upon transfer or exchange of Common Stock) after the Record
Date, but prior
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<PAGE> 13
to the earliest of the Distribution Date, the Expiration Date or the Final
Expiration Date, shall have impressed on, printed on, written on or otherwise
affixed to them the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between John H.
Harland Company and First Chicago Trust Company of New York as Rights
Agent, dated as of December 17, 1998 (the "Rights Agreement"), the
terms of which are incorporated herein by reference and a copy of which
is on file at the principal executive office of John H. Harland
Company. Under certain circumstances as set forth in the Rights
Agreement, such Rights will be evidenced by separate certificates and
will no longer be evidenced by this certificate. John H. Harland
Company will mail to the holder of this certificate a copy of the
Rights Agreement without charge after receipt by it of a written
request therefor. Under certain circumstances as provided in the Rights
Agreement, Rights issued to or beneficially owned by Acquiring Persons
or their Associates or Affiliates (as defined in the Rights Agreement)
or any subsequent holder of such Rights may become null and void.
With respect to such certificates containing the foregoing legend, the Rights
associated with the Common Stock represented by such certificates shall, until
the earliest of the Distribution Date, Expiration Date or the Final Expiration
Date, be evidenced by such certificates alone, and the surrender for transfer of
any such certificate shall also constitute the surrender for transfer of the
Rights associated with the Common Stock represented thereby. If the Company
purchases or acquires any Common Stock after the Record Date but prior to the
Distribution Date, any Rights associated with such Common Stock shall be deemed
canceled and retired so that the Company shall not be entitled to exercise any
Rights associated with shares of Common Stock which are no longer outstanding.
Section 4. Form of Right Certificates.
a. The Right Certificates (and the forms of election to purchase shares
and of assignment to be printed on the reverse thereof), when, as and if issued,
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 Company may deem
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<PAGE> 14
appropriate and as are not inconsistent with the provisions of this Rights
Agreement, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange or trading system on which the Rights may from time to time be listed
or traded, or to conform to usage. Subject to the provisions of Sections 11 and
22 hereof, the Right Certificates whenever distributed, shall be dated as of the
Record Date and on their face shall entitle the holders thereof to purchase one
share of Common Stock, or other securities or property as provided herein, as
the same may from time to time be adjusted as provided herein, at the price of
Ninety Dollars ($90.00), as the same may from time to time be adjusted as
provided herein (the "Purchase Price").
b. Notwithstanding any other provision of this Rights Agreement, any
Right Certificate that represents Rights that are or were at any time on or
after the Distribution Date Beneficially Owned by an Acquiring Person or any
Affiliate or Associate thereof (or any transferee of such Rights) shall have
impressed on, printed on, written on or otherwise affixed to it (if the Company
or the Rights Agent has knowledge that such Person is an Acquiring Person or an
Associate or Affiliate thereof or transferee of such Persons or a nominee of any
of the foregoing) the following legend:
The beneficial owner of the Rights represented by this Right
Certificate is an Acquiring Person or an Affiliate or Associate (as
defined in the Rights Agreement) of an Acquiring Person or a subsequent
holder of such Right Certificate beneficially owned by such Persons.
Accordingly, under circumstances specified in the Rights Agreement,
this Right Certificate and the Rights represented hereby will become
null and void.
Notwithstanding the above provision, failure to place such legend on any Right
Certificate representing Rights which are otherwise null and void pursuant to
the terms of this Agreement shall not affect the null and void status of such
Rights.
Section 5. Countersignature and Registration.
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a. The Right Certificates shall be executed on behalf of the Company by
its Chief Executive Officer, President or any Vice President, either manually or
by facsimile signature, and shall have affixed thereto the Company's seal or a
facsimile thereof which shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile signature. The Right
Certificates shall be countersigned (which countersignature may be a facsimile)
by the Rights Agent and shall not be valid for any purpose unless so
countersigned. If any officer of the Company who shall have signed any of the
Right Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights Agent,
and issued and delivered with the same force and effect as though the person who
signed such Right Certificates had not ceased to be such officer of the Company;
and any Right Certificate may be signed on behalf of the Company by any person
who, at the actual date of the execution of such Right Certificate, shall be a
proper officer of the Company to sign such Right Certificate, although at the
date of the execution of this Rights Agreement any such person was not such an
officer.
b. Following the Distribution Date, the Rights Agent will keep or cause
to be kept, at its principal office, books for registration and transfer of the
Right Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Right Certificates, the number of
Rights evidenced on its face by each of the Right Certificates, the date of each
of the Right Certificates, and the certificate numbers for each of the Right
Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
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<PAGE> 16
a. Subject to the provisions of 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 Expiration Date or the Final Expiration Date, any
Right Certificate or Right Certificates may be (a) transferred or (b) split up,
combined or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of shares of Common
Stock (or, following a Triggering Event, Common Stock, other securities, cash or
other assets, as the case may be) as the Right Certificate or Right Certificates
surrendered then entitled such holder to purchase. Any registered holder
desiring to transfer any Right Certificate shall surrender the Right Certificate
at the principal office of the Rights Agent with the form of assignment on the
reverse side thereof (or enclose with such Right Certificate a written
instrument of transfer in a form satisfactory to the Company and the Rights
Agent), duly executed by the registered holder thereof or his attorney duly
authorized in writing, and with such signature duly guaranteed. Any registered
holder desiring to split up, combine or exchange any Right Certificate shall
make such request in writing delivered to the Rights Agent, and shall surrender
the Right Certificate or Right Certificates to be split up, combined or
exchanged at the principal office of the Rights Agent. Thereupon the Rights
Agent shall countersign (which countersignature may be a facsimile) and deliver
to the person entitled thereto a Right Certificate or Right Certificates, as the
case may be, as so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Right
Certificates.
b. Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, if
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<PAGE> 17
requested by the Company, reimbursement to the Company and the Rights Agent of
all reasonable expenses incidental thereto, and upon surrender to the Rights
Agent and cancellation of the Right Certificate if mutilated, the Company will
execute and deliver a new Right Certificate of like tenor to the Rights Agent
for delivery to the registered holder in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
a. Subject to Section 7(e), the registered holder of any Right
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein, including without limitation, the restrictions on
exercisability set forth in Section 9(b), Section 11(a)(iii) and Section 23(a)),
in whole or in part at any time after the Distribution Date upon surrender of
the Right Certificate, with the form of election to purchase on the reverse side
thereof duly executed (with such signature duly guaranteed), to the Rights Agent
at the principal office of the Rights Agent designated for such purpose together
with payment of the aggregate Purchase Price with respect to each Right
exercised, subject to adjustment as hereinafter provided, at or prior to the
earliest of (i) the Close of Business on July 5, 2009 ("Final Expiration Date"),
(ii) the time at which the Rights are redeemed as provided in Section 23 hereof
(such date being herein referred to as the "Expiration Date") or (iii) the time
at which such Rights are exchanged as provided in Section 24.
b. The Purchase Price shall initially be $90.00 for each share of
Common Stock issued pursuant to the exercise of a Right. The Purchase Price and
the number of shares of Common Stock or other securities or consideration to be
acquired upon exercise of a Right shall be subject to adjustment from time to
time as provided in Sections 11 and 13 hereof. The
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<PAGE> 18
Purchase Price shall be payable in lawful money of the United States of America,
in accordance with Section 7(c) hereof.
c. Except as provided in Section 7(d) hereof, upon receipt of a Right
Certificate representing exercisable rights, with the form of election to
purchase duly executed, accompanied by payment of the Purchase Price or so much
thereof as is necessary for the shares or other securities or assets to be
purchased and an amount equal to any applicable transfer tax, by cash, certified
check or official bank check payable to the order of the Company or the Rights
Agent, the Rights Agent, subject to Section 20(j), shall thereupon promptly (i)
requisition from any transfer agent of the Common Stock (or make available, if
the Rights Agent is the transfer agent for such shares) certificates for the
number of shares of Common Stock so elected to be purchased and the Company will
comply and hereby authorizes and directs such transfer agent to comply with all
such requests, (ii) when appropriate, requisition from the Company the amount of
cash, if any, to be paid in lieu of issuance of fractional shares in accordance
with Section 14(b) hereof, and (iii) promptly after receipt of such Common Stock
certificates cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name or names as
may be designated by such holder, and (iv) when appropriate, after receipt
promptly deliver such cash to or upon the order of the registered holder of such
Right Certificate; provided, however, that in the case of a purchase of
securities, other than Common Stock, pursuant to Section 13 hereof, the Rights
Agent shall promptly take the appropriate actions corresponding to the foregoing
clauses (i) through (iv). In the event that the Company is obligated to issue
other securities of the Company, pay cash and/or distribute other property
pursuant to Section 11(a) hereof, the Company will make all arrangements
necessary so that such
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<PAGE> 19
other securities, cash and/or other property are available for distribution by
the Rights Agent, if and when appropriate.
d. If 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.
e. Notwithstanding anything in this Agreement to the contrary, any
Rights that are at any time Beneficially Owned by an Acquiring Person or any
Affiliate or Associate of an Acquiring Person shall be null and void and
nontransferable, and any holder of any such Right (including any purported
transferee or subsequent holder) shall not have any right to exercise or
transfer any such Right.
f. Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder upon the occurrence of any purported exercise as
set forth in this Section 7 unless such registered holder shall have (i)
completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Rights Certificate surrendered for
such exercise and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates.
All Right Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the Company
or to any of its agents, be delivered to the Rights Agent for cancellation or in
cancelled form, or, if surrendered to the
16
<PAGE> 20
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 Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel and retire,
any Right Certificate purchased or acquired by the Company otherwise than upon
the exercise thereof. The Rights Agent shall deliver all cancelled Right
Certificates to the Company, or shall, at the written request of the Company,
destroy (or cause to be destroyed) such cancelled Right Certificates, and in
such case shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Shares of Common Stock.
a. Subject to the Company's rights under Section 11(a)(iii) to
otherwise fulfill its obligations hereunder, the Company covenants and agrees
that at all times it will cause to be reserved and kept available, out of and to
the extent of its authorized and unissued shares of Common Stock not reserved
for another purpose (and, following the occurrence of a Triggering Event, other
securities) or shares held in its treasury, the number of shares of Common Stock
(and, following the occurrence of a Triggering Event, other securities) that, as
provided in this Agreement, including Section 11(a)(iii) hereof, will be
sufficient to permit the exercise in full of all outstanding Rights; provided,
however, that the Company shall not be required to reserve and keep available
shares of Common Stock or other securities sufficient to permit the exercise in
full of all outstanding Rights pursuant to the adjustments set forth in Section
11(a)(ii), Section 11(a)(iii) or Section 13 hereof unless, and only to the
extent that, the Rights become exercisable pursuant to Section 7(a) following
such adjustments.
b. The Company shall (i) use its best efforts to cause, from and after
such time as the Rights become exercisable, the Rights and all shares of Common
Stock (and following the
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<PAGE> 21
occurrence of a Triggering Event, other securities) issued or reserved for
issuance upon exercise thereof to be listed by the New York Stock Exchange
("NYSE") or any other national securities exchange upon notice of issuance upon
such exercise and (ii) if then necessary to permit the offer and issuance of
such shares of Common Stock (and, following the occurrence of a Triggering
Event, other securities), register and qualify such shares of Common Stock (and,
following the occurrence of a Triggering Event, other securities) under the
Securities Act and any applicable state securities or "blue sky" laws (to the
extent exemptions therefrom are not available), cause such registration
statement and qualifications to become effective as soon as practicable after
such filing and keep such registration and qualifications effective until the
earlier of the Expiration Date or the Final Expiration Date of the Rights. The
Company may temporarily suspend, for a period of time not to exceed 180 days,
the exercisability of the Rights in order to prepare and file a registration
statement under the Securities Act and permit it to become effective. Upon any
such suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction unless the requisite qualification
in such jurisdiction shall have been obtained and until a registration statement
under the Securities Act (if required) shall have been declared effective.
c. The Company covenants and agrees that it will take all such action
as may be necessary to insure that all shares of Common Stock (and following the
occurrence of a Triggering Event, other securities) delivered upon exercise of
Rights shall, at the time of delivery of the certificates for such shares
(subject to payment of the Purchase Price in respect thereof),
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<PAGE> 22
be duly and validly authorized and issued and fully paid and nonassessable
shares in accordance with applicable law.
d. The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges which may
be payable in respect of the issuance or delivery of the Right Certificates or
of any shares of Common Stock (or other securities, as the case may be) upon the
exercise of Rights. The Company shall not, however, be required to pay any
transfer tax which may be payable in respect of any transfer or delivery of
Right Certificates to a Person other than, or the issuance or delivery of
certificates for Common Stock (or other securities, as the case may be) upon
exercise of Rights in a name other than that of, the registered holder of the
Right Certificate, and the Company shall not be required to issue or deliver a
Right Certificate or certificate for Common Stock (or other securities, as the
case may be) to a person other than such registered holder until any such tax
shall have been paid (any such tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been established to the
Company's satisfaction that no such tax is due.
Section 10. Common Stock Record Date.
Each Person in whose name any certificate for shares of Common Stock
(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 Stock (or other securities, as the case may be) represented thereby on,
and such certificate shall be dated, the date upon which the Right Certificate
evidencing such rights was duly surrendered and payment of the Purchase Price
(and any applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Common Stock (or
other securities, as the case may be) transfer books of the Company are closed,
such Person shall be deemed to have become
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<PAGE> 23
the record holder of such shares on, and such certificate shall be dated, the
next succeeding Business Day on which the Common Stock (or other securities)
transfer books of the Company are open.
Section 11. Adjustments to Number and Kind of Shares, Number of Rights
or Purchase Price.
The number and kind of shares subject to purchase upon the exercise of
each Right, the number of Rights outstanding and the Purchase Price are subject
to adjustment from time to time as provided in this Section 11.
a. (i) If the Company shall at any time after the Record Date (A)
declare or pay any dividend on Common Stock payable in shares of Common Stock,
(B) subdivide or split the outstanding shares of Common Stock into a greater
number of shares, (C) combine or consolidate the outstanding shares of Common
Stock into a smaller number of shares or effect a reverse split of the
outstanding shares of Common Stock or (D) issue any shares of its capital stock
in a reclassification of the Common Stock (including any such reclassification
in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation), except as otherwise provided in Section
7(e) or this Section 11(a), the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of shares of Common
Stock or capital stock, as the case may be, issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive, upon payment of the Purchase Price then in
effect, the aggregate number and kind of shares of Common Stock or capital
stock, as the case may be, which, if such Right had been exercised immediately
prior to such date, the holder thereof would have owned upon such exercise and
been entitled to receive by virtue of such dividend, subdivision, combination or
reclassification;
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<PAGE> 24
provided, however, that in no event shall the consideration to be paid upon the
exercise of one such Right be less than the per share par value of the shares of
capital stock of the Company issuable upon exercise of the Right. If an event
occurs which would require an adjustment under both this Section 11(a)(i) and
Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i)
shall be in addition to, and shall be made prior to, any adjustment required
pursuant to Section 11(a)(ii).
(ii) If any Person shall become an Acquiring Person (a "Section
11(a)(ii) Event") other than pursuant to any transaction set forth in Section
13(a) hereof, then, subject to Section 23(a) hereof, and except as otherwise
provided in this Section 11, each holder of a Right (except as provided below
and in Section 7(e)) shall thereafter have a right to receive for each Right,
upon exercise thereof in accordance with the terms of this Rights Agreement and
payment of a price equal to the then current Purchase Price multiplied by the
number of shares of Common Stock for which a Right was theretofore exercisable,
such number of shares of Common Stock of the Company as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the number of
shares of Common Stock for which a Right was exercisable immediately prior to
the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product
(such product, following such first occurrence, shall be referred to as the
"Purchase Price" with respect to each Right for all purposes of this Agreement)
by 50% of the Current Market Price per share of Common Stock on the date of such
first occurrence (such number of shares is herein called the "Adjustment
Shares"); provided that the Purchase Price and the number of Adjustment Shares
shall be further adjusted as provided in this Agreement to reflect any events
occurring after the date of such first occurrence; and provided, further, that
if the transaction that would otherwise give rise to the foregoing adjustment is
also subject to the
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<PAGE> 25
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).
Notwithstanding the foregoing, upon the occurrence of a Section 11(a)(ii) Event,
any Rights that are or were at any time on or after the earlier of the Stock
Acquisition Date or the Distribution Date Beneficially Owned by the Acquiring
Person or any Associate or Affiliate of the Acquiring Person shall become void
and any holder of such Rights shall thereafter have no right to exercise such
Rights under any provision of this Rights Agreement.
(iii) If the number of shares of Common Stock which are authorized by
the Company's articles of incorporation but not outstanding or reserved for
issuance for purposes other than upon exercise of the Rights is not sufficient
to permit the exercise in full of the Rights in accordance with Section
11(a)(ii) and the Rights shall become so exercisable, to the extent permitted by
applicable law and any agreements in effect on the date hereof to which the
Company is a party, the Company shall: (A) determine the value of the Adjustment
Shares issuable upon the exercise of a Right (the "Current Value") and (B) with
respect to each Right (subject to Section 7(e)), upon the exercise of such Right
and payment of the applicable Purchase Price, issue shares of Common Stock to
the extent available for the exercise in full of such Right and, to the extent
shares of Common Stock are not so available, make adequate provision to
substitute for the Adjustment Shares not received upon exercise of such Right
(1) cash, (2) a reduction in the Purchase Price, (3) other equity securities of
the Company (including, without limitation, shares, or units of shares, of
preferred stock of the Company which, by virtue of having dividend, voting and
liquidation rights substantially comparable to those of the Common Stock, are
deemed in good faith by the Board of Directors of the Company to have
substantially the same value as shares of Common Stock (such shares or units of
shares of preferred stock are
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<PAGE> 26
herein called "Common Stock Equivalents")), (4) debt securities of the Company,
(5) other assets, or (6) any combination of the foregoing, having an aggregate
value which, when added to the value of the shares of Common Stock actually
issued upon exercise of such Right, shall have an aggregate value equal to the
Current Value (less the amount of any reduction in the Purchase Price), where
such aggregate value has been determined in good faith by the Board of Directors
of the Company based upon the advice of a nationally recognized independent
investment banking firm selected in good faith by the Board of Directors of the
Company; provided, however, if the Company shall not have made adequate
provision to deliver value pursuant to clause (B) above within thirty days
following the first occurrence of a Section 11(a)(ii) Event (the "Section
11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon
the surrender for exercise of a Right and without requiring payment of the
Purchase Price, shares of Common Stock (to the extent available) and then, if
necessary, cash, which shares and/or cash have an aggregate value equal to the
excess of the Current Value over the Purchase Price. If the Board of Directors
of the Company shall determine in good faith that it is likely that sufficient
additional shares of Common Stock could be authorized for issuance upon exercise
in full of the Rights, the thirty day period set forth above may be extended to
the extent necessary, but not more than 120 days after the Section 11(a)(ii)
Trigger Date, in order that the Company may seek shareholder approval for the
authorization of such additional shares (such thirty day period, as it may be
extended, is herein called the "Substitution Period"). To the extent that the
Company determines that some action need be taken pursuant to the first and/or
second sentence of this Section 11(a)(iii), the Company (x) shall provide,
subject to Section 7(e) and the last sentence of Section 11(a)(ii) hereof, that
such action shall apply uniformly to all outstanding Rights, and (y) may suspend
the exercisability of the Rights until the expiration of the Substitution Period
in
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order to seek any authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such first sentence and
to determine the value thereof. In the event of any such suspension, the Company
shall issue a public announcement stating that the exercisability of the Rights
has been temporarily suspended, as well as a public announcement at such time as
the suspension is no longer in effect. For purposes of this Section 11(a)(iii),
the value of the Common Stock shall be the Current Market Price per share of the
Common Stock on the Section 11(a)(ii) Trigger Date and the per share or per unit
value of any "Common Stock Equivalent" shall be deemed to equal the Current
Market Price per share of the Common Stock on such date. The Board of Directors
may, but shall not be required to, establish procedures to allocate the right to
receive Common Stock upon the exercise of the Rights among holders of Rights
pursuant to this Section 11(a)(iii).
b. If the Company shall fix a record date for the issuance of rights
(other than the Rights), options or warrants to all holders of Common Stock
entitling them to subscribe for or purchase (for a period expiring within
forty-five calendar days after such record date) Common Stock, shares having the
same rights, privileges and preferences as the Common Stock ("Equivalent Common
Stock") or securities convertible into Common Stock or Equivalent Common Stock
at a price per share of Common Stock or Equivalent Common Stock (or having a
conversion price per share, if a security convertible into Common Stock or
Equivalent Common Stock) less than the Current Market Price per share of Common
Stock on such record date, the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding on such record date, plus the
number of shares of Common Stock which the aggregate offering price of the total
number of
24
<PAGE> 28
shares of Common Stock and/or Equivalent Common Stock (and/or the aggregate
initial conversion price of the convertible securities so to be offered) would
purchase at such Current Market Price, and the denominator of which shall be the
number of shares of Common Stock outstanding on such record date, plus the
number of additional shares of Common Stock and/or Equivalent Common Stock to be
offered for subscription or purchase (or into which the convertible securities
so to be offered are initially convertible). In case such subscription price may
be paid by delivery of consideration part or all of which may be in a form other
than cash, the value of such non-cash consideration shall be as determined in
good faith by the Board of Directors of the Company, whose determination shall
be described in a statement filed with the Rights Agent and shall be binding on
the Rights Agent and the holders of the Rights. Shares of Common Stock owned by
or held for the account of the Company shall not be deemed outstanding for the
purpose of any such computation. Such adjustment shall be made successively
whenever such a record date is fixed, and in the event that such rights or
warrants are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date had not been
fixed.
c. If the Company shall fix a record date for a distribution to all
holders of Common Stock (including any such distribution made in connection with
a consolidation or merger in which the Company is the continuing corporation) of
evidences of indebtedness, cash (other than a regular quarterly cash dividend
out of the earnings or retained earnings of the Company), assets (other than a
dividend payable in Common Stock, but including any dividend payable in stock
other than Common Stock) 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
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by a fraction, the numerator of which shall be the Current Market Price per
share of Common Stock on such record date, less the fair market value (as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent) of
the portion of the cash, assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable to a share of
Common Stock and the denominator of which shall be such Current Market Price per
share of Common Stock. Such adjustments shall be made successively whenever such
a record date is fixed; and in the event that such distribution is not so made,
the Purchase Price shall be adjusted to be the Purchase Price which would have
been in effect if such record date had not been fixed.
d. For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) hereof, the "Current Market
Price" per share of Common Stock on any date shall be deemed to be the average
of the daily closing prices per share of the Common Stock for the thirty
consecutive Trading Days (as such term is hereinafter defined) immediately prior
to such date, and for purpose of computations made pursuant to Section
11(a)(iii) hereof, the "Current Market Price" per share of the Common Stock on
any date shall be deemed to be the average of the daily closing prices per share
of the Common Stock for the ten consecutive Trading Days immediately following
such date; provided, however, that in the event that the Current Market Price
per share of the Common Stock is determined during a period following the
announcement by the issuer of the Common Stock of (i) any dividend or
distribution on the Common Stock (other than a regular quarterly cash dividend
and other than the Rights), or (ii) any subdivision,
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combination or reclassification of the Common Stock, and prior to the expiration
of the requisite thirty Trading Day or ten Trading Day period, as set forth
above, the ex-dividend date for such dividend or distribution, or the record
date for such subdivision, combination or reclassification occurs, then, and in
each such case, the Current Market Price shall be properly adjusted to take into
account ex-dividend trading. The closing price for each day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the NYSE or, if the shares of
Common Stock are not listed or admitted to trading on the NYSE, as reported in
the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
shares of Common Stock are listed or admitted to trading or, if the shares of
Common Stock are not listed or admitted to trading on any national securities
exchange, the last quoted sale 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 or
such other system then in use, or, if on any such date the shares of Common
Stock are not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker making a market in
the Common Stock selected by the Board of Directors of the Company. If on any
such date no market maker is making a market in the Common Stock, the fair value
of such shares on such date as determined in good faith by the Board of
Directors of the Company shall be used. The term "Trading Day" shall mean a day
on which the principal national securities exchange or national market system on
which the shares of Common Stock are listed or admitted to trading is open for
the transaction of business or, if the shares of Common Stock are not listed or
admitted to trading on any national securities exchange or national market
system, a Business Day. If the Common Stock is not publicly held or not so
listed or traded, "Current Market Price" per share shall mean the fair value per
share as
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determined in good faith by the Board of Directors of the Company whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.
e. Anything herein to the contrary notwithstanding, no adjustment in
the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least one percent 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 ten-thousandth of a share, as the case may
be. Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which mandates such adjustment, or (ii)
the Expiration Date.
f. If as a result of an adjustment made pursuant to Section 11(a)(ii)
or Section 13(a) hereof, the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock other than Common Stock,
thereafter the number of such other shares so receivable upon exercise of any
Right and the Purchase Price thereof shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the shares of Common Stock contained in Section
11(a), (b), (c), (e), (g), (h), (i), (j), (k), (l) and (m) hereof, and the
provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the Common
Stock shall apply on like terms to any such other shares.
g. All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of shares of Common Stock
purchasable from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.
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h. Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in 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 shares of Common Stock
(calculated to the nearest ten-thousandth) obtained by (i) multiplying (x) the
number of shares covered by a Right immediately prior to this adjustment, by (y)
the Purchase Price in effect immediately prior to such adjustment of the
Purchase Price, and (ii) dividing the product so obtained by the Purchase Price
in effect immediately after such adjustment of the Purchase Price.
i. The Company may elect on or after the date of any adjustment of the
Purchase Price or any adjustment to the number of shares of Common Stock for
which a Right may be exercised, to adjust the number of Rights, in lieu of any
adjustment in the number of shares of Common Stock purchasable upon the exercise
of a Right. Each of the Rights outstanding after the adjustment in the number of
Rights shall be exercisable for the number of shares of Common Stock for which a
Right was exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that number
of Rights (calculated to the nearest ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record date may
be the date on which the Purchase Price is adjusted or any day thereafter, but,
if the Right Certificates have been issued, shall be at least ten days later
than the date of the public
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announcement. If Right Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and replacement for the
Right Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein (and may bear, at the option
of the Company, the adjusted Purchase Price) and shall be registered in the
names of the holders of record of Right Certificates on the record date
specified in the public announcement.
j. Irrespective of any adjustment or change in the Purchase Price or
the number of shares of Common Stock issuable upon the exercise of the Rights,
the Right Certificates theretofore and thereafter issued may continue to express
the Purchase Price per share and the number of 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 of the shares of Common Stock issuable
upon exercise of the Rights, the Company shall take any corporate action,
including using its reasonable best efforts to obtain any required shareholder
approvals, which may, in the opinion of its counsel, be necessary in order that
the Company may validly and legally issue fully paid and nonassessable shares of
Common Stock at such adjusted Purchase Price.
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l. In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the shares of Common Stock and other capital stock or securities of the Company,
if any, issuable upon such exercise over and above the shares of Common Stock
and other capital stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such holder a due bill or
other appropriate instrument evidencing such holder's right to receive such
additional shares of Common Stock and other capital stock or securities upon the
occurrence of the event requiring such adjustment.
m. Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that in its good faith judgment the Board of Directors of the Company
shall determine to be advisable in order that any (i) consolidation or
subdivision of the Common Stock, (ii) issuance for cash of any shares of Common
Stock at less than the Current Market Price, (iii) issuance for cash of shares
of Common Stock or securities which by their terms are convertible into or
exchangeable for shares of Common Stock, (iv) stock dividends or (v) issuance of
rights, options or warrants referred to in this Section 11, hereafter made by
the Company to holders of its Common Stock shall not be taxable to such
shareholders.
n. The Company covenants and agrees that it shall not, at any time
after the Stock Acquisition Date, (i) consolidate with any other
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<PAGE> 35
Person (other than a Subsidiary of the Company in a transaction not prohibited
by Section 11(o)), (ii) merge with or into any other Person (other than a
Subsidiary of the Company in a transaction not prohibited by Section 11(o)), or
(iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction or a series of related transactions not in the ordinary course of
the Company's business, assets, cash flow, or earning power aggregating more
than 50% of the assets, cash flow or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of which
is not prohibited by Section 11(o)), if (x) at the time of or immediately after
such consolidation, merger or sale there are any rights, warrants or other
instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately after
such consolidation, merger or sale, the shareholders of the Person who
constitutes, or would constitute, the "Principal Party" for purposes of Section
13(a) hereof shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates and Associates.
o. The Company covenants and agrees that, after the Stock Acquisition
Date, it will not, except as permitted by Section 23 or Section 27 hereof, take
(or permit any Subsidiary to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will diminish substantially
or eliminate the benefits intended to be afforded by the Rights.
Section 12. Certification of Adjustments. Whenever an adjustment is
made as provided in Sections 11 and 13 hereof, the Company shall (a) promptly
prepare a certificate setting forth such adjustment and a brief statement of the
facts giving rise to such adjustment, (b) promptly file with the Rights Agent
and with each transfer agent for the Common Stock a copy of such certificate and
(c) mail a brief summary thereof to each holder of a Right Certificate (or, if
prior to the Distribution Date, to each holder of a certificate representing
shares of
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Common Stock) in accordance with Section 26 hereof. Notwithstanding the
foregoing sentence, the failure of the Company to give such notice shall not
affect the validity of or the force or effect of or the requirement for such
adjustment. The Rights Agent shall be fully protected in relying on any
certificate prepared by the Company pursuant to Sections 11 and 13 and on any
adjustment therein contained. Any adjustment to be made pursuant to Sections 11
and 13 of this Rights Agreement shall be effective as of the date of the event
giving rise to such adjustment.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
a. If at any time on or after the Stock Acquisition Date, directly or
indirectly, (x) the Company shall consolidate with, or merge with and into, any
other Person or Persons (other than a Subsidiary of the Company in a transaction
which complies with Section 11(o)) and the Company shall not be the surviving or
continuing corporation of such consolidation or merger, (y) any Person or
Persons (other than a Subsidiary of the Company in a transaction which complies
with Section 11(o)) shall consolidate with, or merge with and into, the Company,
and the Company shall be the continuing or surviving corporation of such
consolidation or merger and, in connection with such consolidation or merger,
all or part of the outstanding shares of Common Stock shall be converted into or
exchanged for stock or other securities of any other Person or of the Company or
cash or any other property, or (z) the Company or one or more of its
Subsidiaries shall sell or otherwise transfer to any other Person or any
Affiliate or Associate of such Person (other than the Company or any Subsidiary
of the Company, in one or more transactions not prohibited by Section 11(o)), in
one transaction or a series of related transactions not in the ordinary course
of the Company's business, assets, cash flow, or earning power aggregating more
than 50% of the assets, cash flow or earning power of the Company and its
Subsidiaries (taken as a whole), then, on the first occurrence of any such
event, proper provision shall be made so that (i) each holder of record of a
Right, except as provided in Section 7(e),
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shall thereafter have the right to receive, upon the exercise thereof and
payment of the Purchase Price in accordance with the terms of this Rights
Agreement, such number of shares of validly issued, fully paid and nonassessable
and freely tradeable Common Stock of the Principal Party (as defined in Section
13(b)) not subject to any liens, encumbrances, rights of first refusal or other
adverse claims, as shall be equal to the result obtained by (1) multiplying the
then current Purchase Price by the number of shares of Common Stock for which a
Right was exercisable immediately prior to the first occurrence of a Section 13
Event (or, if a Section 11(a)(ii) Event has occurred prior to the first
occurrence of a Section 13 Event, multiplying the Purchase Price in effect
immediately prior to the first occurrence of a Section 11(a)(ii) Event by the
number of shares of Common Stock for which a Right was exercisable immediately
prior to such first occurrence of a Section 11(a)(ii) Event) and (2) dividing
that product (such product, following the first occurrence of a Section 13
Event, shall be referred to as the "Purchase Price" for all purposes of this
Agreement) by 50% of the Current Market Price (determined as provided in Section
11(d) hereof with respect to the Common Stock) per share of the common stock of
such Principal Party on the date of consummation of such Section 13 Event (or
the fair market value on such date of other securities or property of the
Principal Party, as provided for herein); provided that the Purchase Price and
the number of shares of common stock of such Principal Party issuable upon
exercise of each Right shall be further adjusted as provided in this Agreement
to reflect any events occurring after the date of the first occurrence of a
Section 13 Event; (ii) such Principal Party shall thereafter be liable for, and
shall assume, by virtue of such Section 13 Event, all the obligations and duties
of the Company pursuant to this Rights Agreement; (iii) the term "Company" for
all purposes of this Rights Agreement shall thereafter be deemed to refer to
such Principal Party, it being specifically intended that the provisions of
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<PAGE> 38
Section 11 hereof shall only apply to such Principal Party following the 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
shares of its Common Stock in accordance with Section 9 hereof) in connection
with the consummation of any such transaction as may be necessary to assure that
the provisions hereof shall thereafter be applicable, as nearly as reasonably
may be, in relation to its shares of Common Stock thereafter deliverable upon
the exercise of the Rights; provided, however, that, upon the subsequent
occurrence of any merger, consolidation, sale of all or substantially all
assets, recapitalization, reclassification of shares, reorganization or other
extraordinary transaction in respect of such Principal Party, each holder of a
Right shall thereupon be entitled to receive, upon exercise of a Right and
payment of the Purchase Price, such cash, shares, rights, warrants and other
property which such holder would have been entitled to receive had he, at the
time of such transaction, owned the shares of Common Stock of the Principal
Party purchasable upon the exercise of a Right, and such Principal Party shall
take such steps (including, but not limited to, reservation of shares of stock)
as may be necessary to permit the subsequent exercise of the Rights in
accordance with the terms hereof for such cash, shares, rights, warrants and
other property.
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) hereof: (A) the Person that
is the issuer of any securities into which shares of Common Stock of
the Company are converted in such merger or consolidation, or, if there
is more than one such issuer, the issuer the Common Stock of which has
the greatest market value or (B) if no securities are so issued, (x)
the Person that is the other party to the merger or consolidation
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and that survives said merger or consolidation, or, if there is more
than one such Person, the Person the Common Stock of which has the
greatest market value or (y) if the Person that is the other party to
the merger or consolidation does not survive the merger or
consolidation, the Person that does survive the merger or consolidation
(including the Company if it survives); and
ii. in the case of any transaction described in clause (z) of
the first sentence in Section 13(a) hereof, the Person that is the
party receiving the greatest portion of the assets, cash flow or
earning power transferred pursuant to such transaction or transactions,
or, if each Person that is a party to such transaction or transactions
receives the same portion of the assets or earning power so transferred
or if the Person receiving the greatest portion of the assets or
earning power cannot be determined, whichever of such Persons as is the
issuer of Common Stock having the greatest market value of shares
outstanding;
provided, however, that in any such case described in the foregoing (b)(i) or
(b)(ii), if the Common Stock of such Person is not at such time and has not been
continuously over the preceding 12-month period registered under Section 12 of
the Exchange Act, and such Person is a direct or indirect Subsidiary of another
Person the Common Stock of which is and has been so registered, the term
"Principal Party" shall refer to such other Person, or if such Person is a
Subsidiary, directly or indirectly, of more than one Person, the Common Stock of
which are and have been so registered, the term "Principal Party" shall refer to
whichever of such Persons is the issuer of the Common Stock having the greatest
market value of shares outstanding.
c. The Company shall not consummate any consolidation, merger, sale or
transfer referred to in Section 13(a) unless the Principal Party shall have a
sufficient number of
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authorized shares of its Common Stock which have not been issued or reserved for
issuance to permit the exercise in full of the Rights in accordance with this
Section 13 and unless prior thereto the Company and the Principal Party involved
therein shall have executed and delivered to the Rights Agent an agreement
confirming that the requirements of Sections 13(a) and (b) hereof shall promptly
be performed in accordance with their terms and that such consolidation, merger,
sale or transfer of assets shall not result in a default by the Principal Party
under this Rights Agreement as the same shall have been assumed by the Principal
Party pursuant to Sections 13(a) and (b) hereof and further providing that, as
soon as practicable after executing such agreement pursuant to this Section 13,
the Principal Party will:
i. prepare and file a registration statement under the
Securities Act, if necessary, with respect to the Rights and the
securities purchasable upon exercise of the Rights on an appropriate
form, use its best efforts to cause such registration statement to
become effective as soon as practicable after such filing and use its
best efforts to cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the
Securities Act) until the date of expiration of the Rights, and
similarly comply with applicable state securities laws;
ii. use its best efforts, if the Common Stock of the Principal
Party shall become listed on a national securities exchange, to list
(or continue the listing of) the Rights and the securities purchasable
upon exercise of the Rights on such securities exchange and, if the
Common Stock of the Principal Party shall not be listed on a national
securities exchange, to cause the Rights and the securities purchasable
upon exercise of the Rights to be listed by the NYSE,
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another national securities exchange or admitted for trading on the
Nasdaq Stock Market;
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 (or any successor form)
under the Exchange Act; and
iv. obtain waivers of any rights of first refusal or
preemptive rights in respect of the shares of Common Stock of the
Principal Party subject to purchase upon exercise of outstanding
Rights.
If any of the transactions described in Section 13(a) hereof shall occur at any
time after the occurrence of a transaction described in Section 11(a)(ii)
hereof, the Rights which have not theretofore been exercised shall thereafter be
exercisable in the manner described in Section 13(a). The provisions of this
Section 13 shall similarly apply to all successive mergers, consolidations,
sales, transfers or other Section 13 Events.
d. Furthermore, if the Principal Party which is to be a party to a
transaction referred to in this Section 13 has a provision in any of its
authorized securities or in its certificate of incorporation, articles of
incorporation, bylaws or other instrument governing its corporate affairs, which
provision would have the effect of (i) causing such Principal Party to issue, in
connection with, or as a consequence of, the consummation of a transaction
referred to in this Section 13, shares of Common Stock of such
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Principal Party at less than the then Current Market Price per share (determined
pursuant to Section 11(d) hereof) or securities exercisable for, or convertible
into, Common Stock of such Principal Party at less than such then Current Market
Price (other than to holders of Rights pursuant to this Section 13) or (ii)
providing for any special payment, tax or similar provisions in connection with
the issuance of the Common Stock of such Principal Party pursuant to the
provisions of Section 13; then, in such event, the Company hereby agrees with
each holder of Rights that it shall not consummate any such transaction unless
prior thereto the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing that the
provision in question of such Principal Party shall have been cancelled, waived
or amended, or that the authorized securities shall be redeemed, so that the
applicable provision will have no effect in connection with, or as a consequence
of, the consummation of the proposed transaction.
Section 14. Fractional Rights and Fractional Shares.
a. The Company shall not be required to issue fractions of Rights or to
distribute Right Certificates which evidence fractional Rights. In lieu of such
fractional Rights, there shall be paid to the holders of record 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 then current
market value of a whole Right. For the purposes of this Section 14(a), the then
current market value of a Right shall be determined in the same manner as the
Current Market Price of a share of Common Stock shall be determined pursuant to
Section 11(d) hereof.
b. The Company shall not be required to issue fractions of shares of
Common Stock upon exercise of the Rights or to distribute certificates which
evidence fractional shares. In lieu of issuing fractions of shares of Common
Stock, there shall be paid to the holders of record of Right Certificates at the
time such Right Certificates are exercised as herein provided an amount in cash
equal to the same fraction of the then current market value of a share of Common
Stock. For purposes of this Section 14(b), the then current market value of a
share of Common Stock shall be the Current Market Price thereof as determined
pursuant to Section 11(d) hereof.
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c. The holder of a Right by the acceptance of a Right expressly waives
his right to receive any fractional Right or any fractional shares upon exercise
of a Right.
Section 15. Rights of Action. All rights of action in respect of this
Agreement are vested in the respective holders of record of the Right
Certificates (and, prior to the Distribution Date, the holders of record of the
Common Stock); and any holder of record of any Right Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company or any other Person to enforce, or otherwise act in respect
of, his right to exercise the Rights evidenced by such Right Certificate in the
manner provided in such Right Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and, accordingly, that they 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 Company and the Rights Agent and
with every other holder of a Right that:
a. prior to the Distribution Date, the Rights will not be evidenced by
a Right Certificate and will be transferable only in connection with the
transfer of Common Stock;
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b. after the Distribution Date, the Right Certificates will be
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer;
c. the Company and the Rights Agent may deem and treat the person in
whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Stock 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 Stock certificate
made by anyone other than the Company or the Rights Agent or the transfer agent
of the Common Stock) for all purposes whatsoever, and neither the Company nor
the Rights Agent shall be affected by any notice to the contrary; and
d. notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Rights Agent shall have any liability to any holder of a
Right or 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 Company must use its reasonable 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 Shareholder.
No holder of a Right or a Right Certificate, as such, shall be entitled
to vote, receive dividends in respect of or be deemed for any purpose to be the
holder of Common Stock or any other securities of the Company which may at any
time be issuable upon the exercise of
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the Rights, 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 shareholder of the Company or any right to vote for the election
of directors or upon any matter submitted to shareholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to receive
notice of meetings or other actions affecting shareholders (except as set forth
in Section 25), or to receive dividends or subscription rights in respect of any
such stock or securities, or otherwise until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. Concerning the Rights Agent.
a. The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the administration and execution of this Rights
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability or expense incurred without negligence, bad faith or willful
misconduct on the part of the Rights Agent for anything done or omitted to be
done by the Rights Agent in connection with the acceptance and administration of
this Rights Agreement, including the cost and expenses of defending against any
claim of liability in the premises.
b. The Rights Agent shall be protected and shall incur no liability for
or in respect of any action taken, suffered or omitted by it in connection with
its administration of this Rights Agreement in reliance upon any Right
Certificate, certificate for Common Stock or other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement or other paper or
document
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believed by it to be genuine and to be signed, executed and, where necessary,
guaranteed, verified or acknowledged, by the proper person or persons.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
a. Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust or stock transfer business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Rights
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto, provided that such corporation would be
eligible for appointment as a successor Rights Agent under the provisions of
Section 21 hereof. If at the time such successor Rights Agent shall succeed to
the agency created by this Rights Agreement, any of the Right Certificates shall
have been countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of the predecessor Rights Agent and deliver such
Right Certificates so countersigned; and if at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Rights Agreement.
b. If 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 such Right Certificates so countersigned; and if at that time any of
the Right Certificates shall not have been countersigned,
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<PAGE> 47
the Rights Agent may countersign such Right Certificates either in its prior
name or in its changed name; and in all such cases such Right Certificates shall
have the full force provided in the Right Certificates and in this Rights
Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Rights Agreement upon the following terms
and conditions, by all of which the Company and the holders of Right
Certificates (or, if prior to the Distribution Date, the holders of Common
Stock), by their acceptance thereof, shall be bound:
a. The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company or its own in-house counsel), 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 to be taken by it in good faith and in
accordance with such opinion.
b. Whenever in the performance of its duties under this Rights
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chief Executive Officer, President or
any Vice President and by the Treasurer or any Assistant Treasurer or the
Secretary or any Assistant Secretary of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the provisions of this
Rights Agreement in reliance upon such certificate.
c. The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
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<PAGE> 48
d. The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Rights Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed
to have been made by the Company only.
e. The Rights Agent shall not be under any responsibility in respect
of the validity of this Rights Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Rights Agreement or in any Right
Certificate; nor shall it be responsible for any change in the exercisability
of the Rights or any adjustment required under the provisions hereof or
responsible for the manner, method or amount of any such change or adjustment
or the ascertaining of the existence of facts that would require any such
change or adjustment (except with respect to the exercise of Rights evidenced
by Right Certificates after actual notice of any such change or adjustment);
nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of Common Stock
or other securities to be issued pursuant to this Rights Agreement or any Right
Certificate or as to whether any shares of Common Stock or other securities
will, when issued, be validly authorized and issued, fully paid and
nonassessable.
f. The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Rights Agreement.
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<PAGE> 49
g. The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chief Executive Officer, the President or any Vice President or the Secretary
or any Assistant Secretary or the Treasurer or any Assistant Treasurer of the
Company, and to apply to such officers for advice or instructions in connection
with its duties, and it shall not be liable for any action taken or suffered to
be taken by it in good faith in accordance with instructions of any such
officer.
h. The Rights Agent and any shareholder, director, officer or employee
of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction
in which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not the Rights
Agent under this Rights Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other
entity.
i. The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable
or accountable for any act, default, neglect or misconduct of any such
attorneys or agents or for any loss to the Company resulting from any such act,
default, neglect or misconduct, provided reasonable care was exercised in the
selection and continued employment thereof.
j. If, with respect to any Right Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate contained in the form of
assignment or the form of election to purchase set forth on the reverse
thereof, as the case may be, has either not been completed or indicates an
affirmative response to clause 1 and/or 2 thereof, the Rights Agent shall not
take any
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<PAGE> 50
further action with respect to such requested exercise of transfer without
first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Rights
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Stock by registered or certified mail, and to the
holders of the Right Certificates by first-class mail. The Company may remove
the Rights Agent or any successor Rights Agent (with or without cause) upon 30
days' notice in writing, mailed to the Rights Agent or successor Rights Agent,
as the case may be, and to each transfer agent of the Common Stock by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. Notwithstanding the foregoing provisions of this Section 21,
in no event shall the resignation or removal of a Rights Agent be effective
until a successor Rights Agent shall have been appointed and have accepted such
appointment. If the Company shall fail to make such appointment within a period
of 30 days after such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by
the holder of a Right Certificate (who shall, with such notice, submit his
Right Certificate for inspection by the Company), then the incumbent Rights
Agent or the holder of record of any Right Certificate may apply to any court
of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be (a) a corporation organized and doing business under the laws of the
United States or any State thereof, in good standing, which is authorized under
such laws to exercise corporate trust or stock transfer powers and is subject
to supervision or examination by federal or state
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<PAGE> 51
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $100,000,000 or (b) an Affiliate
controlled by a corporation described in clause (a) of this sentence. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as
Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Common Stock,
and mail a notice thereof in writing to the registered holders of the Right
Certificates. Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity of
the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Rights Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Expiration Date, the Purchase Price per share and
the number, kind or class of shares of stock or other securities or property
purchasable under the Right Certificates made in accordance with the provisions
of this Rights Agreement. In addition, in connection with the issuance or sale
of shares of Common Stock following the Distribution Date and prior to the
expiration of the Rights, the Company (a) shall, with respect to shares of
Common Stock so issued or sold pursuant to the exercise of stock options or
under any employee plan or arrangement, or upon the exercise, conversion or
48
<PAGE> 52
exchange of securities hereinafter issued by the Company, and (b) may, in any
other case, if deemed necessary or appropriate by the Board of Directors of the
Company, issue Right Certificates representing the appropriate number of Rights
in connection with such issuance or sale; provided, however, that (i) no such
Right Certificate shall be issued if, and to the extent that, the Company shall
be advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the Person to whom such
Right Certificate would be issued, and (ii) no such Right Certificate shall be
issued, if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
Section 23. Redemption.
a. The Board of Directors of the Company may, at its option, at any
time prior to the earlier of (i) the Close of Business on the tenth day
following the Stock Acquisition Date (or if the Stock Acquisition Date shall
have occurred prior to the Record Date, the Close of Business on the tenth day
following the Record Date), or (ii) the Close of Business on the Final
Expiration Date, redeem all but not less than all of the then outstanding
Rights at a redemption price of $0.001 per Right, as such amount may be
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"). Notwithstanding anything
contained in this Rights Agreement to the contrary, the Rights shall not be
exercisable after the first occurrence of a Section 11(a)(ii) Event until such
time as the Company's right of redemption hereunder has expired. The Company
may, at its option, pay the Redemption Price in cash, shares of Common Stock
(based on the Current Market Price, as defined in Section 11(d), of the Common
Stock at the time of redemption) or any other form of consideration deemed
appropriate by the Board of Directors of the Company.
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<PAGE> 53
b. Immediately upon the action of the Board of Directors of the
Company 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,
without any interest thereon, for each Right so held. The Company 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 10 days after the action of the Board of
Directors ordering the redemption of the Rights, the Company shall give notice
of such redemption to the Rights Agent and the holders of the then outstanding
Rights by mailing such notice to all such holders at their last addresses as
they appear upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent of the Common
Stock. Any notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption Price
will be made. The failure to give notice required by this Section 23(b) or any
defect therein shall not affect the legality or validity of the action taken by
the Company. Neither the Company nor any of its Affiliates or Associates may
redeem, acquire or purchase for value any Rights at any time in any manner
other than that specifically set forth in this Section 23 or in Section 24, and
other than in connection with the purchase of Common Stock prior to the
Distribution Date.
Section 24. Exchange.
a. The Board of Directors of the Company may, at its option, at any
time after 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 null and void pursuant to
50
<PAGE> 54
the provisions of Section 7(e)) for Common Stock or Common Stock Equivalents at
an exchange ratio of one share of Common Stock or Common Stock Equivalent per
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date of this Agreement (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 after any Person (other than an Exempt Person), together
with all Affiliates and Associates of such Person, becomes the Beneficial Owner
of shares of Common Stock representing 50% or more of the shares of the Common
Stock then outstanding.
b. Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to Section 24(a) and
without any further action and without any notice, the right to exercise such
Rights shall terminate and the only right thereafter of a holder of such Rights
shall be to receive that number of shares of Common Stock or Common Stock
Equivalents equal to the number of such Rights held by such holder multiplied
by the Exchange Ratio. The Company shall promptly give public notice of any
such exchange; provided, however, that the failure to give, or any defect in,
such notice shall not affect the validity of such exchange. The Company shall
promptly mail a notice of any such exchange to all of the holders of such
Rights at the last addresses of the holders 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
shares of Common Stock or Common Stock Equivalents for Rights will be effected
and, in the event of any partial exchange, the number and kind of Rights which
will be exchanged. The failure to give notice required by this Section 24 or
any defect therein shall not affect the legality or validity of any exchange
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<PAGE> 55
hereunder. Any partial exchange shall be effected pro rata based on the number
of Rights being exchanged (other than Rights which have become void pursuant to
the provisions of Section 7(e)) held by each holder of such Rights.
c. If there shall not be sufficient shares of Common Stock issued but
not outstanding or authorized but unissued to permit any exchange of Rights as
contemplated in accordance with this Section 24, the Company may, at its
option, take all such action as may be necessary to authorize additional shares
of Common Stock for issuance upon exchange of the Rights.
Section 25. Notice of Proposed Actions.
a. If the Company, after the Stock Acquisition Date, shall propose (i)
to effect any of the transactions referred to in Section 11(a)(i) or to pay any
dividend to the holders of record of its Common Stock payable in stock of any
class or to make any other distribution to the holders of record of its Common
Stock (other than a regular periodic cash dividend), or (ii) to offer to the
holders of record of its Common Stock options, warrants, or other rights to
subscribe for or to purchase shares of Common Stock (including any security
convertible into or exchangeable for Common Stock) or shares of stock of any
class or any other securities, options, warrants, convertible or exchangeable
securities or other rights, or (iii) to effect any reclassification of its
Common Stock or any recapitalization or reorganization of the Company, or (iv)
to effect any consolidation or merger with or into, or to effect any sale or
other transfer (or to permit one or more of its Subsidiaries to effect any sale
or other transfer), in one transaction or a series of related transactions not
in the ordinary course of the Company's business, of more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to, any other Person or Persons, or (v) to effect the liquidation, dissolution
or winding up of the
52
<PAGE> 56
Company, then, in each such case, the Company shall give to each holder of
record of Rights, in accordance with Section 26 hereof, notice of such proposed
action, which shall specify the record date for the purposes of such
transaction referred to in Section 11(a)(i), or such dividend or distribution,
or the date on which such reclassification, recapitalization, reorganization,
consolidation, merger, sale or transfer of assets, liquidation, dissolution, or
winding up is to take place and the record date for determining participation
therein by the holders of record of Common Stock, if any such date is to be
fixed, and such notice shall be so given in the case of any action covered by
clause (i) or (ii) above at least 10 days prior to the record date for
determining holders of record of the Common Stock for purposes of such action,
and in the case of any such other action, at least 10 days prior to the date of
the taking of such proposed action or the date of participation therein by the
holders of record of Common Stock, whichever shall be the earlier. The failure
to give notice required by this Section 25 or any defect therein shall not
affect the legality or validity of the action taken by the Company or the vote
upon any such action.
b. If any of the transactions referred to in Section 11(a)(ii) or
Section 13 of this Rights Agreement are proposed, then, in any such case, the
Company shall give to each holder of Rights, in accordance with Section 26
hereof, notice of the proposal of such transaction at least 10 days prior to
consummating such transaction, which notice shall specify the proposed event
and the consequences of the event to holders of Rights under Section 11(a)(ii)
or Section 13 hereof, as the case may be, and, upon consummating such
transaction, shall similarly give notice thereof to each holder of Rights.
Section 26. Notices. Notices or demands authorized by this Rights
Agreement to be given or made by the Rights Agent or by the holder of record of
any Right Certificate or Right
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<PAGE> 57
to or on behalf of the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
John H. Harland Company
2939 Miller Road
Decatur, Georgia 30035
Attn: General Counsel
with a copy to:
King & Spalding
191 Peachtree Street
Atlanta, Georgia 30303-1763
Attn: Alan J. Prince, Esq.
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Rights Agreement to be given or made by the Company or by the holder of
record of any Right Certificate or Right to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
First Chicago Trust Company of New York
525 Washington Blvd.
Third Floor, Suite 4660
Jersey City, New Jersey 07310
Attn: Corporate Actions Administration
Notices or demands authorized by this Rights Agreement to be given or made by
the Company or the Rights Agent to the holder of record of any Right
Certificate or Right 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 it appears upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the Transfer Agent.
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Section 27. Supplements and Amendments. Prior to the Stock Acquisition
Date, the Company may in its sole and absolute discretion and the Rights Agent
shall, if the Company so directs, supplement or amend any provision of this
Rights Agreement without the approval of any holders of the Rights or the
Common Stock. From and after the Stock Acquisition Date, Company may and the
Rights Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Rights in order (i) to cure
any ambiguity, (ii) to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provisions herein, or
(iii) to change or supplement the provisions hereunder in any manner which the
Company may deem necessary or desirable; provided, that no such supplement or
amendment shall adversely affect the interests of the holders of Rights (other
than any interest of an Acquiring Person or an Affiliate or Associate of an
Acquiring Person). Upon the delivery of a certificate from an appropriate
officer of the Company which states that the proposed supplement or amendment
is in compliance with the terms of this Section 27, the Rights Agent shall
execute such supplement or amendment. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident with the
interests of the holders of Common Stock.
Section 28. Determinations and Actions by the Board. For all purposes
of this Agreement, any calculation of the number of shares of Common Stock
outstanding at any particular time, including for purposes of determining the
particular percentage of such outstanding shares of Common Stock of which any
Person is the Beneficial Owner, shall be made in accordance with the last
sentence of Rule 13d-3(d)(1)(i) under the Exchange Act as in effect on the date
of this Agreement. The Board of Directors of the Company shall have the
exclusive power and authority to administer this Agreement and to exercise all
rights and powers
55
<PAGE> 59
specifically granted to the Board or to the Company or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including a determination to redeem or
not redeem the Rights or to amend 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 Company, the Rights Agent, the holders of the Rights and all other
parties, and (y) not subject the Board to any liability to the holders of the
Rights.
Section 29. Successors. All of the covenants and provisions of this
Rights Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 30. Benefits of this Rights Agreement. Nothing in this Rights
Agreement shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior
to the Distribution Date, the Common Stock) any legal or equitable right,
remedy or claim under this Rights Agreement; but this Rights Agreement shall be
for the sole and exclusive benefit of the Company, the Rights Agent and the
holders of record of the Right Certificates (and, prior to the Distribution
Date, the Common Stock).
Section 31. Georgia Contract. This Rights Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Georgia 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.
56
<PAGE> 60
Section 32. Counterparts. This Rights Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 33. Descriptive Headings. Descriptive headings of the several
sections of this Rights Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
Section 34. Severability. If any term, provision, covenant or
restriction of this Rights Agreement is held by a court of competent
jurisdiction or other authority to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this
Rights Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
57
<PAGE> 61
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed, all as of the day and year first above written.
Attest: JOHN H. HARLAND COMPANY
By: /s/ Victoria P. Weyand By: /s/ John C. Walters
-------------------------------- --------------------------------
Name: Victoria P. Weyand Name: John C. Walters
Title: Secretary Title: Senior Vice President
Attest: FIRST CHICAGO TRUST COMPANY
OF NEW YORK, Rights Agent
By: /s/ Mary E. Garcia By: /s/ Joanne Gorostiola
--------------------------------- --------------------------------
Name: Mary E. Garcia Name: Joanne Gorostiola
Title: Customer Service Officer Title: Assistant Vice President
58
<PAGE> 62
EXHIBIT A
[Form of Right Certificate]
Certificate No. W- ________ Rights
NOT EXERCISABLE AFTER JULY 5, 2009 OR UNDER CERTAIN CIRCUMSTANCES
EARLIER. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $0.001 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. IN THE EVENT THAT THE RIGHTS REPRESENTED BY THIS
CERTIFICATE ARE ISSUED TO A PERSON WHO IS AN ACQUIRING PERSON OR AN
ASSOCIATE OR AFFILIATE OF AN ACQUIRING PERSON OR A TRANSFEREE OF THE
RIGHTS PREVIOUSLY OWNED BY SUCH PERSONS, THIS RIGHT CERTIFICATE AND
THE RIGHTS REPRESENTED HEREBY WILL BECOME NULL AND VOID.
Right Certificate
John H. Harland Company
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 December 17, 1998 ("Rights
Agreement") between John H. Harland Company, a Georgia corporation ("Company"),
and First Chicago Trust Company of New York ("Rights Agent"), to purchase from
the Company at any time after the Distribution Date (as such term is defined in
the Rights Agreement) and prior to 5:00 P.M. (Atlanta, Georgia time) on July 5,
2009 at the principal office of the Rights Agent, or its successors as Rights
Agent, one fully paid and nonassessable share of Common Stock, par value $1.00
per share ("Common Stock"), of the Company at a purchase price of $90.00 as the
same may from time to time be adjusted in
<PAGE> 63
accordance with the Rights Agreement ("Purchase Price"), upon presentation and
surrender of this Right Certificate with the Form of Election to Purchase duly
executed.
As provided in the Rights Agreement, the Purchase Price and the number
of shares of Common Stock 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 and, upon the happening of
certain events, securities other than shares of Common Stock, or other
property, may be acquired upon exercise of the Rights evidenced by this Right
Certificate, as provided by 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
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 of the Rights Agent,
the Company and the holders of record of the Right Certificates. Copies of the
Rights Agreement are on file at the principal executive office of the Company.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder of record to purchase a like aggregate
number of shares of Common Stock as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall have entitled such holder
to purchase. If this Right Certificate shall be exercised in part, the holder
shall be entitled to receive upon surrender hereof, another Right Certificate
or Right Certificates for the number of whole Rights not exercised.
<PAGE> 64
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at its option
at a redemption price of $0.001 per Right or (ii) may be exchanged in whole or
in part for shares of Common Stock or common stock equivalents.
No fractional shares of Common Stock shall be issued upon the exercise
of any Right or Rights evidenced hereby, and in lieu thereof, as provided in
the Rights Agreement, fractions of shares of Common Stock shall receive an
amount in cash equal to the same fraction of the then current market value of a
share of Common Stock.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Common Stock or of
any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors;
or upon any matter submitted to shareholders at any meeting thereof, or to give
or withhold consent to any corporate action or to receive notice of meetings
(except as provided in the Rights Agreement) or other actions affecting
shareholders or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
<PAGE> 65
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal, dated as of ________________, ____.
ATTEST: JOHN H. HARLAND COMPANY
By:
- ---------------------------- -----------------------------
Secretary Title:
Countersigned:
First Chicago Trust Company
of New York, Rights Agent
By:
-------------------------
Authorized signature
<PAGE> 66
[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)
Rights evidenced by 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 Company, 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 or trust company having an office or
correspondent in the United States.
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are not
being sold, assigned and transferred by or on behalf of a Person who is or was
an Acquiring Person or an Affiliate or Associate of any such Acquiring Person
(as such terms are defined pursuant to the Rights Agreement); and
<PAGE> 67
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate from
any Person who is or was an Acquiring Person or an Affiliate or Associate of an
Acquiring Person or any transferee of such Persons.
Dated: ____________ __, ____
--------------------------------------------
Signature
NOTICE
The signature to the foregoing Assignment must correspond to the name as
written upon the face of this Right Certificate in every particular, without
alteration or enlargement or any change whatsoever.
<PAGE> 68
FORM OF ELECTION TO PURCHASE
(To be executed if registered holder desires to Exercise the
Right Certificate.)
To: John H. Harland Company
The undersigned hereby irrevocably elects to exercise
_____________________ Rights represented by this Right Certificate to purchase
the shares of Common Stock issuable upon the exercise of such Rights and
requests that certificates for such share(s) be issued in the name:
- ------------------------------------------------------
(Please print name and address)
- ------------------------------------------------------
(Please insert social security or other identifying number)
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 print name and address)
- ------------------------------------------------------
(Please insert social security or other identifying number)
Dated: ___________________, ____
--------------------------------------------
Signature
(Signature must conform in all respects to
name of holder as specified on the face of
this Right Certificate)
<PAGE> 69
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 or trust company having an office or
correspondent in the United States.
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1)the Rights evidenced by this Right Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person
or an Affiliate or Associate of any such Acquiring Person (as such terms are
defined pursuant to the Rights Agreement); and
(2)after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate from
any Person who is or was an Acquiring Person or an Affiliate or Associate of an
Acquiring Person or any transferee of such Persons.
Dated:____________________, ____
--------------------------------------------
Signature
<PAGE> 70
EXHIBIT B
JOHN H. HARLAND COMPANY
SUMMARY OF RIGHTS TO PURCHASE
COMMON STOCK
On December 17, 1998, the Board of Directors of John H. Harland
Company (the "Company") adopted a Shareholder Rights Plan pursuant to a Rights
Agreement (the "Rights Agreement") and authorized and declared a dividend of
one Common Stock Purchase Right (a "Right") with respect to each outstanding
share of common stock, par value $1.00 per share ("Common Stock"), of the
Company. The dividend is payable on July 5, 1999 to the shareholders of record
on that date (the "Record Date"), and to each holder of Common Stock issued
thereafter until the Distribution Date (as hereinafter defined) or the
expiration or earlier redemption of the Rights. Except as set forth below, each
Right entitles the registered holder thereof to purchase from the Company at
any time after the Distribution Date one share of Common Stock at a price of
$90.00 per share, subject to adjustment (the "Purchase Price"). The description
and terms of the Rights are set forth in the Rights Agreement.
Initially, the Rights will attach to all certificates of outstanding
shares of Common Stock, and no separate Right Certificates (as hereinafter
defined) will be distributed. The Rights will become exercisable and separate
from the shares of Common Stock upon the earlier to occur of (i) ten days after
the date (the "Stock Acquisition Date") of a public announcement that a person
or group of affiliated or associated persons has acquired beneficial ownership
of 15% or more of the outstanding Common Stock (such person or group being
hereinafter referred to as an "Acquiring Person"(1)); or (ii) ten business 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 the beneficial
owner of 30% or more of the outstanding Common Stock (the earlier of such dates
in clauses (i) and (ii) being called the "Distribution Date"). Shares of Common
Stock beneficially owned by the Company or any subsidiary of the Company will
not be considered outstanding for purposes of calculating the percentage
ownership of any person.
Until the Distribution Date (or earlier redemption or expiration of
the Rights), (i) the Rights will be evidenced by the certificates for the
Common Stock, (ii) the Rights will be transferred with, and only with, the
shares of Common Stock, (iii) new Common Stock certificates issued after the
Record Date upon transfer or new issuance of shares of Common Stock will
contain a notation incorporating the Rights Agreement by reference, and (iv)
the
- ---------------------------------
(1) Each of the following persons will not be deemed to be an Acquiring
Person even if they have acquired, or obtained the right to acquire,
beneficial ownership of 15% or more of the outstanding Common Stock:
(i) the Company, any subsidiary of the Company, or any employee
benefit plan of the Company or of any subsidiary of the Company, and
(ii) any person who would otherwise become an Acquiring Person solely
by virtue of a reduction in the number of outstanding shares of Common
Stock unless and until such person shall become the beneficial owner
of any additional shares of Common Stock.
<PAGE> 71
surrender for transfer of any certificates for shares of Common Stock
outstanding as of the Record Date, even without such notation, will also
constitute the transfer of the Rights associated with the shares of Common
Stock represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights (collectively,
the "Right Certificates") will be mailed to holders of record of the shares of
Common Stock as of the close of business on the Distribution Date, and such
separate Right Certificates alone will evidence the Rights. The Rights are not
exercisable until the Distribution Date. The Rights will expire at the close of
business on July 5, 2009, unless earlier redeemed by the Company as described
below.
If any person becomes an Acquiring Person, each holder of a Right will
thereafter have the right (the "Flip-In Right") to receive upon payment of the
Purchase Price, shares of Common Stock (or in certain circumstances, cash,
property or other securities of the Company) having a value equal to two times
the Purchase Price of the Right. Notwithstanding the foregoing, all Rights that
are, or were, beneficially owned by an Acquiring Person or any affiliate or
associate thereof will be null and void and not exercisable.
If, at any time on or after the Stock Acquisition Date, (i) the
Company is acquired in a merger or other business combination transaction in
which the holders of all of the outstanding shares of Common Stock 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 Company's
assets, cash flow or earning power is sold or transferred other than in the
ordinary course of the Company's business, then each holder of a Right (except
Rights which have previously been voided as set forth above) shall thereafter
have the right (the "Flip-Over Right") to receive, in lieu of shares of Common
Stock and upon exercise and payment of the Purchase Price, common shares of the
acquiring company having a value equal to two times the Purchase Price. If a
transaction would otherwise result in a holder's having a Flip-In as well as a
Flip-Over Right, then only the Flip-Over Right will be exercisable. If a
transaction results in a holder's having a Flip-Over Right subsequent to a
transaction resulting in a holder's having a Flip-In Right, a holder will have
Flip-Over Rights only to the extent such holder's Flip-In Rights have not been
exercised.
The Purchase Price payable, and the number of shares of Common Stock
or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of, the
Common Stock, (ii) upon the grant to holders of the Common Stock of certain
rights or warrants to subscribe for Common Stock or convertible securities at
less than the current market price of the Common Stock or (iii) upon the
distribution to holders of the Common Stock of evidences of indebtedness or
assets (excluding dividends payable in Common Stock) or of subscription rights
or warrants (other than those referred to above). However, no adjustment in the
Purchase Price will be required until cumulative adjustments require an
adjustment of at least 1%.
The number of outstanding Rights and the number of shares of Common
Stock issuable upon exercise of each Right are also subject to adjustment in
the event of a stock split of the Common Stock or a stock dividend on the
Common Stock payable in Common Stock or
-2-
<PAGE> 72
subdivisions, consolidations or combinations of the Common Stock occurring, in
any such case, prior to the Distribution Date.
At any time after a Person becomes an Acquiring Person and before the
acquisition by a Person of 50% or more of the outstanding Common Stock of the
Company, the Board of Directors may, at its option, issue Common Stock or
common stock equivalents of the Company in mandatory redemption of, or in
exchange for, all or part of the then outstanding exercisable Rights (other
than Rights owned by such Acquiring Person which would become null and void) at
an exchange ratio of one share of Common Stock, or common stock equivalents
equal to one share of Common Stock, per Right, subject to adjustment.
To the extent that, after the triggering of Flip-In Rights,
insufficient shares of Common Stock are available for the exercise in full of
the Rights, holders of Rights will receive upon exercise shares of Common Stock
to the extent available and then cash, property or other securities of the
Company, in proportions determined by the Company, so that the aggregate value
received is equal to twice the Purchase Price.
The Company is not required to issue fractional shares of Common Stock
and in lieu thereof, a payment in cash will be made to the holder of such
Rights equal to the same fraction of the current value of share of Common
Stock. Following the triggering of the Flip-In Rights, the Company will not be
required to issue fractional shares of Common Stock upon exercise of the Rights
and, in lieu thereof, a payment in cash will be made to the holder of such
Rights equal to the same fraction of the current market value of a share of
Common Stock.
At any time prior to the Distribution Date, the Board of Directors of
the Company may redeem all, but not less than all, of the then outstanding
Rights at a price of $.001 per Right (the "Redemption Price"). The redemption
of the Rights may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
Immediately upon the action of the Board of Directors ordering redemption of
the Rights, the right to exercise the Rights will terminate and the only right
of the holders of Rights will be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the
right to vote or to receive dividends.
The issuance of the Rights is not taxable to the Company or to
shareholders under presently existing federal income tax law, and will not
change the way in which shareholders can presently trade the Company's shares
of Common Stock. If the Rights should become exercisable, shareholders,
depending on then existing circumstances, may recognize taxable income.
Prior to the Stock Acquisition Date, the Rights Agreement generally
may be amended by the Company without the consent of the holders of the Rights
or the Common Stock. On or after the Stock Acquisition Date, the Company may
amend the Rights Agreement only to (i) cure any ambiguity, (ii) correct or
supplement any provision which may be defective or inconsistent with the other
provisions of the Rights Agreement, or (iii) change or supplement the Rights
-3-
<PAGE> 73
Agreement in any other manner which the Company may deem necessary or
desirable, provided that no amendment shall adversely affect the interests of
the holders of Rights (other than any interest of an Acquiring Person or an
affiliate or associate of an Acquiring Person).
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Company's Board of Directors. Accordingly, the
existence of the Rights may deter certain acquirors from making takeover
proposals or tender offers. However, the Rights Agreement helps ensure that the
Company's shareholders receive fair and equal treatment in the event of any
proposed takeover of the Company. The Rights should not interfere with any
merger or other business combination approved by the Board of Directors because
the Rights may be redeemed by the Company at the Redemption Price prior to the
time that a person or group has acquired beneficial ownership of 15% or more of
the outstanding Common Stock. The adoption of the Rights Agreement is not in
response to any specific takeover threat or proposal, but is a precaution taken
to protect the rights of the Company's shareholders.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to the Company's Registration Statement on
Form 8-A with respect to the Rights filed with the Securities and Exchange
Commission. A copy of the Rights Agreement is available free of charge from the
Company. This summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights Agreement, which is
incorporated in this summary description by reference.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
Certain matters discussed herein may constitute Forward-looking
Statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Act of 1934, as amended, each as
amended by the Private Securities Litigation Reform Act of 1995. Those
statements include statements regarding the intent, belief or current
expectations of the Company and members of its management team as well as the
assumptions on which such statements are based. Any such Forward-looking
Statements are not guarantees of future performance and the Company's actual
results could differ materially from those set forth in such Forward-looking
Statements. Factors currently known to management that could cause actual
results to differ materially from those set forth in such Forward-looking
Statements include risks detailed from time to time in the Company's filings
with the Securities and Exchange Commission, including Quarterly Reports on
Form 10-Q, Current Reports on Form 8-K and Annual Reports on Form 10-K. The
Company undertakes no obligation to update or revise Forward-looking Statements
to reflect changed assumptions, the occurrence of unanticipated events or
changes to future operating results over time.
-4-
<PAGE> 74
FIRST AMENDMENT TO RIGHTS AGREEMENT
This First Amendment to Rights Agreement ("First Amendment"), dated as
of July 1, 1999, between JOHN H. HARLAND COMPANY, a Georgia corporation (the
"Company"), and FIRST CHICAGO TRUST COMPANY OF NEW YORK, a New York corporation
(the "Rights Agent").
W I T N E S S E T H:
WHEREAS, the Company and the Rights Agent entered into that certain
Rights Agreement, dated as of December 17, 1998 (the "Rights Agreement"); and
WHEREAS, the Rights Agreement provides that the Company may amend the
Rights Agreement in certain respects prior to the Stock Acquisition Date (as
defined therein) without the approval of holders of the Rights or Common Stock
(each as defined therein); and
WHEREAS, the Company desires to amend the Rights Agreement as set
forth herein to clarify the Company's original intent, and has directed the
Rights Agent to execute this First Amendment as provided in Section 27 of the
Rights Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
agreement herein set forth, the parties hereby agree as follows:
(A) Section 1(a) of the Rights Agreement is hereby
amended to add "or a Permitted Holder (as such term is hereinafter defined)" at
the end of proviso clause (i). Section 1(a) of the Rights Agreement shall
hereafter read as follows:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all
Affiliates (as such term is hereinafter defined) and
Associates (as such term is hereinafter defined) of such
Person, shall be the Beneficial Owner (as such term is
hereinafter defined) of 15% or more of the outstanding Common
Stock; provided, however, that (i) the term "Acquiring
Person" shall not include an Exempt Person (as such term is
hereinafter defined) or a Permitted Holder (as such term is
hereinafter defined), (ii) a Person shall not be deemed to
have become an Acquiring Person for any purpose of this
Agreement if the Board of Directors in its good faith
judgment determines that a Person has inadvertently become
the Beneficial Owner of 15% or more of the outstanding Common
Stock of the Company (or in the case of a Permitted Holder,
has inadvertently acquired additional shares of Common Stock
of the Company so that it is no longer a Permitted Holder)
and within ten days after the date upon which the Company
shall first become aware of the occurrence of such an event,
the Board of Directors in its sole discretion provides such
Person with a thirty day period to divest a sufficient number
of shares so that such Person no longer is the Beneficial
Owner of 15% or more of the outstanding Common Stock of the
Company (or in the case of a Permitted Holder, to divest all
shares of Common Stock of the Company which prevent such
Person from being a Permitted Holder), and such Person has so
divested such shares of Common Stock of the Company at the
<PAGE> 75
end of any such thirty day period and has not acquired any additional shares
of Common Stock of the Company prior to the end of such thirty day period; and
(iii) shares of Common Stock Beneficially Owned by the Company or any
Subsidiary of the Company shall not be considered outstanding for purposes of
calculating any Person's percentage ownership of the outstanding Common Stock
of the Company.
(B) The Rights Agreement, as amended by this First
Amendment, shall remain in full force and effect in accordance with its terms.
This First Amendment may be executed in one or more counterparts.
<PAGE> 76
IN WITNESS WHEREOF, the parties have caused this First Amendment to be
duly executed, as of the date first above written.
JOHN H. HARLAND COMPANY
By:/s/ John C. Walters
----------------------------------------
Name: John C. Walters
Title: Vice President, Secretary and
General Counsel
Attest:
By: /s/ Victoria P. Weyand
-------------------------------------
Name: Victoria P. Weyand
Title: Vice President and Assistant
Secretary
FIRST CHICAGO TRUST COMPANY OF
NEW YORK
By: /s/ Joanne Gorostiola
----------------------------------------
Name: Joanne Gorostiola
Title: Assistant Vice President
Attest:
By: /s/ Michael Duncan
-------------------------------------
Name: Michael Duncan
Title: Officer - Corporate Actions
<PAGE> 1
EXHIBIT 4.2
[Form of Right Certificate]
Certificate No. W- ________ Rights
NOT EXERCISABLE AFTER JULY 5, 2009 OR UNDER CERTAIN CIRCUMSTANCES
EARLIER. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $0.001 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. IN THE EVENT THAT THE RIGHTS REPRESENTED BY THIS
CERTIFICATE ARE ISSUED TO A PERSON WHO IS AN ACQUIRING PERSON OR AN
ASSOCIATE OR AFFILIATE OF AN ACQUIRING PERSON OR A TRANSFEREE OF THE
RIGHTS PREVIOUSLY OWNED BY SUCH PERSONS, THIS RIGHT CERTIFICATE AND
THE RIGHTS REPRESENTED HEREBY WILL BECOME NULL AND VOID.
Right Certificate
John H. Harland Company
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 December 17, 1998 ("Rights Agreement") between
John H. Harland Company, a Georgia corporation ("Company"), and First Chicago
Trust Company of New York ("Rights Agent"), to purchase from the Company at any
time after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 P.M. (Atlanta, Georgia time) on July 5, 2009 at
the principal office of the Rights Agent, or its successors as Rights Agent,
one fully paid and nonassessable share of Common Stock, par value $1.00 per
share ("Common Stock"), of the Company at a purchase price of $90.00 as the
same may from time to time be adjusted in
<PAGE> 2
accordance with the Rights Agreement ("Purchase Price"), upon presentation and
surrender of this Right Certificate with the Form of Election to Purchase duly
executed.
As provided in the Rights Agreement, the Purchase Price and the number
of shares of Common Stock 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 and, upon the happening of
certain events, securities other than shares of Common Stock, or other
property, may be acquired upon exercise of the Rights evidenced by this Right
Certificate, as provided by 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
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 of the Rights Agent,
the Company and the holders of record of the Right Certificates. Copies of the
Rights Agreement are on file at the principal executive office of the Company.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder of record to purchase a like aggregate
number of shares of Common Stock as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall have entitled such holder
to purchase. If this Right Certificate shall be exercised in part, the holder
shall be entitled to receive upon surrender hereof, another Right Certificate
or Right Certificates for the number of whole Rights not exercised.
<PAGE> 3
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at its option
at a redemption price of $0.001 per Right or (ii) may be exchanged in whole or
in part for shares of Common Stock or common stock equivalents.
No fractional shares of Common Stock shall be issued upon the exercise
of any Right or Rights evidenced hereby, and in lieu thereof, as provided in
the Rights Agreement, fractions of shares of Common Stock shall receive an
amount in cash equal to the same fraction of the then current market value of a
share of Common Stock.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Common Stock or of
any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors;
or upon any matter submitted to shareholders at any meeting thereof, or to give
or withhold consent to any corporate action or to receive notice of meetings
(except as provided in the Rights Agreement) or other actions affecting
shareholders or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
<PAGE> 4
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal, dated as of ________________, ____.
ATTEST: JOHN H. HARLAND COMPANY
By:
-------------------------------------
- ---------------------------------- Title:
Secretary
Countersigned:
First Chicago Trust Company
of New York, Rights Agent
By:
------------------------------
Authorized signature
<PAGE> 5
[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)
Rights evidenced by 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 Company, 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 or trust company having an office or
correspondent in the United States.
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1)the Rights evidenced by this Right Certificate [ ] are [ ] are not
being sold, assigned and transferred by or on behalf of a Person who is or was
an Acquiring Person or an Affiliate or Associate of any such Acquiring Person
(as such terms are defined pursuant to the Rights Agreement); and
<PAGE> 6
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate from
any Person who is or was an Acquiring Person or an Affiliate or Associate of an
Acquiring Person or any transferee of such Persons.
Dated: ____________ __, ____
--------------------------------------------
Signature
NOTICE
The signature to the foregoing Assignment must correspond to the name as
written upon the face of this Right Certificate in every particular, without
alteration or enlargement or any change whatsoever.
<PAGE> 7
FORM OF ELECTION TO PURCHASE
(To be executed if registered holder desires to Exercise the Right Certificate.)
To: John H. Harland Company
The undersigned hereby irrevocably elects to exercise
_____________________ Rights represented by this Right Certificate to purchase
the shares of Common Stock issuable upon the exercise of such Rights and
requests that certificates for such share(s) be issued in the name:
- ------------------------------------------------------------------
(Please print name and address)
- ------------------------------------------------------------------
(Please insert social security or other identifying number)
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 print name and address)
- -------------------------------------------------------------------
(Please insert social security or other identifying number)
Dated: ___________________, ____
--------------------------------------------
Signature
(Signature must conform in all respects to
name of holder as specified on the face of
this Right Certificate)
<PAGE> 8
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 or trust company having an office or
correspondent in the United States.
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate [ ]
are [ ] are not being exercised by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as
such terms are defined pursuant to the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is or was an Acquiring Person or an Affiliate
or Associate of an Acquiring Person or any transferee of such Persons.
Dated:____________________, ____
--------------------------------------------
Signature
