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
November 7, 1994
(Date of earliest event reported)
Comdisco, Inc.
(Exact name of Registrant as specified in its charter)
Delaware 1-7725 36-2687938
(State of (Commission File No.) (IRS Employer
Incorporation) Identification No.)
6111 North River Road, Rosemont, Illinois 60018
(Address of principal executive offices, including zip code)
(708) 698-3000
(Registrant's telephone number, including area code)
N/A _
(Former name or former address, if changed since last report)
Item 5. Other Events.
Effective November 7, 1994, the Board of Directors of Comdisco,
Inc. (the "Company") amended and restated the Rights Agreement (the
"Agreement") between the Company and Chemical Bank (the successor of
Manufacturers Hanover Trust Company), as Rights Agent. The more
significant amendments to the Agreement are described below. The
amended and restated Agreement sets forth the description and terms of the
Rights (the "Rights") held by holders of the Company's common stock, par value
$.10 per share (the "Common Stock"), to purchase Common Stock.
Section 1(a) of the Agreement was amended to define an Acquiring
Person as any person who, together with all affiliates and associates of such
person, is the beneficial owner of 15% or more of the then outstanding Common
Stock and, in connection therewith, to supplement in certain respects the
definition of an Existing Holder.
Section 3(a) of the Agreement was amended to reduce from 30% to 15%
the percentage of Common Stock sought in a tender or exchange offer that would
trigger the Distribution Date and to include as a trigger of a Distribution
Date the determination by the Board of Directors of the Company that a person
is an Adverse Person.
Section 11(a)(ii) of the Agreement was amended to reduce from 40% to
15% the percentage ownership of outstanding Common Stock (other than
ownership by an Existing Holder) which triggers a Right holder's right to
receive, upon exercise of the Right, one share of Common Stock at an
adjusted Purchase Price equal to 20% of the then current market price of the
Common Stock.
Section 11(a)(ii) of the Agreement was also supplemented to
include among those triggers which permit a Right holder to receive, upon
exercise of the Right, one share of Common Stock at an adjusted Purchase Price
equal to 20% of the then current market price of the Common Stock the
determination by the Board of Directors that a person is an Adverse
Person. In order to declare a Person to be an Adverse Person, the Board of
Directors must determine that such person, alone or together with its
affiliates and associates, has become the Beneficial Owner of an amount of
Common Stock which the Board of Directors determines to be substantial
(which amount shall in no event be less than 10% of the Common Stock then
outstanding) and, after reasonable inquiry and investigation, including
consultation with such persons as such directors shall deem appropriate, that
(i) such beneficial ownership by such person is intended to cause the Company
to repurchase the Common Stock beneficially owned by such person or to
cause pressure on the Company to take action or enter into a transaction or
series of transactions 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 that time or (ii) such beneficial ownership is causing or
reasonably likely to cause a material adverse impact (including, but not
limited to, impairment of relationships with customers or impairment of the
Company's ability to maintain its competitive position) on the business or
prospects of the Company, on the Company's employees, customers or suppliers
or on the communities in which the Company operates or is located.
Section 23(a) of the Agreement was amended to (i) delete the
provision providing for the reinstatement of the Board of Directors' right to
redeem the Rights if an Acquiring Person divests his interest in Common Stock
and (ii) provide that the Board of Directors may not redeem any Rights
following a determination by the Board that any person is an Adverse Person.
The foregoing description of the amendments to the Agreement does
not purport to be complete and is qualified in its entirety by reference to
the amended and restated Agreement which is attached hereto as an exhibit
and incorporated herein by reference.
<PAGE>
Item 7. Financial Statements and Exhibits.
Exhibits:
4.1 Rights Agreement, dated as of November 18, 1987, as amended and
restated as of November 7, 1994, between Comdisco, Inc. and Chemical Bank,
as Rights Agent, which includes as Exhibit A thereto the Form of Rights
Certificate.
20.1 Press Release dated November 9, 1994.
SIGNATURE
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.
COMDISCO, INC.
By:/s/ Philip A. Hewes _
Name: Philip A. Hewes
Title: Senior Vice President
and Secretary
November 29, 1994
Exhibit Description Page
4.1
Rights Agreement, dated as of November 18, 1987, as amended and restated
as of November 7, 1994, between Comdisco, Inc. and Chemical Bank, as
Rights Agent, which includes as Exhibit A thereto the Form of Rights
Certificate.
20.1
Press Release dated November 9, 1994.
Exhibit 20.1
For Immediate Release
Media Contact: Mary Moster
708-518-5147
COMDISCO ANNOUNCES AMENDMENTS TO RIGHTS PLAN
Rosemont, IL, November 9, 1994 -- Comdisco, Inc. (NYSE: CDO) announced
that its board of directors has adopted certain amendments to its shareholder
rights plan.
Among the amendments is a reduction of the rights plan's "flip-in"
trigger from 40 percent to 15 percent. As amended, the rights plan provides
that if any person becomes the beneficial owner of 15 percent or more of the
company's common stock, each right not owned by such 15 percent holder will
entitle its holder to purchase one share of the company's common stock at a
purchase price of 20 percent of the then current market price of the common
stock. Current holders of 15 percent or more of the company's stock are
grandfathered from the reduction in the trigger percentage as long as they own
less than 30 percent.
In addition, the rights plan was amended to include among the "flip-in"
triggers a determination by the board of directors whether a person is an
"adverse person." An "adverse person" is a person who holds at least 10
percent of the common stock of the company and who, in the determination of
the board, either intends to take certain actions that would not be in the
best long-term interest of the company and its shareholders or is reasonably
likely to cause a material adverse impact on the business or prospects of the
company.
Copies of the amended and restated shareholder rights plan will be filed
with Chemical Bank, the rights agent, and with the Securities and Exchange
Commission and may be obtained from the Company.
The amended and restated shareholder rights plan was not adopted in
response to, and the Company is not aware of, any effort to acquire control of
the Company.
Celebrating its 25th anniversary in 1994, Comdisco (NYSE: CDO) is the
world's leading provider of solutions that help organizations reduce
technology cost and risk. These services include equipment leasing and
remarketing, business continuity and consulting. Comdisco's revenue totalled
$2.0 billion for fiscal year 1994, ending September 30, 1994.
(..continued)
Exhibit 4.1
COMDISCO, INC.
and
CHEMICAL BANK
Rights Agent
_
Rights Agreement
Dated as of November 18, 1987
and
as Amended and Restated as of
November 7, 1994
Table of Contents
Section Page
1. Certain Definitions 1
2. Appointment of Rights Agent 6
3. Issue of Rights Certificates 6
4. Form of Rights Certificates 9
5. Countersignature and Registration 10
6. Transfer, Split Up, Combination and
Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or
Stolen Rights Certificates 11
7. Exercise of Rights; Purchase Price;
Expiration Date of Rights 12
8. Cancellation and Destruction of Rights
Certificates 15
9. Reservation and Availability of Common Stock 16
10. Common Stock Record Date 18
11. Adjustment of Purchase Price, Number and
Kind of Shares or Number of Rights 19
12. Certificate of Adjusted Purchase Price or
Number of Shares 31
13. Consolidation, Merger or Sale or
Transfer of Assets or Earning Power 31
14. Fractional Rights and Fractional Shares 35
15. Rights of Action 36
16. Agreement of Rights Holders 37
17. Rights Certificate Holder Not
Deemed a Stockholder 38
18. Concerning the Rights Agent 38
19. Merger or Consolidation or
Change of Name of Rights Agent 39
20. Duties of Rights Agent 40
21. Change of Rights Agent 43
22. Issuance of New Rights Certificates 44
23. Redemption and Termination 45
24. Notice of Certain Events 46
25. Notices 47
26. Supplements and Amendments 48
27. Successors 49
28. Determinations and Actions by the
Board of Directors, etc. 49
29. Benefits of This Agreement 49
30. Severability 50
31. Governing Law 50
32. Counterparts 50
33. Descriptive Headings 50
Exhibit A -- Form of Rights Certificate
Exhibit B -- Summary of Rights to Purchase Common
Stock (Not Amended)
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of November 18, 1987 (the "Agreement"),
between COMDISCO, INC., a Delaware corporation (the "Company"), and
CHEMICAL BANK, a New York banking corporation (the "Rights Agent"), as
amended and restated as of November 7, 1994.
W I T N E S S E T H
WHEREAS, on November 18, 1987 (the "Rights Dividend Declaration
Date"), the Board of Directors of the Company authorized and declared a
dividend distribution of one Right for each share of common stock, par value
$.10 per share, of the Company (the "Common Stock") outstanding at the close
of business on November 27, 1987 (the "Record Date"), and has authorized the
issuance of one Right (as such number may be hereinafter adjusted pursuant
to Section 11(i) 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 and, in certain circumstances
provided in Section 22 hereof, after the Distribution Date, each Right
initially representing the right to purchase one share of Common Stock upon
the terms and subject to the conditions hereinafter set forth (the "Rights");
and
WHEREAS, on November 7, 1994, the Board of Directors determined to
amend and restate the Agreement and directed the Rights Agent to enter into
this Amendment and Restatement.
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 15% or more of the shares of Common Stock then
outstanding, but shall not include the Company, any Subsidiary of the
Company or any employee benefit plan of the Company or of any Subsidiary of
the Company or any Person organized, appointed or established by the Company
for or pursuant to the terms of any such plan; provided, however, that
"Acquiring Person" shall not include any Person (an "Existing Holder") who, at
the Record Date, together with all Affiliates and Associates of such Existing
Holder, is the Beneficial Owner of 20% or more of the shares of Common Stock
then outstanding until such time as such Existing Holder or any Affiliate or
Associate of such Existing Holder shall become the Beneficial Owner of any
additional shares of Common Stock or any other Person who is the Beneficial
Owner of any shares of Common Stock shall become an Affiliate or Associate of
such Existing Holder, if after giving effect to such additional shares or the
shares beneficially owned by such other Person, such Existing Holder,
together with all Affiliates and Associates of such Existing Holder, shall
be the Beneficial Owner of 30% of more of the shares of Common Stock then
outstanding; provided, further, that a Person (a "Passive Holder," which term
shall include any Existing Holder) shall not become an Acquiring Person if,
solely as a result of a reduction in the number of shares of Common Stock
outstanding due to the repurchase of Common Stock by the Company, such
Passive Holder, together with all Affiliates and Associates of such Passive
Holder after such repurchase, shall become the Beneficial Owner of 15% or
more (30% or more, in the case of any Existing Holder) of the shares of
Common Stock then outstanding, unless and until such time as such Passive
Holder or any Affiliate or Associate of such Passive Holder shall become the
Beneficial Owner of any additional shares of Common Stock or any other Person
who is the Beneficial Owner of any shares of Common Stock shall become an
Affiliate or Associate of such Passive Holder, if after giving effect to such
additional shares or the shares beneficially owned by such other Person, such
Passive Holder, together with all Affiliates and Associates of such Passive
Holder, shall be the Beneficial Owner of 15% or more (30% or more, in the
case of any Existing Holder) of the shares of Common Stock then outstanding.
Each of the Existing Holder's successors in interest that would beneficially
own, as a result of the transfer to such successor of any shares of Common
Stock beneficially owned by an Existing Holder ("Existing Holder Shares"), 15%
or more of the shares of Common Stock then outstanding shall be treated as
an Existing Holder. An Existing Holder's successors in interest shall be
(i) the beneficiaries (whether by testate or intestate succession) of the
Existing Holder's estate and the trustee (in his fiduciary capacity) or
beneficiary of any trust who obtains (by reason of the Existing Holder's
death) beneficial ownership of any Existing Holder Shares (ii) the Existing
Holder's estate, (iii) donees of the Existing Holder who are the Existing
Holder's lineal descendants (including Persons adopted prior to attaining the
age of 21 years) and the spouses of such lineal descendants (iv) Qualified
Charitable Organizations, (v) trusts for the exclusive benefit of Persons
listed in clauses (iii) and (iv) (including split interest trusts and the
trustee (in his fiduciary capacity) of any such trust, (vi) partnerships,
limited liability companies and corporations in which the Persons listed
in clause (iii) are the exclusive partners, members or shareholders, as the
case may be, and (vii) the Affiliates and Associates of the Persons
listed in the foregoing clauses (i) through (vi).
(b) "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 Existing Holder to be an
Adverse Person.
(c) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended and as in
effect on the date of this Agreement (the "Exchange Act").
(d) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's Affiliates
or Associates, 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, other
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) hereof 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 (d)) or disposing of any voting securities of the Company;
provided, however, that nothing in this paragraph (d) shall cause a person
engaged in business as an underwriter of securities to be the "Beneficial
Owner" of, or to "beneficially own," any securities acquired through such
person's participation in good faith in a firm commitment underwriting until
the expiration of 40 days after the date of such acquisition.
(e) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
(f) "Close of business" on any given date shall mean 5:00
P.M., 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.
(g) "Common Stock" shall mean the common stock, par value $.10
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.
(h) "Current Market Price" shall have the meaning ascribed to
such term in Section 11(d) hereof.
(i) "Person" shall mean any individual, firm, corporation,
partnership or other entity.
(j) "Qualified Charitable Organization" shall mean a
charitable organization described in all of Section 170(c), Section 2055(a)
and Section 2522(a) of the Internal Revenue Code of 1986 (or any successor or
substitute statute), contributions to which are deductible for United States
income, estate and gift tax purposes at the time of any transfer to or for
the benefit of or in trust for such organization.
(k) "Section 11 Event" shall mean any event described in
Section 11(a)(ii)(A)or (B).
(l) "Section 13 Event" shall mean any event described in
clause (x), (y) or (z) of Section 13(a) hereof.
(m) "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.
(n) "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.
(o) "Triggering Event" shall mean any Section 11 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 earlier of (i) the close of business on the
tenth day after the Stock Acquisition 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 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 15% 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,
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 A 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(i) 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) As promptly as practicable following the Record Date, the
Company will send a copy of a Summary of Rights, in substantially the form
attached hereto as Exhibit B (the "Summary of Rights"), by first-class,
postage prepaid mail, to each record holder of the Common Stock as of the
close of business on the Record Date, at the address of such holder shown on
the records of the Company. 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 delivered 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 the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Rights Agreement between Comdisco, Inc.
(the "Company") and Chemical Bank, dated as of November 18, 1987, as from
time to time amended (the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the
principal offices of 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 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 or 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 A 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 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
shares of Common Stock as shall be set forth therein at the price per share
set forth therein (the "Purchase Price"), but the number of shares
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, an 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 trans-feree 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 a plan,
arrangement or understanding which has as a primary purpose or effect the
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, 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 the Rights Agreement.
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 manually countersigned
by the Rights Agent and shall not be valid for any purpose unless so
countersigned. In case any officer of the Company who shall have signed any
of the 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 Certificate 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 may be transferred, split up,
combined or exchanged for another Rights Certificate or Certificates,
entitling the registered holder to purchase a like number of shares of Common
Stock (or, following a Triggering Event, Common Stock, other securities, cash
or other assets, as the case may be) as the 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 or Certificates until the registered
holder shall have completed and signed the certificate contained in the form
of assignment set forth 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) and Section 14 hereof, countersign and deliver
to the Person entitled thereto a Rights Certificate or 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, at
the Company's request, reimbursement to the Company and the Rights Agent of
all reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the 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 shares of Common Stock (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 earlier of (i) the close of business
on November 17, 1997 (the "Final Expiration Date") or (ii) the time at which
the Rights are redeemed as provided in Section 23 hereof (the earlier of (i)
and (ii) being herein referred to as the "Expiration Date").
(b) The Purchase Price for each share of Common Stock
pursuant to the exercise of a Right shall initially be $95.24 (as adjusted
from the original Purchase Price of $100 to reflect the Company's 5% stock
dividend in March 1992), 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 on the reverse side thereof duly executed, accompanied by
payment, with respect to each Right so exercised, of the Purchase Price per
share of Common Stock (or other 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 Common Stock (or make available, if the Rights Agent is the transfer
agent for the Common Stock) certificates for the total number of shares of
Common 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 Common Stock
issuable upon exercise of the Rights hereunder with a depositary agent,
requisition from the depositary agent depositary receipts representing such
number of shares of Common Stock as are to be purchased (in which case
certificates for the shares of Common 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 of Common Stock 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 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.
(d) In case the registered holder of any Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing 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 Section 11 Event, any
Rights beneficially owned by (i) an Acquiring Person, an 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 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
cancelled form, or, if surrendered to the Rights Agent, shall be cancelled
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 cancelled Rights Certificates
to the Company, or shall, at the written request of the Company, destroy such
cancelled Rights Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.
Section 9. Reservation and Availability of Common 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
Common 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 any authorized and issued shares held in its treasury, the number of
shares of Common Stock (and, following the occurrence of a Triggering Event,
shares of 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 Common Stock (and, following the
occurrence of a Triggering Event, shares of Common Stock and/or other
securities) issuable and deliverable upon the exercise of the Rights may be
listed on any national securities exchange, the Company shall use its best
efforts to cause, from and after such time as the Rights become exercisable
(but only to the extent that it is reasonably likely that the Rights will be
exercised), all shares reserved for such issuance to be listed on such
exchange upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as
soon as practicable following the earliest date after the first occurrence of
a Section 11 Event on which the consideration to be delivered by the Company
upon exercise of the Rights has been determined pursuant to this Agreement
(including in accordance with Section 11(a)(iii) hereof), or as soon as is
required by law following the Distribution Date, as the case may be, a
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the Common Stock or other 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 Securities
Act) until the earlier of (A) the date as of which the Rights are no longer
exercisable for such shares of Common Stock or other securities, and (B) the
Expiration Date. 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
or 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 shares of Common Stock
(and, following the occurrence of a Triggering Event, shares of 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 shares of Common 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 shares of
Common 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 shares of Common 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
Certificates at the time of surrender) or until it has been established to the
Company's satisfaction that no such tax is due.
Section 10. Common Stock Record Date. Each person in whose name
any certificate for shares of Common Stock (or other securities, as the case
may be) is issued upon the exercise of Rights shall for all purposes be deemed
to have become the holder of record of the shares of Common Stock (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 Common 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 on, and such certificate shall be dated, the next
succeeding Business Day on which the Common 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 Common Stock payable
in shares of Common Stock, (B) subdivide the outstanding Common Stock, (C)
combine the outstanding Common Stock into a smaller number of shares, or (D)
issue any shares of its capital stock in a reclassification of the Common
Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in 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 Common Stock or
capital stock, as the case may be, issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive, upon payment of the Purchase Price then
in effect, the aggregate number and kind of shares of Common Stock or
capital stock, as the case may be, which, if such Right had been exercised
immediately prior to such date and at a time when the Common Stock transfer
books of the Company were open, he would have owned upon such exercise and
been entitled to receive by virtue of such dividend, subdivision, combination
or reclassification; provided, however, that if the record date for any such
dividend, subdivision, combination or reclassification shall occur prior to
the Distribution Date, the Company shall make an appropriate adjustment to
the Purchase Price (taking into account any additional Rights which may be
issued as a result of such dividend, subdivision, combination or
reclassification), in lieu of adjusting (as described above) the number of
shares of Common Stock (or other capital stock, as the case may be) issu-able
upon exercise of the Rights and Section 11(i) hereof shall not be applicable.
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:
(A) any Person, at any time after the Rights
Dividend Declaration Date, shall become an Acquiring Person, unless the
event causing such Person to become an Acquiring Person is a transaction
set forth in Section 13(a) hereof, or is an acquisition of shares of
Common Stock pursuant to a tender offer or 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, 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 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, 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 this Agreement has been filed with the Securities and Exchange
Commission as an exhibit to a filing under the Exchange Act, 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 that time or (b) such Beneficial Ownership is causing or
reasonably likely to cause a material adverse impact (including, but not
limited to, impairment of relationships with customers or impairment of the
Company's ability to maintain its competitive position) on the business or
prospects of the Company, on the Company's employees, customers or
suppliers or on the communities in which the Company operates or is located,
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) hereof) shall
thereafter have the right to receive, upon exercise thereof, the then number
of shares of Common Stock for which a Right was exercisable immediately prior
to the first occurrence of a Section 11 Event (such number of shares, the
"Adjustment Shares") at an adjusted Purchase Price (the "Section 11 Price")
equal to the product obtained by multiplying the number of Adjustment Shares
by the greater of (x) 20% of the Current Market Price per share of the Common
Stock on the date of the first occurrence of a Section 11 Event and (y) the
par value per share of the Common Stock; and, following the first occurrence
of a Section 11 Event, the Section 11 Price shall be the "Purchase Price"
for all purposes of this Agreement (other than Section 13 hereof); provided
that the Purchase Price and the number of Adjustment Shares shall be further
adjusted as provided in this Agreement to reflect any event occurring after
the date of such first occurrence.
(iii) In the event that the number of shares of Common
Stock which is authorized by the Company's certificate of incorporation but
not outstanding or reserved for issuance for purposes other than upon
exercise of the Rights is not sufficient to permit the exercise in full of
the Rights in accordance with Section 11(a)(ii), the Company shall: (A)
determine the excess of (1) the value of the Adjustment Shares issuable upon
the exercise of a Right (the "Current Value") over (2) the Purchase Price
(such excess is herein called the "Spread"), and (B) with respect to each
Right, make adequate provision to substitute for the Adjustment Shares, upon
exercise of the Rights, (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 which the Board
of Directors of the Company has deemed to have the same value as shares of
Common Stock (such shares or units of shares of preferred stock are referred
to herein 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, where such aggregate value has
been determined by the Board of Directors of the Company based upon the
advice of a nationally recognized investment banking firm selected by the
Board of Directors of the Company; provided, however, if the Company shall
not have made adequate provision to deliver value pursuant to clause (B)
above within thirty (30) days following the later of (x) the first
occurrence of a Section 11 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. If the Board
of Directors of the Company shall determine in good faith that it is likely
that sufficient additional shares of Common Stock could be authorized for
issuance upon exercise in full of the Rights, the thirty (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 stockholder approval for the authorization of such additional shares
(such period, as it may be extended, the "Substitution Period"). To the
extent that the Company determines that some action should be taken pursuant
to the first and/or second sentences of this Section 11(a)(iii), the Company
(x) shall provide, subject to Section 7(e) hereof, that such action shall
apply uniformly to all outstanding Rights, and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution Period
in order to seek any authorization of additional securities and/or to
decide the appropriate form of distribution to be made pursuant to such
first sentence and to determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no longer in effect.
For purposes of this Section 11(a)(iii), the value of the Common Stock shall
be the Current Market Price per share of the Common Stock on the Section
11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall
be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the
issuance of rights (other than the Rights), options or warrants to holders of
Common Stock entitling them to subscribe for or purchase (for a period
expiring within forty-five (45) calendar days after such record date) Common
Stock (or shares having the same rights, privileges and preferences as the
Common Stock ("equivalent common stock")) or securities convertible into
Common Stock or equivalent common stock at a price per share of Common Stock
or per share of equivalent common stock (or having a conversion price per
share, if a security convertible into Common Stock or equivalent common
stock) less than the Current Market Price per share of Common Stock on such
record date, the Purchase Price to be in effect after such record date shall
be determined by multiplying the Purchase Price in effect immediately prior
to such record date by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding on such record date, plus the
number of shares of Common Stock which the aggregate offering price of the
total number of shares of Common Stock and/or equivalent common 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 Common Stock
outstanding on such record date, plus the number of additional shares of
Common Stock and/or equivalent common stock to be offered for subscription or
purchase (or into which the convertible securities so to be offered are
initially convertible). In case such subscription price may be paid by
delivery of consideration part or all of which may be in a form other than
cash, the value of such consideration shall be as determined in good faith by
the Board of Directors of the Company, whose determination shall be described
in a statement filed with the Rights Agent and shall be binding on the Rights
Agent and the holders of the Rights. Shares of Common Stock owned by or held
for the account of the Company shall not be deemed outstanding for the purpose
of any such computation. Such adjustment shall be made successively whenever
such a record date is fixed, and in the event that such rights or warrants are
not so issued, the Purchase Price shall be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Common Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing corporation) of evidences of indebtedness, cash (other than a
regular quarterly cash dividend out of the earnings or retained earnings of
the Company), assets (other than a dividend payable in Common Stock, but
including any dividend payable in stock other than Common Stock) or
subscription rights or warrants (excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the Current
Market Price per share of Common Stock on such record date, less the fair
market value (as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent 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 Common Stock and the denominator of which shall be such Current
Market Price per share of Common Stock. Such adjustments shall be made
successively whenever such a record date is fixed, and in the event that such
distribution is not so made, the Purchase Price shall be adjusted to be the
Purchase Price which would have been in effect if such record date had not
been fixed.
(d) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) hereof, the "Current Market
Price" per share of Common Stock on any date shall be deemed to be the average
of the daily closing prices per share of such Common Stock for the thirty (30)
consecutive Trading Days (as such term is hereinafter defined) 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 the 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 the Common Stock of (i) any
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 (ii) any subdivision, combination or reclassification
of such Common Stock, and the exdividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification shall not have occurred prior to the expiration of the
requisite thirty (30) Trading Day period 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 exdividend 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 New York Stock Exchange or, if the shares of Common Stock are
not listed or admitted to trading on the New York Stock Exchange, as reported
in the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
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 on the
Nasdaq Stock Market or, if on any such date the shares of Common Stock are not
quoted on the Nasdaq Stock Market, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the
Common Stock selected by the Board of Directors of the Company. If on any
such date no market maker is making a market in the Common Stock, the fair
value of such shares on such date as determined in good faith by the Board of
Directors of the Company shall be used. The term "Trading Day" shall mean a
day on which the principal national securities exchange 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 of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent and shall be conclusive
for all purposes.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment
would require an increase or decrease of at least one percent (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 tenthousandth
of a share of Common 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 Common Stock, thereafter the number of such other shares so receivable
upon exercise of any Right and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the shares of Common Stock
contained in 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
Common Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the right
to purchase, at the adjusted Purchase Price, the number of shares of Common
Stock purchasable from time to time hereunder upon exercise of the Rights,
all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price,
that number of shares of Common Stock (calculated to the nearest
tenthousandth) obtained by (i) multiplying (x) the number of shares covered
by a Right immediately prior to this adjustment, by (y) the Purchase Price in
effect immediately prior to such adjustment of the Purchase Price, and (ii)
dividing the product so obtained by the Purchase Price in effect immediately
after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in lieu of
any adjustment in the number of shares of Common Stock purchasable upon the
exercise of a Right. Each of the Rights outstanding after the adjustment in
the number of Rights shall be exercisable for the number of shares of Common
Stock for which a Right was exercisable immediately prior to such adjustment.
Each Right held of record prior to such adjustment of the number of Rights
shall become that number of Rights (calculated to the nearest one
tenthousandth) 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 evidenc-ing 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 shares of Common Stock issuable upon the exercise of
the Rights, the Rights Certificates theretofore and thereafter issued may
continue to express the Purchase Price per share and the number of shares
which were expressed in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the shares of
Common Stock issuable upon exercise of the Rights, the Company shall take any
corporate action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue fully paid and
nonassessable shares of Common 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 shares of Common Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the shares of
Common Stock and other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price in effect prior
to such adjustment; provided, however, that the Company shall deliver to such
holder a due bill or other appropriate instrument evidencing such holder's
right to receive such additional shares of Common Stock and other capital
stock or securities upon the occurrence of the event requiring such
adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in
the Purchase Price, in addition to those adjustments expressly required by
this Section 11, as and to the extent that in 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 Common Stock, (ii) issuance
wholly for cash of any shares of Common Stock at less than the Current Market
Price, (iii) issuance wholly for cash of shares of Common Stock or securities
which by their terms are convertible into or exchangeable for shares of Common
Stock, (iv) stock dividends or (v) issuance of rights, options or warrants
referred to in this Section 11, hereafter made by the Company to holders of
its Common Stock shall not be taxable to such 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 stockholders
of the Person who constitutes, or would constitute, the "Principal Party" for
purposes of Section 13(a) hereof shall have received a distribution of Rights
previously owned by such Person or any of its 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
26 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) The failure of the Board of Directors to declare a Person
to be an Adverse Person following such Person becoming the Beneficial Owner of
shares of Common Stock represent-ing 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 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 25 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 50% or more 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, nonassessable and freely tradeable shares of Common Stock
of the Principal Party (as such term is hereinafter defined), not subject to
any liens, encumbrances, rights of first refusal or other adverse claims, as
shall be equal to the result obtained by (1) multiplying the then current
Purchase Price by the number of shares of Common Stock for which a Right was
exercisable immediately prior to the first occurrence of a Section 13 Event
(or, if a Section 11 Event has occurred prior to the first occurrence of a
Section 13 Event, multiplying the Purchase Price in effect immediately prior
to the first occurrence of a Section 11 Event by the number of shares of
Common Stock for which a Right was exercisable immediately prior to such first
occurrence of a Section 11 Event) and (2) dividing that product (such product
following the first occurrence of a Section 13 Event shall be referred to as
the "Purchase Price" for each Right and for all purposes of this Agreement) by
50% of the Current Market Price 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 for or 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; and (2) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Stock of two or more of which
are and have been so registered, "Principal Party" shall refer to whichever of
such Persons is the issuer of the Common Stock having the greatest aggregate
market value.
(c) The Company shall not consummate any Section 13 Event
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 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 such
Section 13 Event, the Principal Party will
(i) prepare and file a registration statement under the
Securities Act, with respect to the Rights and the securities purchasable
upon exercise of the Rights on an appropriate form, 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 Securities Act) until the
Expiration Date;
(ii) use its best efforts to qualify or register the
Rights and the securities purchasable upon exercise of the Rights under blue
sky laws of such jurisdiction, 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 first occurrence of a Section 11
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 tender offer or exchange offer for all outstanding shares of
Common Stock which complies with the provisions of Section 11(a)(ii)(A) hereof
(or a whollyowned 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 tender offer or exchange 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 tender offer or exchange 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 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 New York Stock Exchange or, if
the Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national securities
exchange on which the Rights are listed or admitted to trading, or if the
Rights are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported on the
Nasdaq Stock Market or, if on any such date the Rights are not quoted on the
Nasdaq Stock Market, 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 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 share of Common Stock. For purposes of this Section 14(b), the
current market value of one share of Common Stock shall be the closing price
per share of Common Stock (determined pursuant to Section 11(d) hereof) on
the Trading Day immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or any fractional
shares upon exercise of a Right.
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 own behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, his right to exercise the Rights evidenced by
such 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 and only 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, with the form of assignment set forth on the
reverse side thereof and the certificate contained therein duly completed
and 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 best 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 shares of Common
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 24
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 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
President, any Vice President, the Treasurer, any Assistant 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 or Section 13 hereof or responsible for the
manner, method or amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment (except with respect
to the exercise of Rights evidenced by 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 other securities to be issued pursuant to this
Agreement or any Rights Certificate or as to whether any shares of Common
Stock or other securities 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 President, any Vice President, the
Secretary, any Assistant Secretary, the Treasurer or any Assistant
Treasurer of the Company or any designee of any of the foregoing, 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 the 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 or transfer without first consulting
with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under
this Agreement upon thirty (30) days' notice in writing mailed to the
Company, and to each transfer agent of the Common 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, 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 any
registered holder of a Rights Certificate (who shall, with such notice,
submit his Rights Certificate for inspection by the Company), then any
registered holder of a 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
corporation organized and doing business under the laws of the United States
or of the State of New York or Illinois (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 or Illinois), in good standing, having
a principal office in the State of New York or Illinois which is authorized
under such laws to exercise corporate trust powers and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $100,000,000 and which shall otherwise meet any requirements imposed by
the New York Stock Exchange on transfer agents and registrars. After
appointment, the successor Rights Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor
Rights Agent shall deliver and transfer to the successor Rights Agent any
property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment, the Company shall file
notice thereof in writing with the predecessor Rights Agent and each transfer
agent of the Common Stock, and mail a notice thereof in writing to the
registered holders of the 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 Rights, Rights Agreement or 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 fifteenth
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
fifteenth 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 $.048 per Right (as adjusted from the original redemption price of
$.05 per Right to reflect the Company's 5% stock dividend in March 1992), as
such amount may be appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the "Redemption Price").
Notwithstanding the foregoing, 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 Event until such time as the Company's right
of redemption set forth in the first sentence of this Section 23(a) has
expired. The Company may, at its option, pay the Redemption Price in cash,
shares of Common Stock (based on the Current Market Price 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.
Section 24. 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 Common Stock or to make any other distribution to the holders
of Common 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
Common Stock rights or war-rants to subscribe for or to purchase any
additional shares of Common Stock or shares of stock of any class or any other
securities, rights or options, or (iii) to effect any reclassification of its
Common Stock (other than a reclassification involving only the subdivision of
outstanding shares of Common 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 25 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, consolida-tion, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the shares of Common Stock, 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 Common Stock for purposes of such
action, and in the case of any such other action, at least twenty (20) days
prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the shares of Common Stock, whichever
shall be the earlier.
(b) In case any Section 11 Event 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 25 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 Common Stock shall be deemed thereafter to refer to
Common Stock and/or other securities, if appropriate.
Section 25. 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:
Comdisco, Inc.
6111 North River Road
Rosemont, Illinois 60018
Attention: 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:
Chemical Bank
450 West 33rd Street, 15th Floor
New York, New York 10001
Attention: Stock Transfer Administration
Attn: Vice President
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 26. Supplements and Amendments. Prior to the Distribution
Date and subject to the penultimate sentence of this Section 26, the Company
may and the Rights Agent shall, if the Company so directs, supplement or amend
any provision of this Agreement without the approval of any holders of
certificates representing shares of Common Stock and associated Rights. From
and after the Distribution Date and subject to the penultimate sentence of
this Section 26, the Company may and the Rights Agent shall, if the Company so
directs, supplement or amend this Agreement without the approval of any
holders of Rights Certificates in order to (i) cure any ambiguity, (ii)
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) shorten or lengthen any
time period hereunder, or (iv) 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, Adverse Person or an Affiliate
or Associate of an Acquiring Person or Adverse Person); provided, however,
that this Agreement may not be supplemented or amended to lengthen, pursuant
to clause (iii) of this sentence, (A) a time period relating to when the
Rights may be redeemed at such time as the Rights are not then redeemable, or
(B) any other time period unless such lengthening is for the purpose of
protecting, enhancing or clarifying the rights of, and/or the benefits to, the
holders of Rights (other than an Acquiring Person or Adverse Person and its
Associates and Affiliates). 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 26, the Rights
Agent shall execute such supplement or amendment. Notwithstanding anything
contained in this Agreement to the contrary, no supplement or amendment shall
be made which changes the Redemption Price, the Final Expiration Date, the
Purchase Price or the number of shares of Common Stock for which a Right is
exercisable. 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 27. 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 28. 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 or any other class of capital 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-3d(1)(i) of the General Rules and Regulations under the Exchange Act.
The Board of Directors of the Company shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board or to the Company, or as may be necessary
or advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including a determination to redeem or
not redeem the Rights or to amend the Agreement). All such actions,
calculations, interpretations and determinations (including, for purpose of
clause (y) below, all omissions with respect to the foregoing) which are done
or made by the Board in good faith, shall (x) be final, conclusive and binding
on the Company, the Rights Agent, the holders of the Rights and all other
parties, and (y) not subject the Board to any liability to the holders of the
Rights.
Section 29. 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 30. 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.
Section 31. 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 Delaware 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 32. 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 33. 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.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
Attest: COMDISCO, INC.
By /s/ Jeremiah Fitzgerald By /s/ John J. Vosicky
Name: Jeremiah Fitzgerald Name: John J. Vosicky
Title: Assistant Secretary Title: Executive Vice
President
Attest: CHEMICAL BANK, as
Rights Agent
By /s/ Raymond Poplasky By /s/ Leslie A. DeLuca _
Name: Raymond Poplasky Name: Leslie A. DeLuca
Title: Assistant Vice Title: Assistant Vice
President President
Exhibit A
[Form of Rights Certificate]
Certificare No. R- Rights
EXERCISABLE AFTER NOVEMBER 17, 1997 OR EAR-LI-ER IF REDEEMED BY THE COMPANY.
THE RIGHTS ARE SUB-JECT TO REDEMPTION, AT THE OPTION OF THE COMPA-NY, AT $.048
PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CER-TAIN
CIRCUM-STANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIR-ING PERSON, AN ADVERSE
PERSON OR AN AFFIL-IATE OR ASSOCIATE OF AN ACQUIRING PER-SON OR ADVERSE PERSON
(AS SUCH TERMS ARE DE-FINED IN THE RIGHTS AGREEMENT) AND ANY SUBSE-QUENT
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 ACQUIR-ING PERSON OR ADVERSE PERSON OR AN AFFIL-IATE OR ASSOCIATE OF
AN AC-QUIRING PERSON OR ADVERSE PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREE-MENT). ACCORD-ING-LY, THIS RIGHT CERTIFICATE AND THE RIGHTS
REPRE-SENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN
THE CIRCUMSTANCES SPECIFIED IN SCETION 7 (e) OF SUCH AGREEMENT1
[FN]
The portion of the legend in brackets shall be inserted only if applicable
and shall replace the preceding sentence.
[/FN]
Rights Certificate
COMDISCO, INC.
This certifies that , or registered assigns, is
the registered holder of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions
of the Amended and Restated Rights Agreement, dated as of November 18, 1987,
as amended and restated as of November 7, 1994 (the "Rights Agreement"),
between COMDISCO, INC., a Delaware corporation (the "Company"), and
CHEMICAL BANK, a New York banking corporation (the "Rights Agent"), to
purchase from the Company at any time prior to 5:00 PM (New York City time)
on November 17, 1997, at the office or offices of the Rights Agent designated
for such purposes, one fully paid and nonassessable share of common stock,
par value $.10 per share (the "Common Stock") of the Company, at a purchase
price of $95.24 per share (the "Purchase Price"), upon presentation and
surrender of this Rights Certificate with the Form of Election to Purchase
set forth on the reverse hereof and the Certificate contained therein duly
executed. The Purchase Price shall be paid in cash. The number of Rights
evidenced by this Rights Certificate, the number of shares of Common Stock
which may be purchased upon exercise thereof and the Purchase Price per
share set forth above are the number of Rights, number of shares of Common
Stock and Purchase Price as of November 7, 1994, based on the Common Stock as
constituted at such date, and are subject to adjustment upon the happening
of certain events as provided in the Rights Agreement.
Upon the occurrence of a Section 11 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 Person (as such terms are defined in the
Rights Agreement), (ii) a transferee of any such Acquiring Person, Adverse
Person, Associate or Affiliate, or (iii) under certain circumstances
specified in the Rights Agreement, a transferee of a person who, concurrently
with or after such transfer, became an Acquiring Person, 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 rights
whatsoever with respect to such Rights from and after the occurrence of such
Section 11 Event.
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
office of the Company and are also available upon written request to the
Company.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the 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 shares of Common 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 Certificates representing
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 $.048 per Right payable, at the election of the Company,
in cash, Common Stock, or such other consideration as the Board of Directors
may determine, 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 or shortened pursuant to the Rights Agreement) or (ii) the
Final Expiration Date.
No fractional shares of Common Stock will be issued upon the
exercise of any Right or Rights evidenced hereby, but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder, as such, of this Rights Certificate shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of the
shares of Common Stock or of any other securities of the Company which may at
any time be issuable on the exercise hereof, nor shall anything contained in
the Rights Agreement or herein be construed to confer upon the holder hereof,
as such, any of the rights of a 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 , 19 _
ATTEST: COMDISCO, INC.
By _
Secretary Title:
Countersigned:
CHEMICAL BANK
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.)
Please print social security or other
identifying number of the transferor: _
FOR VALUE RECEIVED _
hereby sells, assigns and transfers unto _
_
(Please print name and address of transferee)
_
(Please print social security or other
identifying number of the 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
withinnamed Company, with full power of substitution.
Dated: , 19 _
_
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, Adverse Person or an Affiliate or Associate of any such
Person (as such terms are defined in 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, Adverse Person or an Affiliate or Associate of any such
Person.
Dated: , 19 _
Signature
Signature Guaranteed: _
NOTICE
The signatures 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 the registered holder desires to
exercise Rights represented by the Rights Certificate.)
To: COMDISCO, INC.
The undersigned hereby irrevocably elects to exercise
Rights represented by this Rights Certificate to purchase the shares of
Common 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 print name and address)
_
Please insert social security
or other identifying number: _
If such number of Rights shall not be all the Rights evidenced by
this Rights Certificate, a new Rights Certificate for the balance of such
Rights shall be registered in the name of and delivered to:
_
(Please print name and address)
_
Please insert social security
or other identifying number: _
_
Dated: , 19 _
_
Signature
Signature Guaranteed: _
<PAGE>
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, Adverse Person or an Affiliate or Associate of any such Person (as
such terms are defined in 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,
Adverse Person or an Affiliate or Associate of any such Person.
Dated: , 19 _
Signature
Signature Guaranteed: _
NOTICE
The signatures 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.
(NOT AMENDED)
Exhibit B
SUMMARY OF RIGHTS TO PURCHASE
COMMON STOCK
On November 18, 1987, the Board of Directors of Comdisco, Inc., a
Delaware corporation (the "Company"), declared a dividend distribution of one
Right for each outstanding share of common stock, par value $.10 per share
(the "Common Stock"), of the Company to stockholders of record at the close
of business on November 27, 1987 (the "Record Date"). Each Right entitles the
registered holder to purchase from the Company one share of Common Stock at a
Purchase Price of $100, subject to adjustment in certain circumstances. The
Purchase Price shall be paid in cash. The description and terms of the Rights
are set forth in a Rights Agreement, dated as of November 18, 1987 (the
"Rights Agreement"), between the Company and Manufacturers Hanover Trust
Company, as Rights Agent.
Initially, the Rights will be attached to the certificates
representing outstanding shares of Common Stock, and no separate Rights
Certificates evidencing the Rights will be distributed. The Rights will
separate from the Common Stock and a Distribution Date will occur upon the
earlier to occur of (i) ten (10) days following a public announcement that a
person or group of affiliated or associated persons (an "Acquiring Person")
has acquired, or obtained the right to acquire, beneficial ownership of 20%
or more of the outstanding shares of Common Stock (or, in the case of a
person or group beneficially owning 20% or more of the outstanding Common
Stock on the Record Date, 30% or more of the outstanding shares of Common
Stock) (the date of such announcement being the "Stock Acquisition Date"), or
(ii) ten (10) days following the commencement of a tender offer or exchange
offer that would result in a person or group beneficially owning 30% or more
of the outstanding shares of Common Stock. Until the Distribution Date, (i)
the Rights will be evidenced by and will be transferred with and only with
such Common Stock certificates, (ii) new Common Stock certificates issued
after November 27, 1987 upon transfer or new issuance of the Common Stock
will contain a legend incorporating the Rights Agreement by reference and
(iii) the surrender for transfer of any certificate for Common Stock 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 November 17, 1997, 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, such separate
Rights Certificates alone will represent the Rights. All shares of Common
Stock issued prior to the Distribution Date will be issued with Rights.
Shares of Common Stock issued after the Distribution Date will be issued with
Rights if such shares are issued pursuant to the exercise of stock options or
under an employee benefit plan, or upon the conversion of securities issued
after adoption of the Rights Agreement. Except as otherwise determined by the
Board of Directors, no other shares of Common Stock issued after the
Distribution Date will be issued with Rights.
In the event that (i) the Company is the surviving corporation in a
merger or consolidation with an Acquiring Person and the Common Stock is not
changed or exchanged, (ii) a Person becomes the beneficial owner of more than
40% of the then outstanding shares of Common Stock (except pursuant to an
offer for all outstanding shares of Common Stock at a price and on terms which
a majority of the independent directors of the Company determines to be fair
to, and otherwise in the best interests of, the stockholders), (iii) an
Acquiring Person engag-es in one or more "self-dealing" transactions as set
forth in the Rights Agreement, or (iv) during such time as there is an
Acquiring Person, an event occurs which results in such Acquiring Person's
ownership interest being increased by more than 1% (e.g., a reverse stock
split), at any time following the Distribution Date, each holder of a Right
will thereafter have the right to receive, upon exercise, the number of
shares of Common Stock for which such Right was exercisable immediately prior
to the first occurrence of such event at an adjusted per share purchase price
of 20% of the market price per share of Common Stock. Notwithstanding any of
the foregoing, following the occurrence of any of the events set forth in
this paragraph, all Rights that are, or (under certain circumstances
specified in the Rights Agreement) were, beneficially owned by any Acquiring
Person will be null and void. However, Rights are not exercisable following
the occurrence of any of the events set forth above until such time as the
Rights are no longer redeemable by the Company as set forth below.
In the event that following the Stock Acquisition Date, (i) the
Company is acquired in a merger or consolidation in which the Company is not
the surviving corporation (other than a merger described in the preceding
paragraph or a merger that follows a tender offer determined to be fair to
the stockholders of the Company, as described in the preceding paragraph)
or (ii) 50% or more of the Company's assets or earning power is sold or
transferred, each holder of a Right (except Rights which have previously been
voided as set forth above) shall thereafter have the right to receive, upon
exercise of the Right, common stock of the acquiring company having a value
equal to two times the Exercise Price of the Right. The Exercise Price is
the Purchase Price multiplied by the number of shares of Common Stock issuable
upon exercise of a Right prior to the events described in this paragraph
(initially, one). The events set forth in this paragraph and in the preceding
paragraph are collectively referred to as the "Triggering Events."
The Purchase Price payable, and the number of shares of Common Stock
issuable, upon exercise of the Rights are subject to adjustment from time to
time to prevent dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Common Stock, (ii) if
holders of the Common Stock are granted certain rights or warrants to
subscribe for Common Stock or securities convertible into Common Stock at
less than the current market price of the Common Stock, or (iii) upon the
distribution to holders of the Common Stock of evidences of indebtedness or
assets (excluding 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 Common Stock will be issued upon
exercise of the Rights and, in lieu thereof, a cash payment will be made
based on the market price of the Common Stock on the last trading date prior
to the date of exercise.
At any time until fifteen days following the Stock Acquisition
Date, the Company may redeem the Rights in whole, but not in part, at a price
of $.05 per Right, payable, at the election of the Company, in cash or shares
of Common Stock. After the redemption period has expired, the Company's right
of redemption may be reinstated if each Acquiring Person reduces his
beneficial ownership to 10% or less of the outstanding shares of Common Stock
in a transaction or series of transactions not involving the Company.
Immediately upon the action of the Board of Directors of the Company, the
Rights will terminate and the only right of the holders of Rights will be to
receive the $.05 per Right redemption price.
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 an acquiring company as set forth above.
Any of the provisions of the Rights Agreement, other than the
provisions relating to the principal economic terms of the Rights, 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 to cure any ambiguity, defect or inconsistency, to
make changes which do not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person), or to shorten or lengthen
any time period under the Rights Agreement; provided that no amendment to
adjust the time period governing redemption shall be made at such time as the
Rights are not redeemable.
A copy of the Rights Agreement has been filed with the Securities
and Exchange Commission as an Exhibit to a Registration Statement of the
Company on Form 8-A. A copy of the Rights Agreement is available free of
charge from the Company upon written request therefor. This summary
description of the Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement, which is incorporated
herein by reference.
