SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES PURSUANT TO
SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
VMARK SOFTWARE, INC.
(Exact name of registrant as specified in its charter)
Delaware 04-2818132
(State of incorporation or organization) (IRS Employee
Identification
No.)
50 Washington St., Westboro, Massachusetts 01581
(Address of principal executive offices) (Zip Code)
If this Form relates to If this Form relates to the
the registration of a registration of a class of debt
class of debt securities securities and is to become
and is effective upon effective simultaneously with
filing pursuant to General the effectiveness of a concurrent
Instruction A(c)(1)please registration statement under the
check the following box. [ ] Securities Act of 1933 pursuant
to General Instruction A(c)(2)
please check the following
box. [ ]
Securities to be registered pursuant to Section 12(b) of the Act:
NONE
(Name of each exchange on which each class is to be registered):
NONE
Securities to be registered pursuant to Section 12(g) of the Act:
JUNIOR PREFERRED STOCK PURCHASE RIGHTS
(Title of each class to be so registered)
Item 1. Description of Registrant's Securities to be Registered
On June 6, 1996, the Board of Directors (the "Board") of
VMARK Software, Inc. (the "Company") declared a dividend of one
purchase right ("Right") for every outstanding share of the
Company's common stock, $.01 par value (the "Common Stock"). The
Rights will be distributed to holders of record of the Common
Stock as of the close of business on June 12, 1996 (the "Dividend
Record Date"). The terms of the Rights are set forth in a Rights
Agreement dated as of June 12, 1996 (the "Rights Agreement")
between the Company and State Street Bank and Trust Company (the
"Rights Agent"). The Rights Agreement provides for the issuance
of one Right for every share of Common Stock issued and
outstanding on the Dividend Record Date and for each share of
Common Stock which is issued or sold after that date and prior to
the Distribution Date (as defined below).
Each Right entitles the holder to purchase from the Company
one one-thousandth of a share of Series A Junior Preferred Stock,
$.01 par value, of the Company (the "Junior Preferred Stock"), at
a price of $75 per one one-thousandth of a share, subject to
adjustments in certain events. The Rights will expire on June
12, 2006 (the "Expiration Date"), or upon the earlier redemption
of the Rights, and are not exercisable until the Distribution
Date.
No separate Rights certificates will be issued at the
present time. Until the Distribution Date (or earlier redemption
or expiration of the Rights), (i) the Rights will be evidenced by
the outstanding Common Stock certificates and will be transferred
with and only with the Common Stock certificates, (ii) new Common
Stock certificates issued after the Dividend Record Date upon
transfer or new issuance of the Common Stock will contain a
notation incorporating the Rights Agreement by reference and
(iii) the surrender for transfer of any Common Stock certificate
will also constitute the transfer of the Rights associated with
the Common Stock represented by such certificate.
The Rights will separate from the Common Stock on the
Distribution Date. Unless otherwise determined by a majority of
the Continuing Directors (as defined below) then in office, the
Distribution Date (the "Distribution Date") will occur on the
earlier of (i) the tenth day following the date of a public
announcement that a person, together with its affiliates and
associates, except as described below, has acquired or obtained
the rights to acquire beneficial ownership of 15% or more of the
outstanding shares of Common Stock (collectively, an "Acquiring
Person") (such date is referred to herein as the "Shares
Acquisition Date") or (ii) the tenth day following commencement
of a tender offer or exchange offer that would result in any
person, together with its affiliates and associates, owning 30%
or more of the outstanding Common Stock. After the Distribution
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Date, separate certificates evidencing the Rights ("Rights
Certificates") will be mailed to holders of record of the Common
Stock as of the close of business on the Distribution Date and
thereafter such separate Rights Certificates alone will evidence
the Rights. The Board, by action of the Continuing Directors,
may delay the distribution of the Certificates. The term
"Continuing Directors" means (i) any member of the Company's
Board of Directors who is not an Acquiring Person, or an
affiliate, associate or representative of an Acquiring Person, or
(ii) any person who subsequently becomes a member of the Board,
who is not an Acquiring Person or an affiliate, associate or
representative of an Acquiring Person, if such person's
nomination for election or election to the Board is recommended
or approved by a majority of Continuing Directors.
If, at any time after June 12, 1996, any person or group of
affiliated or associated persons (other than the Company and its
affiliates) shall become an Acquiring Person, each holder of a
Right will have the right to receive shares of Common Stock (or,
in certain circumstances, cash, property or other securities of
the Company) having a market value of two times the exercise
price of the Right. Following the occurrence of any such event,
any Rights that are, or (under certain circumstances specified in
the Rights Agreement) were, beneficially owned by any Acquiring
Person shall immediately become null and void. Also, if the
Company were acquired in a merger or other business combination,
or if more than 50% of its assets or earning power were sold,
each holder of a Right would have the right to exercise such
Right and thereby receive common stock of the acquiring company
with a market value of two times the exercise price of the Right.
The Board 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 for shares of Common Stock at
an exchange ratio of one share of Common Stock per Right,
appropriately adjusted to reflect any stock split, stock dividend
or similar transaction occurring after June 12, 1996 (as the same
may be adjusted, the "Exchange Ratio"). The Board however, may
not effect an exchange at any time after any person (other than
(i) the Company, (ii) any subsidiary of the Company, (ii) any
employee benefit plan of the Company or of any subsidiary of the
Company or (iv) any entity holding Common Stock for or pursuant
to the terms of any such plan), together with all affiliates of
such person, becomes the beneficial owner of 50% or more of the
Common Stock then outstanding. Immediately upon the action of
the Board ordering the exchange of any Rights and without any
further action and without any notice, the right to exercise such
Rights will terminate and the only right thereafter of a holder
of such Rights will be to receive that number of shares of Common
Stock equal to the number of such Rights held by the holder
multiplied by the Exchange Ratio.
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The exercise price of the Rights, and the number of one one-
thousandths of a share of Junior Preferred Stock or other
securities or property issuable upon exercise of the Rights, are
subject to adjustment from time to time to prevent dilution (i)
in the event of a stock dividend on, or a subdivision,
combination or reclassification of, the Junior Preferred Stock,
(ii) upon the grant to holders of the Junior Preferred Stock of
certain rights or warrants to subscribe for shares of the Junior
Preferred Stock or certain convertible securities at less than
the current market price of the Junior Preferred Stock, or (iii)
upon the distribution to holders of the Junior Preferred Stock of
evidences of indebtedness or assets (excluding cash dividends
paid out of the earnings or retained earnings of the Company and
certain other distributions) or of subscription rights, or
warrants (other than those referred to above).
At any time prior to the tenth day (or such later date as
may be determined by a majority of the Continuing Directors)
after the Shares Acquisition Date (the "Expiration Date"), the
Company, by a majority vote of the Continuing Directors, may
redeem the Rights at a redemption price of $.01 per Right,
subject to adjustment in certain events (as the same may be
adjusted, the "Redemption Price"). Immediately upon the action
of the Continuing Directors electing to redeem 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.
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 Agreement may be amended by the Board at any time
prior to the Distribution Date without the approval of the
holders of the Rights. From and after the Distribution Date, the
Rights Agreement may be amended by the Board without the approval
of the holders of the Rights in order to cure any ambiguity, to
correct any defective or inconsistent provisions, to change any
time period for redemption or any other time period under the
Rights Agreement or to make any other changes that do not
adversely affect the interests of the holders of the Rights
(other than any Acquiring Person or its affiliates and associates
or their transferees).
A copy of the Rights Agreement dated as of June 12, 1996
between the Company and State Street Bank and Trust Company, as
Rights Agent, specifying the terms of the Rights (including as
exhibits the form of Rights Certificate and the Summary of
Rights) is attached hereto as an exhibit. The foregoing
description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement,
which is incorporated herein by reference.
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Item 2. Exhibits
1. Rights Agreement, dated as of June 12, 1996 (the "Rights
Agreement") between VMARK Software, Inc. and State Street
Bank and Trust Company, as Rights Agent.
2. Form of Certificate of Designations, Rights, Preferences and
Privileges of the Series A Junior Preferred Stock, par value
$.01 per share, of the Company (attached as Exhibit A to the
Rights Agreement).
3. Form of Rights Certificate (attached as Exhibit B to the
Rights Agreement). Pursuant to the Rights Agreement,
printed Rights Certificates will not be mailed until the
Distribution Date (as defined in the Rights Agreement).
4. Summary of Rights (attached as Exhibit C to the Rights
Agreement).
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the Registrant has duly caused this
registration statement to be signed on its behalf by the
undersigned, thereto duly authorized.
VMARK SOFTWARE, INC.
Dated: July 17, 1996 By: /s/ Charles F. Kane
Name: Charles F. Kane
Title: V.P. Finance, CFO
and Treasurer
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EXHIBIT INDEX
The following designated exhibits are filed herewith:
1. Rights Agreement, dated as of June
12, 1996 (the "Rights Agreement")
between VMARK Software, Inc. and
State Street Bank and Trust Company,
as Rights Agent.
2. Form of Certificate of Designations,
Rights, Preferences and Privileges of
the Series A Junior Preferred Stock,
par value $.01 per share, of the
Company (attached as Exhibit A to the
Rights Agreement).
3. Form of Rights Certificate (attached
as Exhibit B to the Rights
Agreement). Pursuant to the Rights
Agreement, printed Rights
Certificates will not be mailed until
the Distribution Date (as defined in
the Rights Agreement).
4. Summary of Rights (attached as
Exhibit C to the Rights Agreement).
ds1 278415.1
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Exhibit 1
VMARK SOFTWARE, INC.
and
STATE STREET BANK AND TRUST COMPANY
Rights Agent
RIGHTS AGREEMENT
Dated as of June 12, 1996
TABLE OF CONTENTS
Page
Section 1. Certain Definitions . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent . . . . . . . . . 5
Section 3. Issuance of Rights Certificates . . . . . . . 5
Section 4. Form of Rights Certificates . . . . . . . . . 7
Section 5. Countersignature and Registration . . . . . . 8
Section 6. Transfer, Split Up, Combination and Exchange
of Rights Certificates; Mutilated, Destroyed, Lost or
Stolen Rights Certificates . . . . . . . . . . . . . . . 9
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights . . . . . . . . . . . . . . . 9
Section 8. Cancellation and Destruction of Rights
Certificates . . . . . . . . . . . . . . . . . . . . . . 11
Section 9. Reservation and Availability of Preferred
Shares . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 10. Preferred Shares Record Date . . . . . . . . . 13
Section 11. Adjustment of Purchase Price; Number of
Shares or Number of Rights . . . . . . . . . . . . . . . 13
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares . . . . . . . . . . . . . . . . . . . . 21
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power . . . . . . . . . . . . . . . . 22
Section 14. Fractional Rights and Fractional Shares . . . 25
Section 15. Rights of Action . . . . . . . . . . . . . . . 25
Section 16. Agreement of Rights Holders . . . . . . . . . 26
Section 17. Rights Certificate Holder Not Deemed a
Stockholder . . . . . . . . . . . . . . . . . . . . . . 26
Section 18. Concerning the Rights Agent . . . . . . . . . 27
Section 19. Merger or Consolidation or Change of Name of
Rights Agent . . . . . . . . . . . . . . . . . . . . . . 27
Section 20. Duties of Rights Agent . . . . . . . . . . . . 28
Section 21. Change of Rights Agent . . . . . . . . . . . . 30
Section 22. Issuance of New Rights Certificate . . . . . . 31
Section 23. Redemption . . . . . . . . . . . . . . . . . . 31
Section 24. Exchange . . . . . . . . . . . . . . . . . . . 32
Section 25. Notice of Certain Events . . . . . . . . . . . 34
Section 26. Notices . . . . . . . . . . . . . . . . . . . 34
Section 27. Supplements and Amendments . . . . . . . . . . 35
Section 28. Successors . . . . . . . . . . . . . . . . . . 35
Section 29. Determinations and Actions by the Board of
Directors, etc . . . . . . . . . . . . . . . . . . . . . 35
Section 30. Benefits of this Agreement . . . . . . . . . . 36
Section 31. Severability . . . . . . . . . . . . . . . . . 36
Section 32. Governing Law . . . . . . . . . . . . . . . . 36
Section 33. Counterparts . . . . . . . . . . . . . . . . . 36
Section 34. Descriptive Headings . . . . . . . . . . . . . 37
EXHIBITS
Exhibit A Form of Certificate of Designations
Exhibit B Form of Rights Certificate
Exhibit C Summary of Rights
RIGHTS AGREEMENT
Rights Agreement, dated as of June 12, 1996 (this
"Agreement"), between VMARK Software, Inc., a Delaware
corporation (the "Company"), and State Street Bank and Trust
Company (the "Rights Agent").
On June 6, 1996 (the "Rights Dividend Declaration Date"),
the Board of Directors of the Company authorized and declared a
dividend of one Preferred Share purchase right (a "Right") for
each Common Share (as hereinafter defined) of the Company
outstanding as of the Close of Business (as hereinafter defined)
on June 12, 1996 (the "Record Date"), each right representing the
right to purchase one one-thousandth of a share of Series A
Junior Preferred Stock (as such number may be adjusted pursuant
to the provisions of this Agreement), having the rights,
preferences and privileges set forth in the form of Certificate
of Designations, Rights, Preferences and Privileges of Series A
Junior Preferred Stock attached hereto as Exhibit A, upon the
terms and subject to the conditions herein set forth, and further
authorized and directed the issuance of one Right (as such number
may be adjusted pursuant to the provisions of this Agreement)
with respect to each Common Share that shall become outstanding
between the Record Date and the earlier of the Distribution Date
and the Expiration Date (as such terms are hereinafter defined),
and in certain circumstances after the Distribution Date.
NOW, THEREFORE, in consideration of the promises and the
mutual agreements herein set forth, the parties hereby agree as
follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or
which, together with all Affiliates and Associates of such
Person, shall be the Beneficial Owner of 15% or more of the
Common Shares then outstanding, but shall not include the
Company, any Subsidiary of the Company or any employee benefit
plan of the Company or of any Subsidiary of the Company, or an
entity holding Common Shares for or pursuant to the terms of any
such plan. Notwithstanding the foregoing, no Person shall be
deemed to be an Acquiring Person either (i) as the result of an
acquisition of Common Shares by the Company which, by reducing
the number of shares outstanding, increases the proportionate
number of shares beneficially owned by such Person to 15% or more
of the Common Shares of the Company then outstanding; provided,
however, that if a Person shall become the Beneficial Owner of
15% of more of the Common Shares of the Company then outstanding
by reason of share purchases by the Company and shall, after such
share purchases by the Company, become the Beneficial Owner of
any additional Common Shares of the Company, then such Person
shall be deemed to be an Acquiring Person, or (ii) if within
eight days after such Person would otherwise become an Acquiring
Person (but for the operation of this clause (ii)), such Person
notifies the Board of Directors that such Person did so
inadvertently and within two days after such notification, such
Person is the Beneficial Owner of less than 15% of the
outstanding Common Shares.
(b) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), as in effect on the
date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of
and shall be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or
indirectly, for purposes of Section 13(d) of the Exchange Act and
Rule 13d-3 thereunder (or any comparable or successor law or
regulation);
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire (whether
such right is exercisable immediately or only after the passage
of time) pursuant to any agreement, arrangement or understanding
(other than customary agreements with and between underwriters
and selling group members with respect to a bona fide public
offering of securities), or upon the exercise of conversion
rights, exchange rights, rights (other than the Rights), warrants
or options, or otherwise; provided, however, that a Person shall
not be deemed pursuant to this Section 1(c)(ii)(A) the Beneficial
Owner of, or to beneficially own, (1) securities tendered
pursuant to a tender or exchange offer made by or on behalf of
such Person or any of such Person's Affiliates or Associates
until such tendered securities are accepted for purchase or
exchange or (2) securities which a Person or any of such Person's
Affiliates or Associates may be deemed to have the right to
acquire pursuant to any merger or other acquisition agreement
between the Company and such Person (or one or more of its
Affiliates or Associates) if such agreement has been approved by
the Board of Directors of the Company prior to there being an
Acquiring Person; or (B) the right to vote pursuant to any
agreement, arrangement or understanding; provided, however, that
a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, any security under this Section 1(c)(ii)(B) if
the agreement, arrangement or understanding to vote such security
(1) arises solely from a revocable proxy or consent given to such
Person in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and
regulations of the Exchange Act and (2) is not also then
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reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) which are beneficially owned, directly
or indirectly, by any other Person (or any Affiliate or Associate
thereof) with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (whether or not in writing) (other than customary
agreements with and between underwriters and selling group
members with respect to a bona fide public offering of
securities) for the purpose of acquiring, holding, voting (except
to the extent contemplated by the proviso to Section 1(c)(ii)(B))
or disposing of any securities of the Company; provided, however,
that in no case shall an officer or director of the Company be
deemed (x) the Beneficial Owner of any securities beneficially
owned by another officer or director of the Company solely by
reason of actions undertaken by such persons in their capacity as
officers or directors of the Company or (y) the Beneficial Owner
of securities held of record by the trustee of any employee
benefit plan of the Company or any Subsidiary of the Company for
the benefit of any employee of the Company or any Subsidiary of
the Company, other than the officer or director, by reason of any
influence that such officer or director may have over the voting
of the securities held in the plan.
(d) "Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in
Massachusetts are authorized or obligated by law or executive
order to close.
(e) "Close of Business" on any given date shall mean
5:00 P.M., Massachusetts time, on such date; provided, however,
that if such date is not a Business Day it shall mean 5:00 P.M.,
Massachusetts time, on the next succeeding Business Day.
(f) "Common Shares" when used with reference to the
Company shall mean the shares of Common Stock of the Company,
$0.01 par value. "Common Shares" when used with reference to any
Person other than the Company shall mean the capital stock (or
equity interest) with the greatest voting power of such other
Person or, if such other Person is a Subsidiary of another
Person, the Person or Persons which ultimately control such
first-mentioned Person.
(g) "Continuing Director" shall mean (i) any member of
the Board of directors of the Company, while a member of the
Board, who is not an Acquiring Person, or an Affiliate or
Associate of an Acquiring Person, or a representative of an
Acquiring Person or of any such Affiliate or Associate, and who
was a member of the Board prior to the date of this Agreement, or
(ii) any Person who subsequently becomes a member of the Board,
while a member of the Board, who is not an Acquiring Person, or
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an Affiliate or Associate of an Acquiring Person, or a
representative of an Acquiring Person or of any such Affiliate or
Associate, if such Person's nomination for election or election
to the Board is recommended or approved by a majority of the
Continuing Directors.
(h) "Distribution Date" shall mean the earlier of (i)
the Close of Business on the tenth day (or such later date as may
be determined by action of a majority of Continuing Directors
then in office) after the Shares Acquisition Date (or, if the
tenth day after the Shares Acquisition Date occurs before the
Record Date, the Close of Business on the Record Date) or (ii)
the Close of Business on the tenth day (or such later date as may
be determined by action of a majority of Continuing Directors
then in office) after the date that a tender or exchange offer by
any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any
Subsidiary of the Company, or any Person or entity organized,
appointed or established by the Company for or pursuant to the
terms of any such plan) is first published or sent or given
within the meaning of Rule 14d-2(a) of the General Rules and
Regulations under the Exchange Act, if, assuming the successful
consummation thereof, such person would be the Beneficial Owner
of 30% or more of the shares of Common Stock then outstanding.
(i) "Equivalent Shares" shall mean Preferred Shares
and any other class or series of capital stock of the Company
which is entitled to participate in dividends and other
distributions, including distributions upon the liquidation,
dissolution or winding up of the Company, on a proportional basis
with the Common Shares. In calculating the number of any class
or series of Equivalent Shares for purposes of Section 11 of this
Agreement, the number of shares, or fractions of a share, of such
class or series of capital stock that is entitled to the same
dividend or distribution as a whole Common Share shall be deemed
to be one share.
(j) "Expiration Date" shall mean the earliest of (i)
the Close of Business on the Final Expiration Date, (ii) the
Redemption Date, (iii) the time at which the Board of Directors
orders the exchange of the Rights as provided in Section 24
hereof or (iv) the consummation of a transaction contemplated by
Section 13(d) hereof.
(k) "Final Expiration Date" shall mean June 12, 2006.
(l) "Permitted Offer" shall mean a tender offer for
all outstanding Common Shares made in the manner prescribed by
Section 14(d) of the Exchange Act and the rules and regulations
promulgated thereunder; provided, however, that such tender
offer occurs at a time when Continuing Directors are in office
and a majority of the Continuing Directors then in office has
4
determined that the offer is both adequate and otherwise in the
best interests of the Company and its stockholders (taking into
account all factors that such Continuing Directors deem relevant,
including without limitation prices that could reasonably be
achieved if the Company or its assets were sold on an orderly
basis designed to realize maximum value).
(m) "Person" shall mean any individual, firm,
corporation or other entity, and shall include any successor (by
merger or otherwise) of such entity.
(n) "Preferred Shares" shall mean shares of Series A
Junior Preferred Stock of the Company.
(o) "Purchase Price" shall have the meaning set forth
in Section 4(a) hereof.
(p) "Record Date" shall have the meaning set forth in
the recitals at the beginning of this Agreement.
(q) "Redemption Date" shall mean the time at which the
Board of Directors of the Company orders redemption of the Rights
as provided in Section 23 hereof.
(r) "Redemption Price" shall have the meaning set
forth in Section 23(a) hereof.
(s) "Rights Dividend Declaration Date" shall have the
meaning set forth in the recitals at the beginning of this
Agreement.
(t) "Section 13 Event" shall mean any event described
in clause (i), (ii) or (iii) of Section 13(a) hereof.
(u) "Shares Acquisition Date" shall mean the first
date of public announcement (which, for purposes of this
definition, shall include, without limitation, a report filed
pursuant to Section 13(d) under the Exchange Act) by the Company
or an Acquiring Person that an Acquiring Person has become such;
provided that, if such person is determined not to have become an
Acquiring Person pursuant to Section 1(a)(ii) hereof, then no
Shares Acquisition Date shall be deemed to have occurred.
(v) "Subsidiary" of any Person shall mean any
corporation or other entity of which an amount of voting
securities sufficient to elect a majority of the directors or
Persons having similar authority of such corporation or other
entity is beneficially owned, directly or indirectly, by such
Person, or any corporation or other entity otherwise controlled
by such Person.
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(w) "Total Exercise Price" shall have the meaning set
forth in Section 4(a) hereof.
(x) "Trading Day" shall have the meaning set forth in
Section 11(d) hereof.
(y) A "Triggering Event" shall be deemed to have
occurred upon any Person (other than the Company, any Subsidiary
of the Company, any employee benefit plan of the Company or any
Subsidiary of the Company, or any entity holding Common Shares
for or pursuant to the terms of any such plan), together with all
Affiliates and Associates of such Person, becoming an Acquiring
Person.
Section 2. Appointment of Rights Agent. The Company
hereby appoints the Rights Agent to act as agent for the Company
and the holders of the Rights (who, in accordance with Section 3
hereof, shall, prior to the Distribution Date, also be the
holders of the Common Shares) in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such co-
Rights Agents as it may deem necessary or desirable.
Section 3. Issuance of Rights Certificates.
(a) Until the Distribution Date, (i) the Rights will
be evidenced (subject to the provisions of Section 3(b) and 3(c)
hereof) by the certificates for Common Shares registered in the
names of the holders thereof (which certificates shall also be
deemed to be Rights Certificates) and not by separate Rights
Certificates and (ii) the right to receive Rights Certificates
will be transferable only in connection with the transfer of
Common Shares. Until the earlier of the Distribution Date or the
Expiration Date, the surrender for transfer of such certificates
for Common Shares shall also constitute the surrender for
transfer of the Rights associated with the Common Shares
represented thereby. As soon as practicable after the
Distribution Date, the Company will prepare and execute, the
Rights Agent will countersign, and the Company will send or cause
to be sent (and the Rights Agent will, if requested, send) by
first-class, postage-prepaid mail, to each record holder of
Common Shares as of the close of business on the Distribution
Date, at the address of such holder shown on the records of the
Company, a Rights Certificate in substantially the form of
Exhibit B hereto (a "Rights Certificate"), evidencing one Right
for each Common Share so held, subject to adjustment as provided
herein. In the event that an adjustment in the number of Rights
per Common Share has been made pursuant to Section 11(a)(i),
Section 11(i) or Section 11(p) hereof, then at the time of
distribution of the Rights Certificates, the Company shall make
the necessary and appropriate rounding adjustments (in accordance
with Section 14(a) hereof) so that Rights Certificates
6
representing only whole numbers of Rights are distributed and
cash is paid in lieu of any fractional Rights. As of the
Distribution Date, the Rights will be evidenced solely by such
Rights Certificates and may be transferred by the transfer of the
Rights Certificates as permitted hereby, separated and apart from
any transfer of one or more Common Shares, and the holders of
such Rights Certificates as listed in the records of the Company
or any transfer agent or registrar for the Rights shall be the
record holders thereof.
(b) On the Record Date or as soon as practicable
thereafter, the Company will send a copy of a Summary of Rights
in substantially the form of Exhibit C hereto (the "Summary of
Rights"), by first-class, postage-prepaid mail, to each record
holder of Common Shares as of the close of business on the Record
Date, at the address of such holder shown on the records of the
Company.
(c) Unless the Board of Directors, by resolution
adopted at or before the time of the issuance (including pursuant
to the exercise of rights under the Company's benefit plans) of
any Common Shares, specifies to the contrary, Rights shall be
issued in respect of all Common Shares that are issued after the
Record Date but prior to the earlier of the Distribution Date or
the Expiration Date or, in certain circumstances provided in
Section 22 hereof, after the Distribution Date. Certificates
representing such Common Shares shall also be deemed to be
certificates for Rights, and shall bear the following legend:
This certificate also evidences and entitles the holder
hereof to certain rights as set forth in a Rights Agreement
between VMARK Software, Inc. and State Street Bank and Trust
Company as the Rights Agent, dated as of June 12, 1996 (the
"Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on
file at the principal executive offices of VMARK Software,
Inc. Under certain circumstances, as set forth in the
Rights Agreement, such Rights will be evidenced by
separate certificates and will no longer be evidenced by
this certificate. VMARK Software, Inc. will mail to the
holder of this certificate a copy of the Rights Agreement
without charge after receipt of a written request therefor.
Under certain circumstances set forth in the Rights
Agreement, Rights issued to, or held by, any Person who is,
was or becomes an Acquiring Person or any Affiliate or
Associate thereof (as such terms are defined in the Rights
Agreement), whether currently held by or on behalf of such
Person or by any subsequent holder, may become null and
void.
With respect to such certificates containing the foregoing
legend, until the earlier of (i) the Distribution Date or (ii)
7
the Expiration Date, the Rights associated with the Common Shares
represented by such certificates shall be evidenced by such
certificates alone, and the surrender for transfer of any such
certificate shall also constitute the transfer of the Rights
associated with the Common Shares represented thereby. In the
event that the Company purchases or acquires any Common Shares
after the Record Date but prior to the Distribution Date, any
Rights associated with such Common Shares shall be deemed
cancelled and retired so that the Company shall not be entitled
to exercise any Rights associated with the Common Shares which
are no longer outstanding.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election
to purchase Common Shares and of assignment to be printed on the
reverse thereof) shall be substantially in the form of Exhibit B
hereto and may have such marks of identification or designation
and such legends, summaries or endorsements printed thereon as
the Company may deem appropriate and as are not inconsistent with
the provisions of this Agreement, or as may be required to comply
with any applicable law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed, or
to conform to usage. Subject to the provisions of Section 11 and
Section 22 hereof, the Rights Certificates, whenever distributed,
shall be dated as of the Record Date (or in the case of Rights
issued with respect to Common Shares issued by the Company after
the Record Date, as of the date of issuance of such Common
Shares) and on their face shall entitle the holders thereof to
purchase such number of one-thousandths of a Preferred Share as
shall be set forth therein at the price set forth therein (such
exercise price per one one-thousandth of a Preferred Share being
hereinafter referred to as the "Purchase Price" and the aggregate
exercise price of all Preferred Shares issuable upon exercise of
one Right being hereinafter referred to as the "Total Exercise
Price"), but the number and type of securities purchasable upon
the exercise of each Right and the Purchase Price shall be
subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section
3(a) or Section 22 hereof that represents Rights beneficially
owned by: (i) an Acquiring Person or any Associate or Affiliate
of an Acquiring Person, (ii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee
after the Acquiring Person becomes such or (iii) a transferee of
an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom such Acquiring Person has any
8
continuing agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer which the Board of Directors
of the Company has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect avoidance
of Section 7(e) hereof, and any Rights Certificate issued
pursuant to Section 6 or Section 11 hereof upon transfer,
exchange, replacement or adjustment of any other Rights
Certificate referred to in this sentence, shall contain (to the
extent feasible) the following legend:
The Rights represented by this Rights Certificate are or
were beneficially owned by a Person who was or became an
Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights
Agreement). Accordingly, this Rights Certificate and the
Rights represented hereby may become null and void in the
circumstances specified in Section 7(e) of the Rights
Agreement.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on
behalf of the Company by its Chairman of the Board, its Chief
Executive Officer, its President or any Vice President, either
manually or by facsimile signature, and by the Secretary or an
Assistant Secretary of the Company, either manually or by
facsimile signature, and shall have affixed thereto the Company's
seal (if any) or a facsimile thereof. The Rights Certificates
shall be manually countersigned by the Rights Agent and shall not
be valid for any purpose unless countersigned. In case any
officer of the Company who shall have signed any of the Rights
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by
the Company, such Rights Certificates nevertheless may be
countersigned by the Rights Agent and issued and delivered by the
Company with the same force and effect as through the person who
signed such Rights Certificates had not ceased to be such officer
of the Company; and any Rights Certificate may be signed on
behalf of the Company by any person who, at the actual date of
the execution of such Rights Certificate, shall be a proper
officer of the Company to sign such Rights Certificate, although
at the date of the execution of this Rights Agreement any such
person was not such an officer.
(b) Following the Distribution Date, the Rights Agent
will keep or cause to be kept, at its office designated for such
purposes, books for registration and transfer of the Rights
Certificates issued hereunder. Such books shall show the names
and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced on its face by each
of the Rights Certificates and the date of each of the Rights
Certificates.
9
Section 6. Transfer, Split Up, Combination and Exchange
of Rights Certificates; Mutilated, Destroyed, Lost or Stolen
Rights Certificates.
(a) Subject to the provisions of Sections 7(e), 14 and
24 hereof, at any time after the Close of Business on the
Distribution Date, and at or prior to the Close of Business on
the Expiration Date, any Rights Certificate or Rights
Certificates may be transferred, split up, combined or exchanged
for another Rights Certificate or Rights Certificates, entitling
the registered holder to purchase a like number of one-
thousandths of a Preferred Share (or, following a Triggering
Event, other securities, cash or other assets, as the case may
be) as the Rights Certificate or Rights Certificates surrendered
then entitled such holder to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Rights
Certificate or Rights Certificates shall make such request in
writing delivered to the Rights Agent, and shall surrender the
Rights Certificate or Rights Certificates to be transferred,
split up, combined or exchanged at the office of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the
Company shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Rights
Certificate until the registered holder shall have completed and
signed the certificate contained in the form of assignment on the
reverse side of such Rights Certificate and shall have provided
such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof
as the Company shall reasonably request. Thereupon the Rights
Agent shall, subject to Sections 7(e), 14 and 24 hereof,
countersign and deliver to the Person entitled thereto a Rights
Certificate or Rights Certificates, as the case may be, as so
requested. The Company may require payment of a sum sufficient
to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange
of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent
of evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Rights Certificate, and, in case
of loss, theft or destruction, of indemnity or security
reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent and
cancellation of the Rights Certificate if mutilated, the Company
will make and deliver a new Rights Certificate of like tenor to
the Rights Agent for delivery to the registered holder in lieu of
the Rights Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights.
10
(a) Subject to Section 7(e) hereof, the registered
holder of any Rights Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein) in whole
or in part at any time after the Distribution Date upon surrender
of the Rights Certificate, with the form of election to purchase
on the reverse side thereof duly executed, to the Rights Agent at
the office of the Rights Agent designated for such purpose,
together with payment of the Purchase Price for each one-
thousandth of a Preferred Share as to which the Rights are
exercised, at or prior to the Expiration Date.
(b) The Purchase Price for each one-thousandth of a
Preferred Share issuable pursuant to the exercise of a Right
shall initially be $75.00, shall be subject to adjustment from
time to time as provided in Sections 11 and 13 hereof and shall
be payable in lawful money of the Untied States of America in
accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase duly
executed, accompanied by payment of the Purchase Price for the
number of one-thousandths of a Preferred Share (or other
securities or property, as the case may be) to be purchased and
an amount equal to any applicable transfer tax required to be
paid by the holder of such Rights Certificate in accordance with
Section 9 hereof in cash, or by certified check or cashier's
check payable to the order of the Company, the Rights Agent
shall, subject to Section 20(k) hereof, thereupon promptly (i)
(A) requisition from any transfer agent of the Preferred Shares
(or make available, if the Rights Agent is the transfer agent for
the Preferred Shares) a certificate or certificates for the
number of one-thousandths of a Preferred Share to be purchased
and the Company hereby irrevocably authorizes its transfer agent
to comply with all such requests or (B) if the Company shall have
elected to deposit the total number of one-thousandths of a
Preferred Share issuable upon exercise of the Rights hereunder
with a depositary agent, requisition from the depositary agent of
depositary receipts representing such number of one-thousandths
of a Preferred Share as are to be purchased (in which case
certificates for the Preferred Shares represented by such
receipts shall be deposited by the transfer agent with the
depositary agent) and the Company hereby directs the depositary
agent to comply with such request, (ii) when appropriate,
requisition from the Company the amount of cash to be paid in
lieu of issuance of fractional shares in accordance with Section
14 hereof, (iii) after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of
the registered holder of such Rights Certificate, registered in
such name or names as may be designated by such holder and (iv)
when appropriate, after receipt thereof, deliver such cash to or
upon the order of the registered holder of such Rights
Certificate. The payment of the Purchase Price (as such amount
11
may be reduced (including to zero) pursuant to Section 11(a)(iv)
hereof) may be made in cash or by certified bank check or bank
draft payable to the order of the Company. In the event that the
Company is obligated to issue other securities of the Company,
pay cash and/or distribute other property pursuant to
Section 11(a) hereof, the Company will make all arrangements
necessary so that such other securities, cash and/or other
property are available for distribution by the Rights Agent, if
and when appropriate.
(d) In case the registered holder of any Rights
Certificate shall exercise less than all the Rights evidenced
thereby, a new Rights Certificate evidencing Rights equivalent to
the Rights remaining unexercised shall be issued by the Rights
Agent to the registered holder of such Rights Certificate or to
his or her duly authorized assigns, subject to the provisions of
Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Triggering
Event or a Section 13 Event, any Rights beneficially owned by (i)
an Acquiring Person or an Associate or Affiliate of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the
Acquiring Person becomes such (a "Post Transferee"), (iii) a
transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity
interests in such Acquiring Person or to any Person with whom the
Acquiring Person has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer
which the Board of Directors of the Company has determined is
part of a plan, arrangement or understanding which has as a
primary purpose or effect the avoidance of this Section 7(e) (a
"Prior Transferee") or (iv) any subsequent transferee receiving
transferred Rights from a Post Transferee or a Prior Transferee,
either directly or through one or more intermediate transferees,
shall become null and void without any further action and no
holder of such Rights shall have any rights whatsoever with
respect to such Rights, whether under any provision of this
Agreement or otherwise. The Company shall use all reasonable
efforts to ensure that the provisions of this Section 7(e) and
Section 4(b) hereof are complied with, but shall have no
liability to any holder of Rights Certificates or to any other
Person as a result of its failure to make any determinations with
respect to an Acquiring Person or any of such Acquiring Person's
Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be
12
obligated to undertake any action with respect to a registered
holder upon the occurrence of any purported exercise as set forth
in this Section 7 unless such registered holder shall have (i)
completed and signed the certificate contained in the form of
election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such exercise and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as
the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights
Certificates. All Rights Certificates surrendered for the
purpose of exercise, transfer, split up, combination or exchange
shall, if surrendered to the Company or to any of its agents, be
delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled
by it, and no Rights Certificates shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this
Agreement. The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel
and retire, any other Rights Certificate purchased or acquired by
the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all cancelled Rights Certificates to the
Company, or shall, at the written request of the Company, destroy
such cancelled Rights Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Preferred
Shares.
(a) The Company covenants and agrees that it will use
its best efforts to cause to be reserved and kept available out
of and to the extent of its authorized and unissued shares of
preferred stock not reserved for another purpose (and, following
the occurrence of a Triggering Event, out of its authorized and
unissued shares of Common Shares and/or other securities), the
number of Preferred Shares (and, following the occurrence of the
Triggering Event, Common Shares and/or other securities) that
will be sufficient to permit the exercise in full of all
outstanding Rights.
(b) If the Company shall hereafter list any of its
Preferred Shares on a national securities exchange, then so long
as the Preferred Shares (and, following the occurrence of a
Triggering Event, Common Shares and/or other securities) issuable
and deliverable upon exercise of the Rights may be listed on a
national securities exchange, the Company shall use its best
efforts to cause, from and after such time as the Rights become
exercisable (but only to the extent that it is reasonably likely
that the Rights will be exercised), all shares reserved for such
13
issuance to be listed on such exchange upon official notice of
issuance upon such exercise.
(c) The Company shall use its best efforts to (i)
file, as soon as practicable following the earliest date after
the first occurrence of a Triggering Event in which the
consideration to be delivered by the Company upon exercise of the
Rights has been determined in accordance with Section 11(a)(iv)
hereof, or as soon as is required by law following the
Distribution Date, as the case may be, a registration statement
under the Securities Act of 1933, as amended (the "Securities
Act"), with respect to the securities purchasable upon exercise
of the Rights on an appropriate form, (ii) cause such
registration statement to become effective as soon as practicable
after such filing, and (iii) cause such registration statement to
remain effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the earlier of (A) the
date as of which the Rights are no longer exercisable for such
securities and (B) the date of expiration of the Rights. The
Company may temporarily suspend, for a period not to exceed
ninety (90) days after the date set forth in clause (i) of the
first sentence of this Section 9(c), the exercisability of the
Rights in order to prepare and file such registration statement
and permit it to become effective. Upon any such suspension, the
Company shall issue a public announcement stating, and notify the
Rights Agent, that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement and
notification to the Rights Agent at such time as the suspension
is no longer in effect. The Company will also take such action
as may be appropriate under, or to ensure compliance with, the
securities or "blue sky" laws of the various states in connection
with the exercisability of the Rights. Notwithstanding any
provision of this Agreement to the contrary, the Rights shall not
be exercisable in any jurisdiction, unless the requisite
qualification in such jurisdiction shall have been obtained, or
an exemption therefrom shall be available, and until a
registration statement has been declared effective.
(d) The Company covenants and agrees that it will take
all such action as may be necessary to ensure that all Preferred
Shares delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such Preferred Shares (subject
to payment of the Purchase Price), be duly and validly authorized
and issued and fully paid and nonassessable shares.
(e) The Company further covenants and agrees that it
will pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of the
original issuance or delivery of the Rights Certificates or of
any Preferred Shares upon the exercise of Rights. The Company
shall not, however, be required to pay any transfer tax which may
be payable in respect of any transfer or delivery of Rights
14
Certificates to a person other than, or the issuance or delivery
of certificates or depositary receipts for the Preferred Shares
in a name other than that of, the registered holder of the Rights
Certificate evidencing Rights surrendered for exercise or to
issue or to deliver any certificates or depositary receipts for
Preferred Shares upon the exercise of any Rights until any such
tax shall have been paid (any such tax being payable by the
holder of such Rights Certificate at the time of surrender) or
until it has been established to the Company's satisfaction that
no such tax is due.
Section 10. Preferred Shares Record Date. Each Person in
whose name any certificate for a number of one-thousandths of a
Preferred Share is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of
Preferred 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
Purchase Price multiplied by the number of one-thousandths of a
Preferred Share with respect to which the Rights have been
exercised (and any applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment is a date
upon which the Preferred Shares 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 Preferred Shares
transfer books of the Company are open. Prior to the exercise of
the Rights evidenced thereby, the holder of a Rights Certificate
shall not be entitled to any rights of a holder of Preferred
Shares for which the Rights shall be exercisable, including,
without limitation, the right to vote, to receive dividends or
other distributions or to exercise any preemptive rights, and
shall not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.
Section 11. Adjustment of Purchase Price; Number of
Shares or Number of Rights. The Purchase Price, the number and
kind of shares or other property covered by each Right and the
number of Rights outstanding are subject to adjustment from time
to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time
after the date of this Agreement (A) declare a dividend on the
Common Shares payable in Common Shares, (B) subdivide the
outstanding Common Shares, (C) combine the outstanding Common
Shares (by reverse stock split or otherwise) into a smaller
number of Common Shares, or (D) issue any shares of its capital
stock in a reclassification of the Common Shares (including any
such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving
corporation), then, in each such event, except as otherwise
provided in this Section 11(a) and Section 7(e) hereof: (1) each
15
of the Rights outstanding at the time of the record date for such
dividend or the effective date of such subdivision, combination
or reclassification shall be proportionately adjusted to that
number of Rights (calculated to the nearest one ten-thousandth
(1/10,000) of a Right) equal to a fraction (the "Exchange
Ratio"), the numerator of which shall be the total number of
Common Shares or shares of capital stock issued in such
reclassification of the Common Shares outstanding immediately
following such time and the denominator of which shall be the
total number of Common Shares outstanding immediately prior to
such time, and the number of Rights that shall thereafter be
issued with respect to each Common Share or share of such other
capital stock that shall become outstanding thereafter prior to
the Distribution Date shall be equal to the total number of
outstanding Rights immediately after such event (as adjusted
pursuant to this clause (1)) divided by the total number of
outstanding Common Shares or shares of such other capital stock
immediately after such event (subject to further adjustment
pursuant to the provisions of this Agreement); (2) the Purchase
Price in effect at the time of the record date for such dividend
or of the effective date of such subdivision, combination or
reclassification shall be adjusted so that the Purchase Price
thereafter shall equal the result obtained by dividing the
Purchase Price in effect immediately prior to such time by the
Exchange Ratio; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less
than the aggregate par value of the shares of capital stock of
the Company issuable upon exercise of such Right; and (3) the
number of Common Shares or shares of such other capital stock
issuable upon the exercise of each Right shall remain unchanged
immediately after such event, but, in the event of a
reclassification, the kind of shares issuable upon the exercise
of each Right immediately after such reclassification shall be
adjusted to be the kind of shares of such other capital stock
issued in such reclassification, rather than Common Shares. If
an event occurs which would require an adjustment under both this
Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment
provided for in this Section 11(a)(i) shall be in addition to,
and shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii) hereof.
(ii) Subject to Section 24 of this Agreement, in
the event a Triggering Event shall have occurred, then promptly
following such Triggering Event, proper provision shall be made
so that each holder of a Right, except as provided in Section
7(e) hereof, shall thereafter have the right to receive for each
Right, upon exercise thereof in accordance with the terms of this
Agreement and payment of the then-current Total Exercise Price,
in lieu of a number of one-thousandths of a Preferred Share, such
number of Common Shares of the Company as shall equal the result
obtained by multiplying the then-current Purchase Price by the
then number of one-thousandths of a Preferred Share for which a
16
Right was exercisable (or would have been exercisable if the
Distribution Date had occurred) immediately prior to the first
occurrence of a Triggering Event, and dividing that product by
50% of the current per share market price (determined pursuant to
Section 11(d) hereof) for Common Shares on the date of occurrence
of the Triggering Event (such number of shares being hereinafter
referred to as the "Adjustment Shares").
(iii) The right to buy Common Shares of the
Company pursuant to Section 11(a)(ii) hereof shall not arise as a
result of any Person becoming an Acquiring Person through an
acquisition of Common Shares pursuant to a Permitted Offer.
(iv) In lieu of issuing Common Shares in
accordance with Section 11(a)(ii) hereof, the Company may, if the
Board of Directors determines that such action is necessary or
appropriate and not contrary to the interest of holders of Rights
(and, in the event that the number of Common Shares which are
authorized by the Company's Certificate of Incorporation but not
outstanding or reserved for issuance for purposes other than upon
exercise of the Rights are not sufficient to permit the exercise
in full of the Rights, or if any necessary regulatory approval
for such issuance has not been obtained by the Company, the
Company shall): (A) determine the excess of (1) the value of the
Common Shares issuable upon the exercise of a Right (the "Current
Value") over (2) the Purchase Price (such excess, the "Spread")
and (B) with respect to each Right make adequate provision to
substitute for such Common Shares, upon exercise of the Rights
(1) cash, (2) a reduction in the Purchase Price, (3) other equity
securities of the Company (including, without limitation, shares
or units of shares of any series of preferred stock which the
Board of Directors of the Company has deemed to have the same
value as Common Shares (such shares or units of shares of
preferred stock are herein called "common stock equivalents"),
except to the extent that the Company has not obtained any
necessary stockholder or regulatory approval for such issuance,
(4) debt securities of the Company except to the extent that the
Company has not obtained any necessary stockholder or regulatory
approval for such issuance, (5) other assets or (6) any
combination of the foregoing, having an aggregate value equal to
the Current Value, where such aggregate value has been determined
by the Board of Directors of the Company based upon the advice of
a nationally recognized investment banking firm selected by the
Board of Directors of the Company; provided, however, if the
Company shall not have made adequate provision to deliver value
pursuant to clause (B) above within thirty (30) days following
the later of (x) the first occurrence of a Triggering Event and
(y) the date on which the Company's right of redemption pursuant
to Section 23(a) expires (the later of (x) and (y) being referred
to herein as the "Section 11(a)(ii) Trigger Date"), then the
Company shall be obligated to deliver, upon the surrender for
exercise of a Right and without requiring payment of the Purchase
17
Price, Common Shares (to the extent available), except to the
extent that the Company has not obtained any necessary
stockholder or regulatory approval for such issuance, and then,
if necessary, cash, which shares and/or cash have an aggregate
value equal to the Spread. If the Board of Directors of the
Company shall determine in good faith that it is likely that
sufficient additional Common Shares could be authorized for
issuance upon exercise in full of the Rights or that any
necessary regulatory approval for such issuance will be obtained,
the thirty (30) day period set forth above may be extended to the
extent necessary, but not more than ninety (90) days after the
Section 11(a)(ii) Trigger Date, in order that the Company may
seek stockholder approval for the authorization of such
additional shares or take action to obtain such regulatory
approval (such period, as it may be extended, the "Substitution
Period"). To the extent that the Company determines that some
action need be taken pursuant to the first and/or second
sentences of this Section 11(a)(iv), the Company (x) shall
provide, subject to Section 7(e) hereof, that such action shall
apply uniformly to all outstanding Rights and (y) may suspend the
exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of
additional shares, to take any action to obtain any required
regulatory approval and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to
determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the
suspension is no longer in effect. For purposes of this Section
11(a)(iv), the value of the Common Shares shall be the current
per share market price (as determined pursuant to Section 11(d)
hereof) of the Common Shares on the Section 11(a)(ii) Trigger
Date and the value of any "common stock equivalent" shall be
deemed to have the same value as the Common Shares on such date.
(b) In case the Company shall, at any time after the
date of this Agreement, fix a record date for the issuance of
rights, options or warrants to all holders of Common Shares or of
any class or series of Equivalent Shares entitling such holders
(for a period expiring within forty-five (45) calendar days after
such record date) to subscribe for or purchase Common Shares or
Equivalent Shares or securities convertible into Common Shares or
Equivalent Shares at a price per share (or having a conversion
price per share, if a security convertible into Common Shares or
Equivalent Shares) less than the then current per share market
price of the Common Shares or Equivalent Shares (as defined in
Section 11(d)) on such record date, then, in each such case, the
Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the
numerator of which shall be the number of Common Shares and
18
Equivalent Shares (if any) outstanding on such record date, plus
the number of Common Shares or Equivalent Shares, as the case may
be, which the aggregate offering price of the total number of
Common Shares or Equivalent Shares, as the case may be, so to be
offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such
current market price, and the denominator of which shall be the
number of Common Shares and Equivalent Shares (if any)
outstanding on such record date, plus the number of additional
Common Shares or Equivalent Shares, as the case may be, to be
offered for subscription or purchase (or into which the
convertible securities so to be offered are initially
convertible). In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than
cash, the value of such consideration shall be as determined in
good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the
Rights Agent and shall be binding on the Rights Agent and the
holders of the Rights. Common Shares and Equivalent Shares owned
by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date
is fixed, and in the event that such rights, options or warrants
are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date
had not been fixed.
(c) In case the Company shall, at any time after the
date of this Agreement, fix a record date for the making of a
distribution to all holders of the Common Shares or of any class
or series of Equivalent Shares (including any such distribution
made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) or evidences
of indebtedness or assets (other than a regular quarterly cash
dividend, if any, or a dividend payable in Common Shares) or
subscription rights, options or warrants (excluding those
referred to in Section 11(b)), then, in each such case, the
Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the
numerator of which shall be the current market price (as
determined pursuant to Section 11(d) hereof) of a Common Share or
an Equivalent Share on such record date, less the fair market
value (as determined in good faith by the Board of Directors of
the Company, whose determination shall be described in a
statement filed with the Rights Agent) of the portion of the
cash, assets or evidences of indebtedness so to be distributed or
of such subscription rights or warrants applicable to a Common
Share or Equivalent Share, as the case may be, and the
denominator of which shall be such current market price (as
determined pursuant to Section 11(d) hereof) of a Common Share or
Equivalent Share on such record date. Such adjustments shall be
19
made successively whenever such a record date is fixed, and in
the event that such distribution is not so made, the Purchase
Price shall be adjusted to be the Purchase Price which would have
been in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder,
other than computations made pursuant to Section 11(a)(iv)
hereof, the "current per share market price" of any security (a
"Security" for the purpose of this Section 11(d)) on any date
shall be deemed to be the average of the daily closing prices per
share of such Security for the thirty (30) consecutive Trading
Days (as such term is hereinafter defined) immediately prior to
such date, and for purposes of computations made pursuant to
Section 11(a)(iv) hereof, the "current per share market price" of
any Security on any date shall be deemed to be the average of the
daily closing prices per share of such Security for the ten (10)
consecutive Trading Days immediately prior to such date;
provided, however, that in the event that the current per share
market price of the Security is determined during a period
following the announcement by the issuer of such Security of (i)
a dividend or distribution on such Security payable in shares of
such Security or securities convertible into such shares or (ii)
any subdivision, combination or reclassification of such
Security, and prior to the expiration of the requisite thirty
(30) Trading Days or ten (10) Trading Day period, after the ex-
dividend date for such dividend or distribution, or the record
date for such subdivision, combination or reclassification, then,
and in each such case, the current per share market price shall
be appropriately adjusted to reflect the current market price per
share equivalent of such Security. The closing price for each
day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid
and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock
Exchange or, if the Security is not listed or admitted to trading
on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange
on which the Security is listed or admitted to trading or, if the
Security is not listed or admitted to trading on any national
securities exchange, the last sale price or, if such last sale
price is not reported, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated
Quotations System ("NASDAQ") or such other system then in use,
or, if on any such date the Security is not quoted by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the
Security selected by the Board of Directors of the Company. If
on any such date no market maker is making a market in the Common
Shares, the fair value of such shares on such date as determined
20
in good faith by the Board of Directors of the Company shall be
used. The term "Trading Day" shall mean a day on which the
principal national securities exchange on which the Security is
listed or admitted to trading is open for the transaction of
business or, if the Security is not listed or admitted to trading
on any national securities exchange, a Business Day. If the
Common Shares are not publicly held or so listed or traded,
"current per share market price" shall mean the fair value per
share as determined in good faith by the Board of Directors of
the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for
all purposes.
(e) Anything herein to the contrary notwithstanding,
no adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1%
in the Purchase Price; provided, however, that any adjustments
which by reason of this Section 11(e) are not required to be made
shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest ten-thousandth of a Common
Share or other share or one hundred-thousandth of a Preferred
Share, as the case may be. Notwithstanding the first sentence of
this Section 11(e), any adjustment required by this Section 11
shall be made no later than the earlier of (i) three (3) years
from the date of the transaction which requires such adjustment
or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a) or 13(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of capital
stock other than Preferred Shares, thereafter the number of such
other shares so receivable upon exercise of any Right and if
required, the Purchase Price thereof, shall be subject to
adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the
Common Shares contained in sections 11(a), (b), (c), (e), (h),
(i), (j), (k), (l) and (m), and the provisions of Sections 7, 9,
10, 13 and 14 with respect to the Preferred Shares shall apply on
like terms to any such other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price hereunder
shall evidence the right to purchase, at the adjusted Purchase
Price, the number of one-thousandths of a Preferred Share
purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i), upon each adjustment of
the Purchase Price as a result of the calculations made in
Section 11(b), each Right outstanding immediately prior to the
21
making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of
Preferred Shares (calculated to the nearest one hundred-
thousandth of a share) obtained by (i) multiplying (x) the number
of Preferred Shares covered by a Right immediately prior to this
adjustment, by (y) the Purchase Price in effect immediately prior
to such adjustment of the Purchase Price, and (ii) dividing the
product so obtained by the Purchase Price in effect immediately
after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price as a result of the calculations
made in Section 11(b) to adjust the number of Rights, in
substitution for any adjustment in the number of Preferred Shares
purchasable upon the exercise of a Right. Each of the Rights
outstanding after such adjustment of the number of Rights shall
be exercisable for the number of one-thousandths of a Preferred
Share for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment
of the number of Rights shall become that number of Rights
(calculated to the nearest ten-thousandth) obtained by dividing
the Purchase Price in effect immediately prior to adjustment of
the Purchase Price by the Purchase Price in effect immediately
after adjustment of the Purchase Price. The Company shall make a
public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This
record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Rights Certificates
have been issued, shall be at least ten (10) days later than the
date of the public announcement. If Rights Certificates have
been issued, upon each adjustment of the number of Rights
pursuant to this Section 11(i), the Company shall, as promptly as
practicable, cause to be distributed to holders of record of
Rights Certificates on such record date Rights Certificates
evidencing, subject to Section 14 hereof, the additional Rights
to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and
replacement for the Rights Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if
required by the Company, new Rights Certificates evidencing all
the Rights to which such holders shall be entitled after such
adjustment. Rights Certificates so to be distributed shall be
issued, executed and countersigned in the manner provided for
herein (and may bear, at the option of the Company, the adjusted
Purchase Price) and shall be registered in the names of the
holders of record of Rights Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of Preferred Shares issuable upon
22
the exercise of the Rights, the Rights Certificates theretofore
and thereafter issued may continue to express the Purchase Price
per one one-thousandth of a Preferred Share and the number of
one-thousandths of a Preferred Share which were expressed in the
initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the par or stated
value, if any, of the number of one-thousandths of a Preferred
Share issuable upon exercise of the Rights, the Company shall
take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and
legally issue as fully paid and nonassessable shares such number
of one-thousandths of a Preferred Share at such adjusted Purchase
Price.
(l) In any case in which this Section 11 shall require
that an adjustment in the Purchase Price be made effective as of
a record date for a specified event, the Company may elect to
defer until the occurrence of such event the issuing to the
holder of any Right exercised after such record date of the
number of one-thousandths of a Preferred Share and other capital
stock or securities of the Company, if any, issuable upon such
exercise over and above the number of one-thousandths of a
Preferred Share and other capital stock or securities of the
Company, if any, issuable upon such exercise on the basis of the
Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due bill
or other appropriate instrument evidencing such holder's right to
receive such additional shares (fractional or otherwise) upon the
occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, prior to the Distribution Date, the Company
shall be entitled to make such reductions in the Purchase Price,
in addition to those adjustments expressly required by this
Section 11, as and to the extent that it in its sole discretion
shall determine to be advisable in order that any (i)
consolidation or subdivision of the Preferred or Common Shares,
(ii) issuance wholly for cash of any Preferred or Common Shares
at less than the current market price, (iii) issuance wholly for
cash of Preferred or Common Shares or securities which by their
terms are convertible into or exchangeable for Preferred or
Common Shares, (iv) stock dividends or (v) issuance of rights,
options or warrants referred to in this Section 11, hereafter
made by the Company to holders of its Preferred or Common Shares
shall not be taxable to such stockholders.
(n) The Company covenants and agrees that it shall
not, at any time after the Distribution Date, effect or permit to
occur any Triggering Event or Section 13 Event, if (i) at the
time or immediately after such Triggering Event or Section 13
23
Event there are any rights, warrants or other instruments or
securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights or (ii) prior to,
simultaneously with or immediately after such Section 13 Event,
the stockholders of the Person who constitutes, or would
constitute, the "Principal Party" for purposes of Section 13(b)
hereof shall have received a distribution of Rights previously
owned by such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Sections
23, 24 or 27 hereof, take (or permit to be taken) any action if
at the time such action is taken it is reasonably foreseeable
that such action will diminish substantially or otherwise
eliminate the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event the Company shall at any time after
the date of this Agreement (A) declare a dividend on the
Preferred Shares payable in Preferred Shares, (B) subdivide the
outstanding Preferred Shares, (C) combine the outstanding
Preferred Shares (by reverse stock split or otherwise) into a
smaller number of Preferred Shares, or (D) issue any shares of
its capital stock in a reclassification of the Preferred Shares
(including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation), then, in each such event, except as
otherwise provided in this Section 11 and Section 7(e) hereof:
(1) each of the Rights outstanding at the time of the record date
for such dividend or the effective date of such subdivision,
combination or reclassification shall be proportionately adjusted
to that number of Rights (calculated to the nearest one ten-
thousandth (1/10,000) of a Right) equal to a fraction (the
"Exchange Fraction"), the numerator of which shall be the total
number of Preferred Shares or shares of capital stock issued in
such reclassification of the Preferred Shares outstanding
immediately following such time and the denominator of which
shall be the total number of Preferred Shares outstanding
immediately prior to such time, and the number of Rights that
shall thereafter be issued with respect to each Common Share or
share of other capital stock that shall be issued in a
reclassification of the Common Shares prior to the Distribution
Date shall be equal to the total number of outstanding Rights
immediately after such event (as adjusted pursuant to this
clause(1)) divided by the total number of outstanding Common
Shares or shares of such other capital stock immediately after
such event (subject to further adjustment pursuant to the
provisions of this Agreement); (2) the Purchase Price in effect
at the time of the record date for such dividend or of the
effective date of such subdivision, combination or
reclassification shall be adjusted so that the Purchase Price
24
thereafter shall equal the result obtained by dividing the
Purchase Price in effect immediately prior to such time by the
Exchange Fraction; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less
than the aggregate par value of the shares of capital stock of
the Company issuable upon exercise of such Right; and (3) the
number of one-thousandths of a Preferred Share or share of such
other capital stock issuable upon the exercise of each Right
shall remain unchanged immediately after such event, but, in the
event of a reclassification, the kind of shares issuable upon the
exercise of each Right immediately after such reclassification
shall be adjusted to be the kind of shares of such other capital
stock issued in such reclassification, rather than Preferred
Shares.
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares. Whenever an adjustment is made as provided in
Sections 11 and 13 hereof, the Company shall promptly (a) prepare
a certificate setting forth such adjustment and a brief statement
of the facts accounting for such adjustment, (b) file with the
Rights Agent and with each transfer agent for the Preferred
Shares a copy of such certificate and (c) mail a brief summary
thereof to each holder of a Rights Certificate in accordance with
Section 26 hereof. Notwithstanding the foregoing sentence, the
failure of the Company to make such certification or give such
notice shall not affect the validity of such adjustment or the
force or effect of the requirement for such adjustment. The
Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment contained therein and shall not
be deemed to have knowledge of such adjustment unless and until
it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power.
(a) In the event that, following the Shares
Acquisition Date, directly or indirectly:
(i) the Company shall consolidate with, or merge
with and into, any other Person (other than a Subsidiary of the
Company in a transaction the principal purpose of which is to
change the state of incorporation of the Company or which
complies with Section 11(o) hereof);
(ii) any Person (other than a Subsidiary of the
Company in a transaction that complies with Section 11(o) hereof)
shall consolidate with the Company, or merge with and into the
Company and the Company shall be the continuing or surviving
corporation of such consolidation or merger; or
(iii) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or
25
otherwise transfer), in one or more transactions, assets or
earning power aggregating 50% or more of the assets or earning
power of the Company and its Subsidiaries (taken as a whole) to
any other Person or Persons (other than the Company or one or
more of its wholly owned Subsidiaries in one or more
transactions, each of which complies with Section 11(o) hereof);
then, and in each such case, proper provision
shall be made so that
(A) each holder of a Right (except as otherwise
provided herein) shall thereafter have the right to receive, upon
the exercise thereof in accordance with the terms of this
Agreement, such number of validly authorized and issued, fully
paid and nonassessable Common Shares of the Principal Party (as
hereinafter defined), free of any liens, encumbrances, rights of
first refusal or other adverse claims, as shall be equal to the
result obtained by (1) multiplying the then current Purchase
Price by the number of one-thousandths of a Preferred Share for
which a Right was exercisable immediately prior to the first
occurrence of a Section 13 Event (or, if a Triggering Event has
occurred prior to the first occurrence of a Section 13 Event,
multiplying the number of such one-thousandths of a Preferred
Share for which a Right was exercisable immediately prior to the
first occurrence of a Triggering Event by the Purchase Price in
effect immediately prior to such first occurrence) and (2)
dividing that product (which, following the first occurrence of a
Section 13 Event, shall be referred to as the "Total Exercise
Price" for each Right and for all purposes of this Agreement) by
50% of the current per share market price (determined pursuant to
Section 11(d) hereof) of the Common Shares of such Principal
Party on the date of consummation of such Section 13 Event;
(B) such Principal Party shall thereafter be
liable for, and shall assume, by virtue of such Section 13 Event,
all the obligations and duties of the Company pursuant to this
Agreement;
(C) the term "Company" shall thereafter be deemed
to refer to such Principal Party, it being specifically intended
that the provisions of Section 11 hereof shall apply only to such
Principal Party following the first occurrence of a Section 13
Event;
(D) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient
number of its Common Shares) in connection with the consummation
of any such transaction as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to its Common Shares thereafter
deliverable upon the exercise of the Rights.
26
(b) "Principal Party" shall mean, in the case of any
transaction described in clause (i), (ii) or (iii) of Section
13(a), the Person or Acquiring Person referred to therein (or
such Person's or Acquiring Person's successor, including, if
applicable, the Company, if it is the surviving corporation),
provided, however, that in any such case, (i) if such Person is a
direct or indirect Subsidiary of another Person, "Principal
Party" shall refer to such other Person and (ii) in case such
Person is a Subsidiary, directly or indirectly, of more than one
Person, "Principal Party" shall refer to whichever of such
Persons is the issuer of the Common Shares having the greatest
aggregate value, and provided, further, that for purposes of
transactions described in clause (iii) hereof, "Principal Party"
shall refer to that Person receiving the greatest portion of the
assets or earning power transferred pursuant to such transaction
or transactions.
(c) If, for any reason, the Rights cannot be exercised
for Common Shares of such Principal Party as provided in Section
13(a), then each holder of Rights shall have the right to
exchange its Rights for cash from such Principal Party in an
amount equal to the number of Common Shares that it would
otherwise be entitled to purchase times 50% of the current per
share market price, as determined pursuant to Section 11(d)
hereof, of such Common Shares of such Principal Party. If, for
any reason, the foregoing formulation cannot be applied to
determine the cash amount into which the Rights are exchangeable,
then the Board of Directors, based upon the advice of one or more
nationally recognized investment banking firms, and based upon
the total value of the Company, shall determine such amount
reasonably and with good faith to the holders of Rights. Any
such determination shall be final and binding on the Rights
Agent.
(d) Notwithstanding anything in this Agreement to the
contrary, Section 13 shall not be applicable to a transaction
described in clauses (i) and (ii) of Section 13(a) if: (i) such
transaction is consummated with a Person or Persons who acquired
Common Shares pursuant to a Permitted Offer (or a wholly-owned
Subsidiary of any such Person or Persons); (ii) the price per
share of Common Shares offered in such transaction is not less
than the price per share of Common Shares paid to all holders of
Common Shares whose shares were purchased pursuant to such
Permitted Offer; and (iii) the form of consideration being
offered to the remaining holders of Common Shares pursuant to
such transaction is the same form as the form of consideration
paid pursuant to such Permitted Offer. Upon consummation of any
such transaction contemplated by this Section 13(d), all rights
hereunder shall expire.
(e) The Company shall not consummate any Section 13
Event unless the Principal Party shall have a sufficient number
27
of authorized Common Shares that have not been issued or reserved
for issuance to permit the exercise in full of the Rights in
accordance with this Section 13 and unless prior thereto the
Company and such issuer shall have executed and delivered to the
Rights Agent a supplemental agreement confirming that such
Principal Party shall, upon consummation of such Section 13
Event, assume this Agreement in accordance with Sections 13(a)
and (b) hereof, that all rights of first refusal or preemptive
rights in respect of the issuance of Common Shares of such
Principal Party upon exercise of outstanding Rights have been
waived, that there are no rights, warrants, instruments or
securities outstanding or any agreements or arrangements which,
as a result of the consummation of such transaction, would
eliminate or substantially diminish the benefits intended to be
afforded by the Rights and that such transaction shall not result
in a default by such Principal Party under this Agreement, and
further providing that, as soon as practicable after the date of
such Section 13 Event, such Principal Party will:
(i) prepare and file a registration statement
under the Securities Act with respect to the Rights and the
securities purchasable upon exercise of the Rights on an
appropriate form, use its best efforts to cause such registration
statement to become effective as soon as practicable after such
filing and use its best efforts to cause such registration
statement to remain effective (with a prospectus at all times
meeting the requirements of the Securities Act) until the
Expiration Date, and similarly comply with applicable state
securities laws;
(ii) use its best efforts to list (or continue the
listing of) the Rights and the securities purchasable upon
exercise of the Rights on a national securities exchange or to
meet the eligibility requirements for quotation on NASDAQ; and
(iii) deliver to holders of the Rights historical
financial statements for such Principal Party which comply in all
respects with the requirements for registration on Form 10 (or
any successor form) under the Exchange Act.
In the event that at any time after the occurrence
of a Triggering Event some or all of the Rights shall not have
been exercised at the time of a transaction described in this
Section 13, the Rights which have not theretofore been exercised
shall thereafter be exercisable in the manner described in
Section 13(a) (without taking into account any prior adjustment
required by Section 11(a)(ii)).
(f) The provisions of this Section 13 shall similarly
apply to successive mergers or consolidations or sales or other
transfers.
28
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue
fractions of Rights or to distribute Rights Certificates which
evidence fractional Rights. In lieu of such fractional Rights,
there shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same
fraction of the current market value of a whole Right. For the
purposes of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable, as
determined pursuant to the second sentence of Section 11(d)
hereof.
(b) The Company shall not be required to issue
fractions of Preferred Shares (other than fractions that are
integral multiples of one one-thousandth of a Preferred Share)
upon exercise of the Rights or to distribute certificates which
evidence fractional Preferred Shares (other than fractions that
are integral multiples of one one-thousandth of a Preferred
Share). In lieu of fractional Preferred Shares that are not
integral multiples of one one-thousandth of a Preferred Share,
the Company shall pay to the registered holders of Rights
Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the
current market value of a Common Share. For purposes of this
Section 14(b), the current market value of a Common Share shall
be the closing price of a Common Share (as determined pursuant to
the second sentence of Section 11(d) hereof) for the Trading Day
immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the
Right expressly waives his or her right to receive any fractional
Rights or any fractional shares upon exercise of a Right.
Section 15. Rights of Action. All rights of action in
respect of this Agreement, excepting the rights of action given
to the Rights Agent under Section 18 hereof, are vested in the
respective registered holders of the Rights Certificates (and,
prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Rights
Certificate (or, prior to the Distribution Date, of the Common
Shares), without the consent of the Rights Agent or of the holder
of any other Rights Certificate (or, prior to the Distribution
Date, of the Common Shares), may, in his or her own behalf and
for his or her own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his or her right to
exercise the Rights evidenced by such Rights Certificate in the
manner provided in such Rights Certificate and in this Agreement.
29
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 violators of, the obligations of any
Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of
a Right, by accepting the same, consents and agrees with the
Company and the Rights Agent and with every other holder of a
Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common
Shares;
(b) after the Distribution Date, the Rights
Certificates are transferable only on the registry books of the
Rights Agent if surrendered at the principal office or offices of
the Rights Agent designated for such purposes duly endorsed or
accompanied by a proper instrument of transfer and with the
appropriate forms and certificates fully executed; and
(c) subject to Sections 6(a) and 7(f) hereof, the
Company and the Rights Agent may deem and treat the person in
whose name the Rights Certificate (or, prior to the Distribution
Date, the associated Common Shares certificate) is registered as
the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Common Shares certificate
made by anyone other than the Company or the Rights Agent) for
all purposes whatsoever, and neither the Company nor the Rights
Agent shall be affected by any notice to the contrary.
Section 17. Rights Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Rights Certificate shall
be entitled to vote, receive dividends or be deemed for any
purpose the holder of the Preferred Shares or any other
securities of the Company which may at any time be issuable on
the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Rights Certificate be
construed to confer upon the holder of any Rights Certificate, as
such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as
provided in Section 25 hereof), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights
evidenced by such Rights Certificate shall have been exercised in
accordance with the provisions hereof.
30
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements
incurred in the administration and execution of this Agreement
and the exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against any loss, liability or expense, incurred
without gross negligence, bad faith or willful misconduct on the
part of the Rights Agent, for anything done or omitted by the
Rights Agent in connection with the acceptance and administration
of this Agreement, including the costs and expenses of defending
against any claim of liability in the premises.
(b) The Rights Agent shall be protected and shall
incur no liability for, or in respect of any action taken,
suffered or omitted by it in connection with, its administration
of this Agreement in reliance upon any Rights Certificate or
certificate for the Common Shares or for other securities of the
Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document believed by it
to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or Persons, or
otherwise upon the advice of counsel as set forth in Section 20
hereof.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the
corporate trust business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under
this Agreement without the execution or filing of any paper or
any further act on the part of any of the parties hereto;
provided, however, that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of
Section 21 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any
of the Rights Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the counter-
signature of the predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of
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the Rights Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Rights Certificates
either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent
shall be changed and at such time any of the Rights Certificates
shall have been countersigned but not delivered, the Rights Agent
may adopt the countersignature under its prior name and deliver
Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned,
the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such cases
such Rights Certificates shall have the full force provided in
the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement
upon the following terms and conditions, by all of which the
Company and the holders of Rights Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel
(who may be legal counsel for the Company), and the opinion or
advice of such counsel shall be full and complete authorization
and protection to the Rights Agent as to any action taken or
omitted by it in good faith and in accordance with such opinion
or advice.
(b) Whenever in the performance of its duties under
this Agreement the Rights Agent shall deem it necessary or
desirable that any fact or matter (including, without limitation,
the identity of any Acquiring Person and the determination of
"current per share market price") be proved or established by the
Company prior to taking or suffering any action hereunder, such
fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by any one of the
Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Chief Financial Officer, the
Secretary or any Assistant Secretary of the Company and delivered
to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or
suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the
Company and any other Person only for its own gross negligence,
bad faith or willful misconduct.
32
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained in
this Agreement or in the Rights Certificates (except its
countersignature thereof) or be required to verify the same, but
all such statements and recitals are and shall be deemed to have
been made by the Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement or
the execution and delivery hereof (except the due execution
hereof by the Rights Agent) or in respect of the validity or
execution of any Rights Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement
or in any Rights Certificate; nor shall it be responsible for any
change in the exercisability of the Rights or any adjustment in
the terms of the Rights (including the manner, method or amount
thereof) provided for in Sections 3, 11, 13, 23 or 24, or the
ascertaining of the existence of facts that would require any
such change or adjustment (except with respect to the exercise of
Rights evidenced by Rights Certificates after receipt by the
Rights Agent of a certificate furnished pursuant to Section 12
describing such change or adjustment); nor shall it by any act
hereunder be deemed to make any representation or warranty as to
the authorization or reservation of any Preferred Shares to be
issued pursuant to this Agreement or any Rights Certificate or as
to whether any Preferred Shares will, when issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed
to accept instructions with respect to the performance of its
duties hereunder from any one of the Chairman of the Board, the
Chief Executive Officer, the President, any Vice President, the
Chief Financial Officer, the Secretary or any Assistant Secretary
of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be
liable for any action taken or suffered by it in good faith in
accordance with instructions of any such officer or for any delay
in acting while waiting for those instructions. Any application
by the Rights Agent for written instructions from the Company
may, at the option of the Rights Agent, set forth in writing any
action proposed to be taken or omitted by the Rights Agent under
this Rights Agreement and the date on and/or after which such
action shall be taken or such omission shall be effective. The
Rights Agent shall not be liable for any action taken by, or
33
omission of, the Rights Agent in accordance with a proposal
included in any such application on or after the date specified
in such application (which date shall not be less than five (5)
Business Days after the date any officer of the Company actually
receives such application, unless any such officer shall have
consented in writing to an earlier date) unless, prior to taking
any such action (or the effective date in the case of an
omission), the Rights Agent shall have received written
instructions in response to such application specifying the
action to be taken or omitted.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal in
any of the Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the Company
may be interested, or contract with or lend money to the Company
or otherwise act as fully and freely as though it were not Rights
Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or
for any other legal entity.
(i) The Rights Agent may execute and exercise any of
the rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or agents,
and the Rights Agent shall not be answerable or accountable for
any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
(j) No provisions of this Agreement shall require the
Rights Agent to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its duties
hereunder or in the exercise of its rights if there shall be
reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Rights Certificate
surrendered to the Rights Agent for exercise or transfer, the
certificate attached to the form of assignment or form of
election to purchase, as the case may be, has either not been
completed or indicates an affirmative response to clause 1 and/or
2 thereof, the Rights Agent shall not take any further action
with respect to such requested exercise or transfer without first
consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or
any successor Rights Agent may resign and be discharged from its
duties under this Agreement upon thirty (30) days' notice in
writing mailed to the Company and to each transfer agent of the
Preferred Shares and the Common Shares by registered or certified
34
mail, and to the holders of the Rights Certificates by first-
class mail. The Company may remove the Rights Agent or any
successor Rights Agent upon thirty (30) days' notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the case
may be, and to each transfer agent of the Preferred Shares and
the Common Shares by registered or certified mail, and to the
holders of the Rights Certificates by first-class mail. If the
Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the
Rights Agent. If the Company shall fail to make such appointment
within a period of thirty (30) days after giving notice of such
removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Rights Certificate (who shall,
with such notice, submit his or her Rights Certificate for
inspection by the Company), then the registered holder of any
Rights Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by
such a court shall be a corporation organized and doing business
under the laws of the United States or of any state of the United
States, in good standing, which is authorized under such laws to
exercise corporate trust or stockholder services powers and is
subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights
Agent a combined capital and surplus of at least $50,000,000.
After appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities as if
it had been originally named as Rights Agent without further act
or deed; but the predecessor Rights Agent shall deliver and
transfer to the successor Rights Agent any property at the time
held by it hereunder, and execute and deliver any further
assurance, conveyance, act or deed necessary for the purpose.
Not later than the effective date of any such appointment, the
Company shall file notice thereof in writing with the predecessor
Rights Agent and each transfer agent of the Preferred Shares and
the Common Shares, and mail a notice thereof in writing to the
registered holders of the Rights Certificates. Failure to give
any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificate.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new
Rights Certificates evidencing Rights in such form as may be
approved by its Board of Directors to reflect any adjustment or
change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the
Rights Certificates made in accordance with the provisions of
this Agreement. In addition, in connection with the issuance or
35
sale of Common Shares following the Distribution Date and prior
to the redemption or expiration of the Rights, the Company
(a) shall, with respect to Common Shares so issued or sold
pursuant to the exercise of stock options or under any employee
plan or arrangement or upon the exercise, conversion or exchange
of securities hereinafter issued by the Company and (b) may, in
any other case, if deemed necessary or appropriate by the Board
of Directors of the Company, issue Rights Certificates
representing the appropriate number of Rights in connection with
such issuance of sale; provided, however, that (i) no such Rights
Certificate shall be issued and this sentence shall be null and
void ab initio if, and to the extent that, such issuance or this
sentence would create a significant risk of or result in material
adverse tax consequences to the Company or the Person to whom
such Rights Certificate would be issued or would create a
significant risk of or result in such options' or employee plans'
or arrangements' failing to qualify for otherwise available
special tax treatment and (ii) no such Rights Certificate shall
be issued if, and to the extent that, appropriate adjustment
shall otherwise have been made in lieu of the issuance thereof.
Section 23. Redemption.
(a) The Company may, at its option and with the
approval of the Board of Directors, at any time prior to the
Close of Business on the earlier of (i) the tenth day following
the Shares Acquisition Date or such later date as may be
determined by action of a majority of Continuing Directors then
in office and publicly announced by the Company or (ii) the Final
Expiration Date, redeem all but not less than all the then
outstanding Rights at a redemption price of $0.01 per Right,
appropriately adjusted to reflect any stock split, stock dividend
or similar transaction occurring after the date hereof (such
redemption price being herein referred to as the "Redemption
Price") and the Company may, at its option, pay the Redemption
Price either in Common Shares (based on the current per share
market price thereof (as determined pursuant to Section 11(d)
hereof) at the time of redemption) or cash; provided, however, if
the Board of Directors of the Company authorizes redemption of
the Rights on or after the time a Person becomes an Acquiring
Person, then there must be Continuing Directors then in office
and such authorization shall require the concurrence of a
majority of such Continuing Directors.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the redemption of the Rights,
evidence of which shall have been filed with the Rights Agent,
and without any further action and without any notice, the right
to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the
Redemption Price. Within ten (10) days after the action of the
Board of Directors ordering the redemption of the Rights, the
36
Company shall give notice of such redemption to the Rights Agent
and the holders of the then outstanding Rights by mailing such
notice to all such holders at their last addresses as they appear
upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent
for the Common Shares. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state
the method by which the payment of the Redemption Price will be
made. Neither the Company nor any of its Affiliates or
Associates may redeem, acquire or purchase for value any Rights
at any time in any manner other than that specifically set forth
in this Section 23 or in Section 24 hereof, and other than in
connection with the purchase of Common Shares prior to the
Distribution Date.
Section 24. Exchange.
(a) Subject to applicable laws, rules and regulations,
and subject to subsection (c) below, the Company may, at its
option, by majority vote of the Board of Directors and a majority
vote of the Continuing Directors, at any time after the
occurrence of a Triggering Event, exchange all or part of the
then outstanding and exercisable Rights (which shall not include
Rights that have become void pursuant to the provisions of
Section 7(e) hereof) for Common Shares at an exchange ratio of
one Common Share per Right, appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring
after the date hereof (such exchange ratio being hereinafter
referred to as the "Ratio of Exchange"). Notwithstanding the
foregoing, the Board of Directors shall not be empowered to
effect such exchange at any time after any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan
of the Company or any such Subsidiary, or any entity holding
Common Shares for or pursuant to the terms of any such plan),
together with all Affiliates and Associates of such Person,
becomes the Beneficial Owner of 50% or more of the Common Shares
then outstanding.
(b) Immediately upon the action of the Board of
Directors ordering the exchange of any Rights pursuant to
subsection (a) of this Section 24 and without any further action
and without any notice, the right to exercise such Rights shall
terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of Common Shares equal to
the number of such Rights held by such holder multiplied by the
Ratio of Exchange. The Company shall give public notice of any
such exchange; provided, however, that the failure to give, or
any defect in, such notice shall not affect the validity of such
exchange. The Company shall mail a notice of any such exchange
to all of the holders of such Rights at their last addresses as
they appear upon the registry books of the Rights Agent. Any
37
notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice.
Each such notice of exchange will state the method by which the
exchange of the Common Shares for Rights will be effected and, in
the event of any partial exchange, the number of Rights which
will be exchanged. Any partial exchange shall be effected pro
rata based on the number of Rights (other than Rights which have
become void pursuant to the provisions of Section 7(e) hereof)
held by each holder of Rights.
(c) In the event that there shall not be sufficient
Common Shares issued but not outstanding or authorized but
unissued to permit any exchange of Rights as contemplated in
accordance with Section 24(a), the Company shall either take such
action as may be necessary to authorize additional Common Shares
for issuance upon exchange of the Rights or alternatively, at the
option of a majority of the Board of Directors, with respect to
each Right (i) pay cash in an amount equal to the Current Value
(as hereinafter defined), in lieu of issuing Common Shares in
exchange therefor, or (ii) issue debt or equity securities or a
combination thereof, having a value equal to the Current Value,
in lieu of issuing Common Shares in exchange for each such Right,
where the value of such securities shall be determined by a
nationally recognized investment banking firm selected by the
Board of Directors by majority vote of the Board of Directors, or
(iii) deliver any combination of cash, property, Common Shares
and/or other securities having a value equal to the Current Value
in exchange for each Right. For purposes of this Section 24(c)
only, the Current Value shall mean the product of the current per
share market price of Common Shares (determined pursuant to
Section 11(d) on the date of the occurrence of the event
described above in subparagraph 9(a)) multiplied by the number of
Common Shares for which the Right otherwise would be exchangeable
if there were sufficient shares available. To the extent that
the Company determines that some action need be taken pursuant to
clauses (i), (ii) or (iii) of this Section 24(c), the Board of
Directors may temporarily suspend the exercisability of the
Rights for a period of up to sixty (60) days following the date
on which the event described in Section 24(a) shall have
occurred, in order to seek any authorization of additional Common
Shares and/or to decide the appropriate form of distribution to
be made pursuant to the above provision and to determine the
value thereof. In the event of any such suspension, the Company
shall issue a public announcement stating that the exercisability
of the Rights has been temporarily suspended.
(d) The Company shall not be required to issue
fractions of Common Shares or to distribute certificates which
evidence fractional Common Shares. In lieu of such fractional
Common Shares, there shall be paid to the registered holders of
the Rights Certificates with regard to which such fractional
Common Shares would otherwise be issuable, an amount in cash
38
equal to the same fraction of the current per share market value
of a whole Common Share (as determined pursuant to the second
sentence of Section 11(d) hereof).
(e) The Company may, at its option, by majority vote
of the Board of Directors, at any time before any Person has
become an Acquiring Person, exchange all or part of the then
outstanding Rights for rights of substantially equivalent value,
as determined reasonably and with good faith by the Board of
Directors, based upon the advice of one or more nationally
recognized investment banking firms.
(f) Immediately upon the action of the Board of
Directors ordering the exchange of any Rights pursuant to
subsection (e) of this Section 24 and without any further action
and without any notice, the right to exercise such Rights shall
terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of rights in exchange
therefor as has been determined by the Board of Directors in
accordance with subsection (e) above. The Company shall give
public notice of any such exchange; provided, however, that the
failure to give, or any defect in, such notice shall not affect
the validity of such exchange. The Company shall mail a notice
of any such exchange to all of the holders of such Rights at
their last addresses as they appear upon the registry books of
the transfer agent for the Common Shares of the Company. Any
notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice.
Each such notice of exchange will state the method by which the
exchange of the Rights will be effected.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose to effect or
permit to occur any Section 13 Event, the Company shall give
notice thereof to each holder of Rights in accordance with
Section 26 hereof at least twenty (20) days prior to occurrence
of such Section 13 Event.
(b) In case any Triggering Event or Section 13 Event
shall occur, then, in any such case, the Company shall as soon as
practicable thereafter give to each holder of a Rights
Certificate, in accordance with Section 26 hereof, a notice of
the occurrence of such event, which shall specify the event and
the consequences of the event to holders of Rights under
Sections 11(a)(ii) and 13 hereof.
Section 26. Notices. Notices or demands authorized by
this Agreement to be given or made by the Rights Agent or by the
holder of any Rights Certificate to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage
39
prepaid, addressed (until another address is filed in writing
with the Rights Agent) as follows:
VMARK Software, Inc.
50 Washington Street
Westboro, Massachusetts 01581
Attention: President
Subject to the provisions of Section 21 hereof, any notice or
demand authorized by this Agreement to be given or made by the
Company or by the holder of any Rights Certificate to or on the
Rights Agent shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
State Street Bank and Trust Company
c/o Boston Equiserve
150 Royall Street, Mail Stop 45-02-62
Canton, MA 02021
Attention:Patricia Foster
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any
Rights Certificate shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at
the address of such holder as shown on the registry books of the
Company.
Section 27. Supplements and Amendments. Prior to the
Distribution Date, the Company may supplement or amend this
Agreement in any respect without the approval of any holders of
Rights and the Rights Agent shall, if the Company so directs,
execute such supplement or amendment. From and after the
Distribution Date, the Company and the Rights Agent may from time
to time supplement or amend this Agreement without the approval
of any holders of Rights in order to (i) cure any ambiguity,
(ii) correct or supplement any provision contained herein which
may be defective or inconsistent with any other provisions
herein, (iii) shorten or lengthen any time period hereunder
(which lengthening or shortening, following the first occurrence
of an event set forth in the proviso to Section 23(a) hereof,
shall be effective only if there are Continuing Directors and
shall require the concurrence of a majority of such Continuing
Directors) or (iv) change or supplement the provisions hereunder
in any manner that the Company may deem necessary or desirable
and that shall not adversely affect the interests of the holders
of Rights (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person); provided, this Agreement may
not be supplemented or amended to lengthen, pursuant to clause
(iii) of this sentence, (A) a time period relating to when the
40
Rights may be redeemed at such time as the Rights are not then
redeemable or (B) any other time period unless such lengthening
is for the purpose of protecting, enhancing, or clarifying the
rights of, and/or the benefits to, the holders of Rights. Upon
the delivery of a certificate from an appropriate officer of the
Company that states that the proposed supplement or amendment is
in compliance with the terms of this Section 27, the Rights Agent
shall execute such supplement or amendment. Prior to the
Distribution Date, the interests of the holders of Rights shall
be deemed coincident with the interests of the holders of Common
Shares.
Section 28. Successors. All the covenants and provisions
of this Agreement by or for the benefit of the Company or the
Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board of
Directors, etc. For all purposes of this Agreement, any
calculation of the number of Common Shares outstanding at any
particular time, including for purposes of determining the
particular percentage of such outstanding Common Shares of which
any Person is the Beneficial Owner, shall be made in accordance
with the last sentence of Rule 13d-3(d)(1)(i) of the General
Rules and Regulations under the Exchange Act. The Board of
Directors of the Company (and, where specifically provided for
herein, the Continuing Directors) shall have the exclusive power
and authority to administer this Agreement and to exercise all
rights and powers specifically granted to the Board, or the
Company (or, where specifically provided for herein, the
Continuing Directors), or as may be necessary or advisable in the
administration of this Agreement, including, without limitation,
the right and power to (i) interpret the provisions of this
Agreement and (ii) make all determinations deemed necessary or
advisable for the administration of this Agreement (including a
determination to redeem or not redeem the Rights or to amend the
Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all
omissions with respect to the foregoing) which are done or made
by the Board (or, where specifically provided for herein, by the
Continuing Directors) in good faith, shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the
holders of the Rights Certificates and all other parties and
(y) not subject the Board or the Continuing Directors to any
liability to the holders of the Rights.
Section 30. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the
Company, the Rights Agent and the registered holders of the
Rights Certificates (and, prior to the Distribution Date, the
Common Shares) any legal or equitable right, remedy or claim
under this Agreement; but this Agreement shall be for the sole
41
and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the
Distribution Date, the Common Shares).
Section 31. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court of
competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants
and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant
or restriction is held by such court or authority to be invalid,
void or unenforceable and the Board of Directors of the Company
determines in its good faith judgment that severing the invalid
language from this Agreement would adversely affect the purpose
or effect of this Agreement, the right of redemption set forth in
Section 23 hereof shall be reinstated and shall not expire until
the close of business on the tenth day following the date of such
determination by the Board of Directors.
Section 32. Governing Law. This Agreement and each Right
and each Rights Certificate issued hereunder shall be deemed to
be a contract made under the laws of the State of Delaware and
for all purposes shall be governed by and construed in accordance
with the laws of such State applicable to contracts to be made
and performed entirely within such State.
Section 33. Counterparts. This Agreement may be executed
in any number of counterparts and each of such counterparts shall
for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same
instrument.
Section 34. Descriptive Headings. Descriptive headings
of the several Sections of this Agreement are inserted for
convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
42
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
Attest: VMARK SOFTWARE, INC.
By: /s/ Richard N. Hoehn By: /s/ Robert M. Morrill
Name: Richard N. Hoehn Name: Robert M. Morrill
Title: Secretary Title: President, Chief Executive
Officer and Chairman of the Board
Attest: STATE STREET BANK AND TRUST COMPANY
By: /s/ S. Cesso By: /s/ Ronald S. Logue
Name: Stephen Cesso Name: Ronald S. Logue
Title: V.P. and Asst. Counsel Title: Executive Vice President
43
EXHIBIT A
CERTIFICATE OF DESIGNATIONS, RIGHTS, PREFERENCES
AND PRIVILEGES OF
SERIES A JUNIOR PREFERRED STOCK
OF
VMARK SOFTWARE, INC.
(Pursuant to Section 151 of the Delaware General Corporation Law)
The undersigned, Robert M. Morrill and Richard N. Hoehn, do
hereby certify:
1. That they are the duly elected and acting President and
Secretary, respectively, of VMARK Software, Inc., a Delaware
corporation (the "Corporation").
2. That pursuant to the authority conferred upon the Board
of Directors by the Certificate of Incorporation of the said
Corporation, the said Board of Directors on June 6, 1996 adopted
the following resolutions creating a series of shares of
Preferred Stock designated as Series A Junior Preferred Stock:
"RESOLVED, that pursuant to the authority vested in the
Board of Directors of the Corporation by the Certificate of
Incorporation, the Board of Directors does hereby provide for the
issue of a series of Preferred Stock, $0.01 par value, of the
Corporation, to be designated "Series A Junior Preferred Stock,"
initially consisting of 15,000 shares and to the extent that the
designations, powers, preferences and relative and other special
rights and the qualifications, limitations and restrictions of
the Series A Junior Preferred Stock are not stated and expressed
in the Certificate of Incorporation, does hereby fix and herein
state and express such designations, powers, preferences and
relative and other special rights and the qualifications,
limitations and restrictions thereof, as follows (all terms used
herein which are defined in the Certificate of Incorporation
shall be deemed to have the meanings provided therein):
Section 1. Designation and Amount. The shares of such
series shall be designated as "Series A Junior Preferred Stock,"
par value $0.01 per share, and the number of shares constituting
such series shall be 15,000.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior right of the
holders of any shares of any series of Preferred Stock ranking
prior and superior to the shares of Series A Junior Preferred
Stock with respect to dividends, the holders of shares of
Series A Junior Preferred Stock shall be entitled to receive
when, as and if declared by the Board of Directors out of funds
legally available for the purpose, quarterly dividends payable in
cash on the last day of March, June, September and December in
each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date") commencing on the first
Quarterly Dividend Payment Date after the first issuance of a
share or fraction of a share of Series A Junior Preferred Stock,
in an amount per share (rounded to the nearest cent) equal to,
subject to the provision for adjustment hereinafter set forth,
1,000 times the aggregate per share amount of all cash dividends,
and 1,000 times the aggregate per share amount (payable in kind)
of all non-cash dividends or other distributions other than a
dividend payable in shares of Common Stock or a subdivision of
the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock of the Corporation (the
"Common Stock") since the immediately preceding Quarterly
Dividend Payment Date, or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series A Junior Preferred Stock. In the
event the Corporation shall at any time after June 6, 1996 (the
"Rights Declaration Date") (i) declare any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the
amount to which holders of shares of Series A Junior Preferred
Stock were entitled immediately prior to such event under the
preceding sentence shall be adjusted by multiplying such amount
by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that
ere outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or
distribution on the Series A Junior Preferred Stock as provided
in paragraph (A) above immediately after it declares a dividend
or distribution on the Common Stock (other than a dividend
payable in shares of Common Stock).
(C) Dividends shall begin to accrue and be cumulative
on outstanding shares of Series A Junior Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of issue
of such shares of Series A Junior Preferred Stock, unless the
date of issue of such shares is prior to the record date for the
first Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue from the date of issue of such
shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the
determination of holders of shares of Series A Junior Preferred
Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such
2
Quarterly Dividend Payment Date. Accrued but unpaid dividends
shall not bear interest. Dividends paid on the shares of Series
A Junior Preferred Stock in an amount less than the total amount
of such dividends at the time accrued and payable on such shares
shall be allocated pro rata on a share-by-share basis among all
such shares at the time outstanding. The Board of Directors may
fix a record date for the determination of holders of shares of
Series A Junior Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date
shall be no more than 30 days prior to the date fixed for the
payment thereof.
Section 3. Voting Rights. The holders of shares of
Series A Junior Preferred Stock shall have the following voting
rights.
(A) Subject to the provision for adjustment
hereinafter set forth, each share of Series A Junior Preferred
Stock shall entitle the holder thereof to 1,000 votes on all
matters submitted to a vote of the stockholders of the
Corporation. In the event the Corporation shall at any time
after the Rights Declaration Date (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii) subdivide
the outstanding Common Stock, or (iii) combine the outstanding
Common Stock to a smaller number of shares, then in each such
case the number of votes per share to which holders of shares of
Series A Junior Preferred Stock were entitled immediately prior
to such event shall be adjusted by multiplying such number by a
fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the
holders of shares of Series A Junior Preferred Stock and the
holders of shares of Common Stock shall vote together as one
class on all matters submitted to a vote of stockholders of the
corporation.
(C) Except as required by law, holders of Series A
Junior 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) The Corporation shall not declare any dividend on,
make any distribution on, or redeem or purchase or otherwise
acquire for consideration any shares of Common Stock after the
first issuance of a share or fraction of a share of Series A
Junior Preferred Stock unless concurrently therewith it shall
3
declare a dividend on the Series A Junior Preferred Stock as
required by Section 2 hereof.
(B) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Junior Preferred Stock as
provided in Section 2 are in arrears, thereafter and until all
accrued and unpaid dividends and distributions, whether or not
declared, on shares of Series A Junior Preferred Stock
outstanding shall have been paid in full, the Corporation shall
not
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Junior 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 Series A Junior Preferred Stock, except dividends paid
ratably on the Series A Junior Preferred Stock and all such
parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such
shares are then entitled;
(iii) redeem or purchase or otherwise acquire
for consideration shares of any stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up)
with the Series A Junior Preferred Stock, provided that the
Corporation may at any time redeem, purchase or otherwise acquire
shares of any such parity stock in exchange for shares of any
stock of the Corporation ranking junior (either as to dividends
or upon dissolution, liquidation or winding up) to the Series A
Junior Preferred Stock;
(iv) purchase or otherwise acquire for
consideration any shares of Series A Junior Preferred Stock, or
any shares of stock ranking on a parity with the Series A Junior
Preferred Stock, except in accordance with a purchase offer made
in writing or by publication (as determined by the Board of
Directors) to all holders of such shares upon such terms as the
Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective
series or classes.
(C) The Corporation shall not permit any subsidiary of
the Corporation to purchase or otherwise acquire for
consideration any shares of stock of the Corporation unless the
Corporation could, under paragraph (A) of this Section 4,
4
purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares. Any shares of Series A
Junior Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and
cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of
a new series of Preferred Stock to be created by resolution or
resolutions of the Board of Directors, subject to the conditions
and restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation (voluntary or otherwise),
dissolution or winding up of the Corporation, no distribution
shall be made to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Junior Preferred Stock unless, prior
thereto, the holders of shares of Series A Junior Preferred Stock
shall have received an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to
the date of such payment, plus an amount equal to the greater of
(1)$1,000 per share, provided that in the event the Corporation
does not have sufficient assets, after payment of its liabilities
and distribution to holders of Preferred Stock ranking prior to
the Series A Junior Preferred Stock, available to permit payment
in full of the $1,000 per share amount, the amount required to be
paid under this Section 6(A)(1) shall, subject to Section 6(B)
hereof, equal the value of the amount of available assets divided
by the number of outstanding shares of Series A Junior Preferred
Stock or (2) subject to the provisions for adjustment hereinafter
set forth, 1,000 times the aggregate per share amount to be
distributed to the holders of Common Stock (the greater of (1) or
(2), the "Series A Liquidation Preference"). 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 to which holders of
shares of Series A Junior Preferred Stock were entitled
immediately prior to such event under clause (2) of the preceding
sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common
Stock that were 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) In the event, however, that there are not
sufficient assets available to permit payment in full of the
Series A Liquidation Preference and the liquidation preferences
5
of all other series of Preferred Stock, if any, which rank on a
parity with the Series A Junior Preferred Stock, then such
remaining assets shall be distributed ratably to the holders of
such parity shares in proportion to their respective liquidation
preferences.
Section 7. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common
Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case
the shares of Series A Junior Preferred Stock shall at the same
time be similarly exchanged or changed in an amount per share
(subject to the provision for adjustment hereinafter set forth)
equal to 1,000 times the aggregate amount of stock, securities,
cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed
or exchanged. In the event the Corporation shall at any time
after the Rights Declaration Date (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii) subdivide
the outstanding Common Stock, or (iii) combine the outstanding
Common Stock into a smaller number of shares, then in each such
case the amount set forth in the preceding sentence with respect
to the exchange or change of shares of Series A Junior Preferred
Stock shall be adjusted by multiplying such amount by a fraction
the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Series A Junior
Preferred Stock shall not be redeemable.
Section 9. Ranking. The Series A Junior Preferred Stock
shall rank junior to all other series of the Corporation's
Preferred Stock as to the payment of dividends and the
distribution of assets, unless the terms of any such series shall
provide otherwise.
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, preference or
special rights of the Series A Junior Preferred Stock so as to
affect them adversely without the affirmative vote of the holders
of a majority or more of the outstanding shares of Series A
Junior Preferred Stock, voting separately as a class.
Section 11 Fractional Shares. Series A Junior 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
6
distributions and to have the benefit of all other rights of
holders of Series A Junior Preferred Stock.
RESOLVED FURTHER, that the President or any Vice President
and the Secretary or any Assistant Secretary of this Corporation
be, and they hereby are, authorized and directed to prepare and
file a Certificate of Designations, Rights, Preferences and
Privileges in accordance with the foregoing resolution and the
provisions of Delaware law and to take such actions as they may
deem necessary or appropriate to carry out the intent of the
foregoing resolution."
3. That the authorized number of shares of Preferred Stock
of the Corporation is 10,000,000 and that no such Preferred Stock
has been issued.
IN WITNESS WHEREOF, we have executed and subscribed this
Certificate and do affirm the foregoing as true under the
penalties of perjury this 6th day of June, 1996.
Name:
Title:
Attest:
____________________________
Name:
Title:
ds1/265284
7
EXHIBIT B
Form of Rights Certificate
Certificate No. ___. ____ Rights
NOT EXERCISABLE AFTER JUNE 12, 2006 OR EARLIER IF TERMINATED BY
THE COMPANY OR IF THE COMPANY EXCHANGES THE RIGHTS PURSUANT TO
THE RIGHTS AGREEMENT. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT
THE OPTION OF THE COMPANY, AT $0.01 PER RIGHT ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES,
RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE
OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN
THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS
MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR
BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF SUCH RIGHTS AGREEMENT.][1]
Rights Certificate
This certifies that ____________, or registered assigns, is
the registered owner of the number of Rights set forth above,
each of which entitles the owner thereof, subject to the terms,
provisions and conditions of the Rights Agreement, dated as of
June 12, 1996 (the "Rights Agreement"), between VMARK Software,
Inc., a Delaware corporation (the "Company"), and State Street
Bank and Trust Company (the "Rights Agent"), to purchase from the
Company at any time after the Distribution Date (as such term is
defined in the Rights Agreement) and prior to 5:00 P.M.,
Massachusetts time, on June 12, 2006 at the office of the Rights
Agent designated for such purpose, or at the office of its
successor as Rights Agent, one one-thousandth of a fully paid
non-assessable share of Series A Junior Preferred Stock, par
value $0.01 per share, (the "Preferred Shares"), of the Company,
at a purchase price of $75.00 per one-thousandth of a Preferred
Share (the "Purchase Price"), upon presentation and surrender of
this Rights Certificate with the Form of Election to Purchase and
related Certificate duly executed. The number of Rights
evidenced by this Rights Certificate (and the number of one-
thousandths of a Preferred Share which may be purchased upon
exercise hereof) set forth above are the number and Purchase
Price as of June 12, 1996 based on the Preferred Shares as
_____________
[1] The portion of the legend in brackets shall be inserted
only if applicable and shall replace the preceding sentence.
constituted at such date. As provided in the Rights Agreement,
the Purchase Price and the number and kind of Preferred Shares or
other securities which may be purchased upon the exercise of the
Rights evidenced by this Rights Certificate are subject to
modification and upon the happening of certain events.
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the
Rights Certificates, which limitations of rights include the
temporary suspension of the exercisability of such Rights under
the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the principal
executive offices of the Company and the above-mentioned office
of the Rights Agent.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Rights Certificate (i) may be redeemed
by the Company, at its option, at a redemption price of $0.01 per
Right or (ii) may be exchanged by the Company in whole or in part
for Common Shares, substantially equivalent rights or other
consideration as determined by the Company.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office 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 amount of securities as the Rights evidenced by the
Rights Certificate or Rights Certificates surrendered shall have
entitled such holders to purchase. If this Rights Certificate
shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Rights Certificate or
Rights Certificates for the number of whole Rights not exercised.
No fractional portion of less than one one-thousandth of a
Preferred Share will be issued upon the exercise of any Right or
Rights evidenced hereby but in lieu thereof a cash payment will
be made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any
purpose the holder of the Preferred Shares or of any other
securities of the Company which may at any time be issuable on
the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder
hereof, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or
2
upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to
receive dividends or subscription rights, or otherwise, until the
Right or Rights evidenced by this Rights Certificate shall have
been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights
Agent.
WITNESS the facsimile signature of the proper officers of
the Company and its corporate seal. Dated as of ________ ___,
19__.
ATTEST VMARK SOFTWARE, INC.
By:
Secretary President
Countersigned:
STATE STREET BANK AND
TRUST COMPANY,
as Rights Agent
By:
Authorized Signature
3
Form of Reverse Side of Rights Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate)
FOR VALUE RECEIVED ______________________________ hereby
sells, assigns and transfers unto
_________________________________________________________________
(Please print name and
address of transferee)
this Rights Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint _______________________________ Attorney, to transfer the
within Rights Certificate on the books of the within-named
Company, with full power of substitution.
Dated: ___________, 19___ ___________________________________
Signature
Signature Guaranteed:
The signature(s) should be guaranteed by an eligible
guarantor institution (Banks, Stockbrokers, Savings and Loan
Associations and Credit Unions with membership in an approved
signature guarantee medallion program) pursuant to S.E.C. Rule
17Ad-15.
4
Form of Reverse Side of Rights Certificate -- continued
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Rights Certificate [ ] is [ ] not being sold,
assigned and transferred by or on behalf of a Person who is or
was an Acquiring Person, or an Affiliate or Associate of any such
Person (as such terms are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights
evidenced by this Rights Certificate from any Person who is, was
or subsequently became an Acquiring Person or an Affiliate or
Associate of any such Person.
Dated: ______________ , 19__ _________________________________
Signature
Signature Guaranteed:
The signature(s) should be guaranteed by an eligible
guarantor institution (Banks, Stockbrokers, Savings and Loan
Associations and Credit Unions with membership in an approved
signature guarantee medallion program) pursuant to S.E.C. Rule
17Ad-15.
5
Form of Reverse Side of Rights Certificate -- continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Rights Certificate)
To:________________________
The undersigned hereby irrevocably elects to exercise
______________________
Rights represented by this Rights Certificate to purchase the
number of one-thousandths of a Preferred Share issuable upon the
exercise of such Rights and requests that certificates for such
number of one-thousandths of a Preferred Share issued in the name
of:
Please insert social security or
other identifying number
_________________________________________________________________
(Please print name and address)
_________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by
this Rights Certificate, a new Rights Certificate for the balance
remaining of such Rights shall be registered in the name of and
delivered to:
Please insert social security or
other identifying number
_________________________________________________________________
(Please print name and address)
_________________________________________________________________
Dated: ______________ , 19__ _________________________________
Signature
Signature Guaranteed:
The signature(s) should be guaranteed by an eligible
guarantor institution (Banks, Stockbrokers, Savings and Loan
Associations and Credit Unions with membership in an approved
signature guarantee medallion program) pursuant to S.E.C. Rule
17Ad-15.
6
Form of Reverse Side of Rights Certificate -- continued
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate [ ]
are [ ] are not being exercised by or on behalf of a Person who
is or was an Acquiring Person or an Affiliate or Associate of any
such Person (as such terms are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights
evidenced by this Rights Certificate from any Person who is, was
or subsequently became an Acquiring Person or an Affiliate or
Associate of any such Person.
Dated: ________________, 19__ ____________________________
Signature
Signature Guaranteed:
The signature(s) should be guaranteed by an eligible
guarantor institution (Banks, Stockbrokers, Savings and Loan
Associations and Credit Unions with membership in an approved
signature guarantee medallion program) pursuant to S.E.C. Rule
17Ad-15.
7
Form of Reverse Side of Rights Certificate -- continued
NOTICE
The signature in the foregoing Forms of Assignment and
Election and Certificates must conform to the name as written
upon the face of this Rights Certificate in every particular,
without alteration or enlargement or any change whatsoever.
8
EXHIBIT C
VMARK SOFTWARE, INC.
STOCKHOLDER RIGHTS PLAN
Summary of Rights
Distribution and The Board of Directors has declared a dividend of one
Transfer of Rights; Right for each share of VMARK Software, Inc. Common
Rights Certificate: Stock outstanding. Prior to the Distribution Date
referred to below, the Rights will be evidenced by
and trade with the certificates for the Common Stock.
After the Distribution Date, VMARK Software, Inc. (the
"Company") will mail Rights certificates to the
Company's stockholders and the Rights will become
transferable apart from the Common Stock.
Distribution Date: Rights will separate from the Common Stock and become
exercisable following the tenth day (the "Distribution
Date") (or such later date as may be determined by a
majority of the Directors not affiliated with the
acquiring person or group (the "Continuing Directors"))
after a person or group (a) acquires beneficial owner-
ship of 15% or more of the Company's Common Stock or
(b) announces a tender or exchange offer, the consumma-
tion of which would result in ownership by a person or
group of 30% or more of the Company's Common Stock.
Preferred Stock After the Distribution Date, each Right will entitle
Purchasable Upon holder to purchase, for $75.00, a fraction of a share
Exercise of Rights: of the Company's Preferred Stock with economic terms
similar to that of one share of the Company's Common
Stock.
Flip-In: If an acquiror (an "Acquiring Person") obtains 15% or
more of the Company's Common Stock (other than pursuant
to a tender offer deemed fair by the Board of Directors
(a "Permitted Offer")), then each Right (other than
Rights owned by an Acquiring Person or its affiliates)
will entitle the holder thereof to purchase, for the
exercise price, a number of shares of the Company's
Common Stock having a then current market value of twice
the exercise price.
Flip-Over: If, after the Shares Acquisition Date (defined below),
(a) the Company merges into another entity, (b) an
acquiring entity merges into the Company or (c) the
Company sells more than 50% of the Company's assets or
earning power, then each Right (other than Rights owned
by an Acquiring Person or its affiliates) will entitle
the holder thereof to purchase, for the exercise price,
a number of shares of Common Stock of the person
engaging in the transaction having a then current market
value of twice the exercise price (unless the transaction
satisfies certain conditions and is consummated with a
person who acquired shares pursuant to a Permitted Offer,
in which case the Rights will expire).
Exchange Provision: At any time after an event triggering the flip-in or
flip-over rights and prior to the acquisition by the
Acquiring Person of 50% or more of the outstanding
Common Stock, the Board of Directors of the Company
may exchange the Rights (other than Rights owned by the
Acquiring Person or its affiliates), in whole or in
part, at an exchange ratio of one Common Share per Right
(subject to adjustment).
Redemption of Rights will be redeemable at the Company's option for
the Rights: $0.01 per Right at any time on or prior to the tenth day
(or such later date as may be determined by a majority
of the Continuing Directors) after public announcement
that a person has acquired beneficial ownership of 15% or
more of the Company's Common Stock (the "Shares
Acquisition Date").
Expiration of The Rights expire on the earliest of (a) June 12, 2006,
the Rights: (b) exchange or redemption of the Rights as described
above, or (c) consummation of a merger or consolidation
or sale of assets resulting in expiration of the Rights
as described above.
Amendment of Terms The terms of the Rights and the Rights Agreement may be
of Rights: amended in any respect without the consent of the Rights
holders on or prior to the Distribution Date; thereafter,
the terms of the Rights and the Rights Agreement may be
amended without the consent of the Rights holders in
order to cure any ambiguities or to make changes which do
not adversely affect the interests of Rights holders
(other than the Acquiring Person).
Voting Rights: Rights will not have any voting rights.
Anti-Dilution Rights will have the benefit of certain customary
Provisions: anti-dilution provisions.
Taxes: The Rights distribution should not be taxable for
federal income tax purposes. However, following an event
which renders the Rights exercisable or upon redemption of
the Rights, stockholders may recognize taxable income.
The foregoing is a summary of certain principal terms of the Stockholder Rights
Plan only and is qualified in its entirety by reference to the detailed terms
of the Rights Agreement, dated as of June 12, 1996, between the Company and
the Rights Agent.
