SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): NOVEMBER 4, 1998
ASA INTERNATIONAL LTD.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
0-14741 02-0398205
(Commission File Number) (IRS Employer
Identification No.)
10 SPEEN STREET, FRAMINGHAM, MASSACHUSETTS 07101
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (508-626-2727)
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(Former name or former address, if changed since last report)
<PAGE>
Item 5. OTHER EVENTS
On October 21, 1998, the Board of Directors of the Registrant declared
a dividend distribution of one right (a "Right") for each outstanding share of
the Registrant's common stock, par value $.01 per share ("Common Stock"), to
stockholders of record at the close of business on November 4, 1998 (the "Record
Date"). The Board of Directors of the Registrant also authorized the issuance of
one Right for each share of Common Stock issued after the Record Date and prior
to the earliest of the Distribution Date (as defined below), the redemption of
the Rights and the expiration of the Rights and, in certain circumstances, after
the Distribution Date. Except as set forth below and subject to adjustment as
provided in the Rights Agreement (defined below), each Right entitles the
registered holder to purchase from the Registrant one one-hundredth of a share
of Series A Junior Participating Preferred Stock (the "Preferred Stock"), at a
purchase price of $10 per Right (the "Purchase Price"). The description and
terms of the Rights are set forth in a Rights Agreement, dated as of October 21,
1998 (the "Rights Agreement"), between the Registrant and American Securities
Transfer & Trust, Inc., as Rights Agent.
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate Rights
Certificates (as defined below) will be distributed. The Rights will separate
from the Common Stock upon the earliest of (i) 10 days following a public
announcement that a person or group (an "Acquiring Person"), together with
persons affiliated or associated with it, has acquired, or obtained the right to
acquire, beneficial ownership of 20% or more of the outstanding shares of Common
Stock (the "Stock Acquisition Date"), (ii) 10 business days (or such later date
as the Board of Directors of the Registrant shall determine) following the
commencement of a tender offer or exchange offer that would result in a person
or group beneficially owning 20% or more of such outstanding shares of Common
Stock, or (iii) 10 business days following a determination by the Board of
Directors of the Registrant that a person (an "Adverse Person"), alone or
together with its affiliates and associates, has become the beneficial owner of
more than 10% of the outstanding Common Stock and that (a) such beneficial
ownership is intended to cause the Registrant to repurchase the Common Stock
beneficially owned by such person or to cause pressure on the Registrant to take
action or enter into transactions intended to provide such person with
short-term financial gain under the circumstances where the Board of Directors
of the Registrant determines that the best long-term interests of the Registrant
would not be served by taking such action or entering into such transactions at
the time or (b) such beneficial ownership is causing or reasonably likely to
cause a material adverse impact on the business or prospects of the Registrant
(the earliest of such dates being called the "Distribution Date").
Until the Distribution Date (or earlier redemption or expiration of
the Rights), (i) the Rights will be transferred with and only with the Common
Stock (except in connection with redemption of the Rights), (ii) new Common
Stock certificates issued after the Record Date upon transfer, replacement or
new issuance of Common Stock will contain a notation incorporating the Rights
Agreement by reference and (iii) the surrender for transfer of any certificates
for Common Stock outstanding will also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate.
The Rights will become first exercisable on the Distribution Date and
will expire at the close of business on October 20, 2008 (the "Expiration
Date"), unless earlier redeemed by the Registrant as described below.
Notwithstanding the foregoing, the Rights will not be exercisable after the
occurrence of a Triggering Event (defined below) until the Registrant's right of
redemption has expired.
As soon as practicable after the Distribution Date, separate
certificates evidencing the Rights (the "Rights Certificates") will be mailed to
holders of record of the Common Stock as of the close of business on the
Distribution Date and, thereafter, such separate Rights Certificates alone will
evidence the Rights. Except for shares of Common Stock issued or sold after the
Distribution Date pursuant to the exercise of stock options or under any
employee benefit plan or arrangement granted or awarded prior to the
Distribution Date, or the exercise, conversion or exchange of securities issued
by the Registrant, and except as otherwise determined by the Board of Directors,
only shares of Common Stock issued prior to the Distribution Date will be issued
with Rights.
In the event that any person shall become (a) an Acquiring Person
(except (i) pursuant to an offer for all outstanding shares of Common Stock
which the independent directors determine to be fair to and otherwise in the
best interest of the Registrant and its stockholders after receiving advice from
one or more investment banking firms (a "Qualifying Offer") and (ii) for certain
persons who report their ownership on Schedule 13G under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), or on Schedule 13D under the
Exchange Act, provided that they do not state any intention to, or reserve the
right to, control or influence the Registrant and such persons certify that they
became an Acquiring Person inadvertently and they agree that they will not
acquire any additional shares of Common Stock) or (b) an Adverse Person (either
such event is referred to herein as a "Triggering Event"), then the Rights will
"flip-in" and entitle each holder of a Right, except as provided below, to
purchase, upon exercise at the then-current Purchase Price, that number of
shares of Common Stock having a market value of two times such Purchase Price.
Any Rights beneficially owned at any time on or after the earlier of
the Distribution Date and the Stock Acquisition Date by an Acquiring Person, an
Adverse Person or an affiliate or associate of an Acquiring Person or an Adverse
Person (whether or not such ownership is subsequently transferred) will become
null and void upon the occurrence of a Triggering Event, and any holder of such
Rights will have no right to exercise such Rights.
In the event that, following a Stock Acquisition Date, the Registrant
is acquired in a merger or other business combination in which the Common Stock
does not remain outstanding or is changed (other than a merger consummated
pursuant to a Qualifying Offer) or 50% of the assets or earning power of the
Registrant and its Subsidiaries (as defined in the Rights Agreement) (taken as a
whole) is sold or otherwise transferred to any person (other than the Registrant
or any Subsidiary of the Registrant) in one transaction or a series of related
transactions, the Rights will "flip-over" and entitle each holder of a Right,
except as provided in the preceding paragraph, to purchase, upon the exercise of
the Right at the then-current Purchase Price, that number of shares of common
stock of the acquiring company which at the time of such transaction would have
a market value of two times such Purchase Price.
The Purchase Price is subject to adjustment from time to time to
prevent dilution upon the (i) declaration of a dividend on the Preferred Stock
payable in shares of Preferred Stock, (ii) subdivision of the outstanding
Preferred Stock, (iii) combination of the outstanding Preferred Stock into a
smaller number of shares, (iv) issuance of any shares of the Registrant's
capital stock in a reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which the
Registrant is the continuing or surviving corporation), (v) grant to holders of
the Preferred Stock of certain rights, options, or warrants to subscribe for
Preferred Stock or securities convertible into Preferred Stock at less than the
current market price of the Preferred Stock, or (vi) distribution to holders of
the Preferred Stock of other evidences of indebtedness, cash (other than a
regular quarterly cash dividend payable out of the earnings or retained earnings
of the Registrant), subscription rights, warrants, or assets (other than a
dividend payable in Preferred Stock, but including any dividend payable in stock
other than Preferred Stock).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% of
the Purchase Price.
At any time until the earlier of (i) ten days following the Stock
Acquisition Date and (ii) the Expiration Date, the Registrant may redeem the
Rights in whole, but not in part, at a price of $.01 per Right, subject to
adjustments. The Registrant may, at its option, pay the redemption price in
cash, shares of Common Stock (based on the current market price of the Common
Stock at the time of redemption) or any other form of consideration deemed
appropriate by the Board of Directors of the Registrant. Immediately upon the
action of the Registrant's Board of Directors ordering redemption of the Rights,
the right to exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the applicable redemption price. In
addition, after a Triggering Event, at the election of the Board of Directors of
the Registrant, the outstanding Rights (other than those beneficially owned by
an Acquiring Person, Adverse Person or an affiliate or associate of an Acquiring
Person or Adverse Person) may be exchanged, in whole or in part, for shares of
Common Stock, or shares of preferred stock of the Registrant having essentially
the same value or economic rights as such shares of Common Stock. Immediately
upon the action of the Board of Directors of the Registrant authorizing any such
exchange, and without any further action or any notice, the Rights (other than
Rights which are not subject to such exchange) will terminate and such Rights
will only entitle holders to receive the shares issuable upon such exchange.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Registrant, including, without limitation, the
right to vote or to receive dividends. While the distribution of the Rights will
not be taxable to stockholders or to the Registrant, stockholders may, depending
upon the circumstances, recognize taxable income in the event that the Rights
become exercisable for Common Stock (or other consideration) of the Registrant
or for common stock of the acquiring company as set forth above.
At any time prior to the Distribution Date, the Registrant may,
without the approval of any holder of the Rights, supplement or amend any
provision of the Rights Agreement. Thereafter, the Rights Agreement may be
amended only (i) to cure ambiguities, (ii) to correct inconsistent provisions,
(iii) to shorten or lengthen any time period thereunder or (iv) in ways that do
not adversely affect the Rights holders (other than an Acquiring Person or
Adverse Person). From and after the Distribution Date, the Rights Agreement may
not be amended to lengthen (A) a time period relating to when the Rights may be
redeemed at such time as the Rights are not then redeemable, or (B) any other
time period unless such lengthening is for the purpose of protecting, enhancing
or clarifying the rights of, and/or the benefits to, the holders of Rights
(other than an Acquiring Person or Adverse Person).
As of October 15, 1998, there were 3,373,462 shares of Common Stock
outstanding (excluding shares held in Treasury). Each outstanding share of
Common Stock on the Record Date will receive one Right. Until the Distribution
Date, the Registrant will issue one Right with each share of Common Stock that
shall become outstanding so that all such shares will have attached Rights.
Sixty thousand (60,000) shares of Preferred Stock have been reserved for
issuance upon exercise of the Rights.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the
Registrant on terms not approved by the Registrant's Board of Directors. The
Rights should not interfere with any merger or other business combination
approved by the Board of Directors of the Registrant since the Board of
Directors may, at its option, at any time until ten days following the Stock
Acquisition Date, redeem all, but no less than all, of the then outstanding
Rights at the applicable redemption price.
The Rights Agreement between the Registrant and the Rights Agent
specifying the terms of the Rights, which includes as Exhibit B the Form of
Rights Certificate, the press release announcing the declaration of the Rights
and a letter to the holders of the Registrant's Common Stock (together with a
summary of the Rights attached thereto) are attached hereto as exhibits and are
incorporated herein by reference. The foregoing description of the Rights does
not purport to be complete and is qualified in its entirety by reference to such
exhibits.
<PAGE>
Item 7. EXHIBITS
EXHIBIT NUMBER DESCRIPTION
4* Rights Agreement, dated as of October 21, 1998,
between the Registrant and American Securities
Transfer & Trust, Inc., as Rights Agent
20* Letter to the holders of the Registrant's Common
Stock, dated November 4, 1998 (including summary
of Rights)
99* Press Release, dated October 22, 1998
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* Filed herewith by direct transmission pursuant to the EDGAR program.
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereto duly authorized.
November 4, 1998 ASA INTERNATIONAL LTD.
(Registrant)
By: /S/ TERRENCE C. MCCARTHY
----------------------------
Terrence C. McCarthy,
Vice President and
Corporate Secretary
<PAGE>
EXHIBIT INDEX
DESCRIPTION EXHIBIT
Rights Agreement, dated as of October 21,
1998, between the Registrant and American
Securities Transfer & Trust, Inc., as Rights
Agent, which includes as Exhibit B
thereto the Form of Rights
Certificate................................................... 4
Letter to the holders of the Registrant's
Common Stock, dated November 4, 1998
(including summary of Rights).................................. 20
Press Release, dated October 22, 1998.......................... 99
EXHIBIT 4
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ASA INTERNATIONAL LTD.
and
AMERICAN SECURITIES TRANSFER & TRUST, INC.
as Rights Agent
-------------------
Rights Agreement
Dated as of October 21, 1998
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<PAGE>
TABLE OF CONTENTS
SECTION PAGE
Section 1. Certain Definitions..........................................1
Section 2. Appointment of Rights Agent..................................6
Section 3. Issue of Rights Certificates.................................6
Section 4. Form of Rights Certificates..................................8
Section 5. Countersignature and Registration............................9
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates.................................................9
Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights...................................................10
Section 8. Cancellation and Destruction of Rights Certificates.........12
Section 9. Reservation and Availability of Capital Stock...............12
Section 10. Preferred Stock Record Date.................................14
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights..................................14
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares......................................................24
Section 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power............................................24
Section 14. Fractional Rights and Fractional Shares.....................26
Section 15. Rights of Action............................................28
Section 16. Agreement of Rights Holders.................................28
Section 17. Rights Certificate Holder Not Deemed a Stockholder..........29
Section 18. Concerning the Rights Agent.................................29
Section 19. Merger or Consolidation or Change of Name of Rights
Agent.......................................................30
Section 20. Duties of Rights Agent......................................30
Section 21. Change of Rights Agent......................................32
Section 22. Issuance of New Rights Certificates.........................33
Section 23. Redemption and Termination..................................33
Section 24. Exchange....................................................34
Section 25. Notice of Certain Events....................................36
Section 26. Notices.....................................................37
Section 27. Supplements and Amendments..................................37
Section 28. Successors..................................................38
Section 29. Determinations and Actions by the Board of
Directors, etc..............................................38
Section 30. Benefits of this Agreement..................................38
Section 31. Severability................................................39
Section 32. Governing Law...............................................39
Section 33. Counterparts................................................39
Section 34. Descriptive Headings........................................39
Exhibit A -- Certificate of Designation, Preferences and Rights
Exhibit B -- Form of Rights Certificate
<PAGE>
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of October 21, 1998 (the "Agreement"),
between ASA International Ltd., a Delaware corporation (the "Company"), and
American Securities Transfer & Trust, Inc. (the "Rights Agent").
W I T N E S S E T H
WHEREAS, on October 21, 1998 (the "Rights Dividend Declaration Date"),
the Board of Directors of the Company has authorized and declared a dividend
distribution of one Right for each share of common stock, par value $.01 per
share, of the Company (the "Common Stock") outstanding at the close of business
on November 4, 1998 (the "Record Date"), and has authorized the issuance of one
Right (as such number may hereinafter be adjusted pursuant to the provisions of
Section 11(p) hereof) for each share of Common Stock of the Company issued
between the Record Date (whether originally issued or delivered from the
Company's treasury) and the Distribution Date (as defined below), each Right
initially representing the right to purchase one one-hundredth (1/100th) of a
share of Series A Junior Participating Preferred Stock (the "Preferred Stock")
of the Company having the rights, powers and preferences set forth in the form
of Certificate of Designation, Preferences and Rights attached hereto as EXHIBIT
A, upon the terms and subject to the conditions hereinafter set forth (the
"Rights");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall be
the Beneficial Owner of 20% or more of the shares of Common Stock then
outstanding, but shall not include (i) the Company, (ii) any
Subsidiary of the Company, (iii) any employee benefit plan of the
Company or of any Subsidiary of the Company, (iv) any Person or entity
organized, appointed or established by the Company for or pursuant to
the terms of any such plan, or (v) Alfred C. Angelone, his issue, his
spouse (collectively the "Angelone Family"), the trustees of any trust
under which a member of the Angelone Family is a beneficiary, or any
legal successor in interest to a member of the Angelone Family
(including but not limited to any Executor or Administrator of the
estate of the individual and any estate beneficiary). Notwithstanding
the foregoing, no Person shall become an "Acquiring Person" solely as
the result of an acquisition of Common Stock by the Company which, by
reducing the number of shares outstanding, increases the proportionate
number of shares beneficially owned by a Person to 20% or more of the
Common Stock of the Company then outstanding as determined above;
PROVIDED, HOWEVER, that if a Person becomes the Beneficial Owner of
20% or more of the Common Stock of the Company then outstanding (as
determined above) solely by reason of purchases of Common Stock by the
Company and shall, after such purchases by the Company, become the
Beneficial Owner of any additional shares of Common Stock by any means
whatsoever, then such Person shall be deemed to be an "Acquiring
Person." 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
provisions of this paragraph (a), has become such inadvertently, and
such Person divests as promptly as practicable a sufficient number of
shares of Common Stock 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) "Act" shall have the meaning set forth in Section 9(c)
hereof.
(c) "Adjustment Shares" shall have the meaning set forth in
Section 11(a)(ii) hereof.
(d) "Adverse Person" shall mean any Person declared to be an
Adverse Person by the Board of Directors upon determination that the
criteria set forth in Section 11(a)(ii)(B) apply to such Person;
PROVIDED, HOWEVER, that the Board of Directors shall not declare any
Person who is the Beneficial Owner of 10% or more (but less than 20%)
of the outstanding Common Stock of the Company to be an Adverse Person
if such Person has reported or is required to report such ownership on
Schedule 13G under the Securities Exchange Act of 1934, as amended and
in effect on the date of this Agreement (the "Exchange Act") (or any
comparable or successor report) or on Schedule 13D under the Exchange
Act (or any comparable or successor report) which Schedule 13D does
not state any intention to or reserve the right to control or
influence the management or policies of the Company or engage in any
of the actions specified in Item 4 of such Schedule (other than the
disposition of the Common Stock) so long as such Person neither
reports nor is required to report such ownership other than as
described in this paragraph (d).
(e) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act.
(f) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the
right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding (whether or not in
writing) or upon the exercise of conversion rights, exchange
rights, rights, warrants or options, or otherwise; PROVIDED,
HOWEVER, that a Person shall not be deemed the "Beneficial
Owner" of, or to "beneficially own," (A) securities tendered
pursuant to a tender or exchange offer made by such Person or
any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange, or
(B) securities issuable upon exercise of Rights at any time
prior to the occurrence of a Triggering Event, or (C)
securities issuable upon exercise of Rights from and after the
occurrence of a Triggering Event which Rights were acquired by
such Person or any of such Person's Affiliates or Associates
prior to the Distribution Date or pursuant to Section 3(a) or
Section 22 hereof (the "Original Rights") or pursuant to
Section 11(i) hereof in connection with an adjustment made
with respect to any Original Rights;
(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the
right to vote or dispose of or has "beneficial ownership" of
(as determined pursuant to Rule 13d-3 of the General Rules and
Regulations under the Exchange Act), including pursuant to any
agreement, arrangement or understanding, whether or not in
writing; PROVIDED, HOWEVER, that a Person shall not be deemed
the "Beneficial Owner" of, or to "beneficially own," any
security under this subparagraph (ii) as a result of an
agreement, arrangement or understanding to vote such security
if such agreement, arrangement or understanding: (A) arises
solely from a revocable proxy given in response to a public
proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the General
Rules and Regulations under the Exchange Act, and (B) is not
also then reportable by such Person on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate
thereof) with which such Person (or any of such Person's
Affiliates or Associates) has any agreement, arrangement or
understanding (whether or not in writing), for the purpose of
acquiring, holding, voting (except pursuant to a revocable
proxy as described in the proviso to subparagraph (ii) of this
paragraph (f)) or disposing of any voting securities of the
Company;
PROVIDED, HOWEVER, that nothing in this paragraph (f) shall cause a
person engaged in business as an underwriter of securities to be the
"Beneficial Owner" of, or to "beneficially own," any securities
acquired through such person's participation in good faith in a firm
commitment underwriting until the expiration of forty days after the
date of such acquisition.
(g) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the State of New York
are authorized or obligated by law or executive order to close.
(h) "Close of business" on any given date shall mean 5:00
P.M., New York City time, on such date; PROVIDED, HOWEVER, that if
such date is not a Business Day it shall mean 5:00 P.M., New York City
time, on the next succeeding Business Day.
(i) "Common Stock" shall mean the common stock, par value
$.01 per share, of the Company, except that "Common Stock" when used
with reference to any Person other than the Company shall mean the
capital stock of such Person with the greatest voting power, or the
equity securities or other equity interest having power to control or
direct the management, of such Person.
(j) "Common Stock Equivalents" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(k) "Current Market Price" shall have the meaning set forth
in Section 11(d)(i) hereof.
(l) "Current Value" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(m) "Distribution Date" shall have the meaning set forth in
Section 3(a) hereof.
(n) "Equivalent Preferred Stock" shall have the meaning set
forth in Section 11(b) hereof.
(o) "Exchange Act" shall have the meaning set forth in
Section 1(d) hereof.
(p) "Exchange Ratio" shall have the meaning set forth in
Section 24 hereof.
(q) "Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(r) "Final Expiration Date" shall have the meaning set forth
in Section 7(a) hereof.
(s) "Person" shall mean any individual, firm, corporation,
partnership or other entity.
(t) "Preferred Stock" shall mean shares of Series A Junior
Participating Preferred Stock, par value $.01 per share, of the
Company, and, to the extent that there are not a sufficient number of
shares of Series A Junior Participating Preferred Stock authorized to
permit the full exercise of the Rights, any other series of Preferred
Stock of the Company designated for such purpose containing terms
substantially similar to the terms of the Series A Junior
Participating Preferred Stock.
(u) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
(v) "Purchase Price" shall have the meaning set forth in
Section 4(a) hereof.
(w) "Qualifying Offer" shall have the meaning set forth in
Section 11(a)(ii)(A) hereof.
(x) "Record Date" shall have the meaning set forth in the
WHEREAS clause at the beginning of this Agreement.
(y) "Redemption Price" shall have the meaning set forth in
Section 23(a) hereof.
(z) "Rights" shall have the meaning set forth in the WHEREAS
clause at the beginning of the Agreement.
(aa) "Rights Agent" shall have the meaning set forth in the
parties clause at the beginning of this Agreement.
(ab) "Rights Certificates" shall have the meaning set forth
in Section 3(a) hereof.
(ac) "Rights Dividend Declaration Date" shall mean October
21, 1998.
(ad) "Section 11(a)(ii) Event" shall mean any event
described in Section 11(a)(ii) hereof.
(ae) "Section 11(a)(ii) Trigger Date" shall have the meaning
set forth in Section 11(a)(iii) hereof.
(af) "Section 13 Event" shall mean any event described in
clauses (x), (y) or (z) of Section 13(a) hereof.
(ag) "Spread" shall have the meaning set forth in Section
11(a)(iii) hereof.
(ah) "Stock Acquisition Date" shall mean the first date of
public announcement (which, for purposes of this definition, shall
include, without limitation, a report filed pursuant to Section 13(d)
under the Exchange Act) by the Company or an Acquiring Person that an
Acquiring Person has become such.
(ai) "Subsidiary" shall mean, with reference to any Person,
any corporation of which an amount of voting securities sufficient to
elect at least a majority of the directors of such corporation is
beneficially owned, directly or indirectly, by such Person, or
otherwise controlled by such Person.
(aj) "Substitution Period" shall have the meaning set forth
in Section 11(a)(iii) hereof.
(ak) "Trading Day" shall have the meaning set forth in
Section 11(d)(i) hereof.
(al) "Triggering Event" shall mean any Section 11(a)(ii)
Event or any Section 13 Event.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints
the Rights Agent to act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3 hereof, shall prior to the Distribution Date
also be the holders of the Common Stock) in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such Co-Rights Agents as it may deem
necessary or desirable.
Section 3. ISSUE OF RIGHTS CERTIFICATES.
(a) Until the earliest of (i) the close of business on the
tenth day after the Stock Acquisition Date (or, if the tenth day after
the Stock Acquisition Date occurs before the Record Date, the close of
business on the Record Date), (ii) the close of business on the tenth
business day (or such later date as the Board shall determine) after
the date that a tender or exchange offer by any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of
the Company or of any Subsidiary of the Company, or any Person or
entity organized, appointed or established by the Company for or
pursuant to the terms of any such plan) is first published or sent or
given within the meaning of Rule 14d-2(a) of the General Rules and
Regulations under the Exchange Act, if upon consummation thereof, such
Person would be the Beneficial Owner of 20% or more of the shares of
Common Stock then outstanding or (iii) the close of business on the
tenth Business Day after the Board of Directors determines, pursuant
to the criteria set forth in Section 11(a)(ii)(B) hereof, that a
Person is an Adverse Person (the earliest of (i), (ii) and (iii) being
herein referred to as the "Distribution Date"), (x) the Rights will be
evidenced (subject to the provisions of paragraph (b) of this Section
3) by the certificates for the Common Stock registered in the names of
the holders of the Common Stock (which certificates for Common Stock
shall be deemed also to be certificates for Rights) and not by
separate certificates, and (y) the Rights will be transferable only in
connection with the transfer of the underlying shares of Common Stock
(including a transfer to the Company). As soon as practicable after
the Distribution Date, the Rights Agent will send by first-class,
insured, postage prepaid mail, to each record holder of the Common
Stock as of the close of business on the Distribution Date, at the
address of such holder shown on the records of the Company, one or
more rights certificates, in substantially the form of EXHIBIT B
hereto (the "Rights Certificates"), evidencing one Right for each
share of Common Stock so held, subject to adjustment as provided
herein. In the event that an adjustment in the number of Rights per
share of Common Stock has been made pursuant to Section 11(p) hereof,
at the time of distribution of the Rights Certificates, the Company
shall make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a) hereof) so that Rights Certificates
representing only whole numbers of Rights are distributed and cash is
paid in lieu of any fractional Rights. As of and after the
Distribution Date, the Rights will be evidenced solely by such Rights
Certificates.
(b) With respect to certificates for the Common Stock
outstanding as of the Record Date, until the Distribution Date, the
Rights will be evidenced by such certificates for the Common Stock and
the registered holders of the Common Stock shall also be the
registered holders of the associated Rights. Until the earlier of the
Distribution Date or the Expiration Date (as such term is defined in
Section 7 hereof), the transfer of any certificates representing
shares of Common Stock in respect of which Rights have been issued
shall also constitute the transfer of the Rights associated with such
shares of Common Stock.
(c) Rights shall be issued in respect of all shares of
Common Stock which are issued (whether originally issued or from the
Company's treasury) after the Record Date but prior to the earlier of
the Distribution Date or the Expiration Date or in certain
circumstances provided in Section 22 hereof, after the Distribution
Date. Certificates representing such shares of Common Stock shall also
be deemed to be certificates for Rights, and shall bear a legend
reading substantially as follows:
This certificate also evidences and entitles the
holder hereof to certain Rights as set forth in the Rights
Agreement between ASA International Ltd. (the "Company") and
American Securities Transfer & Trust, Inc. (the "Rights
Agent"), dated as of October 21, 1998, as amended from time to
time (the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on
file at the principal office of the Company. Under certain
circumstances, as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and will no
longer be evidenced by this certificate. The Company or the
Rights Agent will mail to the holder of this certificate a
copy of the Rights Agreement, as in effect on the date of
mailing, without charge promptly after receipt of a written
request therefor. Under certain circumstances set forth in the
Rights Agreement, Rights issued to, or held by, any Person who
is, was or becomes an Acquiring Person, an Adverse Person or
any Affiliate or Associate thereof (as such terms are defined
in the Rights Agreement), whether currently held by or on
behalf of such Person or by any subsequent holder, may become
null and void.
With respect to such certificates containing the foregoing legend,
until the earlier of (i) the Distribution Date or (ii) the Expiration
Date, the Rights associated with the Common Stock represented by such
certificates shall be evidenced by such certificates alone and
registered holders of Common Stock shall also be the registered holders
of the associated Rights, and the transfer of any of such certificates
shall also constitute the transfer of the Rights associated with the
Common Stock represented by such certificates.
Section 4. FORM OF RIGHTS CERTIFICATES.
(a) The Rights Certificates (and the forms of election to
purchase and of assignment to be printed on the reverse thereof) shall
each be substantially in the form set forth in EXHIBIT B hereto and
may have such marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable law or
with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which the Rights may from time to
time be listed, or to conform to usage. Subject to the provisions of
Section 11 and Section 22 hereof, the Rights Certificates, whenever
distributed, shall be dated as of the Record Date and on their face
shall entitle the holders thereof to purchase such number of one
one-hundredths (1/100ths) of a share of Preferred Stock as shall be
set forth therein at the price set forth therein (such exercise price
per one one-hundredth (1/100th) of a share, the "Purchase Price"), but
the amount and type of securities purchasable upon the exercise of
each Right and the Purchase Price thereof shall be subject to
adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a)
or Section 22 hereof that represents Rights beneficially owned by: (i)
an Acquiring Person or Adverse Person or any Associate or Affiliate of
an Acquiring Person or Adverse Person, (ii) a transferee of an
Acquiring Person or Adverse Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person or
Adverse Person becomes such, or (iii) a transferee of an Acquiring
Person or Adverse Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring
Person or Adverse Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration)
from the Acquiring Person or Adverse Person to holders of equity
interests in such Acquiring Person or Adverse Person or to any Person
with whom such Acquiring Person or Adverse Person has any continuing
agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board of Directors of the Company
has determined is part of a plan, arrangement or understanding which
has as a primary purpose or effect avoidance of Section 7(e) hereof,
and any Rights Certificate issued pursuant to Section 6 or Section 11
hereof upon transfer, exchange, replacement or adjustment of any other
Rights Certificate referred to in this sentence, shall contain (to the
extent feasible) the following legend:
The Rights represented by this Rights Certificate are
or were beneficially owned by a Person who was or became an
Acquiring Person or Adverse Person or an Affiliate or
Associate of an Acquiring Person or Adverse Person (as such
terms are defined in the Rights Agreement). Accordingly, this
Rights Certificate and the Rights represented hereby may
become null and void in the circumstances specified in Section
7(e) of such Agreement.
Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Rights Certificates shall be executed on behalf of
the Company by its Chairman of the Board, its President or any Vice
President, either manually or by facsimile signature, and shall have
affixed thereto the Company's seal or a facsimile thereof which shall
be attested by the Secretary or an Assistant Secretary of the Company,
either manually or by facsimile signature. The Rights Certificates
shall be countersigned by the Rights Agent, either manually or by
facsimile signature, and shall not be valid for any purpose unless so
countersigned. In case any officer of the Company who shall have
signed any of the Rights Certificates shall cease to be such officer
of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Rights Certificates,
nevertheless, may be countersigned by the Rights Agent and issued and
delivered by the Company with the same force and effect as though the
person who signed such Rights Certificates had not ceased to be such
officer of the Company; and any Rights Certificates may be signed on
behalf of the Company by any person who, at the actual date of the
execution of such Rights Certificate, shall be a proper officer of the
Company to sign such Rights Certificate, although at the date of the
execution of this Rights Agreement any such person was not such an
officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its principal office or offices
designated as the appropriate place for surrender of Rights
Certificates upon exercise or transfer, books for registration and
transfer of the Rights Certificates issued hereunder. Such books shall
show the names and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced on its face by each of
the Rights Certificates and the date of each of the Rights
Certificates.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS
CERTIFICATES.
(a) Subject to the provisions of Section 4(b), Section 7(e)
and Section 14 hereof, at any time after the close of business on the
Distribution Date, and at or prior to the close of business on the
Expiration Date, any Rights Certificate or Certificates (other than
Rights Certificates representing Rights that have been exchanged
pursuant to Section 24 hereof) may be transferred, split up, combined
or exchanged for another Rights Certificate or Certificates, entitling
the registered holder to purchase a like number of one one-hundredths
(1/100ths) of a share of Preferred Stock (or, following a Triggering
Event, Common Stock, other securities, cash or other assets, as the
case may be) as the Rights Certificate or Certificates surrendered
then entitled such holder (or former holder in the case of a transfer)
to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Rights Certificate or Certificates shall make
such request in writing delivered to the Rights Agent, and shall
surrender the Rights Certificate or Certificates to be transferred,
split up, combined or exchanged at the principal office or offices of
the Rights Agent designated for such purpose. Neither the Rights Agent
nor the Company shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Rights Certificate
until the registered holder shall have completed and signed the
certificate contained in the form of assignment on the reverse side of
such Rights Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial
Owner) or Affiliates or Associates thereof as the Company shall
reasonably request. Thereupon the Rights Agent shall, subject to
Section 4(b), Section 7(e), Section 14 and Section 24 hereof,
countersign and deliver to the Person entitled thereto a Rights
Certificate or Rights Certificates, as the case may be, as so
requested. The Company may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection
with any transfer, split up, combination or exchange of Rights
Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Rights Certificate, and, in case of
loss, theft or destruction, of indemnity or security reasonably
satisfactory to them, and reimbursement to the Company and the Rights
Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Rights
Certificate if mutilated, the Company will execute and deliver a new
Rights Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of the
Rights Certificate so lost, stolen, destroyed or mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS.
(a) Subject to Section 7(e) hereof, the registered holder of
any Rights Certificate may exercise the Rights evidenced thereby
(except as otherwise provided herein including, without limitation,
the restrictions on exercisability set forth in Section 9(c), Section
11(a)(iii) and Section 23(a) hereof) in whole or in part at any time
after the Distribution Date upon surrender of the Rights Certificate,
with the form of election to purchase and the certificate on the
reverse side thereof duly executed, to the Rights Agent at the
principal office or offices of the Rights Agent designated for such
purpose, together with payment of the aggregate Purchase Price with
respect to the total number of one one-hundredths (1/100ths) of a
share (or other securities, cash or other assets, as the case may be)
as to which such surrendered Rights are then exercisable, at or prior
to the earliest of (i) the close of business on October 20, 2008 (the
"Final Expiration Date"), (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof or (iii) the time at which
such Rights are exchanged pursuant to Section 24 hereof (the earliest
of (i), (ii) and (iii) being herein referred to as the "Expiration
Date").
(b) The Purchase Price for each one one-hundredth (1/100th)
of a share of Preferred Stock pursuant to the exercise of a Right
shall initially be $10.00, and shall be subject to adjustment from
time to time as provided in Sections 11 and 13(a) hereof and shall be
payable in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the
certificate duly executed, accompanied by payment, with respect to
each Right so exercised, of the Purchase Price per one one-hundredth
(1/100th) of a share of Preferred Stock (or other shares, securities,
cash or other assets, as the case may be) to be purchased as set forth
below and an amount equal to any applicable transfer tax, the Rights
Agent shall, subject to Section 20(k) hereof, thereupon promptly (i)
(A) requisition from any transfer agent of the shares of Preferred
Stock (or make available, if the Rights Agent is the transfer agent
for such shares) certificates for the total number of one
one-hundredths (1/100ths) of a share of Preferred Stock to be
purchased and the Company hereby irrevocably authorizes its transfer
agent to comply with all such requests, or (B) if the Company shall
have elected to deposit the total number of shares of Preferred Stock
issuable upon exercise of the Rights hereunder with a depositary
agent, requisition from the depositary agent depositary receipts
representing such number of one one-hundredths (1/100ths) of a share
of Preferred Stock as are to be purchased (in which case certificates
for the shares of Preferred Stock represented by such receipts shall
be deposited by the transfer agent with the depositary agent) and the
Company will direct the depositary agent to comply with such request,
(ii) requisition from the Company the amount of cash, if any, to be
paid in lieu of fractional shares in accordance with Section 14
hereof, (iii) after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the
registered holder of such Rights Certificate, registered in such name
or names as may be designated by such holder, and (iv) after receipt
thereof, deliver such cash, if any, to or upon the order of the
registered holder of such Rights Certificate. The payment of the
Purchase Price (as such amount may be reduced pursuant to Section
11(a)(iii) hereof) shall be made in cash or by certified bank check or
bank draft payable to the order of the Company. In the event that the
Company is obligated to issue other securities (including Common
Stock) of the Company, pay cash and/or distribute other property
pursuant to Section 11(a) hereof, the Company will make all
arrangements necessary so that such other securities, cash and/or
other property are available for distribution by the Rights Agent, if
and when appropriate. The Company reserves the right to require prior
to the occurrence of a Triggering Event that, upon any exercise of
Rights, a number of Rights be exercised so that only whole shares of
Preferred Stock would be issued.
(d) In case the registered holder of any Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new
Rights Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent and
delivered to, or upon the order of, the registered holder of such
Rights Certificate, registered in such name or names as may be
designated by such holder, subject to the provisions of Section 14
hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section 11(a)(ii)
Event, any Rights beneficially owned by (i) an Acquiring Person or
Adverse Person or an Associate or Affiliate of an Acquiring Person or
Adverse Person, (ii) a transferee of an Acquiring Person or Adverse
Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person or Adverse Person becomes such,
or (iii) a transferee of an Acquiring Person or Adverse Person (or of
any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person or Adverse Person becoming such
and receives such Rights pursuant to either (A) a transfer (whether or
not for consideration) from the Acquiring Person or Adverse Person to
holders of equity interests in such Acquiring Person or Adverse Person
or to any Person with whom the Acquiring Person or Adverse Person has
any continuing agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer which the Board of Directors of
the Company has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect the avoidance
of this Section 7(e), shall become null and void without any further
action and no holder of such Rights shall have any rights whatsoever
with respect to such Rights, whether under any provision of this
Agreement or otherwise. The Company shall use all reasonable efforts
to insure that the provisions of this Section 7(e) and Section 4(b)
hereof are complied with, but shall have no liability to any holder of
Rights Certificates or other Person as a result of its failure to make
any determinations with respect to an Acquiring Person or Adverse
Person or any of their respective Affiliates, Associates or
transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated
to undertake any action with respect to a registered holder upon the
occurrence of any purported exercise as set forth in this Section 7
unless such registered holder shall have (i) completed and signed the
certificate contained in the form of election to purchase set forth on
the reverse side of the Rights Certificate surrendered for such
exercise, and (ii) provided such additional evidence of the identity
of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES. All
Rights Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
cancelled Rights Certificates to the Company, or shall, at the written request
of the Company, destroy such cancelled Rights Certificates, and in such case
shall deliver a certificate of destruction thereof to the Company.
Section 9. RESERVATION AND AVAILABILITY OF CAPITAL Stock.
(a) The Company covenants and agrees that it will cause to
be reserved and kept available out of its authorized and unissued
shares of Preferred Stock (and, following the occurrence of a
Triggering Event, out of its authorized and unissued shares of Common
Stock and/or other securities or out of its authorized and issued
shares held in its treasury), the number of shares of Preferred Stock
(and, following the occurrence of a Triggering Event, Common Stock
and/or other securities) that, as provided in this Agreement including
Section 11(a)(iii) hereof, will be sufficient to permit the exercise
in full of all outstanding Rights.
(b) So long as the shares of Preferred Stock (and, following
the occurrence of a Triggering Event, Common Stock and/or other
securities) issuable and deliverable upon the exercise of the Rights
may be listed on any national securities exchange, the Company shall
use its best efforts to cause, from and after such time as the Rights
become exercisable, all shares reserved for such issuance to be listed
on such exchange upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as
soon as practicable following the earliest date after the first
occurrence of a Section 11(a)(ii) Event on which the consideration to
be delivered by the Company upon exercise of the Rights has been
determined in accordance with Section 11(a)(iii) hereof, a
registration statement under the Securities Act of 1933 (the "Act"),
with respect to the securities purchasable upon exercise of the Rights
on an appropriate form, (ii) cause such registration statement to
become effective as soon as practicable after such filing, and (iii)
cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Act) until the
earlier of (A) the date as of which the Rights are no longer
exercisable for such securities, and (B) the date of the expiration of
the Rights. The Company will also take such action as may be
appropriate under, or to ensure compliance with, the securities or
"blue sky" laws of the various states in connection with the
exercisability of the Rights. The Company may temporarily suspend, for
a period of time not to exceed ninety (90) days after the date set
forth in clause (i) of the first sentence of this Section 9(c), the
exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. Upon any
such suspension, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily suspended,
as well as a public announcement at such time as the suspension is no
longer in effect. In addition, if the Company shall determine that a
registration statement is required following the Distribution Date,
the Company may temporarily suspend the exercisability of the Rights
until such time as a registration statement has been declared
effective. Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction if
the requisite qualification in such jurisdiction shall not have been
obtained, the exercise thereof shall not be permitted under applicable
law or a registration statement shall not have been declared
effective.
(d) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all one one-hundredths
(1/100ths) of a share of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other
securities) delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such shares (subject to payment of
the Purchase Price), be duly and validly authorized and issued and
fully paid and nonassessable.
(e) The Company further covenants and agrees that it will
pay when due and payable any and all federal and state transfer taxes
and charges which may be payable in respect of the issuance or
delivery of the Rights Certificates and of any certificates for a
number of one one-hundredths (1/100ths) of a share of Preferred Stock
(or Common Stock and/or other securities, as the case may be) upon the
exercise of Rights. The Company shall not, however, be required to pay
any transfer tax which may be payable in respect of any transfer or
delivery of Rights Certificates to a Person other than, or the
issuance or delivery of a number of one one-hundredths (1/100ths) of a
share of Preferred Stock (or Common Stock and/or other securities, as
the case may be) in respect of a name other than that of, the
registered holder of the Rights Certificates evidencing Rights
surrendered for exercise or to issue or deliver any certificates for a
number of one one-hundredths (1/100ths) of a share of Preferred Stock
(or Common Stock and/or other securities, as the case may be) in a
name other than that of the registered holder upon the exercise of any
Rights until such tax shall have been paid (any such tax being payable
by the holder of such Rights Certificate at the time of surrender) or
until it has been established to the Company's satisfaction that no
such tax is due.
Section 10. PREFERRED STOCK RECORD DATE. Each person in whose name any
certificate for a number of one one-hundredths (1/100ths) of a share of
Preferred Stock (or Common Stock and/or other securities, as the case may be) is
issued upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of such fractional shares of Preferred Stock (or
Common Stock and/or other securities, as the case may be) represented thereby
on, and such certificate shall be dated, the date upon which the Rights
Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and all applicable transfer taxes) was made; PROVIDED, HOWEVER,
that if the date of such surrender and payment is a date upon which the
Preferred Stock (or Common Stock and/or other securities, as the case may be)
transfer books of the Company are closed, such Person shall be deemed to have
become the record holder of such shares (fractional or otherwise) on, and such
certificate shall be dated, the next succeeding Business Day on which the
Preferred Stock (or Common Stock and/or other securities, as the case may be)
transfer books of the Company are open. Prior to the exercise of the Rights
evidenced thereby, the holder of a Rights Certificate shall not be entitled to
any rights of a stockholder of the Company with respect to shares for which the
Rights shall be exercisable, including, without limitation, the right to vote,
to receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES OR
NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred Stock
payable in shares of Preferred Stock, (B) subdivide the outstanding
Preferred Stock, (C) combine the outstanding Preferred Stock into a
smaller number of shares, or (D) issue any shares of its capital stock
in a reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), except as
otherwise provided in this Section 11(a) and Section 7(e) hereof, the
Purchase Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of Preferred Stock
or capital stock, as the case may be, issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised
after such time shall be entitled to receive, upon payment of the
Purchase Price then in effect, the aggregate number and kind of shares
of Preferred Stock or capital stock, as the case may be, which, if
such Right had been exercised immediately prior to such date and at a
time when the Preferred Stock transfer books of the Company were open,
he or she would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs which would require an adjustment
under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the
adjustment provided for in this Section 11(a)(i) shall be in addition
to, and shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii) hereof.
(ii) In the event that:
(A) any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan
of the Company or of any Subsidiary of the Company,
or any Person or entity organized, appointed or
established by the Company for or pursuant to the
terms of any such plan), alone or together with its
Affiliates and Associates, shall, at any time after
the Rights Dividend Declaration Date, become an
Acquiring Person, unless the event causing the Person
to become an Acquiring Person is (1) a transaction
set forth in Section 13(a) hereof or (2) an
acquisition of shares of Common Stock pursuant to a
tender offer or an exchange offer for all outstanding
shares of Common Stock at a price and on terms
determined by at least a majority of the members of
the Board of Directors who are not officers of the
Company and who are not representatives, nominees,
Affiliates or Associates of an Acquiring Person,
after receiving advice from one or more investment
banking firms, to be (a) at a price which is fair to
stockholders (taking into account all factors which
such members of the Board deem relevant including,
without limitation, prices which could reasonably be
achieved if the Company or its assets were sold on an
orderly basis designed to realize maximum value) and
(b) otherwise in the best interests of the Company
and its stockholders (a "Qualifying Offer"), or
(B) the Board of Directors of the Company
shall declare any Person to be an Adverse Person,
upon a determination that such Person, alone or
together with its Affiliates and Associates, has, at
any time after this Agreement has been filed with the
Securities and Exchange Commission as an exhibit to a
filing under the Exchange Act, become the Beneficial
Owner of a number of shares of Common Stock which the
Board of Directors of the Company determines to be
substantial (which number of shares shall in no event
represent less than 10% of the outstanding shares of
Common Stock) and a determination by the Board of
Directors of the Company, after reasonable inquiry
and investigation, including consultation with such
Persons as such directors shall deem appropriate and
consideration of such factors as are permitted by
applicable law, that (a) such Beneficial Ownership by
such Person is intended to cause the Company to
repurchase the shares of Common Stock beneficially
owned by such Person or to cause pressure on the
Company to take action or enter into a transaction or
series of transactions intended to provide such
Person with short-term financial gain under
circumstances where the Board of Directors determines
that the best long-term interests of the Company
would not be served by taking such action or entering
into such transaction or series of transactions at
the time or (b) such Beneficial Ownership is causing
or reasonably likely to cause a material adverse
impact (including, but not limited to, impairment of
relationships with customers or impairment of the
Company's ability to maintain its competitive
position) on the business or prospects of the
Company;
then, promptly following the occurrence of any event described
in Section 11(a)(ii)(A) or (B) hereof, proper provision shall
be made so that each holder of a Right (except as provided
below and in Section 7(e) hereof) shall thereafter have the
right to receive, upon exercise thereof at the then current
Purchase Price in accordance with the terms of this Agreement,
in lieu of a number of one one-hundredths (1/100ths) of a
share of Preferred Stock, such number of shares of Common
Stock of the Company as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the then number
of one one-hundredths (1/100ths) of a share of Preferred Stock
for which a Right was exercisable immediately prior to the
first occurrence of a Section 11(a)(ii) Event, and (y)
dividing that product (which, following such first occurrence,
shall thereafter be referred to as the "Purchase Price" for
each Right and for all purposes of this Agreement) by 50% of
the Current Market Price (determined pursuant to Section 11(d)
hereof) per share of Common Stock on the date of such first
occurrence (such number of shares, the "Adjustment Shares").
(iii) In the event that the number of shares of
Common Stock which are authorized by the Company's Certificate
of Incorporation but not outstanding or reserved for issuance
for purposes other than upon exercise of the Rights are not
sufficient to permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii) of this
Section 11(a), the Company shall (A) determine the value of
the Adjustment Shares issuable upon the exercise of a Right
(the "Current Value"), and (B) with respect to each Right
(subject to Section 7(e) hereof), make adequate provision to
substitute for the Adjustment Shares, upon the exercise of a
Right and payment of the applicable Purchase Price, (1) cash,
(2) a reduction in the Purchase Price, (3) Common Stock or
other equity securities of the Company (including, without
limitation, shares, or units of shares, of preferred stock,
such as the Preferred Stock, which the Board has deemed to
have essentially the same value or economic rights as shares
of Common Stock (such shares of preferred stock being referred
to as "Common Stock Equivalents")), (4) debt securities of the
Company, (5) other assets, or (6) any combination of the
foregoing, having an aggregate value equal to the Current
Value (less the amount of any reduction in the Purchase
Price), where such aggregate value has been determined by the
Board based upon the advice of a nationally recognized
investment banking firm selected by the Board; PROVIDED,
HOWEVER, that if the Company shall not have made adequate
provision to deliver value pursuant to clause (B) above within
thirty (30) days following the later of (x) the first
occurrence of a Section 11(a)(ii) Event and (y) the date on
which the Company's right of redemption pursuant to Section
23(a) expires (the later of (x) and (y) being referred to
herein as the "Section 11(a)(ii) Trigger Date"), then the
Company shall be obligated to deliver, upon the surrender for
exercise of a Right and without requiring payment of the
Purchase Price, shares of Common Stock (to the extent
available) and then, if necessary, cash, which shares and/or
cash have an aggregate value equal to the Spread. For purposes
of the preceding sentence, the term "Spread" shall mean the
excess of (i) the Current Value over (ii) the Purchase Price.
If the Board determines in good faith that it is likely that
sufficient additional shares of Common Stock could be
authorized for issuance upon exercise in full of the Rights,
the thirty (30) day period set forth above may
be extended to the extent necessary, but not more than ninety
(90) days after the Section 11(a)(ii) Trigger Date, in order
that the Company may seek shareholder approval for the
authorization of such additional shares (such thirty (30) day
period, as it may be extended, is herein called the
"Substitution Period"). To the extent that action is to be
taken pursuant to the first and/or third sentences of this
Section 11(a) (iii), the Company (1) shall provide, subject to
Section 7(e) hereof, that such action shall apply uniformly to
all outstanding Rights, and (2) may suspend the exercisability
of the Rights until the expiration of the Substitution Period
in order to seek such shareholder approval for such
authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such
first sentence and to determine the value thereof. In the
event of any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has
been temporarily suspended, as well as a public announcement
at such time as the suspension is no longer in effect. For
purposes of this Section 11(a)(iii), the value of each
Adjustment Share shall be the Current Market Price per share
of the Common Stock on the Section 11(a)(ii) Trigger Date and
the per share or per unit value of any Common Stock Equivalent
shall be deemed to equal the Current Market Price per share of
the Common Stock on such date.
(b) In case the Company shall fix a record date for the
issuance of rights (other than the Rights), options or warrants to all
holders of Preferred Stock entitling them to subscribe for or purchase
(for a period expiring within forty-five (45) calendar days after such
record date) Preferred Stock (or shares having the same rights,
privileges and preferences as the shares of Preferred Stock
("Equivalent Preferred Stock")) or securities convertible into
Preferred Stock or Equivalent Preferred Stock at a price per share of
Preferred Stock or per share of Equivalent Preferred Stock (or having
a conversion price per share, if a security convertible into Preferred
Stock or Equivalent Preferred Stock) less than the Current Market
Price (as determined pursuant to Section 11(d) hereof) per share of
Preferred Stock on such record date, the Purchase Price to be in
effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the number of shares of
Preferred Stock outstanding on such record date, plus the number of
shares of Preferred Stock which the aggregate offering price of the
total number of shares of Preferred Stock and/or Equivalent Preferred
Stock so to be offered (and/or the aggregate initial conversion price
of the convertible securities so to be offered) would purchase at such
Current Market Price, and the denominator of which shall be the number
of shares of Preferred Stock outstanding on such record date, plus the
number of additional shares of Preferred Stock and/or Equivalent
Preferred Stock to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially
convertible). In case such subscription price may be paid by delivery
of consideration part or all of which may be in a form other than
cash, the value of such consideration shall be as determined in good
faith by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and the holders of the Rights.
Shares of Preferred Stock owned by or held for the account of the
Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such
a record date is fixed, and in the event that such rights or warrants
are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date had
not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Preferred Stock (including any such
distribution made in connection with a consolidation or merger in
which the Company is the continuing corporation) of evidences of
indebtedness, cash (other than a regular quarterly cash dividend out
of the earnings or retained earnings of the Company), assets (other
than a dividend payable in Preferred Stock, but including any dividend
payable in stock other than Preferred Stock) or subscription rights or
warrants (excluding those referred to in Section 11(b) hereof), the
Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall
be the Current Market Price (as determined pursuant to Section 11(d)
hereof) per share of Preferred Stock on such record date, less the
fair market value (as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the
Rights Agent and the holders of the Rights) of the portion of the
cash, assets or evidences of indebtedness so to be distributed or of
such subscription rights or warrants applicable to a share of
Preferred Stock and the denominator of which shall be such Current
Market Price (as determined pursuant to Section 11(d) hereof) per
share of Preferred Stock. Such adjustments shall be made successively
whenever such a record date is fixed, and in the event that such
distribution is not so made, the Purchase Price shall be adjusted to
be the Purchase Price which would have been in effect if such record
date had not been fixed.
(d) (i) For the purpose of any computation hereunder, other
than computations made pursuant to Section 11(a)(iii) hereof,
the "Current Market Price" per share of Common Stock on any
date shall be deemed to be the average of the daily closing
prices per share of such Common Stock for the thirty (30)
consecutive Trading Days immediately prior to such date, and
for purposes of computations made pursuant to Section
11(a)(iii) hereof, the Current Market Price
per share of Common Stock on any date shall be deemed to be
the average of the daily closing prices per share of such
Common Stock for the ten (10) consecutive Trading Days
immediately following such date; PROVIDED, HOWEVER, that in
the event that the Current Market Price per share of the
Common Stock is determined during a period following the
announcement by the issuer of such Common Stock of (A) a
dividend or distribution on such Common Stock payable in
shares of such Common Stock or securities convertible into
shares of such Common Stock (other than the Rights), or (B)
any subdivision, combination or reclassification of such
Common Stock, and the ex-dividend date for such dividend or
distribution, or the record date for such subdivision,
combination or reclassification shall not have occurred prior
to the commencement of the requisite thirty (30) Trading Day
or ten (10) Trading Day period, as set forth above, then, and
in each such case, the Current Market Price shall be properly
adjusted to take into account ex-dividend trading. The closing
price for each day shall be the last sale price, regular way,
or, in case no such sale takes place on such day, the average
of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted
to trading on the New York Stock Exchange or, if the shares of
Common Stock are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed
on the principal national securities exchange on which the
shares of Common Stock are listed or admitted to trading or,
if the shares of Common Stock are not listed or admitted to
trading on any national securities exchange, the last quoted
price or, if not so quoted, the average of the high bid and
low asked prices in the over-the-counter market, as reported
by the National Association of Securities Dealers, Inc.
Automated Quotation System ("NASDAQ") or such other system
then in use, or, if on any such date the shares of Common
Stock are not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a
professional market maker making a market in the Common Stock
selected by the Board. If on any such date no market maker is
making a market in the Common Stock, the fair value of such
shares on such date as determined in good faith by the Board
shall be used. The term "Trading Day" shall mean a day on
which the principal national securities exchange on which the
shares of Common Stock are listed or admitted to trading is
open for the transaction of business or, if the shares of
Common Stock are not listed or admitted to trading on any
national securities exchange, a Business Day. If the Common
Stock is not publicly held or not so listed or traded, Current
Market Price per share shall mean the fair value per share as
determined in good faith by the Board, whose determination
shall be described in a statement filed with the Rights Agent
and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder,
the Current Market Price per share of Preferred Stock shall be
determined in the same manner as set forth above for the
Common Stock in clause (i) of this Section 11(d) (other than
the last sentence thereof). If the Current Market Price per
share of Preferred Stock cannot be determined in the manner
provided above or if the Preferred Stock is not publicly held
or listed or traded in a manner described in clause (i) of
this Section 11(d), the Current Market Price per share of
Preferred Stock shall be conclusively deemed to be an amount
equal to 100 (as such number may be appropriately adjusted for
such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock occurring
after the date of this Agreement) multiplied by the Current
Market Price per share of the Common Stock. If neither the
Common Stock nor the Preferred Stock is publicly held or so
listed or traded, Current Market Price per share of the
Preferred Stock shall mean the fair value per share as
determined in good faith by the Board, whose determination
shall be described in a statement filed with the Rights Agent
and shall be conclusive for all purposes.
(e) Anything herein to the contrary not withstanding, no
adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least one
percent (1%) in the Purchase Price; PROVIDED, HOWEVER, that any
adjustments which by reason of this Section 11(e) are not required to
be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall be
made to the nearest cent or to the nearest ten-thousandth of a share
of Common Stock or other share or one-millionth of a share of
Preferred Stock, as the case may be. Notwithstanding the first
sentence of this Section 11(e), any adjustment required by this
Section 11 shall be made no later than the earlier of (i) three (3)
years from the date of the transaction which mandates such adjustment,
or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of capital stock
other than Preferred Stock, thereafter the number of such other shares
so receivable upon exercise of any Right and the Purchase Price
thereof shall be subject to adjustment from time to time in a manner
and on terms as nearly equivalent as practicable to the provisions
with respect to the Preferred Stock contained in Sections 11(a), (b),
(c), (e), (g), (h), (i), (j), (k) and (m), and the provisions of
Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred
Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent
to any adjustment made to the Purchase Price hereunder shall evidence
the right to purchase, at the adjusted Purchase Price, the number of
one one-hundredths (1/100ths) of a share of Preferred Stock
purchasable from time to time hereunder upon exercise of the Rights,
all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price
as a result of the calculations made in Sections 11(b) and (c), each
Right outstanding immediately prior to the making of such adjustment
shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of one one-hundredths (1/100ths) of a
share of Preferred Stock (calculated to the nearest one-millionth)
obtained by (i) multiplying (x) the number of one one-hundredths
(1/100ths) of a share covered by a Right immediately prior to this
adjustment, by (y) the Purchase Price in effect immediately prior to
such adjustment of the Purchase Price, and (ii) dividing the product
so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in
lieu of any adjustment in the number of one one-hundredths (1/100ths)
of a share of Preferred Stock purchasable upon the exercise of a
Right. Each of the Rights outstanding after the adjustment in the
number of Rights shall be exercisable for the number of one
one-hundredths (1/100ths) of a share of Preferred Stock for which a
Right was exercisable immediately prior to such adjustment. Each Right
held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest one
ten-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase
Price in effect immediately after adjustment of the Purchase Price.
The Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be made.
This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Rights Certificates have
been issued, shall be at least ten (10) days later than the date of
the public announcement. If Rights Certificates have been issued, upon
each adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Rights Certificates on such record
date Rights Certificates evidencing, subject to Section 14 hereof, the
additional Rights to which such holders shall be entitled as a result
of such adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and
replacement for the Rights Certificates held by such holders prior to
the date of adjustment, and upon surrender thereof, if required by the
Company, new Rights Certificates evidencing all the Rights to which
such holders shall be entitled after such adjustment. Rights
Certificates so to be distributed shall be issued, executed and
countersigned in the manner provided for herein (and may bear, at the
option of the Company, the adjusted Purchase Price) and shall be
registered in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of one one-hundredths (1/100ths) of a share of
Preferred Stock issuable upon the exercise of the Rights, the Rights
Certificates theretofore and thereafter issued may continue to express
the Purchase Price per one one-hundredths (1/100ths) of a share and
the number of one one-hundredths (1/100ths) of a share which were
expressed in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then stated value, if any, of
the number of one one-hundredths (1/100ths) of a share of Preferred
Stock issuable upon exercise of the Rights, the Company shall take any
corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue
fully paid and nonassessable such number of one one-hundredths
(1/100ths) of a share of Preferred Stock at such adjusted Purchase
Price.
(l) In any case in which this Section 11 shall require that
an adjustment in the Purchase Price be made effective as of a record
date for a specified event, the Company may elect to defer until the
occurrence of such event the issuance to the holder of any Right
exercised after such record date the number of one one-hundredths
(1/100ths) of a share of Preferred Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise over
and above the number of one one-hundredths (1/100ths) of a share of
Preferred Stock and other capital stock or securities of the Company,
if any, issuable upon such exercise on the basis of the Purchase Price
in effect prior to such adjustment; PROVIDED, however, that the
Company shall deliver to such holder a due bill or other appropriate
instrument evidencing such holder's right to receive such additional
shares (fractional or otherwise) or securities upon the occurrence of
the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions
in the Purchase Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that in their good
faith judgment the Board of Directors of the Company shall determine
to be advisable in order that any (i) consolidation or subdivision of
the Preferred Stock, (ii) issuance wholly for cash of any shares of
Preferred Stock at less than the Current Market Price, (iii) issuance
wholly for cash of shares of Preferred Stock or securities which by
their terms are convertible into or exchangeable for shares of
Preferred Stock, (iv) stock dividends or (v) issuance of rights,
options or warrants referred to in this Section 11, hereafter made by
the Company to holders of its Preferred Stock shall not be taxable to
such stockholders.
(n) The Company covenants and agrees that it shall not, at
any time after the Distribution Date, (i) consolidate with any other
Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), (ii) merge with or into any other
Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), or (iii) sell or transfer (or
permit any Subsidiary to sell or transfer), in one transaction, or a
series of related transactions, assets or earning power aggregating
more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other
than the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o) hereof), if (x)
at the time of or immediately after such consolidation, merger or sale
there are any rights, warrants or other instruments or securities
outstanding or agreements in effect which would substantially diminish
or otherwise eliminate the benefits intended to be afforded by the
Rights or (y) prior to, simultaneously with or immediately after such
consolidation, merger or sale, the shareholders of the Person who
constitutes, or would constitute, the "Principal Party" for purposes
of Section 13(a) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates and
Associates.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23 or
Section 27 hereof, take (or permit any Subsidiary to take) any action
if at the time such action is taken it is reasonably foreseeable that
such action will diminish substantially or otherwise eliminate the
benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after
the Rights Dividend Declaration Date and prior to the Distribution
Date (i) declare a dividend on the outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding
shares of Common Stock, or (iii) combine the outstanding shares of
Common Stock into a smaller number of shares, the number of Rights
associated with each share of Common Stock then outstanding, or issued
or delivered thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter
associated with each share of Common Stock following any such event
shall equal the result obtained by multiplying the number of Rights
associated with each share of Common Stock immediately prior to such
event by a fraction the numerator of which shall be the total number
of shares of Common Stock outstanding immediately prior to the
occurrence of the event and the denominator of which shall be the
total number of shares of Common Stock outstanding immediately
following the occurrence of such event.
(q) The failure of the Board of Directors to declare a
Person to be an Adverse Person following such Person becoming the
Beneficial Owner of shares of Common Stock representing 10% or more of
the outstanding shares of Common Stock shall not imply that such
Person is not an Adverse Person or limit the Board of Directors' right
at any time in the future to declare such Person to be an Adverse
Person.
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Section 11 and Section 13 hereof,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent, and with each transfer agent for the
Preferred Stock and the Common Stock, a copy of such certificate, and (c) mail a
brief summary thereof to each holder of a Rights Certificate (or, if prior to
the Distribution Date, to each holder of a certificate representing shares of
Common Stock) in accordance with Section 26 hereof. The Rights Agent shall be
fully protected in relying on any such certificate and on any adjustment therein
contained.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER
(a) In the event that, following the Stock Acquisition Date,
directly or indirectly, (x) the Company shall consolidate with, or
merge with and into, any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o) hereof),
and the Company shall not be the continuing or surviving corporation
of such consolidation or merger, (y) any Person (other than a
Subsidiary of the Company in a transaction which complies with Section
11(o) hereof) shall consolidate with, or merge with or into, the
Company, and the Company shall be the continuing or surviving
corporation of such consolidation or merger and, in connection with
such consolidation or merger, all or part of the outstanding shares of
Common Stock shall be changed into or exchanged for stock or other
securities of any other Person or cash or any other property, or (z)
the Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one transaction or
a series of related transactions, assets or earning power aggregating
more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or Persons (other than
the Company or any Subsidiary of the Company in one or more
transactions each of which complies with Section 11(o) hereof), then,
and in each such case (except as may be contemplated by Section 13(d)
hereof), proper provision shall be made so that: (i) each holder of a
Right, except as provided in Section 7(e) hereof, shall thereafter
have the right to receive, upon the exercise thereof at the then
current Purchase Price in accordance with the terms of this Agreement,
such number of validly authorized and issued, fully paid,
non-assessable and freely tradable shares of Common Stock of the
Principal Party (as such term is hereinafter defined), not subject to
any liens, encumbrances, rights of first refusal or other adverse
claims, as shall be equal to the result obtained by (1) multiplying
the then current Purchase Price by the number of one one-hundredths
(1/100ths) of a share of Preferred Stock for which a Right is
exercisable immediately prior to the first occurrence of a Section 13
Event (or, if a Section 11(a)(ii) Event has occurred prior to the
first occurrence of a Section 13 Event, multiplying the number of such
one one-hundredths (1/100ths) of a share for which a Right was
exercisable immediately prior to the first occurrence of a Section
11(a)(ii) Event by the Purchase Price in effect immediately prior to
such first occurrence), and dividing that product (which, following
the first occurrence of a Section 13 Event, shall be referred to as
the "Purchase Price" for each Right and for all purposes of this
Agreement) by (2) 50% of the Current Market Price (determined pursuant
to Section 11(d)(i) hereof) per share of the Common Stock of such
Principal Party on the date of consummation of such Section 13 Event;
(ii) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such Section 13 Event, all the obligations and
duties of the Company pursuant to this Agreement; (iii) the term
"Company" shall thereafter be deemed to refer to such Principal Party,
it being specifically intended that the provisions of Section 11
hereof shall apply only to such Principal Party following the first
occurrence of a Section 13 Event; (iv) such Principal Party shall take
such steps (including, but not limited to, the reservation of a
sufficient number of shares of its Common Stock) in connection with
the consummation of any such transaction as may be necessary to assure
that the provisions hereof shall thereafter be applicable, as nearly
as reasonably may be, in relation to its shares of Common Stock
thereafter deliverable upon the exercise of the Rights; and (v) the
provisions of Section 11(a)(ii) hereof shall be of no effect following
the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in
clause (x) or (y) of the first sentence of Section 13(a), the
Person that is the issuer of any securities into which shares
of Common Stock of the Company are converted in such merger or
consolidation, and if no securities are so issued, the Person
that is the other party to such merger or consolidation; and
(ii) in the case of any transaction described in
clause (z) of the first sentence of Section 13(a), the Person
that is the party receiving the greatest portion of the assets
or earning power transferred pursuant to such transaction or
transactions;
PROVIDED, HOWEVER, that in any such case, (1) if the Common Stock of
such Person is not at such time and has not been continuously over the
preceding twelve (12) month period registered under Section 12 of the
Exchange Act, and such Person is a direct or indirect Subsidiary of
another Person the Common Stock of which is and has been so registered,
"Principal Party" shall refer to such other Person; and (2) in case
such Person is a Subsidiary, directly or indirectly, of more than one
Person, the Common Stocks of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such Persons
is the issuer of the Common Stock having the greatest aggregate market
value.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless the Principal Party shall have a
sufficient number of authorized shares of its Common Stock which have
not been issued or reserved for issuance to permit the exercise in
full of the Rights in accordance with this Section 13 and unless prior
thereto the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing for
the terms set forth in paragraphs (a) and (b) of this Section 13 and
further providing that, as soon as practicable after the date of any
consolidation, merger or sale of assets mentioned in paragraph (a) of
this Section 13, the Principal Party will:
(i) prepare and file a registration statement under
the Act, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate
form, and will use its best efforts to cause such registration
statement to (A) become effective as soon as practicable after
such filing and (B) remain effective (with a prospectus at all
times meeting the requirements of the Act) until the
Expiration Date; and
(ii) will deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates which comply in all respects with the requirements
for registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. In the event
that a Section 13 Event shall occur at any time after the occurrence of
a Section 11(a)(ii) Event, the Rights which have not theretofore been
exercised shall thereafter become exercisable in the manner described
in Section 13(a).
(d) Notwithstanding anything in this Agreement to the
contrary, Section 13 shall not be applicable to a transaction
described in subparagraphs (x) and (y) of Section 13(a) if (i) such
transaction is consummated with a Person or Persons who acquired
shares of Common Stock pursuant to a Qualifying Offer (or a wholly
owned subsidiary of any such Person or Persons), (ii) the price per
share of Common Stock offered in such transaction is not less than the
price per share of Common Stock paid to all holders of shares of
Common Stock whose shares were purchased pursuant to such Qualifying
Offer and (iii) the form of consideration being offered to the
remaining holders of shares of Common Stock pursuant to such
transaction is the same as the form of consideration paid pursuant to
such Qualifying Offer. Upon consummation of any such transaction
contemplated by this Section 13(d), all Rights hereunder shall expire.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of
Rights, except prior to the Distribution Date as provided in Section
11(p) hereof, or to distribute Rights Certificates which evidence
fractional Rights. In lieu of such fractional Rights, there shall be
paid to the registered holders of the Rights Certificates with regard
to which such fractional Rights would otherwise be issuable, an amount
in cash equal to the same fraction of the current market value of a
whole Right. For purposes of this Section 14(a), the current market
value of a whole Right shall be the closing price of the Rights for
the Trading Day immediately prior to the date on which such fractional
Rights would have been otherwise issuable. The closing price of the
Rights for any day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing
bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock
Exchange or, if the Rights are not listed or admitted to trading on
the New York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the
principal national securities exchange on which the Rights are listed
or admitted to trading, or if the Rights are not listed or admitted to
trading on any national securities exchange, the last quoted price or,
if not so quoted, the average of the high bid and low asked prices in
the over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not quoted
by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in
the Rights selected by the Board of Directors of the Company. If on
any such date no such market maker is making a market in the Rights
the fair value of the Rights on such date as determined in good faith
by the Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than fractions which are integral
multiples of one one-hundredth (1/100th) of a share of Preferred
Stock) upon exercise of the Rights or to distribute certificates which
evidence fractional shares of Preferred Stock (other than fractions
which are integral multiples of one one-hundredth (1/100th) of a share
of Preferred Stock). In lieu of fractional shares of Preferred Stock
that are not integral multiples of one one-hundredth (1/100th) of a
share of Preferred Stock, the Company may pay to the registered
holders of Rights Certificates at the time such Rights are exercised
as herein provided an amount in cash equal to the same fraction of the
current market value of one one-hundredth (1/100th) of a share of
Preferred Stock. For purposes of this Section 14(b), the current
market value of one one-hundredth (1/100th) of a share of Preferred
Stock shall be one one-hundredth (1/100th) of the closing price of a
share of Preferred Stock (as determined pursuant to Section 11(d)(ii)
hereof) for the Trading Day immediately prior to the date of such
exercise.
(c) Following the occurrence of a Triggering Event, the
Company shall not be required to issue fractions of shares of Common
Stock upon exercise of the Rights or to distribute certificates which
evidence fractional shares of Common Stock. In lieu of fractional
shares of Common Stock, the Company may pay to the registered holders
of Rights Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the current
market value of one (1) share of Common Stock. For purposes of this
Section 14(c), the current market value of one share of Common Stock
shall be the closing price of one share of Common Stock (as determined
pursuant to Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the Rights
expressly waives his or her right to receive any fractional Rights or
any fractional shares upon exercise of a Right, except as permitted by
this Section 14.
Section 15. RIGHTS OF ACTION. All rights of action in respect of this
Agreement are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Rights Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his or her own behalf and for
his or her 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 or her right to exercise the Rights evidenced by such Rights Certificate in
the manner provided in such Rights Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and shall be entitled to specific
performance of the obligations hereunder and injunctive relief against actual or
threatened violations of the obligations hereunder of any Person subject to this
Agreement.
Section 16. AGREEMENT OF RIGHTS HOLDERS. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the principal office or offices of the Rights Agent
designated for such purposes, duly endorsed or accompanied by a proper
instrument of transfer and with the appropriate forms and certificates
fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the
Company and the Rights Agent may deem and treat the person in whose
name a Rights Certificate (or, prior to the Distribution Date, the
associated Common Stock certificate) is registered as the absolute
owner thereof and of the Rights evidenced thereby (not withstanding
any notations of ownership or writing on the Rights Certificates or
the associated Common Stock certificate made by anyone other than the
Company or the Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent, subject to the last sentence of
Section 7(e) hereof, shall be required to be affected by any notice to
the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any
liability to any holder of a Right or other Person as a result of its
inability to perform any of its obligations under this Agreement by
reason of any preliminary or permanent injunction or other order,
decree or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, or
any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise
restraining performance of such obligation; PROVIDED, HOWEVER, the
Company must use its best efforts to have any such order, decree or
ruling lifted or otherwise overturned as soon as possible.
Section 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of one
one-hundredths (1/100ths) of a share of Preferred Stock or any other securities
of the Company which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights Certificate, as
such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in Section 25 hereof), or to receive dividends or subscription rights,
or otherwise, until the Right or Rights evidenced by such Rights Certificate
shall have been exercised in accordance with the provisions hereof.
Section 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time
to time, on demand of the Rights Agent, its reasonable expenses and
counsel fees and disbursements and other disbursements incurred in the
administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to
indemnify the Rights Agent for, and to hold it harmless against, any
loss, liability, or expense, incurred without negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done
or omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of
defending against any claim of liability in the premises.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted
by it in connection with its administration of this Agreement in
reliance upon any Rights Certificate or certificate for Common Stock
or for other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights Agent
shall be a party, or any corporation succeeding to the corporate trust
or shareholder services business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further
act on the part of any of the parties hereto; PROVIDED, HOWEVER, that
such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 21 hereof. In case at the
time such successor Rights Agent shall succeed to the agency created
by this Agreement, any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of a predecessor Rights Agent and deliver
such Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Rights Certificates either
in the name of the predecessor or in the name of the successor Rights
Agent; and in all such cases such Rights Certificates shall have the
full force provided in the Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall
be changed and at such time any of the Rights Certificates shall have
been countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates
so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, the Rights Agent may
countersign such Rights Certificates either in its prior name or in
its changed name; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this
Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel
shall be full and complete authorization and protection to the Rights
Agent as to any action taken or omitted by it in good faith and in
accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that
any fact or matter (including, without limitation, the identity of any
Acquiring Person or Adverse Person and the determination of Current
Market Price) be proved or established by the Company prior to taking
or suffering any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a certificate
signed by the Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Treasurer, the Secretary or any
Assistant Secretary of the Company and delivered to the Rights Agent;
and such certificate shall be full authorization to the Rights Agent
for any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement
or in the Rights Certificates or be required to verify the same
(except as to its countersignature on such Rights Certificates), but
all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not be under any responsibility
in respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights Agent)
or in respect of the validity or execution of any Rights Certificate
(except its countersignature thereof); nor shall it be responsible for
any breach by the Company of any covenant or condition contained in
this Agreement or in any Rights Certificate; nor shall it be
responsible for any adjustment required under the provisions of
Section 11, Section 13 or Section 24 hereof or responsible for the
manner, method or amount of any such adjustment or the ascertaining of
the existence of facts that would require any such adjustment (except
with respect to the exercise of Rights evidenced by Rights
Certificates after actual notice of any such adjustment); nor shall it
by any act hereunder be deemed to make any representation or warranty
as to the authorization or reservation of any shares of Common Stock
or Preferred Stock to be issued pursuant to this Agreement or any
Rights Certificate or as to whether any shares of Common Stock or
Preferred Stock will, when so issued, be validly authorized and
issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the Rights
Agent for the carrying out or performing by the Rights Agent of the
provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from the Chairman of the Board, the Chief Executive Officer,
the President, any Vice President, the Secretary, any Assistant
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 to be taken by
it in good faith in accordance with instructions of any such officer.
(h) The Rights Agent and any stockholder, director, officer
or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested,
or contract with or lend money to the Company or otherwise act as
fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the Rights
Agent shall not be answerable or accountable for any act, default,
neglect or misconduct of any such attorneys or agents or for any loss
to the Company resulting from any such act, default, neglect or
misconduct; PROVIDED, HOWEVER, reasonable care was exercised in the
selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of its rights if there shall be reasonable grounds for
believing that repayment of such funds or adequate indemnification
against such risk or liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered
to the Rights Agent for exercise or transfer, the certificate attached
to the form of assignment or form of election to purchase, as the case
may be, has either not been completed or indicates an affirmative
response to clause 1 and/or 2 thereof, the Rights Agent shall not take
any further action with respect to such requested exercise of transfer
without first consulting with the Company.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty (30) days' notice in writing mailed to the Company, and to each
transfer agent of the Common Stock and Preferred Stock, by registered or
certified mail, and to the holders of the Rights Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent upon
thirty (30) days' notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of the Common Stock
and Preferred Stock, by registered or certified mail, and to the holders of the
Rights Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of thirty (30) days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Rights Certificate (who shall, with such notice, submit his Rights Certificate
for inspection by the Company), then any registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for the appointment
of a new Rights Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be (A) a corporation 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 corporation is authorized
to do business as a banking institution in the State of New York), in good
standing, which is authorized under such laws to exercise corporate trust powers
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 capital and surplus of at least $100,000,000 or (B) a subsidiary of a
corporation described in clause (A) of this sentence. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment, the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Stock and the Preferred Stock, and mail a
notice thereof in writing to the registered holders of the Rights Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as
the case may be.
Section 22. ISSUANCE OF NEW RIGHTS CERTIFICATES. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Rights Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Rights Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of shares of Common Stock following the Distribution
Date and prior to the redemption or expiration of the Rights, the Company (a)
shall, with respect to shares of Common Stock so issued or sold pursuant to the
exercise of stock options or under any employee plan or arrangement, granted or
awarded as of the Distribution Date, or upon the exercise, conversion or
exchange of securities hereinafter issued by the Company, and (b) may, in any
other case, if deemed necessary or appropriate by the Board of Directors of the
Company, issue Rights Certificates representing the appropriate number of Rights
in connection with such issuance or sale; PROVIDED, HOWEVER, that (i) no such
Rights Certificate shall be issued if, and to the extent that, the Company shall
be advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the Person to whom such
Rights Certificate would be issued, and (ii) no such Rights Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
Section 23. REDEMPTION AND TERMINATION.
(a) The Board of Directors of the Company may, at its
option, at any time prior to the earlier of (i) the close of business
on the tenth day following the Stock Acquisition Date (or, if the
Stock Acquisition Date shall have occurred prior to the Record Date,
the close of business on the tenth day following the Record Date), or
(ii) the Final Expiration Date, redeem all but not less than all the
then outstanding Rights at a redemption price of $0.01 per Right, as
such amount may be appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof
(such redemption price being hereinafter referred to as the
"Redemption Price"). The Board of Directors may not redeem any Rights
following a determination pursuant to Section 11(a)(ii)(B) that any
Person is an Adverse Person. Notwithstanding anything contained in
this Agreement to the contrary, the Rights shall not be exercisable
after the first occurrence of a Section 11(a)(ii) Event until such
time as the Company's right of redemption hereunder has expired. The
Company may, at its option, pay the Redemption Price in cash, shares
of Common Stock (based on the Current Market Price, as defined in
Section 11(d)(i) hereof, of the Common Stock at the time of
redemption) or any other form of consideration deemed appropriate by
the Board of Directors.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights, evidence of which
shall have been filed with the Rights Agent and without any further
action and without any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of Rights shall
be to receive the Redemption Price for each Right so held. Promptly
after the action of the Board of Directors ordering the redemption of
the Rights, the Company shall give notice of such redemption to the
Rights Agent and the holders of the then outstanding Rights by mailing
such notice to all such holders at each holder's last address as it
appears upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent for the
Common Stock. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice.
Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made.
(c) Notwithstanding the provisions of Section 23(a) hereof,
in the event that a majority of the Board is elected by stockholder
action by written consent, or is comprised of persons elected at a
meeting of stockholders who were not nominated by the Board in office
immediately prior to such meeting or action, then for a period of one
hundred and eighty (180) days following the effectiveness of such
election the Rights shall not be redeemed if such redemption is
reasonably likely to have the purpose or effect of allowing any Person
to become an Acquiring Person or otherwise facilitating the occurrence
of a Triggering Event or a transaction with an Acquiring Person.
Section 24. EXCHANGE.
(a) The Board of Directors of the Company may, at its
option, at any time after any Person becomes an Acquiring Person or is
determined to be an Adverse Person pursuant to Section 11(a)(ii)(B),
exchange all or part of the then outstanding and exercisable Rights
(which shall not include Rights that have become void pursuant to the
provisions of Section 7(e) hereof) for shares of Common Stock at an
exchange ratio of one share of Common Stock per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). Notwithstanding the
foregoing, the Board of Directors shall not be empowered to effect
such exchange at any time after any Person (other than the Company,
any Subsidiary of the Company, any employee benefit plan of the
Company or any such Subsidiary, or any entity holding Common Stock for
or pursuant to the terms of any such plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner
of fifty per cent (50%) or more of the Common Stock then outstanding.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the exchange of any Rights pursuant to subsection
(a) of this Section 24 and without any further action and without any
notice, the right to exercise such Rights shall terminate and the only
right thereafter of a holder of such Rights shall be to receive that
number of shares of Common Stock equal to the number of such Rights
held by such holder multiplied by the Exchange Ratio. The Company
shall promptly give public notice of any such exchange; PROVIDED,
HOWEVER, that the failure to give, or any defect in, such notice shall
not affect the validity of such exchange. The Company promptly shall
mail a notice of any such exchange to all of the holders of such
Rights at their last addresses as they appear upon the registry books
of the Rights Agent. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which
the exchange of the Common Stock for Rights will be effected and, in
the event of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata based on
the number of Rights (other than Rights which have become void
pursuant to the provisions of Section 7(e) hereof) held by each holder
of Rights.
(c) In any exchange pursuant to this Section 24, the
Company, at its option, may substitute shares of Preferred Stock (or
Equivalent Preferred Stock, as such term is defined in paragraph (b)
of Section 11 hereof) for shares of Common Stock exchangeable for
Rights, at the initial rate of one one-hundredth (1/100th) of a share
of Preferred Stock (or Equivalent Preferred Stock) for each share of
Common Stock, as appropriately adjusted to reflect adjustments in the
voting rights of the Preferred Stock pursuant to the terms thereof, so
that the fraction of a share of Preferred Stock delivered in lieu of
each share of Common Stock shall have the same voting rights as one
share of Common Stock.
(d) In the event that there shall not be sufficient shares
of Common Stock issued but not outstanding or authorized but unissued
to permit any exchange of Rights as contemplated in accordance with
this Section 24, the Company shall take all such action as may be
necessary to authorize additional shares of Common Stock for issuance
upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of
shares of Common Stock or to distribute certificates which evidence
fractional shares of Common Stock. In lieu of such fractional shares
of Common Stock, there shall be paid to the registered holders of the
Right Certificates with regard to which such fractional shares of
Common Stock would otherwise be issuable, an amount in cash equal to
the same fraction of the current market value of a whole share of
Common Stock. For the purposes of this subsection (e), the current
market value of a whole share of Common Stock shall be the closing
price of a share of Common Stock (as determined pursuant to the second
sentence of Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of exchange pursuant to this Section 24.
Section 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any
class to the holders of Preferred Stock or to make any other
distribution to the holders of Preferred Stock (other than a regular
quarterly cash dividend out of earnings or retained earnings of the
Company), or (ii) to offer to the holders of Preferred Stock rights or
warrants to subscribe for or to purchase any additional shares of
Preferred Stock or shares of stock of any class or any other
securities, rights or options, or (iii) to effect any reclassification
of its Preferred Stock (other than a reclassification involving only
the subdivision of outstanding shares of Preferred Stock), or (iv) to
effect any consolidation or merger into or with any other Person
(other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), or to effect any sale or other
transfer (or to permit one or more of its Subsidiaries to effect any
sale or other transfer), in one transaction or a series of related
transactions, of more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any other Person or
Persons (other than the Company and/or any of its Subsidiaries in one
or more transactions each of which complies with Section 11(o)
hereof), or (v) to effect the liquidation, dissolution or winding up
of the Company, then, in each such case, the Company shall give to
each holder of a Rights Certificate, to the extent feasible and in
accordance with Section 26 hereof, a notice of such proposed action,
which shall specify the record date for the purposes of such stock
dividend, distribution of rights or warrants, or the date on which
such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date
of participation therein by the holders of the shares of Preferred
Stock, if any such date is to be fixed, and such notice shall be so
given in the case of any action covered by clause (i) or (ii) above at
least twenty (20) days prior to the record date for determining
holders of the shares of Preferred Stock for purposes of such action,
and in the case of any such other action, at least twenty (20) days
prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the shares of Preferred Stock
whichever shall be the earlier.
(b) In case any of the events set forth in Section 11(a)(ii)
hereof shall occur, then, in any such case, (i) the Company shall as
soon as practicable thereafter give to each holder of a Rights
Certificate, to the extent feasible and in accordance with Section 26
hereof, a notice of the occurrence of such event, which shall specify
the event and the consequences of the event to holders of Rights under
Section 11(a)(ii) hereof, and (ii) all references in the preceding
paragraph to Preferred Stock shall be deemed thereafter to refer to
Common Stock and/or, if appropriate, other securities.
Section 26. NOTICES. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Rights Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
ASA International Ltd.
10 Speen Street
Framingham, MA 01701
Attention: Corporate Secretary
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Rights
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:
American Securities Transfer & Trust, Inc.
938 Quail Street
Suite 101
Lakewood, Colorado 80215
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.
Section 27. SUPPLEMENTS AND AMENDMENTS. Prior to the Distribution Date
and subject to the penultimate sentence of this Section 27, the Company and the
Rights Agent shall, if the Company so directs, supplement or amend any provision
of this Agreement without the approval of any holders of certificates
representing shares of Common Stock. From and after the Distribution Date and
subject to the penultimate sentence of this Section 27, the Company and the
Rights Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Rights Certificates in order
(i) to cure any ambiguity, (ii) to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provisions herein,
(iii) to shorten or lengthen any time period hereunder or (iv) to change or
supplement the provisions hereunder in any manner which the Company may deem
necessary or desirable and which shall not adversely affect the interests of the
holders of Rights Certificates (other than an Acquiring Person or Adverse Person
or an Affiliate or Associate of an Acquiring Person or Adverse Person); PROVIDED
this Agreement may not be supplemented or amended to lengthen, pursuant to
clause (iii) of this sentence, (A) a time period relating to when the Rights may
be redeemed at such time as the Rights are not then redeemable, or (B) any other
time period unless such lengthening is for the purpose of protecting, enhancing
or clarifying the rights of, and/or the benefits to, the holders of Rights
(other than an Acquiring Person or Adverse Person and its Affiliates and
Associates). Upon the delivery of a certificate from an appropriate officer of
the Company which states that the proposed supplement or amendment is in
compliance with the terms of this Section 27, the Rights Agent shall execute
such supplement or amendment. Prior to the Distribution Date, the interests of
the holders of Rights shall be deemed coincident with the interests of the
holders of Common Stock.
Section 28. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS, ETC.
For all purposes of this Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial Owner, shall be made in accordance with
the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations
under the Exchange Act. The Board of Directors of the Company shall have the
exclusive power and authority to administer this Agreement and to exercise all
rights and powers specifically granted to the Board or to the Company, or as may
be necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including a determination to redeem or not
redeem the Rights or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
in good faith, shall (x) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights and all other parties, and (y) not
subject the Board to any liability to the holders of the Rights.
Section 30. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of the Common Stock).
Section 31. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
PROVIDED, HOWEVER, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that severing the
invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23 hereof
shall be reinstated and shall not expire until the close of business on the
tenth day following the date of such determination by the Board of Directors.
Without limiting the foregoing, if any provision requiring a majority of the
members of the Board of Directors who are not officers of the Company and who
are not representatives, nominees, Affiliates or Associates of an Acquiring
Person to act is held by any court of competent jurisdiction or other authority
to be invalid, void or unenforceable, such determination shall be made by the
Board of Directors of the Company in accordance with applicable law and the
Company's Certificate of Incorporation and bylaws.
Section 32. GOVERNING LAW. This Agreement, each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts made
and to be performed entirely within such State.
Section 33. COUNTERPARTS. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
Section 34. DESCRIPTIVE HEADINGS. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
Attest: ASA INTERNATIONAL LTD.
By: /S/ TERRENCE C. MCCARTHY By: /S/ ALFRED C. ANGELONE
------------------------- ------------------------
Name: Terrence C. McCarthy Name: Alfred C. Angelone
Title: Corporate Secretary Title: Chairman of the Board
and Chief Executive
Officer
Attest: AMERICAN SECURITIES TRANSFER
& TRUST INC.
By: /S/ KELLIE GWINN By: /S/ LAURA J. SISNEROS
--------------------- ---------------------------
Name: Kellie Gwinn Name: Laura J. Sisneros
Title: Senor VP/Trust Officer Title: Senor VP/Trust Officer
<PAGE>
EXHIBIT A
FORM OF CERTIFICATE OF DESIGNATION,
PREFERENCES AND RIGHTS OF SERIES A JUNIOR
PARTICIPATING PREFERRED STOCK
of
ASA INTERNATIONAL LTD.
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
The undersigned officers of ASA International Ltd., a corporation
organized and existing under the General Corporation Law of the State of
Delaware (the "Corporation"), in accordance with the provisions of Section 103
thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors
by the Amended and Restated Certificate of Incorporation of the said
Corporation, the said Board of Directors on October 21, 1998 adopted the
following resolution creating a series of 60,000 shares of Preferred Stock
designated as Series A Junior Participating Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the provisions of its Amended
and Restated Certificate of Incorporation, a series of Preferred Stock of the
Corporation be and it hereby is created, and that the designation and amount
thereof and the voting powers, preferences and relative, participating, optional
and other special rights of the shares of such series, and the qualifications,
limitations or restrictions thereof are as follows:
Section 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" and the number of
shares constituting such series shall be 60,000.
Section 2. DIVIDENDS AND DISTRIBUTIONS.
(A) The holders of shares of Series A Junior Participating
Preferred Stock shall be entitled to receive, when, as and if declared
by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the last day of March,
June, September and December in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"), commencing
on the first Quarterly Dividend Payment Date after the first issuance
of a share or fraction of a share of Series A Junior Participating
Preferred Stock, in an amount per share (rounded to the nearest cent)
equal to the greater of (a) $0.25 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, par
value $.01 per share, of the Corporation (the "Common Stock") since
the immediately preceding Quarterly Dividend Payment Date, or, with
respect to the first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series A Junior
Participating Preferred Stock. In the event the Corporation shall at
any time after October 21, 1998 (the "Rights Declaration Date") (i)
declare any dividend on Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine
the outstanding Common Stock into a smaller number of shares, then in
each such case the amount to which holders of shares of Series A
Junior Participating Preferred Stock were entitled immediately prior
to such event under clause (b) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of shares
of Common Stock that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution
on the Series A Junior Participating Preferred Stock as provided in
Paragraph (A) above immediately after it declares a dividend or
distribution on the Common Stock (other than a dividend payable in
shares of Common Stock); PROVIDED that, in the event no dividend or
distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $0.25 per
share on the Series A Junior Participating Preferred Stock shall
nevertheless be payable on such subsequent Quarterly Dividend Payment
Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Junior Participating Preferred Stock
from the Quarterly Dividend Payment Date next preceding the date of
issue of such shares of Series A Junior Participating Preferred Stock,
unless the date of issue of such shares is prior to the record date
for the first Quarterly Dividend Payment Date, in which case dividends
on such shares shall begin to accrue from the date of issue of such
shares, or unless the date of issue is a Quarterly Dividend Payment
Date or is a date after the record date for the determination of
holders of shares of Series A Junior Participating Preferred Stock
entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend Payment
Date. Accrued but unpaid dividends shall not bear interest. Dividends
paid on the shares of Series A Junior Participating Preferred Stock in
an amount less than the total amount of such dividends at the time
accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding.
The Board of Directors may fix a record date for the determination of
holders of shares of Series A Junior Participating Preferred Stock
entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be no more than 30 days prior to the
date fixed for the payment thereof.
Section 3. VOTING RIGHTS. The holders of shares of Series A Junior
Participating Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Junior Participating Preferred Stock
shall entitle the holder thereof to 100 votes on all matters submitted
to a vote of the stockholders of the Corporation. In the event the
Corporation shall at any time after the Rights Declaration Date (i)
declare any dividend on Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine
the outstanding Common Stock into a smaller number of shares, then in
each such case the number of votes per share to which holders of
shares of Series A Junior Participating Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such
number by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the
holders of shares of Series A Junior Participating Preferred Stock and
the holders of shares of Common Stock shall vote together as one class
on all matters submitted to a vote of stockholders of the Corporation.
(C) (i) If at any time dividends on any Series A
Junior Participating Preferred Stock shall be in arrears in
an amount equal to six (6) quarterly dividends thereon, the
occurrence of such contingency shall mark the beginning of a
period (herein called a "default period") which shall extend
until such time when all accrued and unpaid dividends for
all previous quarterly dividend periods and for the current
quarterly dividend period on all shares of Series A Junior
Participating Preferred Stock then outstanding shall have
been declared and paid or set apart for payment. During each
default period, all holders of Preferred Stock (including
holders of the Series A Junior Participating Preferred
Stock) with dividends in arrears in an amount equal to six
(6) quarterly dividends thereon, voting as a class,
irrespective of series, shall have the right to elect two
(2) Directors.
(ii) During any default period, such voting right of
the holders of Series A Junior Participating Preferred Stock
may be exercised initially at a special meeting called
pursuant to subparagraph (iii) of this Section 3(C) or at
any annual meeting of stockholders, and thereafter at annual
meetings of stockholders, PROVIDED that such voting right
shall not be exercised unless the holders of ten percent
(10%) in number of shares of Preferred Stock outstanding
shall be present in person or by proxy. The absence of a
quorum of the holders of Common Stock shall not affect the
exercise by the holders of Preferred Stock of such voting
right. At any meeting at which the holders of Preferred
Stock shall exercise such voting right initially during an
existing default period, they shall have the right, voting
as a class, to elect Directors to fill such vacancies, if
any, in the Board of Directors as may then exist up to two
(2) Directors or, if such right is exercised at an annual
meeting, to elect two (2) Directors. If the number which may
be so elected at any special meeting does not amount to the
required number, the holders of the Preferred Stock shall
have the right to make such increase in the number of
Directors as shall be necessary to permit the election by
them of the required number. After the holders of the
Preferred Stock shall have exercised their right to elect
Directors in any default period and during the continuance
of such period, the number of Directors shall not be
increased or decreased except by vote of the holders of
Preferred Stock as herein provided or pursuant to the rights
of any equity securities ranking senior to or pari passu
with the Series A Junior Participating Preferred Stock.
(iii) Unless the holders of Preferred Stock shall,
during an existing default period, have previously exercised
their right to elect Directors, the Board of Directors may
order, or any stockholder or stockholders owning in the
aggregate not less than ten percent (10%) of the total
number of shares of Preferred Stock outstanding,
irrespective of series, may request, the calling of special
meeting of the holders of Preferred Stock, which meeting
shall thereupon be called by the President, a Vice-President
or the Secretary of the Corporation. Notice of such meeting
and of any annual meeting at which holders of Preferred
Stock are entitled to vote pursuant to this Paragraph
(C)(iii) shall be given to each holder of record of
Preferred Stock by mailing a copy of such notice to him or
her at his or her last address as the same appears on the
books of the Corporation. Such meeting shall be called for a
time not earlier than 10 days and not later than 50 days
after such order or request or in default of the calling of
such meeting within 50 days after such order or request,
such meeting may be called on similar notice by any
stockholder or stockholders owning in the aggregate not less
than ten percent (10%) of the total number of shares of
Preferred Stock outstanding. Notwithstanding the provisions
of this Paragraph (C)(iii), no such special meeting shall be
called during the period within 50 days immediately
preceding the date fixed for the next annual meeting of the
stockholders.
(iv) In any default period, the holders of Common
Stock, and other classes of stock of the Corporation if
applicable, shall continue to be entitled to elect the whole
number of Directors until the holders of Preferred Stock
shall have exercised their right to elect two (2) Directors
voting as a class, after the exercise of which right (x) the
Directors so elected by the holders of Preferred Stock shall
continue in office until their successors shall have been
elected by such holders or until the expiration of the
default period, and (y) any vacancy in the Board of
Directors may (except as provided in Paragraph (C)(ii) of
this Section 3) be filled by vote of a majority of the
remaining Directors theretofore elected by the holders of
the class of stock which elected the Director whose office
shall have become vacant. References in this Paragraph (C)
to Directors elected by the holders of a particular class of
stock shall include Directors elected by such Directors to
fill vacancies as provided in clause (y) of the foregoing
sentence.
(v) Immediately upon the expiration of a default
period, (x) the right of the holders of Preferred Stock as a
class to elect Directors shall cease, (y) the term of any
Directors elected by the holders of Preferred Stock as a
class shall terminate, and (z) the number of Directors shall
be such number as may be provided for in the certificate of
incorporation or by-laws irrespective of any increase made
pursuant to the provisions of Paragraph (C)(ii) of this
Section 3 (such number being subject, however, to change
thereafter in any manner provided by law or in the
certificate of incorporation or by-laws). Any vacancies in
the Board of Directors effected by the provisions of clauses
(y) and (z) in the preceding sentence may be filled by a
majority of the remaining Directors.
(D) Except as set forth herein, holders of Series A Junior
Participating Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are
entitled to vote with holders of Common Stock as set forth herein) for
taking any corporate action.
Section 4. CERTAIN RESTRICTIONS.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Junior Participating Preferred
Stock as provided in Section 2 are in arrears, thereafter and until
all accrued and unpaid dividends and distributions, whether or not
declared, on shares of Series A Junior Participating Preferred Stock
outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire
for consideration any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding
up) to the Series A Junior Participating Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Junior Participating Preferred
Stock, except dividends paid ratably on the Series A Junior
Participating Preferred Stock and all such parity stock on
which dividends are payable or in arrears in proportion to the
total amounts to which the holders of all such shares are then
entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding
up) with the Series A Junior Participating Preferred Stock,
provided that the Corporation may at any time redeem, purchase
or otherwise acquire shares of any such parity stock in
exchange for shares of any stock of the Corporation ranking
junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Series A Junior
Participating Preferred Stock; or
(iv) purchase or otherwise acquire for consideration
any shares of Series A Junior Participating Preferred Stock,
or any shares of stock ranking on a parity with the Series A
Junior Participating Preferred Stock, except in accordance
with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such
shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series
and classes, shall determine in good faith will result in fair
and equitable treatment among the respective series or
classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any
shares of stock of the Corporation unless the Corporation could, under
Paragraph (A) of this Section 4, purchase or otherwise acquire such
shares at such time and in such manner.
Section 5. REACQUIRED SHARES. Any shares of Series A Junior
Participating Preferred Stock purchased or otherwise acquired by the Corporation
in any manner whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock and may be reissued as part of
a new series of Preferred Stock to be created by resolution or resolutions of
the Board of Directors, subject to the conditions and restrictions on issuance
set forth herein.
Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP. (A) Upon any
liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Junior Participating Preferred Stock unless, prior
thereto, the holders of shares of Series A Junior Participating Preferred Stock
shall have received $10.00 per share, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment (the "Series A Liquidation Preference"). Following the payment of
the full amount of the Series A Liquidation Preference, no additional
distributions shall be made to the holders of shares of Series A Junior
Participating Preferred Stock unless, prior thereto, the holders of shares of
Common Stock shall have received an amount per share (the "Common Adjustment")
equal to the quotient obtained by dividing (i) the Series A Liquidation
Preference by (ii) 100 (as appropriately adjusted as set forth in subparagraph
(C) below to reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such number in clause (ii),
the "Adjustment Number"). Following the payment of the full amount of the Series
A Liquidation Preference and the Common Adjustment in respect of all outstanding
shares of Series A Junior Participating Preferred Stock and Common Stock,
respectively, holders of Series A Junior Participating Preferred Stock and
holders of shares of Common Stock shall receive their ratable and proportionate
share of the remaining assets to be distributed in the ratio of the Adjustment
Number to 1 with respect to such Preferred Stock and Common Stock, on a per
share basis, respectively.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation Preference and
the liquidation preferences of all other series of preferred stock, if any,
which rank on a parity with the Series A Junior Participating Preferred Stock,
then such remaining assets shall be distributed ratably to the holders of such
parity shares in proportion to their respective liquidation preferences. In the
event, however, that there are not sufficient assets available to permit payment
in full of the Common Adjustment, then such remaining assets shall be
distributed ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the Adjustment Number in effect immediately prior to such event shall be
adjusted by multiplying such Adjustment Number by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
Section 7. CONSOLIDATION, MERGER, ETC. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Series A Junior Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to 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 after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series A Junior Participating Preferred Stock shall be
adjusted by multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. NO REDEMPTION. The shares of Series A Junior Participating
Preferred Stock shall not be redeemable.
Section 9. AMENDMENT. The Amended and Restated Certificate of
Incorporation of the Corporation shall not be further amended in any manner
which would materially alter or change the powers, preferences or special rights
of the Series A Junior Participating Preferred Stock so as to affect them
adversely without the affirmative vote of the holders of a majority or more of
the outstanding shares of Series A Junior Participating Preferred Stock, voting
separately as a class.
Section 10. FRACTIONAL SHARES. Series A Junior Participating Preferred
Stock may be issued in fractions of a share which shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of all
other rights of holders of Series A Junior Participating Preferred Stock.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate
and do affirm the foregoing as true under the penalties of perjury this ______
day of ___________, 1998.
ASA INTERNATIONAL LTD.
------------------------------------
Name:
Title:
Attest:
- -----------------------------
Secretary
<PAGE>
EXHIBIT B
[FORM OF RIGHTS CERTIFICATE]
Certificate No. R- ________ Rights
NOT EXERCISABLE AFTER OCTOBER 20, 2008 OR EARLIER IF REDEEMED BY THE COMPANY.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.01 PER
RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR ADVERSE
PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT
HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS
RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME
AN ACQUIRING PERSON OR ADVERSE PERSON OR AN AFFILIATE OR ASSOCIATE OF AN
ACQUIRING PERSON OR ADVERSE PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED
HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e)
OF SUCH AGREEMENT.]1
- ----------
1 The portion of the legend in brackets shall be inserted only if applicable
and shall replace the preceding sentence.
Rights Certificate
ASA INTERNATIONAL LTD.
This certifies that ________________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of October 21, 1998 (the "Rights Agreement"), between ASA
International Ltd., a Delaware corporation (the "Company"), and American
Securities Transfer & Trust, Inc. (the "Rights Agent"), to purchase from the
Company at any time prior to 5:00 P.M. (New York City time) on October 20, 2008
at the office or offices of the Rights Agent designated for such purpose, or its
successors as Rights Agent, one one-hundredth (1/100th) of a fully paid,
non-assessable share of Series A Junior Participating Preferred Stock (the
"Preferred Stock") of the Company, at a purchase price of $10.00 per one
one-hundredth (1/100th) of a share (the "Purchase Price"), upon presentation and
surrender of this Rights Certificate with the Form of Election to Purchase and
related Certificate duly executed. The number of Rights evidenced by this Rights
Certificate (and the number of shares which may be purchased upon exercise
thereof) set forth above, and the Purchase Price per share set forth above, are
the number and Purchase Price as of __________, ____ based on the Preferred
Stock as constituted at such date. The Company reserves the right to require
prior to the occurrence of a Triggering Event (as such term is defined in the
Rights Agreement) that a number of Rights be exercised so that only whole shares
of Preferred Stock will be issued.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by this Rights
Certificate are beneficially owned by (i) an Acquiring Person or Adverse Person
or an Affiliate or Associate of any such Acquiring Person or Adverse Person (as
such terms are defined in the Rights Agreement), (ii) a transferee of any such
Acquiring Person or Adverse Person, Associate or Affiliate, or (iii) under
certain circumstances specified in the Rights Agreement, a transferee of a
person who, after such transfer, became an Acquiring Person or Adverse Person,
or an Affiliate or Associate of an Acquiring Person or Adverse Person, such
Rights shall become null and void and no holder hereof shall have any right with
respect to such Rights from and after the occurrence of such Section 11(a)(ii)
Event.
As provided in the Rights Agreement, the Purchase Price and the number
and kind of shares of Preferred Stock or other securities which may be purchased
upon the exercise of the Rights evidenced by this Rights Certificate are subject
to modification and adjustment upon the happening of certain events, including
Triggering Events.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned office of the
Rights Agent and are also available upon written request to the Rights Agent.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the principal office or offices of the Rights Agent designated
for such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of one one-hundredths (1/100ths) of a share of
Preferred Stock as the Rights evidenced by the Rights Certificate or Rights
Certificates surrendered shall have entitled such holder to purchase. If this
Rights Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Rights Certificate or Rights Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option at a
redemption price of $0.01 per Right at any time prior to the earlier of the
close of business on (i) the tenth day following the Stock Acquisition Date (as
such time period may be extended pursuant to the Rights Agreement), and (ii) the
Final Expiration Date. In addition, the Rights may be exchanged, in whole or in
part, for shares of the Common Stock, or shares of preferred stock of the
Company having essentially the same value or economic rights as such shares.
Immediately upon the action of the Board of Directors of the Company authorizing
any such exchange, and without any further action or any notice, the Rights
(other than Rights which are not subject to such exchange) will terminate and
the Rights will only enable holders to receive the shares issuable upon such
exchange.
No fractional shares of Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions which are
integral multiples of one one-hundredth (1/100th) of a share of Preferred Stock,
which may, at the election of the Company, be evidenced by depositary receipts),
but in lieu thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Rights Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of shares of Preferred
Stock or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or, to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
<PAGE>
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Dated as of ___________, ____
ATTEST: ASA INTERNATIONAL LTD.
________________________________ By: ______________________
Secretary Title:
Countersigned:
[_______________________]
By: ______________________
Authorized Signature
[FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE]
FORM OF ASSIGNMENT
---------------------
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED _____________________________________________ hereby sells,
assigns and transfer unto ______________________________________________
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _________________ Attorney,
to transfer the within Rights Certificate on the books of the within-named
Company, with full power of substitution.
Dated: ________________, ____
_________________________
Signature
Signature Guaranteed:
<PAGE>
CERTIFICATE
--------------
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or
Adverse Person or an Affiliate or Associate of any such Acquiring Person or
Adverse Person (as such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate from
any Person who is, was or subsequently became an Acquiring Person or Adverse
Person or an Affiliate or Associate of an Acquiring Person or Adverse Person.
Dated: ________________, ____
_____________________________
Signature
Signature Guaranteed:
<PAGE>
NOTICE
---------------------
The signature to the foregoing Assignment and Certificate must correspond to the
name as written upon the face of this Rights Certificate in every particular,
without alteration or enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
---------------------
(To be executed if holder desires to
exercise Rights represented by the
Rights Certificate.)
To: ASA INTERNATIONAL LTD.
The undersigned hereby irrevocably elects to exercise __________
Rights represented by this Rights Certificate to purchase the shares of
Preferred Stock issuable upon the exercise of the Rights (or such other
securities of the Company or of any other person which may be issuable upon the
exercise of the Rights) and requests that certificates for such shares be issued
in the name of and delivered to:
Please insert social security
or other identifying number
- ------------------------------------------------
(Please print name and address)
- ------------------------------------------------
<PAGE>
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
- ------------------------------------------------
(Please print name and address)
- ------------------------------------------------
Dated: ________________, ____
____________________________
Signature
Signature Guaranteed:
<PAGE>
CERTIFICATE
--------------
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person or Adverse Person or an Affiliate or Associate of any such Acquiring
Person or Adverse Person (as such terms are defined pursuant to the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate from
any Person who is, was or became an Acquiring Person or Adverse Person or an
Affiliate or Associate of an Acquiring Person or Adverse Person.
Dated: ________________, ____
------------------------------
Signature
Signature Guaranteed:
<PAGE>
NOTICE
---------------
The signature to the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Rights Certificate
in every particular, without alteration or enlargement or any change whatsoever.
EXHIBIT 20
ASA International Ltd.
10 Speen Street
Framingham, MA 01701
November 4, 1998
To Our Stockholders:
On October 21, 1998, the Board of Directors (the "Board") of ASA
International Ltd. (the "Company") adopted a Shareholders Rights Plan (the
"Plan") that is intended to protect your interests in the event you and the
Company are confronted with coercive takeover tactics.
The Plan provides for a dividend distribution of Rights to purchase
shares of a newly created series of the Company's Preferred Stock. Under certain
circumstances, the Rights could become exercisable to purchase the Company's
Common Stock (the "Common Stock"), or securities of an acquiring entity, at
one-half market value. The Rights may be exercised only if certain events occur.
You are now the owner of one Right for each share of Common Stock you own. The
Plan has been adopted in order to strengthen the ability of the Board to protect
your interests.
We are attaching a summary description that outlines the principal
features of the Plan, and we urge you to read the summary carefully. This letter
reviews our reasons for issuing the Rights.
NO ACTION BY STOCKHOLDERS IS REQUIRED OR PERMITTED AT THIS TIME, AND
NO MONEY SHOULD BE SENT TO THE COMPANY. THE RIGHTS WILL AUTOMATICALLY ATTACH TO
THE SHARES OF COMMON STOCK YOU HOLD AND WILL TRADE WITH THEM. SEPARATE RIGHT
CERTIFICATES WILL BE SENT TO STOCKHOLDERS ONLY IF (I) A PERSON OR GROUP ACQUIRES
20% OR MORE OF THE OUTSTANDING COMMON STOCK, (II) A PERSON OR GROUP MAKES A
TENDER OFFER FOR 20% OR MORE OF THE COMMON STOCK, OR (III) A PERSON OR GROUP
ACQUIRES 10% OR MORE OF THE OUTSTANDING COMMON STOCK AND IS DEEMED TO BE AN
"ADVERSE PERSON", IN EACH CASE SUBJECT TO CERTAIN EXCEPTIONS AND AS MORE FULLY
DESCRIBED IN THE ATTACHED MEMORANDUM. CERTIFICATES FOR COMMON STOCK ISSUED AFTER
NOVEMBER 4, 1998, WILL CONTAIN A REFERENCE TO THE PLAN, BUT THERE IS NO NEED TO
SEND IN YOUR CERTIFICATES TO HAVE THIS REFERENCE ADDED.
The Rights are not being distributed in response to any specific
effort to acquire control of the Company. The Rights are designed to protect
stockholders in the event of an unsolicited attempt to acquire the Company,
including through an accumulation of Common Stock in the open market, a partial,
two-tier or inadequate tender offer that does not treat all stockholders equally
and other abusive takeover tactics which the Board believes are not in the best
interests of stockholders. These tactics unfairly pressure stockholders, squeeze
them out of their investment without giving them any real choice and deprive
them of the full value of their Common Stock. We consider these Rights to be a
valuable means of protecting both your right to retain your equity investment in
the Company and the full value of that investment, while not foreclosing a fair
acquisition bid for the Company.
The Rights are not intended to prevent a takeover of the Company and
will not do so. They are designed to deal with the possibility of unilateral
actions by hostile acquirers that could deprive the Board and stockholders of
the Company of their ability to determine the Company's destiny and obtain the
highest price for their Common Stock.
Adoption of the Plan should not by itself affect any prospective
acquirer who is willing to make an all-cash offer at a full and fair price or
who is willing to negotiate with the Board. The Plan certainly will not
interfere with a merger or other business combination transaction approved by
the Board.
The issuance of the Rights has no dilutive effect, will not affect
reported earnings per share and is not taxable to the Company or to you.
Stockholders may, under certain circumstances, recognize taxable income if the
Rights become exercisable.
Our overriding objective is to continue building value for the
Company's stockholders, and we feel that the Plan will assist in that effort.
Sincerely,
/s/ Alfred C. Angelone
Alfred C. Angelone,
President and Chief Executive Officer
<PAGE>
ASA INTERNATIONAL LTD.
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On October 21, 1998, the Board of Directors of ASA International Ltd.
(the "Company") declared a dividend distribution of one right (a "Right") for
each outstanding share of the Company's Common Stock, $.01 par value per share
("Common Stock"), to stockholders of record at the close of business on November
4, 1998 (the "Record Date"). The Board of Directors of the Company also
authorized the issuance of one Right for each share of Common Stock issued after
the Record Date and prior to the earliest of the Distribution Date (as defined
below), the redemption of the Rights and the expiration of the Rights and, in
certain circumstances, after the Distribution Date. Except as set forth below
and subject to adjustment as provided in the Rights Agreement (defined below),
each Right entitles the registered holder to purchase from the Company one
one-hundredth of a share of Series A Junior Participating Preferred Stock (the
"Preferred Stock"), at a purchase price of $10 per Right (the "Purchase Price").
The description and terms of the Rights are set forth in a Rights Agreement,
dated as of October 21, 1998 (the "Rights Agreement"), between the Company and
American Securities Transfer & Trust, Inc., as Rights Agent.
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate Rights
Certificates (as defined below) will be distributed. The Rights will separate
from the Common Stock upon the earliest of (i) 10 days following a public
announcement that a person or group (an "Acquiring Person"), together with
persons affiliated or associated with it, has acquired, or obtained the right to
acquire, beneficial ownership of 20% or more of the outstanding shares of Common
Stock (the "Stock Acquisition Date"), (ii) 10 business days (or such later date
as the Board of Directors of the Company shall determine) following the
commencement of a tender offer or exchange offer that would result in a person
or group beneficially owning 20% or more of such outstanding shares of Common
Stock, or (iii) 10 business days following a determination by the Board of
Directors of the Company that a person (an "Adverse Person"), alone or together
with its affiliates and associates, has become the beneficial owner of more than
10% of the outstanding Common Stock and that (a) such beneficial ownership is
intended to cause the Company to repurchase the Common Stock beneficially owned
by such person or to cause pressure on the Company to take action or enter into
transactions intended to provide such person with short-term financial gain
under the circumstances where the Board of Directors of the Company determines
that the best long-term interests of the Company would not be served by taking
such action or entering into such transactions at the time or (b) such
beneficial ownership is causing or reasonably likely to cause a material adverse
impact on the business or prospects of the Company (the earliest of such dates
being called the "Distribution Date").
Until the Distribution Date (or earlier redemption or expiration of
the Rights), (i) the Rights will be transferred with and only with the Common
Stock (except in connection with redemption of the Rights), (ii) new Common
Stock certificates issued after the Record Date upon transfer, replacement or
new issuance of Common Stock will contain a notation incorporating the Rights
Agreement by reference and (iii) the surrender for transfer of any certificates
for Common Stock outstanding will also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate.
The Rights will become first exercisable on the Distribution Date and
will expire at the close of business on October 20, 2008 (the "Expiration
Date"), unless earlier redeemed by the Company as described below.
Notwithstanding the foregoing, the Rights will not be exercisable after the
occurrence of a Triggering Event (defined below) until the Company's right of
redemption has expired.
As soon as practicable after the Distribution Date, separate
certificates evidencing the Rights (the "Rights Certificates") will be mailed to
holders of record of the Common Stock as of the close of business on the
Distribution Date and, thereafter, such separate Rights Certificates alone will
evidence the Rights. Except for shares of Common Stock issued or sold after the
Distribution Date pursuant to the exercise of stock options or under any
employee benefit plan or arrangement granted or awarded prior to the
Distribution Date, or the exercise, conversion or exchange of securities issued
by the Company, and except as otherwise determined by the Board of Directors,
only shares of Common Stock issued prior to the Distribution Date will be issued
with Rights.
In the event that any person shall become (a) an Acquiring Person
(except (i) pursuant to an offer for all outstanding shares of Common Stock
which the independent directors determine to be fair to and otherwise in the
best interest of the Company and its stockholders after receiving advice from
one or more investment banking firms (a "Qualifying Offer") and (ii) for certain
persons who report their ownership on Schedule 13G under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), or on Schedule 13D under the
Exchange Act, provided that they do not state any intention to, or reserve the
right to, control or influence the Company and such persons certify that they
became an Acquiring Person inadvertently and they agree that they will not
acquire any additional shares of Common Stock) or (b) an Adverse Person (either
such event is referred to herein as a "Triggering Event"), then the Rights will
"flip-in" and entitle each holder of a Right, except as provided below, to
purchase, upon exercise at the then-current Purchase Price, that number of
shares of Common Stock having a market value of two times such Purchase Price.
Any Rights beneficially owned at any time on or after the earlier of
the Distribution Date and the Stock Acquisition Date by an Acquiring Person, an
Adverse Person or an affiliate or associate of an Acquiring Person or an Adverse
Person (whether or not such ownership is subsequently transferred) will become
null and void upon the occurrence of a Triggering Event, and any holder of such
Rights will have no right to exercise such Rights.
In the event that, following a Stock Acquisition Date, the Company is
acquired in a merger or other business combination in which the Common Stock
does not remain outstanding or is changed (other than a merger consummated
pursuant to a Qualifying Offer) or 50% of the assets or earning power of the
Company is sold or otherwise transferred to any person (other than the Company
or any subsidiary of the Company) in one transaction or a series of related
transactions, the Rights will "flip-over" and entitle each holder of a Right,
except as provided in the preceding paragraph, to purchase, upon the exercise of
the Right at the then-current Purchase Price, that number of shares of common
stock of the acquiring company which at the time of such transaction would have
a market value of two times such Purchase Price.
The Purchase Price is subject to adjustment from time to time to
prevent dilution upon the (i) declaration of a dividend on the Preferred Stock
payable in shares of Preferred Stock, (ii) subdivision of the outstanding
Preferred Stock, (iii) combination of the outstanding Preferred Stock into a
smaller number of shares, (iv) issuance of any shares of the Company's capital
stock in a reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), (v) grant to holders of the
Preferred Stock of certain rights, options, or warrants to subscribe for
Preferred Stock or securities convertible into Preferred Stock at less than the
current market price of the Preferred Stock, or (vi) distribution to holders of
the Preferred Stock of other evidences of indebtedness, cash (other than a
regular quarterly cash dividend payable out of the earnings or retained earnings
of the Company), subscription rights, warrants, or assets (other than a dividend
payable in Preferred Stock, but including any dividend payable in stock other
than Preferred Stock).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% of
the Purchase Price.
At any time until the earlier of (i) ten days following the Stock
Acquisition Date and (ii) the Expiration Date, the Company may redeem the Rights
in whole, but not in part, at a price of $.01 per Right, subject to adjustments.
The Company may, at its option, pay the redemption price in cash, shares of
Common Stock (based on the current market price of the Common Stock at the time
of redemption) or any other form of consideration deemed appropriate by the
Board of Directors of the Company. Immediately upon the action of the Company's
Board of Directors ordering redemption of the Rights, the right to exercise the
Rights will terminate and the only right of the holders of Rights will be to
receive the applicable redemption price. In addition, after a Triggering Event,
at the election of the Board of Directors of the Company, the outstanding Rights
(other than those beneficially owned by an Acquiring Person, Adverse Person or
an affiliate or associate of an Acquiring Person or Adverse Person) may be
exchanged, in whole or in part, for shares of Common Stock, or shares of
preferred stock of the Company having essentially the same value or economic
rights as such shares of Common Stock. Immediately upon the action of the Board
of Directors of the Company authorizing any such exchange, and without any
further action or any notice, the Rights (other than Rights which are not
subject to such exchange) will terminate and such Rights will only entitle
holders to receive the shares issuable upon such exchange.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to stockholders or to the Company, stockholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Stock (or other consideration) of the Company or for
common stock of the acquiring company as set forth above.
At any time prior to the Distribution Date, the Company may, without
the approval of any holder of the Rights, supplement or amend any provision of
the Rights Agreement. Thereafter, the Rights Agreement may be amended only (i)
to cure ambiguities, (ii) to correct inconsistent provisions, (iii) to shorten
or lengthen any time period thereunder or (iv) in ways that do not adversely
affect the Rights holders (other than an Acquiring Person or Adverse Person).
From and after the Distribution Date, the Rights Agreement may not be amended to
lengthen (A) a time period relating to when the Rights may be redeemed at such
time as the Rights are not then redeemable, or (B) any other time period unless
such lengthening is for the purpose of protecting, enhancing or clarifying the
rights of, and/or the benefits to, the holders of Rights (other than an
Acquiring Person or Adverse Person).
As of October 15, 1998, there were 3,373,462 shares of Common Stock
outstanding (excluding shares held in Treasury). Each outstanding share of
Common Stock on the Record Date will receive one Right. Until the Distribution
Date, the Company will issue one Right with each share of Common Stock that
shall become outstanding so that all such shares will have attached Rights.
Sixty thousand (60,000) shares of Preferred Stock have been reserved for
issuance upon exercise of the Rights.
The Rights have certain anti-takeover effects. The Rights will 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. The Rights should not
interfere with any merger or other business combination approved by the Board of
Directors of the Company since the Board of Directors may, at its option, at any
time until ten days following the Stock Acquisition Date, redeem all, but no
less than all, of the then outstanding Rights at the applicable redemption
price.
The foregoing summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement.
Copies of the Rights Agreement will be available free of charge from the
Company.
EXHIBIT 99
[COMPANY LOGO]
----------------------------
FOR IMMEDIATE RELEASE ASA International Ltd.
10 Speen Street
CONTACT: Framingham, Massachusetts 01701
ALFRED C. ANGELONE 508/626-2727
Chairman & CEO www.asaint.com
ASA International Ltd.
(508)626-2727
ASA INTERNATIONAL LTD. DECLARES DIVIDEND
DISTRIBUTION OF PREFERRED SHARE PURCHASE RIGHTS
FRAMINGHAM, MASSACHUSETTS, THURSDAY, OCTOBER 22, 1998 - The Board of directors
of ASA International Ltd. (NASDAQ:ASAA) yesterday declared a dividend
distribution of one Preferred Share Purchase Right on each outstanding share of
ASA International Ltd.'s common stock. Each Right will entitle stockholders to
buy one one-hundredth of a share of newly created Series A Junior Participating
Preferred Stock of the company at an exercise price of $10. The Rights will be
exercisable if a person or group acquires 20% or more of the Company's common
stock or announces a tender offer for 20% or more of the common stock, subject
to certain exceptions. ASA International Ltd.'s Board of Directors will be
entitled to redeem the Rights at $0.01 per Right at any time before, or until 10
days after, a person has acquired 20% or more of the outstanding common stock.
The Rights are not being distributed in response to any specific effort to
acquire control of the Company. The Rights are designed to assure that all ASA
International Ltd. stockholders receive fair and equal treatment in the event of
any proposed takeover of the Company and to guard against partial tender offers,
open market accumulations and other abusive tactics to gain control of the
Company without paying all stockholders a control premium.
Generally, if a person acquires 20% or more of the outstanding common stock of
ASA International Ltd., each Right will entitle its holder to purchase, at the
Right's then-current exercise price, a number of common shares of the Company
having a market value at that time to twice the Right's exercise price. Rights
held by the 20% holder will become void and will not be exercisable to purchase
shares at the bargain purchase price. If the Company is acquired in a merger or
other business combination transaction which has not been approved by the Board
of Directors, each Right will entitle its holder to purchase, at the Right's
then-current exercise price, a number of the acquiring company's common shares
having a market value at that time of twice the Right's exercise price.
"The Rights are intended to enable all ASA International Ltd. stockholders to
realize the long-8term value of their investment in the Company. They do not
prevent a takeover, but should encourage anyone seeking to acquire the Company
to negotiate with the Board of directors prior to attempting a takeover," said
Alfred C. Angelone, Chairman and Chief Executive Officer of ASA International
Ltd.
The dividend distribution will be payable to stockholders of record on November
4, 1998. The Rights will expire in 10 years. The Rights distribution is not
taxable to stockholders.
ASA International Ltd. develops and builds enterprise software solutions,
delivers support and services, and empowers leading companies in a wide range of
industries to achieve a maximum return on their information technology
investment. ASA's software is installed in more than 1200 businesses in North
America, South America, Western Europe and Australia. ASA was established in
1969 and is headquartered in Framingham, Massachusetts.
