SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
Date of Report (date of earliest event reported): March 21, 1996
RCM TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Nevada 1-10245 95-1480559
State or other (Commission (I.R.S Employer
jurisdiction of incorporation File Number) Indentification No.)
or organization
2500 McClellan Avenue, Suite 350
Pennsauken, New Jersey 08109-4613
(Address of principal executive office)
Registrant's telephone number: (609) 486-1777
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Item 5 Other Events
On March 14, 1996, the Board of Directors of RCM Technologies, Inc.
(the "Company") declared a dividend of one Right for each outstanding share of
common stock, par value $.05 per share (the "Common Stock"), of the Company to
stockholders of record at the close of business on April 1, 1996 (the "Record
Date") and authorized the issuance of one Right with respect to each share of
Common Stock that shall become outstanding between the Record Date and the
earliest of the Distribution Date, the Redemption Date or the Expiration Date
(as such terms are defined below); provided, however, that Rights may be issued
with respect to shares of Common Stock that become outstanding after the
Distribution Date and prior to the earlier of the Redemption Date or the
Expiration Date under certain circumstances. Except as described below, each
Right, when exercisable, entitles the registered holder to purchase from the
Company one additional share of Common Stock, at a price of $3.00 per share (the
"Purchase Price"), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement dated as of March 14, 1996 between
the Company and American Stock Transfer & Trust Company, as Rights Agent (the
"Rights Agreement").
Initially, the Rights will be evidenced by the Certificates for Common
Stock of the Company (the "Common Shares") registered in the names of the
holders thereof and not by separate Right certificates. Subject to certain
exceptions, until the earlier of (i) such time as the Company learns that a
person, alone or together with all affiliates and associates ("Acquiring
Person") has acquired the beneficial ownership of 15% or more of the Common
Shares then outstanding or (ii) the close of business on such date, if any, as
may be designated by the Board of Directors of the Company following the
commencement of, or first public disclosure of an intent to commence, a tender
or exchange offer by any person for outstanding Common Shares if, upon
consummation of such tender or exchange offer, such person would be the
beneficial owner of 15% or more of the outstanding Common Shares (the close of
business on the earlier of such dates being the "Distribution Date"), no
separate Right certificates will be distributed and the Rights, including the
Right to receive Right certificates, will be transferrable only in connection
with the transfer of Common Shares. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to the holders of record of the Common Shares as
of the Distribution Date and, thereafter, the Rights will be evidenced solely by
such Right Certificates.
The Rights Agreement provides that, until the earliest of the
Distribution Date, the close of business on October 31, 2005 (the "Expiration
Date") or any day set by the Board of Directors of the Company for the
redemption of all then outstanding Rights (the "Redemption Date"), the Rights
shall be evidenced by the Certificates representing the Common Shares and will
be transferred with the Common Shares. With regard to certificates for Common
Shares issued after the Record Date but prior to the earliest of the
Distribution Date, Redemption Date or Expiration Date, a legend will be affixed
to the certificate stating that the certificate also evidences and entitles the
holder of the certificate to the Rights. The omission of a legend shall not
affect the enforceability of any part
<PAGE>
of the Rights Agreement or the rights of any holder of Rights.
The Rights are not exercisable until the Distribution Date and will
expire at the earlier of the Expiration Date or the Redemption Date.
Notwithstanding the foregoing, any Rights that are/or were at any time
beneficially owned by an Acquiring Person, or any affiliate or associate of an
Acquiring person, shall be null and void and nontransferable and any holder of
any such Right, including any purported transferee or subsequent holder thereof,
shall not have any right to exercise or transfer any such Right.
Additionally, for a period not to exceed 90 days after the Distribution
Date, the Company may temporarily suspend the exercisability of the Rights in
order to prepare and file a Registration Statement with the Securities and
Exchange Commission under the Securities Act of 1933 with respect to the Common
Shares purchasable upon exercise of the Rights. No such suspension shall remain
effective after, and the Rights shall without any further action by the Company
or any other person become exercisable immediately upon, the effectiveness of
such Registration Statement. Upon any such suspension, the Company will issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended and shall issue a further public announcement at such time
as the suspension is no longer in effect. Thereafter, the Company will use its
best efforts to prepare and file a Registration Statement with the Securities
and Exchange Commission with respect to the Common Shares purchasable upon
exercise of the Rights, cause such Registration Statement to become effective
and to remain effective until the Expiration Date and to qualify or register the
Common Shares purchasable upon exercise of the Rights under the securities laws
of other jurisdictions as may be necessary or appropriate.
In the event that there shall not be sufficient Common Shares to permit
the exercise or exchange of rights, the Company will take all such action as may
be necessary to authorize additional Common Shares; provided however that if the
Company is unable to cause the authorization of additional Common Shares, the
Company may pay cash equal to the Purchase Price in lieu of issuing Common
Shares, issue equity securities having a value equal to the value of the Common
Shares which otherwise would have been issuable or distribute a combination of
Common Shares, cash and/or other equity and/or debt securities having an
aggregate value equal to the value of the Common Shares which otherwise would
have been issuable.
In the event that any person becomes an Acquiring Person, each holder
of a Right will thereafter have the right to receive upon exercise at the then
current Purchase Price in accordance with the terms of the Rights Agreement,
such number of Common Shares as shall equal the result obtained by multiplying
the Purchase Price by a fraction, the numerator of which is the number of Common
Shares for which a Right is then exercisable and the denominator of which is 50%
of the market value of the Common Shares on the date on which a person becomes
an Acquiring Person. The Board of Directors of the Company may, at its option,
at any time after a person becomes an Acquiring Person exchange all or part of
the then outstanding and exercisable Rights for consideration per Right
consisting of one-half of the securities that would be issuable at such time
upon the exercise of one Right.
In the event that, following a Distribution Date, the Company is
involved in a merger or business combination or 50% or more of the Company's
assets or
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earning power are sold, each holder of a Right will thereafter have the right to
receive, upon exercise at the then current Purchase Price associated with the
Right, common stock of the acquiring or surviving company having a value equal
to two times the exercise price of the Right.
To preserve the actual or potential economic value of the Rights in the
event that there are any changes in the Common Shares by reason of, among
others, stock dividends, stock splits, recapitalization, combinations or
exchanges of securities, the Board of Directors of the Company shall make
appropriate adjustments to the number of Common Shares (or the number and kind
of other securities) issuable upon exercise of each Right, the Purchase Price
and Redemption Price in effect at such time, and the number of Rights
outstanding at such time to prevent dilution.
At any time prior to the earlier of (i) such time as a person becomes
an Acquiring Person and (ii) the Expiration Date, the Board of Directors of the
Company may order the redemption of all, but not fewer than all, the then
outstanding Rights at a price of $.01 per Right or at a price adjusted by the
Board of Directors of the Company in accordance with the Rights Agreement (the
"Redemption Price"), which may, at the option of the Company, be paid in cash or
Common Shares or other securities of the Company deemed by the Board of
Directors of the Company, in its sole discretion, to be at least equivalent in
value to the Redemption Price. Immediately upon the Board of Directors of the
Company ordering the redemption of the Rights, the Rights will terminate and the
only right thereafter of the holders of the Rights shall be to receive the
Redemption Price.
Until a Right is exercised, the holder thereof shall not be deemed for
any purpose the holder of the Common Shares, or of any other securities of the
Company which may at any time be issuable upon the exercise of the Rights, and
will have no Rights as a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends.
At anytime prior to the Distribution Date, the Company may supplement
or amend any provision of the Rights Agreement with the exceptions of (i)
providing for an earlier Expiration Date or (ii) reducing the Redemption Price
(except as specifically set forth in the Rights Agreement) without the approval
of any holder of the Rights. From and after the Distribution Date and subject to
applicable law, the Company may amend the Rights Agreement without the approval
of any holders of Right Certificates for certain specified purposes so long as
such amendment does not adversely affect the interests of the holders of Right
Certificates (other than an Acquiring Person or an affiliate or associate of an
Acquiring Person). Any supplement or amendment adopted during any period after
any person has become an Acquiring Person but prior to the Distribution Date
shall be null and void unless such supplement or amendment could have been
adopted from and after the Distribution Date as set forth above.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
without conditioning the offer on the Rights being redeemed or a substantial
number of Rights being acquired, and under certain circumstances the Rights
beneficially owned by such a person or group may become void. The Rights should
not interfere with any merger or other business combination approved by the
Board of Directors of the Company because, if the Rights would become
exercisable as
<PAGE>
a result of such merger or other business combination, the Board of Directors,
may, at its option, prior to the time that any person becomes an Acquiring
Person, redeem all, but not less than all, of the then outstanding Rights at the
Redemption Price.
The Rights Agreement dated as of March 14, 1996 between RCM
Technologies, Inc. and American Stock Transfer & Trust Company, as Rights Agent
is attached hereto as Exhibit No. 4 and incorporated herein by reference. This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement.
Item 7 Financial Information and Exhibits
Exhibit No. Description
4 Rights Agreement dated as of March 14, 1996 between RCM Technologies,
Inc. and American Stock Transfer & Trust Company, as Rights Agent
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RCM Technologies, Inc.
Dated: March 22, 1996 By:/s/ Stanton Remer
-----------------
Stanton Remer
Chief Financial Officer
Treasurer and Director
EXHIBIT INDEX
Page Number In Exhibit Rule 0-3(b)
Number Sequential (Referenced Numbering
System to Item 601 of Reg. S-K) Where Exhibit
Description of Exhibit Can be Found.
4. Rights Agreement dated as of
March 14, 1996 between RCM
Technologies, Inc. and American
Stock Transfer & Trust Company,
as Rights Agent
<PAGE>
RIGHTS AGREEMENT
Dated as of March 14, 1996
between
RCM TECHNOLOGIES, INC.
and
American Stock Transfer & Trust Company
as Rights Agent
<PAGE>
RIGHTS AGREEMENT, dated as of March 14, 1996, between RCM Technologies,
Inc., a Nevada corporation (the "Company"), and American Stock Transfer & Trust
Company, as Rights Agent (the "Rights Agent").
The Board of Directors of the Company has authorized and declared a
dividend of one Right (as hereinafter defined) for each share of Common Stock,
par value $.05 per share, of the Company (the "Common Stock") outstanding at the
Close of Business (as hereinafter defined) on April 1, 1996 (the "Record Date"),
and has authorized the issuance of one Right (as such number may hereafter be
adjusted pursuant to the provisions of this Rights Agreement) with respect to
each share of Common Stock that shall become outstanding between the Record Date
and the earliest of the Distribution Date, the Redemption Date or the Expiration
Date (as such terms are hereinafter defined); provided, however, that Rights may
be issued with respect to shares of Common Stock that shall become outstanding
after the Distribution Date and prior to the earlier of the Redemption Date or
the Expiration Date in accordance with the provisions of Section 23. Each Right
shall initially represent the right to purchase one share of Common Stock.
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
SECTION 1. ertain Definitions. For purposes of this Rights Agreement,
the following terms have the meanings indicated:
"Acquiring Person" shall mean any Person who or which, alone or together
with all Affiliates and Associates of such Person, shall be the Beneficial Owner
of 15% or more of the Common Shares then outstanding, but shall not include (a)
Messrs. Barry Meyers and Martin Blaire, so long as their Beneficial Ownership of
Common Shares, together with their Affiliates and Associates, in the aggregate,
does not exceed 30% of the Company's Common Shares then outstanding, (b) the
Company, any Subsidiary of the Company, any employee benefit plan of the Company
or of any of its Subsidiaries, or any Person holding Common Shares for or
pursuant to the terms of any such employee benefit plan, (c) any such Person who
has become such a Beneficial Owner solely because (i) of a change in the
aggregate number of Common Shares outstanding since the last date on which such
Person acquired Beneficial Ownership of any Common Shares or (ii) it acquired
such Beneficial Ownership in the good faith belief that such acquisition would
not (x) cause such Beneficial Ownership to equal or exceed 15% of the Common
Shares then outstanding and such Person relied in good faith in computing the
percentage of its Beneficial Ownership on publicly filed reports or documents of
the Company which are inaccurate or out-of-date or (y) otherwise cause a
Distribution Date or the adjustment provided for in Section 11(a) to occur or
(c) any such person who has become such a Beneficial Owner solely because of
shares acquired directly from the Company in connection with the Company's
acquisition of a business or pursuant to an agreement with the Company stating
such Person is not intended to become an Acquiring Person as a result of such
acquisition. Notwithstanding clause (c)of the prior sentence, if any Person that
is not an Acquiring Person due to such clause (c)does not reduce its percentage
of Beneficial Ownership of Common Shares to less than 15% by the Close of
Business on the fifth Business Day after notice from the Company (the date of
notice being the first day) that such Person's Beneficial Ownership of Common
Shares so equals
<PAGE>
or exceeds 15%, such Person shall, at the end of such five Business Day
period, become an Acquiring Person (and such clause (c) shall no longer apply to
such Person). For purposes of this definition, the determination whether any
Person acted in "good faith" shall be conclusively determined by the Board of
Directors of the Company, acting by a vote of those directors of the Company
whose approval would be required to redeem the Rights under Section 24.
"Affiliate" and "Associate," when used with reference to any Person, shall
have the respective meanings ascribed to such terms in Rule 12b-2 of the General
Rules and Regulations under the Exchange Act, as in effect on the date of this
Rights Agreement.
A Person shall be deemed the "Beneficial Owner" of, and shall be deemed to
"Beneficially Own," and shall be deemed to have "Beneficial Ownership" of, any
securities:
(i) which such Person or any of such Person's Affiliates or Associates is
deemed to "beneficially own" within the meaning of Rule 13d- 3 of the General
Rules and Regulations under the Exchange Act, as in effect on the date of this
Rights Agreement;
(ii) which such Person or any of such Person's Affiliates or Associates has
(A) the right to acquire (whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement, arrangement or
understanding (written or oral), or upon the exercise of conversion rights,
exchange rights, rights (other than the Rights), warrants or options, or
otherwise; provided, however, that a Person shall not be deemed the Beneficial
Owner of, or to Beneficially Own, or to have Beneficial Ownership of, securities
tendered pursuant to a tender or exchange offer made by or on behalf of such
Person or any of such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange thereunder, or (B) the right to
vote pursuant to any agreement, arrangement or understanding (written or oral)
provided, however, that a Person shall not be deemed the Beneficial Owner of, or
to Beneficially Own, any security if (1) the agreement, arrangement or
understanding (written or oral) to vote such security arises solely from a
revocable proxy or consent given to such Person in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the applicable
rules and regulations under the Exchange Act and (2) the beneficial ownership of
such security is not also then reportable on Schedule 13D under the Exchange Act
(or any comparable or successor report);
(iii) which are beneficially owned, directly or indirectly, by any other
Person with which such Person or any of such Person's Affiliates or Associates
has any agreement, arrangement or understanding (written or oral) for the
purpose of acquiring, holding, voting (except pursuant to a revocable proxy as
described in clause (ii) (B) of this definition) or disposing of any securities
of the Company.
<PAGE>
Notwithstanding the foregoing, nothing contained in this definition shall
cause a Person ordinarily engaged in business as an underwriter of securities to
be the "Beneficial Owner" of, or to "Beneficially Own," any securities acquired
in a bona fide firm commitment underwriting pursuant to an underwriting
agreement with the Company.
"Book Value," when used with reference to Common Shares issued by any
Person, shall mean the amount of equity of such Person applicable to each Common
Share, determined (i) in accordance with generally accepted accounting
principles in effect on the date as of which such Book Value is to be
determined, (ii) using all the consolidated assets and all the consolidated
liabilities of such Person on the date as of which such Book Value is to be
determined, except that no value shall be included in such assets for goodwill
arising from consummation of a business combination, and (iii) after giving
effect to (A) the exercise of all rights, options and warrants to purchase such
Common Shares (other than the Rights), and the conversion of all securities
convertible into such Common Shares, at an exercise or conversion price, per
Common Share, which is less than such Book Value before giving effect to such
exercise or conversion (whether or not exercisability or convertibility is
conditioned upon occurrence of a future event), (B) all dividends and other
distributions on the capital stock of such Person declared prior to the date as
of which such Book Value is to be determined and to be paid or made after such
date, and (C) any other agreement, arrangement or understanding (written or
oral), or transaction or other action prior to the date as of which such Book
Value is to be determined which would have the effect of thereafter reducing
such Book Value.
"Business Combination" shall have the meaning set forth in Section
11(c)(I).
"Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in the City of New York,
are authorized or obligated by law or executive order to close.
"Close of Business" on any given date shall mean 5:00 pm., New York City
time, on such date; provided, however, that, if such date is not a Business Day,
"Close of Business" shall mean 5:00 pm., New York City time, on the next
succeeding Business Day.
"Common Shares," when used with reference to the Company prior to a
Business Combination, shall mean the shares of Common Stock of the Company or
any other shares of capital stock of the Company into which the Common Stock
shall be reclassified or changed. "Common Shares," when used with reference to
any Person (other than the Company prior to a Business Combination), shall mean
shares of capital stock of such Person (if such Person is a corporation) of any
class or series, or units of equity interests in such Person (if such Person is
not a corporation) of any class or series, the terms of which do not limit (as a
maximum amount and not merely in proportional terms) the amount of dividends or
income payable or on such class or series or the amount of assets on such class
or series upon any voluntary or involuntary liquidation, dissolution or
<PAGE>
winding up of such Person and do not provide that such class or series is
subject to redemption at the option of such Person, or any shares of capital
stock or units of equity interests into which the foregoing shall be
reclassified or changed; provided, however, that, if at any time there shall be
more than one such class or series of capital stock or equity interests of such
Person, "Common Shares" of such Person shall include all such classes and series
substantially in the proportion of the total number of shares or other units of
each such class or series outstanding at such time.
"Common Stock" shall mean the Common Stock, par value $.05 per share, of
the Company.
"Company" shall have the meaning set forth in the heading of this Rights
Agreement; provided, however, that if there is a Business Combination, "Company"
shall have the meaning set forth in Section 11(c)(III).
The term "control" with respect to any Person shall mean the power to
direct the management and policies of such Person, directly or indirectly, by or
through stock ownership, agency or otherwise, or pursuant to or in connection
with an agreement, arrangement or understanding (written or oral) with one or
more other Persons by or through stock ownership, agency or otherwise, and the
terms "controlling" and "controlled" shall have meanings correlative to the
foregoing.
"Distribution Date" shall have the meaning set forth in Section 3(b).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as in effect
on the date in question, unless otherwise specifically provided.
"Exchange Consideration" shall have the meaning set forth in Section
11(b)(I).
"Expiration Date" shall have the meaning set forth in Section 7(a).
"Major Part," when used with reference to the assets of the Company and its
Subsidiaries as of any date, shall mean assets (i) having a fair market value
aggregating 50% or more of the total fair market value of all the assets of the
Company and its Subsidiaries (taken as a whole) as of the date in question, (ii)
accounting for 50% or more of the total value (net of depreciation and
amortization) of all the assets of the Company and its Subsidiaries (taken as a
whole) as would be shown on a consolidated or combined balance sheet of the
Company and its Subsidiaries as of the date in question, prepared in accordance
with generally accepted accounting principles then in effect, or (iii)
accounting for 50% or more of the total amount of earnings before interest,
taxes, depreciation and amortization or revenues of the Company and its
Subsidiaries (taken as a whole) as would be shown on, or derived from, a
consolidated or combined statement of income of the Company and its Subsidiaries
for the period of 12 months ending on the last day of the Company's monthly
accounting period
<PAGE>
next preceding the date in question, prepared in accordance with generally
accepted accounting principles then in effect.
"Market Value", when used with reference to Common Shares on any date,
shall be deemed to be the average of the daily closing prices, per share, of
such Common Shares for the period which is the shorter of (1) 30 consecutive
Trading Days immediately prior to the date in question or (2) the number of
consecutive Trading Days beginning on the Trading Day immediately after the date
of the first public announcement of the event requiring a determination of the
Market Value and ending on the Trading Day immediately prior to the record date
of such event; provided, however, that, in the event that the Market Value of
such Common Shares is to be determined in whole or in part during a period
following the announcement by the issuer of such Common Shares of any action of
the type described in Section 12(a) that would require an adjustment thereunder,
then, and in each such case, the Market Value of such Common Shares shall be
appropriately adjusted to reflect the effect of such action on the market price
of such Common Shares. The closing price for each Trading Day shall be the
closing price quoted on the composite tape for securities listed on the
principal United States securities exchange registered under the Exchange Act on
which such securities are listed, or, if such securities are not listed on any
such exchange, the average of the closing bid and asked quotations with respect
to a share of such securities on the National Association of Securities Dealers,
Inc. Automated Quotations System or such other system then in use, or, if no
such quotations are available, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in such securities
selected by the Board of Directors of the Company. If on any such Trading Day no
market maker is making a market in such securities, the closing price of such
securities on such Trading Day shall be deemed to be the fair value of such
securities as determined in good faith by the Board of Directors of the Company
(whose determination shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agent, the holders of Rights and all
other Persons).
"Person" shall mean an individual, corporation, partnership, joint venture,
association, trust, unincorporated organization or other entity.
"Principal Party" shall mean the Surviving Person in a Business
Combination; provided, however, that, if such Surviving Person is a direct or
indirect Subsidiary of any other Person, "Principal Party" shall mean the Person
which is the ultimate parent of such Surviving Person and which is not itself a
Subsidiary of another Person. In the event ultimate control of such Surviving
Person is shared by two or more Persons, "Principal Party" shall mean that
Person that is immediately controlled by such two or more Persons.
"Purchase Price" with respect to each Right shall mean $3.00, as such
amount may from time to time be adjusted as provided herein, and shall be
payable in lawful money of the United States of America. All references herein
to the Purchase Price shall mean the Purchase Price as in effect at the time in
question.
<PAGE>
"Record Date" shall have the meaning set forth in the introductory
paragraph of this Rights Agreement.
"Redemption Date" shall have the meaning set forth in Section 24(a).
"Redemption Price" with respect to each Right shall mean $.01, as such
amount may from time to time be adjusted in accordance with Section 12. All
references herein to the Redemption Price shall mean the Redemption Price as in
effect at the time in question.
"Registered Common Shares" shall mean Common Shares which are, as of the
date of consummation of a Business Combination, and have continuously been for
the 12 months immediately preceding such date, registered under Section 12 of
the Exchange Act.
"Right Certificate" shall mean a certificate evidencing a Right in
substantially the form attached as Exhibit A.
"Rights" shall mean the rights to purchase Common Stock (or other
securities) as provided in this Rights Agreement.
"Securities Act" shall mean the Securities Act of 1933, as in effect on the
date in question, unless otherwise specifically provided.
"Subsidiary" shall mean a Person, at least a majority of the total
outstanding voting power (being the power under ordinary circumstances (and not
merely upon the happening of a contingency) to vote in the election of directors
of such Person (if such Person is a corporation) or to participate in the
management and control of such Person (if such Person is not a corporation)) of
which is owned, directly or indirectly, by another Person or by one or more
other Subsidiaries of such other Person or by such other Person and one or more
other Subsidiaries of such other Person.
"Surviving Person" shall mean (1) the Person which is the continuing or
surviving Person in a consolidation or merger specified in Section 11(c)(I)(i)
or 11(c)(I)(ii) or (2) the Person to which the Major Part of the assets of the
Company and its Subsidiaries is sold, leased, exchanged or otherwise transferred
or disposed of in a transaction specified in Section 11(c)(I)(iii); provided,
however, that, if the Major Part of the assets of the Company and its
Subsidiaries is sold, leased, exchanged or otherwise transferred or disposed of
in one or more related transactions specified in Section 11(c)(I)(iii) to more
than one Person, the "Surviving Person" in such case shall mean the Person that
acquired assets of the Company and/or its Subsidiaries with the greatest fair
market value in such transaction or transactions.
"Trading Day" shall mean a day on which the principal national securities
exchange or recognized quotation system on which any Common Shares or Rights, as
the case may be, are listed or admitted to trading is open for the transaction
of business or, if the Common Shares or Rights in question are not listed or
<PAGE>
admitted to trading on any national securities exchange or recognized quotation
system, a Business Day.
SECTION 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the term and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint one or more co-Rights Agents as it may
deem necessary or desirable (the term "Rights Agent" being used herein to refer,
collectively, to the Rights Agent together with any such co-Rights Agents). In
the event the Company appoints one or more Rights Agents, the respective duties
of the Rights Agent and any co-Rights Agents shall be as the Company shall
determine.
SECTION 3. Issue of Rights and Right Certificates. (a) One Right shall be
associated with each Common Share outstanding on the Record Date, each
additional Common Share that shall become outstanding between the Record Date
and the earliest of the Distribution Date, the Redemption Date or the Expiration
Date and each additional Common Share with which Rights are issued after the
Distribution Date but prior to the earlier of the Redemption Date or the
Expiration Date as provided in Section 23; provided, however, that, if the
number of outstanding Rights are combined into a smaller number of outstanding
Rights pursuant to Section 12(a), the appropriate fractional Right determined
pursuant to such Section shall thereafter be associated with each such Common
Share.
(b) Until the earlier of (i) such time as the Company learns that a Person
has become an Acquiring Person or (ii) the Close of Business on such date, if
any, as may be designated by the Board of Directors of the Company following the
commencement of, or first public disclosure of an intent to commence, a tender
or exchange offer by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any of its Subsidiaries,
or any Person holding Common Shares for or pursuant to the terms of any such
employee benefit plan) for outstanding Common Shares, if upon consummation of
such tender or exchange offer such Person could be the Beneficial Owner of more
15% or more of the outstanding Common Shares (the Close of Business on the
earlier of such dates being the "Distribution Date"), (x) the Rights will be
evidenced by the certificates for Common Shares registered in the names of the
holders thereof and not by separate Right Certificates and (y) the Rights,
including the right to receive Right Certificates, will be transferable only in
connection with the transfer of Common Shares. As soon as practicable after the
Distribution Date, the Rights Agent will send, by first-class, postage-prepaid
mail, to each record holder of Common Shares as of the Distribution Date, at the
address of such holder shown on the records of the Company, a Right Certificate
evidencing one whole Right for each Common Share (or for the number of Common
Shares with which one whole Right is then associated if the number of Rights per
Common Share held by such record holder has been adjusted in accordance with the
provisions of Section 3(a)). If the number of Rights associated with each Common
Share has been adjusted in accordance with the provision in Section 3(a), at the
time of distribution of the Right Certificates the Company may make any
necessary
<PAGE>
and appropriate rounding adjustments so that Right Certificates
representing only whole numbers of Rights are distributed and cash is paid in
lieu of any fractional Right in accordance with Section 15(a). As of and after
the Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(c) With respect to any certificate for Common Shares, until the earliest
of the Distribution Date, the Redemption Date or the Expiration Date, the Rights
associated with the Common Shares represented by any such certificate shall be
evidenced by such certificate alone, the registered holders of the Common Shares
shall also be the registered holders of the associated Rights and the surrender
for transfer of any such certificate shall also constitute the transfer of the
Rights associated with the Common Shares represented thereby.
(d) Certificates issued for Common Shares after the Record Date (including,
without limitation, upon transfer or exchange of outstanding Common Shares), but
prior to the earliest of the Distribution Date, the Redemption Date or the
Expiration Date, may have printed on, written on or otherwise affixed to them
the following legend:
This certificate also evidences and entitles the holder hereof to certain
Rights as set forth in a Rights Agreement dated as of March 14, 1996, as it may
be amended from time to time (the "Rights Agreement"), between RCM Technologies,
Inc. (the "Company") and American Stock Transfer & Trust Company, as Rights
Agent (the "Rights Agent"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal executive offices of
the Company. Under certain circumstances, as set forth in the Rights Agreement,
such Rights will be evidenced by separate certificates and will no longer be
evidenced by this certificate. The Rights Agent will mail to the holder of this
certificate a copy of the Rights Agreement without charge after receipt of a
written request therefor. Rights beneficially owned by Acquiring Persons or
their Affiliates or Associates (as such terms are defined in the Rights
Agreement) and by any subsequent holder of such Rights are null and void and
nontransferable.
Notwithstanding this paragraph (d), the omission of a legend shall not
affect the enforceability of any part of this Rights Agreement or the rights of
any holder of Rights.
SECTION 4. Form of Right Certificates. The Right Certificates (and the form
of election to purchase and form of assignment to be printed on the reverse side
thereof), shall be in substantially the form set forth as Exhibit A and may have
such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Rights Agreement, or as may be required
to comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Rights
may from time to time be listed, or to conform to usage. Subject to the
<PAGE>
provisions of Sections 7, 11 and 23, the Right Certificates, whenever
issued, shall be dated as of the Distribution Date, and on their face shall
entitle the holders thereof to purchase such number of Common Shares as shall be
set forth therein for the Purchase Price set forth therein, subject to
adjustment from time to time as herein provided.
SECTION 5. Execution, Countersignature and Registration. (a) The Right
Certificates shall be executed on behalf of the Company by the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Treasurer or a Vice President (whether preceded by any additional title) of
the Company, either manually or by facsimile signature, and have affixed thereto
the Company's seal or a facsimile thereof which shall be attested by the
Secretary, an Assistant Secretary or a Vice President (whether preceded by any
additional title, provided that such Vice President shall not have also executed
the Right Certificates) of the Company, either manually or by facsimile
signature. The Right Certificates shall be manually countersigned by the Rights
Agent and shall not be valid or obligatory for any purpose unless so
countersigned. In case an officer of the Company who shall have signed any of
the Right Certificates shall cease to be such an officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates may nevertheless be countersigned by the Rights Agent
and issued and delivered by the Company with the same force and effect as though
the person who signed such Right Certificates had not ceased to be such an
officer of the Company; and any Right Certificate may be signed on behalf of the
Company by any person who, at the actual date of execution of such Right
Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of execution of this Rights Agreement any such
person was not such an officer of the Company.
(b) Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at its principal office in New York, New York, books for registration
and transfer of the Right Certificates issued hereunder. Such books shall show
the names and addresses of the respective holders of the Right Certificates, the
number of Rights evidenced by each of the Right Certificates, the certificate
number of 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;
Uncertificated Rights. (a) Subject to the provisions of Sections 7(e) and 15, at
any time after the Distribution Date, and at or prior to the Close of Business
on the earlier of the Redemption Date or the Expiration Date, any Right
Certificate or Right Certificates may be transferred, split-up, combined or
exchanged for another Right Certificate or Right Certificates representing, in
the aggregate, the same number of Rights as the Right Certificate or Right
Certificates surrendered then represented. 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 Right Certificates to be transferred, split-up, combined or
<PAGE>
exchanged at the principal office of the Rights Agent; provided, however,
that neither the Rights Agent nor the Company shall be obligated to take any
action whatsoever with respect to the transfer of any Right Certificate
surrendered for transfer until the registered holder shall have completed and
signed the certification 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 Sections 7(e) and 15, countersign and deliver to
the Person entitled thereto a Right Certificate or Right Certificates, as the
case may be, as so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split-up, combination or exchange of Right
Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a valid
Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will make a new Right
Certificate of like tenor and deliver such new Right Certificate to the Rights
Agent for delivery to the registered owner in lieu of the Right Certificate so
lost, stolen, destroyed or mutilated.
(c) Notwithstanding any other provision hereof, the Company and the Rights
Agent may amend this Rights Agreement to provide for uncertificated Rights in
addition to or in place of Rights evidenced by Right Certificates.
SECTION 7. Exercise of Rights; Expiration Date of Rights. (a) Subject to
Section 7(e) and except as otherwise provided herein (including Section 11),
each Right shall entitle the registered holder thereof, upon exercise thereof as
provided herein, to purchase for the Purchase Price, at any time after the
Distribution Date and at or prior to the earlier of (i) the Close of Business on
October 31, 2005 (the Close of Business on such date being the "Expiration
Date"), or (ii) the Redemption Date, one Share of Common Stock, subject to
adjustment from time to time as provided in sections 11 and 12.
(b) 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 on the reverse side thereof duly executed,
to the Rights Agent at the principal office of the Rights Agent in New York, New
York, together with payment of the Purchase Price for each Common Share to which
the Rights are exercised, at or prior to the earlier of (i) the Expiration Date
or (ii) the Redemption Date.
(c) Upon receipt of a Right Certificate representing exercisable Rights,
with the form of election to purchase duly executed, accompanied by payment of
<PAGE>
the Purchase Price for the Common Stock to be purchased together with an
amount equal to any applicable transfer tax, in lawful money of the United
States of America, in cash or by certified check or money order payable to the
order of the Company, the Rights Agent shall thereupon (i) either (A) promptly
requisition from any transfer agent of the Common Shares (or make available, if
the Rights Agent is the transfer agent) certificates for the number of Common
Shares 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 Common Shares purchasable upon exercise
of the Rights hereunder with a depositary agent under a depositary arrangement,
promptly requisition from the depositary agent depositary receipts representing
the number of Common Shares to be purchased (in which case certificates for the
Common Shares to be 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 all such requests, (ii) when appropriate,
promptly requisition from the Company the amount of cash to be paid in lieu of
issuance of fractional shares in accordance with Section 15, (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.
(d) In case the registered holder of any Right Certificate shall exercise
fewer 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 15.
(e) Notwithstanding anything in this Rights Agreement to the contrary, any
Rights that are at any time Beneficially Owned by an Acquiring Person or any
Affiliate or Associate of an Acquiring Person shall be null and void and
nontransferable, and any holder of any such Right (including any purported
transferee or subsequent holder) shall not have any right to exercise or
transfer any such Right.
(f) Notwithstanding anything in this Rights Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder of any Right Certificates upon the
occurrence of any purported exercise as set forth in this Section 7 unless such
registered holder shall have (i) completed and signed the certificate contained
in the form of election to purchase set forth on the reverse side of the Right
Certificate surrendered for such exercise and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably request.
(g) The Company may temporarily suspend, for a period of time not to exceed
90 calendar days after the Distribution Date, the exercisability of the Rights
in order to prepare and file a registration statement under the Securities Act,
<PAGE>
on an appropriate form, with respect to the Common Shares purchasable upon
exercise of the Rights and permit such registration statement to become
effective; provided, however, that no such suspension shall remain effective
after, and the Rights shall without any further action by the Company or any
other Person become exercisable immediately upon, the effectiveness of such
registration statement. Upon any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended and shall issue a further public announcement at such time
as the suspension is no longer in effect. Notwithstanding any provision herein
to the contrary, the Rights shall not be exercisable in any jurisdiction if the
requisite qualification under the blue sky or securities laws of such
jurisdiction shall not have been obtained or the exercise of the Rights shall
not be permitted under applicable law.
SECTION 8. Cancellation and Destruction of Right Certificates. All Right
Certificates surrendered or presented to the Rights Agent for the purpose of
exercise, transfer, split-up, combination or exchange, and any Right Certificate
representing Rights that have become null and void and nontransferable pursuant
to Section 7(e) surrendered or presented to the Company or to any of its agents,
for any purpose, shall be canceled by it, and no Right Certificates shall be
issued in lieu thereof except as expressly permitted by this Rights Agreement.
The Company shall deliver to the Rights Agent for cancellation and retirement,
and the Rights Agent shall so cancel and retire, any Right Certificate purchased
or acquired by the Company. The Rights Agent shall deliver all canceled Right
Certificates to the Company, or shall, at the written request of the Company,
destroy such canceled Right Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
SECTION 9. Reservation and Availability of Common Shares. (a) The Company
covenants and agrees that it will cause to be reserved and kept available out of
its authorized and unissued Common Shares or issued and outstanding shares of
Common Stock held in its treasury, a number of Common Shares sufficient to
permit the exercise in full of all outstanding Rights.
(b) In the event that there shall not be a sufficient number of Common
Shares issued but not outstanding or authorized but unissued to permit the
exercise or exchange of Rights in accordance with Section 11, the Company may
take all such action as may be necessary to authorize additional Common Shares
for issuance upon the exercise or exchange of Rights pursuant to Section 11;
provided, however, that if the Company is unable to cause the authorization of
additional Common Shares, then the Company shall, or in lieu of seeking any such
authorization, the Company may, to the extent necessary and permitted by
applicable law and any agreements or instruments in effect prior to the
Distribution Date to which it is a party, (A) upon surrender of a Right, pay
cash equal to the Purchase Price in lieu of issuing Common Shares and requiring
payment therefor, (B) upon due exercise of a Right and payment of the Purchase
Price for each Common Share as to which such Right is exercised, issue debt
securities having a value equal to the value of the Common Shares which
otherwise would have been issuable pursuant to Section 11, which value shall be
determined
<PAGE>
by a nationally recognized investment banking firm selected by the Board or
(C) upon due exercise of a Right and payment of the Purchase Price for each
Common Share as to which such Right is exercised, distribute a combination of
Common Shares, cash and/or debt securities having an aggregate value equal to
the value of the Common Shares which otherwise would have been issuable pursuant
to Section 11, which value shall be determined by a nationally recognized
investment banking firm selected by the Board. To the extent that any legal or
contractual restrictions (pursuant to agreements or instruments in effect prior
to the Distribution Date to which it is party) prevent the Company from paying
the full amount payable in accordance with the foregoing sentence, the Company
shall pay to holders of the Rights as to which such payments are being made all
amounts which are not then restricted on a pro rata basis as such payments
become permissible under such legal or contractual restrictions until such
payments have been paid in full.
(c) The Company covenants and agrees that it will take all such action as
may be necessary to ensure that all Common Shares delivered upon exercise or
exchange of Rights shall, at the time of delivery of the certificates for such
Common Shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable shares.
(d) So long as the Common Shares issuable upon the exercise or exchange of
Rights are to be listed on any national securities exchange, the Company
covenants and agrees to use its best efforts to cause, from and after such time
as the Rights become exercisable or exchangeable, all Common Shares reserved for
such issuance to be listed on such securities exchange upon official notice of
issuance upon such exercise or exchange.
(e) 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 Right Certificates or of any
Common Shares or other securities issuable upon the exercise or exchange of the
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 certificates for the Common Shares or other securities, as the case may be,
in a name other than that of the registered holder of the Right Certificate
evidencing Rights surrendered for exercise or exchange, or to issue or deliver
any certificates for Common Shares or other securities, as the case may be, upon
the exercise or exchange of any Rights until any such tax shall have been paid
(any such tax being payable by the holder of such Right Certificate at the time
of surrender) or until it has been established to the Company's satisfaction
that no such tax is due.
SECTION 10. Common Stock Record Date. Each Person in whose name any
certificate for Common Shares or other securities is issued upon the exercise or
exchange of Rights shall for all purposes be deemed to have become the holder of
record of the Common Shares or other securities, as the case may be, represented
thereby on, and such certificate shall be dated, the date upon which the Right
<PAGE>
Certificate evidencing such Rights was duly surrendered and payment of any
Purchase Price (and any applicable transfer taxes) was made; provided, however,
that, if the date of such surrender and payment is a date upon which the
transfer books of the Company for the Common Shares or other securities, as the
case may be, are closed, such Person shall be deemed to have become the record
holder of such Common Shares or other securities, as the case may be, on, and
such certificate shall be dated, the next succeeding Business Day on which the
transfer books of the Company for the Common Shares or other securities, as the
case may be, are open.
SECTION 11. Adjustments in Rights After There Is an Acquiring Person;
Exchange of Rights for Shares; Business Combinations. (a) Upon a Person becoming
an Acquiring Person, proper provision shall be made so that each holder of a
Right, except as provided in Section 7(e), shall thereafter have a right to
receive, upon exercise thereof for the Purchase Price in accordance with the
terms of this Rights Agreement, such number of Common Shares as shall equal the
result obtained by multiplying the Purchase Price by a fraction, the numerator
of which is the number of Common Shares for which a Right is then exercisable
and the denominator of which is 50% of the market value of the Common Shares on
the date on which a Person becomes an Acquiring Person. As soon as practicable
after a Person becomes an Acquiring Person (provided the Company shall not have
elected to make the exchange permitted by Section 11(b)(I) for all outstanding
Rights), the Company covenants and agrees to use its best efforts to:
(I) prepare and file a registration statement under the Securities Act, on
an appropriate form, with respect to the Common Shares purchasable upon exercise
of the Rights;
(II) cause such registration statement to become effective as soon as
practicable after such filing;
(III) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Securities Act) until
the Expiration Date; and
(IV) qualify or register the Common Shares purchasable upon exercise of the
Rights under the blue sky or securities laws of such jurisdictions as may be
necessary or appropriate.
(b)(I) The Board of Directors of the Company may, at its option, at any
time after a Person becomes an Acquiring Person, mandatorily exchange all or
part of the then outstanding and exercisable Rights (which shall not include
Rights that shall have become null and void and nontransferable pursuant to the
provisions of Section 7(e)) for consideration per Right consisting of one-half
of the securities that would be issuable at such time upon the exercise of one
Right in accordance with Section 11(a) or, if applicable, Section 9(b) (the
consideration issuable per Right pursuant to this Section 11(b)(l) being the
"Exchange Consideration"). If the Board of Directors of the Company elects to
exchange all the Rights for Exchange Consideration pursuant to this Section
<PAGE>
11(b)(I) prior to the physical distribution of the Right Certificates, the
Corporation may distribute the Exchange Consideration in lieu of distributing
Right Certificates, in which case for purposes of this Rights Agreement holders
of Rights shall be deemed to have simultaneously received and surrendered for
exchange Right Certificates on the date of such distribution.
(II) Any action of the Board of Directors of the Company ordering the
exchange of any Rights pursuant to Section 11(b)(I) shall be irrevocable and,
immediately upon the taking of such action and without any further action and
without any notice, the right to exercise any such Right pursuant to Section
11(a) shall terminate and the only right thereafter of a holder of such Right
shall be to receive the Exchange Consideration in exchange for each such Right
held by such holder or, if the Exchange Consideration shall not have been paid
or issued, to exercise any such Right pursuant to Section 11(c)(I). The Company
shall promptly give public notice of any such exchange; provided, however, that
the failure to give, or any defect in, such notice shall not affect the validity
of such exchange. The Company promptly shall mail a notice of any such exchange
to all 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 Rights for the Exchange Consideration 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 shall have become null and void and nontransferable pursuant
to the provisions of Section 7(e)) held by each holder of Rights.
(c)(I) In the event that, following a Distribution Date, directly or
indirectly, any transactions specified in the following clause (i), (ii) or
(iii) of this Section 11(c) (each such transaction being a "Business
Combination") shall be consummated:
(i) the Company shall consolidate with, or merge with and into, any
Acquiring Person or any Affiliate or Associate of an Acquiring Person;
(ii) any Acquiring Person or any Affiliate or Associate of an Acquiring
Person shall merge with and into the Company and, in connection with such
merger, all or part of the Common Shares shall be changed into or exchanged for
capital stock or other securities of the Company or of any Acquiring Person or
Affiliate or Associate of an Acquiring Person or cash or any other property; or
(iii) the Company shall sell, lease, exchange or otherwise transfer or
dispose of (or one or more of its Subsidiaries shall sell, lease, exchange or
otherwise transfer or dispose of), in one or more transactions, the Major Part
of the assets of the Company and its Subsidiaries (taken as a whole) to any
Acquiring Person or any Affiliate or Associate of an Acquiring Person,
<PAGE>
then, in each such case, proper provision shall be made so that each holder
of a Right, except as provided in Section 7(e), shall thereafter have the right
to receive, upon the exercise thereof for the Purchase Price in accordance with
the terms of this Rights Agreement, the securities specified below (or, at such
holder's option, the securities specified in Section 11(a)):
(A) If the Principal Party in such Business Combination has Registered
Common Shares outstanding, each Right shall thereafter represent the right to
receive, upon the exercise thereof for the Purchase Price in accordance with the
terms of this Rights Agreement, such number of Registered Common Shares of such
Principal Party, free and clear of all liens, encumbrances or other adverse
claims, as shall have an aggregate Market Value equal to the result obtained by
multiplying the Purchase Price by two;
(B) If the Principal Party involved in such Business Combination does not
have Registered Common Shares outstanding, each Right shall thereafter represent
the right to receive, upon the exercise thereof for the Purchase Price in
accordance with the terms of this Rights Agreement, at the election of the
holder of such Right at the time of the exercise thereof, any of:
(1) such number of Common Shares of the Surviving Person in such Business
Combination as shall have an aggregate Book Value immediately after giving
effect to such Business Combination equal to the result obtained by multiplying
the Purchase Price by two;
(2) such number of Common Shares of the Principal Party in such Business
Combination (if the Principal Party is not also the Surviving Person in such
Business Combination) as shall have an aggregate Book Value immediately after
giving effect to such Business Combination equal to the result obtained by
multiplying the Purchase Price by two; or
(3) if the Principal Party in such Business Combination is an Affiliate of
one or more Persons which has Registered Common Shares outstanding, such number
of Registered Common Shares of whichever of such Affiliates of the Principal
Party has Registered Common Shares with the greatest aggregate Market Value on
the date of consummation of such Business Combination and shall have an
aggregate Market Value on the date of such Business Combination equal to the
result obtained by multiplying the Purchase Price by two.
(II) The Company shall not consummate any Business Combination unless each
issuer of Common Shares for which Rights may be exercised, as set forth in this
Section 11(C), shall have sufficient authorized Common Shares that have not been
issued or reserved for issuance (and which shall, when issued upon exercise
thereof in accordance with this Rights Agreement, be validly issued, fully paid
and nonassessable and free of preemptive rights, rights of first refusal or any
<PAGE>
other restrictions or limitations on the transfer or ownership thereof) to
permit the exercise in full of the Rights in accordance with this Section 11(c)
and unless prior thereto:
(i) a registration statement under the Securities Act on an appropriate
form, with respect to the Rights and the Common Shares of such issuer
purchasable upon exercise of the Rights, shall be effective under the Securities
Act; and
(ii) the Company and each such issuer shall have:
(A) executed and delivered to the Rights Agent a supplemental agreement
providing for the assumption by such issuer of the obligations set forth in this
Section 11(c) (including the obligation of such issuer to issue Common Shares
upon the exercise of Rights in accordance with the terms set forth in Sections
11(c)(I) and 11(c)(III)) and further providing that such issuer, at its own
expense, will use its best efforts to:
(1) cause a registration statement under the Securities Act on an
appropriate form, with respect to the Rights and the Common Shares of such
issuer purchasable upon exercise of the Rights, to remain effective (with a
prospectus at all times meeting the requirements of the Securities Act) until
the Expiration Date;
(2) qualify or register the Rights and the Common Shares of such issuer
purchasable upon exercise of the Rights under the blue sky or securities laws of
such jurisdictions as may be necessary or appropriate; and
(3) list the Rights and the Common Shares of such issuer purchasable upon
exercise of the Rights on each national securities exchange on which the Common
Shares were listed prior to the consummation of the Business Combination or, if
the Common Shares were not listed on a national securities exchange prior to the
consummation of the Business Combination, on a national securities exchange;
(B) furnished to the Rights Agent a written opinion of independent counsel
stating that such supplemental agreement is a valid, binding and enforceable
agreement of such issuer; and
(C) filed with the Rights Agent a certificate of a nationally recognized
firm of independent accountants setting forth the number of Common Shares of
such issuer which may be purchased upon the exercise of each Right after the
consummation of such Business Combination.
(III) After consummation of any Business Combination and subject to the
provisions of Section 11(c)(II), (i) each issuer of Common Shares for which
<PAGE>
Rights may be exercised as set forth in this Section 11(c) shall be liable
for, and shall assume, by virtue of such Business Combination, all the
obligations and duties of the Company pursuant to this Rights Agreement, (ii)
the term "Company" shall thereafter be deemed to refer to such issuer, (iii)
each such issuer shall take such steps in connection with such consummation as
may be necessary to assure that the provisions hereof (including the provisions
of Sections 11(a) and 11(c)) shall thereafter be applicable, as nearly as
reasonably may be, in relation to its Common Shares thereafter deliverable upon
the exercise of the Rights, and (iv) the number of Common Shares of each such
issuer thereafter 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 of Sections 11 and 12 and the provisions of
Section 7, 9 and 10 with respect to the Common Shares shall apply, as nearly as
reasonably may be, on like terms to any such Common Shares.
SECTION 12. Certain Adjustments. (a) To preserve the actual or potential
economic value of the Rights, if at any time after the date of this Rights
Agreement there shall be any change in the Common Shares, whether by reason of
stock dividends, stock splits, recapitalizations, mergers, consolidations,
combinations or exchanges of securities, split-ups, split-offs, spin-offs,
liquidations, other similar changes in capitalization, any distribution or
issuance of cash, assets, evidences of indebtedness or subscription rights,
options or warrants to holders of Common Shares (other than distribution of the
Rights or regular quarterly cash dividends) or otherwise, then, in each such
event the Board of Directors of the Company shall make such appropriate
adjustments in the number of Common Shares (or the number and kind of other
securities) issuable upon exercise of each Right, the Purchase Price and
Redemption Price in effect at such time and the number of Rights outstanding at
such time (including the number of Rights or fractional Rights associated with
each Common Share) such that following such adjustment such event shall not have
had the effect of reducing or limiting the benefits the holders of the Rights
would have had absent such event.
(b) If, as a result of an adjustment made pursuant to Section 12(a), the
holder of any Right thereafter exercised shall become entitled to receive any
securities other than Common Shares, thereafter the number of such securities 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 of Sections 11 and 12 and the provisions of Sections 7, 9 and 10 with
respect to the Common Shares shall apply, as nearly as reasonably may be, on
like terms to any such other securities.
(c) All Rights originally issued by the Company subsequent to any
adjustment made to the amount of Common Shares or other securities relating to a
Right shall evidence the right to purchase, for the Purchase Price, the adjusted
number and kind of securities purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided herein.
<PAGE>
(d) Irrespective of any adjustment or change in the Purchase Price or the
number of Common Shares or number or kind of other securities issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter issued
may continue to express the terms which were expressed in the initial Right
Certificates issued hereunder.
(e) In any case in which action taken pursuant to Section 12(a) requires
that an adjustment 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 Common Shares
and/or other securities, if any, issuable upon such exercise over and above the
Common Shares and/or other securities, if any, issuable before giving effect 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 securities upon the occurrence of the event requiring
such adjustment.
SECTION 13. Certificate of Adjustment. Whenever an adjustment is made as
provided in Section 11 or 12, the Company shall (a) promptly prepare a
certificate setting forth such adjustment and a brief statement of the facts
accounting for such adjustment (b) promptly file with the Rights Agent and with
each transfer agent for the Common Shares a copy of such certificate and (c)
mail a brief summary thereof to each holder of a Right Certificate (or, prior to
the Distribution Date, of the Common Shares) in accordance with Section 25. The
Rights Agent shall be fully protected in relying on any such certificate and on
any adjustment therein contained.
SECTION 14. Additional Covenants. (a) Notwithstanding any other provision
of this Rights Agreement, no adjustment to the number of Common Shares (or
fractions of a share) or other securities for which a Right is exercisable or
the number of Rights outstanding or associated with each Common Share or any
similar or other adjustment shall be made or be effective if such adjustment
would have the effect of reducing or limiting the benefits the holders of the
Rights would have had absent such adjustment, including, without limitation, the
benefits under Sections 11 and 12, unless the terms of this Rights Agreement are
amended as to preserve such benefits.
(b) The Company covenants and agrees that, after the Distribution Date,
except as permitted by Section 26, it will not take (or permit any Subsidiary of
the Company to take) any action if at the time such action is taken it is
intended or reasonably foreseeable that such action will reduce or otherwise
limit the benefits the holders of the Rights would have had absent such action,
including, without limitation, the benefits under Sections 11 and 12. Any action
taken by the Company during any period after any Person becomes an Acquiring
Person but prior to the Distribution Date shall be null and void unless such
action could be taken under this Section 14(b) from and after the Distribution
Date. The Company shall not consummate any Business Combination if any issuer of
Common Shares for which Rights may be exercised after such Business Combination
in accordance with Section 11(c) shall have taken any action that
<PAGE>
reduces or otherwise limits the benefits the holders of the Rights would
have had absent such action, including, without limitation, the benefits under
Sections 11 and 12.
SECTION 15. Fractional Rights and Fractional Shares. (a) The Company may,
but shall not be required to, issue fractions of Rights or distribute Right
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, the Company may pay to the registered holders of the Right Certificates
with regard to which such fractional Rights would otherwise be issuable an
amount in cash equal to the same fraction of the current Market Value of a whole
Right. For purposes of this Section 15(a), the current Market Value of a whole
Right shall be the closing price of the Rights (as determined pursuant to the
second and third sentences of the definition of Market Value contained in
Section 1) for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable.
(b) The Company may, but shall not be required to, issue fractions of
Common Shares upon exercise of the Rights or distribute certificates which
evidence fractional Common Shares. In lieu of fractional Common Shares, the
Company shall pay to the registered holders of Right Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current Market Value of one Common Share. For purposes of this
Section 15(b), the current Market Value of a Common Share shall be equal to the
closing price of a Common Share (as determined pursuant to the second and third
sentences of the definition of Market Value contained in Section l) for the
Trading Day immediately prior to the date of such exercise. If, as a result of
an adjustment made pursuant to Section 12(a), the holder of any Right thereafter
exercised shall become entitled to receive any securities other than Common
Shares, the provisions of this Section 15(b) shall apply, as nearly as
reasonably may be, on like terms to such other securities.
(c) The holder of Rights 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 provided in this Section 15.
SECTION 16. Rights of Action. (a) All rights of action in respect of this
Rights Agreement are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Shares), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Shares) may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Right Certificate in the manner provided
in such Right Certificate and in this Rights Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Rights Agreement and shall be entitled to specific
<PAGE>
performance of the obligations of any Person under, and injunctive relief
against actual or threatened violations of the obligations of any Person subject
to, this Rights Agreement.
(b) Any holder of Rights who prevails in an action to enforce the
provisions of this Rights Agreement shall be entitled to recover the reasonable
costs and expenses, including attorneys' fees, incurred in such action.
SECTION 17. Transfer and Ownership of Rights and Right Certificates. (a)
Prior to the Distribution Date, the Rights will be transferable only in
connection with the transfer of the Common Shares.
(b) After the Distribution Date, the Right Certificates will be
transferable, subject to Section 7(e), only on the registry books of the Rights
Agent if surrendered at the principal office of the Rights Agent, duly endorsed
or accompanied by a proper instrument of transfer.
(c) The Company and the Rights Agent may deem and treat the Person in whose
name a Right Certificate (or, prior to the Distribution Date, the associated
Common Share 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 certificate for Common Shares made
by anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be affected by
any notice to the contrary.
SECTION 18. Right Certificate Holder Not Deemed a Stockholder. No holder,
as such, of any Right Certificate shall be entitled to vote or receive dividends
or be deemed, for any purpose, the holder of the Common Shares or of any other
securities of the Company which may at any time be issuable on the exercise of
the Rights represented thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company,
including, without limitation, 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, or to receive dividends or other
distributions 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 19. Concerning the Rights Agent. (a) The Company agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder and from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration
and execution of this Rights Agreement and the exercise and performance of its
duties hereunder.
<PAGE>
(b) The Rights Agent shall be protected and shall incur no liability for or
in respect of any action taken, suffered or omitted by it in connection with its
administration of this Rights Agreement in reliance upon any Right Certificate
or certificate for the Common Shares or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement, or other paper or
document believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons.
SECTION 20. Merger or Consolidation or Change 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 stock transfer or
corporate trust business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Rights Agreement without
the execution or filing of any paper or any further act on the part of any of
the parties hereto; provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 22. In
case, at the time such successor Rights Agent shall succeed to the agency
created by this Rights Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and, in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Rights Agreement.
(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 Rights Agreement.
SECTION 21. Duties of Rights Agent. The Rights Agent undertakes the duties
and obligations imposed by this Rights Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates
(or, prior to the Distribution Date, of the Common Shares), by their acceptance
thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action
taken, suffered or omitted by it in good faith and in accordance with such
opinion.
<PAGE>
(b) Whenever in the performance of its duties under this Rights Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person) be proved
or established by the Company prior to taking, refraining from taking or
suffering any action hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by any one of the
Chairman of the Board, the Chief Executive Officer, the President, the Chief
Operating Officer, the Chief Financial Officer, a Vice President (whether
preceded by any additional title), the Treasurer or the Secretary of the Company
and delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered in good faith
by it under the provisions of this Rights Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder only for its own negligence,
bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Rights Agreement or in the
Right Certificates (except as to its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect of
the validity of this Rights Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Rights Agreement or in any Right
Certificate; nor shall it be responsible for any adjustment required under the
provisions of Section 11 or 12 or responsible for the manner, method or amount
of any such adjustment or the ascertaining of the existence of facts that would
require any such adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after actual notice of any such adjustment); nor
shall it by any act hereunder be deemed to make any representation or warranty
as to the authorization or reservation of any Common Shares or other securities
to be issued pursuant to this Rights Agreement or any Right Certificate or as to
whether any Common Shares 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 Rights Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one
<PAGE>
of the Chairman of the Board, the Chief Executive Officer, the President,
the Chief Operating Officer, a Vice President (whether preceded by any
additional title), the Secretary or the Treasurer of the Company, in connection
with its duties and it shall not be liable for any action taken or suffered to
be taken by it in good faith in accordance with instructions of any such
officer.
(h) The Rights Agent and any stockholder, director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other securities
of the Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not the Rights Agent under
this Rights Agreement. Nothing herein shall preclude the Rights Agent from
acting in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or through
its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct provided reasonable care was exercised in the selection
and continued employment thereof.
(j) The Company agrees to indemnify and to hold the Rights Agent harmless
against any loss, liability, damage or expense (including reasonable fees and
expenses of counsel) which the Rights Agent may incur resulting from its actions
as Rights Agent pursuant to this Rights Agreement; provided, however, that the
Rights Agent shall not be indemnified or held harmless with respect to any such
loss, liability, damage or expense incurred by the Rights Agent as a result of,
or arising out of, its own negligence, bad faith or willful misconduct. In no
case shall the Company be liable with respect to any action, proceeding, suit or
claim against the Rights Agent unless the Rights Agent shall have notified the
Company, by letter or by facsimile confirmed by letter, of the assertion of any
action, proceeding, suit or claim against the Rights Agent, promptly after the
Rights Agent shall have notice of any such assertion of an action, proceeding,
suit or claim or have been served with the summons or other first legal process
giving information as to the nature and basis of the action, proceeding, suit or
claim. The Company shall be entitled to participate at its own expense in the
defense of any such action, proceeding, suit or claim, and, if the Company so
elects, the Company shall assume the defense of any such action, proceeding,
suit or claim. In the event that the Company assumes such defense, the Company
shall not thereafter be liable for the fees and expenses of any additional
counsel retained by the Rights Agent, so long as the Company shall retain
counsel satisfactory to the Rights Agent, in the exercise of its reasonable
judgment, to defend such action, proceeding, suit or claim. The Rights Agent
agrees not to settle any litigation in connection with any action, proceeding,
suit or claim with respect to which it may seek indemnification from the Company
without the prior written consent of the Company.
<PAGE>
SECTION 22. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Rights
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Stock by registered or certified mail, and to the
holders of the Right Certificates (or, prior to the Distribution Date, of the
Common Shares) by first-class mail. The Company may remove the Rights Agent or
any successor Rights Agent upon 30 days' notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be, and to each transfer agent
of the Common Stock by registered or certified mail, and to the holders of the
Right Certificates (or, prior to the Distribution Date, of the Common Shares) 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 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 (or, prior to
the Distribution Date, of the Common Shares) (who shall, with such notice,
submit his Right Certificate or, prior to the Distribution Date, the certificate
representing his Common Shares, for inspection by the Company), then the
registered holder of any Right Certificate (or, prior to the Distribution Date,
of the Common Shares) may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be a corporation organized and doing
business under the laws of the United States or of any state of the United
States, 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 $5,000,000; provided
that the principal transfer agent for the Common Shares shall in any event be
qualified to be the Rights Agent. After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and responsibilities as if
it had been originally named as Rights Agent without further act or deed; but
the predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Shares and mail a notice thereof in writing to the registered holders
of the Right Certificates (or, prior to the Distribution Date, of the Common
Shares). Failure to give any notice provided for in this Section 22, 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 23. Issuance of Additional Rights and Right Certificates.
Notwithstanding any of the provisions of this Rights Agreement or of the Rights
to the contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change made in accordance with the provisions of this
<PAGE>
Rights Agreement. In addition, in connection with the issuance or sale of
Common Shares following the Distribution Date and prior to the earlier of the
Redemption Date and the Expiration Date, the Company (a) shall, with respect to
Common Shares so issued or sold pursuant to the exercise of stock options or
under any employee plan or arrangement, or upon the exercise, conversion or
exchange of securities, notes or debentures issued by the Company, and (b) may,
in any other case, if deemed necessary or appropriate by the Board of Directors
of the Company, issue Right Certificates representing the appropriate number of
Rights in connection with such issuance or sale; provided, however, that (i) no
such Right Certificate shall be issued if, and to the extent that, the Company
shall be advised by counsel that such issuance would create a significant risk
of material adverse tax consequences to the Company or the Person to whom such
Right Certificate would be issued, and (ii) no such Right Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
SECTION 24. Redemption and Termination. (a) The Board of Directors of the
Company may, at its option, at any time prior to the earlier of (i) such time as
a Person becomes an Acquiring Person and (ii) the Expiration Date, order the
redemption of all, but not fewer than all, the then outstanding Rights at the
Redemption Price (the date of such redemption being the "Redemption Date"), and
the Company, at its option, may pay the Redemption Price either in cash or
Common Shares or other securities of the Company deemed by the Board of
Directors of the Company, in the exercise of its sole discretion, to be at least
equivalent in value to the Redemption Price; provided, however, such redemption
is subject to any limitations contained herein on the right to redeem
outstanding Rights (including the occurrence of any event or the expiration of
any period after which the Rights may no longer be redeemed).
(b) Immediately upon the action of the Board of Directors of the Company
ordering the redemption of the Rights, and without any further action and
without any notice, the right to exercise the Rights will terminate and the only
right thereafter of the holders of Rights shall be to receive the Redemption
Price. Within ten (10) Business Days after the action of the Board of Directors
of the Company ordering the redemption of the Rights, the Company shall give
notice of such redemption to the holders of the then outstanding Rights by
mailing such notice to all such holders at their last addresses as they appear
upon the registry books of the Rights Agent or, prior to the Distribution Date,
on the registry books of the transfer agent for the Common Shares. Each such
notice of redemption will state the method by which payment of the Redemption
Price will be made. The notice, if mailed in the manner herein provided, shall
be conclusively presumed to have been duly given, whether or not the holder of
Rights receives such notice. In any case, failure to give such notice by mail,
or any defect in the notice, to any particular holder of Rights shall not affect
the sufficiency of the notice to other holders of Rights.
SECTION 25. Notices. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of a Right Certificate (or,
prior to the Distribution Date, of the Common Shares) to or on the Company shall
<PAGE>
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:
RCM Technologies, Inc.
2500 McClellan Avenue
Suite 350
Pennsauken, NJ 08109
Attention of Treasurer
Subject to the provisions of Section 22, any notice or demand authorized by
this Rights Agreement to be given or made by the Company or by the holder of a
Right Certificate (or, prior to the Distribution Date, of the Common Shares) to
or on the Rights Agent shall be sufficiently given or made if sent by first-
class mail, postage prepaid, addressed (until another address is filed in
writing with the Company) as follows:
*******
Notices or demands authorized by this Rights Agreement to be given or made
by the Company or the Rights Agent to any holder of a Right Certificate (or,
prior to the Distribution Date, of the Common Shares) shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed to such
holder at the address of such holder as shown on the registry books of the
Rights Agent or, prior to the Distribution Date, on the registry books of the
transfer agent for the Common Shares.
SECTION 26. Supplements and Amendments. At any time prior to the
Distribution Date and subject to the last sentence of this Section 26, the
Company may, and the Rights Agent shall if the Company so directs, supplement or
amend any provision of this Rights Agreement (including, without limitation, the
date on which the Distribution Date shall occur, the time during which the
Rights may be redeemed pursuant to Section 24 or any provision of the
Certificate of Designation) without the approval of any holder of the Rights.
From and after the Distribution Date and subject to applicable law, the Company
may, and the Rights Agent shall if the Company so directs, amend this Rights
Agreement without the approval of any holders of Right Certificates (i) to cure
any ambiguity or to correct or supplement any provision contained herein which
may be defective or inconsistent with any other provision of this Rights
Agreement or (ii) to make any other provisions in regard to matters or questions
arising hereunder 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 or an Affiliate or Associate of an Acquiring
Person). Any supplement or amendment adopted during any period after any Person
has become an Acquiring Person but prior to the Distribution Date shall be null
and void unless such supplement or amendment could have been adopted under the
prior sentence from and after the Distribution Date. Any supplement or amendment
to this Rights Agreement duly approved by the Company that does not amend
Sections 19, 20, 21
<PAGE>
or 22 in a manner adverse to the Rights Agent shall become effective
immediately upon execution by the Company, whether or not also executed by the
Rights Agent. Notwithstanding anything to the contrary contained in this Rights
Agreement, no supplement or amendment to this Rights Agreement shall be made
which (a) reduces the Redemption Price (except as required by Section 12(a)) or
(b) provides for an earlier Expiration Date.
SECTION 27. Successors. All the covenants and provisions of this Rights
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
SECTION 28. Benefits of Rights Agreement; Determinations and Actions by the
Board of Directors, etc. (a) Nothing in this Rights Agreement shall be construed
to give to any Person other than the Company, the Rights Agent and the
registered holders of the Right Certificates (and prior to the Distribution
Date, of the Common Shares) any legal or equitable right, remedy or claim under
this Rights Agreement; but this Rights Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date, of the Common
Shares).
(b) Except as explicitly otherwise provided in this Rights Agreement, the
Board of Directors of the Company shall have the exclusive power and authority
to administer this Rights Agreement and to exercise all rights and powers
specifically granted to the Board of Directors of the Company or to the Company,
or as may be necessary or advisable in the administration of this Rights
Agreement, including, without limitation, the right and power to (i) interpret
the provisions of this Rights Agreement and (ii) make all determinations deemed
necessary or advisable for the administration of this Rights Agreement
(including, without limitation, a determination to redeem or not redeem the
Rights or to amend this Rights Agreement and a determination of whether there is
an Acquiring Person).
(c) Nothing contained in this Rights Agreement shall be deemed to be in
derogation of the obligation of the Board of Directors of the Company to
exercise its fiduciary duty. Without limiting the foregoing, nothing contained
herein shall be construed to suggest or imply that the Board of Directors shall
not be entitled to reject any tender offer, or to recommend that holders of
Common Shares reject any tender offer, or to take any other action (including,
without limitation, the commencement, prosecution, defense or settlement of any
litigation and the submission of additional or alternative offers or other
proposals) with respect to any tender offer that the Board of Directors believes
is necessary or appropriate in the exercise of such fiduciary duty.
SECTION 29. Severability. If any term, provision, covenant or restriction
of this Rights Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Rights Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
<PAGE>
SECTION 30. Governing Law. This Rights Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the law of the
State of Nevada and for all purposes shall be governed by and construed in
accordance with the law of such State applicable to contracts to be made and
performed entirely within such State.
SECTION 31. Counterparts; Effectiveness. The Rights Agreement may be
executed in any number of counterparts and each of such counterparts shall for
all purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument. This Rights Agreement shall
be effective as of the Close of business on the date hereof.
SECTION 32. Descriptive Headings. Descriptive headings of the several
Sections of this Rights Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions of
this Rights Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Rights Agreement to
be duly executed as of the day and year first above written.
RCM TECHNOLOGIES, INC.
By: /s/Leon Kopyt
Name:Leon Kopyt
Title:President, Chief Executive Officer
Attest:
/s/Stanton Remer
Name:Stanton Remer
Title:Chief Financial Officer
Countersigned:
American Stock Transfer & Trust Company, as Rights Agent,
By: Herbert Lemer
Authorized Officer
<PAGE>
EXHIBIT A
[Form of Right Certificate]
Certificate No. [R] -
____________ Rights
NOT EXERCISABLE AFTER OCTOBER 31, 2005, OR EARLIER IF REDEEMED BY THE
COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT
$.01 PER RIGHT, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND BY ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS ARE NULL AND VOID AND NONTRANSFERABLE.
Right Certificate
RCM TECHNOLOGIES, INC.
This certifies that ___________________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement dated as of February __, 1996 (the "Rights Agreement"), between RCM
Technologies, Inc., a Nevada corporation (the "Company"), and American Stock
Transfer & Trust Company, as Rights Agent (the "Rights Agent"), unless the
Rights evidenced hereby shall have been previously redeemed by the Company, to
purchase from the Company at any time after the Distribution Date (as defined in
the Rights Agreement) and prior to 5:00 pm., New York City time, on October 31,
2005 (the "Expiration Date"), at the principal office of the Rights Agent, or
its successors as Rights Agent, in the City of New York, one fully paid,
nonassessable share of Common Stock, par value $.05 per share, of the Company at
a purchase price per share of Common Stock equal to $3.00 (the "Purchase Price")
payable in cash, upon presentation and surrender of this Right Certificate with
the Form of Election to Purchase duly executed.
The Purchase Price and the number and kind of shares which may be purchased
upon exercise of each Right evidenced by this Right Certificate, as set forth
above, are the Purchase Price and the number and kind of shares which may be so
purchased as of April 1, 1996. As provided in the Rights Agreement, the Purchase
Price and the number and kind of shares which may be purchased upon the exercise
of each Right evidenced by this Right Certificate are subject to modification
and adjustment upon the happening of certain events.
If the Rights evidenced by this Right Certificate are at any time
beneficially owned by an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights Agreement), such
Rights
<PAGE>
shall be null and void and nontransferable and the holder of any such Right
(including any purported transferee or subsequent holder) shall not have any
right to exercise or transfer any such Right.
This Right Certificate is subject to all 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
reference to the Rights Agreement is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities hereunder of
the Rights Agent, the Company and the holders of the Right Certificates. Copies
of the Rights Agreement are on file at the above-mentioned office of the Rights
Agent and are also available from the Company upon written request.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal stock transfer or corporate trust office of the
Rights Agent, may be exchanged for another Right Certificate or Right
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number and kind of shares as the Rights evidenced by
the Right Certificate or Right Certificates surrendered shall have entitled such
holder to purchase. If this Right Certificate shall be exercised in part, the
holder shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Right Certificate may be redeemed by the Company at its option at a
redemption price (in cash or shares of Common Stock or other securities of the
Company deemed by the Board of Directors to be at least equivalent in value) of
$.01 per Right (which amount shall be subject to adjustment as provided in the
Rights Agreement) at any time prior to the earlier of (i) such time as a Person
becomes an Acquiring Person and (ii) the Expiration Date.
The Company may, but shall not be required to, issue fractions of Common
Shares or distribute certificates which evidence fractions of Common Shares upon
the exercise of any Right or Rights evidenced hereby. In lieu of issuing
fractional shares, the Company shall elect to make a cash payment as provided in
the Rights Agreement for fractions of a share.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Common Shares or of any
other securities of the 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, including, without limitation, any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or other
distributions or subscription rights, or otherwise, until the Right or Rights
evidenced by this
<PAGE>
Right Certificate shall have been exercised as provided in accordance with the
provisions of the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal.
Dated as of:
RCM TECHNOLOGIES, INC.
By:_______________________________
Name:
Title:
Attest:
_____________________________
Name:
Title:
Countersigned:
American Stock Transfer & Trust Company, as Rights Agent,
By:___________________________
Authorized Officer
[On Reverse Side of Right Certificate]
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if such holder desires to exercise the
Rights represented by this Right Certificate.)
To the Rights Agent:
The undersigned hereby irrevocably elects to exercise _______________
Rights represented by this Right Certificate to purchase the Common Shares (or
other shares) issuable upon the exercise of such Rights and requests that
certificates for such shares be issued in the name of:
Please insert social security or other identifying number
_____________________________________________________________________________
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance remaining of Such
Rights shall be registered in the name of and delivered to:
Please insert social security or other identifying number
_____________________________________________________________________________
(Please print name and address)
Dated:__________, 19__
____________________________________________
Signature
Signature Guaranteed:
NOTICE
The signature on the foregoing Form of Election to Purchase must correspond
to the name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change whatsoever.
<PAGE>
