SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
PITNEY BOWES INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 06-0495050
(State of Incorporation or Organization) (IRS Employer
Identification No.)
World Headquarters, Stamford, Connecticut 06926-0700
(Address of principal executive offices) (zip code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which
to be so Registered Each Class is to be Registered
Preference Share Purchase Rights New York Stock Exchange
Securities to be registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
Page 1 of 7<PAGE>
Item 1. Description of Registrant's Securities to be
Registered.
On December 11, 1995, the Board of Directors of
Pitney Bowes Inc. (the "Company") declared a dividend of one
preference share purchase right (a "Right") for each
outstanding share of common stock, par value $2.00 per share
(the "Common Shares"), of the Company. The dividend is
payable on February 20, 1996 (the "Record Date") to the
stockholders of record on that date. Each Right entitles the
registered holder to purchase from the Company one one-
hundredth of a share of Series A Junior Participating
Preference Stock, without par value (the "Preference
Shares"), of the Company at a price of $195.00 per one one-
hundredth of a Preference Share (the "Purchase Price"),
subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement, dated as of
December 11, 1995 (the "Rights Agreement"), between the
Company and Chemical Mellon Shareholder Services, L.L.C., as
Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following
a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") have acquired ben-
eficial ownership of 20% or more of the outstanding Common
Shares or (ii) 10 business days (or such later date as may be
determined by action of the Board of Directors prior to such
time as any person or group of affiliated persons becomes an
Acquiring Person) following the commencement of, or announce-
ment of an intention to make, a tender offer or exchange of-
fer the consummation of which would result in the beneficial
ownership by a person or group of 20% or more of the out-
standing Common Shares (the earlier of such dates being
called the "Distribution Date"), the Rights will be evi-
denced, with respect to any of the Common Share certificates
outstanding as of the Record Date, by such Common Share cer-
tificate with a copy of this Summary of Rights attached
thereto.
The Rights Agreement provides that, until the Dis-
tribution Date (or earlier redemption or expiration of the
Rights), the Rights will be transferred with and only with
the Common Shares. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Share
certificates issued after the Record Date upon transfer or
new issuance of Common Shares will contain a notation incor-
porating the Rights Agreement by reference. Until the Dis-
tribution Date (or earlier redemption or expiration of the
Rights), the surrender for transfer of any certificates for
Common Shares outstanding as of the Record Date, even without
such notation or a copy of the Summary of Rights being at-
tached thereto, will also constitute the transfer of the
Rights associated with the Common Shares represented by such
Page 2 of 7<PAGE>
certificate. As soon as practicable following the Distribu-
tion Date, separate certificates evidencing the Rights
("Right Certificates") will be mailed to holders of record of
the Common Shares as of the close of business on the Distri-
bution Date and such separate Right Certificates alone will
evidence the Rights.
The Rights are not exercisable until the Distribu-
tion Date. The Rights will expire on February 20, 2006 (the
"Final Expiration Date"), unless the Final Expiration Date is
extended or unless the Rights are earlier redeemed or ex-
changed by the Company, in each case, as described below.
The Purchase Price payable, and the number of Pre-
ference Shares 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
Preference Shares, (ii) upon the grant to holders of the Pre-
ference Shares of certain rights or warrants to subscribe for
or purchase Preference Shares at a price, or securities con-
vertible into Preference Shares with a conversion price, less
than the then-current market price of the Preference Shares
or (iii) upon the distribution to holders of the Preference
Shares of evidences of indebtedness or assets (excluding reg-
ular periodic cash dividends paid out of earnings or retained
earnings or dividends payable in Preference Shares) or of
subscription rights or warrants (other than those referred to
above).
The number of outstanding Rights and the number of
one one-hundredths of a Preference Share issuable upon exer-
cise of each Right are also subject to adjustment in the
event of a stock split of the Common Shares or a stock divi-
dend on the Common Shares payable in Common Shares or subdi-
visions, consolidations or combinations of the Common Shares
occurring, in any such case, prior to the Distribution Date.
Preference Shares purchasable upon exercise of the
Rights will not be redeemable. Each Preference Share will be
entitled to a minimum preferential quarterly dividend payment
of $1 per share but will be entitled to an aggregate dividend
of 100 times the dividend declared per Common Share. In the
event of liquidation, the holders of the Preference Shares
will be entitled to a minimum preferential liquidation pay-
ment of $100 per share but will be entitled to an aggregate
payment of 100 times the payment made per Common Share. Each
Preference Share will have 100 votes, voting together with
the Common Shares. Finally, in the event of any merger, con-
solidation or other transaction in which Common Shares are
exchanged, each Preference Share will be entitled to receive
100 times the amount received per Common Share. These rights
are protected by customary antidilution provisions.
Page 3 of 7<PAGE>
Because of the nature of the Preference Shares'
dividend, liquidation and voting rights, the value of the one
one-hundredth interest in a Preference Share purchasable upon
exercise of each Right should approximate the value of one
Common Share.
In the event that the Company is acquired in a
merger or other business combination transaction or 50% or
more of its consolidated assets or earning power are sold
after a person or group has become an Acquiring Person,
proper provision will be made so that each holder of a Right
will thereafter have the right to receive, upon the exercise
thereof at the then current exercise price of the Right, that
number of shares of common stock of the acquiring company
which at the time of such transaction will have a market
value of two times the exercise price of the Right. In the
event that any person or group of affiliated or associated
persons becomes an Acquiring Person, proper provision shall
be made so that each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will there-
after be void), will thereafter have the right to receive
upon exercise that number of Common Shares having a market
value of two times the exercise price of the Right.
At any time after any person or group becomes an
Acquiring Person and prior to the acquisition by such person
or group of 50% or more of the outstanding Common Shares, the
Board of Directors of the Company may exchange the Rights
(other than Rights owned by such person or group which will
have become void), in whole or in part, at an exchange ratio
of one Common Share, or one one-hundredth of a Preference
Share (or of a share of a class or series of the Company's
preference stock having equivalent rights, preferences and
privileges), per Right (subject to adjustment).
With certain exceptions, no adjustment in the Pur-
chase Price will be required until cumulative adjustments
require an adjustment of at least 1% in such Purchase Price.
No fractional Preference Shares will be issued (other than
fractions which are integral multiples of one one-hundredth
of a Preference Share, which may, at the election of the Com-
pany, be evidenced by depositary receipts) and in lieu there-
of, an adjustment in cash will be made based on the market
price of the Preference Shares on the last trading day prior
to the date of exercise.
At any time prior to the acquisition by a person or
group of affiliated or associated persons of beneficial own-
ership of 20% or more of the outstanding Common Shares, the
Board of Directors of the Company may redeem the Rights in
whole, but not in part, at a price of $.01 per Right (the
"Redemption Price"). The redemption of the Rights may be
made effective at such time on such basis with such condi-
tions as the Board of Directors in its sole discretion may
Page 4 of 7<PAGE>
establish. Immediately upon any redemption of the Rights,
the right to exercise the Rights will terminate and the only
right of the holders of Rights will be to receive the Redemp-
tion Price.
The terms of the Rights may be amended by the Board
of Directors of the Company without the consent of the hold-
ers of the Rights, including an amendment to lower certain
thresholds described above to not less than the greater of
(i) the sum of .001% and the largest percentage of the out-
standing Common Shares then known to the Company to be ben-
eficially owned by any person or group of affiliated or asso-
ciated persons and (ii) 10%, except that from and after such
time as any person or group of affiliated or associated per-
sons becomes an Acquiring Person no such amendment may
adversely affect the interests of the holders of the Rights.
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 re-
ceive dividends.
The Rights have certain anti-takeover effects. The
Rights may cause substantial dilution to a person or group
that attempts to acquire the Company on terms not approved by
the Company's Board of Directors, except pursuant to an offer
conditioned on a substantial number of Rights being acquired.
The Rights should not interfere with any merger or other
business combination approved by the Board of Directors since
the Rights may be redeemed by the Company at the Redemption
Price prior to the time that a person or group has acquired
beneficial ownership of 20% or more of the Common Shares.
The Rights Agreement, specifying the terms of the
Rights and including the form of the Certificate of
Designations setting forth the terms of the Preference Shares
as an exhibit thereto and the form of press release
announcing the declaration of the Rights, are attached hereto
as exhibits and are incorporated herein by reference. The
foregoing description of the Rights is qualified in its
entirety by reference to such exhibits.
Page 5 of 7<PAGE>
Item 2. Exhibits.
1. Rights Agreement, dated as of December
11, 1995, between Pitney Bowes Inc. and
Chemical Mellon Shareholder Services,
L.L.C., which includes the form of
Certificate of Designations setting forth
the terms of the Series A Junior
Participating Preference Stock, without
par value, as Exhibit A, the form of
Right Certificate as Exhibit B and the
Summary of Rights to Purchase Preference
Shares as Exhibit C.
Page 6 of 7<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, thereunto duly authorized.
Dated: February 15, 1996
PITNEY BOWES INC.
By /s/ Carmine F. Adimando
Name: Carmine F. Adimando
Title: Vice President-Finance
and Administration and
Treasurer
Page 7 of 7<PAGE>
EXHIBIT LIST
Exhibit No.
1. Rights Agreement, dated as of December 11, 1995,
between Pitney Bowes Inc. and Chemical Mellon
Shareholder Services, L.L.C., which includes the
form of Certificate of Designations setting forth
the terms of the Series A Junior Participating
Preference Stock, without par value, as Exhibit
A, the form of Right Certificate as Exhibit B and
the Summary of Rights to Purchase Preference
Shares as Exhibit C.
<PAGE>
EXHIBIT 1
PITNEY BOWES INC.
and
CHEMICAL MELLON SHAREHOLDER SERVICES, L.L.C.
Rights Agent
Rights Agreement
Dated as of December 11, 1995
____________________________________________________________<PAGE>
TABLE OF CONTENTS
Page
Section 1. Certain Definitions....................... 1
Section 2. Appointment of Rights Agent............... 7
Section 3. Issue of Right Certificates............... 7
Section 4. Form of Right Certificates................ 11
Section 5. Countersignature and Registration......... 11
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates;
Mutilated, Destroyed, Lost or
Stolen Right Certificates............... 13
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights............... 14
Section 8. Cancellation and Destruction of
Right Certificates...................... 17
Section 9. Availability of Preference Shares......... 17
Section 10. Preference Shares Record Date............. 19
Section 11. Adjustment of Purchase Price, Number of
Shares or Number of Rights.............. 19
Section 12. Certificate of Adjusted Purchase Price
or Number of Shares..................... 34
Section 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power.............. 35
Section 14. Fractional Rights and Fractional Shares... 37
Section 15. Rights of Action.......................... 40
Section 16. Agreement of Right Holders................ 40
Section 17. Right Certificate Holder Not Deemed a
Stockholder............................. 41
-i-<PAGE>
Page
Section 18. Concerning the Rights Agent............... 42
Section 19. Merger or Consolidation or Change of
Name of Rights Agent.................... 43
Section 20. Duties of Rights Agent.................... 45
Section 21. Change of Rights Agent.................... 48
Section 22. Issuance of New Right Certificates........ 50
Section 23. Redemption................................ 51
Section 24. Exchange.................................. 52
Section 25. Notice of Certain Events.................. 55
Section 26. Notices................................... 57
Section 27. Supplements and Amendments................ 58
Section 28. Successors................................ 59
Section 29. Benefits of this Agreement................ 59
Section 30. Severability.............................. 59
Section 31. Governing Law............................. 60
Section 32. Counterparts.............................. 60
Section 33. Descriptive Headings...................... 60
Signatures............................................ 60
Exhibit A - Form of Certificate of Designations
Exhibit B - Form of Right Certificate
Exhibit C - Summary of Rights to Purchase Preference
Shares
-ii-<PAGE>
Agreement, dated as of December 11, 1995, between
Pitney Bowes Inc., a Delaware corporation (the "Company"),
and Chemical Mellon Shareholder Services, L.L.C., a
corporation (the "Rights Agent").
The Board of Directors of the Company has
authorized and declared a dividend of one preference share
purchase right (a "Right") for each Common Share (as
hereinafter defined) of the Company outstanding on February
20, 1996 (the "Record Date"), each Right representing the
right to purchase one one-hundredth of a Preference Share (as
hereinafter defined), upon the terms and subject to the
conditions herein set forth, and has further authorized and
directed the issuance of one Right with respect to each Com-
mon Share that shall become outstanding between the Record
Date and the earliest of the Distribution Date, the Redemp-
tion Date and the Final Expiration Date (as such terms are
hereinafter defined).
Accordingly, in consideration of the premises and
the mutual agreements herein set forth, the parties hereby
agree as follows:
Section 1. Certain Definitions. For purposes of
this Agreement, the following terms have the meanings
indicated:<PAGE>
(a) "Acquiring Person" shall mean any Person (as
such term is hereinafter defined) who or which, together with
all Affiliates and Associates (as such terms are hereinafter
defined) of such Person, shall be the Beneficial Owner (as
such term is hereinafter defined) of 20% or more of the Com-
mon Shares of the Company then outstanding, but shall not
include the Company, any Subsidiary (as such term is
hereinafter defined) of the Company, any employee benefit
plan of the Company or any Subsidiary of the Company, or any
entity holding Common Shares for or pursuant to the terms of
any such plan. Notwithstanding the foregoing, no Person
shall become an "Acquiring Person" as the result of an
acquisition of Common Shares by the Company which, by reduc-
ing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such
Person to 20% or more of the Common Shares of the Company
then outstanding; provided, however, that if a Person shall
become the Beneficial Owner of 20% or more of the Common
Shares of the Company then outstanding by reason of share
purchases by the Company and shall, after such share
purchases by the Company, become the Beneficial Owner of any
additional Common Shares of the Company, then such Person
shall be deemed to be an "Acquiring Person". Notwithstanding
the foregoing, if the Board of Directors of the Company
determines in good faith that a Person who would otherwise be
an "Acquiring Person", as defined pursuant to the foregoing
-2-<PAGE>
provisions of this paragraph (a), has become such inadvert-
ently, and such Person divests as promptly as practicable a
sufficient number of Common Shares so that such Person would
no longer be an "Acquiring Person," as defined pursuant to
the foregoing provisions of this paragraph (a), then such
Person shall not be deemed to be an "Acquiring Person" for
any purposes of this Agreement.
(b) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of
the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as in
effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial
Owner" of and shall be deemed to "beneficially own" any
securities:
(i) which such Person or any of such Person's Af-
filiates or Associates beneficially owns, directly or
indirectly;
(ii) which such Person or any of such Person's Af-
filiates or Associates has (A) the right to acquire
(whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement,
arrangement or understanding (other than customary
agreements with and between underwriters and selling
-3-<PAGE>
group members with respect to a bona fide public offer-
ing of securities), or upon the exercise of conversion
rights, exchange rights, rights (other than these
Rights), warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, securities
tendered pursuant to a tender or exchange offer made by
or on behalf of such Person or any of such Person's Af-
filiates or Associates until such tendered securities
are accepted for purchase or exchange; or (B) the right
to vote pursuant to any agreement, arrangement or
understanding; provided, however, that a Person shall
not be deemed the Beneficial Owner of, or to
beneficially own, any security if the agreement, ar-
rangement or understanding to vote such security (1)
arises solely from a revocable proxy or consent given to
such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with,
the applicable rules and regulations promulgated under
the Exchange Act and (2) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable
or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person
or any of such Person's Affiliates or Associates has any
agreement, arrangement or understanding (other than
-4-<PAGE>
customary agreements with and between underwriters and
selling group members with respect to a bona fide public
offering of securities) for the purpose of acquiring,
holding, voting (except to the extent contemplated by
the proviso to Section 1(c)(ii)(B)) or disposing of any
securities of the Company.
Notwithstanding anything in this definition of
Beneficial Ownership to the contrary, the phrase "then
outstanding," when used with reference to a Person's
Beneficial Ownership of securities of the Company, shall mean
the number of such securities then issued and outstanding
together with the number of such securities not then actually
issued and outstanding which such Person would be deemed to
own beneficially hereunder.
(d) "Business Day" shall mean any day other than a
Saturday, a Sunday, or a day on which banking institutions in
New York are authorized or obligated by law or executive
order to close.
(e) "Close of business" on any given date shall
mean 5:00 P.M., Eastern Standard time, on such date;
provided, however, that if such date is not a Business Day it
shall mean 5:00 P.M., Eastern Standard time, on the next
succeeding Business Day.
-5-<PAGE>
(f) "Common Shares" when used with reference to
the Company shall mean the shares of common stock, par value
$2.00 per share, of the Company. "Common Shares" when used
with reference to any Person other than the Company shall
mean the capital stock (or equity interest) with the greatest
voting power of such other Person or, if such other Person is
a Subsidiary of another Person, the Person or Persons which
ultimately control such first-mentioned Person.
(g) "Distribution Date" shall have the meaning set
forth in Section 3 hereof.
(h) "Final Expiration Date" shall have the meaning
set forth in Section 7 hereof.
(i) "Person" shall mean any individual, firm,
corporation or other entity, and shall include any successor
(by merger or otherwise) of such entity.
(j) "Preference Shares" shall mean shares of
Series A Junior Participating Preference Stock, without par
value, of the Company having the rights and preferences set
forth in the Form of Certificate of Designations attached to
this Agreement as Exhibit A.
(k) "Redemption Date" shall have the meaning set
forth in Section 7 hereof.
-6-<PAGE>
(l) "Shares Acquisition Date" shall mean the first
date of public announcement by the Company or an Acquiring
Person that an Acquiring Person has become such.
(m) "Subsidiary" of any Person shall mean any
corporation or other entity of which a majority of the voting
power of the voting equity securities or equity interest is
owned, directly or indirectly, by such Person.
Section 2. Appointment of Rights Agent. The
Company hereby appoints the Rights Agent to act as agent for
the Company and the holders of the Rights (who, in accordance
with Section 3 hereof, shall prior to the Distribution Date
also be the holders of the Common Shares) in accordance with
the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company may from time to time
appoint such co-Rights Agents as it may deem necessary or
desirable.
Section 3. Issue of Right Certificates. (a)
Until the earlier of (i) the tenth day after the Shares
Acquisition Date or (ii) the tenth business day (or such
later date as may be determined by action of the Board of
Directors prior to such time as any Person becomes an Acquir-
ing Person) after the date of the commencement by any Person
(other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of
-7-<PAGE>
the Company or any entity holding Common Shares for or pursu-
ant to the terms of any such plan) of, or of the first public
announcement of the intention of 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 entity holding Common Shares for or pursuant to the terms
of any such plan) to commence, a tender or exchange offer the
consummation of which would result in any Person becoming the
Beneficial Owner of Common Shares aggregating 20% or more of
the then outstanding Common Shares (including any such date
which is after the date of this Agreement and prior to the
issuance of the Rights; the earlier of such dates being
herein referred to as the "Distribution Date"), (x) the
Rights will be evidenced (subject to the provisions of Sec-
tion 3(b) hereof) by the certificates for Common Shares
registered in the names of the holders thereof (which
certificates shall also be deemed to be Right Certificates)
and not by separate Right Certificates, and (y) the right to
receive Right Certificates will be transferable only in con-
nection with the transfer of Common Shares. As soon as
practicable after the Distribution Date, the Company will
prepare and execute, the Rights Agent will countersign, and
the Company will send or cause to be sent (and the Rights
Agent will, if requested, send) by first-class, insured,
postage-prepaid mail, to each record holder of Common Shares
as of the close of business on the Distribution Date, at the
-8-<PAGE>
address of such holder shown on the records of the Company, a
Right Certificate, in substantially the form of Exhibit B
hereto (a "Right Certificate"), evidencing one Right for each
Common Share so held. As of the Distribution Date, the
Rights will be evidenced solely by such Right Certificates.
(b) On the Record Date, or as soon as practicable
thereafter, the Company will send a copy of a Summary of
Rights to Purchase Preference Shares, in substantially the
form of Exhibit C hereto (the "Summary of Rights"), by
first-class, postage-prepaid mail, to each record holder of
Common Shares 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 Common Shares
outstanding as of the Record Date, until the Distribution
Date, the Rights will be evidenced by such certificates
registered in the names of the holders thereof together with
a copy of the Summary of Rights attached thereto. Until the
Distribution Date (or the earlier of the Redemption Date or
the Final Expiration Date), the surrender for transfer of any
certificate for Common Shares outstanding on the Record Date,
with or without a copy of the Summary of Rights attached
thereto, shall also constitute the transfer of the Rights
associated with the Common Shares represented thereby.
(c) Certificates for Common Shares which become
outstanding (including, without limitation, reacquired Common
-9-<PAGE>
Shares referred to in the last sentence of this paragraph
(c)) after the Record Date but prior to the earliest of the
Distribution Date, the Redemption Date or the Final Expira-
tion Date shall have impressed on, printed on, written on or
otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder
hereof to certain rights as set forth in a Rights Agree-
ment between Pitney Bowes Inc. and Chemical Mellon
Shareholder Services, L.L.C., dated as of December 11,
1995 (the "Rights Agreement"), the terms of which are
hereby incorporated herein by reference and a copy of
which is on file at the principal executive offices of
Pitney Bowes Inc. 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. Pitney Bowes Inc. will
mail to the holder of this certificate a copy of the
Rights Agreement without charge after receipt of a
written request therefor. Under certain circumstances,
as set forth in the Rights Agreement, Rights issued to
any Person who becomes an Acquiring Person (as defined
in the Rights Agreement) may become null and void.
With respect to such certificates containing the foregoing
legend, until the Distribution Date, the Rights associated
with the Common Shares represented by such certificates shall
be evidenced by such certificates alone, and the surrender
for transfer of any such certificate shall also constitute
the transfer of the Rights associated with the Common Shares
represented thereby. In the event that the Company purchases
or acquires any Common Shares after the Record Date but prior
to the Distribution Date, any Rights associated with such
Common Shares shall be deemed cancelled and retired so that
-10-<PAGE>
the Company shall not be entitled to exercise any Rights as-
sociated with the Common Shares which are no longer outstand-
ing.
Section 4. Form of Right Certificates. The Right
Certificates (and the forms of election to purchase
Preference Shares and of assignment to be printed on the
reverse thereof) shall be substantially the same as Exhibit B
hereto and may have such marks of identification or
designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as
are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or
with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Rights
may from time to time be listed, or to conform to usage.
Subject to the provisions of Section 22 hereof, the Right
Certificates shall entitle the holders thereof to purchase
such number of one one-hundredths of a Preference Share as
shall be set forth therein at the price per one one-hundredth
of a Preference Share set forth therein (the "Purchase
Price"), but the number of such one one-hundredths of a
Preference Share and the Purchase Price shall be subject to
adjustment as provided herein.
Section 5. Countersignature and Registration. The
Right Certificates shall be executed on behalf of the Company
-11-<PAGE>
by its Chairman of the Board, its Chief Executive Officer,
its President, any of its Vice Presidents, or its Treasurer,
either manually or by facsimile signature, shall have affixed
thereto the Company's seal or a facsimile thereof, and shall
be attested by the Secretary or an Assistant Secretary of the
Company, either manually or by facsimile signature. The
Right Certificates shall be manually countersigned by the
Rights Agent and shall not be valid for any purpose unless
countersigned. In case any officer of the Company who shall
have signed any of the Right Certificates shall cease to be
such officer of the Company before countersignature by the
Rights Agent and issuance and delivery by the Company, such
Right 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
Right Certificates had not ceased to be such officer of the
Company; and any Right Certificate may be signed on behalf of
the Company by any person who, at the actual date of the
execution of such Right Certificate, shall be a proper of-
ficer of the Company to sign such Right Certificate, although
at the date of the execution of this Rights Agreement any
such person was not such an officer.
Following the Distribution Date, the Rights Agent
will keep or cause to be kept, at its principal office, books
-12-<PAGE>
for registration and transfer of the Right Certificates is-
sued hereunder. Such books shall show the names and ad-
dresses of the respective holders of the Right Certificates,
the number of Rights evidenced on its face by each of the
Right Certificates and the date of each of the Right
Certificates.
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates; Mutilated, Destroyed, Lost or
Stolen Right Certificates. Subject to the provisions of Sec-
tion 14 hereof, at any time after the close of business on
the Distribution Date, and at or prior to the close of busi-
ness on the earlier of the Redemption Date or the Final
Expiration Date, any Right Certificate or Right Certificates
(other than Right Certificates representing Rights that have
become void pursuant to Section 11(a)(ii) hereof or that have
been exchanged pursuant to Section 24 hereof) may be
transferred, split up, combined or exchanged for another
Right Certificate or Right Certificates, entitling the
registered holder to purchase a like number of one
one-hundredths of a Preference Share as the Right Certificate
or Right Certificates surrendered then entitled such holder
to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Right Certificate or Right
Certificates shall make such request in writing delivered to
the Rights Agent, and shall surrender the Right Certificate
or Right Certificates to be transferred, split up, combined
-13-<PAGE>
or exchanged at the principal office of the Rights Agent.
Thereupon the Rights Agent shall countersign and deliver to
the person entitled thereto a Right Certificate or Right
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 Right
Certificates.
Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Right Certificate, and, in
case of loss, theft or destruction, of indemnity or security
reasonably satisfactory to them, and, at the Company's
request, reimbursement to the Company and the Rights Agent of
all reasonable expenses incidental thereto, and upon sur-
render to the Rights Agent and cancellation of the Right
Certificate if mutilated, the Company will make and deliver a
new Right Certificate of like tenor to the Rights Agent for
delivery to the registered holder in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights. (a) The registered holder of any
Right Certificate may exercise the Rights evidenced thereby
(except as otherwise provided herein) in whole or in part at
any time after the Distribution Date upon surrender of the
-14-<PAGE>
Right Certificate, with the form of election to purchase on
the reverse side thereof duly executed, to the Rights Agent
at the principal office of the Rights Agent, together with
payment of the Purchase Price for each one one-hundredth of a
Preference Share as to which the Rights are exercised, at or
prior to the earliest of (i) the close of business on
February 20, 2006 (the "Final Expiration Date"), (ii) the
time at which the Rights are redeemed as provided in Section
23 hereof (the "Redemption Date"), or (iii) the time at which
such Rights are exchanged as provided in Section 24 hereof.
(b) The Purchase Price for each one one-hundredth
of a Preference Share purchasable pursuant to the exercise of
a Right shall initially be $195.00, and shall be subject to
adjustment from time to time as provided in Section 11 or 13
hereof and shall be payable in lawful money of the United
States of America in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate represent-
ing exercisable Rights, with the form of election to purchase
duly executed, accompanied by payment of the Purchase Price
for the shares to be purchased and an amount equal to any
applicable transfer tax required to be paid by the holder of
such Right Certificate in accordance with Section 9 hereof by
certified check, cashier's check or money order payable to
the order of the Company, the Rights Agent shall thereupon
promptly (i) (A) requisition from any transfer agent of the
-15-<PAGE>
Preference Shares certificates for the number of Preference
Shares to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such
requests, or (B) requisition from the depositary agent
depositary receipts representing such number of one
one-hundredths of a Preference Share as are to be purchased
(in which case certificates for the Preference Shares
represented by such receipts shall be deposited by the
transfer agent with the depositary agent) and the Company
hereby directs the depositary agent to comply with such
request, (ii) when appropriate, requisition from the Company
the amount of cash to be paid in lieu of issuance of
fractional shares in accordance with Section 14 hereof, (iii)
after receipt of such certificates or depositary receipts,
cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in
such name or names as may be designated by such holder and
(iv) when appropriate, after receipt, deliver such cash to or
upon the order of the registered holder of such Right
Certificate.
(d) In case the registered holder of any Right
Certificate shall exercise less than all the Rights evidenced
thereby, a new Right Certificate evidencing Rights equivalent
to the Rights remaining unexercised shall be issued by the
Rights Agent to the registered holder of such Right
-16-<PAGE>
Certificate or to his duly authorized assigns, subject to the
provisions of Section 14 hereof.
Section 8. Cancellation and Destruction of Right
Certificates. All Right Certificates surrendered for the
purpose of exercise, transfer, split up, combination or
exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancellation
or in cancelled form, or, if surrendered to the Rights Agent,
shall be cancelled by it, and no Right Certificates shall be
issued in lieu thereof except as expressly permitted by any
of the provisions of this Rights Agreement. The Company
shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall so cancel and retire,
any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all canceled Right Certificates to the
Company, or shall, at the written request of the Company,
destroy such cancelled Right Certificates, and in such case
shall deliver a certificate of destruction thereof to the
Company.
Section 9. Availability of Preference Shares. The
Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and
unissued Preference Shares or any Preference Shares held in
its treasury, the number of Preference Shares that will be
-17-<PAGE>
sufficient to permit the exercise in full of all outstanding
Rights in accordance with Section 7. The Company covenants
and agrees that it will take all such action as may be
necessary to ensure that all Preference Shares delivered upon
exercise of Rights shall, at the time of delivery of the
certificates for such Preference Shares (subject to payment
of the Purchase Price), be duly and validly authorized and
issued and fully paid and nonassessable shares.
The Company further covenants and agrees that it
will pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of
the issuance or delivery of the Right Certificates or of any
Preference Shares upon the exercise of Rights. The Company
shall not, however, be required to pay any transfer tax which
may be payable in respect of any transfer or delivery of
Right Certificates to a person other than, or the issuance or
delivery of certificates or depositary receipts for the
Preference Shares in a name other than that of, the
registered holder of the Right Certificate evidencing Rights
surrendered for exercise or to issue or to deliver any
certificates or depositary receipts for Preference Shares
upon the exercise of any Rights until any such tax shall have
been paid (any such tax being payable by the holder of such
Right Certificate at the time of surrender) or until it has
been established to the Company's reasonable satisfaction
that no such tax is due.
-18-<PAGE>
Section 10. Preference Shares Record Date. Each
person in whose name any certificate for Preference Shares is
issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of the Preference
Shares represented thereby on, and such certificate shall be
dated, the date upon which the Right Certificate evidencing
such Rights was duly surrendered and payment of the Purchase
Price (and any applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment is a
date upon which the Preference Shares transfer books of the
Company are closed, such person shall be deemed to have
become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day
on which the Preference Shares transfer books of the Company
are open. Prior to the exercise of the Rights evidenced
thereby, the holder of a Right Certificate shall not be
entitled to any rights of a holder of Preference Shares for
which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall
not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number
of Shares or Number of Rights. The Purchase Price, the
number of Preference Shares covered by each Right and the
-19-<PAGE>
number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any
time after the date of this Agreement (A) declare a dividend
on the Preference Shares payable in Preference Shares, (B)
subdivide the outstanding Preference Shares, (C) combine the
outstanding Preference Shares into a smaller number of
Preference Shares or (D) issue any shares of its capital
stock in a reclassification of the Preference Shares
(including any such reclassification in connection with a
consolidation or merger in which the Company is the
continuing or surviving corporation), except as otherwise
provided in this Section 11(a), the Purchase Price in effect
at the time of the record date for such dividend or of the
effective date of such subdivision, combination or
reclassification, and the number and kind of shares of
capital stock issuable on such date, shall be proportionately
adjusted so that the holder of any Right exercised after such
time shall be entitled to receive the aggregate number and
kind of shares of capital stock which, if such Right had been
exercised immediately prior to such date and at a time when
the Preference Shares transfer books of the Company were
open, he would have owned upon such exercise and been
entitled to receive by virtue of such dividend, subdivision,
combination or reclassification; provided, however, that in
no event shall the consideration to be paid upon the exercise
-20-<PAGE>
of one Right be less than the aggregate par value of the
shares of capital stock of the Company issuable upon exercise
of one Right.
(ii) Subject to Section 24 of this Agreement, in
the event any Person becomes an Acquiring Person, each holder
of a Right shall thereafter have a right to receive, upon
exercise thereof at a price equal to the then current
Purchase Price multiplied by the number of one one-hundredths
of a Preference Share for which a Right is then exercisable,
in accordance with the terms of this Agreement and in lieu of
Preference Shares, such number of Common Shares of the
Company as shall equal the result obtained by (x) multiplying
the then current Purchase Price by the number of one
one-hundredths of a Preference Share for which a Right is
then exercisable and dividing that product by (y) 50% of the
then current per share market price of the Company's Common
Shares (determined pursuant to Section 11(d) hereof) on the
date of the occurrence of such event. In the event that any
Person shall become an Acquiring Person and the Rights shall
then be outstanding, the Company shall not take any action
which would eliminate or diminish the benefits intended to be
afforded by the Rights.
From and after the occurrence of such event, any
Rights that are or were acquired or beneficially owned by any
Acquiring Person (or any Associate or Affiliate of such
-21-<PAGE>
Acquiring Person) shall be void and any holder of such Rights
shall thereafter have no right to exercise such Rights under
any provision of this Agreement. No Right Certificate shall
be issued pursuant to Section 3 that represents Rights
beneficially owned by an Acquiring Person whose Rights would
be void pursuant to the preceding sentence or any Associate
or Affiliate thereof; no Right Certificate shall be issued at
any time upon the transfer of any Rights to an Acquiring
Person whose Rights would be void pursuant to the preceding
sentence or any Associate or Affiliate thereof or to any
nominee of such Acquiring Person, Associate or Affiliate; and
any Right Certificate delivered to the Rights Agent for
transfer to an Acquiring Person whose Rights would be void
pursuant to the preceding sentence shall be cancelled.
(iii) In the event that there shall not be suf-
ficient Common Shares issued but not outstanding or
authorized but unissued to permit the exercise in full of the
Rights in accordance with the foregoing subparagraph (ii),
the Company shall take all such action as may be necessary to
authorize additional Common Shares for issuance upon exercise
of the Rights. In the event the Company shall, after good
faith effort, be unable to take all such action as may be
necessary to authorize such additional Common Shares, the
Company shall substitute, for each Common Share that would
otherwise be issuable upon exercise of a Right, a number of
Preference Shares or fraction thereof such that the current
-22-<PAGE>
per share market price of one Preference Share multiplied by
such number or fraction is equal to the current per share
market price of one Common Share as of the date of issuance
of such Preference Shares or fraction thereof.
(b) In case the Company shall fix a record date
for the issuance of rights, options or warrants to all hold-
ers of Preference Shares entitling them (for a period
expiring within 45 calendar days after such record date) to
subscribe for or purchase Preference Shares (or shares having
the same rights, privileges and preferences as the Preference
Shares ("equivalent preference shares")) or securities
convertible into Preference Shares or equivalent preference
shares at a price per Preference Share or equivalent
preference share (or having a conversion price per share, if
a security convertible into Preference Shares or equivalent
preference shares) less than the then current per share
market price of the Preference Shares (as defined in Section
11(d)) on such record date, the Purchase Price to be in
effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall
be the number of Preference Shares outstanding on such record
date plus the number of Preference Shares which the aggregate
offering price of the total number of Preference Shares
and/or equivalent preference shares so to be offered (and/or
the aggregate initial conversion price of the convertible
-23-<PAGE>
securities so to be offered) would purchase at such current
market price and the denominator of which shall be the number
of Preference Shares outstanding on such record date plus the
number of additional Preference Shares and/or equivalent
preference shares to be offered for subscription or purchase
(or into which the convertible securities so to be offered
are initially convertible); provided, however, that in no
event shall the consideration to be paid upon the exercise of
one Right be less than the aggregate par value of the shares
of capital stock of the Company issuable upon exercise of one
Right. In case such subscription price may be paid in a
consideration part or all of which shall be in a form other
than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a
statement filed with the Rights Agent. Preference Shares
owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation.
Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such rights,
options or warrants are not so issued, the Purchase Price
shall be adjusted to be the Purchase Price which would then
be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date
for the making of a distribution to all holders of the
Preference Shares (including any such distribution made in
-24-<PAGE>
connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of
evidences of indebtedness or assets (other than a regular
quarterly cash dividend or a dividend payable in Preference
Shares) or subscription rights or warrants (excluding those
referred to in Section 11(b) hereof), the Purchase Price to
be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall
be the then current per share market price of the Preference
Shares on such record date, less the fair market value (as
determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a state-
ment filed with the Rights Agent) of the portion of the as-
sets or evidences of indebtedness so to be distributed or of
such subscription rights or warrants applicable to one
Preference Share and the denominator of which shall be such
current per share market price of the Preference Shares;
provided, however, that in no event shall the consideration
to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the
Company to be issued upon exercise of one Right. Such
adjustments shall be made successively whenever such a record
date is fixed; and in the event that such distribution is not
so made, the Purchase Price shall again be adjusted to be the
-25-<PAGE>
Purchase Price which would then be in effect if such record
date had not been fixed.
(d) (i) For the purpose of any computation
hereunder, the "current per share market price" of any
security (a "Security" for the purpose of this Section
11(d)(i)) on any date shall be deemed to be the average of
the daily closing prices per share of such Security for the
30 consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date; provided, however,
that in the event that the current per share market price of
the Security is determined during a period following the an-
nouncement by the issuer of such Security of (A) a dividend
or distribution on such Security payable in shares of such
Security or securities convertible into such shares, or (B)
any subdivision, combination or reclassification of such
Security and prior to the expiration of 30 Trading Days after
the ex-dividend date for such dividend or distribution, or
the record date for such subdivision, combination or reclas-
sification, then, and in each such case, the current per
share market price shall be appropriately adjusted to reflect
the current market price per share equivalent of such
Security. The closing price for each day shall be the last
sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to
-26-<PAGE>
securities listed or admitted to trading on the New York
Stock Exchange or, if the Security is 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 Security is listed or admit-
ted to trading or, if the Security is not listed or admitted
to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as
reported by the National Association of Securities Dealers,
Inc. Automated Quotations System ("NASDAQ") or such other
system then in use, or, if on any such date the Security is
not quoted by any such organization, the average of the clos-
ing bid and asked prices as furnished by a professional
market maker making a market in the Security selected by the
Board of Directors of the Company. The term "Trading Day"
shall mean a day on which the principal national securities
exchange on which the Security is listed or admitted to trad-
ing is open for the transaction of business or, if the
Security is not listed or admitted to trading on any national
securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder,
the "current per share market price" of the Preference Shares
shall be determined in accordance with the method set forth
in Section 11(d)(i). If the Preference Shares are not
-27-<PAGE>
publicly traded, the "current per share market price" of the
Preference Shares shall be conclusively deemed to be the cur-
rent per share market price of the Common Shares as
determined pursuant to Section 11(d)(i) (appropriately
adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof),
multiplied by one hundred. If neither the Common Shares nor
the Preference Shares are publicly held or so listed or
traded, "current per share market price" shall mean the fair
value per share as determined in good faith by the Board of
Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent.
(e) No adjustment in the Purchase Price shall be
required unless such adjustment would require an increase or
decrease of at least 1% in the Purchase Price; provided,
however, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward
and taken into account in any subsequent adjustment. All
calculations under this Section 11 shall be made to the near-
est cent or to the nearest one one-millionth of a Preference
Share or one ten-thousandth of any other share or security as
the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11
shall be made no later than the earlier of (i) three years
-28-<PAGE>
from the date of the transaction which requires such adjust-
ment or (ii) the date of the expiration of the right to
exercise any Rights.
(f) If as a result of an adjustment made pursuant
to Section 11(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of
capital stock of the Company other than Preference Shares,
thereafter the number of such other shares so receivable upon
exercise of any Right shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preference
Shares contained in Section 11(a) through (c), inclusive, and
the provisions of Sections 7, 9, 10 and 13 with respect to
the Preference Shares shall apply on like terms to any such
other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price
hereunder shall evidence the right to purchase, at the
adjusted Purchase Price, the number of one one-hundredths of
a Preference Share purchasable from time to time hereunder
upon exercise of the Rights, all subject to further adjust-
ment as provided herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i), upon each adjustment
of the Purchase Price as a result of the calculations made in
-29-<PAGE>
Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase
Price, that number of one one-hundredths of a Preference
Share (calculated to the nearest one one-millionth of a
Preference Share) obtained by (i) multiplying (x) the number
of one one-hundredths of a share covered by a Right
immediately prior to this adjustment by (y) the Purchase
Price in effect immediately prior to such adjustment of the
Purchase Price and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of
any adjustment of the Purchase Price to adjust the number of
Rights, in substitution for any adjustment in the number of
one one-hundredths of a Preference Share purchasable upon the
exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights shall be exercisable
for the number of one one-hundredths of a Preference Share
for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjust-
ment of the number of Rights shall become that number of
Rights (calculated to the nearest one ten-thousandth)
obtained by dividing the Purchase Price in effect immediately
prior to adjustment of the Purchase Price by the Purchase
Price in effect immediately after adjustment of the Purchase
-30-<PAGE>
Price. The Company shall make a public announcement of its
election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time,
the amount of the adjustment to be made. This record date
may be the date on which the Purchase Price is adjusted or
any day thereafter, but, if the Right Certificates have been
issued, shall be at least 10 days later than the date of the
public announcement. If Right Certificates have been issued,
upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable,
cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidenc-
ing, subject to Section 14 hereof, the additional Rights to
which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof,
if required by the Company, new Right Certificates evidencing
all the Rights to which such holders shall be entitled after
such adjustment. Right Certificates so to be distributed
shall be issued, executed and countersigned in the manner
provided for herein and shall be registered in the names of
the holders of record of Right Certificates on the record
date specified in the public announcement.
-31-<PAGE>
(j) Irrespective of any adjustment or change in
the Purchase Price or the number of one one-hundredths of a
Preference Share issuable upon the exercise of the Rights,
the Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price and the number of one
one-hundredths of a Preference Share which were expressed in
the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below one
one-hundredth of the then par value, if any, of the
Preference Shares issuable upon exercise of the Rights, the
Company shall take any corporate action which may, in the
opinion of its counsel, be necessary in order that the
Company may validly and legally issue fully paid and
nonassessable Preference Shares at such adjusted Purchase
Price.
(l) In any case in which this Section 11 shall
require that an adjustment in the Purchase Price be made ef-
fective as of a record date for a specified event, the
Company may elect to defer until the occurrence of such event
the issuing to the holder of any Right exercised after such
record date of the Preference Shares and other capital stock
or securities of the Company, if any, issuable upon such
exercise over and above the Preference Shares and other
capital stock or securities of the Company, if any, issuable
-32-<PAGE>
upon such exercise on the basis of the Purchase Price in ef-
fect prior to such adjustment; provided, however, that the
Company shall deliver to such holder a due bill or other ap-
propriate instrument evidencing such holder's right to
receive such additional shares upon the occurrence of the
event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to
be advisable in order that any consolidation or subdivision
of the Preference Shares, issuance wholly for cash of any
Preference Shares at less than the current market price,
issuance wholly for cash of Preference Shares or securities
which by their terms are convertible into or exchangeable for
Preference Shares, dividends on Preference Shares payable in
Preference Shares or issuance of rights, options or warrants
referred to hereinabove in Section 11(b), hereafter made by
the Company to holders of its Preference Shares shall not be
taxable to such stockholders.
(n) In the event that at any time after the date
of this Agreement and prior to the Distribution Date, the
Company shall (i) declare or pay any dividend on the Common
Shares payable in Common Shares or (ii) effect a subdivision,
-33-<PAGE>
combination or consolidation of the Common Shares (by reclas-
sification or otherwise than by payment of dividends in Com-
mon Shares) into a greater or lesser number of Common Shares,
then in any such case (A) the number of one one-hundredths of
a Preference Share purchasable after such event upon proper
exercise of each Right shall be determined by multiplying the
number of one one-hundredths of a Preference Share so
purchasable immediately prior to such event by a fraction,
the numerator of which is the number of Common Shares
outstanding immediately before such event and the denominator
of which is the number of Common Shares outstanding
immediately after such event, and (B) each Common Share
outstanding immediately after such event shall have issued
with respect to it that number of Rights which each Common
Share outstanding immediately prior to such event had issued
with respect to it. The adjustments provided for in this
Section 11(n) shall be made successively whenever such a
dividend is declared or paid or such a subdivision,
combination or consolidation is effected.
Section 12. Certificate of Adjusted Purchase Price
or Number of Shares. Whenever an adjustment is made as
provided in Section 11 or 13 hereof, the Company shall
promptly (a) prepare a certificate setting forth such adjust-
ment, and a brief statement of the facts accounting for such
adjustment, (b) file with the Rights Agent and with each
transfer agent for the Common Shares or the Preference Shares
-34-<PAGE>
a copy of such certificate and (c) mail a brief summary
thereof to each holder of a Right Certificate in accordance
with Section 25 hereof.
Section 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning Power. In the event, directly
or indirectly, at any time after a Person has become an
Acquiring Person, (a) the Company shall consolidate with, or
merge with and into, any other Person, (b) any Person shall
consolidate with the Company, or merge with and into the
Company and the Company shall be the continuing or surviving
corporation of such merger and, in connection with such
merger, all or part of the Common Shares shall be changed
into or exchanged for stock or other securities of any other
Person (or the Company) or cash or any other property, or (c)
the Company shall sell or otherwise transfer (or one or more
of its Subsidiaries shall sell or otherwise transfer), in one
or more transactions, assets or earning power aggregating 50%
or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person other
than the Company or one or more of its wholly-owned
Subsidiaries, then, and in each such case, proper provision
shall be made so that (i) each holder of a Right (except as
otherwise provided herein) shall thereafter have the right to
receive, upon the exercise thereof at a price equal to the
then current Purchase Price multiplied by the number of one
one-hundredths of a Preference Share for which a Right is
-35-<PAGE>
then exercisable, in accordance with the terms of this
Agreement and in lieu of Preference Shares, such number of
Common Shares of such other Person (including the Company as
successor thereto or as the surviving corporation) as shall
equal the result obtained by (A) multiplying the then current
Purchase Price by the number of one one-hundredths of a
Preference Share for which a Right is then exercisable and
dividing that product by (B) 50% of the then current per
share market price of the Common Shares of such other Person
(determined pursuant to Section 11(d) hereof) on the date of
consummation of such consolidation, merger, sale or transfer;
(ii) the issuer of such Common Shares shall thereafter be
liable for, and shall assume, by virtue of such
consolidation, merger, sale or transfer, all the obligations
and duties of the Company pursuant to this Agreement; (iii)
the term "Company" shall thereafter be deemed to refer to
such issuer; and (iv) such issuer shall take such steps
(including, but not limited to, the reservation of a
sufficient number of its Common Shares in accordance with
Section 9 hereof) in connection with such consummation as may
be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in
relation to the Common Shares thereafter deliverable upon the
exercise of the Rights. The Company shall not consummate any
such consolidation, merger, sale or transfer unless prior
thereto the Company and such issuer shall have executed and
-36-<PAGE>
delivered to the Rights Agent a supplemental agreement so
providing. The Company shall not enter into any transaction
of the kind referred to in this Section 13 if at the time of
such transaction there are any rights, warrants, instruments
or securities outstanding or any agreements or arrangements
which, as a result of the consummation of such transaction,
would eliminate or substantially diminish the benefits
intended to be afforded by the Rights. The provisions of
this Section 13 shall similarly apply to successive mergers
or consolidations or sales or other transfers.
Section 14. Fractional Rights and Fractional
Shares. (a) The Company shall not be required to issue
fractions of Rights or to distribute Right Certificates which
evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the
Right Certificates with regard to which such fractional
Rights would otherwise be issuable, an amount in cash equal
to the same fraction of the current market value of a whole
Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of
the Rights for the Trading Day immediately prior to the date
on which such fractional Rights would have been otherwise
issuable. The closing price for any day shall be the last
sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal
-37-<PAGE>
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 admit-
ted 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 organiza-
tion, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in
the Rights selected by the Board of Directors of the Company.
If on any such date no such market maker is making a market
in the Rights, the fair value of the Rights on such date as
determined in good faith by the Board of Directors of the
Company shall be used.
(b) The Company shall not be required to issue
fractions of Preference Shares (other than fractions which
are integral multiples of one one-hundredth of a Preference
Share) upon exercise of the Rights or to distribute
certificates which evidence fractional Preference Shares
(other than fractions which are integral multiples of one
-38-<PAGE>
one-hundredth of a Preference Share). Fractions of
Preference Shares in integral multiples of one one-hundredth
of a Preference Share may, at the election of the Company, be
evidenced by depositary receipts, pursuant to an appropriate
agreement between the Company and a depositary selected by
it; provided, that such agreement shall provide that the
holders of such depositary receipts shall have all the
rights, privileges and preferences to which they are entitled
as beneficial owners of the Preference Shares represented by
such depositary receipts. In lieu of fractional Preference
Shares that are not integral multiples of one one-hundredth
of a Preference Share, the Company shall pay to the
registered holders of Right Certificates at the time such
Rights are exercised as herein provided an amount in cash
equal to the same fraction of the current market value of one
Preference Share. For the purposes of this Section 14(b),
the current market value of a Preference Share shall be the
closing price of a Preference Share (as determined pursuant
to the second sentence of Section 11(d)(i) hereof) for the
Trading Day immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the
Right expressly waives his right to receive any fractional
Rights or any fractional shares upon exercise of a Right
(except as provided above).
-39-<PAGE>
Section 15. Rights of Action. All rights of ac-
tion in respect of this Agreement, excepting the rights of
action given to the Rights Agent under Section 18 hereof, are
vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the
registered holders of the Common Shares); and any registered
holder of any Right Certificate (or, prior to the Distribu-
tion Date, of the Common Shares), without the consent of the
Rights Agent or of the holder of any other Right Certificate
(or, prior to the Distribution Date, of the Common Shares),
may, in his own behalf and for his own benefit, enforce, and
may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect
of, his right to exercise the Rights evidenced by such Right
Certificate in the manner provided in such Right Certificate
and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would
not have an adequate remedy at law for any breach of this
Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or
threatened violations of the obligations of any Person
subject to, this Agreement.
Section 16. Agreement of Right Holders. Every
holder of a Right, by accepting the same, consents and agrees
-40-<PAGE>
with the Company and the Rights Agent and with every other
holder of a Right that:
(a) prior to the Distribution Date, the Rights
will be transferable only in connection with the transfer of
the Common Shares;
(b) after the Distribution Date, the Right
Certificates are transferable only on the registry books of
the Rights Agent if surrendered at the principal office of
the Rights Agent, duly endorsed or accompanied by a proper
instrument of transfer; and
(c) the Company and the Rights Agent may deem and
treat the person in whose name the Right Certificate (or,
prior to the Distribution Date, the associated Common Shares
certificate) is registered as the absolute owner thereof and
of the Rights evidenced thereby (notwithstanding any nota-
tions of ownership or writing on the Right Certificates or
the associated Common Shares certificate made by anyone other
than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent
shall be affected by any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Right Certificate
shall be entitled to vote, receive dividends or be deemed for
any purpose the holder of the Preference Shares or any other
-41-<PAGE>
securities of the Company which may at any time be issuable
on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Right Certificate be
construed to confer upon the holder of any Right Certificate,
as such, any of the rights of a stockholder of the Company or
any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or
to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to
receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by such Right Certificate shall
have been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. The
Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and,
from time to time, on demand of the Rights Agent, its reason-
able expenses and counsel fees and other disbursements
incurred in the administration and execution of this Agree-
ment and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights
Agent for, and to hold it harmless against, any loss, li-
ability, or expense, incurred without negligence, bad faith
or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection
with the acceptance and administration of this Agreement,
-42-<PAGE>
including the costs and expenses of defending against any
claim of liability in the premises.
The Rights Agent shall be protected and shall incur
no liability for, or in respect of any action taken, suffered
or omitted by it in connection with, its administration of
this Agreement in reliance upon any Right Certificate or
certificate for the Preference Shares or Common Shares 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, or otherwise
upon the advice of counsel as set forth in Section 20 hereof.
Section 19. Merger or Consolidation or Change of
Name of Rights Agent. Any corporation into which the Rights
Agent or any successor Rights Agent may be merged or with
which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Rights Agent or
any successor Rights Agent shall be a party, or any corpora-
tion succeeding to the stock transfer or corporate trust pow-
ers of the Rights Agent or any successor Rights Agent, shall
be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further
act on the part of any of the parties hereto; provided, that
-43-<PAGE>
such corporation would be eligible for appointment as a suc-
cessor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent
shall succeed to the agency created by this Agreement, any of
the Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver
such Right Certificates so countersigned; and in case at that
time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign
such Right Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent;
and in all such cases such Right Certificates shall have the
full force provided in the Right Certificates and in this
Agreement.
In case at any time the name of the Rights Agent
shall be changed and at such time any of the Right
Certificates shall have been countersigned but not delivered,
the Rights Agent may adopt the countersignature under its
prior name and deliver Right Certificates so countersigned;
and in case at that time any of the Right Certificates shall
not have been countersigned, the Rights Agent may countersign
such Right Certificates either in its prior name or in its
changed name; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates
and in this Agreement.
-44-<PAGE>
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 Right Certificates, by
their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal
counsel (who may be legal counsel for the Company), and the
opinion of such counsel shall be full and complete authoriza-
tion and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with
such opinion.
(b) Whenever in the performance of its duties
under this Agreement the Rights Agent shall deem it necessary
or desirable that any fact or matter be proved or established
by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a
certificate signed by any one of the Chairman of the Board,
the Chief Executive Officer, the President, any Vice
President, the Treasurer or the Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be
full authorization to the Rights Agent for any action taken
or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
-45-<PAGE>
(c) The Rights Agent shall be liable hereunder to
the Company and any other Person only for its own negligence,
bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained
in this Agreement or in the Right Certificates (except its
countersignature thereof) or be required to verify the same,
but all such statements and recitals are and shall be deemed
to have been made by the Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement
or the execution and delivery hereof (except the due execu-
tion hereof by the Rights Agent) or in respect of the valid-
ity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for
any breach by the Company of any covenant or condition
contained in this Agreement or in any Right Certificate; nor
shall it be responsible for any change in the exercisability
of the Rights (including the Rights becoming void pursuant to
Section 11(a)(ii) hereof) or any adjustment in the terms of
the Rights (including the manner, method or amount thereof)
provided for in Section 3, 11, 13, 23 or 24, or the
ascertaining of the existence of facts that would require any
such change or adjustment (except with respect to the
exercise of Rights evidenced by Right Certificates after
-46-<PAGE>
actual notice that such change or adjustment is required);
nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or
reservation of any Preference Shares to be issued pursuant to
this Agreement or any Right Certificate or as to whether any
Preference Shares will, when issued, be validly authorized
and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform,
execute, acknowledge and deliver or cause to be performed,
executed, acknowledged and delivered all such further and
other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or perform-
ing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and
directed to accept instructions with respect to the
performance of its duties hereunder from any one of the
Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Secretary or the Treasurer
of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not
be liable for any action taken or suffered by it in good
faith in accordance with instructions of any such officer or
for any delay in acting while waiting for those instructions.
(h) The Rights Agent and any stockholder, direc-
tor, officer or employee of the Rights Agent may buy, sell or
-47-<PAGE>
deal in any of the Rights or other securities of the Company
or become pecuniarily interested in any transaction in which
the Company may be interested, or contract with or lend money
to the Company or otherwise act as fully and freely as though
it were not Rights Agent under this Agreement. Nothing
herein shall preclude the Rights Agent from acting in any
other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any
of the rights or powers hereby vested in it or perform any
duty hereunder either itself or by or through its attorneys
or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company
resulting from any such act, default, neglect or misconduct,
provided reasonable care was exercised in the selection and
continued employment thereof.
Section 21. Change of Rights Agent. The Rights
Agent or any successor Rights Agent may resign and be
discharged from its duties under this Agreement upon 30 days'
notice in writing mailed to the Company and to each transfer
agent of the Common Shares or Preference Shares by registered
or certified mail, and to the holders of the Right
Certificates by first-class mail. The Company may remove the
Rights Agent or any successor Rights Agent upon 30 days'
notice in writing, mailed to the Rights Agent or successor
-48-<PAGE>
Rights Agent, as the case may be, and to each transfer agent
of the Common Shares or Preference Shares by registered or
certified mail, and to the holders of the Right Certificates
by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the
Company shall appoint a successor to the Rights Agent. If
the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or
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 Right Certificate (who shall, with such
notice, submit his Right Certificate for inspection by the
Company), then the registered holder of any Right Certificate
may apply to any court of competent jurisdiction for the ap-
pointment of a new Rights Agent. Any successor Rights Agent,
whether appointed by the Company or by such a court, shall be
a Person (excluding any individual) organized and doing
business under the laws of the United States or of the State
of New York (or of any other state of the United States so
long as such Person (excluding any individual) is authorized
to do business in the State of New York), in good standing,
having an office in the State of New York, which is
authorized under such laws to exercise corporate trust or
stock transfer powers and is subject to supervision or
examination by federal or state authority and which has at
the time of its appointment as Rights Agent a combined
-49-<PAGE>
capital and surplus of at least $25 million. After
appointment, the successor Rights Agent shall be vested with
the same powers, rights, duties and responsibilities as if it
had been originally named as Rights Agent without further act
or deed; but the predecessor Rights Agent shall deliver and
transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such ap-
pointment the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of
the Common Shares or Preference Shares, and mail a notice
thereof in writing to the registered holders of the Right
Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal
of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of
the Rights to the contrary, the Company may, at its option,
issue new Right 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
-50-<PAGE>
purchasable under the Right Certificates made in accordance
with the provisions of this Agreement.
Section 23. Redemption. (a) The Board of Direc-
tors of the Company may, at its option, at any time prior to
such time as any Person becomes an Acquiring Person, redeem
all but not less than all the then outstanding Rights at a
redemption price of $.01 per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transac-
tion occurring after the date hereof (such redemption price
being hereinafter referred to as the "Redemption Price").
The redemption of the Rights by the Board of Directors may be
made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion
may establish.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the redemption of the
Rights pursuant to paragraph (a) of this Section 23, and
without any further action and without any notice, the right
to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the
Redemption Price. The Company shall promptly give public
notice of any such redemption; provided, however, that the
failure to give, or any defect in, any such notice shall not
affect the validity of such redemption. Within 10 days after
such action of the Board of Directors ordering the redemption
-51-<PAGE>
of the Rights, the Company shall mail a notice of redemption
to all the holders of the then outstanding Rights at their
last addresses as they appear 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 Shares.
Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the
notice. Each such notice of redemption will state the method
by which the payment of the Redemption Price will be made.
Neither the Company nor any of its Affiliates or Associates
may redeem, acquire or purchase for value any Rights at any
time in any manner other than that specifically set forth in
this Section 23 or in Section 24 hereof, and other than in
connection with the purchase of Common Shares prior to the
Distribution Date.
Section 24. Exchange. (a) The Board of Directors
of the Company may, at its option, at any time after any
Person becomes an Acquiring Person, exchange all or part of
the then outstanding and exercisable Rights (which shall not
include Rights that have become void pursuant to the provi-
sions of Section 11(a)(ii) hereof) for Common Shares at an
exchange ratio of one Common Share per Right, appropriately
adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such
exchange ratio being hereinafter referred to as the "Exchange
-52-<PAGE>
Ratio"). Notwithstanding the foregoing, the Board of Direc-
tors shall not be empowered to effect such exchange at any
time after any Person (other than the Company, any Subsidiary
of the Company, any employee benefit plan of the Company or
any such Subsidiary, or any entity holding Common Shares for
or pursuant to the terms of any such plan), together with all
Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Common Shares then
outstanding.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the exchange of any Rights
pursuant to paragraph (a) of this Section 24 and without any
further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of
a holder of such Rights shall be to receive that number of
Common Shares equal to the number of such Rights held by such
holder multiplied by the Exchange Ratio. The Company shall
promptly give public notice of any such exchange; provided,
however, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. The
Company promptly shall mail a notice of any such exchange to
all of the holders of such Rights at their last addresses as
they appear upon the registry books of the Rights Agent. Any
notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice.
Each such notice of exchange will state the method by which
-53-<PAGE>
the exchange of the Common Shares for Rights will be effected
and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange shall
be effected pro rata based on the number of Rights (other
than Rights which have become void pursuant to the provisions
of Section 11(a)(ii) hereof) held by each holder of Rights.
(c) In the event that there shall not be suf-
ficient Common Shares issued but not outstanding or
authorized but unissued to permit any exchange of Rights as
contemplated in accordance with this Section 24, the Company
shall take all such action as may be necessary to authorize
additional Common Shares for issuance upon exchange of the
Rights. In the event the Company shall, after good faith
effort, be unable to take all such action as may be necessary
to authorize such additional Common Shares, the Company shall
substitute, for each Common Share that would otherwise be
issuable upon exchange of a Right, a number of Preference
Shares or fraction thereof such that the current per share
market price of one Preference Share multiplied by such
number or fraction is equal to the current per share market
price of one Common Share as of the date of issuance of such
Preference Shares or fraction thereof.
(d) The Company shall not be required to issue
fractions of Common Shares or to distribute certificates
which evidence fractional Common Shares. In lieu of such
-54-<PAGE>
fractional Common Shares, the Company shall pay to the
registered holders of the Right Certificates with regard to
which such fractional Common Shares would otherwise be
issuable an amount in cash equal to the same fraction of the
current market value of a whole Common Share. For the
purposes of this paragraph (d), the current market value of a
whole Common Share shall be the closing price of a Common
Share (as determined pursuant to the second sentence of Sec-
tion 11(d)(i) hereof) for the Trading Day immediately prior
to the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events. (a) In case
the Company shall propose (i) to pay any dividend payable in
stock of any class to the holders of its Preference Shares or
to make any other distribution to the holders of its
Preference Shares (other than a regular quarterly cash
dividend), (ii) to offer to the holders of its Preference
Shares rights or warrants to subscribe for or to purchase any
additional Preference Shares or shares of stock of any class
or any other securities, rights or options, (iii) to effect
any reclassification of its Preference Shares (other than a
reclassification involving only the subdivision of outstand-
ing Preference Shares), (iv) to effect any consolidation or
merger into or with, or to effect any sale or other transfer
(or to permit one or more of its Subsidiaries to effect any
sale or other transfer), in one or more transactions, of 50%
or more of the assets or earning power of the Company and its
-55-<PAGE>
Subsidiaries (taken as a whole) to, any other Person, (v) to
effect the liquidation, dissolution or winding up of the
Company, or (vi) to declare or pay any dividend on the Common
Shares payable in Common Shares or to effect a subdivision,
combination or consolidation of the Common Shares (by reclas-
sification or otherwise than by payment of dividends in Com-
mon Shares), then, in each such case, the Company shall give
to each holder of a Right Certificate, in accordance with
Section 26 hereof, a notice of such proposed action, which
shall specify the record date for the purposes of such stock
dividend, or distribution of rights or warrants, or the date
on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, or winding up is to take
place and the date of participation therein by the holders of
the Common Shares and/or Preference Shares, if any such date
is to be fixed, and such notice shall be so given in the case
of any action covered by clause (i) or (ii) above at least 10
days prior to the record date for determining holders of the
Preference Shares for purposes of such action, and in the
case of any such other action, at least 10 days prior to the
date of the taking of such proposed action or the date of
participation therein by the holders of the Common Shares
and/or Preference Shares, whichever shall be the earlier.
(b) In case the event set forth in Section
11(a)(ii) hereof shall occur, then the Company shall as soon
as practicable thereafter give to each holder of a Right
-56-<PAGE>
Certificate, in accordance with Section 26 hereof, a notice
of the occurrence of such event, which notice shall describe
such event and the consequences of such event to holders of
Rights under Section 11(a)(ii) hereof.
Section 26. Notices. Notices or demands
authorized by this Agreement to be given or made by the
Rights Agent or by the holder of any Right Certificate to or
on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent) as fol-
lows:
Pitney Bowes Inc.
1 Elmcroft Road
Stamford, CT 06926
Attention: Corporate Secretary
Subject to the provisions of Section 21 hereof, any notice or
demand authorized by this Agreement to be given or made by
the Company or by the holder of any Right Certificate to or
on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Company) as fol-
lows:
Chemical Mellon Shareholder Services, L.L.C.
450 W. 33rd St., 15th Fl.
New York, NY 10001-2697
Attention: Brian Goldstone
-57-<PAGE>
Notices or demands authorized by this Agreement to be given
or made by the Company or the Rights Agent to the holder of
any Right Certificate shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed to such
holder at the address of such holder as shown on the registry
books of the Company.
Section 27. Supplements and Amendments. The
Company may from time to time supplement or amend this Agree-
ment without the approval of any holders of Right
Certificates in order to cure any ambiguity, to correct or
supplement any provision contained herein which may be defec-
tive or inconsistent with any other provisions herein, or to
make any other provisions with respect to the Rights which
the Company may deem necessary or desirable, any such supple-
ment or amendment to be evidenced by a writing signed by the
Company and the Rights Agent; provided, however, that from
and after such time as any Person becomes an Acquiring
Person, this Agreement shall not be amended in any manner
which would adversely affect the interests of the holders of
Rights. Without limiting the foregoing, the Company may at
any time prior to such time as any Person becomes an Acquir-
ing Person amend this Agreement to lower the thresholds set
forth in Sections 1(a) and 3(a) to not less than the greater
of (i) the sum of .001% and the largest percentage of the
outstanding Common Shares then known by the Company to be
beneficially owned by any Person (other than the Company, any
-58-<PAGE>
Subsidiary of the Company, any employee benefit plan of the
Company or any Subsidiary of the Company, or any entity hold-
ing Common Shares for or pursuant to the terms of any such
plan) and (ii) 10%.
Section 28. Successors. All the covenants and
provisions of this Agreement by or for the benefit of the
Company or the Rights Agent shall bind and inure to the
benefit of their respective successors and assigns hereunder.
Section 29. Benefits of this Agreement. Nothing
in this Agreement shall be construed to give to any person or
corporation other than the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to
the Distribution Date, the Common Shares) any legal or
equitable right, remedy or claim under this Agreement; but
this Agreement shall be for the sole and exclusive benefit of
the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date,
the Common Shares).
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, provi-
sions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be af-
fected, impaired or invalidated.
-59-<PAGE>
Section 31. Governing Law. This Agreement and
each Right Certificate issued hereunder shall be deemed to be
a contract made under the laws of the State of Delaware and
for all purposes shall be governed by and construed in ac-
cordance with the laws of such State applicable to contracts
to be made and performed entirely within such State.
Section 32. Counterparts. This Agreement may be
executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an
original, and all such counterparts shall together constitute
but one and the same instrument.
Section 33. Descriptive Headings. Descriptive
headings of the several Sections of this Agreement are
inserted for convenience only and shall not control or affect
the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed and attested, all as of
the day and year first above written.
PITNEY BOWES INC.
Attest:
By /s/ Robbie Narcisse By /s/ George B. Harvey
Title: Assistant General Title: Chairman, President
Counsel and Assistant and Chief Executive
Secretary Officer
-60-<PAGE>
CHEMICAL MELLON SHAREHOLDER
SERVICES, L.L.C.
Attest:
By /s/ By /s/
Title: Trust Officer Title: Vice President
-61-<PAGE>
Exhibit A
FORM
of
CERTIFICATE OF DESIGNATIONS
of
SERIES A JUNIOR PARTICIPATING PREFERENCE STOCK
of
PITNEY BOWES INC.
(Pursuant to Section 151 of the
Delaware General Corporation Law)
Pitney Bowes Inc., a corporation organized and
existing under the General Corporation Law of the State of
Delaware (hereinafter called the "Corporation"), hereby
certifies that the following resolution was adopted by the
Board of Directors of the Corporation as required by Section
151 of the General Corporation Law at a meeting duly called
and held on December 11, 1995:
RESOLVED, that pursuant to the authority granted to
and vested in the Board of Directors of this Corporation
(hereinafter called the "Board of Directors" or the "Board")
in accordance with the provisions of the Certificate of
Incorporation, the Board of Directors hereby creates a series
of Preference Stock, without par value (the "Preference
Stock"), of the Corporation and hereby states the designation
and number of shares, and fixes the relative rights,
preferences, and limitations thereof as follows:
Series A Junior Participating Preference Stock:
Section 1. Designation and Amount. The shares of
such series shall be designated as "Series A Junior
Participating Preference Stock" (the "Series A Preference
Stock") and the number of shares constituting the Series A
Preference Stock shall be 1,700,000. Such number of shares
may be increased or decreased by resolution of the Board of
Directors; provided, that no decrease shall reduce the number
of shares of Series A Preference Stock to a number less than
the number of shares then outstanding plus the number of
A-1<PAGE>
shares reserved for issuance upon the exercise of outstanding
options, rights or warrants or upon the conversion of any
outstanding securities issued by the Corporation convertible
into Series A Preference Stock.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any
shares of any series of Preference Stock (or any similar
stock) ranking prior and superior to the Series A
Preference Stock with respect to dividends, the holders
of shares of Series A Preference Stock, in preference to
the holders of Common Stock, par value $2.00 per share
(the "Common Stock"), of the Corporation, and of any
other junior stock, shall be entitled to receive, when,
as and if declared by the Board of Directors out of
funds legally available for the purpose, quarterly
dividends payable in cash on the first day of March,
June, September and December in each year (each such
date being referred to herein as a "Quarterly Dividend
Payment Date"), commencing on the first Quarterly
Dividend Payment Date after the first issuance of a
share or fraction of a share of Series A Preference
Stock, in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $1 or (b) subject to
the provision for adjustment hereinafter set forth, 100
times the aggregate per share amount of all cash
dividends, and 100 times the aggregate per share amount
(payable in kind) of all non-cash dividends or other
distributions, other than a dividend payable in shares
of Common Stock or a subdivision of the outstanding
shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the im-
mediately 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 A Preference Stock. In the event
the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock
(by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each
such case the amount to which holders of shares of
Series A Preference Stock were entitled immediately
prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by
a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of
A-2<PAGE>
shares of Common Stock that were outstanding immediately
prior to such event.
(B) The Corporation shall declare a dividend or
distribution on the Series A Preference Stock as
provided in paragraph (A) of this Section immediately
after it declares a dividend or distribution on the
Common Stock (other than a dividend payable in shares of
Common Stock); provided that, in the event no dividend
or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend
Payment Date and the next subsequent Quarterly Dividend
Payment Date, a dividend of $1 per share on the Series A
Preference Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumula-
tive on outstanding shares of Series A Preference Stock
from the Quarterly Dividend Payment Date next preceding
the date of issue of such shares, unless the date of
issue of such shares is prior to the record date for the
first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the
date of issue of such shares, or unless the date of is-
sue is a Quarterly Dividend Payment Date or is a date
after the record date for the determination of holders
of shares of Series A Preference Stock entitled to
receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from
such Quarterly Dividend Payment Date. Accrued but
unpaid dividends shall not bear interest. Dividends
paid on the shares of Series A Preference Stock in an
amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all
such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of
holders of shares of Series A Preference Stock entitled
to receive payment of a dividend or distribution
declared thereon, which record date shall be not more
than 60 days prior to the date fixed for the payment
thereof.
Section 3. Voting Rights. The holders of shares
of Series A Preference Stock shall have the following voting
rights:
(A) Subject to the provision for adjustment
hereinafter set forth, each share of Series A Preference
Stock shall entitle the holder thereof to 100 votes on
all matters submitted to a vote of the stockholders of
A-3<PAGE>
the Corporation. In the event the Corporation shall at
any time declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivi-
sion or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise
than by payment of a dividend in shares of Common Stock)
into a greater or lesser number of shares of Common
Stock, then in each such case the number of votes per
share to which holders of shares of Series A Preference
Stock were entitled immediately prior to such event
shall be adjusted by multiplying such number by a frac-
tion, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to
such event.
(B) Except as otherwise provided herein, in any
other Certificate of Designations creating a series of
Preference Stock or any similar stock, or by law, the
holders of shares of Series A Preference Stock and the
holders of shares of Common Stock and any other capital
stock of the Corporation having general voting rights
shall vote together as one class on all matters submit-
ted to a vote of stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise
provided by law, holders of Series A Preference Stock
shall have no special voting rights and their consent
shall not be required (except to the extent they are
entitled to vote with holders of Common Stock as set
forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other
dividends or distributions payable on the Series A
Preference 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 A Preference Stock outstanding shall
have been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking
junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A
Preference Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a
parity (either as to dividends or upon liquidation,
A-4<PAGE>
dissolution or winding up) with the Series A
Preference Stock, except dividends paid ratably on
the Series A Preference 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 junior
(either as to dividends or upon liquidation, dis-
solution or winding up) to the Series A Preference
Stock, provided that the Corporation may at any
time redeem, purchase or otherwise acquire shares
of any such junior 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 A Preference Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series A Preference
Stock, or any shares of stock ranking on a parity
with the Series A Preference Stock, except in ac-
cordance with a purchase offer made in writing or
by publication (as determined by the Board of
Directors) to all holders of such shares upon such
terms as the Board of Directors, after
consideration of the respective annual dividend
rates and other relative rights and preferences of
the respective series and classes, shall determine
in good faith will result in fair and equitable
treatment among the respective series or classes.
(B) The Corporation shall not permit any
subsidiary of the Corporation to purchase or otherwise
acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under
paragraph (A) of this Section 4, purchase or otherwise
acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of
Series A Preference Stock purchased or otherwise acquired by
the Corporation in any manner whatsoever shall be retired and
cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but
unissued shares of Preference Stock and may be reissued as
part of a new series of Preference Stock subject to the
conditions and restrictions on issuance set forth herein, in
the Certificate of Incorporation, or in any other Certificate
of Designations creating a series of Preference Stock or any
similar stock or as otherwise required by law.
A-5<PAGE>
Section 6. Liquidation, Dissolution or Winding Up.
Upon any liquidation, dissolution or winding up of the
Corporation, no distribution shall be made (1) to the holders
of shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A
Preference Stock unless, prior thereto, the holders of shares
of Series A Preference Stock shall have received $100 per
share, plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the
date of such payment, provided that the holders of shares of
Series A Preference Stock shall be entitled to receive an ag-
gregate amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 100 times the ag-
gregate amount to be distributed per share to holders of
shares of Common Stock, or (2) to the holders of shares of
stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A
Preference Stock, except distributions made ratably on the
Series A Preference Stock and all such parity stock in
proportion to the total amounts to which the holders of all
such shares are entitled upon such liquidation, dissolution
or winding up. In the event the Corporation shall at any
time declare or pay any dividend on the Common Stock payable
in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in
each such case the aggregate amount to which holders of
shares of Series A Preference Stock were entitled immediately
prior to such event under the proviso in clause (1) of the
preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to such
event.
Section 7. Consolidation, Merger, etc. In case
the Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Com-
mon Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such
case each share of Series A Preference Stock shall at the
same time be similarly exchanged or changed into an amount
per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate
amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for
which each share of Common Stock is changed or exchanged. In
the event the Corporation shall at any time declare or pay
any dividend on the Common Stock payable in shares of Common
A-6<PAGE>
Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then in each such case the amount set
forth in the preceding sentence with respect to the exchange
or change of shares of Series A Preference Stock shall be
adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Series A
Preference Stock shall not be redeemable.
Section 9. Rank. The Series A Preference Stock
shall rank, with respect to the payment of dividends and the
distribution of assets, junior to all series of any other
class of the Corporation's Preference Stock.
Section 10. Amendment. The Certificate of
Incorporation of the Corporation shall not be amended in any
manner which would materially alter or change the powers,
preferences or special rights of the Series A Preference
Stock so as to affect them adversely without the affirmative
vote of the holders of at least two-thirds of the outstanding
shares of Series A Preference Stock, voting together as a
single class.
IN WITNESS WHEREOF, this Certificate of Designa-
tions is executed on behalf of the Corporation by its Chair-
man of the Board and attested by its Secretary this day
of , 1996.
Chairman of the Board
Attest:
Secretary
A-7<PAGE>
Exhibit B
Form of Right Certificate
Certificate No. R- Rights
NOT EXERCISABLE AFTER FEBRUARY 20, 2006 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT
TO REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE ON THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT.
Right Certificate
PITNEY BOWES INC.
This certifies that , or regis-
tered 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 11, 1995 (the
"Rights Agreement"), between Pitney Bowes Inc., a Delaware
corporation (the "Company"), and Chemical Mellon Shareholder
Services, L.L.C. (the "Rights Agent"), to purchase from the
Company at any time after the Distribution Date (as such term
is defined in the Rights Agreement) and prior to 5:00 P.M.,
Eastern Standard time, on February 20, 2006 at the principal
office of the Rights Agent, or at the office of its successor
as Rights Agent, one one-hundredth of a fully paid
non-assessable share of Series A Junior Participating
Preference Stock, without par value (the "Preference
Shares"), of the Company, at a purchase price of $195.00 per
one one-hundredth of a Preference Share (the "Purchase
Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase duly exe-
cuted. The number of Rights evidenced by this Right Certif-
icate (and the number of one one-hundredths of a Preference
Share which may be purchased upon exercise hereof) set forth
above, and the Purchase Price set forth above, are the number
and Purchase Price as of December 11, 1995, based on the Pre-
ference Shares as constituted at such date. As provided in
the Rights Agreement, the Purchase Price and the number of
one one-hundredths of a Preference Share which may be pur-
chased upon the exercise of the Rights evidenced by this
B-1<PAGE>
Right Certificate are subject to modification and adjustment
upon the happening of certain events.
This Right Certificate is subject to all of the
terms, provisions and conditions of the Rights Agreement,
which terms, provisions and conditions are hereby incorpo-
rated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full descrip-
tion of the rights, limitations of rights, obligations,
duties and immunities hereunder of the Rights Agent, the Com-
pany and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive
offices of the Company and the above-mentioned offices of the
Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office of the
Rights Agent, may be exchanged for another Right Certificate
or Right Certificates of like tenor and date evidencing
Rights entitling the holder to purchase a like aggregate num-
ber of Preference Shares as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall have en-
titled such holder to purchase. If this Right Certificate
shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or
Right Certificates for the number of whole Rights not exer-
cised.
Subject to the provisions of the Rights Agreement,
the Rights evidenced by this Certificate (i) may be redeemed
by the Company at a redemption price of $.01 per Right or
(ii) may be exchanged in whole or in part for Preference
Shares or shares of the Company's Common Stock, par value
$2.00 per share.
No fractional Preference Shares will be issued upon
the exercise of any Right or Rights evidenced hereby (other
than fractions which are integral multiples of one
one-hundredth of a Preference Share, which may, at the elec-
tion of the Company, be evidenced by depositary receipts),
but in lieu thereof a cash payment will be made, as provided
in the Rights Agreement.
No holder of this Right Certificate shall be en-
titled to vote or receive dividends or be deemed for any pur-
pose the holder of the Preference Shares or of any other
securities of the Company which may at any time be issuable
on the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the
holder hereof, as such, any of the rights of a stockholder of
B-2<PAGE>
the Company or any right to vote for the election of direc-
tors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corpo-
rate action, or to receive notice of meetings or other ac-
tions 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 Right Certificate shall have been exercised as provided
in the Rights Agreement.
This Right Certificate shall not be valid or obliga-
tory for any purpose until it shall have been countersigned
by the Rights Agent.
WITNESS the facsimile signature of the proper offic-
ers of the Company and its corporate seal. Dated as of
, .
ATTEST: PITNEY BOWES INC.
By
Countersigned:
CHEMICAL MELLON SHAREHOLDER
SERVICES, L.L.C.
By
Authorized Signature
B-3<PAGE>
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto
(Please print name and address of transferee)
this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint Attorney, to transfer the within
Right Certificate on the books of the within-named Company,
with full power of substitution.
Dated: ,
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a
registered national securities exchange, a member of the
National Association of Securities Dealers, Inc., or a com-
mercial bank or trust company having an office or correspon-
dent in the United States.
------------------------------------------------------------
The undersigned hereby certifies that the Rights
evidenced by this Right Certificate are not beneficially
owned by an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement).
Signature
-------------------------------------------------------------
B-4<PAGE>
Form of Reverse Side of Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Right Certificate.)
To: PITNEY BOWES INC.
The undersigned hereby irrevocably elects to exer-
cise Rights represented by this
Right Certificate to purchase the Preference Shares issuable
upon the exercise of such Rights and requests that certif-
icates for such Preference Shares be issued in the name of:
Please insert social security
or other identifying number
(Please print name and address)
If such number of Rights shall not be all the Rights evi-
denced by this Right Certificate, a new Right Certificate for
the balance remaining of such Rights shall be registered in
the name of and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
Dated: ,
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a
registered national securities exchange, a member of the
National Association of Securities Dealers, Inc., or a com-
mercial bank or trust company having an office or correspon-
dent in the United States.
B-5<PAGE>
Form of Reverse Side of Right Certificate -- continued
-------------------------------------------------------------
The undersigned hereby certifies that the Rights
evidenced by this Right Certificate are not beneficially
owned by an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement).
Signature
-------------------------------------------------------------
NOTICE
The signature in the Form of Assignment or Form of
Election to Purchase, as the case may be, must conform to the
name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any
change whatsoever.
In the event the certification set forth above in
the Form of Assignment or the Form of Election to Purchase,
as the case may be, is not completed, the Company and the
Rights Agent will deem the beneficial owner of the Rights
evidenced by this Right Certificate to be an Acquiring Person
or an Affiliate or Associate thereof (as defined in the
Rights Agreement) and such Assignment or Election to Purchase
will not be honored.
B-6<PAGE>
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
PREFERENCE SHARES
On December 11, 1995, the Board of Directors of
Pitney Bowes Inc. (the "Company") declared a dividend of one
preference share purchase right (a "Right") for each
outstanding share of common stock, par value $2.00 per share
(the "Common Shares"), of the Company. The dividend is
payable on February 20, 1996 (the "Record Date") to the
stockholders of record on that date. Each Right entitles the
registered holder to purchase from the Company one one-
hundredth of a share of Series A Junior Participating
Preference Stock, without par value (the "Preference
Shares"), of the Company at a price of $195.00 per one one-
hundredth of a Preference Share (the "Purchase Price"),
subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement (the "Rights
Agreement") between the Company and Chemical Mellon
Shareholder Services, L.L.C. as Rights Agent (the "Rights
Agent").
Until the earlier to occur of (i) 10 days following
a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") have acquired ben-
eficial ownership of 20% or more of the outstanding Common
Shares or (ii) 10 business days (or such later date as may be
determined by action of the Board of Directors prior to such
time as any person or group of affiliated persons becomes an
Acquiring Person) following the commencement of, or announce-
ment of an intention to make, a tender offer or exchange of-
fer the consummation of which would result in the beneficial
ownership by a person or group of 20% or more of the out-
standing Common Shares (the earlier of such dates being
called the "Distribution Date"), the Rights will be evi-
denced, with respect to any of the Common Share certificates
outstanding as of the Record Date, by such Common Share cer-
tificate with a copy of this Summary of Rights attached
thereto.
The Rights Agreement provides that, until the Dis-
tribution Date (or earlier redemption or expiration of the
Rights), the Rights will be transferred with and only with
the Common Shares. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Share
certificates issued after the Record Date upon transfer or
C-1<PAGE>
new issuance of Common Shares will contain a notation incor-
porating the Rights Agreement by reference. Until the Dis-
tribution Date (or earlier redemption or expiration of the
Rights), the surrender for transfer of any certificates for
Common Shares outstanding as of the Record Date, even without
such notation or a copy of this Summary of Rights being at-
tached thereto, will also constitute the transfer of the
Rights associated with the Common Shares represented by such
certificate. As soon as practicable following the Distribu-
tion Date, separate certificates evidencing the Rights
("Right Certificates") will be mailed to holders of record of
the Common Shares as of the close of business on the Distri-
bution Date and such separate Right Certificates alone will
evidence the Rights.
The Rights are not exercisable until the Distribu-
tion Date. The Rights will expire on February 20, 2006 (the
"Final Expiration Date"), unless the Final Expiration Date is
extended or unless the Rights are earlier redeemed or ex-
changed by the Company, in each case, as described below.
The Purchase Price payable, and the number of Pre-
ference Shares 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
Preference Shares, (ii) upon the grant to holders of the Pre-
ference Shares of certain rights or warrants to subscribe for
or purchase Preference Shares at a price, or securities con-
vertible into Preference Shares with a conversion price, less
than the then-current market price of the Preference Shares
or (iii) upon the distribution to holders of the Preference
Shares of evidences of indebtedness or assets (excluding reg-
ular periodic cash dividends paid out of earnings or retained
earnings or dividends payable in Preference Shares) or of
subscription rights or warrants (other than those referred to
above).
The number of outstanding Rights and the number of
one one-hundredths of a Preference Share issuable upon exer-
cise of each Right are also subject to adjustment in the
event of a stock split of the Common Shares or a stock divi-
dend on the Common Shares payable in Common Shares or subdi-
visions, consolidations or combinations of the Common Shares
occurring, in any such case, prior to the Distribution Date.
Preference Shares purchasable upon exercise of the
Rights will not be redeemable. Each Preference Share will be
entitled to a minimum preferential quarterly dividend payment
of $1 per share but will be entitled to an aggregate dividend
C-3<PAGE>
of 100 times the dividend declared per Common Share. In the
event of liquidation, the holders of the Preference Shares
will be entitled to a minimum preferential liquidation pay-
ment of $100 per share but will be entitled to an aggregate
payment of 100 times the payment made per Common Share. Each
Preference Share will have 100 votes, voting together with
the Common Shares. Finally, in the event of any merger, con-
solidation or other transaction in which Common Shares are
exchanged, each Preference Share will be entitled to receive
100 times the amount received per Common Share. These rights
are protected by customary antidilution provisions.
Because of the nature of the Preference Shares'
dividend, liquidation and voting rights, the value of the one
one-hundredth interest in a Preference Share purchasable upon
exercise of each Right should approximate the value of one
Common Share.
In the event that the Company is acquired in a
merger or other business combination transaction or 50% or
more of its consolidated assets or earning power are sold
after a person or group has become an Acquiring Person,
proper provision will be made so that each holder of a Right
will thereafter have the right to receive, upon the exercise
thereof at the then current exercise price of the Right, that
number of shares of common stock of the acquiring company
which at the time of such transaction will have a market
value of two times the exercise price of the Right. In the
event that any person or group of affiliated or associated
persons becomes an Acquiring Person, proper provision shall
be made so that each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will there-
after be void), will thereafter have the right to receive
upon exercise that number of Common Shares having a market
value of two times the exercise price of the Right.
At any time after any person or group becomes an
Acquiring Person and prior to the acquisition by such person
or group of 50% or more of the outstanding Common Shares, the
Board of Directors of the Company may exchange the Rights
(other than Rights owned by such person or group which will
have become void), in whole or in part, at an exchange ratio
of one Common Share, or one one-hundredth of a Preference
Share (or of a share of a class or series of the Company's
preference stock having equivalent rights, preferences and
privileges), per Right (subject to adjustment).
With certain exceptions, no adjustment in the Pur-
chase Price will be required until cumulative adjustments
require an adjustment of at least 1% in such Purchase Price.
C-3<PAGE>
No fractional Preference Shares will be issued (other than
fractions which are integral multiples of one one-hundredth
of a Preference Share, which may, at the election of the Com-
pany, be evidenced by depositary receipts) and in lieu there-
of, an adjustment in cash will be made based on the market
price of the Preference Shares on the last trading day prior
to the date of exercise.
At any time prior to the acquisition by a person or
group of affiliated or associated persons of beneficial own-
ership of 20% or more of the outstanding Common Shares, the
Board of Directors of the Company may redeem the Rights in
whole, but not in part, at a price of $.01 per Right (the
"Redemption Price"). The redemption of the Rights may be
made effective at such time on such basis with such condi-
tions as the Board of Directors in its sole discretion may
establish. Immediately upon any redemption of the Rights,
the right to exercise the Rights will terminate and the only
right of the holders of Rights will be to receive the Redemp-
tion Price.
The terms of the Rights may be amended by the Board
of Directors of the Company without the consent of the hold-
ers of the Rights, including an amendment to lower certain
thresholds described above to not less than the greater of
(i) the sum of .001% and the largest percentage of the out-
standing Common Shares then known to the Company to be ben-
eficially owned by any person or group of affiliated or asso-
ciated persons and (ii) 10%, except that from and after such
time as any person or group of affiliated or associated per-
sons becomes an Acquiring Person no such amendment may
adversely affect the interests of the holders of the Rights.
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 re-
ceive dividends.
A copy of the Rights Agreement has been filed with
the Securities and Exchange Commission as an Exhibit to a
Registration Statement on Form 8-A dated , 1996.
A copy of the Rights Agreement is available free of charge
from the Company. This summary description of the Rights
does not purport to be complete and is qualified in its
entirety by reference to the Rights Agreement, which is
hereby incorporated herein by reference.
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