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) April 16, 1999
COMPTEK RESEARCH, INC.
(Exact name of registrant as specified in its charter)
New York 1-8502 16-0959023
- ----------------- --------------- ---------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) ID Number)
incorporation)
2732 Transit Road, Buffalo, New York 14224-2523
- -----------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number,
including area code: (716) 677-4070
_____________________________________________________________
(Former name or former address, if changed since last report)
<PAGE 1>
Item 5. Other Events
On April 16, 1999, the Board of Directors of Comptek
Research, Inc. (the "Company") declared a dividend of one Right
for each outstanding share of the Company's Common Stock, par
value $.02 per share (the "Common Stock"), to stockholders of
record at the close of business on April 30, 1999 (the "Record
Date"). Each Right entitles the registered holder to purchase
from the Company a unit consisting of one one-hundredth of a
share of Series A Junior Participating Preferred Stock, par value
$.01 per share (the "Preferred Stock"), at a Purchase Price of
$45.00 per unit of one one-hundredth of a share, subject to
adjustment. The description and terms of the Rights are set
forth in a Rights Agreement (the "Rights Agreement") between the
Company and American Stock Transfer & Trust Company, as Rights
Agent.
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no
separate Rights Certificates will be distributed. The Rights
will separate from the Common Stock and a Distribution Date will
occur upon the earliest of (i) 10 days following a public
announcement that a person or group of affiliated or associated
persons (other than those who report ownership on Schedule 13G
under the Securities Exchange Act of 1934) (an "Acquiring
Person") has acquired, or obtained the right to acquire,
beneficial ownership of 20% or more of the shares of Common Stock
then outstanding1 (the "Stock Acquisition Date"), (ii) 10
business days following the commencement of a tender offer or
exchange offer that would result in a person or group
beneficially owning 20% or more of such outstanding shares of
Common Stock, or (iii) 10 business days following the date the
Board of Directors declares a person to be an "Adverse Person,"
upon a determination by the Board that such person, alone or
together with his affiliates or associates, is or has become the
beneficial owner of 10% or more of the shares of Common Stock
outstanding, and upon a determination by the Board of Directors
of the Company, after reasonable inquiry and investigation,
including consultation with such persons as such directors shall
deem appropriate, that (a) such beneficial ownership by such
person is intended to cause the Company to repurchase the shares
of Common Stock beneficially owned by such person or to cause
pressure on the Company to take action or enter into a
transaction or series of transactions intended to provide such
person with short-term financial gain under circumstances where
the Board of Directors determines that the best long-term
interests of the Company and its stockholders would not be served
by taking such action or entering into such transactions or
series of transactions at that time, or (b) such beneficial
ownership is causing or reasonably likely to cause a material
adverse impact (including, but not limited to, impairment of
relationships with customers or impairment of the Company's
ability to maintain its competitive position) on the business,
financial condition, competitive position or prospects of the
Company.
________________
(1) Under the Rights Agreement, for purposes of calculating
percentages of Common Stock outstanding, shares of Common
Stock outstanding shall include all shares of Common Stock
deemed to be beneficially owned by a Person and its
affiliates and associates, even if not actually then
outstanding.
<PAGE 2>
Until the Distribution Date, (i) the Rights will be
evidenced by the Common Stock certificates and will be
transferred with and only with such Common Stock certificates,
(ii) new Common Stock certificates issued after the Record Date
will contain a notation incorporating the Rights Agreement by
reference, and (iii) the surrender for transfer of any
certificates for Common Stock outstanding will also constitute
the transfer of the Rights associated with the Common Stock
represented by such certificate.
The Rights are not exercisable until the Distribution Date
and will expire at the close of business on April 29, 2009 (the
"Final Expiration Date"), unless earlier redeemed by the Company
as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common
Stock as of the close of business on the Distribution Date and,
thereafter, the separate Rights Certificates alone will represent
the Rights. Except (i) with respect to certain shares of Common
Stock issued or sold pursuant to the exercise of stock options or
under any employee benefit plan or compensation arrangement, or
upon the exercise, conversion or exchange of certain securities
of the Company, or (ii) as otherwise determined by the Board of
Directors, only shares of Common Stock issued prior to the
Distribution Date will be issued with Rights.
In the event that (i) a person or group becomes the
beneficial owner of 20% or more of the then outstanding shares of
Common Stock (except pursuant to a tender offer or an exchange
offer for all outstanding shares of Common Stock at a price and
on terms which a majority of the Directors who are not officers
of the Company and who are not representatives, nominees,
affiliates or associates of such person, with the concurrence of
a majority of the Continuing Directors (as defined below), after
receiving advice from one or more nationally recognized
investment banking firms, determines to be fair to and otherwise
in the best interests of the Company and its stockholders (a
"Qualifying Offer")), or (ii) the Board of Directors declares
that a person is an Adverse Person (each such event, a "Flip-in
Event"), each holder of a Right will thereafter have the right to
receive, upon exercise of such Right, Common Stock (or, in
certain circumstances, cash, property or other securities of the
Company) having a value (based on a formula set forth in the
Rights Agreement) equal to two times the Purchase Price of the
Right. Notwithstanding any of the foregoing, following the
occurrence of any Flip-in Event, all Rights that are, or (under
certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person or an Adverse Person
(or by certain related parties) will be null and void. However,
Rights are not exercisable following the occurrence of any Flip-
in Event until such time as the Rights are no longer redeemable
by the Company as set forth below.
For example, at a Purchase Price of $45.00 per Right, each
Right not owned by an Acquiring Person or an Adverse Person (or
by certain related parties) following a Flip-in Event would
entitle its holder to purchase $90.00 worth of Common Stock (or
other consideration, as noted above) determined pursuant to a
formula set forth in the Rights Agreement, for $45.00.
<PAGE 3>
Assuming that the Common Stock had a per share value of $22.50 at
such time (as determined pursuant to such formula), the holder of
each valid Right would be entitled to purchase four shares of
Common Stock for $45.00.
In the event that, at any time following the Stock
Acquisition Date (i) the Company is acquired in a merger or other
business combination transaction in which the Company is not the
surviving corporation or in which it is the surviving
corporation, (ii) the Company engages in a merger or other
business combination transaction in which the Company is the
surviving corporation but its Common Stock is changed or
exchanged for stock or securities of any other person or cash or
any other property (other than a merger meeting certain
conditions which follows an offer for all outstanding shares of
Common Stock which a majority of the unaffiliated Directors who
are not officers of the Company determine to be fair to and
otherwise in the best interests of the Company and its
stockholders), or (iii) 50% or more of the Company's assets or
earning power is sold or transferred (in one transaction or a
series of transactions) (each such event, a "Flip-Over Event"),
then each holder of a Right (except Rights which previously have
been voided as set forth above) shall thereafter have the right
to receive, upon exercise at the then current Purchase Price (as
set forth in the Rights Agreement), common stock of the acquiring
company having a then current market value equal to two times the
exercise price of the Right. The events set forth in this
paragraph and the Flip-in Events described in the second
preceding paragraph are referred to as the "Triggering Events."
The Company may not engage in a transaction with an
Acquiring Person constituting a Flip-Over Event unless the
Acquiring Person meets certain conditions. If the Acquiring
Person's (or its affiliated entity's) common stock has not been
registered under the Securities Exchange Act of 1934, as amended,
for the preceding twelve months, but it is a direct or indirect
subsidiary of another company which has registered common stock,
the Rights shall be exercisable as described above to purchase
the common stock of such parent company. Moreover, the Company
may not engage in a flip-over transaction unless the Acquiring
Person (or its affiliated entity or parent, as applicable),
(i) has sufficient shares of common stock authorized to permit
the full exercise of the Rights and (ii) enters into an agreement
containing the terms set forth above and providing that, as soon
as practicable after the date of the Flip-Over Event, the
Acquiring Person will register the Rights and the securities
issuable upon exercise of the Rights under the Securities Act of
1933, as amended, and maintain the effectiveness of such
registration statement until the Expiration Date of the Rights
Plan. Notwithstanding the foregoing, a merger or consolidation
will not constitute a Flip-Over Event if (i) the transaction is
consummated with a person who acquired Common Stock pursuant to
Qualifying Offer or with a subsidiary of such person; (ii) the
price per share of Common Stock offered in such transaction is
not less than the price paid to holders of the Company's Common
Stock whose shares were purchased in the Qualifying Offer; and
(iii) the form of consideration offered in the transaction is the
same as the form of consideration paid pursuant to the Qualifying
Offer.
The Purchase Price payable, and the number of units of
shares of Preferred Stock or other securities or property
issuable, upon exercise of the Rights are subject to adjustment
from time to time to
<PAGE 4>
prevent dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Preferred
Stock, (ii) if holders of the Preferred Stock are granted certain
rights or warrants to subscribe for Preferred Stock or
convertible securities at less than the current market price of
the Preferred Stock, or (iii) upon the distribution to holders of
the Preferred Stock of evidences of indebtedness or assets
(excluding regular quarterly cash dividends) or of subscription
rights or warrants (other than those referred to above). With
certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of
the Purchase Price. No fractional shares of Preferred Stock
(other than fractions of one one-hundredth of a share, or
integral multiples thereof) will be issued and, in lieu thereof,
an adjustment in cash will be made based on the market price of
the Preferred Stock on the last trading date prior to the date of
exercise.
At any time until the earlier of (a) ten days following the
Stock Acquisition Date or (b) the Final Expiration Date, the
Company may redeem the Rights in whole, but not in part, at a
price of $.01 per Right (payable in cash, Common Stock or other
consideration deemed appropriate by the Board of Directors).
Under certain circumstances set forth in the Rights Agreement,
the decision to redeem shall require the concurrence of a
majority of the Continuing Directors. The Company may not redeem
the Rights if the Board of Directors has previously declared a
person to be an Adverse Person. Immediately upon the action of
the Board of Directors ordering redemption of the Rights, with,
where required, the concurrence of such Continuing Directors, the
Rights will terminate and the only right of the holders of Rights
will be to receive the $.01 redemption price. In the event that
a majority of the members of the Board serving following a
meeting of stockholders or stockholder action by written consent
are not nominated by the Board serving immediately prior to such
meeting or action, then for 180 days following such meeting or
action the Rights may not be redeemed if such redemption is
reasonably likely to have the purpose or effect of allowing any
person to become an Acquiring Person, or otherwise facilitating
the occurrence of a Flip-In Event, or a Flip-Over Event or a
transaction with an Acquiring Person.
The term "Continuing Directors" means any member of the
Board of Directors of the Company who was a member of the Board
prior to the date of the Rights Agreement, and any person who is
subsequently elected to the Board if such person is recommended
or approved by a majority of the Continuing Directors, but shall
not include an Acquiring Person, an Adverse Person or an
affiliate or associate of any such person, or any representative
of the foregoing entities.
Until a Right is exercised, the holder thereof, as such,
will have no rights as a stockholder of the Company, including,
without limitation, the right to vote or to receive dividends.
While the distribution of the Rights will not be taxable to
stockholders or to the Company, stockholders may, depending upon
the circumstances, recognize taxable income in the event that the
Rights become exercisable for Common Stock (or other
consideration) of the Company or for common stock of the
acquiring company as set forth above, or are redeemed as provided
in the second preceding paragraph.
<PAGE 5>
Other than certain provisions relating to the principal
economic terms of the Rights, any of the provisions of the Rights
Agreement may be amended by the Board of Directors of the Company
prior to the Distribution Date. After the Distribution Date, the
provisions of the Rights Agreement may be amended by the Board
(in certain circumstances, with the concurrence of the Continuing
Directors) in order to cure any ambiguity, defect or
inconsistency, to make changes which do not adversely affect the
interests of holders of Rights (other than an Acquiring Person,
an Adverse Person or an affiliate or associate thereof), or to
shorten or lengthen any time period under the Rights Agreement;
provided, however, that an amendment to lengthen the time period
governing redemption may be made only if the Rights are
redeemable and an amendment to lengthen any other time period may
be made only for the purpose of protecting, enhancing or
clarifying the rights of, and/or benefits to, the holders of
Rights (other than any Acquiring Person or Adverse Person).
The Rights will have certain anti-takeover effects.
Exercise of the Rights will cause substantial dilution to a
person or group that attempts to acquire the Company on terms not
approved by the Company's Board of Directors. The existence of
Rights, however, should not affect an offer at a fair price and
otherwise in the best interests of the Company and its
stockholders as determined by the Board of Directors. The Rights
should not interfere with any merger or other business
combination approved by the Board of Directors since the Board of
Directors may, at its option, at any time until ten days
following the Stock Acquisition Date or until a person has been
determined to be an Adverse Person redeem all but not less than
all of the then outstanding Rights at the $.01 redemption price.
The Rights Agreement between the Company and the Rights
Agent specifying the terms of the Rights, which includes as an
exhibit the form of Rights Certificate, is incorporated herein by
reference. The foregoing description of the Rights does not
purport to be complete and is qualified in its entirety by
reference to the Rights Agreement.
<PAGE 6>
Item 7. Exhibits
Exhibit Number Description
4 Rights Agreement, dated as of
April 16, 1999, between Comptek Research,
Inc. and American Stock Transfer & Trust
Company, as Rights Agent
99 Press Release, dated April 19,1999
<PAGE 7>
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 hereunto duly authorized.
COMPTEK RESEARCH, INC.
By: /s/John J. Sciuto
John J. Sciuto
Chairman, President and CEO
Dated: April 19, 1999
<PAGE 8>
EXHIBIT INDEX
Exhibit Number Description Page
- -------------- --------------------------------------- -----
4 Rights Agreement, dated as of April 16, 9
1999, between Comptek Research, Inc. and
American Stock Transfer & Trust Company,
as Rights Agent
99 Press Release, dated April 19, 1999 67
<PAGE 9>
Exhibit 4
Rights Agreement, dated as of April 16, 1999, between
Comptek Research, Inc. and American Stock Transfer & Trust
Company,
as Rights Agent
_____________________________________________________________
____________________
COMPTEK RESEARCH, INC.
and
AMERICAN STOCK TRANSFER & TRUST COMPANY
as Rights Agent
___________________
Rights Agreement
Dated as of April 16, 1999
_________________________________________________________________
_____________
Table of Contents
Section Page
Section 1. Certain Definitions 1
Section 2. Appointment of Rights Agent 6
Section 3. Issue of Rights Certificates 6
Section 4. Form of Rights Certificates 8
Section 5. Countersignature and Registration 9
Section 6. Transfer, Split Up, Combination and Exchange of
Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights
Certificates. 10
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights 11
Section 8. Cancellation and Destruction of Rights
Certificates 13
Section 9. Reservation and Availability of Capital Stock 13
Section 10. Preferred Stock Record Date 14
Section 11. Adjustment of Purchase Price, Number and Kind
of Shares or
Number of Rights 15
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares 24
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power 24
Section 14. Fractional Rights and Fractional Shares 27
Section 15. Rights of Action 28
Section 16. Agreement of Rights Holders 29
Section 17. Rights Certificate Holder Not Deemed a
Stockholder 29
Section 18. Concerning the Rights Agent 30
Section 19. Merger or Consolidation or Change of Name of
Rights Agent 30
Section 20. Duties of Rights Agent 31
Section 21. Change of Rights Agent 33
Section 22. Issuance of New Rights Certificates 34
Section 23. Redemption and Termination 34
Section 24. Exchange 35
Section 25. Notice of Certain Events 36
Section 26. Notices 37
Section 27. Supplements and Amendments 38
Section 28. Successors 39
Section 29. Determinations and Actions by the Board of
Directors, etc. 39
Section 30. Benefits of this Agreement 39
Section 31. Severability 39
Section 32. Governing Law 40
Section 33. Counterparts 40
Section 34. Descriptive Headings 40
Exhibit A -- Certificate of Designation, Preferences and Rights
Exhibit B -- Form of Rights Certificate
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of April 16, 1999 (the
"Agreement"), between Comptek Research, Inc., a New York
corporation (the "Company"), and American Stock Transfer & Trust
Company (the "Rights Agent").
W I T N E S S E T H
WHEREAS, the Board of Directors of the Company has
authorized and declared a dividend distribution of one Right for
each share of common stock, par value $.02 per share, of the
Company (the "Common Stock") outstanding at the close of business
on April 30, 1999 (the "Record Date"), and has authorized the
issuance of one Right (as such number may hereinafter be adjusted
pursuant to the provisions of Section 11(p) hereof) for each
share of Common Stock of the Company issued between the Record
Date (whether originally issued or delivered from the Company's
treasury) and the Distribution Date (as defined below), each
Right initially representing the right to purchase one one-
hundredth (1/100th) of a share of Series A Junior Participating
Preferred Stock (the "Preferred Stock") of the Company having the
rights, powers and preferences set forth in the form of
Certificate of Designation, Preferences and Rights attached
hereto as Exhibit A, upon the terms and subject to the conditions
hereinafter set forth (the "Rights");
WHEREAS, the Company desires to appoint the Rights Agent to
act as provided herein, and the Rights Agent is willing to so
act;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as
follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or
which, together with all Affiliates and Associates of such
Person, shall be the Beneficial Owner of 20% or more of the
shares of Common Stock then outstanding, but shall not
include (i) the Company, (ii) any Subsidiary of the Company,
(iii) any employee benefit plan or compensation arrangement
of the Company or of any Subsidiary of the Company, (iv) any
Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan or (v)
any Person who has reported or is required to report such
ownership on Schedule 13G under the Securities Exchange Act
of 1934, as amended and in effect on the date of this
Agreement (the "Exchange Act") (or any comparable or
successor report). Notwithstanding the foregoing, no Person
shall become an "Acquiring Person" solely as the result of
an acquisition of Common Stock by the Company which, by
reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by a
Person to 20% or more of the Common Stock of the Company
then outstanding as determined above; provided, however,
that if a Person becomes the Beneficial Owner of 20% or more
of the Common Stock of the Company then outstanding (as
determined above) solely by reason of purchases of Common
Stock by the Company and shall, after such purchases by the
Company, become the Beneficial Owner of any additional
shares of Common Stock by any means whatsoever, then such
Person shall be deemed to be an "Acquiring Person."
Notwithstanding the foregoing, (i) if the Board of Directors
of the Company, with the concurrence of a majority of the
Continuing Director, determines in good faith that a Person
who would otherwise be an "Acquiring Person," as defined
pursuant to the foregoing provisions of this paragraph (a),
has become such inadvertently, and such Person divests as
promptly as practicable a sufficient number of shares of
Common Stock so that such Person would no longer be an
"Acquiring Person," as defined pursuant to the foregoing
provisions of this paragraph (a), then such Person shall not
be deemed to be an "Acquiring Person" for any purposes of
this Agreement or (ii) if a Person becomes the Beneficial
Owner of 20% or more of the Common Stock then outstanding
solely as a result of such Person's entering into an
agreement, arrangement or understanding (including an
irrevocable proxy or consent) whereby such Person obtains
the right to vote such Common Stock and prior to the time
such agreement, arrangement or understanding is entered into
the Board of Directors has approved either (x) a "business
combination" (as such term is defined in Section 912 the New
York Business Corporation Law) to which such Person or an
Affiliate of such Person is a party or (y) such agreement,
arrangement or understanding with such Person, then such
Person shall not be deemed to be an "Acquiring Person" for
the purposes of this Agreement.
(b) "Act" shall have the meaning set forth in Section
9(c) hereof.
(c) "Adjustment Shares" shall have the meaning set
forth in Section 11(a)(ii) hereof.
(d) "Adverse Person" shall mean any Person declared to
be an Adverse Person by the Board of Directors upon
determination that the criteria set forth in Section
11(a)(ii)(B) apply to such Person; provided, however, that
the Board of Directors shall not declare any Person who is
the Beneficial Owner of 10% or more (but less than 20%) of
the outstanding Common Stock of the Company to be an Adverse
Person if such Person has reported or is required to report
such ownership on Schedule 13G under the Exchange Act (or
any comparable or successor report) or on Schedule 13D under
the Exchange Act (or any comparable or successor report)
which Schedule 13D does not state any intention to or
reserve the right to control or influence the management or
policies of the Company or engage in any of the actions
specified in Item 4 of such Schedule (other than the
disposition of the Common Stock) so long as such Person
neither reports nor is required to report such ownership
other than as described in this paragraph (d).
(e) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of
the General Rules and Regulations under the Exchange Act.
(f) A Person shall be deemed the "Beneficial Owner"
of, and shall be deemed to "beneficially own," any
securities:
(i) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has
the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant
to any agreement, arrangement or understanding (whether
or not in writing) or upon the exercise of conversion
rights, exchange rights, rights, warrants or options,
or otherwise; provided, however, that a Person shall
not be deemed the "Beneficial Owner" of, or to
"beneficially own," (A) securities tendered pursuant to
a tender or exchange offer made by such Person or any
of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or
exchange, or (B) securities issuable upon exercise of
Rights at any time prior to the occurrence of a
Triggering Event, or (C) securities issuable upon
exercise of Rights from and after the occurrence of a
Triggering Event which Rights were acquired by such
Person or any of such Person's Affiliates or Associates
prior to the Distribution Date or pursuant to Section
3(a) or Section 22 hereof (the "Original Rights") or
pursuant to Section 11(i) hereof in connection with an
adjustment made with respect to any Original Rights;
(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has
the right to vote or dispose of or has "beneficial
ownership" of (as determined pursuant to Rule 13d-3 of
the General Rules and Regulations under the Exchange
Act), including pursuant to any agreement, arrangement
or understanding, whether or not in writing; provided,
however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," any
security under this subparagraph (ii) as a result of an
agreement, arrangement or understanding to vote such
security if such agreement, arrangement or
understanding: (A) arises solely from a revocable
proxy given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with,
the applicable provisions of the General Rules and
Regulations under the Exchange Act, and (B) is not also
then reportable by such Person on Schedule 13D under
the Exchange Act (or any comparable or successor
report); or
(iii) which are beneficially owned, directly
or indirectly, by any other Person (or any Affiliate or
Associate thereof) with which such Person (or any of
such Person's Affiliates or Associates) has any
agreement, arrangement or understanding (whether or not
in writing), for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy as
described in the proviso to subparagraph (ii) of this
paragraph (f)) or disposing of any voting securities of
the Company;
provided, however, that nothing in this paragraph (f) shall
cause a person engaged in business as an underwriter of
securities to be the "Beneficial Owner" of, or to
"beneficially own," any securities acquired through such
person's participation in good faith in a firm commitment
underwriting until the expiration of forty days after the
date of such acquisition.
(g) "Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in
the State of New York are authorized or obligated by law or
executive order to close.
(h) "Close of business" on any given date shall mean
5:00 P.M., New York City time, on such date; provided,
however, that if such date is not a Business Day it shall
mean 5:00 P.M., New York City time, on the next succeeding
Business Day.
(i) "Common Stock" shall mean the common stock, par
value $.02 per share, of the Company, except that "Common
Stock" when used with reference to any Person other than the
Company shall mean the capital stock of such Person with the
greatest voting power, or the equity securities or other
equity interest having power to control or direct the
management, of such Person.
(j) "Common Stock Equivalents" shall have the meaning
set forth in Section 11(a)(iii) hereof.
(k) "Continuing Director" shall mean (i) any member of
the Board of Directors of the Company, while such Person is
a member of the Board, who is not an Acquiring Person or
Adverse Person, an Affiliate or Associate of an Acquiring
Person or Adverse Person, or a representative or nominee of
an Acquiring Person or Adverse Person or of any such
Affiliate or Associate, and was a member of the Board prior
to the date of this Agreement, or (ii) any Person who
subsequently becomes a member of the Board, while such
Person is a member of the Board, who is not an Acquiring
Person or Adverse Person, an Affiliate or Associate of an
Acquiring Person or Adverse Person, or a representative or
nominee of an Acquiring Person or Adverse Person or of any
such Affiliate or Associate, if such Person's nomination for
election or election to the Board is recommended or approved
by a majority of the Continuing Directors or a nominating
committee of the Board consisting solely of Continuing
Directors.
(l) "Current Market Price" shall have the meaning set
forth in Section 11(d)(i) hereof.
(m) "Current Value" shall have the meaning set forth
in Section 11(a)(iii) hereof.
(n) "Distribution Date" shall have the meaning set
forth in Section 3(a) hereof.
(o) "Equivalent Preferred Stock" shall have the
meaning set forth in Section 11(b) hereof.
(p) "Exchange Act" shall have the meaning set forth in
Section 1(d) hereof.
(q) "Exchange Ratio" shall have the meaning set forth
in Section 24 hereof.
(r) "Expiration Date" shall have the meaning set forth
in Section 7(a) hereof.
(s) "Final Expiration Date" shall have the meaning set
forth in Section 7(a) hereof.
(t) "Person" shall mean any individual, firm,
corporation, partnership, limited liability entity or other
entity.
(u) "Preferred Stock" shall mean shares of Series A
Junior Participating Preferred Stock, par value $.01 per
share, of the Company, and, to the extent that there are not
a sufficient number of shares of Series A Junior
Participating Preferred Stock authorized to permit the full
exercise of the Rights, any other series of Preferred Stock
of the Company designated for such purpose containing terms
substantially similar to the terms of the Series A Junior
Participating Preferred Stock.
(v) "Principal Party" shall have the meaning set forth
in Section 13(b) hereof.
(w) "Purchase Price" shall have the meaning set forth
in Section 4(a) hereof.
(x) "Qualifying Offer" shall have the meaning set
forth in Section 11(a)(ii)(A) hereof.
(y) "Record Date" shall have the meaning set forth in
the WHEREAS clause at the beginning of this Agreement.
(z) "Redemption Price" shall have the meaning set
forth in Section 23(a) hereof.
(aa) "Rights" shall have the meaning set forth in the
WHEREAS clause at the beginning of the Agreement.
(ab) "Rights Agent" shall have the meaning set forth in
the parties clause at the beginning of this Agreement.
(ac) "Rights Certificates" shall have the meaning set
forth in Section 3(a) hereof.
(ad) "Rights Dividend Declaration Date" shall mean
April 16, 1999.
(ae) "Section 11(a)(ii) Event" shall mean any event
described in Section 11(a)(ii) hereof.
(af) "Section 11(a)(ii) Trigger Date" shall have the
meaning set forth in Section 11(a)(iii) hereof.
(ag) "Section 13 Event" shall mean any event described
in clauses (x), (y) or (z) of Section 13(a) hereof.
(ah) "Spread" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(ai) "Stock Acquisition Date" shall mean the first date
of public announcement (which, for purposes of this
definition, shall include, without limitation, a report
filed pursuant to Section 13(d) under the Exchange Act) by
the Company or an Acquiring Person that an Acquiring Person
has become such.
(aj) "Subsidiary" shall mean, with reference to any
Person, any corporation of which an amount of voting
securities sufficient to elect at least a majority of the
directors of such corporation is beneficially owned,
directly or indirectly, by such Person, or otherwise
controlled by such Person.
(ak) "Substitution Period" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(al) "Trading Day" shall have the meaning set forth in
Section 11(d)(i) hereof.
(am) "Triggering Event" shall mean any Section
11(a)(ii) Event or any Section 13 Event.
Section 2. Appointment of Rights Agent. The Company
hereby appoints the Rights Agent to act as agent for the Company
and the holders of the Rights (who, in accordance with Section 3
hereof, shall prior to the Distribution Date also be the holders
of the Common Stock) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment.
The Company may from time to time appoint such Co-Rights Agents
as it may deem necessary or desirable.
Section 3. Issue of Rights Certificates.
(a) Until the earliest of (i) the close of business on
the tenth day after the Stock Acquisition Date (or, if the
tenth day after the Stock Acquisition Date occurs before the
Record Date, the close of business on the Record Date), (ii)
the close of business on the tenth business day (or such
later date as the Board of Directors shall determine) after
the date that 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 Subsidiary of
the Company, or any Person or entity organized, appointed or
established by the Company for or pursuant to the terms of
any such plan) is first published or sent or given within
the meaning of Rule 14d-2(a) of the General Rules and
Regulations under the Exchange Act, if upon consummation
thereof, such Person would be the Beneficial Owner of 20% or
more of the shares of Common Stock then outstanding or (iii)
the close of business on the tenth Business Day after the
Board of Directors determines, pursuant to the criteria set
forth in Section 11(a)(ii)(B) hereof, that a Person is an
Adverse Person (the earliest of (i), (ii) and (iii) being
herein referred to as the "Distribution Date"), (x) the
Rights will be evidenced (subject to the provisions of
paragraph (b) of this Section 3) by the certificates for the
Common Stock registered in the names of the holders of the
Common Stock (which certificates for Common Stock shall be
deemed also to be certificates for Rights) and not by
separate certificates, and (y) the Rights will be
transferable only in connection with the transfer of the
underlying shares of Common Stock (including a transfer to
the Company). As soon as practicable after the Distribution
Date, the Rights Agent will send by first-class, insured,
postage prepaid mail, to each record holder of the Common
Stock as of the close of business on the Distribution Date,
at the address of such holder shown on the records of the
Company, one or more rights certificates, in substantially
the form of Exhibit B hereto (the "Rights Certificates"),
evidencing one Right for each share of Common Stock so held,
subject to adjustment as provided herein. In the event that
an adjustment in the number of Rights per share of Common
Stock has been made pursuant to Section 11(p) hereof, at the
time of distribution of the Rights Certificates, the Company
shall make the necessary and appropriate rounding
adjustments (in accordance with Section 14(a) hereof) so
that Rights Certificates representing only whole numbers of
Rights are distributed and cash is paid in lieu of any
fractional Rights. As of and after the Distribution Date,
the Rights will be evidenced solely by such Rights
Certificates.
(b) With respect to certificates for the Common Stock
outstanding as of the Record Date, until the Distribution
Date, the Rights will be evidenced by such certificates for
the Common Stock and the registered holders of the Common
Stock shall also be the registered holders of the associated
Rights. Until the earlier of the Distribution Date or the
Expiration Date (as such term is defined in Section 7
hereof), the transfer of any certificates representing
shares of Common Stock in respect of which Rights have been
issued shall also constitute the transfer of the Rights
associated with such shares of Common Stock.
(c) Rights shall be issued in respect of all shares of
Common Stock which are issued (whether originally issued or
from the Company's treasury) after the Record Date but prior
to the earlier of the Distribution Date or the Expiration
Date or in certain circumstances provided in Section 22
hereof, after the Distribution Date. Certificates
representing such shares of Common Stock shall also be
deemed to be certificates for Rights, and shall bear a
legend reading substantially as follows:
This certificate also evidences and
entitles the holder hereof to certain Rights
as set forth in the Rights Agreement between
Comptek Research, Inc. (the "Company") and
American Stock Transfer & Trust Company (the
"Rights Agent"), dated as of April 16, 1999,
as amended from time to time (the "Rights
Agreement"), the terms of which are hereby
incorporated herein by reference and a copy
of which is on file at the principal office
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 Company or the
Rights Agent will mail to the holder of this
certificate a copy of the Rights Agreement,
as in effect on the date of mailing, without
charge promptly after receipt of a written
request therefor. Under certain
circumstances set forth in the Rights
Agreement, Rights issued to, or held by, any
Person who is, was or becomes an Acquiring
Person, an Adverse Person or any Affiliate or
Associate thereof (as such terms are defined
in the Rights Agreement), whether currently
held by or on behalf of such Person or by any
subsequent holder, may become null and void.
With respect to such certificates containing the foregoing
legend, until the earlier of (i) the Distribution Date or
(ii) the Expiration Date, the Rights associated with the
Common Stock represented by such certificates shall be
evidenced by such certificates alone and registered holders
of Common Stock shall also be the registered holders of the
associated Rights, and the transfer of any of such
certificates shall also constitute the transfer of the
Rights associated with the Common Stock represented by such
certificates.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election
to purchase and of assignment to be printed on the reverse
thereof) shall each be substantially in the form set forth
in Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions
of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange
or quotation system on which the Rights may from time to
time be listed, or to conform to usage. Subject to the
provisions of Section 11 and Section 22 hereof, the Rights
Certificates, whenever distributed, shall be dated as of the
Record Date and on their face shall entitle the holders
thereof to purchase such number of one one-hundredths
(1/100ths) of a share of Preferred Stock as shall be set
forth therein at the price set forth therein (such exercise
price per one one-hundredth (1/100th) of a share, the
"Purchase Price"), but the amount and type of securities
purchasable upon the exercise of each Right and the Purchase
Price thereof shall be subject to adjustment as provided
herein.
(b) Any Rights Certificate issued pursuant to Section
3(a) or Section 22 hereof that represents Rights
beneficially owned by: (i) an Acquiring Person or Adverse
Person or any Associate or Affiliate of an Acquiring Person
or Adverse Person, (ii) a transferee of an Acquiring Person
or Adverse Person (or of any such Associate or Affiliate)
who becomes a transferee after the Acquiring Person or
Adverse Person becomes such, or (iii) a transferee of an
Acquiring Person or Adverse Person (or of any such Associate
or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person or Adverse Person
becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the
Acquiring Person or Adverse Person to holders of equity
interests in such Acquiring Person or Adverse Person or to
any Person with whom such Acquiring Person or Adverse Person
has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the
Board of Directors of the Company has determined is part of
an agreement, a plan, arrangement or understanding which has
as a primary purpose or effect avoidance of Section 7(e)
hereof, and any Rights Certificate issued pursuant to
Section 6 or Section 11 hereof upon transfer, exchange,
replacement or adjustment of any other Rights Certificate
referred to in this sentence, shall contain (to the extent
feasible) the following legend:
The Rights represented by this Rights
Certificate are or were beneficially owned by
a Person who was or became an Acquiring
Person or Adverse Person or an Affiliate or
Associate of an Acquiring Person or Adverse
Person (as such terms are defined in the
Rights Agreement). Accordingly, this Rights
Certificate and the Rights represented hereby
may become null and void in the circumstances
specified in Section 7(e) of such Agreement.
The failure to print the foregoing legend on any such Right
Certificate or any defect therein shall not affect in any manner
whatsoever the application or interpretation of the provisions of
Section 7(e) hereof.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on
behalf of the Company by its Chairman of the Board, its
President or any Vice President, either manually or by
facsimile signature, and shall have affixed thereto the
Company's seal or a facsimile thereof which shall be
attested by the Secretary or an Assistant Secretary of the
Company, either manually or by facsimile signature. The
Rights Certificates shall be countersigned by the Rights
Agent, either manually or by facsimile signature, and shall
not be valid for any purpose unless so countersigned. In
case any officer of the Company who shall have signed any of
the Rights Certificates shall cease to be such officer of
the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Rights
Certificates, nevertheless, may 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 Rights Certificates had not ceased to be such officer
of the Company; and any Rights Certificates may be signed on
behalf of the Company by any person who, at the actual date
of the execution of such Rights Certificate, shall be a
proper officer of the Company to sign such Rights
Certificate, although at the date of the execution of this
Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent
will keep or cause to be kept, at its principal office or
offices designated as the appropriate place for surrender of
Rights Certificates upon exercise or transfer, books for
registration and transfer of the Rights Certificates issued
hereunder. Such books shall show the names and addresses of
the respective holders of the Rights Certificates, the
number of Rights evidenced on its face by each of the Rights
Certificates and the date of each of the Rights
Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost or
Stolen Rights Certificates.
(a) Subject to the provisions of Section 4(b), Section
7(e) and Section 14 hereof, at any time after the close of
business on the Distribution Date, and at or prior to the
close of business on the Expiration Date, any Rights
Certificate or Certificates (other than Rights Certificates
representing Rights that have been exchanged pursuant to
Section 24 hereof) may be transferred, split up, combined or
exchanged for another Rights Certificate or Certificates,
entitling the registered holder to purchase a like number of
one one-hundredths (1/100ths) of a share of Preferred Stock
(or, following a Triggering Event, Common Stock, other
securities, cash or other assets, as the case may be) as the
Rights Certificate or Certificates surrendered then entitled
such holder (or former holder in the case of a transfer) to
purchase. Any registered holder desiring to transfer, split
up, combine or exchange any Rights Certificate or
Certificates shall make such request in writing delivered to
the Rights Agent, and shall surrender the Rights Certificate
or Certificates to be transferred, split up, combined or
exchanged at the principal office or offices of the Rights
Agent designated for such purpose. Neither the Rights Agent
nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such
surrendered Rights Certificate until the registered holder
shall have completed and signed the certificate contained in
the form of assignment on the reverse side of such Rights
Certificate and shall have provided such additional evidence
of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the
Company shall reasonably request. Thereupon the Rights
Agent shall, subject to Section 4(b), Section 7(e), Section
14 and Section 24 hereof, countersign and deliver to the
Person entitled thereto a Rights Certificate or Rights
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
Rights 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 Rights Certificate,
and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and reimbursement
to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Rights Certificate if
mutilated, the Company will execute and deliver a new Rights
Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in
lieu of the Rights Certificate so lost, stolen, destroyed or
mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights.
(a) Subject to Section 7(e) hereof, the registered
holder of any Rights Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein
including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section 11(a)(iii)
and Section 23(a) hereof) in whole or in part at any time
after the Distribution Date upon surrender of the Rights
Certificate, with the form of election to purchase and the
certificate on the reverse side thereof duly executed, to
the Rights Agent at the principal office or offices of the
Rights Agent designated for such purpose, together with
payment of the aggregate Purchase Price with respect to the
total number of one one-hundredths (1/100ths) of a share (or
other securities, cash or other assets, as the case may be)
as to which such surrendered Rights are then exercisable, at
or prior to the earliest of (i) the close of business on
April 29, 2009 (the "Final Expiration Date"), (ii) the time
at which the Rights are redeemed as provided in Section 23
hereof or (iii) the time at which such Rights are exchanged
pursuant to Section 24 hereof (the earliest of (i), (ii) and
(iii) being herein referred to as the "Expiration Date").
(b) The Purchase Price for each one one-hundredth
(1/100th) of a share of Preferred Stock pursuant to the
exercise of a Right shall initially be $45.00, and shall be
subject to adjustment from time to time as provided in
Sections 11 and 13(a) hereof and shall be payable in
accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase
and the certificate duly executed, accompanied by payment,
with respect to each Right so exercised, of the Purchase
Price per one one-hundredth (1/100th) of a share of
Preferred Stock (or other shares, securities, cash or other
assets, as the case may be) to be purchased as set forth
below and an amount equal to any applicable transfer tax,
the Rights Agent shall, subject to Section 20(k) hereof,
thereupon promptly (i) (A) requisition from any transfer
agent of the shares of Preferred Stock (or make available,
if the Rights Agent is the transfer agent for such shares)
certificates for the total number of one one-hundredths
(1/100ths) of a share of Preferred Stock to be purchased and
the Company hereby irrevocably authorizes its transfer agent
to comply with all such requests, or (B) if the Company
shall have elected to deposit the total number of shares of
Preferred Stock issuable upon exercise of the Rights
hereunder with a depositary agent, requisition from the
depositary agent depositary receipts representing such
number of one one-hundredths (1/100ths) of a share of
Preferred Stock as are to be purchased (in which case
certificates for the shares of Preferred Stock represented
by such receipts shall be deposited by the transfer agent
with the depositary agent) and the Company will direct the
depositary agent to comply with such request,
(ii) requisition from the Company the amount of cash, if
any, to be paid in lieu of fractional shares in accordance
with Section 14 hereof, (iii) after receipt of such
certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of
such Rights Certificate, registered in such name or names as
may be designated by such holder, and (iv) after receipt
thereof, deliver such cash, if any, to or upon the order of
the registered holder of such Rights Certificate. The
payment of the Purchase Price (as such amount may be reduced
pursuant to Section 11(a)(iii) hereof) shall be made in cash
or by certified bank check or bank draft payable to the
order of the Company. In the event that the Company is
obligated to issue other securities (including Common Stock)
of the Company, pay cash and/or distribute other property
pursuant to Section 11(a) hereof, the Company will make all
arrangements necessary so that such other securities, cash
and/or other property are available for distribution by the
Rights Agent, if and when appropriate. The Company reserves
the right to require prior to the occurrence of a Triggering
Event that, upon any exercise of Rights, a number of Rights
be exercised so that only whole shares of Preferred Stock
would be issued.
(d) In case the registered holder of any Rights
Certificate shall exercise less than all the Rights
evidenced thereby, a new Rights Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall
be issued by the Rights Agent and delivered to, or upon the
order of, the registered holder of such Rights Certificate,
registered in such name or names as may be designated by
such holder, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a
Triggering Event, any Rights beneficially owned by (i) an
Acquiring Person or Adverse Person or an Associate or
Affiliate of an Acquiring Person or Adverse Person, (ii) a
transferee of an Acquiring Person or Adverse Person (or of
any such Associate or Affiliate) who becomes a transferee
after the Acquiring Person or Adverse Person becomes such,
or (iii) a transferee of an Acquiring Person or Adverse
Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring
Person or Adverse Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person or Adverse Person
to holders of equity interests in such Acquiring Person or
Adverse Person or to any Person with whom the Acquiring
Person or Adverse Person has any continuing agreement,
arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board of Directors of the
Company, with the concurrence of a majority of the
Continuing Directors, has determined is part of a plan,
arrangement or understanding which has as a primary purpose
or effect the avoidance of this Section 7(e), shall become
null and void without any further action and no holder of
such Rights shall have any rights whatsoever with respect to
such Rights, whether under any provision of this Agreement
or otherwise. The Company shall use all reasonable efforts
to insure that the provisions of this Section 7(e) and
Section 4(b) hereof are complied with, but shall have no
liability to any holder of Rights Certificates or other
Person as a result of its failure to make any determinations
with respect to an Acquiring Person or Adverse Person or any
of their respective Affiliates, Associates or transferees
hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a
registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless such
registered holder shall have (i) completed and signed the
certificate contained in the form of election to purchase
set forth on the reverse side of the Rights Certificate
surrendered for such exercise, and (ii) provided such
additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights
Certificates. All Rights Certificates surrendered for the
purpose of exercise, transfer, split up, combination or exchange
shall, if surrendered to the Company or any of its agents, be
delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered to the Rights Agent, shall be canceled
by it, and no Rights Certificates shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this
Agreement. The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel
and retire, any other Rights Certificate purchased or acquired by
the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all canceled Rights Certificates to the
Company, or shall, at the written request of the Company, destroy
such canceled Rights Certificates, and in such case shall deliver
a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) The Company covenants and agrees that it will
cause to be reserved and kept available out of its
authorized and unissued shares of Preferred Stock (and,
following the occurrence of a Triggering Event, out of its
authorized and unissued shares of Common Stock and/or other
securities or out of its authorized and issued shares held
in its treasury), the number of shares of Preferred Stock
(and, following the occurrence of a Triggering Event, Common
Stock and/or other securities) that, as provided in this
Agreement including Section 11(a)(iii) hereof, will be
sufficient to permit the exercise in full of all outstanding
Rights.
(b) So long as the shares of Preferred Stock (and,
following the occurrence of a Triggering Event, Common Stock
and/or other securities) issuable and deliverable upon the
exercise of the Rights may be listed on any national
securities exchange or automated quotation system, the
Company shall use its reasonable efforts to cause, from and
after such time as the Rights become exercisable, all shares
reserved for such issuance to be listed on such exchange or
automated quotation system upon official notice of issuance
upon such exercise.
(c) The Company shall use its reasonable efforts to
(i) file, as soon as practicable following the earliest date
after the first occurrence of a Section 11(a)(ii) Event on
which the consideration to be delivered by the Company upon
exercise of the Rights has been determined in accordance
with Section 11(a)(iii) hereof, a registration statement
under the Securities Act of 1933, as amended (the "Act"),
with respect to the securities purchasable upon exercise of
the Rights on an appropriate form, (ii) cause such
registration statement to become effective as soon as
practicable after such filing, and (iii) cause such
registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Act)
until the earlier of (A) the date as of which the Rights are
no longer exercisable for such securities, and (B) the date
of the expiration of the Rights. The Company will also take
such action as may be appropriate under, or to ensure
compliance with, the securities or "blue sky" laws of the
various states in connection with the exercisability of the
Rights. The Company may temporarily suspend, for a period of
time not to exceed ninety (90) days after the date set forth
in clause (i) of the first sentence of this Section 9(c),
the exercisability of the Rights in order to prepare and
file such registration statement and permit it to become
effective. Upon any such suspension, the Company shall
issue a public announcement stating that the exercisability
of the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no
longer in effect. In addition, if the Company shall
determine that a registration statement is required
following the Distribution Date, the Company may temporarily
suspend the exercisability of the Rights until such time as
a registration statement has been declared effective.
Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable in any
jurisdiction if the requisite qualification in such
jurisdiction shall not have been obtained, the exercise
thereof shall not be permitted under applicable law or a
registration statement shall not have been declared
effective.
(d) The Company covenants and agrees that it will take
all such action as may be necessary to ensure that all one
one-hundredths (1/100ths) of a share of Preferred Stock
(and, following the occurrence of a Triggering Event, Common
Stock and/or other securities) delivered upon exercise of
Rights shall, at the time of delivery of the certificates
for such shares (subject to payment of the Purchase Price),
be duly and validly authorized and issued and fully paid and
nonassessable.
(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 the Rights Certificates and
of any certificates for a number of one one-hundredths
(1/100ths) of a share of Preferred Stock (or Common Stock
and/or other securities, as the case may be) upon the
exercise of Rights. The Company shall not, however, be
required to pay any transfer tax which may be payable in
respect of any transfer or delivery of Rights Certificates
to a Person other than, or the issuance or delivery of a
number of one one-hundredths (1/100ths) of a share of
Preferred Stock (or Common Stock and/or other securities, as
the case may be) in respect of a name other than that of,
the registered holder of the Rights Certificates evidencing
Rights surrendered for exercise or to issue or deliver any
certificates for a number of one one-hundredths (1/100ths)
of a share of Preferred Stock (or Common Stock and/or other
securities, as the case may be) in a name other than that of
the registered holder upon the exercise of any Rights until
such tax shall have been paid (any such tax being payable by
the holder of such Rights Certificate at the time of
surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each person in
whose name any certificate for a number of one one-hundredths
(1/100ths) of a share of Preferred Stock (or Common Stock and/or
other securities, as the case may be) is issued upon the exercise
of Rights shall for all purposes be deemed to have become the
holder of record of such fractional shares of Preferred Stock (or
Common Stock and/or other securities, as the case may be)
represented thereby on, and such certificate shall be dated, the
date upon which the Rights Certificate evidencing such Rights was
duly surrendered and payment of the Purchase Price (and all
applicable transfer taxes) was made; provided, however, that if
the date of such surrender and payment is a date upon which the
Preferred Stock (or Common Stock and/or other securities, as the
case may be) transfer books of the Company are closed, such
Person shall be deemed to have become the record holder of such
shares (fractional or otherwise) on, and such certificate shall
be dated, the next succeeding Business Day on which the Preferred
Stock (or Common Stock and/or other securities, as the case may
be) transfer books of the Company are open. Prior to the
exercise of the Rights evidenced thereby, the holder of a Rights
Certificate shall not be entitled to any rights of a stockholder
of the Company with respect to shares for which the Rights shall
be exercisable, including, without limitation, the right to vote,
to receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any
notice of any proceedings of the Company, except as provided
herein.
Section 11. Adjustment of Purchase Price, Number and Kind
of Shares or Number of Rights. The Purchase Price, the number
and kind of shares covered by each Right and the number of Rights
outstanding are subject to adjustment from time to time as
provided in this Section 11.
(a) (i) In the event the Company shall at any time
after the date of this Agreement (A) declare a dividend
on the Preferred Stock payable in shares of Preferred
Stock, (B) subdivide the outstanding Preferred Stock,
(C) combine the outstanding Preferred Stock into a
smaller number of shares, or (D) issue any shares of
its capital stock in a reclassification of the
Preferred Stock (including, without limitation, any
such reclassification in connection with a
consolidation or merger in which the Company is the
continuing or surviving corporation), except as
otherwise provided in this Section 11(a) and Section
7(e) hereof, the Purchase Price in effect at the time
of the record date for such dividend or of the
effective date of such subdivision, combination or
reclassification, and the number and kind of shares of
Preferred Stock or capital stock, as the case may be,
issuable on such date, shall be proportionately
adjusted so that the holder of any Right exercised
after such time shall be entitled to receive, upon
payment of the Purchase Price then in effect, the
aggregate number and kind of shares of Preferred Stock
or capital stock, as the case may be, which, if such
Right had been exercised immediately prior to such date
and at a time when the Preferred Stock transfer books
of the Company were open, he or she would have owned
upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination or
reclassification. If an event occurs which would
require an adjustment under both this Section 11(a)(i)
and Section 11(a)(ii) hereof, the adjustment provided
for in this Section 11(a)(i) shall be in addition to,
and shall be made prior to, any adjustment required
pursuant to Section 11(a)(ii) hereof.
(ii) In the event that:
(A) any Person (other than the Company, any
Subsidiary of the Company, any employee benefit
plan or compensation arrangement of the Company or
of any Subsidiary of the Company, or any Person or
entity organized, appointed or established by the
Company for or pursuant to the terms of any such
plan), alone or together with its Affiliates and
Associates, shall, at any time after the Rights
Dividend Declaration Date, become an Acquiring
Person, unless the event causing the Person to
become an Acquiring Person is (1) a transaction
set forth in Section 13(a) hereof or (2) an
acquisition of shares of Common Stock pursuant to
a tender offer or an exchange offer for all
outstanding shares of Common Stock at a price and
on terms determined by at least a majority of the
members of the Board of Directors who are not
officers of the Company and who are not
representatives, nominees, Affiliates or
Associates of an Acquiring Person, with the
concurrence of a majority of the Continuing
Directors, after receiving advice from one or more
investment banking firms, to be (a) at a price
which is fair to stockholders (taking into account
all factors which such members of the Board of
Directors deem relevant including, without
limitation, prices which could reasonably be
achieved if the Company or its assets were sold on
an orderly basis designed to realize maximum
value) and (b) otherwise in the best interests of
the Company and its stockholders (a "Qualifying
Offer") or (B) the Board of Directors of the
Company shall declare any Person to be an Adverse
Person, upon a determination that such Person,
alone or together with its Affiliates and
Associates, has, at any time after the Rights
Dividend Declaration Date become the Beneficial
Owner of a number of shares of Common Stock which
the Board of Directors of the Company determines
to be substantial (which number of shares shall in
no event represent less than 10% of the
outstanding shares of Common Stock) and a
determination by the Board of Directors of the
Company, after reasonable inquiry and
investigation, including consultation with such
Persons as such directors shall deem appropriate
and consideration of such factors as are permitted
by applicable law, that (a) such Beneficial
Ownership by such Person is intended to cause the
Company to repurchase the shares of Common Stock
beneficially owned by such Person or to cause
pressure on the Company to take action or enter
into a transaction or series of transactions
intended to provide such Person with short-term
financial gain under circumstances where the Board
of Directors determines that the best long-term
interests of the Company would not be served by
taking such action or entering into such
transaction or series of transactions at the time
or (b) such Beneficial Ownership is causing or
reasonably likely to cause a material adverse
impact (including, but not limited to, impairment
of relationships with customers or impairment of
the Company's ability to maintain its competitive
position) on the business, financial condition,
competitive position or prospects of the Company;
then, promptly following the occurrence of any event
described in Section 11(a)(ii)(A) or (B) hereof, proper
provision shall be made so that each holder of a Right
(except as provided below and in Section 7(e) and
Section 24 hereof) shall thereafter have the right to
receive, upon exercise thereof at the then current
Purchase Price in accordance with the terms of this
Agreement, in lieu of a number of one one-hundredths
(1/100ths) of a share of Preferred Stock, such number
of shares of Common Stock of the Company as shall equal
the result obtained by (x) multiplying the then current
Purchase Price by the then number of one one-hundredths
(1/100ths) of a share of Preferred Stock for which a
Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event, and (y)
dividing that product (which, following such first
occurrence, shall thereafter be referred to as the
"Purchase Price" for each Right and for all purposes of
this Agreement) by 50% of the Current Market Price
(determined pursuant to Section 11(d) hereof) per share
of Common Stock on the date of such first occurrence
(such number of shares, the "Adjustment Shares").
(iii) In the event that the number of shares
of Common Stock which are authorized by the Company's
Articles of Incorporation but not outstanding or
reserved for issuance for purposes other than upon
exercise of the Rights are not sufficient to permit the
exercise in full of the Rights in accordance with the
foregoing subparagraph (ii) of this Section 11(a), the
Company shall (A) determine the value of the Adjustment
Shares issuable upon the exercise of a Right (the
"Current Value"), and (B) with respect to each Right
(subject to Section 7(e) hereof), make adequate
provision to substitute for the Adjustment Shares, upon
the exercise of a Right and payment of the applicable
Purchase Price, (1) cash, (2) a reduction in the
Purchase Price, (3) Common Stock or other equity
securities of the Company (including, without
limitation, shares, or units of shares, of preferred
stock, such as the Preferred Stock, which the Board has
deemed to have essentially the same value or economic
rights as shares of Common Stock (such shares of
preferred stock being referred to as "Common Stock
Equivalents")), (4) debt securities of the Company, (5)
other assets, or (6) any combination of the foregoing,
having an aggregate value equal to the Current Value
(less the amount of any reduction in the Purchase
Price), where such aggregate value has been determined
by the Board based upon the advice of a nationally
recognized investment banking firm selected by the
Board; provided, however, that if the Company shall not
have made adequate provision to deliver value pursuant
to clause (B) above within thirty (30) days following
the later of (x) the first occurrence of a Section
11(a)(ii) Event and (y) the date on which the Company's
right of redemption pursuant to Section 23(a) expires
(the later of (x) and (y) being referred to herein as
the "Section 11(a)(ii) Trigger Date"), then the Company
shall be obligated to deliver, upon the surrender for
exercise of a Right and without requiring payment of
the Purchase Price, shares of Common Stock (to the
extent available) and then, if necessary, cash, which
shares and/or cash have an aggregate value equal to the
Spread. For purposes of the preceding sentence, the
term "Spread" shall mean the excess of (i) the Current
Value over (ii) the Purchase Price. If the Board
determines in good faith that it is likely that
sufficient additional shares of Common Stock could be
authorized for issuance upon exercise in full of the
Rights, the thirty (30) day period set forth above may
be extended to the extent necessary, but not more than
ninety (90) days after the Section 11(a)(ii) Trigger
Date, in order that the Company may seek shareholder
approval for the authorization of such additional
shares (such thirty (30) day period, as it may be
extended, is herein called the "Substitution Period").
To the extent that action is to be taken pursuant to
the first and/or third sentences of this Section 11(a)
(iii), the Company (1) shall provide, subject to
Section 7(e) hereof, that such action shall apply
uniformly to all outstanding Rights, and (2) may
suspend the exercisability of the Rights until the
expiration of the Substitution Period in order to seek
such shareholder approval for such authorization of
additional shares and/or to decide the appropriate form
of distribution to be made pursuant to such first
sentence and to determine the value thereof. In the
event of any such suspension, the Company shall issue a
public announcement stating that the exercisability of
the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is
no longer in effect. For purposes of this Section
11(a)(iii), the value of each Adjustment Share shall be
the Current Market Price per share of the Common Stock
on the Section 11(a)(ii) Trigger Date and the per share
or per unit value of any Common Stock Equivalent shall
be deemed to equal the Current Market Price per share
of the Common Stock on such date. The Board of
Directors of the Company may, but shall not be required
to, establish procedures to allocate the right to
receive shares of Common Stock upon the exercise of the
Rights among holders of Rights pursuant to this Section
11(a)(iii).
(b) In case the Company shall fix a record date for
the issuance of rights (other than the Rights), options or
warrants to all holders of Preferred Stock entitling them to
subscribe for or purchase (for a period expiring within
forty-five (45) calendar days after such record date)
Preferred Stock (or shares having the same rights,
privileges and preferences as the shares of Preferred Stock
("Equivalent Preferred Stock")) or securities convertible
into Preferred Stock or Equivalent Preferred Stock at a
price per share of Preferred Stock or per share of
Equivalent Preferred Stock (or having a conversion price per
share, if a security convertible into Preferred Stock or
Equivalent Preferred Stock) less than the Current Market
Price (as determined pursuant to Section 11(d) hereof) per
share of Preferred Stock on such record date, the Purchase
Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the
numerator of which shall be the number of shares of
Preferred Stock outstanding on such record date, plus the
number of shares of Preferred Stock which the aggregate
offering price of the total number of shares of Preferred
Stock and/or Equivalent Preferred Stock so to be offered
(and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at
such Current Market Price, and the denominator of which
shall be the number of shares of Preferred Stock outstanding
on such record date, plus the number of additional shares of
Preferred Stock and/or Equivalent Preferred Stock to be
offered for subscription or purchase (or into which the
convertible securities so to be offered are initially
convertible). In case such subscription price may be paid
by delivery of consideration part or all of which may be in
a form other than cash, the value of such consideration
shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and the holders of the
Rights. Shares of Preferred Stock owned by or held for the
account of the Company shall not be deemed outstanding for
the purpose of any such computation. Such adjustment shall
be made successively whenever such a record date is fixed,
and in the event that such rights or warrants are not so
issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record
date had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Preferred Stock (including
any such distribution made in connection with a
consolidation or merger in which the Company is the
continuing corporation) of evidences of indebtedness, cash
(other than a regular quarterly cash dividend out of the
earnings or retained earnings of the Company), assets (other
than a dividend payable in Preferred Stock, but including
any dividend payable in stock other than Preferred Stock) or
subscription rights or warrants (excluding those referred to
in Section 11(b) hereof), the Purchase Price to be in effect
after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be
the Current Market Price (as determined pursuant to Section
11(d) hereof) per share of Preferred Stock on such record
date, less the fair market value (as determined in good
faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with
the Rights Agent and shall be binding on the Rights Agent
and the holders of the Rights) of the portion of the cash,
assets or evidences of indebtedness so to be distributed or
of such subscription rights or warrants applicable to a
share of Preferred Stock and the denominator of which shall
be such Current Market Price (as determined pursuant to
Section 11(d) hereof) per share of Preferred Stock. Such
adjustments shall be made successively whenever such a
record date is fixed, and in the event that such
distribution is not so made, the Purchase Price shall be
adjusted to be the Purchase Price which would have been in
effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder,
other than computations made pursuant to Section
11(a)(iii) hereof, the "Current Market Price" per share
of Common Stock on any date shall be deemed to be the
average of the daily closing prices per share of such
Common Stock for the thirty (30) consecutive Trading
Days immediately prior to such date, and for purposes
of computations made pursuant to Section 11(a)(iii)
hereof, the Current Market Price per share of Common
Stock on any date shall be deemed to be the average of
the daily closing prices per share of such Common Stock
for the ten (10) consecutive Trading Days immediately
following such date; provided, however, that in the
event that the Current Market Price per share of the
Common Stock is determined during a period following
the announcement by the issuer of such Common Stock of
(A) a dividend or distribution on such Common Stock
payable in shares of such Common Stock or securities
convertible into shares of such Common Stock (other
than the Rights), or (B) any subdivision, combination
or reclassification of such Common Stock, and the ex-
dividend date for such dividend or distribution, or the
record date for such subdivision, combination or
reclassification shall not have occurred prior to the
commencement of the requisite thirty (30) Trading Day
or ten (10) Trading Day period, as set forth above,
then, and in each such case, the Current Market Price
shall be properly adjusted to take into account ex-
dividend trading. The closing price for each day shall
be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either
case as reported in the principal consolidated
transaction reporting system with respect to securities
listed or admitted to trading on the American Stock
Exchange or, if the shares of Common Stock are not
listed or admitted to trading on the American Stock
Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities
listed on the principal national securities exchange on
which the shares of Common Stock are listed or admitted
to trading or, if the shares of Common Stock are not
listed or admitted to trading on any national
securities exchange, the last quoted price or, if not
so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by
the National Association of Securities Dealers, Inc.
Automated Quotation System ("NASDAQ") or such other
system then in use, or, if on any such date the shares
of Common Stock are not quoted by any such
organization, the average of the closing bid and asked
prices as furnished by a professional market maker
making a market in the Common Stock selected by the
Board. If on any such date no market maker is making a
market in the Common Stock, the fair value of such
shares on such date as determined in good faith by the
Board shall be used. The term "Trading Day" shall mean
a day on which the principal national securities
exchange on which the shares of Common Stock are listed
or admitted to trading is open for the transaction of
business or, if the shares of Common Stock are not
listed or admitted to trading on any national
securities exchange, a Business Day. If the Common
Stock is not publicly held or not so listed or traded,
Current Market Price per share shall mean the fair
value per share as determined in good faith by the
Board, whose determination shall be described in a
statement filed with the Rights Agent and shall be
conclusive for all purposes.
(ii) For the purpose of any computation hereunder,
the Current Market Price per share of Preferred Stock
shall be determined in the same manner as set forth
above for the Common Stock in clause (i) of this
Section 11(d) (other than the last sentence thereof).
If the Current Market Price per share of Preferred
Stock cannot be determined in the manner provided above
or if the Preferred Stock is not publicly held or
listed or traded in a manner described in clause (i) of
this Section 11(d), the Current Market Price per share
of Preferred Stock shall be conclusively deemed to be
an amount equal to 100 (as such number may be
appropriately adjusted for such events as stock splits,
stock dividends and recapitalizations with respect to
the Common Stock occurring after the date of this
Agreement) multiplied by the Current Market Price per
share of the Common Stock. If neither the Common Stock
nor the Preferred Stock is publicly held or so listed
or traded, Current Market Price per share of the
Preferred Stock shall mean the fair value per share as
determined in good faith by the Board, whose
determination shall be described in a statement filed
with the Rights Agent and shall be conclusive for all
purposes.
(e) Anything herein to the contrary notwithstanding,
no adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at
least one percent (1%) in the Purchase Price; provided,
however, that any adjustments which by reason of this
Section 11(e) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment.
All calculations under this Section 11 shall be made to the
nearest cent or to the nearest ten-thousandth of a share of
Common Stock or other share or one-millionth of a share of
Preferred Stock, as the case may be. Notwithstanding the
first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the
earlier of (i) three (3) years from the date of the
transaction which mandates such adjustment, or (ii) the
Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a)(ii) or Section 13(a) hereof, the holder of any
Right thereafter exercised shall become entitled to receive
any shares of capital stock other than Preferred Stock,
thereafter the number of such other shares so receivable
upon exercise of any Right and the Purchase Price thereof
shall be subject to adjustment from time to time in a manner
and on terms as nearly equivalent as practicable to the
provisions with respect to the Preferred Stock contained in
Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and
(m), and the provisions of Sections 7, 9, 10, 13 and 14
hereof with respect to the Preferred Stock shall apply on
like terms to any such other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price
hereunder shall evidence the right to purchase, at the
adjusted Purchase Price, the number of one one-hundredths
(1/100ths) of a share of Preferred Stock purchasable from
time to time hereunder upon exercise of the Rights, all
subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i), upon each adjustment
of the Purchase Price as a result of the calculations made
in Sections 11(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of one one-hundredths (1/100ths)
of a share of Preferred Stock (calculated to the nearest one-
millionth) obtained by (i) multiplying (x) the number of one
one-hundredths (1/100ths) of a share covered by a Right
immediately prior to this adjustment, by (y) the Purchase
Price in effect immediately prior to such adjustment of the
Purchase Price, and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of
Rights, in lieu of any adjustment in the number of one one-
hundredths (1/100ths) of a share of Preferred Stock
purchasable upon the exercise of a Right. Each of the
Rights outstanding after the adjustment in the number of
Rights shall be exercisable for the number of one one-
hundredths (1/100ths) of a share of Preferred Stock for
which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number
of Rights (calculated to the nearest one ten-thousandth)
obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public
announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known
at the time, the amount of the adjustment to be made. This
record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Rights
Certificates have been issued, shall be at least ten (10)
days later than the date of the public announcement. If
Rights Certificates have been issued, upon each adjustment
of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be
distributed to holders of record of Rights Certificates on
such record date Rights Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment,
or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and
replacement for the Rights Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof,
if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be
entitled after such adjustment. Rights Certificates so to
be distributed shall be issued, executed and countersigned
in the manner provided for herein (and may bear, at the
option of the Company, the adjusted Purchase Price) and
shall be registered in the names of the holders of record of
Rights Certificates on the record date specified in the
public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of one one-hundredths
(1/100ths) of a share of Preferred Stock issuable upon the
exercise of the Rights, the Rights Certificates theretofore
and thereafter issued may continue to express the Purchase
Price per one one-hundredths (1/100ths) of a share and the
number of one one-hundredths (1/100ths) of a share which
were expressed in the initial Rights Certificates issued
hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then stated
value, if any, of the number of one one-hundredths
(1/100ths) of a share of Preferred Stock issuable upon
exercise of the Rights, the Company shall take any corporate
action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally
issue fully paid and nonassessable such number of one one-
hundredths (1/100ths) of a share of Preferred Stock at such
adjusted Purchase Price.
(l) In any case in which this Section 11 shall require
that an adjustment in the Purchase Price be made effective
as of a record date for a specified event, the Company may
elect to defer until the occurrence of such event the
issuance to the holder of any Right exercised after such
record date the number of one one-hundredths (1/100ths) of a
share of Preferred Stock and other capital stock or
securities of the Company, if any, issuable upon such
exercise over and above the number of one one-hundredths
(1/100ths) of a share of Preferred Stock and other capital
stock or securities of the Company, if any, issuable upon
such exercise on the basis of the Purchase Price in effect
prior to such adjustment; provided, however, that the
Company shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to
receive such additional shares (fractional or otherwise) or
securities upon the occurrence of the event requiring such
adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to
the extent that in their good faith judgment the Board of
Directors of the Company shall determine to be advisable in
order that any (i) consolidation or subdivision of the
Preferred Stock, (ii) issuance wholly for cash of any shares
of Preferred Stock at less than the Current Market Price,
(iii) issuance wholly for cash of shares of Preferred Stock
or securities which by their terms are convertible into or
exchangeable for shares of Preferred Stock, (iv) stock
dividends or (v) issuance of rights, options or warrants
referred to in this Section 11, hereafter made by the
Company to holders of its Preferred Stock shall not be
taxable to such stockholders.
(n) The Company covenants and agrees that it shall
not, at any time after the Distribution Date, (i)
consolidate with any other Person (other than a Subsidiary
of the Company in a transaction which complies with Section
11(o) hereof), (ii) merge with or into any other Person
(other than a Subsidiary of the Company in a transaction
which complies with Section 11(o) hereof), or (iii) sell or
transfer (or permit any Subsidiary to sell or transfer), in
one transaction, or a series of related transactions, assets
or earning power aggregating more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as
a whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o)
hereof), if (x) at the time of or immediately after such
consolidation, merger or sale there are any rights, warrants
or other instruments or securities outstanding or agreements
in effect which would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights
or (y) prior to, simultaneously with or immediately after
such consolidation, merger or sale, the shareholders of the
Person who constitutes, or would constitute, the "Principal
Party" for purposes of Section 13(a) hereof shall have
received a distribution of Rights previously owned by such
Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by
Section 23 or Section 27 hereof, take (or permit any
Subsidiary to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will
diminish substantially or otherwise eliminate the benefits
intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any
time after the Rights Dividend Declaration Date and prior to
the Distribution Date (i) declare a dividend on the
outstanding shares of Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding shares of
Common Stock, or (iii) combine the outstanding shares of
Common Stock into a smaller number of shares, the number of
Rights associated with each share of Common Stock then
outstanding, or issued or delivered thereafter but prior to
the Distribution Date, shall be proportionately adjusted so
that the number of Rights thereafter associated with each
share of Common Stock following any such event shall equal
the result obtained by multiplying the number of Rights
associated with each share of Common Stock immediately prior
to such event by a fraction the numerator of which shall be
the total number of shares of Common Stock outstanding
immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares of
Common Stock outstanding immediately following the
occurrence of such event.
(q) The failure of the Board of Directors at any time
to declare a Person to be an Adverse Person following such
Person becoming the Beneficial Owner of shares of Common
Stock representing 10% or more of the outstanding shares of
Common Stock shall not imply that such Person is not an
Adverse Person or limit the Board of Directors' right at any
time in the future to declare such Person to be an Adverse
Person.
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares. Whenever an adjustment is made as provided in
Section 11 and Section 13 hereof, the Company shall (a) promptly
prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment, (b)
promptly file with the Rights Agent, and with each transfer agent
for the Preferred Stock and the Common Stock, a copy of such
certificate, and (c) mail a brief summary thereof to each holder
of a Rights Certificate (or, if prior to the Distribution Date,
to each holder of a certificate representing shares of Common
Stock) in accordance with Section 26 hereof. The Rights Agent
shall be fully protected in relying on any such certificate and
on any adjustment therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power
(a) In the event that, following the Stock Acquisition
Date, directly or indirectly, (x) the Company shall
consolidate with, or merge with and into, any other Person
(other than a Subsidiary of the Company in a transaction
which complies with Section 11(o) hereof), and the Company
shall not be the continuing or surviving corporation of such
consolidation or merger, (y) any Person (other than a
Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof) shall consolidate with, or merge
with or into, the Company, and the Company shall be the
continuing or surviving corporation of such consolidation or
merger and, in connection with such consolidation or merger,
all or part of the outstanding shares of Common Stock shall
be changed into or exchanged for stock or other securities
of any other Person or cash or any other property, or (z)
the Company shall sell or otherwise transfer (or one or more
of its Subsidiaries shall sell or otherwise transfer), in
one transaction or a series of related transactions, assets
or earning power aggregating more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as
a whole) to any Person or Persons (other than the Company or
any Subsidiary of the Company in one or more transactions
each of which complies with Section 11(o) hereof), then, and
in each such case (except as may be contemplated by Section
13(d) hereof), proper provision shall be made so that: (i)
each holder of a Right, except as provided in Section 7(e)
hereof, shall thereafter have the right to receive, upon the
exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, such number of
validly authorized and issued, fully paid, non-assessable
and freely tradable shares of Common Stock of the Principal
Party (as such term is hereinafter defined), not subject to
any liens, encumbrances, preemptive rights, rights of first
refusal or other adverse claims, as shall be equal to the
result obtained by (1) multiplying the then current Purchase
Price by the number of one one-hundredths (1/100ths) of a
share of Preferred Stock for which a Right is exercisable
immediately prior to the first occurrence of a Section 13
Event (or, if a Section 11(a)(ii) Event has occurred prior
to the first occurrence of a Section 13 Event, multiplying
the number of such one one-hundredths (1/100ths) of a share
for which a Right was exercisable immediately prior to the
first occurrence of a Section 11(a)(ii) Event by the
Purchase Price in effect immediately prior to such first
occurrence), and dividing that product (which, following the
first occurrence of a Section 13 Event, shall be referred to
as the "Purchase Price" for each Right and for all purposes
of this Agreement) by (2) 50% of the Current Market Price
(determined pursuant to Section 11(d)(i) hereof) per share
of the Common Stock of such Principal Party on the date of
consummation of such Section 13 Event; (ii) such Principal
Party shall thereafter be liable for, and shall assume, by
virtue of such Section 13 Event, all the obligations and
duties of the Company pursuant to this Agreement; (iii) the
term "Company" shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the
provisions of Section 11 hereof shall apply only to such
Principal Party following the first occurrence of a Section
13 Event; (iv) such Principal Party shall take such steps
(including, but not limited to, the reservation of a
sufficient number of shares of its Common Stock) in
connection with the consummation of any such transaction as
may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in
relation to its shares of Common Stock thereafter
deliverable upon the exercise of the Rights; and (v) the
provisions of Section 11(a)(ii) hereof shall be of no effect
following the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in
clause (x) or (y) of the first sentence of Section
13(a), the Person that is the issuer of any securities
into which shares of Common Stock of the Company are
converted in such merger or consolidation, and if no
securities are so issued, the Person that is the other
party to such merger or consolidation; and
(ii) in the case of any transaction described in
clause (z) of the first sentence of Section 13(a), the
Person that is the party receiving the greatest portion
of the assets or earning power transferred pursuant to
such transaction or transactions;
provided, however, that in any such case, (1) if the Common
Stock of such Person is not at such time and has not been
continuously over the preceding twelve (12) month period
registered under Section 12 of the Exchange Act, and such
Person is a direct or indirect Subsidiary of another Person
the Common Stock of which is and has been so registered,
"Principal Party" shall refer to such other Person; (2) in
case such Person is a Subsidiary, directly or indirectly, of
more than one Person, the Common Stocks of two or more of
which are and have been so registered, "Principal Party"
shall refer to whichever of such Persons is the issuer of
the Common Stock having the greatest aggregate market value;
and (3) in case such Person is, or is owned directly or
indirectly by, a partnership or joint venture formed by two
or more Persons that are not owned, directly or indirectly,
by the same Person, the rules set forth in (1) and (2) above
shall apply to each of the chains of ownership having an
interest in such joint venture as if such party were a
"Subsidiary" of both or all of such joint venturers and the
Principal Parties in each such chain shall bear the
obligations set forth in this Section 13 in the same ratio
as their direct or indirect interests in such Person bear to
the total of such interests.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless the Principal
Party shall have a sufficient number of authorized shares of
its Common Stock which have not been issued or reserved for
issuance to permit the exercise in full of the Rights in
accordance with this Section 13 and unless prior thereto the
Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement
providing for the Principal Party to assume and perform the
terms set forth in paragraphs (a) and (b) of this Section 13
and further providing that, as soon as practicable after the
date of any consolidation, merger or sale of assets
mentioned in paragraph (a) of this Section 13, the Principal
Party will:
(i) prepare and file a registration statement
under the Act, with respect to the Rights and the
securities purchasable upon exercise of the Rights on
an appropriate form, and will use its best efforts to
cause such registration statement to (A) become
effective as soon as practicable after such filing and
(B) remain effective (with a prospectus at all times
meeting the requirements of the Act) until the
Expiration Date;
(ii) use its best efforts to qualify or register
the Rights and the securities purchasable upon exercise
of the Rights under the "blue sky laws" of such
jurisdictions as may be necessary or appropriate; and
(iii) will deliver to holders of the Rights
historical financial statements for the Principal Party
and each of its Affiliates which comply in all respects
with the requirements for registration on Form 10 under
the Exchange Act.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other
transfers. In the event that a Section 13 Event shall occur
at any time after the occurrence of a Section 11(a)(ii)
Event, the Rights which have not theretofore been exercised
shall thereafter become exercisable in the manner described
in Section 13(a).
(d) Notwithstanding anything in this Agreement to the
contrary, Section 13 shall not be applicable to a
transaction described in subparagraphs (x) and (y) of
Section 13(a) if (i) such transaction is consummated with a
Person or Persons who acquired shares of Common Stock
pursuant to a Qualifying Offer (or a wholly owned subsidiary
of any such Person or Persons), (ii) the price per share of
Common Stock offered in such transaction is not less than
the price per share of Common Stock paid to all holders of
shares of Common Stock whose shares were purchased pursuant
to such Qualifying Offer and (iii) the form of consideration
being offered to the remaining holders of shares of Common
Stock pursuant to such transaction is the same as the form
of consideration paid pursuant to such Qualifying Offer.
Upon consummation of any such transaction contemplated by
this Section 13(d), all Rights hereunder shall expire.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue
fractions of Rights, except prior to the Distribution Date
as provided in Section 11(p) hereof, or to distribute Rights
Certificates which evidence fractional Rights. In lieu of
such fractional Rights, there shall be paid to the
registered holders of the Rights Certificates with regard to
which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current
market value of a whole Right. For purposes of this Section
14(a), the current market value of a whole Right shall be
the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional
Rights would have been otherwise issuable. The closing
price of the Rights for any day shall be the last sale
price, regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to
securities listed or admitted to trading on the American
Stock Exchange or, if the Rights are not listed or admitted
to trading on the American Stock Exchange, as reported in
the principal consolidated transaction reporting system with
respect to securities listed on the principal national
securities exchange on which the Rights are listed or
admitted to trading, or if the Rights are not listed or
admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter
market, as reported by NASDAQ or such other system then in
use or, if on any such date the Rights are not quoted by any
such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a
market in the Rights selected by the Board of Directors of
the Company. If on any such date no such market maker is
making a market in the Rights the fair value of the Rights
on such date as determined in good faith by the Board of
Directors of the Company shall be used.
(b) The Company shall not be required to issue
fractions of shares of Preferred Stock (other than fractions
which are integral multiples of one one-hundredth (1/100th)
of a share of Preferred Stock) upon exercise of the Rights
or to distribute certificates which evidence fractional
shares of Preferred Stock (other than fractions which are
integral multiples of one one-hundredth (1/100th) of a share
of Preferred Stock). In lieu of fractional shares of
Preferred Stock that are not integral multiples of one one-
hundredth (1/100th) of a share of Preferred Stock, the
Company may pay to the registered holders of Rights
Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the
current market value of one one-hundredth (1/100th) of a
share of Preferred Stock. For purposes of this Section
14(b), the current market value of one one-hundredth
(1/100th) of a share of Preferred Stock shall be one one-
hundredth (1/100th) of the closing price of a share of
Preferred Stock (as determined pursuant to Section 11(d)(ii)
hereof) for the Trading Day immediately prior to the date of
such exercise.
(c) Following the occurrence of a Triggering Event,
the Company shall not be required to issue fractions of
shares of Common Stock upon exercise of the Rights or to
distribute certificates which evidence fractional shares of
Common Stock. In lieu of fractional shares of Common Stock,
the Company may pay to the registered holders of Rights
Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the
current market value of one (1) share of Common Stock. For
purposes of this Section 14(c), the current market value of
one share of Common Stock shall be the closing price of one
share of Common Stock (as determined pursuant to Section
11(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise.
(d) The holder of a Right by the acceptance of the
Rights expressly waives his or her right to receive any
fractional Rights or any fractional shares upon exercise of
a Right, except as permitted by this Section 14.
Section 15. Rights of Action. All rights of action in
respect of this Agreement are vested in the respective registered
holders of the Rights Certificates (and, prior to the
Distribution Date, the registered holders of the Common Stock);
and any registered holder of any Rights Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent
of the Rights Agent or of the holder of any other Rights
Certificate (or, prior to the Distribution Date, of the Common
Stock), may, in his or her own behalf and for his or her 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 or her right to exercise the Rights evidenced by
such Rights Certificate in the manner provided in such Rights
Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it
is specifically acknowledged that the holders of Rights would not
have an adequate remedy at law for any breach of this Agreement
and shall be entitled to specific performance of the obligations
hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to
this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a
Right by accepting the same consents and agrees with the Company
and the Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common
Stock;
(b) after the Distribution Date, the Rights
Certificates are transferable only on the registry books of
the Rights Agent if surrendered at the principal office or
offices of the Rights Agent designated for such purposes,
duly endorsed or accompanied by a proper instrument of
transfer and with the appropriate forms and certificates
fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof,
the Company and the Rights Agent may deem and treat the
person in whose name a Rights Certificate (or, prior to the
Distribution Date, the associated Common Stock certificate)
is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Rights Certificates or the
associated Common Stock certificate made by anyone other
than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent,
subject to the last sentence of Section 7(e) hereof, shall
be required to be affected by any notice to the contrary;
and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall
have any liability to any holder of a Right or other Person
as a result of its inability to perform any of its
obligations under this Agreement by reason of any
preliminary or permanent injunction or other order, decree
or ruling issued by a court of competent jurisdiction or by
a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive
order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such
obligation; provided, however, the Company must use its
reasonable efforts to have any such order, decree or ruling
lifted or otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Rights Certificate shall
be entitled to vote, receive dividends or be deemed for any
purpose the holder of the number of one one-hundredths (1/100ths)
of a share of Preferred Stock or any other securities of the
Company which may at any time be issuable on the exercise of the
Rights represented thereby, nor shall anything contained herein
or in any Rights Certificate be construed to confer upon the
holder of any Rights Certificate, as such, any of the rights of a
stockholder of the Company or any right to vote for the election
of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate
action, or to receive notice of meetings or other actions
affecting stockholders (except as provided in Section 25 hereof),
or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by such Rights Certificate
shall have been exercised in accordance with the provisions
hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights
Agent, its reasonable expenses and counsel fees and
disbursements and other disbursements incurred in the
administration and execution of this Agreement and the
exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and
to hold it harmless against, any loss, liability, or
expense, incurred without negligence, bad faith or willful
misconduct on the part of the Rights Agent, for anything
done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including
the costs and expenses of defending against any claim of
liability in the premises.
(b) The Rights Agent shall be protected and shall
incur no liability for or in respect of any action taken,
suffered or omitted by it in connection with its
administration of this Agreement in reliance upon any Rights
Certificate or certificate for Common Stock 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 19. Merger or Consolidation or Change of Name of
Rights Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger
or consolidation to which the Rights Agent or any successor
Rights Agent shall be a party, or any corporation succeeding
to the corporate trust or shareholder services business of
the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without
the execution or filing of any paper or any further act on
the part of any of the parties hereto; provided, however,
that such corporation would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent
shall succeed to the agency created by this Agreement, any
of the Rights Certificates shall have been countersigned but
not delivered, any such successor Rights Agent may adopt the
countersignature of a predecessor Rights Agent and deliver
such Rights Certificates so countersigned; and in case at
that time any of the Rights Certificates shall not have been
countersigned, any successor Rights Agent may countersign
such Rights Certificates either in the name of the
predecessor or in the name of the successor Rights Agent;
and in all such cases such Rights Certificates shall have
the full force provided in the Rights Certificates and in
this Agreement.
(b) In case at any time the name of the Rights Agent
shall be changed and at such time any of the Rights
Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Rights Certificates so
countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, the Rights
Agent may countersign such Rights Certificates either in its
prior name or in its changed name; and in all such cases
such Rights Certificates shall have the full force provided
in the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement
upon the following terms and conditions, by all of which the
Company and the holders of Rights Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel
(who may be legal counsel for the Company), and the opinion
of such counsel shall be full and complete authorization and
protection to the Rights Agent as to any action taken or
omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under
this Agreement the Rights Agent shall deem it necessary or
desirable that any fact or matter (including, without
limitation, the identity of any Acquiring Person or Adverse
Person and the determination of Current Market Price) be
proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chairman of the
Board, the Chief Executive Officer, the President, any Vice
President, the Treasurer, the Secretary or any Assistant
Secretary of the Company and delivered to the Rights Agent;
and such certificate shall be full authorization to the
Rights Agent for any action taken or suffered in good faith
by it under the provisions of this 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 Agreement or in the Rights Certificates or
be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such
statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement
or the execution and delivery hereof (except the due
execution hereof by the Rights Agent) or in respect of the
validity or execution of any Rights Certificate (except its
countersignature thereof); nor shall it be responsible for
any breach by the Company of any covenant or condition
contained in this Agreement or in any Rights Certificate;
nor shall it be responsible for any adjustment required
under the provisions of Section 11, Section 13 or Section 24
hereof or responsible for the manner, method or amount of
any such adjustment or the ascertaining of the existence of
facts that would require any such adjustment (except with
respect to the exercise of Rights evidenced by Rights
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 shares of Common Stock or Preferred Stock
to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any shares of Common Stock or
Preferred Stock will, when so issued, be validly authorized
and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by
the Rights Agent for the carrying out or performing by the
Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed
to accept instructions with respect to the performance of
its duties hereunder from the Chairman of the Board, the
Chief Executive Officer, the President, any Vice President,
the Secretary, any Assistant Secretary or the Treasurer of
the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not
be liable for any action taken or suffered to be taken by it
in good faith in accordance with instructions of any such
officer.
(h) The Rights Agent and any 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 Rights Agent under this Agreement.
Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal
entity.
(i) The Rights Agent may execute and exercise any of
the rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or
agents, and the Rights Agent shall not be answerable or
accountable for any act, 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, however, reasonable care was exercised in the
selection and continued employment thereof.
(j) No provision of this Agreement shall require the
Rights Agent to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of
its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that
repayment of such funds or adequate indemnification against
such risk or liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate
surrendered to the Rights Agent for exercise or transfer,
the certificate attached to the form of assignment or form
of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to
clause 1 and/or 2 thereof, the Rights Agent shall not take
any further action with respect to such requested exercise
of transfer without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or
any successor Rights Agent may resign and be discharged from its
duties under this Agreement upon thirty (30) days' notice in
writing mailed to the Company, and to each transfer agent of the
Common Stock and Preferred Stock, by registered or certified
mail, and to the holders of the Rights Certificates by first-
class mail. The Company may remove the Rights Agent or any
successor Rights Agent upon thirty (30) days' notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the case
may be, and to each transfer agent of the Common Stock and
Preferred Stock, by registered or certified mail, and to the
holders of the Rights Certificates by first-class mail. If the
Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the
Rights Agent. If the Company shall fail to make such appointment
within a period of thirty (30) days after giving notice of such
removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Rights Certificate (who shall,
with such notice, submit his Rights Certificate for inspection by
the Company), then any registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for
the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court, shall
be (A) a corporation organized and doing business under the laws
of the United States or of the State of New York (or of any other
state of the United States so long as such corporation is
authorized to do business as a banking institution in the State
of New York), in good standing, which is authorized under such
laws to exercise corporate trust powers or stock transfer powers
and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights
Agent a combined capital and surplus of at least $100,000,000 or
(B) a subsidiary of a corporation described in clause (A) of this
sentence. After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and responsibilities
as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property
at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the
Common Stock and the Preferred Stock, and mail a notice thereof
in writing to the registered holders of the Rights Certificates.
Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new
Rights Certificates evidencing Rights in such form as may be
approved by its Board of Directors to reflect any adjustment or
change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the
Rights Certificates made in accordance with the provisions of
this Agreement. In addition, in connection with the issuance or
sale of shares of Common Stock following the Distribution Date
and prior to the redemption or expiration of the Rights, the
Company (a) shall, with respect to shares of Common Stock so
issued or sold pursuant to the exercise of stock options or under
any employee plan or arrangement, granted or awarded as of the
Distribution Date, or upon the exercise, conversion or exchange
of securities hereinafter issued by the Company, and (b) may, in
any other case, if deemed necessary or appropriate by the Board
of Directors of the Company, issue Rights Certificates
representing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i) no such Rights
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 Rights Certificate would
be issued, and (ii) no such Rights Certificate shall be issued
if, and to the extent that, appropriate adjustment shall
otherwise have been made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) The Board of Directors of the Company may, at its
option, at any time prior to the earlier of (i) the close of
business on the tenth day following the Stock Acquisition
Date (or, if the Stock Acquisition Date shall have occurred
prior to the Record Date, the close of business on the tenth
day following the Record Date), or (ii) the Final Expiration
Date, redeem all but not less than all the then outstanding
Rights at a redemption price of $0.01 per Right, as such
amount may be appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after
the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price"); provided, however,
that any redemption after the Stock Acquisition Date must be
authorized by the Board (and, until the expiration of the
180-day period referred to in Section 23(c) hereof, with the
concurrence of a majority of the Continuing Directors). The
Board of Directors may not redeem any Rights following a
determination pursuant to Section 11(a)(ii)(B) that any
Person is an Adverse Person. Notwithstanding anything
contained in this Agreement to the contrary, the Rights
shall not be exercisable after the first occurrence of a
Section 11(a)(ii) Event until such time as the Company's
right of redemption hereunder has expired. The Company may,
at its option, pay the Redemption Price in cash, shares of
Common Stock (based on the Current Market Price, as defined
in Section 11(d)(i) hereof, of the Common Stock at the time
of redemption) or any other form of consideration deemed
appropriate by the Board of Directors.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the redemption of the
Rights, evidence of which shall have been filed with the
Rights Agent and without any further action and without any
notice, the right to exercise the Rights will terminate and
the only right thereafter of the holders of Rights shall be
to receive the Redemption Price for each Right so held.
Promptly after the action of the Board of Directors ordering
the redemption of the Rights, the Company shall give notice
of such redemption to the Rights Agent and the holders of
the then outstanding Rights by mailing such notice to all
such holders at each holder's last address as it appears
upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer
agent for the Common Stock. Any notice which is mailed in
the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the
Redemption Price will be made.
(c) Notwithstanding the provisions of Section 23(a)
hereof, in the event that a majority of the Board is elected
by stockholder action by written consent, or is comprised of
persons elected at a meeting of stockholders who were not
nominated by the Board in office immediately prior to such
meeting or action, then for a period of one hundred and
eighty (180) days following the effectiveness of such
election the Rights shall not be redeemed if such redemption
is reasonably likely to have the purpose or effect of
allowing any Person to become an Acquiring Person or
otherwise facilitating the occurrence of a Triggering Event
or a transaction with an Acquiring Person.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its
option, at any time after any Person becomes an Acquiring
Person or is determined to be an Adverse Person pursuant to
Section 11(a)(ii)(B), exchange all or part of the then
outstanding and exercisable Rights (which shall not include
Rights that have become void pursuant to the provisions of
Section 7(e) hereof) for shares of Common Stock at an
exchange ratio of one share of Common Stock per Right,
appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date
hereof (such exchange ratio being hereinafter referred to as
the "Exchange Ratio"). Notwithstanding the foregoing, the
Board of Directors shall not be empowered to effect such
exchange at any time after any Person (other than the
Company, any Subsidiary of the Company, any employee benefit
plan of the Company or any such Subsidiary, or any entity
holding Common Stock for or pursuant to the terms of any
such plan), together with all Affiliates and Associates of
such Person, becomes the Beneficial Owner of fifty per cent
(50%) or more of the Common Stock then outstanding.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the exchange of any Rights
pursuant to subsection (a) of this Section 24 and without
any further action and without any notice, the right to
exercise such Rights shall terminate and the only right
thereafter of a holder of such Rights shall be to receive
that number of shares of Common Stock equal to the number of
such Rights held by such holder multiplied by the Exchange
Ratio. The Company shall promptly give 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 of the holders of such Rights at
their last addresses as they appear upon the registry books
of the Rights Agent. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not
the holder receives the notice. Each such notice of
exchange will state the method by which the exchange of the
Common Stock for Rights will be effected and, in the event
of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata
based on the number of Rights (other than Rights which have
become void pursuant to the provisions of Section 7(e)
hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the
Company, at its option, may substitute shares of Preferred
Stock (or Equivalent Preferred Stock, as such term is
defined in paragraph (b) of Section 11 hereof) for shares of
Common Stock exchangeable for Rights, at the initial rate of
one one-hundredth (1/100th) of a share of Preferred Stock
(or Equivalent Preferred Stock) for each share of Common
Stock, as appropriately adjusted to reflect adjustments in
the voting rights of the Preferred Stock pursuant to the
terms thereof, so that the fraction of a share of Preferred
Stock delivered in lieu of each share of Common Stock shall
have the same voting rights as one share of Common Stock.
(d) In the event that there shall not be sufficient
shares of Common Stock issued but not outstanding or
authorized but unissued to permit any exchange of Rights as
contemplated in accordance with this Section 24, the Company
shall take all such action as may be necessary to authorize
additional shares of Common Stock for issuance upon exchange
of the Rights.
(e) The Company shall not be required to issue
fractions of shares of Common Stock or to distribute
certificates which evidence fractional shares of Common
Stock. In lieu of such fractional shares of Common Stock,
there shall be paid to the registered holders of the Right
Certificates with regard to which such fractional shares of
Common Stock would otherwise be issuable, an amount in cash
equal to the same fraction of the current market value of a
whole share of Common Stock. For the purposes of this
subsection (e), the current market value of a whole share of
Common Stock shall be the closing price of a share of Common
Stock (as determined pursuant to the second sentence of
Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose, at any time
after the Distribution Date, (i) to pay any dividend payable
in stock of any class to the holders of Preferred Stock or
to make any other distribution to the holders of Preferred
Stock (other than a regular quarterly cash dividend out of
earnings or retained earnings of the Company), or (ii) to
offer to the holders of Preferred Stock rights or warrants
to subscribe for or to purchase any additional shares of
Preferred Stock or shares of stock of any class or any other
securities, rights or options, or (iii) to effect any
reclassification of its Preferred Stock (other than a
reclassification involving only the subdivision of
outstanding shares of Preferred Stock), or (iv) to effect
any consolidation or merger into or with any other Person
(other than a Subsidiary of the Company in a transaction
which complies with Section 11(o) hereof), or to effect any
sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one
transaction or a series of related transactions, of more
than 50% of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to any other Person or
Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which
complies with Section 11(o) hereof), or (v) to effect the
liquidation, dissolution or winding up of the Company, then,
in each such case, the Company shall give to each holder of
a Rights Certificate, to the extent feasible and in
accordance with Section 26 hereof, a notice of such proposed
action, which shall specify the record date for the purposes
of such stock dividend, distribution of rights or warrants,
or the date on which such reclassification, consolidation,
merger, sale, transfer, liquidation, dissolution, or winding
up is to take place and the date of participation therein by
the holders of the shares of Preferred Stock, if any such
date is to be fixed, and such notice shall be so given in
the case of any action covered by clause (i) or (ii) above
at least twenty (20) days prior to the record date for
determining holders of the shares of Preferred Stock for
purposes of such action, and in the case of any such other
action, at least twenty (20) days prior to the date of the
taking of such proposed action or the date of participation
therein by the holders of the shares of Preferred Stock
whichever shall be the earlier.
(b) In case any of the events set forth in Section
11(a)(ii) hereof shall occur, then, in any such case, (i)
the Company shall as soon as practicable thereafter give to
each holder of a Rights Certificate, to the extent feasible
and in accordance with Section 26 hereof, a notice of the
occurrence of such event, which shall specify the event and
the consequences of the event to holders of Rights under
Section 11(a)(ii) hereof, and (ii) all references in the
preceding paragraph to Preferred Stock shall be deemed
thereafter to refer to Common Stock and/or, if appropriate,
other securities.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the
holder of any Rights Certificate to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing
with the Rights Agent) as follows:
Comptek Research, Inc.
2732 Transit Road
Buffalo, New York 14224
Attention: Corporate Secretary
Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company
or by the holder of any Rights Certificate to or on the Rights
Agent shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed
in writing with the Company) as follows:
American Stock Transfer & Trust Company
40 Wall Street
46th Floor
New York, New York 10005
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any
Rights Certificate (or, if prior to the Distribution Date, to the
holder of certificates representing shares of Common Stock) shall
be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such
holder as shown on the registry books of the Company.
Section 27. Supplements and Amendments. Prior to the
Distribution Date and subject to the penultimate sentence of this
Section 27, the Company and the Rights Agent shall, if the
Company so directs, supplement or amend any provision of this
Agreement without the approval of any holders of certificates
representing shares of Common Stock. From and after the
Distribution Date and subject to the penultimate sentence of this
Section 27, the Company and the Rights Agent shall, if the
Company so directs, supplement or amend this Agreement without
the approval of any holders of Rights Certificates in order (i)
to cure any ambiguity, (ii) to correct or supplement any
provision contained herein which may be defective or inconsistent
with any other provisions herein, (iii) to shorten or lengthen
any time period hereunder or (iv) to change or supplement the
provisions hereunder in any manner which the Company may deem
necessary or desirable and which shall not adversely affect the
interests of the holders of Rights Certificates (other than an
Acquiring Person or Adverse Person or an Affiliate or Associate
of an Acquiring Person or Adverse Person); provided, however,
that any supplement or amendment of this Agreement after the
Stock Acquisition Date or after the date on which the Board of
Directors determines, pursuant to the criteria set forth in
Section 11(a)(ii)(B) hereof, that a Person is an Adverse Person,
must be approved by a majority of the Continuing Directors.
Notwithstanding the foregoing provisions of this Section 27, this
Agreement may not be supplemented or amended to lengthen,
pursuant to clause (iii) of this sentence, (A) a time period
relating to when the Rights may be redeemed at such time as the
Rights are not then redeemable, or (B) any other time period
unless such lengthening is for the purpose of protecting,
enhancing or clarifying the rights of, and/or the benefits to,
the holders of Rights (other than an Acquiring Person or Adverse
Person and its Affiliates and Associates). Upon the delivery of
a certificate from an appropriate officer of the Company which
states that the proposed supplement or amendment is in compliance
with the terms of this Section 27, the Rights Agent shall execute
such supplement or amendment. Prior to the Distribution Date,
the interests of the holders of Rights shall be deemed coincident
with the interests of the holders of Common Stock.
Section 28. Successors. All the covenants and provisions
of this Agreement by or for the benefit of the Company or the
Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board of
Directors, etc. For all purposes of this Agreement, any
calculation of the number of shares of Common Stock outstanding
at any particular time, including for purposes of determining the
particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the
General Rules and Regulations under the Exchange Act. The Board
of Directors (with, where specifically provided for in this
Agreement, the concurrence of the Continuing Directors) of the
Company shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers
specifically granted to the Board (with, where specifically
provided for in this Agreement, the concurrence of the Continuing
Directors) or to the Company, or as may be necessary or advisable
in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions
of this Agreement, and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement
(including, without limitation, a determination to redeem or not
redeem the Rights or to amend the Agreement). All such actions,
calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the
foregoing) which are done or made by the Board (with, where
specifically provided for in this Agreement, the concurrence of
the Continuing Directors) in good faith, shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the
holders of the Rights and all other parties, and (y) not subject
the Board to any liability to the holders of the Rights.
Section 30. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the
Company, the Rights Agent and the registered holders of the
Rights Certificates (and, prior to the Distribution Date,
registered holders of the Common Stock) any legal or equitable
right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, registered
holders of the Common Stock).
Section 31. Severability. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants
and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant
or restriction is held by such court or authority to be invalid,
void or unenforceable and the Board of Directors of the Company
determines in its good faith judgment that severing the invalid
language from this Agreement would adversely affect the purpose
or effect of this Agreement, the right of redemption set forth in
Section 23 hereof shall be reinstated and shall not expire until
the close of business on the tenth day following the date of such
determination by the Board of Directors. Without limiting the
foregoing, if any provision requiring a majority of the members
of the Board of Directors to be Continuing Directors to act is
held by any court of competent jurisdiction or other authority to
be invalid, void or unenforceable, such determination shall be
made by the Board of Directors of the Company in accordance with
applicable law and the Company's Articles of Incorporation and
bylaws.
Section 32. Governing Law. This Agreement, each Right and
each Rights Certificate issued hereunder shall be deemed to be a
contract made under the laws of the State of New York and for all
purposes shall be governed by and construed in accordance with
the laws of such State applicable to contracts made and to be
performed entirely within such State.
Section 33. Counterparts. This Agreement may be executed
in any number of counterparts and each of such counterparts shall
for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same
instrument.
Section 34. Descriptive Headings. Descriptive headings of
the several Sections of this Agreement are inserted for
convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Rights Agreement to be duly executed and their respective
corporate seals to be hereunto affixed and attested, all as of
the day and year first above written.
Attest: COMPTEK RESEARCH, INC.
By: /s/Christopher A. Head By: /s/John J. Sciuto
Name: Christopher A. Head Name: John J. Sciuto
Title: Secretary Title: Chairman, President and
CEO
Attest: AMERICAN STOCK TRANSFER
& TRUST COMPANY
By: /s/Susan Silder By: /s/Herbert J. Lemmer
Name: Susan Silder Name: Herbert J. Lemmer
Title: Assistant Secretary Title: Vice President
Exhibit A
FORM OF CERTIFICATE OF DESIGNATION,
PREFERENCES AND RIGHTS OF SERIES A JUNIOR
PARTICIPATING PREFERRED STOCK
of
COMPTEK RESEARCH, INC.
Pursuant to Section 402 of the Business Corporation Law
of the State of New York
The undersigned officers of Comptek Research, Inc., a
corporation organized and existing under the Business Corporation
Law of the State of New York (the "Corporation"), in accordance
with the provisions of Section 104 thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of
Directors by the Amended and Restated Articles of Incorporation
of the said Corporation, the said Board of Directors on April 16,
1999 adopted the following resolution creating a series of
100,000 shares of Preferred Stock designated as Series A Junior
Participating Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board
of Directors of this Corporation in accordance with the
provisions of its Amended and Restated Articles of Incorporation,
a series of Preferred Stock of the Corporation be and it hereby
is created, and that the designation and amount thereof and the
voting powers, preferences and relative, participating, optional
and other special rights of the shares of such series, and the
qualifications, limitations or restrictions thereof are as
follows:
Section 1. Designation and Amount. The shares of such
series shall be designated as "Series A Junior Participating
Preferred Stock" and the number of shares constituting such
series shall be 100,000.
Section 2. Dividends and Distributions.
(A) The holders of shares of Series A Junior
Participating Preferred Stock shall be entitled to receive,
when, as and if declared by the Board of Directors out of
funds legally available for the purpose, quarterly dividends
payable in cash on the last day of March, June, September
and December in each year (each such date being referred to
herein as a "Quarterly Dividend Payment Date"), commencing
on the first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Series A
Junior Participating Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (a)
$2.25 or (b) subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate per share
amount of all cash dividends, and 100 times the aggregate
per share amount (payable in kind) of all non-cash dividends
or other distributions other than a dividend payable in
shares of Common Stock or a subdivision of the outstanding
shares of Common Stock (by reclassification or otherwise),
declared on the Common Stock, par value $.02 per share, of
the Corporation (the "Common Stock") since the immediately
preceding Quarterly Dividend Payment Date, or, with respect
to the first Quarterly Dividend Payment Date, since the
first issuance of any share or fraction of a share of Series
A Junior Participating Preferred Stock. In the event the
Corporation shall at any time after April 16, 1999 (the
"Rights Declaration Date") (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares,
then in each such case the amount to which holders of shares
of Series A Junior Participating Preferred Stock were
entitled immediately prior to such event under clause (b) of
the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares
of Common Stock that were outstanding immediately prior to
such event.
(B) The Corporation shall declare a dividend or
distribution on the Series A Junior Participating Preferred
Stock as provided in Paragraph (A) above immediately after
it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock);
provided that, in the event no dividend or distribution
shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the
next subsequent Quarterly Dividend Payment Date, a dividend
of $2.25 per share on the Series A Junior Participating
Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative
on outstanding shares of Series A Junior Participating
Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares of Series A
Junior Participating Preferred Stock, unless the date of
issue of such shares is prior to the record date for the
first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date
of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the
record date for the determination of holders of shares of
Series A Junior Participating Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the
shares of Series A Junior Participating Preferred Stock in
an amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may
fix a record date for the determination of holders of shares
of Series A Junior Participating Preferred Stock entitled to
receive payment of a dividend or distribution declared
thereon, which record date shall be no more than 30 days
prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series
A Junior Participating Preferred Stock shall have the following
voting rights:
(A) Subject to the provision for adjustment
hereinafter set forth, each share of Series A Junior
Participating Preferred Stock shall entitle the holder
thereof to 100 votes on all matters submitted to a vote of
the stockholders of the Corporation. In the event the
Corporation shall at any time after the Rights Declaration
Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding
Common Stock, or (iii) combine the outstanding Common Stock
into a smaller number of shares, then in each such case the
number of votes per share to which holders of shares of
Series A Junior Participating Preferred Stock were entitled
immediately prior to such event shall be adjusted by
multiplying such number by a fraction the numerator of which
is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) Except as otherwise provided herein or by law, the
holders of shares of Series A Junior Participating Preferred
Stock and the holders of shares of Common Stock shall vote
together as one class on all matters submitted to a vote of
stockholders of the Corporation.
(C) (i) If at any time dividends on any Series A
Junior Participating Preferred Stock shall be in
arrears in an amount equal to six (6) quarterly
dividends thereon, the occurrence of such contingency
shall mark the beginning of a period (herein called a
"default period") which shall extend until such time
when all accrued and unpaid dividends for all previous
quarterly dividend periods and for the current
quarterly dividend period on all shares of Series A
Junior Participating Preferred Stock then outstanding
shall have been declared and paid or set apart for
payment. During each default period, all holders of
Preferred Stock (including holders of the Series A
Junior Participating Preferred Stock) with dividends in
arrears in an amount equal to six (6) quarterly
dividends thereon, voting as a class, irrespective of
series, shall have the right to elect two (2)
Directors.
(ii) During any default period, such voting right
of the holders of Series A Junior Participating
Preferred Stock may be exercised initially at a special
meeting called pursuant to subparagraph (iii) of this
Section 3(C) or at any annual meeting of stockholders,
and thereafter at annual meetings of stockholders,
provided that such voting right shall not be exercised
unless the holders of not less than ten percent (10%)
in number of shares of Preferred Stock outstanding
shall be present in person or by proxy. The absence of
a quorum of the holders of Common Stock shall not
affect the exercise by the holders of Preferred Stock
of such voting right. At any meeting at which the
holders of Preferred Stock shall exercise such voting
right initially during an existing default period, they
shall have the right, voting as a class, to elect
Directors to fill such vacancies, if any, in the Board
of Directors as may then exist up to two (2) Directors
or, if such right is exercised at an annual meeting, to
elect two (2) Directors. If the number which may be so
elected at any special meeting does not amount to the
required number, the holders of the Preferred Stock
shall have the right to make such increase in the
number of Directors as shall be necessary to permit the
election by them of the required number. After the
holders of the Preferred Stock shall have exercised
their right to elect Directors in any default period
and during the continuance of such period, the number
of Directors shall not be increased or decreased
except by vote of the holders of Preferred Stock as
herein provided or pursuant to the rights of any equity
securities ranking senior to or pari passu with the
Series A Junior Participating Preferred Stock.
(iii) Unless the holders of Preferred Stock
shall, during an existing default period, have
previously exercised their right to elect Directors,
the Board of Directors may order, or any stockholder or
stockholders owning in the aggregate not less than ten
percent (10%) of the total number of shares of
Preferred Stock outstanding, irrespective of series,
may request, the calling of special meeting of the
holders of Preferred Stock, which meeting shall
thereupon be called by the President, a Vice-President
or the Secretary of the Corporation. Notice of such
meeting and of any annual meeting at which holders of
Preferred Stock are entitled to vote pursuant to this
Paragraph (C)(iii) shall be given to each holder of
record of Preferred Stock by mailing a copy of such
notice to him or her at his or her last address as the
same appears on the books of the Corporation. Such
meeting shall be called for a time not earlier than 10
days and not later than 50 days after such order or
request or in default of the calling of such meeting
within 50 days after such order or request, such
meeting may be called on similar notice by any
stockholder or stockholders owning in the aggregate not
less than ten percent (10%) of the total number of
shares of Preferred Stock outstanding. Notwithstanding
the provisions of this Paragraph (C)(iii), no such
special meeting shall be called during the period
within 50 days immediately preceding the date fixed for
the next annual meeting of the stockholders.
(iv) In any default period, the holders of Common
Stock, and other classes of stock of the Corporation if
applicable, shall continue to be entitled to elect the
whole number of Directors until the holders of
Preferred Stock shall have exercised their right to
elect two (2) Directors voting as a class, after the
exercise of which right (x) the Directors so elected by
the holders of Preferred Stock shall continue in office
until their successors shall have been elected by such
holders or until the expiration of the default period,
and (y) any vacancy in the Board of Directors may
(except as provided in Paragraph (C)(ii) of this
Section 3) be filled by vote of a majority of the
remaining Directors theretofore elected by the holders
of the class of stock which elected the Director whose
office shall have become vacant. References in this
Paragraph (C) to Directors elected by the holders of a
particular class of stock shall include Directors
elected by such Directors to fill vacancies as provided
in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default
period, (x) the right of the holders of Preferred Stock
as a class to elect Directors shall cease, (y) the term
of any Directors elected by the holders of Preferred
Stock as a class shall terminate, and (z) the number of
Directors shall be such number as may be provided for
in the certificate of incorporation or by-laws
irrespective of any increase made pursuant to the
provisions of Paragraph (C)(ii) of this Section 3 (such
number being subject, however, to change thereafter in
any manner provided by law or in the certificate of
incorporation or by-laws). Any vacancies in the Board
of Directors effected by the provisions of clauses (y)
and (z) in the preceding sentence may be filled by a
majority of the remaining Directors.
(D) Except as set forth herein, holders of Series A
Junior Participating Preferred Stock shall have no special
voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders
of Common Stock as set forth herein) for taking any
corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Junior Participating
Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series
A Junior Participating Preferred Stock outstanding shall
have been paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise
acquire for consideration any shares of stock ranking
junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Junior
Participating Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a
parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Junior
Participating Preferred Stock, except dividends paid
ratably on the Series A Junior Participating Preferred
Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total
amounts to which the holders of all such shares are
then entitled;
(iii) redeem or purchase or otherwise acquire
for consideration shares of any stock ranking on a
parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Junior
Participating Preferred Stock, provided that the
Corporation may at any time redeem, purchase or
otherwise acquire shares of any such parity stock in
exchange for shares of any stock of the Corporation
ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A
Junior Participating Preferred Stock; or
(iv) purchase or otherwise acquire for
consideration any shares of Series A Junior
Participating Preferred Stock, or any shares of stock
ranking on a parity with the Series A Junior
Participating Preferred Stock, except in accordance
with a purchase offer made in writing or by publication
(as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual
dividend rates and other relative rights and
preferences of the respective series and classes, shall
determine in good faith will result in fair and
equitable treatment among the respective series or
classes.
(B) The Corporation shall not permit any subsidiary of
the Corporation to purchase or otherwise acquire for
consideration any shares of stock of the Corporation unless
the Corporation could, under Paragraph (A) of this Section
4, purchase or otherwise acquire such shares at such time
and in such manner.
Section 5. Reacquired Shares. Any shares of Series A
Junior Participating Preferred Stock purchased or otherwise
acquired by the Corporation in any manner whatsoever shall be
retired and canceled promptly after the acquisition thereof. All
such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of
a new series of Preferred Stock to be created by resolution or
resolutions of the Board of Directors, subject to the conditions
and restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up. (A)
Upon any liquidation (voluntary or otherwise), dissolution or
winding up of the Corporation, no distribution shall be made to
the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Junior Participating Preferred Stock unless, prior
thereto, the holders of shares of Series A Junior Participating
Preferred Stock shall have received $45.00 per share, plus an
amount equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such payment
(the "Series A Liquidation Preference"). Following the payment
of the full amount of the Series A Liquidation Preference, no
additional distributions shall be made to the holders of shares
of Series A Junior Participating Preferred Stock unless, prior
thereto, the holders of shares of Common Stock shall have
received an amount per share (the "Common Adjustment") equal to
the quotient obtained by dividing (i) the Series A Liquidation
Preference by (ii) 100 (as appropriately adjusted as set forth in
subparagraph (C) below to reflect such events as stock splits,
stock dividends and recapitalizations with respect to the Common
Stock) (such number in clause (ii), the "Adjustment Number").
Following the payment of the full amount of the Series A
Liquidation Preference and the Common Adjustment in respect of
all outstanding shares of Series A Junior Participating Preferred
Stock and Common Stock, respectively, holders of Series A Junior
Participating Preferred Stock and holders of shares of Common
Stock shall receive their ratable and proportionate share of the
remaining assets to be distributed in the ratio of the Adjustment
Number to 1 with respect to such Preferred Stock and Common
Stock, on a per share basis, respectively.
(B) In the event, however, that there are not
sufficient assets available to permit payment in full of the
Series A Liquidation Preference and the liquidation preferences
of all other series of preferred stock, if any, which rank on a
parity with the Series A Junior Participating Preferred Stock,
then such remaining assets shall be distributed ratably to the
holders of such parity shares in proportion to their respective
liquidation preferences. In the event, however, that there are
not sufficient assets available to permit payment in full of the
Common Adjustment, then such remaining assets shall be
distributed ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time
after the Rights Declaration Date (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii) subdivide
the outstanding Common Stock, or (iii) combine the outstanding
Common Stock into a smaller number of shares, then in each such
case the Adjustment Number in effect immediately prior to such
event shall be adjusted by multiplying such Adjustment Number by
a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common
Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case
the shares of Series A Junior Participating Preferred Stock shall
at the same time be similarly exchanged or changed in an amount
per share (subject to the provision for adjustment hereinafter
set forth) equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as
the case may be, into which or for which each share of Common
Stock is changed or exchanged. In the event the Corporation
shall at any time after the Rights Declaration Date (i) declare
any dividend on Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in
each such case the amount set forth in the preceding sentence
with respect to the exchange or change of shares of Series A
Junior Participating Preferred Stock shall be adjusted by
multiplying such amount by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to
such event.
Section 8. No Redemption. The shares of Series A Junior
Participating Preferred Stock shall not be redeemable.
Section 9. Amendment. The Amended and Restated Articles of
Incorporation of the Corporation shall not be further amended in
any manner which would materially alter or change the powers,
preferences or special rights of the Series A Junior
Participating Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of a majority or more
of the outstanding shares of Series A Junior Participating
Preferred Stock, voting separately as a class.
Section 10. Fractional Shares. Series A Junior
Participating Preferred Stock may be issued in fractions of a
share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive
dividends, participate in distributions and to have the benefit
of all other rights of holders of Series A Junior Participating
Preferred Stock.
IN WITNESS WHEREOF, we have executed and subscribed this
Certificate and do affirm the foregoing as true under the
penalties of perjury this ____ day of ___________, 1999.
COMPTEK RESEARCH, INC.
___________________________________
_
Name:
Title:
Attest:
_____________________________
Secretary
Exhibit B
[Form of Rights Certificate]
Certificate No. R- ________
Rights
NOT EXERCISABLE AFTER APRIL 29, 2009 OR EARLIER IF REDEEMED BY
THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION
OF THE COMPANY, AT $0.01 PER RIGHT ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR ADVERSE PERSON (AS
SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE
RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING
PERSON OR ADVERSE PERSON OR AN AFFILIATE OR ASSOCIATE OF AN
ACQUIRING PERSON OR ADVERSE PERSON (AS SUCH TERMS ARE DEFINED IN
THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND
THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.]1
Rights Certificate
COMPTEK RESEARCH, 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
April 16, 1999 (the "Rights Agreement"), between Comptek
Research, Inc., a New York corporation (the "Company"), and
American Stock Transfer & Trust Company (the "Rights Agent"), to
purchase from the Company at any time prior to 5:00 P.M. (New
York City time) on April 29, 2009 at the office or offices of the
Rights Agent designated for such purpose, or its successors as
Rights Agent, one one-hundredth (1/100th) of a fully paid, non-
assessable share of Series A Junior Participating Preferred Stock
(the "Preferred Stock") of the Company, at a purchase price of
$45.00 per one one-hundredth (1/100th) of a share (the "Purchase
Price"), upon presentation and surrender of this Rights
Certificate with the Form of Election to Purchase and related
Certificate duly executed. The number of Rights evidenced by
this Rights Certificate (and the number of shares which may be
purchased upon exercise thereof) set forth above, and the
Purchase Price per share set forth above, are the number and
Purchase Price as of April 30, 1999 based on the Preferred Stock
as constituted at such date. The Company reserves the right to
require prior to the occurrence of a Triggering Event (as such
term is defined in the Rights Agreement) that a number of Rights
be exercised so that only whole shares of Preferred Stock will be
_______________________________
1 The portion of the legend in brackets whall be inserted only if
applicable and shall replace the preceding sentence.
issued.
Upon the occurrence of a Section 11(a)(ii) Event (as such
term is defined in the Rights Agreement), if the Rights evidenced
by this Rights Certificate are beneficially owned by (i) an
Acquiring Person or Adverse Person or an Affiliate or Associate
of any such Acquiring Person or Adverse Person (as such terms are
defined in the Rights Agreement), (ii) a transferee of any such
Acquiring Person or Adverse Person, Associate or Affiliate, or
(iii) under certain circumstances specified in the Rights
Agreement, a transferee of a person who, after such transfer,
became an Acquiring Person or Adverse Person, or an Affiliate or
Associate of an Acquiring Person or Adverse Person, such Rights
shall become null and void and no holder hereof shall have any
right with respect to such Rights from and after the occurrence
of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and
the number and kind of shares of Preferred Stock or other
securities which may be purchased upon the exercise of the Rights
evidenced by this Rights Certificate are subject to modification
and adjustment upon the happening of certain events, including
Triggering Events.
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the
Rights Certificates, which limitations of rights include the
temporary suspension of the exercisability of such Rights under
the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned
office of the Rights Agent and are also available upon written
request to the Rights Agent.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the principal office or offices
of the Rights Agent designated for such purpose, may be exchanged
for another Rights Certificate or Rights Certificates of like
tenor and date evidencing Rights entitling the holder to purchase
a like aggregate number of one one-hundredths (1/100ths) of a
share of Preferred Stock as the Rights evidenced by the Rights
Certificate or Rights Certificates surrendered shall have
entitled such holder to purchase. If this Rights Certificate
shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Rights Certificate or
Rights Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Certificate may be redeemed by the
Company at its option at a redemption price of $0.01 per Right at
any time prior to the earlier of the close of business on (i) the
tenth day following the Stock Acquisition Date (as such time
period may be extended pursuant to the Rights Agreement), and
(ii) the Final Expiration Date. In addition, the Rights may be
exchanged, in whole or in part, for shares of the Common Stock,
or shares of preferred stock of the Company having essentially
the same value or economic rights as such shares. Immediately
upon the action of the Board of Directors of the Company
authorizing any such exchange, and without any further action or
any notice, the Rights (other than Rights which are not subject
to such exchange) will terminate and the Rights will only enable
holders to receive the shares issuable upon such exchange.
No fractional shares of Preferred Stock will be issued upon
the exercise of any Right or Rights evidenced hereby (other than
fractions which are integral multiples of one one-hundredth
(1/100th) of a share of Preferred Stock, which may, at the
election of the Company, be evidenced by depositary receipts),
but in lieu thereof a cash payment will be made, as provided in
the Rights Agreement.
No holder of this Rights Certificate shall be entitled to
vote or receive dividends or be deemed for any purpose the holder
of shares of Preferred Stock or of any other securities of the
Company which may at any time be issuable on the exercise hereof,
nor shall anything contained in the Rights Agreement or herein be
construed to confer upon the holder hereof, as such, any of the
rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or, to receive notice of
meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights
evidenced by this Rights Certificate shall have been exercised as
provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights
Agent.
WITNESS the facsimile signature of the proper officers of
the Company and its corporate seal.
Dated as of ___________, ____
ATTEST: COMPTEK RESEARCH, INC.
__________________________ By:_________________________________
Secretary Title:
Countersigned:
[_______________________]
By: ______________________
Authorized Signature
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
_____________________
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED
_________________________________________________ hereby sells,
assigns and transfers unto
___________________________________________________
(Please
print name and address of transferee)
this Rights Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint _________________ Attorney, to transfer the within Rights
Certificate on the books of the within-named Company, with full
power of substitution.
Dated: ________________, ____
______________________________
Signature
Signature Guaranteed:
CERTIFICATE
______________
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or
was an Acquiring Person or Adverse Person or an Affiliate or
Associate of any such Acquiring Person or Adverse Person (as such
terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced
by this Rights Certificate from any Person who is, was or
subsequently became an Acquiring Person or Adverse Person or an
Affiliate or Associate of an Acquiring Person or Adverse Person.
Dated: ________________, ____
______________________________
Signature
Signature Guaranteed:
NOTICE
_____________________
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights
Certificate in every particular, without alteration or
enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
_____________________
(To be executed if holder desires to
exercise Rights represented by the
Rights Certificate.)
To: COMPTEK RESEARCH, INC.
The undersigned hereby irrevocably elects to exercise
__________ Rights represented by this Rights Certificate to
purchase the shares of Preferred Stock issuable upon the exercise
of the Rights (or such other securities of the Company or of any
other person which may be issuable upon the exercise of the
Rights) and requests that certificates for such shares be issued
in the name of and delivered to:
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 Rights Certificate, a new Rights Certificate
for the balance 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: ________________, ____
______________________________
Signature
Signature Guaranteed:
CERTIFICATE
______________
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are
[ ] are not being exercised by or on behalf of a Person who is or
was an Acquiring Person or Adverse Person or an Affiliate or
Associate of any such Acquiring Person or Adverse Person (as such
terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced
by this Rights Certificate from any Person who is, was or became
an Acquiring Person or Adverse Person or an Affiliate or
Associate of an Acquiring Person or Adverse Person.
Dated: ________________, ____
______________________________
Signature
Signature Guaranteed:
NOTICE
_______________
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face
of this Rights Certificate in every particular, without
alteration or enlargement or any change whatsoever.
Exhibit 99
Press Release, dated April 19, 1999
FOR IMMEDIATE RELEASE
Contact: Christopher A. Head
Executive Vice President
Comptek Research, Inc.
716-677-4070
COMPTEK ADOPTS
SHAREHOLDERS RIGHTS PLAN
_____________________
BUFFALO, N.Y., April 19, 1999 -- Comptek Research, Inc.
(AMEX:CTK) announced today that its Board of Directors adopted a
"Shareholders Rights Plan" to protect its investors from
potential inequitable takeover tactics and preserve the future
value of the company.
"The rights plan isn't intended to prevent the acquisition of
Comptek, but to deter coercive takeover tactics and to prevent a
potential acquiror from gaining control of the Company without
offering a fair price to all of the company's shareholders," said
John J. Sciuto, chairman, president and chief executive officer.
"The rights plan wasn't adopted in response to any specific
effort to acquire control of the company," Mr. Sciuto said.
"Our directors, however, believe this measure to be prudent in
the current environment of consolidation in the defense
industry."
A right to purchase shares of a new series of preferred stock
will be distributed as a dividend at the rate of one right for
each common share held by a shareholder of record as of the close
of business April 30, 1999. The rights will expire on April 29,
2009, unless earlier redeemed by the company.
Each right will entitle shareholders to buy one-hundredth of a
share of the company's new Series A Junior Participating
Preferred Stock at an initial exercise price of $45. The rights
will be exercisable if a person or group acquires beneficial
ownership of 20 percent or more of the company's outstanding
common stock, or begins a tender or exchange offer for 20 percent
or more of the common stock. In addition, the rights will be
exercisable if an "adverse person," as determined by the
directors, acquires beneficial ownership of 10 percent or more of
the company's outstanding common stock.
Until a triggering event, the rights attach to and trade with the
shares of the company's common stock. No separate rights
certificate will be issued until an event triggering the exercise
of the rights occurs.
If any person becomes the beneficial owner of 20 percent or more
of Comptek's common stock -except through an offer which the
board determines to be fair- and the board does not redeem the
rights within 10 days, or a 10 percent holder is determined by
the directors to be an "adverse person," then each right not
owned by such "adverse person" will then enable its holder to
purchase, at the right's then-current exercise price, common
stock of the other entity having a value of twice the rights
exercise price.
Under certain circumstances, if Comptek is acquired in a merger
or similar transaction with another person, or sells more than 50
percent of its assets, earning power or cash flow to another
entity, each right that has not previously been exercised will
entitle its holder to purchase, at the right's then-current
exercise price, common stock of such other entity having a value
of twice the right's exercise price.
Comptek will generally be entitled to redeem the rights at one
cent per right at any time until 10 days following a public
announcement that a 20 percent position has been acquired. The
time limit may be extended by the directors.
Details of the plan are outlined in a letter which will be mailed
to all shareholders and in filings with the Securities and
Exchange Commission.
Comptek Research, Inc., with offices in the United States and
Canada, is a U.S. and international supplier of technically
advanced electronics and data communications systems to
government and industry.
Note: Today's news release and Comptek's news releases for
the past year are available on the Internet at
http://www.cfonews.com under the heading "Company News, Comptek
Research." Additional information about Comptek is also
available at http://www.comptek.com.
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