SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A/A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMDISCO, INC.
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(Exact name of registrant as specified in its charter)
Delaware 36-2687938
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(State of incorporation or organization) (IRS Employer
Identification Number)
6111 North River Road
Rosemont, Illinois 60018
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(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which
to be so Registered Each Class is to be Registered
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Rights to Purchase Series C Junior New York Stock Exchange
Participating Preferred Stock Chicago Stock Exchange
Securities to be registered pursuant to Section 12(g) of the Act: None.
Item 1. Description of Registrant's Securities to Be Registered
On November 4, 1997, the Board of Directors of the Registrant
declared a dividend distribution of one right (a "Right") for each
outstanding share of the Registrant's Common Stock, $0.10 par value per
share ("Common Stock"), to stockholders of record at the close of
business on November 17, 1997 (the "Record Date"). The Board of
Directors of the Registrant also authorized the issuance of one Right
for each share of Common Stock issued after the Record Date and prior
to the earliest of the Distribution Date (as defined below), the
redemption, exchange or expiration of the Rights. Except as set forth
below and subject to adjustment as provided in the Rights Agreement
(defined below), each Right entitles the registered holder to purchase
from the Registrant one one-thousandth of a share of Series C Junior
Participating Preferred Stock (the "Preferred Stock"), at a purchase
price of $150 per Right (the "Purchase Price"). The description and
terms of the Rights are set forth in a Rights Agreement, dated as of
November 17, 1997 (the "Rights Agreement"), between the Registrant and
ChaseMellon Shareholder Services, L.L.C., as Rights Agent.
Upon payment of the dividend at the close of business on the
Record Date, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate
Rights Certificates (as defined below) will be distributed. The Rights
will separate from the Common Stock upon the earliest of (i) 10 days
following a public announcement that a person or group (an "Acquiring
Person"), together with persons affiliated or associated with it, has
acquired, or obtained the right to acquire, beneficial ownership of 15%
or more of the outstanding shares of Common Stock (the "Stock
Acquisition Date"); provided, however, that any person (an "Existing
Holder") who, on the Record Date, is the beneficial owner of 20% or
more of the outstanding Common Stock, or any successor in interest (as
that term is used in the Rights Agreement) of an Existing Holder shall
not be considered an Acquiring Person, (ii) 10 business days (or such
later date as the Board of Directors of the Registrant shall determine)
following the commencement of a tender offer or exchange offer that
would result in a person or group beneficially owning 15% or more of
such outstanding shares of Common Stock, or (iii) 10 business days
following a determination by the Board of Directors of the Registrant
that a person (an "Adverse Person"), alone or together with its
affiliates and associates, has become the beneficial owner of more than
10% of the Common Stock and that (a) such beneficial ownership is
intended to cause the Registrant to repurchase the Common Stock
beneficially owned by such person or to cause pressure on the
Registrant to take action or enter into transactions intended to
provide such person with short-term financial gain under circumstances
where the Board of Directors of the Registrant determines that the best
long-term interests of the Registrant would not be served by taking
such action or entering into such transactions at the time or (b) such
beneficial ownership is causing or reasonably likely to cause a
material adverse impact on the business or prospects of the Registrant;
provided, however, that the Board of Directors of the Registrant shall
not declare to be an Adverse Person any Existing Holder or any person
which has reported or is required to report its ownership of Common
Stock on Schedule 13G under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or on Schedule 13D under the Exchange Act
which Schedule 13D does not state any intention to, or reserve the
right to, control or influence the Registrant or engage in certain
other actions, so long as such person neither reports nor is required
to report such ownership other than as described in this proviso (the
earliest of such dates, the "Distribution Date").
Until the Distribution Date (or earlier redemption or
expiration of the Rights), (i) the Rights will be transferred with and
only with the Common Stock (except in connection with redemption of the
Rights), (ii) new Common Stock certificates issued after the Record
Date upon transfer, replacement or new issuance of Common Stock will
contain a notation incorporating the Rights Agreement by reference and
(iii) the surrender for transfer of any certificates for Common Stock
outstanding will also constitute the transfer of the Rights associated
with the Common Stock represented by such certificate.
The Rights will first become exercisable on the Distribution
Date and will expire at the close of business on November 17, 2007 (the
"Final Expiration Date"), unless earlier redeemed or exchanged by the
Registrant as described below. Notwithstanding the foregoing, the
Rights will not be exercisable after the occurrence of a Triggering
Event (defined below) until the Registrant's right of redemption has
expired.
As soon as practicable after the Distribution Date, separate
certificates evidencing the Rights (the "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 evidence the Rights. Except for shares of
Common Stock issued or sold after the Distribution Date pursuant to the
exercise of stock options or under any employee benefit plan or
arrangement granted or awarded prior to the Distribution Date, or the
exercise, conversion or exchange of securities issued by the
Registrant, and except as otherwise determined by the Board of
Directors, only shares of Common Stock issued prior to the Distribution
Date will be issued with Rights.
In the event that any person shall become (a) an Acquiring
Person (except (i) pursuant to an offer for all outstanding shares of
Common Stock which the independent directors determine to be fair to and
otherwise in the best interest of the Registrant and its stockholders
after receiving advice from one or more investment banking firms (a
"Qualifying Offer") and (ii) for certain persons who report their
ownership on Schedule 13G under the Exchange Act, or on Schedule 13D
under the Exchange Act, provided that they do not state any intention
to, or reserve the right to, control or influence the Registrant and
such persons certify that they became an Acquiring Person inadvertently
and they agree that they will not acquire any additional shares of
Common Stock) or (b) an Adverse Person (either such event is referred
to herein as a "Triggering Event"), then the Rights will "flip-in" and
entitle each holder of a Right, except as provided below, to purchase,
upon exercise at the then-current Purchase Price, that number of shares
of Common Stock having a market value of two times such Purchase Price.
Any Rights beneficially owned at any time on or after the
earlier of the Distribution Date and the Stock Acquisition Date by an
Acquiring Person, an Adverse Person or an affiliate or associate of an
Acquiring Person or an Adverse Person (whether or not such ownership is
subsequently transferred) will become null and void upon the occurrence
of a Triggering Event, and any holder of such Rights will have no right
to exercise such Rights.
In the event that, following a Triggering Event, the
Registrant is acquired in a merger or other business combination in
which the Common Stock does not remain outstanding or is changed (other
than a merger following a Qualifying Offer) or 50% of the assets or
earning power of the Registrant and its Subsidiaries (as defined in the
Rights Agreement) (taken as a whole) is sold or otherwise transferred
to any person (other than the Registrant or any Subsidiary of the
Registrant) in one transaction or a series of related transactions, the
Rights will "flip-over" and entitle each holder of a Right, except as
provided in the preceding paragraph, to purchase, upon exercise of the
Right at the then-current Purchase Price, that number of shares of
common stock of the acquiring company (or, in certain circumstances,
one of its affiliates) which at the time of such transaction would have
a market value of two times such Purchase Price.
The Purchase Price is subject to adjustment from time to time
to prevent dilution upon the (i) declaration of a dividend on the
Preferred Stock payable in shares of Preferred Stock, (ii) subdivision
of the outstanding Preferred Stock, (iii) combination of the
outstanding Preferred Stock into a smaller number of shares, (iv)
issuance of any shares of the Registrant's capital stock in a
reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which
the Registrant is the continuing or surviving corporation), (v) grant
to holders of the Preferred Stock of certain rights, options, or
warrants to subscribe for Preferred Stock or securities convertible
into Preferred Stock at less than the current market price of the
Preferred Stock, or (vi) distribution to holders of the Preferred Stock
of other evidences of indebtedness, cash (other than a regular
quarterly cash dividend payable out of the earnings or retained
earnings of the Registrant), subscription rights, warrants, or assets
(other than a dividend payable in Preferred Stock, but including any
dividend payable in stock other than Preferred Stock).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an adjustment of
at least 1% of the Purchase Price.
At any time until the earlier of (i) fifteen days following
the Stock Acquisition Date and (ii) the Final Expiration Date, the
Registrant may redeem the Rights in whole, but not in part, at a price
of $0.01 per Right, subject to adjustments. The Registrant may not
redeem the Rights following a determination that any person is an
Adverse Person. The Registrant 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 of the
Registrant. Immediately upon the action of the Registrant's Board of
Directors ordering redemption of the Rights, the right to exercise the
Rights will terminate and the only right of the holders of Rights will
be to receive the applicable redemption price. In addition, after a
Triggering Event, at the election of the Board of Directors of the
Registrant, the outstanding Rights (other than those beneficially owned
by an Acquiring Person, Adverse Person or an affiliate or associate of
an Acquiring Person or Adverse Person) may be exchanged, in whole or in
part, for shares of Common Stock, or shares of preferred stock of the
Registrant having essentially the same value or economic rights as such
shares. Immediately upon the action of the Board of Directors of the
Registrant authorizing any such exchange, and without any further
action or any notice, the Rights (other than Rights which are not
subject to such exchange) will terminate and such Rights will only
entitle holders to receive the shares issuable upon such exchange.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Registrant, 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 Registrant, 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 Registrant
or for common stock of the acquiring company as set forth above.
At any time prior to the Distribution Date, the Registrant
may, without the approval of any holder of the Rights, supplement or
amend any provision of the Rights Agreement. Thereafter, the Rights
Agreement may be amended only (i) to cure ambiguities, (ii) to correct
inconsistent provisions, (iii) to shorten or lengthen any time period
thereunder (under certain circumstances only with the concurrence of a
majority of the Continuing Directors) or (iv) in ways that do not
adversely affect the Rights holders (other than an Acquiring Person or
Adverse Person). From and after the Distribution Date, the Rights
Agreement may not be amended to lengthen (x) a time period relating to
when the Rights may be redeemed at such time as the Rights are not then
redeemable, or (y) 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).
As of June 30, 1997, there were 74,301,841 shares of Common
Stock outstanding. Each outstanding share of Common Stock on the
Record Date will receive one Right. Until the Distribution Date, the
Registrant will issue one Right with each share of Common Stock that
shall become outstanding so that all such shares will have attached
Rights. 200,000 shares of Preferred Stock have been reserved for
issuance upon exercise of the Rights.
The Rights have certain antitakeover effects. The Rights
will cause substantial dilution to a person or group that attempts to
acquire the Registrant on terms not approved by the Registrant's Board
of Directors. The Rights should not interfere with any merger or other
business combination approved by the Board of Directors of the
Registrant since the Board of Directors may, at its option, at any time
until ten days following the Stock Acquisition Date, redeem all, but
not less than all, of the then outstanding Rights at the applicable
redemption price.
The foregoing summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to
the Rights Agreement (which includes as Exhibit A the Certificate of
Designation, Preferences and Right of Series C Junior Participating
Preferred Stock and as Exhibit B the Form of Rights Certificate), a
copy of which is incorporated herein by reference to Exhibit 4.1 to
this registration statement. Copies of the Rights Agreement will be
available free of charge from the Registrant.
Item 2. Exhibits
The following documents are filed as exhibits to this registration
statement.
4.1. Rights Agreement, dated as of November 17, 1997, between the
Registrant and ChaseMellon Shareholder Services, L.L.C., as
Rights Agent, which includes as Exhibit A thereto the
Certificate of Designation, Preferences and Right of Series C
Junior Participating Preferred Stock and as Exhibit B thereto
the Form of Rights Certificate.
Signature
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the Registrant has duly caused this registration
statement to be signed on its behalf by the undersigned, thereto duly
authorized.
January 22, 1998 COMDISCO, INC.
(Registrant)
By: /s/ Jeremiah M. Fitzgerald
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Name: Jeremiah M. Fitzgerald
Title: Vice President
and General Counsel
Exhibit Index
Exhibit Description Page
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4.1 Rights Agreement, dated as of November 17, N/A
1997, between the Registrant and
ChaseMellon Shareholder Services, L.L.C.,
as Rights Agent, which includes as Exhibit A
thereto the Certificate of Designation,
Preferences and Right of Series C Junior
Participating Preferred Stock and as
Exhibit B thereto the Form of Rights
Certificate.
EXHIBIT 4.1
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COMDISCO, INC.
and
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
Rights Agent
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Rights Agreement
Dated as of November 17, 1997
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Table of Contents
Section Page
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1. Certain Definitions . . . . . . . . . . . . . . . . . . . . 1
2. Appointment of Rights Agent . . . . . . . . . . . . . . . . 7
3. Issue of Rights Certificates . . . . . . . . . . . . . . . . 7
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 Capital Stock . . . . . . . 15
10. Preferred Stock Record Date . . . . . . . . . . . . . . . . 17
11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights . . . . . . . . . . . . . . . . . 18
12. Certificate of Adjusted Purchase Price or Number
of Shares . . . . . . . . . . . . . . . . . . . . . . . . . 29
13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power . . . . . . . . . . . . . . . . . . . . . . 30
14. Fractional Rights and Fractional Shares . . . . . . . . . . 33
15. Rights of Action . . . . . . . . . . . . . . . . . . . . . . 34
16. Agreement of Rights Holders . . . . . . . . . . . . . . . . 35
17. Rights Certificate Holder Not Deemed a Stockholder . . . . . 36
18. Concerning the Rights Agent . . . . . . . . . . . . . . . . 36
19. Merger or Consolidation or Change of Name of
Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . 37
20. Duties of Rights Agent . . . . . . . . . . . . . . . . . . . 37
21. Change of Rights Agent . . . . . . . . . . . . . . . . . . . 40
22. Issuance of New Rights Certificates . . . . . . . . . . . . 41
23. Redemption and Termination . . . . . . . . . . . . . . . . . 41
24. Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . 42
25. Notice of Certain Events . . . . . . . . . . . . . . . . . . 44
26. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 45
27. Supplements and Amendments . . . . . . . . . . . . . . . . . 46
28. Successors . . . . . . . . . . . . . . . . . . . . . . . . . 46
29. Determinations and Actions by the Board of
Directors, etc. . . . . . . . . . . . . . . . . . . . . . . 47
30. Benefits of This Agreement . . . . . . . . . . . . . . . . . 47
31. Severability . . . . . . . . . . . . . . . . . . . . . . . . 47
32. Governing Law . . . . . . . . . . . . . . . . . . . . . . . 48
33. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 48
34. Descriptive Headings . . . . . . . . . . . . . . . . . . . . 48
Exhibit A -- Certificate of Designation, Preferences
and Rights of Series C Junior Participating
Preferred Stock
Exhibit B -- Form of Rights Certificate
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of November 17, 1997 (the
"Agreement"), between COMDISCO, INC., a Delaware corporation (the
"Company"), and CHASEMELLON SHAREHOLDER SERVICES, L.L.C., a New Jersey
limited liability company (the "Rights Agent").
W I T N E S S E T H
WHEREAS, on November 4, 1997 (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 $0.10 per share, of the Company (the "Common
Stock") outstanding at the close of business on November 17, 1997 (the
"Record Date"), and has authorized the issuance of one Right (as such
number may be hereinafter adjusted pursuant to Section 11(i) or 11(p)
hereof) for each share of Common Stock of the Company issued between
the Record Date (whether originally issued or delivered from the
Company's treasury) and the Distribution Date and, in certain
circumstances provided in Section 22 hereof, after the Distribution
Date, each Right initially representing the right to purchase one one-
thousandth of a share of Series C Junior Participating Preferred Stock
(the "Preferred Stock") of the Company having the rights, powers and
preferences set forth in the Exhibit A attached hereto, upon the terms
and subject to the conditions hereinafter set forth (the "Rights").
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as
follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) (i) Except as provided in Clause (ii),
"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 (A) the Company, (B) any Subsidiary of the
Company, (C) any employee benefit plan of the Company or of any
Subsidiary of the Company, (D) any Person organized, appointed or
established by the Company for or pursuant to the terms of any such
plan or (E) any Person who has reported or is required to report such
ownership (but less than 25%) on Schedule 13G under the Exchange Act
(or any comparable or successor report) or on Schedule 13D under the
Exchange Act (or any comparable or successor report) which Schedule 13D
does not state any intention to or reserve the right to control or
influence the management or policies of the Company or engage in any of
the actions specified in Item 4 of such Schedule (other than the
disposition of the Common Stock) and, within 10 Business Days of being
requested by the Company to advise it regarding the same, certifies to
the Company that such Person acquired shares of Common Stock
representing in excess of 14.9% of the outstanding Common Stock
inadvertently or without knowledge of the terms of the Rights and who,
together with all Affiliates and Associates, thereafter does not
acquire additional shares of Common Stock while the Beneficial Owner of
15% or more of the shares of Common Stock then outstanding, provided,
however, that if the Person described in this clause (E) requested to
so certify fails to do so within 10 Business Days, then such Person
shall become an Acquiring Person immediately after such 10 Business Day
Period.
(ii) None of the following shall be considered an
"Acquiring Person":
(A) 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;
(B) any Person (a "Passive Holder," which term
shall include any Existing Holder) who, 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, shall become,
together with all Affiliates and Associates of such Passive Holder
after such repurchase, 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); or
(C) any Person who shall have become an
Acquiring Person solely as the result of an acquisition of Common
Stock by the Company which, by reducing the number of shares
outstanding, increases the proportionate number of shares
beneficially owned by a Person to 15% or more of the Common Stock
of the Company then outstanding as determined above; provided,
however, that if a Person becomes the Beneficial Owner of 15% or
more of the Common Stock of the Company then outstanding (as
determined above) solely by reason of purchases of Common Stock by
the Company and shall, after such purchases by the Company, become
the Beneficial Owner of any additional shares of Common Stock by
any means whatsoever, then such Person shall be deemed to be an
Acquiring Person.
(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; provided, further, that the
Board of Directors shall not declare any Person who is the Beneficial
Owner of 10% or more of the outstanding Common Stock of the Company to
be an Adverse Person if such Person has reported or is required to
report such ownership on Schedule 13G under the Exchange Act (or any
comparable or successor report) or on Schedule 13D under the Exchange
Act (or any comparable or successor report) which Schedule 13D does not
state any intention to or reserve the right to control or influence the
management or policies of the Company or engage in any of the actions
specified in Item 4 of such Schedule (other than the disposition of the
Common Stock) so long as such Person neither reports nor is required to
report such ownership other than as described in this proviso to
Section 1(b).
(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) or 11(p) 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 $0.10 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) "Preferred Stock" shall mean shares of Series C
Junior Participating Preferred Stock, par value $0.10 per share, of the
Company, and, to the extent there are not a sufficient number of shares
of Series C Junior Participating Preferred Stock authorized to permit
the full exercise of the Rights, any other series of Preferred Stock,
par value $0.10 per share, of the Company designated for such purpose
containing terms substantially similar to the terms of the Series C
Junior Participating Preferred Stock.
(k) "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, as
amended (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.
(l) "Section 11 Event" shall mean any event described
in Section 11(a)(ii)(A)or (B).
(m) "Section 13 Event" shall mean any event described
in clauses (x), (y) or (z) of Section 13(a) hereof.
(n) "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.
(o) "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.
(p) "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 earliest of (i) the close of business on
the tenth day after the Stock Acquisition Date (or, if the tenth day
after the Stock Acquisition Date occurs before the Record Date, the
close of business on the Record Date), (ii) the close of business on
the tenth Business Day (or such later date as the Board of Directors
shall determine) after the date that a tender or exchange offer by any
Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of the
Company or any Person 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, insured, postage prepaid mail, to each record holder of
the Common Stock as of the close of business on the Distribution Date,
at the address of such holder shown on the records of the Company, one
or more right certificates, in substantially the form of Exhibit B
hereto (the "Rights Certificates"), evidencing one Right for each share
of Common Stock so held, subject to adjustment as provided herein. In
the event that an adjustment in the number of Rights per share of
Common Stock has been made pursuant to Section 11(i) or 11(p) hereof,
at the time of distribution of the Rights Certificates, the Company
shall make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a) hereof) so that Rights Certificates
representing only whole numbers of Rights are distributed and cash is
paid in lieu of any fractional Rights. As of and after the
Distribution Date, the Rights will be evidenced solely by such Rights
Certificates.
(b) With respect to certificates for the Common Stock
outstanding as of the Record Date, until the Distribution Date, the
Rights will be evidenced by such certificates for the Common Stock and
the registered holders of the Common Stock shall also be the registered
holders of the associated Rights. Until the earlier of the
Distribution Date or the Expiration Date (as such term is defined in
Section 7 hereof), the transfer of any certificates representing shares
of Common Stock in respect of which Rights have been issued shall also
constitute the transfer of the Rights associated with such shares of
Common Stock.
(c) Rights shall be issued in respect of all shares of
Common Stock which are issued (whether originally issued or 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
ChaseMellon Shareholder Services, L.L.C., dated as of
November 17, 1997, 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 B hereto
and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may
deem appropriate and as are not inconsistent with the provisions of
this Agreement, or as may be required to comply with any applicable law
or with any rule or regulation made pursuant thereto or with any rule
or regulation of any stock exchange on which the Rights may from time
to time be listed, or to conform to usage. Subject to the provisions
of Section 11 and Section 22 hereof, the Rights Certificates, whenever
distributed, shall be dated as of the Record Date and on their face
shall entitle the holders thereof to purchase such number of one one-
thousandths of a share of Preferred Stock as shall be set forth therein
at the price set forth therein (such exercise price per one one-
thousandth of a share, the "Purchase Price"), but the amount and type
of securities purchasable upon the exercise of each Right and the
Purchase Price thereof shall be subject to adjustment as provided
herein.
(b) Any Rights Certificate issued pursuant to Section
3(a) or Section 22 hereof that represents Rights beneficially owned by
(i) an Acquiring Person, 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 transferee prior to or concurrently with the Acquiring Person
or Adverse Person becoming such and receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from the
Acquiring Person or Adverse Person to holders of equity interests in
such Acquiring Person or Adverse Person or to any Person with whom such
Acquiring Person or Adverse Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a
transfer which the Board of Directors of the Company has determined is
part of 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 such 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 countersigned by the Rights Agent, either manually or by
facsimile signature, and shall not be valid for any purpose unless so
countersigned. In case any officer of the Company who shall have
signed any of the Rights Certificates shall cease to be such officer of
the Company before countersignature by the Rights Agent and issuance
and delivery by the Company, such Rights Certificates, nevertheless,
may be countersigned by the Rights Agent and issued and delivered by
the Company with the same force and effect as though the person who
signed such Rights Certificates had not ceased to be such officer of
the Company; and any Rights 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 (other than
Rights Certificates representing Rights that have been exchanged
pursuant to Section 24 hereof) may be transferred, split up, combined
or exchanged for another Rights Certificate or Certificates, entitling
the registered holder to purchase a like number of one one-thousandths
of a share of Preferred Stock (or, following a Triggering Event, Common
Stock, other securities, cash or other assets, as the case may be) as
the Rights Certificate or Certificates surrendered then entitled such
holder (or former holder in the case of a transfer) to purchase. Any
registered holder desiring to transfer, split up, combine or exchange
any Rights Certificate or Certificates shall make such request in
writing delivered to the Rights Agent, and shall surrender the Rights
Certificate or Certificates to be transferred, split up, combined or
exchanged at the principal office or offices of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the Company
shall be obligated to take any action whatsoever with respect to the
transfer of any such surrendered Rights Certificate 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
Sections 4(b), 7(e), 14 and 24 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 reimbursement to the Company and the Rights
Agent of all reasonable expenses incidental thereto, and upon surrender
to the Rights Agent and cancellation of the Rights Certificate if
mutilated, the Company will execute and deliver a new Rights
Certificate of like tenor to the Rights Agent for countersignature and
delivery to the registered owner in lieu of the Rights Certificate so
lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights.
(a) Subject to Section 7(e) hereof, the registered
holder of any Rights Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein including, without
limitation, the restrictions on exercisability set forth in Section
9(c), Section 11(a)(iii) and Section 23(a) hereof) in whole or in part
at any time after the Distribution Date upon surrender of the Rights
Certificate, with the form of election to purchase and the certificate
on the reverse side thereof duly executed, to the Rights Agent at the
principal office or offices of the Rights Agent designated for such
purpose, together with payment of the aggregate Purchase Price with
respect to the total number of one one-thousandths of a share of
Preferred Stock (or other securities, cash or other assets, as the case
may be) as to which such surrendered Rights are then exercisable, at or
prior to the earliest of (i) the close of business on November 17, 2007
(the "Final Expiration Date"), (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof, or (iii), the time at which
such Rights are exchanged pursuant to Section 24 hereof (the earliest
of (i), (ii) and (iii) being herein referred to as the "Expiration
Date").
(b) The Purchase Price for each one one-thousandth of a
share of Preferred Stock pursuant to the exercise of a Right shall
initially be $150, 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 one one-thousandth of a share of Preferred Stock (or other shares,
securities, cash or other assets, as the case may be) to be purchased
as set forth below and an amount equal to any applicable transfer tax,
the Rights Agent shall, subject to Section 20(k) hereof, thereupon
promptly (i) (A) requisition from any transfer agent of the shares of
Preferred Stock (or make available, if the Rights Agent is the transfer
agent for such shares) certificates for the total number of one one-
thousandths of a share of Preferred Stock to be purchased, and the
Company hereby irrevocably authorizes its transfer agent to comply with
all such requests, or (B) if the Company shall have elected to deposit
the total number of shares of Preferred Stock issuable upon exercise of
the Rights hereunder with a depositary agent, requisition from the
depositary agent depositary receipts representing such number of one
one-thousandths of a share of Preferred Stock as are to be purchased
(in which case certificates for the shares of Preferred Stock
represented by such receipts shall be deposited by the transfer agent
with the depositary agent) and the Company will direct the depositary
agent to comply with such request, (ii) requisition from the Company
the amount of cash, if any, to be paid in lieu of fractional shares in
accordance with Section 14 hereof, (iii) after receipt of such
certificates or depositary receipts, cause the same to be delivered to
or upon the order of the registered holder of such Rights Certificate,
registered in such name or names as may be designated by such holder,
and (iv) after receipt thereof, deliver such cash, if any, to or upon
the order of the registered holder of such Rights Certificate. The
payment of the Purchase Price (as such amount may be reduced pursuant
to Section 11(a)(iii) hereof) shall be made in cash or by certified
bank check or bank draft payable to the order of the Company. In the
event that the Company is obligated to issue other securities
(including Common Stock) of the Company, pay cash and/or distribute
other property pursuant to Section 11(a) hereof, the Company will make
all arrangements necessary so that such other securities, cash and/or
other property are available for distribution by the Rights Agent, if
and when appropriate. The Company reserves the right to require prior
to the occurrence of a Triggering Event that, upon any exercise of
Rights, a number of Rights be exercised so that only whole shares of
Preferred Stock would be issued.
(d) In case the registered holder of any Rights
Certificate shall exercise less than all the Rights evidenced thereby,
a new Rights Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent and delivered
to, or upon the order of, the registered holder of such Rights
Certificate, registered in such name or names as may be designated by
such holder, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a 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 Capital Stock.
(a) The Company covenants and agrees that it will cause
to be reserved and kept available out of its authorized and unissued
shares of Preferred Stock (and, following the occurrence of a
Triggering Event, out of its authorized and unissued shares of Common
Stock and/or other securities or out of any authorized and issued
shares held in its treasury), the number of shares of Preferred 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 Preferred 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 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 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 one one-
thousandths of a share of Preferred 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 a
number of one one-thousandths of a share of Preferred Stock (or Common
Stock and/or other securities, as the case may be) upon the exercise of
Rights. The Company shall not, however, be required to pay any
transfer tax which may be payable in respect of any transfer or
delivery of Rights Certificates to a Person other than, or the issuance
or delivery of a number of one one-thousandths of a share of Preferred
Stock (or Common Stock and/or other securities, as the case may be) in
respect of a name other than that of, the registered holder of the
Rights Certificates evidencing Rights surrendered for exercise or to
issue or deliver any certificates for a number of one one-thousandths
of a share of Preferred Stock (or Common Stock and/or other securities,
as the case may be) in a name other than that of the registered holder
upon the exercise of any Rights until such tax shall have been paid
(any such tax being payable by the holder of such Rights 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. Preferred Stock Record Date. Each person in
whose name any certificate for a number of one one-thousandths of a
share of Preferred Stock (or Common Stock and/or other securities, as
the case may be) is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of such
fractional shares of Preferred Stock (or Common Stock and/or other
securities, as the case may be) represented thereby on, and such
certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Purchase
Price (and all applicable transfer taxes) was made; provided, however,
that if the date of such surrender and payment is a date upon which the
Preferred Stock (or Common Stock and/or other securities, as the case
may be) transfer books of the Company are closed, such Person shall be
deemed to have become the record holder of such shares (fractional or
otherwise) on, and such certificate shall be dated, the next succeeding
Business Day on which the Preferred Stock (or Common Stock and/or other
securities, as the case may be) transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby, the holder of a
Rights Certificate shall not be entitled to any rights of a stockholder
of the Company with respect to shares for which the Rights shall be
exercisable, including, without limitation, the right to vote, to
receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights. The Purchase Price, the number and kind of
shares covered by each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 11.
(a)(i) In the event the Company shall at any time after
the date of this Agreement (A) declare a dividend on the Preferred
Stock payable in shares of Preferred Stock, (B) subdivide the
outstanding Preferred Stock, (C) combine the outstanding Preferred
Stock into a smaller number of shares, or (D) issue any shares of
its capital stock in a reclassification of the Preferred Stock
(including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation), except as otherwise provided in this
Section 11(a) and Section 7(e) hereof, the Purchase Price in effect
at the time of the record date for such dividend or of the
effective date of such subdivision, combination or
reclassification, and the number and kind of shares of Preferred
Stock or capital stock, as the case may be, issuable on such date,
shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive, upon
payment of the Purchase Price then in effect, the aggregate number
and kind of shares of Preferred Stock or capital stock, as the case
may be, which, if such Right had been exercised immediately prior
to such date and at a time when the Preferred Stock transfer books
of the Company were open, he would have owned upon such exercise
and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification. If an event occurs
which would require an adjustment under both this Section 11(a)(i)
and Section 11(a)(ii) hereof, the adjustment provided for in this
Section 11(a)(i) shall be in addition to, and shall be made prior
to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) In the event:
(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 (a
"Qualifying Offer"), or
(B) the Board of Directors of the Company shall
declare any Person to be an Adverse Person, upon a determination
that such Person, alone or together with its Affiliates and
Associates, has, at any time after 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, at the then current Purchase Price in accordance with the
terms of this Agreement, in lieu of a number of one one-thousandths of
a share of Preferred Stock, such number of shares of Common Stock as
shall equal the result obtained by (x) multiplying the then current
Purchase Price by the then number of one one-thousandths of a share of
Preferred Stock for which a Right was exercisable immediately prior to
the first occurrence of a Section 11 Event, and (y) dividing that
product (which, following such first occurrence, shall thereafter be
referred to as the "Purchase Price" for each Right and for all purposes
of this Agreement) by 50% of the Current Market Price (determined
pursuant to Section 11(d) hereof) per share of Common Stock on the date
of such first occurrence (such number of shares, the "Adjustment
Shares").
(iii) In the event that the number of shares of Common
Stock which are authorized by the Company's Certificate of
Incorporation, but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights, are not sufficient
to permit the exercise in full of the Rights in accordance with the
foregoing subparagraph (ii) of this Section 11(a), the Company
shall: (A) determine the 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, the "Spread"), and (B)
with respect to each Right, subject to Section 7(e) hereof, make
adequate provision to substitute for the Adjustment Shares, upon
the exercise of a Right and payment of the applicable Purchase
Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common
Stock or other equity securities of the Company (including, without
limitation, shares, or units of shares, of preferred stock, such as
the Preferred Stock, which the Board of Directors of the Company
has deemed to have essentially the same value or economic rights 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 (less the amount of any reduction in the Purchase
Price), 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, that if the Company
shall not have made adequate provision to deliver value pursuant to
clause (B) above within thirty (30) days following the later of (x)
the first occurrence of a Section 11 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 thirty (30) day 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 stockholder
approval for such authorization of additional shares and/or to
decide the appropriate form of distribution to be made pursuant to
such first sentence and to determine the value thereof. In the
event of any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such
time as the suspension is no longer in effect. For purposes of this
Section 11(a)(iii), the value of each Adjustment Share shall be the
Current Market Price per share of the Common Stock on the Section
11(a)(ii) Trigger Date and the per share or per unit value of any
Common Stock Equivalent shall be deemed to have the Current Market
Price per share of 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 all
holders of Preferred Stock entitling them to subscribe for or purchase
(for a period expiring within forty-five (45) calendar days after such
record date) Preferred Stock (or shares having the same rights,
privileges and preferences as the shares of Preferred Stock
("equivalent preferred stock")) or securities convertible into
Preferred Stock or equivalent preferred stock at a price per share of
Preferred Stock or per share of equivalent preferred stock (or having a
conversion price per share, if a security convertible into Preferred
Stock or equivalent preferred stock) less than the Current Market Price
per share of Preferred Stock on such record date, the Purchase Price to
be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the number of shares of
Preferred Stock outstanding on such record date, plus the number of
shares of Preferred Stock which the aggregate offering price of the
total number of shares of Preferred Stock and/or equivalent preferred
stock so to be offered (and/or the aggregate initial conversion price
of the convertible securities so to be offered) would purchase at such
Current Market Price, and the denominator of which shall be the number
of shares of Preferred Stock outstanding on such record date, plus the
number of additional shares of Preferred Stock and/or equivalent
preferred stock to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially
convertible). In case such subscription price may be paid by delivery
of consideration part or all of which may be in a form other than cash,
the value of such consideration shall be as determined in good faith by
the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent and shall be
binding on the Rights Agent and the holders of the Rights. Shares of
Preferred Stock owned by or held for the account of the Company shall
not be deemed outstanding for the purpose of any such computation.
Such adjustment shall be made successively whenever such a record date
is fixed, and in the event that such rights or warrants are not so
issued, the Purchase Price shall be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which
the Company is the continuing corporation) of evidences of
indebtedness, cash (other than a regular quarterly cash dividend out of
the earnings or retained earnings of the Company), assets (other than a
dividend payable in Preferred Stock, but including any dividend payable
in stock other than Preferred Stock) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the Purchase
Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the Current
Market Price per share of Preferred Stock on such record date, less the
fair market value (as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the
Rights Agent and the holders of the Rights) of the portion of the cash,
assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to a share of Preferred
Stock and the denominator of which shall be such Current Market Price
per share of Preferred Stock. Such adjustments shall be made
successively whenever such a record date is fixed, and in the event
that such distribution is not so made, the Purchase Price shall be
adjusted to be the Purchase Price which would have been in effect if
such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder,
other than computations made pursuant to Section 11(a)(iii) hereof,
the "Current Market Price" per share of Common Stock on any date
shall be deemed to be the average of the daily closing prices per
share of such Common Stock for the thirty (30) consecutive Trading
Days immediately prior to such date, and for purposes of
computations made pursuant to Section 11(a)(iii) hereof, the
"Current Market Price" per share of Common Stock on any date shall
be deemed to be the average of the daily closing prices per share
of such Common Stock for the ten (10) consecutive Trading Days
immediately following such date; provided, however, that in the
event that the Current Market Price per share of Common Stock is
determined during a period following the announcement by the issuer
of the Common Stock of (A) 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 (B) any subdivision, combination or reclassification of
such Common Stock, and the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination
or reclassification shall not have occurred prior to the
commencement of the requisite thirty (30) Trading Day 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 ex-dividend trading. The closing price for each day
shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to
securities listed or admitted to trading on the 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 by the
National Association of Securities Dealers, Inc. Automated
Quotation System ("NASDAQ") or such other system then in use, or,
if on any such date the shares of Common Stock are not quoted by
any such system, 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.
(ii) For the purpose of any computation hereunder,
the "Current Market Price" per share of Preferred Stock shall be
determined in the same manner as set forth above for the Common
Stock in clause (i) of this Section 11(d) (other than the last
sentence thereof). If the Current Market Price per share of
Preferred Stock cannot be determined in the manner provided above
or if the Preferred Stock is not publicly held or listed or traded
in a manner described in clause (i) of this Section 11(d), the
"Current Market Price" per share of Preferred Stock shall be
conclusively deemed to be an amount equal to 1,000 (as such number
may be appropriately adjusted for such events as stock splits,
stock dividends and recapitalizations with respect to the Common
Stock occurring after the date of this Agreement) multiplied by the
Current Market Price per share of the Common Stock. If neither the
Common Stock nor the Preferred Stock is publicly held or so listed
or traded, "Current Market Price" per share of the Preferred Stock
shall mean the fair value per share as determined in good faith by
the Board 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 ten-thousandth of a share of
Common Stock or other share or one millionth of a share of Preferred
Stock, as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall be made
no later than the earlier of (i) three (3) years from the date of the
transaction which mandates such adjustment, or (ii) the Expiration
Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a)(ii) or Section 13(a) hereof, the holder of any Right
thereafter exercised shall become entitled to receive any shares of
capital stock other than Preferred Stock, thereafter the number of such
other shares so receivable upon exercise of any Right and the Purchase
Price thereof shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Preferred Stock contained in Sections
11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m), and the
provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the
Preferred Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price hereunder shall
evidence the right to purchase, at the adjusted Purchase Price, the
number of one one-thousandths of a share of Preferred Stock purchasable
from time to time hereunder upon exercise of the Rights, all subject to
further adjustment as provided herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i), upon each adjustment of the
Purchase Price as a result of the calculations made in Sections 11(b)
and (c), each Right outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase, at the
adjusted Purchase Price, that number of one one-thousandths of a share
of Preferred Stock (calculated to the nearest one-millionth) obtained
by (i) multiplying (x) the number of one one-thousandths of a share
covered by a Right immediately prior to this adjustment, by (y) the
Purchase Price in effect immediately prior to such adjustment of the
Purchase Price, and (ii) dividing the product so obtained by the
Purchase Price in effect immediately after such adjustment of the
Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in
lieu of any adjustment in the number of one one-thousandths of a share
of Preferred Stock purchasable upon the exercise of a Right. Each of
the Rights outstanding after the adjustment in the number of Rights
shall be exercisable for the number of one one-thousandths of a share
of Preferred Stock for which a Right was exercisable immediately prior
to such adjustment. Each Right held of record prior to such adjustment
of the number of Rights shall become that number of Rights (calculated
to the nearest one ten-thousandth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement of its
election to adjust the number of Rights, indicating the record date for
the adjustment, and, if known at the time, the amount of the adjustment
to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Rights
Certificates have been issued, shall be at least ten (10) days later
than the date of the public announcement. If Rights Certificates have
been issued, upon each adjustment of the number of Rights pursuant to
this Section 11(i), the Company shall, as promptly as practicable,
cause to be distributed to holders of record of Rights Certificates on
such record date Rights Certificates evidencing, subject to Section 14
hereof, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall
cause to be distributed to such holders of record in substitution and
replacement for the Rights Certificates held by such holders prior to
the date of adjustment, and upon surrender thereof, if required by the
Company, new Rights Certificates evidencing all the Rights to which
such holders shall be entitled after such adjustment. Rights
Certificates so to be distributed shall be issued, executed and
countersigned in the manner provided for herein (and may bear, at the
option of the Company, the adjusted Purchase Price) and shall be
registered in the names of the holders of record of Rights Certificates
on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of one one-thousandths of a share of
Preferred Stock issuable upon the exercise of the Rights, the Rights
Certificates theretofore and thereafter issued may continue to express
the Purchase Price per one one-thousandths of a share and the number of
one one-thousandths of a share which were expressed in the initial
Rights Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then stated value, if
any, of the number of one one-thousandths of a share of Preferred Stock
issuable upon exercise of the Rights, the Company shall take any
corporate action which may, in the opinion of its counsel, be necessary
in order that the Company may validly and legally issue fully paid and
nonassessable such number of one one-thousandths of a share of
Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require
that an adjustment in the Purchase Price be made effective as of a
record date for a specified event, the Company may elect to defer until
the occurrence of such event the issuance to the holder of any Right
exercised after such record date the number of one one-thousandths of a
share of Preferred Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the number
of one one-thousandths of a share of Preferred Stock and other capital
stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such holder a due
bill or other appropriate instrument evidencing such holders right to
receive such additional shares (fractional or otherwise) or securities
upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions
in the Purchase Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that in their good
faith judgment the Board of Directors of the Company shall determine to
be advisable in order that any (i) consolidation or subdivision of the
Preferred Stock, (ii) issuance wholly for cash of any shares of
Preferred Stock at less than the Current Market Price, (iii) issuance
wholly for cash of shares of Preferred Stock or securities which by
their terms are convertible into or exchangeable for shares of
Preferred Stock, (iv) stock dividends or (v) issuance of rights,
options or warrants referred to in this Section 11, hereafter made by
the Company to holders of its Preferred Stock shall not be taxable to
such stockholders.
(n) The Company covenants and agrees that it shall not,
at any time after the Distribution Date, (i) consolidate with any other
Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), (ii) merge with or into any other
Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), or (iii) sell or transfer (or
permit any Subsidiary to sell or transfer), in one transaction or a
series of related transactions, assets or earning power aggregating
more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other
than the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o) hereof), if (x)
at the time of or immediately after such consolidation, merger or sale
there are any rights, warrants or other instruments or securities
outstanding or agreements in effect which would substantially diminish
or otherwise eliminate the benefits intended to be afforded by the
Rights or (y) prior to, simultaneously with or immediately after such
consolidation, merger or sale, the 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 27 hereof, take (or permit any Subsidiary to take) any action
if at the time such action is taken it is reasonably foreseeable that
such action will diminish substantially or otherwise eliminate the
benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after
the Rights Dividend Declaration Date and prior to the Distribution Date
(i) declare a dividend on the outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding
shares of Common Stock, or (iii) combine the outstanding shares of
Common Stock into a smaller number of shares, the number of Rights
associated with each share of Common Stock then outstanding, or issued
or delivered thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter
associated with each share of Common Stock following any such event
shall equal the result obtained by multiplying the number of Rights
associated with each share of Common Stock immediately prior to such
event by a fraction the numerator which shall be the total number of
shares of Common Stock outstanding immediately prior to the occurrence
of the event and the denominator of which shall be the total number of
shares of Common Stock outstanding immediately following the occurrence
of such event.
(q) The failure of the Board of Directors to declare a
Person to be an Adverse Person following such Person becoming the
Beneficial Owner of shares of Common Stock representing 10% or more of
the outstanding shares of Common Stock shall not imply that such Person
is not an Adverse Person or limit the Board of Directors' right at any
time in the future to declare such Person to be an Adverse Person.
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares. Whenever an adjustment is made as provided in Section 11
and Section 13 hereof, the Company shall (a) promptly prepare a
certificate setting forth such adjustment and a brief statement of the
facts accounting for such adjustment, (b) promptly file with the Rights
Agent, and with each transfer agent for the Preferred Stock and the
Common Stock, a copy of such certificate, and (c) mail a brief summary
thereof to each holder of a Rights Certificate (or, if prior to the
Distribution Date, to each holder of a certificate representing shares
of Common Stock) in accordance with Section 26 hereof. The Rights
Agent shall be fully protected in relying on any such certificate and
on any adjustment therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power.
(a) In the event that, following the Stock Acquisition
Date, directly or indirectly, (x) the Company shall consolidate with,
or merge with and into, any other Person (other than a Subsidiary of
the Company in a transaction which complies with Section 11(o) hereof),
and the Company shall not be the continuing or surviving corporation of
such consolidation or merger, (y) any Person (other than a Subsidiary
of the Company in a transaction which complies with Section 11(o)
hereof) shall consolidate with, or merge with or into, the Company, and
the Company shall be the continuing or surviving corporation of such
consolidation or merger and, in connection with such consolidation or
merger, all or part of the outstanding shares of Common Stock shall be
changed into or exchanged for stock or other securities of any other
Person or cash or any other property, or (z) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer), in one transaction or a series of related
transactions, assets or earning power aggregating 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, non-assessable 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 one one-thousandths of a share of Preferred 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 number of such
one one-thousandths of a share for which a Right was exercisable
immediately prior to the first occurrence of a Section 11 Event by the
Purchase Price in effect immediately prior to such first occurrence)
and dividing that product (which, following the first occurrence of a
Section 13 Event shall be referred to as the "Purchase Price" for each
Right and for all purposes of this Agreement) by (2) 50% of the Current
Market Price 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 Stocks of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such Persons
is the issuer of the Common Stock having the greatest aggregate market
value.
(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 (or a wholly-owned Subsidiary
of any such Person or Persons) who acquired shares of Common Stock
pursuant to a Qualifying Offer, (ii) the price per share of Common
Stock offered in such transaction is not less than the price per share
of Common Stock paid to all holders of shares of Common Stock whose
shares were purchased pursuant to such Qualifying Offer, and (iii) the
form of consideration being offered to the remaining holders of shares
of Common Stock pursuant to such transaction is the same as the form of
consideration paid pursuant to such Qualifying Offer. Upon
consummation of any such transaction contemplated by this Section
13(d), all Rights hereunder shall expire.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue
fractions of Rights, except prior to the Distribution Date as provided
in Section 11(p) hereof, or to distribute Rights Certificates which
evidence fractional Rights. In lieu of such fractional Rights, there
shall be paid to the registered holders of the Rights Certificates with
regard to which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current market value
of a whole Right. For purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights
for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing
price of the Rights for any day shall be the last sale price, regular
way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system
with respect to securities listed or admitted to trading on the 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 by NASDAQ
or such other system then in use or, if on any such date the Rights are
not quoted by any such system, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in
the Rights selected by the Board of Directors of the Company. If on
any such date no such market maker is making a market in the Rights the
fair value of the Rights on such date as determined in good faith by
the Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue
fractions of shares of Preferred Stock (other than fractions which are
integral multiples of one one-thousandth of a share of Preferred Stock)
upon exercise of the Rights or to distribute certificates which
evidence fractional shares of Preferred Stock (other than fractions
which are integral multiples of one one-thousandth of a share of
Preferred Stock). In lieu of fractional shares of Preferred Stock that
are not integral multiples of one one-thousandth of a share of
Preferred Stock, the Company may pay to the registered holders of
Rights Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the current
market value of one one-thousandth of a share of Preferred Stock. For
purposes of this Section 14(b), the current market value of one
one-thousandth of a share of Preferred Stock shall be one
one-thousandth of the closing price of a share of Preferred Stock (as
determined pursuant to Section 11(d)(ii) hereof) for the Trading Day
immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event, the
Company shall not be required to issue fractions of shares of Common
Stock upon exercise of the Rights or to distribute certificates which
evidence fractional shares of Common Stock. In lieu of fractional
shares of Common Stock, the Company may pay to the registered holders
of Rights Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the current
market value of one (1) share of Common Stock. For purposes of this
Section 14(c), the current market value of one share of Common Stock
shall be the closing price per share of Common Stock (determined
pursuant to Section 11(d)(i) hereof) on the Trading Day immediately
prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the
Rights expressly waives his right to receive any fractional Rights or
any fractional shares upon exercise of a Right, except as permitted by
this Section 14.
Section 15. Rights of Action. All rights of action in
respect of this Agreement are vested in the respective registered
holders of the Rights Certificates (and, prior to the Distribution
Date, the registered holders of the Common Stock); and any registered
holder of any Rights Certificate (or, prior to the Distribution Date,
of the Common Stock), without the consent of the Rights Agent or of the
holder of any other Rights Certificate (or, prior to the Distribution
Date, of the Common Stock), may, in his 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 and with the appropriate forms and
certificates fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof,
the Company and the Rights Agent may deem and treat the person in whose
name a Rights Certificate (or, prior to the Distribution Date, the
associated Common Stock certificate) is registered as the absolute
owner thereof and of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Rights Certificates or the
associated Common Stock certificate made by anyone other than the
Company or the Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent, subject to the last sentence of
Section 7(e) hereof, shall be required to be affected by any notice to
the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any
liability to any holder of a Right or other Person as a result of its
inability to perform any of its obligations under this Agreement by
reason of any preliminary or permanent injunction or other order,
decree or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, or any
statute, rule, regulation or executive order promulgated or enacted by
any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use
its 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 number of one one-thousandths of a share of Preferred
Stock or any other securities of the Company which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Rights Certificate be construed to
confer upon the holder of any Rights Certificate, as such, any of the
rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any corporate
action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to receive
dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Rights Certificate shall have been exercised
in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder and,
from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and disbursements and other disbursements
incurred in the administration and execution of this Agreement and the
exercise and performance of its duties hereunder. The Company also
agrees to indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability, or expense, incurred without negligence,
bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs
and expenses of defending against any claim of liability in the
premises.
(b) The Rights Agent shall be protected and shall incur
no liability for or in respect of any action taken, suffered or omitted
by it in connection with its administration of this Agreement in
reliance upon any Rights Certificate or certificate for Common Stock or
for other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights Agent
shall be a party, or any corporation succeeding to the corporate trust
or shareholder services business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further
act on the part of any of the parties hereto; provided, however, that
such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 21 hereof. In case at the
time such successor Rights Agent shall succeed to the agency created by
this Agreement, any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of a predecessor Rights Agent and deliver
such Rights Certificates so countersigned; and in case at that time any
of the Rights Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Rights Certificates either
in the name of the predecessor or in the name of the successor Rights
Agent; and in all such cases such Rights Certificates shall have the
full force provided in the Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent
shall be changed and at such time any of the Rights Certificates shall
have been countersigned but not delivered, the Rights Agent may adopt
the countersignature under its prior name and deliver Rights
Certificates so countersigned; and in case at that time any of the
Rights Certificates shall not have been countersigned, the Rights Agent
may countersign such Rights Certificates either in its prior name or in
its changed name; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this
Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement upon
the following terms and conditions, by all of which the Company and the
holders of Rights Certificates, by their acceptance thereof, shall be
bound:
(a) The Rights Agent may consult with legal counsel
(who may be legal counsel for the Company), and the opinion of such
counsel shall be full and complete authorization and protection to the
Rights Agent as to any action taken or omitted by it in good faith and
in accordance with such opinion.
(b) Whenever in the performance of its duties under
this Agreement the Rights Agent shall deem it necessary or desirable
that any fact or matter (including, without limitation, the identity of
any Acquiring Person or Adverse Person and the determination of
"Current Market Price") be proved or established by the Company prior
to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by
a certificate signed by the Chairman of the Board, the 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, Section 13 or Section 24 hereof or responsible for the
manner, method or amount of any such adjustment or the ascertaining of
the existence of facts that would require any such adjustment (except
with respect to the exercise of Rights evidenced by Rights Certificates
after actual notice of any such adjustment); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock or Preferred
Stock to be issued pursuant to this Agreement or any Rights Certificate
or as to whether any shares of Common Stock or Preferred Stock will,
when so issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts, instruments
and assurances as may reasonably be required by the Rights Agent for
the carrying out or performing by the Rights Agent of the provisions of
this Agreement.
(g) The Rights Agent is hereby authorized and directed
to accept instructions with respect to the performance of its duties
hereunder from the Chairman of the Board, the 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 Right 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 and
Preferred Stock, by registered or certified mail, and to the holders of
the Rights Certificates by first-class mail. The Company may remove
the Rights Agent or any successor Rights Agent upon thirty (30) days'
notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Common
Stock and Preferred Stock, by registered or certified mail, and to the
holders of the Rights Certificates by first-class mail. If the Rights
Agent shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights Agent. If
the Company shall fail to make such appointment within a period of
thirty (30) days after giving notice of such removal or after it has
been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by 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 the Preferred Stock, and mail a notice thereof in
writing to the registered holders of the Rights Certificates. Failure
to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the
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 $0.01 per Right, as
such amount may be appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof
(such redemption price being hereinafter referred to as the "Redemption
Price"). 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. Exchange.
(a) The Board of Directors of the Company may, at its
option, at any time after any Person becomes an Acquiring Person or is
determined to be an Adverse Person pursuant to Section 11(a)(ii)(B),
exchange all or part of the then outstanding and exercisable Rights
(which shall not include Rights that have become void pursuant to the
provisions of Section 7(e) hereof) for shares of Common Stock at an
exchange ratio of one share of Common Stock per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). Notwithstanding the
foregoing, the Board of Directors shall not be empowered to effect such
exchange at any time after any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or
any such Subsidiary, or any entity holding Common Stock for or pursuant
to the terms of any such plan), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of fifty
percent (50%) or more of the Common Stock then outstanding.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the exchange of any Rights pursuant
to subsection (a) of this Section 24 and without any further action and
without any notice, the right to exercise such Rights shall terminate
and the only right thereafter of a holder of such Rights shall be to
receive that number of shares of Common Stock equal to the number of
such Rights held by such holder multiplied by the Exchange Ratio. The
Company shall promptly give public notice of any such exchange;
provided, however, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. The Company
promptly shall mail a notice of any such exchange to all of the holders
of such Rights at their last addresses as they appear upon the registry
books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange will state the
method by which the exchange of the Common Stock for Rights will be
effected and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange shall be effected
pro rata based on the number of Rights (other than Rights which have
become void pursuant to the provisions of Section 7(e) hereof) held by
each holder of Rights.
(c) In any exchange pursuant to this Section 24, the
Company, at its option, may substitute shares of Preferred Stock (or
equivalent preferred stock, as such term is defined in paragraph (b) of
Section 11 hereof) for shares of Common Stock exchangeable for Rights,
at the initial rate of one one-thousandth of a share of Preferred Stock
(or equivalent preferred stock) for each share of Common Stock, as
appropriately adjusted to reflect adjustments in the voting rights of
the Preferred Stock pursuant to Section 3(A) of the rights, powers and
preferences attached hereto as Exhibit A, so that the fraction of a
share of Preferred Stock delivered in lieu of each share of Common
Stock shall have the same voting rights as one share of Common Stock.
(d) In the event that there shall not be sufficient
shares of Common Stock issued but not outstanding or authorized but
unissued to permit any exchange of Rights as contemplated in accordance
with this Section 24, the Company shall take all such action as may be
necessary to authorize additional shares of Common Stock for issuance
upon exchange of the Rights.
(e) The Company shall not be required to issue
fractions of shares of Common Stock or to distribute certificates which
evidence fractional shares of Common Stock. In lieu of such fractional
shares of Common Stock, there shall be paid to the registered holders
of the Right Certificates with regard to which such fractional share of
Common Stock would otherwise be issuable, an amount in cash equal to
the same fraction of the Current Market Value of a whole share of
Common Stock. For the purposes of this subsection (e), the "Current
Market Value" of a whole share of Common Stock shall be the closing
price of a share of Common Stock (as determined pursuant to the second
sentence of Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose, at any time
after the Distribution Date, (i) to pay any dividend payable in stock
of any class to the holders of Preferred Stock or to make any other
distribution to the holders of Preferred Stock (other than a regular
quarterly cash dividend out of earnings or retained earnings of the
Company), or (ii) to offer to the holders of Preferred Stock rights or
warrants to subscribe for or to purchase any additional shares of
Preferred Stock or shares of stock of any class or any other
securities, rights or options, or (iii) to effect any reclassification
of its Preferred Stock (other than a reclassification involving only
the subdivision of outstanding shares of Preferred Stock), or (iv) to
effect any consolidation or merger into or with any other Person (other
than a Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof), or to effect any sale or other transfer (or to
permit one or more of its Subsidiaries to effect any sale or other
transfer), in one transaction or a series of related transactions, of
more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other
than the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o) hereof), or (v)
to effect the liquidation, dissolution or winding up of the Company,
then, in each such case, the Company shall give to each holder of a
Rights Certificate, to the extent feasible and in accordance with
Section 26 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend,
distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of
participation therein by the holders of the shares of Preferred Stock,
if any such date is to be fixed, and such notice shall be so given in
the case of any action covered by clause (i) or (ii) above at least
twenty (20) days prior to the record date for determining holders of
the shares of Preferred Stock for purposes of such action, and in the
case of any such other action, at least twenty (20) days prior to the
date of the taking of such proposed action or the date of participation
therein by the holders of the shares of Preferred Stock, whichever
shall be the earlier.
(b) In case any 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 26 hereof, a notice of the occurrence of
such event, which shall specify the event and the consequences of the
event to holders of Rights under Section 11(a)(ii) hereof, and (ii) all
references in the preceding paragraph to Preferred Stock shall be
deemed thereafter to refer to Common Stock and/or other securities.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of
any Rights Certificate to or on the Company shall be sufficiently given
or made if sent by first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Rights Agent) as follows:
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:
ChaseMellon Shareholder Services, L.L.C.
85 Challenger Road
Ridgefield Park, New Jersey 07660
Attention: Reorganization Department
Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to the holder of any Rights Certificate
(or, if prior to the Distribution Date, to the holder of certificates
representing shares of Common Stock) shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed to such
holder at the address of such holder as shown on the registry books of
the Company.
Section 27. Supplements and Amendments. Prior to the
Distribution Date and subject to the penultimate sentence of this
Section 27, the Company and, if so directed by the Company, the Rights
Agent, shall 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 27, 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 27, the Rights Agent shall execute such
supplement or amendment. Prior to the Distribution Date, the interests
of the holders of Rights shall be deemed coincident with the interests
of the holders of Common Stock.
Section 28. Successors. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights Agent
shall bind and inure to the benefit of their respective successors and
assigns hereunder.
Section 29. Determinations and Actions by the Board of
Directors, etc. For all purposes of this Agreement, any calculation of
the number of shares of Common Stock 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-3(d)(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 purposes of clause (y) below, all
omissions with respect to the foregoing) which are done or made by the
Board in good faith, shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all other
parties, and (y) not subject the Board to any liability to the holders
of the Rights.
Section 30. Benefits of This Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the
Company, the Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, registered holders
of the Common Stock) any legal or equitable right, remedy or claim
under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered
holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of the Common Stock).
Section 31. Severability. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of
this Agreement shall remain in full force and effect and shall in no
way be affected, impaired or invalidated; provided, however, that
notwithstanding anything in this Agreement to the contrary, if any such
term, provision, covenant or restriction is held by such court or
authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that
severing the invalid language from this Agreement would adversely
affect the purpose or effect of this Agreement, the right of redemption
set forth in Section 23 hereof shall be reinstated and shall not expire
until the close of business on the tenth day following the date of such
determination by the Board of Directors. Without limiting the
foregoing, if any provision requiring a majority of the members of the
Board of Directors who are not officers of the Company and who are not
representatives, nominees, Affiliates or Associates of an Acquiring
Person to act is held by any court of competent jurisdiction or other
authority to be invalid, void or unenforceable, such determination
shall be made by the Board of Directors of the Company in accordance
with applicable law and the Company's Certificate of Incorporation and
Bylaws.
Section 32. Governing Law. This Agreement, each Right and
each Rights Certificate issued hereunder shall be deemed to be a
contract made under the laws of the State of 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 33. Counterparts. This Agreement may be executed in
any number of counterparts and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of
the several Sections of this Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of any
of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Rights Agreement to be duly executed and their respective corporate
seals to be hereunto affixed and attested, all as of the day and year
first above written.
Attest: COMDISCO, INC.
By By /s/ Philip A. Hewes
--------------------- -----------------------------------
Name: Name: Philip A. Hewes
Title: Title: Senior Vice President/Legal
Attest: ChaseMellon Shareholder
Services, L.L.C., as Rights Agent
By By /s/ Laura Picone
----------------------- ------------------------------------
Name: Name: Laura Picone
Title: Title: Vice President
EXHIBIT A
CERTIFICATE OF DESIGNATION, PREFERENCES
AND RIGHTS OF SERIES C JUNIOR
PARTICIPATING PREFERRED STOCK
of
COMDISCO, INC.
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
The undersigned officer of Comdisco, Inc., a corporation
organized and existing under the General Corporation Law of the State
of Delaware, in accordance with the provisions of Section 103 thereof,
DOES HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of
Directors by the Restated Certificate of Incorporation of the said
Corporation, the said Board of Directors on November 4, 1997 adopted
the following resolution creating a series of 200,000 shares of
Preferred Stock designated as Series C Junior Participating Preferred
Stock:
RESOLVED, that pursuant to the authority vested in the Board
of Directors of this Corporation in accordance with the provisions of
its Restated Certificate of Incorporation, a series of Preferred Stock
of the Corporation be and it hereby is created, and that the
designation and amount thereof and the voting powers, preferences and
relative, participating, optional and other special rights of the
shares of such series, and the qualifications, limitations or
restrictions thereof are as follows:
Section 1. Designation and Amount. The shares of such
series shall be designated as "Series C Junior Participating Preferred
Stock" and the number of shares constituting such series shall be
200,000.
Section 2. Dividends and Distributions.
(A) The holders of shares of Series C Junior Participating
Preferred Stock shall be entitled to receive, when, as and if declared
by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the last day of March,
June, September and December in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"), commencing
on the first Quarterly Dividend Payment Date after the first issuance
of a share or fraction of a share of Series C Junior Participating
Preferred Stock, in an amount per share (rounded to the nearest cent)
equal to the greater of (a) $1.00 or (b) subject to the provision for
adjustment hereinafter set forth, 1,000 times the aggregate per share
amount of all cash dividends, and 1,000 times the aggregate per share
amount (payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in shares of Common Stock
or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock, par value
$0.10 per share, of the Corporation (the "Common Stock") since the
immediately preceding Quarterly Dividend Payment Date, or, with respect
to the first Quarterly Dividend Payment Date, since the first issuance
of any share or fraction of a share of Series C Junior Participating
Preferred Stock. In the event the Corporation shall at any time after
November 4, 1997 (the "Rights Declaration Date") (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each
such case the amount to which holders of shares of Series C Junior
Participating Preferred Stock were entitled immediately prior to such
event under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution
on the Series C Junior Participating Preferred Stock as provided in
Paragraph (A) above immediately after it declares a dividend or
distribution on the Common Stock (other than a dividend payable in
shares of Common Stock); provided that, in the event no dividend or
distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $0.01 per
share on the Series C Junior Participating Preferred Stock shall
nevertheless be payable on such subsequent Quarterly Dividend Payment
Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series C Junior Participating Preferred Stock
from the Quarterly Dividend Payment Date next preceding the date of
issue of such shares of Series C Junior Participating Preferred Stock,
unless the date of issue of such shares is prior to the record date for
the first Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue from the date of issue of such
shares, or unless the date of issue is a Quarterly Dividend Payment
Date or is a date after the record date for the determination of
holders of shares of Series C Junior Participating Preferred Stock
entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend Payment
Date. Accrued but unpaid dividends shall not bear interest. Dividends
paid on the shares of Series C Junior Participating Preferred Stock in
an amount less than the total amount of such dividends at the time
accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding.
The Board of Directors may fix a record date for the determination of
holders of shares of Series C Junior Participating Preferred Stock
entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be no more than 30 days prior to the
date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series C
Junior Participating Preferred Stock shall have the following voting
rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series C Junior Participating Preferred Stock
shall entitle the holder thereof to 1,000 votes on all matters
submitted to a vote of the stockholders of the Corporation. In the
event the Corporation shall at any time after the Rights Declaration
Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares,
then in each such case the number of votes per share to which holders
of shares of Series C Junior Participating Preferred Stock were
entitled immediately prior to such event shall be adjusted by
multiplying such number by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the
holders of shares of Series C Junior Participating Preferred Stock and
the holders of shares of Common Stock shall vote together as one class
on all matters submitted to a vote of stockholders of the Corporation.
(C) (i) If at any time dividends on any Series C Junior
Participating Preferred Stock shall be in arrears in an amount
equal to six (6) quarterly dividends thereon, the occurrence of
such contingency shall mark the beginning of a period (herein
called a "default period") which shall extend until such time when
all accrued and unpaid dividends for all previous quarterly
dividend periods and for the current quarterly dividend period on
all shares of Series C Junior Participating Preferred Stock then
outstanding shall have been declared and paid or set apart for
payment. During each default period, all holders of Preferred Stock
(including holders of the Series C Junior Participating Preferred
Stock) with dividends in arrears in an amount equal to six (6)
quarterly dividends thereon, voting as a class, irrespective of
series, shall have the right to elect two (2) directors.
(ii) During any default period, such voting right of the
holders of Series C Junior Participating Preferred Stock may be
exercised initially at a special meeting called pursuant to
subparagraph (iii) of this Section 3(C) or at any annual meeting of
stockholders, and thereafter at annual meetings of stockholders,
provided that such voting right shall not be exercised unless the
holders of ten percent (10%) in number of shares of Preferred Stock
outstanding shall be present in person or by proxy. The absence of
a quorum of the holders of Common Stock shall not affect the
exercise by the holders of Preferred Stock of such voting right. At
any meeting at which the holders of Preferred Stock shall exercise
such voting right initially during an existing default period, they
shall have the right, voting as a class, to elect directors to fill
such vacancies, if any, in the Board of Directors as may then exist
up to two (2) directors or, if such right is exercised at an annual
meeting, to elect two (2) directors. If the number which may be so
elected at any special meeting does not amount to the required
number, the holders of the Preferred Stock shall have the right to
make such increase in the number of directors as shall be necessary
to permit the election by them of the required number. After the
holders of the Preferred Stock shall have exercised their right to
elect directors in any default period and during the continuance of
such period, the number of directors shall not be increased or
decreased except by vote of the holders of Preferred Stock as
herein provided or pursuant to the rights of any equity securities
ranking senior to or pari passu with the Series C Junior
Participating Preferred Stock.
(iii) Unless the holders of Preferred Stock shall, during
an existing default period, have previously exercised their right
to elect directors, the Board of Directors may order, or any
stockholder or stockholders owning in the aggregate not less than
ten percent (10%) of the total number of shares of Preferred Stock
outstanding, irrespective of series, may request, the calling of
special meeting of the holders of Preferred Stock, which meeting
shall thereupon be called by the President, a Vice-President or the
Secretary of the Corporation. Notice of such meeting and of any
annual meeting at which holders of Preferred Stock are entitled to
vote pursuant to this Paragraph (C)(iii) shall be given to each
holder of record of Preferred Stock by mailing a copy of such
notice to him or her at his or her last address as the same appears
on the books of the Corporation. Such meeting shall be called for a
time not earlier than 20 days and not later than 60 days after such
order or request or in default of the calling of such meeting
within 60 days after such order or request, such meeting may be
called on similar notice by any stockholder or stockholders owning
in the aggregate not less than ten percent (10%) of the total
number of shares of Preferred Stock outstanding. Notwithstanding
the provisions of this Paragraph (C)(iii), no such special meeting
shall be called during the period within 60 days immediately
preceding the date fixed for the next annual meeting of the
stockholders.
(iv) In any default period, the holders of Common Stock,
and other classes of stock of the Corporation if applicable, shall
continue to be entitled to elect the whole number of directors
until the holders of Preferred Stock shall have exercised their
right to elect two (2) directors voting as a class, after the
exercise of which right (x) the directors so elected by the holders
of Preferred Stock shall continue in office until their successors
shall have been elected by such holders or until the expiration of
the default period, and (y) any vacancy in the Board of Directors
may (except as provided in Paragraph (C)(ii) of this Section 3) be
filled by vote of a majority of the remaining directors theretofore
elected by the holders of the class of stock which elected the
director whose office shall have become vacant. References in this
Paragraph (C) to directors elected by the holders of a particular
class of stock shall include directors elected by such directors to
fill vacancies as provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period,
(x) the right of the holders of Preferred Stock as a class to elect
directors shall cease, (y) the term of any directors elected by the
holders of Preferred Stock as a class shall terminate, and (z) the
number of directors shall be such number as may be provided for in
the certificate of incorporation or by-laws irrespective of any
increase made pursuant to the provisions of Paragraph (C)(ii) of
this Section 3 (such number being subject, however, to change
thereafter in any manner provided by law or in the certificate of
incorporation or by-laws). Any vacancies in the Board of Directors
effected by the provisions of clauses (y) and (z) in the preceding
sentence may be filled by a majority of the remaining directors.
(D) Except as set forth herein, holders of Series C Junior
Participating Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are
entitled to vote with holders of Common Stock as set forth herein) for
taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series C Junior Participating Preferred
Stock as provided in Section 2 are in arrears, thereafter and until all
accrued and unpaid dividends and distributions, whether or not
declared, on shares of Series C Junior Participating Preferred Stock
outstanding shall have been paid in full, the Corporation shall not
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series C Junior Participating Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with
the Series C Junior Participating Preferred Stock, except dividends
paid ratably on the Series C Junior Participating Preferred Stock
and all such parity stock on which dividends are payable or in
arrears in proportion to the total amounts to which the holders of
all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series C Junior Participating Preferred Stock, provided that the
Corporation may at any time redeem, purchase or otherwise acquire
shares of any such parity stock in exchange for shares of any stock
of the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series C Junior
Participating Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series C Junior Participating Preferred Stock, or any
shares of stock ranking on a parity with the Series C Junior
Participating Preferred Stock, except in accordance with a purchase
offer made in writing or by publication (as determined by the Board
of Directors) to all holders of such shares upon such terms as the
Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series
or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any
shares of stock of the Corporation unless the Corporation could, under
Paragraph (A) of this Section 4, purchase or otherwise acquire such
shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series C Junior
Participating Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and cancelled
promptly after the acquisition thereof. All such shares shall upon
their cancellation become authorized but unissued shares of Preferred
Stock and may be reissued as part of a new series of Preferred Stock to
be created by resolution or resolutions of the Board of Directors,
subject to the conditions and restrictions on issuance set forth
herein.
Section 6. Liquidation, Dissolution or Winding Up. (A)
Upon any liquidation (voluntary or otherwise), dissolution or winding
up of the Corporation, no distribution shall be made to the holders of
shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series C Junior
Participating Preferred Stock unless, prior thereto, the holders of
shares of Series C Junior Participating Preferred Stock shall have
received an amount equal to 1,000 times the Purchase Price, plus an
amount equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment (the "Series C
Liquidation Preference"). Following the payment of the full amount of
the Series C Liquidation Preference, no additional distributions shall
be made to the holders of shares of Series C Junior Participating
Preferred Stock unless, prior thereto, the holders of shares of Common
Stock shall have received an amount per share (the "Common Adjustment")
equal to the quotient obtained by dividing (i) the Series C Liquidation
Preference by (ii) 1,000 (as appropriately adjusted as set forth in
subparagraph (C) below to reflect such events as stock splits, stock
dividends and recapitalizations with respect to the Common Stock) (such
number in clause (ii), the "Adjustment Number"). Following the payment
of the full amount of the Series C Liquidation Preference and the
Common Adjustment in respect of all outstanding shares of Series C
Junior Participating Preferred Stock and Common Stock, respectively,
holders of Series C Junior Participating Preferred Stock and holders of
shares of Common Stock shall receive their ratable and proportionate
share of the remaining assets to be distributed in the ratio of the
Adjustment Number to 1 with respect to such Preferred Stock and Common
Stock, on a per share basis, respectively.
(B) In the event, however, that there are not sufficient
assets available to permit payment in full of the Series C Liquidation
Preference and the liquidation preferences of all other series of
preferred stock, if any, which rank on a parity with the Series C
Junior Participating Preferred Stock, then such remaining assets shall
be distributed ratably to the holders of such parity shares in
proportion to their respective liquidation preferences. In the event,
however, that there are not sufficient assets available to permit
payment in full of the Common Adjustment, then such remaining assets
shall be distributed ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock, or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the Adjustment Number
in effect immediately prior to such event shall be adjusted by
multiplying such Adjustment Number by a fraction the numerator of which
is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger, combination or
other transaction in which the shares of Common Stock are exchanged for
or changed into other stock or securities, cash and/or any other
property, then in any such case the shares of Series C Junior
Participating Preferred Stock shall at the same time be similarly
exchanged or changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to 1,000 times the
aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each
share of Common Stock is changed or exchanged. In the event the
Corporation shall at any time after the Rights Declaration Date (i)
declare any dividend on Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each
such case the amount set forth in the preceding sentence with respect
to the exchange or change of shares of Series C Junior Participating
Preferred Stock shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which
is the number of shares of Common Stock that were outstanding
immediately prior to such event.
Section 8. No Redemption. The shares of Series C Junior
Participating Preferred Stock shall not be redeemable.
Section 9. Amendment. The Restated Certificate of
Incorporation of the Corporation shall not be further amended in any
manner which would materially alter or change the powers, preferences
or special rights of the Series C Junior Participating Preferred Stock
so as to affect them adversely without the affirmative vote of the
holders of a majority or more of the outstanding shares of Series C
Junior Participating Preferred Stock, voting separately as a class.
Section 10. Fractional Shares. Series C Junior
Participating Preferred Stock may be issued in fractions of a share
which shall entitle the holder, in proportion to such holders
fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other
rights of holders of Series C Junior Participating Preferred Stock.
IN WITNESS WHEREOF, we have executed and subscribed this
Certificate and do affirm the foregoing as true under the penalties of
perjury this __ day of November, 1997.
COMDISCO, INC.
-------------------------------
Name:
Title:
EXHIBIT B
[Form of Rights Certificate]
Certificate No. R- _______ Rights
NOT EXERCISABLE AFTER NOVEMBER 17, 2007 OR EARLIER IF REDEEMED BY THE
COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $0.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY
AN ACQUIRING PERSON OR AN ADVERSE PERSON (AS SUCH TERMS ARE DEFINED IN
THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR
BECAME AN ACQUIRING PERSON OR ADVERSE PERSON OR AN AFFILIATE OR
ASSOCIATE OF AN ACQUIRING PERSON OR ADVERSE PERSON (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHT CERTIFICATE
AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.](1)
- --------------
1 The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
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 Rights Agreement, dated as of November __, 1997
(the "Rights Agreement"), between COMDISCO, INC., a Delaware
corporation (the "Company"), and ChaseMellon Shareholder Services,
L.L.C., a New Jersey limited liability company (the "Rights Agent"), to
purchase from the Company at any time prior to 5:00 PM (New York City
time) on November 17, 2007, at the office or offices of the Rights
Agent designated for such purpose, or its successors as Rights Agent,
one one-thousandth of a fully-paid, nonassessable share of Series C
Junior Participating Preferred Stock (the "Preferred Stock") of the
Company, at a purchase price of $150 per one one-thousandth of a 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 (and the number of shares which
may be purchased upon exercise thereof) set forth above, and the
Purchase Price per share set forth above, are the number of Rights,
number and Purchase Price as of November 17, 1997, based on the
Preferred Stock as constituted at such date, and are subject to
adjustment upon the happening of certain events as provided in the
Rights Agreement. The Company reserves the right to require prior to
the occurrence of a Triggering Event (as such term is defined in the
Rights Agreement) that a number of Rights be exercised so that only
whole shares of Preferred Stock will be issued.
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 Acquiring
Person or Adverse 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 above-mentioned office of the Rights Agent and are also
available upon written request to the Rights Agent.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the principal office or offices of the
Rights Agent designated for such purpose, may be exchanged for another
Rights Certificate or Rights Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate
number of one one-thousandths of a share of Preferred Stock as the
Rights evidenced by the Rights Certificate or Rights Certificates
surrendered shall have entitled such holder to purchase. If this
Rights Certificate shall be exercised in part, the holder shall be
entitled to receive upon surrender hereof another Rights Certificate or
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 $0.01 per Right at any time prior to
the earlier of the close of business on (i) the fifteenth 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. In addition, the Rights may be exchanged, in whole or
in part, for shares of Common Stock, or shares of preferred stock of
the Company having essentially the same value or economic rights as
such shares. Immediately upon the action of the Board of Directors of
the Company authorizing any such exchange, and without any further
action or any notice, the Rights (other than Rights which are not
subject to such exchange) will terminate and the Rights will only
enable holders to receive the shares issuable upon such exchange.
No fractional shares of Preferred Stock will be issued upon
the exercise of any Right or Rights evidenced hereby (other than
fractions which are integral multiples of one one-thousandth of a share
of Preferred Stock, which may, at the election of the Company, be
evidenced by depositary receipts), but in lieu thereof a cash payment
will be made, as provided in the Rights Agreement.
No holder, 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 Preferred Stock or of any other securities of
the Company which may at any time be issuable on the exercise hereof,
nor shall anything contained in the Rights Agreement or herein be
construed to confer upon the holder hereof, as such, any of the rights
of a stockholder of the Company or any right to vote for the election
of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate
action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to
receive dividends or subscription rights, or otherwise, until the Right
or Rights evidenced by this Rights Certificate shall have been
exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Dated as of _____________, 19__
ATTEST: COMDISCO, INC.
________________________ By________________________
Secretary Title:
Countersigned:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
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 within-named 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 Acquiring Person or Adverse 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 Acquiring Person or Adverse 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 Preferred Stock issuable upon the exercise of the Rights
(or such other securities of the Company or of any other person which
may be issuable upon the exercise of the Rights) and requests that
certificates for such shares be issued in the name of and delivered to:
__________________________________________
(Please print name and address)
__________________________________________
(Please print 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 print social security or other
identifying number)
Dated:_______________, 19__
_______________________
Signature
Signature Guaranteed:__________________________
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are
[ ] are not being exercised by or on behalf of a Person who is or was
an Acquiring Person, Adverse Person or an Affiliate or Associate of any
such Acquiring Person or Adverse 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 Acquiring Person or Adverse.
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.
