<PAGE>
-------------------------
FORM 8-A
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
AEGIS COMMUNICATIONS GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 75-2050538
(State of incorporation (I.R.S. Employer
or organization) Identification No.)
7880 Bent Branch Drive, Suite 150, Irving, Texas 75063
(Address of Principal Executive Offices) (Zip Code)
-------------------------
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange
to be registered on which each class is
to be registered
------------------- ----------------------
None None
Securities to be registered pursuant to Section 12(g) of the Act: Preferred
Stock Purchase Rights.
<PAGE>
ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
On December 16, 1998, the Board of Directors of Aegis Communications
Group, Inc. (the "COMPANY") adopted a Stockholder Rights Plan, providing that
one right (a "RIGHT") will be attached to each share of common stock, $.01
par value, of the Company (the "COMMON STOCK") as of December 28, 1998 (the
"RECORD DATE"). Each Right entitles the registered holder to purchase from
the Company one one-thousandth of a share of Series D Junior Participating
Preferred Stock, par value $.01 per share (the "PREFERRED STOCK"), at a
Purchase Price of $7.50 per share (the "PURCHASE PRICE"), subject to
adjustment. The description and terms of the Rights are set forth in the
Rights Agreement (the "RIGHTS AGREEMENT"), dated as of December 16, 1998,
between the Company and Harris Trust and Savings Bank as Rights Agent (the
"RIGHTS AGENT").
Initially, the Rights will be attached to all Common Stock certificates
representing shares outstanding as of the Record Date, and no separate Rights
Certificate will be distributed. The Rights will separate from the Common
Stock and a distribution date ("Distribution Date") will occur upon the
earlier of (i) 10 days following a public announcement that a person or group
of affiliated or associated persons (an "ACQUIRING PERSON") has acquired, or
obtained the right to acquire, beneficial ownership of 20% or more of the
outstanding shares of Common Stock (the "STOCK ACQUISITION DATE"), or (ii) 10
business days following the commencement of a tender offer or exchange offer
that would result in a person or group beneficially owning 20% or more of
such outstanding shares of Common Stock. Until the Distribution Date, (i)
the Rights will be evidenced by the Common Stock certificates and will be
transferred with and only with such Common Stock certificates, (ii) new
Common Stock certificates will contain a notation incorporating the Rights
Agreement by reference; and (iii) the surrender for transfer of any
certificates for Common Stock outstanding will also constitute the transfer
of the Rights associated with the Common Stock represented by such
certificate.
The Rights Agreement provides that Thayer Equity Investors III, L.P.,
Edward Blank, ITC Holding Company, Codinvest Limited, and their successors
and affiliates, who together currently are the beneficial owners of more than
50% of the Common Stock of the Company outstanding on December 16, 1998, are
excluded from the definition of "Acquiring Person."
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on December 16, 2008, unless earlier redeemed
by the Company as described below.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of the Common Stock as of the close of
business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Except as otherwise determined
by the Board of Directors, only shares of Common Stock outstanding prior to
the Distribution Date will be issued with Rights.
In the event that (i) the Company is the surviving corporation in a
merger or combination with any Acquiring Person, or any Associate or
Affiliate of any Acquiring Person, and its Common Stock remains outstanding,
(ii) any Acquiring Person, or any Associate or Affiliate of
<PAGE>
any Acquiring Person, engages in one or more "self-dealing" transactions as
set forth in the Rights Agreement, (iii) an Acquiring Person becomes the
beneficial owner of 20% or more of the then outstanding shares of Common
Stock or 20%, or (iv) during such time as there is an Acquiring Person, an
event occurs that results in such Acquiring Person's ownership interest being
increased by more than 1% (E.G., a reverse stock split or recapitalization),
each holder of a Right will thereafter have the right to receive, upon
exercise, Common Stock (or, in certain circumstances, cash, property, or
other securities of the Company), having a value equal to two times the
Exercise Price of the Right. The Exercise Price is the Purchase Price times
the number of shares of Common Stock associated with each Right (initially,
one). Notwithstanding any of the foregoing, following the occurrence of any
of the events set forth in this paragraph (the "Flip-In Events"), all Rights
that are, or (under certain circumstances specified in the Rights Agreement)
were, beneficially owned by any Acquiring Person, or an Associate or
Affiliate of any Acquiring Person, will be null and void. However, Rights
are not exercisable following the occurrence of any of the Flip-In Events set
forth above until such time as the Rights are no longer redeemable by the
Company as set forth below.
For example, at an exercise price of $7.50 per Right, each Right not
owned by an Acquiring Person (or by certain related parties) following an
event set forth in the preceding paragraph would entitle its holder to
purchase Common Stock with a value of $15 (or other consideration, as noted
above) for $7.50. Assuming that the Common Stock had a per share value of
$7.50 at such time, the holder of each valid Right would be entitled to
purchase 2.0 shares of Common Stock for $7.50. Alternatively, the Company
could permit the holder to surrender each Right in exchange for stock, cash,
or other property equivalent to one share of Common Stock (with a value of
$7.50) without the payment of any consideration other than the surrender of
the Right.
In the event that following the Stock Acquisition Date, (i) the Company
is acquired in a merger or consolidation in which the Company is not the
surviving corporation or (ii) 50% or more of the Company's assets or earning
power is sold or transferred, each holder of a Right (except Rights which
have previously been voided as set forth above) will thereafter have the
right (a flip-over right) to receive, upon exercise of the Right, Common
Stock of the acquiring company having a value equal to two times the Exercise
Price of the Right.
The Purchase Price payable, and the number of shares of Preferred Stock
or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event
of a stock dividend on, or a subdivision, combination or reclassification of,
the Preferred Stock, (ii) if holders of the Preferred Stock are granted
certain rights or warrants to subscribe for Preferred Stock or convertible
securities at less than the current market price of the Preferred Stock, or
(iii) upon the distribution to holders of the Preferred Stock of evidences of
indebtedness or assets (excluding regular quarterly cash dividends) or of
subscription rights or warrants (other than those referred to above).
With certain exceptions, no adjustments in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fractional shares will be
<PAGE>
issued and, in lieu thereof, an adjustment in cash will be made based on the
market price of the Preferred Stock on the last trading date prior to the
date of exercise.
At any time until 10 days following the Stock Acquisition Date, the
Company may redeem the Rights in whole, but not in part, at a price of $.001
per Right. The ten day redemption period may be extended by the Board of
Directors so long as the Rights are still redeemable. Immediately upon the
action of the Board of Directors ordering redemption of the Rights, the
Rights will terminate and the only right of the holders of Rights will be to
receive the $.001 redemption price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends. While the distribution of the Rights
will not be taxable to stockholders or to the Company, stockholders may,
depending upon the circumstances, recognize taxable income in the event that
the Rights become exercisable for Common Stock (or other consideration) of
the Company as set forth above.
Any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement may be amended by
the Board in order to cure any ambiguity, to make changes which do not
adversely affect the interests of holders of Rights (excluding the interest
of any Acquiring Person, or to shorten or lengthen any time period under the
Rights Agreement; provided that no amendment to adjust the time period
governing redemption will be made at such time as the Rights are not
redeemable.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the
Company in certain circumstances. Accordingly, the existence of the Rights
may deter certain acquirors from making takeover proposals or tender offers.
The Rights Agreement between the Company and the Rights Agent
specifying the terms of the Rights, which includes as Exhibit B the Form of
Rights Certificate, is attached as an exhibit and incorporated by reference.
The foregoing description of the Rights does not purport to be complete and
is qualified in its entirety by reference to the Rights Agreement.
<PAGE>
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.
AEGIS COMMUNICATIONS GROUP, INC.
By: /s/ Matthew S. Waller
--------------------------------
Name: Matthew S. Waller
------------------------------
Title: Chief Financial Officer
-----------------------------
Date: December 17, 1998
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequentially
Description of Exhibit Numbered Page
---------------------- -------------
<S> <C> <C>
1. Restated Certificate of Incorporation of the Registrant --
(incorporated by reference to Exhibit 3.1 to the
Registrant's Form 10-K for the year ended June 30, 1998)
2. Certificate of Designation, Rights, Preferences, and --
Rights of Series D Junior Participating Preferred Stock
of the Registrant (included as Exhibit A in Exhibit 3
filed herewith).
3. Rights Agreement dated as of December 16, 1998 between --
the Registrant and Harris Trust and Savings Bank as the
Rights Agent (filed herewith).
</TABLE>
<PAGE>
EXHIBIT 3 TO FORM 8-A
AEGIS COMMUNICATIONS GROUP, INC.
and
HARRIS TRUST AND SAVINGS BANK
as Rights Agent
Rights Agreement
December 16, 1998
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
<S> <C> <C>
Section
1. Certain Definitions 1
2. Appointment of Rights Agent 5
3. Issue of Rights Certificates 5
4. Form of Rights Certificates 7
5. Countersignature and Registration 8
6. Transfer, Split Up, Combination, and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost, or
Stolen Rights Certificates 8
7. Exercise of Rights; Purchase Price;
Expiration Date of Rights 9
8. Cancellation and Destruction of Rights Certificates 12
9. Reservation and Availability of
Capital Stock 12
10. Preferred Stock Record Date 14
11. Adjustment of Purchase Price, Number, and Kind of Shares or
Number of Rights 14
12. Certificate of Adjusted Purchase Price or Number of Shares 25
13. Consolidation, Merger, or Sale or Transfer of Assets or
Earning Power 25
14. Fractional Rights and Fractional Shares 27
15. Rights of Action 29
16. Agreement of Rights Holders 29
17. Rights Certificate Holder Not Deemed a Stockholder 30
18. Concerning the Rights Agent 30
<PAGE>
19. Merger or Consolidation or Change of Name of Rights Agent 31
20. Duties of Rights Agent 32
21. Change of Rights Agent 34
22. Issuance of New Rights Certificates 34
23. Redemption and Termination 35
24. Notice of Certain Events 36
25. Notices 37
26. Supplement and Amendments 37
27. Successors 38
28. Determinations and Actions by the Board of Directors, Etc. 38
29. Benefits of this Agreement 39
30 Severability 39
31. Governing Law 39
32. Counterparts 39
33. Interpretation 39
34. Establishment of Fund for Directors 39
35. Exchange 40
</TABLE>
Exhibit A -- Form of Certificate of Designation, Preferences, and Rights
Exhibit B -- Form of Rights Certificate
Exhibit C -- Form of Summary of Rights
<PAGE>
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of December 16, 1998 (the "AGREEMENT"), between
Aegis Communications Group, Inc., a Delaware corporation (the "COMPANY"), and
Harris Trust and Savings Bank, an Illinois banking corporation (the "RIGHTS
AGENT").
BACKGROUND
On December 16, 1998 (the "RIGHTS DIVIDEND DECLARATION DATE"), the Board
of Directors of the Company authorized and declared a dividend distribution of
one Right ("RIGHT") for each share of common stock, $.01 par value, of the
Company (the "COMMON STOCK") outstanding at the Close of Business on December
28, 1998 (the "RECORD DATE"), and has authorized the issuance of one Right (as
such number may be adjusted pursuant to the provisions of SECTION 11(p)) for
each share of Common Stock of the Company issued between the Record Date
(whether originally issued or delivered from the Company's treasury) and the
Distribution Date (as defined in Section 3(a)). Each Right initially will
represent the right to purchase one one-thousandth of a share of Series D Junior
Participating Preferred Stock of the Company having the rights, powers, and
preferences set forth in the form of Certificate of Designation, Preferences,
and Rights attached to this Agreement as EXHIBIT A, upon the terms and subject
to the conditions set forth below.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
set forth in this Agreement, 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" means any Person that, together with all
Affiliates and Associates of such Person, is the Beneficial Owner of 20%
or more of the shares of Common Stock then outstanding, but does not
include (i) the Company; (ii) any Subsidiary of the Company; (iii) any
employee benefit plan of the Company or of any Subsidiary of the Company;
(iv) any Person organized, appointed, or established by the Company for or
pursuant to the terms of any such plan; (v) Thayer Equity Investors III,
L.P., Edward Blank, ITC Holding Company, Codinvest Limited or any
Affiliate or Associate of such Persons; (vi) any Person that has reported
or is required to report such beneficial ownership on Schedule 13G (or any
comparable or successor report) or on Schedule 13D under the Exchange Act
(or any comparable or successor report) under the Securities Exchange Act
of 1934, as amended (the "EXCHANGE ACT"), which Schedule 13D does not
state any intention to, or reserve the right to, control or influence the
management or policies of the Company or engage in
1
<PAGE>
any of the actions specified in Item 4 of such Schedule 13D (other than
the disposition of the Common Stock) and, within five (5) Business Days
(as defined below) of being requested by the Company to advise it
regarding the same, certifies to the Company that such Person acquired
beneficial ownership of shares of Common Stock in excess of 20%
inadvertently or without knowledge of the terms of the Rights and such
certification is accepted as true by the Board of Directors acting in
good faith, such Person divests as promptly as practicable a sufficient
number of shares of Common Stock so that such Person no longer holds in
excess of 20% of the Common Stock then outstanding, and that, together
with all of such Person's Affiliates and Associates, thereafter does
not acquire additional shares of Common Stock to become the Beneficial
Owner of 20% or more of the shares of Common Stock then outstanding;
provided, however, that if the Person requested to so certify fails to
do so within five Business Days, then such Person will become an
Acquiring Person immediately after such five Business-Day Period; (vii)
any Person that becomes an Acquiring Person solely as a result of a
reduction in the number of outstanding shares of Common Stock in a
transaction that is approved by the Board of Directors, provided that
such Person will immediately be an Acquiring Person in the event such
Person thereafter acquires any additional shares of Common Stock (other
than as a result of a stock split or stock dividend) while the
Beneficial Owner of 20% or more of the shares of Common Stock then
outstanding; and (viii) any Person that is the Beneficial Owner as of
the date of this Agreement of in excess of 20% of the outstanding
Common Stock that has publicly disclosed such Beneficial Ownership.
(b) "AFFILIATE" and "ASSOCIATE" and "CONTROL" have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act as in effect on the date of this
Agreement.
(c) A Person will be deemed the "BENEFICIAL OWNER" of, and will be
deemed to "BENEFICIALLY OWN," any securities that:
(i) such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire
(whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement, or
understanding (whether or not in writing) or upon the exercise of
conversion rights, exchange rights, rights, warrants or options,
or otherwise; provided, however, that a Person will not be deemed
the "Beneficial Owner" of, or to "beneficially own," (A) securities
tendered pursuant to a tender or exchange offer made by such Person
or any of such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange, (B) securities
issuable upon exercise of Rights at any time prior to the occurrence
of a Triggering Event, or (C) securities issuable upon exercise of
Rights from and after the occurrence of a Triggering Event, which
Rights were
2
<PAGE>
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 (the "ORIGINAL RIGHTS") or pursuant to
SECTION 11(i) in connection with an adjustment made with respect
to any Original Rights;
(ii) such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or
dispose of or has "beneficial ownership" of (as determined
pursuant to Rule 13d-3 of the General Rules and Regulations under
the Exchange Act), including pursuant to any agreement,
arrangement, or understanding, whether or not in writing;
provided, however, that a Person will not be deemed the
"Beneficial Owner" of, or to "beneficially own," any security
under this SECTION 1(d)(ii) as a result of an agreement,
arrangement, or understanding to vote such security if such
agreement, arrangement, or understanding: (1) arises solely from
a revocable proxy given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the
applicable provisions of the General Rules and Regulations under
the Exchange Act, and (2) is not also then reportable by such
Person on Schedule 13D under the Exchange Act (or any comparable
or successor report); or
(iii) are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate of such Person)
with which such Person (or any of such Person's Affiliates or
Associates) has any agreement, arrangement, or understanding
(whether or not in writing), for the purpose of acquiring,
holding, voting (except pursuant to a revocable proxy as
described in the proviso in SECTION 1(d)(ii)), or disposing of
any voting securities of the Company;
provided, however, that nothing in this SECTION 1(d) will 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 bona fide firm commitment
underwriting until the expiration of forty days after the date of such
acquisition.
(d) "BUSINESS DAY" means any day other than a Saturday, Sunday, or
a day on which banking institutions in the State of Delaware are
authorized or obligated by law or executive order to close.
(e) "CLOSE OF BUSINESS" on any given date will mean 5:00 p.m.,
Delaware time, on such date; provided, however, that if such date is not a
Business Day it will mean 5:00 p.m., Delaware time, on the next succeeding
Business Day.
3
<PAGE>
(f) "COMMON STOCK" shall have the meaning set forth in the recital
to this Agreement, except that "COMMON STOCK" when used with reference to
any Person other than the Company will mean the capital stock of such
Person with the greatest voting power, or the equity securities or other
equity interest having power to control or direct the management, of such
Person.
(g) "DISTRIBUTION DATE" has the meaning given it in SECTION 3(a).
(h) "EXCLUDED PERSON" means each of (i) Thayer Equity Investers
III, L.P., Edward Blank, ITC Holding Company, Codinvest Limited, and any
Affiliate or Associate of such Person and such Person's spouse; (ii) such
Person's lineal descendants and their spouses with respect to Beneficial
Ownership of Common Stock received from such Person, such Person's spouse,
and such Person's lineal descendants or their spouses; (iii) any Person
established by one or more of the Persons referred to in CLAUSES (i) or
(ii) for charitable or estate planning purposes; and (iv) any other Person
controlled by one or more persons referred to in CLAUSES (i), (ii), or
(iii) or in which the Persons referred to in CLAUSES (i), (ii), or (iii)
beneficially own in excess of 51% of the beneficial interest.
(i) "PERSON" means any individual, firm, corporation, partnership,
or other public or private entity.
(j) "PREFERRED STOCK" means (i) shares of Series D Junior
Participating Preferred Stock, par value $0.01 per share, of the Company,
and, to the extent that there are not a sufficient number of shares of
Series D Junior Participating Preferred Stock authorized to permit the
full exercise of the Rights, any other series of Preferred Stock, par
value $0.01 per share, of the Company designated for such purpose
containing terms substantially similar to the terms of the Series D Junior
Participating Preferred Stock.
(k) "SECTION 11(a)(ii) EVENT" means any event described in SECTION
11(a)(ii).
(l) "SECTION 13 EVENT" means any event described in clauses (x),
(y), or (z) of SECTION 13(a).
(m) "STOCK ACQUISITION DATE" means the first date of public
announcement (which, for purposes of this definition, will 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 an Acquiring Person.
(n) "SUBSIDIARY" means, with reference to any Person, any entity
of which an amount of voting securities sufficient to elect at least a
majority of the
4
<PAGE>
directors or similar Persons of such entity is beneficially owned,
directly or indirectly, by such Person, or otherwise controlled by such
Person.
(o) "TRIGGERING EVENT" means any Section 11(a)(ii) Event or any
Section 13 Event.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the terms and
conditions of this Agreement, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such Co-Rights Agents as
it may deem necessary or desirable.
Section 3. ISSUE OF RIGHTS CERTIFICATES.
(a) Until the earlier of (i) the Close of Business on the tenth
day after the Stock Acquisition Date (or, if the tenth day after the Stock
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
(or such later date as the Board determines) after the date that a tender
offer or exchange offer by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of
any Subsidiary of the Company, or any Person or entity organized,
appointed, or established by the Company for or pursuant to the terms of
any such plan) is first published or sent or given within the meaning of
Rule 14d-2(a) of the General Rules and Regulations under the Exchange Act,
if upon consummation thereof, such Person would be the Beneficial Owner of
20% or more of the shares of Common Stock then outstanding (the earlier of
the times referred to in CLAUSES (i), and (ii) being referred to as the
"DISTRIBUTION DATE"), (x) the Rights will be evidenced (subject to the
provisions of this SECTION 3(a)) by the certificates for the Common Stock
registered in the names of the holders of the Common Stock (which
certificates for Common Stock will be deemed also to be certificates for
Rights), and not by separate certificates, and (y) the Rights will be
transferable only in connection with the transfer of the underlying shares
of Common Stock (including a transfer to the Company). As soon as
practicable after the Distribution Date, the Rights Agent will send by
first-class, insured, postage prepaid mail, to each record holder of the
Common Stock as of the Distribution Date, at the address of such holder
shown on the records of the Company, one or more rights certificates, in
substantially the form of EXHIBIT B (the "RIGHTS CERTIFICATES"),
evidencing one Right for each share of Common Stock so held, subject to
adjustment as provided in this Agreement. In the event that an adjustment
in the number of Rights per share of Common Stock has been made pursuant
to SECTION 11(p), at the time of distribution of the Rights Certificates,
the Company will make the necessary and appropriate rounding adjustments
(in accordance with SECTION 14(a)) so that Rights Certificates
representing only whole numbers of Rights are distributed and cash
5
<PAGE>
is paid in lieu of any fractional Rights. As of and after the
Distribution Date, the Rights will be evidenced solely by such Rights
Certificates.
(b) As promptly as practicable following the Record Date, the
Company will send a copy of a Summary of Rights, in substantially the form
of EXHIBIT C, by first-class, postage prepaid mail, to each record holder
of the Common Stock as of the Close of Business on the Record Date, at the
address of such holder shown on the records of the Company. With respect
to certificates for the Common Stock outstanding as of the Record Date,
until the Distribution Date, the Rights will be evidenced by such
certificates for the Common Stock and the registered holders of the Common
Stock will also be the registered holders of the associated Rights. Until
the earlier of the Distribution Date or the Expiration Date (as defined in
SECTION 7), the transfer of any certificates representing shares of Common
Stock in respect of which Rights have been issued will also constitute the
transfer of the Rights associated with such shares of Common Stock.
(c) Rights will be issued in respect of all shares of Common Stock
that are issued (whether originally issued or from the Company's treasury)
after the Record Date but prior to the earlier of the Distribution Date or
the Expiration Date. Certificates representing such shares of Common
Stock will also be deemed to be certificates for Rights, and will bear the
following legend:
THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER TO
CERTAIN RIGHTS AS SET FORTH IN THE RIGHTS AGREEMENT BETWEEN
AEGIS COMMUNICATIONS GROUP, INC. (THE "COMPANY") AND HARRIS
TRUST AND SAVINGS BANK (THE "RIGHTS AGENT") DATED AS OF
DECEMBER 16, 1998 (AS AMENDED FROM TIME TO TIME, THE "RIGHTS
AGREEMENT"), THE TERMS OF WHICH ARE HEREBY INCORPORATED IN
THIS CERTIFICATE BY REFERENCE AND A COPY OF WHICH IS ON FILE
AT THE PRINCIPAL OFFICES OF THE COMPANY. UNDER CERTAIN
CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, SUCH
RIGHTS WILL BE EVIDENCED BY SEPARATE CERTIFICATES AND WILL NO
LONGER BE EVIDENCED BY THIS CERTIFICATE. THE COMPANY WILL MAIL
TO THE HOLDER OF THIS CERTIFICATE A COPY OF THE RIGHTS
AGREEMENT, AS IN EFFECT ON THE DATE OF MAILING, WITHOUT CHARGE
PROMPTLY AFTER RECEIPT OF A WRITTEN REQUEST. UNDER CERTAIN
CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS
BENEFICIALLY OWNED BY ANY PERSON WHO IS, WAS, OR BECOMES AN
ACQUIRING PERSON OR ANY AFFILIATE OR ASSOCIATE OF AN ACQUIRING
PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT),
WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY
ANY SUBSEQUENT HOLDER, MAY BECOME NULL AND VOID.
6
<PAGE>
With respect to such certificates containing the foregoing legend,
until the earlier of (i) the Distribution Date or (ii) the Expiration
Date, the Rights associated with the Common Stock represented by such
certificates will be evidenced by such certificates alone and registered
holders of Common Stock will also be the registered holders of the
associated Rights, and the transfer of any of such certificates will also
constitute the transfer of the Rights associated with the Common Stock
represented by such certificates.
Section 4. FORM OF RIGHTS CERTIFICATES.
(a) The Rights Certificates (and the forms of election to purchase
and of assignment to be printed on the reverse of the rights certificates)
will each be substantially in the form set forth in EXHIBIT B and may have
such marks of identification or designation and such legends, summaries,
or endorsements as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required
to comply with any applicable law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange or
quotation system on which the Rights may from time to time be listed, or
to conform to usage. Subject to the provisions of SECTION 11 and SECTION
22, the Rights Certificates, whenever distributed, will be dated as of the
Record Date and on their face will entitle the holders of such Rights
Certificates to purchase such number of one one-thousandths of a share of
Preferred Stock as is set forth in such Rights Certificates at the price
set forth in such Rights Certificates (such exercise price per one
one-thousandth of a share, the "PURCHASE PRICE"), but the amount and type
of securities purchasable upon the exercise of each Right and the Purchase
Price will be subject to adjustment as provided in this Agreement.
(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 from an Acquiring Person (or from any Associate or Affiliate of
an Acquiring Person) that becomes a transferee after the Acquiring Person
becomes an Acquiring Person, or (iii) a transferee from an Acquiring
Person (or of any Associate or Affiliate of an Acquiring Person) that
becomes a transferee prior to or concurrently with the Acquiring Person
becoming an Acquiring Person 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 such 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 an agreement, plan, arrangement, or understanding that has as a
substantial purpose or effect avoidance of SECTION 7(e), and any Rights
Certificate issued pursuant to SECTION 6 or SECTION 11 upon transfer,
exchange, replacement, or
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adjustment of any other Rights Certificate referred to in this SECTION
4(b), will contain (to the extent feasible) the following legend:
THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO IS, 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 SUCH AGREEMENT.
Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Rights Certificates will be executed on behalf of the
Company by its Chairman of the Board, its Chief Executive Officer, its
Chief Operating Officer, its President, or any Vice President, either
manually or by facsimile signature; will have affixed thereto the
Company's seal or a facsimile thereof; and will be attested by the
Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Rights Certificates will be countersigned by the
Rights Agent, either manually or by facsimile signature and will not be
valid for any purpose unless so countersigned. In case any officer of the
Company who has signed any of the Rights Certificates ceases 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, is a proper officer of the Company to sign such
Rights Certificate, although at the date of the execution of such Rights
Certificate any such Person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office or offices designated as the
appropriate place for surrender of Rights Certificates upon exercise or
transfer, books for registration and transfer of the Rights Certificates
issued under this Agreement. Such books will show the names and addresses
of the respective holders of the Rights Certificates, the number of Rights
evidenced on the face of the Rights Certificates, and the date of each of
the Rights Certificates.
Section 6. TRANSFER, SPLIT UP, COMBINATION, AND EXCHANGE OF RIGHTS
CERTIFICATES; MUTILATED, DESTROYED, LOST, OR STOLEN RIGHTS CERTIFICATES.
(a) Subject to the provisions of SECTION 4(b), SECTION 7(e), and
SECTION 14, at any time after the Distribution Date, and at or prior to
the
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Expiration Date, any Rights Certificate or Certificates 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 share of Preferred
Stock (or, following a Triggering Event, Common Stock, other securities,
cash, or other property, 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 or Rights Certificates will make such request in writing
delivered to the Rights Agent, and will 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 will be obligated to
take any action whatsoever with respect to the transfer of any such
surrendered Rights Certificate until the registered holder has completed
and signed the certificate contained in the form of assignment on the
reverse side of such Rights Certificate and has provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial
Owner) or Affiliates or Associates thereof as the Company requests in good
faith. Thereupon, the Rights Agent will, subject to SECTION 4(b), SECTION
7(e), and SECTION 14, 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 any Rights
Certificate.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction, or
mutilation of a Rights Certificate, and, in case of loss, theft, or
destruction, of indemnity or security satisfactory to them, and
reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Rights Certificate if mutilated, the Company will
execute and deliver a new Rights Certificate of like tenor to the Rights
Agent for countersignature and delivery to the registered owner in lieu of
the Rights Certificate so lost, stolen, destroyed, or mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS.
(a) Subject to SECTION 7(e), the registered holder of any Rights
Certificate may exercise the Rights evidenced thereby (except as
otherwise provided in this Agreement including, without limitation, the
restrictions on exercisability set forth in SECTION 9(c), SECTION
11(a)(iii), and SECTION 23(a)) 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 of the Rights Certificate duly executed, to the Rights Agent at
the principal office or offices of the Rights Agent designated for such
purpose,
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together with payment of the aggregate Purchase Price with respect to
the total number of one one-thousandths of a share of Preferred Stock
(or other securities, cash, or other property, 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 December 16, 2008, (the
"FINAL EXPIRATION DATE"), or (ii) the time at which the Rights are
redeemed as provided in SECTION 23 (the earlier of the times referred
to in CLAUSES (i) and (ii) being referred to as the "EXPIRATION DATE")).
(b) The Purchase Price for each one one-thousandth of a share of
Preferred Stock pursuant to the exercise of a Right will initially be
$7.50; will be subject to adjustment from time to time as provided in
SECTION 11, and SECTION 13(a); and will be payable in accordance with
SECTION 7(c).
(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-thousandth of a share of Preferred Stock
(or other shares, securities, cash, or other property, as the case may be)
to be purchased as set forth below and an amount equal to any applicable
transfer tax, the Rights Agent will, subject to SECTION 20(k), promptly
(i) (A) requisition from any transfer agent of the shares of Preferred
Stock (or make available, if the Rights Agent is the transfer agent for
such shares) certificates for the total number of one one-thousandths of a
share of Preferred Stock to be purchased, (the Company hereby irrevocably
authorizing its transfer agent to comply with all such requests), or (B)
if the Company has elected to deposit the total number of shares of
Preferred Stock issuable upon exercise of the Rights with a depository
agent, requisition from the depository agent depository receipts
representing such number of one one-thousandths of a share of Preferred
Stock as are to be purchased (in which case certificates for the shares of
Preferred Stock represented by such receipts will be deposited by the
transfer agent with the depository agent) and the Company will direct the
depository agent to comply with such request; (ii) requisition from the
Company the amount of cash, if any, to be paid in lieu of fractional
shares in accordance with SECTION 14; (iii) after receipt of such
certificates or depository receipts, cause such certificates or depository
receipts to be delivered to or upon the order of the registered holder of
such Rights Certificate, registered in such name or names as may be
designated by such holder; and (iv) after receipt thereof, deliver such
cash, if any, to or upon the order of the registered holder of such Rights
Certificate. The payment of the Purchase Price (as such amount may be
reduced pursuant to SECTION 11(a)(iii)) will be made in cash or by
certified bank check or bank draft payable to the order of the Company. In
the event that the Company is obligated to issue other securities
(including Common Stock) of the Company, pay cash, or distribute other
property pursuant to SECTION 11(a), the Company will make all arrangements
necessary so that such other securities, cash, or other property
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are available for distribution by the Rights Agent, if and when
appropriate. The Company reserves the right to require prior to the
occurrence of a Triggering Event that, upon any exercise of Rights, a
number of Rights be exercised so that only whole shares of Preferred
Stock would be issued.
(d) In case the registered holder of any Rights Certificate
exercises less than all the Rights evidenced thereby, a new Rights
Certificate evidencing Rights equivalent to the Rights remaining
unexercised will be issued by the Rights Agent and delivered to, or upon
the order of, the registered holder of such Rights Certificate, registered
in such name or names as may be designated by such holder, subject to the
provisions of SECTION 14.
(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 any Person referred to in CLAUSES (i) through
(iii) below will become null and void without any further action, and no
holder of such Rights will have any rights whatsoever with respect to such
Rights, whether under any provision of this Agreement or otherwise: (i) an
Acquiring Person or an Associate or Affiliate of an Acquiring Person, (ii)
a transferee from an Acquiring Person (or from any Associate or Affiliate
of an Acquiring Person) that becomes a transferee after the Acquiring
Person becomes such, or (iii) a transferee from an Acquiring Person (or of
any such Associate or Affiliate) that becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and that 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 an agreement, plan, arrangement, or
understanding that has as a substantial purpose or effect the avoidance of
this SECTION 7(e). The Company will use reasonable efforts to insure that
the provisions of this SECTION 7(e) and SECTION 4(b) are complied with,
but will have no liability under this Agreement to any holder of Rights
Certificates or other Person as a result of its failure to make any
determinations with respect to an Acquiring Person, or any of their
Affiliates, Associates, or transferees.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company will 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 has (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
requests in good faith.
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Section 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES. All
Rights Certificates surrendered for the purpose of exercise, transfer, split up,
combination, or exchange will, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, will be cancelled by it, and no Rights
Certificates will be issued in lieu thereof except as expressly permitted by any
of the provisions of this Agreement. The Company will deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent will so cancel and
retire, any other Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent will deliver all
cancelled Rights Certificates to the Company, or will, at the written request of
the Company, destroy such cancelled Rights Certificates, and in such case will
deliver a certificate of destruction to the Company.
Section 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares of
Preferred Stock (and, following the occurrence of a Triggering Event, out
of its authorized and unissued shares of Common Stock or other securities
or out of its authorized and issued shares held in its treasury), the
number of shares of Preferred Stock (and, following the occurrence of a
Triggering Event, Common Stock or other securities) that (as provided in
this Agreement including, without limitation, SECTION 11(a)(iii)), will be
sufficient to permit the exercise in full of all outstanding Rights.
(b) So long as the shares of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock or other securities)
issuable and deliverable upon the exercise of the Rights may be listed on
any national securities exchange or automated quotation system, the
Company will use its reasonable efforts to cause, from and after such time
as the Rights become exercisable, all shares reserved for such issuance to
be listed on such exchange or automated quotation system upon official
notice of issuance upon such exercise.
(c) The Company will use its best reasonable efforts to (i) file,
as soon as practicable following the earliest date after the first
occurrence of a Section 11(a)(ii) Event on which the consideration to be
delivered by the Company upon exercise of the Rights has been determined
in accordance with SECTION 11(a)(iii), a registration statement under the
Securities Act of 1933, as amended (the "ACT"), with respect to the
securities purchasable upon exercise of the Rights on an appropriate form,
(ii) cause such registration statement to become effective as soon as
practicable after such filing, and (iii) cause such registration statement
to remain effective (with a prospectus at all times meeting the
requirements of the Act) until the earlier of (A) the date as of which the
Rights
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are no longer exercisable for such securities, and (B) the date of the
expiration of the Rights. The Company will also take such action as may
be appropriate under, or to ensure compliance with, the securities or
"blue sky" laws of the various states in connection with the
exercisability of the Rights. The Company may temporarily suspend, for
a period of time not to exceed ninety (90) days after the date set
forth in clause (i) of the first sentence of this SECTION 9(c), the
exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. Upon any such
suspension, the Company will issue a public announcement stating that
the exercisability of the Rights has been temporarily suspended, as
well as a public announcement at such time as the suspension is no
longer in effect. In addition, if the Company determines that a
registration statement is required following the Distribution Date, the
Company may temporarily suspend the exercisability of the Rights until
such time as a registration statement has been declared effective.
Notwithstanding any provision of this Agreement to the contrary, the
Rights will not be exercisable in any jurisdiction if the requisite
qualification in such jurisdiction has not been obtained, the exercise
of such Rights is not permitted under applicable law, or a registration
statement has not been declared effective.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all shares of Preferred Stock
(and, following the occurrence of a Triggering Event, Common Stock or
other securities) delivered upon exercise of Rights will, at the time of
delivery of the certificates for such shares (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully paid
and nonassessable.
(e) The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and charges
that may be payable in respect of the issuance or delivery of the Rights
Certificates and of any certificates for a number of one one-thousandths
of a share of Preferred Stock (or Common Stock or other securities, as the
case may be) upon the exercise of Rights. The Company will not, however,
be required to pay any transfer tax that may be payable in respect of any
transfer or delivery of Rights Certificates to a Person other than, or the
issuance or delivery of a number of one one-thousandths of a share of
Preferred Stock (or Common Stock or other securities, as the case may be)
in respect of a name other than that of, the registered holder of the
Rights Certificates evidencing Rights surrendered for exercise or to issue
or deliver any certificates for a number of one one-thousandths of a share
of Preferred Stock (or Common Stock or other securities, as the case may
be) in a name other than that of the registered holder upon the exercise
of any Rights until such tax has 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.
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Section 10. PREFERRED STOCK RECORD DATE. Each Person in whose name any
certificate for a number of one one-thousandths of a share of Preferred Stock
(or Common Stock or other securities, as the case may be) is issued upon the
exercise of Rights will for all purposes be deemed to have become the holder of
record of such fractional shares of Preferred Stock (or Common Stock or other
securities, as the case may be) represented thereby on, and such certificate
will be dated, the date upon which the Rights Certificate evidencing such Rights
was duly surrendered and payment of the Purchase Price (and all applicable
transfer taxes) was made; provided, however, that if the date of such surrender
and payment is a date upon which the Preferred Stock (or Common Stock or other
securities, as the case may be) transfer books of the Company are closed, such
Person will be deemed to have become the record holder of such shares
(fractional or otherwise) on, and such certificate will be dated, the next
succeeding Business Day on which the Preferred Stock (or Common Stock 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
will not be entitled to any rights of a stockholder of the Company with respect
to shares for which the Rights are exercisable, including, without limitation,
the right to vote, to receive dividends or other distributions, or to exercise
any preemptive rights, and will not be entitled to receive any notice of any
proceedings of the Company, except as provided in this Agreement.
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 at any time after the date of this
Agreement (A) declares a dividend on the Preferred Stock payable in
shares of Preferred Stock, (B) subdivides the outstanding Preferred
Stock, (C) combines the outstanding Preferred Stock into a smaller
number of shares, or (D) issues any shares of its capital stock in a
reclassification of the Preferred Stock (including, without
limitation, any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation), except as otherwise provided in this SECTION
11(a) and SECTION 7(e), the Purchase Price in effect at the time of
the record date for such dividend or of the effective date of such
subdivision, combination, or reclassification, and the number and
kind of shares of Preferred Stock or capital stock, as the case may
be, issuable on such date, will be proportionately adjusted so that
the holder of any Right exercised after such time will be entitled
to receive, upon payment of the Purchase Price then in effect, the
aggregate number and kind of shares of Preferred Stock or capital
stock, as the case may be, that, if such Right had been exercised
immediately prior to such date and at a time when the Preferred
Stock transfer books of the Company were open, such holder would
have owned upon such exercise
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and been entitled to receive by virtue of such dividend,
subdivision, combination, or reclassification. If an event occurs
that would require an adjustment under both this SECTION 11(a)(i)
and SECTION 11(a)(ii), the adjustment provided for in this SECTION
11(a)(i) will be in addition to, and will be made prior to, any
adjustment required pursuant to SECTION 11(a)(ii).
(ii) In the event that:
(A) Any Acquiring Person or any Associate or Affiliate
of any Acquiring Person, at any time after the date of this
Agreement, directly or indirectly, (1) merges from, with, or
into the Company or otherwise combines with the Company and
the Company is the continuing or surviving Person of such
merger or combination and the Common Stock of the Company
or other equity securities of the Company remain
outstanding, (2) in one transaction or a series of
transactions, transfers any assets to the Company or to any
of the Company's Subsidiaries in exchange (in whole or in
part) for Common Stock, for shares of other equity
securities of the Company, or for securities exercisable
for or convertible into shares of equity securities of the
Company (Common Stock or otherwise) or otherwise obtains
from the Company, with or without consideration, any
additional shares of such equity securities or securities
exercisable for or convertible into shares of such equity
securities (other than pursuant to a pro rata distribution
to all holders of Common Shares), (3) sells, purchases,
leases, exchanges, mortgages, pledges, transfers, or
otherwise acquires or disposes of assets in one transaction
or a series of transactions, to, from, or with (as the case
may be) the Company or any of the Company's Subsidiaries,
on terms or conditions less favorable in any respect than
the Company or such Subsidiary would be able to obtain in
arm's-length negotiation with an unaffiliated third party,
other than pursuant to a Section 13 Event, (4) sells,
purchases, leases, exchanges, mortgages, pledges,
transfers, or otherwise acquires or disposes of assets or
earning power aggregating more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as
a whole) in one transaction or a series of transactions to,
from, or with (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 of
this Agreement between the Company or such Subsidiary, on
the one hand, and such Acquiring Person or such Associate
or Affiliate, on the other), other than pursuant to a
Section 13 Event, (5) receives any compensation from the
Company or any of the Company's Subsidiaries other than
compensation for full-time employment as
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a regular employee at rates in accordance with the Company's
(or such Subsidiaries') past practices, or (6) receives the
benefits, directly or indirectly (except proportionately as
a stockholder and as a result of any requirement of law or
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 the Company's Subsidiaries;
(B) any Person, alone or together with its Affiliates
or Associates, at any time after the Rights Dividend
Declaration Date, becomes an Acquiring Person, unless the
event causing such Person to become an Acquiring Person is
a Section 13 Event; or
(C) during such time as there is an Acquiring Person,
there is any reclassification of securities (including any
reverse stock split), recapitalization of the Company, or
any merger or consolidation of the Company into, from, or
with any of its Subsidiaries or any other transaction or
series of transactions involving the Company or any of its
Subsidiaries, other than a Section 13 Event, or series of
such events (whether or not with or into or otherwise
involving and Acquiring Person) that 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 securities convertible into such
equity securities) of the Company or any of its
Subsidiaries that is directly or indirectly beneficially
owned by an Acquiring Person or any Associate or Affiliate
of any Acquiring Person.
then, promptly following the first occurrence of a Section 11(a)(ii)
Event, proper provision will be made so that each holder of a Right
(except as provided below in this SECTION 11(a)(ii) and in SECTION 7(e))
will thereafter have the right to receive, upon exercise of such Right at
the then current Purchase Price in accordance with the terms of this
Agreement, in lieu of a number of one one-thousandths of a share of
Preferred Stock, such number of shares of Common Stock of the Company as
equals the result obtained by (x) multiplying the then current Purchase
Price by the then number of one one-thousandths of a share of Preferred
Stock for which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event, and (y) dividing that product
(which, following such first occurrence, will thereafter be referred to as
the "PURCHASE PRICE" for each Right and for all purposes of this
Agreement) by 50% of the Current Market Price (determined pursuant to
SECTION 11(d)) per share of Common Stock on the date of such first
occurrence (such number of shares, the "ADJUSTMENT SHARES").
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(iii) In the event that the number of shares of Common Stock
that are authorized by the Company's articles of incorporation but
not outstanding or reserved for issuance for purposes other than
upon exercise of the Rights is not sufficient to permit the exercise
in full of the Rights in accordance with SECTION 11(a)(ii), the
Company will (A) determine the value of the Adjustment Shares
issuable upon the exercise of a Right (the "CURRENT VALUE"), and
(B) with respect to each Right (subject to SECTION 7(e)), make
adequate provision to substitute for the Adjustment Shares, upon
the exercise of a Right and payment of the applicable Purchase
Price, (1) cash, (2) a reduction in the Purchase Price, (3)
Common Stock or other equity securities of the Company
(including, without limitation, shares, or units of shares, of
preferred stock, such as the Preferred Stock, that the Board of
Directors has deemed to have essentially the same value or
economic rights as shares of Common Stock (such securities being
referred to as "COMMON STOCK EQUIVALENTS")), (4) debt securities
of the Company, (5) other assets or property, or (6) any
combination of the foregoing, having an aggregate value equal to
the Current Value (less the amount of any reduction in the
Purchase Price), where such aggregate value has been conclusively
determined by the Board of Directors based upon the advice of a
nationally recognized investment banking firm selected by the
Board of Directors; provided, however, that if the Company has
not made adequate provision to deliver value pursuant to CLAUSE
(B) above within thirty (30) days following the later of (x) the
first occurrence of a Section 11(a)(ii) Event and (y) the date on
which the Company's right of redemption pursuant to SECTION 23(a)
expires (the later of (x) and (y) being referred to as the
"SECTION 11(a)(ii) TRIGGER DATE"), then the Company will be
obligated to deliver, upon the surrender for exercise of a Right
and without requiring payment of the Purchase Price, shares of
Common Stock, (to the extent available) and then, if necessary,
cash, which shares or cash have an aggregate value equal to the
Spread. For purposes of the preceding sentence, the term "SPREAD"
means the excess of (i) the Current Value over (ii) the Purchase
Price. If the Board determines in good faith that it is likely
that sufficient additional shares of Common Stock could be
authorized for issuance upon exercise in full of the Rights, the
thirty (30) day period set forth above may be extended to the
extent necessary, but not more than ninety (90) days after the
Section 11(a)(ii) Trigger Date, in order that the Company may
seek shareholder approval for the authorization of such
additional shares (such thirty (30) day period, as it may be
extended, being the "SUBSTITUTION PERIOD"). To the extent that
action is to be taken pursuant to the first or third sentences of
this SECTION 11(a)(iii), the Company (1) will provide, subject to
SECTION 7(e), that such action will apply uniformly to all
outstanding Rights, and (2) may suspend the exercisability of the
Rights until the expiration of the Substitution Period in order
to seek such shareholder approval for such
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authorization of additional shares or to determine the
appropriate form of distribution to be made pursuant to such
first sentence and to determine the value of such distribution.
In the event of any such suspension, the Company will issue a
public announcement stating that the exercisability of the Rights
has been temporarily suspended, as well as a public announcement
at such time as the suspension is no longer in effect. For
purposes of this SECTION 11(a)(iii), the value of each Adjustment
Share will be the Current Market Price per share of the Common
Stock, on the Section 11(a)(ii) Trigger Date and the per share or
per unit value of any Common Stock Equivalent will be deemed to
equal the Current Market Price per share of the Common Stock, on
such date.
(b) In case the Company fixes a record date for the issuance of
rights, options, or warrants to holders of any class or series of
Preferred Stock entitling them to subscribe for or purchase (for a period
expiring within forty-five (45) calendar days after such record date)
Preferred Stock (or securities having the same rights, privileges, and
preferences as the shares of Preferred Stock ("EQUIVALENT PREFERRED
STOCK")) or securities convertible into Preferred Stock or Equivalent
Preferred Stock at a price per share of Preferred Stock or per share of
Equivalent Preferred Stock (or having a conversion price per share, if a
security convertible into Preferred Stock or Equivalent Preferred Stock)
less than the Current Market Price (as determined pursuant to SECTION
11(d)) per share of Preferred Stock on such record date, the Purchase
Price to be in effect after such record date will be determined by
multiplying the Purchase Price in effect immediately prior to such record
date by a fraction, the numerator of which is the number of shares of
Preferred Stock outstanding on such record date, plus the number of shares
of Preferred Stock that the aggregate offering price of the total number
of shares of Preferred Stock or Equivalent Preferred Stock 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 is the number of shares of Preferred Stock
outstanding on such record date, plus the number of additional shares of
Preferred Stock or Equivalent Preferred Stock to be offered for
subscription or purchase (or into the maximum number of shares into which
the convertible securities so to be offered are initially convertible). In
the event that the number of shares of Preferred Stock or Equivalent
Preferred Stock issuable under the terms of a convertible security, or the
conversion or exercise price of such convertible security, changes after
the initial issuance of such convertible security, an adjustment will be
made to the Purchase Price that conforms with the adjustment set forth in
this SECTION 11(b). In case such subscription price may be paid by
delivery of consideration part or all of which may be in a form other than
cash, the value of such consideration will be as conclusively determined
in good faith by the Board of Directors, whose determination will be
described in a statement filed with the Rights Agent and will be binding
on the Rights Agent and the holders of the Rights. Shares of Preferred
Stock owned by or held for the account of the
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Company will be deemed not to be outstanding for the purpose of any such
computation. Such adjustment will be made successively whenever such a
record date is fixed, and in the event that such rights, options, or
warrants are not so issued, the Purchase Price will be adjusted to be
the Purchase Price that would then be in effect if such record date had
not been fixed.
(c) In case the Company fixes a record date for a distribution to
holders of any class or series of Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which
the Company is the continuing corporation) of evidences of indebtedness,
cash (other than a regular quarterly cash dividend out of the earnings or
retained earnings of the Company), assets (other than a dividend payable
in Preferred Stock, but including any dividend payable in stock other than
Preferred Stock) or subscription rights or warrants (excluding those
referred to in SECTION 11(b)), the Purchase Price to be in effect after
such record date will be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the numerator
of which is the Current Market Price (as determined pursuant to SECTION
11(d)) per share of Preferred Stock on such record date, less the fair
market value (as conclusively determined in good faith by the Board of
Directors, whose determination will 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 a share of Preferred Stock and the denominator of
which is such Current Market Price (as determined pursuant to SECTION
11(d)) per share of Preferred Stock. Such adjustments will be made
successively whenever such a record date is fixed, and in the event that
such distribution is not so made, the Purchase Price will be adjusted to
be the Purchase Price that would have been in effect if such record date
had not been fixed.
(d) (i) For the purpose of any computation under this Agreement,
other than computations made pursuant to SECTION 11(a)(iii), the
"CURRENT MARKET PRICE" per share of Common Stock on any date will be
deemed to be the average of the daily closing prices per share of
Common Stock for the thirty (30) consecutive Trading Days (as
defined below) immediately prior to such date, and for purposes of
computations made pursuant to SECTION 11(a)(iii), the "CURRENT
MARKET PRICE" per share of Common Stock on any date will be deemed
to be the average of the daily closing prices per share of Common
Stock for the ten (10) consecutive Trading Days immediately
following such date; provided, however, that in the event that the
Current Market Price per share of the Common Stock is determined
during a period following the announcement by the issuer of Common
Stock of (A) a dividend or distribution on such Common Stock payable
in shares of such Common Stock or securities convertible into shares
of such Common Stock (other than the Rights), or (B) any
subdivision, combination, or reclassification of such Common Stock,
and the ex-
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dividend date for such dividend or distribution, or the record
date for such subdivision, combination, or reclassification has
not occurred prior to the commencement of the requisite thirty
(30) Trading Day or ten (10) Trading Day period, as set forth
above, then, and in each such case, the Current Market Price will
be properly adjusted to take into account ex-dividend trading.
The closing price for each day will be the last sale price,
regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the shares of
Common Stock are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on
the principal national securities exchange on which the shares of
Common Stock are listed or admitted to trading or, if the shares
of Common Stock are not listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other
system then in use, or, if on any such date the shares of Common
Stock are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional
market maker making a market in the Common Stock selected by the
Board of Directors. If on any such date no market maker is making
a market in the Common Stock, the fair value of such shares on
such date as determined in good faith by the Board of Directors
will be used. The term "TRADING DAY" means a day on which the
principal national securities exchange on which the shares of
Common Stock are listed or admitted to trading is open for the
transaction of business or, if the shares of Common Stock are not
listed or admitted to trading on any national securities
exchange, a Business Day. If the Common Stock is not publicly
held or not so listed or traded, Current Market Price per share
will mean the fair value per share as determined in good faith by
the Board of Directors, the determination of which will be
described in a statement filed with the Rights Agent and will be
conclusive for all purposes.
(ii) For the purpose of any computation under this
Agreement, the "CURRENT MARKET PRICE" per share of any class or
series of Preferred Stock will be determined in the same manner
as set forth above for the Common Stock in SECTION 11(d)(i)
(other than the last sentence thereof). If the Current Market
Price per share of Preferred Stock cannot be determined in the
manner provided above or if the Preferred Stock is not publicly
held or listed or traded in a manner described in SECTION
11(d)(i), the Current Market Price per share of Preferred Stock
will be conclusively deemed to be an amount equal to one thousand
(1000) (as such number may be appropriately adjusted for such
events as stock splits, stock
20
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dividends, and recapitalizations with respect to the Common Stock
occurring after the date of this Agreement) multiplied by the
Current Market Price per share of the Common Stock. If neither
the Common Stock nor the Preferred Stock is publicly held or so
listed or traded, Current Market Price per share of the Preferred
Stock will mean the fair value per share as determined in good
faith by the Board of Directors, whose determination will be
described in a statement filed with the Rights Agent and will be
conclusive for all purposes. For all purposes of this Agreement,
the Current Market Price of one one-thousandth of a share of
Preferred Stock will be equal to the Current Market Price of one
share of Preferred Stock divided by one thousand (1000).
(e) Anything in this Agreement to the contrary notwithstanding, no
adjustment in the Purchase Price will be required unless such adjustment
would require an increase or decrease of at least one percent (1%) in the
Purchase Price; provided, however, that any adjustments that by reason of
this SECTION 11(e) are not required to be made will be carried forward and
taken into account in any subsequent adjustment. All calculations under
this SECTION 11 will be made to the nearest cent or to the nearest
ten-thousandth of a share of Common Stock or other share or one-millionth
of a share of Preferred Stock, as the case may be. Notwithstanding the
first sentence of this SECTION 11(e), any adjustment required by this
SECTION 11 will be made no later than the earlier of (i) three (3) years
from the date of the transaction that mandates such adjustment or (ii) the
Expiration Date.
(f) If, as a result of an adjustment made pursuant to SECTION
11(a)(ii) or SECTION 13(a), the holder of any Right thereafter exercised
becomes entitled to receive any shares of capital stock other than
Preferred Stock, then the number of such other shares so receivable upon
exercise of any Right and the Purchase Price will be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred Stock
contained in SECTIONS 11(a), (b), (c), (e), (g), (h), (i), (j), (k), (m),
and (q) and the provisions of SECTIONS 7, 9, 10, 13, and 14 with respect
to the Preferred Stock will 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 under this Agreement will evidence
the right to purchase, at the adjusted Purchase Price, the number of one
one-thousandths of a share of Preferred Stock purchasable from time to
time under this Agreement upon exercise of the Rights, all subject to
further adjustment as provided in this Agreement.
(h) Unless the Company has exercised its election as provided in
SECTION 11(i), upon each adjustment of the Purchase Price as a result of
the calculations made in SECTIONS 11(b) and (c), each Right outstanding
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immediately prior to the making of such adjustment will thereafter
evidence the right to purchase, at the adjusted Purchase Price, that
number of one one-thousandths of a share of Preferred Stock (calculated to
the nearest one-millionth) obtained by (i) multiplying (x) the number of
one one-thousandths of a share covered by a Right immediately prior to
this adjustment, by (y) the Purchase Price in effect immediately prior to
such adjustment of the Purchase Price, and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such adjustment
of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment
of the Purchase Price to adjust the number of Rights, in lieu of any
adjustment in the number of one one-thousandths of a share of Preferred
Stock purchasable upon the exercise of a Right. Each of the Rights
outstanding after such an adjustment in the number of Rights will be
exercisable for the number of one one-thousandths of a share of Preferred
Stock for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the
number of Rights will 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 will make a public announcement of its election to
adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to be
made. This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Rights Certificates have been
issued, will be at least ten (10) days later than the date of the public
announcement. If Rights Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this SECTION 11(i), the
Company will, 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, the additional Rights to
which such holders are entitled as a result of such adjustment, or, at the
option of the Company, will cause to be distributed to such holders of
record in substitution and replacement for the Rights Certificates held by
such holders prior to the date of adjustment, and upon surrender thereof,
if required by the Company, new Rights Certificates evidencing all the
Rights to which such holders are entitled after such adjustment. Rights
Certificates so to be distributed will be issued, executed, and
countersigned in the manner provided for in this Agreement (and may bear,
at the option of the Company, the adjusted Purchase Price) and will be
registered in the names of the holders of record of Rights Certificates on
the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of one one-thousandths of a share of Preferred Stock
issuable upon the exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express the Purchase
Price per one one-thousandth of a
22
<PAGE>
share and the number of one one-thousandths of a share that were
expressed in the initial Rights Certificates issued under this Agreement.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then stated value, if any, of the
number of one one-thousandths of a share of Preferred Stock issuable upon
exercise of the Rights, the Company will take any corporate action that
may, in the opinion of its counsel, be necessary in order that the Company
may validly and legally issue such number of fully paid and nonassessable
one one-thousandths of a share of Preferred Stock at such adjusted
Purchase Price.
(l) In any case in which this SECTION 11 requires that an
adjustment in the Purchase Price be made effective as of a record date for
a specified event, the Company may elect to defer until the occurrence of
such event the issuance to the holder of any Right exercised after such
record date the number of one one-thousandths of a share of Preferred
Stock and other capital stock or securities of the Company, if any,
issuable upon such exercise over and above the number of one
one-thousandths of a share of Preferred Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise on the
basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company will 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 will 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 its good faith judgment, the Board of
Directors of the Company determines it to be advisable in order that any
(i) consolidation or subdivision of the Preferred Stock, (ii) issuance
wholly for cash of any shares of Preferred Stock at less than the current
market price, (iii) issuance wholly for cash of shares of Preferred Stock
or securities that by their terms are convertible into or exchangeable for
shares of Preferred Stock, (iv) stock dividends, or (v) issuance of
rights, options, or warrants referred to in this SECTION 11, hereafter
made by the Company to holders of its Preferred Stock will not be taxable
to such stockholders.
(n) The Company covenants and agrees that it will not, at any time
after the Distribution Date, (i) consolidate with any other Person (other
than a Subsidiary of the Company in a transaction that complies with
SECTION 11(o)), (ii) merge with, from, or into any other Person (other
than a Subsidiary of the Company in a transaction that complies with
SECTION 11(o)), 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
23
<PAGE>
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 or any of its Subsidiaries in one or more transactions each of
which complies with SECTION 11(o)), if (x) at the time of or
immediately after such consolidation, merger, sale, or transfer, there
are any rights, warrants, or other instruments or securities
outstanding or agreements in effect that could reasonably be expected
to 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, sale, or transfer, the
stockholders of the Person that constitutes, or would constitute, the
"PRINCIPAL PARTY" for purposes of SECTION 13(a) has received a
distribution of Rights previously owned by such Person or any of its
Affiliates and Associates.
(o) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by SECTION 23 or SECTION 26, take
(or permit any Subsidiary to take) any action if at the time such action
is taken it is reasonably foreseeable that such action will diminish
substantially or otherwise eliminate the benefits intended to be afforded
by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding, in
the event that the Company at any time after the Rights Dividend
Declaration Date and prior to the Distribution Date (i) declares a
dividend on the outstanding shares of Common Stock payable in shares of
Common Stock, (ii) subdivides the outstanding shares of Common Stock, or
(iii) combines the outstanding shares of Common Stock into a smaller
number of shares, the number of Rights associated with each share of
Common Stock then outstanding, or issued or delivered thereafter but prior
to the Distribution Date, will be proportionately adjusted so that the
number of Rights thereafter associated with each share of Common Stock
following any such event will equal the result obtained by multiplying the
number of Rights associated with each share of Common Stock immediately
prior to such event by a fraction the numerator of which is the total
number of shares of Common Stock outstanding immediately prior to the
occurrence of the event and the denominator of which is the total number
of shares of Common Stock outstanding immediately following the occurrence
of such event.
(q) In the event that the Rights become exercisable following a
Section 11(a)(ii) Event, the Company, by action of the Board of Directors,
may permit the Rights, subject to SECTION 7(e), to be exercised for 50% of
the shares of Common Stock (or cash or other securities or assets to be
substituted for the Adjustment Shares pursuant to SECTION 11(a)(iii)) that
would otherwise be purchasable under SECTION 11(a) in consideration of the
surrender to the Company of the Rights so exercised and without other
payment of the Purchase Price. Rights exercised under this SECTION 11(q)
will be deemed to have been exercised in full and will be cancelled.
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<PAGE>
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in SECTION 11 or SECTION 13, the
Company will (a) promptly prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent, and with each transfer agent for the Preferred Stock
and the Common Stock, a copy of such certificate, and (c) mail a brief summary
thereof to each holder of a Rights Certificate (or, if prior to the Distribution
Date, to each holder of a certificate representing shares of Common Stock) in
accordance with SECTION 25. The Rights Agent will be fully protected in relying
on any such certificate and on any adjustment contained in such certificate.
Section 13. CONSOLIDATION, MERGER, OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.
(a) In the event that, following the Stock Acquisition Date,
directly or indirectly, (x) the Company consolidates with, or merges from,
with, or into, any other Person (other than a Subsidiary of the Company in
a transaction that complies with SECTION 11(o)), and the Company is not
the continuing or surviving Person of such consolidation or merger; (y)
any Person (other than a Subsidiary of the Company in a transaction that
complies with SECTION 11(o)) consolidates with, or merges from, with, or
into, the Company, and the Company is the continuing or surviving
corporation of such consolidation or merger and, in connection with such
consolidation or merger, all or part of the outstanding shares of Common
Stock of the Company is changed into or exchanged for stock or other
securities of any other Person or cash or any other property; or (z) the
Company sells or otherwise transfers (or one or more of its Subsidiaries
sells or otherwise transfers), in one transaction or a series of related
transactions, assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any Person or Persons (other than the Company or any Subsidiary
of the Company in one or more transactions each of which complies with
SECTION 11(o)), then, and in each such case, proper provision will be made
so that (i) each holder of a Right, except as provided in SECTION 7(e) or
SECTION 13(d), will thereafter have the right to receive, upon the
exercise of such Right 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 tradable shares of Common
Stock of the Principal Party (as defined below), not subject to any liens,
encumbrances, preemptive rights, rights of first refusal, or other adverse
claims, as are equal to the result obtained by (1) multiplying the then
current Purchase Price by the number of one one-thousandths of a share of
Preferred Stock for which a Right is exercisable immediately prior to
the first occurrence of a Section 13 Event (or, if a Section 11(a)(ii)
Event has occurred prior to the first occurrence of a Section 13 Event,
multiplying the number of such one one-thousandths of a share for which
a Right was exercisable immediately prior to
25
<PAGE>
the first occurrence of a Section 11(a)(ii) Event by the Purchase Price
in effect immediately prior to such first occurrence), and dividing that
product (which, following the first occurrence of a Section 13 Event,
will be referred to as the "PURCHASE PRICE" for each Right and for all
purposes of this Agreement) by (2) 50% of the Current Market Price
(determined pursuant to SECTION 11(d)(i)) per share of the Common Stock
of such Principal Party on the date of consummation of such Section 13
Event; (ii) such Principal Party will thereafter be liable for, and will
assume, by virtue of such Section 13 Event, all the obligations and duties
of the Company pursuant to this Agreement; (iii) the term "COMPANY" will
thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of SECTION 11 will apply only
to such Principal Party following the first occurrence of a Section 13
Event; (iv) such Principal Party will take such steps (including, but
not limited to, the reservation of a sufficient number of shares of its
Common Stock) in connection with the consummation of any such
transaction as may be necessary to assure that the provisions of this
Agreement will thereafter be applicable, as nearly as may be, in
relation to its shares of Common Stock thereafter deliverable upon the
exercise of the Rights; and (v) the provisions of SECTION 11(a)(ii)
will be of no effect following the first occurrence of any Section 13
Event.
(b) "PRINCIPAL PARTY" means
(i) in the case of any transaction described in CLAUSE (x)
or (y) of the first sentence of SECTION 13(a), the Person that is
the issuer of any securities into which shares of Common Stock of
the Company are converted in such merger or consolidation, and if no
securities are so issued, the Person that is the other party to such
merger or consolidation; and
(ii) in the case of any transaction described in CLAUSE (z)
of the first sentence of SECTION 13(a), the Person that is the party
receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions;
provided, however, that in any such case, (1) if the Common Stock
of such Person is not at such time and has not been continuously
over the preceding twelve (12) month period registered under
Section 12 of the Exchange Act, and such Person is a direct or
indirect Subsidiary of another Person the Common Stock of which
is and has been so registered, "PRINCIPAL PARTY" will refer to
such other Person; and (2) in case such Person is a Subsidiary,
directly or indirectly, of more than one Person, the Common
Stocks of two or more of which are and have been so registered,
"PRINCIPAL PARTY" will refer to whichever of such Persons is the
issuer of the Common Stock having the greatest aggregate market
value.
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<PAGE>
(c) The Company will not consummate any such consolidation,
merger, sale, or transfer unless the Principal Party has a sufficient
number of authorized shares of its Common Stock that have not been
issued or reserved for issuance to permit the exercise in full of the
Rights in accordance with this SECTION 13 and unless prior thereto the
Company and such Principal Party have executed and delivered to the
Rights Agent a supplemental agreement providing for the Principal Party
to assume and perform the terms set forth in SECTIONS 13(a) and (b) and
further providing that, as soon as practicable after the date of any
consolidation, merger, or transfer mentioned in SECTION 13(a), 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
cause such registration statement to (A) become effective as soon
as practicable after such filing and (B) remain effective (with a
prospectus at all times meeting the requirements of the Act) until
the Expiration Date; and
(ii) will deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates that comply in all respects with the requirements for
registration on Form 10 under the Exchange Act.
The provisions of this SECTION 13 will similarly apply to successive mergers,
consolidations, and sales or other transfers. In the event that a Section 13
Event occurs at any time after the occurrence of a Section 11(a)(ii) Event, the
Rights that have not theretofore been exercised will thereafter become
exercisable in the manner described in SECTION 13(a).
(d) In the event that the Rights become exercisable under SECTION
13(a), the Company, by action of the Board of Directors, may agree with
the Principal Party that the Principal Party may permit the Rights to be
exercised for 50% of the Common Shares of the Principal Party that would
otherwise be purchasable under SECTION 13(a), in consideration of the
surrender to the Principal Party, as the successor to the Company under
SECTION 13(a)(ii), of the Rights so exercised and without other payment of
the Purchase Price. Rights exercised under this SECTION 13(d) will be
deemed to have been exercised in full and cancelled.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company will not be required to issue fractions of Rights,
except prior to the Distribution Date as provided in SECTION 11(p), or to
distribute Rights Certificates that evidence fractional Rights. In lieu of
such fractional
27
<PAGE>
Rights, there will be paid to the registered holders of the Rights
Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of
the current market value of a whole Right. For purposes of this SECTION
14(a), the current market value of a whole Right will be the closing
price of the Rights for the Trading Day immediately prior to the date
on which such fractional Rights would have been otherwise issuable. The
closing price of the Rights for any day will be the last sale price,
regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the
New York Stock Exchange or, if the Rights are not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the
Rights are listed or admitted to trading, or if the Rights are not
listed or admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the high bid and
low asked prices in the over-the-counter market, as reported by NASDAQ
or such other system then in use or, if on any such date the Rights are
not quoted by any such 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. 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 conclusively determined in good
faith by the Board of Directors will be used.
(b) The Company will not be required to issue fractions of shares
of Preferred Stock (other than fractions that are integral multiples of
one one-thousandth of a share of Preferred Stock) upon exercise of the
Rights or to distribute certificates that evidence fractional shares of
Preferred Stock (other than fractions that are integral multiples of one
one-thousandth of a share of Preferred Stock). In lieu of fractional
shares of Preferred Stock that are not integral multiples of one
one-thousandth of a share of Preferred Stock, the Company may pay to the
registered holders of Rights Certificates at the time such Rights are
exercised as provided in this Agreement an amount in cash equal to the
same fraction of the current market value of one one-thousandth of a share
of Preferred Stock. For purposes of this SECTION 14(b), the current market
value of one one-thousandth of a share of Preferred Stock will be one
one-thousandth of the closing price of a share of Preferred Stock (as
determined pursuant to SECTION 11(d)(ii)) for the Trading Day immediately
prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event, the Company
will not be required to issue fractions of shares of Common Stock upon
exercise of the Rights or to distribute certificates that evidence
fractional shares of Common Stock. In lieu of fractional shares of Common
Stock, the Company may pay to
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the registered holders of Rights Certificates at the time such Rights
are exercised as provided in this Agreement an amount in cash equal to
the same fraction of the current market value of one share of Common
Stock. For purposes of this SECTION 14(c), the current market value of
one share of Common Stock will be the Current Market Value of one share
of Common Stock (as determined pursuant to SECTION 11(d)(i)) for the
Trading Day immediately prior to the date of such exercise.
(d) The holder of a Right, by the acceptance of the Rights,
expressly waives the right to receive any fractional Rights or any
fractional shares upon exercise of a Right, except as permitted by this
SECTION 14.
Section 15. RIGHTS OF ACTION. All rights of action in respect of this
Agreement are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Rights Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in its own behalf and for its own
benefit, enforce, and may institute and maintain any suit, action, or proceeding
against the Company to enforce, or otherwise act in respect of, its 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 this Agreement and injunctive relief against actual or
threatened violations of the obligations under this Agreement of any Person
subject to this Agreement.
Section 16. AGREEMENT OF RIGHTS HOLDERS. Every holder of a Right by
accepting the Rights consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered
at the principal office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer,
and with the appropriate forms and certificates fully executed;
(c) subject to SECTION 6(a) and SECTION 7(f), the Company and the
Rights Agent may deem and treat the person in whose name a Rights
Certificate (or, prior to the Distribution Date, the associated Common
Stock certificate) is registered as the absolute owner of the Rights
evidenced thereby
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(notwithstanding any notations of ownership or writing on the Rights
Certificates or the associated Common Stock certificate made by anyone
other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent, subject to
the last sentence of SECTION 7(e), will be required to be affected by
any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent will 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 will use its reasonable best efforts to
have any such order, decree, or ruling lifted or otherwise overturned as
soon as possible.
Section 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No
holder, as such, of any Rights Certificate will be entitled to vote or receive
dividends or be deemed for any purpose the holder of the number of one
one-thousandths of a share of Preferred Stock or any other securities of the
Company that may at any time be issuable on the exercise of the Rights
represented thereby, nor will anything contained in this Agreement or in any
Rights Certificate be construed to confer upon the holder of any Rights
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in SECTION 24), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such Rights Certificate have
been exercised in accordance with the provisions of this Agreement.
Section 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it under this Agreement and,
from time to time, on demand of the Rights Agent, its reasonable expenses
and counsel fees and disbursements and other disbursements incurred in the
administration and execution of this Agreement and the exercise and
performance of its duties under this Agreement. The Company also agrees to
indemnify the Rights Agent for, and to hold it harmless against, any loss,
liability, or expense, incurred without negligence, bad faith, or willful
misconduct on the part of the Rights Agent, for anything done or omitted
to be done by the Rights Agent in connection with the acceptance and
administration of this Agreement, including, without limitation, the costs
and expenses of defending against any claim of
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liability. In no case will the Rights Agent be liable for special,
indirect, incidental, or consequential loss or damages of any kind
whatsoever, even if the Rights Agent has been advised or is otherwise
aware of the likelihood of such loss or damage.
(b) The Rights Agent will be protected and will incur no liability
for or in respect of any action taken, suffered, or omitted by it in
connection with its administration of this Agreement in reliance upon any
Rights Certificate or certificate for Common Stock or for other securities
of the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to
be signed, executed, and, where necessary, verified or acknowledged, by
the proper Person or Persons.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
(a) Any Person into or with which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated,
or any Person resulting from any merger or consolidation to which the
Rights Agent or any successor Rights Agent is a party, or any corporation
succeeding to the corporate trust or shareholder services business of the
Rights Agent or any successor Rights Agent, will 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 to this
Agreement; provided, however, 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 succeeds to the agency
created by this Agreement, any of the Rights Certificates have been
countersigned but not delivered, any such successor Rights Agent may adopt
the countersignature of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates have not been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor
or in the name of the successor Rights Agent; and in all such cases such
Rights Certificates will have the full force provided in the Rights
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent is changed
and at such time any of the Rights Certificates 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 have not 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 will have the full force provided in the Rights
Certificates and in this Agreement.
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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 of such Rights Certificates, will be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel will be
full and complete authorization and protection to the Rights Agent as to
any action taken or omitted by it in good faith and in accordance with
such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent deems 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 or suffering any action under this Agreement,
such fact or matter (unless other evidence in respect of such fact or
matter is specifically prescribed in this Agreement) may be deemed to be
conclusively proved and established by a certificate signed by the
Chairman of the Board, the Chief Executive Officer, the Chief Operating
Officer, the President, any Vice President, the Treasurer, any Assistant
Treasurer, the Secretary, or any Assistant Secretary of the Company and
delivered to the Rights Agent; and such certificate will be full
authorization to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent will be liable under this Agreement only for
its own gross negligence, bad faith or willful misconduct.
(d) The Rights Agent will not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the
Rights Certificates or be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such statements and
recitals are and will be deemed to have been made by the Company only.
(e) The Rights Agent will not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery of
this Agreement (except the due execution of this Agreement by the Rights
Agent) or in respect of the validity or execution of any Rights
Certificate (except its countersignature); nor will it be responsible for
any breach by the Company of any covenant or condition contained in this
Agreement or in any Rights Certificate; nor will it be responsible for any
adjustment required under the provisions of SECTION 11 or SECTION 13, or
responsible for the manner, method, or amount of any such adjustment or
the ascertaining of the existence of facts that would require any such
adjustment (except with respect to the exercise of Rights evidenced by
Rights Certificates after actual notice of any such adjustment); nor will
it by any
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act under this Agreement be deemed to make any representation or
warranty as to the authorization or reservation of any shares of Common
Stock or Preferred Stock to be issued pursuant to this Agreement or any
Rights Certificate or as to whether any shares of Common Stock or
Preferred Stock will, when so issued, be validly authorized or issued,
fully paid, or nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge, and deliver or cause to be performed, executed, acknowledged,
and delivered all such further and other acts, instruments, and assurances
as may reasonably be required by the Rights Agent for the carrying out or
performing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties under this
Agreement from the Chairman of the Board, the Chief Executive Officer, the
Chief Operating Officer, the President, any Vice President, the Secretary,
any Assistant Secretary, the Treasurer, or any Assistant Treasurer of the
Company, and to apply to such officers for advice or instructions in
connection with its duties, and it will not be liable for any action taken
or suffered to be taken by it in good faith in accordance with
instructions of any such officer.
(h) The Rights Agent and any stockholder, director, officer, or
employee of the Rights Agent may buy, sell, or deal in any of the Rights
or other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, 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 in this Agreement will
preclude the Rights Agent from acting in any other capacity for the
Company or for any other Person.
(i) The Rights Agent may execute and exercise any of the rights or
powers vested by this Agreement in it or perform any duty under this
Agreement either itself or by or through its attorneys or agents, and the
Rights Agent will not be answerable or accountable for any act, default,
neglect, or misconduct of any such attorneys or agents or for any loss to
the Company resulting from any such act, default, neglect, or misconduct;
provided, however, reasonable care was exercised in the selection and
continued employment of such Person.
(j) No provision of this Agreement will 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 under this Agreement or in the
exercise of its rights if there are reasonable grounds for believing that
repayment of such funds or adequate indemnification against such risk or
liability is not reasonably assured to it.
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(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 or 2 of such certificate, the Rights Agent will not take any
further action with respect to such requested exercise of transfer without
first consulting with the Company.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty (30) days' notice in writing mailed to the Company, and to each
transfer agent of the Common Stock and Preferred Stock, by registered or
certified mail, and to the holders of the Rights Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent upon
thirty (30) days' notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of the Common Stock
and Preferred Stock, by registered or certified mail, and to the holders of the
Rights Certificates by first-class mail. If the Rights Agent resigns or is
removed or otherwise becomes incapable of acting, the Company will appoint a
successor to the Rights Agent. If the Company fails to make such appointment
within a period of thirty (30) days after giving notice of such removal or after
it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Rights Certificate
(who will, with such notice, submit such holder's Rights Certificate for
inspection by the Company), then any registered holder of any Rights Certificate
may apply to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Company or by
such a court, will be a corporation organized and doing business under the laws
of the United States or a State of the United States, in good standing, that is
authorized under such laws to exercise corporate trust powers and is subject to
supervision or examination by federal or state authority and that has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $100,000,000. After appointment, the successor Rights Agent will 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, except that the
predecessor Rights Agent will deliver and transfer to the successor Rights Agent
any property at the time held by it under this Agreement 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 will file
notice of such appointment in writing with the predecessor Rights Agent and each
transfer agent of the Common Stock and the Preferred Stock, and mail a notice of
such appointment 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 in such notice, will 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, in its
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discretion, issue new Rights Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change
in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Rights Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of shares of Common Stock following the
Distribution Date and prior to the redemption or expiration of the Rights,
the Company (a) will, with respect to shares of Common Stock so issued or
sold pursuant to the exercise of stock options or under any employee plan or
arrangement, granted or awarded as of the Distribution Date, or upon the
exercise, conversion, or exchange of securities issued by the Company, and
(b) may, in any other case, if deemed necessary or appropriate by the Board
of Directors of the Company, issue Rights Certificates representing the
appropriate number of Rights in connection with such issuance or sale;
provided, however, that (y) no such Rights Certificate will be issued if, and
to the extent that, the Company is advised by counsel that such issuance
would create a significant risk of material adverse tax consequences to the
Company or the Person to whom such Rights Certificate would be issued, and
(z) no such Rights Certificate will be issued if, and to the extent that,
appropriate adjustment has otherwise been made in lieu of the issuance of
such Rights Certificate.
Section 23. REDEMPTION AND TERMINATION. The Company may, at its option,
by action of its Board of Directors at any time prior to the earlier of (i)
the Close of Business on the tenth day following the Stock Acquisition Date
(or, if the Stock Acquisition Date has occurred prior to the Record Date, the
Close of Business on the tenth day following the Record Date), or (ii) the
Final Expiration Date, redeem all but not less than all the then outstanding
Rights at a redemption price of $0.001 per Right, as such amount may be
appropriately adjusted to reflect any stock split, stock dividend, or similar
transaction occurring after the date of this Agreement (such redemption price
being referred to as the "REDEMPTION PRICE"). Notwithstanding anything
contained in this Agreement to the contrary, the Rights will not be
exercisable after the first occurrence of a Section 11(a)(ii) Event except
during the period that the Company's right of redemption under this Agreement
has expired. The Company may, at its option, pay the Redemption Price, in
cash, shares of Common Stock (based on the Current Market Price as defined in
SECTION 11(d)(i), of the Common Stock at the time of redemption) or any other
form of consideration deemed appropriate by the Board of Directors.
Immediately upon the action of the Board of Directors of the Company ordering
the redemption of the Rights, evidence of which has been filed with the
Rights Agent and without any further action and without any notice, the right
to exercise the Rights will terminate and the only right thereafter of the
holders of Rights will 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 will give notice of such redemption to
the Rights Agent and the holders of the then outstanding Rights by mailing
such notice to all such holders at each holder's last address as it appears
upon the registry books of the Rights Agent or, prior to the Distribution
Date, on the registry books of the transfer agent for the Common Stock. Any
notice that is mailed in
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the manner in this Agreement provided will be deemed given, whether or not
the holder receives the notice. Each such notice of redemption will state the
method by which the payment of the Redemption Price will be made.
Section 24. NOTICE OF CERTAIN EVENTS.
(a) In case the Company proposes, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class
to the holders of Preferred Stock or to make any other distribution to the
holders of Preferred Stock (other than a regular quarterly cash dividend
out of earnings or retained earnings of the Company); (ii) to offer to the
holders of Preferred Stock rights or warrants to subscribe for or to
purchase any additional shares of Preferred Stock or shares of stock of
any class or any other securities, rights, or options; (iii) to effect any
reclassification of its Preferred Stock (other than a reclassification
involving only the subdivision of outstanding shares of Preferred Stock);
(iv) to effect any consolidation or merger from, into, or with any other
Person (other than a Subsidiary of the Company in a transaction that
complies with SECTION 11(o)), or to effect any sale or other transfer (or
to permit one or more of its Subsidiaries to effect any sale or other
transfer), in one transaction or a series of related transactions, of more
than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than
the Company or any of its Subsidiaries in one or more transactions each of
which complies with SECTION 11(o)); or (v) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the
Company will give to each holder of a Rights Certificate, to the extent
feasible and in accordance with SECTION 25, a notice of such proposed
action, which will specify the record date for the purposes of such stock
dividend, distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the shares of Preferred Stock, if any such date
is to be fixed, and such notice will be so given in the case of any action
covered by CLAUSE (i) or (ii) above at least twenty (20) days prior to the
record date for determining holders of the shares of Preferred Stock for
purposes of such action, and in the case of any such other action, at
least twenty (20) days prior to the date of the taking of such proposed
action or the date of participation in such proposed action by the holders
of the shares of Preferred Stock, whichever is the earlier.
(b) In case any of the events set forth in SECTION 11(a)(ii)
occurs, then, in any such case, (i) the Company will as soon as
practicable give to each holder of a Rights Certificate, to the extent
feasible and in accordance with SECTION 25, a notice of the occurrence of
such event, which will specify the event and the consequences of the event
to holders of Rights under SECTION 11(a)(ii), and (ii) all references in
SECTION 24(a) to Preferred Stock will be deemed thereafter to refer to
Common Stock or, if appropriate, other securities.
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Section 25. NOTICES. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any Rights
Certificate to or on the Company will 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:
Aegis Communications Group, Inc.
7880 Bent Branch Drive, Suite 150
Irving, Texas 75063
Attention: Chief Executive Officer
with a copy to:
Hughes & Luce, L.L.P.
1717 Main Street
Suite 2800
Dallas, Texas 75201
Attention: Ken Hawari
Subject to the provisions of SECTION 21, any notice or demand
authorized by this Agreement to be given or made by the Company or by the
holder of any Rights Certificate to or on the Rights Agent will 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:
Harris and Savings Bank
P.O. Box 755
Chicago, Illinois 60690
Attention: Carol McFarland
Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to the holder of any Rights Certificate (or,
if prior to the Distribution Date, to the holder of certificates representing
shares of Common Stock) will be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.
Section 26. SUPPLEMENT AND AMENDMENTS. Prior to the Distribution Date
and subject to the penultimate sentence of this SECTION 26, the Company and
the Rights Agent will, if the Company so directs, supplement or amend any
provision of this Agreement without the approval of any holders of
certificates representing shares of Common Stock. From and after the
Distribution Date and subject to the penultimate sentence of this SECTION 26,
the Company and the Rights Agent will, if the Company so
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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 in this Agreement that may be
defective or inconsistent with any other provision in this Agreement, (iii)
to shorten or lengthen any time period under this Agreement, or (iv) to
change or supplement the provisions under this Agreement in any manner that
the Company may deem necessary or desirable and that will 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, however, 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, or the
benefits to, the holders of Rights. Upon the delivery of a certificate from
an appropriate officer of the Company that states that the proposed
supplement or amendment is in compliance with the terms of this SECTION 26,
the Rights Agent will execute such supplement or amendment. Notwithstanding
anything contained in this Agreement to the contrary after the occurrence of
a Distribution Date, no supplement or amendment will be made that changes the
Redemption Price, the Final Expiration Date, the Purchase Price or the number
of one one-thousandths of a share of Preferred Stock for which a Right is
exercisable. Prior to the Distribution Date, the interests of the holders of
Rights will be deemed coincident with the interests of the holders of Common
Stock.
Section 27. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent will bind
and inure to the benefit of their respective successors and assigns under
this Agreement.
Section 28. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS, ETC.
For all purposes of this Agreement, any calculation of the number of shares
of Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common
Stock of which any Person is the Beneficial Owner, will 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 as in effect on the date of this
Agreement. The Board of Directors of the Company will have the exclusive
power and authority to administer this Agreement and to exercise all rights
and powers specifically granted to the Board or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (a) interpret the provisions of
this Agreement, and (b) make all determinations deemed necessary or advisable
for the administration of this Agreement (including, without limitation, a
determination to redeem or not redeem the Rights or to amend the Agreement).
All such actions, calculations, interpretations and determinations
(including, for purposes of CLAUSE (y) below, all omissions with respect to
the foregoing) that are done or made by the Board in good faith, will (x) be
final, conclusive, and binding on the Company, the Rights Agent, the holders
of the Rights, and all other Persons, and (y) not subject the Board to any
liability to the holders of the Rights.
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Section 29. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement will
be construed to give to any Person other than the Company, the Rights Agent,
and the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock) any legal or
equitable right, remedy, or claim under this Agreement; and this Agreement
will be for the sole and exclusive benefit of the Company, the Rights Agent,
and the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock).
Section 30. SEVERABILITY. If any term, provision, covenant, or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void, or unenforceable, the remainder of the
terms, provisions, covenants, and restrictions of this Agreement will remain
in full force and effect and will in no way be affected, impaired, or
invalidated; provided, however, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant, or
restriction is held by such court or authority to be invalid, void, or
unenforceable and the Board of Directors of the Company determines in good
faith 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 will be reinstated and will not expire until the Close of
Business on the tenth day following the date of such determination by the
Board of Directors.
Section 31. GOVERNING LAW. This Agreement, each Right, and each Rights
Certificate issued under this Agreement will be deemed to be a contract made
under the laws of the State of Delaware and for all purposes will be governed
by and construed in accordance with the laws of such State applicable to
contracts made and to be performed entirely within such State.
Section 32. COUNTERPARTS. This Agreement may be executed in any number
of counterparts and each of such counterparts will for all purposes be deemed
to be an original, and all such counterparts will together constitute but one
and the same instrument.
Section 33. INTERPRETATION. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and will not
control or affect the meaning or construction of any of the provisions of
this Agreement. References in this Agreement to Sections and Exhibits are
references to the Sections of and Exhibits to this Agreement unless the
context requires otherwise. In this Agreement, the word "or" is not
exclusive.
Section 34. ESTABLISHMENT OF FUND FOR DIRECTORS. The Board may, at any
time it deems appropriate, establish or set aside one or more funds, whether
in trust, escrow or otherwise (and regardless of whether such fund is
combined with any other fund established or set aside by the Company), for
the purpose of assuring that adequate resources are available to the Board of
Directors in order to enable them to carry out
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their prescribed functions under this Agreement and to fulfill their
fiduciary obligations to stockholders of the Company.
Section 35. EXCHANGE.
(a) The Company may, at its option, at any time and from time to
time after the first occurrence of a Section 11(a)(ii) Event, exchange all
or part of the then outstanding and exercisable Rights (other than Rights
that have become void as provided in SECTION 7(e)) for one-half the number
of shares of Common Stock, one-thousandths of a share of Preferred Stock,
or shares or other units of property for which the Rights are exercisable
immediately before the time of the action of the Board of Directors to
exchange the Rights (the "EXCHANGE NUMBER") or any combination thereof as
determined by the Board. Notwithstanding the foregoing, the Company will
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, any such Subsidiary or any entity holding
shares of Common Stock for or pursuant to any such plan), together with
all Affiliates and Associates of such Person, becomes the Beneficial Owner
of 50% or more of the shares of Common Stock then outstanding. The
exchange of the Rights by the Company may be made effective at such time,
on such basis and with such conditions as the Board in its sole discretion
may establish.
(b) Immediately upon the action of the Company ordering the
exchange of any Rights pursuant to SECTION 35(a), evidence of which has
been filed with the Rights Agent, and without any further action and
without any notice, the right to exercise such Rights will terminate and
the only right of a holder of such Rights will be to receive that number
of shares of Common Stock, Preferred Stock, or units of other property
equal to the number of such Rights held by such holder multiplied by the
Exchange Number. Promptly after the action of the Company ordering the
exchange of the Rights, the Company will (i) file evidence of such action
with the Rights Agent, (ii) give public notice of such exchange; provided,
however, that the failure to give, or any defect in, such notice will not
affect the validity of such exchange, and (iii) mail notice of such
exchange to the holders of such Rights at their last addresses as they
appear upon the registry books of the Rights Agent. Any notice that is
mailed in the manner provided in this SECTION 35(b) will be deemed given,
whether or not the holder receives the notice. Each such notice or
exchange will state the method by which the exchange will be effected and,
in the event of any partial exchange, the number of Rights that will be
exchanged. Any partial exchange will be effected pro rata based on the
number of Rights (other than Rights that have become void as provided in
SECTION 7(e)) held by each holder of Rights.
(c) In the event that the number of shares of Common Stock that
are authorized by the Company's Certificate of Incorporation but not
outstanding or
40
<PAGE>
reserved for issuance for purpose other than upon exercise of the Rights
is not sufficient to permit any exchange of Rights in accordance with
this SECTION 35, the Company may, at its option, take all such action as
may be necessary to authorize additional shares of Common Stock for
issuance upon such exchange.
(d) Upon the action of the Company ordering the exchange of any
Rights pursuant to SECTION 35(a), the Company will not be required to
issue fractions of shares or to distribute certificates which evidence
fractional shares. In lieu of such fractional shares, the Company may pay
to the registered holders of the Rights Certificates with regard to which
such fractional shares would otherwise be issuable an amount in cash equal
to the same fraction of the current market value of one share of Common
Stock. For purposes of this SECTION 35(a), the current market value of
one share of Common Stock will be the closing price of one share of Common
Stock (as determined consistent with SECTION 11(d)(i)) for the Trading Day
immediately prior to the date of exchange pursuant to this SECTION 35(a).
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
Attest: AEGIS COMMUNICATIONS GROUP, INC.
---------------------------
By:
------------------------------------
Name:
----------------------------------
Its:
-----------------------------------
Attest: HARRIS TRUST AND SAVINGS BANK
---------------------------
By:
------------------------------------
Name:
----------------------------------
Its:
-----------------------------------
41
<PAGE>
Exhibit A
to Rights Agreement
[FORM OF]
CERTIFICATE OF DESIGNATION, PREFERENCES,
AND RIGHTS OF SERIES D JUNIOR
PARTICIPATING PREFERRED STOCK
of
AEGIS COMMUNICATIONS GROUP, INC.
Pursuant to Section 151 of the Delaware General Corporation Law
The undersigned officers of Aegis Communications Group, Inc. (the
"CORPORATION"), a corporation organized and existing under the Delaware
General Corporation Law, in accordance with the provisions of Section 151,
thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by
the Restated Articles of Incorporation of such Corporation, such Board of
Directors on December 16, 1998, adopted the resolutions set forth below
creating a series of 100,000 shares of Preferred Stock designated as "Series
D Junior Participating Preferred Stock":
That no shares of Series D Junior Participating Preferred Stock have
heretofore been issued.
RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the provisions of its
Restated Certificate of Incorporation, a series of Preferred Stock of the
Corporation be and it hereby is created, and that the designation and amount
thereof and the voting powers, preferences, and relative, participating,
optional, and other special rights of the shares of such series, and the
qualifications, limitations, or restrictions thereof are as follows:
(1) DESIGNATION AND AMOUNT. The shares of such series will be
designated as "Series D Junior Participating Preferred Stock" and the number
of shares constituting such series will be 100,000.
(2) DIVIDENDS AND DISTRIBUTIONS.
(a) The holders of shares of Series D Junior Participating
Preferred Stock will be entitled to receive, when, as, and if declared by
the Board of Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on the last day of March, June,
September, and December in
A-1
<PAGE>
each year (each such date being referred to as a "QUARTERLY DIVIDEND
PAYMENT DATE"), commencing on the first Quarterly Dividend Payment Date
after the first issuance of a share or fraction of a share of Series D
Junior Participating Preferred Stock, in an amount per share (rounded to
the nearest cent) equal to the greater of (i) $0.01 or (ii) subject to
the provision for adjustment set forth below, one thousand times the
aggregate per share amount of all cash dividends, and one thousand times
the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions other than a dividend payable in shares
of Common Stock, $.01 par value (the "COMMON STOCK") or a subdivision of
the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the immediately preceding
quarterly Dividend Payment Date, or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share or fraction
of a share of Series D Junior Participating Preferred Stock. In the event
the Corporation at any time after December 16, 1998 (the "RIGHTS
DECLARATION DATE") (i) declares any dividend on the Common Stock payable
in shares of Common Stock, (ii) subdivides the outstanding Common Stock,
or (iii) combines the outstanding Common Stock into a smaller number of
shares, then in each such case the amount to which holders of shares of
Series D Junior Participating Preferred Stock were entitled immediately
prior to such event under CLAUSE (ii) of the preceding sentence will be
adjusted by multiplying such amount by a fraction the numerator of which
is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
(b) The Corporation will declare a dividend or distribution on the
Series D Junior Participating Preferred Stock as provided in SECTION 2(a)
above immediately after it declares a dividend or distribution on the
Common Stock (other than a dividend payable in shares of Common Stock);
provided that, in the event no dividend or distribution has been declared
on the Common Stock during the period between any quarterly Dividend
Payment Date and the next subsequent Quarterly Dividend Payment Date, a
dividend of $0.01 per share on the Series D Junior Participating Preferred
Stock will nevertheless be payable on such subsequent Quarterly Dividend
Payment Date.
(c) Dividends will begin to accrue and be cumulative on
outstanding shares of Series D Junior Participating Preferred Stock from
the Quarterly Dividend Payment Date next preceding the date of issue of
such shares of Series D Junior Participating Preferred Stock, unless the
date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares
will begin to accrue from the date of issue of such shares, or unless the
date of issue is a Quarterly Dividend Payment Date or is a date after the
record date for the determination of holders of shares of Series D Junior
Participating Preferred Stock entitled to receive a quarterly dividend and
before such Quarterly Dividend Payment Date, in either
A-2
<PAGE>
of which events such dividends will begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends
will not bear interest. Dividends paid on the shares of Series D Junior
Participating Preferred Stock in an amount less than the total amount of
such dividends at the time accrued and payable on such shares will be
allocated pro rata on a share-by-share basis among all such shares at the
time outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of Series D Junior Participating
Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date will be no more than 30 days prior to
the date fixed for the payment thereof.
(3) VOTING RIGHTS.
(a) The holders of shares of Series D Junior Participating
Preferred Stock will have the following voting rights:
Subject to the provision for adjustment set forth below, each share
of Series D Junior Participating Preferred Stock will entitle the holder
to a number of votes on all matters submitted to a vote of the
stockholders of the Corporation equal to one thousand the number of votes
per share to which shares of Common Stock are entitled. In the event the
Corporation at any time after the Rights Declaration Date (i) declares any
dividend on Common Stock payable in shares of Common Stock, (ii)
subdivides the outstanding Common Stock, or (iii) combines the outstanding
Common Stock into a smaller number of shares, then in each such case the
number of votes per share to which holders of shares of Series D Junior
Participating Preferred Stock were entitled immediately prior to such
event will be adjusted by multiplying such number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such
event.
(b) Except as otherwise provided in this Agreement or by law, the
holders of shares of Series D Junior Participating Preferred Stock and the
holders of shares of Common Stock will vote together as one class on all
matters submitted to a vote of stockholders of the Corporation.
(c) (i) If at any time dividends on any Series D Junior
Participating Preferred Stock are in arrears in an amount equal to
six (6) quarterly dividends thereon, the occurrence of such
contingency will mark the beginning of a period (a "DEFAULT PERIOD")
that will extend until such time when all accrued and unpaid
dividends for all previous quarterly dividend periods and for the
current quarterly dividend period on all shares of Series D Junior
Participating Preferred Stock then outstanding have been declared
and paid or set apart for payment. During each default period, all
holders of preferred stock of the Corporation (the "PREFERRED
STOCK")
A-3
<PAGE>
(including holders of the Series D Junior Participating Preferred
Stock) with dividends in arrears in an amount equal to six (6)
quarterly dividends thereon, voting as a class, irrespective of
series, will have the right to elect two (2) Directors.
(ii) During any default period, such voting right of the
holders of Series D Junior Participating Preferred Stock may be
exercised initially at a special meeting called pursuant to
SECTION 3(c)(iii) or at any annual meeting of stockholders, and
thereafter at annual meetings of stockholders, provided that such
voting right will not be exercised unless the holders of ten percent
(10%) in number of shares of Preferred Stock outstanding are present
in person or by proxy. The absence of a quorum of the holders of
Common Stock will not affect the exercise by the holders of
Preferred Stock of such voting right. At any meeting at which the
holders of Preferred Stock exercise such voting right initially
during an existing default period, they will have the right, voting
as a class, to elect Directors to fill such vacancies, if any, in
the Board of Directors as may then exist up to two (2) Directors or,
if such right is exercised at an annual meeting, to elect two (2)
Directors. If the number that may be so elected at any special
meeting does not amount to the required number, the holders of the
Preferred Stock will have the right to make such increase in the
number of Directors as is necessary to permit the election by them
of the required number. After the holders of the Preferred Stock
have exercised their right to elect Directors in any default period
and during the continuance of such period, the number of Directors
will not be increased or decreased except by vote of the holders of
Preferred Stock as provided herein or pursuant to the rights of any
equity securities ranking senior to or pari passu with the Series D
Junior Participating Preferred Stock.
(iii) Unless the holders of Preferred Stock, during an
existing default period, have previously exercised their right to
elect Directors, the Board of Directors may order, or any
stockholder or stockholders owning in the aggregate not less than
ten percent (10%) of the total number of shares of Preferred Stock
outstanding, irrespective of series, may request, the calling of a
special meeting of the holders of Preferred Stock, which meeting
will thereupon be called by the Chief Executive Officer, the Chief
Operating Officer, the President, a Vice-President, or the Secretary
of the Corporation. Notice of such meeting and of any annual meeting
at which holders of Preferred Stock are entitled to vote pursuant to
this SECTION 3(c)(iii) will be given to each holder of record of
Preferred Stock by mailing a copy of such notice to such holder at
such holder's last address as it appears on the books of the
Corporation. Such meeting will be called for a time not earlier than
20 days and not later than 60 days after such order or request or in
default of the calling of such meeting within 60 days after such
order or request, such meeting may be called on
A-4
<PAGE>
similar notice by any stockholder or stockholders owning in the
aggregate not less than ten percent (10%) of the total number of
shares of Preferred Stock outstanding. Notwithstanding the
provisions of this SECTION 3(c)(iii), no such special meeting will
be called during the period within 60 days immediately preceding
the date fixed for the next annual meeting of the stockholders.
(iv) In any default period, the holders of Common Stock, and
other classes of stock of the Corporation if applicable, will
continue to be entitled to elect the whole number of Directors until
the holders of Preferred Stock have exercised their right to elect
two (2) Directors voting as a class, after the exercise of which
right (x) the Directors so elected by the holders of Preferred Stock
will continue in office until their successors have been elected by
such holders or until the expiration of the default period, and (y)
any vacancy in the Board of Directors may (except as provided in
SECTION 3(c)(ii)) be filled by vote of a majority of the remaining
Directors theretofore elected by the holders of the class of stock
that elected the Director whose office has become vacant.
References in this SECTION 3(c) to Directors elected by the holders
of a particular class of stock will include Directors elected by
such Directors to fill vacancies as provided in clause (y) of the
foregoing sentence.
(v) Immediately upon the expiration of a default period,
(x) the right of the holders of Preferred Stock as a class to elect
Directors will cease, (y) the term of any Directors elected by the
holders of Preferred Stock as a class will terminate, and (z) the
number of Directors will be such number as may be provided for in
the articles of incorporation or by-laws irrespective of any
increase made pursuant to the provisions of SECTION 3(c)(ii) (such
number being subject, however, to change thereafter in any manner
provided by law or in the articles of incorporation or by-laws). Any
vacancies in the Board of Directors effected by the provisions of
CLAUSES (y) and (z) in the preceding sentence may be filled by a
majority of the remaining Directors.
Except as set forth herein, holders of Series D Junior Participating
Preferred Stock will have no special voting rights and their consent will not
be required (except to the extent they are entitled to vote with holders of
Common Stock as set forth herein) for taking any corporate action.
(4) CERTAIN RESTRICTIONS.
(a) Whenever quarterly dividends or other dividends or
distributions payable on the Series D Junior Participating Preferred Stock
as provided in SECTION 2 are in arrears, thereafter and until all accrued
and unpaid dividends and distributions, whether or not declared, on shares
of Series D Junior
A-5
<PAGE>
Participating Preferred Stock outstanding have been paid in full, the
Corporation will not
(i) declare or pay dividends on, make any other distributions
on, or redeem or purchase or otherwise acquire for consideration any
shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution, or winding up) to the Series D Junior
Participating Preferred Stock;
(ii) declare or pay dividends on or make any other distributions
on any shares of stock ranking on a parity (either as to dividends
or upon liquidation, dissolution, or winding up) with the Series D
Junior Participating Preferred Stock, except dividends paid ratably
on the Series D Junior Participating Preferred Stock and all such
parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such
shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking on a parity (either as to dividends or
upon liquidation, dissolution, or winding up) with the Series D
Junior Participating Preferred Stock, provided that the Corporation
may at any time redeem, purchase, or otherwise acquire shares of any
such parity stock in exchange for shares of any stock of the
Corporation ranking junior (either as to dividends or upon
dissolution, liquidation, or winding up) to the Series D Junior
Participating Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares
of Series D Junior Participating Preferred Stock, or any shares of
stock ranking on a parity with the Series D Junior Participating
Preferred Stock, except in accordance with a purchase offer made in
writing or by publication (as determined by the Board of Directors)
to all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend
rates and other relative rights and preferences of the respective
series and classes, determines in good faith will result in fair and
equitable treatment among the respective series or classes.
(b) The Corporation will not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares
of stock of the Corporation unless the Corporation could, under SECTION
4(a), purchase or otherwise acquire such shares at such time and in such
manner.
(5) REACQUIRED SHARES. Any shares of Series D Junior Participating
Preferred Stock purchased or otherwise acquired by the Corporation in any
manner whatsoever will be retired and cancelled promptly after the
acquisition thereof. All such
A-6
<PAGE>
shares will upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred
Stock to be created by resolution or resolutions of the Board of Directors,
subject to the conditions and restrictions on issuance set forth herein.
(6) LIQUIDATION, DISSOLUTION, OR WINDING UP.
(a) Upon any liquidation (voluntary or otherwise), dissolution, or
winding up of the Corporation, no distribution will be made to the holders
of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution, or winding up) to the Series D Junior
Participating Preferred Stock unless, prior thereto, the holders of shares
of Series D Junior Participating Preferred Stock have received an amount
equal to $7.50 for each one one-thousandth share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment (the "SERIES D LIQUIDATION
PREFERENCE"). Following the payment of the full amount of the Series D
Liquidation Preference, no additional distributions will be made to the
holders of shares of Series D Junior Participating Preferred Stock unless,
prior thereto, the holders of shares of Common Stock have received an
amount per share (the "COMMON ADJUSTMENT") equal to the quotient obtained
by dividing (i) the Series D Liquidation Preference by (ii) 1000 (as
appropriately adjusted as set forth in SECTION 6(c) to reflect such events
as stock splits, stock dividends, and recapitalizations with respect to
the Common Stock) (such number in CLAUSE (ii), the "ADJUSTMENT NUMBER").
Following the payment of the full amount of the Series D Liquidation
Preference and the Common Adjustment in respect of all outstanding shares
of Series D Junior Participating Preferred Stock and Common Stock,
respectively, holders of Series D Junior Participating Preferred Stock and
holders of shares of Common Stock will receive their ratable and
proportionate share of the remaining assets to be distributed in the ratio
of the Adjustment Number to 1 with respect to such Preferred Stock and
Common Stock, on a per share basis, respectively.
(b) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series D Liquidation Preference
and the liquidation preferences of all other series of preferred stock, if
any, that rank on a parity with the Series D Junior Participating
Preferred Stock, then such remaining assets will be distributed ratably to
the holders of such parity shares in proportion to their respective
liquidation preferences. In the event, however, that there are not
sufficient assets available to permit payment in full of the Common
Adjustment, then such remaining assets will be distributed ratably to the
holders of Common Stock.
(c) In the event the Corporation at any time after December 16,
1998 (i) declares any dividend on Common Stock payable in shares of Common
Stock, (ii) subdivides the outstanding Common Stock, or (iii) combines the
A-7
<PAGE>
outstanding Common Stock into a smaller number of shares, then in each
such case the Adjustment Number in effect immediately prior to such event
will be adjusted by multiplying such Adjustment Number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such
event.
(7) CONSOLIDATION, MERGER, ETC. In case the Corporation enters into
any consolidation, merger, combination, or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash, and/or any other property, then in any such case the shares
of Series D Junior Participating Preferred Stock will at the same time be
similarly exchanged or changed in an amount per share (subject to the
provision for adjustment set forth below) equal to one thousand times the
aggregate amount of stock, securities, cash, and/or any other property
(payable in kind), as the case may be, into which or for which each share of
Common Stock is changed or exchanged. In the event the Corporation at any
time after December 16, 1998 (i) declares any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivides the outstanding Common
Stock, or (iii) combines the outstanding Common Stock into a smaller number
of shares, then in each such case the amount set forth in the preceding
sentence with respect to the exchange or change of shares of Series D Junior
Participating Preferred Stock will be adjusted by multiplying such amount by
a fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such event.
(8) NO REDEMPTION. The shares of Series D Junior Participating
Preferred Stock will not be redeemable.
(9) AMENDMENT. The Restated Articles of Incorporation of the
Corporation will not be further amended in any manner that would materially
alter or change the powers, preferences, or special rights of the Series D
Junior Participating Preferred Stock so as to affect them adversely without
the affirmative vote of the holders of a majority or more of the outstanding
shares of Series D Junior Participating Preferred Stock, voting separately as
a class.
(10) FRACTIONAL SHARES. Series D Junior Participating Preferred Stock
may be issued in fractions of a share that entitle the holder, in proportion
to such holders fractional shares, to exercise voting rights, receive
dividends, participate in distributions, and to have the benefit of all other
rights of holders of Series D Junior Participating Preferred Stock.
A-8
<PAGE>
IN WITNESS WHEREOF, we have executed and subscribed this Certificate
and do affirm the foregoing as true under the penalties of perjury this 16th
day of December, 1998.
AEGIS COMMUNICATIONS GROUP, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
The foregoing instrument was acknowledged before me by Stephen A.
McNeely on the 16th day of December, 1998, in the capacities indicated.
---------------------------------------
(Notary)
The foregoing instrument was acknowledged before me Matthew S. Waller on
the 16th day of December, 1998, in the capacities indicated.
---------------------------------------
(Notary)
A-9
<PAGE>
Exhibit B
to Rights Agreement
Form of Rights Certificate
Certificate No. R-_______
NOT EXERCISABLE AFTER DECEMBER 16, 2008 OR EARLIER IF REDEEMED BY THE
COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT
$0.001 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 IS, 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 SUCH
AGREEMENT.](1)
Rights Certificate
AEGIS COMMUNICATIONS GROUP, INC.
This certifies that _____________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions, and conditions of the
Rights Agreement, dated as of December 16, 1998 (as amended from time to time,
the "RIGHTS AGREEMENT"), between Aegis Communications Group, Inc., a Delaware
corporation (the "COMPANY"), and Harris Trust and Savings Bank, (the "RIGHTS
AGENT"), to purchase from the Company at any time prior to 5:00 p.m. (Delaware
time) on December 16, 2008 at the office or offices of the Rights Agent
designated for such purpose, or its successors as Rights Agent, one
one-thousandth of a fully paid, nonassessable share of Series D Junior
Participating Preferred Stock (the "PREFERRED STOCK") of the Company, at a
purchase price of $7.50 per one one-thousandth of a share (the "PURCHASE
PRICE"), upon presentation and surrender of this Rights Certificate with the
Form of Election to Purchase and related Certificate duly executed. The number
of Rights evidenced by this Rights Certificate (and the number of shares that
may be purchased upon exercise
- --------------------------
(1) The portion of the legend in brackets shall be inserted only if applicable
and shall replace the preceding sentence.
B-1
<PAGE>
thereof) set forth above, and the Purchase Price per share set forth above,
are the number and Purchase Price as of December 16, 1998 based on the
Preferred Stock as constituted at such date. The Company reserves the right
to require prior to the occurrence of a Triggering Event (as such term is
defined in the Rights Agreement) that a number of Rights be exercised so that
only whole shares of Preferred Stock will be issued.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is defined
in the Rights Agreement), if the Rights evidenced by this Rights Certificate are
beneficially owned by (i) an Acquiring Person or 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, after such transfer, became an Acquiring Person, or
an Affiliate or Associate of an Acquiring Person, such Rights will become null
and void and no holder of this certificate will have any right with respect to
such Rights from and after the occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and the number and
kind of shares of Preferred Stock or other securities, that may be purchased
upon the exercise of the Rights evidenced by this Rights Certificate are subject
to modification and adjustment upon the happening of certain events, including
Triggering Events.
This Rights Certificate is subject to all of the terms, provisions, and
conditions of the Rights Agreement, which terms, provisions, and conditions are
hereby incorporated in this Rights Certificate by reference and made a part of
this certificate 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 certain circumstances
set forth in the Rights Agreement. Copies of the Rights Agreement are on file at
the above-mentioned office of the Rights Agent and are also available upon
written request to the Rights Agent.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the principal office or offices of the Rights Agent designated for
such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of one one-thousandths of a share of Preferred
Stock as the Rights evidenced by the Rights Certificate or Rights Certificates
surrendered have entitled such holder to purchase. If this Rights Certificate is
exercised in part, the holder will be entitled to receive upon surrender of this
Rights Certificate another Rights Certificate or Rights Certificates for the
number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate may be redeemed by the Company at its option at a redemption
price of
B-2
<PAGE>
$0.001 per Right at any time prior to the earlier of the Close of Business on
(i) the tenth day following the Stock Acquisition Date (as such time period
may be extended pursuant to the Rights Agreement), and (ii) the Final
Expiration Date. In addition, in certain circumstances the Rights may be
exchanged, in whole or in part, for shares of the Common Stock, or shares of
preferred stock of the Company or other consideration having essentially the
same value or economic rights as such shares. Immediately upon the action of
the Board of Directors of the Company authorizing any such exchange, and
without any further action or any notice, the Rights (other than Rights that
are not subject to such exchange) will terminate and the Rights will only
enable holders to receive the shares issuable upon such exchange.
No fractional shares of Preferred Stock will be issued upon the exercise
of any Right or Rights evidenced hereby (other than fractions that are integral
multiples of one one-thousandth of a share of Preferred Stock, which may, at the
election of the Company, be evidenced by depository receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate will be entitled to vote or receive
dividends or be deemed for any purpose the holder of shares of Preferred Stock
or of any other securities of the Company that may at any time be issuable on
the exercise hereof, nor will anything contained in the Rights Agreement or
herein be construed to confer upon the holder of this certificate, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or, to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Rights
Certificate have been exercised as provided in the Rights Agreement.
This Rights Certificate will not be valid or obligatory for any purpose
until it has been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal.
Dated as of ____________________
ATTEST: AEGIS COMMUNICATIONS GROUP, INC.
By:
- ------------------------------ ----------------------------------
Title:
--------------------------------
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<PAGE>
Countersigned:
- -------------------------
By
------------------------
Authorized Signature
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<PAGE>
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to
transfer the Rights Certificate.)
FOR VALUE RECEIVED hereby sells, assigns, and transfer unto
(Please print name and address of transferee)
This Rights Certificate, together with all right, title, and interest
therein, and does hereby irrevocably constitute and appoint _________________
attorney, to transfer the within Rights Certificate on the books of the
within-named Company, with full power of substitution.
Dated:_________________, ____
--------------------------------------
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned, 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
in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it [ ]
did [ ] did not acquire the Rights evidenced by this Rights Certificate from
any Person who is, was, or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated:_________________, ____
--------------------------------------
Signature
Signature Guaranteed:
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<PAGE>
NOTICE
The signature to the foregoing Assignment and Certificate must correspond
to the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
To: AEGIS COMMUNICATIONS GROUP, INC.:
The undersigned hereby irrevocably elects to exercise __________ Rights
represented by this Rights Certificate to purchase the shares of Preferred Stock
issuable upon the exercise of the Rights (or such other securities of the
Company or of any other Person that 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 are not all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such Rights will be
registered in the name of and delivered to:
please insert social security
or other identifying number
(please print name and address)
Dated:_________________, ____
--------------------------------------
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as such terms are
defined in the Rights Agreement);
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<PAGE>
(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:
B-7
<PAGE>
Exhibit C
to Rights Agreement
DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED
On December 16, 1998, the Board of Directors of Aegis Communications
Group, Inc. (the "COMPANY") adopted a Stockholder Rights Plan, providing that
one right (a "RIGHT") will be attached to each share of common stock, $.01 par
value, of the Company (the "COMMON STOCK") as of December 28, 1998 (the "RECORD
DATE"). Each Right entitles the registered holder to purchase from the Company
one one-thousandth of a share of Series D Junior Participating Preferred Stock,
par value $.01 per share (the "PREFERRED STOCK"), at a Purchase Price of $7.50
per share (the "PURCHASE PRICE"), subject to adjustment. The description and
terms of the Rights are set forth in the Rights Agreement (the "RIGHTS
AGREEMENT"), dated as of December 16, 1998, between the Company and Harris Trust
and Savings Bank as Rights Agent (the "RIGHTS AGENT").
Initially, the Rights will be attached to all Common Stock certificates
representing shares outstanding as of the Record Date, and no separate Rights
Certificate will be distributed. The Rights will separate from the Common Stock
and a distribution date ("Distribution Date") will occur upon the earlier of (i)
10 days following a public announcement that a person or group of affiliated or
associated persons (an "ACQUIRING PERSON") has acquired, or obtained the right
to acquire, beneficial ownership of 20% or more of the outstanding shares of
Common Stock (the "STOCK ACQUISITION DATE"), or (ii) 10 business days following
the commencement of a tender offer or exchange offer that would result in a
person or group beneficially owning 20% or more of such outstanding shares of
Common Stock. Until the Distribution Date, (i) the Rights will be evidenced by
the Common Stock certificates and will be transferred with and only with such
Common Stock certificates, (ii) new Common Stock certificates will contain a
notation incorporating the Rights Agreement by reference; and (iii) the
surrender for transfer of any certificates for Common Stock outstanding will
also constitute the transfer of the Rights associated with the Common Stock
represented by such certificate.
The Rights Agreement provides that Thayer Equity Investors III, L.P.,
Edward Blank, ITC Holding Company, Codinvest Limited, and their successors and
affiliates, who together will be beneficial owners of more than 50% of the
Common Stock of the Company outstanding on December 16, 1998, are excluded from
the definition of "Acquiring Person."
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<PAGE>
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on December 16, 2008, unless earlier redeemed by the
Company as described below.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of the Common Stock as of the close of
business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Except as otherwise determined by
the Board of Directors, only shares of Common Stock outstanding prior to the
Distribution Date will be issued with Rights.
In the event that (i) the Company is the surviving corporation in a merger
or combination with any Acquiring Person, or any Associate or Affiliate of any
Acquiring Person, and its Common Stock remains outstanding, (ii) any Acquiring
Person, or any Associate or Affiliate of any Acquiring Person, engages in one or
more "self-dealing" transactions as set forth in the Rights Agreement, (iii) an
Acquiring Person becomes the beneficial owner of 20% or more of the then
outstanding shares of Common Stock, or (iv) during such time as there is an
Acquiring Person an event occurs that results in such Acquiring Person's
ownership interest being increased by more than 1% (E.G., a reverse stock split
or recapitalization), each holder of a Right will thereafter have the right to
receive, upon exercise, Common Stock (or, in certain circumstances, cash,
property, or other securities of the Company), having a value equal to two times
the Exercise Price of the Right. The Exercise Price is the Purchase Price times
the number of shares of Common Stock associated with each Right (initially,
one). Notwithstanding any of the foregoing, following the occurrence of any of
the events set forth in this paragraph (the "Flip-In Events"), all Rights that
are, or (under certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person, or an Associate or Affiliate of any
Acquiring Person, will be null and void. However, Rights are not exercisable
following the occurrence of any of the Flip-In Events set forth above until such
time as the Rights are no longer redeemable by the Company as set forth below.
For example, at an exercise price of $7.50 per Right, each Right not owned
by an Acquiring Person (or by certain related parties) following an event set
forth in the preceding paragraph would entitle its holder to purchase Common
Stock with a value of $15 (or other consideration, as noted above) for $7.50.
Assuming that the Common Stock had a per share value of $7.50 at such time, the
holder of each valid Right would be entitled to purchase 2.0 shares of Common
Stock for $7.50. Alternatively, the Company could permit the holder to
surrender each Right in exchange for stock or cash equivalent to one share of
Common Stock (with a value of $7.50) without the payment of any consideration
other than the surrender of the Right.
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<PAGE>
In the event that following the Stock Acquisition Date, (i) the Company is
acquired in a merger or consolidation in which the Company is not the surviving
corporation or (ii) 50% or more of the Company's assets or earning power is sold
or transferred, each holder of a Right (except Rights which have previously been
voided as set forth above) will thereafter have the right (a flip-over right) to
receive, upon exercise of the Right, Common Stock of the acquiring company
having a value equal to two times the Exercise Price of the Right.
The Purchase Price payable, and the number of shares of Preferred Stock or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Stock, (ii) if holders of the Preferred Stock are granted certain rights or
warrants to subscribe for Preferred Stock or convertible securities at less than
the current market price of the Preferred Stock, or (iii) upon the distribution
to holders of the Preferred Stock of evidences of indebtedness or assets
(excluding regular quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above).
With certain exceptions, no adjustments in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fractional shares will be issued and, in lieu thereof, an adjustment
in cash will be made based on the market price of the Preferred Stock on the
last trading date prior to the date of exercise.
At any time until 10 days following the Stock Acquisition Date, the
Company may redeem the Rights in whole, but not in part, at a price of $.001 per
Right. The ten day redemption period may be extended by the Board of Directors
so long as the Rights are still redeemable. Immediately upon the action of the
Board of Directors ordering redemption of the Rights, the Rights will terminate
and the only right of the holders of Rights will be to receive the $.001
redemption price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to stockholders or to the Company, stockholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Stock (or other consideration) of the Company as set
forth above.
Any of the provisions of the Rights Agreement may be amended by the Board
of Directors of the Company prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement may be amended by the
Board in order to cure any ambiguity, to make changes which do not
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<PAGE>
adversely affect the interests of holders of Rights (excluding the interest
of any Acquiring Person), or to shorten or lengthen any time period under the
Rights Agreement; provided that no amendment to adjust the time period
governing redemption will be made at such time as the Rights are not
redeemable.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
in certain circumstances. Accordingly, the existence of the Rights may deter
certain acquirors from making takeover proposals or tender offers.
The Rights Agreement between the Company and the Rights Agent specifying
the terms of the Rights, which includes as Exhibit B the Form of Rights
Certificate, is attached as an exhibit and incorporated by reference. The
foregoing description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement.
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