SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------------
AMENDMENT NO. 1 TO
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
MERIDIAN DATA, INC.
(Exact name of Registrant as specified in its charter)
Delaware 77-0188708
(State of incorporation or organization) (IRS Employer Identification No.)
5616 Scotts Valley Drive
Scotts Valley, California 95066
(Address of principal executive offices) (Zip Code)
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Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
- ------------------- ------------------------------
None None
Securities to be registered pursuant to Section 12(g) of the Act:
Preferred Share Purchase Rights
-------------------------------
(Title of Class)
<PAGE>
Item 1. Description of Securities to be Registered.
On July 18, 1997, pursuant to a Preferred Shares Rights Agreement (the
"Original Rights Agreement") between Meridian Data, Inc. (the "Company") and
Bank Boston, N.A., as Rights Agent, the Company's Board of Directors declared a
dividend of one right (a "Right") to purchase one one-thousandth share of the
Company's Series A Participating Preferred Stock ("Series A Preferred") for each
outstanding share of Common Stock, no par value ("Common Shares"), of the
Company. The dividend was payable on August 25, 1997 (the "Record Date"), to
stockholders of record as of the close of business on that date. Each Right
entitles the registered holder to purchase from the Company one one-thousandth
of a share of Series A Preferred at an exercise price of $30.00 (the "Purchase
Price"), subject to adjustment.On May __, 1999 the Original Rights Agreement was
amended and restated.
The following summary of the principal terms of the Amended and
Restated Preferred Shares Rights Agreement dated May __, 1999 (the "Rights
Agreement), between the Company and Bank Boston, N.A., as Rights Agent (the
"Rights Agent"), is a general description only and is subject to the detailed
terms and conditions of the Rights Agreement. A copy of the Rights Agreement is
attached as Exhibit 1 to this Registration Statement and is incorporated herein
by reference.
Rights Evidenced by Common Share Certificates
The Rights will not be exercisable until the Distribution Date (defined
below). Certificates for the Rights ("Rights Certificates") will not be sent to
stockholders, and the Rights will attach to and trade only together with the
Common Shares. Accordingly, Common Share certificates outstanding on the Record
Date will evidence the Rights related thereto, and Common Share certificates
issued after the Record Date will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender or transfer of any certificates for
Common Shares, outstanding as of the Record Date, even without notation or a
copy of the Summary of Rights being attached thereto, also will constitute the
transfer of the Rights associated with the Common Shares represented by such
certificate.
Distribution Date
The Rights will separate from the Common Shares, Rights Certificates
will be issued and the Rights will become exercisable upon the earlier of: (i)
ten days following the date of the first public announcement by the Company or
an Acquiring Person (as defined below) that an Acquiring Person has become such
(the "Shares Acquisition Date") and (ii) ten business days (or such later date
as may be determined by the Board of Directors) following the commencement of,
or announcement of an intention to make, a tender offer or exchange offer, the
consummation of which would result in a person or group becoming an Acquiring
Person. The earlier of such dates is referred to as the "Distribution Date." A
person or group of affiliated or associated persons that beneficially owns, or
has the right to acquire beneficial ownership of, 15% or more of the outstanding
Common Shares is referred to as an "Acquiring Person."
Issuance of Rights Certificates; Expiration of Rights
As soon as practicable following the Distribution Date, separate Rights
Certificates will be mailed to holders of record of the Common Shares as of the
close of business on the Distribution Date and such separate Rights Certificates
alone will evidence the Rights from and after the Distribution Date. The Rights
will expire on the earliest of (i) August 11, 2007 (the "Final Expiration Date")
or (ii) redemption or exchange of the Rights as described below.
Initial Exercise of the Rights
Following the Distribution Date, and until one of the further events
described below, holders of the Rights will be entitled to receive, upon
exercise and the payment of the Purchase Price, one one-thousandth of a share of
the Series A Preferred.
Right to Buy Company Common Shares
Unless the Rights are earlier redeemed or exchanged, in the event that
a person becomes an Acquiring Person (a "Triggering Event"), then proper
provision will be made so that each holder of a Right that has not theretofore
been exercised (other than Rights beneficially owned by the Acquiring Person or
any affiliate of the Acquiring Person, which will thereafter be void) will
thereafter have the right to receive, upon exercise, Common Shares having a
value equal to two times the Purchase Price. In the event that the Company does
not have sufficient Common Shares available for all Rights to be exercised, or
the Board decides that such action is necessary and not contrary to the
interests of Rights holders, the Company may instead substitute cash, assets or
other securities for the Common Shares for which the Rights would have been
exercisable.
Right to Buy Acquiring Company Stock
Similarly, unless the Rights are earlier redeemed or exchanged, in the
event that, after a Triggering Event, (i) the Company is acquired in a merger or
other business combination transaction, or (ii) 50% or more of the Company's
consolidated assets or earning power are sold (other than in transactions in the
ordinary course of business), proper provision must be made so that each holder
of a Right that has not theretofore been exercised (other than Rights
beneficially owned by the Acquiring Person or any affiliate of the Acquiring
Person, which will thereafter be void) will thereafter have the right to
receive, upon exercise, shares of common stock of the acquiring company having a
value equal to two times the Purchase Price.
Exchange Provision
At any time after a Triggering Event and prior to the acquisition by
any person or entity of beneficial ownership of 50% or more of the Company's
outstanding Common Shares, the Board of Directors of the Company may exchange
the Rights (other than Rights owned by the Acquiring Person), in whole or in
part, at an exchange ratio of one Common Share per Right.
Redemption
At any time on or prior to the close of business on the earlier of (i)
the Shares Acquisition Date and (ii) the Final Expiration Date of the Rights,
the Company may redeem the Rights in whole, but not in part, at a price of $0.01
per Right.
Adjustments to Prevent Dilution
The Purchase Price payable, the number of Rights, and the number of
Series A Preferred or Common Shares or other securities or property issuable
upon exercise of the Rights are subject to adjustment from time to time in
connection with the dilutive issuances by the Company as set forth in the Rights
Agreement. With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price.
Cash Paid Instead of Issuing Fractional Shares
No fractional portion less than integral multiples of one Common Share
or one one-thousandth of a share of Series A Preferred will be issued upon
exercise of a Right and in lieu thereof, an adjustment in cash will be made
based on the market price of the security to be so issued on the last trading
date prior to the date of exercise.
No Stockholders' Rights Prior to Exercise
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company (other than any rights resulting from
such holder's ownership of Common Shares), including, without limitation, the
right to vote or to receive dividends.
Amendment of Rights Agreement
The provisions of the Rights Agreement may be supplemented or amended
by the Board of Directors in any manner prior to the Distribution Date. After
the Distribution Date, the provisions of the Rights Agreement may be amended by
the Board in order to cure any ambiguity, defect or inconsistency, to make
changes that do not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person).
Rights and Preferences of the Series A Preferred
Series A Preferred purchasable upon exercise of the Rights will not be
redeemable. Each share of Series A Preferred will be entitled to an aggregate
dividend of 1,000 times the dividend declared per Common Share. In the event of
liquidation, in preference to the holders of shares of stock ranking junior to
the Series A Preferred, the holders of the Series A Preferred will be entitled
to receive one thousand dollars ($1,000.00) per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment (the "Series A Liquidation Preference"). Each share
of Series A Preferred will have 1,000 votes, voting together with the Common
Shares. These dividend, liquidation and voting rights of the Series A Preferred
are protected by customary anti-dilution provisions.
Certain Anti-takeover Effects
The Rights approved by the Board are designed to protect and maximize
the value of the outstanding equity interests in the Company in the event of an
unsolicited attempt by an acquiror to take over the Company, in a manner or on
terms not approved by the Board of Directors. Takeover attempts frequently
include coercive tactics to deprive the Company's Board of Directors and its
stockholders of any real opportunity to determine the destiny of the Company.
The Rights have been declared by the Board in order to deter such tactics,
including a gradual accumulation of shares in the open market of a 15% or
greater position to be followed by a merger or a partial or two-tier tender
offer that does not treat all stockholders equally. These tactics unfairly
pressure stockholders, squeeze them out of their investment without giving them
any real choice and deprive them of the full value of their shares.
The Rights are not intended to prevent a takeover of the Company and
will not do so. The Rights may be redeemed by the Company at $0.01 per Right
within ten days after the accumulation of 15% or more of the Company's shares by
a single acquiror or group. Accordingly, the Rights should not interfere with
any merger or business combination approved by the Board of Directors.
Issuance of the Rights does not in any way weaken the financial
strength of the Company or interfere with its business plans. The issuance of
the Rights themselves has no dilutive effect, will not affect reported earnings
per share, should not be taxable to the Company or to its stockholders, and will
not change the way in which the Company's shares are presently traded. The
Company's Board of Directors believes that the Rights represent a sound and
reasonable means of addressing the complex issues of corporate policy created by
the current takeover environment.
However, the Rights may have the effect of rendering more difficult or
discouraging an acquisition of the Company deemed undesirable by the Board of
Directors. The Rights may cause substantial dilution to a person or group, that
attempts to acquire the Company on terms or in a manner not approved by the
Company's Board of Directors, except pursuant to an offer conditioned upon the
negotiation, purchase, or redemption of the Rights.
The Rights are not applicable to the entry by the Company into the
Agreement and Plan of Merger and Reorganization, dated as of May 10, 1999 (the
"Merger Agreement"), by and among Quantum Corporation, a Delaware corporation
("Parent"), Defiant Acquisition Sub, a Delaware corporation ("Sub"), and the
Company or to the merger of Sub with and into the Company or the other
transactions contemplated by the Merger Agreement.
<PAGE>
Item 2. Exhibits.
1. Amended and Restated Preferred Shares Rights Agreement,
dated as of May __, 1999, between Meridian Data, Inc.
and Bank Boston, N.A., including the Certificate of
Determination, the form of Rights Certificate and the
Summary of Rights attached thereto as Exhibits A, B and
C, respectively.
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this Amendment No. 1 to Registration
Statement on Form 8-A to be signed on its behalf by the undersigned, thereto
duly authorized.
MERIDIAN DATA, INC.
Date: May __, 1999
By:/s/GIANLUCA U. RATTAZZI
Gianluca U. Rattazzi
President and Chief
Executive Officer
<PAGE>
EXHIBIT 1
MERIDIAN DATA, INC.
and
BANKBOSTON, N.A.
Rights Agent
AMENDED AND RESTATED
PREFERRED SHARES RIGHTS AGREEMENT
Dated as of May __, 1999
<PAGE>
TABLE OF CONTENTS
Page
1. Certain Definitions........................................................2
2. Appointment of Rights Agent................................................9
3. Issuance of Rights Certificates............................................9
4. Form of Rights Certificates...............................................11
5. Countersignature and Registration.........................................12
6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates..............................................................13
7. Exercise of Rights; Exercise Price; Expiration Date of Rights.............13
8. Cancellation and Destruction of Rights Certificates.......................15
9. Reservation and Availability of Preferred Shares..........................16
10. Record Date...............................................................17
11. Adjustment of Exercise Price, Number of Shares or Number of Rights........18
12. Certificate of Adjusted Exercise Price or Number of Shares................24
13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power......25
14. Fractional Rights and Fractional Shares...................................29
15. Rights of Action..........................................................30
16. Agreement of Rights Holders...............................................31
17. Rights Certificate Holder Not Deemed a Stockholder........................31
18. Concerning the Rights Agent...............................................31
19. Merger or Consolidation or Change of Name of Rights Agent.................32
20. Duties of Rights Agent....................................................33
21. Change of Rights Agent....................................................35
22. Issuance of New Rights Certificates.......................................36
23. Redemption................................................................36
24. Exchange..................................................................37
25. Notice of Certain Events..................................................39
26. Notices...................................................................40
27. Supplements and Amendments................................................40
28. Successors................................................................41
29. Determinations and Actions by the Board of Directors, etc.................41
30. Benefits of this Agreement................................................41
31. Severability..............................................................42
32. Governing Law.............................................................42
33. Counterparts..............................................................42
34. Descriptive Headings......................................................42
<PAGE>
Exhibits:
========
Exhibit A - Certificate of Designation of Rights, Preferences and Privileges of
Series A Participating Preferred Stock of Meridian Data, Inc.
Exhibit B - Form of Rights Certificate
Exhibit C - Meridian Data, Inc. Stockholder Rights Plan
<PAGE>
AMENDED AND RESTATED PREFERRED SHARES RIGHTS AGREEMENT
This Amended and Restated Rights Agreement (the "Agreement"), dated as
of May __, 1999, between Meridian Data, Inc., a Delaware corporation, and
BankBoston, N.A., a national banking association (the "Rights Agent").
R E C I T A L S
WHEREAS, on July 18, 1997, the Board of Directors of the Company
authorized and declared a dividend of one Preferred Share Purchase Right (a
"Right") for each share of Common Stock (as hereinafter defined) of the Company
outstanding on the Close of Business (as defined below) on August 25, 1997 (the
"Record Date"), each right representing the right to purchase one share of
Common Stock (as hereinafter defined), upon the terms and subject to the
conditions set forth in the original Preferred Shares Rights Agreement between
the parties hereto, dated as of August 11, 1997 (the "Original Agreement"); and
WHEREAS, on January 20, 1999, the Board of Directors of the Company
authorized the amendment and restatement of the Original Agreement in its
entirety;
WHEREAS, on May 9, 1999, the Board of Directors of the Company
authorized the entry by the Company into an Agreement and Plan of Merger and
Reorganization, dated as of May 10, 1999 (the "Merger Agreement"), by and among
Quantum Corporation, a Delaware corporation ("Parent"), Defiant Acquisition Sub,
a Delaware corporation ("Sub"), and the Company providing for, among other
things, the merger (the "Merger") of Sub with and into the Company, and
authorized the Company to amend Original Agreement to ensure that the Original
Agreement will not be applicable to the Merger and the other transactions
contemplated by the Merger Agreement; and
WHEREAS, pursuant to Section 27 of the Original Agreement, the parties
hereto and thereto wish to amend and restate the Original Agreement to read in
its entirety as set forth herein, such that this Agreement shall supersede and
replace the Original Agreement;
NOW THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree that the Original
Agreement shall be amended and restated to read in its entirety as follows:
<PAGE>
1) Certain Definitions. For purposes of this Agreement, the following terms have
the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which, together with all
Affiliates and Associates of such Person, shall be the Beneficial Owner of 15%
or more of the Common Shares then outstanding, but shall not include the
Company, any Subsidiary of the Company or any employee benefit plan of the
Company or of any Subsidiary of the Company, or any entity holding Common Shares
for or pursuant to the terms of any such plan. Notwithstanding the foregoing, no
Person shall be deemed to be an Acquiring Person as the result of an acquisition
of Common 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 Common Shares of the Company then outstanding;
provided, however, that if a Person shall become the Beneficial Owner of 15% or
more of the Common Shares of the Company then outstanding by reason of share
purchases by the Company and shall, after such share purchases by the Company,
become the Beneficial Owner of any additional Common Shares of the Company
(other than pursuant to a dividend or distribution paid or made by the Company
on the outstanding Common Shares in Common Shares or pursuant to a split or
subdivision of the outstanding Common Shares), then such Person shall be deemed
to be an Acquiring Person unless upon becoming the Beneficial Owner of such
additional Common Shares of the Company such Person does not beneficially own
15% or more of the Common Shares of the Company then outstanding.
Notwithstanding the foregoing, (i) if the Company's Board of Directors
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 (including, without limitation, because (A) such
Person was unaware that it beneficially owned a percentage of the Common Shares
that would otherwise cause such Person to be an "Acquiring Person," as defined
pursuant to the foregoing provisions of this paragraph (a), or (B) such Person
was aware of the extent of the Common Shares it beneficially owned but had no
actual knowledge of the consequences of such beneficial ownership under this
Agreement) and without any intention of changing or influencing control of the
Company, and if such Person divested or 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 or to have become an
"Acquiring Person" for any purposes of this Agreement; and (ii) if, as of the
date hereof, any Person is the Beneficial Owner of 15% or more of the Common
Shares outstanding, such Person shall not be or become an "Acquiring Person," as
defined pursuant to the foregoing provisions of this paragraph (a), unless and
until such time as such Person shall become the Beneficial Owner of additional
Common Shares (other than pursuant to a dividend or distribution paid or made by
the Company on the outstanding Common Shares in Common Shares or pursuant to a
split or subdivision of the outstanding Common Shares), unless, upon becoming
the Beneficial Owner of such additional Common Shares, such Person is not then
the Beneficial Owner of 15% or more of the Common Shares then outstanding.
Notwithstanding the foregoing, none of Parent or its subsidiaries shall become
an Acquiring Person solely by virtue of the execution of the Merger Agreement or
the consummation of the Merger or the other transactions contemplated thereby.
(b) "Adjustment Fraction" shall have the meaning set forth in Section 11(a)(i)
hereof.
(c) "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.
(d) A Person shall be deemed the "Beneficial Owner" of and shall be deemed to
"beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or Associates
beneficially owns, directly or indirectly, for purposes of Section
13(d) of the Exchange Act and Rule 13d-3 thereunder (or any comparable
or successor law or regulation);
(ii) which 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 of securities), or upon
the exercise of conversion rights, exchange rights, rights (other than
the Rights), warrants or options, or otherwise; provided, however,
that a Person shall not be deemed pursuant to this Section 1(d)(ii)(A)
to be the Beneficial Owner of, or to beneficially own, (1) securities
tendered pursuant to a tender or exchange offer made by or on behalf
of such Person or any of such Person's Affiliates or Associates until
such tendered securities are accepted for purchase or exchange, or (2)
securities which a Person or any of such Person's Affiliates or
Associates may be deemed to have the right to acquire pursuant to any
merger or other acquisition agreement between the Company and such
Person (or one or more of its Affiliates or Associates) if such
agreement has been approved by the Board of Directors of the Company
prior to there being an Acquiring Person; or (B) the right to vote
pursuant to any agreement, arrangement or understanding; provided,
however, that a Person shall not be deemed the Beneficial Owner of, or
to beneficially own, any security under this Section 1(d)(ii)(B) if
the agreement, arrangement or understanding to vote such security (1)
arises solely from a revocable proxy or consent given to such Person
in response to a public proxy or consent solicitation made pursuant
to, and in accordance with, the applicable rules and regulations of
the Exchange Act and (2) is not also then reportable on Schedule 13D
under the Exchange Act (or any comparable or successor report); or
(iii)which are beneficially owned, directly or indirectly, by any other
Person (or any Affiliate or Associate thereof) with which such Person
or any of such Person's Affiliates or Associates has any agreement,
arrangement or understanding, whether or not in writing (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 (except to the extent
contemplated by the proviso to Section 1(d)(ii)(B)) or disposing of
any securities of the Company; provided, however, that in no case
shall an officer or director of the Company be deemed (x) the
Beneficial Owner of any securities beneficially owned by another
officer or director of the Company solely by reason of actions
undertaken by such persons in their capacity as officers or directors
of the Company or (y) the Beneficial Owner of securities held of
record by the trustee of any employee benefit plan of the Company or
any Subsidiary of the Company for the benefit of any employee of the
Company or any Subsidiary of the Company, other than the officer or
director, by reason of any influence that such officer or director may
have over the voting of the securities held in the plan.
(e) "Business Day" shall mean any day other than a Saturday, Sunday or a day on
which banking institutions in The Commonwealth of Massachusetts are authorized
or obligated by law or executive order to close.
(f) "Close of Business" on any given date shall mean 5:00 P. M., New York time,
on such date; provided, however, that if such date is not a Business Day it
shall mean 5:00 P.M., New York time, on the next succeeding Business Day.
(g) "Common Shares" when used with reference to the Company shall mean the
shares of Common Stock of the Company, $0. 001 par value. Common Shares when
used with reference to any Person other than the Company shall mean the capital
stock (or equity interest) with the greatest voting power of such other Person
or, if such other Person is a Subsidiary of another Person, the Person or
Persons which ultimately control such first-mentioned Person.
(h) "Common Stock Equivalents" shall have the meaning set forth in Section
11(a)(iii) hereof.
(i) "Company" shall mean Meridian Data, Inc. , a Delaware corporation, subject
to the terms of Section 13(a)(iii)(C) hereof.
(j) "Current Per Share Market Price" of any security (a "Security" for purposes
of this definition), for all computations other than those made pursuant to
Section 11(a)(iii) hereof, shall mean the average of the daily closing prices
per share of such Security for the thirty (30) consecutive Trading Days
immediately prior to such date, and for purposes of computations made pursuant
to Section 11(a)(iii) hereof, the Current Per Share Market Price of any Security
on any date shall be deemed to be the average of the daily closing prices per
share of such Security for the ten (10) consecutive Trading Days immediately
prior to such date; provided, however, that in the event that the Current Per
Share Market Price of the Security is determined during a period following the
announcement by the issuer of such Security of (i) a dividend or distribution on
such Security payable in shares of such Security or securities convertible into
such shares or (ii) any subdivision, combination or reclassification of such
Security, and prior to the expiration of the applicable thirty (30) Trading Day
or ten (10) Trading Day period, after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the Current Per Share Market
Price shall be appropriately adjusted to reflect the current market price per
share equivalent of such Security. The closing price for each day shall be the
last sale price, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Security is not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Security is listed or admitted to trading or, if the Security is
not listed or admitted to trading on any national securities exchange, the last
sale price or, if such last sale price is not reported, the average of the high
bid and low asked prices in the over-the-counter market, as reported by Nasdaq
or such other system then in use, or, if on any such date the 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 the Security
selected by the Board of Directors of the Company. If on any such date no market
maker is making a market in the Security, the fair value of such shares on such
date as determined in good faith by the Board of Directors of the Company shall
be used. If the Preferred Shares are not publicly traded, 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 as determined pursuant to
this Section 1(j), as appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof, multiplied by
1000. If the Security is not publicly held or so listed or traded, Current Per
Share Market Price shall mean the fair value per share as determined in good
faith by the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent and shall be conclusive for
all purposes.
(k)"Current Value" shall have the meaning set forth in Section 11(a)(iii) hereof
(l) "Distribution Date" shall mean the earlier of (i) the Close of Business on
the tenth day after the Shares Acquisition Date (or, if the tenth day after the
Shares Acquisition Date occurs before the Record Date, the Close of Business on
the Record Date) or (ii) the Close of Business on the tenth Business Day (or
such later date as may be determined by action of the Company's Board of
Directors) after the date that a tender or exchange offer by any Person (other
than the Company, any Subsidiary of the Company, any employee benefit plan of
the Company or of any Subsidiary of the Company, or any Person or entity
organized, appointed or established by the Company for or pursuant to the terms
of any such plan) is first published or sent or given within the meaning of Rule
14d-2(a) of the General Rules and Regulations under the Exchange Act, if,
assuming the successful consummation thereof, such Person would be an Acquiring
Person. Notwithstanding the foregoing, a Distribution Date shall not occur
solely by reason of the execution of the Merger Agreement, the consummation of
the Merger, or the consummation of the transactions contemplated thereby.
(m) "Equivalent Shares" shall mean Preferred Shares and any other class or
series of capital stock of the Company which is entitled to the same rights,
privileges and preferences as the Preferred Shares.
(n) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
(o) "Exchange Ratio" shall have the meaning set forth in Section 24(a) hereof.
(p) "Exercise Price" shall have the meaning set forth in Section 4(a) hereof.
(q) "Expiration Date" shall mean the earliest to occur of: (i) the Close of
Business on the Final Expiration Date, (ii) the Redemption Date, or (iii) the
time at which the Board of Directors orders the exchange of the Rights as
provided in Section 24 hereof.
(r) "Final Expiration Date" shall mean August 11, 2007.
(s) "Nasdaq" shall mean the National Association of Securities Dealers, Inc.
Automated Quotations System.
(t) "Person" shall mean any individual, firm, corporation or other entity, and
shall include any successor (by merger or otherwise) of such entity.
(u) "Post-Event Transferee" shall have the meaning set forth in Section 7(e)
hereof.
(v) "Preferred Shares" shall mean shares of Series A Participating Preferred
Stock, $0. 001 par value, of the Company.
(w) "Pre-Event Transferee" shall have the meaning set forth in Section 7(e)
hereof.
(x) "Principal Party" shall have the meaning set forth in Section 13(b) hereof.
(y) "Record Date" shall have the meaning set forth in the recitals at the
beginning of this Agreement.
(z) "Redemption Date" shall have the meaning set forth in Section 23(a) hereof.
(aa) "Redemption Price" shall have the meaning set forth in Section 23(a)
hereof.
(bb) "Rights Agent" shall mean BankBoston, N. A. or its successor or replacement
as provided in Sections 19 and 21 hereof.
(cc) "Rights Certificate" shall mean a certificate substantially in the form
attached hereto as Exhibit B.
(dd) "Rights Dividend Declaration Date" shall have the meaning set forth in the
recitals at the beginning of this Agreement.
(ee) "Section 11(a)(ii) Trigger Date" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(ff) "Section 13 Event" shall mean any event described in clause (i), (ii) or
(iii) of Section 13(a) hereof.
(gg) "Securities Act" shall mean the Securities Act of 1933, as amended.
(hh) "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) under 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 become an Acquiring Person pursuant to
Section 1(a) hereof, then no Shares Acquisition Date shall be deemed to have
occurred.
(ii) "Spread" shall have the meaning set forth in Section 11(a)(iii) hereof.
(jj) "Subsidiary" of any Person shall mean any corporation or other entity of
which an amount of voting securities sufficient to elect a majority of the
directors or Persons having similar authority of such corporation or other
entity is beneficially owned, directly or indirectly, by such Person, or any
corporation or other entity otherwise controlled by such Person.
(kk) "Substitution Period" shall have the meaning set forth in Section
11(a)(iii) hereof.
(ll) "Summary of Rights" shall mean a summary of this Agreement substantially in
the form attached hereto as Exhibit C.
(mm) "Total Exercise Price" shall have the meaning set forth in Section 4(a)
hereof.
(nn) "Trading Day" shall mean a day on which the principal national securities
exchange on which a referenced security is listed or admitted to trading is open
for the transaction of business or, if a referenced security is not listed or
admitted to trading on any national securities exchange, a Business Day.
(oo) A "Triggering Event" shall be deemed to have occurred upon any Person,
becoming an Acquiring Person.
2. Appointment of Rights Agent. The Company hereby appoints the Rights Agent to
act as agent for the Company and the holders of the Rights (who, in accordance
with Section 3 hereof, shall prior to the Distribution Date also be the holders
of the Common Shares) in accordance with the terms and conditions hereof, and
the Rights Agent hereby accepts such appointment. The Company may from time to
time appoint such co-Rights Agents as it may deem necessary or desirable upon
ten (10) days prior written notice to the Rights Agent. The Rights Agent shall
have no duty to supervise, and shall in no event be liable for the acts or
omissions of any such co-Rights Agent.
3. Issuance of Rights Certificates.
(a) Until the Distribution Date, (i) the Rights will be evidenced (subject to
the provisions of Sections 3(b) and 3(c) hereof) by the certificates for Common
Shares registered in the names of the holders thereof (which certificates shall
also be deemed to be Rights Certificates) and not by separate Rights
Certificates and (ii) the right to receive Rights Certificates will be
transferable only in connection with the transfer of Common Shares. Until the
earlier of the Distribution Date or the Expiration Date, the surrender for
transfer of certificates for Common Shares shall also constitute the surrender
for transfer of the Rights associated with the Common Shares represented
thereby. As soon as practicable after the Distribution Date, the Company will
prepare and execute, the Rights Agent will countersign, and the Company will
send or cause to be sent (and the Rights Agent will, if requested, send) by
first-class, postage-prepaid mail, to each record holder of Common Shares as of
the Close of Business on the Distribution Date, at the address of such holder
shown on the records of the Company, a Rights Certificate evidencing one Right
for each Common Share so held, subject to adjustment as provided herein. In the
event that an adjustment in the number of Rights per Common Share has been made
pursuant to Section 11 hereof, then at the time of distribution of the Rights
Certificates, the Company shall make the necessary and appropriate rounding
adjustments (in accordance with Section 14(a) hereof) so that Rights
Certificates representing only whole numbers of Rights are distributed and cash
is paid in lieu of any fractional Rights. As of the Distribution Date, the
Rights will be evidenced solely by such Rights Certificates and may be
transferred by the transfer of the Rights Certificates as permitted hereby,
separately and apart from any transfer of Common Shares, and the holders of such
Rights Certificates as listed in the records of the Company or any transfer
agent or registrar for the Rights shall be the record holders thereof.
(b) On the Record Date or as soon as practicable thereafter, the Company will
send a copy of the Summary of Rights by first-class, postage-prepaid mail, to
each record holder of Common Shares as of the Close of Business on the Record
Date, at the address of such holder shown on the records of the Company's
transfer agent and registrar. With respect to certificates for Common Shares
outstanding as of the Record Date, until the Distribution Date, the Rights will
be evidenced by such certificates registered in the names of the holders thereof
together with the Summary of Rights. Until the Distribution Date (or, if
earlier, the Expiration Date), the surrender for transfer of any certificate for
Common Shares outstanding on the Record Date, with or without a copy of the
Summary of Rights, shall also constitute the transfer of the Rights associated
with the Common Shares represented thereby.
(c) Unless the Board of Directors by resolution adopted at or before the time of
the issuance of any Common Shares specifies to the contrary, Rights shall be
issued in respect of all Common Shares that are issued after the Record Date but
prior to the earlier of the Distribution Date or the Expiration Date or, in
certain circumstances provided in Section 22 hereof, after the Distribution
Date. Certificates representing such Common Shares shall also be deemed to be
certificates for Rights, and shall bear the following legend:
THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO
CERTAIN RIGHTS AS SET FORTH IN A RIGHTS AGREEMENT BETWEEN MERIDIAN
DATA, INC. AND BANKBOSTON, N.A., AS THE RIGHTS AGENT, (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 MERIDIAN DATA, INC. UNDER CERTAIN CIRCUMSTANCES, AS SET
FORTH IN THE RIGHTS AGREEMENT, SUCH RIGHTS WILL BE EVIDENCED BY
SEPARATE CERTIFICATES AND WILL NO LONGER BE EVIDENCED BY THIS
CERTIFICATE. MERIDIAN DATA, INC. WILL MAIL TO THE HOLDER OF THIS
CERTIFICATE A COPY OF THE RIGHTS AGREEMENT WITHOUT CHARGE AFTER RECEIPT
OF A WRITTEN REQUEST THEREFOR. UNDER CERTAIN CIRCUMSTANCES SET FORTH IN
THE RIGHTS AGREEMENT, RIGHTS ISSUED TO, OR HELD BY, ANY PERSON WHO IS,
WAS OR BECOMES AN ACQUIRING PERSON OR ANY AFFILIATE OR ASSOCIATE
THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), WHETHER
CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT
HOLDER, MAY BECOME NULL AND VOID.
With respect to such certificates containing the foregoing legend, until the
earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights
associated with the Common Shares represented by such certificates shall be
evidenced by such certificates alone, and the surrender for transfer of any such
certificate shall also constitute the transfer of the Rights associated with the
Common Shares represented thereby.
(d) In the event that the Company purchases or acquires any Common Shares after
the Record Date but prior to the Distribution Date, any Rights associated with
such Common Shares shall be deemed canceled and retired so that the Company
shall not be entitled to exercise any Rights associated with the Common Shares
which are no longer outstanding.
4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to purchase Common Shares
and of assignment to be printed on the reverse thereof) shall be substantially
in the form of Exhibit B hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as the
Company may deem appropriate and as are not inconsistent with the provisions of
this Agreement, or as may be required to comply with any applicable law or with
any rule or regulation made pursuant thereto or with any rule or regulation of
any stock exchange or automated quotation system, on which the Rights may from
time to time be listed or included, or to conform to usage. Subject to the
provisions of Section 11 and Section 22 hereof, the Rights Certificates,
whenever distributed, shall be dated as of the Record Date (or in the case of
Rights issued with respect to Common Shares issued by the Company after the
Record Date, as of the date of issuance of such Common Shares) and on their face
shall entitle the holders thereof to purchase such number of one-thousandths of
a Preferred Share as shall be set forth therein at the price set forth therein
(such exercise price per one one-thousandth of a Preferred Share being
hereinafter referred to as the "Exercise Price" and the aggregate Exercise Price
of all Preferred Shares issuable upon exercise of one Right being hereinafter
referred to as the "Total Exercise Price"), but the number and type of
securities purchasable upon the exercise of each Right and the Exercise Price
shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) or Section 22 hereof
that represents Rights beneficially owned by: (i) an Acquiring Person or any
Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee after
the Acquiring Person becomes such or (iii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee 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 such Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer
which the Company's Board of Directors has determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect avoidance
of Section 7(e) hereof, and any Rights Certificate issued pursuant to Section 6
or Section 11 hereof upon transfer, exchange, replacement or adjustment of any
other Rights Certificate referred to in this sentence, shall contain (to the
extent feasible) the following legend:
THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR
AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE
AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT.
5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of the Company by its
Chairman of the Board, its Chief Executive Officer, its Chief Financial Officer,
its President or any Vice President, either manually or by facsimile signature,
and by the Secretary or an Assistant Secretary of the Company, either manually
or by facsimile signature, and shall have affixed thereto the Company's seal (if
any) or a facsimile thereof. The Rights Certificates shall be manually
countersigned by the Rights Agent and shall not be valid for any purpose unless
countersigned. In case any officer of the Company who shall have signed any of
the Rights Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Rights Certificates, nevertheless, may be countersigned by the Rights Agent
and issued and delivered by the Company with the same force and effect as though
the person who signed such Rights Certificates on behalf of the Company had not
ceased to be such officer of the Company; and any Rights Certificate may be
signed on behalf of the Company by any person who, at the actual date of the
execution of such Rights Certificate, shall be a proper officer of the Company
to sign such Rights Certificate, although at the date of the execution of this
Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or cause to be
kept, at its office designated for such purposes, books for registration and
transfer of the Rights Certificates issued hereunder. Such books shall show the
names and addresses of the respective holders of the Rights Certificates, the
number of Rights evidenced on its face by each of the Rights Certificates and
the date of each of the Rights Certificates.
6. Transfer, Split Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Sections 7(e), 14 and 24 hereof, at any time
after the Close of Business on the Distribution Date, and at or prior to the
Close of Business on the Expiration Date, any Rights Certificate or Rights
Certificates may be transferred, split up, combined or exchanged for another
Rights Certificate or Rights Certificates, entitling the registered holder to
purchase a like number of one-thousandths of a Preferred Share (or, following a
Triggering Event, other securities, cash or other assets, as the case may be) as
the Rights Certificate or Rights Certificates surrendered then entitled such
holder to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Rights Certificate or Rights Certificates shall make
such request in writing delivered to the Rights Agent, and shall surrender the
Rights Certificate or Rights Certificates to be transferred, split up, combined
or exchanged at the principal office of the Rights Agent. Neither the Rights
Agent nor the Company shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Rights Certificate until the
registered holder shall have completed and signed the certificate contained in
the form of assignment on the reverse side of such Rights Certificate and shall
have provided such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request. Thereupon the Rights Agent shall, subject to Sections
7(e), 14 and 24 hereof, countersign and deliver to the person entitled thereto a
Rights Certificate or Rights Certificates, as the case may be, as so requested.
The Company may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer, split
up, combination or exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Rights
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Rights Certificate if mutilated, the Company will make and deliver a new
Rights Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Rights Certificate so lost, stolen, destroyed
or mutilated.
7. Exercise of Rights; Exercise Price; Expiration Date of Rights.
(a) Subject to Sections 7(e), 23(b) and 24(b) hereof, the registered holder of
any Rights Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein) in whole or in part at any time after the
Distribution Date and prior to the Close of Business on the Expiration Date by
surrender of the Rights Certificate, with the form of election to purchase on
the reverse side thereof duly executed, to the Rights Agent at the principal
office of the Rights Agent, together with payment of the Exercise Price for each
one-thousandth of a Preferred Share (or, following a Triggering Event, other
securities, cash or other assets as the case may be) as to which the Rights are
exercised.
(b) The Exercise Price for each one-thousandth of a Preferred Share issuable
pursuant to the exercise of a Right shall initially be Thirty Dollars ($30. 00),
shall be subject to adjustment from time to time as provided in Sections 11 and
13 hereof and shall be payable in lawful money of the United States of America
in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing exercisable Rights, with
the form of election to purchase duly executed, accompanied by payment of the
Exercise Price for the number of one-thousandths of a Preferred Share (or,
following a Triggering Event, other securities, cash or other assets as the case
may be) to be purchased and an amount equal to any applicable transfer tax
required to be paid by the holder of such Rights Certificate in accordance with
Section 9(e) hereof, the Rights Agent shall, subject to Section 20(k) hereof,
thereupon promptly (i) (A) requisition from any transfer agent of the Preferred
Shares (or make available, if the Rights Agent is the transfer agent for the
Preferred Shares) a certificate or certificates for the number of
one-thousandths of a Preferred Share (or, following a Triggering Event, other
securities, cash or other assets as the case may be) to be purchased and the
Company hereby irrevocably authorizes its transfer agent to comply with all such
requests or (B) if the Company shall have elected to deposit the total number of
one-thousandths of a Preferred Share (or, following a Triggering Event, other
securities, cash or other assets as the case may be) issuable upon exercise of
the Rights hereunder with a depositary agent, requisition from the depositary
agent depositary receipts representing such number of one-thousandths of a
Preferred Share (or, following a Triggering Event, other securities, cash or
other assets as the case may be) as are to be purchased (in which case
certificates for the Preferred Shares (or, following a Triggering Event, other
securities, cash or other assets as the case may be) represented by such
receipts shall be deposited by the transfer agent with the depositary agent) and
the Company hereby directs the depositary agent to comply with such request,
(ii) when appropriate, requisition from the Company the amount of cash to be
paid in lieu of issuance of fractional shares in accordance with Section 14
hereof, (iii) after receipt of such certificates or depositary receipts, cause
the same to be delivered to or upon the order of the registered holder of such
Rights Certificate, registered in such name or names as may be designated by
such holder and (iv) when appropriate, after receipt thereof, deliver such cash
to or upon the order of the registered holder of such Rights Certificate. The
payment of the Exercise Price (as such amount may be reduced (including to zero)
pursuant to Section 11(a)(iii) hereof) and an amount equal to any applicable
transfer tax required to be paid by the holder of such Rights Certificate in
accordance with Section 9(e) hereof, may be made in cash or by certified bank
check, cashier's check or bank draft payable to the order of the Company. In the
event that the Company is obligated to issue securities of the Company other
than Preferred Shares, pay cash and/or distribute other property pursuant to
Section 11(a) hereof, the Company will make all arrangements necessary so that
such other securities, cash and/or other property are available for distribution
by the Rights Agent, if and when appropriate.
(d) In case the registered holder of any Rights Certificate shall exercise less
than all the Rights evidenced thereby, a new Rights Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent to the registered holder of such Rights Certificate or to his or
her duly authorized assigns, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from and after
the first occurrence of a Triggering Event, any Rights beneficially owned by (i)
an Acquiring Person or an Associate or Affiliate of an Acquiring Person, (ii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person becomes such (a "Post-Event
Transferee"), (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) 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 any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Company's Board of
Directors has determined is part of a plan, arrangement or understanding which
has as a primary purpose or effect the avoidance of this Section 7(e) (a
"Pre-Event Transferee") or (iv) any subsequent transferee receiving transferred
Rights from a Post-Event Transferee or a Pre-Event Transferee, either directly
or through one or more intermediate transferees, shall become null and void
without any further action and no holder of such Rights shall have any rights
whatsoever with respect to such Rights, whether under any provision of this
Agreement or otherwise. The Company shall use all reasonable efforts to ensure
that the provisions of this Section 7(e) and Section 4(b) hereof are complied
with, but shall have no liability to any holder of Rights Certificates or to any
other Person as a result of its failure to make any determinations with respect
to an Acquiring Person or any of such Acquiring Person's Affiliates, Associates
or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary, neither the
Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder upon the occurrence of any purported exercise as
set forth in this Section 7 unless such registered holder shall, in addition to
having complied with the requirements of Section 7(a), have (i) completed and
signed the certificate contained in the form of election to purchase set forth
on the reverse side of the Rights Certificate surrendered for such exercise and
(ii) provided such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request.
8. Cancellation and Destruction of Rights Certificates. All Rights Certificates
surrendered for the purpose of exercise, transfer, split up, combination or
exchange shall, if surrendered to the Company or to any of its agents, be
delivered to the Rights Agent for cancellation or in canceled form, or, if
surrendered to the Rights Agent, shall be canceled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any Rights Certificate purchased or acquired by the Company otherwise
than upon the exercise thereof. The Rights Agent shall deliver all canceled
Rights Certificates to the Company, or shall, at the written request of the
Company, destroy such canceled Rights Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
9. Reservation and Availability of Preferred Shares.
(a) The Company covenants and agrees that it will use its best efforts to cause
to be reserved and kept available out of its authorized and unissued Preferred
Shares not reserved for another purpose (and, following the occurrence of a
Triggering Event, out of its authorized and unissued Common Shares and/or other
securities), the number of Preferred Shares (and, following the occurrence of
the Triggering Event, Common Shares and/or other securities) that will be
sufficient to permit the exercise in full of all outstanding Rights.
(b) If the Company shall hereafter list any of its Preferred Shares on a
national securities exchange, then so long as the Preferred Shares (and,
following the occurrence of a Triggering Event, Common Shares and/or other
securities) issuable and deliverable upon exercise of the Rights may be listed
on such exchange, the Company shall use its best efforts to cause, from and
after such time as the Rights become exercisable (but only to the extent that it
is reasonably likely that the Rights will be exercised), all shares reserved for
such issuance to be listed on such exchange upon official notice of issuance
upon such exercise.
(c) The Company shall use its best efforts to (i) file, as soon as practicable
following the earliest date after the first occurrence of a Triggering Event in
which the consideration to be delivered by the Company upon exercise of the
Rights is described in Section 11(a)(ii) or Section 11(a)(iii) hereof, or as
soon as is required by law following the Distribution Date, as the case may be,
a registration statement under the Securities Act with respect to the securities
purchasable upon exercise of the Rights on an appropriate form, (ii) cause such
registration statement to become effective as soon as practicable after such
filing and (iii) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Securities Act) until
the earlier of (A) the date as of which the Rights are no longer exercisable for
such securities and (B) the date of expiration of the Rights. The Company may
temporarily suspend, for a period not to exceed ninety (90) days after the date
set forth in clause (i) of the first sentence of this Section 9(c), the
exercisability of the Rights in order to prepare and file such registration
statement and permit it to become effective. Upon any such suspension, the
Company shall issue a public announcement stating, and notify the Rights Agent,
that the exercisability of the Rights has been temporarily suspended, as well as
a public announcement and notification to the Rights Agent at such time as the
suspension is no longer in effect. The Company will also take such action as may
be appropriate under, or to ensure compliance with, the securities or "blue sky"
laws of the various states in connection with the exercisability of the Rights.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction, unless the requisite qualification
in such jurisdiction shall have been obtained, or an exemption therefrom shall
be available, and until a registration statement has been declared effective.
(d) The Company covenants and agrees that it will take all such action as may be
necessary to ensure that all Preferred Shares (or other securities of the
Company) delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such securities (subject to payment of the Exercise Price), be
duly and validly authorized and issued and fully paid and nonassessable shares.
(e) The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the original issuance or delivery of the Rights
Certificates or of any Preferred Shares (or other securities of the Company)
upon the exercise of Rights. The Company shall not, however, be required to pay
any transfer tax which may be payable in respect of any transfer or delivery of
Rights Certificates to a person other than, or the issuance or delivery of
certificates or depositary receipts for the Preferred Shares (or other
securities of the Company) in a name other than that of, the registered holder
of the Rights Certificate evidencing Rights surrendered for exercise or to issue
or to deliver any certificates or depositary receipts for Preferred Shares (or
other securities of the Company) upon the exercise of any Rights until any such
tax shall have been paid (any such tax being payable by the holder of such
Rights Certificate at the time of surrender) or until it has been established to
the Company's satisfaction that no such tax is due.
10. Record Date. Each Person in whose name any certificate for a number of
one-thousandths of a Preferred Share (or other securities 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 other securities of the
Company) represented thereby on, and such certificate shall be dated, the date
upon which the Rights Certificate evidencing such Rights was duly surrendered
and payment of the Exercise Price with respect to which the Rights have been
exercised (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 are closed, such Person shall be deemed to have become the
record holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which the transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby, the holder of a Rights
Certificate shall not be entitled to any rights of a holder of Preferred Shares
(or other securities of the Company) for which the Rights shall be exercisable,
including, without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided herein.
11. Adjustment of Exercise Price, Number of Shares or Number of Rights. The
Exercise Price, the number and kind of shares or other property covered by each
Right and the number of Rights outstanding are subject to adjustment from time
to time as provided in this Section 11.
(a) (i)......Anything in this Agreement to the contrary notwithstanding,
in the event the Company shall at any time after the date of this
Agreement (A) declare a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C)
combine the outstanding Preferred Shares (by reverse stock split or
otherwise) 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), then, in each such event, except as otherwise
provided in this Section 11 and Section 7(e) hereof: (1) the Exercise
Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or
reclassification shall be adjusted so that the Exercise Price
thereafter shall equal the result obtained by dividing the Exercise
Price in effect immediately prior to such time by a fraction (the
"Adjustment Fraction"), the numerator of which shall be the total
number of Preferred Shares (or shares of capital stock issued in such
reclassification of the Preferred Shares) outstanding immediately
following such time and the denominator of which shall be the total
number of Preferred Shares outstanding immediately prior to such time;
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
such Right; and (2) the number of one-thousandths of a Preferred Share
(or share of such other capital stock) issuable upon the exercise of
each Right shall equal the number of one-thousandths of a Preferred
Share (or share of such other capital stock) as was issuable upon
exercise of a Right immediately prior to the occurrence of the event
described in clauses (A)-(D) of this Section 11(a)(i), multiplied by
the Adjustment Fraction; provided, however, that, no such adjustment
shall be made pursuant to this Section 11(a)(i) to the extent that
there shall have simultaneously occurred an event described in clause
(A), (B), (C) or (D) of Section 11(n) with a proportionate adjustment
being made thereunder. Each Common Share that shall become outstanding
after an adjustment has been made pursuant to this Section 11(a)(i)
shall have associated with it the number of Rights, exercisable at the
Exercise Price and for the number of one-thousandths of a Preferred
Share (or shares of such other capital stock) as one Common Share has
associated with it immediately following the adjustment made pursuant
to this Section 11(a)(i).
(ii) Subject to Section 24 of this Agreement,in the event a Triggering
Event shall have occurred, then promptly following such Triggering
Event each holder of a Right, except as provided in Section 7(e)
hereof, shall thereafter have the right to receive for each Right,
upon exercise thereof in accordance with the terms of this Agreement
and payment of the Exercise Price in effect immediately prior to the
occurrence of the Triggering Event, in lieu of a number of
one-thousandths of a Preferred Share, such number of Common Shares of
the Company as shall equal the result obtained by multiplying the
Exercise Price in effect immediately prior to the occurrence of the
Triggering Event by the number of one-thousandths of a Preferred Share
for which a Right was exercisable (or would have been exercisable if
the Distribution Date had occurred) immediately prior to the first
occurrence of a Triggering Event, and dividing that product by 50% of
the Current Per Share Market Price for Common Shares on the date of
occurrence of the Triggering Event; provided, however, that the
Exercise Price and the number of Common Shares of the Company so
receivable upon exercise of a Right shall be subject to further
adjustment as appropriate in accordance with Section 11(e) hereof to
reflect any events occurring in respect of the Common Shares of the
Company after the occurrence of the Triggering Event.
(iii) In lieu of issuing Common Shares in accordance with Section
11(a)(ii) hereof, the Company may, if the Company's Board of Directors
determines that such action is necessary or appropriate and not
contrary to the interest of holders of Rights and, in the event that
the number of Common Shares which are authorized by the Company's
Certificate of Incorporation but not outstanding or reserved for
issuance for purposes other than upon exercise of the Rights are not
sufficient to permit the exercise in full of the Rights, or if any
necessary regulatory approval for such issuance has not been obtained
by the Company, the Company shall: (A) determine the excess of (1) the
value of the Common Shares issuable upon the exercise of a Right (the
"Current Value") over (2) the Exercise Price (such excess, the
"Spread") and (B) with respect to each Right, make adequate provision
to substitute for such Common Shares, upon exercise of the Rights, (1)
cash, (2) a reduction in the Exercise Price, (3) other equity
securities of the Company (including, without limitation, shares or
units of shares of any series of preferred stock which the Company's
Board of Directors has deemed to have the same value as Common Shares
(such shares or units of shares of preferred stock are herein called
"Common Stock Equivalents")), except to the extent that the Company
has not obtained any necessary stockholder or regulatory approval for
such issuance, (4) debt securities of the Company, except to the
extent that the Company has not obtained any necessary stockholder or
regulatory approval for such issuance, (5) other assets or (6) any
combination of the foregoing, having an aggregate value equal to the
Current Value, where such aggregate value has been determined by the
Company's Board of Directors based upon the advice of a nationally
recognized investment banking firm selected by the Company's Board of
Directors; provided, however, if the Company shall not have made
adequate provision to deliver value pursuant to clause (B) above
within thirty (30) days following the later of (x) the first
occurrence of a Triggering Event and (y) the date on which the
Company's right of redemption pursuant to Section 23(a) expires (the
later of (x) and (y) being referred to herein as the "Section
11(a)(ii) Trigger Date"), then the Company shall be obligated to
deliver, upon the surrender for exercise of a Right and without
requiring payment of the Exercise Price, Common Shares (to the extent
available), except to the extent that the Company has not obtained any
necessary stockholder or regulatory approval for such issuance, and
then, if necessary, cash, which shares and/or cash have an aggregate
value equal to the Spread. If the Company's Board of Directors shall
determine in good faith that it is likely that sufficient additional
Common Shares could be authorized for issuance upon exercise in full
of the Rights or that any necessary regulatory approval for such
issuance will be obtained, the thirty (30) day period set forth above
may be extended to the extent necessary, but not more than ninety (90)
days after the Section 11(a)(ii) Trigger Date, in order that the
Company may seek stockholder approval for the authorization of such
additional shares or take action to obtain such regulatory approval
(such period, as it may be extended, the "Substitution Period"). To
the extent that the Company determines that some action need be taken
pursuant to the first and/or second sentences of this Section
11(a)(iii), the Company (x) shall provide, subject to Section 7(e)
hereof, that such action shall apply uniformly to all outstanding
Rights and (y) may suspend the exercisability of the Rights until the
expiration of the Substitution Period in order to seek any
authorization of additional shares, to take any action to obtain any
required regulatory approval and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to
determine the value thereof. In the event of any such suspension, the
Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well
as a public announcement at such time as the suspension is no longer
in effect. For purposes of this Section 11(a)(iii), the value of the
Common Shares shall be the Current Per Share Market Price of the
Common Shares on the Section 11(a)(ii) Trigger Date and the value of
any Common Stock Equivalent shall be deemed to have the same value as
the Common Shares on such date.
(b) In case the Company shall, at any time after the date of this Agreement, fix
a record date for the issuance of rights, options or warrants to all holders of
Preferred Shares entitling such holders (for a period expiring within forty-five
(45) calendar days after such record date) to subscribe for or purchase
Preferred Shares or Equivalent Shares or securities convertible into Preferred
Shares or Equivalent Shares at a price per share (or having a conversion price
per share, if a security convertible into Preferred Shares or Equivalent Shares)
less than the then Current Per Share Market Price of the Preferred Shares or
Equivalent Shares on such record date, then, in each such case, the Exercise
Price to be in effect after such record date shall be determined by multiplying
the Exercise Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the number of Preferred Shares and
Equivalent Shares (if any) outstanding on such record date, plus the number of
Preferred Shares or Equivalent Shares, as the case may be, which the aggregate
offering price of the total number of Preferred Shares or Equivalent Shares, as
the case may be, to be offered or issued (and/or the aggregate initial
conversion price of the convertible securities to be offered or issued) would
purchase at such current market price, and the denominator of which shall be the
number of Preferred Shares and Equivalent Shares (if any) outstanding on such
record date, plus the number of additional Preferred Shares or Equivalent
Shares, as the case may be, to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially convertible);
provided, however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one Right. In case such
subscription price may be paid in a consideration part or all of which shall be
in a form other than cash, the value of such consideration shall be as
determined in good faith by the Company's Board of Directors, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and the holders of the Rights. Preferred
Shares and Equivalent Shares owned by or held for the account of the Company
shall not be deemed outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date is fixed, and
in the event that such rights, options or warrants are not so issued, the
Exercise Price shall be adjusted to be the Exercise Price which would then be in
effect if such record date had not been fixed.
(c) In case the Company shall, at any time after the date of this Agreement, fix
a record date for the making of a distribution to all holders of the Preferred
Shares or of any class or series of Equivalent 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, if any, or a dividend
payable in Preferred Shares) or subscription rights, options or warrants
(excluding those referred to in Section 11(b)), then, in each such case, the
Exercise Price to be in effect after such record date shall be determined by
multiplying the Exercise Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the Current Per Share Market
Price of a Preferred Share or an Equivalent Share on such record date, less the
fair market value per Preferred Share or Equivalent Share (as determined in good
faith by the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent) of the portion of the
cash, assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to a Preferred Share or Equivalent
Share, as the case may be, and the denominator of which shall be such Current
Per Share Market Price of a Preferred Share or Equivalent Share on such record
date; 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. Such
adjustments shall be made successively whenever such a record date is fixed, and
in the event that such distribution is not so made, the Exercise Price shall be
adjusted to be the Exercise Price which would have been in effect if such record
date had not been fixed.
(d) Anything herein to the contrary notwithstanding, no adjustment in the
Exercise Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Exercise Price; provided, however,
that any adjustments which by reason of this Section 11(d) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the nearest
cent or to the nearest ten-thousandth of a Common Share or other share or one
hundred-thousandth of a Preferred Share, as the case may be. Notwithstanding the
first sentence of this Section 11(d), any adjustment required by this Section 11
shall be made no later than the earlier of (i) three (3) years from the date of
the transaction which requires such adjustment or (ii) the Expiration Date.
(e) If as a result of an adjustment made pursuant to Section 11(a) or 13(a)
hereof, the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock other than Preferred Shares, thereafter the
number of such other shares so receivable upon exercise of any Right and, if
required, the Exercise Price thereof, shall be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Preferred Shares contained in Sections 11(a),
11(b), 11(c), 11(d), 11(g), 11(h), 11(i), 11(j), 11(k) and 11(l), and the
provisions of Sections 7, 9, 10, 13 and 14 with respect to the Preferred Shares
shall apply on like terms to any such other shares.
(f) All Rights originally issued by the Company subsequent to any adjustment
made to the Exercise Price hereunder shall evidence the right to purchase, at
the adjusted Exercise Price, the number of one-thousandths of a Preferred Share
purchasable from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.
(g) Unless the Company shall have exercised its election as provided in Section
11(h), upon each adjustment of the Exercise Price as a result of the
calculations made in Section 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Exercise Price, that number of Preferred Shares
(calculated to the nearest one hundred-thousandth of a share) obtained by (i)
multiplying (x) the number of Preferred Shares covered by a Right immediately
prior to this adjustment, by (y) the Exercise Price in effect immediately prior
to such adjustment of the Exercise Price, and (ii) dividing the product so
obtained by the Exercise Price in effect immediately after such adjustment of
the Exercise Price.
(h) The Company may elect on or after the date of any adjustment of the Exercise
Price as a result of the calculations made in Section 11(b) or (c) to adjust the
number of Rights, in substitution for any adjustment in the number of Preferred
Shares purchasable upon the exercise of a Right. Each of the Rights outstanding
after such adjustment of the number of Rights shall be exercisable for the
number of one-thousandths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one hundred-thousandth) obtained by dividing the
Exercise Price in effect immediately prior to adjustment of the Exercise Price
by the Exercise Price in effect immediately after adjustment of the Exercise
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 Exercise Price is adjusted or any day thereafter, but,
if the Rights Certificates have been issued, shall be at least ten (10) days
later than the date of the public announcement. If Rights Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this Section
11(h), the Company shall, as promptly as practicable, cause to be distributed to
holders of record of Rights Certificates on such record date Rights Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Rights Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein (and may bear, at the option of the Company, the adjusted Exercise
Price) and shall be registered in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.
(i) Irrespective of any adjustment or change in the Exercise Price or the number
of Preferred Shares issuable upon the exercise of the Rights, the Rights
Certificates theretofore and thereafter issued may continue to express the
Exercise Price per one one-thousandth of a Preferred Share and the number of
one-thousandths of a Preferred Share which were expressed in the initial Rights
Certificates issued hereunder.
(j) Before taking any action that would cause an adjustment reducing the
Exercise Price below the par or stated value, if any, of the number of
one-thousandths of a Preferred Share issuable upon exercise of the Rights, the
Company shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally issue as
fully paid and nonassessable shares such number of one-thousandths of a
Preferred Share at such adjusted Exercise Price.
(k) In any case in which this Section 11 shall require that an adjustment in the
Exercise Price be made effective as of a record date for a specified event, the
Company may elect to defer until the occurrence of such event the issuing to the
holder of any Right exercised after such record date of the number of
one-thousandths of a Preferred Share and other capital stock or securities of
the Company, if any, issuable upon such exercise over and above the number of
one-thousandths of a Preferred Share and other capital stock or securities of
the Company, if any, issuable upon such exercise on the basis of the Exercise
Price in effect prior to such adjustment; provided, however, that the Company
shall deliver to such holder a due bill or other appropriate instrument
evidencing such holder's right to receive such additional shares (fractional or
otherwise) upon the occurrence of the event requiring such adjustment.
(l) Anything in this Section 11 to the contrary notwithstanding, prior to the
Distribution Date, the Company shall be entitled to make such reductions in the
Exercise Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that it in its sole discretion shall determine
to be advisable in order that any (i) consolidation or subdivision of the
Preferred or Common Shares, (ii) issuance wholly for cash of any Preferred or
Common Shares at less than the current market price, (iii) issuance wholly for
cash of Preferred or Common Shares or securities which by their terms are
convertible into or exchangeable for Preferred or Common Shares, (iv) stock
dividends or (v) issuance of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to holders of its Preferred or Common
Shares shall not be taxable to such stockholders.
(m) The Company covenants and agrees that, after the Distribution Date, it will
not, except as permitted by Sections 23, 24 or 27 hereof, take (or permit to be
taken) any action if at the time such action is taken it is reasonably
foreseeable that such action will diminish substantially or otherwise eliminate
the benefits intended to be afforded by the Rights.
(n) In the event the Company shall at any time after the date of this Agreement
(A) declare a dividend on the Common Shares payable in Common Shares, (B)
subdivide the outstanding Common Shares, (C) combine the outstanding Common
Shares (by reverse stock split or otherwise) into a smaller number of Common
Shares, or (D) issue any shares of its capital stock in a reclassification of
the Common Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), then, in each such event, except as otherwise provided in this
Section 11(a) and Section 7(e) hereof: (1) each Common Share (or shares of
capital stock issued in such reclassification of the Common Shares) outstanding
immediately following such time shall have associated with it the number of
Rights as were associated with one Common Share immediately prior to the
occurrence of the event described in clauses (A)-(D) above; (2) the Exercise
Price in effect at the time of the record date for such dividend or of the
effective date of such subdivision, combination or reclassification shall be
adjusted so that the Exercise Price thereafter shall equal the result obtained
by multiplying the Exercise Price in effect immediately prior to such time by a
fraction, the numerator of which shall be the total number of Common Shares
outstanding immediately prior to the event described in clauses (A)-(D) above,
and the denominator of which shall be the total number of Common Shares
outstanding immediately after such event; 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 such Right; and (3) the number of one-thousandths of a
Preferred Share (or shares of such other capital stock) issuable upon the
exercise of each Right outstanding after such event shall equal the number of
one-thousandths of a Preferred Share (or shares of such other capital stock) as
were issuable with respect to one Right immediately prior to such event. Each
Common Share that shall become outstanding after an adjustment has been made
pursuant to this Section 11(n) shall have associated with it the number of
Rights, exercisable at the Exercise Price and for the number of one-thousandths
of a Preferred Share (or shares of such other capital stock) as one Common Share
has associated with it immediately following the adjustment made pursuant to
this Section 11(n). If an event occurs which would require an adjustment under
both this Section 11(n) and Section 11(a)(ii) hereof, the adjustment provided
for in this Section 11(n) shall be in addition to, and shall be made prior to,
any adjustment required pursuant to Section 11(a)(ii) hereof.
12. Certificate of Adjusted Exercise Price or Number of Shares. Whenever an
adjustment is made as provided in Sections 11 and 13 hereof, the Company shall
promptly (a) prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment, (b) file with the Rights
Agent and with each transfer agent for the Preferred Shares a copy of such
certificate and (c) mail a brief summary thereof to each holder of a Rights
Certificate in accordance with Section 26 hereof. Notwithstanding the foregoing
sentence, the failure of the Company to make such certification or give such
notice shall not affect the validity of such adjustment or the force or effect
of the requirement for such adjustment. The Rights Agent shall be fully
protected in relying on any such certificate and on any adjustment contained
therein and shall not be deemed to have knowledge of such adjustment unless and
until it shall have received such certificate.
13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power.
(a) In the event that, following a Triggering Event, directly or
indirectly:
(i) the Company shall consolidate with, or merge with and into, any
other Person (other than a wholly-owned Subsidiary of the Company in a
transaction the principal purpose of which is to change the state of
incorporation of the Company and which complies with Section 11(m)
hereof);
(ii) any Person shall consolidate with the Company, or merge with and
into the Company and the Company shall be the continuing or surviving
corporation of such consolidation or merger and, in connection with
such merger, all or part of the Common Shares shall be changed into or
exchanged for stock or other securities of any other person (or the
Company); or
(iii) the Company shall sell or otherwise transfer (or one or more of
its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating 50% or more of the
assets or earning power of the Company and its Subsidiaries (taken as
a whole) to any other Person or Persons (other than the Company or one
or more of its wholly owned Subsidiaries in one or more transactions,
each of which individually (and together) complies with Section 11(m)
hereof),
then, concurrent with and in each such case,
(1) each holder of a Right (except as provided in Section 7(e)
hereof) shall thereafter have the right to receive, upon the
exercise thereof at a price equal to the Total Exercise Price
applicable immediately prior to the occurrence of the Section 13
Event in accordance with the terms of this Agreement, such number
of validly authorized and issued, fully paid, nonassessable and
freely tradeable Common Shares of the Principal Party (as
hereinafter defined), free of any liens, encumbrances, rights of
first refusal or other adverse claims, as shall be equal to the
result obtained by dividing such Total Exercise Price by 50% of
the Current Per Share Market Price of the Common Shares of such
Principal Party on the date of consummation of such Section 13
Event, provided, however, that the Exercise Price and the number
of Common Shares of such Principal Party so receivable upon
exercise of a Right shall be subject to further adjustment as
appropriate in accordance with Section 11(e) hereof;
(2) such Principal Party shall thereafter be liable for, and
shall assume, by virtue of such Section 13 Event, all the
obligations and duties of the Company pursuant to this Agreement;
(3) the term "Company" shall thereafter be deemed to refer to
such Principal Party, it being specifically intended that the
provisions of Section 11 hereof shall apply only to such
Principal Party following the first occurrence of a Section 13
Event;
(4) such Principal Party shall take such steps (including, but
not limited to, the reservation of a sufficient number of its
Common Shares) in connection with the consummation of any such
transaction as may be necessary to ensure that the provisions
hereof shall thereafter be applicable, as nearly as reasonably
may be, in relation to its Common Shares thereafter deliverable
upon the exercise of the Rights; and
(5) upon the subsequent occurrence of any consolidation, merger,
sale or transfer of assets or other extraordinary transaction in
respect of such Principal Party, each holder of a Right shall
thereupon be entitled to receive, upon exercise of a Right and
payment of the Total Exercise Price as provided in this Section
13(a), such cash, shares, rights, warrants and other property
which such holder would have been entitled to receive had such
holder, at the time of such transaction, owned the Common Shares
of the Principal Party receivable upon the exercise of such Right
pursuant to this Section 13(a), and such Principal Party shall
take such steps (including, but not limited to, reservation of
shares of stock) as may be necessary to permit the subsequent
exercise of the Rights in accordance with the terms hereof for
such cash, shares, rights, warrants and other property.
(6) For purposes hereof, the "earning power" of the Company and
its Subsidiaries shall be determined in good faith by the
Company's Board of Directors on the basis of the operating
earnings of each business operated by the Company and its
Subsidiaries during the three fiscal years preceding the date of
such determination (or, in the case of any business not operated
by the Company or any Subsidiary during three full fiscal years
preceding such date, during the period such business was operated
by the Company or any Subsidiary).
(b) For purposes of this Agreement, the term "Principal Party" shall mean:
(i) in the case of any transaction described in clause (i) or (ii) of
Section 13(a) hereof: (A) the Person that is the issuer of the securities
into which the Common Shares are converted in such merger or consolidation,
or, if there is more than one such issuer, the issuer the Common Shares of
which have the greatest aggregate market value of shares outstanding, or
(B) if no securities are so issued, (x) the Person that is the other party
to the merger, if such Person survives said merger, or, if there is more
than one such Person, the Person the Common Shares of which have the
greatest aggregate market value of shares outstanding or (y) if the Person
that is the other party to the merger does not survive the merger, the
Person that does survive the merger (including the Company if it survives)
or (z) the Person resulting from the consolidation; and
(ii) in the case of any transaction described in clause (iii) of Section
13(a) hereof, the Person that is the party receiving the greatest portion
of the assets or earning power transferred pursuant to such transaction or
transactions, or, if more than one Person that is a party to such
transaction or transactions receives the same portion of the assets or
earning power so transferred and each such portion would, were it not for
the other equal portions, constitute the greatest portion of the assets or
earning power so transferred, or if the Person receiving the greatest
portion of the assets or earning power cannot be determined, whichever of
such Persons is the issuer of Common Shares having the greatest aggregate
market value of shares outstanding;
provided, however, that in any such case described in the foregoing clause
(b)(i) or (b)(ii), if the Common Shares of such Person are not at such time or
have not been continuously over the preceding 12-month period registered under
Section 12 of the Exchange Act, then (1) if such Person is a direct or indirect
Subsidiary of another Person the Common Shares of which are and have been so
registered, the term "Principal Party" shall refer to such other Person, or (2)
if such Person is a Subsidiary, directly or indirectly, of more than one Person,
the Common Shares of which are and have been so registered, the term "Principal
Party" shall refer to whichever of such Persons is the issuer of Common Shares
having the greatest aggregate market value of shares outstanding, or (3) if 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 clauses (1) and (2) above shall apply to each of the owners
having an interest in the venture as if the Person owned by the joint venture
was a Subsidiary of both or all of such joint venturers, and the Principal Party
in each such case shall bear the obligations set forth in this Section 13 in the
same ratio as its interest in such Person bears to the total of such interests.
(c) The Company shall not consummate any Section 13 Event unless the Principal
Party shall have a sufficient number of authorized Common Shares that have not
been issued or reserved for issuance to permit the exercise in full of the
Rights in accordance with this Section 13 and unless prior thereto the Company
and such issuer shall have executed and delivered to the Rights Agent a
supplemental agreement confirming that such Principal Party shall, upon
consummation of such Section 13 Event, assume this Agreement in accordance with
Sections 13(a) and 13(b) hereof, that all rights of first refusal or preemptive
rights in respect of the issuance of Common Shares of such Principal Party upon
exercise of outstanding Rights have been waived, that there are no rights,
warrants, instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such transaction, would
eliminate or substantially diminish the benefits intended to be afforded by the
Rights and that such transaction shall not result in a default by such Principal
Party under this Agreement, and further providing that, as soon as practicable
after the date of such Section 13 Event, such Principal Party will:
(i) prepare and file a registration statement under the Securities Act with
respect to the Rights and the securities purchasable upon exercise of the
Rights on an appropriate form, use its best efforts to cause such
registration statement to become effective as soon as practicable after
such filing and use its best efforts to cause such registration statement
to remain effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the Expiration Date, and
similarly comply with applicable state securities laws;
(ii) use its best efforts to list (or continue the listing of) the Rights
and the securities purchasable upon exercise of the Rights on a national
securities exchange or to meet the eligibility requirements for quotation
on Nasdaq and list (or continue the listing of) the Rights and the
securities purchasable upon exercise of the Rights on Nasdaq; and
(iii) deliver to holders of the Rights historical financial statements for
such Principal Party which comply in all respects with the requirements for
registration on Form 10 (or any successor form) under the Exchange Act.
In the event that at any time after the occurrence of a Triggering Event
some or all of the Rights shall not have been exercised at the time of a
transaction described in this Section 13, the Rights which have not theretofore
been exercised shall thereafter be exercisable in the manner described in
Section 13(a) (without taking into account any prior adjustment required by
Section 11(a)(ii)).
(d) In case the "Principal Party" for purposes of Section 13(b) hereof has
provision in any of its authorized securities or in its certificate of
incorporation or by-laws or other instrument governing its corporate affairs,
which provision would have the effect of (i) causing such Principal Party to
issue (other than to holders of Rights pursuant to Section 13 hereof), in
connection with, or as a consequence of, the consummation of a Section 13 Event,
Common Shares or Equivalent Shares of such Principal Party at less than the then
Current Per Share Market Price thereof or securities exercisable for, or
convertible into, Common Shares or Equivalent Shares of such Principal Party at
less than such then Current Per Share Market Price, or (ii) providing for any
special payment, tax or similar provision in connection with the issuance of the
Common Shares of such Principal Party pursuant to the provisions of Section 13
hereof, then, in such event, the Company hereby agrees with each holder of
Rights that it shall not consummate any such transaction unless prior thereto
the Company and such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement providing that the provision in question
of such Principal Party shall have been canceled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with or as a consequence of, the consummation of
the proposed transaction.
(e) The Company covenants and agrees that it shall not, at any time after the
Distribution Date, effect or permit to occur any Section 13 Event, if (i) at the
time or immediately after such Section 13 Event there are any rights, warrants
or other instruments or securities outstanding or agreements in effect which
would substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights, (ii) prior to, simultaneously with or immediately after
such Section 13 Event, the stockholders of the Person who constitutes, or would
constitute, the "Principal Party" for purposes of Section 13(b) hereof shall
have received a distribution of Rights previously owned by such Person or any of
its Affiliates or Associates or (iii) the form or nature of organization of the
Principal Party would preclude or limit the exercisability of the Rights.
(f) The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers.
14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights or to
distribute Rights Certificates which evidence fractional Rights. In lieu of such
fractional Rights, there shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable, as determined pursuant to the second sentence of
Section 1(j) hereof.
(b) The Company shall not be required to issue fractions of Preferred Shares
(other than fractions that are integral multiples of one one-thousandth of a
Preferred Share) upon exercise of the Rights or to distribute certificates which
evidence fractional Preferred Shares (other than fractions that are integral
multiples of one one-thousandth of a Preferred Share). Interests in fractions of
Preferred Shares in integral multiples of one one-thousandth 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
represented by such depositary receipts. In lieu of fractional Preferred Shares
that are not integral multiples of one one-thousandth of a Preferred Share, the
Company shall pay to the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of a Preferred Share. For purposes of this
Section 14(b), the current market value of a Preferred Share shall be one
thousand times the closing price of a Common Share (as determined pursuant to
the second sentence of Section 1(j) hereof) for the Trading Day immediately
prior to the date of such exercise.
(c) The Company shall not be required to issue fractions of Common Shares or to
distribute certificates which evidence fractional Common Shares upon the
exercise or exchange of Rights. In lieu of such fractional Common Shares, the
Company shall pay to the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of a Common Share. For purposes of this
Section 14(c), the current market value of a Common Share shall be the closing
price of a Common Share (as determined pursuant to the second sentence of
Section 1(j) hereof) for the Trading Day immediately prior to the date of such
exercise.
(d) The holder of a Right by the acceptance of the Right expressly waives his or
her right to receive any fractional Rights or any fractional shares (other than
fractions that are integral multiples of one one-thousandth of a Preferred
Share) upon exercise of a Right.
15. Rights of Action. All rights of action in respect of this Agreement,
excepting the rights of action given to the Rights Agent under Section 18
hereof, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Rights Certificate (or, prior
to the Distribution Date, of the Common Shares), without the consent of the
Rights Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of the Common Shares), may, in his or her own behalf and for
his or her own benefit, enforce, and may institute and maintain any suit, action
or proceeding against the Company to enforce, or otherwise act in respect of,
his or her right to exercise the Rights evidenced by such Rights Certificate in
the manner provided in such Rights Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and 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.
16. Agreement of Rights Holders. Every holder of a Right, by accepting the same,
consents and agrees with the Company and the Rights Agent and with every other
holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable only in
connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Rights Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the
principal office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer and with the appropriate forms and
certificates fully executed; and
(c) subject to Sections 6(a) and 7(f) hereof, the Company and the Rights
Agent may deem and treat the person in whose name the Rights Certificate
(or, prior to the Distribution Date, the associated Common Shares
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on
the Rights Certificates or the associated Common Shares certificate made by
anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be affected
by any notice to the contrary.
17. Rights Certificate Holder Not Deemed a Stockholder. No holder, as such, of
any Rights Certificate shall be entitled to vote, receive dividends or be deemed
for any purpose to be the holder of the Preferred Shares or any other securities
of the Company which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights Certificate, as
such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in Section 25 hereof), or to receive dividends or subscription rights,
or otherwise, until the Right or Rights evidenced by such Rights Certificate
shall have been exercised in accordance with the provisions hereof.
18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable compensation for
all services rendered by it hereunder and, from time to time, on demand of the
Rights Agent, its reasonable expenses and counsel fees and 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. Anything in this Agreement to the contrary notwithstanding, in no
event will the Rights Agent be liable for special, indirect, incidental or
consequential loss or damage of any kind whatsoever, even if the Rights Agent
has been advised of the possibility of such loss or damage.
(b) The Rights Agent shall be protected and shall incur no liability for, or in
respect of any action taken, suffered or omitted by it in connection with, its
administration of this Agreement in reliance upon any Rights Certificate or
certificate for the Preferred Shares or Common Shares or for other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement or other paper or document reasonably believed by it to be genuine and
to be signed, executed and, where necessary, verified or acknowledged, by the
proper Person or Persons, or otherwise upon the advice of counsel as set forth
in Section 20 hereof.
19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under
this Agreement without the execution or filing of any paper or any further
act on the part of any of the parties hereto; provided, however, that such
corporation would be eligible for appointment as a successor Rights Agent
under the provisions of Section 21 hereof. In case at the time such
successor Rights Agent shall succeed to the agency created by this
Agreement, any of the Rights Certificates shall have been countersigned but
not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent
may countersign such Rights Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and
in all such cases such Rights Certificates shall have the full force
provided in the Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed and
at such time any of the Rights Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under
its prior name and deliver Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such Rights Certificates
either in its prior name or in its changed name; and in all such cases such
Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
20. Duties of Rights Agent. The Rights Agent undertakes the duties and
obligations imposed by this Agreement upon the following terms and conditions,
by all of which the Company and the holders of Rights Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the written advice or opinion of such counsel
shall be full and complete authorization and protection to the Rights Agent
as to any action taken or omitted by it in good faith and in accordance
with such written advice or opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and
the determination of Current Per Share Market Price) be proved or
established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the
Board, the Chief Executive Officer, the President, any Vice President, the
Chief Financial Officer, 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 and any other
Person only for its own gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Rights
Certificates (except its countersignature thereof) or be required to verify
the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in respect of the validity
or execution of any Rights Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Rights
Certificate; nor shall it be responsible for any change in the
exercisability of the Rights or any adjustment in the terms of the Rights
(including the manner, method or amount thereof) provided for in Sections
3, 11, 13, 23 or 24, or the ascertaining of the existence of facts that
would require any such change or adjustment (except with respect to the
exercise of Rights evidenced by Rights Certificates after receipt by the
Rights Agent of a certificate furnished pursuant to Section 12 describing
such change or adjustment); 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 to be issued pursuant to this Agreement or any
Rights Certificate or as to whether any Preferred Shares will, when issued,
be validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably
be required by the Rights Agent for the carrying out or performing by the
Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
any one of the Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Chief Financial Officer, 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 by it in good faith in
accordance with instructions of any such officer or for any delay in acting
while waiting for those instructions. Any application by the Rights Agent
for written instructions from the Company may, at the option of the Rights
Agent, set forth in writing any action proposed to be taken or omitted by
the Rights Agent under this Rights Agreement and the date on and/or after
which such action shall be taken or such omission shall be effective. The
Rights Agent shall not be liable for any action taken by, or omission of,
the Rights Agent in accordance with a proposal included in any such
application on or after the date specified in such application (which date
shall not be less than five (5) Business Days after the date any officer of
the Company actually receives such application, unless any such officer
shall have consented in writing to an earlier date) unless, prior to taking
any such action (or the effective date in the case of an omission), the
Rights Agent shall have received written instructions in response to such
application specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though it
were not Rights Agent under this Agreement. Nothing herein shall preclude
the Rights Agent from acting in any other capacity for the Company or for
any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company resulting from
any such act, default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights
if there shall be reasonable grounds for believing that repayment of such
funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either
not been completed or indicates an affirmative response to clause 1 and/or
2 thereof, the Rights Agent shall not take any further action with respect
to such requested exercise or transfer without first consulting with the
Company.
21. Change of Rights Agent. The Rights Agent or any successor Rights Agent may
resign and be discharged from its duties under this Agreement upon thirty (30)
days' notice in writing mailed to the Company and to each transfer agent of the
Preferred Shares and the Common Shares by registered or certified mail, and to
the holders of the Rights Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon thirty (30) days'
notice in writing, mailed to the Rights Agent or successor Rights Agent, as the
case may be, and to each transfer agent of the Preferred Shares and the Common
Shares by registered or certified mail, and to the holders of the Rights
Certificates by first-class mail. If the Rights Agent shall resign or be removed
or shall otherwise become incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of thirty (30) days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Rights Certificate (who shall, with such notice, submit his or her Rights
Certificate for inspection by the Company), then the registered holder of any
Rights Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be a corporation organized and doing
business under the laws of the United States or of any state of the United
States, in good standing, which is authorized under such laws to exercise
corporate trust or stockholder 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 $100
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 of the Preferred
Shares and the Common Shares, and mail a notice thereof in writing to the
registered holders of the Rights Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
22. Issuance of New Rights Certificates. Notwithstanding any of the provisions
of this Agreement or of the Rights to the contrary, the Company may, at its
option, issue new Rights Certificates evidencing Rights in such form as may be
approved by its Board of Directors to reflect any adjustment or change in the
Exercise Price and the number or kind or class of shares or other securities or
property purchasable under the Rights Certificates made in accordance with the
provisions of this Agreement. In addition, in connection with the issuance or
sale of Common Shares following the Distribution Date and prior to the
redemption or expiration of the Rights, the Company (a) shall, with respect to
Common Shares so issued or sold pursuant to the exercise of stock options or
under any employee plan or arrangement or upon the exercise, conversion or
exchange of other securities of the Company outstanding at the date hereof or
upon the exercise, conversion or exchange of securities hereinafter issued by
the Company and (b) may, in any other case, if deemed necessary or appropriate
by the Board of Directors of the Company, issue Rights Certificates representing
the appropriate number of Rights in connection with such issuance or sale;
provided, however, that (i) no such Rights Certificate shall be issued and this
sentence shall be null and void ab initio if, and to the extent that, such
issuance or this sentence would create a significant risk of or result in
material adverse tax consequences to the Company or the Person to whom such
Rights Certificate would be issued or would create a significant risk of or
result in such options' or employee plans' or arrangements' failing to qualify
for otherwise available special tax treatment and (ii) no such Rights
Certificate shall be issued if, and to the extent that, appropriate adjustment
shall otherwise have been made in lieu of the issuance thereof.
23. Redemption.
(a) The Company may, at its option and with the approval of the Board of
Directors, at any time prior to the earlier of (i) the Distribution Date or
(ii) the Close of Business on the Final Expiration Date, redeem all but not
less than all the then outstanding Rights at a redemption price of $0. 01
per Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof (such
redemption price being herein referred to as the "Redemption Price") and
the Company may, at its option, pay the Redemption Price either in Common
Shares (based on the Current Per Share Market Price thereof at the time of
redemption) or cash. Such redemption of the Rights by the Company 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 date on which
the Board of Directors elects to make the redemption effective shall be
referred to as the "Redemption Date."
(b) Immediately upon the action of the Board of Directors of the Company
ordering the redemption of the Rights, evidence of which shall have been
filed with the Rights Agent, and without any further action and without any
notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption
Price. The Company shall promptly give public notice of any such
redemption; provided, however, that the failure to give or any defect in,
any such notice shall not affect the validity of such redemption. Within
ten (10) days after the action of the Board of Directors ordering the
redemption of the Rights, the Company shall give notice of such redemption
to the Rights Agent and the holders of the then outstanding Rights by
mailing such notice to all such holders at their last addresses as they
appear upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent for the
Common Shares. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each
such notice of redemption will state the method by which the payment of the
Redemption Price will be made. Neither the Company nor any of its
Affiliates or Associates may redeem, acquire or purchase for value any
Rights at any time in any manner other than that specifically set forth in
this Section 23 or in Section 24 hereof, and other than in connection with
the purchase of Common Shares prior to the Distribution Date.
24. Exchange.
(a) Subject to applicable laws, rules and regulations, and subject to
subsection 24(c) below, the Company may, at its option, by action of the
Board of Directors, at any time after the occurrence of a Triggering Event,
exchange all or part of the then outstanding and exercisable Rights (which
shall not include Rights that have become void pursuant to the provisions
of Section 7(e) hereof) for Common Shares at an exchange ratio of one
Common Share per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such
exchange ratio being hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors shall not be
empowered to effect such exchange at any time after any Person (other than
the Company, any Subsidiary of the Company, any employee benefit plan of
the Company or any such Subsidiary, or any entity holding Common Shares for
or pursuant to the terms of any such plan), together with all Affiliates
and Associates of such Person, becomes the Beneficial Owner of 50% or more
of the Common Shares then outstanding.
(b) Immediately upon the action of the Board of Directors ordering the
exchange of any Rights pursuant to subsection 24(a) and without any further
action and without any notice, the right to exercise such Rights shall
terminate and the only right thereafter of a holder of such Rights shall be
to receive that number of Common Shares equal to the number of such Rights
held by such holder multiplied by the Exchange Ratio. The Company shall
give public notice of any such exchange; provided, however, that the
failure to give, or any defect in, such notice shall not affect the
validity of such exchange. The Company shall mail a notice of any such
exchange to all of the holders of such Rights at their last addresses as
they appear upon the registry books of the Rights Agent. Any notice which
is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of exchange will state
the method by which the exchange of the Common Shares for Rights will be
effected and, in the event of any partial exchange, the number of Rights
which will be exchanged. Any partial exchange shall be effected pro rata
based on the number of Rights (other than Rights which have become void
pursuant to the provisions of Section 7(e) hereof) held by each holder of
Rights.
(c) In the event that there shall not be sufficient Common Shares issued
but not outstanding or authorized but unissued to permit any exchange of
Rights as contemplated in accordance with Section 24(a), the Company shall
either take such action as may be necessary to authorize additional Common
Shares for issuance upon exchange of the Rights or alternatively, at the
option of a majority of the Board of Directors, with respect to each Right
(i) pay cash in an amount equal to the Current Value (as hereinafter
defined), in lieu of issuing Common Shares in exchange therefor, or (ii)
issue debt or equity securities or a combination thereof, having a value
equal to the Current Value, in lieu of issuing Common Shares in exchange
for each such Right, where the value of such securities shall be determined
by a nationally recognized investment banking firm selected by majority
vote of the Board of Directors, or (iii) deliver any combination of cash,
property, Common Shares and/or other securities having a value equal to the
Current Value in exchange for each Right. For purposes of this Section
24(c) only, the Current Value shall mean the product of the Current Per
Share Market Price of Common Shares on the date of the occurrence of the
event described above in subparagraph (a), multiplied by the number of
Common Shares for which the Right otherwise would be exchangeable if there
were sufficient shares available. To the extent that the Company determines
that some action need be taken pursuant to clauses (i), (ii) or (iii) of
this Section 24(c), the Board of Directors may temporarily suspend the
exercisability of the Rights for a period of up to sixty (60) days
following the date on which the event described in Section 24(a) shall have
occurred, in order to seek any authorization of additional Common Shares
and/or to decide the appropriate form of distribution to be made pursuant
to the above provision and to determine the value thereof. In the event of
any such suspension, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily suspended.
(d) The Company shall not be required to issue fractions of Common Shares
or to distribute certificates which evidence fractional Common Shares. In
lieu of such fractional Common Shares, there shall be paid to the
registered holders of the Rights Certificates with regard to which such
fractional Common Shares would otherwise be issuable, an amount in cash
equal to the same fraction of the current market value of a whole Common
Share (as determined pursuant to the second sentence of Section 1(j)
hereof).
(e) The Company may, at its option, by majority vote of the Board of
Directors, at any time before any Person has become an Acquiring Person,
exchange all or part of the then outstanding Rights for rights of
substantially equivalent value, as determined reasonably and with good
faith by the Board of Directors, based upon the advice of one or more
nationally recognized investment banking firms.
(f) Immediately upon the action of the Board of Directors ordering the
exchange of any Rights pursuant to subsection 24(e) of this Section 24 and
without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a holder of
such Rights shall be to receive that number of rights in exchange therefor
as has been determined by the Board of Directors in accordance with
subsection 24(e) above. The Company shall give public notice of any such
exchange; provided, however, that the failure to give, or any defect in,
such notice shall not affect the validity of such exchange. The Company
shall mail a notice of any such exchange to all of the holders of such
Rights at their last addresses as they appear upon the registry books of
the transfer agent for the Common Shares of the Company. Any notice which
is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of exchange will state
the method by which the exchange of the Rights will be effected.
25. Notice of Certain Events.
(a) In case the Company shall propose to effect or permit to occur any
Triggering Event or Section 13 Event, the Company shall give notice thereof
to each holder of Rights in accordance with Section 26 hereof at least
twenty (20) days prior to occurrence of such Triggering Event or such
Section 13 Event.
(b) In case any Triggering Event or Section 13 Event shall occur, then, in
any such case, the Company shall as soon as practicable thereafter give to
each holder of a Rights Certificate, in accordance with Section 26 hereof,
a notice of the occurrence of such event, which shall specify the event and
the consequences of the event to holders of Rights under Sections 11(a)(ii)
and 13 hereof.
26. Notices. Notices or demands authorized by this Agreement to be given or made
by the Rights Agent or by the holder of any Rights Certificate to or on the
Company shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Rights
Agent) as follows:
MERIDIAN DATA, INC.
5615 Scotts Valley Drive
Scotts Valley, CA 95066
Attention: Gianluca U. Rattazzi
with a copy to:
Wilson Sonsini Goodrich & Rosati
Professional Corporation
650 Page Mill Road
Palo Alto, California 94304-1050
Attention: Mario M. Rosati
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Company or by the holder
of any Rights Certificate to or on the Rights Agent shall be sufficiently given
or made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
BANKBOSTON, N.A.
c/o EquiServe Limited Partnership
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 Rights Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
27. Supplements and Amendments.
(a) Prior to the occurrence of a Distribution Date, the Company may
supplement or amend this Agreement in any respect without the approval of
any holders of Rights and the Rights Agent shall, if the Company so
directs, execute such supplement or amendment. From and after the
occurrence of a Distribution Date, the Company and the Rights Agent may
from time to time supplement or amend this Agreement without the approval
of any holders of Rights in order to (i) cure any ambiguity, (ii) correct
or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) shorten or lengthen
any time period hereunder or (iv) to change or supplement the provisions
hereunder in any manner that the Company may deem necessary or desirable
and that shall not adversely affect the interests of the holders of Rights
(other than an Acquiring Person or an Affiliate or Associate of an
Acquiring Person); provided, this Agreement may not be supplemented or
amended to lengthen, pursuant to clause (iii) of this sentence, (A) a time
period relating to when the Rights may be redeemed at such time as the
Rights are not then redeemable or (B) any other time period unless such
lengthening is for the purpose of protecting, enhancing or clarifying the
rights of, and/or the benefits to, the holders of Rights (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring Person). 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 27, the Rights Agent shall execute such
supplement or amendment. Prior to the Distribution Date, the interests of
the holders of Rights shall be deemed coincident with the interests of the
holders of Common Shares.
28. Successors. All the covenants and provisions of this Agreement by or for the
benefit of the Company or the Rights Agent shall bind and inure to the benefit
of their respective successors and assigns hereunder.
29. Determinations and Actions by the Board of Directors, etc. For all purposes
of this Agreement, any calculation of the number of Common Shares outstanding at
any particular time, including for purposes of determining the particular
percentage of such outstanding Common Shares of which any Person is the
Beneficial Owner, shall be made in accordance with the last sentence of Rule
13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act. The
Board of Directors of the Company shall have the exclusive power and authority
to administer this Agreement and to exercise all rights and powers specifically
granted to the Board, or the Company, or as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the right and
power to (i) interpret the provisions of this Agreement and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the Rights or to
amend the Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions with
respect to the foregoing) which are done or made by the Board in good faith,
shall (x) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights Certificates and all other parties and (y) not subject the
Board to any liability to the holders of the Rights.
30. Benefits of this Agreement. Nothing in this Agreement shall be construed to
give to any Person other than the Company, the Rights Agent and the registered
holders of the Rights Certificates (and, prior to the Distribution Date, the
Common Shares) any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of the Rights Certificates
(and, prior to the Distribution Date, the Common Shares).
31. Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or other authority to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated; provided,
however, that notwithstanding anything in this Agreement to the contrary, if any
such term, provision, covenant or restriction is held by such court or authority
to be invalid, void or unenforceable and the Board of Directors of the Company
determines in its good faith judgment that severing the invalid language from
this Agreement would adversely affect the purpose or effect of this Agreement,
the right of redemption set forth in Section 23 hereof shall be reinstated and
shall not expire until the Close of Business on the tenth day following the date
of such determination by the Board of Directors.
32. Governing Law. This Agreement and each Right and each Rights Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Delaware and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State.
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.
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.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
"COMPANY" MERIDIAN DATA, INC.
By: /s/GIANLUCA U. RATTAZZI
Gianluca U. Rattazzi
President and Chief Executive Officer
"RIGHTS AGENT" BANKBOSTON, N.A.
By: /s/MARGARET M. PRENTICE
Margaret M. Prentice
Director of Client Services
[Signature Page to Preferred Shares Rights Agreement]
<PAGE>
EXHIBIT A
CERTIFICATE OF DESIGNATION OF RIGHTS, PREFERENCES
AND PRIVILEGES OF
SERIES A PARTICIPATING PREFERRED STOCK
OF MERIDIAN DATA, INC.
The undersigned, Gianluca Rattazzi and Robert D. Brownell do hereby certify:
1........That they are the duly elected and acting Chief Executive Officer
and Assistant Secretary, respectively, of Meridian Data, Inc., a Delaware
corporation (the "Corporation").
2........That pursuant to the authority conferred upon the Board of
Directors by the Certificate of Incorporation of the Corporation, the Board
of Directors on July 18, 1997 adopted the following resolution creating a
series of 30,000 shares of Preferred Stock designated as Series A
Participating Preferred Stock:
"RESOLVED: That pursuant to the authority vested in the Board of Directors
of the corporation by the Certificate of Incorporation, the Board of
Directors does hereby provide for the issue of a series of Preferred Stock
of the Corporation, to be designated "Series A Participating Preferred
Stock," initially consisting of 30,000 shares and to the extent that the
designations, powers, preferences and relative and other special rights and
the qualifications, limitations and restrictions of the Series A
Participating Preferred Stock are not stated and expressed in the
Certificate of Incorporation, does hereby fix and herein state and express
such designations, powers, preferences and relative and other special
rights and the qualifications, limitations and restrictions thereof, as
follows (all terms used herein which are defined in the Certificate of
Incorporation shall be deemed to have the meanings provided therein):
1. Designation and Amount. The shares of such series shall be
designated as "Series A Participating Preferred Stock," and the number
of shares constituting such series shall be 30,000.
2. Dividends and Distributions.
(a) Subject to the prior and superior right of the holders of any
shares of any series of Preferred Stock ranking prior and
superior to the shares of Series A Participating Preferred Stock
with respect to dividends, the holders of shares of Series A
Participating Preferred Stock shall be entitled to receive when,
as and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on
the last day of September, December, March and June in each year
(each such date being referred to herein as a "Quarterly Dividend
Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a
share of Series A Participating Preferred Stock, in an amount per
share (rounded to the nearest cent) equal to, subject to the
provision for adjustment hereinafter set forth, 1,000 times the
aggregate per share amount of all cash dividends, and 1,000 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 of the Corporation (the "Common Stock") since
the immediately preceding Quarterly Dividend Payment Date, or,
with respect to the first Quarterly Dividend Payment Date, since
the first issuance of any share or fraction of a share of Series
A Participating Preferred Stock. In the event the Corporation
shall at any time after July 18, 1997 (the "Rights Declaration
Date") (i) declare any dividend on Common Stock payable in shares
of Common Stock, (ii) subdivide the outstanding Common Stock, or
(iii) combine the outstanding Common Stock into a smaller number
of shares, then in each such case the amount to which holders of
shares of Series A Participating Preferred Stock were entitled
immediately prior to such event under the preceding sentence
shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(b) The Corporation shall declare a dividend or distribution on
the Series A Participating Preferred Stock as provided in
paragraph (a) above immediately after it declares a dividend or
distribution on the Common Stock (other than a dividend payable
in shares of Common Stock).
(c) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Participating Preferred Stock from
the Quarterly Dividend Payment Date next preceding the date of
issue of such shares of Series A Participating Preferred Stock,
unless the date of issue of such shares is prior to the record
date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date of
issue of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Participating
Preferred Stock entitled to receive a quarterly dividend and
before such Quarterly Dividend Payment Date, in either of which
events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares
of Series A Participating Preferred Stock in an amount less than
the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of Series A Participating
Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more
than 30 days prior to the date fixed for the payment thereof.
3. Voting Rights. The holders of shares of Series A Participating Preferred
Stock shall have the following voting rights:
(a) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Participating Preferred Stock shall
entitle the holder thereof to 1,000 votes on all matters
submitted to a vote of the stockholders of the Corporation. In
the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable
in shares of Common Stock, (ii) subdivide the outstanding Common
Stock, or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the number of
votes per share to which holders of shares of Series A
Participating Preferred Stock were entitled immediately prior to
such event shall be adjusted by multiplying such number by a
fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
(b) Except as otherwise provided herein or by law, the holders of
shares of Series A Participating Preferred Stock and the holders
of shares of Common Stock shall vote together as one class on all
matters submitted to a vote of stockholders of the Corporation.
(c) Except as required by law, holders of Series A Participating
Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are
entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.
4. Certain Restrictions.
(a) The Corporation shall not declare any dividend on, make any
distribution on, or redeem or purchase or otherwise acquire for
consideration any shares of Common Stock after the first issuance
of a share or fraction of a share of Series A Participating
Preferred Stock unless concurrently therewith it shall declare a
dividend on the Series A Participating Preferred Stock as
required by Section 2 hereof.
(b) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Participating Preferred
Stock as provided in Section 2 are in arrears, thereafter and
until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series A Participating Preferred
Stock outstanding shall have been paid in full, the Corporation
shall not
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire
for consideration any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding
up) to the Series A Participating Preferred Stock;
(ii) declare or pay dividends on, 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 Series A Participating Preferred Stock,
except dividends paid ratably on the Series A Participating
Preferred Stock and all such parity stock on which dividends
are payable or in arrears in proportion to the total amounts
to which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Participating Preferred Stock,
provided that the Corporation may at any time redeem,
purchase or otherwise acquire shares of any such parity
stock in exchange for shares of any stock of the Corporation
ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Series A Participating
Preferred Stock;
(iv) purchase or otherwise acquire for consideration any
shares of Series A Participating Preferred Stock, or any
shares of stock ranking on a parity with the Series A
Participating Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such
shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and
other relative rights and preferences of the respective
series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective
series or classes.
(c) 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.
5. Reacquired Shares. Any shares of Series A Participating Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All
such shares shall upon their cancellation become authorized but unissued
shares of Preferred Stock and may be reissued as part of a new series of
Preferred Stock to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance set forth
herein.
6. Liquidation, Dissolution or Winding Up.
(a) Upon any liquidation (voluntary or otherwise), dissolution or
winding up of the Corporation, no distribution shall be made to
the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Participating Preferred Stock unless, prior thereto, the
holders of shares of Series A Participating Preferred Stock shall
have received $1,000.00 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether
or not declared, to the date of such payment (the "Series A
Liquidation Preference"). Following the payment of the full
amount of the Series A Liquidation Preference, no additional
distributions shall be made to the holders of shares of Series A
Participating Preferred Stock unless, prior thereto, the holders
of shares of Common Stock shall have received an amount per share
(the "Common Adjustment") equal to the quotient obtained by
dividing (i) the Series A Liquidation Preference by (ii) 1,000
(as appropriately adjusted as set forth in subparagraph (C) below
to reflect such events as stock splits, stock dividends and
recapitalization with respect to the Common Stock) (such number
in clause (ii), the "Adjustment Number"). Following the payment
of the full amount of the Series A Liquidation Preference and the
Common Adjustment in respect of all outstanding shares of Series
A Participating Preferred Stock and Common Stock, respectively,
holders of Series A Participating Preferred Stock and holders of
shares of Common Stock shall receive their ratable and
proportionate share of the remaining assets to be distributed in
the ratio of the Adjustment Number to 1 with respect to such
Preferred Stock and Common Stock, on a per share basis,
respectively.
(b) In the event, however, that there are not sufficient assets
available to permit payment in full to the Series A Liquidation
Preference and the liquidation preferences of all other series of
Preferred Stock, if any, which rank on a parity with the Series A
Participating Preferred Stock, then such remaining assets shall
be distributed ratably to the holders of such parity shares in
proportion to their respective liquidation preferences. In the
event, however, that there are not sufficient assets available to
permit payment in full of the Common Adjustment, then such
remaining assets shall be distributed ratably to the holders of
Common Stock.
(c) In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock, or (iii) combine the outstanding Common Stock into
a smaller number of shares, then in each such case the Adjustment
Number in effect immediately prior to such event shall be
adjusted by multiplying such Adjustment Number by a fraction the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
7. Consolidation, Merger, etc. In case the Corporation shall enter into any
consolidation, merger, combination or other transaction in which the shares
of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the
shares of Series A Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to the
provision for adjustment hereinafter set forth) equal to 1,000 times the
aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share
of Common Stock is changed or exchanged. In the event the Corporation shall
at any time after the Rights Declaration Date (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock
into a smaller number of shares, then in each such case the amount set
forth in the preceding sentence with respect to the exchange or change of
shares of Series A Participating Preferred Stock shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
8. No Redemption. The shares of Series A Participating Preferred Stock
shall not be redeemable.
9. Ranking. The Series A Participating Preferred Stock shall rank junior to
all other series of the Corporation's Preferred Stock as to the payment of
dividends and the distribution of assets, unless the terms of any such
series shall provide otherwise.
10. Amendment. The Restated Certificate of Incorporation of the Corporation
shall not be further amended in any manner which would materially alter or
change the powers, preference or special rights of the Series A
Participating Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of a majority or more of the outstanding
shares of Series A Participating Preferred Stock, voting separately as a
class.
11. Fractional Shares. Series A Participating Preferred Stock may be issued
in fractions of a share which shall entitle the holder, in proportion to
such holder's fractional shares, to exercise voting rights, receive
dividends, participate in distributions and to have the benefit of all
other rights of holders of Series A Participating Preferred Stock.
RESOLVED FURTHER, that the President or any Vice President and the Secretary or
any Assistant Secretary of this corporation be, and they hereby are, authorized
and directed to prepare and file a Certificate of Designation of Rights,
Preferences and Privileges in accordance with the foregoing resolution and the
provisions of Delaware law and to take such actions as they may deem necessary
or appropriate to carry out the intent of the foregoing resolution."
3........That the authorized number of shares of Preferred Stock of the
Corporation is 5,000,000 and that no such Preferred Stock has been issued.
[The remainder of this page is intentionally left blank.]
<PAGE>
We further declare under penalty of perjury that the matters set forth
in the foregoing Certificate of Designation are true and correct of our own
knowledge.
Executed at Scotts Valley, California on August 8, 1997.
/s/ GIANLUCA U. RATTAZZI
Gianluca U. Rattazzi,
Chief Executive Officer
/s/ ROBERT D. BROWNELL
Robert D. Brownell,
Assistant Secretary
<PAGE>
EXHIBIT B
FORM OF RIGHTS CERTIFICATE
Certificate No. R- _________ Rights
NOT EXERCISABLE AFTER THE EARLIER OF (i) AUGUST 11, 2007 (ii) THE DATE
TERMINATED BY THE COMPANY OR (iii) THE DATE THE COMPANY EXCHANGES THE
RIGHTS PURSUANT TO THE RIGHTS AGREEMENT. THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.01 PER RIGHT ON THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES,
RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME
NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE
OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING
PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID
IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH RIGHTS
AGREEMENT.]1
RIGHTS CERTIFICATE
MERIDIAN DATA, INC.
This certifies that ______________________________, or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Preferred Shares Rights Agreement, (the "Rights Agreement"),
between MERIDIAN DATA, INC., a Delaware corporation (the "Company"), and
BANKBOSTON, 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., New York time, on August 11, 2007 at the principal
office of the Rights Agent, or at the office of its successor as Rights Agent,
one one-thousandth (1/1,000) of a fully paid non-assessable share of Series A
Participating Preferred Stock, $0.001 par value, (the "Preferred Shares"), of
the Company, at a Exercise Price of Thirty Dollars ($30.00) per one-thousandth
of a Preferred Share (the "Exercise Price"), upon presentation and surrender of
this Rights Certificate with the Form of Election to Purchase and related
Certificate duly executed. The number of Rights evidenced by this Rights
Certificate (and the number of one-thousandths of a Preferred Share which may be
purchased upon exercise hereof) set forth above are the number and Exercise
Price as of ________ based on the Preferred Shares as constituted at such date.
As provided in the Rights Agreement, the Exercise Price and the number and kind
of Preferred Shares or other securities which may be purchased upon the exercise
of the Rights evidenced by this Rights Certificate are subject to modification
and adjustment upon the happening of certain events.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the principal executive offices of
the Company and the above-mentioned office of the Rights Agent.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Rights Certificate (i) may be redeemed by the Company, at its option, at
a redemption price of $0.01 per Right or (ii) may be exchanged by the Company in
whole or in part for Common Shares, substantially equivalent rights or other
consideration as determined by the Company.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the principal office of the Rights Agent, may be exchanged for
another Rights Certificate or Rights Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate amount of
securities as the Rights evidenced by the Rights Certificate or Rights
Certificates surrendered shall have entitled such holder to purchase. If this
Rights Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Rights Certificate or Rights Certificates
for the number of whole Rights not exercised.
No fractional portion of less than one one-thousandth of a Preferred
Share will be issued upon the exercise of any Right or Rights evidenced hereby
but in lieu thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Rights Certificate, as such, 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 stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of _______________, 19____.
ATTEST: MERIDIAN DATA, INC.
__________________________ By:____________________
Mario M. Rosati, Secretary Gianluca Rattazzi,
President and Chief
Executive Officer
Countersigned:
BANKBOSTON, N.A.
as Rights Agent
By:_________________________
Its:________________________
================================================================================
1 - The protion of the legend in bracket shall be inserted only if applicable
and shall replace the preceding sentence.
================================================================================
<PAGE>
Form of Reverse Side of Rights Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate)
FOR VALUE RECEIVED______________________hereby sells, assigns and transfers unto
________________________________________________________________________________
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint __________________________
Attorney, to transfer the within Rights Certificate on the books of the
within-named Company, with full power of substitution.
Dated: _______________, 19____
_________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned
and transferred by or on behalf of a Person who is or was an Acquiring Person,
or an Affiliate or Associate of any such Person (as such terms are defined
in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate from
any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of any such Person.
Dated: _______________, 19____
___________________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
<PAGE>
Form of Reverse Side of Rights Certificate -- continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise the Rights Certificate)
To:___________________________
The undersigned hereby irrevocably elects to exercise
_________________________ Rights represented by this Rights Certificate to
purchase the number of one-thousandths of a Preferred Share issuable upon the
exercise of such Rights and requests that certificates for such number of
one-thousandths of a Preferred Share 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 Rights
Certificate, a new Rights Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
Dated: ___________________ , 19____
_____________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Person (as such terms are defined in the
Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate from
any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of any such Person.
Dated: _______________, 19____
____________________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
<PAGE>
Form of Reverse Side of Rights Certificate -- continued
NOTICE
The signature in the foregoing Forms of Assignment and Election must
conform to the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
<PAGE>
EXHIBIT C
MERIDIAN DATA, INC.
PREFERRED SHARES RIGHTS PLAN
Summary of Rights
Distribution and Transfer The Board of Directors has declared a dividend
of Rights; Rights Certificate: of one Right for each share of Meridian Data,
Inc. Common Stock outstanding. Prior to the
Distribution Date referred to below, the Rights
will be evidenced by and trade with the
certificates for the Common Stock. After the
Distribution Date, Meridian Data, Inc. (the
"Company") will mail Rights certificates to the
Company's stockholders and the Rights will
become transferable apart from the Common
Stock.
Distribution Date: Rights will separate from the Common Stock and
become exercisable following (a) the tenth day
after a person or group acquires beneficial
ownership of 15% or more of the Company's
Common Stock or (b) the tenth business day (or
such later date as may be determined by the
Company's Board of Directors) after a person
or group announces a tender or exchange offer,
the consummation of which would result in
ownership by a person or group of 15% or more
of the Company's Common Stock.
Preferred Stock Purchasable After the Distribution Date, each Right will
Upon Exercise of Rights: entitle the holder to purchase for $30.00 (the
"Exercise Price"), a fraction of a share of
the Company's Preferred Stock with economic
terms similar to that of one share of the
Company's Common Stock.
Flip-In: If an acquiror (an "Acquiring Person")
obtains 15% or more of the Company's Common
Stock then each Right (other than Rights
owned by an Acquiring Person or its affiliates)
will entitle the holder thereof to purchase,
for the Exercise Price, a number of shares of
the Company's Common Stock having a then
current market value of twice the Exercise
Price.
Flip-Over: If, after an Acquiring Person obtains 15% or
more of the Company's Common Stock, (a) the
Company merges into another entity, (b) an
acquiring entity merges into the Company or
(c) the Company sells more than 50% of the
Company's assets or earning power, then each
Right (other than Rights owned by an Acquiring
Person or its affiliates) will entitle the
holder thereof to purchase, for the Exercise
Price,a number of shares of Common Stock of the
person engaging in the transaction having a
then current market value of twice the Exercise
Price.
Exchange Provision: At any time after the date an Acquiring Person
obtains 15% or more of the Company's Common
Stock and prior to the acquisition by the
Acquiring Person of 50% of the outstanding
Common Stock, the Company's Board of Directors
may exchange the Rights (other than Rights
owned by the Acquiring Person or its
affiliates), in whole or in part, for shares of
Common Stock of the Company at an exchange
ratio of one share of Common Stock per Right
(subject to adjustment).
Redemption of the Rights: Rights will be redeemable at the Company's
option for $0.01 per Right at any time on or
prior to public announcement that a Person has
acquired beneficial ownership of 15% or more of
the Company's Common Stock (the "Shares
Acquisition Date").
Expiration of the Rights: The Rights expire on the earliest of (a) August
11, 2007 or (b) exchange or redemption of the
Rights as described above.
Amendment of Terms of Rights: The terms of the Rights and the Rights
Agreement may be amended in any respect without
the consent of the Rights holders on or prior
to the Distribution Date; thereafter, the terms
of the Rights and the Rights Agreement may be
amended without the consent of the Rights
holders in order to cure any ambiguities or to
make changes which do not adversely affect the
interests of Rights holders (other than the
Acquiring Person).
Voting Rights: Rights will not have any voting rights.
Anti-Dilution Rights will have the benefit of certain
Provisions: customary anti-dilution provisions.
Taxes: The Rights distribution should not be taxable
for federal income tax purposes. However,
following an event which renders the Rights
exercisable or upon redemption of the Rights,
stockholders may recognize taxable income.
The foregoing is a summary of certain principal terms of the Stockholder Rights
Plan only and is qualified in its entirety by reference to the detailed terms of
the Preferred Shares Rights Agreement, between the Company and the Rights Agent.
THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF THE PREFERRED SHARES RIGHTS AGREEMENT BETWEEN
MERIDIAN DATA, INC. AND BANKBOSTON, N.A. DATED AS OF MAY __, 1999.
