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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 22, 1997
Catalina Marketing Corporation
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
1-11008 33-0499007
Commission File Number (IRS Employer
Identification No.)
11300 9th Street North
St. Petersburg, Florida 33716
(Address of principal executive offices) (Zip Code)
(813) 579-5000
Registrant's Telephone Number
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Item 5. Other Events.
On April 22, 1997, the Board of Directors of Catalina
Marketing Corporation (the "Company") declared a dividend of one preferred
share purchase right (a "Right") for each outstanding share of common stock,
par value $0.01 per share (the "Common Shares"), of the Company. The dividend
is payable immediately following the approval of the Rights for listing on the
New York Stock Exchange to the stockholders of record on May 12, 1997 (the
"Record Date"). Each Right entitles the registered holder to purchase from the
Company units, each unit being one one-hundredth of a share, of Series X Junior
Participating Preferred Stock, par value $0.01 per share (the "Preferred
Shares"), of the Company at a price of $120 per Right (the "Exercise Price"),
subject to adjustment. The description and terms of the Rights are set forth
in a Stockholder Protection Agreement (the "Rights Agreement"), dated as of May
8, 1997, between the Company and ChaseMellon Shareholder Services, L.L.C., as
Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 business days following a
public announcement that a person or group of affiliated or associated persons
have acquired beneficial ownership of 15% or more of the outstanding Common
Shares (any such person or group an "Acquiring Person") or (ii) 10 business
days following the commencement of, or announcement of an intention to make, a
tender offer or exchange offer the consummation of which would result in such
person or group becoming an Acquiring Person (the earlier of such dates being
the "Separation Time"), the Rights will be evidenced, with respect to Common
Share certificates outstanding as of the Record Date, by such Common Share
certificate with a copy of the summary of Rights attached thereto.
Notwithstanding the above, certain persons acquiring more than 15% but not more
than 24% of the Company's common stock with the express written approval of the
Company's Board of Directors shall not be deemed Acquiring Persons.
The Rights Agreement provides that, until the Separation Time
(or earlier redemption or expiration of the Rights), the Rights will be
transferred with and only with the Common Shares. Until the Separation Time
(or earlier redemption or expiration of the Rights), new Common Share
certificates issued after the Record Date upon transfer or a new issuance of
Common Shares will contain a notation incorporating the Rights Agreement by
reference. Until the Separation Time (or earlier redemption or expiration of
the Rights), the surrender for transfer of any certificates for Common Shares
outstanding as of the Record Date, even without such notation or a copy of the
Summary of Rights being attached thereto, will also constitute
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the transfer of the Rights associated with the Common Shares represented by
such certificate. As soon as practicable following the Separation Time,
separate certificates evidencing the Rights ("Right Certificates") will be
mailed to holders of record of the Common Shares and such separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Separation Time. The
Rights will expire as of the close of business April 22, 2007 (the "Expiration
Time"), unless the Expiration Time is extended or unless the Rights are earlier
redeemed or exchanged by the Company, in each case, as described below.
Following the Separation Time, holders of Rights (other than
Rights beneficially owned by the Acquiring Person, which will thereafter be
void) will be entitled to receive upon exercise and payment of the Exercise
Price that number of units (each unit being one one-hundredth of a share) of
Preferred Shares which equals the result obtained by dividing the Exercise
Price by 50% of the average market price per Common Share for the twenty
trading days immediately preceding the date of exercise.
The Exercise Price and number of Rights outstanding or, if
after the Separation Time, the number and type of securities purchasable upon
exercise of the Rights, shall be adjusted from time to time to prevent dilution
if the Company (i) declares or pays a dividend on the Common Shares payable in
Common Shares (or other capital stock), (ii) subdivides the outstanding Common
Shares or (iii) combines the outstanding Common Shares into a smaller number of
Common Shares. Further, the number and kind of units of Preferred Shares or
other securities issuable upon the exercise of the Rights shall be adjusted if
the Company (w) declares or pays a dividend on the Preferred Shares payable in
voting stock of the Company, (x) subdivides the outstanding Preferred Shares,
(y) combines the outstanding Preferred Shares into a small number of shares or
(z) issues voting stock in a reclassification of the Preferred Shares.
Preferred Shares purchasable upon exercise of the Rights will
not be redeemable. Each Preferred Share will entitle the holder thereof, when,
as and if declared by the Board of Directors of the Company to dividends equal
to 100 times all dividends declared on the Common Shares since the first
issuance of any Preferred Share or fraction of a Preferred Share. In the event
of the liquidation of the Company, the holders of the Preferred Shares will be
entitled to a minimum preferential liquidation payment of $100 per share plus
all accrued dividends and distributions. Following payment of such preference,
the holders of Common Shares shall be entitled to a payment per share equal to
one one-hundredth of the Preferred Share per share
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payment. Following payment of this amount to the holders of the Common Shares,
holders of Preferred Shares and Common Shares will participate ratably in all
additional liquidation payments such that holders of Preferred Shares will
receive per share 100 times the amount paid on each Common Share. Each
Preferred Share will have 100 votes, voting together with the Common Shares.
These rights are protected by customary antidilution provisions.
Because of the nature of the Preferred Shares' dividend,
liquidation and voting rights, the value of each unit of a Preferred Share
(i.e., a one one-hundredth interest in a Preferred Share) purchasable upon
exercise of the Rights should approximate the value of one Common Share.
In the event that (i) the Company is acquired in a merger or
other business combination transaction in which the Company is not the survivor
or the Common Shares are exchanged for cash, stock or assets or (ii) 50% or
more of the Company's consolidated assets or earning power are sold, in either
case, after a person or group has become an Acquiring Person, proper provision
will be made so that each holder of a Right (other than the Acquiring Person,
whose Rights will be void) will thereafter have the right to receive, upon the
exercise thereof at the then-current Exercise Price of each Right, that number
of shares of common stock of the acquiring company which at the time of such
transaction will have a market value of two times the Exercise Price. Any
Preferred Share outstanding as of the date of such business combination or
other transaction described above shall entitle the holder thereof to 100 times
the consideration each Common Share receives in connection therewith.
At any time after the Separation Time, and prior to the
acquisition by the Acquiring Person of 50% or more of the outstanding Common
Shares, the Board of Directors of the Company may exchange the Rights (other
than Rights which have become void), in whole or in part, for Common Shares at
an exchange ratio equal to the Exercise Price divided by the then market price
of a Common Share.
No fractional Preferred Shares will be issued (other than
fractions which are integral multiples of one one-hundredth of a Preferred
Share, which may, at the election of the Company, be evidenced by depositary
receipts) and, in lieu thereof, an adjustment in cash will be made based on the
market price of the Preferred Shares on the last trading day prior to the date
of exercise.
At any time prior to the Separation Time, the Company may
redeem the Rights, in whole but not in part, at a price of $.01 per Right (the
"Redemption Price"). Immediately upon any
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redemption of the Rights, the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption
Price.
The terms of the Rights may be amended by the Board of
Directors of the Company without the consent of the holders of the Rights prior
to the Separation Time. After the Separation Time, no such amendment may
materially and adversely affect the interests of the holders of the Rights.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without limitation,
the right to vote or to receive dividends.
The Rights have certain anti-takeover effects. The Rights
will cause substantial dilution to a person or group that attempts to acquire
the Company on terms not approved by the Company's Board of Directors, except
pursuant to an offer conditioned on a substantial number of Rights being
acquired. The Rights should not interfere with any merger or other business
combination approved by the Board of Directors since the Rights may be redeemed
by the Company at the Redemption Price prior to the time that a person or group
becomes an Acquiring Person.
The Rights Agreement, specifying the terms of the Rights and
including the form of the Certificate of Designation, Preferences and Rights
setting forth the terms of the Preferred Shares as an exhibit thereto and the
form of press release announcing the declaration of the Rights are attached
hereto as exhibits and are incorporated herein by reference. The foregoing
description of the Rights is qualified in its entirety by reference to such
exhibits.
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Item 7. Exhibits.
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1. Stockholder Protection Agreement, dated as of May 8, 1997, between Catalina Marketing
Corporation and ChaseMellon Shareholder Services, Inc., which includes the form of Certificate
of Designation, Preferences and Rights setting forth the terms of the Series X Junior
Participating Preferred Stock, par value $0.01 per share, as Exhibit A, the Summary of
Stockholder Protection Agreement as Exhibit B and the form of Right Certificate as Exhibit C.
Pursuant to the Stockholder Protection Agreement, printed Right Certificates will not be mailed
until as soon as practicable after the earlier of the tenth business day after public
announcement that a person or group has become an Acquiring Person or the tenth business day
after a person commences, or announces its intention to commence, a tender offer or exchange
offer the consummation of which would result in such person becoming an Acquiring Person.
2. Form of press release dated May 8, 1997.
</TABLE>
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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 report to be signed
on its behalf by the undersigned, thereunto duly authorized.
CATALINA MARKETING CORPORATION
By /s/ Philip B. Livingston
-----------------------------
Philip B. Livingston,
Senior Vice President and
Chief Executive Officer
Dated: May 8, 1997
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EXHIBIT LIST
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1. Stockholder Protection Agreement, dated as of May 8, 1997, between Catalina
Marketing Corporation and ChaseMellon Shareholder Services, L.L.C., which
includes the form of Certificate of Designation, Preferences and Rights
setting forth the terms of the Series X Junior Participating Preferred
Stock, par value $0.01 per share, as Exhibit A, the Summary of Stockholder
Protection Agreement as Exhibit B and the form of Right Certificate as
Exhibit C. Pursuant to the Stockholder Protection Agreement, printed Right
Certificates will not be mailed until as soon as practicable after the
earlier of the tenth business day after public announcement that a person or
group has become an Acquiring Person or the tenth business day after a
person commences, or announces its intention to commence, a tender offer or
exchange offer the consummation of which would result in such person
becoming an Acquiring Person.
2. Form of press release dated May 8, 1997.
</TABLE>
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Exhibit 1
STOCKHOLDER PROTECTION AGREEMENT
DATED AS OF
MAY 8, 1997
BETWEEN
CATALINA MARKETING CORPORATION
AND
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.,
AS RIGHTS AGENT
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STOCKHOLDER PROTECTION AGREEMENT
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C> <C>
ARTICLE I - CERTAIN DEFINITIONS
1.1 Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II - THE RIGHTS
2.1 Summary of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.2 Legend on Stock Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.3 Exercise Price; Exercise of Rights; Detachment of Rights . . . . . . . . . . . . . . . . . . . . . . 6
2.4 Adjustments to Exercise Price; Number of Rights; Securities Purchasable . . . . . . . . . . . . . . 9
2.5 Date On Which Exercise Is Effective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.6 Execution, Authentication, Delivery and Dating of Rights Certificates . . . . . . . . . . . . . . . 11
2.7 Registration, Registration of Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . 12
2.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates . . . . . . . . . . . . . . . . . . . . . 12
2.9 Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.10 Delivery and Cancellation of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.11 Agreements of Rights Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.12 Consolidation, Merger or Sale or Transfer of Assets or Earning Power . . . . . . . . . . . . . . . . 14
2.13 Certificate of Adjusted Exercise Price or Number of Shares . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE III - THE RIGHTS AGENT
3.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.2 Merger or Consolidation or Change of Name of Rights Agent . . . . . . . . . . . . . . . . . . . . . 16
3.3 Duties of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.4 Change of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE IV - MISCELLANEOUS
4.1 Redemption, Termination and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.2 Provision in Event of Insufficient Shares of Series X Preferred Stock . . . . . . . . . . . . . . . 21
4.3 Issuance of New Rights Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.4 Supplements and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.5 Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.6 Transactions After the Separation Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.7 Rights of Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.8 Holder of Rights Not Deemed a Stockholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.9 Notice of Proposed Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.10 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.11 Costs of Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.12 Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.13 Benefits of this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.14 Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
</TABLE>
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<TABLE>
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4.15 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.16 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.17 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
</TABLE>
EXHIBITS
<TABLE>
<S> <C>
Exhibit A Form of Certificate of Designation, Preferences and Rights of
Series X Junior Participating Preferred Stock
Exhibit B Form of Summary of Stockholder Protection Plan
Exhibit C Form of Rights Certificate (Together With Form of Election to
Purchase)
</TABLE>
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STOCKHOLDER PROTECTION AGREEMENT
This Stockholder Protection Agreement (the "Agreement"), is entered
into as of May 8, 1997, between CATALINA MARKETING CORPORATION, a Delaware
corporation (the "Company"), and CHASEMELLON SHAREHOLDER SERVICES, L.L.C., as
Rights Agent (the "Rights Agent", which term shall include any successor Rights
Agent hereunder).
WHEREAS, on April 22, 1997, the Board of Directors of the Company
adopted a stockholder protection plan designed to provide protection to the
Company's stockholders in the event any person should attempt to acquire a 15%
or greater equity interest in the Company at a price, under circumstances or on
terms that are not in the best interests of the Company and its stockholders;
WHEREAS, the Board of Directors of the Company has (a) authorized and
declared a dividend of one contingent preferred stock purchase right ("Right")
in respect of each share of Common Stock (as hereinafter defined) held of
record as of the close of business on May 12, 1997 (the "Record Time") and (b)
authorized the issuance of one Right in respect of each share of Common Stock
that shall become outstanding after the Record Time and prior to the Separation
Time (as hereinafter defined);
WHEREAS, each Right entitles the holder thereof, after the Separation
Time, to purchase that number of Units (as hereinafter defined) of a share of
the Company's Series X Preferred Stock (as hereinafter defined) which equals
the quotient obtained by dividing the Exercise Price (as hereinafter defined)
by fifty percent (50%) of the Market Price (as hereinafter defined) per share
of Common Stock, pursuant to the terms and subject to the conditions set forth
herein; and
WHEREAS, the Company desires to appoint the Rights Agent to act on
behalf of the Company, and the Rights Agent is willing to so act, in connection
with the issuance, transfer, exchange and replacement of Rights Certificates
(as hereinafter defined), the exercise of Rights and other matters referred to
herein;
NOW, THEREFORE, in consideration of the mutual covenants set forth
herein, the parties hereto agree as follows:
ARTICLE I - CERTAIN DEFINITIONS
1.1 CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who has (i)
acquired or obtained the right to acquire Beneficial Ownership of 15% or more
of the outstanding shares of Common Stock or (ii) has commenced or announced an
intention to commence a tender or exchange offer which would result in that
Person obtaining Beneficial Ownership of 15% or more of the outstanding shares
of Common Stock; provided, however, that the term "Acquiring Person" shall not
include the Company, any wholly-owned Subsidiary of the Company, any employee
stock ownership or other employee
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benefit plan of the Company or of a Subsidiary of the Company (a "Plan"), any
Person holding Common Stock for or pursuant to the terms of any such Plan or
any Exempted Person. Notwithstanding the foregoing, any Person who acquires
the Beneficial Ownership of 15% or more of the shares of Common Stock of the
Company either (i) by reason of share purchases by the Company reducing the
number of shares of Common Stock outstanding (provided such Person does not
acquire additional shares of Common Stock other than by stock dividend), or
(ii) inadvertently, if such Person notifies the Board of Directors of such
inadvertent purchase within five business days and within two business days
after such notice divests itself of enough shares of Common Stock so as to no
longer have the Beneficial Ownership of 15% of the outstanding Common Stock,
will not be an Acquiring Person.
(b) "Affiliate", when used to indicate a relationship
with a specified Person, shall mean a Person that directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or is under
common control with, such specified Person.
(c) "Associate" of a specified Person shall mean (i) any
corporation, partnership or other organization of which such specified Person
is an officer or partner or is, directly or indirectly, the Beneficial Owner of
10% or more of any class of equity securities, (ii) any trust or other estate
in which such specified Person has a substantial beneficial interest or as to
which such specified Person serves as trustee or in a similar fiduciary
capacity, (iii) any relative or spouse of such specified Person, or any
relative of such spouse, who has the same home as such specified Person or who
is a director or officer of the Company or an Affiliate of the Company and (iv)
any Person who is a director, officer, partner or trustee of such specified
Person or of any corporation, partnership or other organization (other than the
Company or any wholly owned Subsidiary of the Company) that is an Affiliate or
Associate of such specified Person.
(d) A Person shall be deemed the "Beneficial Owner", and
to have "Beneficial Ownership", of, and to "Beneficially Own", any securities
as to which such Person or any of such Person's Affiliates or Associates is or
may be deemed to be the Beneficial Owner pursuant to Rule 13d-3 or Rule 13d-5
under the Securities Exchange Act of 1934, as amended (the "Exchange Act") (or
pursuant to any comparable or successor laws or regulations or, if such Rules
shall be rescinded and there shall be no comparable or successor laws or
regulations, pursuant to Rule 13d-3 or Rule 13d-5 as in effect on the date of
this Agreement), as well as any securities as to which such Person or any of
such Person's Affiliates or Associates has the right to become a Beneficial
Owner (whether such right is exercisable immediately or only after the passage
of time) pursuant to any agreement, arrangement or understanding, 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 the "Beneficial Owner", or to have "Beneficial Ownership", of, or to
"Beneficially Own", any security (i) solely because such Person or any of such
Person's Affiliates or Associates has or shares the power to vote or direct the
voting of such security pursuant to a revocable proxy given in response to a
public proxy or consent solicitation made pursuant to, and in accordance with,
the applicable rules and regulations under the Exchange Act, except if such
power (or the arrangements relating thereto) is then reportable under Item 6 of
Schedule 13D under the Exchange Act (or any similar provision of a comparable
or successor report) or (ii) held for or pursuant to the terms of any Plan; and
provided,
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however, that nothing in this paragraph 1.1(d) shall cause a Person engaged in
business as an underwriter of securities to be the Beneficial Owner of, to have
Beneficial Ownership of, or to Beneficially Own, any securities acquired
through such Person's participation in good faith in a firm commitment
underwriting until the expiration of 40 days after the date of such
acquisition. For purposes of this Agreement, in determining the percentage of
the outstanding shares of Common Stock with respect to which a Person is the
Beneficial Owner, all shares as to which such Person is deemed the Beneficial
Owner shall be deemed outstanding.
(e) "Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in the Cities of New
York and St. Petersburg, Florida are generally authorized or obligated by law
or executive order to close.
(f) "Close of business" on any given day shall mean the
time on such date (or, if such date is not a Business Day, the time on the next
succeeding Business Day) at which the offices of the transfer agent for the
Common Stock (or, after the Separation Time, the offices of the Rights Agent)
are closed to the public.
(g) "Common Stock" shall mean the Common Stock, par value
$.01 per share, of the Company, except that "common stock" when used with
reference to any Person other than the Company shall mean the capital stock of
such Person with the greatest voting power, or equity securities or other
equity interests having power to control or direct the management of such
Person.
(h) "Exempted Person" shall mean any Institutional
Investor and any Minority Investor. Notwithstanding the foregoing, if any
Institutional Investor or Minority Investor acquires Beneficial Ownership of
the outstanding Common Stock in excess of that percentage expressly approved in
writing by the Board of Directors of the Company, either (i) by reason of share
purchases by the Company reducing the number of shares of Common Stock
outstanding (provided such Exempted Person does not acquire additional shares
of Common Stock other than by stock dividend) or (ii) inadvertently, if such
Exempted Person notifies the Board of Directors of such inadvertent purchase
within five business days and within two business days after such notice
divests itself of enough shares of Common Stock so as to no longer have the
Beneficial Ownership of the outstanding Common Stock in excess of the specified
percentage, then in either case such Institutional Investor or Minority
Investor will not cease to be an Exempted Person.
(i) "Exercise Price" shall initially be $120, subject to
adjustment from time to time as provided in Section 2.4 hereof.
(j) "Expiration Time" shall be the close of business on
April 22, 2007.
(k) "Institutional Investor" shall mean any Person
(together with such Institutional Investor's Affiliates and Associates) (i)
who, with the express written approval of the Board of Directors of the
Company, acquires aggregate Beneficial Ownership of between 15% and 24% of the
outstanding Common Stock of the Company, provided, however, that the
Institutional Investor acquires such Beneficial Ownership in the ordinary
course of business and not with the purpose nor with the effect of changing or
influencing the control of the Company, nor in connection with or as a
participant in
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any transaction having such purpose or effect, including any transaction
subject to Rule 13d-3(b) of the Exchange Act, and (ii) who is: (A) a broker or
dealer registered under Section 15 of the Exchange Act; (B) a bank as defined
in Section 3(a)(6) of the Exchange Act; (C) an insurance company as defined in
Section 3(a)(19) of the Exchange Act; (D) an investment company registered
under Section 8 of the Investment Company Act of 1940; (E) an investment
adviser registered under Section 203 of the Investment Advisers Act of 1940;
(F) an employee benefit plan or pension fund which is subject to the provisions
of the Employee Retirement Income Security Act of 1974 or an endowment fund;
(G) a parent holding company for Persons described in clauses (A) through (F)
above, provided the aggregate amount held directly by the parent, and directly
and indirectly by its subsidiaries which are not Persons specified in clauses
(A) through (F) above, does not exceed one percent of the securities of the
subject class; or (H) a group, provided that all the members are Persons
specified in clauses (A) through (G) above.
(l) "Market Price" per share of Common Stock on any date
of determination shall mean the average of the daily closing prices per share
of Common Stock (determined as described below) on each of the 20 consecutive
Trading Days through and including the fifth Trading Day immediately preceding
such determination date; provided, however, that if the first public
announcement of an event described in Section 2.4 hereof occurs within such 20
Trading Day period, Market Price per share of Common Stock on such
determination date shall mean the average of the daily closing prices per share
of Common Stock on each Trading Day from and including the day after the date
of such announcement through and including the fifth Trading Day immediately
preceding such determination date. The closing price per share of Common Stock
on any date shall be the last sale price, regular way, or, in case no such sale
takes place on such date, the average of the closing bid and asked prices,
regular way, for each share of Common Stock, 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 Common
Stock is not then 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 Common Stock is listed or admitted to trading or, if the Common Stock
is not then listed or admitted to trading on any national securities exchange,
the average of the high bid and low asked prices for each share of Common Stock
in the over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or such other
system then in use, or, if on any such date the Common Stock is not then quoted
by any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Common Stock
selected by the Board of Directors of the Company; provided, however, that if
on any such date the Common Stock is not listed or admitted for trading on a
national securities exchange or traded in the over-the-counter market, the
closing price per share of Common Stock on such date shall mean the fair value
per share of Common Stock on such date as determined in good faith by the Board
of Directors of the Company, after consultation with a nationally recognized
investment banking firm with respect to the fair value per share of Common
Stock. Market Price per share of Series X Preferred Stock on any date of
determination shall be determined in the same manner set forth above for Common
Stock, other than as provided in the proviso to the immediately preceding
sentence. If the Market Price per share of Series X Preferred Stock cannot be
determined in the manner provided above, or if the Series X Preferred Stock is
not publicly held or listed or traded in a manner described above,
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<PAGE> 16
the Market Price per share of Series X Preferred Stock shall be conclusively
deemed to be an amount equal to 100 (as such number may be appropriately
adjusted for such events as subdivisions or combinations of stock, stock
dividends and recapitalizations with respect to the Common Stock occurring
after the date of this Agreement) multiplied by the Market Price per share of
Common Stock. The Market Price of a Unit shall be equal to the Market Price of
one share of Series X Preferred Stock divided by 100.
(m) "Minority Investor" shall mean any Person (together
with such Minority Investor's Affiliates and Associates), other than an
Institutional Investor, who, with the express, written approval of the Board of
Directors of the Company, acquires aggregate Beneficial Ownership of between 15%
and 24% of the outstanding Common Stock of the Company.
(n) "Person" shall mean any individual, firm,
partnership, limited liability company, association, group (as such term is
used in Rule 13d-5 under the Exchange Act, as in effect on the date of this
Agreement), corporation or other entity.
(o) "Series X Preferred Stock" shall mean the Series X
Junior Participating Preferred Stock, par value $.01 per share, of the Company
having the rights, powers, privileges and restrictions, qualifications and
limitations set forth in the Certificate of Designation, Preferences and Rights
of Series X Junior Participating Preferred Stock in the form attached as
Exhibit A.
(p) "Separation Time" shall mean the close of business on
the tenth Business Day after (i) a public announcement establishing that an
Acquiring Person has become such or (ii) a resolution by the Board of Directors
stating that the majority of the Board of Directors is aware that a Person has
become an Acquiring Person, provided that if the foregoing results in the
Separation Time being prior to the Record Time, the Separation Time shall be
extended to the Record Time.
(q) "Subsidiary" of any specified Person shall mean any
corporation or other entity of which a majority of the voting power of the
equity securities or a majority of the equity interest is Beneficially Owned,
directly or indirectly, or otherwise controlled by such Person.
(r) "Trading Day" shall mean a day on which the principal
national securities exchange or over-the- counter market on which the Common
Stock is then listed or admitted to trading is open for the transaction of
business or, if the Common Stock is not then listed or admitted to trading on
any national securities exchange or over-the- counter market, a Business Day.
(s) A "Unit" of Series X Preferred Stock shall mean one
one-hundredth of a share of Series X Preferred Stock.
(t) "Voting Stock" shall mean (i) a Unit of Series X
Preferred Stock, (ii) a share of Common Stock and (iii) any other share of
capital stock of the Company entitled to vote generally in the election of
directors or entitled to vote together with the Common Stock in respect of any
merger, consolidation, liquidation, dissolution or winding up of the Company or
sale of all or substantially all of the Company's assets.
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<PAGE> 17
ARTICLE II - THE RIGHTS
2.1 SUMMARY OF RIGHTS. As soon as practicable after the date
hereof, the Company will mail to each holder of record of Common Stock as of
the Record Time, at such holder's address as shown on the records of the
Company, a copy of a Summary of Stockholder Protection Agreement in
substantially the form attached as Exhibit B.
2.2 LEGEND ON STOCK CERTIFICATES. Certificates for the Common
Stock issued after the Record Time but prior to the close of business on the
Separation Time shall evidence one Right for each share of Common Stock
represented thereby and shall have impressed on, printed on, written on or
otherwise affixed to them the following legend:
Until the earlier of the Separation Time or the Expiration
Time (as such terms are defined in the Stockholder Protection
Agreement referred to below), this certificate also evidences
and entitles the holder hereof to certain Rights as set forth
in a Stockholder Protection Agreement, dated as of May 8, 1997
as amended, supplemented or otherwise modified from time to
time (the "Stockholder Protection Agreement"), between
CATALINA MARKETING CORPORATION (the "Company") and CHASEMELLON
SHAREHOLDER SERVICES, L.L.C., as Rights Agent, the terms of
which are hereby incorporated herein by reference and a copy
of which is on file at the principal executive offices of the
Company. Under certain circumstances, as set forth in the
Stockholder Protection Agreement, such Rights may expire, may
become void (if they are "Beneficially Owned" by an "Acquiring
Person" or an "Affiliate" or "Associate" thereof, as such
terms are defined in the Stockholder Protection Agreement, or
a transferee of any of the foregoing) or may be evidenced by
separate certificates and may no longer be evidenced by this
certificate. The Company will mail or arrange for the mailing
of a copy of the Stockholder Protection Agreement to the
holder of this certificate without charge within five days
after the receipt of a written request therefor.
Notwithstanding the absence of the foregoing legend, certificates representing
shares of Common Stock that are issued and outstanding at the Record Time shall
evidence one Right for each share of the Common Stock evidenced thereby.
2.3 EXERCISE PRICE; EXERCISE OF RIGHTS; DETACHMENT OF RIGHTS.
(a) Subject to the terms and conditions of this
Agreement, after the Separation Time, each Right will entitle the holder
thereof to receive, upon the exercise thereof and payment of the Exercise
Price, that number of Units of Series X Preferred Stock which equals the
quotient obtained by dividing the Exercise Price by fifty percent (50%) of the
Market Price per share of Common Stock at the Separation Time, which number and
type of securities are subject to adjustment as provided in Section 2.12 hereof
and in Section 2.4 hereof. The Company shall calculate the Exercise Price and
provide the Rights Agent with notice of such Exercise Price immediately after
the Separation Time.
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<PAGE> 18
(b) Until the Separation Time, (i) no Right may be
exercised and (ii) each Right will be evidenced by the certificate for the
associated share of Common Stock (together, in the case of certificates issued
prior to the Record Time, with the letter or other communication mailed to each
holder of record of Common Stock pursuant to Section 2.1 hereof) and will be
transferable and/or convertible only together with, and will be transferred by
a transfer or a conversion of, such associated share (whether with or without
such letter or other communication).
(c) After the Separation Time and prior to the Expiration
Time, and subject to the provisions of clause (g) and the second paragraph of
clause (h) of this Section 2.3, the Rights (i) may be exercised and (ii) will
be transferable independently of the Common Stock. As soon as practicable
following the Separation Time, the Rights Agent will mail to each holder of
record of Common Stock as of the Separation Time (other than a holder known by
the Rights Agent to be an Acquiring Person or an Affiliate or Associate
thereof), at such holder's address as shown by the records of the Company (the
Company hereby agreeing to furnish copies of such records to the Rights Agent
for this purpose), (x) a certificate (a "Rights Certificate") in substantially
the form of Exhibit C hereto appropriately completed, representing the number
of Rights held by such holder at the Separation Time and having 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
law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange or quotation system on which the Rights may
from time to time be listed or traded, or to conform to usage, and (y) a
disclosure statement describing the Rights.
(d) Subject to the provisions of clause (g) and the
second paragraph of clause (h) of this Section 2.3, Rights may be exercised on
any Business Day after the Separation Time and prior to the Expiration Time by
submitting to the Rights Agent the Rights Certificate evidencing such Rights
with an Election to Purchase (an "Election to Purchase") and certificate
substantially in the form attached to the Rights Certificate duly completed,
accompanied by payment of the Exercise Price multiplied by the number of Rights
being exercised and a sum sufficient to cover any transfer tax or charge that
may be payable in respect of any transfer involved in the transfer or delivery
of Rights Certificates or the issuance or delivery of certificates for Series X
Preferred Stock or depositary receipts as referenced in Section 4.5 hereof (or
both) in a name other than that of the holder of the Rights being exercised.
Payment of the Exercise Price for the Units purchased upon the exercise of the
Rights hereunder shall be made by delivery to the Company of (i) cash, (ii)
certified check or money order payable to the order of the Company, (iii)
Common Stock, (iv) Rights to purchase Units of the Company's Series X Preferred
Stock or (v) in such other form as may be determined by the Board of Directors
of the Company, in each case in an amount equal to the aggregate Exercise Price
of such Rights. For the purposes of the preceding sentence, (x) Common Stock
shall be valued at its Market Price and (y) Rights to purchase Units of the
Company's Series X Preferred Stock shall be valued at an amount equal to the
fair market value of the Units subject to the Rights (as determined by the
Company's Board of Directors) less the Exercise Price.
(e) Upon receipt of a Rights Certificate, with an
Election to Purchase and certificate duly executed accompanied by payment as
set forth in Section 2.3(d)
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<PAGE> 19
above, and subject to the provisions of clause (g) and the second paragraph of
clause (h) of this Section 2.3, the Rights Agent will thereupon promptly (i)(A)
requisition from the Company's transfer agent certificates for the number of
shares of stock to be purchased (the Company hereby irrevocably authorizing its
transfer agent to comply with all such requisitions) and (B) if the Company
elects pursuant to Section 4.5 hereof not to issue certificates representing
fractional shares of stock, requisition from the depositary selected by the
Company cash or depositary receipts, as the case may be, representing the
fractional shares of stock to be purchased and (ii) after receipt of such
certificates or depositary receipts, deliver such certificates or depositary
receipts 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.
(f) If the holder of any Rights shall exercise fewer than
all the Rights evidenced by such holder's Rights Certificate, a new Rights
Certificate evidencing the Rights remaining unexercised will be issued by the
Rights Agent to such holder or to such holder's duly authorized assigns,
subject to the provisions of Section 4.5 hereof.
(g) Anything in this Agreement or in the Rights
Certificates to the contrary notwithstanding, Rights Beneficially Owned by an
Acquiring Person or an Affiliate or Associate thereof or any transferee of any
of the foregoing cannot validly be transferred or exercised and shall be for
all purposes void.
(h) The Company covenants and agrees that it will (i)
cause to be reserved and kept available until the Expiration Time out of its
authorized and unissued shares of capital stock a number of shares of Series X
Preferred Stock and/or Common Stock or other preferred stock or equity
securities of the Company satisfactory for delivery pursuant to Section 4.2
hereof, sufficient to permit the exercise in full of all outstanding Rights;
(ii) take all such action as may be necessary to ensure that all shares
delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such shares (subject to payment of the Exercise Price), be
duly and validly authorized, executed, issued and delivered and fully paid and
nonassessable; (iii) take all such action as may be necessary to comply with
any applicable requirements of the Securities Act of 1933, as amended (the
"Securities Act"), and the Exchange Act, and the rules and regulations
thereunder, and any other applicable law, rule or regulation, in connection
with the issuance of any shares upon exercise of Rights; (iv) use its best
efforts to cause all shares issued upon exercise of Rights to be listed on a
national securities exchange or traded in the over-the-counter market and
quoted on NASDAQ upon issuance; and (v) pay when due and payable any and all
federal and state transfer taxes and charges that may be payable in respect of
the original issuance or delivery of the Rights Certificates or of any shares
issued upon the exercise of Rights, provided that the Company shall not be
required to pay any transfer tax or charge that may be payable in respect of
any transfer involved in the transfer or delivery of Rights Certificates or the
issuance or delivery of certificates for shares in a name other than that of
the holder of the Rights being transferred or exercised.
The Company may temporarily suspend, at any time, the
exercisability of the Rights for such period of time as may be reasonably
necessary to prepare and file such documents and to perform such acts as are
required to ensure compliance with the Securities Act, the Exchange Act, the
rules and regulations thereunder, the "blue sky" laws of the various states and
any other applicable law, rule or regulation, as provided
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<PAGE> 20
in clause (iii) above. The Company may also suspend such exercisability for
such period of time as may be reasonably necessary to permit any registration
statement or statements required by the Securities Act or the Exchange Act or
any registration or qualification required by any other applicable law, rule or
regulation, to be effective with respect to any securities to be issued upon
exercise of Rights. Upon any suspension of exercisability, the Company shall
issue a public announcement stating that the exercisability of the Rights has
been temporarily suspended. Notwithstanding any provision of this Agreement to
the contrary, the Rights shall not be exercisable in any jurisdiction if the
requisite qualification in such jurisdiction shall not have been obtained or
the exercise thereof shall not be permitted under applicable law.
2.4 ADJUSTMENTS TO EXERCISE PRICE; NUMBER OF RIGHTS; SECURITIES
PURCHASABLE.
(a) If the Company shall at any time after the Record
Time and prior to the Expiration Time (i) declare or pay a dividend on Common
Stock payable in Common Stock (or other capital stock), (ii) subdivide the
outstanding Common Stock or (iii) combine the outstanding Common Stock into a
smaller number of shares of Common Stock, the Exercise Price and number of
Rights outstanding, or, if the payment or effective date therefor shall occur
after the Separation Time, the securities purchasable upon exercise of Rights
shall be adjusted in the manner set forth below. If the Exercise Price and
number of Rights are to be adjusted, (x) the Exercise Price in effect after
such adjustment will be equal to the Exercise Price in effect immediately prior
to such adjustment divided by the number of shares of Common Stock (or other
capital stock) (the "Expansion Factor") that a holder of one share of Common
Stock immediately prior to such dividend, subdivision or combination would hold
thereafter as a result thereof and (y) each Right held prior to such adjustment
will become that number of Rights equal to the Expansion Factor, and the
adjusted number of Rights will be deemed to be distributed among the shares of
Common Stock with respect to which the original Rights were associated (if they
remain outstanding) and the shares issued in respect of such dividend,
subdivision or combination, so that each such share of Common Stock will have
exactly one Right associated with it. If the securities purchasable upon
exercise of Rights are to be adjusted, the securities purchasable upon exercise
of each Right after such adjustment will be the securities that a holder of the
securities purchasable upon exercise of one Right immediately prior to such
dividend, subdivision or combination would hold immediately thereafter. If
after the Record Time and prior to the Expiration Time the Company shall issue
any shares of capital stock other than Common Stock in a transaction of a type
described in the first sentence of this Section 2.4(a) or shall issue any
Voting Stock in a reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), shares of such capital
stock shall be treated herein as nearly equivalent to shares of Common Stock as
may be practicable and appropriate under the circumstances and the Company and
the Rights Agent agree to amend this Agreement to effect such treatment.
If the Company shall at any time after the Record Time and
prior to the Separation Time issue any shares of Common Stock otherwise than in
a transaction referred to in the preceding paragraph or in Section 2.4(b)
hereof, each such share of Common Stock so issued shall automatically have one
new Right associated with it, which Right shall be evidenced by the certificate
representing such share.
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<PAGE> 21
(b)(i) If the Company shall at any time after the Record
Time and prior to the Expiration Time (A) declare or pay any dividend on the
Series X Preferred Stock payable in Voting Stock, (B) subdivide the outstanding
Series X Preferred Stock, (C) combine the outstanding Series X Preferred Stock
into a smaller number of shares of Series X Preferred Stock or (D) issue Voting
Stock in a reclassification of the Series X Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), then, and in each such
event, the number and kind of Units of Series X Preferred Stock or other
securities issuable upon the exercise of a Right on such date shall be
proportionately adjusted so that the holder of any Right exercised on or after
such date shall be entitled to receive, upon the exercise thereof and payment
of the Exercise Price, the aggregate number and kind of Units of Series X
Preferred Stock or other securities or other property, as the case may be,
that, if such Right had been exercised immediately prior to such date and at a
time when such Right was exercisable and the transfer books of the Company were
open, such holder would have owned upon such exercise and would have been
entitled to receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs on or prior to the Separation Time that
would require an adjustment under this Section 2.4(b)(i), the adjustment
provided for in this Section 2.4(b)(i) shall be made prior to giving effect to
Section 2.3(a) or Section 2.12 hereof.
(ii) If the Company shall at any time after the Record
Time and prior to the Expiration Time fix a record date for the making of a
distribution to all holders of Series X Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the surviving corporation) of securities or assets (other than a
distribution solely of Voting Stock for which an adjustment is required under
Section 2.4(b)(i) hereof or a regular quarterly cash dividend), 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 equal to the difference of the Market
Price per share of Series X Preferred Stock on such record date minus the fair
market value of the portion of the securities or assets to be so distributed
applicable to one share of Series X Preferred Stock, and the denominator of
which shall be equal to such Market Price per share of Series X Preferred
Stock. Such adjustments shall be made successively whenever such a record date
is fixed, and if such a distribution is not so made, the Exercise Price shall
be adjusted to be the Exercise Price that would then be in effect if such
record date had not been fixed. If the Company fixes a record date for the
making of a distribution of both Voting Stock and other securities or assets
(other than a regular quarterly cash dividend), such that the provisions of
Section 2.4(b)(i) and Section 2.4(b)(ii) hereof would otherwise be applicable,
then the provisions of each such section shall be applicable to each such
distribution, respectively, according to the terms of each such section. If an
event occurs on or prior to the Separation Time that would require an
adjustment under this Section 2.4(b)(ii), the adjustment provided for in this
Section 2.4(b)(ii) shall be made prior to giving effect to Section 2.3(a) or
Section 2.12 hereof.
(c) Each adjustment made pursuant to this Section 2.4
shall be made as of (i) the record date for the applicable issuance and
distribution, in the case of an adjustment made pursuant to Section 2.4(b)
above, and (ii) the payment or effective date for the applicable dividend,
subdivision or combination, in the case of an adjustment made pursuant to
Section 2.4(a) above.
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<PAGE> 22
(d) Each adjustment to the Exercise Price made pursuant
to this Section 2.4 shall be calculated to the nearest cent. Whenever an
adjustment to the Exercise Price is made pursuant to this Section 2.4, the
Company shall (i) promptly prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment, (ii)
promptly file with the Rights Agent and with the transfer agent for the Series
X Preferred Stock, and the transfer agent for the Common Stock a copy of such
certificate and (ii) mail a brief summary thereof to each holder of Rights.
(e) Irrespective of any adjustment or change in the
securities purchasable upon exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express the securities so
purchasable that were expressed in the initial Rights Certificates issued
hereunder.
2.5 DATE ON WHICH EXERCISE IS EFFECTIVE. Each person in whose
name any certificates for shares are issued upon the exercise of Rights shall
for all purposes be deemed to have become the holder of record of the shares
represented thereby on, and such certificate shall be dated, the date upon
which the Rights Certificate evidencing such Rights was duly surrendered and
payment of the Exercise Price for such Rights (and any applicable taxes and
other governmental charges payable by the exercising holder hereunder) was
made; provided, however, that if the date of such surrender and payment is a
date upon which the stock 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 stock
transfer books of the Company are open.
2.6 EXECUTION, AUTHENTICATION, DELIVERY AND DATING OF RIGHTS
CERTIFICATES.
(a) The Rights Certificates shall be executed on behalf
of the Company by its Chairman of the Board, President or one of its Vice
Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Rights Certificates may be manual or facsimile.
(b) Rights Certificates bearing the manual or facsimile
signatures of individuals who were at any time the proper officers of the
Company shall bind the Company, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the countersignature and
delivery of such Rights Certificates.
(c) Promptly after the Company learns of the Separation
Time, the Company will notify the Rights Agent of such Separation Time and will
deliver Rights Certificates executed by the Company to the Rights Agent for
countersignature, and the Rights Agent shall manually countersign and deliver
such Rights Certificates to the holders of the Rights pursuant to Section
2.3(c) hereof. No Rights Certificate shall be valid for any purpose until
manually countersigned by the Rights Agent.
(d) Each Rights Certificate shall be dated the date of
countersignature thereof.
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<PAGE> 23
2.7 REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
(a) The Company will cause to be kept a register (the
"Rights Register") in which, subject to such reasonable regulations as it may
prescribe, the Company will provide for the registration and transfer of
Rights. The Rights Agent is hereby appointed "Rights Registrar" for the
purpose of maintaining the Rights Register for the Company and registering
Rights and transfers of Rights as herein provided. If the Rights Agent shall
cease to be the Rights Registrar, the Rights Agent will have the right to
examine the Rights Register at all reasonable times.
(b) After the Separation Time and prior to the Expiration
Time, upon surrender for registration of transfer or exchange of any Rights
Certificate, and subject to the provisions of Sections 2.3(g) and 2.7(d)
hereof, the Company will execute, and the Rights Agent will countersign and
deliver, in the name of the holder or the designated transferee or transferees,
as required pursuant to the holder's instructions, one or more new Rights
Certificates evidencing the same aggregate number of Rights as did the Rights
Certificate so surrendered.
(c) Subject to the provisions of Section 2.3(g) hereof,
all Rights issued upon any registration of transfer or exchange of Rights
Certificates shall be the valid obligations of the Company, and such Rights
shall be entitled to the same benefits under this Agreement as the Rights
surrendered upon such registration of transfer or exchange.
(d) Every Rights Certificate surrendered for registration
of transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company or the Rights Agent,
as the case may be, duly executed by the holder thereof or such holder's
attorney-in-fact duly authorized in writing. As a condition to the issuance of
any new Rights Certificate under this Section 2.7, the Company may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto.
2.8 MUTILATED, DESTROYED, LOST AND STOLEN RIGHTS CERTIFICATES.
(a) If any mutilated Rights Certificate is surrendered to
the Rights Agent prior to the Expiration Time, the Company shall execute and
the Rights Agent shall countersign and deliver in exchange therefor a new
Rights Certificate evidencing the same number of Rights as did the Rights
Certificate so surrendered.
(b) If there shall be delivered to the Company and the
Rights Agent prior to the Expiration Time (i) evidence to their satisfaction of
the destruction, loss or theft of any Rights Certificate and (ii) such security
or indemnity as may be required by them to save each of them and any of their
agents harmless, then, in the absence of notice to the Company or the Rights
Agent that such Rights Certificate has been acquired by a bona fide purchaser,
the Company shall execute and upon its request the Rights Agent shall
countersign and deliver, in lieu of any such destroyed, lost or stolen Rights
Certificate, a new Rights Certificate evidencing the same number of Rights as
did the Rights Certificate so destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights
Certificate under this Section 2.8, the Company may require the payment of a
sum sufficient to cover any
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<PAGE> 24
tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Rights Agent)
connected therewith.
(d) Subject to the provisions of Section 2.3(g) hereof,
every new Rights Certificate issued pursuant to this Section 2.8 in lieu of any
destroyed, lost or stolen Rights Certificate shall evidence an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Rights Certificate shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this Agreement equally and
proportionately with any and all other Rights duly issued hereunder.
2.9 PERSONS DEEMED OWNERS. Prior to due presentment of a Rights
Certificate (or, prior to the Separation Time, the associated Common Stock
certificate) for registration of transfer, the Company, the Rights Agent and
any agent of the Company or the Rights Agent may deem and treat the person in
whose name such Rights Certificate (or, prior to the Separation Time, such
Common Stock certificate) is registered as the absolute owner thereof and of
the Rights evidenced thereby for all purposes whatsoever. As used in this
Agreement, unless the context otherwise requires, the term "holder" of any
Right shall mean the registered holder of such Rights (or, prior to the
Separation Time, the associated shares of Common Stock).
2.10 DELIVERY AND CANCELLATION OF CERTIFICATES. All Rights
Certificates surrendered upon exercise or for redemption, registration or
transfer or exchange shall, if surrendered to any person other than the Rights
Agent, be delivered to the Rights Agent and, in any case, shall be promptly
cancelled by the Rights Agent. The Company may at any time deliver to the
Rights Agent for cancellation any Rights Certificates previously countersigned
and delivered hereunder that the Company may have acquired in any manner
whatsoever, and all Rights Certificates so delivered shall be promptly
cancelled by the Rights Agent. No Rights Certificates shall be countersigned
in lieu of or in exchange for any Rights Certificates cancelled as provided in
this Section 2.10, except as expressly permitted by this Agreement. The Rights
Agent shall destroy all cancelled Rights Certificates and deliver a certificate
of destruction to the Company.
2.11 AGREEMENTS OF RIGHTS HOLDERS. Every holder of Rights by
accepting such Rights consents and agrees with the Company and the Rights Agent
and with every other holder of Rights that:
(a) prior to the Separation Time, each Right will be
transferable only together with, and will be transferred by a transfer of, the
associated share of Common Stock;
(b) after the Separation Time, the Rights Certificates
will be transferable only on the Rights Register as provided herein;
(c) each Right Beneficially Owned by an Acquiring Person
or an Affiliate or Associate thereof or any transferee of any of the foregoing
cannot validly be transferred or exercised and shall for all purposes be void;
to effectuate the foregoing, each Rights Certificate shall be transferable or
exercisable only if the holder so transferring or exercising shall certify, for
the benefit of all holders of Rights, that such holder is not an Acquiring
Person or an Affiliate or Associate of an Acquiring Person and that, to the
best of such holder's knowledge, no Rights evidenced by such Rights
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<PAGE> 25
Certificates have ever been Beneficially Owned by an Acquiring Person or an
Affiliate or Associate of an Acquiring Person;
(d) prior to due presentment of a Rights Certificate (or,
prior to the Separation Time, the associated Common Stock certificate) for
registration of transfer, the Company, the Rights Agent and any agent of the
Company or the Rights Agent may deem and treat the person in whose name the
Rights Certificate (or, prior to the Separation Time, the associated Common
Stock certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or writing
on such Rights Certificate or the associated Common Stock certificate made by
anyone other than the Company or the Rights Agent) for all purposes whatsoever,
and neither the Company nor the Rights Agent shall be affected by any notice to
the contrary; and
(e) this Agreement may be supplemented or amended from
time to time pursuant to Section 4.4 or the last sentence of the first
paragraph of Section 2.4(a) hereof.
2.12 CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
POWER. Subject to the terms and conditions of this Agreement, if after the
Separation Time, directly or indirectly, (a) the Company shall consolidate
with, or merge with and into, any other Person and is not the continuing or
surviving corporation, (b) any Person shall consolidate with the Company, or
merge with and into the Company and the Company shall be the continuing or
surviving corporation of such merger and, in connection with such merger, all
or part of the Common Stock shall be changed into or exchanged for stock or
other securities of any Person (including the Company) or cash or any other
property, or (c) the Company shall sell or otherwise transfer (or one or more
of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating fifty percent (50%) or more
of the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any Person other than the Company or one or more of its wholly owned
Subsidiaries, then, and in each such case, proper provision shall be made so
that (i) each holder of a Right (except as otherwise provided herein) shall
thereafter have the right to receive, upon the exercise thereof at any time
prior to the Expiration Time and payment of the then current Exercise Price, in
accordance with the terms of this Agreement, such number of validly authorized
and issued, fully paid and nonassessable shares of common stock of such Person
or of that Affiliate or Associate of such Person which has the greatest
aggregate market value, determined in the same manner as the Market Price per
share of Common Stock is determined pursuant to Section 1.1(l) hereof, of
outstanding shares of publicly traded common stock (other than common stock
held by its Affiliates, officers, directors or employee benefit plans, or
Associates of the foregoing) as shall be equal to the result obtained by
dividing the then current Exercise Price by fifty percent (50%) of the Market
Price per share of Common Stock on the date of consummation of such
consolidation, merger, sale or transfer of a share of the common stock that the
holder of a Right shall have the right to receive; (ii) the issuer of such
common stock shall thereafter be liable for, and shall assume, by virtue of
such consolidation, merger, sale or transfer, all the obligations and duties of
the Company pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such issuer; and (iv) such issuer shall take
such steps (including, but not limited to, the reservation of a sufficient
number of shares of its common stock) in connection with such consummation as
may be necessary
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to ensure that the provisions hereof shall thereafter be applicable, as nearly
as reasonably may be, in relation to the shares of common stock thereafter
deliverable upon the exercise of the Rights. The Company shall not enter into
any transaction of the kind referred to in this Section 2.12 if at the time of
such transaction there are any rights, warrants, instruments or securities
outstanding or any agreements or arrangements that, as a result of the
consummation of such transaction, would eliminate or substantially diminish the
benefits intended to be afforded by the Rights. The Company shall not
consummate any such consolidation, merger, sale or transfer unless such issuer
shall have a sufficient number of authorized shares of its common stock that
have not been issued or reserved for issuance to permit the exercise in full of
the Rights in accordance with this Section 2.12 and unless prior thereto the
Company and such issuer shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in this Section 2.12
and further providing that, as soon as practicable after the date of any
consolidation, merger or sale of assets mentioned in this Section 2.12, such
issuer 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, and will use its best efforts to cause such
registration statement to (A) become effective as soon as practicable after such
filing and (B) remain effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the Expiration Time; and (ii) will
deliver to holders of the Rights historical financial statements for such issuer
and each of its Affiliates that comply in all respects with the requirements for
registration on Form 10 under the Exchange Act. The provisions of this Section
2.12 shall similarly apply to successive mergers or consolidations or sales or
other transfers.
2.13 CERTIFICATE OF ADJUSTED EXERCISE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Sections 2.4 and 2.12 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 the transfer agents for the Series X Preferred
Stock and for the Common Stock a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Rights Certificate (or, if prior to the
Separation Time, to each holder of a certificate representing shares of Common
Stock) in accordance with Section 4.10 hereof. Notwithstanding the foregoing
sentence, the failure of the Company to make such certification or to give such
notice shall not affect the validity or the force and effect of such
adjustment. Any adjustment to be made pursuant to Sections 2.4 and 2.12 hereof
shall be effective as of the date of the event giving rise to such adjustment.
The Rights Agent shall be fully protected in relying on any such certificate
and on any adjustment therein contained and shall not be deemed to have
knowledge of any adjustment unless and until it shall have received such
certificate.
ARTICLE III - THE RIGHTS AGENT
3.1 GENERAL.
(a) The Company hereby appoints the Rights Agent to act
as agent for the Company in accordance with the terms and conditions hereof,
and the Rights Agent hereby accepts such appointment. The Company agrees to
pay to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time,
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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 no case shall 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 likelihood 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
certificate for Series X Preferred Stock, Rights Certificate, certificate for
or other securities of the Company, instrument of assignment or transfer, power
of attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper person or persons, or otherwise upon the advice of counsel as set
forth in Section 3.3 hereof.
3.2 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 is a party, or any corporation succeeding
to the stockholder services business of the Rights Agent or any successor
Rights Agent, will be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 3.4
hereof. In case at the time such successor Rights Agent succeeds to the agency
created by this Agreement any of the Rights Certificates 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 have not 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 will 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 is
changed and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates shall
not have been countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in its changed name; and in all such
cases such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
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<PAGE> 28
3.3 DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who
may be legal counsel for the Company), and the opinion of such counsel will be
full and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent deems it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by a person believed by the Rights Agent to
be the Chairman of the Board, the President or any Vice President, and by the
Chief Financial Officer or the Secretary or any Assistant Secretary of the
Company and delivered to the Rights Agent; and such certificate will be full
authorization to the Rights Agent for any action taken or omitted by it in good
faith under the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent will be liable hereunder only for
its own negligence, bad faith or willful misconduct.
(d) The Rights Agent will not be liable for or by reason
of any of the statements of fact or recitals contained in this Agreement or in
the certificates for Series X Preferred Stock or the Rights Certificates
(except its countersignature thereof) and will not be required to verify any of
the foregoing, and all such statements and recitals are and will be deemed to
have been made by the Company only.
(e) The Rights Agent will not be under any responsibility
in respect of the validity of this Agreement or the execution and delivery
hereof (except the due authorization, execution and delivery hereof by the
Rights Agent) or in respect of the validity or execution of any certificate for
Series X Preferred Stock or Rights Certificate (except its countersignature
thereof); nor will it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Rights Certificate;
nor will it be responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 2.3(g) hereof) or any
adjustment required under the provisions of Section 2.4 hereof or responsible
for the manner, method or amount of any such adjustment or the ascertaining of
the existence of facts that would require any such adjustment (except with
respect to the exercise of Rights after receipt of the certificate contemplated
by Section 2.4 describing any such adjustment); nor will it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Series X Preferred Stock to be
issued pursuant to this Agreement or any Rights or as to whether any shares of
Series X Preferred Stock will, when issued, be duly and validly authorized,
executed, issued and delivered and 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
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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 person believed by the Rights Agent to be the Chairman of the Board,
the President, a Vice President, the Chief Financial Officer, the Secretary or
any Assistant Secretary of the Company or any other person designated in
writing by such persons, and to apply to such persons for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken or omitted by it in good faith in accordance with instructions of
any such person. 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 with respect to
its duties or obligations under this Agreement and the date on and/or after
which such action shall be taken or omitted and the Rights Agent shall not be
liable for any action taken or omitted in accordance with a proposal included
in any such application on or after the date specified therein (which date
shall not be less than ten business days after the date any such officer
actually receives such application, unless any such officer shall have
consented in writing to any earlier date) unless, prior to taking or omitting
any such action, the Rights Agent has 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 Series X
Preferred Stock, 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
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 will 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.
3.4 CHANGE OF RIGHTS AGENT. The Rights Agent may resign and be
discharged from its duties under this Agreement upon 90 days' prior notice (or
such lesser notice as is acceptable to the Company) in writing mailed to the
Company and to each transfer agent of the Series X Preferred Stock and the
Common Stock by registered or certified mail, and at the expense of the Company
to the holders of the Rights in accordance with Section 4.10. The Company may
remove the Rights Agent upon 30 days' prior notice in writing, mailed to the
Rights Agent and to each transfer agent of the Series X Preferred Stock and the
Common Stock by registered or certified mail, and to the holders of the Rights
in accordance with Section 4.10. If the Rights Agent should resign or be
removed or otherwise become incapable of acting, the Company will appoint a
successor to the Rights Agent. If the Company fails to make such appointment
within a period of 30 days after such removal or after it has been notified in
writing of such
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resignation or incapacity by the resigning or incapacitated Rights Agent or by
the holder of any Rights (which holder shall, with such notice, submit such
holder's Rights Certificate for inspection by the Company), then the holder of
any Rights 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 either (a) a corporation organized and
doing business under the laws of the United States or the State of Florida, New
York or California, in good standing, having its principal office in the State
of Florida or New York, that is authorized under such laws to exercise the
powers of the Rights Agent contemplated by this Agreement and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50,000,000 or (b) an affiliate of such a corporation. After
appointment, the successor Rights Agent will 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 will file notice thereof in
writing with the predecessor Rights Agent and each transfer agent of the Series
X Preferred Stock and the Common Stock and mail a notice thereof in writing to
the holders of the Rights in accordance with Section 4.10. Failure to give any
notice provided for in this Section 3.4, 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.
ARTICLE IV - MISCELLANEOUS
4.1 REDEMPTION, TERMINATION AND EXCHANGE.
(a) The Board of Directors of the Company may, at its
option, at any time prior to the earlier of the Separation Time or the
Expiration Time redeem all but not less than all of the then outstanding Rights
at a redemption price of $.01 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (the "Redemption Price"). The Company may, at
its option, pay the Redemption Price in cash, shares of Common Stock (based on
the Market Price at the time of redemption) or any other form of consideration
deemed appropriate by the Board of Directors.
(b) Immediately upon the action of the Board of Directors
of the Company ordering the redemption of the Rights, evidence of which shall
have been filed with the Rights Agent, and without any further action and
without any notice, the Rights will terminate and the only right thereafter of
the holders of Rights shall be to receive the Redemption Price for each Right
so held. Promptly after the action of the Board of Directors ordering the
redemption of the Rights, the Company shall give notice of such redemption to
the Rights Agent and the holders of the then outstanding Rights. Any notice
that is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives such notice. Each such notice of redemption will state
the method by which the payment of the Redemption Price will be made.
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(c)(i) The Board of Directors of the Company may, at its
option, at any time after any Person becomes an Acquiring Person, exchange all
or part of the then outstanding and exercisable Rights (which shall not include
Rights that have become void pursuant to the provisions of Section 2.3(g) and
the second paragraph of Section 2.3(h) hereof) for shares of Common Stock at an
exchange ratio which equals the quotient obtained by dividing the Exercise
Price by the Market Price per share of Common Stock per Right, appropriately
adjusted pursuant to Section 2.4 hereof (such exchange ratio being hereinafter
referred to as the "Exchange Ratio"). Notwithstanding the foregoing, the Board
of Directors shall not be empowered to effect such exchange at any time after
any Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any such Subsidiary, or any entity holding
Common Stock for or pursuant to the terms of any such plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50%
or more of the Common Stock then outstanding.
(ii) Immediately upon the action of the Board of Directors
of the Company ordering the exchange of any Rights pursuant to paragraph (c)(i)
of this Section 4.1 and without any further action and without any notice, the
right to exercise such Rights shall terminate and the only right thereafter of
a holder of such Rights shall be to receive that number of shares of Common
Stock equal to the number of such Rights held by such holder multiplied by the
Exchange Ratio. The Company shall promptly give public notice of any such
exchange; provided, however, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. The Company promptly
shall mail a notice of any such exchange to all of the holders of such Rights
at their last addresses as they appear upon the registry books of the Rights
Agent. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice
of exchange will state the method by which the exchange of Common Stock for
Rights will be effected and, in the event of any partial exchange, the number
of Rights which will be exchanged. Any partial exchange shall be effected pro
rata based on the number of Rights (other than Rights which have become void
pursuant to the provisions of Section 2.3(g) and the second paragraph of
Section 2.3(h) hereof) held by each holder of Rights.
(iii) In the event that there shall not be sufficient
Common Stock issued but not outstanding or authorized but unissued to permit
any exchange of Rights as contemplated in accordance with this Section 4.1(c),
the Company shall take all such action as may be necessary to authorize
additional shares of Common Stock for issuance upon exchange of the Rights. In
the event the Company shall, after good faith effort, be unable to take all
such action as may be necessary to authorize such additional Common Stock, the
Company shall substitute, for each share of Common Stock that would otherwise
be issuable upon exchange of a Right, a number of shares of Series X Preferred
Stock or fraction thereof having a current market price per share equal to the
Market Price per share of one share of Common Stock as of the date of issuance
of such shares of Series X Preferred Stock or fraction thereof.
(iv) The Company shall not be required to issue fractions
of a share of Common Stock or to distribute certificates which evidence
fractional shares of Common Stock. In lieu of such fractional shares, there
shall be paid to the registered holders of the Rights with regard to which such
fractional shares of Common Stock would otherwise be issuable, either (i)
evidence of such fractional shares by depository receipts, in
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accordance with the terms of Section 4.5 hereof or (ii) an amount in cash equal
to the same fraction of the Market Price of a whole share of Common Stock based
upon the date of exchange pursuant to this Section 4.1(c), subject to the terms
of Section 4.6 hereof.
4.2 PROVISION IN EVENT OF INSUFFICIENT SHARES OF SERIES X
PREFERRED STOCK. If there shall not be sufficient authorized but unissued
shares or reserved shares of Series X Preferred Stock of the Company to permit
the exercise in full of the Rights in accordance with the terms hereof, the
Company, with respect to each Right being exercised and to the extent
necessary, may make adequate provision to substitute for the delivery of Units
or shares or fractions of shares of Series X Preferred Stock (i) cash, (ii)
Common Stock, or other preferred stock or equity securities of the Company,
(iii) debt securities of the Company, (iv) other assets or (v) any combination
of the foregoing, having an aggregate value equal to the Market Price of the
Units of Series X Preferred Stock that would have been purchasable upon
exercise of such Right in the absence of this Section 4.2, or may reduce the
Exercise Price.
4.3 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 number or kind or class of shares of stock purchasable upon
exercise of Rights made in accordance with the provisions of this Agreement.
4.4 SUPPLEMENTS AND AMENDMENTS. Prior to the Separation Time, the
Company and the Rights Agent, upon receipt of the certificate described
hereinbelow, shall, if the Company so directs, supplement or amend any
provision of this Agreement in any respect without the approval of any holders
of Rights. From and after the Separation Time, the Company and Rights Agent,
upon receipt of the certificate described hereinbelow, shall, if the Company so
directs, supplement or amend this Agreement without the approval of any holders
of Rights (i) to cure any ambiguity, (ii) to correct or supplement any
provision contained herein that may be defective or inconsistent with any other
provisions herein, (iii) to shorten or lengthen any time period hereunder,
other than the time period during which the Rights may be exercised, or (iv) to
change or supplement the provisions hereunder in any manner that the Company
may deem necessary or desirable and which shall not materially and adversely
affect the interests of the holders of Rights (other than an Acquiring Person
or an Affiliate or Associate of an Acquiring Person). Upon delivery of a
certificate from an appropriate officer of the Company stating that the
proposed supplement or amendment is in compliance with the terms of this
Section 4.4, the Rights Agent shall execute such supplement or amendment.
Prior to the Separation Time, the interests of the holders of Rights shall be
deemed coincident with the interests of the holders of Common Stock.
4.5 FRACTIONAL SHARES. If the Company elects not to issue
certificates representing fractional shares of Series X Preferred Stock or
other securities (pursuant to Section 4.2 hereof) upon exercise of Rights, the
Company may, in lieu thereof, either (i) evidence such fractional shares by
depositary receipts issued pursuant to an appropriate agreement between the
Company and a depositary selected by it, provided that such agreement shall
provide that the holders of the depositary receipts shall have all of the
rights, privileges and preferences to which they are entitled as Beneficial
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Owners of such stock, or (ii) subject to Section 4.6 hereof, pay an amount in
cash equal to the same fraction of the Market Price of a Unit of Series X
Preferred Stock.
4.6 TRANSACTIONS AFTER THE SEPARATION TIME. After the Separation
Time and prior to the Expiration Time, the Company shall not engage in any
transaction not in the ordinary course of business that would eliminate or
otherwise diminish in any material respect the benefits intended to be afforded
by this Agreement to the holders of Rights (other than Acquiring Persons or
Affiliates or Associates thereof, or Persons who may become any of the
foregoing). Without limiting the foregoing, after the Separation Time and
prior to the Expiration Time, the Company shall not (i) sell or issue to an
Acquiring Person or any Affiliate or Associate thereof, any rights, options,
warrants or convertible securities on terms similar to, or that materially
adversely affect the value of, the Rights, or (ii) sell or issue to an
Acquiring Person or any Affiliate or Associate thereof, Series X Preferred
Stock, Common Stock or shares of any other class of capital stock if such sale
or issue is intended to or would materially adversely affect the value of the
Rights.
4.7 RIGHTS OF ACTION. Subject to the terms of this Agreement,
rights of action in respect of this Agreement, other than rights of action
vested solely in the Rights Agent, are vested in the respective holders of the
Rights (other than Acquiring Persons or Affiliates or Associates thereof); and
any holder of any Rights (other than Acquiring Persons or Affiliates or
Associates thereof), without the consent of the Rights Agent or of the holder
of any other Rights, may, on such holder's own behalf and for such holder's own
benefit and the benefit of other holders of Rights, enforce, and may institute
and maintain any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, such holder's right to exercise such holder's
Rights in the manner provided in such holder's 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.
4.8 HOLDER OF RIGHTS NOT DEEMED A STOCKHOLDER. No holder, as
such, of any Right shall be entitled to vote, receive dividends or be deemed
for any purpose the holder of Series X Preferred Stock or any other securities
that may at any time be issuable on the exercise of such Rights, nor shall
anything contained herein or in any Rights Certificate be construed to confer
upon the holder of any Rights, 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 4.9 hereof), or
to receive dividends or subscription rights, or otherwise, until such Rights
shall have been exercised in accordance with the provisions hereof.
4.9 NOTICE OF PROPOSED ACTIONS. If the Company shall propose
after the Separation Time and prior to the Expiration Time to effect a
liquidation, a consolidation or merger with or a sale of all or substantially
all of its assets to any other Person or a reclassification of the Series X
Preferred Stock, then, in each such case, the Company shall give to each holder
of a Right, in accordance with Section 4.10 hereof, a notice of such proposed
action, which shall specify the date on which such action is to take place,
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and such notice shall be so given at least 20 Business Days prior to the date
of the taking of such proposed action.
4.10 NOTICES. Notices or demands authorized or required by this
Agreement to be given or made by the Rights Agent or by the holder of any
Rights to or on the Company shall be sufficiently given or made if delivered or
sent by first class mail, postage prepaid, addressed (until another address is
filed in writing with the Rights Agent) as follows:
CATALINA MARKETING CORPORATION
11300 9th Street North
St. Petersburg, Florida 33716
Attention: Chief Executive Officer
Any notice or demand authorized or required by this Agreement to be given or
made by the Company or by the holder of any Rights to or on the Rights Agent
shall be sufficiently given or made if delivered or sent by first class mail,
postage prepaid, addressed (until another address is filed in writing with the
Company) as follows:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
400 South Hope Street, 4th Floor
Los Angeles, California 90071
Attention: Mary Ann McElroy
Notices or demands authorized or required by this Agreement to be given or made
by the Company or the Rights Agent to or on the holder of any Rights shall be
sufficiently given or made if delivered or sent by first class mail, postage
prepaid, addressed to such holder at the address of such holder as it appears
upon the Rights Register or, prior to the Separation Time, on the registry
books of the transfer agent for the Common Stock. Any notice which is mailed
in the manner herein provided shall be deemed given, whether or not the holder
receives the notice.
4.11 COSTS OF ENFORCEMENT. The Company agrees that if the Company
or any other Person the securities of which are purchasable upon exercise of
Rights fails to fulfill any of its obligations pursuant to this Agreement, then
the Company or such Person will reimburse the holder of any Rights for the
costs and expenses (including legal fees) incurred by such holder in actions to
enforce such holder's rights pursuant to any Rights or this Agreement.
4.12 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.
4.13 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 holders of the Rights any legal or equitable right, remedy or claim under
this Agreement, and this Agreement shall be for the sole and exclusive benefit
of the Company, the Rights Agent and the holders of the Rights.
-23-
<PAGE> 35
4.14 DESCRIPTIVE HEADINGS. Descriptive headings appear herein for
convenience of reference only and shall not control or affect the meaning or
construction of any of the provisions hereof.
4.15 GOVERNING LAW. This Agreement and each Right 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 without regard to the laws of such state as to choice or
conflict of laws.
4.16 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, but all such counterparts shall together constitute one and the
same instrument.
4.17 SEVERABILITY. If any term or provision hereof or the
application thereof to any circumstance shall, in any jurisdiction and to any
extent, be invalid or unenforceable, such term or provision shall be
ineffective as to such jurisdiction to the extent of such invalidity or
unenforceability without invalidating or rendering unenforceable the remaining
terms and provisions hereof or the application of such terms or provision to
circumstances other than those as to which it is held invalid or unenforceable.
-24-
<PAGE> 36
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and attested as of the date first above set forth.
CATALINA MARKETING CORPORATION
By:
-------------------------------------
George W. Off
President and Chief Executive Officer
Attest:
- -------------------------------
Barry A. Brooks, Secretary
CHASEMELLON SHAREHOLDER
SERVICES, L.L.C.
By:
-------------------------------------
Name:
--------------------------------
Title:
-------------------------------
Attest:
- -------------------------------
Title:
-------------------------
Signature page of the Stockholder
Protection Agreement, dated as of
_____________ ____, 1997, between
CATALINA MARKETING CORPORATION and
__________________, as Rights Agent
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<PAGE> 37
EXHIBIT A
FORM OF CERTIFICATE OF
DESIGNATION, PREFERENCES AND RIGHTS OF
SERIES X JUNIOR PARTICIPATING PREFERRED STOCK
OF
CATALINA MARKETING CORPORATION
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
We, George W. Off, President and Chief Executive Officer, and Barry A.
Brooks, Secretary of CATALINA MARKETING CORPORATION, a corporation organized
and existing under the General Corporation Law of the State of Delaware, in
accordance with provisions of Section 103 thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors
by the Certificate of Incorporation, as amended, of the said Corporation, the
said Board of Directors on April 22, 1997, adopted the following resolution
creating a series of 2,000,000 shares of Preferred Stock designated as Series X
Junior Participating Preferred Stock:
RESOLVED, that a series of the Corporation's
Preferred Stock consisting of 2,000,000 shares of Preferred
Stock, par value $.01 per share, be and hereby is, designated
as "Series X Junior Participating Preferred Stock" (the
"Series X Preferred Stock"), and that the Series X Preferred
Stock shall have the designations, powers, preferences, rights
and qualifications, limitations and restrictions substantially
as set forth in the Certificate of Designation, Preferences
and Rights of Series X Junior Participating Preferred Stock
(the "Certificate") attached as Exhibit A.
This Certificate states that the Board of Directors does hereby fix
and herein state and express such designations, powers, preferences and
relative and other special rights and qualifications, limitations and
restrictions thereof as follows (all terms used herein which are defined in the
Certificate of Incorporation shall be deemed to have the meanings provided
therein).
SECTION 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Series X Junior Participating Preferred Stock" (the "Series X
Preferred Stock") and the number of shares constituting such series shall be
2,000,000. Such number of shares of Series X Preferred Stock may be increased
or decreased by resolution of the Board of Directors; provided, that no
decrease shall reduce the number of shares of Series X Preferred Stock to a
number less than the number of shares of Series X Preferred Stock then
outstanding plus the number of shares of Series X
<PAGE> 38
Preferred Stock reserved for issuance upon the exercise of outstanding options,
rights or warrants exercisable for, or upon the conversion of any outstanding
securities issued by the Corporation convertible into, Series X Preferred
Stock.
SECTION 2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the prior and superior rights of the holders of any
shares of any series of preferred stock ranking prior and superior to the
shares of Series X Preferred Stock with respect to dividends, the holders of
shares of Series X Preferred Stock shall be entitled to receive, when, as and
if declared by the Board of Directors out of funds legally available for the
purpose, dividends payable in cash in an amount per share (rounded to the
nearest cent), subject to the provision for adjustment hereinafter set forth,
equal to 100 (the "Dividend Factor") times the aggregate per share amount of
all cash dividends, and the Dividend Factor 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 the Common Stock, par value $.01
per share, of the Corporation (the "Common Stock") or a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise)),
declared on the Common Stock since the first issuance of any share or fraction
of a share of Series X Preferred Stock. In the event the Corporation shall at
any time after April 22, 1997 (the "Rights Declaration Date") (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the Dividend Factor in the
immediately preceding sentence shall be adjusted by multiplying the Dividend
Factor by a fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
(B) The Corporation shall declare a dividend or distribution on
the Series X Preferred Stock as provided in paragraph (A) above immediately
after it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock).
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series X Preferred Stock from the date of declaration of
dividends on the Common Stock (other than a dividend payable in shares of
Common Stock). Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Series X Preferred Stock in an amount less than
the total amount of such accrued dividends 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 X Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more than 30 days
prior to the date fixed for the payment thereof.
SECTION 3. VOTING RIGHTS. The holders of shares of Series X Preferred
Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series X Preferred Stock shall entitle the holder thereof to 100
votes on all matters submitted to a vote of the stockholders of the Corporation
for each matter with respect
-2-
<PAGE> 39
to which the holders of Common Stock are entitled to vote. In the event the
Corporation shall at any time after the Rights Declaration Date (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each case the number of votes per share to
which holders of shares of Series X Preferred Stock were entitled immediately
prior to such event shall be adjusted by multiplying such number by a fraction,
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the holders of
shares of Series X Preferred Stock and the holders of shares of Common Stock
shall vote together as one class on all matters submitted to a vote of
stockholders of the Corporation.
(C) Except as otherwise provided herein or provided by law, the
holders of shares of Series X Preferred Stock shall have no special voting
rights and their consent shall not be required (except to the extent they are
entitled to vote with holders of Common Stock as set forth herein) for taking
any corporate action.
SECTION 4. CERTAIN RESTRICTIONS.
(A) Whenever dividends or distributions payable on the Series X
Preferred Stock as provided in Section 2 are in arrears, thereafter and until
all accrued and unpaid dividends and distributions, whether or not declared, on
shares of Series X Preferred Stock outstanding shall have been paid in full,
the Corporation shall not:
(i) declare or pay dividends on, make any other
distribution 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 X Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series X Preferred Stock, except dividends paid or distributions made
ratably on the Series X Preferred Stock and all such stock ranking on
a parity with respect to the particular dividend or distribution in
proportion to the total amounts to which the holders of all such
shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series X Preferred Stock, provided that the Corporation may at any
time redeem, purchase or otherwise acquire shares of any such parity
stock in exchange for shares of any stock of the Corporation ranking
junior (both as to dividends and upon dissolution, liquidation or
winding up) to the Series X Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series X Preferred Stock, or any shares of stock ranking on
a parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series X
-3-
<PAGE> 40
Preferred Stock, except in accordance with a purchase offer made in
writing or by publication (as determined by the Board of Directors) to
all holders of such shares upon such terms as the Board of Directors,
after consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
SECTION 5. REACQUIRED SHARES. Any shares of Series X Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All
such shares shall upon their cancellation become authorized but unissued shares
of Preferred Stock and may be reissued as part of a new series of Preferred
Stock to be created by resolution or resolutions of the Board of Directors,
subject to the conditions and restrictions on issuance set forth herein.
SECTION 6. LIQUIDATION, DISSOLUTION OR WINDING UP.
(A) Upon any liquidation (voluntary or otherwise), dissolution or
winding up of the Corporation, no distribution shall be made to the holders of
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series X Preferred Stock unless, prior
thereto, the holders of shares of Series X Preferred Stock shall have received
$100 per share, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment
(the "Series X Liquidation Preference"). Following the payment of the full
amount of the Series X Liquidation Preference, no additional distributions
shall be made to the holders of shares of Series X Preferred Stock unless,
prior thereto, the holders of shares of Common Stock shall have received an
amount per share (the "Common Stock Liquidation Amount") equal to the quotient
obtained by dividing (i) the Series X Liquidation Preference by (ii) 100 (as
appropriately adjusted as set forth in subparagraph (C) below to reflect such
events as stock splits, stock dividends and recapitalizations with respect to
the Common Stock) (such number in clause (ii), the "Adjustment Number").
Following the payment of the full amount of the Series X Liquidation Preference
and the Common Stock Liquidation Amount in respect of all outstanding shares of
Series X Preferred Stock and Common Stock, respectively, holders of Series X
Preferred Stock and holders of shares of Common Stock shall receive their
ratable and proportionate share of remaining assets to be distributed in the
ratio of the Adjustment Number to 1 with respect to such Preferred Stock and
Common Stock, on a per share basis, respectively.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series X Liquidation Preference and
the liquidation preferences of all other series of preferred stock, if any,
which rank on a parity with the Series X Preferred Stock, then such remaining
assets shall be distributed ratably to the holders of the Series X Preferred
Stock and the holders of such parity shares in proportion to their respective
liquidation preferences.
-4-
<PAGE> 41
(C) In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, (iii)
combine the outstanding Common Stock into a smaller number of shares, (iv)
reclassify the Common Stock or (v) effect a recapitalization of the Common
Stock, then in each such case the Adjustment Number in effect immediately prior
to such event shall be adjusted by multiplying such Adjustment Number by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such event.
SECTION 7. CONSOLIDATION, MERGER, ETC. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Series X Preferred Stock shall at the same time be similarly exchanged or
changed in an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time after the Rights Declaration
Date (i) declare any dividend on Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such
case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series X Preferred Stock shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
SECTION 8. NO REDEMPTION. The shares of Series X Preferred Stock
shall not be redeemable.
SECTION 9. RANKING. The Series X Preferred Stock shall rank junior to
all other series of the Corporation's preferred stock, if any, as to the
payment of dividends and the distribution of assets, unless the terms of any
such series shall provide otherwise. Nothing in this Certificate shall limit
the power of the Board of Directors to create a new series of preferred stock
ranking senior to the Series X Preferred Stock in any respect.
SECTION 10. AMENDMENT. The Certificate of Incorporation of the
Corporation shall not be further amended in any manner which would materially
alter or change the powers, preferences or special rights of the Series X
Preferred Stock so as to affect them adversely without the affirmative vote of
the holders of two-thirds or more of the outstanding shares of Series X
Preferred Stock, voting separately as a class.
SECTION 11. FRACTIONAL SHARES. Series X Preferred Stock may be
issued in fractions of a share, which shall entitle the holder, in proportion
to such holder's fractional shares, to exercise voting rights, receive
dividends, participate in distributions and to have the benefit of all other
rights of holders of Series X Preferred Stock.
-5-
<PAGE> 42
IN WITNESS WHEREOF, we have executed and subscribed this Certificate
and do affirm the foregoing as true under the penalties of perjury this _____
day of May, 1997.
---------------------------------
George W. Off, President
Attest:
- ------------------------------------
Barry A. Brooks, Secretary
-6-
<PAGE> 43
EXHIBIT B
SUMMARY OF STOCKHOLDER PROTECTION AGREEMENT
On April 22, 1997, the Board of Directors of CATALINA MARKETING
CORPORATION (the "Company") declared a dividend distribution of one right (a
"Right") to purchase a certain number of units (determined by a formula
described herein) for each outstanding share of common stock, par value $.01
per share (the "Common Shares"), of the Company at a price of $120, subject to
adjustment (the "Exercise Price"). Each unit is equal to one one-hundredth of
a share of a newly authorized Series X Junior Participating Preferred Stock,
par value $.01 per share ("Series X Preferred Shares") of the Company. The
distribution will be payable on May 12, 1997 (the "Record Date") to the
stockholders of record on that date. The description and terms of the Rights
are set forth in the Stockholder Protection Agreement (the "Agreement") between
the Company and CHASEMELLON SHAREHOLDER SERVICES, L.L.C., as rights agent (the
"Rights Agent").
The following is a general description only and is subject to the
detailed terms and conditions of the Agreement.
- Common Share Certificates Evidencing Rights
Until the Separation Time (as defined below), the Rights are
not exercisable. Certificates for the Rights will not be sent
to stockholders; the Rights are deemed to attach to and trade
together with the Common Shares. Common Shares issued after
the Record Date and prior to the Separation Time will be
issued with accompanying Rights. Accordingly, the Common
Share certificates outstanding on the Record Date will
represent the Rights related thereto, and Common Share
certificates issued after the Record Date (upon the transfer
of shares or the issuance of new shares) will also contain a
notation incorporating the Agreement by reference.
- Separation Time
Subject to certain exceptions described in the Agreement,
unless earlier redeemed by the Company, the Rights will
separate from the Common Shares, separate certificates
evidencing the Rights (the "Rights Certificates") will be
issued and the Rights will become exercisable 10 business days
(the "Separation Time") following the date on which a person
(including its affiliates and associates) (i) acquires, (ii)
obtains the right to acquire or (iii) announces or commences a
tender or exchange offer to acquire Beneficial Ownership of
15% or more of the outstanding
<PAGE> 44
Common Shares (such person thereby becoming an "Acquiring
Person").(1)
- Issuance of Rights Certificates; Expiration of Rights
As soon as practicable following the Separation Time, the
Rights Certificates will be mailed to holders of record of the
Common Shares as of the Separation Time and such separate
Rights Certificates alone will evidence the Rights from and
after the Separation Time. The Rights will expire on the
tenth anniversary of the adoption of the Agreement (the
"Expiration Date").
- Exercise of the Rights
Following the Separation Time, holders of the Rights (the
"Rights Holders") (other than Rights beneficially owned by the
Acquiring Person or its affiliates or associates, which will
thereafter be void) will be entitled to receive upon exercise
and payment of the Exercise Price that number of units of
Series X Preferred Shares which equals the result obtained by
dividing the Exercise Price by 50% of the average market price
per Common Share over the 20 trading days immediately
preceding the date of such exercise (the "Market Price") (as
defined in the Agreement). Assuming for purposes of
illustration an unadjusted Exercise Price of $20 per Right and
a Common Share Market Price of $5, a payment by a Rights
Holder of $20 would entitle him to 8 units or .08 Series X
Preferred Shares. The Rights Holder would receive 8 Series X
Preferred Shares for each 100 Common Shares held by him. The
rights, preferences, privileges and restrictions with respect
to the Series X Preferred Shares are set forth in a
Certificate of Designation, Rights and Preferences filed with
the office of the Delaware Secretary of State.
- Right to Buy Acquiring Company Shares at Half Price
If, after the Separation Time, unless the Rights are earlier
redeemed or amended, (i) the Company were to be acquired in a
merger or other business combination transaction in which the
Company was not the surviving corporation or in which the
Company's outstanding Common Shares were changed or exchanged
for cash, stock or assets of another person or (ii) 50% or
more of the Company's consolidated assets or earning power
were to be sold (other than in transactions in the ordinary
course of business), then proper provision would be made so
that each Rights Holder who has not theretofore exercised his
Rights (other than Rights beneficially owned by the Acquiring
Person or its affiliates or associates, which will thereafter
be void) will thereafter have the right to
- --------------------
(1) Pursuant to the terms of the Agreement, certain types of institutional
investors, as well as designated minority investors, will not become an
Acquiring Person unless it (i) acquires, (ii) obtains the right to acquire or
(iii) announces or commences a tender or exchange offer to acquire Beneficial
Ownership of in excess of 24% of the outstanding Common Shares.
-2-
<PAGE> 45
receive, upon exercise, a number of shares of common stock of
the acquiring company having a value equal to two times the
Exercise Price.
Each Series X Preferred Share for which Rights had been
exercised prior to a business combination or other transaction
of the type referred to in clause (i) in the immediately
preceding paragraph would be entitled to receive upon
consummation thereof 100 times the consideration (cash,
securities or other property, or a combination thereof) that
one Common Share would receive. Assuming again the
illustrative facts set forth under Exercise of the Rights
above, and assuming also that each Common Share was exchanged
for $5 in cash and a debenture having a face amount of $2, the
holder of 100 Common Shares and 8 Series X Preferred Shares
would be entitled to receive $4,500 in cash and $1,800 face
amount of debentures. Without the Series X Preferred Shares,
such holder would have been entitled to receive $500 in cash
and $200 face amount of debentures.
- Redemption
Any time on or prior to the earlier of (i) the Separation Time
or (ii) the Expiration Date of the Rights, the Company may
redeem the Rights in whole, but not in part, at a price of
$.01 per Right (the "Redemption Price"). Immediately upon the
action of the Board of Directors authorizing redemption of the
Rights, the right to exercise the Rights will terminate and
the only right of the Rights Holders will be to receive the
Redemption Price.
- Amendment of Agreement
The provisions of the Agreement may be supplemented or amended
by the Board of Directors, without approval of Rights Holders,
in any manner prior to the Separation Time. Any amendment
adopted by the Board of Directors after the Separation Time
may not materially and adversely affect the interests of the
holders of the Rights Certificates.
- Exchange for Common Shares
At any time following the Separation Time but before the
Expiration Date, the Company may, at its option, exchange all
or any portion of the Rights (except those Rights which are
void) for Common Shares at an exchange ratio which equals the
Exchange Price divided by the Market Price per Common Share
per Right. The Company, however, may not effect such an
exchange if an Acquiring Person becomes the owner of 50% or
more of the then outstanding Common Shares.
- Adjustments to Prevent Dilution
Each of the Exercise Price payable, the number of Rights
issued per Common Share and the number of Series X Preferred
Shares or other securities or property issuable upon exercise
of the Rights is subject to
-3-
<PAGE> 46
adjustment from time to time to prevent dilution, as set
forth in the Agreement.
- Fractional Shares
The Company may elect not to issue fractional Series X
Preferred Shares, Common Shares or other securities of the
Company upon exercise or exchange of the Rights and in lieu
thereof may evidence such fractional shares by depositary
receipts or may make an adjustment in cash based on the value
of the Series X Preferred Shares, Common Shares or other
securities of the Company. The holders of any such depositary
receipts will have all the rights, preferences and privileges
to which they are entitled as holders of Series X Preferred
Shares.
- No Stock Rights Prior to Exercise
Until a Right is exercised, the Rights Holder, as such, will
have no rights as a shareholder of the Company (other than
rights resulting from such Rights Holder's ownership of Common
Shares), including, without limitation, the right to vote or
to receive dividends.
- Federal Securities Law Registration
The sale of Series X Preferred Shares pursuant to the Rights
will be subject to the effectiveness of a registration
statement under the Securities Act of 1933 and a Registration
Statement on Form 8-A under the Securities Exchange Act of
1934. A copy of the Agreement will be filed with the
Securities and Exchange Commission as an exhibit to such
registration statements and as an exhibit to the Company's
Current Report on Form 8-K relating to the Agreement. Rights
Holders will be able to obtain a copy of the Agreement free of
charge from the Company.
-4-
<PAGE> 47
EXHIBIT C
FORM OF RIGHTS CERTIFICATE
CERTIFICATE NO. R- RIGHTS
--------
RIGHTS CERTIFICATE
CATALINA MARKETING CORPORATION
NOT EXERCISABLE AFTER APRIL 22, 2007 OR EARLIER IF REDEEMED BY THE COMPANY.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.01 PER
RIGHT ON THE TERMS SET FORTH IN THE STOCKHOLDER PROTECTION AGREEMENT. UNDER
CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS
SUCH TERM IS DEFINED IN THE STOCKHOLDER PROTECTION AGREEMENT) AND ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. IF 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 STOCKHOLDER PROTECTION
AGREEMENT), THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY
BECOME NULL AND VOID AS SPECIFIED IN SECTION 2.3(g) OF SUCH AGREEMENT.
This certifies that ____________________, or registered assigns, is
the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Stockholder Protection Agreement, dated as of May 8, 1997 (the "Stockholder
Protection Agreement"), between CATALINA MARKETING CORPORATION, a Delaware
corporation (the "Company"), and CHASEMELLON SHAREHOLDER SERVICES, L.L.C. (the
"Rights Agent"), to purchase from the Company at any time after the Separation
Time, as such term is defined in the Stockholder Protection Agreement, and
prior to the close of business on April 22, 2007, at the office or offices of
the Rights Agent designated for such purpose, or its successors as Rights
Agent, at a purchase price of $120 per share (the "Exercise Price"), that
number of one one-hundredths of a share (each one one-hundredth of a share
being referred to hereinafter as a "Unit") of the Company's Series X Junior
Participating Preferred Stock, par value of $.01 per share (the "Series X
Preferred Stock"), which equals the quotient obtained by dividing the Exercise
Price by 50% of the Market Price (as defined in the Stockholder Protection
Agreement) per share of the Company's Common Stock, $.01 par value per share
(the "Common Stock"), upon presentation and surrender of this Rights
Certificate with the Form of Election to Purchase and related Certificate duly
executed. If, after the Separation Time, (i) the Company is acquired in a
merger or other business combination transaction in which the Company is not
the surviving corporation or in which the Company's outstanding Common Stock is
changed or exchanged for stock or assets of another person or (ii) 50% or more
of the Company's consolidated assets or earning power is sold, then proper
<PAGE> 48
provision must be made so that each holder of a Right which has not theretofore
been exercised (except as otherwise provided in the Stockholder Protection
Agreement) will thereafter have the right to receive, upon exercise, shares of
common stock of the acquiring company having a value equal to two times the
Exercise Price. The Exercise Price shall be paid, at the election of the
holder, in cash, by certified check or money order payable to the order of the
Company, Common Stock, Rights to purchase Units of the Company's Series X
Preferred Stock, or, in the sole discretion of the Board of Directors of the
Company, in such other form as may be determined by the Board of Directors of
the Company, in each case in an amount equal to the aggregate Exercise Price of
such Rights. The number of Rights evidenced by this Rights Certificate (and
the number of shares that may be purchased upon exercise thereof) set forth
above, and the Exercise Price per share set forth above, are the number and
Exercise Price as of April 22, 1997.
At the Separation Time (as such term is defined in the Stockholder
Protection Agreement), if the Rights evidenced by this Rights Certificate are
beneficially owned by (i) an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person (as such terms are defined in the Stockholder
Protection Agreement) or (ii) a transferee of any such Acquiring Person,
Associate or Affiliate, such Rights cannot validly be transferred or exercised
and are for all purposes void.
As provided in the Stockholder Protection Agreement, the Exercise
Price is subject to adjustment upon the occurrence of certain events.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Stockholder Protection Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Stockholder Protection Agreement reference is hereby made for a
full description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of the
Rights Certificates, which limitations of rights include the temporary
suspension of the exercisability of such Rights under the specific
circumstances set forth in the Stockholder Protection Agreement. Copies of the
Stockholder Protection Agreement are on file at the office of the Rights Agent
and are also available upon written request to the Rights Agent.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the principal office or offices of the Rights Agent
designated for such purpose, may be exchanged for another Rights Certificate or
Rights Certificates of like tenor and date evidencing Rights entitling the
holder to purchase a like aggregate number of shares of Series X Preferred
Stock (or such other securities) as the Rights evidenced by the Rights
Certificate or Rights Certificates surrendered shall have entitled such holder
to purchase. If this Rights Certificate shall be exercised in part, the holder
shall be entitled to receive upon surrender hereof another Rights Certificate
or Rights Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Stockholder Protection Agreement, the
Rights evidenced by this Certificate may be redeemed by the Company at its
option at a redemption price of $.01 per Right at any time prior to the earlier
of the Separation Time or the Expiration Time.
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<PAGE> 49
If the Company does not have a sufficient number of shares of Series X
Preferred Stock to permit the exercise in full of the Rights, the Company may
issue, in lieu of Units of Series X Preferred Stock, cash, Common Stock or
other preferred stock or equity securities, debt securities, other assets, or
any combination of the foregoing, or may reduce the Exercise Price.
The Company is not obligated to issue fractional shares of Series X
Preferred Stock (or such other securities of the Company) upon the exercise of
any Right or Rights evidenced hereby, but in lieu thereof may issue depository
receipts, as provided in the Stockholder Protection Agreement.
No holder, as such, of this Rights Certificate shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of shares of
Series X Preferred Stock or of any other securities of the Company that may at
any time be issuable on the exercise hereof, nor shall anything contained in
the Stockholder Protection Agreement or herein be construed to confer upon the
holder hereof, as such, any of the rights of a stockholder of the Company or
any right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in the Stockholder Protection Agreement), or
to receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by this Rights Certificate shall have been exercised as
provided in the Stockholder Protection Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Dated as of , .
----- -- ----
ATTEST: CATALINA MARKETING CORPORATION
By:
- ----------------------------- ----------------------------------
Secretary Name: George W. Off
Title: President and Chief
Executive Officer
Countersigned:
CHASEMELLON SHAREHOLDER
SERVICES, L.L.C.
By:
--------------------------
Authorized Officer
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<PAGE> 50
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED,__________________________________________________________
hereby sells, assigns and transfers unto ____________________________________
_____________________________________________________________________________
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint __________________________
Attorney-in-Fact, to transfer the within Rights Certificate on the books of the
within-named Company, with full power of substitution.
Dated:
---------------------- --------------------------------
Signature
Signature Guaranteed:
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<PAGE> 51
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned
and transferred by or on behalf of a Person who is or was an Acquiring Person
or an Affiliate or Associate of any such Acquiring Person (as such terms are
defined pursuant to the Stockholder Protection Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
Dated:
--------------------------- ------------------------------
Signature
Signature Guaranteed:
- ----- ----- ----- ----- ----- ----- ----- -----
NOTICE
The signature to the foregoing assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
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<PAGE> 52
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate.)
To: CATALINA MARKETING CORPORATION
The undersigned hereby irrevocably elects to exercise ______ Rights
represented by this Rights Certificate to purchase the shares of Series X
Preferred Stock issuable upon the exercise of the Rights (or such other
securities of the Company or of any other person which may be issuable upon the
exercise of the Rights) and requests that certificates for such shares be
issued in the name of and delivered to:
Please insert social security or other identifying number
-----------------------
- --------------------------------------------------------------------------------
(Please print name and address)
- --------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
Please insert social security or other identifying number
-----------------------
- --------------------------------------------------------------------------------
(Please print name and address)
- --------------------------------------------------------------------------------
Dated:
---------------------------- ------------------------------
Signature
Signature Guaranteed:
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<PAGE> 53
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ]
are not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined pursuant to the Stockholder Protection Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated:
--------------------------- ------------------------------
Signature
Signature Guaranteed:
- ----- ----- ----- ----- ----- ----- ----- -----
NOTICE
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of this Rights
Certificate in every particular, without alternation or enlargement or any
change whatsoever.
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<PAGE> 54
Exhibit 2
PRESS RELEASE
-------------
IMMEDIATE RELEASE
CATALINA MARKETING CORPORATION ADOPTS STOCKHOLDER
PROTECTION PLAN
St. Petersburg, Florida: May 8, 1997 - Catalina Marketing
Corporation (NYSE:POS) announced today that it has adopted a Stockholder
Protection Plan, sometimes known as a "poison pill." To implement the plan,
the Company has declared a dividend of one Preferred Share Purchase Right on
each outstanding share of the Company's common stock.
In commenting on the Stockholder Protection Plan and the
Preferred Share Purchase Rights, George W. Off, President and Chief Executive
Officer of Catalina Marketing Corporation, noted: "The plan is designed to
assure that all of our stockholders receive fair and equal treatment in the
event of any proposed takeover of the Company and to guard against partial
tender offers, squeezeouts, open market accumulations and other abusive tactics
to gain control of the Company without paying all stockholders the same control
premium. The plan will not prevent a takeover, but should encourage anyone
seeking to acquire the Company to negotiate with the Board prior to attempting a
takeover."
The Rights will be exercisable only if a person or group
acquires 15% or more of the Company's common stock or announces or commences a
tender offer for 15% or more of the common stock, except that the acquisition
of more than 15% but not more than 24% of the Company's common stock with the
express written approval of the Board of Directors of the Company will not
result in the Rights becoming exercisable. Once the Rights become exercisable,
each Right will entitle stockholders (other than the person or group acquiring
15% or more of the Company's common stock) to buy shares, or fractions of
shares, of a new series of junior participating preferred stock of the Company
at an exercise price of $120; which preferred shares will have a market value
of twice that price.
In addition, if the Company is acquired in a merger or other
business combination transaction after a person has acquired 15% or more of the
Company's common stock, each Right will entitle its holder to purchase, at the
Right's then-current exercise price, a number of the acquiring company's common
shares having a market value of twice such price.
<PAGE> 55
Following the acquisition by a person or group of beneficial
ownership of 15% or more of the Company's common stock and prior to an
acquisition of 50% or more of the common stock by such person or group, the
Board of Directors may exchange the Rights (other than the Rights owned by such
person or group), in whole or in part, for shares of common stock of the
Company at an exchange ratio equal to the then-current exercise price of the
Rights divided by the then market price of the common stock.
Prior to the acquisition by a person or group of beneficial
ownership of 15% or more of the common stock, the Rights are redeemable for one
cent per Right at the option of the Board of Directors.
The Board of Directors is also authorized to amend the terms
of the Rights, prior to the acquisition by a person or group of beneficial
ownership of 15% or more of the common stock and without the approval of the
holders of Rights, in any manner, including to reduce the 15% threshold.
The dividend distribution will be payable to stockholders of
record on May 12, 1997 and distributed immediately following listing of the
Rights with the New York Stock Exchange. The Rights will expire ten years from
the date of distribution. The Rights distribution is not taxable to
stockholders.
Based in St. Petersburg, Florida, Catalina Marketing
Corporation provides in-store electronic marketing programs for more than 150
consumer goods companies. The Catalina Marketing(R) Network reaches more than
144 million shoppers each week in more than 10,700 supermarkets across the
United States. The Company consists of four distinct business units: Catalina
Marketing Services, which markets the company's core electronic marketing
programs; Catalina Marketing International, which markets Network programs
abroad; Health Resource Publishing Company, which delivers incentives through
customized newsletters in the pharmacy; and SuperMarkets Online, Inc., which
operates a cooperative web site in partnership with major retailers and
manufacturers.
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