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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
AMERICAN BUSINESS INFORMATION, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 47-0751545
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(State of incorporation or organization) (I.R.S. Employer Identification No.)
5711 SOUTH 86TH CIRCLE, OMAHA, NE 68127
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(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Name of each exchange on which each
Title of each class to be so registered class is to be registered
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N/A N/A
Securities to be registered pursuant to Section 12(g) of the Act:
CLASS A COMMON STOCK
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Item 1. Description of Securities to be Registered
The Company is registering hereby its Class A Common Stock.
The Company's authorized capital stock consists of 295,000,000 shares
of Common Stock, par value $0.0025, and 5,000,000 shares of Preferred Stock,
par value $0.0025. Of the Common Stock, 220,000,000 shares have been
designated Class A Common Stock and 75,000,000 shares have been designated
Class B Common Stock. Of the Preferred Stock, 35,000 shares have been
designated Series A Preferred Stock, 220,000 shares have been designated Series
B Preferred Stock, and 4,745,000 remain undesignated.
The following summary of certain features of the Common Stock and
Preferred Stock does not purport to be complete and is subject to, and
qualified in its entirety by, the provisions of the Company's Certificate of
Incorporation, as amended, and Certificate of Designation, as amended, which
are included as exhibits to this Registration Statement and by the provisions
of applicable law.
COMMON STOCK
Except as set forth below, the Class A Common Stock and Class B Common
Stock are substantially identical. The holders of Common Stock may take action
by written consent in accordance with Delaware law, but do not have the right
to cumulate votes in connection with the election of Directors. In the event
of a liquidation, dissolution or winding up of the Company and subject to any
rights of the Preferred Stock, the holders of each class of Common Stock shall
first receive any declared but unpaid dividends with respect to such class, and
then shall be entitled to share ratably in all assets remaining after payment
of the Company's liabilities. A sale of all or substantially all of the
Company's assets or a merger in which the stockholders of the Company
immediately prior to the merger own less than a majority of the voting power of
the surviving entity following the merger, will be treated as a liquidation,
dissolution or winding up of the Company. The Common Stock has no preemptive,
conversion or other subscription rights and there are no redemption or sinking
fund provisions applicable to the Common Stock. All outstanding shares of
Common Stock are fully paid and non-assessable. There are no restrictions on
the transferability of the Common Stock, except for such restrictions as may be
entered into by the holders thereof contractually, or may be imposed on the
holders thereof by applicable laws.
Voting Rights. Holders of the Class A Common Stock are entitled to
one vote per share on all matters submitted to a vote of the stockholders.
Holders of the Class B Common Stock are entitled to ten votes per share on all
matters submitted to a vote of the stockholders. The votes of holders of Class
A Common Stock and Class B Common Stock will be counted together for all
purposes, including any increase or decrease in the number of authorized shares
of Class A Common Stock or Class B Common Stock, unless the matter to be voted
on would increase or decrease the par value of such class or alter or change
the powers, preferences or special rights of the shares of such class so as to
affect it adversely. As a result of this difference in voting rights, the
holders of Class B Common Stock will effectively maintain voting control of the
Company, except in limited circumstances.
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Dividend Rights. Neither the Class A Common Stock nor the Class B
Common Stock have any right to receive dividends unless and until such
dividends are declared by the Board of Directors out of funds legally available
therefor. Subject to any dividend rights of the Preferred Stock, when and if
the Board of Directors declares a dividend on Common Stock payable other than
in shares of capital stock of the Company or in rights to acquire such capital
stock, holders of Class B Common Stock will not be entitled to any such
dividend until the holders of the Class A Common Stock have received a dividend
in such year equal to $0.02 per share. Thereafter, all such dividends declared
on Class A Common Stock and Class B Common Stock shall be paid at an equal
per-share rate. The Company has not paid any cash dividends since its
inception, and does not anticipate paying cash dividends in the foreseeable
future. The Company currently intends to retain available future earnings to
finance the operations of the business.
PREFERRED STOCK
Series A Preferred Stock and Series B Preferred Stock.
No shares of Series A Preferred Stock or Series B Preferred Stock are
currently outstanding. The Series A Preferred Stock and Series B Preferred
Stock were designated by the Board of Directors in connection with the
Company's stockholder rights plans. The Series A Preferred Stock is issuable
upon the exercise of certain currently unexercisable purchase rights, which
rights are currently attached to and trade with the outstanding shares of Class
A Common Stock. Similarly, the Series B Preferred Stock is issuable upon the
exercise of certain currently unexercisable purchase rights, which rights are
currently attached to and trade with the outstanding shares of Class B Common
Stock. Because of the voting, dividend and liquidation rights of each series
of Preferred Stock, described below, the value of a one- thousandth interest in
one share of Series A Preferred Stock or a one-thousandth interest in one share
of Series B Preferred Stock should approximate the value of one share of Class
A Common Stock or Class B Common Stock, respectively. The Preferred Stock
purchase rights, and the conditions upon which they detach from the Common
Stock and become exercisable, are discussed in detail at "Certain Anti-Takeover
Effects--Stockholder Rights Plans."
Except as set forth below, the Series A Preferred Stock and Series B
Preferred Stock are substantially identical. Upon issuance of Preferred Stock,
the holders thereof, together with the holders of Common Stock, may take action
by written consent in accordance with Delaware law, but will not have the right
to cumulate votes in connection with the election of Directors. The Preferred
Stock has no preemptive, conversion or other subscription rights and there are
no redemption or sinking fund provisions applicable to the Preferred Stock.
There are no restrictions on the transferability of the Preferred Stock, except
for such restrictions as may be entered into by the holders thereof
contractually, or may be imposed on the holders thereof by applicable laws.
Voting Rights. Holders of the Series A Preferred Stock are entitled
to 1,000 votes per share on all matters submitted to a vote of the
stockholders. Holders of the Series B Preferred Stock are entitled to 10,000
votes per share on all matters submitted to a vote of the stockholders. The
votes of holders of Series A Preferred Stock and Series B Preferred Stock will
be counted together with the votes of the Common Stock for all purposes, unless
the matter to be voted on would increase or decrease the par
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value of such series or alter or change the powers, preferences or special
rights of the shares of such series so as to affect it adversely.
Dividend Rights. The Series A Preferred Stock is entitled to a
dividend equal to 1,000 times any dividend declared per share of Class A Common
Stock. The Series B Preferred Stock is entitled to a dividend equal to 1,000
times any dividend declared per share of Class B Common Stock.
Liquidation Rights. In the event of a liquidation, dissolution or
winding up of the Company holders of Series A Preferred Stock are entitled to
receive 1,000 times any amount payable to the Class A Common Stock, while
holders of Series B Preferred Stock are entitled to receive 1,000 times any
amount payable to the Class B Common Stock, plus, in each case, any accrued but
unpaid dividends. As is the case for the Common Stock, a sale of all or
substantially all of the Company's assets or a merger in which the stockholders
of the Company, immediately prior to the merger own less than a majority of the
voting power of the surviving entity following the entity, will be treated as a
liquidation, dissolution or winding up of the Company.
Undesignated Preferred Stock
Pursuant to the Company's Certificate of Incorporation, the Board of
Directors has the authority, without further action by the stockholders, to
issue the remaining 4,745,000 undesignated shares of Preferred Stock in one or
more series and to fix the designations, powers, preferences and privileges,
and relative participating, optional or special rights and the qualifications,
limitations or restrictions thereof, including dividend rights, conversion
rights, voting rights, terms of redemption and liquidation preferences, any or
all of which may be greater than the rights of the Common stock, the Series A
Preferred Stock or the Series B Preferred Stock. The Board of Directors,
without stockholder approval, can issue Preferred Stock with voting, conversion
or other rights that could adversely affect the voting power and other rights
of holders of Common Stock, the Series A Preferred Stock or the Series B
Preferred Stock. Preferred Stock could thus be issued quickly with terms
calculated to delay, or prevent a change in control of the Company or make
removal of management more difficult. Additionally, the issuance of Preferred
Stock may have the effect of decreasing the market price of either or both
classes of Common Stock, and may adversely affect the voting and the other
rights of the holders of either or both classes of Common Stock. At present,
there are no shares of Preferred Stock outstanding and the Company has no plans
to issue any of the Preferred Stock, except as described above. See "Series A
Preferred Stock and Series B Preferred Stock."
TRANSFER AGENT AND REGISTRAR
The Transfer Agent and Registrar for the Company's Common Stock is
NorWest Shareowner Services of Minnesota.
CERTAIN ANTI-TAKEOVER EFFECTS
Two Classes of Common Stock. The Company recently reclassified its
Common Stock as Class B Common Stock, with ten votes per share, and authorized
the new Class A Common Stock, with one
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vote per share (together, the "Reclassification"), to provide greater
flexibility to issue Common Stock without substantial diminution of the voting
power of the existing stockholders. The Reclassification could also result in
certain anti-takeover effects because the Class B Common Stock effectively
controls all matters subject to stockholder vote. New issuances of Class A
Common Stock, including the offering made hereby, will not substantially reduce
the voting control of the Board and management. As a result, the
Reclassification might reduce the possibility of the stockholders receiving and
accepting hostile takeover bids, which are often made at premiums over
then-current market prices of the target company's stock. The Reclassification
may also render more difficult or discourage mergers, proxy contests, removal
of current management or other changes in control of the Company that may be
desired by substantial holders of the Company's equity securities, particularly
if their holdings are primarily Class A Common Stock.
Stockholder Rights Plans. The Board recently adopted a stockholder
rights plan with respect to its Class A Common Stock and another stockholder
rights plan with respect to its Class B Common Stock (together, the "Rights
Plans"). Pursuant to the Rights Plans, the Board declared a dividend
distribution of Series A Preferred Stock purchase rights to the holders of the
Class A Common Stock (the "Series A Rights") and a dividend distribution of
Series B Preferred Stock purchase rights to the holders of the Class B Common
Stock (the "Series B Rights" or, together with the Series A Rights, the
"Rights"). The Series A Rights and Series B Rights currently trade with shares
of the Company's Class A Common Stock and Class B Common Stock, respectively,
and have no impact on the way the Company's shares are traded. The Rights are
not exercisable until ten days after a person or group (other than present
holders of more than 15% of the Company's voting stock, including the Company's
Chairman, Vinod Gupta, or members of his family announces acquisition of 15% or
more of the Company's outstanding voting stock or the commencement of a tender
offer which would result in ownership of the person or group of 15% or more of
the outstanding voting stock.
Once a person or group (the "Acquiring Person") acquires 15% or more
of the Company's voting stock, including the Class A Common Stock as Class B
Common Stock together (a "Trigger Event"), each Series A Right or Series B
Right not owned by the Acquiring Person will entitle its holder to purchase, at
such Right's then current exercise price, that number of shares of Class A
Common Stock or Class B Common Stock, respectively, of the Company (or, in
certain circumstances as determined by the Board, cash, other property or other
securities) having a market value at that time of twice such Right's exercise
price. If, after the tenth day following acquisition by such Acquiring Person
of 15% or more of the Company's voting stock, the Company sells more than 50%
of its assets or earning power or is acquired in a merger or other business
combination transaction, the Acquiring Person must assume the obligations under
the Rights and the Rights will become exercisable to acquire common stock of
the Acquiring Person at the discounted price. The Rights are redeemable at the
Company's option for $0.001 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 voting stock.
The Rights are designed to protect and maximize the value of
stockholders' interests in the Company in the event of an unsolicited takeover
attempt through methods as a gradual accumulation of shares in excess of 15% of
the outstanding stock followed by a two-tier tender offer or other tactics that
do not treat all shareholders equally. The Rights Plan is not intended to
prevent a takeover, but instead
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to protect stockholders from the abusive and coercive tactics that often occur
in takeover attempts. These tactics may unfairly pressure stockholders, deprive
them of the full value of their shares, or squeeze them out of their investment
without giving them any real choice.
Classified Board of Directors. The Company's Certificate of
Incorporation currently provides for three classes of directors, each with
three-year terms. The term of one class of Directors terminates at each annual
meeting of stockholders. As a result, stockholders desiring to replace the
incumbent directors and gain control of the Board would be required to win at
least two annual contests before their nominees constituted a majority of
directors.
Super-majority Required to Amend Certificate of Incorporation. The
Company's Certificate of Incorporation provides that the affirmative vote of
the holders of at least 60% of the shares entitled to vote, voting together as
a single class, is required to amend provisions of the Certificate of
Incorporation. These provisions of the Certificate of Incorporation could
discourage potential acquisition proposals and could delay or prevent a change
in control of the Company.
Section 203 of the Delaware General Corporation Law. Finally, because
the Company has not by a provision in its Certificate of Incorporation elected
otherwise, it is subject to Section 203 of the Delaware General Corporation Law
("Section 203"), which imposes certain restrictions, described below, on
"business combinations" with an "interested stockholder" that could produce
anti-takeover effects in certain circumstances. Section 203 defines a business
combination to include: (i) any merger or consolidation involving the
corporation and the interested stockholder; (ii) any sale, transfer, pledge or
other disposition involving the interested stockholder of 10% or more of the
assets of the corporation; (iii) subject to certain exceptions, any transaction
which results in the issuance or transfer by the corporation of any stock of
the corporation to the interested stockholder; (iv) any transaction involving
the corporation which has the effect of increasing the proportionate share of
the stock of any class or series of the corporation beneficially owned by the
interested stockholder; or (v) the receipt by the interested stockholder of the
benefit of any loans, advances, guarantees, pledges or other financial benefits
provided by or through the corporation. In general, Section 203 defines an
"interested stockholder" as any entity or person beneficially owning 15% or
more of the outstanding voting stock of the corporation and any entity or
person affiliated with or controlling or controlled by such entity or person.
Subject to certain exceptions, Section 203 prohibits a Delaware
corporation from engaging in any business combination with any interested
stockholder for a period of three years following the time that such
stockholder became an interested stockholder, unless (i) prior to such time,
the board of directors of the corporation approved either the business
combination or the transaction which resulted in the stockholder becoming an
interested stockholder, (ii) upon consummation of the transaction which
resulted in the stockholder becoming an interested stockholder, the interested
stockholder owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced (not counting those shares
owned by directors who are also officers and by employee stock plans in which
employee participants do not have the right to determine confidentially whether
shares held subject to the plan will be tendered in a tender or exchange
offer), or (iii) at or subsequent to such time, the business combination is
approved by the board of directors and authorized at an annual or special
meeting of
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stockholders, and not by written consent, by the affirmative vote of at least
66 2/3% of the outstanding voting stock which is not owned by the interested
stockholder.
Item 2. Exhibits.
1. Certificate of Incorporation of American Business Information,
Inc., as amended, is incorporated herein by reference to the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996.
2. Amendment to Certificate of Incorporation filed with the
Delaware Secretary of State on October 3, 1997.
3. Amended and Restated Certificate of Designations of Rights,
Preferences and Privileges of Participating Preferred Shares
of American Business Information, Inc., filed with the
Delaware Secretary of State on October 3, 1997.
4. Series A Preferred Shares Rights Agreement, dated as of
October 3, 1997 between American Business Information, Inc.
and Norwest Bank Minnesota, N.A.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereto duly authorized.
American Business Information, Inc.
Date: October 3, 1997
By: /s/ JON H. WELLMAN
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Jon H. Wellman, President and
Chief Operating Officer
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Page Number
Under
Sequential
Exhibit Numbering
No. Exhibit System
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<S> <C>
1. Certificate of Incorporation of American Business Information, Inc., as amended,
is incorporated herein by reference to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1996.
2. Amendment to Certificate of Incorporation filed with the Delaware Secretary of
State on October 3, 1997.
3. Amended and Restated Certificate of Designations of Rights, Preferences and
Privileges of Participating Preferred Shares of American Business Information,
Inc., filed with the Delaware Secretary of State on October 3, 1997.
4. Series A Preferred Shares Rights Agreement, dated as of October 3, 1997 between
American Business Information, Inc. and Norwest Bank Minnesota, N.A.
</TABLE>
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EXHIBIT 2
CERTIFICATE OF AMENDMENT TO CERTIFICATE OF INCORPORATION
OF AMERICAN BUSINESS INFORMATION, INC.
American Business Information, Inc., a corporation organized and existing
under the laws of the State of Delaware (the ''Company''), hereby certifies as
follows:
FIRST: The Board of Directors of the Company, at a meeting duly called and
held in accordance with the Bylaws of the Company and Section 141 of the
Delaware General Corporation Law, as amended, duly adopted resolutions
proposing and declaring advisable the amendment to the Certificate of
Incorporation of the Company as set forth below.
SECOND: That Article IV of the Company's Certificate of Incorporation, as
amended to date, is hereby amended in its entirety to read as follows:
"Article IV. AUTHORIZED STOCK.
A. The total number of shares of all classes of capital stock which the
corporation shall have authority to issue is three hundred million
(300,000,000) shares which shall be divided into three classes as follows:
(i) Two Hundred Twenty Million (220,000,000) shares of Class A Common
Stock of the par value of one fourth of one cent ($0.0025) per share;
(ii) Seventy-Five million (75,000,000) shares of Class B Common Stock
of the par value of one fourth of one cent ($0.0025) per share; and
(iii) Five Million (5,000,000) shares of Preferred Stock with a par
value of one fourth of one cent ($0.0025) per share.
Upon this Certificate of Amendment of Certificate of Incorporation
becoming effective pursuant to the General Corporation Law of the State of
Delaware (the ''Effective Time''), and without any further action on the part
of the Corporation or its stockholders, each share of the Corporation's Common
Stock, one fourth of one cent ($0.0025) par value, then issued (including
shares held in the treasury of the Corporation), shall be automatically
reclassified, changed and converted into one (1) fully paid and non-assessable
share of Class B Common Stock, one fourth of one cent ($0.0025) par value. Any
stock certificate which, immediately prior to the Effective Time, represents
shares of Common Stock, one fourth of one cent ($0.0025) par value, will, from
and after the Effective Time, automatically and without the necessity of
presenting the same for exchange, represent that number of shares of Class B
Common Stock equal to the number of shares of Common Stock represented by such
certificate prior to the Effective Time. As soon as practicable after the
Effective Time, the corporation's transfer agent shall mail a transmittal
letter to each record holder who then holds shares of Class B Common Stock,
informing such persons of this reclassification with appropriate instructions
on exchanging certificates representing such shares and other relevant matters.
The Class A Common Stock and Class B Common Stock are hereinafter collectively
referred to as the ''Common Stock.''
The rights, preferences, privileges, restrictions and limitations
pertaining to the Common Stock, subject to applicable law, are set forth in
Section B of this Article IV. The rights, preferences,
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privileges, restrictions and limitations pertaining to the Preferred Stock,
subject to applicable law, are set forth in Article V.
B. COMMON STOCK: Except as set forth expressly in this Section B and to
the fullest extent not otherwise required by applicable law, the Class A Common
Stock and Class B Common Stock shall be identical in every respect.
(i) DIVIDENDS: Subject to all of the rights of any Preferred Stock as
to dividends, holders of shares of Class A Common Stock shall be entitled
to receive, when and as declared by the Board of Directors, out of funds
legally available therefor, dividends at the rate per share of $0.02, per
annum, as adjusted for stock splits, stock dividends, recapitalizations,
and similar events, payable in preference and priority to any payment of
any dividend on the Class B Common Stock of the Corporation (such
preferential dividends, the ''Class A Preferential Dividends''). The Class
A Preferential Dividends shall not be cumulative, and no right to such
dividends shall accrue to holders of Class A Common Stock unless declared
by the Board of Directors. No dividends or other distributions shall be
made with respect to the Class B Common Stock in any fiscal year, other
than dividends payable solely in capital stock, until (a) the Class A
Preferential Dividends have been paid to or declared and set apart upon
all shares of Class A Common Stock during that fiscal year, and (b) such
dividend is declared by the Board of Directors. All dividends other than
the Class A Preferential Dividends shall be paid, when, as and if declared
by the Board of Directors, at an equal per-share rate on all
then-outstanding shares of Class A Common Stock and Class B Common Stock.
(ii) VOTING: To the fullest extent not otherwise required by law, the
holder of each share of Class A Common Stock issued and outstanding shall
have one vote with respect to such share and the holder of each share of
Class B Common Stock shall have ten (10) votes with respect to such share,
such votes to be counted together with all other shares of stock of the
Corporation having general voting power and not separately as a class.
Holders of Common Stock shall be entitled to notice of any shareholders'
meeting in accordance with the Bylaws of the Corporation. Pursuant to
Section 242(c) of the General Corporation Law of Delaware, the number of
authorized shares of Class A Common Stock or Class B Common Stock may be
increased or decreased (but not below the number of shares thereof then
outstanding) by the affirmative vote of the holders of a majority of the
stock of the corporation entitled to vote, voting together as a single
class.
(iii) ALLOCATIONS OF PROCEEDS UPON LIQUIDATION: In the event of any
liquidation, dissolution or winding up of the Corporation (a
"Liquidation Event") the assets or funds of the Corporation legally
available for distribution to its stockholders by reason of their
ownership of the stock of the Corporation shall, subject to all of the
rights of any Preferred Stock to receive assets of the Corporation upon a
Liquidation Event, be distributed as follows: first, the holders of Common
Stock shall be entitled to receive for each outstanding share of Common
Stock then held by them an amount equal to all declared but unpaid
dividends on such share; second, all remaining assets and funds of the
Corporation legally available for distribution to stockholders by reason
of their ownership of stock of the Corporation shall be distributed
ratably among the holders of Common Stock in proportion to the number of
shares of Common Stock held by them. For purposes of
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this paragraph, a merger or consolidation of the Corporation with or into
any other corporation or corporations, or a sale of all or substantially
all of the assets of the Corporation, shall be treated as a liquidation,
dissolution or winding up, unless the stockholders of the Corporation
immediately prior to such transaction hold at least 50% of the outstanding
voting equity securities of the surviving corporation in such merger,
consolidation or sale of assets reorganization.
C. ISSUANCES AND REPURCHASES OF COMMON STOCK: The Board of Directors
shall have the power to issue and sell all or any part of any class of stock
herein or hereafter authorized to such persons, firms, associations or
corporations, and for such consideration as the Board of Directors shall from
time to time, in its discretion, determine, whether or not greater
consideration could be received upon the issue or sale of the same number of
shares of another class, and as otherwise permitted by law. In addition, the
Board of Directors shall have the power to purchase any class of stock herein
or hereafter authorized from such persons, firms, associations or corporations,
and for such consideration as the Board of Directors shall from time to time,
in its discretion, determine, whether or not less consideration could be paid
upon the purchase of the same number of shares of another class, and as
otherwise permitted by law.''
THIRD: The undersigned, Jon H. Wellman and Steven Purcell further verify
that:
A. This Amendment to Certificate of Incorporation has been duly
adopted in accordance with Section 242 of the Delaware General
Corporation Law, as amended.
B. Pursuant to a duly adopted resolution of the Board of Directors of
the Company, a special meeting of the stockholders of the Company was
duly called and held, upon notice in accordance with Section 222 of the
Delaware General Corporation Law, as amended, at which meeting holders of
at least sixty percent of the outstanding shares of Common Stock of the
Company, constituting the only outstanding securities of the Company
entitled to vote in respect of the amendment to the Certificate of
Incorporation of the Company as set forth above, duly approved said
amendment.
THE UNDERSIGNED, being the President and Secretary, respectively, of
American Business Information, Inc., do make this Amendment to Certificate of
Incorporation, hereby declaring and certifying that this is an act and deed of
the Company and that the facts herein stated are true, and accordingly have
hereunto set their hands this 3rd day of October, 1997.
/s/ JON H. WELLMAN
----------------------------------
Jon H. Wellman,
President
/s/ STEVEN PURCELL
----------------------------------
Steven Purcell,
Secretary
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EXHIBIT 3
AMENDED AND RESTATED
CERTIFICATE OF DESIGNATION OF RIGHTS, PREFERENCES
AND PRIVILEGES OF
PARTICIPATING PREFERRED STOCK
OF AMERICAN BUSINESS INFORMATION, INC.
(FORMERLY THE CERTIFICATE OF DESIGNATIONS OF RIGHTS, PREFERENCES AND
PRIVILEGES OF SERIES A PARTICIPATING PREFERRED STOCK OF
AMERICAN BUSINESS INFORMATION, INC. DATED AUGUST 5, 1997)
The undersigned, Jon Wellman and Steven Purcell, do hereby certify:
1. That they are the duly elected and acting President and
Secretary, respectively, of American Business Information, 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 said Corporation, the said
Board of Directors on October 3, 1997 adopted the following resolution amending
and restating the Certificate of Designation of Rights, Preferences and
Privileges of Series A Participating Preferred Stock of American Business
Information, Inc. dated August 5, 1997, creating a new series of 220,000 shares
of Preferred Stock designated as Series A Participating Preferred Stock, and
reclassifying the previously authorized Series A Preferred Stock as Series B
Preferred Stock, with 35,000 shares authorized.
"RESOLVED, that pursuant to the authority vested in the Board of
Directors of the corporation by the Restated Certificate of Incorporation, the
Board of Directors does hereby provide for the issue of two series of Preferred
Stock of the Corporation and does hereby fix and herein state and express the
designations, powers, preferences and relative and other special rights and the
qualifications, limitations and restrictions of such series of Preferred Stock
as follows:
Section 1. Designation and Amount.
(a) The shares of the Series A Participating Preferred
Stock, shall be designated as "SERIES A PREFERRED SHARES." The shares of the
Series B Participating Preferred Stock, shall be designated as "SERIES B
PREFERRED SHARES." The Series A Preferred Shares shall have a par value of
$.0025 per share, and the number of shares constituting such series shall be
220,000. The Series B Preferred Shares shall have a par value of $.0025 per
share, and the number of shares constituting such series shall be 35,000.
(b) Upon this Amended and Restated Certificate of
Designation becoming effective pursuant to the General Corporation Law of the
State of Delaware (the "EFFECTIVE TIME"), and without any further action on the
part of the Corporation or its stockholders, each share of the Corporation's
Series A Preferred Stock, one fourth of one cent ($0.0025) par value, then
authorized, shall be automatically reclassified, changed and converted into one
(1) share of Series B Preferred Stock, one fourth of one cent ($0.0025) par
value.
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Section 2. Proportional Adjustment.
(a) In the event the Corporation shall at any time after
the issuance of any share or shares of Series A Preferred Shares (i) declare
any dividend on Class A Common Stock of the Corporation ("CLASS A COMMON
SHARES") payable in shares of Class A Common Shares, (ii) subdivide the
outstanding Class A Common Shares or (iii) combine the outstanding Class A
Common Shares into a smaller number of shares, then in each such case the
Corporation shall simultaneously effect a proportional adjustment to the number
of outstanding shares of Series A Preferred Shares.
(b) In the event the Corporation shall at any time after
the issuance of any share or shares of Series B Preferred Shares (i) declare
any dividend on Class B Common Stock of the Corporation ("CLASS B COMMON
SHARES") payable in shares of Class B Common Shares, (ii) subdivide the
outstanding Class B Common Shares or (iii) combine the outstanding Class B
Common Shares into a smaller number of shares, then in each such case the
Corporation shall simultaneously effect a proportional adjustment to the number
of outstanding shares of Series B Preferred Shares.
Section 3. 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 Preferred Shares with respect to dividends,
the holders of shares of Series A Preferred Shares 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 January, April, July and October 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 Preferred Shares, in an amount per share (rounded to the
nearest cent) equal to 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 Class A Common Shares or a subdivision of the outstanding shares of
Class A Common Shares (by reclassification or otherwise), declared on the Class
A Common Shares since the immediately preceding Quarterly Dividend Payment
Date, or, with respect to the first Quarterly Dividend Payment Date, since the
first issuance of any share or fraction of a share of Series A Preferred
Shares.
(b) 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 B Preferred Shares with respect to dividends,
the holders of shares of Series B Preferred Shares 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 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 B
Preferred Shares, in an amount per share (rounded to the nearest cent) equal to
1,000 times the aggregate per share amount of all cash dividends, and 1,000
times the aggregate per share amount
<PAGE> 3
(payable in kind) of all non-cash dividends or other distributions other than a
dividend payable in shares of Class B Common Shares or a subdivision of the
outstanding shares of Class B Common Shares (by reclassification or otherwise),
declared on the Class B Common Shares 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 B
Preferred Shares.
(c) The Corporation shall declare a dividend or
distribution on the Series A Preferred Shares as provided in paragraph (a)
above immediately after it declares a dividend or distribution on the Class A
Common Shares (other than a dividend payable in shares of Class A Common
Shares).
(d) The Corporation shall declare a dividend or
distribution on the Series B Preferred Shares as provided in paragraph (b)
above immediately after it declares a dividend or distribution on the Class B
Common Shares (other than a dividend payable in shares of Class B Common
Shares).
(e) Dividends shall begin to accrue on outstanding shares
of Series A Preferred Shares and on outstanding shares of Series B Preferred
Shares from the Quarterly Dividend Payment Date next preceding the date of
issue of such shares of Series A Preferred Shares and such shares of Series B
Preferred Shares, unless the date of issue of such shares is prior to the
record date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date of issue of such
shares, or unless the date of issue is a Quarterly Dividend Payment Date or is
a date after the record date for the determination of holders of shares of
Series A Preferred Shares and holders of shares of Series B Preferred Shares
entitled to receive a quarterly dividend and before such Quarterly Dividend
Payment Date, in either of which events such dividends shall begin to accrue
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series A Preferred Shares
and on the shares of Series B Preferred Shares in an amount less than the total
amount of such dividends at the time accrued and payable on such shares shall
be allocated pro rata on a share-by-share basis among all such shares at the
time outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of Series A Preferred Shares and holders of
shares of Series B Preferred Shares entitled to receive payment of a dividend
or distribution declared thereon, which record date shall be no more than 30
days prior to the date fixed for the payment thereof.
Section 4. Voting Rights. The holders of shares of Series A
Preferred Shares and the holders of shares of Series B Preferred Shares shall
have the following voting rights:
(a) Each share of Series A Preferred Shares shall entitle
the holder thereof to 1,000 votes on all matters submitted to a vote of the
stockholders of the Corporation.
(b) Each share of Series B Preferred Shares shall entitle
the holder thereof to 10,000 votes on all matters submitted to a vote of the
stockholders of the Corporation.
<PAGE> 4
(c) Except as otherwise provided herein or by law, the
holders of shares of Class A Common Stock, the holders of shares of Class B
Common Stock, the holders of shares of Series A Preferred Shares, and the
holders of shares of Series B Preferred Shares shall vote together as one class
on all matters submitted to a vote of stockholders of the Corporation.
(d) Except as required by law, holders of Series A
Preferred Shares and holders of Series B Preferred Shares 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 Class A Common Stock and
holders of Class B Common Stock, as set forth herein) for taking any corporate
action.
Section 5. 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 Class A Common Stock after the first issuance of a
share or fraction of a share of Series A Preferred Shares unless concurrently
therewith it shall declare a dividend on the Series A Preferred Shares as
required by Section 3 hereof.
(b) The Corporation shall not declare any dividend on,
make any distribution on, or redeem or purchase or otherwise acquire for
consideration any shares of Class B Common Stock after the first issuance of a
share or fraction of a share of Series B Preferred Shares unless concurrently
therewith it shall declare a dividend on the Series B Preferred Shares as
required by Section 3 hereof.
(c) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Shares or on the Series B
Preferred Shares as provided in Section 3 are in arrears, thereafter and until
all accrued and unpaid dividends and distributions, whether or not declared, on
shares of Series A Preferred Shares outstanding and shares of Series B
Preferred Shares 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 Preferred Shares or the Series B
Preferred Shares;
(ii) declare or pay dividends on, or make any
other distributions on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Shares or with the Series B Preferred Shares, except dividends paid
ratably on the Series A Preferred Shares or on the Series B Preferred Shares
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)
<PAGE> 5
with the Series A Preferred Shares or the Series B Preferred Shares, 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 Preferred Shares or the Series B
Preferred Shares;
(iv) purchase or otherwise acquire for
consideration any shares of Series A Preferred Shares or Series B Preferred
Shares, or any shares of stock ranking on a parity with the Series A Preferred
Shares or with the Series B Preferred Shares, 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.
(d) 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 5, purchase or otherwise acquire such shares at such time and
in such manner.
Section 6. Reacquired Shares. Any shares of Series A Preferred
Shares or Series B Preferred Shares 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 and, in the Restated Certificate of
Incorporation, as then amended.
Section 7. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, the holders of
shares of Series A Preferred Shares and the holders of shares of Series B
Preferred Shares shall be entitled to receive an aggregate amount per share
equal to 1000 times the aggregate amount to be distributed per share to holders
of shares of Class A Common Stock and to holders of shares of Class B Common
Stock, respectively, plus an amount equal to any accrued and unpaid dividends
on such shares of Series A Preferred Shares and Series B Preferred Shares.
Section 8. Consolidation, Merger, etc.
(a) In case the Corporation shall enter into any
consolidation, merger, combination or other transaction in which the shares of
Class A 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 Preferred Shares shall at the same time be similarly exchanged or
changed in an amount per share 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 Class A Common Stock is
changed or exchanged.
<PAGE> 6
(b) In case the Corporation shall enter into any
consolidation, merger, combination or other transaction in which the shares of
Class B 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 B Preferred Shares shall at the same time be similarly exchanged or
changed in an amount per share 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 Class B Common Stock is
changed or exchanged.
Section 9. No Redemption. The shares of Series A Preferred
Shares and the shares of Series B Preferred Shares shall not be redeemable.
Section 10. Ranking. The Series A Preferred Shares and the
Series B Preferred Shares shall rank pari passu to each other and 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.
Section 11. Amendment. The 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
Preferred Shares or of the Series B Preferred Shares so as to affect them
adversely without the affirmative vote of the holders of a majority of the
outstanding shares of Series A Preferred Shares and Series B Preferred Shares,
respectively, voting together as a class.
Section 12. Fractional Shares. Series A Preferred Shares and
Series B Preferred Shares 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 Preferred Shares
and Series B Preferred Shares.
<PAGE> 7
RESOLVED FURTHER, that the President, any Vice President, the Chief
Financial Officer, Secretary or any Assistant Secretary of this Corporation
be, and they hereby are, authorized and directed to prepare and file an Amended
and Restated 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."
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 Omaha, Nebraska on October 3, 1997.
/s/ JON H. WELLMAN
-------------------------------------
Jon H. Wellman, President
/s/ STEVEN PURCELL
-------------------------------------
Steven Purcell, Secretary
<PAGE> 1
EXHIBIT 4
AMERICAN BUSINESS INFORMATION, INC.
AND
NORWEST BANK MINNESOTA, N.A.
RIGHTS AGENT
SERIES A PREFERRED SHARES
RIGHTS AGREEMENT
DATED AS OF OCTOBER 3, 1997
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
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<S> <C> <C>
Section 1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 3. Issuance of Rights Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 4. Form of Rights Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5. Countersignature and Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates . . . . . . . . . . . . . . . . . . . . . . 11
Section 7. Exercise of Rights; Exercise Price; Expiration Date of Rights . . . . . . . . . . . . . . . . . . . 11
Section 8. Cancellation and Destruction of Rights Certificates . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 9. Reservation and Availability of Series A Preferred Shares . . . . . . . . . . . . . . . . . . . . . 13
Section 10. Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 11. Adjustment of Exercise Price, Number of Shares or Number of Rights . . . . . . . . . . . . . . . . . 15
Section 12. Certificate of Adjusted Exercise Price or Number of Shares . . . . . . . . . . . . . . . . . . . . . 21
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power . . . . . . . . . . . . . . . . 22
Section 14. Fractional Rights and Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 15. Rights of Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 16. Agreement of Rights Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 17. Rights Certificate Holder Not Deemed a Stockholder . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 18. Concerning the Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 19. Merger or Consolidation or Change of Name of Rights Agent . . . . . . . . . . . . . . . . . . . . . 28
Section 20. Duties of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 21. Change of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
</TABLE>
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<PAGE> 3
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
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<S> <C> <C>
Section 22. Issuance of New Rights Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 23. Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 24. Notice of Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 25. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 26. Supplements and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 27. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 28. Determinations and Actions by the Board of Directors, etc. . . . . . . . . . . . . . . . . . . . . . 34
Section 29. Benefits of this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 30. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 31. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 32. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 33. Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
EXHIBITS
Exhibit A Form of Certificate of Designation
Exhibit B Form of Rights Certificate
Exhibit C Summary of Rights
</TABLE>
-ii-
<PAGE> 4
SERIES A PREFERRED SHARES
RIGHTS AGREEMENT
Agreement, dated as of October 3, 1997, (the "EFFECTIVE DATE") between
American Business Information, Inc., a Delaware corporation, and Norwest Bank
Minnesota, N.A.
On October 3, 1997 (the "RIGHTS DIVIDEND DECLARATION DATE"), the Board
of Directors of the Company authorized and declared a dividend of one Preferred
Share Purchase Right (a "RIGHT") for each Class A Common Share (as hereinafter
defined) of the Company to be paid in the form of a dividend on each share of
Class B Common Stock outstanding as of October 3, 1997 (the "RECORD DATE"),
each Right representing the right to purchase one one-thousandth of a share of
Series A Participating Preferred Stock (as such number may be adjusted pursuant
to the provisions of this Agreement), having the rights, preferences and
privileges set forth in the form of Certificate of Designations of Rights,
Preferences and Privileges of Series A Participating Preferred Stock attached
hereto as Exhibit A, upon the terms and subject to the conditions herein set
forth, and further authorized and directed the issuance of one Right (as such
number may be adjusted pursuant to the provisions of this Agreement) with
respect to each Common Share that shall become outstanding between the Record
Date and the earlier of the Distribution Date and the Expiration Date (as such
terms are hereinafter defined), and in certain circumstances after the
Distribution Date.
NOW, THEREFORE, in consideration of the promises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions.
For purposes of this Agreement, the following terms have the meanings
indicated:
(a) "ACQUIRING PERSON" shall mean any Person who or
which, together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 15% or more of the Voting Shares then outstanding (as such
term is hereinafter defined) 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 Voting Shares for or pursuant to the
terms of any such plan or any of the persons or entities, singly or together
set forth on Schedule 1 to this Agreement. Notwithstanding the foregoing, no
Person shall be deemed to be an Acquiring Person as the result of an
acquisition of Voting Shares by the Company which, by reducing the number of
shares outstanding, increases the proportionate number of shares beneficially
owned by such Person to 15% or more of the Voting Shares of the Company then
outstanding; provided, however, that if a Person shall become the Beneficial
Owner of 15% or more of the Voting Shares of the Company then outstanding by
reason of share purchases by the Company and shall, after such share purchases
by the Company, become the Beneficial Owner of any additional Voting Shares of
the Company (other than pursuant to a dividend or distribution paid or made by
the Company on the outstanding Voting Shares in Voting Shares or pursuant to a
split or subdivision of the outstanding Voting Shares), then such Person shall
be deemed to be an Acquiring Person unless upon becoming the Beneficial Owner
of such additional Voting Shares of the Company
<PAGE> 5
such Person does not beneficially own 15% or more of the Voting 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 Voting 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 Voting Shares
it beneficially owned but had no actual knowledge of the consequences of such
beneficial ownership under this Agreement) and had no intention of changing or
influencing control of the Company, and if such Person divested or divests as
promptly as practicable a sufficient number of Voting 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 Voting 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 Voting Shares (other than
pursuant to a dividend or distribution paid or made by the Company on the
outstanding Voting Shares in Voting Shares or pursuant to a split or
subdivision of the outstanding Voting Shares), unless, upon becoming the
Beneficial Owner of such additional Voting Shares, such Person is not then the
Beneficial Owner of 15% or more of the Voting Shares then outstanding.
(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
-2-
<PAGE> 6
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 New York are
authorized or obligated by law or executive order to close.
(f) "CLASS A COMMON SHARES" when used with reference to
the Company shall mean the shares of Common Stock of the Company, $.0025 par
value and entitled to one vote per share on the date of adoption of this
Agreement.
(g) "CLASS B COMMON SHARES" when used with reference to
the Company shall mean the shares of Common Stock of the Company, $.0025 par
value and entitled to ten votes per share on the date of adoption of this
Agreement.
(h) "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.
-3-
<PAGE> 7
(i) "COMMON SHARES" shall include Class A Common Shares
and/or Class B Common Shares, each defined above. 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.
(j) "COMMON STOCK EQUIVALENTS" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(k) "COMPANY" shall mean American Business Information,
Inc., a Delaware corporation, subject to the terms of Section 13(a)(iii)(C)
hereof.
(l) "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 Series A Preferred Shares are not publicly traded, the Current
Per Share Market Price of the Series A Preferred Shares shall be conclusively
deemed to be the Current Per Share Market Price of the Class A Common Shares as
determined pursuant to this Section 1(j), as appropriately adjusted to reflect
any stock split, stock
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<PAGE> 8
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.
(m) "CURRENT VALUE" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(n) "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.
(o) "EFFECTIVE DATE" shall have the meaning set forth in
the recitals at the beginning of this Agreement.
(p) "EQUIVALENT SHARES" shall mean Series A 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 Series A
Preferred Shares.
(q) "EXCHANGE ACT" shall mean the Securities Exchange Act
of 1934, as amended.
(r) "EXERCISE PRICE" shall have the meaning set forth in
Section 4(a) hereof.
(s) "EXPIRATION DATE" shall mean the earliest to occur
of: (i) the Close of Business on the Final Expiration Date, or (ii) the
Redemption Date.
(t) "FINAL EXPIRATION DATE" shall mean July 21, 2007.
(u) "NASDAQ" shall mean the National Association of
Securities Dealers, Inc. Automated Quotations System.
(v) "PERSON" shall mean any individual, firm, corporation
or other entity, and shall include any successor (by merger or otherwise) of
such entity.
(w) "POST-EVENT TRANSFEREE" shall have the meaning set
forth in Section 7(e) hereof.
(x) "PRE-EVENT TRANSFEREE" shall have the meaning set
forth in Section 7(e) hereof.
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<PAGE> 9
(y) "PRINCIPAL PARTY" shall have the meaning set forth in
Section 13(b) hereof.
(z) "RECORD DATE" shall have the meaning set forth in the
recitals at the beginning of this Agreement.
(aa) "REDEMPTION DATE"shall have the meaning set forth in
Section 23(a) hereof.
(bb) "REDEMPTION PRICE" shall have the meaning set forth
in Section 23(a) hereof.
(cc) "RIGHTS AGENT" shall mean Norwest Bank Minnesota,
N.A. or its successor or replacement as provided in Sections 19 and 21 hereof.
(dd) "RIGHTS CERTIFICATE" shall mean a certificate
substantially in the form attached hereto as Exhibit B.
(ee) "RIGHTS DIVIDEND DECLARATION DATE" shall have the
meaning set forth in the recitals at the beginning of this Agreement.
(ff) "SECTION 11(a)(ii) TRIGGER DATE" shall have the
meaning set forth in Section 11(a)(iii) hereof.
(gg) "SECTION 13 EVENT" shall mean any event described in
clause (i), (ii) or (iii) of Section 13(a) hereof.
(hh) "SECURITIES ACT" shall mean the Securities Act of
1933, as amended.
(ii) "SERIES A PREFERRED SHARES" shall mean shares of
Series A Participating Preferred Stock, $.0025 par value, of the Company.
(jj) "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.
(kk) "SPREAD" shall have the meaning set forth in Section
11(a)(iii) hereof.
(ll) "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.
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<PAGE> 10
(mm) "SUBSTITUTION PERIOD" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(nn) "AMENDED SUMMARY OF RIGHTS" shall mean a summary of
this Agreement substantially in the form attached hereto as Exhibit C.
(oo) "TOTAL EXERCISE PRICE" shall have the meaning set
forth in Section 4(a) hereof.
(pp) "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.
(qq) A "TRIGGERING EVENT" shall be deemed to have occurred
upon any Person, becoming an Acquiring Person.
(rr) "VOTING SHARES" shall be the outstanding shares of
Class A Common Shares and outstanding shares of Class B Common Shares, taken
together as a single class. For the purpose of calculating the percentage of
Voting Shares beneficially owned, such percentage shall be determined by a
fraction, the numerator of which shall be the total number of votes represented
by the shares of Class A Common Shares and Class B Common Shares beneficially
owned by such person, and the denominator of which shall be the total number of
votes represented by all of the Class A Common Shares and Class B Common Shares
then outstanding.
Section 2. Appointment of Rights Agent.
The Company hereby appoints the Rights Agent to act as agent for the
Company and the holders of the Rights (who, in accordance with Section 3 hereof,
shall prior to the Distribution Date also be the holders of the Class A Common
Shares) in accordance with the terms and conditions hereof, and the Rights Agent
hereby accepts such appointment. The Company may from time to time appoint such
co-Rights Agents as it may deem necessary or desirable.
Section 3. 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 Class A 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 Class
A Common Shares. Until the earlier of the Distribution Date or the Expiration
Date, the surrender for transfer of certificates for Class A Common Shares
shall also constitute the surrender for transfer of the Rights associated with
the Class A 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 Class A Common Shares as of the Close of Business on the
Distribution Date, at the address of such holder
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<PAGE> 11
shown on the records of the Company, a Rights Certificate evidencing one Right
for each Class A Common Share so held, subject to adjustment as provided
herein. In the event that an adjustment in the number of Rights per Class A
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 Class A 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 Effective Date or as soon as practicable
thereafter, the Company will send a copy of the Amended Summary of Rights by
first-class, postage-prepaid mail, to each record holder of Class A Common
Shares as of the Close of Business on the Effective Date, at the address of
such holder shown on the records of the Company's transfer agent and registrar.
With respect to certificates for Class A 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 Class A 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
Class A Common Shares represented thereby.
(c) Unless the Board of Directors by resolution adopted
at or before the time of the issuance of any Class A Common Shares specifies to
the contrary, Rights shall be issued in respect of all Class A 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 Class A 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 AMERICAN
BUSINESS INFORMATION, INC., AND NORWEST BANK MINNESOTA, N.A., AS THE
RIGHTS AGENT, DATED AS OF OCTOBER 3, 1997, (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
AMERICAN BUSINESS INFORMATION, 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. AMERICAN BUSINESS INFORMATION, 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
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<PAGE> 12
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 Class A 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 Class A Common Shares represented thereby.
(d) In the event that the Company purchases or acquires
any Class A Common Shares after the Record Date but prior to the Distribution
Date, any Rights associated with such Class A Common Shares shall be deemed
canceled and retired so that the Company shall not be entitled to exercise any
Rights associated with the Class A Common Shares which are no longer
outstanding.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to
purchase Series A Preferred 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 a national
market 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 Class A Common
Shares issued by the Company after the Record Date, as of the date of issuance
of such Class A Common Shares) and on their face shall entitle the holders
thereof to purchase such number of one-thousandths of a Series A Preferred
Share as shall be set forth therein at the price set forth therein (such
exercise price per one one-thousandth of a Series A Preferred Share being
hereinafter referred to as the "EXERCISE PRICE" and the aggregate Exercise
Price of all Series A 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
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<PAGE> 13
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.
Section 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.
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<PAGE> 14
Section 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) and 14
hereof, at any time after the Close of Business on the Distribution Date, and at
or prior to the Close of Business on the Expiration Date, any Rights Certificate
or 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 Series 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 office of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the transfer of any such
surrendered Rights Certificate until the registered holder shall have completed
and signed the certificate contained in the form of assignment on the reverse
side of such Rights Certificate and shall have provided such additional evidence
of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to Sections 7(e) and 14 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.
Section 7. Exercise of Rights; Exercise Price; Expiration Date
of Rights.
(a) Subject to Sections 7(e) and 23(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 office of the Rights Agent designated for such purpose, together
with payment of the Exercise Price for each one-thousandth of a Series 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
Series A Preferred Share issuable pursuant to the exercise of a Right shall
initially be sixty dollars ($60.00), 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.
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<PAGE> 15
(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 Series 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 Series A Preferred Shares (or make
available, if the Rights Agent is the transfer agent for the Series A Preferred
Shares) a certificate or certificates for the number of one-thousandths of a
Series 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 Series 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 Series 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 Series A 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 Series A 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
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<PAGE> 16
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.
Section 8. Cancellation and Destruction of Rights Certificates.
All Rights Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the Company
or 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.
Section 9. Reservation and Availability of Series A 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 Series A Preferred Shares not reserved for another purpose (and,
following the occurrence of a Triggering Event, out of its authorized and
unissued Class A Common Shares and/or other securities), the number of Series A
Preferred Shares (and, following the occurrence of the Triggering Event, Class
A Common Shares and/or other securities) that will be sufficient to permit the
exercise in full of all outstanding Rights.
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<PAGE> 17
(b) If the Company shall hereafter list any of its Series
A Preferred Shares on a national securities exchange, then so long as the
Series A Preferred Shares (and, following the occurrence of a Triggering Event,
Class A 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 Series A 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 the Series A 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 Series A
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
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<PAGE> 18
depositary receipts for Series A 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.
Section 10. Record Date.
Each Person in whose name any certificate for a number of
one-thousandths of a Series 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 Series A 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 Total 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 Series A 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.
Section 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 Series A Preferred Shares payable
in Series A Preferred Shares, (B) subdivide the outstanding Series A Preferred
Shares, (C) combine the outstanding Series A Preferred Shares (by reverse stock
split or otherwise) into a smaller number of Series A Preferred Shares, or (D)
issue any shares of its capital stock in a reclassification of the Series A
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
Series A Preferred Shares (or shares of capital stock issued in such
reclassification of the Series A Preferred Shares) outstanding immediately
following such time and the denominator of which shall be the total number of
Series A 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 Series A Preferred Share (or share of such other
capital
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<PAGE> 19
stock) issuable upon the exercise of each Right shall equal the number of
one-thousandths of a Series 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 Class A 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 Series A Preferred Share (or shares of
such other capital stock) as one Class A Common Share has associated with it
immediately following the adjustment made pursuant to this Section 11(a)(i).
(ii) 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 Series A Preferred Share, such number of Class A 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 Series 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 Class A
Common Shares on the date of occurrence of the Triggering Event; provided,
however, that the Exercise Price and the number of Class A 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 Class A Common Shares of the Company
after the occurrence of the Triggering Event.
(iii) In lieu of issuing Class A 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 Class A 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 Class A 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 Class A 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 Class A 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
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<PAGE> 20
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, Class A 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 Class A 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 Class A
Common Shares shall be the Current Per Share Market Price of the Class A 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 Class A 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 Series A Preferred Shares entitling such holders
(for a period expiring within forty-five (45) calendar days after such record
date) to subscribe for or purchase Series A Preferred Shares or Equivalent
Shares or securities convertible into Series A Preferred Shares or Equivalent
Shares at a price per share (or having a conversion price per share, if a
security convertible into Series A Preferred Shares or Equivalent Shares) less
than the then Current Per Share Market Price of the Series A 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 Series A Preferred
Shares and Equivalent Shares (if any) outstanding on such record date, plus the
number of Series A Preferred Shares or Equivalent Shares, as
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<PAGE> 21
the case may be, which the aggregate offering price of the total number of
Series A 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 Series A
Preferred Shares and Equivalent Shares (if any) outstanding on such record
date, plus the number of additional Series A 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. Series A
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 Series A 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 Series A 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 Series A
Preferred Share or an Equivalent Share on such record date, less the fair
market value per Series A 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 Series 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 Series 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.
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<PAGE> 22
All calculations under this Section 11 shall be made to the nearest cent or to
the nearest ten-thousandth of a Class A Common Share or other share or one
hundred-thousandth of a Series 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 Series
A 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 Series A
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 Series A 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 Series 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
Series A Preferred Shares (calculated to the nearest one hundred-thousandth of
a share) obtained by (i) multiplying (x) the number of Series A 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 Series A 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 Series 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
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<PAGE> 23
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 Series A 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
Series A Preferred Share and the number of one-thousandths of a Series 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 Series 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 Series 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 Series 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 Series 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 Series A Preferred or Class A Common Shares, (ii)
issuance wholly for cash of any Series A Preferred or Class A Common Shares at
less than the current market price, (iii) issuance wholly for cash of Series A
Preferred or Class A Common Shares or securities which by their terms are
convertible into or
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<PAGE> 24
exchangeable for Series A Preferred or Class A 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 Series A Preferred
or Class A 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 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
Class A 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 Class A 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 Series 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 Series A Preferred Share, or shares of such other capital
stock, as were issuable with respect to one Right immediately prior to such
event. Each Class A 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 Series A Preferred Share, or shares of such
other capital stock, as one Class A 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.
Section 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 Series A
Preferred Shares
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<PAGE> 25
a copy of such certificate and (c) mail a brief summary thereof to each holder
of a Rights Certificate in accordance with Section 25 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.
Section 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,
(A) 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;
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<PAGE> 26
(B) 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;
(C) 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;
(D) 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
(E) 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.
(F) 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
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(ii) in the case of any transaction described in
clause (iii) of Section13(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;
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(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.
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<PAGE> 29
Section 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 Series A Preferred Shares (other than fractions that are integral multiples
of one one-thousandth of a Series A Preferred Share) upon exercise of the
Rights or to distribute certificates which evidence fractional Series A
Preferred Shares (other than fractions that are integral multiples of one
one-thousandth of a Series A Preferred Share). Interests in fractions of
Series A Preferred Shares in integral multiples of one one-thousandth of a
Series 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 Series A Preferred Shares represented by such depositary receipts. In lieu
of fractional Series A Preferred Shares that are not integral multiples of one
one-thousandth of a Series 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 Series A Preferred Share. For purposes of this Section
14(b), the current market value of a Series A Preferred Share shall be one
thousand times the closing price of a Class 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 Class A Common Shares or to distribute certificates which evidence
fractional Class A Common Shares upon the exercise or exchange of Rights. In
lieu of such fractional Class A 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 Class A Common Share. For purposes of this Section 14(c),
the current market value of a Class A Common Share shall be the closing price
of a Class 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 Series A Preferred Share) upon exercise of a Right.
Section 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
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<PAGE> 30
holders of the Rights Certificates (and, prior to the Distribution Date, the
registered holders of the Class A Common Shares); and any registered holder of
any Rights Certificate (or, prior to the Distribution Date, of the Class A
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 Class A
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.
Section 16. Agreement of Rights Holders.
Every holder of a Right, by accepting the same, consents and agrees
with the Company and the Rights Agent and with every other holder of a Right
that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Class A 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 or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer and
with the appropriate forms and certificates fully executed; 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 Class A 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 Class A Common Shares certificate
made by anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be affected by
any notice to the contrary.
Section 17. 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
Series A 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 24 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.
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Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder and, from
time to time, on demand of the Rights Agent, its reasonable expenses and
counsel fees and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent,
for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the premises. 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 Series A Preferred Shares or Class A
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.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust 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;
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<PAGE> 32
and in case at that time any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
Section 20. Duties of Rights Agent.
The Rights Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of which the Company
and the holders of Rights Certificates, by their acceptance thereof, shall be
bound:
(a) The Rights Agent may consult with legal counsel (who
may be legal counsel for the Company), and the 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 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, or 23, 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
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<PAGE> 33
any representation or warranty as to the authorization or reservation of any
Series A Preferred Shares to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any Series A 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.
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<PAGE> 34
(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.
Section 21. Change of Rights Agent.
The Rights Agent or any successor Rights Agent may resign and be
discharged from its duties under this Agreement upon thirty (30) days' notice in
writing mailed to the Company and to each transfer agent of the Series A
Preferred Shares and the Class A 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 Series A Preferred Shares and the
Class A 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 Series A
Preferred Shares and the Class A 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.
Section 22. Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new Rights
Certificates evidencing Rights in such form as may be approved by its Board of
Directors to reflect any adjustment or change in the 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 Class A
Common Shares following
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<PAGE> 35
the Distribution Date and prior to the redemption or expiration of the Rights,
the Company (a) shall, with respect to Class A 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.
Section 23. Redemption.
(a) The Company may, at its option and with the approval
of the Board of Directors, at any time prior to the Close of Business on the
earlier of (i) the Shares Acquisition Date and (ii) the Final Expiration Date,
redeem all but not less than all the then outstanding Rights at a redemption
price of $0.001 per Right, 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 Class B Common
Shares (based on the Current Per Share Market Price thereof at the time of
redemption) or cash, provided, however, that the Company may not redeem the
Rights unless it simultaneously redeems all other rights to purchase Preferred
Stock under Agreements substantially similar to this Agreement. 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 Class A 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
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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, and
other than in connection with the purchase of Class A Common Shares prior to
the Distribution Date.
Section 24. 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 25 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 25 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.
Section 25. Notices.
Notices or demands authorized by this Agreement to be given or made by
the Rights Agent or by the holder of any Rights Certificate to or on the
Company 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:
American Business Information, Inc.
5711 South 86th Circle
Omaha, NE 68127
Attention: Jon Wellman
with a copy to:
Wilson Sonsini Goodrich & Rosati
Professional Corporation
650 Page Mill Road
Palo Alto, California 94304-1050
Attention: Francis S. Currie
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:
Norwest Bank Minnesota, N.A.
161 North Concord Exchange
South Saint Paul, MN 55075
Attention: Shareowner Services Department
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<PAGE> 37
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.
Section 26. Supplements and Amendments.
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 Class A
Common Shares.
Section 27. Successors.
All the covenants and provisions of this Agreement by or for the
benefit of the Company or the Rights Agent shall bind and inure to the benefit
of their respective successors and assigns hereunder.
Section 28. Determinations and Actions by the Board of Directors,
etc.
For all purposes of this Agreement, any calculation of the number of
Voting Shares outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding Voting 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)
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<PAGE> 38
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.
Section 29. 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 Class A 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 Class A Common Shares).
Section 30. Severability.
If any term, provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction or other authority to be invalid,
void or unenforceable, the remainder of the terms, 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.
Section 31. 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.
Section 32. Counterparts.
This Agreement may be executed in any number of counterparts and each
of such counterparts shall for all purposes be deemed to be an original, and
all such counterparts shall together constitute but one and the same
instrument.
Section 33. Descriptive Headings.
Descriptive headings of the several Sections of this Agreement are
inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
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<PAGE> 39
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
"COMPANY" AMERICAN BUSINESS INFORMATION, INC.
By: /s/ SCOTT DAHNKE
--------------------------------
Name: Scott Dahnke
------------------------------
Title: Chief Executive Officer
-----------------------------
By: /s/ JON WELLMAN
--------------------------------
Name: Jon Wellman
------------------------------
Title: President
-----------------------------
"RIGHTS AGENT" NORWEST BANK MINNESOTA, N.A.
By: /s/ BEA HUSTON
--------------------------------
Name: Bea Huston
------------------------------
Title:
-----------------------------
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