<PAGE> 1
FORM 8-A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
GENICOM CORPORATION
--------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 51-0271821
-------------------------------- ------------------------
(State of incorporation or (I.R.S. Employer
organization) Identification No.)
14800 Conference Center Drive
Suite 400, Westfields
Chantilly, Virginia 20151
-------------------------------- -----------------------
(Address of Principal Zip Code
Executive Offices)
Securities to be registered pursuant to Section 12(b) of the Act:
None
-----------------------------------------------------------------
(Title of Class)
Securities to be registered pursuant to Section 12(g) of the Act:
Title of each class
to be so registered
-------------------
Common Stock
Purchase Right
----------------------
<PAGE> 2
Item 1. Description of Registrant's Securities to be Registered.
On June 16, 1996 the Board of Directors of the Company declared a dividend
distribution of one common share purchase right (a "Right") for each
outstanding share of Common Stock ("Common Share"). The distribution was
payable on July 5, 1996 to the shareholders of record at the close of business
on that date.
The description and terms of the Rights are set forth in the Rights
Agreement, dated as of June 16, 1996 (the "Rights Agreement"), between the
Company and First Union National Bank of North Carolina as Rights Agent (the
"Rights Agent"). Each Right will entitle the registered holder to purchase
from the Company one one-thousandth of a Common Share at an initial price of
$40.00 per one one-thousandth of a share (the "Purchase Price"), subject to
adjustment. A Common Share and the Right issued or to be issued in respect
thereof will not be separately transferable until the "Distribution Date,"
which is the earlier of (i) the tenth day after a public announcement that a
Person (which term as used herein means an individual or business entity, other
than the Company and certain related entities) or group of affiliated or
associated Persons has acquired, or obtained the right to acquire, beneficial
ownership of 17% or more of the outstanding Common Shares (thereby becoming an
"Acquiring Person") or (ii) the tenth business day after the date of the
commencement of or first public announcement of the intent of any Person to
commence a tender or exchange offer the consummation of which would result in
such a Person becoming an Acquiring Person.
However, a Person will not become an Acquiring Person if such Person,
i) who, together with all affiliates and associates of such Person,
inadvertently becomes Beneficial Owner of 17% or more of the Common Shares, ii)
delivers to the Company the undertaking (the "Undertaking") required by the
Rights Agreement within five days of the first public announcement by the
Company or such Person, that such Person, together with all affiliates or
associates of such Person, has become Beneficial Owner of 17% or more of the
outstanding Common Shares, and iii) has not delivered another Undertaking
within the preceding two years. A Person described in the preceding sentence
will become an Acquiring Person (A) if such Person, together with all
affiliates and associates of such Person, does not reduce the number of Common
Shares Beneficially Owned by such Person, together with all affiliates and
associates of such Person, to less than 17% of the outstanding Common Shares
within the thirty day period specified in the Undertaking, or, (B) if in the
sole opinion of the Board of Directors, such Person has breached any
representation or covenant contained in such Undertaking. In the Undertaking
such Person shall represent that the acquisition of Common Shares resulting in
Beneficial
-2-
<PAGE> 3
Ownership of Common Shares of 17% or more was inadvertent and agree to i)
reduce such beneficial ownership to less than 17% within thirty days, ii) not
acquire additional Common Shares while such Person is Beneficial Owner of 17%
or more of Common Shares (except as a result of corporate action not caused,
directly or indirectly, by such Person), and iii) not seek to acquire or effect
control of the Company while Beneficial Owner of 17% or more of the Common
Shares.
Every Common Share issued after July 5, 1996 but prior to the Distribution
Date will also have a Right issued in respect thereof. As soon as practicable
after the Company has notified the Rights Agent of the occurrence of the
Distribution Date, separate certificates evidencing the Rights ("Rights
Certificates") will be mailed to holders of record of the Common Shares as of
the close of business on the Distribution Date. Common Shares issued after the
Distribution Date will be issued with Rights if such shares are issued pursuant
to the exercise of stock options, under an employee benefit plan, or upon the
conversion of securities, which options, plan or securities were granted,
established or issued before the Distribution Date. Except as otherwise
determined by the Board of Directors, no other Common Shares issued after the
Distribution Date will be issued with Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire at the close of business on July 1, 2006, unless earlier redeemed
by the Company as described below.
The Purchase Price payable, and the number of Common Shares or other
securities or property issuable, upon exercise of the Rights, as well as the
number of Rights outstanding, are subject to adjustment from time to time upon
the occurrence of certain dilutive events.
Each holder of a Right will have the right to receive, upon exercise of a
Right, Common Shares (or, in certain circumstances, cash, property or other
securities of the Company) having a value equal to two times the purchase price
for the Rights then in effect, (a) if after the Distribution Date, (i) the
Company is the surviving or continuing corporation in a merger or other
combination with an Acquiring Person and the Common Shares are not changed or
exchanged, (ii) an Acquiring Person consummates, with the Company or any
subsidiary, any one of a number of transactions listed in the Rights Agreement,
examples of which include acquiring stock or convertible securities except on a
pro rata basis with other shareholders, obtaining any assets except on an
arms-length basis, obtaining or disposing of any assets having a fair market
value of more than $2 million, or receiving certain financial benefits such as
loans, guarantees, tax benefits, except on a pro rata basis with other
shareholders or compensation, except as a full-time employee at normal rates,
or
-3-
<PAGE> 4
(iii) while there is an Acquiring Person, an event occurs which results in such
Acquiring Person's ownership interest being increased by more than 1% (e.g., a
reverse stock split), or (b) if an Acquiring Person acquired beneficial
ownership of 17% or more of the outstanding Common Shares except pursuant to a
cash tender offer for all outstanding shares which is determined to be fair by
the Continuing Directors (each of which events is popularly termed a flip-in
event). Notwithstanding any of the foregoing, following the occurrence of any
of the events set forth in this paragraph, all Rights that are, or (under
certain circumstances specified in the Rights Agreement) were, beneficially
owned by any Acquiring Person will be null and void. The Continuing Directors
are the directors on the Distribution Date or are directors elected or
nominated by a majority of the Continuing Directors in office on the date of
such election or nomination.
In the event that, at any time after it is announced that a Person or
group has become an Acquiring Person, (i) the Company is acquired in a merger
or other business combination transaction and is not the surviving or
continuing corporation, (ii) the Company is the surviving or continuing
corporation in a merger or other business combination and the Common Shares are
changed or exchanged for securities of another Person, or (iii) 50% or more of
the Company's assets or earning power is sold or transferred (each of which
events is popularly termed a flip-over event), each holder of a Right shall
thereafter have the right to receive, upon exercise, common stock (or
equivalent securities) of the acquiring entity having a value equal to two
times the purchase price for the Rights then in effect. The events set forth
in this paragraph and in the preceding paragraph are referred to as the
"Triggering Events."
No fractional Common Shares will be issued (other than fractions which are
integral multiples of one one-thousandth of a Common 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
Common Shares on the last trading date prior to the date of exercise. If the
Company is not able to issue the Common Shares because of the absence of
necessary regulatory approval, restrictions contained in the Company's Restated
Certificate of Incorporation, as amended, or for any other reason, a person
exercising the Rights will be entitled to receive a combination of cash or
property or other securities having a value equal to the value of the Common
Shares which would otherwise have been issued upon exercise of the Rights.
At any time until ten days after the announcement that a Person or group
has become an Acquiring Person, the Company may redeem the Rights in whole, but
not in part, at a price of $.01 per Right, payable, at the option of the
Company, in cash or
-4-
<PAGE> 5
Common Shares. When the Board of Directors (with the approval of a majority of
Continuing Directors) orders a redemption of the Rights, the Rights will
terminate and the only right of the holders of Rights will be to receive the
redemption price.
After a Person or group becomes an Acquiring Person and before the
Acquiring Person acquires 50% or more of the outstanding Common Shares, the
Company, with the approval of a majority of Continuing Directors, may require a
holder to exchange all or any portion of his Rights for one Common Share (or in
certain circumstances, other securities of the Company), per Right.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the
right to vote or to receive dividends.
Other than those provisions relating to the principal economic terms of
the Rights, any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company prior to the Distribution Date. After the
Distribution Date, the Rights Agreement may still be amended by the Board
(under certain circumstances only with the approval of a majority of Continuing
Directors) in order to cure any ambiguity, defect or inconsistency, to make
changes which do not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person), or to shorten or lengthen
any time period under the Rights Agreement; provided, however, that no
amendment to adjust the time period governing redemption shall be made at such
time as the Rights are not redeemable.
Item 2. Exhibits
<TABLE>
<CAPTION>
Number Description
- -------- ---------------------------------------------------------------
<S> <C>
3.1 Restated Certificate of Incorporation effective as of June 15,
1992 - filed herewith.
3.2 Certificate of Amendment to Certificate of Incorporation
effective as of July 17, 1995 - filed herewith.
3.3 By-laws, dated June 1, 1983, as amended January 23, 1989 -
incorporated by reference to Exhibit 3.2 to Form 10-K filed with
the Commission on March 29, 1989.
4.1 Rights Agreement dated as of June 16, 1996 between Genicom
Corporation and First Union National Bank of North Carolina;
including Exhibit A thereto, Form of Rights Certificate - filed
herewith.
</TABLE>
-5-
<PAGE> 6
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.
GENICOM CORPORATION
Dated: July 5, 1996 By \s\ James C. Gale
----------------------------------
James C. Gale
Senior Vice President and
Chief Financial Officer
-6-
<PAGE> 1
RESTATED CERTIFICATE OF INCORPORATION
OF
GENICOM CORPORATION
(Pursuant to Section 245 of the General
Corporation Law of the State of Delaware)
The undersigned President and Assistant Secretary of Genicom Corporation,
a corporation organized and existing under the laws of the State of Delaware,
hereby certify as follows:
1. The Corporation's present name is Genicom Corporation, the name under
which it was originally incorporated. The date of filing of its original
Certificate of Incorporation with the Secretary of State was June 1, 1983.
2. The Restated Certificate of Incorporation restates and integrates
previous amendments to the Certificate of Incorporation and does not in any way
further amend the Certificate of Incorporation of the Corporation, as
heretofore amended and now in effect. As such, stockholder approval of the
restatement was not required. The Restated Certificate of Incorporation was
approved by the Board of Directors by Unanimous Written Consent effective June
15, 1992 in accordance with Section 141(f) of the General Corporation Law, and
is as follows:
FIRST: The name of the Corporation is
GENICOM CORPORATION
SECOND: The address of the registered office of the Corporation in
the State of Delaware is 1209 Orange Street, in the City of Wilmington, County
of New Castle. The name of the Corporation's registered agent at such address
is The Corporation
<PAGE> 2
Trust Company.
THIRD: The purposes for which the Corporation is formed are to
engage in any lawful act or activity for which corporations may be organized
under the Delaware General Corporation Law.
FOURTH: The total number of shares of all classes of stock which
the Corporation shall have authority to issue is 15,000,000 shares, consisting
of 15,000,000 shares of Common Stock, $.01 par value (herein called the "Common
Stock"). All cross references in each subdivision of this Article FOURTH shall
refer to other paragraphs in such subdivision unless otherwise indicated.
The following is a statement of the designations, and the powers,
preferences and rights, and the qualifications, limitations or restrictions
thereof, in respect of each class of stock of the Corporation:
COMMON STOCK
All shares of Common Stock shall be identical and shall entitle the
holders thereof to the same rights and privileges.
1. Dividends
When and as dividends are declared upon the Common Stock, whether
payable in cash, in property or in shares of stock of the Corporation, the
holders of Common Stock shall be entitled to share equally, share for share, in
such dividends.
2. Voting Rights
Each holder of Common Stock shall be entitled to one
2
<PAGE> 3
vote per share.
OTHER PROVISIONS
No holder of any of the shares of any class or series of stock or of
options, warrants or other rights to purchase shares of any class or series of
stock or of other securities of the Corporation shall have any preemptive
rights to purchase or subscribe for any unissued stock of any class or series
or any additional shares of any class or series to be issued by reason of any
increase of the authorized capital stock of the Corporation of any class or
series, or bonds, certificates of indebtedness, debentures or other securities
convertible into or exchangeable for stock of the Corporation of any class or
series, but any such unissued stock, additional authorized issue of shares of
any class or series of stock or securities convertible into or exchangeable for
stock, or carrying any right to purchase stock, may be issued and disposed of
pursuant to resolution of the Board of Directors to such persons, firms,
corporations or associations, whether such holders or others, and upon such
terms as may be deemed advisable by the Board of Directors in the exercise of
its sole discretion.
FIFTH: In furtherance and not in limitation of the powers
conferred by the laws of the State of Delaware, the Board of Directors of the
Corporation is expressly authorized and empowered to make, alter or repeal the
By-laws of the Corporation, subject to the power of the stockholders of the
Corporation to alter or repeal any By-law made by the Board of
3
<PAGE> 4
Directors.
SIXTH: The Corporation reserves the right at any time and from
time to time to amend, alter, change or repeal any provisions contained in this
Certificate of Incorporation; and other provisions authorized by the laws of
the State of Delaware at the time in force may be added or inserted, in the
manner now or hereafter prescribed by law; and all rights, preferences and
privileges of whatsoever nature conferred upon stockholders, directors or any
other persons whomsoever by and pursuant to this Certificate of Incorporation
in its present form or as hereafter amended are granted subject to the right
reserved in this Article.
SEVENTH: INDEMNIFICATION
A. Definitions. For purposes of this Article: (i) "Corporation"
shall be deemed to mean this Corporation only and not any predecessor entity of
the Corporation in a merger or other transaction in which the predecessor's
existence ceased upon consummation of the transaction; (ii) a "legal entity" is
a corporation, partnership, joint venture, trust or other enterprise; (iii) a
"proceeding" is any action, suit or proceeding, whether civil, criminal,
administrative, arbitrative or investigative, including an action or suit by or
in the right of the Corporation to procure a judgment in its favor, and any
appeal in such an action, suit, or proceeding, and any inquiry or investigation
that could lead to such an action, suit or proceeding; and (iv) a "qualified
position" with respect to any
4
<PAGE> 5
legal entity is a position as a director or an officer of such legal entity or
a position held by a director, officer or employee of such legal entity which
does or might constitute him a fiduciary with respect to any employee benefit
plan for the employees of such legal entity under any federal or state law
regulating employee benefit plans.
B. Mandatory Indemnification. The Corporation shall indemnify each
person who was or is a party or is threatened to be made a party to any
proceeding by reason of the fact that he is serving in a qualified position
with respect to the Corporation or is serving in a similar capacity with
respect to any other legal entity at the request of the Corporation, against
all expenses (including attorneys' fees and costs of investigation and
litigation), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with any such proceeding to the
maximum extent permitted under the Delaware General Corporation Law (the
"Delaware Law", which term shall be deemed to include the Delaware Law or any
successor statute or section thereof, as now written or hereafter amended).
The termination of any proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, shall not of itself create
a presumption that such person acted in such a manner as to make him ineligible
for indemnification. The right of a person to be indemnified hereunder shall
be a contract right and shall include the right to be paid by the Corporation
all expenses incurred in
5
<PAGE> 6
defending any such proceeding in advance of its final disposition upon
compliance with the provisions of Delaware Law then in effect concerning
advancement of expenses.
C. Permissive Indemnification. In addition to the indemnification
provided for in paragraph B, the Corporation shall have the power to indemnify
or contract in advance to indemnify, to a lesser or the same extent that
indemnification is required under paragraph B, any person who was or is a party
or is threatened to be made a party to any proceeding by reason of the fact
that he is serving in any capacity with respect to the Corporation or with
respect to any other legal entity at the request of the Corporation.
D. Determination that Indemnification is Proper. Any
indemnification under this Article (unless ordered by a court) shall be made by
the Corporation only as authorized in the specific case upon a determination
that such indemnification is permitted under Delaware Law, or, in the case of
indemnification under paragraph C, is proper because the requirements specified
by the Corporation with respect to such indemnification have been met. Such
determination shall be made (i) by the Board of Directors by a majority vote of
a quorum consisting of directors who neither are nor were parties to the
proceeding, or (ii) if such a quorum is not obtainable, or, even though
obtainable, a majority of disinterested directors so directs, by independent
legal counsel in a written opinion, or (iii) by the stockholders. In making a
determination the directors may rely, as to all
6
<PAGE> 7
questions of law, on the advice of independent legal counsel.
E. Claims for Indemnification or Advances. If a claim for
indemnification or advancement of expenses hereunder is not paid in full by the
Corporation within 60 days after a written claim has been received by the
Corporation, the claimant may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim, and if successful in
whole or in part, the claimant shall be entitled to be paid the expenses of
prosecuting such claim. It shall be a defense to any such action that such
indemnification or advancement of costs of defense are not permitted under
Delaware Law, but the burden of proving such defense shall be on the
Corporation.
F. Miscellaneous. Every reference in this Article to persons who
are entitled to indemnification and advancement of expenses shall include all
persons who formerly occupied any of the positions hereinabove set forth in
this Article, to the extent they would have been entitled to indemnification
and advancement of expenses under the provisions of this Article if they still
held such positions and their respective heirs, executors and administrators.
Indemnification or advancement of expenses provided pursuant to the foregoing
provisions of this Article shall not exclusive of any other rights of
indemnification or advancement of expenses to which any person may be entitled.
Such rights include, but are not limited to, any and all rights under policies
of insurance that may be purchased and maintained by the Corporation or others,
whether or
7
<PAGE> 8
not the Corporation would have the power to indemnify such person in the
particular instance under the provisions of this Article, but no person shall
be entitled to indemnification by the Corporation to the extent he is
indemnified by any other party, including an insurer.
EIGHTH: A director of this Corporation shall not be personally
liable to the Corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or
a knowing violation of law, (iii) under Section 174 of Delaware General
Corporation Law, or (iv) for any transaction from which the director derived an
improper personal benefit. No amendment to or repeal of this Article EIGHTH
shall apply to or have any effect on the liability or alleged liability of any
director of the Corporation for or with respect to any acts or omissions of
such director occurring prior to such amendment.
3. The capital of the Corporation shall not be reduced under or by
reason of this restatement.
IN WITNESS WHEREOF, the undersigned have signed this instrument the 15th
day of June, 1992.
/s/ Paul T. Winn
Paul T. Winn, President
ATTEST:
/s/ James A. Jones
James A. Jones, Assistant Secretary
8
<PAGE> 1
CERTIFICATE OF AMENDMENT
TO
CERTIFICATE OF INCORPORATION
OF
GENICOM CORPORATION
GENICOM CORPORATION, a corporation organized and existing under the laws
of the State of Delaware, hereby certifies as follows:
FIRST: That the first paragraph of Article FOURTH of the Certificate of
Incorporation of the Corporation is hereby amended to read as follows:
"FOURTH: The total number of shares of all classes of stock which
the Corporation shall have authority to issue is 18,000,000 shares,
consisting of 18,000,000 shares of Common Stock, $.01 par value
(herein called the "Common Stock"). All cross references in each
subdivision of this Article FOURTH shall refer to other paragraphs in
such subdivision unless otherwise indicated."
SECOND: That the amendment of the Certificate of Incorporation effected
by this Certificate was (i) duly adopted on February 13, 1995 by unanimous
written consent of the Board of Directors of the Corporation, setting forth the
proposed amendment to the Certificate of Incorporation of the Corporation,
declaring such amendment to be advisable and directing that such amendment be
submitted to the stockholders of the Corporation for their approval
<PAGE> 2
and (ii) duly authorized, by the affirmative vote of the holders of a majority
of the outstanding shares of the Corporation's Common Stock entitled to vote,
at a duly held meeting of the stockholders on April 27, 1995, all in accordance
with the provisions of Section 242 of the General Corporation Law of the State
of Delaware.
THIRD: That the capital of the Corporation will not be reduced under,
or by any reason of, the foregoing amendment to the Certificate of
Incorporation of the Corporation.
IN WITNESS WHEREOF, GENICOM CORPORATION has caused its corporate seal to
be hereunto affixed and this certificate to be signed by James C. Gale, its
Senior Vice President, who acknowledges under penalties of perjury that the
facts herein stated are true and that this certificate is his act and deed, and
attested by James A. Jones, its Assistant Secretary, this 26 day of June, 1995.
GENICOM CORPORATION
By: /s/ James C. Gale
----------------------------
Name: James C. Gale
--------------------------
Title:Senior Vice President
-------------------------
ATTEST:
By: /s/ James A. Jones
----------------------------
Name: James A. Jones
--------------------------
Title: Assistant Secretary
-------------------------
<PAGE> 1
RIGHTS AGREEMENT
between
GENICOM CORPORATION
and
FIRST UNION NATIONAL BANK
OF NORTH CAROLINA
Dated as of June 16, 1996
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Section 1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
-------------------
Section 2. Appointment of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
---------------------------
Section 3. Issuance of Rights Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
-------------------------------
Section 4. Form of Rights Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
---------------------------
Section 5. Countersignature and Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
---------------------------------
Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or
---------------------------------------------------------------------------------------------------
Stolen Rights Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
--------------------------
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights . . . . . . . . . . . . . . . . . . . . . 16
-------------------------------------------------------------
Section 8. Cancellation and Destruction of Rights Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . 21
---------------------------------------------------
Section 9. Reservation and Availability of Common Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
---------------------------------------------
Section 10. Common Shares Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
-------------------------
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights . . . . . . . . . . . . . 27
---------------------------------------------------------------------------
Section 12. Certificate of Adjusted Purchase Price or Number of Shares. . . . . . . . . . . . . . . . . . . . . . 47
----------------------------------------------------------
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power. . . . . . . . . . . . . . . . . 48
--------------------------------------------------------------------
Section 14. Fractional Rights and Fractional Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
---------------------------------------
Section 15. Rights of Action. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
----------------
Section 16. Agreement of Right Holders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
--------------------------
Section 17. Rights Certificate Holder Not Deemed a Shareholder. . . . . . . . . . . . . . . . . . . . . . . . . . 57
--------------------------------------------------
Section 18. Concerning the Rights Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
---------------------------
Section 19. Merger or Consolidation or Change of Name of Rights Agent. . . . . . . . . . . . . . . . . . . . . . . 59
---------------------------------------------------------
Section 20. Duties of Rights Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
----------------------
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
Section 21. Change of Rights Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
----------------------
Section 22. Issuance of New Rights Certificates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
-----------------------------------
Section 23. Redemption and Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
--------------------------
Section 24. Exchange. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
--------
Section 25. Notice of Certain Events. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
------------------------
Section 26. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
-------
Section 27. Supplements and Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
--------------------------
Section 28. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
----------
Section 29. Determinations and Actions by the Board of Directors, etc. . . . . . . . . . . . . . . . . . . . . . . . 77
----------------------------------------------------------
Section 30. Benefits of this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
--------------------------
Section 31. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
------------
Section 32. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
-------------
Section 33. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
------------
Section 34. Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
--------------------
</TABLE>
<PAGE> 4
RIGHTS AGREEMENT
This Rights Agreement dated as of June 16, 1996, between GENICOM
CORPORATION, a Delaware corporation (the "Company"), and FIRST UNION NATIONAL
BANK OF NORTH CAROLINA, a national banking institution (the "Rights Agent").
The Board of Directors of the Company has authorized and declared a
dividend (the "Rights Dividend") of one common share purchase right (a "Right")
for each Common Share (as hereinafter defined) of the Company outstanding
immediately before the close of business on July 5, 1996 (the "Record Date"),
each Right representing the right to purchase one one-thousandth of a Common
Share upon the terms and subject to the conditions herein set forth, and,
subject to such terms and conditions, has further authorized the issuance of
one Right (as such number may hereafter be adjusted pursuant to the provisions
hereof) with respect to each Common Share that shall become outstanding (i)
between the Record Date and the earliest of the Distribution Date, the
Redemption Date and the Final Expiration Date (as such terms are defined in
Sections 3 and 7 hereof) or (ii) after the Distribution Date but before the
earlier of the Redemption Date or the Final Expiration Date, if such Common
Share became outstanding (A) upon the exercise of a stock option, (B) pursuant
to any employee plan or arrangement, or (C) upon the conversion or exchange of
a security which option, plan, arrangement or
<PAGE> 5
security was granted, established or issued, as the case may be, by the Company
before the Distribution Date.
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and Associates
(as such terms are hereinafter defined) of such Person, shall be the Beneficial
Owner (as such term is hereinafter defined) of 17% or more of the Common Shares
then outstanding, but shall not include (i) the Company, any wholly-owned
Subsidiary (as such term is hereinafter defined) of the Company or any employee
benefit plan of the Company or any Subsidiary of the Company, or any Person or
entity holding Common Shares for or pursuant to the terms of any such plan or
(ii) a Person (A) who or which, together with all Affiliates and Associates of
such Person, inadvertently becomes Beneficial Owner of 17% or more of the
Common Shares, (B) delivers to the Company an Undertaking within five days of
the first 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 such Person, that such Person, together with
all Affiliates or Associates of such Person, has become Beneficial Owner of 17%
or more of the
2
<PAGE> 6
outstanding Common Shares, and (C) who or which, together with all Affiliates
and Associates of such Person, has not delivered another Undertaking within the
preceding two years; provided that, a Person described in clause (ii) shall
cease to be subject to such clause and shall be an Acquiring Person if (X) such
Person, together with all Affiliates and Associates of such Person does not,
pursuant to such Undertaking, reduce the number of Common Shares Beneficially
Owned by such Person to less than 17% of the outstanding Common Shares within
the 30 day period specified in the Undertaking or (Y) if, in the sole opinion
of the Board of Directors of the Company, such Person has breached any
representation or covenant contained in the Undertaking delivered by such
Person.
(b) "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 (the "Exchange Act"), as in
effect on the date of this Agreement.
(c) 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 beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has (A) the right to acquire (whether
such right is exercisable immediately or only after the passage of time)
pursuant to
3
<PAGE> 7
any agreement, arrangement or understanding (whether or not in writing),
or upon the exercise of conversion rights, exchange rights, rights (other
than these Rights), warrants or options, or otherwise; provided, however,
that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, (1) securities tendered pursuant to a tender or exchange
offer made by or on behalf of such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted for
purchase or exchange, (2) securities issuable upon exercise of Rights at
any time prior to the occurrence of a Triggering Event (as hereinafter
defined), or (3) securities issuable upon exercise of Rights from and
after the occurrence of a Triggering Event which Rights were acquired by
such Person or any of such Person's Affiliates or Associates prior to the
Distribution Date or pursuant to Section 3(a) or Section 22 hereof (the
"Original Rights") or pursuant to Section 11(i) hereof in connection with
an adjustment made with respect to any Original Rights; or (B) 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 if the agreement, arrangement or understanding to vote
such security (1) arises solely from a revocable proxy
4
<PAGE> 8
or consent given to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable
rules and regulations of the Exchange Act and (2) is not also then
reportable 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 to the extent
contemplated by the proviso to Section 1(c)(ii)(B)), or disposing of any
securities of the Company; provided, however, that nothing in this
paragraph (iii) shall cause a person engaged in business as an underwriter
of securities to be the "Beneficial Owner" of, or to "beneficially own,"
any securities acquired through such person's participation in good faith
in a firm commitment underwriting until the expiration of forty days after
the date of such acquisition.
(d) "Business Day" shall mean any day other than a Saturday, Sunday,
or a day on which banking institutions in the Commonwealth of Virginia are
authorized or obligated by law or executive order to close.
(e) "Close of Business" on any given date shall mean 5:00 P.M., New
York, New York time, on such date; provided, however, that if such date is not
a Business Day it shall mean
5
<PAGE> 9
5:00 P.M., New York, New York time, on the next succeeding Business Day.
(f) "Common Shares" when used with reference to the Company shall
mean shares of Common Stock, $.01 par value, of the Company. "Common Shares"
when used with reference to any Person other than the Company shall mean the
capital stock (or equity interest) with the greatest voting power, or having
power to control or direct the management, of such other Person or, if such
other Person is a Subsidiary of another Person, of the Person or Persons which
ultimately control such first mentioned Person.
(g) "Continuing Director" shall mean a director who was a member of
the Board of Directors of the Company on the Distribution Date or who
subsequently became a director and whose election, or nomination for election
by the Company's shareholders, was approved by a vote of a majority of
Continuing Directors on the Board of Directors of the Company on the date of
such election or nomination.
(h) "Person" shall mean any individual, firm, corporation,
partnership or other entity, and shall include any successor (by merger or
otherwise) of such entity.
(i) "Section 11(a)(ii) Event" shall mean any event described in
Section 11(a)(ii)(A) or (B) hereof.
(j) "Section 13 Event" shall mean any event described in clauses
(i), (ii) or (iii) of Section 13(a) hereof.
(k) "Share Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition,
6
<PAGE> 10
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.
(l) "Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity securities
or equity interest is owned, directly or indirectly, by such Person.
(m) "Triggering Event" shall mean any Section 11(a)(ii) Event or any
Section 13 Event.
(n) "Undertaking" shall mean a binding and enforceable written
undertaking to the Company of any Person, in form reasonably satisfactory to
the Company, containing the following provisions and covenants:
(i) a representation that the acquisition of Common Shares
which results in such Person, together with all Affiliates and Associates of
such Person, becoming a Beneficial Owner of 17% or more of the Common Shares
was inadvertent,
(ii) an agreement to reduce such Person's beneficial ownership
to less than 17% of the outstanding Common Shares within 30 days,
(iii) an agreement not to acquire additional Common Shares while
such Person is Beneficial Owner of 17% or more of the Common Shares (except as
a result of corporate action not caused, directly or indirectly, by such
Person), and
(iv) an agreement that such Person will not, while such Person
is the Beneficial Owner of 17% of the Common Shares to which the Undertaking
relates, directly or indirectly, singly
7
<PAGE> 11
or as part of a "partnership, limited partnership, syndicate or other group"
(within the meaning of Section 13(d)(3) of the Exchange Act), seek to acquire
or affect the control of the Company.
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 Shares) 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. Issuance of Rights Certificates. (a) The Rights in
respect of the issued and outstanding Common Shares will be issued and become
effective on the Record Date. A Common Share and the Right or Rights issued or
to be issued hereunder in respect thereof will not be separately transferable
until the date (the "Distribution Date") which is the earlier of (i) the close
of business on the tenth day after the Share Acquisition Date (or, if the tenth
day after the Share Acquisition Date occurs before the Record Date, the close
of business on the Record Date) or (ii) the close of business on the tenth
Business Day after the date of the commencement of, or first public
announcement of the intent of any Person (other than the Company, any
wholly-owned Subsidiary of the Company or any employee benefit plan of the
Company or of any Subsidiary of the Company or any entity holding Common Shares
for or pursuant to the terms
8
<PAGE> 12
of any such plan) to commence, a tender or exchange offer the consummation of
which would result in beneficial ownership by a Person of 17% or more of the
outstanding Common Shares (including any such date which is after the date of
this Agreement and prior to the issuance of the Rights). Prior to the
Distribution Date, each holder of Common Shares will be the holder of the
Rights associated with each such share so held, except as otherwise provided in
Section 7(e). (A Common Share and its associated Right or Rights before the
Distribution Date shall be collectively referred to as the "Unit".) Until the
Distribution Date, the Rights issued from time to time hereunder shall be
evidenced collectively by one or more certificates (the "Rights Certificates")
delivered to and registered in the name of the Rights Agent, as Rights Agent
under this Agreement; but the issuance of the Rights hereunder shall not be
affected by any failure to deliver a new or replacement Rights Certificate to
the Rights Agent in respect thereof. The initial Rights Certificate and any
additional or replacement Rights Certificates delivered to the Rights Agent
shall, prior to the Distribution Date, have a legend set forth on the face
thereof to the effect that the Rights represented thereby shall not be
exercisable until the Distribution Date. As soon as practicable after the
Company has notified the Rights Agent of the occurrence of the Distribution
Date, the Rights Agent will send, by first-class, insured, postage prepaid
mail, to each record holder of Common Shares as of the close of business on the
Distribution Date, at the address of such holder shown on the records of the
Company, a Rights
9
<PAGE> 13
Certificate, in substantially the form of Exhibit A hereto, evidencing one
Right for each Common Share so held. As of the Distribution Date, the Rights
will be evidenced solely by such Rights Certificates. The failure to mail any
such Rights Certificate shall not affect the legality or validity of the
Rights.
(b) On the Record Date or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights to Purchase Common Shares, in
substantially the form attached hereto as Exhibit B (the "Summary of Rights"),
by first-class, postage prepaid mail, to each record holder of the Units as of
the close of business on the Record Date, at the address of such holder shown
on the records of the Company. The failure to send a copy of a Summary of
Rights shall not affect the legality or validity of the Rights.
(c) Certificates for Common Shares issued after the Record Date but
prior to the earliest of the Distribution Date or the Redemption Date or the
Final Expiration Date shall have impressed on, printed on, written on or
otherwise affixed to them the following legend:
The holder of this certificate is entitled to certain Rights as set forth
in a Rights Agreement between Genicom Corporation and First Union National
Bank of North Carolina, dated as of June 16, 1996, as the same may be
amended or supplemented from time to time hereafter (the "Rights
Agreement"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal executive
offices of Genicom Corporation. One or more certificates evidencing such
Rights have been delivered to and registered in the name of [INSERT NAME
OF RIGHTS AGENT], as Rights Agent under the Rights Agreement. Genicom
Corporation will mail to the holder of this certificate a copy of the
Rights Agreement without charge after receipt of
10
<PAGE> 14
a written request therefor. As described in the Rights Agreement, Rights
issued to any Person who becomes an Acquiring Person (as defined in the
Rights Agreement) shall become null and void.
Section 4. Form of Rights Certificates. (a) The Rights
Certificates (and the forms of election to purchase Common Shares and of
assignment to be printed on the reverse thereof) shall be substantially the
same as Exhibit A hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as the
Company may deem appropriate and as are not inconsistent with the provisions of
this Agreement, or as may be required to comply with any applicable law or with
any rule or regulation made pursuant thereto or with any rule or regulation of
any stock exchange on which the Rights may from time to time be listed, or to
conform to usage. Subject to the provisions of Section 11 and Section 22
hereof, the Rights Certificates, whenever issued, that are issued in respect of
Common Shares which were issued and outstanding as of the Distribution Date,
shall be dated as of the Distribution Date, and all Rights Certificates that
are issued in respect of other Common Shares shall be dated as of the
respective dates of issuance of such Common Shares, and in each such case on
their face shall entitle the holders thereof to purchase such number of one
one-thousandths of a Common Share as shall be set forth therein at the price
per one one-thousandth of a Common Share set forth therein (the "Purchase
Price"), but the amount and type of securities purchasable upon the exercise of
each Right and the
11
<PAGE> 15
Purchase Price thereof shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) or Section 22
that represents Rights beneficially owned by: (i) an Acquiring Person or any
Associate or Affiliate of an Acquiring Person, (ii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee before or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interest in such
Acquiring Person or to any Person with whom such Acquiring 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), and any Rights
Certificate issued pursuant to Section 6 or Section 11 upon transfer, exchange,
replacement or adjustment of any other Rights Certificate referred to in this
sentence, shall contain (to the extent feasible) the following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person (as such terms
are defined in the Rights Agreement). Accordingly, this Rights
Certificate and the Rights represented hereby may
12
<PAGE> 16
become null and void in the circumstance specified in Section 7(e)
of such Agreement.
Section 5. Countersignature and Registration. The Rights
Certificates shall be executed on behalf of the Company by its President, any
Senior Vice President, and by the Secretary, an Assistant Secretary, Treasurer
or an Assistant Treasurer of the Company, either manually or by facsimile
signature, and have affixed thereto the Company's seal or a facsimile thereof.
The Rights Certificates shall not be valid for any purpose unless manually
countersigned by an authorized signatory of the Rights Agent. 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.
The Rights Agent will keep or cause to be kept, at its principal
offices, 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
13
<PAGE> 17
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.
Subject to the provisions of Section 4(b), Section 7(e) and Section 14 hereof,
at or prior to the close of business on the earlier of the Redemption Date or
the Final Expiration Date (as such terms are defined in Section 7 hereof), any
Rights Certificate or Rights Certificates (other than Rights Certificates
representing Rights that have become void pursuant to Section 7(e)) may be
transferred, split up, combined or exchanged for another Rights Certificate or
Rights Certificates, entitling the registered holder to purchase a like number
of one one-thousandths of a Common Share (or, following a Triggering Event,
Common Shares, other securities, cash or other assets, as the case may be) as
the Rights Certificate or Rights 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 shall make such request in writing delivered to the Rights
Agent, and shall surrender the Rights Certificate or Rights 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
14
<PAGE> 18
Certificate until the registered holder shall have completed and signed the
certificate contained in the form of assignment on the reverse side of such
Rights Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall request. Thereupon the Rights Agent
shall, subject to Section 4(b), Section 7(e) and Section 14 hereof, countersign
and deliver to the Person entitled thereto a Rights Certificate or Rights
Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or exchange of
Rights Certificates.
Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation
of a Rights Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and, at the Company's
request, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Rights Certificate if mutilated, the Company will execute
and deliver a new Rights Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of the Rights
Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights. (a) Subject to Section 7(e) hereof,
15
<PAGE> 19
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) and
Section 11(a)(iii) 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
Common Share (or other securities, cash or other assets, as the case may be) as
to which such surrendered Rights are then exercisable, at or prior to the
earlier of (i) the close of business on July 1, 2006 (the "Final Expiration
Date"), (ii) the time at which the Rights are redeemed as provided in Section
23 hereof (the "Redemption Date"), or (iii) the time at which the Board of
Directors takes action ordering the exchange of such Rights as provided in
Section 24 hereof.
(b) The Purchase Price for each one one-thousandth of a Common Share
pursuant to the exercise of a Right shall initially be $40, shall be subject to
adjustment from time to time as provided in Sections 11 and 13 hereof and shall
be payable in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly
executed, accompanied by payment, with respect to each Right so exercised, of
the Purchase Price per one one-
16
<PAGE> 20
thousandth of a Common Share (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 required to be paid by the holder of such
Rights Certificate in accordance with Section 9, the Rights Agent shall,
subject to Section 20(k) hereof, thereupon promptly (i) (A) requisition from
any transfer agent of the Common Shares (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 Common Share to be purchased and the Company hereby
irrevocably authorizes its transfer agent to comply with all such requests, or
(B) if the Company shall have elected to deposit the total number of Common
Shares 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 Common Share as are to be purchased (in
which case certificates for the Common Shares represented by such receipts
shall be deposited by the transfer agent with the depositary agent) and the
Company hereby directs the depositary agent to comply with such request, (ii)
when appropriate, requisition from the Company the amount of cash, if any, to
be paid in lieu of issuance of fractional shares in accordance with Section 14,
(iii) promptly after receipt of such certificates or depositary receipts, cause
the same to be delivered to or upon the order of the registered holder of such
Rights Certificate, registered in such name or names as may be designated by
such holder and (iv) when appropriate, after receipt, promptly deliver
17
<PAGE> 21
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 (x) in cash or by
certified bank check or bank draft payable to the order of the Company, or (y)
at the election of the Company with respect to all exercisable Rights by
delivery of a certificate or certificates (with appropriate stock powers
executed in blank attached thereto) evidencing a number of Common Shares equal
to the then Purchase Price divided by the closing price (as determined pursuant
to Section 11(d) hereof) per Common Share on the Trading Day (as hereinafter
defined) immediately preceding the date of such exercise, or (z) in the event
the Company permits payment with Common Shares, a combination thereof. In the
event the Company elects to accept Common Shares in payment of the Purchase
Price, it shall notify the Rights Agent of such election and of the closing
price per Common Share on the Trading Date immediately preceding the date of
exercise to which such election relates. In the event that the Company is
obligated to issue other securities of the Company, pay cash and/or distribute
other property pursuant to Section 11(a) hereof, the Company will make all
arrangements necessary so that such other securities, cash and/or other
property are available for distribution by the Rights Agent, if and when
appropriate.
(d) In case the registered holder of any Rights Certificate shall
exercise fewer than all the Rights evidenced thereby, a new Rights Certificate
evidencing Rights equivalent to
18
<PAGE> 22
the Rights remaining unexercised shall be issued by the Rights Agent to the
registered holder of such Rights Certificate or to his duly authorized assigns,
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(a)(ii) Event, any Rights
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of
an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee before or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person with whom
the Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer that 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 be void without any further action and any holder of such Rights shall
thereafter have no right whatsoever with respect to such Rights (including,
without limitation, the right to exercise such Rights) under any provision of
this Agreement or otherwise. No Rights Certificate shall be issued pursuant to
Section 3 that represents Rights
19
<PAGE> 23
beneficially owned by an Acquiring Person whose Rights would be void pursuant
to the preceding sentence or any Associate or Affiliate thereof; no Rights
Certificate shall be issued at any time upon the transfer of any Rights to an
Acquiring Person whose Rights would be void pursuant to the preceding sentence
or any Associate or Affiliate thereof or to any nominee of such Acquiring
Person, Associate or Affiliate; and any Rights Certificate delivered to the
Rights Agent for transfer to an Acquiring Person whose Rights would be void
pursuant to the preceding sentence shall be cancelled. The Company shall use
all reasonable efforts to insure that the provisions of this Section 7(e) and
Section 4(b) are complied with, but shall have no liability to any holder of
Rights Certificates or any other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or its 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.
20
<PAGE> 24
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 to 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 Rights 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.
Section 9. Reservation and Availability of Common Shares. (a) The
Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued Common Shares or any authorized
and issued Common Shares held in treasury (and, following the occurrence of a
Triggering Event, out of any other securities) the number of Common Shares
(and, following the occurrence of a Triggering Event, out of any other
securities) that, as provided in this Agreement, will be sufficient to permit
the exercise in full of all outstanding Rights.
(b) In the event the Common Shares (and, following the occurrence of
a Triggering Event, any other securities) issuable and deliverable upon the
exercise of Rights are listed on any
21
<PAGE> 25
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(a)(ii) 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), a registration
statement under the Securities Act of 1933 (the "Act"), with respect to the
securities purchasable upon exercise of the Rights on an appropriate form, (ii)
cause such registration statement to become effective as soon as practicable
after such filing, (iii) cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the Act) until the
earlier of (A) the date as of which the Rights are no longer exercisable for
such securities, and (B) the Final Expiration Date, and (iv) obtain such
regulatory approvals as may be necessary for it to issue securities purchasable
upon the exercise of the Rights. The Company will also take such action as may
be appropriate under, or to ensure compliance with, the securities or "blue
sky" laws of the various states in connection with the exercisability of the
Rights. The Company may temporarily suspend, for a period of time not to
exceed 90 days
22
<PAGE> 26
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 or to obtain any other
required regulatory approval in connection with the exercisability of the
Rights. Upon any such suspension, the Company shall issue a public
announcement stating, and notify the Rights Agent, 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. In the event any Right is exercised prior to the occurrence of a
Section 11(a)(ii) Event or a Section 13 Event, the Company may defer for up to
90 days the issuance of Common Shares upon such exercise in order to obtain any
necessary regulatory approval. If, within 90 days after such exercise of any
Right, the Company is unable to obtain any required regulatory approval for the
issuance of the Common Shares, or if the Company is otherwise unable to issue
the Common Shares under the terms of its Certificate of Incorporation or for
any other reason, then the Company shall substitute for the Common Shares
otherwise issuable upon exercise of the Right (1) cash, (2) a reduction in the
Purchase Price, (3) other equity securities of the Company, except to the
extent that the Company has not obtained any necessary regulatory approval for
such
23
<PAGE> 27
issuance, (4) debt securities of the Company, except to the extent that the
Company has not obtained any necessary regulatory approval for such issuance,
(5) other assets, or (6) any combination of the foregoing, having an aggregate
value equal to the Current Market Price (as defined in Section 11(d)(ii)) of
the Common Shares for which such Right is exercisable, 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. 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.
(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 Common
Share (and, following the occurrence of a Triggering Event, any 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 shares.
(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 certificate for a number of one one-thousandths of a
Common Share
24
<PAGE> 28
(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 certificates or depositary
receipts for a number of one one-thousandths of a Common Share (or other
securities, as the case may be) in respect of a name other than that of, the
registered holder of the Rights Certificate evidencing Rights surrendered for
exercise or to issue or deliver any certificates or depositary receipts for a
number of one one-thousandths of a Common Share (or other securities, as the
case may be) upon the exercise of any Rights until any such tax shall have been
paid (any such tax being payable by the holder of such Rights Certificate at
the time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
Section 10. Common Shares Record Date. Each person in whose name
any certificate for a number of one one-thousandths of a Common Share is issued
upon the exercise of Rights shall for all purposes be deemed to have become the
holder of record of the Common Shares (or other securities, as the case may be)
represented thereby on, and such certificate shall be dated, the date upon
which the Rights Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (and any applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date
upon which the Common Shares (or other securities, as the case may be) transfer
25
<PAGE> 29
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 Common Shares (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 shareholder of the Company
with respect to shares for which the Rights shall be exercisable, including,
without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled
to receive any notice of any proceedings of the Company, except as provided
herein.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares
or Number of Rights. The Purchase Price, the number and kind of shares covered
by each Right and the number of Rights outstanding are subject to adjustment
from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date
of this Agreement (A) declare a dividend on the Common Shares payable in
Common Shares, (B) subdivide the outstanding Common Shares, (C) combine
the outstanding Common Shares into a smaller number of Common Shares or
(D) issue any shares of its capital stock in a reclassification of the
Common Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation), except
26
<PAGE> 30
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 capital stock
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 capital stock which, if such Right had been
exercised immediately prior to such date and at a time when the Common
Shares transfer books of the Company were open, he would have owned upon
such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification; provided, however, that in
no event shall the consideration to be paid upon the exercise of one Right
be less than the aggregate par value of the shares of capital stock of the
Company issuable upon exercise of one Right. If an event occurs which
would require an adjustment under both Section 11(a)(i) and Section
11(a)(ii), 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).
(ii) In the event
(A) any Acquiring Person or any Associate or Affiliate of
any Acquiring Person, at any time after the date of this
Agreement, directly or
27
<PAGE> 31
indirectly, (1) shall merge into the Company or otherwise
combine with the Company and the Company shall be the continuing
or surviving corporation of such merger or combination and the
Common Shares of the Company shall remain outstanding and not
changed into or exchanged for stock or other securities of any
other Person or the Company or cash or any other property, (2)
shall, in one or more transactions, transfer any assets to the
Company or any of its Subsidiaries in exchange (in whole or in
part) for shares of any class of capital stock of the Company or
any of its Subsidiaries or for securities exercisable for or
convertible into shares of any class of capital stock of the
Company or any of its Subsidiaries or otherwise obtain from the
Company or any of its Subsidiaries, with or without
consideration, any additional shares of any class of capital
stock of the Company or any of its Subsidiaries or securities
exercisable for or convertible into shares of any class of
capital stock of the Company or any of its Subsidiaries (other
than as part of a pro rata distribution to all holders of such
shares of any class of capital stock of the Company or any of
its Subsidiaries), (3) shall sell, purchase, lease, exchange,
mortgage, pledge, transfer or otherwise acquire or dispose (in
one
28
<PAGE> 32
or more transactions), to, from, with or of, as the case may be,
the Company or any of its Subsidiaries, assets (including
securities) on terms and conditions less favorable to the
Company than the Company would be able to obtain in arm's-length
negotiation with an unaffiliated third party (other than
pursuant to a transaction set forth in Section 13(a) hereof),
(4) shall sell, purchase, lease, exchange, mortgage, pledge,
transfer or otherwise acquire or dispose (in one or more
transactions), to, from, with or of, as the case may be, the
Company or any of the Company's Subsidiaries (other than
incidental to the lines of business, if any, engaged in as of
the date hereof between the Company and such Acquiring Person or
Associate or Affiliate) assets having an aggregate fair market
value of more than $2 million (other than pursuant to a
transaction set forth in Section 13(a) hereof), (5) shall
receive any compensation from the Company or any of the
Company's Subsidiaries other than compensation for full-time
employment as a regular employee at rates in accordance with the
Company's (or its Subsidiaries') past practices, or (6) shall
receive the benefit, directly or indirectly (except
proportionately as a shareholder and except if resulting from a
requirement of law or
29
<PAGE> 33
governmental regulation), of any loans, advances, guarantees,
pledges or other financial assistance or any tax credits or
other tax advantage provided by the Company or any of its
Subsidiaries, or
(B) any Person shall become the Beneficial Owner of 17% or
more of the Common Shares of the Company then outstanding,
except pursuant to a tender offer made in the manner prescribed
by Section 14(d) of the Exchange Act and the rules and
regulations promulgated thereunder; provided, however, that (a)
such tender offer shall provide for the acquisition of all of
the outstanding Common Shares held by any Person other than such
Acquiring Person and its Associates or Affiliates for cash and
(b) a majority of the Continuing Directors shall have determined
that such tender offer is fair, or
(C) during such time as there is an Acquiring Person, there
shall be any reclassification of securities (including any
reverse stock split), or recapitalization of the Company, or any
merger or consolidation of the Company with any of its
Subsidiaries or any other transaction or series of transactions
involving the Company or any of its Subsidiaries (whether or not
with or into or otherwise involving an Acquiring Person), other
than a transaction or transactions to which the
30
<PAGE> 34
provisions of Section 13(a) apply, which has the effect,
directly or indirectly, of increasing by more than 1% the
proportionate share of the outstanding shares of any class of
equity securities or of securities exercisable for or
convertible into securities of the Company or any of its
Subsidiaries which is directly or indirectly owned by any
Acquiring Person or any Associate or Affiliate of any Acquiring
Person,
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), 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 Common Share, such number of Common Shares as shall equal the
result obtained by (x) multiplying the then current Purchase Price by
the then number of one one-thousandths of a Common Share for which a
Right was exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event, and dividing that product (which product,
following such first occurrence, shall thereafter be referred to as
the "Purchase Price" for each Right and for all purposes of this
Agreement) by (y) 50% of the Current Market Price per share of the
Common Shares (determined pursuant to Section 11(d)) on the date of
such
31
<PAGE> 35
first occurrence (such number of shares, the "Adjustment Shares");
provided, that the Purchase Price and the number of Adjustment Shares
shall be further adjusted as provided in this Agreement to reflect
any events occurring after the date of such first occurrence.
(iii) In the event that the number of Common Shares
authorized by the Company's Certificate of Incorporation but not
outstanding or reserved for issuance for purposes other than upon
exercise of the Rights and the authorized and issued shares held in
its treasury and not reserved for issuance for purposes other than
upon exercise of the Rights is not sufficient to permit the exercise
in full of the Rights in accordance with the foregoing subparagraph
(ii) of this Section 11(a), or if any necessary regulatory approval
for such issuance has not been obtained by the Company, 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, make adequate provision to substitute for the
Adjustment Shares, upon exercise of the Rights, (1) cash, (2) a
reduction in the Purchase Price, (3) Common Shares or other equity
securities of the Company (including, without limitation, shares or
units of shares of preferred stock (if then authorized by the
Company's Certificate of Incorporation) which the Board of Directors
of the Company has deemed to have the same value as Common Shares
(such
32
<PAGE> 36
shares or units of shares of preferred stock are herein called
"common stock equivalents")), except to the extent that the Company
has not obtained any necessary regulatory approval for such issuance,
(4) debt securities of the Company, except to the extent that the
Company has not obtained any necessary regulatory approval for such
issuance, (5) other assets, or (6) any combination of the foregoing,
having an aggregate value equal to the Current Value, where such
aggregate value has been determined by the Board of Directors of the
Company based upon the advice of a nationally recognized investment
banking firm selected by the Board of Directors of the Company;
provided, however, if the Company shall not have made adequate
provision to deliver value pursuant to clause (B) above within 30
days following the later of (x) the first occurrence of a Section
11(a)(ii) Event and (y) the date on which the Company's right of
redemption pursuant to Section 23(a) expires (the later of (x) and
(y) being referred to herein as the "Section 11(a)(ii) Trigger
Date"), then the Company shall be obligated, subject to Section 7(e),
to deliver, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, Common Shares (to the extent
available), except to the extent that the Company has not obtained
any necessary regulatory approval for such issuance, 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
33
<PAGE> 37
faith that it is likely that sufficient additional Common Shares
could be authorized for issuance upon exercise in full of the Rights
or that any necessary regulatory approval for such issuance will be
obtained, the 30-day period set forth above may be extended to the
extent necessary, but not more than 90 days after the Section
11(a)(ii) Trigger Date, in order that the Company may seek
shareholder approval for the authorization of such additional shares
or take action to obtain such regulatory approval (such period, as it
may be extended, the "Substitution Period"). To the extent that the
Company determines that some action need to be taken pursuant to the
first and/or second sentences of this Section 11(a)(iii), the Company
(x) shall provide, subject to Section 7(e) hereof, that such action
shall apply uniformly to all outstanding Rights, and (y) may suspend
the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of additional
shares, to take any action to obtain any required regulatory approval
and/or to decide the appropriate form of distribution to be made
pursuant to such first sentence and to determine the value thereof.
In the event of any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time
as the suspension is no longer in effect. For purposes of this
Section 11(a)(iii), the value of the Common Shares shall be the
Current Market Price (as determined
34
<PAGE> 38
pursuant to Section 11(d) hereof) per share of the Common Shares on
the Section 11(a)(ii) Trigger Date and the value of any "common stock
equivalent" shall be deemed to have the same value as the Common
Shares on such date.
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Common Shares entitling them (for
a period expiring within 45 calendar days after such record date) to subscribe
for or purchase Common Shares (or securities convertible into Common Shares) at
a price per Common Share (or having a conversion price per share, if a security
convertible into Common Shares) less than the Current Market Price per share of
the Common Shares (as defined in Section 11(d)) 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 Common Shares
outstanding on such record date plus the number of Common Shares which the
aggregate offering price of the total number of Common Shares so to be offered
(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 Common Shares outstanding on such record date plus
the number of additional Common Shares to be offered for subscription or
purchase (or into which the convertible securities so to be offered are
initially convertible); provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less
35
<PAGE> 39
than the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right. In case such subscription price may be
paid in a 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. Common Shares 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 the making of a
distribution to all holders of the Common Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation) of evidences of indebtedness or assets
(other than a cash dividend (provided if such cash dividend occurs after the
Distribution Date, only if such cash dividend is approved by a majority of
Continuing Directors) or a dividend payable in Common Shares) or subscription
rights or warrants (excluding those referred to in Section 11(b)), 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
36
<PAGE> 40
a fraction, the numerator of which shall be the Current Market Price per share
of the Common Shares (as defined in Section 11(d)) 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) of the portion of the cash, assets or evidences of
indebtedness so to be distributed or of such subscription rights or warrants
applicable to one Common Share and the denominator of which shall be such
Current Market Price per share of the Common Shares; provided, however, that in
no event shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital stock of the Company
to be issued upon exercise of one Right. 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 again be adjusted to be
the Purchase Price which would then be 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 the Common Shares on any date shall be deemed
to be the average of the daily closing prices per share of such Common
Shares for the 30 consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date, and for purposes of computations
made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per
share of the Common Shares on any
37
<PAGE> 41
date shall be deemed to be the average of the daily closing prices per
share of such Common Shares for the ten consecutive Trading Days
immediately following such date; provided, however, that in the event that
the Current Market Price per share of the Common Shares is determined
during a period following the announcement by the issuer of such Common
Shares of (A) a dividend or distribution on such Common Shares payable in
such Common Shares or securities convertible into such Common Shares
(other than the Rights), or (B) any subdivision, combination or
reclassification of such Common Shares, and prior to the expiration of the
requisite 30 Trading Days or ten Trading Days, as set forth above, after
the ex-dividend date for such dividend or distribution or the record date
for such subdivision, combination or reclassification, then, and in each
such case, the Current Market Price shall be appropriately adjusted to
reflect the Current Market Price per Common Share equivalent. 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
Common Shares 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
38
<PAGE> 42
listed on the principal national securities exchange on which the Common
Shares are listed or admitted to trading or, if the Common Shares 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 Quotations
System ("NASDAQ") or such other system then in use, or, if on any such
date the Common Shares are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Common Shares selected by the Board of
Directors of the Company. If on any such date no market maker is making a
market in the Common Shares, 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 Common Shares are listed or
admitted to trading is open for the transaction of business or, if the
Common Shares are not listed or admitted to trading on any national
securities exchange, a Business Day. If the Common Shares are 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
39
<PAGE> 43
conclusive for all purposes. For all purposes of this Agreement, the
"Current Market Price" of one one-thousandth of a Common Share shall be
equal to the "Current Market Price" of one Common Share divided by 1,000.
(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 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 Common Share or other share,
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 years from the date of the transaction which requires such
adjustment or (ii) the date of the expiration of the right to exercise any
Rights.
(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 of the Company
other than Common Shares, 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
40
<PAGE> 44
respect to the Common Shares contained in Section 11(a), (b), (c), (e), (g),
(h), (i), (j), (k) and (m), and the provisions of Sections 7, 9, 10, 13 and 14
with respect to the Common Shares 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 Common Share 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 Section 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 per one one-thousandth of a Common
Share, that number of one one-thousandths of a Common Share (calculated to the
nearest one one-millionth of a Common Share) 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 substitution for any
adjustment in the number of one one-
41
<PAGE> 45
thousandths of a Common Share purchasable upon the exercise of a Right. Each
of the Rights outstanding after such adjustment in the number of Rights shall
be exercisable for the number of one one-thousandths of a Common Share 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, and notify
the Rights Agent, 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 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
42
<PAGE> 46
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 Common Share issuable upon the
exercise of the Rights, the Rights Certificates theretofore and thereafter
issued may continue to express the Purchase Price per one one-thousandth of a
share and the number of 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 one one-thousandth of the then par value, if any, of
the number of one one-thousandths of a Common Share 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 Common Shares 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
43
<PAGE> 47
defer until the occurrence of such event the issuance to the holder of any
Right exercised after such record date of the number of one one-thousandths of
a Common Share 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 Common Share and other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price in effect prior
to such adjustment; provided, however, that the Company shall deliver to such
holder a due bill or other appropriate instrument evidencing such holder's
right to receive such additional shares (fractional or otherwise) or securities
upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that in their good faith judgment the Board of Directors of the
Company shall determine to be advisable in order that any consolidation or
subdivision of the Common Shares, issuance wholly for cash of any of the Common
Shares at less than the Current Market Price, issuance wholly for cash of
Common Shares or securities which by their terms are convertible into or
exchangeable for Common Shares, stock dividends or issuance of rights, options
or warrants referred to in this Section 11, hereafter made by the Company to
holders of its Common Shares shall not be taxable to such shareholders.
44
<PAGE> 48
(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
45
<PAGE> 49
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.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Sections 11 and 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 the transfer agent for the
Common Shares a copy of such certificate and (c) mail a brief summary thereof
to each holder of a Rights Certificate in accordance with Section 25 hereof.
The Rights Agent shall be fully protected in relying on any such certificate
and on any adjustment therein and shall not be deemed to have knowledge of any
such adjustment unless and until it shall have received such a certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. (a) In the event that, following the Share Acquisition Date,
directly or indirectly, (i) 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 or any employee benefit
plan of the Company, or any entity holding Common Shares for or pursuant to the
terms of any such plan) and the Company shall not be the continuing or
surviving corporation of such consolidation or merger, (ii) any Person (other
than a Subsidiary of the
46
<PAGE> 50
Company in a transaction which complies with Section 11(o) hereof or any
employee benefit plan of the Company, or any entity holding Common Shares for
or pursuant to the terms of any such plan) shall consolidate with the Company,
or merge with and into the Company, and the Company shall be the continuing or
surviving corporation of such consolidation or merger and, in connection with
such merger, all or part of the outstanding Common Shares shall be changed into
or exchanged for stock or other securities of any other Person (or the Company)
or cash or any other property, or (iii) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or otherwise transfer),
in one or more 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 of its
Subsidiaries in one or more transactions each of which complies with Section
11(o) hereof), then, and in each such case, proper provision shall be made so
that (A) each holder of a Right (except as otherwise provided in Section 7(e)
hereof) shall thereafter have the right to receive, upon the exercise thereof
at the then current Purchase Price, in accordance with the terms of this
Agreement, such number of validly authorized and issued, fully paid,
nonassessable and freely tradeable shares of Common Shares 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
47
<PAGE> 51
one one-thousandths of a Common Share for which a Right is then exercisable
(without taking into account any adjustment previously made pursuant to Section
11(a)(ii)) 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 Shares of such Principal Party on the date of
consummation of such Section 13 Event; (B) 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; (C)
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; (D) such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of shares of its Common
Shares in accordance with Section 9) 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
Common Shares thereafter deliverable upon the exercise of the Rights; and (E)
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
48
<PAGE> 52
(i) in the case of any transaction described in clause (i) or
(ii) of the first sentence of Section 13(a), the Person that is the issuer
of any securities into which Common Shares 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 (iii) 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 Shares of such
Person are not at such time and have not been continuously over the preceding
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 Shares
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 Shares 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 Shares 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 Shares which have not been
49
<PAGE> 53
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 Section 13 Event, the Principal Party will
(i) prepare and file a registration statement under the Act,
with respect to the Rights and the securities purchasable upon exercise of
the Rights on an appropriate form, and will use its best efforts to cause
such registration statement to (A) become effective as soon as practicable
after such filing and (B) remain effective (with a prospectus at all times
meeting the requirements of the Act) until the Final Expiration Date; and
(ii) 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 foregoing provisions set forth in this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. In the event
that a Section 13 Event shall occur at any time after the occurrence of a
Section 11(a)(ii) Event, the Rights which have not theretofore been exercised
shall
50
<PAGE> 54
thereafter become exercisable in the manner described in Section 13(a).
Section 14. Fractional Rights and Fractional Shares.a)
(a) The Company shall not be required to issue fractions of Rights
or to distribute Rights Certificates which evidence fractional Rights. In lieu
of such fractional Rights, there shall be paid to the registered holders of the
Rights Certificates with regard to which such fractional Rights would otherwise
be issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For the 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 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
51
<PAGE> 55
asked prices in the over-the-counter market, as reported by NASDAQ or such
other system then in use or, if on any such date the Rights are not quoted by
any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Rights selected
by the Board of Directors of the Company. If on any such date no such market
maker is making a market in the Rights the fair value of the Rights on such
date as determined in good faith by the Board of Directors of the Company shall
be used.
(b) The Company shall not be required to issue fractions of Common
Shares (other than fractions which are integral multiples of one
one-thousandths of a Common Share) upon exercise of the Rights or to distribute
certificates which evidence fractional Common Shares (other than fractions
which are integral multiples of one one-thousandths of a Common Share).
Fractions of Common Shares in integral multiples of one one-thousandths of a
Common Share may, at the election of the Company, be evidenced by depositary
receipts, pursuant to an appropriate agreement between the Company and a
depositary selected by it, provided that such agreement shall provide that the
holders of such depositary receipts shall have all the rights, privileges and
preferences to which they are entitled as Beneficial Owners of the Common
Shares. In lieu of fractional Common Shares the Company shall 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 Common Share. For purposes of
52
<PAGE> 56
this Section 14(b), the current market value of a Common Share shall be the
closing price of a Common Share (as determined pursuant to the second sentence
of Section 11(d)) for the Trading Day immediately prior to the date of such
exercise.
(c) The holder of a Right by the acceptance of the Rights expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right.
Section 15. Rights of Action. All rights of action in respect to
this Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the
Rights Certificates (and, prior to the Distribution Date, the registered
holders of the Common Shares); and any registered holder of any Rights
Certificate (or, prior to the Distribution Date, of the Common Shares), without
the consent of the Rights Agent or of the holder of any other Rights
Certificate (or, prior to the Distribution Date, of the Common Shares), may, on
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
will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened
53
<PAGE> 57
violations of, the obligations of any Person subject to this Agreement.
Section 16. Agreement of Right 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 the Common Shares;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer and
with the appropriate forms and certificates fully executed;
(c) subject to Section 6 and Section 7(f) hereof, the Company and
the Rights Agent may deem and treat the person in whose name the Rights
Certificate (or, prior to the Distribution Date, the associated Common Shares
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 Shares 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
54
<PAGE> 58
(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 Shareholder. 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 Common Shares or any
other securities of the Company which may at any time be issuable upon 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 shareholder of the Company
or any right to vote for the election of directors or upon any matter submitted
to shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 25), or to receive dividends or
subscription rights, or
55
<PAGE> 59
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. The Company agrees to pay
to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the acceptance, exercise and
performance of its duties hereunder. The Company also agrees to indemnify the
Rights Agent, its officers, directors, employees and agents for, and to hold
each of them harmless against, any loss, liability, or expense, incurred
without gross negligence, bad faith or willful misconduct on the part of the
Rights Agent or such other indemnified party, for anything done, suffered or
omitted by the Rights Agent or such other indemnified party in connection with
the acceptance and administration of this Agreement or the exercise or
performance of its duties hereunder, including the costs and expenses of
defending against any claim of liability in the premises (including reasonable
counsel fees and expenses).
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 or the exercise or performance of
its duties hereunder in reliance upon any Rights Certificate or certificate for
the Common Shares or for other securities of the Company, instrument
56
<PAGE> 60
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, or otherwise upon
the advice of its counsel as set forth in Section 20 hereof.
Anything in this Agreement to the contrary notwithstanding, in no event
shall the Rights Agent be liable for special, indirect or consequential loss or
damage of any kind whatsoever (including but not limited to lost profits), even
if the Rights Agent has been advised of the likelihood of such loss or damage
and regardless of the form of the action.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent. Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21. 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
57
<PAGE> 61
such successor Rights Agent may adopt the countersignature of the 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,
a successor Rights Agent may countersign such Rights Certificates either in the
name of the predecessor Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Rights Certificates shall have the full force
provided in the Rights Certificates and in this Agreement.
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 written advice or opinion of such
counsel shall be full and complete
58
<PAGE> 62
authorization and protection to the Rights Agent as to any action taken,
suffered or omitted in good faith by it under the provisions of this Agreement
in reliance upon such written advice or 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 and the
determination of "Current Market Price") be proved or established by the
Company prior to taking, suffering or omitting 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 a person reasonably believed by the Rights Agent to be
any one of the President or any Senior Vice President or the Chief Financial
Officer of the Company and delivered to the Rights Agent; and such certificate
shall be full and complete authorization to the Rights Agent for any action
taken, suffered or omitted in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and
any other Person only for its own gross 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, the Summary of
Rights or in the Rights Certificates (except its countersignature thereof) or
be required
59
<PAGE> 63
to verify the same, but all such statements and recitals are and shall be
deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of any provision 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 change in the
exercisability of the Rights or any adjustment in the terms of the Rights
(including the manner, method or amount thereof) provided for in this
Agreement, or the ascertaining of the existence of facts that would require any
such change or adjustment (except with respect to the exercise of Rights
evidenced by Rights Certificates after actual notice that such change or
adjustment is required); nor shall it by any act hereunder be deemed to make
any representation or warranty as to the authorization or reservation of any
Common Shares or other securities to be issued pursuant to this Agreement or
any Rights Certificate or as to whether any Common Shares or other securities
will, when 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
60
<PAGE> 64
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 any
person reasonably believed by the Rights Agent to be any one of the President
or any Senior Vice President of the Company, and to apply to such officers for
advice or instructions in connection with its duties, and it shall not be
liable for any action taken, suffered or omitted to be taken in good faith by
it under the provisions of this Agreement in reliance upon instructions of any
such officer. At any time the Rights Agent may apply to the Company for
written instructions with respect to any matter arising in connection with the
Rights Agent's duties and obligations arising under this Agreement. Such
application by the Rights Agent for written instructions from the Company may,
at the option of the Rights Agent, set forth in writing any action proposed to
be taken or omitted by the Rights Agent with respect to its duties or
obligations under this Agreement and the date on and/or after which such action
shall be taken and the Rights Agent shall not be liable for any action taken or
omitted in accordance with a proposal included in any such application on or
after the date specified therein (which date shall not be less than three
Business Days after the Company receives such application, without the
Company's consent) unless, prior to taking or initiating such action, the
Rights Agent has received written
61
<PAGE> 65
instructions in response to such application specifying the action to be taken
or omitted.
(h) The Rights Agent and any shareholder, 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 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.
62
<PAGE> 66
(k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to
such requested exercise or transfer without first consulting with the Company.
(l) The Rights Agent undertakes only the express duties and
obligations imposed on it by this Agreement and no implied duties or
obligations shall be read into this Agreement against the Rights Agent.
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 30 days notice in writing mailed to the Company and to the
transfer agent of the Common Shares 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 30 days notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the case may be, and
to the transfer agent of the Common Shares 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 30 days after giving
notice of such removal or
63
<PAGE> 67
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Rights
Certificate (who shall, with such notice, submit his Rights Certificate for
inspection by the Company), then the registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a corporation organized
and doing business under the laws of the United States or of the States of New
York or Virginia (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 States
of New York or Virginia), in good standing, having an office in the States of
New York or Virginia, 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 $50 million. 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
64
<PAGE> 68
and the transfer agent of the Common Shares, and mail a notice thereof in
writing to the registered holders of the Rights Certificates. Failure to give
any notice provided for in this Section 21, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal of the
Rights Agent or the appointment of the successor Rights Agent, as the case may
be.
Section 22. Issuance of New Rights Certificates. Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the Rights
Certificates made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of Common Shares following
the Distribution Date and prior to the redemption or expiration of the Rights,
the Company (a) shall, with respect to Common Shares so issued or sold pursuant
to the exercise of stock options or under any employee plan or arrangement (so
long as such options, plan or arrangement were granted or established, as the
case may be, prior to the Distribution Date), or upon the exercise, conversion
or exchange of securities issued by the Company after the date hereof and prior
to the Distribution Date, 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
65
<PAGE> 69
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 Persons to whom such Rights Certificate would be issued, and
(ii) no such Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.
Section 23. Redemption and Termination.
(a) The Board of Directors of the Company may, at its option, at any
time prior to the earlier of (i) the close of business on the tenth day
following the Share Acquisition Date (or, if the Share 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 $.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")
and the Company may, at its option, pay the Redemption Price either in Common
Shares (based on the "Current Market Price," as defined in Section 11(d)(i)
hereof, of the Common Shares at the time of redemption) or cash; provided,
however, if the Board of Directors of the Company authorizes redemption of the
Rights in either of the circumstances set forth in clauses
66
<PAGE> 70
(i) and (ii) below, then there must be Continuing Directors then in office and
such authorization shall require the concurrence of a majority of such
Continuing Directors: (i) such authorization occurs on or after the time a
Person becomes an Acquiring Person, or (ii) such authorization occurs on or
after the date of a change (resulting from a proxy or consent solicitation) in
a majority of the directors in office at the commencement of such solicitation
if any Person who is a participant in such solicitation has stated (or, if upon
the commencement of such solicitation, a majority of the Board of Directors of
the Company has determined in good faith) that such Person (or any of its
Affiliates or Associates) intends to take, or may consider taking, any action
which would result in such Person becoming an Acquiring Person or which would
cause the occurrence of a Triggering Event.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights (such action being adopted in the
manner required by paragraph (a) above), evidence of which shall have been
filed with the Rights Agent and without any further action and without any
notice, 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
67
<PAGE> 71
the registry books of the Rights Agent or, prior to the Distribution Date, on
the registry books of the transfer agent for the Common Shares. 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) With the affirmative vote of a majority
of the Continuing Directors, the Company may at any time after any Person
becomes an Acquiring Person, exchange all or part of the then outstanding and
exercisable Rights for Common Shares at an exchange ratio of one Common Share
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 Company 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 Shares for or pursuant to the terms of any such plan), together
with all Affiliates and Associates of such Person, becomes the Beneficial Owner
of 50% or more of the Common Shares 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
68
<PAGE> 72
Rights shall terminate and the only right thereafter of a holder of such Rights
shall be to receive that number of Common Shares 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 Shares for Rights will be effected and, in the
event of any partial exchange, the number of Rights will be exchanged. Any
partial exchange shall be effected pro rata based on the number of Rights held
by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute preferred shares (if then authorized by the Company's
Certificate of Incorporation), with dividend, liquidation and voting rights per
share comparable to a Common Share, for Common Shares exchangeable for Rights,
at the initial rate of such preferred share for each Common Share.
(d) In the event that there shall not be sufficient Common Shares
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
69
<PAGE> 73
authorize additional Common Shares for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional Common Shares.
In lieu of such fractional Common Shares, the Company shall pay to the
registered holders of the Rights Certificates with regard to which such
fractional Common Shares would otherwise be issuable an amount in cash equal to
the same fraction of the current market value of a whole Common Share. For the
purposes of this subsection (e), the current market value of a whole Common
Share shall be the closing price of a Common Share (as determined pursuant to
the second sentence of Section 11(d)(i) hereof) for the Trading Day immediately
after the public announcement by the Company that an exchange is to be effected
pursuant to this Section 24.
Section 25. Notice of Certain Events. In case the Company shall
propose (a) to pay any dividend payable in stock of any class to the holders of
its Common Shares or to make any other distribution to the holders of its
Common Shares (other than a cash dividend (provided if such cash dividend
occurs after the Distribution Date, only if such cash dividend is approved by a
majority of Continuing Directors), or (b) to offer to the holders of its Common
Shares rights or warrants to subscribe for or to purchase any additional Common
Shares or shares of stock of any class or any other securities, rights or
options, or (c) to effect any reclassification of its Common Shares (other than
a reclassification involving only the subdivision of outstanding
70
<PAGE> 74
Common Shares), or (d) 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 or more transactions, of 50% or more of the assets or earning
power of the Company and its Subsidiaries (taken as a whole) to, any other
Person (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 (e) 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, 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, or
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
Common Shares, if any such date is to be fixed, and such notice shall be so
given in the case of any action covered by clause (a) or (b) above at least 10
days prior to the record date for determining holders of the Common Shares for
purposes of such action, and in the case of any such other action, at least 10
days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the Common Shares, whichever shall be
the earlier.
71
<PAGE> 75
In case any Section 11(a)(ii) Event shall occur, then, in any such
case, the Company shall as soon as practicable thereafter give to each holder
of a Rights Certificate, 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 all
references in the preceding paragraph to Common Shares shall be deemed
thereafter references to other securities, if appropriate.
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:
Genicom Corporation
14800 Conference Center Drive
Suite 400, Westfields
Chantilly, Virginia 22021
Attention: Chief Executive Officer
Subject to the provisions of Section 21 hereof, 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:
72
<PAGE> 76
First Union National Bank
of North Carolina
230 South Tryon Street
Charlotte, NC 28288
Attention: Shareholder Services
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 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
may and the Rights Agent shall, if the Company so directs, supplement or amend
any provision of this Agreement without the approval of any holders of
certificates representing Common Shares. 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
(i) to cure any ambiguity, (ii) to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provisions herein, (iii) shorten or lengthen any time period hereunder (which
lengthening or shortening, following the first occurrence of an event set forth
in clauses (i) and (ii) of the proviso to Section 23(a) hereof, shall be
effective only if there are Continuing Directors and shall require the
concurrence of a
73
<PAGE> 77
majority of such Continuing Directors), or (iv) to change or supplement the
provisions hereunder in any manner which the Company may deem necessary or
desirable and which shall not adversely affect the interests of the holders of
Rights Certificates (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person); provided, 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 any
Acquiring Person and its Affiliates and Associates). Upon the delivery of a
certificate from an appropriate officer of the Company which states that the
proposed supplement or amendment is in compliance with the terms of this
Section 27, the Rights Agent shall execute such supplement or amendment.
Notwithstanding anything contained in this Agreement to the contrary, no
supplement or amendment shall be made which changes the Redemption Price, the
Final Expiration Date, the Purchase Price or the number of one-thousandths of a
Common Share for which a Right is exercisable. Prior to the Distribution Date,
the interests of the holders of Rights shall be deemed coincident with the
interests of the holders of Common Shares (other than an Acquiring Person).
Notwithstanding anything contained in this Agreement to the contrary, no
supplement or amendment that changes the rights and duties of the Rights Agent
under this
74
<PAGE> 78
Agreement shall be effective without the consent of the Rights Agent.
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
Common Shares outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding Common Shares 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 (with, where
specifically provided for herein, the consent of a majority of the Continuing
Directors) shall have the exclusive power and authority to administer this
Agreement and to exercise all rights and powers specifically granted to the
Board (with, where specifically provided for herein, the consent of a majority
of the Continuing Directors) or to the Company, or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this
Agreement, (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) and (iii) make all factual
determinations deemed
75
<PAGE> 79
necessary or advisable for the administration of this 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 or corporation other than the Company,
the Rights Agent and the registered holders of the Rights Certificates (and,
prior to the Distribution Date, the Common Shares) 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, the Common Shares).
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement, or any portion thereof, 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, including any portions of any thereof which are not held to be
invalid, void or unenforceable, shall remain in full force and effect and shall
in no way be affected, impaired or invalidated; provided, however, that
notwithstanding anything in
76
<PAGE> 80
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, with the consent of a
majority of the Continuing Directors after the Distribution Date, determines in
its good faith business judgment that severing the invalid language from this
Agreement would adversely affect the purpose or effect of this Agreement, the
right of redemption set forth in Section 23 hereof shall be reinstated and
shall not expire until the close of business on the tenth day following the
date of such determination by the Board of Directors.
Section 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 to
be made and 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.
77
<PAGE> 81
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
GENICOM CORPORATION
Attest:
By \s\ Maria Gutierrez By \s\ James C. Gale
------------------------ ----------------------------
Title: Assistant Secretary Title: Senior Vice President
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA
Attest:
By \s\ Eleanor G. Autry By \s\ Frances S. Bean
------------------------ ----------------------------
Title: Vice President Title: Vice President
78
<PAGE> 82
Exhibit A
[Form of Rights Certificate]
Certificate No. R- ________ Rights
NOT EXERCISABLE [BEFORE THE DISTRIBUTION DATE (AS SUCH TERM IS DEFINED IN THE
RIGHTS AGREEMENT) OR] AFTER JULY 1, 2006 OR EARLIER IF NOTICE OF REDEMPTION IS
GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.001 PER RIGHT ON THE TERMS
SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND 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 AN AFFILIATE OR ASSOCIATE OF AN
ACQUIRING 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.]
Right Certificate
------------------
This certifies that ____________________________, or registered assigns,
is the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement, dated as of June 16, 1996 (the "Rights Agreement"),
between GENICOM Corporation, a Delaware corporation (the "Company"), and First
Union National Bank of North Carolina, (or its successor as rights agent under
the Rights Agreement, the "Rights Agent"), to purchase from the Company at any
time after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 P.M. (New York City time) on July 1, 2006 (the
"Final Expiration Date") at the principal office or offices of the Rights Agent
designated for such purpose, or at its successor as Rights Agent, one one-
<PAGE> 83
thousandth of a fully paid nonassessable share of Common Stock, $.01 par value
(the "Common Shares"), of the Company, at a purchase price of $40 per one
one-thousandth of a Common Share (the "Purchase Price"), upon presentation and
surrender of this Rights Certificate with the Form of Election to Purchase and
related Certificate duly executed. The Purchase Price shall be paid in cash
or, if the Company so permits, Common Shares having an equivalent value or, if
the Company has permitted payment with Common Shares, a combination of cash and
Common Shares. 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 as of June 16, 1996, based on the Common Shares
as constituted at such date.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is defined
in the Rights Agreement), if the Rights evidenced by this Right Certificate are
beneficially owned by (i) an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person (as such terms are defined in the Rights Agreement),
(ii) a transferee of any such Acquiring 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 or an Affiliate or Associate of an Acquiring Person, such
Rights shall become null and void and no holder hereof shall have any right
with respect to such Rights from and after the occurrence of such Section
11(a)(ii) Event.
2
<PAGE> 84
As provided in the Rights Agreement, the Purchase Price and the number and
kind of Common Shares or other securities which may be purchased upon the
exercise of the Rights evidenced by this Rights Certificate are subject to
modification and adjustment upon the happening of certain events, including
Triggering Events (as such term is defined in the Rights Agreement).
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 principal offices of the
Company and are also available upon written request to the Company.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the office or offices of the Rights Agent designated for such
purpose, may be exchanged for another Rights Certificate or Rights Certificates
of like tenor and date evidencing Rights entitling the holder to purchase a
like aggregate number of one one-thousandths of a Common Share as the Rights
evidenced by the Rights Certificate or Rights Certificates surrendered shall
have entitled such holder to purchase. If this
3
<PAGE> 85
Rights Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Rights Certificate or Rights Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate may be redeemed by the Company at its option, with the
approval of a majority of the Continuing Directors (as such term is defined in
the Rights Agreement) at a redemption price of $.01 per Right, payable, at the
option of the Company, in cash or Common Shares, at any time prior to the
earlier of the close of business on (i) the tenth day (as such time period may
be extended or shortened pursuant to the Rights Agreement) following the Share
Acquisition Date (as such term is defined in the Rights Agreement) and (ii) the
Final Expiration Date.
No fractional Common Shares will be issued upon the exercise of any Right
or Rights evidenced hereby (other than fractions which are integral multiples
of one one-thousandths of a Common Share, which may, at the election of the
Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Common Shares or of
any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
shareholder
4
<PAGE> 86
of the Company or any right to vote for the election of directors or upon any
matter submitted to shareholders at any meeting thereof, or to give or withhold
consent to any corporate action, or, to receive notice of meetings or other
actions affecting shareholders (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 signatures of the proper officers of the Company and
its corporate seal. Dated:
ATTEST: GENICOM CORPORATION
By:
- ------------------------- ---------------------------
Title: Title:
Countersigned:
[INSERT NAME OF RIGHTS AGENT]
By:
--------------------------
Authorized Signature
5
<PAGE> 87
[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 Certificates.)
FOR VALUE RECEIVED _________________________________________
hereby sells, assigns and transfers unto
_________________________________________________________________
(Please print name and address of transferee)
_________________________________________________________________
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ________________________
Attorney, to transfer the within-named Rights Certificate on the books of the
within-named Company, with full power of substitution.
Dated: _________________, ____
--------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership
in an approved signature guarantee Medallion program), pursuant to SEC Rule
17Ad-15.
- -------------------------------------------------------------------------------
Certificate
The undersigned hereby certifies by checking the appropriate boxes that: (I)
this Rights Certificate [ ] is [ ] is not being sold, assigned or transferred
by or on behalf of a Person who is or was an Acquiring Person or an Affiliate
or Associate of any such Acquiring Person (as such terms are defined pursuant
to the Rights Agreement); and (ii) after due inquiry and to the best knowledge
of the undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this
Rights Certificate from any Person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated: ,
--------- ---- --------------------------------
Signature
6
<PAGE> 88
Notices
The signature to the foregoing Assignment and Certificate must correspond
to the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
7
<PAGE> 89
[Form of Reverse Side of Rights Certificate -- continued]
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Rights Certificate.)
To: Genicom Corporation
The undersigned hereby irrevocably elects to exercise
_________________________________ Rights represented by this Rights Certificate
to purchase the Common Shares issuable upon the exercise of the Rights (or such
other securities of the Company or of any other person which may be issuable
upon the exercise of the Rights) and requests that certificates for such shares
be issued in the name of and delivered to:
Please insert social security
or other identifying number
- -------------------------------------------------------------------
(Please print name and address)
- -------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
- -------------------------------------------------------------------
(Please print name and address)
- -------------------------------------------------------------------
Dated: ,
------------------ ----
-------------------------------
Signature
(Signature must conform in all respects to
name of holder as specified on the face of
this Rights Certificate in every particular,
without alteration or enlargement or any
change whatsoever.)
8
<PAGE> 90
Signature Guaranteed:
Signatures must be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership
in an approved signature guarantee Medallion program), pursuant to SEC Rule
17Ad-15.
Dated: ,
------------- ---- --------------------------------
Signature
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
1. the Rights evidenced by this Rights Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person
or an Affiliate or Associate of any such Acquiring Person (as such terms are
defined pursuant to the Rights Agreement);
2. after due inquiry and to the best knowledge of the undersigned, it [
] did [ ] did not acquire the Rights evidenced by this Rights Certificate from
any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: ,
------------- ---- --------------------------------
Signature
Signature Guaranteed:
Notice
The signature to the foregoing Election 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.
9
<PAGE> 91
EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE COMMON SHARES
On June 16, 1996, the Board of Directors of GENICOM Corporation, a
Delaware corporation (the "Company") declared a dividend of one common share
purchase right (a "Right") for each outstanding share of Common Stock, $.01 par
value ("Common Share") of the Company on July 5, 1996. The distribution is
payable on July 5, 1996 to shareholders of record at the close of business on
that date.
Each Right will entitle the holder to purchase from the Company one
one-thousandth of a Common Share at an initial price of $40 per one
one-thousandth of a Common Share (the "Purchase Price"). The description and
terms of the Rights are set forth in the Rights Agreement dated as of June 16,
1996 (the "Rights Agreement") between GENICOM Corporation and First Union
National Bank of North Carolina, as rights agent (the "Rights Agent").
The Rights are not exercisable, and are not transferable apart from the
Common Shares, until the "Distribution Date" which is the earlier of (i) the
tenth day after a public announcement that a Person (which term as used in this
summary means an individual or any business entity, other than the Company and
certain related entities) or group of affiliated or associated Persons has
acquired, or obtained the right to acquire, beneficial ownership of 17% or more
of the outstanding Common Shares, thereby becoming an "Acquiring Person," or
(ii) the tenth business day after the date of the commencement of, or first
public announcement of the intent of any Person to commence, a tender or
exchange offer the consummation of which would result in such Person becoming an
Acquiring Person. A Person who inadvertently acquires beneficial ownership of
17% or more of the outstanding Common Stock will not become an Acquiring Person
if certain procedures specified in the Rights Agreement are followed. These
procedures include the timely delivery of an undertaking to, among other things,
reduce beneficial ownership to less than 17% within 30 days and to refrain from
acquiring additional Common Shares or otherwise seeking to acquire or affect
control of the Company during such period. These procedures are not applicable
to Persons who have delivered another such undertaking in the previous two
years. Such a Person will become an Acquiring Person if beneficial ownership is
not reduced to less than 17% within 30 days or if, in the sole opinion of the
Board of Directors of the Company, such Person has breached any representations
or warranties in the undertaking.
After the Distribution Date, the Rights are exercisable and separately
transferable.
<PAGE> 92
Before the Distribution Date, a holder of Common Shares will be the
owner of one Right for each Common Share he holds, but the Rights will be
evidenced by one or more certificates ("Rights Certificate") held by the Rights
Agent. After the Distribution Date, separate Rights Certificates will be mailed
to holders of record of the Common Shares at the close of business on the
Distribution Date.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to shareholders or to the Company, shareholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable. The Purchase Price payable, and the number of Common Shares or
other securities or property issuable upon exercise of the Rights, as well as
the number of Rights outstanding, are subject to adjustment from time to time
upon the occurrence of certain dilutive events.
Any additional Common Shares issued before the Distribution Date will
also have Rights issued in respect thereof and Common Shares issued after the
Distribution Date will be issued with Rights if such shares are issued in
respect of stock options, employee benefit plans or convertible securities which
were granted, established or issued before the Distribution Date.
The Rights will expire at the close of business on July1, 2006, unless
earlier exercised or redeemed by the Company.
No fractional Common Shares will be issued (other than fractions which
are integral multiples of one one-thousandth of a Common Share) when a Right is
exercised and, in lieu thereof, an adjustment in cash will be made based on the
market price of the Common Shares on the last trading date prior to the date of
exercise.
Each holder of a Right will have the right to receive, upon exercise of
a Right, Common Shares (or, in certain circumstances, cash, property or other
securities of the Company) having a value equal to two times the purchase price
for the Rights then in effect, (a) if after the Distribution Date, (i) the
Company is the surviving or continuing corporation in a merger or other
combination with an Acquiring Person and the Common Shares are not changed or
exchanged, (ii) an Acquiring Person consummates, with the Company or any
subsidiary, any one of a number of transactions listed in the Rights Agreement,
examples of which include acquiring stock or convertible securities except on a
pro rata basis with other shareholders, obtaining any assets except on an
arms-length basis, obtaining or disposing of any assets having a fair market
value of more than $2 million, or receiving certain financial benefits such as
loans, guarantees, tax
2
<PAGE> 93
benefits, except on a pro rata basis with other shareholders or
compensation, except as a full-time employee at normal rates, or (iii) while
there is an Acquiring Person, an event occurs which results in such Acquiring
Person's ownership interest being increased by more than 1% (e.g., a reverse
stock split), or (b) if an Acquiring Person acquired beneficial owner of 17% or
more of the outstanding Common Shares except pursuant to a cash tender offer for
all outstanding shares which is determined to be fair by the Continuing
Directors (each of which events is popularly termed a flip-in event).
Notwithstanding any of the foregoing, following the occurrence of any of the
events set forth in this paragraph, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned by any
Acquiring Person will be null and void. The Continuing Directors are the
directors on the Distribution Date or are directors elected or nominated by a
majority of the Continuing Directors in office on the date of such election or
nomination.
For example, if the Purchase Price is $40 upon exercise of a Right and
the payment of $40 a Right holder would receive $80 worth of Common Shares (or
other consideration, as noted above).
Each holder of a Right will have the right to receive, upon exercise,
common stock (or equivalent securities) of the acquiring entity having a value
equal to two times the Purchase Price then in effect, if after it is announced
that a Person or group has become an Acquiring Person, (i) the Company is
acquired in a merger or other business combination transaction and is not the
surviving or continuing corporation, (ii) the Company is the surviving or
continuing corporation in a merger or other business combination and the Common
Shares are changed or exchanged for securities of another Person, or (iii) 50%
or more of the assets or earning power of the Company is sold or transferred
(each of which events is popularly termed a flip-over event).
If the Company is not able to issue the Common Shares because of the
absence of necessary regulatory approval, restrictions contained in the
Company's Certificate of Incorporation or for any other reason, a person
exercising Rights will be entitled to receive a combination of cash or property
or other securities having a value equal to the value of the Common Shares which
would otherwise have been issued upon exercise of the Rights.
At any time until ten days after the announcement that a Person or group
has become an Acquiring Person, the Company may redeem the Rights in whole, but
not in part, at a price of $.01 per Right, payable in cash or Common Shares.
When the Board of Directors (with the approval of a majority of Continuing
Directors) orders a redemption of the Rights, the Rights will terminate and the
only right of the holders of Rights will be to receive the redemption price.
3
<PAGE> 94
After a Person becomes an Acquiring Person and before the Acquiring
Person acquires 50% or more of the outstanding Common Shares, the Company, with
the approval of a majority of Continuing Directors, may require a holder to
exchange all or any portion of his Rights for one Common Share (or in certain
circumstances, other securities of the Company) per Right.
Other than those provisions relating to the principal economic terms of
the Rights, any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company prior to the Distribution Date. After the
Distribution Date, the Rights Agreement may still be amended by the Board (under
certain circumstances only with the approval of a majority of the Continuing
Directors) in order to cure any ambiguity, defect or inconsistency, to make
changes which do not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person), or to shorten or lengthen any
time period under the Rights Agreement (including the time period for redeeming
the Rights); provided, however, that no amendment to adjust the time period
governing redemption shall be made if the Rights are not redeemable.
4
