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EXHIBIT 1
RIGHTS AGREEMENT
This Rights Agreement, dated as of October 25, 2000, is between
Compuware Corporation, a Michigan corporation (the "Company"), and EquiServe
Trust Company, N.A., a National Banking Association, as Rights Agent.
WHEREAS, the Board of Directors of the Company, having determined its
actions to be in the interests of the Company, has authorized the creation of
Rights, has authorized and directed the issuance to the holders of record of
Common Shares of the Company outstanding on November 9, 2000 of one Right with
respect to each Common Share of the Company outstanding on November 9, 2000, and
has further authorized and directed the issuance of one Right with respect to
each Common Share that shall become outstanding between November 9, 2000 and the
earlier of the Distribution Date, the Redemption Date and the Final Expiration
Date; and
WHEREAS, the Board of Directors of the Company has authorized and
directed that the terms and conditions under which the Rights are to be
distributed, including without limitation those affecting the exercise thereof,
the securities or other property to be acquired thereby and the purchase price
to be paid therefor, shall be set forth in a written agreement between the
Company and a rights agent made for the benefit of the holders of the Rights to
the extent so provided therein.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms shall have the meanings indicated:
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"Acquiring Person" shall mean any Person who or which, together with
all Affiliates and Associates of such Person, shall be the Beneficial Owner of
15% or more of the Voting Shares of the Company then outstanding (other than as
a result of a Permitted Offer) or was such a Beneficial Owner at any time after
the date of this Agreement, regardless of whether such person continues to be
the Beneficial Owner of 15% or more of the then outstanding Voting Shares, but
shall not include the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company or any trustee
of or fiduciary with respect to any such plan when acting in such capacity.
Notwithstanding the foregoing, no Person shall become an "Acquiring Person" if
such Person, together with all Affiliates and Associates of such person, becomes
the Beneficial Owner of 15% or more of the then outstanding Voting Shares as a
result of the acquisition of Common Shares that the Board of Directors has
specifically permitted, authorized or approved in advance, provided, however,
that if after such permitted acquisition, such Person, together with all
Affiliates and Associates of such Person, acquires additional Common Shares not
so specifically permitted, authorized or approved in advance by the Board of
Directors which, together with all Common Shares beneficially owned by the
Person, together with all Affiliates or Associates of such Person, totals 15% or
more of the Common Shares then outstanding, then such Person shall be deemed to
be an Acquiring Person. Notwithstanding the foregoing, no Person shall become an
"Acquiring Person" as the result of an acquisition of Voting Shares by the
Company which, by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to 15% or more
of the Voting Shares of the Company then outstanding; provided, however, that,
if a Person shall become the Beneficial Owner of 15% or more of the Voting
Shares of the Company then outstanding by reason of share purchases by the
Company and shall, after such
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share purchases by the Company and at a time when such Person is the Beneficial
Owner of 15% or more of the Voting Shares of the Company then outstanding,
become the Beneficial Owner of any additional Voting Shares of the Company, then
such Person shall be deemed to be an "Acquiring Person". Notwithstanding the
foregoing, if the Board of Directors of the Company determines in good faith
that a Person who would otherwise be an "Acquiring Person", as defined pursuant
to the foregoing provisions of this paragraph (a), has become such
inadvertently, and such Person divests as promptly as practicable a sufficient
number of Common Shares so that such Person would no longer be an "Acquiring
Person," as defined pursuant to the foregoing provisions of this paragraph (a),
then such Person shall not be deemed to be an "Acquiring Person" for any
purposes of this Agreement unless and until such Person subsequently meets the
definition of an Acquiring Person.
"Agreement" shall mean this Rights Agreement as hereafter amended from
time to time.
"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 as in effect on the date of this Agreement.
A Person shall be deemed the "Beneficial Owner" of and shall be deemed
to "own beneficially" any securities which (without duplication):
(i) such Person or any of such Person's Affiliates or Associates
beneficially owns, directly or indirectly, within the meaning of either Section
13 or 16 of the Exchange Act;
(ii) such Person or any of such Person's Affiliates or Associates has
(A) the right to acquire (whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement, arrangement or
understanding (other than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering
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of securities), or upon the exercise of conversion rights, exchange rights,
rights (other than these Rights), warrants or options, or otherwise; or (B) the
right to vote pursuant to any agreement, arrangement or understanding; or
(iii) are beneficially owned, directly or indirectly, by any other
Person with which such Person or any of such Person's Affiliates or Associates
has any agreement, arrangement or understanding (other than customary agreements
with and between underwriters and selling group members with respect to a bona
fide public offering of securities) for the purpose of acquiring, holding,
voting or disposing of any securities of the Company; provided, however, that,
for purposes of each clause of this definition, a Person shall not be deemed the
Beneficial Owner of, or to own beneficially, securities tendered pursuant to a
tender or exchange offer made by or on behalf of such Person or any of such
Person's Affiliates or Associates until such tendered securities are accepted
for purchase or exchange; and provided, further, that, for purposes of each
clause of this definition, a Person shall not be deemed the Beneficial Owner of,
or to own beneficially, any security as a result of any agreement, arrangement
or understanding to vote such security if such agreement, arrangement or
understanding (1) arises solely from a revocable proxy or consent given to such
Person in response to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable rules and regulations promulgated under
the Exchange Act and (2) is not also then reportable on Schedule 13D under the
Exchange Act (or any comparable or successor report).
Notwithstanding anything in this definition to the contrary, the phrase
"then outstanding", when used with reference to a Person's Beneficial Ownership
of securities of the Company (or to the number of such securities "beneficially
owned"), shall mean the number of such securities
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then issued and outstanding together with the number of such securities not then
actually issued and outstanding which such Person would be deemed to own
beneficially hereunder.
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in the State of Michigan or the state wherein
the principal office of the Rights Agent is located are authorized or obligated
by law or executive order to close.
"Close of Business" on any given date shall mean 5:00 P.M., eastern
time, on such date; provided, however, that if such date is not a Business Day
it shall mean 5:00 P.M., eastern time, on the next succeeding Business Day.
"Closing Price", with respect to any security, shall mean the last sale
price, regular way, on a specific Trading Day or, in case no such sale takes
place on such Trading 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 Nasdaq Stock Market or the New York Stock Exchange or, if such
security is not then listed or admitted to trading on the Nasdaq Stock Market or
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 such security is listed or admitted to
trading or, if such security is not then 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 Nasdaq, Inc. automated quotations system or such other system
then in use, or, if on any such Trading Day such security is 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 such security selected by the
Board of Directors of the Company. If such security is not publicly held or so
listed or traded, "Closing Price" shall
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mean the fair value per unit of such security as determined in good faith by the
Board of Directors of the Company, whose determination shall be described and
the Closing Price set forth in a statement filed with the Rights Agent.
"Common Shares" when used with reference to the Company shall mean
shares of capital stock of the Company which have no preference over any other
class of stock with respect to dividends or assets, which are not redeemable at
the option of the Company and with respect to which no sinking, purchase or
similar fund is provided and shall initially mean the shares of Common Stock,
par value $.01, of the Company. "Common Shares" when used with reference to any
Person other than the Company shall, if used with reference to a corporation,
mean the capital stock (or equity interest) with the greatest voting power of
such other Person or, if such other Person is a Subsidiary of another Person,
the Person or Persons which ultimately control such first-mentioned Person and,
if used with reference to any other Person, mean the equity interest in such
Person (or, if the net worth determined in accordance with generally accepted
accounting principles of another Person (other than an individual) which
controls such first-mentioned Person is greater than such first-mentioned
Person, then such other Person) with the greatest voting power or managerial
power with respect to the business and affairs of such Person.
"Company" shall mean Compuware Corporation, a Michigan corporation, and
its successors.
"Company Order" means a written request or order signed in the name of
the Company by its Chairman of the Board, its President or a Vice President, and
by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant
Secretary, and delivered to the Rights Agent.
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"Distribution Date" shall mean the earlier of (i) the Shares
Acquisition Date or (ii) the Close of Business on the tenth Business Day (or
such later date as may be determined by action of the Board of Directors) after
the date of commencement by any Person (other than the Company, any Subsidiary
of the Company, any employee benefit plan of the Company or of any Subsidiary of
the Company, or any trustee of or fiduciary with respect to any such plan when
acting in such capacity) of, or after the date of the first public announcement
of the intent of any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of the
Company, or any trustee of or fiduciary with respect to any such plan when
acting in such capacity) to commence, a tender or exchange offer the
consummation of which would result in any Person becoming an Acquiring Person
(including, in the case of both (i) and (ii), any such date that is after the
date of this Agreement and before the issuance of the Rights); provided,
however, that an occurrence described in clause (ii) of this definition above
shall not cause the occurrence of the Distribution Date if the Board of
Directors of the Company shall, prior to such tenth Business Day (or such later
date as described in clause (ii) above), determine that such tender or exchange
offer is spurious or if such tender offer is terminated, unless thereafter, the
Board of Directors of the Company shall make a contrary determination, in which
event the Distribution Date shall occur on the later to occur of such tenth
Business Day (or such later date as described in clause (ii) above) and the date
of such latter determination.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and any successor statute thereto.
"Final Expiration Date" shall mean the Close of Business on November 9,
2010.
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"Interested Shareholder" shall mean any Acquiring Person or any
Affiliate or Associate of an Acquiring Person or any other Person in which any
such Acquiring Person, Affiliate or Associate has an interest, or any other
Person acting directly or indirectly on behalf of or in concert with any such
Acquiring Person, Affiliate or Associate,
"Permitted Offer" shall mean a tender or exchange offer which is for
all outstanding Common Shares at a price and on terms determined, before the
purchase of shares under such tender or exchange offer, by at least a majority
of the members of the board of Directors who are not officers of the Company and
who are not Acquiring Persons or Affiliates, Associates, nominees or
representatives of an Acquiring Person, to be adequate (taking into account all
factors that such Directors deem relevant, including, without limitation, prices
that could reasonably be achieved if the Company or its assets were sold on an
orderly basis designed to realize maximum value) and otherwise in the best
interests of the Company and its shareholders (other than the Person or any
Affiliate or Associate of such Person on whose basis the offer is being made)
taking into account all factors that such directors may deem relevant.
"Person" shall mean any individual, firm, corporation, partnership,
limited partnership, limited liability company, trust or other entity, and shall
include any successor (by merger or otherwise) of such entity.
"Preferred Shares" shall mean shares of Series A Junior Participating
Preferred Stock, par value $.01 per share, of the Company having the rights and
preferences set forth in the form of Certificate of Designation of Series A
Junior Participating Preferred Stock attached hereto as Exhibit A.
"Purchase Price" shall mean the price at which the holder of a Right
may, subject to the terms and conditions of this Agreement, purchase one
two-thousandth (1/2000) of a Preferred
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Share (which initial price is set forth in Section 8(b) hereof), as such price
shall be adjusted pursuant to the terms of this Agreement.
"Redemption Date" shall mean the time at which the Rights are redeemed
pursuant to Section 24 herein.
"Redemption Price" shall have the meaning specified in Section 24(b)
herein.
"Right" shall mean one preferred share purchase right which initially
represents the right of the registered holder thereof to purchase one
two-thousandth (1/2000) of a Preferred Share upon the terms and subject to the
conditions herein set forth.
"Rights Agent" shall mean EquiServe Trust Company, N.A., a National
Banking Association, and any successor thereto appointed in accordance with the
terms hereof, in its capacity as agent for the Company and the holders of the
Rights pursuant to this Agreement.
"Right Certificate" shall mean a certificate, in substantially the form
of Exhibit B attached to this Rights Agreement, evidencing the Rights registered
in the name of the holder thereof.
"Rights Register" and "Rights Registrar" shall have the meanings
specified in Section 6.
"Shareholder Services Office" means the principal office of the Rights
Agent at which it administers shareholder services business, which, in the case
of EquiServe Trust Company, N.A. shall, until hereafter changed, be its office
at 150 Royall Street, Canton, MA 02021.
"Shares 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) or Section 16(a) of the
Exchange Act) by the Company or an Acquiring Person that an Acquiring Person has
become such; provided that, if such Person is determined not to have
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become an Acquiring Person pursuant to this Section 1, then no Shares
Acquisition Date shall be deemed to have occurred.
"Subsidiary" of any Person shall mean any corporation or other entity
of which a majority of the outstanding capital stock or other equity interest
having ordinary voting power in the election of directors or similar officials
is owned, directly or indirectly, by such Person.
"Summary of Rights" shall mean a Summary of Rights to Purchase
Preferred Shares in substantially the form attached as Exhibit C to this
Agreement.
"Trading Day" shall mean a day on which the Nasdaq Stock Market or the
principal national securities exchange on which any of the Voting Shares of the
Company are listed or admitted to trading is open for the transaction of
business or, if none of the Voting Shares of the Company is listed or admitted
to trading on the Nasdaq Stock Market or any national stock exchange, a Business
Day.
"Voting Shares" shall mean (i) the Common Shares of the Company and
(ii) any other shares of capital stock of the Company entitled to vote generally
in the election of directors or entitled to vote together with the Common Shares
in respect of any merger or consolidation of the Company, any statutory share
exchange involving the Company, any sale of all or substantially all of the
Company's assets or any liquidation, dissolution or winding up of the Company.
Whenever any provision of this Agreement requires a determination of whether a
number of Voting Shares comprising a specified percentage of such Voting Shares
is, was or will be beneficially owned or has been voted, tendered, acquired,
sold or otherwise disposed of or a determination of whether a Person has offered
or proposed to acquire a number of Voting Shares comprising such specified
percentage, the number of Voting Shares comprising such specified
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percentage of Voting Shares shall in every such case be deemed to be the number
of Voting Shares comprising the specified percentage of all the Company's then
outstanding Voting Shares.
"Wholly-Owned Subsidiary" of a Person shall mean any corporation or
other entity all the outstanding capital stock or other equity interests of
which having ordinary voting power in the election of directors or similar
officials (other than directors' qualifying shares or similar interests) are
owned, directly or indirectly, by such Person.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Common Shares of the Company) 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, upon ten (10) days' prior written notice to the Rights
Agent. The Rights Agent shall have no duty to supervise, and in no event be
liable for, the acts and omissions of any such co-Rights Agent.
Section 3. Issue of Right Certificates. (a) From and after November 9,
2000 until the Distribution Date, (i) outstanding Rights will be evidenced
(subject to the provisions of paragraph (b) of this Section 3) by the
certificates for outstanding Common Shares of the Company and not by separate
Right Certificates, and (ii) the right to receive Right Certificates will be
transferable only in connection with the transfer of Common Shares of the
Company. As soon as practicable after the Rights Agent is notified in writing by
the Company of the occurrence of the Distribution Date, the Rights Agent will
send, by first-class, postage-prepaid mail, to each record holder of Common
Shares of the Company as of the Close of Business on the Distribution Date, at
the address of such holder shown on the stock transfer records of the Company, a
Right
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Certificate evidencing one Right for each Common Share so held, subject to
adjustment as provided in this Agreement. From and after the Distribution Date,
the Rights will be evidenced solely by such Right Certificates.
(b) On November 10, 2000, or as soon thereafter as practicable, the
Company will send a copy of a Summary of Rights, by first-class, postage-prepaid
mail to each record holder of Common Shares of the Company as of the Close of
Business on November 9, 2000, at the address of such holder shown on the stock
transfer records of the Company. With respect to Common Shares outstanding on
November 9, 2000, the certificates evidencing such Common Shares shall
thereafter also evidence the outstanding Rights (as such Rights may be amended
or supplemented) distributed with respect thereto until the earlier of the
Distribution Date or the date of surrender thereof to the Company's transfer
agent for registration of transfer or exchange of Common Shares. Until the
Distribution Date (or, if earlier, the Redemption Date or Final Expiration
Date), the surrender for registration of transfer or exchange of any certificate
for Common Shares outstanding as of the Close of Business on November 9, 2000,
with or without a copy of the Summary of Rights attached thereto, shall also
constitute the surrender for registration of transfer or exchange of the
outstanding Rights associated with the Common Shares represented thereby.
(c) The Company agrees that, at any time after November 9, 2000 and
prior to the Distribution Date (or, if earlier, the Redemption Date or Final
Expiration Date) at which it issues any of its Common Shares upon original issue
or out of treasury, it will concurrently distribute to the holder of such Common
Shares one Right for each such Common Share, which Right shall be subject to the
terms and provisions of this Agreement and will evidence the right
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to purchase the same number of one two-thousandths (1/2000s) of a Preferred
Share at the same Purchase Price as the Rights then outstanding.
(d) Certificates for Common Shares issued after November 9, 2000 but
prior to the earliest of the Distribution Date, the Redemption Date and the
Final Expiration Date, whether upon registration of transfer or exchange of
Common Shares outstanding on November 9, 2000 or upon original issue or out of
treasury thereafter, shall have impressed on, printed on, written on or
otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in a Rights Agreement between Compuware
Corporation and EquiServe Trust Company, N.A., a National Banking
Association, dated as of October 25, 2000 (the "Rights Agreement"), the
terms of which are hereby incorporated herein by reference and a copy
of which is on file at the principal executive offices of Compuware
Corporation. 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. Compuware Corporation
will mail to the holder of this certificate a copy of the Rights
Agreement without charge after receipt of a written request therefor.
As described in the Rights Agreement, Rights issued to or acquired by
any Acquiring Person or any Affiliate or Associate thereof (each as
defined in the Rights Agreement) shall under certain circumstances,
become null and void.
With respect to certificates containing the foregoing legend, until the
Distribution Date, outstanding Rights associated with the Common Shares
represented by such certificates shall be evidenced by such certificates alone,
and the surrender of any such certificate for registration of transfer or
exchange of the Common Shares evidenced thereby shall also constitute surrender
for registration of transfer or exchange of outstanding Rights (as such Rights
may be amended or supplemented) associated with the Common Shares represented
thereby.
(e) If the Company purchases or acquires any of its Common Shares after
November 9, 2000, but prior to the Distribution Date, any Rights associated with
such Common
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Shares shall be deemed cancelled and retired so that the Company shall not be
entitled to exercise any Rights associated with the Common Shares which are no
longer outstanding.
Section 4. Form of Right Certificates. The form of Right Certificates
(and the forms of election to purchase Preferred Shares (or other securities)
and of assignment to be printed on the reverse thereof) shall in form and
substance be substantially the same as Exhibit B hereto and may have such marks
of identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange or trading market on which the Rights
may from time to time be listed or as may be necessary to conform to usage.
Subject to the provisions of Section 23 hereof the Right Certificates, whenever
issued, shall be dated as of the date of authentication thereof, but, regardless
of any adjustments of the Purchase Price or the number of Preferred Shares (or
other securities) as to which a Right is exercisable (whether pursuant to this
Agreement or any future amendments or supplements to this Agreement), or both,
occurring after November 9, 2000 and prior to the date of such authentication,
such Right Certificates may, on their face, without invalidating or otherwise
affecting any such adjustment, expressly entitle the holders thereof to purchase
such number of Preferred Shares at the Purchase Price per one two-thousandth
(1/2000) of a Preferred Share as to which a Right would be exercisable if the
Distribution Date were November 9, 2000; no adjustment of the Purchase Price or
the number of Preferred Shares (or other securities) as to which a Right is
exercisable, or both, effected subsequent to the date of authentication of any
Right Certificate shall be invalidated or otherwise affected by the fact that
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such adjustment is not expressly reflected on the face or in the provisions of
such Right Certificate.
Pending the preparation of definitive Right Certificates, the Company
may execute, and upon Company Order the Rights Agent shall authenticate and
send, by first-class postage-prepaid mail to each record holder of Common Shares
of the Company as of the Close of Business on the Distribution Date, temporary
Right Certificates which are printed, lithographed, typewritten, mimeographed or
otherwise produced substantially of the tenor of the definitive Right
Certificates in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Right Certificates may determine, as evidenced by their execution
of such Right Certificates.
If temporary Right Certificates are issued, the Company will cause
definitive Right Certificates to be prepared without unreasonable delay. After
the preparation of definitive Right Certificates, the temporary Right
Certificates shall be exchangeable for definitive Right Certificates, upon
surrender of the temporary Right Certificates at the Shareholder Services Office
of the Rights Agent, without charge to the holder. Upon surrender for
cancellation of any one or more temporary Right Certificates, the Company shall
execute and the Rights Agent shall authenticate and deliver in exchange therefor
one or more definitive Right Certificates, evidencing a like number of Rights.
Until so exchanged, the temporary Right Certificates shall in all respects be
entitled to the same benefits under this Agreement as definitive Right
Certificates.
Section 5. Execution, Authentication and Delivery. The Right
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, its President or one of its Vice
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Presidents, and attested by its Secretary or one of its Assistant Secretaries.
The signature of any of these officers on the Right Certificates may be manual
or facsimile.
Right Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Right
Certificates or did not hold such offices at the date of authentication of such
Right Certificates. At any time and from time to time after the execution and
delivery of this Agreement, the Company may deliver Right Certificates executed
by the Company to the Rights Agent for authentication, together with a Company
Order for the authentication and delivery of such Right Certificates; and the
Rights Agent in accordance with such Company Order shall authenticate and
deliver such Right Certificates as in this Agreement provided and not otherwise.
No Right Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose unless there appears on such
Right Certificate a certificate of authentication substantially in the form
provided for herein executed by the Rights Agent by manual signature, and such
certificate upon any Right Certificate shall be conclusive evidence, and the
only evidence, that such Right Certificate has been duly authenticated and
delivered hereunder.
Section 6. Registration, Registration of Transfer and Exchange. From
and after the Distribution Date and prior to the earlier of the Redemption Date
and the Final Expiration Date, the Company shall cause to be kept at the
Shareholder Services Office of the Rights Agent a Rights Register (a "Rights
Register") in which, subject to such reasonable regulations as it may prescribe,
the Company shall provide for the registration of Right Certificates and of
transfers of
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Rights. The Rights Agent is hereby appointed the registrar and transfer agent
(the "Rights Registrar") for the purpose of registering Right Certificates and
transfers of Rights as herein provided and the Rights Agent agrees to maintain
such Rights Register in accordance with such regulations so long as it continues
to be designated as Rights Registrar hereunder. Upon surrender to the Rights
Agent for registration of transfer of any Right Certificate, the Company shall
execute, and the Rights Agent shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Right Certificates
evidencing a like number of Rights.
At the option of the holder, Right Certificates may be exchanged for
other Right Certificates upon surrender of the Right Certificates to be
exchanged to the Rights Agent. Whenever any Right Certificates are so
surrendered for exchange, the Company shall execute, and the Rights Agent shall
authenticate and deliver, the Right Certificates which the holder making the
exchange is entitled to receive.
All Right Certificates issued upon any registration of transfer or
exchange of Right Certificates shall be the valid obligations of the Company,
evidencing the same Rights, and entitled to the same benefits under this
Agreement, as the Right Certificates surrendered upon such registration of
transfer or exchange.
Every Right Certificate presented or surrendered for registration of
transfer or exchange shall (if so required by the Company or the Rights Agent)
be duly endorsed, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Rights Registrar duly executed, by the
holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Right Certificates, but the Company may require payment of a sum
sufficient to cover any tax or other
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governmental charge that may be imposed in connection with any registration of
transfer or exchange of Right Certificates, other than exchanges not involving
any transfer.
The provisions of this Section 6 shall be subject to the provisions of
Section 15.
Section 7. Mutilated, Destroyed, Lost and Stolen Right Certificates. If
any mutilated Right Certificate is surrendered to the Rights Agent, the Company
shall execute and the Rights Agent shall authenticate and deliver in exchange
therefor a new Right Certificate of like tenor, for a like number of Rights and
bearing registration number not contemporaneously outstanding.
If there shall be delivered to the Company and the Rights Agent (i)
evidence to their satisfaction of the destruction, loss or theft of a Right
Certificate and (ii) such security or indemnity, if any, as may be required by
them to save each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Rights Agent that such Right Certificate
has been acquired by a bona fide purchaser, the Company shall execute and upon
its request the Rights Agent shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Right Certificate, a new Right Certificate of like
tenor, for a like number of rights and bearing a registration number not
contemporaneously outstanding.
Upon the issuance of any new Right Certificate under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Rights Agent) connected
therewith.
Every new Right Certificate issued pursuant to this Section in lieu of
any destroyed, lost or stolen Right Certificate shall constitute an additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Right Certificate shall be at any time enforceable by
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anyone, and shall be entitled to all the benefits of this Agreement equally and
proportionately with any and all other Right Certificates duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Right Certificates.
Section 8. Exercise of Rights; Purchase Price; Expiration Date of
Rights. (a) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein) in whole or in
part at any time after the Distribution Date upon surrender of the Right
Certificate, with the form of election to purchase on the reverse side thereof
duly executed, to the Rights Agent at its Shareholder Services Office, together
with payment of the Purchase Price for each one two-thousandth (1/2000) of a
Preferred Share (or other securities) as to which the Rights are exercised, at
or prior to the earliest of (i) the Close of Business on the Final Expiration
Date, or (ii) the time of redemption on the Redemption Date.
(b) The Purchase Price for each one two-thousandth (1/2000) of a
Preferred Share pursuant to the exercise of a Right shall initially be Forty
dollars ($40.00), shall be subject to adjustment from time to time as provided
in Sections 12 and 14 hereof and shall be payable in lawful money of the United
States of America in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the securities to be purchased and an amount
equal to any applicable transfer tax required to be paid by the holder of such
Right Certificate in accordance with Section 10 in cash, or by certified check
or cashiers check payable to the order of the Company, the Rights Agent shall
thereupon promptly (i) (A) requisition from any transfer agent of the Preferred
Shares (or other
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securities) certificates for such number of one two-thousandths (1/2000s) of a
Preferred Share (or other securities) as are to be purchased and registered in
such name or names as may be designated by the registered holder of such Right
Certificate or, if appropriate, in the name of a depositary agent or its
nominee, and the Company hereby irrevocably authorizes its transfer agent to
comply with all such requests, and (B) requisition from a depositary agent
appointed by the Company, if any, depositary receipts representing such number
of one two-thousandths (1/2000s) of a Preferred Share as are to be purchased and
registered in such name or names as may be designated by such holder (in which
case certificates for the Preferred Shares represented by such receipts shall be
deposited by the transfer agent with such depositary agent), and the Company
hereby directs such depositary agent to comply with all such requests, (ii) when
appropriate, requisition from the Company the amount of cash to be paid in lieu
of issuance of fractional shares, in accordance with Section 15, (iii) promptly
after receipt of such certificates or depositary receipts registered in such
name or names as may be designated by such holder, cause the same to be
delivered to or upon the order of the registered holder of such Right
Certificate and (iv) when appropriate, after receipt, promptly deliver such cash
to or upon the order of such holder.
(d) If the registered holder of the Right Certificate shall exercise
less than all the Rights evidenced thereby, a new Right Certificate evidencing
Rights equal to the Rights remaining unexercised shall be issued by the Rights
Agent to the registered holder of such Right Certificate or to his, her or its
duly authorized assigns, subject to the provisions of Section 15 hereof.
(e) 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
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<PAGE> 21
registered holder upon the occurrence of any purported exercise as set forth in
this Section 8 unless such registered holder shall have (i) completed and signed
the certificate contained in the form of election to purchase set forth in the
reverse side of the Right Certificate surrendered for exercise, and (2) 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 9. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer or exchange
shall, if surrendered to the Company or to any of its other agents, be delivered
to the Rights Agent for such purpose and for cancellation or, if surrendered to
the Rights Agent for such purpose, shall be cancelled by it. No Right
Certificates shall be authenticated in lieu of or in exchange for any Right
Certificates cancelled as provided in this Section except as expressly permitted
by any of the provisions of this Agreement. The Company shall deliver to the
Rights Agent for cancellation, and the Rights Agent shall so cancel, any other
Right Certificate purchased or acquired by the Company. The Rights Agent shall
deliver all cancelled Right Certificates to the Company, or shall, pursuant to a
Company Order, destroy such cancelled Right Certificates and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 10. Reservation and Availability of Shares. The Company
covenants and agrees that it will cause to be reserved and kept available out of
its authorized and unissued Preferred Shares or any Preferred Shares held in its
treasury, the number of Preferred Shares that will be sufficient to permit the
exercise in full of all outstanding Rights.
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The Company covenants and agrees that it will take all such action as may be
necessary to ensure that all Preferred Shares of the Company issued upon
exercise of Rights shall (subject to payment of the Purchase Price) be duly
authorized, validly issued, fully paid and nonassessable.
The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Right Certificates or of
any Preferred Shares upon the exercise of a Right. The Company shall not,
however, be required to pay any transfer tax which may be payable in respect of
any transfer or delivery of Right Certificates to a Person other than, or in
respect of the issuance or delivery of certificates or depositary receipts for
the Preferred Shares in a name other than, that of the registered holder of the
Right Certificate evidencing Rights surrendered for transfer or exercise or to
issue or deliver any certificates or depositary receipts for Preferred Shares
upon the exercise of any Rights until any such tax shall have been paid (any
such tax being payable by the holder of such Right Certificate at the time of
surrender thereof) or until it has been established to the Company's
satisfaction that no such tax is due.
Section 11. Record Date. Each Person in whose name any certificate for
Preferred Shares or Common Shares of the Company is issued upon the exercise of
Rights shall for all purposes be deemed to have become the holder of record of
the Preferred Shares or Common Shares represented thereby, and such certificate
shall be dated the date upon which the Right Certificate evidencing such Rights
was duly surrendered and payment of the Purchase Price (and any applicable
transfer taxes) was made; provided however, that, if the date of such surrender
and payment is a date upon which the transfer books of the Company for its
Preferred Shares or Common Shares, as the case may be, are closed, such Person
shall be deemed to have become
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<PAGE> 23
the record holder of such shares on, and such certificate shall be dated, the
next succeeding Business Day on which such transfer books of the Company are
open.
Section 12. Adjustment of Purchase Price, Number of Shares or Number of
Rights. The Purchase Price, the number and kind of shares of capital stock of
the Company covered by each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 12.
(a) (i) If the Company shall at any time (A) declare a dividend on the
Preferred Shares payable in Preferred Shares, (B) subdivide the outstanding
Preferred Shares, (C) combine the outstanding Preferred Shares into a smaller
number of Preferred Shares or (D) issue any shares of its capital stock in a
reclassification of the Preferred Shares (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation), except as otherwise provided in this Section 12(a),
the Purchase Price in effect at the time of the record date for such dividend or
of the effective date of such subdivision, combination or reclassification, and
the number and kind of shares of capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised thereafter
shall be entitled to receive, upon payment of the Purchase Price for the number
of one two-thousandths (1/2000s) of a Preferred Share for which a Right was
exercisable immediately prior to such date, the aggregate number and kind of
shares of capital stock which, if such Right had been duly exercised immediately
prior to such date (at a time when the Preferred Shares transfer books of the
Company were open), such holder would have acquired upon such exercise and been
entitled to receive upon payment or effectuation of such dividend, subdivision,
combination or reclassification; provided however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of
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<PAGE> 24
the shares of capital stock of the Company issuable upon exercise of one Right.
If an event occurs which would require an adjustment under both Section 12(a)(i)
and Section 12(a)(ii), the adjustment provided for in this Section 12(a)(i)
shall be in addition to, and shall be made prior to, any adjustment required
pursuant to Section 12(a)(ii).
(ii) If any Person shall become an Acquiring Person, each holder of a
Right shall thereafter have a right to receive, upon exercise thereof at a price
equal to the then current Purchase Price multiplied by the number of one
two-thousandths (1/2000s) of a Preferred Share for which a Right is then
exercisable, in accordance with the terms of this Agreement and in lieu of
Preferred Shares, such number of Common Shares of the Company as shall equal the
quotient obtained by (x) multiplying the then current Purchase Price by the
number of one two-thousandths (1/2000s) of a Preferred Share for which a Right
is then exercisable and dividing that product by (y) 50% of the then current per
share market price of the Company's Common Shares (determined pursuant to
Section 12(d)) on the date such Person became an Acquiring Person; provided,
however, that if the transaction that would otherwise give rise to the foregoing
adjustment is also subject to the provisions of Section 14, then only the
provisions of Section 14 shall apply and no adjustment shall be made pursuant to
this Section 12(a)(ii). If any Person shall become an Acquiring Person and the
Rights shall then be outstanding, the Company shall not take any action which
would eliminate or diminish the benefits intended to be afforded by the Rights.
Notwithstanding any other provision of this Agreement, from and after
the time any Person shall become an Acquiring Person, any Rights Beneficially
Owned by (i) any Acquiring Person (or any Associate or Affiliate of an Acquiring
Person), (ii) a transferee of an Acquiring Person (or any Affiliate or Associate
thereof) who becomes a transferee after the Acquiring
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<PAGE> 25
Person becomes such, or (iii) a transferee of an Acquiring Person (or of any
Affiliate or Associate thereof) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or to
any Person with whom the Acquiring Person has a 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 12(a)(ii), shall be null and void and any holder of
such Rights shall thereafter have no right to exercise such Rights under any
provision of this Agreement. No Right Certificate shall be issued pursuant to
this Agreement that represents Rights beneficially owned by an Acquiring Person
whose Rights would be null and void pursuant to the preceding sentence or by any
Associate of Affiliate thereof; no Right Certificate shall be issued at any time
upon the transfer of any Rights to an Acquiring Person whose Rights would be
null and void pursuant to the preceding sentence or to any Associate or
Affiliate thereof or to any nominee (acting in its capacity as such) of such
Acquiring Person, Associate or Affiliate; and any Right Certificate delivered to
the Rights Agent for transfer to an Acquiring Person whose Rights would be null
and void pursuant to the preceding sentence or to any Associate or Affiliate
thereof or to any nominee (acting in its capacity as such) of such Acquiring
Person, Associate or Affiliate shall be cancelled. The Company shall use all
reasonable efforts to insure that the provisions of this Section 12(a)(ii) are
complied with, but shall have no liability to any holder of Right Certificates
or other Person as a result of its failure to make any determinations with
respect to an Acquiring person or its Affiliates, Associates or transferees
under this Agreement.
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<PAGE> 26
(iii) If on or after the Distribution Date there shall not be
sufficient Common Shares authorized but unissued to permit the exercise in full
of all outstanding Rights in accordance with the foregoing subparagraph (ii),
the Company shall take all such action as is within its power, including without
limitation appropriate action by its Board of Directors, as may be necessary to
amend the Company's articles of incorporation to authorize additional Common
Shares for issuance upon exercise of the Rights. If, notwithstanding the
foregoing, the shareholders shall not approve an amendment to the Company's
articles of incorporation authorizing such additional Common Shares, the
adjustment prescribed in Section 12(a)(ii) shall not be made but, in lieu
thereof each holder of a Right shall have the right to receive, upon exercise
thereof in accordance with the terms of this Agreement, such number of one
two-thousandths (1/2000s) of a Preferred Share as shall equal the quotient
obtained by (x) multiplying the then current Purchase Price by the number of one
two-thousandths (1/2000s) of a Preferred Share for which a Right is then
exercisable and dividing that product by (y) 50% of the then current per share
market price of one two-thousandth (1/2000) of a Preferred Share (determined
pursuant to Section 12(d)) on the date such Person became an Acquiring Person.
(b) If the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Shares entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Preferred Shares (or shares having the same rights,
privileges and preferences as the Preferred Shares ("equivalent preferred
shares")) or securities convertible into or exchangeable for Preferred Shares or
equivalent preferred shares at a price per Preferred Share or equivalent
preferred share (together with any additional consideration required upon
conversion or exchange in the case of a security Convertible into or
exchangeable for Preferred Shares or equivalent preferred shares), less than
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<PAGE> 27
the current per share market price of the Preferred Shares (determined pursuant
to Section 12(d) on such record date), the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record data by a fraction, the numerator of which
shall be the number of Preferred Shares outstanding on such record date plus the
number of Preferred Shares which the aggregate offering price of the total
number of Preferred Shares and/or equivalent preferred shares so to be offered
(together with the aggregate of any additional consideration required upon
conversion or exchange in the case of any convertible or exchangeable securities
so to be offered) would purchase at such current market price and the
denominator of which shall be the number of Preferred Shares outstanding on such
record date plus the number of additional Preferred Shares and/or equivalent
preferred shares to be offered for subscription or purchase (or into or for
which the convertible or exchangeable securities so to be offered are initially
convertible or exchangeable); provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable upon
exercise of one Right. In case all or part of such subscription or purchase
price may be paid 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. Preferred Shares owned by or held for the account of the Company or any
of its Subsidiaries shall not be deemed outstanding for the purpose of any
computation described in this Section 12(b). The adjustment described in this
Section 12(b) shall be made successively whenever such a record date is fixed
and, if none of such rights, options or warrants is 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.
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<PAGE> 28
(c) If the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular quarterly cash dividend or a dividend payable in
Preferred Shares) or subscription rights or warrants (excluding those referred
to in Section 12(b)), the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
then current per share market price of the Preferred Shares (determined pursuant
to Section 12(d)) on such record date, less the fair market value (as determined
in good faith by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent) of the portion of
the assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to one Preferred Share and the
denominator of which shall be such current per share market price of the
Preferred Shares; provided however, that in no event shall the consideration to
be paid upon the exercise of one Right be less than the aggregate par value of
the shares of capital stock of the Company to be issued upon the exercise of one
Right. Such adjustments shall be made successively whenever such a record date
is fixed; and, if such distribution is not so made, the Purchase Price shall
again be adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(d)(i) For the purpose of any computation hereunder, the "current per
share market price" of the Common Shares an any date shall be deemed to be the
average of the daily Closing Prices per share of such Common Shares for the 30
consecutive Trading Days immediately prior to such date; provided however, that,
if the issuer of such Common Shares
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<PAGE> 29
shall announce (A) a dividend or distribution on such Common Shares payable in
such Common Shares or securities convertible into such Common Shares or (B) any
subdivision, combination or reclassification of such Common Shares, and the
ex-dividend date for such dividend or distribution, or the record date for such
subdivision, combination or reclassification, shall occur during such period of
30 Trading Days, then, and in each such case, the current per share market price
of the Common Shares shall be appropriately adjusted to reflect the current
market price per Common Share equivalent.
(ii) For the purpose of any computation hereunder, the "current per
share market price" of the Preferred Shares shall be determined in the same
manner as set forth above for Common Shares in paragraph (i) of this Section
12(d). If the current per share market price of the Preferred Shares cannot be
determined in the manner provided above, the "current per share market price" of
the Preferred Shares shall be conclusively deemed to be the current per share
market price of the Common Shares (determined in the manner provided above)
multiplied by two thousand.
(e) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the Purchase
Price; provided; however, that any adjustments which by reason of this Section
12(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 12
shall be made to the nearest cent or to the nearest ten-thousandth of a Common
Share or other share or one ten-millionth of a Preferred Share, as the case may
be, and references herein to the "number of one two-thousandths (1/2000s) of a
Preferred Share" (or similar phrases) shall be construed to include fractions of
one two-thousandth (1/2000) of a Preferred Share. Notwithstanding the first
sentence of this Section 12(e), each adjustment
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<PAGE> 30
required by this Section 12 shall be made no later than the earlier of (i) three
years from the date of the transaction which requires such adjustment or (ii)
the thirtieth day preceding the Final Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 12(a),
the holder of any Right thereafter exercised shall become entitled to receive
any shares of capital stock of the Company other than Preferred Shares,
thereafter the number of such other shares so receivable upon exercise of any
Right shall be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with respect to the shares
contained in this Section 12, and the provisions of this Agreement, including
without limitation Sections 8, 10, 11 and 14, with respect to the Preferred
Shares shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall, whether or not the Right
Certificate evidencing such Rights reflects such adjusted Purchase Price,
evidence the right to purchase, at the adjusted Purchase Price, the number of
one two-thousandths (1/2000s) of a Preferred Share purchasable from time to time
hereunder upon exercise of the Rights, all subject to further adjustment as
provided herein.
(h) Unless the Company shall have exercised its election as provided
in Section 12(i), upon each adjustment of the Purchase Price pursuant to Section
12(b) or 12(c), each Right outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase, at the adjusted
Purchase Price per one two-thousandth (1/2000) of a Preferred Share, that number
of one two-thousandths (1/2000s) of a Preferred Share obtained by (i)
multiplying (x) the number of two-thousandths (1/2000s) of a share covered by a
Right
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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 outstanding in lieu of any
adjustment in the number of one two-thousandths (1/2000s) of a Preferred Share
purchasable upon the exercise of a Right. Each Right outstanding after such
adjustment of the number of Rights shall be exercisable for the number of one
two-thousandths (1/2000s) of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment of the Purchase Price. 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 Right Certificates have been issued, shall be at least 10 days later
than the date of the public announcement. Until such record date, however, any
adjustment in the number of one two-thousandths (1/2000s) of a Preferred Share
for which a Right shall be exercisable made as required by this Agreement shall
remain in effect. If Right Certificates have been issued, upon each adjustment
of the number of Rights pursuant to this Section 12(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing, subject to
Section 15 hereof, the additional Rights to
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which such holders shall be entitled as a result of such adjustment, or, at the
option of the Company, shall cause to be distributed to such holders of record
in substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be distributed
shall be issued, executed and authenticated in the manner provided for herein
and shall be registered in the names of the holders of record of Right
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of one two-thousandths (1/2000s) of a Preferred Share issuable upon
the exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price and the number of one
two-thousandths (1/2000s) of a Preferred Share which were expressed in the
initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below one two-thousandth (1/2000) of the amount of
consideration per Preferred Share determined by the Board of Directors of the
Company to be capital, or below one two-thousandth (1/2000) of the par value, if
any, per Preferred Share issuable upon exercise of the Rights, the Company
agrees to take such corporate action as is within its power, including without
limitation appropriate action by its Board of Directors, and which is, in the
opinion of its counsel, necessary in order that the Company may validly and
legally issue fully paid and nonassessable one two-thousandth (1/2000) of a
Preferred Share at such adjusted Purchase Price.
(l) In any case in which this Section 12 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may
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elect to defer until the occurrence of such event the issuance to the holder of
any Right exercised after such record date of the Preferred Shares or other
capital stock or securities of the Company, if any, issuable upon such exercise
over and above the Preferred Shares or 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 securities upon the occurrence of
the event requiring such adjustment.
(m) Anything in this Section 12 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 12, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any combination or subdivision of the Preferred Shares, issuance
wholly for cash of Preferred Shares or securities which by their terms are
convertible into or exchangeable for Preferred Shares, dividends on Preferred
Shares payable in Preferred Shares or issuance of rights, options or warrants
referred to in subsection (b) of this Section 12, hereafter effected by the
Company to holders of its Preferred Shares shall not be taxable to such
shareholders.
(n) If at any time prior to the Distribution Date, the Company shall
(i) declare or pay any dividend on the Common Shares payable in Common Shares or
(ii) effect a subdivision or combination of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares)
into a greater or lesser number of Common Shares, then in any such case (i) the
Purchase Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision or combination shall be adjusted by
multiplying such Purchase Price by a fraction, the numerator of which is the
number of Common
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Shares outstanding immediately before such event and the denominator of which is
the number of Common Shares outstanding immediately after such event, and (ii)
the number of Rights outstanding immediately after such event shall be adjusted,
either through cancellation of outstanding Rights or through distribution of
additional Rights (but without duplication of the Company's obligations under
Section 3(c)), so that the certificate evidencing each Common Share outstanding
immediately after such event shall also evidence the associated Right to
purchase the same number of one two-thousandths (1/2000s) of a Preferred Share
as to which a Right would have entitled the holder thereof to purchase
immediately prior to such event. The adjustment provided for in this Section
12(n) shall be made successively whenever such a dividend is declared or paid or
such a subdivision or combination is effected. If an event occurs which would
require an adjustment under Section 12(a)(ii) and this Section 12(n), the
adjustments provided for in this Section 12(n) shall be in addition and prior to
any adjustment required pursuant to Section 12(a)(ii).
Section 13. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Section 12 or 14 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
Common Shares of the Company and the Preferred Shares a copy of such certificate
and (c) mail a brief summary thereof to each holder of record of a Right
Certificate in accordance with Section 27 hereof.
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Section 14. Consolidation, Merger, Share Exchange or Sale or Transfer of Assets
or Earning Power.
(a) If, on or following the Shares Acquisition Date, directly or
indirectly, (a) the Company shall consolidate with, merge with and into, or
engage in a statutory share exchange with, any Interested Shareholder or, if in
such merger, consolidation or share exchange all holders of Common Shares are
not treated alike, any other Person, (b) the Company shall consolidate with,
merge with, or engage in a statutory share exchange with, any Interested
Shareholder or, if in such merger, consolidation or share exchange all holders
of Common Shares are not treated alike, any other Person, and the Company shall
be the continuing or surviving corporation of such consolidation, merger or
share exchange (other than, in a case of any transaction described in (a) or
(b), a merger, consolidation or share exchange which would result in all of the
Voting Shares outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into securities of the
surviving entity) all of the Voting Shares of the Company or such surviving
entity outstanding immediately after such merger, consolidation or share
exchange and the holders of such securities not having changed as a result of
such merger or consolidation), or (c) 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 two or more related transactions, assets of
the Company or its Subsidiaries which constitute more than 50% of the assets or
which produce more than 50% of the earning power of the Company and its
Subsidiaries (taken as a whole) to any Interested Shareholder or Shareholders
or, if in such transaction all holders of Common Shares are not treated alike,
any other Person (other than the Company or any Subsidiary of the Company in one
or more transactions each of which does not, except as permitted by Section 24
or 28, have the purpose of, or reasonably foreseeably have
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<PAGE> 36
the effect to, materially diminish or otherwise eliminate the benefits intended
to be afforded by the Rights), then, and in each such case (except as provided
in Section 14(d)), the Company shall, as a condition to engaging in any such
transaction, make or cause to be made proper provision so that (i) each holder
of a Right (except as otherwise provided herein) shall thereafter have the right
to receive, upon the exercise thereof in accordance with the terms of this
Agreement and in lieu of Preferred Shares, such number of freely tradable Common
Shares of the Principal Party (as defined below), not subject to any liens,
encumbrances, rights of first refusal or other adverse claims, as shall be equal
to the quotient obtained by (X) multiplying the then current Purchase Price by
the number of one two-thousandths (1/2000s) of a Preferred Share for which a
Right is then exercisable (without taking into account any adjustment previously
made pursuant to Section 12(a)(ii)) and dividing that product by (Y) 50% of the
current per share market price of the Common Shares of such Principal Party
(determined pursuant to Section 12(d)) on the date of consummation of such
consolidation, merger, share exchange, sale or transfer; (ii) such Principal
Party shall thereafter be liable for, and shall assume, by virtue of such
consolidation, merger, share exchange, sale or transfer, all the obligations and
duties of the Company pursuant to this Agreement; (iii) the term "Company", as
used herein, shall thereafter be deemed to refer to such Principal Party, it
being specifically intended that the provisions of Section 12 shall apply only
to such Principal Party following such consolidation, merger, share exchange,
sale or transfer; and (iv) such Principal Party shall take such steps (including
without limitation the reservation of a sufficient number of its Common Shares
in accordance with Section 10) in connection with such consummation as may be
necessary to assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to the Common Shares thereafter
deliverable upon the exercise of the Rights. The Company shall not
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enter into any transaction of the kind referred to in this Section 14 if at the
time of such transaction there are outstanding any rights, warrants, instruments
or securities or any agreement or arrangements which, as a result of the
consummation of such transaction, would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights. For the purposes
of this Section 14, 50% of the assets of the Company and its Subsidiaries shall
be determined by reference to the book value of such assets as set forth in the
most recent consolidated balance sheet of the Company and its Subsidiaries
(which need not be audited) and 50% of the earning power of the Company and its
Subsidiaries shall be determined by reference to the mathematical average of the
operating income resulting from the operations of the Company and its
Subsidiaries for the two most recent full fiscal years as set forth in the
consolidated and consolidating financial statements of the Company and its
Subsidiaries for such years; provided, however, that, if the Company has, during
such period, engaged in one or more transactions to which purchase accounting is
applicable, such determination shall be made by reference to the pro forma
operating income of the Company and its Subsidiaries giving effect to such
transactions as if they had occurred at the commencement of such two-year
period.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in clause (a) or (b) of
the first sentence of Section 14(a), the Person that is the issuer of any
securities into which Common Shares of the Company are converted in such merger,
consolidation or share exchange, and if no securities are so issued, the person
that is the surviving party to such merger, consolidation or share exchange
(including, if applicable, the Company if it is the surviving corporation); and
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(ii) in the case of any transaction described in clause (c) of the
first sentence of Section 14(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 of the foregoing
cases, (1) if the Common Shares of such Person are not at such time and have not
been continuously over the preceding 12 month period registered under Section 12
of the Exchange Act, and such Person is a direct or indirect Subsidiary of
another person the Common Shares of which are and have been so registered,
"Principal Party" shall refer to such other Person, (2) in case such Person is a
Subsidiary, directly or indirectly or more than one Person, the Common Shares of
two or more of which are and have been so registered, "Principal Party" shall
refer to whichever of such Persons is the issuer of the Common Shares having the
greatest aggregate market value; and (3) in case such Person is owned, directly
or indirectly, by a joint venture formed by two or more Persons that are not
owned, directly or indirectly, by the same Person, the rules set forth in (1)
and (2) above shall apply to each of the chains of ownership having an interest
in such joint venture as if such party were a "Subsidiary" of both or all of
such joint venturers and the Principal Parties in each such chain shall bear the
obligations set forth in this Section 14 in the same ratio as their direct or
indirect interests in such Person bear to the total of such interests.
(c) The Company shall not consummate any such consolidation, merger,
share exchange, sale or transfer unless the Principal Party shall have a
sufficient number of its authorized Common Shares which have not been issued or
reserved for issuance to permit the exercise in full of the Rights in accordance
with this Section 14 and unless prior thereto the Company and such Principal
Party shall have executed and delivered to the Rights Agent an agreement
supplemental to this Agreement providing for the terms set forth in, and
complying
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with the provisions of, this Section 14 and further providing that, as soon as
practicable after the date of any consolidation, merger, share exchange, sale or
transfer mentioned in Section 14(a), the Principal Party at its own expense
shall:
(i) prepare and file a registration statement under the Securities
Act of 1933, as amended (the "Securities 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 Securities Act)
until the Final Expiration Date;
(ii) use its best efforts to qualify or register the Rights and the
securities purchasable upon exercise of the rights under the blue sky laws of
such jurisdictions as may be necessary or appropriate; and
(iii) deliver to holders of the Rights historical financial statements
for the Principal Party which comply in all respects with the requirements for
registration on Form 10 under the Securities Exchange Act of 1934, as amended.
The provisions of this Section 14 shall similarly apply to successive mergers,
consolidations, share exchanges, sales or other transfers.
(d) Notwithstanding anything in this Agreement to the contrary,
Section 14 shall not be applicable to a transaction described in subparagraphs
(a) and (b) of the first sentence of Section 14(a) if: (1) such transaction is
consummated with a Person or Persons who acquired Common Shares pursuant to a
Permitted Offer (or a wholly-owned Subsidiary of any such Person or Persons),
(2) the price per Common Share offered in such transaction is not less than the
price per Common Share paid to all holders of Common Shares whose shares were
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<PAGE> 40
purchased pursuant to such Permitted Offer, and (3) the form of consideration
offered in such transaction is the same as the form of consideration paid
pursuant to such Permitted Offer. Upon consummation of any such transaction
contemplated by this Section 14(d), all Rights hereunder shall expire.
Section 15. Fractional Rights and Fractional Shares. (a) The Company
shall not be required to issue or distribute Right Certificates which evidence
fractional Rights. If, on the Distribution Date or thereafter, as a result of
any adjustment effected pursuant to Section 12 or otherwise hereunder, a Person
would otherwise be entitled to receive a Right Certificate evidencing a
fractional Right, the Company shall, in lieu thereof, pay or cause to be paid to
such Person an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purpose of this Section 15(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.
(b) The Company shall not be required to issue fractions of Preferred
Shares (other than fractions which are integral multiples of one two-thousandth
(1/2000) of a Preferred Share) upon exercise of the Rights or to distribute
certificates which evidence fractional Preferred Shares (other than fractions
which are integral multiples of one two-thousandth (1/2000) of a Preferred
Share). Fractions of Preferred Shares in integral multiples of one
two-thousandth (1/2000) of a Preferred Share may, at the election of the
Company, be evidenced by depositary receipts, pursuant to an appropriate
agreement between the Company and a depositary selected by it, provided that
such agreement shall provide that the holders of such depositary receipts shall
have all the rights, privileges and preferences to which they are entitled as
beneficial owners of the Preferred Shares. If, on the Distribution Date or
thereafter, as a result of
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<PAGE> 41
any adjustment effected hereunder in the number of one two-thousandths (1/2000s)
of a Preferred Share as to which a Right has become exercisable, a Person would
otherwise be entitled to receive a fractional Preferred Share that is not an
integral multiple of one two-thousandth (1/2000) of a Preferred Share, the
Company shall, in lieu thereof, pay to such Person at the time such Right is
exercised as herein provided an amount in cash equal to the same fraction (which
is not an integral multiple of one two-thousandth (1/2000) of a Preferred Share)
of the current market value of one Preferred Share. For purposes of this Section
15(b), the current market value of a Preferred Share shall be the Closing Price
of a Preferred Share for the Trading Day immediately prior to the date of such
exercise.
(c) Should any adjustment contemplated by Section 12(a)(ii) occur,
the Company shall not be required to issue fractions of Common Shares upon
exercise of the Rights or to distribute certificates which evidence fractional
Common Shares. If after any such adjustment, a Person would otherwise be
entitled to receive a fractional Common Share of the Company upon exercise of
any Right Certificate, the Company shall, in lieu thereof, pay to such Person at
the time such Right is exercised as herein provided an amount in cash equal to
the same fraction of the current market value of one Common Share. For purposes
of this Section 15(c), the current market value of a Common Share shall be the
Closing Price of a Common Share for the Trading Day immediately prior to the
date of such exercise.
(d) The holder of a Right by the acceptance thereof expressly waives
his, her or its right to receive any fractional Rights or any fractional shares
upon exercise of a Right (except as provided above).
Section 16. Rights of Action. (a) All rights of action in respect of
the obligations and duties owed to the holders of the Rights under this
Agreement are vested in the registered holders
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<PAGE> 42
of the Rights; and, without the consent of the Rights Agent or of the holder of
any other Rights, any registered holder of any Rights may, in his, her or its
own behalf and for his, her or its own benefit, enforce, and may institute and
maintain any suit, action or proceeding, judicial or otherwise, against the
Company to enforce, or otherwise to act in respect of such holder's right to
exercise such Rights in the manner provided in the Right Certificate evidencing
such Rights and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened violations
of, the obligations of any Person subject to this Agreement.
(b) No right or remedy herein conferred upon or reserved to the
registered holder of Rights is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy, whether hereunder or otherwise, shall not
prevent the concurrent assertion or employment of any other appropriate right or
remedy.
(c) No delay or omission of any registered holder of Rights to
exercise any right or remedy accruing hereunder shall impair any such right or
remedy or constitute a waiver of any default hereunder or an acquiescence
therein. Every right and remedy given hereunder or by law to such holders may be
exercised from time to time, and as often as may be deemed expedient, by such
holders.
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Section 17. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Shares of the Company,
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the Shareholder Services Office of the Rights Agent duly endorsed or accompanied
by a proper instrument of transfer, and
(c) the Company and the Rights Agent may deem and treat the person in
whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated Common Shares
certificate made by anyone other than the Company or the Rights Agent) for all
purposes, and neither the Company nor the Rights Agent shall be affected by any
notice to the contrary.
Section 18. Right Certificate Holder Not Deemed a Shareholder. No
holder, as such, of any Right (whether or not then evidenced by a Right
Certificate) shall be entitled to vote, receive dividends or be deemed for any
purpose the holder of Preferred Shares, Common Shares of the Company 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 Right Certificate be construed to confer upon any such holder, as
such, any of the rights of a shareholder of the Company, including without
limitation any right to vote for the election of
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<PAGE> 44
directors or upon any matter submitted to shareholders at any meeting thereof,
to give or withhold consent to any corporate action, to receive notice of
meetings or other actions affecting shareholders (except as provided in Section
25) or to receive dividends or subscription rights until the Right or Rights
evidenced by such Right Certificate shall have been exercised (or mandatorily
redeemed and exchanged) in accordance with the provisions hereof.
Section 19. Concerning the Rights Agent. The Company agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration
and execution of this Agreement and the 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 gross
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.
The Rights Agent shall be protected and shall incur no liability for,
or in respect of any action taken, suffered or omitted by it in connection with,
its administration of this Agreement in reliance upon any Right Certificate or
Certificate for Preferred Shares, Common Shares of the Company or other
securities of the Company, Company Order, 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 executed and, where necessary, verified or acknowledged, by the proper
person or persons, or otherwise upon the advice of its counsel as set forth in
Section 20 hereof.
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Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound.
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete 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 be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the
President, any Vice President, the Treasurer, any Assistant Treasurer, the
Secretary or any Assistant Secretary of the Company and delivered to the Rights
Agent; and such certificate 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 to the Company or any
other Person only for its gross negligence, bad faith or willful misconduct.
Anything in this Agreement to the contrary notwithstanding, in no event shall
the Rights Agent be liable for special, indirect or consequential loss or damage
of any kind whatsoever (including, but not limited to, lost profits), even if
the Rights Agent has been advised of the likelihood of such loss or damage and
regardless of the form of action.
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(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its authentication thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not have any responsibility with respect to
the validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or with respect to the validity or
execution of any Right Certificate (except its authentication thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right Certificate; nor shall it
be responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 12(a)(ii) hereof) or any adjustment in
the terms of the Rights (including the manner, method or amount thereof)
provided for in Sections 3, 12, 14 and 24, or the ascertainment of the existence
of facts that would require any such change or adjustment (except with respect
to the exercise of Rights evidenced by Right Certificates after actual notice
that such change or adjustment is required); nor shall it by any act hereunder
be deemed to make any representation or warranty as to the authorization or
reservation of any Preferred Shares or Common Shares to be issued pursuant to
this Agreement or any Right Certificates or as to whether any Preferred Shares
or Common Shares will, when issued, be duly authorized, validly 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
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(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the President, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary 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 shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company.
(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 of the Company resulting from any such act, default, bad
faith, neglect, gross negligence or willful misconduct provided reasonable care
was exercised in the selection and continued employment thereof.
Section 21. Merger or Consolidation or Change of Name of Rights
Agent. Any corporation into which the Rights Agent or any successor Rights Agent
may be merged or with which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Rights Agent or any successor
Rights Agent shall be a party, or any corporation succeeding to the corporate
trust business or shareholder services business of the Rights Agent or
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<PAGE> 48
any successor Rights Agent, shall be the successor to the Rights agent under
this Agreement without the execution or filing of any paper or any further act
on the part of any of the parties hereto, provided that such corporation would
be eligible for appointment as a successor Rights Agent under the provisions of
Section 22. If at the time such successor Rights Agent shall succeed to the
agency created by this Agreement any of the Right Certificates shall have been
authenticated but not delivered, any such successor Rights Agent may adopt the
authentication of the predecessor Rights Agent and deliver such Right
Certificates so authenticated, and, if at that time any of the Right
Certificates shall not have been authenticated, any successor Rights Agent may
authenticate such Right Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all such cases
such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
If at any time the name of the Rights Agent shall be changed and at
such time any of the Right Certificates shall have been authenticated but not
delivered, the Rights Agent may adopt the authentication under its prior name
and deliver Right Certificates so authenticated; and, in case at that time any
of the Right Certificates shall not have been authenticated, the Rights Agent
may authenticate such Right Certificates either in its prior name or in its
changed name; and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.
Section 22. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
for the Common Shares of the Company and the Preferred Shares by registered or
certified mail and to the holders of the Right Certificates by first-class mail.
The Company may remove the Rights Agent or any successor
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Rights Agent upon 30 days' notice in writing mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent for the
Common Shares of the Company and the Preferred Shares by registered or certified
mail, and to the holders of the Right Certificates by first-class mail. If the
Rights Agent shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of 30 days after
giving notice of such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by
the registered holder of a Right Certificate (or, prior to the Distribution
Date, of Common Shares), then any registered holder of a Right Certificate (or,
prior to the Distribution Date, of Common Shares) may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the United States or
of any state of the United States, which is authorized under such laws to
exercise corporate trust or shareholder services powers and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50 million. After appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent for
the Common Shares of the Company and the Preferred Shares, and
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<PAGE> 50
mail a notice thereof in writing to the registered holders of the Right
Certificates. Failure to give any notice provided for in this Section 22,
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 23. Issuance of New-Right Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at is 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 per share and the number or kind or class of shares or
other securities purchasable under the Right Certificates made in accordance
with the provisions of this Agreement. In addition, in connection with the
issuance or sale of Common Shares following the Distribution Date and before the
earlier of the Redemption Date and the Final Expiration Date, the Company (1)
shall, with respect to Common Shares so issued or sold pursuant to the exercise
of stock options or under any employee plan or arrangement, or upon the
exercise, conversion or exchange of securities, notes or debentures issued by
the Company, and (2) may, in any other case, if deemed necessary or appropriate
by the Board of Directors of the Company, issue Right Certificates representing
the appropriate number of Rights in connection with such issuance or sale;
provided, however, that (a) the Company shall not be obligated to issue any such
Right Certificate 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 Right Certificate
would be issued, and (b) no Right Certificate shall be issued if, and to the
extent that, appropriate adjustment shall otherwise have been made in lieu of
the issuance thereof.
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Section 24. Redemption. (a) The Rights may be redeemed by action of the
Board of Directors of the Company pursuant to paragraph (b) of this Section 24,
but shall not be redeemed in any other manner.
(b) (i) The Board of Directors of the Company may, at its option, at
any time prior to the time any Person becomes an Acquiring Person redeem all but
not less than all the then outstanding Rights at a redemption price of one-tenth
(1/10) of one cent ($0.001) per Right then outstanding, appropriately adjusted
to reflect any adjustment in the number of Rights outstanding pursuant to
Section 12(a)(i) herein (such redemption price being hereinafter referred to as
the "Redemption Price"). Any such redemption of the Rights by the Board of
Directors may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish. The
Company may, at its option, pay the Redemption Price either in Common Shares
(based on the "current per share market price," as defined in Section 12(d), of
the Common Share at the time of redemption) or cash; provided that if the
Company elects to pay the Redemption Price in Common Shares, the Company shall
not be required to issue any fractional Common Shares and the number of Common
Shares issuable to each holder of Rights shall be rounded down to the next whole
share.
(ii) In addition, the Board of Directors of the Company may, at its
option, at any time (A) following a period of 60 days after the later of (I) the
time any Person becomes an Acquiring Person, and (II) the effective date of an
appropriate registration statement under the Securities Act permitting the
issuance of securities upon exercise of the Rights, but (B) before the
occurrence of any of the events described in Section 14(a), redeem all, but not
less than all, of the then outstanding Rights at the Redemption Price (x) in
connection with any merger, consolidation, statutory share exchange, business
combination or sale or other transfer (in one
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transaction or in a series of related transactions) of assets or earning power
aggregating more than 50% of the earning power of the Company and its
Subsidiaries (taken as a whole) in which all holders of Common Shares are
treated alike and not involving (other than as a holder of Common Shares being
treated like all other such holders) an Interested Shareholder or (y) (I) if and
for so long as the Acquiring Person is not thereafter the Beneficial Owner of
10% of the Common Shares, and (II) at the time of redemption no other Persons
are Acquiring Persons.
(c) The right of the registered holders of Right Certificates to
exercise the Rights evidenced thereby or, if the Distribution Date has not
theretofore occurred, the inchoate right of the registered holders of Rights to
exercise the same shall, without notice to such holders or to the Rights Agent
and without further action, terminate and be of no further force or effect
effective as of the time of adoption by the Board of Directors of the Company of
a resolution authorizing and directing the redemption of the Rights pursuant to
paragraph (b) of this Section 24 (or, alternatively, if the, Board of Directors
qualified such action as to time, basis or conditions, then at such time, on
such basis and with such conditions as the Board of Directors may have
established pursuant to such paragraph (b)); thereafter, the only right of the
holders of Rights shall be to receive the Redemption Price. The Company shall
promptly give public notice of any redemption resolution pursuant to paragraph
(b) of this Section 24; provided, however, that the failure to give, or any
defect in, any such notice shall not affect the validity of such redemption.
Within 10 days after the adoption of any redemption resolution pursuant to
paragraph (b) of this Section 24, the Company shall give notice of such
redemption to the holders of the then outstanding Rights by mailing such notice
to all such holders at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agent for the Common Shares. Any notice which is
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mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of redemption shall state the
method by which the payment of the Redemption Price will be made.
(d) Neither the Company nor any of its Affiliates or Associates may
acquire (other than, in the case of such Affiliates and Associates, in their
capacity as holders of Common Shares of the Company), redeem or purchase for
value any Rights at any time in any manner other than as specifically set forth
in this Section 24, and other than in connection with the purchase of Common
Shares prior to the Distribution Date.
Section 25. Notice of Certain Events. If the Company shall on or after
the Distribution Date, propose (a) to pay any dividend or other distribution
payable in stock of any class of the Company or any Subsidiary of the Company to
the holders of its Preferred Shares, (b) to distribute to the holders of its
Preferred Shares rights or warrants to subscribe for or to purchase any
additional Preferred Shares or shares of stock of any class or any other
securities, rights or options, (c) to make any other distribution to the holders
of its Preferred Shares (other than a regular quarterly cash dividend), (d) to
effect any reclassification of its Preferred Shares (other than a
reclassification involving only the subdivision of outstanding Preferred
Shares), (e) to effect any consolidation with, merger into or with. or statutory
share exchange with, or to effect any sale or other transfer (or to permit one
or more of its Subsidiaries to effect any sale or other transfer), in one or
more transactions, of more than 50% of the assets or earning power of the
Company and its Subsidiaries (determined as provided in Section 14 herein) to,
any other Person (other than the Company or a Wholly-Owned Subsidiary or
Wholly-Owned Subsidiaries of the Company), (f) to effect the liquidation,
dissolution or winding up of the Company or (g) if the Rights have theretofore
become exercisable with respect to Common Shares pursuant to Section
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<PAGE> 54
12(a)(ii) herein, to declare or pay any dividend or other distribution on the
Common Shares payable in Common Shares or in stock of any other class of the
Company or any Subsidiary of the Company or to effect a subdivision or
combination of the Common Shares (by reclassification or otherwise than by
payment of dividends in Common Shares) then, in each such case, the Company
shall give to each holder of a Right Certificate, in accordance with Section 27
hereof, notice of such proposed action, which shall specify the date of
authorization by the Board of Directors of the Company, and record date for,
such stock dividend or such distribution of rights or warrants or the date on
which such reclassification, consolidation, merger, share exchange, sale,
transfer, liquidation, dissolution, winding up, subdivision or combination is to
take place and the date of participation therein by the holders of the Common
Shares of the Company or the Preferred Shares, or both, if any such date is to
be fixed. Such notice shall be so given in the case of any action covered by
clause (a), (b) or (g) above at least 20 days prior to the record date for
determining holders of the Preferred Shares or of the Common Shares of the
Company, as the case may be, for purposes of such action, and in the case of any
such other action, at least 20 days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of the
Preferred Shares or Common Shares of the Company, as the case may be, whichever
shall be the earlier.
If any of the events set forth in Section 12(a)(ii) of this Agreement
shall occur, then, in any such case, the Company shall as soon as practicable
thereafter give to each holder of a Right Certificate, in accordance with
Section 27 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
12(a)(ii) hereof.
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<PAGE> 55
Section 26. Securities Laws Registrations. To the extent legally
required, the Company agrees that it will prepare and file no later than the
Distribution Date, and will use its best efforts to cause to be declared
effective, a registration statement under the Securities Act of 1933, as
amended, registering the offering, sale and delivery of the Preferred Shares
issuable upon exercise of the Rights, and the Company will, thereafter, use its
best efforts to maintain such registration statement (or another) continuously
in effect so long as any Rights remain outstanding and exercisable with respect
to Preferred Shares. Should the Rights become exercisable with respect to
securities of the Company or one of its Subsidiaries other than Preferred
Shares, the Company agrees that it will, to the extent legally required,
promptly thereafter prepare and file, or cause to be prepared and filed, and
will use its best efforts to cause to be declared effective, a registration
statement under such Act registering the offering sale and delivery of such
other securities and the Company will, thereafter, use its best efforts to
maintain such registration statement (or another) continuously in effect so long
as any outstanding Rights are exercisable with respect to such securities. The
Company further agrees to use its best efforts, from and after the Distribution
Date, to qualify or register for sale the Preferred Shares or other securities
of the Company or one of its Subsidiaries issuable upon exercise of the Rights
under the securities or "blue sky" laws (to the extent legally required
thereunder) of all jurisdictions in which registered holders of Right
Certificates reside determined by reference to the Rights Register.
Section 27. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
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<PAGE> 56
Compuware Corporation
31440 Northwestern Highway
Farmington Hills, Michigan 48334-2564
Attention: Secretary
Subject to the provisions of Section 22 hereof any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
EquiServe Trust Company, N.A.
150 Royall Street
Canton, MA 02021
Attention: Client Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the Rights
Register of the Company or, prior to the Distribution Date, on the stock
transfer records for the Common Shares of the Company.
Section 28. Supplements and Amendments. Before the Distribution Date,
the Company and the Rights Agent shall, if the Company so directs, supplement or
amend any provision of this Agreement (which supplement or amendment shall be
evidenced by a writing signed by the Company and the Rights Agent) without the
approval of any holders of certificates representing Rights or Common Shares.
From and after the Distribution Date, the Company and the Rights Agent shall, if
the Company so directs, supplement or amend this Agreement without the approval
of any holders of Right Certificates in order (1) to cure any ambiguity, (2) to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (3) to shorten or lengthen any
time period under this Agreement, or (4)
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<PAGE> 57
to change or supplement the provisions under this Agreement in any manner that
the Company deems necessary or desirable and that shall not adversely affect the
interests of the holders of Right Certificates (other than an Acquiring Person
or an Affiliate or Associate of an Acquiring Person); provided, however, that
this Agreement may not be supplemented or amended to lengthen, pursuant to
clause (3) 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. Upon
the delivery of a certificate from an appropriate officer of the Company that
states that the proposed supplement or amendment is in compliance with the terms
of this Section 28, the Rights Agent shall execute such supplement or amendment,
provided that such supplement or amendment does not adversely affect the rights
or obligations of the Rights Agent under Section 19 or 20 of this Agreement.
Before the Distribution Date, the interests of the holders of the Rights shall
be deemed coincident with the interests of the holders of Common Shares.
Section 29. 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 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 (and, prior to the Distribution Date, the
Common Shares) any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of the Rights (and, prior
to the Distribution Date, the Common Shares).
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<PAGE> 58
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.
Section 32. Governing Law. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Michigan and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State.
Section 33. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original and all such counterparts shall together constitute but one
and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
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<PAGE> 59
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.
<TABLE>
<S> <C>
COMPUWARE CORPORATION
Attest:
By /s/ Thomas Costello, Jr. By /s/ Joseph A. Nathan
-------------------------- ----------------------------
Title: Secretary Title: President
EQUISERVE TRUST COMPANY, N.A.,
As Rights Agent
Attest:
By /s/ Tracy Chipman By /s/ Carol Mulvey-Eori
-------------------------- ----------------------------
Title: Authorized Officer Authorized Officer
</TABLE>
59
<PAGE> 60
EXHIBIT A
CERTIFICATE OF DESIGNATION
OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
COMPUWARE CORPORATION
Pursuant to Section 302 of the
Michigan Business Corporation Act
Compuware Corporation, a Michigan corporation (the "Corporation"),
through the undersigned duly authorized officer, in accordance with the
provisions of Sections 302, 602 and 611 of the Michigan Business Corporation
Act, DOES HEREBY CERTIFY:
That, the Board of Directors of the Corporation on October 23, 2000,
pursuant to the authority conferred upon the Board of Directors by the Articles
of Incorporation, as amended, of the Corporation (the "Articles of
Incorporation") and in accordance with the provisions of Sections 302, 602 and
611 of the Michigan Business Corporation Act, adopted the following resolution
creating a series of 800,000 Series A Junior Participating Preferred Stock, par
value $0.01 per share:
RESOLVED, that, pursuant to the authority expressly granted to and
vested in the Board of Directors of the Corporation in accordance with the
provisions of the Articles of Incorporation, a series of the Preferred Stock of
the Corporation, par value $0.01 per share, be, and hereby is, created and that
the voting powers, designations, number of shares, preferences and relative,
participating, optional and other special rights of the shares of such series,
and the qualifications, limitations and restrictions thereof are as follows:
Series A Junior Participating Preferred Stock:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" (the "Series A
Preferred Stock"), the shares of such series shall be with par value of $0.01
per share and the number of shares constituting the Series A Preferred Stock
shall be 800,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided, that no decrease shall reduce
the number of shares of Series A Preferred Stock to a number less than the
number of shares then outstanding plus the number of shares reserved for
issuance upon the exercise of outstanding options, rights or warrants or upon
the conversion of any outstanding securities issued by the Corporation
convertible into Series A Preferred Stock.
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<PAGE> 61
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of any series of
Preferred Stock (or any similar stock) ranking prior and superior to the Series
A Preferred Stock with respect to dividends, the holders of shares of Series A
Preferred Stock, in preference to the holders of Common Stock, par value $0.01
per share (the "Common Stock"), of the Corporation, and of any other junior
stock, shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, quarterly dividends
payable on the last business day of March, June, September and December in each
year (each such date being referred to herein as a "Quarterly Dividend Payment
Date") as provided in paragraphs (B) and (C) of this Section 2 in an amount per
share (rounded to the nearest cent) equal to the greater of (a) $1.00 in cash or
(b) subject to the provision for adjustment hereinafter set forth, 2,000 times
the aggregate per share amount (payable in cash) of all cash dividends, and
2,000 times the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions, other than a dividend payable in shares of
Common Stock or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock since the
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 Preferred Stock. If the Corporation shall at any
time declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination of the outstanding shares of
Common Stock (by reclassification or otherwise) into a greater or lesser number
of shares of Common Stock, then in each such case the amount to which holders of
shares of Series A 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 was outstanding immediately prior to
such event.
(B) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph (A) of this Section 2
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided that, if no
dividend or distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $1.00 per share payable in cash
on the Series A Preferred Stock shall nevertheless accrue and be cumulative on
the outstanding shares of Series A Preferred Stock as provided in paragraph (C)
of this Section 2.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares, unless the date of issue of such
shares is prior to the record date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin to accrue from the date
of issue of such shares, or unless the date of 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 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
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<PAGE> 62
interest. Dividends paid on the shares of Series A 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 Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon, which record
date shall be not more than 60 days prior to the date fixed for the payment
thereof.
Section 3. Voting Rights. The holders of shares of Series A Preferred
Stock shall have the following voting rights:
(A) Subject to the provisions for adjustment hereinafter set forth,
each share of Series A Preferred Stock shall entitle the holder thereof to 2,000
votes on all matters submitted to a vote of the stockholders of the Corporation.
If the Corporation shall at any time declare or pay any dividend on Common Stock
payable in shares of Common Stock, or effect a subdivision or combination of the
outstanding shares of Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock, then in each such case the
number of votes per share to which holders of shares of Series A 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 was outstanding immediately
prior to such event.
(B) Except as otherwise provided herein, in any other Certificate of
Designation creating a series of Preferred Stock or any similar stock, of by
law, the holders of shares of Series A Preferred Stock and the holders of shares
of Common Stock and any other capital stock of the Corporation having general
voting rights shall vote together as one class on all matters submitted to a
vote of stockholders of the Corporation.
(C) Except as set forth herein or as otherwise provided by law, holders
of Series A 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 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 Preferred Stock outstanding shall have
been paid in full, or declared and a sum sufficient for the payment therefor be
set apart for payment and be in the process of payment, the Corporation shall
not:
(i) declare or pay dividends, or make any other distributions, on any
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock;
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<PAGE> 63
(ii) declare or pay dividends, or make any other distributions, on any
shares of stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred Stock, except dividends
paid ratably on the Series A 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 junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock, provided that the
Corporation may at any time redeem, purchase or otherwise acquire shares of any
such junior stock in exchange for shares of any stock of the Corporation ranking
junior (as to both dividends and upon dissolution, liquidation or winding up) to
the Series A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock or any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with the
Series A 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 holders of 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 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
subject to the conditions and restrictions on issuance set forth herein, in the
Articles of Incorporation, or in any other Certificate of Designation creating a
series of Preferred Stock or any similar stock or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the holders of shares of stock ranking junior (either as to
dividends or as to amounts payable upon liquidation, dissolution or winding up)
to the Series A Preferred Stock unless prior thereto, the holders of Series A
Preferred Stock shall have received an amount per share (rounded to the nearest
cent) equal to the greater of (a) $1,000 per share, or (b) an amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 2,000
times the aggregate amount to be distributed per share to holders of Common
Stock, plus, in either case, an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment, or
(2)
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<PAGE> 64
to the holders of stock ranking on a parity (either as to dividends or as to
amounts payable upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except distributions made ratably on the Series A Preferred
Stock and all such parity stock in proportion to the total amounts to which the
holders of all such Shares are entitled upon such liquidation, dissolution or
winding up. If the Corporation shall at any time declare or pay any dividend on
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination of the outstanding shares of Common Stock (by reclassification or
otherwise) into a greater or lesser number of shares of Common Stock, then in
each such case the aggregate amount to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event under the proviso
in clause (1)(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 was outstanding immediately prior to
such event.
Section 7. Consolidation, Merger, etc. If the Corporation shall enter
into any consolidation, merger, statutory share exchange, combination or other
transaction in which the shares of Common Stock are exchanged for or changed
into other stock or securities cash or any other property, or any combination
thereof then in any such case each share of Series A Preferred Stock shall at
the same time be similarly exchanged or changed into an amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 2,000
times the aggregate amount of stock, securities, cash or any other property
(payable in kind), or any combination thereof as the case may be, into which or
for which each share of Common Stock is changed or exchanged. If the Corporation
shall at any time declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification or otherwise)
into a greater or lesser number of shares of Common Stock, then in each such
case the amount set forth in the preceding sentence with respect to the exchange
or change of shares of Series A 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 was outstanding immediately
prior to such event.
Section 8. Redemption. The shares of Series A Preferred Stock shall not
be redeemable. So long as any shares of Series A Preferred Stock remain
outstanding, the Corporation shall not purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolving or winding up) to the Series A Preferred Stock unless
the Corporation shall substantially concurrently also purchase or acquire for
consideration a proportionate number of shares of Series A Preferred Stock.
Section 9. Rank. The Series A Preferred Stock shall rank, with respect
to payment of dividends and the distribution of assets, junior to all series of
any other class of the Corporation's Preferred Stock.
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<PAGE> 65
IN WITNESS WHEREOF, this Certificate of Designation is executed on
behalf of the Corporation by the undersigned, this day of ,
2000.
COMPUWARE CORPORATION
By:
-------------------------------------
Title:
----------------------------------
ATTEST:
By:
----------------------------------
-----------------------------
Secretary
65
<PAGE> 66
EXHIBIT B
Form of Right Certificate
Certificate No. R- Rights
-----
NOT EXERCISABLE AFTER NOVEMBER 9, 2010 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO
REDEMPTION AT $.001 PER RIGHT AND TO EXCHANGE ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES,
RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS (AS DEFINED IN
SECTION 1 OF THE RIGHTS AGREEMENT), ANY ASSOCIATE OR AFFILIATE
OF SUCH ACQUIRING PERSONS OR ANY SUBSEQUENT HOLDER OF SUCH
RIGHTS MAY BECOME NULL AND VOID.
Right Certificate
COMPUWARE CORPORATION
This certifies that , or registered assigns, is
the registered owner of the number of Rights set forth above, each of which
entities the owner thereof subject to the terms, provisions and conditions of
the Rights Agreement, dated as of October 25, 2000 (the, "Rights Agreement"),
between COMPUWARE CORPORATION, a Michigan corporation (the "Company"), and
EquiServe Trust Company, N.A. (the "Rights Agent"), to purchase from the Company
at any time after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 p.m., eastern time, on November 9, 2010, unless the
Rights evidenced hereby shall have been previously redeemed by the Company, at
the Shareholder Services Office of the Rights Agent (or at the office of its
successor as Rights Agent), one two-thousandth (1/2000) of a fully paid
non-assessable share of Series A Junior Participating Preferred Stock, par value
$0.01 per share (the "Preferred Shares"), of the Company, at a purchase price of
$40.00 per one two-thousandth (1/2000) of a Preferred Share (the "Purchase
Price"), upon presentation and surrender of this Right Certificate with the Form
of Election to Purchase duly executed. The number of Rights evidenced by this
Right Certificate (and the number of one two-thousandths of a Preferred Share
which may be purchased upon exercise hereof) set forth above, and the Purchase
Price set forth above, are the number and Purchase Price as of November 9, 2000,
based on the Preferred Shares as constituted at such date. As provided in the
Rights Agreement, the Purchase Price and the number of one two-thousandths of a
Preferred Share which may be purchased upon the exercise of the Rights evidenced
by this Right Certificate are subject to modification and adjustment upon that
happening of certain events.
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<PAGE> 67
This Right 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 Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the Shareholder Services Office of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the Shareholder Services Office of the Rights Agent, may be
exchanged for another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder to purchase a like aggregate number
of Preferred Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate (i) may be redeemed by the Company at a redemption price of
$.00l per Right or (ii) may be exchanged by the Company in whole or in part for
Preferred Shares or shares of the Company's common stock, par value $0.01 per
share.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one two-thousandth of a Preferred Share, which may, at the election
of the Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof as such, any
of the rights of a shareholder of the Company or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be entitled to any benefit under the
Rights Agreement or be valid or obligatory for any purpose until it shall have
been authenticated by the Rights Agent.
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WITNESS the facsimile signatures of the proper officers of the Company.
Dated as of , .
ATTEST: COMPUWARE CORPORATION
By:
------------------------------------ ---------------------------------
Secretary Title:
------------------------------
Authentication:
This is one of the Right Certificates referred to in the within-mentioned Rights
Agreement.
EQUISERVE TRUST COMPANY, N.A., as Rights Agent
By:
---------------------------------
Authorized Signature
Title:
------------------------------
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[Form of Reverse Side of Right Certificate)
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer the
Right Certificate)
FOR VALUE RECEIVED, hereby
-------------------------------------------
sells, assigns and transfers unto
-----------------------------------------------
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint Attorney, to
transfer the within Right Certificate on the books of the within-named Company,
with full power of substitution.
Dated as of , .
------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a bank, broker, dealer, savings
institution or other eligible institution participating in a signature guarantee
medallion program recognized by the Securities Transfer Association, Inc.
--------------------------------------------------------------------------------
[To be executed if statement is correct]
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by, and were not acquired from, an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement).
------------------------------
Signature
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<PAGE> 70
[Form of Reverse Side of Right Certificate - continued]
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights represented by the Right
Certificate)
TO COMPUWARE CORPORATION:
The undersigned hereby irrevocably elects to exercise Rights
represented by this Right Certificate to purchase the Preferred Shares (or other
securities) issuable upon the exercise of such Rights and requests that
certificates for such Preferred Shares (or other securities) be issued in the
name of:
Please insert social security
or other identifying number:
----------------------
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security or other identifying number:
----------------------
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
Dated as of , .
------------------------------
Signature
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<PAGE> 71
[Form of Reverse Side of Right Certificate - continued]
Signature Guaranteed:
Signatures must be guaranteed by a bank, broker, dealer, savings
institution or other eligible institution participating in a signature guarantee
medallion program recognized the Securities Transfer Association, Inc.
--------------------------------------------------------------------------------
[To be executed if statement is correct]
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by, and were not acquired from, an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement).
------------------------------
Signature
--------------------------------------------------------------------------------
NOTICE
The signature in the foregoing Form of Assignment or Form of Election
to Purchase must conform to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
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<PAGE> 72
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On October 23, 2000, the Board of Directors of Compuware Corporation
(the "Company") declared a dividend of one preferred share purchase right (a
"Right") for each outstanding Common Share, par value $0.01 per share (the
"Common Shares"), of the Company. The dividend is payable to the shareholders of
record at the close of business on November 9, 2000 (the "Record Date"), and
with respect to Common Shares issued thereafter until the Distribution Date (as
defined below) and, in some circumstances, with respect to Common Shares issued
after the Distribution Date. Except as set forth below, each Right, when it
becomes exercisable, entitles the registered holder to purchase from the Company
one two-thousandth of a share of Series A Junior Participating Preferred Stock,
par value $0.01 per share (the "Preferred Shares"), of the Company at a price of
$40.00 per one two-thousandth of a Preferred Share (the "Purchase Price"),
subject to adjustment. The description and terms of the Rights are set forth in
a Rights Agreement (the "Rights Agreement") between the Company and EquiServe
Trust Company, N.A., as Rights Agent (the "Rights Agent"), dated as of October
25, 2000.
Initially, the Rights will be evidenced by the certificates
representing Common Shares then outstanding, and no separate Right Certificates
will be distributed. The Rights will become exercisable and separate from the
Common Shares upon the earlier to occur of (1) the first date of public
announcement that a person or group of affiliated or associated persons, other
than the Company, any subsidiary, or an employee benefit plan of the Company or
one of its subsidiaries, has acquired, or obtained the right to acquire,
beneficial ownership of 15% or more of the outstanding Common Shares (except
pursuant to a Permitted Offer, as defined below, specified acquisitions of
Common Shares by the Company, specified inadvertent acquisitions, and specified
acquisitions specifically permitted by the Company's Board of Directors); or (2)
the close of business on the tenth business day (or such later date as the
Company's Board of Directors may determine) after the commencement of, or a
public announcement of an intention to commence (which tender offer is not
terminated within such ten business days), a tender or exchange offer the
consummation of which would result in a person or group becoming an Acquiring
Person (as defined below), the earlier of such dates being called the
"Distribution Date." A person or group whose acquisition of Common Shares causes
a Distribution Date pursuant to clause (1) above is an "Acquiring Person." The
first date of public announcement that a person or group has become an Acquiring
Person is the "Shares Acquisition Date."
The Rights Agreement provides that, until the Distribution Date, the
right to receive Right Certificates will be transferable only with the Common
Shares. Until the Distribution Date (or earlier redemption or expiration of the
Rights), new Common Share certificates issued after the Record Date upon
transfer or new issuance of Common Shares will contain a notation incorporating
the Rights Agreement by reference. Until the Distribution Date (or earlier
redemption or expiration of the Rights), the transfer of any certificates for
Common Shares, with or without such notation or a copy of this Summary of Rights
attached, will also constitute the transfer of the Rights associated with the
Common Shares represented by such certificates. As
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<PAGE> 73
soon as practicable following the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed to holders of record
of the Common Shares as of the close of business on the Distribution Date (and
to each initial record holder of certain Common Shares issued after the
Distribution Date), and, thereafter, such separate Right Certificates alone will
evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire at the close of business on November 9, 2010 (the "Final Expiration
Date"), unless the Final Expiration Date is extended or unless the Rights are
earlier redeemed by the Company as described below.
In the event that any person becomes an Acquiring Person (except
pursuant to a tender or exchange offer for all outstanding Common Shares at a
price and on terms which a majority of the Company's directors determines to be
adequate and in the best interests of the Company and its shareholders, other
than such Acquiring Person, its affiliates and associates (a "Permitted
Offer")), each holder of a Right will thereafter have the right (the "Flip-In
Right") to receive upon exercise, at the then current exercise price of the
Right, that number of Common Shares (or, in certain circumstances, one
two-thousandths of a Preferred Share) having an average market value during a
specified time period equal to two times the exercise price of such Right.
Notwithstanding the foregoing, following the occurrence of a person becoming an
Acquiring Person, any Rights that are, or (under certain circumstances specified
in the Rights Agreement) were, beneficially owned by any Acquiring Person or any
affiliate or associate thereof will be null and void. In other words, the Rights
holders, other than the Acquiring Person and certain others, may purchase Common
Shares (or, in certain circumstances, Preferred Shares) at a 50% discount.
Alternatively, in the event that, at any time on or following the
Shares Acquisition Date, (1) the Company is a party to a merger or statutory
share exchange in which the holders of all of the outstanding Common Shares
immediately before the consummation of the transaction are not the holders of
all of the surviving corporation's voting power, or (2) more than 50% of the
Company's assets or earning power is sold or transferred, in either case with or
to an Acquiring Person or any affiliate or associate or any other person in
which such Acquiring Person, affiliate or associate has an interest or any
person acting on behalf of or in concert with such Acquiring Person, affiliate
or associate, or, if in such transaction all holders of Common Shares are not
treated alike, any other person, then each holder of a Right (except Rights that
have been voided as set forth above) shall thereafter have the right (the
"Flip-Over Right") to receive, upon exercise, at the then current exercise price
of the Right, common shares of the acquiring or surviving company having an
average market value during a specified time period equal to two times the
exercise price of the Right. In other words, the Rights holders, other than the
Acquiring Person and certain others, may purchase the acquiring or surviving
company's common shares at a 50% discount.
The Purchase Price payable, and the number of one two-thousandths of a
Preferred Share or Common Shares issuable, upon exercise of the Rights, are
subject to adjustment from time to time to prevent dilution (1) in the event of
a stock dividend on, or a subdivision, combination or reclassification of, the
Preferred Shares, (2) upon the grant to holders of the Preferred Shares of
certain rights, options or warrants to subscribe for or purchase Preferred
Shares at a price, or
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<PAGE> 74
securities convertible into Preferred Shares with a conversion price, less than
the then current market price of the Preferred Shares, or (3) upon the
distribution to holders of the Preferred Shares of evidences of indebtedness or
assets (excluding regular quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above). The number of outstanding Rights
and the exercise price of the Rights are also subject to adjustment in the event
of a stock dividend on the Common Shares payable in Common Shares or
subdivisions or combinations of the Common Shares occurring, in any such case,
before the Distribution Date.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
the Purchase Price. The Company will not be required to issue fractional
Preferred Shares (other than fractions that are integral multiples of one
two-thousandth of a Preferred Share, which may, at the election of the Company,
be evidenced by depositary receipts) or fractional Common Shares and, in lieu
thereof, an adjustment in cash may be made based on the market price of the
Preferred Shares or Common Shares, as applicable, on, or an average ending
immediately before, the last trading date before the date of exercise.
At any time before a person becomes an Acquiring Person, the Company
may redeem the Rights in whole, but not in part, at a price of $.001 per Right
(the "Redemption Price"), which redemption shall be effective upon the action of
the Board of Directors. Additionally, after 60 days after the later of the date
holders of Rights begin to have Flip-In Rights and the effective date of a
registration statement under the Securities Act of 1933 with respect to
securities issuable upon exercise of such Flip-In Rights, but before holders of
Rights begin to have Flip-Over Rights, the Company may redeem the then
outstanding Rights in whole, but not in part, at the Redemption Price; provided
that such redemption is (1) in connection with a merger, statutory share
exchange or other business combination transaction or series of transactions
involving the Company in which all holders of Common Shares are treated alike
but not involving an Acquiring Person or its affiliates or associates, or (2) at
a time when no other persons are Acquiring Persons and the Acquiring Person is
not the beneficial owner of 10% of the Common Shares. The Redemption Price may,
at the option of the Company, be paid in cash or Common Shares. Effective at the
time of adoption by the Board of Directors of a resolution authorizing the
redemption of the Rights (or such other date chosen by the Board of Directors in
authorizing such redemption), the right to exercise the Rights shall terminate
and the only right of holders of the Rights will be to receive the Redemption
Price.
The Preferred Shares purchasable upon the exercise of the Rights will
not be redeemable. Each Preferred Share will be entitled to a preferential
quarterly dividend in an amount equal to the greater of $1.00 per share and
2,000 times the dividend declared on each Common Share. In the event of
liquidation, the holders of Preferred Shares will receive a preferential
liquidation payment equal to the greater of $1,000 per share and 2,000 times the
payment made per Common Share, plus, in each case, accrued and unpaid dividends.
In the event of any merger, consolidation, statutory share exchange, combination
or other transaction in which Common Shares are exchanged, each Preferred Share
will be entitled to receive 2,000 times the amount received per Common Share.
Each Preferred Share will have 2,000 votes, voting together with the Common
Shares. The rights of the holders of Preferred Shares as to dividends,
liquidation
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and voting, and in the event of mergers, consolidations and statutory share
exchanges, are protected by customary anti-dilution provisions.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights should not
be taxable to shareholders or to the Company, shareholders will recognize
taxable income if the Rights are redeemed and may, depending on the
circumstances, recognize taxable income if the Rights become exercisable or are
exercised or upon the occurrence of certain events thereafter. Shareholders are
encouraged to consult their own tax advisers concerning the tax treatment in
their particular situation.
Any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company before the Distribution Date without the
consent of the Rights holders. From and after the Distribution Date, the
provisions of the Rights Agreement may be amended by the Board in order to cure
any ambiguity, to correct or supplement any provision contained in the Rights
Agreement which may be defective or inconsistent with any other provision, to
make changes which do not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person), or, subject to certain
limitations, to shorten or lengthen any time period under the Rights Agreement,
so long as no amendment to adjust the time period governing redemption shall be
made at a time when the Rights are not redeemable.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
without conditioning the offer on the Rights being redeemed or a substantial
number of Rights being acquired, and under certain circumstances the Rights
beneficially owned by such a person or group may become void. The Rights should
not interfere with any merger, statutory share exchange or other business
combination approved by the Board of Directors because, if the Rights would
become exercisable as a result of such merger, share exchange or business
combination, the Board of Directors may, at its option, at any time before the
time that any person becomes an Acquiring Person, redeem all (but not less than
all) of the then outstanding Rights at the Redemption Price.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A, dated
October 30, 2000. A copy of the Rights Agreement is available free of charge
from the Company and may be obtained by contacting the Company's Secretary. This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is
incorporated herein by reference.
4
