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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): February 24, 1997
METROMAIL CORPORATION
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
Delaware 1-14348 13-3015410
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(State or other jurisdiction of (Commission File Number) (IRS Employer Identification No.)
incorporation)
360 East 22nd Street, Lombard IL 60148
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(Address of principal executive (Zip Code)
offices)
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Registrant's telephone number, including area code: (630) 620-3300
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ITEM 5. OTHER EVENTS
Adoption of Stockholder Rights Plan
On February 24, 1997, the Board of Directors of Metromail Corporation
(the "Company") authorized the issuance of one preferred share purchase right (a
"Right") for each outstanding share of common stock, par value $.01 per share
(the "Common Stock"), of the Company. The distribution is payable to the
stockholders of record at the close of business on March 7, 1997 (the "Record
Date") and with respect to all shares of Common Stock that are issued after the
Record Date and prior to the earliest of the Distribution Date (as defined
below), the redemption of the Rights, the exchange of the Rights and the
expiration of the Rights (and, in certain cases, following the Distribution
Date). Each Right entitles the registered holder to purchase from the Company
one one-thousandth of a share of a Junior Participating Preferred Stock, Series
A, par value $.01 per share, of the Company (the "Preferred Shares") at a price
of $100.00 per one one-thousandth of a Preferred Share (the "Purchase Price"),
subject to adjustment. The description and terms of the Rights are set forth in
a Rights Agreement (the "Rights Agreement") between the Company and American
Stock Transfer & Trust Company, as Rights Agent (the "Rights Agent").
Rights will be evidenced by Common Stock certificates and not by
separate certificates until the earlier to occur of (i) the expiration of the
Company's redemption right following the date of public disclosure that a person
other than an Exempt Person (as defined below) (an "Acquiring Person"), together
with persons affiliated or associated with such Acquiring Person, has acquired,
or obtained the right to acquire, beneficial ownership of 15% or more of the
outstanding Common Stock (the "Stock Acquisition Date") or (ii) the tenth
business day after the date of commencement or public disclosure of an intention
to commence a tender offer or exchange offer by a person, other than an Exempt
Person, if, upon consummation of the offer, such person could acquire beneficial
ownership of 15% or more of the outstanding Common Stock (the earlier of such
dates being called the "Distribution Date"). The Rights Agreement provides that,
until the Distribution Date (or earlier redemption, exchange or expiration of
the Rights), the Rights will be transferred with and only with the Common Stock.
Until the Distribution Date (or earlier redemption, exchange or expiration of
the Rights), new Common Stock certificates issued after March 7, 1997, upon
transfer or new issuance of Common Stock, will contain a notation incorporating
the Rights Agreement by reference. Until the Distribution Date (or earlier
redemption, exchange or expiration of the Rights) the surrender for transfer of
any certificate for Common Stock, with or without such notation, will also
constitute the transfer of the Rights associated with the Common Stock
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date, and such separate Right Certificates
alone will evidence the Rights.
The Rights will first become exercisable after the Distribution Date
(unless sooner redeemed or exchanged). The Rights will expire at the close of
business on March 7, 2007 (the "Expiration Date"), unless earlier redeemed or
exchanged by the Company as described below.
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The Purchase Price payable, and the number of Preferred Shares or
other securities, cash or other property issuable, upon exercise of the Rights
are subject to adjustment from time to time to prevent dilution (i) in the event
of a stock dividend or distribution on, or a subdivision, combination or
reclassification of, the Preferred Shares, (ii) upon the grant to holders of the
Preferred Shares of certain rights, options or warrants to subscribe for
Preferred Shares or securities convertible into Preferred Shares at less than
the current market price of the Preferred Shares or (iii) upon the distribution
to holders of the Preferred Shares of evidences of indebtedness or assets
(excluding regular periodic cash dividends) or of subscription rights or
warrants (other than those referred to above). In addition, the Purchase Price
payable, and the number of Preferred Shares purchasable, on exercise of a Right
is subject to adjustment in the event that the Company should (i) declare or pay
any dividend on the Common Stock payable in Common Stock or (ii) effect a
subdivision or combination of the Common Stock into a different number of shares
of Common Stock.
In the event that there is public disclosure that an Acquiring Person
has become such, proper provision will be made so that each holder of a Right,
other than Rights that are (or were under certain circumstances) beneficially
owned by the Acquiring Person and certain related persons and transferees (which
will thereafter be void), on or after the earlier of the Distribution Date and
the first public disclosure that an Acquiring Person has become such, will
thereafter have the right to receive upon exercise that number of shares of
Common Stock (or other securities) having (as of the date of occurrence of the
triggering event) a market value of two times the exercise price of a Right. In
addition, the Company's Board of Directors has the option of exchanging all or
part of the Rights (excluding void Rights) for Common Stock on a one-for-one
basis in the manner described in the Rights Agreement. In the event that, at any
time following public disclosure that an Acquiring Person has become such, the
Company is involved in a merger or other business combination transaction where
the Company is not the surviving corporation or where Common Stock is changed or
exchanged or in a transaction or transactions where 50% or more of its
consolidated assets or earning power are sold, proper provision will be made so
that each holder of a Right (other than the Acquiring Person and certain related
persons or transferees) shall thereafter have the right to receive, upon the
exercise thereof at the then current exercise price of the Right, that number of
shares of common stock of the acquiring company or the Company, as the case may
be, which at the time of such transaction would have a market value of two times
the exercise price of the Right.
No adjustment in the Purchase Price will be required until cumulative
adjustments require an adjustment of at least 1% in such Purchase Price. No
fractional Preferred Shares will be issued (other than fractions which are
integral multiples of one one-thousandth of a Preferred Share, which may, at the
election of the Company, be evidenced by depositary receipts) and in lieu
thereof an adjustment in cash will be made based on the market price of the
Preferred Shares on the last trading date prior to the date of exercise.
At any time prior to public disclosure that an Acquiring Person has
become such, the Board of Directors of the Company may redeem the Rights in
whole, but not in part, at a price of $.01 per Right (the "Redemption Price"),
payable in cash, shares (including fractional shares) of
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Common Stock or any other form of consideration deemed appropriate by the Board
of Directors. Immediately upon action of the Board of Directors ordering
redemption of the Rights, the ability of holders to exercise the Rights will
terminate and the only right of such holders will be to receive the Redemption
Price.
At any time prior to a public disclosure that an Acquiring Person has
become such, the Board of Directors of the Company may amend or supplement the
Rights Agreement, including without limitation, the beneficial ownership percent
at which a person becomes an Acquiring Person and the definition of exempt
person to include any person in addition to the persons described therein,
without the approval of the Rights Agent or any holder of the Rights, except for
an amendment or supplement which would change the Redemption Price, provide for
an earlier expiration date of the Rights or change the Purchase Price.
Thereafter, the Board of Directors of the Company may amend or supplement the
Rights Agreement without such approval only to cure ambiguity, correct or
supplement any defective or inconsistent provision or change or supplement the
Rights Agreement in any manner which will not adversely affect the interests of
the holders of the Rights (other than an Acquiring Person or an affiliate or
associate thereof). Immediately upon the action of the Board of Directors
providing for any amendment or supplement, such amendment or supplement will be
deemed effective.
The Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment equal to the greater of $25 per share and 1,000 times
the dividend declared per share of Common Stock. In the event of liquidation,
the holders of the Preferred Shares will be entitled to a minimum preferential
liquidation payment equal to the greater of $100 per share and 1,000 times the
payment made per share of Common Stock. Each Preferred Share will have 1,000
votes per share, voting together with the Common Stock. In the event of any
merger, consolidation or other transaction in which the Common Stock is
exchanged, each Preferred Share will be entitled to receive 1,000 times the
amount received per share of Common Stock. The rights described in this
paragraph are protected by customary antidilution provisions.
The Rights have certain anti-takeover effects. The Rights may cause
substantial dilution to a person that attempts to acquire the Company on terms
not approved by the Board of Directors of the Company, except pursuant to an
offer conditioned on a substantial number of Rights being acquired. The Rights
should not interfere with any merger or other business combination approved by
the Board of Directors prior to the time a person has acquired beneficial
ownership of 15% or more of the Common Stock, because until such time the Rights
may generally be redeemed by the Company at $.01 per Right.
Exempt Persons include R.R. Donnelley & Sons Company ("R.R. Donnelley") so
long as (i) R.R. Donnelley is the beneficial owner in the aggregate of not less
than 15% of the outstanding common stock of the Company and (ii) the aggregate
beneficial ownership of R.R. Donnelley of the common stock of the Company is not
in excess of the base percentage owned by them at a specified time plus 2%.
Exempt Persons also include certain transferees of R.R. Donnelley that
beneficially own less than 20% of the outstanding common stock of the Company.
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Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.
This summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights Agreement attached
hereto as Exhibit 4.1, which is incorporated by reference in this Current Report
on Form 8-K.
Contemporaneously with the adoption of the Rights Plan the Company
entered into a Registration Rights Agreement (the "Registration Agreement") and
a Letter Agreement (the "Letter Agreement") with R.R. Donnelley, each of which
are dated as of February 24, 1997. Pursuant to the Registration Agreement the
Company granted to R.R. Donnelley certain registration rights. In consideration
of the grant of such registration rights, R.R. Donnelley entered into the Letter
Agreement whereby it agreed, among other things, not to oppose the adoption of
the Rights Plan and not to seek the redemption of the Rights or the termination
or amendment of the Rights Plan. In addition, the Letter Agreement sets forth
the number of directors of the Company which R.R. Donnelley shall be entitled to
elect based on the level of R.R. Donnelley's ownership in the Company.
This summary description of the Registration Agreement and the Letter
Agreement does not purport to be complete and is qualified in its entirety by
reference to the Registration Agreement attached hereto as Exhibit 99.2 and the
Letter Agreement attached hereto as Exhibit 99.3.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Not Applicable
(b) Not Applicable
(c) Exhibits
4.1 Rights Agreement, dated as of February 24, 1997, between
Metromail Corporation and American Stock Transfer & Trust
Company, as Rights Agent (including the form of Certificate
of Designation, Preferences and Rights of Junior
Participating Preferred Stock, Series A attached thereto as
Exhibit A, the form of Rights Certificate attached thereto
as Exhibit B and the Summary of Rights attached thereto as
Exhibit C), incorporated by reference to the Company's
Registration Statement on Form 8-A, filed with the
Commission on February 26, 1997.
99.1 Press Release, dated February 24, 1997, issued by the
Company.
99.2 Registration Rights Agreement, dated as of February 24,
1997, between Metromail Corporation and R.R. Donnelley &
Sons Company.
99.3 Acknowledgement and Agreement, dated as of February 24,
1997, between Metromail Corporation and R.R. Donnelley &
Sons Company.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
METROMAIL CORPORATION
Dated: February 26, 1997 By: /s/ Thomas J. Quarles
-----------------------------
Name: Thomas J. Quarles
Title: Senior Vice President and
General Counsel
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EXHIBIT INDEX
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Exhibit No. Description Page No.
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| 4.1 | Rights Agreement, dated as of February 24, 1997, between | * |
| | Metromail Corporation and American Stock Transfer & Trust | |
| | Company, including the form of Certificate of Designation, | |
| | Preferences and Rights of Junior Participating Preferred Stock, | |
| | Series A attached thereto as Exhibit A, the form of Rights | |
| | Certificate attached thereto as Exhibit B and the Summary of | |
| | Rights attached thereto as Exhibit C. | |
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| 99.1 | Press Release, dated February 24, 1997, issued by the Company. | 8 |
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| 99.2 | Registration Rights Agreement, dated as of February 24, 1997, | |
| | between Metromail Corporation and R.R. Donnelley & Sons | 9 |
| | Company. | |
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| 99.3 | Acknowledgement and Agreement, dated as of February 24, 1997, | |
| | between Metromail Corporation and R.R. Donnelley & Sons | 28 |
| | Company. | |
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* Incorporated by reference to the Company's Registration Statement on Form
8-A, filed with the Commission on February 26, 1997.
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EXHIBIT 99.1
[METROMAIL LOGO]
NEWS RELEASE
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FOR MORE INFORMATION, CONTACT:
Ronald G. Eidell
Senior Vice President and Chief Financial Officer
Telephone: (630) 932-3980
METROMAIL CORPORATION ADOPTS
A STOCKHOLDERS' RIGHTS PLAN
LOMBARD, Ill. / Feb. 24, 1997 / -- Metromail Corporation (NYSE: ML) announced
that its Board of Directors today adopted a stockholders' rights plan and
declared a dividend to be made to stockholders of record on March 7, 1997, of
one preferred share purchase right on each outstanding share of the company's
common stock. Each such right will entitle a stockholder to buy one one-
thousandth of a share of a new series of junior participating preferred stock
for an exercise price of $100.00.
The stockholders' rights plan was adopted to preserve for the stockholders of
the company the long-term value of the company in the event of a takeover of the
company or the purchase of a significant block of common stock of the company
and to protect the company and its stockholders against coercive takeover
tactics.
The rights will become exercisable only if a person acquires, or announces a
tender offer for, 15% (20% in the case of certain transferees of R.R.
Donnelley & Sons Company) or more of the company's common stock (with certain
exceptions). Prior to the time the rights become exercisable, the rights will be
evidenced by the certificates representing shares of common stock of the company
and will be transferable only in connection with the transfer of shares of
common stock. If a person acquires 15% (20% in the case of certain transferees
of R.R. Donnelley & Sons Company) of the company's common stock, each right
will entitle the holder thereof to purchase for an exercise price of $100.00
(subject to adjustment) shares of the company's common stock having a market
value of twice such exercise price, valued as of the date of occurrence of such
triggering event, subject to the right of the company to exchange the rights for
common stock of the company on a one-for-one basis.
The company will be entitled to redeem the rights at $.01 per right at any time
before public disclosure that a triggering position has been acquired. The
rights will expire on March 7, 2007, unless previously redeemed or exercised.
The distribution of the rights will not be a taxable event to stockholders.
Metromail Corporation is a leading provider of database marketing, direct
marketing and reference products and services in the United States and United
Kingdom. Metromail helps its customers identify and reach targeted audiences,
utilizing its comprehensive, proprietary consumer database encompassing 90
percent of U.S. households, as well as providing database marketing software and
related services. Metromail's 3,200 employees generated 1996 revenues of $281
million. The company is headquartered in Lombard, IL.
###
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EXHIBIT 99.2
REGISTRATION RIGHTS AGREEMENT
by and between
METROMAIL CORPORATION
and
R.R. DONNELLEY & SONS COMPANY
Dated as of February 24, 1997
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TABLE OF CONTENTS
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Page
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1. Definitions............................................................ 1
2. Demand Registrations................................................... 2
3. Piggyback Registrations................................................ 4
4. Priorities of Inclusion................................................ 5
5. Registration Procedures................................................ 6
6. Registration Expenses..................................................10
7. Indemnification........................................................11
8. Standby................................................................15
9. Miscellaneous..........................................................15
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REGISTRATION RIGHTS AGREEMENT
-----------------------------
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made as of
February 24, 1997, by and between Metromail Corporation, a Delaware corporation
(the "Company") and R.R. Donnelley & Sons Company, a Delaware corporation (the
"Stockholder").
The parties hereto agree as follows:
1. Definitions. The following terms as used herein shall have the following
meanings:
"Commission" means the Securities and Exchange Commission and any
other similar or successor agency of the Federal government then
administering the Securities Act or the Exchange Act.
"Common Stock" means the Common Stock, par value $.01 per share, of
the Company.
"Company" shall have the meaning specified in the introductory
paragraph of this Agreement.
"Demand Registration Statement" shall have the meaning specified in
Section 2.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any similar Federal statute then in effect, and any reference to a
particular section thereof shall include a reference to the comparable
section, if any, of any such similar Federal statute, and the rules and
regulations thereunder.
"Participating Stockholders" with respect to any Registration
Statement means Stockholders holding Registrable Securities to be sold
pursuant to such Registration Statement.
"Person" means any individual, corporation, partnership, association,
trust or other entity or organization, including a government or political
subdivision or any agency or instrumentality thereof.
"Prospectus" means the prospectus included in any Registration
Statement, as amended or supplemented by any prospectus supplement with
respect to the terms of the offering of any of the Registrable Securities
covered by such Registration Statement and by all other amendments and
supplements to the prospectus, including post-effective amendments and all
material incorporated by reference in such prospectus.
"Registered Securities" with respect to any Registration Statement
means the securities covered by such Registration Statement.
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"Registrable Securities" means (i) the Common Stock owned by the
Stockholder or any direct or indirect transferee of the Stockholder, (ii)
any shares of Common Stock of the Company issued pursuant to clause (iii)
hereafter, (iii) any shares of Common Stock issued or issuable in respect
of the securities described in clauses (i) and (ii) by reason of a stock
split, stock dividend or other recapitalization of the Company and (iv) any
securities convertible into or exchangeable for shares of Common Stock
covered by the preceding part of this definition. For the purposes of this
Agreement, Registrable Securities will cease to be Registrable Securities
when (i) a registration statement covering such Registrable Securities has
been declared effective and they have been disposed of pursuant to such
effective registration statement, (ii) they are distributed to the public
pursuant to Rule 144 (or any similar provision then in force) or (iii) they
have been otherwise transferred and the Company has delivered new
certificates or other evidences of ownership for them not subject to any
legal or other restriction on transfer and not bearing the following or any
similar legend: "These securities have not been registered under the
Securities Act of 1933, as amended, and may not be transferred, sold or
otherwise disposed of except pursuant to an effective registration under
said Act."
"Registration Statement" means any registration statement filed by the
Company under the Securities Act in which any of the Registrable Securities
may be included pursuant to this Agreement, including the Prospectus, any
amendments and supplements to such Registration Statement, including post-
effective amendments and all exhibits and all material incorporated by
reference in such registration statement.
"Rule 144" means Rule 144 under the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar Federal statute then in effect, and any reference to a particular
section thereof shall include a reference to a comparable section, if any,
of any such similar Federal statute, and the rules and regulations
thereunder.
"Stockholder" or "Stockholders" shall mean the Stockholder specified
in the introductory paragraph of this Agreement and any direct or indirect
transferee of Registrable Securities.
2. Demand Registrations.
2.01 Demand Registration. At any time and from time to time the holder
or holders of ten percent or more of the then outstanding Registrable Securities
shall have the right, by delivery of a written request to the Company, to
require the Company to file and use its best efforts to have declared effective
in a timely manner a Registration Statement on Form S-1, Form S-2 or Form S-3
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(the "Demand Registration Statement") registering the disposition of all or any
portion of the Registrable Securities in accordance with the intended method or
methods of distribution specified in such request (including, but not limited
to, the disposition of such Registrable Securities upon the conversion or
exchange of debt or equity securities of a Stockholder that are convertible into
or exchangeable for Registrable Securities), subject to the provisions of
Section 2.02. Each request to file a Demand Registration Statement shall
specify the number of Registrable Securities requested to be registered.
2.02 Limitations on Demand Registrations. The demand registration rights
granted to the Stockholders pursuant to Section 2.01 are subject to the
following limitations:
(a) the Company shall not be obligated under Section 2.01 to cause to
become effective more than four Demand Registration Statements, provided that
the following shall not be deemed to constitute a Demand Registration Statement
pursuant to Section 2.01: (i) a Registration Statement which does not become or
remain effective for the period specified in Section 5.01(a) (unless such Demand
Registration Statement has not become effective or does not remain effective due
solely to the fault of the Stockholders and the Stockholders have not reimbursed
the Company for the expenses incurred by the Company with respect thereto), (ii)
a Registration Statement that becomes subject to any stop order, injunction or
other order or similar action of the Commission or other governmental agency or
court for any reason or (iii) a Registration Statement for which the conditions
to closing specified in the purchase agreement or underwriting agreement entered
into in connection therewith are not satisfied, other than primarily by reason
of an act or omission of a Stockholder);
(b) the Company shall not be obligated to cause any Demand
Registration Statement to be declared effective less than 6 months after the
effective date of any other Registration Statement filed pursuant to Section
2.01;
(c) if the sale of Registrable Securities under any Registration
Statement filed under Section 2.01 shall be on an underwritten basis, the
Participating Stockholders shall have the right to select the managing
underwriter of such offering, subject to the approval of the Company, which
approval shall not be unreasonably withheld;
(d) the Company shall not be obligated to file a Demand Registration
Statement unless the total number of shares of Registrable Securities requested
to be included in such offering by the Stockholders equals or exceeds 500,000
shares of Common Stock;
(e) the Company shall be entitled to postpone for a reasonable time,
not exceeding 90 days (provided that all postponements under this paragraph in
any 12-month period shall not exceed 180 days), the filing of any Demand
Registration Statement or its efforts to cause any Demand Registration Statement
to become effective if at the time the right to delay is exercised the Company
shall determine in good faith that such offering would interfere in any material
respect with any material acquisition, financing or other transaction which the
Company is actively pursuing or require premature disclosure of any other
material corporate development, which disclosure would adversely affect the
interests of the Company in any material respect; and
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(f) if the Demand Registration Statement is for a "shelf" offering
under Rule 415 under the Securities Act, the Participating Stockholders who wish
to sell shall give two business days advance notice to the Company each time
they wish to begin sales thereunder and each such notice shall entitle such
Participating Stockholders to make sales for a 30-day period beginning with the
third business day after the giving of such notice, provided that the Company by
notice to the Participating Stockholders may postpone all sales under such
Demand Registration Statement for a reasonable time, not exceeding 90 days
(provided that all postponements under this paragraph in any 12-month period
shall not exceed 180 days), if the Company shall determine in good faith that
permitting such sales would interfere in any material respect with any material
acquisition, financing other transaction which the Company is actively pursuing
or require premature disclosure of any other material corporate development,
which disclosure would adversely affect the interests of the Company in any
material respect. The Company shall not be required to file such a shelf
registration with respect to the conversion or exchange of any convertible or
exchangeable Registrable Securities. The Company shall not be required to file
such a shelf registration statement unless the Stockholders hold less than 10%
of the outstanding Common Stock and Participating Stockholders have previously
sold Registered Securities under two underwritten Demand Registration
Statements.
2.03 Over-Allotment Option; Withdrawal. If the managing underwriter of
any registration pursuant to this Section 2 requests that the Participating
Stockholders grant the underwriters an over-allotment option for the purpose of
covering over-allotments that may be made by the underwriters in connection with
such offering, then a percentage of the Registrable Securities proposed to be
sold by the Participating Stockholders, which portion shall not exceed the
maximum amount then permitted by the rules of the National Association of
Securities Dealers, Inc. (currently 15%), shall instead be made subject to such
over-allotment option, unless otherwise agreed in the underwriting agreement
relating thereto. The Participating Stockholders may withdraw any Demand
Registration Statement filed with the Commission pursuant to this Section 2 by
giving written notice to the Company or the managing underwriter, prior to the
effective date of such Demand Registration Statement.
3. Piggyback Registrations.
In the event that at any time while Registrable Securities are
outstanding, the Company proposes or is required to file a Registration
Statement, including pursuant to Section 2, registering any Common Stock to be
sold for cash on a form other than Form S-4 or Form S-8 (or such other forms as
the Commission may hereafter promulgate for registration of securities in
transactions for which Form S-4 or Form S-8 may be used as of the date hereof),
whether or not for sale for its own account, the Company will give written
notice to the Stockholders at least 15 days prior to the date of filing of the
proposed Registration Statement. Upon written request by any Stockholder within
7 days after the receipt of such notice by the Company, the Company will include
in the securities to be registered by such Registration Statement all
Registrable Securities that any Stockholder indicates in such notice that it
desires to sell, subject to the following terms and conditions:
(a) If such Registration Statement is for a prospective underwritten
offering, the Participating Stockholders agree to sell their securities, if the
Company so requests, on the same basis as the other securities covered by such
Registration Statement are being sold, except that (i) no
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Stockholder shall be required to sell its securities at a price below the
minimum price at which such Stockholder is willing to sell its securities as
specified to the Company in writing at least five business days prior to the
anticipated date of execution of the underwriting agreement, and (ii) no
Stockholder shall be required to refrain from disposing of any securities of the
Company held by it beyond the periods specified in Section 8 hereof; and
(b) the Company may withdraw any such Registration Statement before it
becomes effective or postpone the offering of securities contemplated by such
Registration Statement without any obligation to the Stockholders.
4. Priorities of Inclusion.
In the case of any underwritten offering (other than pursuant to
Section 2), if the number of shares of Registrable Securities requested to be
included by the Stockholders pursuant to Section 3 in the respective
Registration Statement exceeds the maximum number of shares of stock which the
managing underwriter advises the Company, in its judgment, may be distributed
without materially adversely affecting the price, timing or distribution of the
securities to be included in the offering by the Company or the stockholder
selling under such Registration Statement, the Company may reduce the amount of
securities to be included by the Participating Stockholders, any stockholder
selling under such Registration Statement and the Company as follows:
(a) if the Company initiates the offering, first all the shares being
offered by the Company shall be included, then all the shares being offered by
the Participating Stockholders shall be included (prorated among them based upon
shares owned if all shares offered by the Participating Stockholders cannot be
so included) and finally shares being offered by others may be included; and
(b) if the offering is initiated by other stockholders, the number of
shares which may be included by the Participating Stockholders and all other
stockholders shall be prorated based upon the numbers of shares owned by each
such seller.
5. Registration Procedures.
5.01 Preparation and Filing. If and whenever the Company is required to
use its reasonable best efforts to, or proposes to, effect or cause the
registration of any Registrable Securities pursuant to a Registration Statement
under the Securities Act, the Company will:
(a) promptly prepare and file with the Commission (in the case of a
registration pursuant to Section 2, such filing to be made within 40 days after
the initial request to register Registrable Securities pursuant thereto) a
Registration Statement with respect to such Registrable Securities and use its
reasonable best efforts to cause such Registration Statement to become and
remain effective until the earlier of (i) the disposition of the Registered
Securities and (ii) 180 days after the effective date of such Registration
Statement, as such 180 day period may be extended in a manner consistent with
Section 5.02;
(b) otherwise use its best efforts to comply in all material respects
with all applicable rules and regulations of the Commission;
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(c) use its best efforts (i) to cause all the Registered Securities to
be listed on the national securities exchange on which the Common Stock of the
Company is then listed (currently the New York Stock Exchange), if the listing
of the Registered Securities is then permitted under the rules of such exchange
or (ii) if the Common Stock of the Company is not listed on any national
securities exchange or such listing of the Registered Securities is not
possible, to secure the listing of all the Registered Securities with the Nasdaq
Stock Market, Inc.;
(d) enter into such customary agreements (including an underwriting
agreement in customary form) and take such other actions (including, without
limitation, participating and causing the Company's senior executives to
participate, in a road show and otherwise cooperating as reasonably requested in
the selling efforts with respect to the Registered Securities) as the
Participating Stockholders shall reasonably request in order to expedite or
facilitate the disposition of such Registered Securities;
(e) on the effective date of the Registration Statement or, in the
case of an underwritten offering, on the date of delivery (including delivery
pursuant to the exercise of any over-allotment option) of the Registered
Securities sold pursuant thereto, cause to be delivered to the Participating
Stockholders and the underwriters or agents, if any, opinions of counsel for the
Company, which counsel and opinions (in form, scope and substance) shall be
reasonably satisfactory to counsel for the underwriters or agents, if any, and
counsel for the Participating Stockholders, covering the matters customarily
covered in opinions given to underwriters in primary underwritten public
offerings. Immediately prior to the effectiveness of the Registration Statement
or, in the case of an underwritten offering, at the time of delivery of any
Registered Securities sold pursuant thereto, the Company shall cause to be
delivered to the Participating Stockholders and underwriters or agents, if any,
comfort letters from the independent public accountants of the Company stating
that such accountants are independent public accountants with respect to the
Company within the meaning of the Securities Act and the applicable published
rules and regulations of the Commission thereunder, and otherwise in customary
form and covering such financial and accounting matters as are customarily
covered by such letters of the independent public accountants delivered in
connection with primary underwritten public offerings;
(f) make available for inspection by the Participating Stockholders,
by any underwriter participating in any disposition to be effected pursuant to
such Registration Statement and by any attorney, accountant or other agent
retained by the Participating Stockholders or any such underwriter, all
pertinent financial and other records, pertinent corporation documents and
properties of the Company, and cause all of the officers, directors and
employees of the Company to be available to respond to questions and to supply
all information, in each case as reasonably requested by the Participating
Stockholders, underwriter, attorney, accountant or agent in connection with such
Registration Statement;
(g) permit the Participating Stockholders to participate in the
preparation of such Registration Statement and to require the insertion therein
of material furnished to the Company in writing which in the judgment of the
Participating Stockholders should be included and which is reasonably acceptable
to the Company;
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(h) use best efforts to prevent the issuance of any stop order
suspending the effectiveness of such Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus and, if any such
order is issued, to obtain the lifting thereof at the earliest reasonable time;
(i) not at any time file or make any amendment to the Registration
Statement, or any amendment of or supplement to the Prospectus (excluding the
documents incorporated by reference into the Prospectus), of which the
Participating Stockholders and the managing underwriter or agent shall not have
previously been advised and furnished a copy or to which the Participating
Stockholders, the managing underwriter or agent, or counsel for the
Participating Stockholders or counsel for the underwriter or agent shall
reasonably object;
(j) furnish to each Participating Stockholder and to the managing
underwriter or agent, without charge, one signed copy of the Registration
Statement (as originally filed) and of all amendments thereto, whether filed
before or after the Registration Statement becomes effective, copies of all
exhibits and documents filed therewith, including documents incorporated by
reference into the Prospectus, and one signed copy of all consents and
certificates of experts, and furnish to the managing underwriter, for each other
underwriter participating in an underwritten offering, as many conformed copies
of the Registration Statement as originally filed and of each amendment thereto
(including documents incorporated by reference into the Prospectus but without
exhibits) as the managing underwriter may reasonably request;
(k) deliver to each Participating Stockholder, underwriter or agent
participating in such offering, without charge, as many copies of each
preliminary prospectus as such Stockholder, underwriter or agent may reasonably
request, and the Company hereby consents to the use of such copies for purposes
permitted by the Securities Act. The Company will deliver to each Stockholder,
underwriter or agent participating in such offering, without charge, from time
to time during the period when the Prospectus is required to be delivered under
the Securities Act, such number of copies of the Prospectus (as supplemented or
amended) as such Stockholder, underwriter or agent may reasonably request;
(l) comply in all material respects with the Securities Act and the
rules and regulations of the Commission thereunder, and the Exchange Act and the
rules and regulations of the Commission thereunder, so as to permit the
completion of the distribution of the Registered Securities in accordance with
the intended method or methods of distribution contemplated in the Prospectus.
If at any time when a prospectus is required by the Securities Act to be
delivered in connection with sales of the Registered Securities any event shall
occur or condition exist as a result of which it is necessary or desirable,
based on the advice of counsel for the Participating Stockholders, counsel for
the underwriters or agents or counsel for the Company, to amend the Registration
Statement or amend or supplement the Prospectus in order that the Prospectus
will not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein not misleading
in the light of the circumstances existing at the time it is delivered to a
purchaser, or if it shall be necessary or desirable, based on the advice of any
such
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counsel, at any such time to amend the Registration Statement or amend or
supplement such Prospectus of the Company, the Company will promptly prepare and
file with the Commission such amendment or supplement as may be necessary to
correct such untrue statement or omission or to make the Registration Statement
or the Prospectus comply with such requirements; and
(m) make such representations and warranties to the Participating
Stockholders and the underwriters or agents, if any, in form, substance and
scope as are customarily made by issuers to underwriters and selling holders, as
the case may be, in underwritten public offerings.
5.02 Amendments. In connection with any Registration Statement filed
pursuant to this Agreement, the Company shall file any post-effective amendment
or amendments to the Registration Statement which may be required under the
Securities Act during the period required to effect the distribution
contemplated thereby; provided that the Company shall not be required to file
any post-effective amendment to any Registration Statement described in Section
2 more than 180 days after the effective date of the Registration Statement,
provided, further, that such 180-day period shall be extended (i) by the length
of any period that a stop order or similar proceeding is in effect which
prohibits the distribution of the Registered Securities and (ii) by the number
of days during the period from and including the date when the Participating
Stockholders shall have received a notice to cease making offers and sales
delivered pursuant to Section 5.03 until the date when the Participating
Stockholders shall have received a copy of the supplemented or amended
Prospectus contemplated by Section 5.03.
5.03 Notification of Certain Events.
(a) During the period for which the Company is required to file and
keep effective a Registration Statement pursuant to this Agreement, the Company
shall promptly notify the Participating Stockholders during the period such
Registration Statement is required to remain effective, or at any time when a
Prospectus relating thereto is required to be delivered under the Securities
Act, of the happening of any event or the existence of any fact, as a result of
which the Registration Statement or such Prospectus contained in such
Registration Statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of
circumstances then existing. The Participating Stockholders agree, upon receipt
of such notice, forthwith to cease making offers and sales of such securities
pursuant to such Registration Statement or deliveries of the Prospectus
contained therein for any purpose and to return to the Company the copies of
such Prospectus not theretofore delivered by such Stockholders. Subject to
Section 5.02, the Company shall prepare and furnish to the Participating
Stockholders and each underwriter a reasonable number of copies of any
supplement to or amendment of such Prospectus that may be necessary so that, as
thereafter delivered to the purchaser of the Registered Securities, such
Prospectus shall not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of circumstances then existing.
(b) The Company will promptly notify the Participating Stockholders
and the managing underwriter or agent, if any, and confirm the notice in
writing, (i) when the Registration Statement, or any post-effective amendment to
the Registration Statement, shall have become
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effective, or any supplement to the Prospectus or any amended Prospectus shall
have been filed, (ii) of any request by the Commission to amend the Registration
Statement or amend or supplement the Prospectus or for additional information
and (iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus, or of the suspension of the
qualification of the Registered Securities for offering or sale in any
jurisdiction, or of the institution or threatening of any proceedings for any of
such purposes.
5.04 Provision of Information. As a condition to the obligation of the
Company under Section 2 or Section 3 to cause a Registration Statement or an
amendment to be filed or shares to be included in a Registration Statement, the
Participating Stockholders shall provide such information and execute such
documents, questionnaires, powers of attorney, underwriting agreements, other
documents required under the terms of applicable underwriting arrangements and
indemnities (including any agreement or undertaking relating to expenses,
indemnification or other matters contemplated by this Agreement), as may
reasonably be required by the Company or any underwriter in connection with such
registration.
5.05 Reports. The Company covenants that it will file the reports
required to be filed by it under the Securities Act and the Exchange Act and the
rules and regulations of the Commission thereunder and it will take such further
action as the Stockholders may reasonably request, all to the extent required
from time to time to enable the Stockholders to sell Registrable Securities
without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144.
5.06 State Securities Laws. In connection with the offering of any
securities registered pursuant to this Agreement, the Company shall use its best
efforts to qualify or register in a timely manner the securities to be sold
under the securities or "blue sky" laws of such jurisdictions as may be
reasonably requested by the Participating Stockholders and do any other acts and
things which may be necessary or advisable to enable the Participating
Stockholders or underwriter to consummate the disposition in such jurisdiction
of such securities; provided, however, that the Company shall not be obligated
to qualify as a foreign corporation to do business under the laws of any such
jurisdiction in which it is not then qualified or to file any general consent to
service of process.
6. Registration Expenses.
(a) Except as provided in Section 6(c) and 6(d), the Company will pay
and bear all costs and expenses incident to the performance of its obligations
under this Agreement with respect to each registration pursuant to Section 2 and
Section 3, including:
(i) the preparation, printing and filing of the Registration
Statement (including financial statements and exhibits) as originally filed
and as amended, any preliminary prospectuses and the Prospectus and any
amendments or supplements thereto, and the cost of furnishing copies
thereof to the Participating Stockholders and the underwriters or agents,
as the case may be;
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(ii) the preparation, printing and distribution of any
underwriting or agency agreement, certificates representing the Registered
Securities, any blue sky survey and other documents relating to the
performance of or compliance by the Company with this Agreement;
(iii) the fees and disbursements of the counsel and accountants
of the Company and the reasonable fees and disbursements of one counsel
retained by the Participating Stockholders pursuant to Section 6(b);
(iv) the fees and disbursements of the underwriters or agents
customarily paid by issuers or sellers of securities (including the
reasonable costs of any road shows in connection with the disposition
thereof) and the reasonable fees and expenses of any special experts
retained in connection with the Registration Statement, but excluding
underwriting discounts and commissions and transfer taxes, if any, as
referred to in Section 6(c);
(v) the qualification of the Registered Securities under
applicable securities laws and any filing for review of the offering with
the National Association of Securities Dealers, Inc., including filing fees
and fees and disbursements of counsel for the Participating Stockholders
and the underwriters or their agents, as the case may be, in connection
therewith, in connection with any blue sky survey and in connection with
any reserve share program; and
(vi) all fees and expenses incurred in connection with the
listing of any of the Registered Securities on any securities exchange or
other trading market.
(b) In connection with the filing of each Registration Statement,
the Company will reimburse the Participating Stockholders for the
reasonable fees and disbursements of one firm of legal counsel, which shall
be chosen by the Participating Stockholders and shall be reasonably
satisfactory to the Company.
(c) The Participating Stockholders will pay and bear all costs
and expenses incident to the delivery of the Registered Securities to be
sold by it, including any stock transfer taxes payable upon the sale of
such Registered Securities to the purchaser thereof and any underwriter
discounts or commissions payable to underwriters or their agents in
connection therewith.
(d) If the Participating Stockholders withdraw Registrable
Securities such that less than 500,000 shares of Registrable Securities are
to be included in a Demand Registration Statement requested pursuant to
Section 2 and subsequently such Demand Registration Statement is not filed
and declared effective, or if the Stockholder withdraws any Demand
Registration Statement filed with the Commission pursuant to Section 2
prior to the effective time of such Demand Registration Statement, at the
election of the Stockholders, either (i) the Stockholders shall bear the
expenses pertaining to such demand registration or (ii) such demand
registration shall be deemed to be one of the four demand registrations
that the Stockholders are entitled to request pursuant to Section 2.02(a).
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7. Indemnification.
7.01 Indemnification by the Company. In connection with any registration
of securities pursuant to this Agreement, to the extent permitted by law, the
Company shall indemnify and hold harmless the Participating Stockholders and
each officer, director and employee of the Participating Stockholders, each
underwriter, if any, for the sale or distribution of the shares of the
Participating Stockholders, and each Person, if any, who controls the
Participating Stockholders or underwriter (within the meaning of the Securities
Act or the Exchange Act) (such holder and any such other Person being
hereinafter an "Indemnitee") (i) against any and all losses, claims, damages and
expenses whatsoever to which such Indemnitee may become subject, to the extent
such losses, claims, damages or expenses (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any Registration Statement, Prospectus or any
preliminary prospectus, or any amendment or supplement to any of the foregoing,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; (ii) against any and all losses, claims, damages and
expenses whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any governmental
agency or body, commenced or threatened, or of any claim whatsoever based upon
any such untrue statement or omission, or any such alleged untrue statement or
omission, if such settlement is effected with the written consent of the
Company; and (iii) against any and all expense whatsoever, as incurred
(including reasonable fees and disbursements of counsel chosen by the
Participating Stockholders and by the underwriters or agents), reasonably
incurred in investigating, preparing for or defending against any litigation, or
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent that
any such expense is not paid under subparagraph (i) or (ii) above; provided,
however, that the Company shall not be required to indemnify and hold harmless
or reimburse an Indemnitee to the extent that any such loss, claim, damage or
expense arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission in any document made in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of such Indemnitee expressly for use in the preparation of such
documents. If the offering pursuant to any Registration Statement provided for
under this Agreement is made through underwriters, no action or failure to act
on the part of such underwriters (whether or not such underwriter is an
affiliate of any holder of Registrable Securities) shall affect the obligations
of the Company to indemnify the Participating Stockholders or any other
Indemnitee pursuant to this Section 7 provided that the Company shall not be
required to indemnify any Indemnitees, to the extent that the loss, claim,
damage, liability (or actions in respect thereof) or expense for which
indemnification is claimed results from the failure by such Indemnitee to send
or give a copy of the amended or supplemented final prospectus to the Person
asserting an untrue statement or alleged untrue statement or omission or alleged
omission at or prior to the written confirmation of the sale of Registrable
Securities to such Person if such statement or omission was corrected in such
amended or supplemented final prospectus prior to such written confirmation and
the underwriter was given notice of the availability of such amended or
supplemented final prospectus. If the offering pursuant to any Registration
Statement provided for under this Agreement is made through underwriters, the
Company agrees to enter into an underwriting agreement in customary form with
such underwriters and to indemnify such
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underwriters, their officers and directors (including without limitation each
Person, if any, who controls such underwriters within the meaning of Section 15
of the Securities Act), to the same extent as hereinbefore provided with respect
to the indemnification of Indemnitees; provided that the Company shall not be
required to indemnify any such underwriter, or any officer, director or
affiliate of such underwriter or any Person who controls such underwriter within
the meaning of Section 15 of the Securities Act, to the extent that the loss,
claim, damage, liability (or actions in respect thereof) or expense for which
indemnification is claimed results from such underwriter's failure to send or to
give a copy of the amended or supplemented final prospectus to the Person
asserting an untrue statement or alleged untrue statement or omission or alleged
omission at or prior to the written confirmation of the sale of Registrable
Securities to such Person if such statement or omission was corrected in such
amended or supplemented final prospectus prior to such written confirmation and
the underwriter was given notice of the availability of such amended or
supplemented final prospectus.
7.02 Indemnification by the Stockholder. In connection with any
Registration Statement in which the Stockholder is participating, the
Stockholder will furnish to the Company in writing such information as shall be
reasonably requested by the Company for use in any such Registration Statement
or prospectus and shall, to the extent permitted by law, indemnify and hold
harmless the Company, its directors, officers and employees and each Person, if
any, who controls the Company (within the meaning of the Securities Act or the
Exchange Act) (the Company and any such other Person being hereinafter a
"Company Indemnitee") against all losses, claims, damages or liabilities to
which any such Company Indemnitee may become subject, under the Securities Act
or the Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue or alleged untrue statement of any material fact contained in any
Registration Statement, prospectus or any preliminary prospectus or any
amendment or supplement to any of the foregoing, or arise out of or are based
upon the omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, in each case, to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the Stockholder
expressly for use in the preparation of such documents; and, subject to Section
7.03, the Stockholder shall reimburse the Company Indemnitee for any legal or
other expenses reasonably incurred by the Company Indemnitee in connection with
investigating, preparing for or defending against any such loss, claim, damage,
liability or action; provided, however, that the maximum amount of liability of
the Stockholder under this Section 7.02 shall be limited to an amount equal to
the net proceeds actually received by the Stockholders (after deducting any
underwriting discount and expenses) from the sale of securities effected
pursuant to such registration.
7.03 Indemnification Procedures. Promptly after receipt by an
indemnified party under Section 7.01 or Section 7.02 of notice of the
commencement of any action, suit, proceeding or investigation or threat thereof
made in writing for which such Person will claim indemnification or contribution
pursuant to this Agreement, the indemnified party shall notify the indemnifying
party thereof in writing and, unless in such indemnified party's reasonable
judgment a conflict of interest may exist between such indemnified and
indemnifying parties with respect to such claim, shall permit such indemnifying
party to assume and control the defense of such claim at its expense with
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counsel reasonably satisfactory to such indemnified party. The failure to so
notify the indemnifying party shall not relieve the indemnifying party from any
liability hereunder with respect to the action except to the extent that such
failure prevents the indemnifying party from contesting such action; provided,
however that any such failure shall not relieve the indemnifying party from any
other liability which it may have to any other party. If the indemnifying party
gives notice to such indemnified party of its election to assume and control the
defense of such claim, the indemnifying party will not be liable to such
indemnified party for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense or investigation of the action
unless the indemnified party shall have given the indemnifying party notice of a
conflict of interest with respect to such claim. The failure of an indemnifying
party to give notice to the indemnified party of its election to assume and
control the defense of any action for which notice has been received by the
indemnifying party in accordance with this Section 7.03 within 45 days after the
receipt of such notice shall constitute an election by the indemnifying party
not to assume and control the defense of such action. An indemnifying party who
is not entitled to, or elects not to, assume the defense of a claim will not be
obligated to pay the fees and expenses of more than one counsel for all parties
indemnified by such indemnifying party with respect to such claim, unless in the
reasonable judgment of any indemnified party a conflict of interest may exist
between such indemnified party and any other indemnified party with respect to
such claim, in which event the indemnifying party shall be obligated to pay the
fees and expenses of separate counsel for such indemnified parties. No
indemnified party shall be entitled to indemnification hereunder with respect to
the consent to entry of any judgment or any settlement with respect to a claim
entered into without the consent of the indemnifying party.
7.04 Rights of Contribution. In order to provide for just and equitable
contribution in circumstances under with the indemnity contemplated by Section
7.01 and Section 7.02 is for any reason not available, other than by reason of
the exceptions provided therein, the parties required to indemnify by the terms
thereof shall contribute to the aggregate losses, liabilities, claims, damages
and expenses of the nature contemplated by such indemnity agreement incurred by
the Company, the Stockholder and one or more of the underwriters, except to the
extent that contribution is not permitted under Section 11(f) of the Securities
Act. In determining the amounts which the respective parties shall contribute,
there shall be considered (i) the relative fault of each party and (ii) if the
allocation provided in clause (i) is not permitted by applicable law, the
relative benefits received by each party from the offering of the Registered
Securities. In determining the relative fault of any party, there shall be taken
into consideration the relative knowledge of the parties and access to
information concerning the matter with respect to which the claim was asserted,
the opportunity to correct and prevent any statement or omission and any other
equitable considerations appropriate under the circumstances. The Company and
the Stockholder agree with each other that the Stockholder shall not be required
to contribute any amount in excess of the amount the Stockholder would have been
required to pay to an indemnified party if the indemnity under Section 7.02 were
available. The Company and the Stockholder agree with each other and the
underwriters of the Registered Securities, if requested by such underwriters,
that it would not be equitable if the amount of such contribution were
determined by pro rata or per capita allocation (even if the underwriters are
treated as one entity for such purpose) or for the underwriters' portion of such
contribution to exceed the percentage that the underwriting discount bears to
the public offering price of the Registered Securities. For purposes of this
Section 7.04, each Person, if any, who controls an underwriter within the
meaning of Section 15 of the Securities Act shall have the same rights to
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contribution as such underwriter, and each director and each officer of the
Company who signed the Registration Statement, and each Person, if any, who
controls the Company or the Stockholder within the meaning of Section 15 of the
Securities Act shall have the same rights to contribution as the Company or the
Stockholder, as the case may be.
8. Standby.
The Stockholders and the Company agree that with respect to any
Registration Statement that the Company may file (other than on Form S-4 or Form
S-8), including pursuant to a request under Section 2.01, neither the
Stockholders nor the Company will, and the Company will cause its executive
officers and request its directors not to, offer, sell or otherwise publicly
distribute any equity securities of the Company (whether or not such securities
are Registrable Securities, and however acquired), other than securities, if
any, of the Stockholders or the Company included in such Registration Statement
or securities offered or sold under employee benefit plans or under outstanding
options, rights or other derivative securities of the Company or as may be
otherwise agreed by the Company and the managing underwriter, during the period
commencing 5 days before the date on which such Registration Statement is
declared effective and ending on the earlier of (i) the last date upon which the
Stockholders or the Company, as the case may be, is prohibited from effecting
any such sale pursuant to any agreement entered into by and among any
Stockholder, the Company and one or more of the underwriters with respect to
such offering and (ii) 90 days after the date such Registration Statement is
declared effective. The foregoing shall not, however, restrict the Stockholders
from selling any securities of the Company at any time in private sales.
9. Miscellaneous.
9.01 Mergers and Other Transactions. The Company agrees that, as a
condition to any merger, consolidation or the sale of all or substantially all
of its assets in exchange for securities of another company, it will require the
surviving, consolidated or purchasing corporation to enter into an agreement to
register the securities of such surviving, consolidated or purchasing
corporation, to be received by the Stockholders, on substantially the same terms
and provisions as are provided in this Agreement.
9.02 Assignment. The registration rights contained in Section 2 and
Section 3 of this Agreement may be assigned by the initial Stockholder and each
subsequent transferee of Registrable Securities to any transferee of Registrable
Securities and any such assignment shall not eliminate or reduce the rights of
the assignor as a Stockholder hereunder. This Agreement is not otherwise
assignable other than by operation of law or with the consent of all parties
hereto, and any purported assignment in violation hereof shall be null and void.
9.03 Limitation of Registration Rights. Nothing contained in this
Agreement shall create any obligation on behalf of the Company to register under
the Securities Act any securities which are not Registrable Securities held by
the Stockholders.
9.04 No Inconsistent Agreements. The Company will not hereafter enter
into any agreement with respect to its securities which is inconsistent with the
rights granted to the Stockholders in this Agreement. In particular, the Company
will not grant any rights to any person
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other than the Stockholders to include any securities of the Company held by
such person in any demand registration pursuant to Section 2.02 hereof. The
Company has not previously entered into any agreement, with respect to any of
its securities, granting any registration rights to any person, which agreement
is in effect on the date hereof.
9.05 Remedies. The Stockholders, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement. The
Company agrees that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of the provisions of this Agreement
and hereby agrees to waive the defense in any action for specific performance
that a remedy at law would be adequate.
9.06 Notices. All notices and any other communications provided for or
permitted hereunder shall be made by hand delivery or registered first-class
mail:
(a) If to the Company:
Metromail Corporation
360 East 22nd Street
Lombard, Illinois 60148
Attn: Chief Financial Officer
(b) If to the Stockholders
R.R. Donnelley & Sons Company
77 West Wacker Drive
Chicago, Illinois 60601
Attn: Chief Financial Officer
All such notices and communications shall be deemed to have been duly
given when delivered by hand, if personally delivered, and 5 business days after
being deposited in the mail, postage prepaid, if mailed.
9.07 Counterparts. This agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which taken
together shall constitute one and the same agreement.
9.08 Headings. Section headings are inserted herein for convenience only
and do not form a part of this Agreement.
9.09 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Illinois without regard to
principles of conflicts of law.
9.10 Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other
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respect and of the remaining provisions contained herein shall not be in any way
impaired thereby, it being intended that all of the rights and privileges of the
Stockholder shall be enforceable to the fullest extent permitted by law.
9.11 Entire Agreement; Amendment. This agreement contains the
entire agreement among the parties hereto with respect to the transactions
contemplated herein, and supersedes all prior written agreements, and
negotiations and oral understandings, if any, with respect to its subject
matter. This Agreement may not be amended, supplemented or discharged except by
an instrument in writing signed by the Company and the Stockholders holding a
majority of the then outstanding Registrable Securities.
* * * *
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first written above.
METROMAIL CORPORATION
By: /s/ Thomas J. Quarles
---------------------------
Its: Senior Vice President
--------------------------
R.R. DONNELLEY & SONS COMPANY
By: /s/ W. Ed Tyler
---------------------------
Its: Executive Vice President
--------------------------
17
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EXHIBIT 99.3
February 24, 1997
R. R. Donnelley & Sons Company
77 West Wacker Drive
Chicago, IL 60601
Ladies and Gentlemen:
This letter will confirm our understanding that, in consideration for our
grant to you of registration rights pursuant to that certain Registration Rights
Agreement of even date herewith (the "Registration Rights"), you agree to the
provisions set forth below concerning the shareholder rights plan which
Metromail Corporation (the "Company") intends to adopt in the form attached
hereto (the "Rights Plan") at the meeting of its Board of Directors today.
In consideration of the grant to you of the Registration Rights and subject
to compliance by the Company with the last sentence of this paragraph, you (and
your affiliates) will not, and will not solicit any third party to, on your
behalf (a) oppose the adoption of the Rights Plan, (b) seek to include a
proposal to redeem the rights issued pursuant to the Rights Plan or to terminate
the Rights Plan in any proxy materials of the Company or (c) raise for
consideration by the stockholders of the Company at any annual or special
meeting the redemption of the rights issued pursuant to the Rights Plan or the
termination or amendment of the Rights Plan. In addition, we understand that
your representatives on the Board of Directors of the Company intend to vote in
favor of the adoption of the Rights Plan. The Company agrees with you that it
will not amend the Rights Plan in any manner which would impose greater
limitations on you, your affiliates or direct or indirect transferees than those
imposed by the Rights Plan as presently written or adopt any new rights plan
which would have the effect of imposing such greater limitations.
This will also confirm that (i) the Company will take all actions within
its control to elect and nominate to the Board of Directors persons reasonably
satisfactory to the Company who are requested to be so nominated and elected by
you, and (ii) the number of such nominees that you may so request to be elected
and that the Company will take such action to elect and nominate shall be
determined based on the level of your ownership in the Company as follows:
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(a) so long as you own more than 20% of the Company's outstanding shares of
common stock, two directors;
(b) so long as you own 20% or less but more than 10% of such stock, one
director;
and
(c) if you own 10% or less of such stock, no directors; and
(iii) if your ownership declines such that the number of persons serving on the
Board of Directors at your request exceeds the number specified in clause (ii),
you will promptly request that an appropriate number of such directors resign
(for example, if your ownership declines to (15%) and two persons are serving on
the Board at your request, you will request that one of them resign). If the
total number of Directors of the Company is increased above six, you and the
Company will adjust proportionately the number of directors which you are so
entitled to have nominated and caused to be elected so that such number equals
(as nearly as possible, rounding to the nearest whole number of directors) one-
third of the total number of directors when your ownership of the Company's
outstanding shares of common stock is greater than 20% or one-sixth of the total
number of directors when you own less than 20% but more than 10% of such stock.
Except to the extent that it is inconsistent with independence requirements of
stock exchange rules or tax or securities laws (as in the case of the Audit and
Human Resources Committees), the Company will take all actions within its
control to cause your representation on committees of the Board of Directors to
be proportional to your representation on the Board.
Finally, as we have discussed, your management shall have reasonable access
to the management of the Company.
If the foregoing accurately reflects our understanding, please sign and
return the enclosed copy of this letter.
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Sincerely,
METROMAIL CORPORATION
By: /s/ Thomas J. Quarles
Name: Thomas J. Quarles
Title: Senior Vice President
Acknowledged and agreed:
R. R. DONNELLEY & SONS COMPANY
By: /s/ W. Ed Tyler
Name: W. Ed Tyler
Title: Executive Vice President
