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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 AND EXCHANGE ACT OF 1934
American Science and Engineering, Inc.
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(Exact Name of Registrant as Specified in Its Charter)
Massachusetts 04-224091
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(State of Incorporation or Organization) (I.R.S. Employer Identification No.)
829 Middlesex Turnpike, Billerica, Massachusetts 01821
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(Address of Principal Executive Offices) (Zip Code)
If this form relates to the registration of a class of securities pursuant
to Section 12(b) of the Exchange Act and is effective pursuant to General
Instruction A.(c), check the following box. [X]
If this form relates to the registration of a class of securities pursuant
to Section 12(g) of the Exchange Act and is effective pursuant to General
Instruction A.(d), check the following box. [ ]
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:
Title Of Each Class Name Of Each Exchange On Which
To Be So Registered Each Class Is To Be Registered
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Series A Junior Participating Cumulative American Stock Exchange
Preferred Stock Purchase Rights
Securities To Be Registered Pursuant To Section 12(g) Of The Act:
None
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(Title of Class)
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Item 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
On April 9, 1998, the Board of Directors of American Science and
Engineering, Inc. (the "Company") declared a dividend of one preferred share
purchase right (a "Right") for each outstanding share of common stock, par value
$0.66 2/3 per share (the "Common Shares"), of the Company. The dividend is
payable on April 17, 1998 to all holders of record of Common Shares as of the
close of business on April 17, 1998 (the "Record Date"). Each Right entitles the
registered holder to purchase from the Company one one-thousandth of a share of
Series A Junior Participating Preferred Stock, no par value (the "Preferred
Shares"), of the Company at a price of $60.00 per one one-thousandth of a
Preferred Share (the "Purchase Price"), subject to adjustment.
The description and terms of the Rights are set forth in a Rights Agreement
(the "Rights Agreement") between the Company and American Stock Transfer & Trust
Co., New York, New York, as Rights Agent (the "Rights Agent"). A copy of the
Rights Agreement is attached hereto as an exhibit and is hereby incorporated by
reference. The following summary of the Rights is qualified in its entirety by
reference to the Rights Agreement.
Until the earliest to occur of (i) 10 business days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired beneficial ownership of 15% or more of the
outstanding Common Shares or (ii) 10 business days (or such other date as may be
determined by the Board of Directors) following the commencement of a tender
offer or exchange offer the consummation of which would result in the beneficial
ownership by a person or group of 15% or more of the outstanding Common Shares,
or (iii) the date on which the Board of Directors determines that a person or
group which beneficially owns more than 10% of the outstanding Common Shares is
an Adverse Person, as defined in the Rights Agreement (the earliest of such
dates being called the "Distribution Date"), the Rights will be evidenced by the
certificates representing Common Shares.
The Rights Agreement provides that, until the Distribution Date (or earlier
redemption or expiration of the Rights), the Rights will be transferred with and
only with the Common Shares. Until the Distribution Date (or earlier redemption
or expiration of the Rights), certificates representing Common Shares issued
after the Record Date upon transfer or new issuance will contain a notation
incorporating the Rights Agreement by reference. Until the Distribution Date (or
earlier redemption or expiration of the Rights), the surrender for transfer of
any certificates for Common Shares outstanding as of the Record Date, even
without such notation, will also constitute the transfer of the Rights
associated with the Common Shares represented by such certificate.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date, and thereafter such separate Right Certificates alone will
evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights will
expire on April 16, 2008 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or unless the Rights are earlier redeemed or
exchanged by the Company, in each case, as described below.
At any time following the Distribution Date, Rights (other than Rights
owned by an Acquiring Person or Adverse Person, and the Acquiring Person's or
Adverse Person's affiliates and associates,
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which will have become void) may be exercised (subject to their earlier
termination, expiration or exchange) to acquire that number of Preferred Shares
at the then current Purchase Price of the Right, or if the Board of Directors so
determines, Common Shares, which at such time will have a market value of two
times the Purchase Price of the Right.
The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights
or warrants to subscribe for or purchase Preferred Shares at a price, or
securities convertible into Preferred Shares with a conversion price, less than
the then-current market price of the Preferred Shares or (iii) upon the
distribution to holders of the Preferred Shares of evidences of indebtedness or
assets (excluding regular periodic cash dividends paid out of earnings or
retained earnings or dividends payable in Preferred Shares) or of subscription
rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of one one-thousandths of a
Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $1.00 per share but will be entitled to an
aggregate dividend of 1,000 times the dividend declared per Common Share. In the
event of liquidation, the holders of the Preferred Shares will be entitled to a
minimum preferential liquidation payment of $1,000 per share but will be
entitled to an aggregate payment of 1,000 times the payment made per Common
Share. Each Preferred Share will have 1,000 votes, voting together with the
Common Shares. Finally, in the event of any merger consolidation or other
transaction in which Common Shares are exchanged, each Preferred Share will be
entitled to receive 1,000 times the amount received per Common Share. These
rights are protected by customary antidilution provisions.
Because of the nature of the dividend, liquidation and voting rights of the
Preferred Shares, the value of one one-thousandth of a Preferred Share
purchasable upon exercise of each Right should approximate the value of one
Common Share.
In the event that any person or group of affiliated or associated persons
becomes an Acquiring Person, proper provision shall be made so that each holder
of a Right, other than Rights beneficially owned by the Acquiring Person or
Adverse Person or the affiliates and associates of such Acquiring Person or
Adverse Person (which will thereafter be void), will thereafter have the right
to receive upon exercise that number of Preferred Shares having a market value
of two times the Purchase Price of the Right.
At any time after any person or group becomes an Acquiring Person and prior
to the acquisition by such person or group of 50% or more of the outstanding
Common Shares, the Board of Directors of
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the Company may exchange the Rights (other than Rights owned by such person or
group and their respective affiliates and associates which will have become
void) in whole or in part, at an exchange ratio of one one-thousandth of a
Preferred Share (or of a share of a class or series of the Company's Preferred
Stock having equivalent rights, preferences and privileges) or one Common Share
per Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Preferred Shares will be issued (other than
fractions which are integral multiples of one one-thousandth of a Preferred
Share, which may, at the election of the Company, be evidenced by depository
receipts) and in lieu thereof, an adjustment in cash will be made based on the
market price of the Preferred Shares on the last trading day prior to the date
of exercise.
At any time prior to or within 10 business days following (i) the
acquisition by a person or group of affiliated or associated persons of
beneficial ownership of 15% or more of the outstanding Common Shares, or (ii)
the date on which the Board of Directors of the Company determines a person or
group to be an Adverse Person, the Board of Directors of the Company may redeem
the Rights in whole, but not in part, at a price of $.01 per Right (the
"Redemption Price"). The redemption of the Rights may be made effective at such
time on such basis with such conditions as the Board of Directors in its sole
discretion may establish. Immediately upon any 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.
In the event that the Company is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are sold after a person or group has become an Acquiring Person, proper
provision will be made so that each holder of a Right (other than an Acquiring
Person or Adverse Person and the affiliates and associates of such Acquiring
Person or Adverse Person, whose Rights will have become void) will thereafter
have the right to receive, upon the exercise thereof at the then current
Purchase Price of the Right, that number of shares of common stock of the
acquiring company which at the time of such transaction will have a market value
of two times the Purchase Price of the Right.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.
Prior to the Distribution Date, the Company may supplement or amend any
provision of the Rights Agreement in any manner. From and after the Distribution
Date, the Company may supplement or amend the Rights Agreement to: (i) cure any
ambiguity; (ii) correct or supplement any provision contained in the Rights
Agreement which may be defective or inconsistent with any other provision of the
Rights Agreement; (iii) shorten or lengthen any time period contained in the
Rights Agreement; or (iv) change or supplement the provisions in the Rights
Agreement in any manner which the Company may deem necessary or desirable and
which shall not adversely affect the interest of the holders of Rights (other
than Rights owned by an Acquiring Person, Adverse Person or any affiliate or
associate of an Acquiring Person or Adverse Person).
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Item 2. EXHIBITS.
1. Shareholder Rights Agreement dated as of April 17, 1998 between American
Science and Engineering, Inc. and American Stock Transfer & Trust Co., as Rights
Agent, which includes as Exhibit C a summary of the provisions of the Rights
Agreement and as Exhibit B the forms of Right Certificate and Election to
Exercise.
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.
AMERICAN SCIENCE AND ENGINEERING, INC.
By: /s/ Ralph S. Sheridan
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Ralph S. Sheridan,
President and Chief Executive Officer
Dated: April 14, 1998
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EXHIBIT 1
SHAREHOLDER RIGHTS AGREEMENT
between
AMERICAN SCIENCE AND ENGINEERING, INC.
and
AMERICAN STOCK TRANSFER & TRUST CO.
Dated: April 17, 1998
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<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
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<S> <C>
SECTION 1. CERTAIN DEFINITIONS...........................................................................................1
SECTION 2. APPOINTMENT OF RIGHTS AGENT...................................................................................6
SECTION 3. ISSUE OF RIGHT CERTIFICATES...................................................................................7
SECTION 4. FORM OF RIGHT CERTIFICATES....................................................................................8
SECTION 5. COUNTERSIGNATURE AND REGISTRATION.............................................................................9
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN
RIGHT CERTIFICATES......................................................................................................10
SECTION 7. EXERCISE OF RIGHTS; EXERCISE PRICE; EXPIRATION DATE OF RIGHTS................................................11
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES...........................................................13
SECTION 9. RESERVATION AND AVAILABILITY OF PREFERRED STOCK..............................................................13
SECTION 10. PREFERRED STOCK RECORD DATE.................................................................................14
SECTION 11. ADJUSTMENT OF EXERCISE PRICE, NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS.................................15
SECTION 12. CERTIFICATE OF ADJUSTED EXERCISE PRICE OR NUMBER OF SHARES..................................................22
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING POWER........................................22
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.....................................................................24
SECTION 15. RIGHTS OF ACTION............................................................................................25
SECTION 16. AGREEMENT OF RIGHT HOLDERS..................................................................................25
SECTION 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER...........................................................26
SECTION 18. CONCERNING THE RIGHTS AGENT.................................................................................26
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT...................................................27
SECTION 20. DUTIES OF RIGHTS AGENT......................................................................................27
SECTION 21. CHANGE OF RIGHTS AGENT......................................................................................30
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES..........................................................................30
SECTION 23. REDEMPTION AND TERMINATION..................................................................................31
</TABLE>
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<TABLE>
<S> <C>
SECTION 24. EXCHANGE....................................................................................................32
SECTION 25. NOTICE OF CERTAIN EVENTS....................................................................................34
SECTION 26. NOTICES.....................................................................................................34
SECTION 27. SUPPLEMENTS AND AMENDMENTS..................................................................................35
SECTION 28. SUCCESSORS..................................................................................................36
SECTION 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS........................................................36
SECTION 30. BENEFITS OF THIS AGREEMENT..................................................................................36
SECTION 31. SEVERABILITY................................................................................................36
SECTION 32. GOVERNING LAW...............................................................................................37
SECTION 33. COUNTERPARTS................................................................................................37
SECTION 34. DESCRIPTIVE HEADINGS........................................................................................37
</TABLE>
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SHAREHOLDER RIGHTS AGREEMENT
Agreement, dated as of April 17, 1998, between American Science and
Engineering, Inc., a Massachusetts corporation (the "Company"), and American
Stock Transfer & Trust Co., a New York trust company (the "Rights Agent").
WITNESSETH
WHEREAS, the Board of Directors of the Company desires to provide
shareholders of the Company with the opportunity to benefit from the long-term
prospects and value of the Company and to ensure that shareholders of the
Company receive fair and equal treatment in the event of any proposed takeover
of the Company; and
WHEREAS, on April 9, 1998, the Board of Directors of the Company authorized
and declared a dividend distribution of one Right (as hereafter defined) for
each outstanding share of Common Stock, par value $.66 2/3 per share of the
Company (the "Common Stock") outstanding as of the close of business on April
17, 1998 (the "Record Date"), and contemplates the issuance of one Right for
each share of Common Stock of the Company issued (whether originally issued or
sold from the Company's treasury) between the Record Date and the earlier of the
Distribution Date or the Expiration Date (as hereafter defined), each Right
initially representing the right to purchase one one-thousandth of a share of
Series A Junior Participating Cumulative Preferred Stock of the Company having
the rights, powers and preferences set forth on Exhibit A hereto, upon the terms
and subject to the conditions hereinafter set forth (the "Rights");
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the indicated meanings:
"Acquiring Person" means any Person who or which, together with all
Affiliates and Associates of such Person, shall be the Beneficial Owner of 15%
or more of the shares of Common Stock then outstanding, but shall not include
any Exempt Person.
Notwithstanding the foregoing, no Person shall become an "Acquiring Person"
(i) as the result of an acquisition of Common Stock by the Company which, by
reducing the number of shares outstanding, increases the proportionate number of
shares beneficially owned by such Person to 15% or more of the shares of Common
Stock then outstanding; provided, however, that if a Person shall become the
Beneficial Owner of 15% or more of the shares of Common Stock of the Company
then outstanding by reason of share purchases by the Company and shall, after
such share purchases by the Company, become the Beneficial Owner of any
additional shares (other than pursuant to a stock split, stock dividend or
similar transaction) of Common Stock of the Company and immediately thereafter
be the Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding, then such Person shall be deemed to be an "Acquiring Person," or
(ii) if the Board of Directors of the Company determines that a Person who would
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otherwise be an "Acquiring Person" has become such inadvertently, and such
Person divests as promptly as practicable a sufficient number of shares of
Common Stock so that such Person would no longer be an "Acquiring Person," as
defined pursuant to the foregoing provisions.
"Adverse Person" means any Person declared to be an Adverse Person by the
Board of Directors after (x) a determination that such Person, alone or together
with its Affiliates and Associates, has become the Beneficial Owner of 10% or
more of the outstanding shares of Common Stock and (y) a determination by the
Board of Directors, after reasonable inquiry and investigation, including such
consultation, if any, with such persons as such directors shall deem
appropriate, that (a) such Beneficial Ownership by such Person is intended to
cause, is reasonably likely to cause or will cause the Company to repurchase the
Common Stock beneficially owned by such Person or to cause pressure on the
Company to take action or enter into a transaction or series of transactions
which would provide such Person with short-term financial gain under
circumstances where the Board of Directors determines that the best long-term
interests of the Company and its shareholders, but for the actions and possible
actions of such Person, would not be served by taking such action or entering
into such transactions or series of transactions at that time or (b) such
Beneficial Ownership is causing or reasonably likely to cause a material adverse
impact (including, but not limited to, impairment of relationships with
customers or impairment of the Company's ability to maintain its competitive
position) on the business or prospects of the Company; provided, however, that
the Board of Directors of the Company may not declare a Person to be an Adverse
Person if, prior to the time that such Person acquired 10% or more of the shares
of Common Stock then outstanding, such Person provided to the Board of Directors
in writing a statement of such Person's purpose and intentions in connection
with the proposed acquisition of Common Stock, together with any other
information reasonably requested of such Person by the Board of Directors, and
the Board of Directors, based on such statement and reasonable inquiry and
investigation, including such consultation, if any, with such Person as the
Board of Directors shall deem appropriate, determines to notify and notifies
such Person in writing that it will not declare such Person to be an Adverse
Person; provided further, that the Board of Directors may expressly condition in
any manner a determination not to declare a Person an Adverse Person on such
conditions as the Board of Directors may select, including without limitation
such Person's not acquiring more than a specified amount of stock and/or on such
Person's not taking actions inconsistent with the purposes and intentions
disclosed by such Person in the statement provided to the Board of Directors. No
delay or failure by the Board of Directors to declare a Person to be an Adverse
Person shall in any way waive or otherwise affect the power of the Board of
Directors subsequently to declare a Person to be an Adverse Person. In the event
that the Board of Directors should at any time determine, upon reasonable
inquiry and investigation, including consultation with such Persons as the Board
of Directors shall deem appropriate, that such Person has not met or complied
with any condition specified by the Board of Directors, the Board of Directors
may at any time thereafter declare such Person to be an Adverse Person.
"Affiliate" and "Associate" have the respective meanings ascribed to such
terms in Rule 12b-2 under the Exchange Act, as in effect on the date of this
Agreement; provided, however, that no Person who is a director or officer of the
Company shall be deemed an Affiliate or an
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Associate of any other director or officer of the Company solely as a result of
his or her position as director or officer of the Company.
"Beneficial Owner" means a person who is deemed to "beneficially own," any
securities:
(i) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, beneficially owns (as determined
pursuant to Rule 13d-3 of the rules under the Exchange Act, as in effect on
the date of this Agreement);
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has:
(A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time or upon the satisfaction of
any conditions or both) pursuant to any agreement, arrangement or
understanding (whether or not in writing) (other than customary agreements
with and between underwriters and selling group members with respect to a
bona fide public offering of securities) or upon the exercise of conversion
rights, exchange rights, rights (other than the Rights), warrants or
options, or otherwise; provided, however, that a Person shall not be deemed
the "Beneficial Owner" of (1) securities tendered pursuant to a tender or
exchange offer made by or on behalf of such Person or any of such Persons
Affiliates or Associates until such tendered securities are accepted for
purchase or exchange; (2) securities issuable upon exercise of these Rights
at any time prior to the occurrence of a Triggering Event; or (3)
securities issuable upon exercise of Rights from and after the occurrence
of a Triggering Event, which Rights were acquired by such Person or any of
such Person's Affiliates or Associates prior to the Distribution Date or
pursuant to Sections 3(a), 11 (i) or 22 hereof; 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 any security under this
clause (B) if the agreement, arrangement or understanding to vote such
security (1) arises solely from a revocable proxy given in response to a
public proxy or consent solicitation made pursuant to, and in accordance
with, the rules of the Exchange Act and (2) is not also then reportable by
such person on Schedule 13D under the Exchange Act (or any comparable or
successor report); or
(C) the right to dispose of pursuant to any agreement,
arrangement or understanding (whether or not in writing) (other than
customary arrangements with and between underwriters and selling group
members with respect to a bona fide public offering of securities); or
(iii) which are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) with which such Person
or any of such Person's Affiliates or Associates has any agreement,
arrangement or understanding (whether or not in writing) (other than
customary agreements with and between underwriters and selling
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group members with respect to a bona fide public offering of securities)
for the purpose of acquiring, holding, voting (except, pursuant to a
revocable proxy as described in clause (B) hereof) or disposing of any
securities of the Company;
PROVIDED, however, that (1) no Person engaged in business as an underwriter of
securities shall be deemed the Beneficial Owner of any securities acquired
through such Person's participation as an underwriter in good faith in a firm
commitment underwriting until the expiration of 40 days after the date of such
acquisition, and (2) no Person who is a director or an officer of the Company
shall be deemed, as a result of his or her position as director or officer of
the Company, the Beneficial Owner of any securities of the Company that are
beneficially owned by any other director or officer of the Company.
"Business Day" means any day other than a Saturday, Sunday, or a day on
which banking institutions in the Commonwealth of Massachusetts are authorized
or obligated by law or executive order to close.
"Close of Business" on any given date means 5:00 p.m., Boston,
Massachusetts time, on such date; PROVIDED, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Boston, Massachusetts time, on the next
succeeding Business Day.
"Common Stock" means the Common Stock, par value $.66 2/3 per share, of the
Company, except that "Common Stock" when used with reference to any Person other
than the Company shall mean the capital stock with the greatest voting power, or
the equity securities or other equity interests having power to control or
direct the management, of such Person or, if such Person is a Subsidiary of
another Person, the Person which ultimately controls such first-mentioned Person
and which has issued and outstanding such capital stock, equity securities or
equity interests.
"Distribution Date" has the meaning defined in Section 3(a) hereof.
"Exempt Person" means (i) the Company, (ii) any Subsidiary of the Company,
(iii) any employee benefit plan or compensation arrangement of the Company or
any Subsidiary of the Company, or (iv) any Person holding shares of Common Stock
organized, appointed or established by the Company or any Subsidiary of the
Company for or pursuant to the terms of any such employee benefit plan or
compensation arrangement.
"Exercise Price" has the meaning defined in Section 7(b) hereof.
"Expiration Date" means the earlier of (i) the close of business on April
16, 2008 (the "Final Expiration Date"), (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof, or (iii) the time at which such
Rights are exchanged as provided in Section 24 hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Ratio" has the meaning defined in Section 24.
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"Fair Market Value" of any securities or other property shall be as
determined in accordance with Section 11(d) hereof.
"Person" means an individual, a corporation, a partnership, an association,
a joint stock company, a trust, a business trust, a government or political
subdivision, any unincorporated organization, or any other association or
entity.
"Preferred Stock" means shares of Series A Junior Participating Cumulative
Preferred Stock, no par value, of the Company having the rights and preferences
set forth in the form of Certificate of Designation attached hereto as Exhibit
A.
"Principal Party" has the meaning defined in Section 13(b) hereof.
"Redemption Price" has the meaning defined in Section 23 hereof.
"Rights Certificate" means a certificate evidencing the Rights
substantially in the form of Exhibit B hereto.
"Section 11(a)(ii) Event" means any event described in Section 11(a)(ii)
hereof.
"Section 13 Event" means any event described in clauses (x), (y) or (z) of
Section 13(a) hereof.
"Securities Act" means the Securities Act of 1933, as amended.
"Stock Acquisition Date" means the date of the first public announcement
(which for purposes of this definition shall include, without limitation, the
issuance of a press release or the filing of a publicly-available report or
other document with the Securities and Exchange Commission or any other
governmental agency) by the Company or an Acquiring Person that an Acquiring
Person has become such.
"Subsidiary" means with respect to any Person, any other Person of which a
majority of the voting power of the voting equity securities or voting interests
is owned, directly or indirectly, by such Person, or which is otherwise
controlled by such Person.
"Trading Day" means a day on which the principal national securities
exchange on which such security is listed or admitted to trading is open for the
transaction of business or, if such security is not listed or admitted to
trading on any national securities exchange, a Business Day.
"Triggering Event" means any Section 11(a)(ii) Event or any Section 13
Event.
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SECTION 2. APPOINTMENT OF RIGHTS AGENT.
The Company hereby appoints the Rights Agent to act as agent for the
Company and the holders of the Rights (who, in accordance with Section 3 hereof,
shall prior to the Distribution Date also be the holders of the Common Stock) in
accordance with the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company may from time to time appoint such
Co-Rights Agents as it may deem necessary or desirable. In the event 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.
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SECTION 3. ISSUE OF RIGHT CERTIFICATES.
(a) From the date hereof until the EARLIER of (i) the close of business on
the tenth Business Day after the Stock Acquisition Date, (ii) the close of
business on the tenth Business Day (or such other Business Day, if any, as the
Board of Directors may determine in its sole discretion) after the date of the
commencement by any Person, other than an Exempt Person, of a tender or exchange
offer if, upon consummation thereof, such Person would be the beneficial Owner
of 15% or more of the shares of Common Stock then outstanding, or (iii) the
determination by the Board of Directors of the Company, pursuant to the criteria
set forth in Section 11(a) (ii) (B) hereof, that a Person is an Adverse Person
(including any such date which is after the date of this Agreement and prior to
the issuance of the Rights) (the earliest of such dates being herein referred to
as the "Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of Section 3 (b) hereof) by the certificates for 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 certificates, and (y) the Rights will be transferable only in
connection with the transfer of the underlying shares of Common Stock. As soon
as practicable after the Company has notified the Rights Agent of the occurrence
of the Distribution Date, the Rights Agent will, at the Company's expense, send
by first-class, insured, postage prepaid mail, to each record holder of the
Common Stock as of the close of business on the Distribution Date, at the
address of such holder shown on the records of the Company, one or more
certificates, in substantially the form of Exhibit B hereto (the "Right
Certificates"), evidencing one Right for each share of Common Stock so held. In
the event that an adjustment in the number of Rights per share of Common Stock
has been made pursuant to Section 11(o) hereof, the Company shall make the
necessary and appropriate rounding adjustments (in accordance with Section 14(a)
hereof) at the time of distribution of the Right Certificates, so that Right
Certificates representing only whole numbers of Rights are distributed and cash
is paid in lieu of any fractional Rights. As of and after the close of business
on the Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(b) With respect to certificates for the Common Stock issued prior to the
close of business on the Record Date, the Rights will be evidenced by such
certificates for the Common Stock on or until the Distribution Date (or the
earlier redemption, expiration or termination of the Rights), and the registered
holders of the Common Stock also shall be the registered holders of the
associated Rights. Until the Distribution Date (or the earlier redemption,
expiration or termination of the Rights), the transfer of any of the
certificates for the Common Stock outstanding prior to the date of this
Agreement shall also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate.
(c) Certificates for the Common Stock issued after the Record Date, but
prior to the earlier of the Distribution Date or the redemption, expiration or
termination of the Rights, shall be deemed also to be certificates for Rights,
and shall bear a legend, substantially in the form set forth below:
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This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Shareholder Rights Agreement between
American Science and Engineering, Inc. and American Stock Transfer &
Trust Co., as Rights Agent, dated as of April 17, 1998 (the "Rights
Agreement"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal offices of
American Science and Engineering, Inc. Under certain circumstances, as
set forth in the Rights Agreement, such Rights will be evidenced by
separate certificates and will no longer be evidenced by this
certificate. American Science and Engineering, Inc. may redeem the
Rights at a redemption price of $0.01 per Right, subject to
adjustment, under the terms of the Rights Agreement. American Science
and Engineering, Inc. will mail to the holder of this certificate a
copy of the Rights Agreement, as in effect on the date of mailing,
without charge promptly after receipt of a written request therefor.
Under certain circumstances, Rights issued to or held by Acquiring
Persons, Adverse Persons or any Affiliates or Associates thereof (as
defined in the Rights Agreement), and any subsequent holder of such
Rights, may become null and void.
(d) The Rights associated with the Common Stock represented by certificates
containing the legend in paragraph (c) above shall be evidenced by the Common
Stock certificates alone until the Distribution Date (or the earlier redemption,
expiration or termination of the Rights), and the transfer of any of such
certificates shall also constitute the transfer of the Rights associated with
the Common Stock represented by such certificates. In the event that the Company
purchases or acquires any shares of 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 the Shares of Common Stock which are no
longer outstanding. The failure to print the foregoing legend on any such Common
Stock certificate or any defect therein shall not affect in any manner
whatsoever the application or interpretation of the provisions of Section 7(e)
hereof.
SECTION 4. FORM OF RIGHT CERTIFICATES.
(a) The Right Certificates (and the forms of election to purchase shares
and of assignment and certificate to be printed on the reverse thereof) shall
each be substantially in the form of Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law, rule or regulation or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed, or to conform to
customary usage. The Rights Certificates shall be in a machine printable format
and in a form reasonably satisfactory to the Rights Agent. Subject to the
provisions of Section 11 and Section 22 hereof, the Right Certificates, whenever
distributed, shall be dated as of the Record Date, shall show the date of
countersignature, and on their face shall entitle the holders thereof to
purchase such number of a one one-thousandth of a share of Preferred Stock as
shall be set forth therein at the price set forth therein
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(the "Exercise Price"), but the number of such shares and the Exercise Price
shall be subject to adjustment as provided herein.
(b) Any Right Certificate issued pursuant to Section 3(a) or Section 22
hereof that represents Rights beneficially owned by (i) an Acquiring Person, an
Adverse Person or any Associate or Affiliate of an Acquiring Person or an
Adverse Person, (ii) a transferee of an Acquiring Person or an Adverse Person
(or of any Associate or Affiliate of an Acquiring Person, on or an Adverse
Person) who becomes a transferee after the Acquiring Person or Adverse Person
becomes such, or (iii) a transferee of an Acquiring Person or an Adverse Person
(or of any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person or Adverse Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person or Adverse Person to holders of equity
interests in such Acquiring Person or Adverse Person or to any Person with whom
the Acquiring Person or Adverse Person has any continuing agreement, arrangement
or understanding (whether or not in writing) regarding the transferred Rights,
or (B) a transfer which the Board of Directors of the Company has determined is
part of a plan, arrangement or understanding which has as a primary purpose or
effect the avoidance of Section 7(e) hereof, and any Right Certificate issued
pursuant to Section 6, Section 11 or Section 22 upon transfer, exchange,
replacement or adjustment of any other Right Certificate referred to in this
sentence, shall have deleted therefrom the second sentence of the existing
legend on such Right Certificate and in substitution therefor shall contain the
following legend:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person,
an Adverse Person or an Affiliate or an Associate of an Acquiring
Person or an Adverse Person (as such terms are defined in the Rights
Agreement). This Right Certificate and the Rights represented hereby
may become null and void under certain circumstances as specified in
Section 7(e) of the Rights Agreement.
(c) The Company shall give notice to the Rights Agent promptly after it
becomes aware of the existence and identity of any Acquiring Person or Adverse
Person or any Associate or Affiliate thereof. The Company shall instruct the
Rights Agent in writing of the Rights which should be so legended. The failure
to print the foregoing legend on any such Right Certificate or any defect
therein shall not affect in any manner whatsoever the application or
interpretation of the provisions of Section 7(e) hereof.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Right Certificates shall be executed on behalf of the Company by
its Chairman of the Board, or its President or any Vice President and by its
Treasurer or any Assistant Treasurer, or by its Secretary or any Assistant
Secretary, either manually or by facsimile signature, and shall have affixed
thereto the Company's seal or a facsimile thereof which shall be attested to by
the Secretary or any Assistant Secretary of the Company, either manually or by
facsimile signature. The Right Certificates shall be manually countersigned by
an authorized signatory of the Rights
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<PAGE> 13
Agent and shall not be valid for any purpose unless so countersigned. In case
any officer of the Company who shall have signed any of the Right Certificates
shall cease to be such officer of the Company before countersignature by the
Rights Agent and issuance and delivery by the Company, such Right Certificates,
nevertheless, may be countersigned by an authorized signatory of the Rights
Agent, and issued and delivered by the Company with the same force and effect as
though the person who signed such Right Certificates had not ceased to be such
officer of the Company; and any Right Certificates 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 one of its offices designated as the appropriate place for surrender
of Right Certificates upon exercise or transfer, books for registration and
transfer of the Right Certificates issued hereunder. Such books shall show the
names and addresses of the respective holders of the Right Certificates, the
number of Rights evidenced on its face by each of the Right Certificates and the
date of each of the Right Certificates.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.
(a) Subject to the provisions of Section 4(b), Section 7(e) and Section 14,
at any time after the close of business on the Distribution Date, and at or
prior to the close of business on the Expiration Date, any Right Certificate or
Certificates may be transferred, split up, combined or exchanged for another
Right Certificate or Certificates, entitling the registered holder to purchase a
like number of one one-thousandth of a share of Preferred Stock (or following a
Triggering Event, preferred stock, cash, property, debt securities, common stock
or any combination thereof) as the Right Certificate or Certificates surrendered
then entitled such holder to purchase and at the same Exercise Price. Any
registered holder desiring to transfer, split up, combine or exchange any Right
Certificate shall make such request in writing delivered to the Rights Agent,
and shall surrender the Right Certificate or Certificates to be transferred,
split up, combined or exchanged, with the form of assignment and certificate
duly executed, at the office or offices of the Rights Agent designated for such
purpose. Neither the Rights Agent nor the Company shall be obligated to take any
action whatsoever with respect to the transfer of any such surrendered Right
Certificate until the registered holder shall have completed and signed the
certificate contained in the form of assignment on the reverse side of such
Right Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request. Thereupon the Rights
Agent shall, subject to Section 4(b), Section 7(e) and Section 14 hereof,
countersign and deliver to the Person entitled thereto a Right Certificate or
Certificates, as the case may be, as so requested. The Company may require
payment by the registered holder of a Right Certificate, 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.
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<PAGE> 14
(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 satisfactory to them, and 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 countersignature and delivery to the registered owner in lieu
of the Right Certificate so lost, stolen, destroyed or mutilated.
SECTION 7. EXERCISE OF RIGHTS; EXERCISE 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)
in whole or in part at any time after the Distribution Date upon surrender of
the Right Certificate, with the form of election to purchase and the certificate
on the reverse side thereof duly executed, to the Rights Agent at the office or
offices of the Rights Agent designated for such purpose, together with payment
of the aggregate Exercise Price for the total number of one one-thousandth of a
share of Preferred Stock (or other securities, cash or other assets, as the case
may be) as to which such surrendered Rights are then exercised, at or prior to
the Expiration Date. Except as set forth in Section 7(e) hereof and
notwithstanding any other provision of this Agreement, any Person who prior to
the Distribution Date becomes a record holder of shares of Common Stock may
exercise all of the rights of a registered holder of a Right Certificate with
respect to the Rights associated with such shares of Common Stock in accordance
with the provisions of this Agreement, as of the date such Person becomes a
record holder of shares of Common Stock.
(b) The Exercise Price for each one one-thousandth of a share of Preferred
Stock pursuant to the exercise of a Right shall initially be $60.00, shall be
subject to adjustment from time to time as provided in section 11 and Section 13
hereof, and shall be payable in lawful money of the United States of America in
accordance with Section 7(c) below.
(c) Upon receipt of a Right Certificate representing exercisable Rights,
with the form of election to purchase and the certificate on the reverse side
thereof duly executed, accompanied by payment of the Exercise Price for the
shares to be purchased and an amount equal to any applicable transfer tax (as
determined by the Rights Agent) in cash, or by certified check or bank draft
payable to the order of the Company, the Rights Agent shall, subject to Section
20(k) hereof, thereupon promptly (i) (A) requisition from any transfer agent of
Preferred Stock (or make available, if the Rights Agent is the transfer agent
therefor) certificates for the number of one one-thousandth of a share of
Preferred Stock to be purchased and the Company hereby irrevocably authorizes
its transfer agent to comply with all such requests, or (B) if the Company shall
have elected to deposit the total number of shares of Preferred Stock issuable
upon exercise of the Rights hereunder with a depository agent, requisition from
the depository agent depositary receipts representing such number of one
one-thousandth of a share of Preferred Stock as are to be purchased (in which
case certificates for the shares of Preferred Stock represented by such receipts
shall be deposited by the transfer agent with the depositary agent) and the
Company will direct the depositary agent to comply with such request, (ii) when
appropriate, requisition from
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<PAGE> 15
the Company the amount of cash, if any, to be paid in lieu of issuance of
fractional shares in accordance with Section 14 hereof, (iii) promptly after
receipt of such certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder and (iv) when appropriate, after receipt promptly deliver such cash to or
upon the order of the registered holder of such Right Certificate. In the event
that the Company is obligated to issue other securities (including Common Stock)
of the Company, pay cash or distribute other property pursuant to Section 11 (a)
hereof, the Company will make all arrangements necessary so that such other
securities, cash or other property are available for distribution by the Rights
Agent, if and when appropriate.
(d) In case the registered holder of any Right Certificate shall exercise
less than all the Rights evidenced thereby, a new Right Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent and delivered to the registered holder of such Right Certificate or
to his duly authorized assigns, subject to the provisions of Section 14.
(e) Notwithstanding anything in this Agreement to the contrary, from and
after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially
owned by (i) an Acquiring Person, an Adverse Person or any Associate or
Affiliate of an Acquiring Person or an Adverse Person, (ii) a transferee of an
Acquiring Person or an Adverse Person (or of any Associate or Affiliate of an
Acquiring Person or an Adverse Person) who becomes a transferee after the
Acquiring Person or Adverse Person becomes such or (iii) a transferee of an
Acquiring Person or an Adverse Person (or of any Associate or Affiliate of an
Acquiring Person or an Adverse Person) who becomes a transferee prior to or
concurrently with the Acquiring Person or Adverse Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person or Adverse Person to holders of equity
interests in such Acquiring Person or Adverse Person or to any Person with whom
the Acquiring Person or Adverse Person has any continuing agreement, arrangement
or understanding regarding the transferred Rights, (B) a transfer which the
Board of Directors of the Company has determined is part of a plan, arrangement
or understanding which has as a primary purpose or effect the avoidance of this
Section 7(e), shall become null and void without any further action; and no
holder of such Rights shall have any rights whatsoever with respect to such
Rights, whether under any provision of this Agreement or otherwise. The Company
shall use all reasonable efforts to ensure that the provisions of this Section
7(e) and Section 4(b) hereof are complied with, but shall have no liability to
any holder of Right Certificates or other Person as a result of its failure to
make any determinations with respect to an Acquiring Person or Adverse Person or
any Affiliates or Associates of an Acquiring Person or an Adverse Person or any
transferee of any of them hereunder.
(f) Notwithstanding anything in this Agreement to the contrary, neither the
Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder of Rights upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered holder shall have
(i) completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Right Certificate surrendered for
such
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<PAGE> 16
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 any of
its agents, be delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered to the Rights Agent, shall be canceled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all canceled Right Certificates to the Company.
SECTION 9. RESERVATION AND AVAILABILITY OF PREFERRED STOCK.
(a) The Company covenants and agrees that it will cause to be reserved and
kept available out of its authorized and unissued shares of Preferred Stock or
any authorized and issued shares of Preferred Stock held in its treasury, the
number of shares of Preferred Stock that will be sufficient to permit the
exercise in full of all outstanding and exercisable Rights.
(b) So long as the Preferred Stock (or following a Triggering Event, Common
Stock or other securities) issuable or deliverable upon exercise of Rights may
be listed on any national securities exchange or automated quotation system, the
Company shall use its best efforts to cause, from and after such time as the
Rights become exercisable, all shares of Preferred Stock issued or reserved for
issuance to be so listed, upon official notice of issuance, upon the principal
national securities exchange, if any, upon which the Common Stock is listed or,
if the principal market for the Common Stock is not on any national securities
exchange, to be eligible for quotation on the Nasdaq National Market or any
successor thereto or other comparable quotation system.
(c) The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the occurrence of a Section
11(a)(ii) Event on which the consideration to be delivered by the Company upon
exercise of the Rights has been determined in accordance with Section 11(a)(iii)
hereof, or as soon as required by law following the Distribution Date, as the
case may be, a registration statement under the Securities Act with respect to
the securities purchasable upon exercise of the Rights on an appropriate form,
(ii) cause such registration statement to become effective as soon as
practicable after such filing, and (iii) cause such registration statement to
remain effective (with a prospectus that at all times meets the requirements of
the Securities Act) until the earlier of (A) the date as of which the Rights are
no longer exercisable for such securities or (B) the Expiration Date. The
Company will also take such action as may be appropriate under, and which will
ensure compliance with, the securities or "blue sky" laws of the various states
in connection with the exercisability of the Rights. The Company may temporarily
suspend, for a period of time not to exceed ninety (90) days after the
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date determined in accordance with the provisions of the first sentence of this
Section 9(c), the exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. Upon 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, in each case with prompt
written notice to the Rights Agent. Notwithstanding any such provision of this
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification in such jurisdiction shall have
been obtained.
(d) The Company covenants and agrees that it will take all such action as
may be necessary to ensure that all shares of Preferred Stock delivered upon the
exercise of the Rights shall, at the time of delivery of the certificates for
such shares (subject to payment of the Exercise Price), be duly and validly
authorized and issued and fully paid and nonassessable.
(e) From and after the Distribution Date, 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 certificates for shares of
Preferred Stock 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 in respect of the
issuance or delivery of securities in a name other than that of, the registered
holder of the Right Certificates evidencing Rights surrendered for exercise or
to issue or deliver any certificates for securities in a name other than that of
the registered holder upon the exercise of any Rights until such tax shall have
been, paid (any such tax being payable by the holder of such Right Certificate
at the time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
SECTION 10. PREFERRED STOCK RECORD DATE.
Each Person in whose name any certificate for Preferred Stock is issued
upon the exercise of Rights shall for all purposes be deemed to have become the
holder of record of the shares of Preferred Stock 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 Exercise Price
(and any applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Preferred Stock
transfer books of the Company are closed, such person shall be deemed to have
become the record holder of such shares on, and such certificate shall be dated,
the next succeeding Business Day on which the Preferred Stock transfer books of
the Company are open. Prior to the exercise of the Right evidenced thereby, the
holder of a Right Certificate shall not be entitled to any rights of a
shareholder of the Company with respect to shares for which the Rights shall be
exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and shall
not be entitled to receive any notice of any proceedings of the Company, except
as provided herein.
SECTION 11. ADJUSTMENT OF EXERCISE PRICE, NUMBER AND KIND OF SHARES OR
NUMBER OF RIGHTS.
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<PAGE> 18
The Exercise Price, the number and kind of shares covered by each Right and
the number of Rights outstanding are subject to adjustment from time to time as
provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date of this
Agreement (A) declare a dividend on the Preferred Stock payable in shares of
Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the
outstanding Preferred Stock into a smaller number of shares, or (D) issue any
shares of its capital stock in a reclassification of the Preferred Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), except
as otherwise provided in this Section 11 (a) and Section 7 (e) hereof, the
Exercise Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or reclassification, and the
number and kind of shares of capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive the aggregate number and kind of shares of
capital stock which, if such Right had been exercised immediately prior to such
date and at a time when the Preferred Stock transfer books of the Company were
open, he would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination or reclassification; PROVIDED,
however, that in no event shall the consideration to be paid upon the exercise
of a Right be less than the aggregate par value of the shares of capital stock
of the Company issuable upon exercise of a Right. If an event occurs which would
require an adjustment under both Section 11 (a) (i) and Section 11 (a) (ii)
hereof, the adjustment provided for in this Section 11 (a) (i) shall be in
addition to, and shall be made prior to, any adjustment required pursuant to
Section 11 (a) (ii) hereof.
(ii) Subject to the provisions of Sections 23 and 24 hereof, in the
event that:
(A) any Person (other than an Exempt Person) alone or together
with its Affiliates and Associates, shall become an Acquiring Person; or
(B) the Board of Directors of the Company, by majority vote,
shall declare any Person to be an Adverse Person;
then, in each such case, promptly following any such occurrence, proper
provision shall be made so that each holder of a Right, except as provided in
Section 7 (e) hereof, shall thereafter have a right to receive, upon exercise
thereof at the then current Exercise Price in accordance with the terms of this
Agreement, such number of shares of Preferred Stock of the Company (or, in the
discretion of the Board of Directors, Common Stock) as shall equal the result
obtained by (x) multiplying the then current Exercise Price by the then number
of one one-thousandth of a share of Preferred Stock for which a Right was
exercisable immediately prior to the first occurrence of a Section 11(a)(ii)
Event and dividing that product by (y) 50% of the Fair Market Value per one
one-thousandth of a share of the Preferred Stock (determined pursuant to Section
11(d)) on the date of the occurrence of any one of the events listed above in
this Section 11(a)(ii).
(iii) In the event that there shall not be sufficient authorized but
unissued shares of Preferred Stock to permit the exercise in full of the Rights
in accordance with the
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foregoing Section 11(a)(ii), the Company shall take all action as may be
necessary to authorize and reserve for issuance such number of additional shares
of Preferred Stock as may from time to time be required to be issued upon the
exercise in full of all Rights outstanding and, if necessary, shall use its best
efforts to obtain shareholder approval thereof. Notwithstanding the foregoing
provisions of this Section 11(a)(iii), in lieu of issuing shares of Preferred
Stock in accordance with Section 11(a)(ii) hereof, if a majority of the
Directors then in office determines that such action is necessary or appropriate
and is not contrary to the interests of the holders of the Rights, they may
elect to cause the Company to pay, and if sufficient shares of Preferred Stock
cannot be issued for such purpose in accordance with the provisions hereof, the
Company shall issue or pay upon the exercise of the Rights, cash, property, debt
securities, shares of preferred stock or common stock, or any combination
thereof, having an aggregate Fair Market Value equal to the Fair Market Value of
the shares of Preferred Stock which otherwise would have been issuable pursuant
to Section 11(a)(ii). Any such election by a majority of the Directors of the
Company must be made and publicly announced within 30 days after the date on
which any Section 11(a)(ii) Event first occurs following the Stock Acquisition
Date.
(b) If the Company shall fix a record date for the issuance of rights,
options or warrants to all holders of Preferred Stock entitling them (for a
period expiring within 45 calendar days after such record date) to subscribe for
or purchase Preferred Stock (or securities having the same or more favorable
rights, privileges and preferences as the shares of Preferred Stock ("preferred
stock equivalents")) or securities convertible into Preferred Stock or preferred
stock equivalents at a price per share of Preferred Stock or per share of
preferred stock equivalents (or having a conversion price per share, if a
security convertible into Preferred Stock or preferred stock equivalents) less
than the Fair Market Value (as determined pursuant to Section 11 (d) hereof) per
share of Preferred Stock on such record date, the Exercise Price to be in effect
after such record date shall be determined by multiplying the Exercise Price in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the number of shares of Preferred Stock outstanding on such
record date, plus the number of shares of Preferred Stock which the aggregate
offering price of the total number of shares of Preferred Stock to be offered
(and the aggregate initial conversion price of the convertible securities so to
be offered) would purchase at such Fair Market Value and the denominator of
which shall be the number of shares of Preferred Stock outstanding on such
record date, plus the number of additional shares of Preferred Stock and
preferred stock equivalents to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially convertible);
PROVIDED, however, that in no such event shall the consideration to be paid upon
the exercise of a Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of a Right. In case such
subscription price may be paid in a consideration part or all of which shall be
in a form other than cash, the value of such consideration shall be the Fair
Market Value thereof determined in accordance with Section 11(d) hereof. Shares
of Preferred Stock owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation. Such adjustments
shall be made successively whenever such a record date is fixed, and in the
event that such rights or warrants are not so issued, the Exercise Price shall
be adjusted to be the Exercise Price which would then be in effect if such
record date had not been fixed.
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<PAGE> 20
(c) If the Company shall fix a record date for the making of a distribution
to all holders of Preferred Stock (including any such distribution made in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation) of evidences of indebtedness, cash (other than a
regular periodic cash dividend out of the earnings or retained earnings of the
Company), assets (other than a dividend payable in Preferred Stock, but
including any dividend payable in stock other than Preferred Stock) or
convertible securities, subscription rights or warrants (excluding those
referred to in Section 11(b) ), the Exercise Price to be in effect after such
record date shall be determined by multiplying the Exercise Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the Fair Market Value (as determined pursuant to Section 11 (d) hereof)
per one one-thousandth of a share of Preferred Stock on such record date, less
the Fair Market Value (as determined pursuant to Section 11(d) hereof) of the
portion of the cash, assets or evidences of indebtedness so to be distributed or
of such convertible securities, subscription rights or warrants applicable to
one one-thousandth of a share of Preferred Stock and the denominator of which
shall be the Fair Market Value (as determined pursuant to Section 11(d) hereof)
per one one-thousandth of a share of Preferred Stock; PROVIDED, however, that in
no event shall the consideration to be paid upon the exercise of a Right be less
than the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of a Right. Such adjustments shall be made successively
whenever such a record date is fixed, and in the event that such distribution is
not so made, the Exercise Price shall again be adjusted to be the Exercise Price
which would be in effect if such record date had not been fixed.
(d) For the purpose of this Agreement, the "Fair Market Value" of any share
of Preferred Stock, Common Stock or any other stock or any Right or other
security or any other property shall be determined as provided in this Section
11(d).
(i) In the case of a publicly-traded stock or other security, the Fair
Market Value on any date shall be deemed to be the average of the daily closing
prices per share of such stock or per unit of such other security for the 30
consecutive Trading Days immediately prior to such date; provided, however, that
in the event that the Fair Market Value per share of any share of stock is
determined during a period following the announcement by the issuer of such
stock of (x) a dividend or distribution on such stock payable in shares of such
stock or securities convertible into shares of such stock or (y) any
subdivision, combination or reclassification of such stock, and prior to the
expiration of the 30 Trading Day period after the ex-dividend date for such
dividend or distribution, or the record date for such subdivision, combination
or reclassification, then, and in each such case, the Fair Market Value 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 American Stock Exchange or, if the securities are not listed or
admitted to trading on the American Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which such security is listed or
admitted to trading; or, if not listed or admitted to trading on any national
securities exchange, the last quoted price (or, if not so quoted, the average of
the last quoted high bid and low asked
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<PAGE> 21
prices) in the over-the-counter market, as reported by NASDAQ or such other
system then in use; or, if on any such date no bids for such security are 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 such security
selected by the Board of Directors of the Company. If on any such date no market
maker is making a market in such security, the Fair Market Value of such
security on such date shall be determined reasonably and with utmost good faith
to the holders of the Rights by the Board of Directors of the Company: PROVIDED,
however, that if at the time of such determination there is an Acquiring Person
or an Adverse Person, the Fair Market Value of such security on such date shall
be determined by a nationally recognized investment banking firm selected by the
Board of Directors, which 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.
(ii) If the Preferred Stock is not publicly held or not so listed or
traded in the manner described in clause (i) but the Common Stock is so listed
or traded, then the "Fair Market Value" of a share of the Preferred Stock shall
be conclusively deemed to be an amount equal to 1,000 (as such number may be
appropriately adjusted for events such as stock splits, stock dividends and
recapitalizations with respect to the Common Stock after the date of this
Agreement) multiplied by the Fair Market Value of a share of the Common Stock.
(iii) If neither the Preferred Stock or Common Stock is publicly held
or not so listed or traded, "Fair Market Value" shall mean the fair value per
share of stock or per other unit of such security, determined reasonably and
with utmost good faith to the holders of the Rights by the Board of Directors of
the Company; PROVIDED, however, that if at the time of such determination there
is an Acquiring Person or an Adverse Person, the Fair Market Value of such
security on such date shall be determined by a nationally recognized investment
banking firm selected by the Board of Directors, which 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.
(iv) In the case of property other than securities, the Fair Market
Value thereof shall be determined reasonably and with utmost good faith to the
holders of Rights by the Board of Directors of the Company; PROVIDED, however,
that if at the time of such determination there is an Acquiring Person or an
Adverse Person, the Fair Market Value of such property on such date shall be
determined by a nationally recognized investment banking firm selected by the
Board of Directors, which determination shall be described in a statement filed
with the Rights Agent and shall be binding upon the Rights Agent and the holders
of the Rights.
(e) Anything herein to the contrary notwithstanding, no adjustment in the
Exercise Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Exercise Price; PROVIDED, however,
that any adjustments which by reason of this Section 11(e) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the nearest
cent or to the nearest ten-thousandth of a share of Common Stock or
one-millionth of a share of Preferred Stock, as the case may be, or to such
other figure as the Board of Directors may deem appropriate. Notwithstanding the
first sentence of this Section 11(e), any adjustment required by
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<PAGE> 22
this Section 11 shall be made no later than the earlier of (i) three (3) years
from the date of the transaction which mandates such adjustment or (ii) the
Expiration Date.
(f) If as a result of any provision of Section 11(a) hereof, the holder of
any Right thereafter exercised shall become entitled to receive any shares of
capital stock of the Company other than Preferred Stock, thereafter the number
of such other shares so receivable upon exercise of any Right shall be subject
to adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred Stock contained in
Section 11(a), (b), (c), and the provisions of Sections 7, 9, 10, 13 and 14
hereof with respect to the Preferred 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 Exercise Price hereunder shall evidence the right to
purchase, at the adjusted Exercise Price, the number of one one-thousandth of a
share of Preferred Stock purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11 (i), upon each adjustment of the Exercise Price as a result of the
calculations made in Section 11 (b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Exercise Price, that number of one one-thousandth of a
share of Preferred Stock (calculated to the nearest one ten-thousandths)
obtained by (i) multiplying (x) the number of one one-thousandth of a share of
Preferred Stock for which a Right may be exercisable immediately prior to this
adjustment by (y) the Exercise Price in effect immediately prior to such
adjustment of the Exercise Price and (ii) dividing the product so obtained by
the Exercise Price in effect immediately after such adjustment of the Exercise
Price.
(i) The Company may elect on or after the date of any adjustment of the
Exercise Price to adjust the number of Rights, in substitution for any
adjustment in the number of shares of Preferred Stock purchasable upon the
exercise of a Right. Each of the Rights outstanding after the adjustment in the
number of Rights shall be exercisable for the number of one one-thousandth of a
share of Preferred Stock for which a Right was exercisable immediately prior to
such adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the nearest
one one-thousandth) obtained by dividing the Exercise Price in effect
immediately prior to adjustment of the Exercise Price by the Exercise Price in
effect immediately after adjustment of the Exercise Price. 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 Exercise Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least ten (10) days later than the
date of the public announcement. If Right Certificates have been issued, upon
each adjustment of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to holders of
record of Right Certificates on such record date Right Certificates evidencing,
subject to Section 14 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
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<PAGE> 23
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 Exercise 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 Exercise Price or the
number of one one-thousandth of a share of Preferred Stock issuable upon, the
exercise of the Rights, the Right Certificates theretofore and thereafter issued
may continue to express the Exercise 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
Exercise Price below the then stated value, if any, of the number of one
one-thousandth of a share of Preferred Stock issuable upon exercise of the
Rights, the Company shall take any corporate action which may, in the opinion of
its counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable shares of Preferred Stock at such adjusted
Exercise Price.
(1) In any case in which this Section 11 shall require that an adjustment
in the Exercise Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event the
issuing to the holder of any Right exercised after such record date the number
of one one-thousandth of a share of Preferred Stock or other capital stock or
securities of the Company, if any, issuable upon such exercise over and above
the number of one one-thousandth of a share of Preferred Stock and other capital
stock or securities of the Company, if any, issuable upon such exercise on the
basis of the Exercise Price in effect prior to such adjustment; PROVIDED,
however, that the Company shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive such additional
shares upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Exercise Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any (i) consolidation or subdivision of the Preferred Stock, (ii)
issuance wholly for cash of any shares of Preferred Stock at less than the Fair
Market Value, (iii) issuance wholly for cash of shares of Preferred Stock or
securities which by their terms are convertible into or exchangeable for shares
of Preferred Stock, (iv) stock dividends, or (v) issuance of rights, options or
warrants referred to hereinabove in this Section 11 hereafter made by the
Company to holders of its Preferred Stock shall not be taxable to such
shareholders.
(n) The Company covenants and agrees that it shall not, at any time after
the Distribution Date and so long as the Rights have not been redeemed pursuant
to Section 23 hereof or exchanged pursuant to Section 24 hereof, (i) consolidate
with any other Person, (ii) merge with or into any other Person, or (iii) sell
or transfer (or permit any Subsidiary to sell or transfer), in one transaction
or a series of related transactions, assets or earning power
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<PAGE> 24
aggregating 50% or more of the assets or earning power of the Company and its
Subsidiaries taken as a whole, to any other Person if (x) at the time of or
immediately after such consolidation, merger or sale there are any rights,
warrants or other instruments outstanding or agreements or arrangements 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 a
person who constitutes, or would constitute, the "Principal Party" for the
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. The
Company further covenants and agrees that after the Distribution 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 substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights.
(o) In the event the Company shall at any time after the date of this
Agreement and prior to the Distribution Date (i) declare or pay any dividend on
the outstanding Common Stock payable in shares of Common Stock or (ii) effect a
subdivision, combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of dividends in shares
of Common Stock) into a greater or lesser number of shares of Common Stock, then
in any such case (A) the number of one one-thousandth of a share of Preferred
Stock purchasable after such event upon proper exercise of each Right shall be
determined by multiplying the number of one one-thousandth of a share of
Preferred Stock so purchasable immediately prior to such event by a fraction,
the numerator of which is the number of shares of Common Stock outstanding
immediately prior to such event and the denominator of which is the number of
shares of Common Stock outstanding immediately after such event, and (B) each
share of Common Stock outstanding immediately after such event shall have issued
with respect to it that number of Rights which each share of Common Stock
outstanding immediately prior to such event had issued with respect to it. The
adjustments provided for in this Section 11(o) shall be made successively
whenever such a dividend is declared or paid or such a subdivision, combination
or consolidation is effected.
(p) The exercise of Rights under Section 11(a)(ii) shall only result in the
loss of rights under Section 11(a)(ii) to the extent so exercised and shall not
otherwise affect the rights of holders of Right Certificates under this Rights
Agreement, including rights to purchase securities of the Principal Party
following a Section 13 Event which has occurred or may thereafter occur, as set
forth in Section 13 hereof. Upon exercise of a Right Certificate under Section
11(a)(ii), the Rights Agent shall return such Right Certificate duly marked to
indicate that such exercise has occurred.
SECTION 12. CERTIFICATE OF ADJUSTED EXERCISE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Section 11 or Section 13
hereof, the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent and with each transfer agent for the
Preferred Stock and the Common Stock a copy of such
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<PAGE> 25
certificate, and (c) mail a brief summary thereof to each holder of a Right
Certificate in accordance with Section 26 hereof. The Rights Agent shall be
fully protected in relying on any such certificate and on any adjustment
contained therein and shall not be deemed to have knowledge of any such
adjustment unless and until it shall have received such certificate.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
POWER.
(a) In the event that, following the Stock Acquisition Date, directly or
indirectly, (x) the Company shall consolidate with, or merge with and into, any
other Person (other than a Subsidiary of the Company in a transaction which is
not prohibited by Section 11(n) hereof), and the Company shall not be the
continuing or surviving corporation of such consolidation or merger, (y) any
Person (other than a Subsidiary of the Company in a transaction which is not
prohibited by Section 11(n) hereof) shall consolidate with the Company, or merge
with and into the Company and the Company shall be the continuing or surviving
corporation of such merger and, in connection with such merger, all or part of
the shares of Common Stock shall be changed into or exchanged for stock or other
securities of any other Person or cash or any other property, or (z) the Company
shall sell, mortgage or otherwise transfer (or one or more of its Subsidiaries
shall sell, mortgage or otherwise transfer), in one transaction or a series of
related transactions, assets or earning power aggregating 50% or more of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to any other Person or Persons (other than the Company or any Subsidiary of the
Company in one or more transactions, each of which is not prohibited by Section
11(n) hereof), then, and in each such case, proper provision shall be made so
that: (i) each holder of a Right, except as provided in Section 7(e) hereof,
shall have the right to receive, upon the exercise thereof at the then current
Exercise Price in accordance with the terms of this Agreement, such number of
validly authorized and issued, fully paid and nonassessable shares of freely
tradeable Common Stock of the Principal Party, free and clear of rights of call
or first refusal, liens, encumbrances or other adverse claims, as shall be equal
to the result obtained by (1) multiplying the then current Exercise Price by the
number of one one-thousandths of a share of Preferred Stock for which a Right is
exercisable immediately prior to the first occurrence of a Section 13 Event, and
dividing that product by (2) 50% of the Fair Market Value (determined pursuant
to Section 11(d) hereof) per share of the Common Stock of such Principal Party
on the date of consummation of such consolidation, merger, sale or transfer;
(ii) such Principal Party shall thereafter be liable for, and shall assume, by
virtue of such consolidation, merger, sale, mortgage or transfer, all the
obligations and duties of the Company pursuant to this Agreement; (iii) the term
"Company" shall thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11 hereof shall apply to
such Principal Party; 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 to permit exercise of all outstanding Rights in accordance
with this Section 13(a) and the making of payments in cash and/or other
securities in accordance with Section 11(a)(iii) hereof) in connection with such
consummation as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to its
shares of Common Stock thereafter deliverable upon the exercise of the Rights.
(b) "Principal Party" shall mean:
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<PAGE> 26
(i) in the case of any transaction described in clause (x) or (y) of
the first sentence of Section 13(a), the Person that is the issuer of any
securities into which shares of Common Stock of the Company are converted in
such merger or consolidation, and if no securities are so issued, the Person
that is the other party to the merger or consolidation; and
(ii) in the case of any transaction described in clause (z) of the
first sentence of Section 13(a), the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to such
transaction or transactions;
PROVIDED, however, that in any such case, (x) if the Common Stock of such Person
is not at such time and has not been continuously over the preceding 12-month
period registered under Section 12 of the Exchange Act, and such Person is a
direct or indirect Subsidiary or Affiliate of another Person the Common Stock of
which is and has been so registered, "Principal Party" shall refer to such other
Person; (y) in case such Person is a direct or indirect Subsidiary or Affiliate
of more than one Person, the Common Stock of two or more of which are and have
been so registered, "Principal Party" shall refer to whichever of such Persons
is the issuer of the Common Stock having the greatest aggregate market value of
shares outstanding; and (z) in case such Person is owned, directly or
indirectly, by a joint venture formed by two or more Persons that are not owned,
directly or indirectly, by the same Person, the rules set forth in (x) and (y)
above shall apply to each of the chains of ownership having an interest in such
joint venture as if such party were a "Subsidiary" of both or all of such joint
ventures and the Principal Parties in each such chain shall bear the obligations
set forth in this Section 13 in the same ratio as their direct or indirect
interests in such Person bear to the total of such interests.
(c) The Company shall not consummate any such consolidation, merger, sale
or transfer unless prior thereto (x) the Principal Party shall have a sufficient
number of authorized shares of its Common Stock issued or reserved for issuance
to permit the exercise in full of the Rights in accordance with this Section 13,
and (y) the Company and each Principal Party and each other Person who may
become a Principal Party as a result of such consolidation, merger, sale or
transfer shall have executed and delivered to the Rights Agent a supplemental
agreement providing for the terms set forth in Section 13(a) and (b) and further
providing that, as soon as practicable after the date of any consolidation,
merger, sale or transfer of assets mentioned in Section 13(a), the Principal
Party at its own expense will:
(i) prepare and file a registration statement under the Securities
Act with respect to the Rights and the securities purchasable upon exercise of
the Rights on an appropriate form, use its best efforts to cause such
registration statement to become effective as soon as practicable after such
filing and use its best efforts to cause such registration statement to remain
effective (with a prospectus that at all times meets the requirements of the
Securities Act) until the Expiration Date;
(ii) use its best efforts to qualify or register the Rights and the
securities purchasable upon exercise of the Rights under the blue sky laws of
such jurisdictions as may be necessary or appropriate;
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<PAGE> 27
(iii) use its best efforts to list (or continue the listing of) the
Rights and the securities purchasable upon exercise of the Rights on a national
securities exchange or to meet the eligibility requirements for quotation on the
NASDAQ National Market; and
(iv) deliver to holders of the Rights historical financial statements
for the Principal Party and each of its Affiliates which comply in all material
respects with the requirements for registration on Form 10 under the Exchange
Act.
The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers.
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights, except
prior to the Distribution Date as provided in Section 11(o) hereof, or to
distribute Right Certificates which evidence fractional Rights. If the Company
elects not to issue such fractional Rights, the Company shall pay, in lieu of
such fractional Rights, to the registered holders of the Right Certificates with
regard to which such fractional Rights would otherwise be issuable, an amount in
cash equal to the same fraction of the Fair Market Value of a whole Right, as
determined pursuant to Section 11(d) hereof.
(b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions which are integral multiples of one
one-thousandth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates which evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one one-thousandth of a
share of Preferred Stock). In lieu of fractional shares of Preferred Stock that
are not integral multiples of one one-thousandth of a share of Preferred Stock,
the Company may pay to the registered holders of Right Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the Fair Market Value of one one-thousandth of a share of Preferred
Stock. For purposes of this Section 14 (b), the Fair Market Value of one
one-thousandth of a share of Preferred Stock shall be determined pursuant to
Section 11(d) hereof for the Trading Day immediately prior to the date of such
exercise.
(c) The holder of a Right by the acceptance of the Rights expressly waives
his right to receive any fractional Rights or any fractional shares upon
exercise of a Right, except as permitted by this Section 14.
SECTION 15. RIGHTS OF ACTION.
All rights of action in respect of this Agreement, other than rights of
action vested in the Rights Agent pursuant to Sections 18 and 20 hereof, are
vested in the respective registered holders of the Right Certificates (or, prior
to the Distribution Date, the registered holders of the Common Stock). Any
registered holder of any Right Certificate (or, prior to the Distribution Date,
of the Common Stock), without the consent of the Right Agent or of the holder of
any
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<PAGE> 28
other Right Certificate (or, prior to the Distribution Date, of the Common
Stock), may, on his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise the Right
evidenced by such Right Certificate in the manner provided in such Right
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and shall be entitled to specific performance of the
obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this Agreement.
Holders of Rights shall be entitled to recover the reasonable costs and
expenses, including attorneys' fees, incurred by them in any action to enforce
the provisions of 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, each Right will be transferable only
simultaneously and together with the transfer of shares of Common Stock;
(b) after the Distribution Date, the Right Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the office or
offices of the Rights Agent designated for such purpose, 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 a 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 Certificates or the associated Common Stock certificate made by
anyone other than the Company or the Rights Agent) for all purposes whatsoever,
and neither the Company nor the Rights Agent shall be affected by any notice to
the contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither the
Company nor the Rights Agent shall have any liability to any holder of a Right
or other Person as the 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
obligations; PROVIDED, however, that the Company must use its best efforts to
have any such order, decree or ruling lifted or otherwise overturned as soon as
possible.
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<PAGE> 29
SECTION 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER.
No holder of any Right Certificate, as such, shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the shares of
Preferred Stock or any other securities of the Company which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall anything
contained herein or in any Right Certificate be construed to confer upon the
holder of any Right 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 provided in Section 25 hereof), or to
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
SECTION 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent such compensation as
shall be agreed to in writing between the Company and the Rights Agent 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 disbursements and
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability, or expense, incurred without gross negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done or omitted
by the Rights Agent in connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against any claim of
liability arising therefrom, directly or indirectly. The provisions of this
Section 18(a) shall survive the expiration of the Rights and the termination of
this Agreement.
(b) The Rights Agent shall be protected and shall incur no liability for or
in respect of any action taken, suffered or omitted by it in connection with its
administration of this Agreement in reliance upon any Right Certificate or
certificate for Common Stock, Preferred 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 believed by it to be genuine and to be signed and executed by
the proper Person or Persons.
(c) The Rights Agent shall not be liable for consequential damages under
any provision of this Agreement or for any consequential damages arising out, of
any act or failure to act hereunder.
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 shareholder services business of the Rights
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<PAGE> 30
Agent or any successor Rights Agent, shall be the successor to the Rights Agent
under this Agreement without the execution or filing of any paper or any further
act on the part of any of the parties hereto, provided that such corporation
would be eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In case at the time such successor Rights Agent
shall succeed to the agency created by this Agreement any of the Right
Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of the predecessor Rights Agent and
deliver such Right Certificates so countersigned; and in case at that time any
of the Right Certificates shall not have been countersigned, any Successor
Rights Agent may countersign such Right Certificates either in the name of the
predecessor or in the name of the successor Rights Agent; and in all such cases
such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
SECTION 20. DUTIES OF RIGHTS AGENT.
The Rights Agent undertakes the duties and obligations expressly imposed by
this Agreement upon the following terms and conditions, by all of which the
Company and the holders of Right Certificates, by their acceptance thereof,
shall be bound:
(a) The Rights Agent may consult with legal counsel selected by it (who may
be legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person or Adverse
Person and the determination of Fair Market Value) 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 shall be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by a person believed by the Rights Agent to be the Chairman
of the Board, a Vice Chairman of the Board, the President, a Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or Assistant Secretary of the
Company and delivered to the Rights such certificate shall be full authorization
to the Rights Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
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(c) The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify the
name, 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 Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right Certificate; nor shall it
be responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 7(e) hereof) or any adjustment required
under the provisions of Sections 11, 13 or 23(c) hereof or responsible for the
manner, method or amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment (except with respect
to the exercise of Rights evidenced by Right Certificates after receipt of a
certificate describing any such adjustment furnished in accordance with Section
12 hereof), nor shall it be responsible for any determination by the Board of
Directors of the Company of the Fair Market Value of the Rights or Preferred
Stock pursuant to the provisions of Section 14 hereof; nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock or Preferred Stock to
be issued pursuant to this Agreement or any Right Certificate or as to whether
any shares of Common Stock or Preferred Stock will, when so issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder and
certificates delivered pursuant to any provision hereof from any person believed
by the Rights Agent to be the Chairman of the Board, any Vice Chairman of the
Board, the President, a Vice President, the Secretary, an Assistant Secretary,
the Treasurer or an Assistant Treasurer of the Company, and is authorized 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. Any application
by the Rights Agent for written instructions from the Company may, at the option
of the Rights Agent, set forth in writing any action proposed to be taken or
omitted by the Rights Agent under this Agreement and the date on or after which
such action shall be taken or such omission shall be effective. The Rights Agent
shall not be liable for any action taken by, or omission of, the Rights Agent in
accordance with a proposal included in such application on or after the date
specified in such application (which date shall not be less than five Business
Days after the date any officer of the Company actually receives such
application, unless any
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such officer shall have consented in writing to an earlier date) unless, prior
to taking any such action (or the effective date in the case of an omission),
the Rights Agent shall have received written instructions in response to such
application specifying the action to be taken or omitted.
(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 peculiarly interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not the Rights Agent under
this Agreement. Nothing herein shall preclude the Rights Agent from acting in
any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or through
its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, omission, default, neglect or misconduct of any such
attorneys or agents or for any loss to the Company or to the holders of the
Rights resulting from any such act, omission, default, neglect or misconduct,
provided reasonable care was exercised in the selection and continued employment
thereof.
(j) No provision of this Agreement shall require the Rights Agent to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) If, with respect to any Right Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause (1) or clause (2)
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise or 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 Agreement upon thirty (30) days notice in writing
mailed to the Company by first class mail. The Company may remove the Rights
Agent or any successor Rights Agent (with or without cause) upon thirty (30)
days notice in writing, mailed to the Rights Agent or successor Rights Agent, as
the case may be, and to each transfer agent of the Common Stock and Preferred
Stock by registered or certified mails and to the holders of the Right
Certificates by first-class mail. If the Rights Agent shall resign or be removed
or shall otherwise become incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of thirty (30) days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Right Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Company), then the incumbent Rights Agent or
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the registered holder of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be (a)
a corporation organized and doing business under the laws of the United States
or of the Commonwealth of Massachusetts or the State of New York (or of any
other state of the United States so long as such corporation is authorized to do
business as a banking institution in the Commonwealth of Massachusetts or the
State of New York), in good standing, which is authorized under such laws to
exercise stock transfer or corporate trust powers and is subject to supervision
or examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$50,000,000 or (b) an Affiliate of a corporation described in clause (a) of this
sentence. After appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor Rights
Agent shall delete 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 the Preferred Stock, and mail a notice thereof in writing to the registered
holders of the Right Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES.
Notwithstanding any of the provisions of this Agreement or of the Rights to
the contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the Exercise Price per share and the number
or 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
Agreement. In addition, in connection with the issuance or sale of shares of
Common Stock following the Distribution Date and prior to the redemption or
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
exchange of securities hereafter 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 adjustments shall otherwise have
been made in lieu of the issuance thereof.
SECTION 23. REDEMPTION AND TERMINATION.
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(a) The Board of Directors of the Company may, at its option, redeem all
but not less than all of the then outstanding Rights at a redemption price of
$0.01 per Right, appropriately adjusted to reflect any dividend declared or paid
on the Common Stock in shares of Common Stock or any subdivision or combination
of the outstanding shares of Common Stock or similar event occurring after the
date of this Agreement (such redemption price, as adjusted from time to time,
being hereinafter referred to as the "Redemption Price"). The Rights may be
redeemed only until the EARLIEST to occur of (i) 5:00 P.M., Boston,
Massachusetts time, on the tenth Business Day after the Stock Acquisition Date,
(ii) the declaration by the Board of Directors that any Person is an Adverse
Person, or (iii) the Final Expiration Date.
(b) Immediately upon the action of the Board of Directors of the Company
ordering the redemption of the Rights, and without any further action and
without any notice, the right to exercise the Rights will terminate and the only
right thereafter of the holders of Rights shall be to receive the Redemption
Price for each Right so held. Promptly 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 the Rights Agent and to all such holders at
their last addresses as they appear upon the registry books of the Rights Agent
or, prior to the Distribution Date, on the registry books of the Transfer Agent
for the Common Stock. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each such
notice of redemption will state the method by which the payment of the
Redemption Price will be made. 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 Section
24 hereof or in connection with the purchase of shares of Common Stock prior to
the Distribution Date.
(c) The Company may, at its option, pay the Redemption Price in cash,
shares of Common Stock (based on the Fair Market Value of the Common Stock as of
the time of redemption) or any other form of consideration deemed appropriate by
the Board of Directors.
SECTION 24. EXCHANGE.
(a) The Board of Directors of the Company may, at its option, at any time
on or after the occurrence of a Section 11(a)(ii) Event, exchange all or part of
the then outstanding and exercisable Rights (which shall not include Rights that
have become void pursuant to the provisions of Section 7(e) hereof) for shares
of Common Stock at an exchange ratio of one share of Common Stock per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). Notwithstanding the foregoing,
the Board of Directors shall not be empowered to effect such exchange at any
time after any Person (other than an Exempt Person), together with all
Affiliates and Associates of such Person, becomes the beneficial Owner of 50% or
more of the Common Stock of the Company.
(b) Immediately upon the action of the Company ordering the exchange of any
Rights pursuant to subsection (a) of this Section 24 and without any further
action and without any
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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 equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company shall promptly give notice of any
such exchange in accordance with Section 26 hereof; 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 their last addresses as they appear upon
the registry books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the exchange
of the shares of Common Stock for Rights will be effected and, in the event of
any partial exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other than
Rights which have become void pursuant to the provisions of Section 7(e) hereof)
held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute Preferred Stock (or preferred stock equivalent, as such
term is defined in Section 11(b) hereof) for some or all of the Common Stock
exchangeable for Rights, at the initial rate of one one-thousandth of a share of
Preferred Stock (or preferred stock equivalent) for each share of Common Stock,
as appropriately adjusted to reflect adjustments in the voting rights of the
Preferred Stock pursuant to the terms thereof, so that the fraction of a share
of Preferred Stock delivered in lieu of each share of Common Stock shall have
the same voting rights as one share of Common Stock.
(d) In the event that there shall not be sufficient shares of Common Stock
or Preferred Stock (or preferred stock equivalent) issued but not outstanding or
authorized but unissued to permit any exchange of Rights as contemplated in
accordance with this Section 24, the Company shall take all such action as may
be necessary to authorize additional shares of Common Stock or Preferred Stock
(or preferred stock equivalent) for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of Common Stock or
to distribute certificates which evidence fractional shares of Common Stock. If
the Company elects not to issue such fractional shares of Common Stock, the
Company shall pay, in lieu of such fractional shares of Common Stock, to the
registered holders of the Right Certificates with regard to which such
fractional shares of Common Stock would otherwise be issuable, an amount in cash
equal to the same fraction of the Fair Market Value of a whole share of Common
Stock. For the purposes of this paragraph (e), the Fair Market Value of a whole
share of Common Stock shall be the closing price of a share of Common Stock (as
determined pursuant to the second sentence of section 11(d)(i) hereof) for the
Trading Day immediately prior to the date of exchange pursuant to this Section
24.
SECTION 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose, at any time after the Distribution
Date, (i) to pay any dividend payable in stock of any class to the holders of
Preferred Stock or to make any other distribution to the holders of Preferred
Stock (other than a regular periodic cash dividend out of
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earnings or retained earnings of the Company), or (ii) to offer to the holders
of Preferred Stock rights or warrants to subscribe for or to purchase any
additional shares of Preferred Stock or shares of stock of any class or any
other securities, rights or options, or (iii) to effect any reclassification of
its Preferred Stock (other than a reclassification involving only the
subdivision of outstanding shares of Preferred Stock), or (iv) to effect any
consolidation or merger into or with, or to effect any sale, mortgage or other
transfer (or to permit one or more of its Subsidiaries to effect any sale,
mortgage or other transfer), in one transaction or a series of related
transactions, of 50% or more of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to, any other Person (other than a
Subsidiary of the Company in one or more transactions each of which is not
prohibited by Section 11 (n) hereof), or (v) to effect the liquidation,
dissolution or winding up of the Company, (vi) to declare or pay any dividend on
the Common Stock payable in Common Stock or to effect a subdivision, combination
or consolidation of the Common Stock (by reclassification or otherwise than by
payment of dividends in Common Stock) then in each such case, the Company shall
give to each holder of a Right Certificate and to the Rights Agent, in
accordance with Section 26 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend, distribution of
rights or warrants, or the date on which such reclassification, consolidation,
merger, sale, transfer, liquidation, dissolution, or winding up is to take place
and the date of participation therein by the holders of the shares of Common
Stock and/or Preferred Stock, if any such date is to be fixed, and such notice
shall be so given in the case of any action covered by clause (i) or (ii) above
at least twenty (20) days prior to the record date for determining holders of
the shares of Preferred Stock for purposes of such action, and in the case of
any such other action, at least twenty (20) days prior to the date of the taking
of such proposed action or the date of participation therein by the holders of
the shares of Common Stock and/or Preferred Stock, whichever shall be the
earlier.
(b) In case any Section 11(a)(ii) Event shall occur, then, in any such
case, the Company shall as soon as practicable thereafter give to each
registered holder of a Right Certificate and to the Rights Agent, in accordance
with Section 26 hereof, a notice of the occurrence of such event, which shall
specify the event and the consequences of the event to holders of Rights under
Section 11(a)(ii) hereof.
SECTION 26. NOTICES.
Notices or demands authorized by this Agreement to be given or made by the
Rights Agent or by the holder of any Right Certificate to or on the 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:
American Stock Transfer & Trust Co.
40 Wall Street
New York, NY 10005
Subject to the provisions of Section 21, any notice or demand authorized by
this Agreement to be given or made by the Company or by the holder of any Right
Certificate to or on the Rights
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Agent shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Company)
as follows:
American Science and Engineering, Inc.
829 Middlesex Turnpike
Billerica, MA 01821
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate (or, prior to
the Distribution Date, to the holder of any certificate representing shares of
Common Stock) shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such holder as shown
on the registry books of the Company.
SECTION 27. SUPPLEMENTS AND AMENDMENTS.
Prior to the Distribution Date, the Company and the Rights Agent shall, if
the Company so directs, supplement or amend any provision of this Agreement as
the Company may deem necessary or desirable without the approval of any holders
of certificates representing shares of Common Stock. From and after the
Distribution Date, the Company and the Rights Agent shall, if the Company so
directs, supplement or amend this Agreement without the approval of any holder
of Right Certificates in order (i) to cure any ambiguity, (ii) to correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provisions herein, (iii) to shorten or lengthen any time period
hereunder, or (iv) to change or supplement the provisions hereof in any manner
which the Company may deem necessary or desirable and which shall not adversely
affect the interests of the holders of Right Certificates (other than an
Acquiring Person, Adverse Person or any Affiliate or Associate of an Acquiring
Person Or Adverse Person); PROVIDED, however, that from and after the
Distribution Date this Agreement may not be supplemented or amended to lengthen,
pursuant to clause (iii) of this sentence, (A) a time period relating to when
the Rights may be redeemed at such time as the Rights are not then redeemable or
(B) any other time period unless such lengthening is for the purpose of
protecting, enhancing or clarifying the rights of, and the benefits to, the
holders of Rights. Upon the delivery of such 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. Notwithstanding any other provision hereof, the Rights
Agent's consent must be obtained regarding any amendment or supplement pursuant
to this Section 27 which alters the Rights Agent's rights or duties.
SECTION 28. SUCCESSORS.
All the covenants and provisions of this Agreement by or for the benefit of
the Company or the Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
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SECTION 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS.
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) of the rules under the Exchange Act as
in effect on the date hereof. 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 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 the 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
of Directors 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 any member of the Board of Directors to any liability to the
holders of the Rights or to any other person.
SECTION 30. BENEFITS OF THIS AGREEMENT.
Nothing in this Agreement shall be construed to give to any person or
corporation other than the Company, the Rights Agent and the registered holders
of the Right Certificates (and, prior to the Distribution Date, the Common
Stock) any legal or equitable right, remedy or claim under this Agreement; but
this Agreement shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior to
the Distribution Date, registered holders of the Common Stock).
SECTION 31. SEVERABILITY.
If any term, provision, covenant or restriction of this Agreement is held
by a court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated; provided, however, that
notwithstanding anything in this Agreement to the contrary, if any such term,
provision, covenant or restriction is held by such court or authority to be
invalid, void or unenforceable and the Board of Directors of the Company
determines in its good faith judgment that severing the invalid language from
the Agreement would adversely affect the purpose or effect of the Agreement, the
right of redemption set forth in Section 23 hereof shall be reinstated and shall
not expire until the close of business on the tenth day following the date of
such determination by the Board of Directors.
SECTION 32. GOVERNING LAW.
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This Agreement, each Right and each Right Certificate issued hereunder
shall be deemed to be a contract made under the laws of the Commonwealth of
Massachusetts 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 to
be performed entirely within such State.
SECTION 33. COUNTERPARTS.
This Agreement may be executed in any number of counterparts and each of
such counterparts shall for all purposes be deemed to be an original, and all
such counterparts shall together constitute but one and the same instrument.
SECTION 34. DESCRIPTIVE HEADINGS.
Descriptive headings of the several Sections of this Agreement are inserted
for convenience only and shall not control or affect the meaning or construction
of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
ATTEST: AMERICAN SCIENCE AND ENGINEERING, INC.
By: Jeffrey A. Bernfeld, Clerk By:
-------------------------------------
Name: Ralph S. Sheridan
Title: President, Chief Executive
Officer
ATTEST: AMERICAN STOCK TRANSFER & TRUST CO.,
as Rights Agent
By: By:
-------------------------------------
Name:
Title:
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<PAGE> 40
EXHIBITS TO
SHAREHOLDER RIGHTS AGREEMENT
Exhibit A - Certificate of Designation of Preferred Stock
Exhibit B - Rights Certificate
Exhibit C - Summary of Rights for Dissemination to Stockholders
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EXHIBIT A
FEDERAL IDENTIFICATION
NO. 04-2240991
------------------
THE COMMONWEALTH OF MASSACHUSETTS
WILLIAM FRANCIS GALVIN
Secretary of the Commonwealth
One Ashburton Place, Boston, Massachusetts 02108-1512
CERTIFICATE OF VOTE OF DIRECTORS
ESTABLISHING A CLASS OR SERIES OF STOCK
(GENERAL LAWS, CHAPTER 156B, SECTION 26)
We, Ralph S. Sheridan , *President
----------------------------------------------
and Jeffrey A. Bernfeld , *Clerk
----------------------------------------------
of American Science and Engineering, Inc. ,
---------------------------------------------------------------------------
(Exact name of corporation)
located at: 829 Middlesex Turnpike, Billerica, MA 01820 ,
-------------------------------------------------------------------
(Street Address of corporation in Massachusetts)
do hereby certify that at a meeting of the directors of the corporation held on
April 9, 1998, the following vote establishing and designating a class or series
of stock and determining the relative rights and preferences thereof was duly
adopted:
VOTED: That pursuant to authority conferred upon and vested in the
Board of Directors by the Restated Articles of Organization, as amended as of
the date hereof (the "Articles of Organization"), of American Science and
Engineering, Inc. (the "Corporation"), the Board of Directors hereby establishes
and designates a series of Preferred Stock of the Corporation and hereby fixes
and determines the preferences, voting powers, qualifications and special and
relative rights of the shares of such series, in addition to those set forth in
the Articles of Organization, as follows:
SECTION 1. DESIGNATION AND AMOUNT.
The shares of such series shall be designated as "Series A Junior
Participating Cumulative Preferred Stock" (the "Series A Preferred Stock"), and
the number of shares initially constituting such series shall be Ten Thousand
(10,000) PROVIDED, however, that if more than a total of Ten Thousand (10,000)
shares of Series A Preferred Stock shall be issuable upon the exercise of Rights
(the "Rights") issued pursuant to the Shareholder Rights Agreement dated as of
April 17, 1998, between the Corporation and American Stock Transfer & Trust Co.,
as Rights Agent (the "Rights Agreement"), the Board of Directors of the
Corporation, pursuant to Section 26 of the Massachusetts Business Corporation
Law, shall direct by resolution or resolutions that a certificate be properly
executed, acknowledged, filed and recorded, in accordance with the provisions of
said law, providing for the total number of shares of Series A Preferred Stock
authorized to be issued to be increased (to the extent that the Articles of
Organization then permits) to the largest number of whole shares (rounded up to
the nearest whole number) issuable upon exercise of such Rights.
SECTION 2. DIVIDENDS AND DISTRIBUTIONS.
(A) (i) Subject to the rights of the holders of any shares of any
series of Preferred Stock (or any similar stock) ranking prior and superior to
the Series A Preferred Stock with respect to dividends, the holders of shares of
Series A Preferred Stock, in preference to the holders of shares of Common Stock
and of any other junior stock, shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the first day of March, June,
September and December in each year
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(each such date being referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Series A Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to the greater of (a) $1.00
or (b) subject to the provisions for adjustment hereinafter set forth, 1000
times the aggregate per share amount of all cash dividends, and 1000 times the
aggregate per share amount (payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date, or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share or fraction of a
share of Series A Preferred Stock. The multiple of cash and non-cash dividends
declared on the Common Stock to which holders of the Series A Preferred Stock
are entitled, which shall be one thousand initially but which shall be adjusted
from time to time as hereinafter provided, is hereinafter referred to as the
"Dividend Multiple." In the event the Corporation shall at any time after April
17, 1998 (the "Rights Declaration Date") (i) declare or pay any dividend on
Common Stock payable in shares of Common Stock, or (ii) effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the Dividend Multiple thereafter applicable to the determination of
the amount of dividends which holders of shares of Series A Preferred Stock
shall be entitled to receive shall be the Dividend Multiple applicable
immediately prior to such event multiplied by a fraction, the numerator of which
is the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(ii) Notwithstanding anything else contained in this paragraph
(A), the Corporation shall, out of funds legally available for that purpose,
declare a dividend or distribution on the Series A Preferred Stock as provided
in this paragraph (A) immediately after it declares a dividend or distribution
on the Common Stock (other than a dividend payable in shares of Common Stock);
provided that, in the event no dividend or distribution shall have been declared
on the Common Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date, a dividend of
$1.00 per share on the Series A Preferred Stock shall nevertheless be payable on
such subsequent Quarterly Dividend Payment Date.
(B) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series A Preferred Stock, unless
the date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series A Preferred Stock entitled
to receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series A Preferred Stock in
an
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amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix in
accordance with applicable law a record date for the determination of holders of
shares of Series A Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be not more than such
number of days prior to the date fixed for the payment thereof as may be allowed
by applicable law.
SECTION 3. VOTING RIGHTS.
In addition to any other voting rights required by law or the Articles
of Organization, the holders of shares of Series A Preferred Stock shall have
the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each
share of Series A Preferred Stock shall entitle the holder thereof to one
thousand votes on all matters submitted to a vote of the stockholders of the
Corporation. The number of votes which a holder of a share of Series A Preferred
Stock is entitled to cast, which shall initially be one thousand but which may
be adjusted from time to time as hereinafter provided, is hereinafter referred
to as the "Vote Multiple." In the event the Corporation shall at any time after
the Rights Declaration Date (i) declare or pay any dividend on Common Stock
payable in shares of Common Stock, or (ii) effect a subdivision or combination
or consolidation of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
Vote Multiple thereafter applicable to the determination of the number of votes
per share to which holders of shares of Series A Preferred Stock shall be
entitled shall be the Vote Multiple immediately prior to such event multiplied
by a fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
(B) Except as otherwise provided herein, by law or by the Articles of
Organization, the holders of shares of Series A Preferred Stock and the holders
of shares of Common Stock and the holders of shares of any other capital stock
of this Corporation having general voting rights, shall vote together as one
class on all matters submitted to a vote of stockholders of the Corporation.
(C) Except as otherwise required by applicable law, by the Articles of
Organization or as set forth herein, holders of Series A Preferred Stock shall
have no special voting rights and their consent shall not be required (except to
the extent they are entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.
SECTION 4. CERTAIN RESTRICTIONS.
(A) Whenever dividends or distributions payable on the Series A
Preferred Stock as provided in Section 2 are in arrears, thereafter and until
all accrued and unpaid dividends and distributions, whether or not declared, on
shares of Series A Preferred Stock outstanding shall have been paid in full, the
Corporation shall not:
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(i) declare or pay dividends on, make any other distributions on,
or redeem or purchase or otherwise acquire for consideration
any shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A
Preferred Stock;
(ii) declare or pay dividends on or make any other distributions on
any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with
the Series A Preferred Stock, except dividends paid ratably on
the Series A Preferred Stock and all such parity stock on
which dividends are payable or in arrears in proportion to the
total amounts to which the holders of all such shares are then
entitled;
(iii) except as permitted in subsection 4 (A) (iv) below, redeem,
purchase or otherwise acquire for consideration shares of any
stock ranking on parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A
Preferred Stock, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such
parity stock in exchange for shares of any stock of the
Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A
Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares of
Series A Preferred Stock, or any shares of any stock ranking
on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred Stock,
except in accordance with a purchase offer made in writing or
by publication (as determined by the Board of Directors) to
all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of
the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the
respective series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under subsection (A) of this Section
4, purchase or otherwise acquire such shares at such time and in such manner.
SECTION 5. REACQUIRED SHARES.
Any shares of Series A Preferred Stock purchased or otherwise acquired
by the Corporation in any manner whatsoever shall be retired and canceled
promptly after the acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued shares of Preferred Stock and may be
reissued as part of a new series of Preferred Stock to be created by resolution
or resolutions of the Board of Directors, subject to the conditions and
restrictions on issuance set forth herein and in the Articles of Organization.
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SECTION 6. LIQUIDATION, DISSOLUTION OR WINDING UP.
(A) Upon any liquidation (voluntary or otherwise), dissolution or
winding up of the Corporation, no distribution shall be made (x) to the holders
of shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock unless, prior
thereto, the holders of shares of Series A Preferred Stock shall have received
an amount equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment, plus an amount equal to
the greater of (1) $1,000 per share or (2) an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 1,000
times the aggregate amount to be distributed per share to holders of Common
Stock, or (y) to the holders of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except distributions made ratably on the Series A Preferred
Stock and all other such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Corporation shall at any time after
the Rights Declaration Date (i) declare or pay any dividend on Common Stock
payable in shares of Common Stock, or (ii) effect a subdivision or combination
or consolidation of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
aggregate amount per share to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under clause (x) of the
preceding sentence shall be adjusted by multiplying such amount by a fraction,
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) Neither the consolidation nor merging of the Corporation with or
into any other corporation or corporations, nor the sale or other transfer of
all or substantially all of the assets of the Corporation, shall be deemed to be
a liquidation, dissolution or winding up of the Corporation within the meaning
of this Section 6.
SECTION 7. CONSOLIDATION, MERGER, ETC.
In case the Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash and/or any other
property, then in any such case the shares of Series A Preferred Stock shall at
the same time be similarly exchanged or changed in an amount per share (subject
to the provision for adjustment hereinafter set forth) equal to 1000 times the
aggregate amount of stock, securities, cash and/or any other property (payable
in kind), as the case may be, into which or for which each share of Common Stock
is changed or exchanged, plus accrued and unpaid dividends, if any, payable with
respect to the Series A Preferred Stock. In the event the Corporation shall at
any time after the Rights Declaration Date (i) declare or pay any dividend on
Common Stock payable in shares of Common Stock, or (ii) effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of
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shares of Common Stock, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of shares of Series A
Preferred Stock shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
SECTION 8. REDEMPTION.
The shares of Series A Preferred Stock shall not be redeemable.
SECTION 9. RANKING.
Unless otherwise provided in the Articles of Organization or a
Certificate of Designation Establishing a Class of Stock relating to a
subsequently-designated series of Preferred Stock of the Corporation, the Series
A Preferred Stock shall rank junior to any other series of the Corporation's
Preferred Stock subsequently issued, as to the payment of dividends and the
distribution of assets on liquidation, dissolution or winding up and shall rank
senior to the Common Stock.
SECTION 10. AMENDMENT.
The Articles of Organization and this Certificate of Designation shall
not be amended in any manner which would materially alter or change the powers,
preferences or special rights of the Series A Preferred Stock so as to affect
them adversely without the affirmative vote of the holders of two-thirds or more
of the outstanding shares of Series A Preferred Stock, voting separately as a
class.
SECTION 11. FRACTIONAL SHARES.
Series A Preferred Stock may be issued in whole shares or in any
fraction of a share that is one one-thousandth of a share or any integral
multiple of such fraction, which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock. In lieu of fractional shares, the
Corporation may elect to make a cash payment as provided in the Rights Agreement
for fractions of a share other than one one-thousandth of a share or any
integral multiple thereof. In the event the Corporation shall at any time after
the Rights Declaration Date (i) declare or pay any dividend on Common Stock
payable in shares of Common Stock, or (ii) effect a subdivision or combination
or consolidation of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount set forth in the preceding sentence with respect to the issuance of
fractions of a share of Series A Preferred Stock in multiples of one-thousandth
of a share shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the
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<PAGE> 47
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
SIGNED UNDER THE PENALTIES OF PERJURY, this ______ day of __________April, 1998,
Ralph S. Sheridan , *President
- --------------------------------------------------------------------
Jeffrey A. Bernfeld , *Clerk
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THE COMMONWEALTH OF MASSACHUSETTS
CERTIFICATE OF VOTE OF DIRECTORS
ESTABLISHING A SERIES OF A CLASS OF STOCK
(GENERAL LAWS, CHAPTER 156B, SECTION 26)
======================
I hereby approve the within Certificate of Vote of Directors and, the
filing fee in the amount of $__________________ having been paid,
said certificate is deemed to have been filed with me this _________
day of _____________________, 19__.
Effective date: ___________________________________________
WILLIAM FRANCIS GALVIN
Secretary of the Commonwealth
TO BE FILLED IN BY CORPORATION
PHOTOCOPY OF DOCUMENT TO BE SENT TO:
Steven R. London
--------------------------------------
Brown, Rudnick, Freed & Gesmer
--------------------------------------
One Financial Center, Boston, MA 02111
--------------------------------------
Telephone: (617) 856-8200
--------------------------------------
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EXHIBIT B
FORM OF RIGHT CERTIFICATE
Certificate No. R- _____ Rights
NOT EXERCISABLE AFTER APRIL 16, 2008 OR EARLIER IF NOTICE OF REDEMPTION IS
GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF AMERICAN SCIENCE
AND ENGINEERING, INC. AT $0.01 PER RIGHT ON THE TERMS SET FORTH IN THE
SHAREHOLDER RIGHTS AGREEMENT BETWEEN AMERICAN SCIENCE AND ENGINEERING, INC. AND
AMERICAN STOCK TRANSFER & TRUST CO., AS RIGHTS AGENT, DATED AS OF APRIL 17, 1998
(THE "RIGHTS AGREEMENT"). UNDER CERTAIN CIRCUMSTANCES SPECIFIED IN SECTION 7 (e)
OF THE RIGHTS AGREEMENT, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON, AN
ADVERSE PERSON OR AN ASSOCIATE OR AFFILIATE OF AN ACQUIRING PERSON OR AN ADVERSE
PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT
HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
RIGHT CERTIFICATE
AMERICAN SCIENCE AND ENGINEERING, INC.
This certifies that _________________________ , or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the
Shareholder Rights Agreement dated as of April 17, 1998 (the "Rights Agreement")
between American Science and Engineering, Inc. (the "Company") and American
Stock Transfer & Trust Co. as Rights Agent (the "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 the close of business on April 16,
2008 at the office or offices of the Rights Agent designated for such purpose,
or its successors as Rights Agent, one one-thousandth of a fully paid,
non-assessable share of the Series A Junior Participating Cumulative Preferred
Stock (the "Preferred Stock") of the Company, at a purchase price of $60.00 per
one one-thousandth of a share (the "Exercise Price") upon presentation and
surrender of this Right Certificate with the Form of Election to Purchase and
the related Certificate duly executed. The number of Rights evidenced by this
Right Certificate (and the number of shares which may be purchased upon exercise
thereof) set forth above, and the Exercise Price per share set forth above, are
the number and Exercise Price as of April 17, 1998, based on the Preferred Stock
as constituted at such date.
Upon the occurrence of a Section 11 (a) (ii) Event (as such term is defined
in the Rights Agreement), if the Rights evidenced by this Right Certificate are
beneficially owned by (i) an Acquiring Person, an Adverse Person or an Affiliate
or Associate of any such Person (as such
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terms are defined in the Rights Agreement), (ii) a transferee of any such
Acquiring Person, Adverse Person, Associate or Affiliate, or (iii) under certain
circumstances specified in the Rights Agreement, a transferee of a Person who,
after such transfer, became an Acquiring Person or an Adverse Person, or an
Affiliate or Associate of an Acquiring Person or an Adverse Person, such Rights
shall become null and void and no holder hereof shall have any right with
respect to such Rights from and after the occurrence of such Section 11 (a) (ii)
Event.
As provided in the Rights Agreement, the Exercise Price and the number of
shares of Preferred Stock or other securities which may be purchased upon the
exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the principal office of the
Company and the designated office of the Rights Agent and are also available
upon written request to the Company or the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office or offices of the Rights Agent designated for such
purpose, may be exchanged for another Right Certificate or Certificates of like
tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of shares of Preferred Stock as the Rights evidenced by the
Right Certificate or 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
Certificates for the number of whole Rights not exercised. If this Right
Certificate shall be exercised in whole or in part pursuant to Section 11(a)
(ii) of the Rights Agreement, the holder shall be entitled to receive this Right
Certificate duly marked to indicate that such exercise has occurred as set forth
in the Rights Agreement.
Under certain circumstances, subject to the provisions of the Rights
Agreement, the Board of Directors of the Company at its option may exchange all
of any part of the Rights evidenced by this Certificate for shares of the
Company's Common Stock or Preferred Stock at an exchange ratio (subject to
adjustment) of one share of Common Stock or one one-thousandth of a share of
Preferred Stock per Right.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate may be redeemed by the Board of Directors of the Company at its
option at a redemption price of $0.01 per Right (payable in cash, Common Stock
or other consideration deemed appropriate by the Board of Directors).
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The Company is not obligated to issue fractional shares of stock upon the
exercise of any Right or Rights evidenced hereby (other than fractions which are
integral multiples of one one-thousandth of a share of Preferred Stock, as
adjusted in accordance with the terms of the Preferred Stock, which may, at the
election of the Company, be evidenced by depositary receipts). If the Company
elects not to issue such fractional shares, in lieu thereof a cash payment will
be made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of shares of Preferred
Stock, Common Stock or any other securities of the Company which may at any time
be issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by any authorized signatory of the Rights
Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal.
Corporate Seal AMERICAN SCIENCE AND ENGINEERING, INC.
Attested: By:
-------------------------------------
Name: Ralph S. Sheridan
Title: President and Chief Executive
By: Officer
------------------------------------
Jeffrey A. Bernfeld, Clerk
Countersigned:
AMERICAN STOCK TRANSFER & TRUST CO.,
as Rights Agent
- ------------------------------------
Authorized Signatory
Date of countersignature:
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<PAGE> 52
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
transferred) _____________________ 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: ___________________________
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate _______ are ______ are
not being transferred by or on behalf of the Person who is or was an Acquiring
Person, an Adverse Person or an Affiliate or Associate of any such Person (as
such terms are defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned ___ did ___ did not directly or indirectly acquire the Rights
evidenced by the Right Certificate from any Person who is, was or became an
Acquiring Person, an Adverse Person or an Affiliate or Associate of any such
Person.
Dated:_________________, ____ _____________________________________
Signature
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<PAGE> 53
NOTICE
The signature to the foregoing Assignment and Certificate must correspond
to the name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To: American Science and Engineering, Inc.
The undersigned hereby irrevocably elects to exercise ______________ Rights
represented by this Right Certificate to purchase the shares of Preferred Stock
issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person which may be issuable upon the exercise of the
Rights) and requests that certificates for such shares be issued in the name of:
Please insert social security
or other identifying taxpayer number: ________________________
- --------------------------------------------------------------------------------
(Please print name and address)
- --------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidences by this
Right Certificate or if the Rights are being exercised pursuant to Section
11(a)(ii) of the Rights Agreement, a new Right Certificate for the balance of
such Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying taxpayer number: _________________________
- --------------------------------------------------------------------------------
(Please print name and address)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated: ____________, _____
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<PAGE> 54
________________________________________
Signature
Signature Guaranteed: ________________
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate ____ are ____ are not
being exercised by or on behalf of a Person who is or was an Acquiring Person,
an Adverse Person or an Affiliate or Associate of any such Person (as such terms
are defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned ___ did ___ did not directly or indirectly acquire the Rights
evidenced by this Right Certificate from any person who is, was or became an
Acquiring Person, an Adverse Person or an Affiliate or Associate of any such
person.
Dated:_______________, _____ ________________________________________
Signature
NOTICE
The signature to the foregoing Election to Purchase and Certificate 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.
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EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On April 9, 1998, the Board of Directors of American Science and
Engineering, Inc. (the "Company") declared a dividend of one preferred share
purchase right (a "Right") for each outstanding share of common stock, par value
$0.66 2/3 per share (the "Common Shares"), of the Company. The dividend is
payable on April 17, 1998 to all holders of record of Common Shares as of the
close of business on April 17, 1998 (the "Record Date"). Each Right entitles the
registered holder to purchase from the Company one one-thousandth of a share of
Series A Junior Participating Preferred Stock, no par value (the "Preferred
Shares"), of the Company at a price of $60.00 per one one-thousandth of a
Preferred Share (the "Purchase Price"), subject to adjustment.
The description and terms of the Rights are set forth in a Rights Agreement
(the "Rights Agreement") between the Company and American Stock Transfer & Trust
Co., New York, New York, as Rights Agent (the "Rights Agent"). A copy of the
Rights Agreement is attached hereto as an exhibit and is hereby incorporated by
reference. The following summary of the Rights is qualified in its entirety by
reference to the Rights Agreement.
Until the earliest to occur of (i) 10 business days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired beneficial ownership of 15% or more of the
outstanding Common Shares or (ii) 10 business days (or such other date as may be
determined by the Board of Directors) following the commencement of a tender
offer or exchange offer the consummation of which would result in the beneficial
ownership by a person or group of 15% or more of the outstanding Common Shares,
or (iii) the date on which the Board of Directors determines that a person or
group which beneficially owns more than 10% of the outstanding Common Shares is
an Adverse Person, as defined in the Rights Agreement (the earliest of such
dates being called the "Distribution Date"), the Rights will be evidenced by the
certificates representing Common Shares.
The Rights Agreement provides that, until the Distribution Date (or earlier
redemption or expiration of the Rights), the Rights will be transferred with and
only with the Common Shares. Until the Distribution Date (or earlier redemption
or expiration of the Rights), certificates representing Common Shares issued
after the Record Date upon transfer or new issuance will contain a notation
incorporating the Rights Agreement by reference. Until the Distribution Date (or
earlier redemption or expiration of the Rights), the surrender for transfer of
any certificates for Common Shares outstanding as of the Record Date, even
without such notation, will also constitute the transfer of the Rights
associated with the Common Shares represented by such certificate.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Shares as of
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the close of business on the Distribution Date, and thereafter such separate
Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights will
expire on April 16, 2008 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or unless the Rights are earlier redeemed or
exchanged by the Company, in each case, as described below.
At any time following the Distribution Date, Rights (other than Rights
owned by an Acquiring Person or Adverse Person, and the Acquiring Person's or
Adverse Person's affiliates and associates, which will have become void) may be
exercised (subject to their earlier termination, expiration or exchange) to
acquire that number of Preferred Shares at the then current Purchase Price of
the Right, or if the Board of Directors so determines, Common Shares, which at
such time will have a market value of two times the Purchase Price of the Right.
The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights
or warrants to subscribe for or purchase Preferred Shares at a price, or
securities convertible into Preferred Shares with a conversion price, less than
the then-current market price of the Preferred Shares or (iii) upon the
distribution to holders of the Preferred Shares of evidences of indebtedness or
assets (excluding regular periodic cash dividends paid out of earnings or
retained earnings or dividends payable in Preferred Shares) or of subscription
rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of one one-thousandths of a
Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $1.00 per share but will be entitled to an
aggregate dividend of 1,000 times the dividend declared per Common Share. In the
event of liquidation, the holders of the Preferred Shares will be entitled to a
minimum preferential liquidation payment of $1,000 per share but will be
entitled to an aggregate payment of 1,000 times the payment made per Common
Share. Each Preferred Share will have 1,000 votes, voting together with the
Common Shares. Finally, in the event of any merger consolidation or other
transaction in which Common Shares are exchanged, each Preferred Share will be
entitled to receive 1,000 times the amount received per Common Share. These
rights are protected by customary antidilution provisions.
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Because of the nature of the dividend, liquidation and voting rights of the
Preferred Shares, the value of one one-thousandth of a Preferred Share
purchasable upon exercise of each Right should approximate the value of one
Common Share. value of two times the Purchase Price of the Right.
In the event that any person or group of affiliated or associated persons
becomes an Acquiring Person, proper provision shall be made so that each holder
of a Right, other than Rights beneficially owned by the Acquiring Person or
Adverse Person or the affiliates and associates of such Acquiring Person or
Adverse Person (which will thereafter be void), will thereafter have the right
to receive upon exercise that number of Preferred Shares having a market value
of two times the Purchase Price of the Right.
At any time after any person or group becomes an Acquiring Person and prior
to the acquisition by such person or group of 50% or more of the outstanding
Common Shares, the Board of Directors of the Company may exchange the Rights
(other than Rights owned by such person or group and their respective affiliates
and associates which will have become void) in whole or in part, at an exchange
ratio of one one-thousandth of a Preferred Share (or of a share of a class or
series of the Company's Preferred Stock having equivalent rights, preferences
and privileges) or one Common Share per Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Preferred Shares will be issued (other than
fractions which are integral multiples of one one-thousandth of a Preferred
Share, which may, at the election of the Company, be evidenced by depository
receipts) and in lieu thereof, an adjustment in cash will be made based on the
market price of the Preferred Shares on the last trading day prior to the date
of exercise.
At any time prior to or within 10 business days following (i) the
acquisition by a person or group of affiliated or associated persons of
beneficial ownership of 15% or more of the outstanding Common Shares, or (ii)
the date on which the Board of Directors of the Company determines a person or
group to be an Adverse Person, the Board of Directors of the Company may redeem
the Rights in whole, but not in part, at a price of $.01 per Right (the
"Redemption Price"). The redemption of the Rights may be made effective at such
time on such basis with such conditions as the Board of Directors in its sole
discretion may establish. Immediately upon any 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.
In the event that the Company is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are sold after a person or group has become an Acquiring Person, proper
provision will be made so that each holder of a Right (other than an Acquiring
Person or Adverse Person and the affiliates and associates of such Acquiring
Person or Adverse Person, whose Rights will have become void) will thereafter
have the right to receive, upon the exercise thereof at the then current
Purchase Price of the Right, that number of shares of common stock of the
acquiring company which at the time of such transaction will have a market
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Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.
Prior to the Distribution Date, the Company may supplement or amend any
provision of the Rights Agreement in any manner. From and after the Distribution
Date, the Company may supplement or amend the Rights Agreement to: (i) cure any
ambiguity; (ii) correct or supplement any provision contained in the Rights
Agreement which may be defective or inconsistent with any other provision of the
Rights Agreement; (iii) shorten or lengthen any time period contained in the
Rights Agreement; or (iv) change or supplement the provisions in the Rights
Agreement in any manner which the Company may deem necessary or desirable and
which shall not adversely affect the interest of the holders of Rights (other
than Rights owned by an Acquiring Person, Adverse Person or any affiliate or
associate of an Acquiring Person or Adverse Person).
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
hereby incorporated herein by reference.
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