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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
BROADWAY & SEYMOUR, INC.
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(Exact name of registrant as specified in its charter)
Delaware 41-1522214
- ---------------------------------------- ------------------------------------
(State of incorporation or organization) (I.R.S. Employer Identification No.)
128 South Tryon Street
Charlotte, North Carolina 28202
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(Address of principal executive offices) (Zip Code)
If this form relates to the If this form relates to the
registration of a class of securities registration of a class of securities
pursuant to Section 12(b) of the pursuant to Section 12(g) of the
Exchange Act and is effective Exchange Act and is effective
pursuant to General Instruction pursuant to General Instruction
A.(c), please check the following A.(d), please check the following
box. [ ] box. [X]
Securities Act registration statement file number to which this form
relates: not applicable
----------------
(If applicable)
Securities to be registered pursuant to Section 12(b) of the Act:
None
Securities to be registered pursuant to Section 12(g) of the Act:
Stock Purchase Rights
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(Title of Class)
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Item 1. Description of Registrant's Securities to be Registered
On April 13, 1999, the Board of Directors of Broadway & Seymour, Inc.
(the "Company") declared a dividend of one preferred share purchase right (a
"Right") for each outstanding share of common stock, par value $0.01 per share,
of the Company (the "Common Stock"). The dividend is payable on April 26, 1999
(the "Record Date") to the stockholders of record on that date. Each Right
entitles the registered holder to purchase from the Company one one-hundredth
of a share of Series A Junior Participating Preferred Stock, par value $0.01
per share, of the Company (the "Preferred Stock") at a price of $22.00 per one
one-hundredth of a share of Preferred Stock (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set forth in a Rights
Agreement, dated as of April 14, 1999, as the same may be amended from time to
time (the "Rights Agreement"), between the Company and EquiServe Trust Company,
N.A., as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person"), with certain exceptions set forth below, has acquired
beneficial ownership of 20% or more of the outstanding shares of Common Stock
or (ii) 10 business days (or such later date as may be determined by action of
the Board of Directors prior to such time as any person or group of affiliated
persons becomes an Acquiring Person) following the commencement of, or
announcement of an intention to make, a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a person or
group of 20% or more of the outstanding shares of Common Stock (the earlier of
such dates being called the "Distribution Date"), the Rights will be evidenced,
with respect to any of the Common Stock certificates outstanding as of the
Record Date, by such Common Stock certificate. An Acquiring Person does not
include (A) the Company, any subsidiary of the Company, any employee benefit
plan of the Company or of any subsidiary of the Company, or any entity or
trustee holding Common Stock for or pursuant to the terms of any such plan or
for the purpose of funding any such plan or funding other employee benefits for
employees of the Company or of any subsidiary of the Company, (B) any person
that would be deemed an "Acquiring Person" upon the adoption of the Rights
Agreement, unless and until such person acquires beneficial ownership of any
additional shares of Common Stock after the date of the Rights Agreement, or
(C) any person whose beneficial ownership of 20% or more of the outstanding
shares of Common Stock results from an acquisition of shares of Common Stock by
the Company that, by reducing the number of shares outstanding, increases the
proportionate number of shares of Common Stock beneficially owned by such
person to 20% or more of the shares of Common Stock then outstanding, unless
such person thereafter become the beneficial owner of any additional shares of
Common Stock and upon the consummation of such acquisition such person
beneficially owns 20% or more of the shares of Common Stock then outstanding.
The Rights Agreement provides that, until the Distribution Date (or
earlier redemption or expiration of the Rights), the Rights will be transferred
with and only with the Common Stock. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Stock certificates issued
after the Record Date upon transfer or new issuances of Common Stock will
contain a legend incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any
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certificates for shares of Common Stock outstanding as of the Record Date, even
without such notation or a copy of this Summary of Rights, will also constitute
the transfer of the Rights associated with the shares of Common Stock
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Stock as of
the close of business on the Distribution Date, and such separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on April 14, 2009 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or unless the Rights are earlier redeemed or
exchanged by the Company, in each case as described below.
The Purchase Price payable, and the number of shares of 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
Preferred Stock, (ii) upon the grant to holders of the Preferred Stock of
certain rights or warrants to subscribe for or purchase Preferred Stock at a
price, or securities convertible into Preferred Stock with a conversion price,
less than the then current market price of the Preferred Stock or (iii) upon
the distribution to holders of the Preferred Stock of evidences of indebtedness
or assets (excluding regular periodic cash dividends or dividends payable in
Preferred Stock) or of subscription rights or warrants (other than those
referred to above).
The number of outstanding Rights and the number of one one-hundredths
of a share of Preferred Stock issuable upon exercise of each Right are also
subject to adjustment in the event of a stock split of the Common Stock or a
dividend on the Common Stock payable in shares of Common Stock or subdivisions,
consolidations or combinations of the Common Stock occurring, in any such case,
prior to the Distribution Date.
Shares of Preferred Stock purchasable upon exercise of the Rights will
not be redeemable. Unless otherwise provided in connection with the creation of
a subsequent series of preferred stock, the Preferred Stock will be subordinate
to any other series of the Company's preferred stock. Each share of Preferred
Stock will be entitled, when, as and if declared, to a minimum quarterly
dividend payment of $1.00 per share but will be entitled to an aggregate
dividend of 100 times the dividend declared per share of Common Stock. In the
event of the liquidation of the Company, the holders of the Preferred Stock
will be entitled to receive a minimum liquidation payment of $100.00 per share
(plus any accrued but unpaid dividends) but will be entitled to an aggregate
payment of 100 times the payment made per share of Common Stock. Each share of
Preferred Stock will have 100 votes, voting together with the Common Stock. In
the event of any merger, consolidation or other transaction in which shares of
Common Stock are converted or exchanged, each share of Preferred Stock will be
entitled to receive 100 times the amount received per share of Common Stock.
The rights of Preferred Stock as to dividends, liquidation and voting are
protected by customary antidilution provisions. Because of the nature of the
Preferred Stock's dividend, liquidation and voting rights, the value of the one
one-hundredth interest in a share of Preferred Stock purchasable upon exercise
of each Right should approximate the value of one share of Common Stock.
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In the event that any person or group of affiliated or associated
persons becomes an Acquiring Person, each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will thereupon become void),
will thereafter have the right to receive, upon exercise of a Right at the then
current Purchase Price, that number of shares of Common Stock (or other
securities or property) having a market value of two times the Purchase Price.
In the event that, after a person or group of affiliated or associated
persons has become an Acquiring Person, the Company is acquired in a merger or
other business combination transaction or 50% or more of its consolidated
assets or earning power are sold, proper provision will be made so that each
holder of a Right (other than Rights beneficially owned by an Acquiring Person,
which will have become void) will thereafter have the right to receive, upon
the exercise thereof at the then current Purchase Price, that number of shares
of common stock of the person with whom the Company has engaged in the
foregoing transaction (or its parent), which number of shares at the time of
such transaction will have a market value of two times the Purchase Price.
At any time after any person or group of affiliated or associated
persons becomes an Acquiring Person and prior to the acquisition by such person
or group of 50% or more of the outstanding shares of Common Stock, the Board of
Directors of the Company may cause the Company to exchange the Rights (other
than Rights owned by such person or group, which will have become void), in
whole or in part, at an exchange ratio of one share of Common Stock (or one
one-hundredth of a share of Preferred Stock, or shares of a class or series of
the Company's preferred stock having equivalent rights, preferences and
privileges) per Right, subject to adjustment.
No fractional shares of Preferred Stock will be issued (other than
fractions that are integral multiples of one one-hundredth of a share of
Preferred Stock, which may, at the election of the Company, be evidenced by
depositary receipts), and in lieu thereof an adjustment in cash will be made
based on the market price of the Preferred Stock on the last trading day prior
to the date of exercise.
At any time prior to the earlier of (i) the tenth day after the time
that a person or group of affiliated or associated persons has become an
Acquiring Person (subject to extension by the Board of Directors) and (ii) the
Final Expiration Date, the Board of Directors may cause the Company to redeem
the Rights in whole, but not in part, at a price of $.01 per Right (the
"Redemption Price"). The redemption of the Rights may be made effective at such
time, on such basis and with such conditions as the Board of Directors in its
sole discretion may establish. Immediately upon any redemption of the Rights,
the right to exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price.
For so long as the Rights are then redeemable, the Company may, except
with respect to the Redemption Price, amend the Rights in any manner, including
an amendment to lower certain thresholds described above to not less than the
greater of (i) the sum of 0.001% and the largest percentage of the outstanding
shares of Common Stock then known to the Company to be beneficially owned by
any person or group of affiliated or associated persons and (ii) 10%. After the
Rights are no longer redeemable, the Company may, except with respect to the
Redemption
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Price, amend the Rights in any manner that does not adversely affect the
interests of holders of the Rights.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends.
As of March 31, 1999, there were 8,279,380 shares of Common Stock
issued and outstanding and 1,029,582 shares of Common Stock reserved for
issuance pursuant to outstanding options issued under the Company's employee
benefit plans. As long as the Rights are attached to the Common Stock, the
Company will issue one Right with each new share of Common Stock so that all
such shares will have Rights attached.
The Rights Agreement is filed herewith as Exhibit 1, and is
incorporated herein by reference. A copy of the Rights Agreement is available
free of charge from the Company. This summary description of the Rights does
not purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, as the same may be amended from time to time.
Item 2. Exhibits
Exhibit No. Description
- ----------- -----------
1 Rights Agreement, dated as of April 14, 1999, between
Broadway & Seymour, Inc. and EquiServe Trust Company, N.A.,
as Rights Agent, including the form of Certificate of
Designations with respect to the Series A Junior
Participating Preferred Stock, included as Exhibit A to the
Rights Agreement, the forms of Rights Certificate and of
Election to Exercise, included as Exhibit B to the Rights
Agreement, and the form of Summary of Rights to Purchase
Shares of Series A Junior Participating Preferred Stock
included as Exhibit C to the Rights Agreement.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereto duly authorized.
BROADWAY & SEYMOUR, INC.
By: /s/ Lillian N. Wilson
---------------------
Lillian N. Wilson
Secretary
Date: April 16, 1999
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EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
1 Rights Agreement, dated as of April 14, 1999, between
Broadway & Seymour, Inc. and EquiServe Trust Company, N.A.,
as Rights Agent, including the form of Certificate of
Designations with respect to the Series A Junior
Participating Preferred Stock, included as Exhibit A to the
Rights Agreement, the forms of Rights Certificate and of
Election to Exercise, included as Exhibit B to the Rights
Agreement, and the form of Summary of Rights to Purchase
Shares of Series A Junior Participating Preferred Stock
included as Exhibit C to the Rights Agreement.
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- --------------------------------------------------------------------------------
RIGHTS AGREEMENT
dated as of
April 14, 1999
between
BROADWAY & SEYMOUR, INC.
and
EQUISERVE TRUST COMPANY, N.A.
as Rights Agent
- --------------------------------------------------------------------------------
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Section 1. Certain Definitions...............................................................................1
Section 2. Appointment of Rights Agent.......................................................................7
Section 3. Issue of Right Certificates.......................................................................7
Section 4. Form of Right Certificates.......................................................................10
Section 5. Countersignature and Registration................................................................11
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates.....................................................12
Section 7. Exercise of Rights, Purchase Price; Expiration Date of Rights....................................13
Section 8. Cancellation and Destruction of Right Certificates...............................................17
Section 9. Availability of Shares of Preferred Stock........................................................18
Section 10. Preferred Stock Record Date......................................................................20
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights......................21
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.......................................34
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earnings Power............................35
Section 14. Fractional Rights and Fractional Shares..........................................................40
Section 15. Rights of Action.................................................................................42
Section 16. Agreement of Right Holders.......................................................................42
Section 17. Right Certificate Holder Not Deemed a Stockholder................................................43
Section 18. Concerning the Rights Agent......................................................................44
</TABLE>
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<TABLE>
<S> <C> <C>
Section 19. Merger or Consolidation or Change of Name of Rights Agent........................................44
Section 20. Duties of Rights Agent...........................................................................45
Section 21. Change of Rights Agent...........................................................................49
Section 22. Issuance of New Right Certificates...............................................................51
Section 23. Redemption.......................................................................................51
Section 24. Exchange.........................................................................................53
Section 25. Notice of Certain Events.........................................................................55
Section 26. Notices..........................................................................................56
Section 27. Supplements and Amendments.......................................................................57
Section 28. Successors.......................................................................................58
Section 29. Benefits of this Agreement.......................................................................58
Section 30. Determinations and Actions by the Board of Directors.............................................58
Section 31. Severability.....................................................................................59
Section 32. Governing Law....................................................................................59
Section 33. Counterparts.....................................................................................60
Section 34. Descriptive Headings.............................................................................60
</TABLE>
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RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of April 14, 1999 (this "Agreement"),
between Broadway & Seymour, Inc., a Delaware corporation (the "Company"), and
Equiserve Trust Company, N.A., a national banking association (the "Rights
Agent").
The Board of Directors of the Company (the "Board of Directors") has
authorized and declared a dividend of one preferred share purchase right (a
"Right") for each share of Common Stock (as hereinafter defined) of the Company
outstanding at the Close of Business (as hereinafter defined) on April 26, 1999
(the "Record Date"), each Right initially representing the right to purchase
one one-hundredth of a share (subject to adjustment as provided herein) of
Preferred Stock (as hereinafter defined) of the Company, upon the terms and
subject to the conditions herein set forth, and has further authorized and
directed the issuance of one Right (subject to adjustment as provided herein)
with respect to each share of Common Stock 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, to the extent
provided in Section 22 hereof, with respect to each share of Common Stock that
shall become outstanding after the Distribution Date and prior to the
Expiration Date.
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, in
addition to the terms defined in the recitals hereof and elsewhere herein, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as hereinafter defined)
that, together with all Affiliates and Associates (as such terms are
hereinafter defined) of such Person, shall be
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the Beneficial Owner (as hereinafter defined) of 20% or more of the shares of
Common Stock then outstanding, but shall not include an Exempt Person (as such
term is hereinafter defined); provided, however, that if the Board of Directors
determines in good faith that a Person who would otherwise be an "Acquiring
Person" has become such inadvertently, and if such Person as promptly as
practicable divests itself of Beneficial Ownership of a sufficient number of
shares of Common Stock so that such Person would no longer be an "Acquiring
Person," then such Person shall not be deemed to be or to have become an
"Acquiring Person" for any purposes of this Agreement. Notwithstanding the
foregoing, (i) if a Person would be deemed an "Acquiring Person" upon the
adoption of this Agreement, such Person shall not be deemed an "Acquiring
Person" for any purposes of this Agreement unless and until such Person
acquires Beneficial Ownership of any additional shares of Common Stock after
the date of this Agreement, and (ii) no Person shall become an "Acquiring
Person" as the result of an acquisition of shares of Common Stock by the
Company that, by reducing the number of shares outstanding, increases the
proportionate number of shares of Common Stock beneficially owned by such
Person to 20% or more of the shares of Common Stock then outstanding; provided,
however, that if a Person shall become the Beneficial Owner of 20% or more of
the shares of Common Stock then outstanding by reason of such share
acquisitions by the Company and shall thereafter become the Beneficial Owner of
any additional shares of Common Stock, then such Person shall be deemed to be
an "Acquiring Person" unless upon the consummation of the acquisition of such
additional shares of Common Stock such Person does not beneficially own 20% or
more of the shares of Common Stock then outstanding.
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(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 Exchange Act as in effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of, shall he
deemed to have "Beneficial Ownership" of and shall be deemed to "beneficially
own" any securities:
(i) that such Person or any of such Person's Affiliates or
Associates "beneficially owns," directly or indirectly, within the
meaning of Rule 13d-3 of the General Rules and Regulations under the
Exchange Act as in effect on the date of this Agreement;
(ii) that such Person or any of such Person's Affiliates or
Associates has, directly or indirectly, (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 (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), or upon
the exercise of conversion rights, exchange rights, rights, warrants
or options, or otherwise; provided, however, that a Person shall not
be deemed the Beneficial Owner of, or to beneficially own, 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 (B)
the right to vote or dispose of pursuant to any agreement, arrangement
or understanding (whether or not in writing); provided, however, that
a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, any security by reason of any such agreement,
arrangement or understanding to vote such security if such agreement,
arrangement or understanding (1) arises solely from a revocable proxy
or consent given to such Person in
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response to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable rules and regulations
promulgated under the Exchange Act and (2) is not also then reportable
by such Person on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) that 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 a Person shall not be deemed the "Beneficial Owner" of,
or to have "Beneficial Ownership" of or to "beneficially own," (x) any security
in the course of engaging in business as an underwriter of securities, solely
by reason of having acquired such security through such Person's participation
in good faith in a firm commitment underwriting of securities of the Company,
until the expiration of 40 days after the date of acquisition, or (y) solely by
reason of such Person's status or authority as an officer, director or employee
of an Exempt Person, any security "beneficially owned" (including, without
limitation, in a fiduciary capacity) by an Exempt Person or by any other such
officer, director or employee of an Exempt Person. Notwithstanding any
provision contained herein to the contrary, the phrase "then outstanding," when
used with reference to a Person's Beneficial Ownership of securities of the
Company at any particular time, shall mean the number of such securities then
issued and outstanding together with the number of
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such securities not then actually issued and outstanding that such Person would
be deemed to beneficially own hereunder.
(d) "Business Day" shall mean any day other than a Saturday, a Sunday
or a day on which banking institutions in the Commonwealth of Massachusetts or
the State of California 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.,
Boston, Massachusetts time, on such date; provided, however, that if such date
is not a Business Day it shall mean 5:00 p.m., Boston, Massachusetts time, on
the next succeeding Business Day.
(f) "Common Stock" when used with reference to the Company shall mean
the Common Stock, presently par value $0.01 per share, of the Company. "Common
Stock" when used with reference to any Person other than the Company shall mean
the capital stock (or, in the case of an unincorporated entity, the equivalent
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 that
ultimately control such first-mentioned Person.
(g) "Distribution Date" shall have the meaning set forth in Section
3(a) hereof.
(h) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(i) "Exchange Ratio" shall have the meaning set forth in Section 24(a)
hereof.
(j) "Exempt Person" shall mean (i) the Company, (ii) any Subsidiary
(as such term is hereinafter defined) of the Company, (iii) any employee
benefit plan of the Company or of any Subsidiary of the Company, or (iv) any
entity or trustee holding Common Stock for or pursuant to the terms of any such
plan or for the purpose of funding any such plan or funding other employee
benefits for employees of the Company or of any Subsidiary of the Company.
(k) "Expiration Date" shall have the meaning set forth in Section 7(a)
hereof.
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(l) "Final Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(m) "NASDAQ" shall have the meaning set forth in Section 9(b) hereof.
(n) "NASDAQ Stock Market" shall mean the stock market operated by the
National Association of Securities Dealers, Inc.
(o) "Person" shall mean any individual, firm, corporation,
partnership, trust or other entity, and shall include any successor (by merger
or otherwise) to such entity.
(p) "Preferred Stock" shall mean the Series A Junior Participating
Preferred Stock, par value $0.01 per share, of the Company, having the rights
and preferences set forth in the Form of Certificate of Designations attached
to this Agreement as Exhibit A.
(q) "Principal Party" shall have the meaning set forth in Section
13(b) hereof.
(r) "Purchase Price" shall have the meaning set forth in Section 4(a)
hereof.
(s) "Redemption Price" shall have the meaning set forth in Section
23(a) hereof.
(t) "Right Certificates" shall have the meaning set forth in Section
3(a) hereof.
(u) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(v) "Section 11(a)(ii) Event" shall have the meaning set forth in
Section 11(a)(ii) hereof.
(w) "Stock 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) of the Exchange Act) by
the Company or an Acquiring Person that an Acquiring Person has become such.
(x) "Subsidiary" shall mean, with reference to any Person, any
corporation or other entity of which securities or other ownership interests
having ordinary voting power sufficient to elect a majority of the board of
directors or other persons performing similar functions are
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beneficially owned, directly or indirectly, by such Person, and any corporation
or other entity that is otherwise controlled by such Person.
(y) "Trading Day" shall have the meaning set forth in Section 11(d)
hereof.
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 Common Stock) in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable, upon ten (10) days' prior written notice to the Rights
Agent. The Rights Agent shall have no duty to supervise, and shall in no event
be liable for, the acts or omissions of any such co-Rights Agent.
Section 3. Issue of Right Certificates.
(a) Until the Close of Business on the earlier of (i) the tenth day
after the Stock Acquisition Date or (ii) the tenth Business Day (or such later
date as may be determined by action of the Board of Directors prior to such
time as any Person becomes an Acquiring Person) after the date of the
commencement by any Person (other than an Exempt Person) of, or of the first
public announcement of the intention of any Person (other than an Exempt
Person) to commence, a tender or exchange offer the consummation of which would
result in any such Person becoming the Beneficial Owner of shares of Common
Stock aggregating 20% or more of the Common Stock then outstanding (including
any such date that is after the date of this Agreement and prior to the
issuance of the Rights; the earlier of such dates being herein referred to as
the "Distribution Date"), (x) the Rights shall be evidenced (subject to the
provisions of Section 3(b) hereof) by the certificates for Common Stock
registered in the names of the holders thereof (which certificates
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for Common Stock shall also be deemed to be Right Certificates) and not by
separate Right Certificates, and (y) the Rights shall be transferable only in
connection with the transfer of the underlying Common Stock. As soon as
practicable after the Distribution Date, the Company will prepare and execute,
the Rights Agent will countersign, and the Rights Agent will send or cause to
be sent by first-class, insured, postage-prepaid mail, to each record holder of
Common Stock as of the Close of Business on the Distribution Date, at the
address of such holder shown on the records of the Company, one or more Right
Certificates, in substantially the form of Exhibit B hereto (the "Right
Certificates"), evidencing one Right (subject to adjustment as provided herein)
for each share of Common Stock so held. As of and after the Distribution Date,
the Rights shall be evidenced solely by such Right Certificates.
(b) On the Record Date, or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights to Purchase Shares of Series A
Junior Participating Preferred Stock, in substantially the form of Exhibit C
hereto (the "Summary of Rights"), by first-class, postage-prepaid mail, to each
record holder of Common Stock as of the Close of Business on the Record Date,
at the address of such holder shown on the records of the Company. With respect
to certificates for Common Stock outstanding as of the Record Date, until the
Distribution Date, the Rights shall be evidenced by such certificates
registered in the names of the holders thereof, and the registered holders of
such Common Stock certificates shall also be the registered holders of the
associated Rights. Until the Distribution Date (or, if earlier, the Expiration
Date), the surrender for transfer of any certificate representing Common Stock
outstanding on the Record Date, with or without a copy of the Summary of
Rights, shall also constitute the transfer of the Rights associated with the
Common Stock represented thereby.
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<PAGE> 12
(c) Unless the Board of Directors by resolution adopted at or before
the time of issuance (including pursuant to the exercise of rights under the
Company's employee benefit plans) of any shares of Common Stock specifies to
the contrary, Rights shall be issued in respect of all shares of Common Stock
that are issued after the Record Date but prior to the earlier of the
Distribution Date and the Expiration Date. Certificates issued for such shares
of Common Stock (including, without limitation, upon transfer of outstanding
Common Stock, disposition of Common Stock out of treasury stock or issuance or
reissuance of Common Stock out of authorized but unissued shares) shall have
impressed on, printed on, written on or otherwise affixed to them the following
legend:
This certificate also evidences and entitles the holder hereof to
certain rights as set forth in a Rights Agreement between Broadway &
Seymour, Inc. and EquiServe Trust Company, N.A., dated as of April 14,
1999, as the same may be amended from time to time (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 Broadway & Seymour, 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. Broadway & Seymour, 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, as
set forth in the Rights Agreement, Rights beneficially owned by or
transferred to any Person who is or becomes an Acquiring Person or an
Affiliate or Associate thereof (as such terms are defined in the
Rights Agreement) and certain transferees thereof may become null and
void and may no longer be transferable.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Stock represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate, except as otherwise provided
herein, shall also constitute the transfer of the Rights associated with the
Common Stock represented thereby. In the event that the Company purchases or
otherwise acquires any shares of Common Stock after the Record Date but prior
to the Distribution Date, any Rights associated
9
<PAGE> 13
with such shares of Common Stock shall be deemed cancelled and retired so that
the Company shall not be entitled to exercise any Rights associated with shares
of Common Stock that are no longer outstanding. Notwithstanding this paragraph
(c), the omission of a legend shall not affect the enforceability of any part
of this Agreement or the rights of any holder of the Rights.
Section 4. Form of Right Certificates. (a) The Right Certificates (and
the forms of election to purchase shares and of assignment to be printed on the
reverse thereof) shall be substantially in the form set forth in 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 the NASDAQ
Stock Market, or to conform to usage. Subject to the provisions of Sections 11,
13 and 22 hereof, the Right Certificates shall entitle the holders thereof to
purchase such number of one one-hundredths of a share of Preferred Stock as
shall be set forth therein at the price per one one-hundredth of a share of
Preferred Stock set forth therein (the "Purchase Price"), but the amount and
type of securities purchasable upon the exercise of each Right and the Purchase
Price thereof shall be subject to adjustment as provided herein.
(b) Any Right Certificate issued pursuant to Section 3 or Section 22
hereof or upon transfer, exchange, replacement or adjustment 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
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<PAGE> 14
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 before or at the same time the
Acquiring Person becomes 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
(whether or not in writing) regarding the transferred Rights or (B) a transfer
that the Board of Directors has determined is part of a plan, arrangement or
understanding that has as a primary purpose or effect the avoidance of the
provisions of Section 7(e) hereof, and any Right Certificate issued upon
transfer, exchange, replacement or adjustment of any other Right Certificate
referred to in this sentence, shall contain (to the extent feasible) the
following legend:
The Rights represented by this Right 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 Right Certificate
and the Rights represented hereby may become null and void under the
circumstances specified in Section 7(e) of the Rights Agreement.
The provisions of Section 7(e) hereof shall be operative whether or not the
foregoing legend is contained on any such Right Certificate.
Section 5. Countersignature and Registration. (a) The Right
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, Chief Executive Officer, President or Treasurer or any of its Vice
Presidents, either manually or by facsimile signature, shall have affixed
thereto the Company's seal or a facsimile thereof, and shall be attested by the
Secretary or any Assistant Secretary of the Company, either manually or by
facsimile signature. The Right 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 Right
Certificates shall cease to be such officer of the Company before
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<PAGE> 15
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights Agent
and issued and delivered by the Company with the same force and effect as
though the person who signed such Right Certificates had not ceased to be such
officer of the Company; and any Right Certificate may be signed on behalf of
the Company by any Person who, at the actual date of the execution of such
Right Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this 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 an office designated for such purpose, books for
registration and transfer of the Right Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the Right
Certificates and the date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. (a)
Subject to the provisions of Sections 4(b), 7(e), 14 and 24 hereof, at any time
after the Close of Business on the Distribution Date and prior to the Close of
Business on the Expiration Date, any Right Certificate or Right Certificates
may be transferred, split up, combined or exchanged for another Right
Certificate or Right Certificates, entitling the registered holder to purchase
a like number of one one-hundredths of a share of Preferred Stock (or other
securities, assets or property, as the case may be) as the Right Certificate or
Right Certificates surrendered then entitled such holder (or former holder, in
the case of a transfer) to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Right Certificate or Right
Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender the Right Certificate or Right Certificates to be
12
<PAGE> 16
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 Right Certificate until the registered holder shall have
completed and signed the certificate contained in the form of assignment on the
reverse side of such Right 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 4(b), 7(e), 14 and 24
hereof, countersign and deliver to the Person entitled thereto a Right
Certificate or Right 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 Right 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 Right Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and, at the Company's
request, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate if mutilated, the Company will make and
deliver a new Right Certificate of like tenor to the Rights Agent for
countersignature and delivery to, or upon the order of, the registered holder
in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights, Purchase Price; Expiration Date of
Rights. (a) Subject to Section 7(e) hereof, the registered holder of any Right
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or in part at any time on or
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<PAGE> 17
after the Distribution Date upon surrender of the Right Certificate, with the
form of election to purchase and the certificate 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 aggregate Purchase Price with
respect to the total number of one one-hundredths of a share of Preferred Stock
(or other securities, assets or property, as the case may be) as to which the
Rights are exercised, at or prior to the earliest of (i) the Close of Business
on April 14, 2009 (the "Final Expiration Date"), (ii) the time at which the
Rights are redeemed as provided in Section 23 hereof or (iii) the time at which
such Rights are exchanged as provided in Section 24 hereof (the earliest of the
times described in clauses (i), (ii) and (iii) above being herein referred to
as the "Expiration Date").
(b) The Purchase Price shall initially be $22.00 for each one
one-hundredth of a share of Preferred Stock purchasable upon the exercise of a
Right. The Purchase Price and the number of shares of Preferred Stock or other
securities, assets or property to be acquired upon exercise of a Right shall be
subject to adjustment from time to time as provided in Sections 11 and 13
hereof and shall be payable in lawful money of the United States of America in
accordance with paragraph (c) of this Section 7.
(c) Except as otherwise provided herein, upon receipt of a Right
Certificate representing exercisable Rights, with the form of election to
purchase and the certificate duly executed, accompanied by payment of the
aggregate Purchase Price for the shares of Preferred Stock (or other
securities, assets 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 Right Certificate in accordance with Section 9 hereof, in cash or by
certified check, cashier's check or money order payable to the order of the
Company, the Rights Agent shall thereupon promptly (i)(A) requisition
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<PAGE> 18
from any transfer agent of the Preferred Stock (or make available, if the
Rights Agent is also the transfer agent for the Preferred Stock) certificates
for the number of shares of Preferred Stock to be purchased and the Company
hereby irrevocably authorizes its transfer agent to comply with all such
requests, or (B) if the Company in its sole discretion shall have elected to
deposit the Preferred Shares issuable upon exercise of the Rights hereunder
with a depositary agent, requisition from the depositary agent depositary
receipts representing interests in such number of shares of Preferred Stock as
are to be purchased (in which case certificates for the shares of Preferred
Stock 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) promptly 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 Right Certificate, registered in
such name or names as may be designated by such holder, and (iv) when
appropriate, after receipt, promptly deliver such cash to or upon the order of
the registered holder of such Right Certificate. 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) Except as otherwise provided herein, in case the registered holder
of any Right Certificate shall exercise less than all of the Rights evidenced
thereby, a new Right Certificate evidencing Rights equivalent to the
exercisable Rights remaining unexercised shall be issued by the Rights Agent
and delivered to, or upon the order of, the registered holder of such Right
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<PAGE> 19
Certificate, registered in such name or names as may be designated by such
holder, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary,
however, from and after the time (the "invalidation time") when any Person
first becomes an Acquiring Person, any Rights that are beneficially owned by
(x) any Acquiring Person (or any Affiliate or Associate of any Acquiring
Person), (y) a transferee of any Acquiring Person (or any such Affiliate or
Associate) who becomes a transferee after the invalidation time or (z) a
transferee of any Acquiring Person (or any such Affiliate or Associate) who
became a transferee prior to or concurrently with the invalidation time
pursuant to either (I) a transfer from the Acquiring Person to holders of its
equity securities or to any Person with whom it has any continuing agreement,
arrangement or understanding (whether or not in writing) regarding the
transferred Rights or (II) a transfer that the Board of Directors has
determined is part of a plan, arrangement or understanding that has the purpose
or effect of avoiding the provisions of this Section 7(e), and subsequent
transferees of such Persons, shall be void without any further action and any
holder of such Rights shall thereafter have no rights whatsoever with respect
to such Rights under any provision of this Agreement. The Company shall use all
reasonable efforts to ensure that the provisions of this Section 7(e) are
complied with, but shall have no liability to any holder of Right Certificates
or other Person as a result of its failure to make any determinations with
respect to an Acquiring Person or its Affiliates, Associates or transferees
hereunder. From and after the invalidation time, no Right Certificate shall be
issued pursuant to Section 3 or Section 6 hereof that represents Rights that
are or have become, or upon any such transfer would become, void pursuant to
the provisions of this Section 7(e), and any Right Certificate delivered to the
Rights
16
<PAGE> 20
Agent that represents Rights that are or have become, or upon any such transfer
would become, void pursuant to the provisions of this Section 7(e) shall be
cancelled.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder of Rights upon the occurrence of any
purported transfer or exercise of Rights pursuant to Section 6 hereof or this
Section 7 unless such registered holder shall have (i) completed and signed the
certificate contained in the form of assignment or form of election to purchase
set forth on the reverse side of the Right Certificate surrendered for such
transfer or exercise, (ii) indicated a negative response to clauses (1) and (2)
of the certificate contained in the form of assignment set forth on the reverse
side of the Right Certificate and (iii) provided such additional evidence of
the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliate
or Associate thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates. All
Right 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 Right
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 Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall
deliver all cancelled Right Certificates to the Company, or shall, at the
written request of the Company, destroy such cancelled Right Certificates, and
in such case shall deliver a certificate of destruction thereof to the Company.
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Section 9. Availability of Shares of Preferred Stock.
(a) The Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued shares of Preferred Stock
or any shares of Preferred Stock held in its treasury (and, after the
occurrence of a Section 11(a)(ii) Event or a Section 13 Event, out of its
authorized and unissued Common Stock and/or other securities or any shares of
Common Stock and/or other securities held in its treasury), the number of
shares of Preferred Stock (and, after the occurrence of a Section 11(a)(ii)
Event or a Section 13 Event, the number of shares of Common Stock and/or other
securities) that will be sufficient to permit the exercise in full of all
outstanding Rights.
(b) So long as the shares of Preferred Stock (and, following the
occurrence of a Section 11(a)(ii) Event or a Section 13 Event, shares of Common
Stock and/or other securities, as the case may be) issuable and deliverable
upon the exercise of Rights may be listed or admitted to trading on any
national securities exchange or on the NASDAQ Stock Market or included for
quotation on the National Association of Securities Dealers, Inc. Automated
Quotation System ("NASDAQ") or any other transaction reporting system, the
Company shall use its best efforts to cause, from and after such time as the
Rights become exercisable, all shares reserved for such issuance to be listed
or admitted to trading on such exchange or on the NASDAQ Stock Market or
included for quotation on any such transaction reporting system, upon official
notice of issuance upon such exercise.
(c) From and after such time as the Rights become exercisable, the
Company shall use its best efforts, if then necessary to permit the issuance of
shares of Preferred Stock (and, following the occurrence of a Section 11(a)(ii)
Event or a Section 13 Event, shares of Common Stock and/or other securities, as
the case may be) upon the exercise of Rights, to register and
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<PAGE> 22
qualify such shares of Preferred Stock (and, following the occurrence of a
Section 11(a)(ii) Event or a Section 13 Event, shares of Common Stock and/or
other securities, as the case may be) under the Securities Act and any
applicable state securities or "blue sky" laws (to the extent exemptions
therefrom are not available), cause such registration statement and
qualifications to become effective as soon as possible after such filing and
keep such registration and qualifications effective (with a prospectus at all
times meeting the requirements of the Securities Act) until the earlier of the
date as of which the Rights are no longer exercisable for such securities and
the Expiration Date. The Company may temporarily suspend, for a period of time
not to exceed 90 days, the exercisability of the Rights in order to prepare and
file a registration statement under the Securities Act and permit it to become
effective. Upon 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. 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 and until
a registration statement under the Securities Act (if required) shall have been
declared effective.
(d) The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all shares of Preferred Stock (and,
following the occurrence of a Section 11(a)(ii) Event or a Section 13 Event,
shares of Common Stock and/or other securities, as the case may be) delivered
upon exercise of Rights shall, at the time of delivery of the certificates
therefor (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable shares.
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<PAGE> 23
(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 that may
be payable in respect of the issuance or delivery of the Right Certificates or
of any shares of Preferred Stock (or shares of Common Stock or other
securities, as the case may be) upon the exercise of Rights. The Company shall
not, however, be required to pay any transfer tax that may be payable in
respect of any transfer or delivery of Right Certificates to a Person other
than, or the issuance or delivery of certificates or depositary receipts for
the Preferred Stock (or shares of Common Stock or other securities, as the case
may be) in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or to issue or deliver
any certificates or depositary receipts for Preferred Stock (or shares of
Common Stock or other securities, as the case may be) upon the exercise of any
Rights until any such tax shall have been paid (any such tax being payable by
that holder of such Right Certificate at the time of surrender) or until it has
been established to the Company's reasonable satisfaction that no such tax is
due.
Section 10. Preferred Stock Record Date. Each Person in whose name any
certificate for Preferred Stock (or Common Stock and/or other securities, as
the case may be) is issued upon the exercise of Rights shall for all purposes
be deemed to have become the holder of record of the Preferred Stock (or Common
Stock and/or other securities, as the case may be) represented thereby on, and
such certificate shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Preferred Stock (or
Common Stock and/or other securities, as the case may be) 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
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<PAGE> 24
succeeding Business Day on which the applicable transfer books of the Company
are open. Prior to the exercise of the Rights evidenced thereby, the holder of
a Right Certificate shall not be entitled to any rights of a stockholder of the
Company with respect to shares for which the Rights shall be exercisable,
including, without limitation, the right to vote or 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 and Kind of Shares or
Number of Rights. The Purchase Price, the number of shares of Preferred Stock
or other securities or property purchasable upon exercise of 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 Preferred Stock
payable in shares of Preferred Stock, (B) subdivide the outstanding
Preferred Stock, (C) combine the outstanding Preferred Stock into a
smaller number of shares of Preferred Stock or (D) issue any shares of
its capital stock in a reclassification of the Preferred Stock
(including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation), except as otherwise provided in this Section
11(a), the Purchase Price in effect at the time of the record date for
such dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of shares of
Preferred Stock or other capital stock, as the case may be, issuable
on such date, shall be proportionately adjusted so that the holder of
any Right exercised after such time shall be entitled to receive, upon
payment of the Purchase Price then in effect, the aggregate number and
kind of shares of capital stock that, if such Right had been
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<PAGE> 25
exercised immediately prior to such date and at a time when the
Preferred Stock or other capital stock transfer books of the Company
were open, the holder would have owned upon such exercise and been
entitled to receive by virtue of such dividend, subdivision,
combination or reclassification; provided, however, that in no event
shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of Preferred Stock or
other capital stock of the Company issuable upon exercise of one
Right. If an event occurs that would require an adjustment under both
this Section 11(a)(i) and Section 11(a)(ii), 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).
(ii) Subject to Section 24 of this Agreement, in the
event that any Person, alone or together with its Affiliates and
Associates, shall become an Acquiring Person (other than pursuant to a
transaction to which the provisions of Section 13 apply), then, upon
the first occurrence of such event (a "Section 11(a)(ii) Event"), each
holder of a Right, except as otherwise provided in this Section 11 and
in Section 7(e) hereof, shall thereafter have the right to receive,
upon exercise thereof at a price equal to the then current Purchase
Price multiplied by the number of one one-hundredths of a share of
Preferred Stock for which a Right is then exercisable in accordance
with the terms of this Agreement, and in lieu of Preferred Stock, such
number of shares of Common Stock as shall equal the result obtained by
(x) multiplying the then current Purchase Price by the number of one
one-hundredths of a share of Preferred Stock for which a Right is then
exercisable and (y) dividing that product (which, following the first
occurrence of a Section 11(a)(ii) Event, shall be referred to as the
"Purchase Price" for each Right for all
22
<PAGE> 26
purposes of this Agreement) by 50% of the current per share market
price of the Common Stock (determined pursuant to Section 11(d)
hereof) on the date of the occurrence of such Section 11(a)(ii) Event
(such result being hereinafter referred to as the "Adjustment
Shares"). From and after the time of occurrence of a Section 13 Event,
any Rights that theretofore have not been exercised pursuant to this
Section 11(a)(ii) shall thereafter be exercisable only in accordance
with Section 13 and not pursuant to this Section 11(a)(ii).
(iii) In lieu of issuing shares of Common Stock in
accordance with Section 11(a)(ii) hereof, the Company may, acting by
resolution of the Board of Directors, and, in the event that there
shall not be sufficient shares of Common Stock issued but not
outstanding or authorized but unissued to permit the exercise in full
of the Rights in accordance with Section 11(a)(ii) hereof, the Company
shall, to the extent permitted by applicable law and any material
agreements then in effect to which the Company is a party: (A)
determine the excess (such excess, the "Spread") of (1) the value of
the Adjustment Shares issuable upon the exercise of a Right in
accordance with Section 11(a)(ii) hereof (the "Current Value") over
(2) the Purchase Price (as adjusted in accordance with Section
11(a)(ii) hereof), and (B) with respect to each Right (other than
Rights that have become void pursuant to Section 7(e) hereof), make
adequate provision to substitute for the Adjustment Shares, upon
payment of the applicable Purchase Price, (1) cash, (2) a reduction in
the Purchase Price, (3) shares of preferred stock or other equity
securities of the Company (including, without limitation, shares, or
one-one hundredths of shares, of Preferred Stock and other shares, or
units of shares, of preferred stock that, by virtue of having
dividend, voting and liquidation rights substantially comparable to
those of the shares of Common Stock, are deemed in good faith by the
Board of Directors to have
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<PAGE> 27
substantially the same value as the shares of Common Stock (such
shares of preferred stock or other equity securities or units thereof
are hereinafter referred to as "Common Stock equivalents"), (4) debt
securities of the Company, (5) other assets, or (6) any combination of
the foregoing having a value that, when added to the value of the
shares of Common Stock actually issued upon exercise of such Right,
shall have an aggregate value equal to the Current Value, where such
aggregate value has been determined by the Board of Directors upon the
advice of a nationally recognized investment banking firm selected in
good faith by the Board of Directors; provided, however, that if the
Company shall not make adequate provision to deliver value pursuant to
clause (B) above within thirty (30) days following the date of the
first occurrence of a Section 11(a)(ii) Event (the "Section 11(a)(ii)
Trigger Date"), then the Company shall be obligated to deliver, to the
extent permitted by applicable law and any material agreements then in
effect to which the Company is a party, upon the surrender for
exercise of a Right and without requiring payment of the applicable
Purchase Price, shares of Common Stock (to the extent available), and
then, if necessary, cash, which shares and/or cash have an aggregate
value equal to the Spread. If, after the occurrence of a Section
11(a)(ii) Event, the Board of Directors shall determine in good faith
that it is likely that sufficient additional shares of Common Stock
could be authorized for issuance upon exercise in full of the Rights,
then, if the Board of Directors so elects, 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 (such thirty (30) day period,
as it may be extended, being referred to herein as the "Substitution
Period"). To the extent that the
24
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Company determines that some action need be taken pursuant to the
first and/or second sentences of this Section 11(a)(iii), the Company
(x) shall provide, subject to Section 7(e) hereof, that such action
shall apply uniformly to all outstanding Rights and (y) may suspend
the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of additional
shares and/or to decide the appropriate form of distribution to be
made pursuant to this Section 11(a)(iii) and to determine the value
thereof. In the event of any such suspension, the Company shall issue
a public announcement stating that the exercisability of the Rights
has been temporarily suspended, as well as a public announcement at
such time as the suspension is no longer in effect. For purposes of
this Section 11(a)(iii), the value of the shares of Common Stock shall
be the current per share market price (as determined pursuant to
Section 11(d) hereof) on the Section 11(a)(ii) Trigger Date and the
per share or fractional value of any "Common Stock equivalent" shall
be deemed to equal the current per share market price of the Common
Stock on such date. The Board of Directors may, but shall not be
required to, establish procedures to allocate the right to receive
shares of Common Stock upon the exercise of the Rights among holders
of Rights pursuant to this Section 11(a)(iii).
(b) In the event that the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Stock
entitling them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Preferred Stock (or shares having the same
rights, privileges and preferences as the Preferred Stock ("equivalent
preferred stock")) or securities convertible into Preferred Stock or equivalent
preferred stock at a price per share of Preferred Stock or equivalent preferred
stock (or having a conversion price per share, if a security convertible into
shares of Preferred Stock or equivalent preferred stock) less than the
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then current per share market price of the Preferred Stock (determined pursuant
to Section 11(d) hereof) on such record date, the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of shares of Preferred Stock outstanding
on such record date plus the number of shares of Preferred Stock and/or
equivalent preferred stock that the aggregate offering price of the total
number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock
outstanding on such record date plus the number of additional shares of
Preferred Stock and/or equivalent preferred stock to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible); provided, however, that in no event shall
the consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable upon
exercise of one Right. In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board
of Directors, whose determination shall be described in a statement filed with
the Rights Agent and shall be binding on the holders of the Rights. Shares of
Preferred Stock and equivalent preferred stock 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 that
would then be in effect if such record date had not been fixed.
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<PAGE> 30
(c) In the event that the Company shall fix a record date for the
making of a distribution to all holders of the Preferred Stock (including any
such distribution made in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend or a
dividend payable in Preferred Stock) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the Purchase Price to be
in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the then current per share market price of the
Preferred Stock (determined pursuant to Section 11(d) hereof) on such record
date, less the fair market value (as determined in good faith by the Board of
Directors, whose determination shall be described in a statement filed with the
Rights Agent and shall be binding on the holders of the Rights) of the portion
of the assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to one share of Preferred Stock, and
the denominator of which shall be such current per share market price
(determined pursuant to Section 11(d) hereof) of the Preferred Stock; provided,
however, that in no event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the shares of capital
stock of the Company to be issued upon exercise of one Right. Such adjustments
shall be made successively whenever such a record date is fixed; and in the
event that such distribution is not so made, the Purchase Price shall again be
adjusted to be the Purchase Price that would then be in effect if such record
date had not been fixed.
(d) (i) Except as otherwise provided in subparagraph (ii) of
this Section 11(d), for the purpose of any computation hereunder, the
"current per share market price" of the Common Stock, the Preferred
Stock or any other security (a
27
<PAGE> 31
"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 30 consecutive Trading Days (as hereinafter defined)
immediately prior to such date; provided, however, that in the event
that the current per share market price of any Security is determined
during a period following the announcement by the issuer of such
Security of (A) a dividend or distribution on such Security payable in
shares of such Security or securities convertible into such shares, or
(B) any subdivision, combination or reclassification of such Security,
and prior to the expiration of 30 Trading Days 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 by 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 on
the NASDAQ Stock Market, if the Security is listed or admitted to
trading thereon), or, if the Security is not listed or admitted to
trading on any national securities exchange or on the NASDAQ Stock
Market, the last quoted price or, if not so quoted, the average,of the
high bid and low asked prices in the over-the-counter market, as
reported by NASDAQ or such other system then in use, or, if
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<PAGE> 32
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. 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 or the NASDAQ Stock Market is open
for the transaction of business or, if the Security is not listed or
admitted to trading on any national securities exchange or on the
NASDAQ Stock Market, a Business Day. If a Security is not publicly
held or so listed or traded, then the "current per share market price"
of such Security 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 binding on the holders of the Rights.
(ii) For the purpose of any computation hereunder,
if the Preferred Stock is publicly held or so listed or traded, the
"current per share market price" of the Preferred Stock shall be
determined in accordance with the method set forth in Section
11(d)(i). If the Preferred Stock is not publicly held or so listed or
traded but the Common Stock is publicly held or so listed or traded,
the "current per share market price" of a share of the Preferred Stock
shall be conclusively deemed to be the current per share market price
of the Common Stock (as determined pursuant to Section 11(d) hereof)
multiplied by one hundred (appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date
hereof). If neither the Common Stock nor the Preferred Stock is
publicly held or so listed or traded, then the "current per share
market price" of the Preferred Stock shall mean the fair value per
share as determined in good faith by the Board of Directors of the
Company, whose determination shall be
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<PAGE> 33
described in a statement filed with the Rights Agent and shall be
binding on the holders of the Rights.
(e) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the Purchase
Price; provided, however, that any adjustments which by reason of this Section
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 one ten-thousandth of a
share of Preferred Stock or other share or security, 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 years from the date of the transaction that requires such adjustment or
(ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a) or
Section 13(a) hereof, the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of the Company other than
Preferred Stock, thereafter the number of such other shares so receivable upon
exercise of a Right and 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 Preferred Stock contained in
Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m) hereof, as
applicable, and the provisions of Sections 7, 9, 10, 13 and 14 hereof with
respect to the Preferred Stock 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 one-hundredths of a
share of Preferred Stock (or other securities, assets or
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<PAGE> 34
property, as the case may be) 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 Sections 11(b) and (c) hereof, each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence
the right to purchase, at the adjusted Purchase Price, that number of one
one-hundredths of a share of Preferred Stock (calculated to the nearest one
ten-thousandth of a share of Preferred Stock) obtained by (i) multiplying (x)
the number of one one-hundredths of a share covered by a Right immediately
prior to such adjustment by (y) the Purchase Price in effect immediately prior
to such adjustment of the Purchase Price and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such adjustment of
the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of one one-hundredths of a share of Preferred Stock
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 one-hundredths of a share of Preferred Stock for which a Right was
exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest one 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
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<PAGE> 35
or any day thereafter, but, if the Right Certificates have been issued, shall
be at least 10 days later than the date of the public announcement. If Right
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 Right Certificates on such
record date Right 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 Right
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein and shall be registered in
the names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of one one-hundredths of a share of Preferred Stock issuable upon
the exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price and the number of one
one-hundredths of a share of Preferred Stock that were expressed in the initial
Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par value, if any, of the Preferred Stock or
other shares of capital stock issuable upon exercise of the Rights, the Company
shall take any corporate action that may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully
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<PAGE> 36
paid and nonassessable shares of Preferred Stock or other such shares 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 Preferred Stock and other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the Preferred Stock 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 upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any consolidation or subdivision of the Preferred Stock, issuance
wholly for cash of any shares of Preferred Stock at less than the current
market price, issuance wholly for cash of Preferred Stock or securities that by
their terms are convertible into or exchangeable for Preferred Stock, dividends
on Preferred Stock payable in shares of Preferred Stock or issuance of rights,
options or warrants referred to hereinabove in Section 11(b), hereafter made by
the Company to holders of its Preferred Stock shall not be taxable to such
stockholders.
(n) In the event that at any time after the date of this Rights
Agreement and prior to the Distribution Date, the Company shall (i) declare or
pay any dividend on the Common Stock payable in Common Stock or (ii) effect a
subdivision, combination or consolidation of the
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<PAGE> 37
Common Stock (by reclassification or otherwise than by payment of a dividend
payable in Common Stock) into a greater or lesser number of shares of Common
Stock, then in such case, (A) the number of one one-hundredths of a share of
Preferred Stock purchasable after such event upon proper exercise of each Right
shall be determined by multiplying the number of one one-hundredths of a share
of Preferred Stock so purchasable immediately prior to such event by a
fraction, the numerator of which shall be the total number of shares of Common
Stock outstanding immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately following the occurrence of such event and (B) action
shall be taken such that each share of Common Stock outstanding immediately
after such event shall have issued with respect to it that number of Rights
which each share of Common Stock outstanding immediately prior to such event
had issued with respect to it. The adjustments provided for in this Section
11(n) shall be made successively whenever a dividend is declared or paid or
such a subdivision, combination or consolidation is effected.
(o) The Company agrees that, after the Distribution Date, it will not,
except as permitted by Sections 23, 24 or 27 hereof, take (or permit any
Subsidiary to take) any action if at the time such action is taken it is
reasonably foreseeable that such action will diminish substantially or
eliminate the benefits intended to be afforded by the Rights.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Section 11 or Section 13
hereof, the Company shall (a) promptly prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent, and with each transfer agent for the
Common Stock and the Preferred Stock, a copy of such certificate, and (c) mail
a
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<PAGE> 38
brief summary thereof to each holder of a Right Certificate (or, if prior to
the Distribution Date, to each holder of a certificate representing shares of
Common Stock) in accordance with Section 25 hereof. Notwithstanding the
foregoing sentence, the failure of the Company to make such certification or to
give such notice shall not affect the validity, 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 therein contained and
shall not be deemed to have knowledge of any such adjustment unless and until
it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earnings Power. (a) In the event (a "Section 13 Event") that, at any time
following the Stock Acquisition Date, directly or indirectly, (i) the Company
shall consolidate with, or merge with and into, any other Person, and the
Company shall not be the continuing or surviving corporation of such
consolidation or merger, (ii) any Person shall consolidate with, or merge with
or into, the Company, and the Company shall be the continuing or surviving
corporation of such consolidation or merger and, in connection with such
consolidation or merger, all or part of the outstanding shares of Common Stock
shall be changed into or exchanged for stock or other securities of any other
Person (or of the Company) or cash or any other property, or (iii) the Company
shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell
or otherwise transfer), in one transaction or a series of related 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, then, and in each such case, proper provision shall be made so that:
(A) each holder of a Right (except as provided in Section 7(e) hereof) shall
thereafter have the right to receive, upon the exercise thereof at the then
current Purchase Price in accordance with the terms of this Agreement, such
number of validly authorized and issued, fully
35
<PAGE> 39
paid, nonassessable and freely tradeable shares of Common Stock of the
Principal Party (as such term is hereinafter defined), not subject to 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 one-hundredths of a share of Preferred Stock for
which a Right is exercisable immediately prior to the first occurrence of a
Section 13 Event (or, if a Section 11(a)(ii) Event has occurred prior to the
first occurrence of a Section 13 Event, multiplying the number of one
one-hundredths of a share of Preferred Stock for which a Right was exercisable
immediately prior to the first occurrence of a Section 11(a)(ii) Event by the
Purchase Price in effect immediately prior to such first occurrence), and
dividing that product (which, following the first occurrence of a Section 13
Event, shall be referred to as the "Purchase Price" for each Right for all
purposes of this Agreement) by (2) 50% of the current per share market price of
the Common Stock of such Principal Party (determined pursuant to Section 11(d)
hereof) on the date of consummation of such consolidation, merger, sale or
transfer; (B) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such consolidation, merger, sale or transfer, all the
obligations and duties of the Company pursuant to this Agreement; (C) the term
"Company" shall thereafter be deemed to refer to such Principal Party; (D) such
Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of its shares of Common Stock in accordance
with Section 9 hereof) in connection with the consummation of any such
transaction as may be necessary to ensure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to the
shares of its Common Stock thereafter deliverable upon the exercise of the
Rights; and (E) the provisions of Section 11(a)(ii) hereof shall be of no
effect following the first occurrence of any Section 13 Event.
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(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (i)
or (ii) of the first sentence of Section 13(a) hereof: (A) the Person
that is the issuer of the securities into which the shares of Common
Stock are converted in such merger or consolidation, or, if there is
more than one such issuer, the issuer the shares of Common Stock of
which have the greatest aggregate market value of shares outstanding,
or (B) if no securities are so issued, (x) the Person that is the
other party to such merger or consolidation, if such Person survives
such merger or consolidation, or, if there is more than one such
Person, the Person the shares of Common Stock of which have the
greatest aggregate market value of shares outstanding, (y) in the case
of a merger, if the Person that is the other party to such merger does
not survive such merger, the Person that does survive such merger
(including the Company if it survives) or (z) in the case of a
consolidation, the Person resulting from such consolidation; and
(ii) in the case of any transaction described in clause (iii)
of the first sentence of Section 13(a) hereof, the Person that is the
party receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions, or, if each
Person that is a party to such transaction or transactions receives
the same portion of the assets or earning power so transferred or if
the Person receiving the greatest portion of the assets or earning
power cannot be determined, whichever of such Persons as is the issuer
of Common Stock having the greatest aggregate market value of shares
outstanding;
provided, however, that in any such case described in the foregoing clauses
(b)(i) and (b)(ii), (1) if the Common Stock of such Person is not at such time
and has not been continuously over the
37
<PAGE> 41
preceding 12-month period registered under Section 12 of the Exchange Act, and
if such Person is a direct or indirect Subsidiary of another Person the Common
Stock of which is and has been so registered, the term "Principal Party" shall
refer to such other Person; and (2) if such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Stocks of two or more of which
are and have been so registered, the term "Principal Party" shall refer to
whichever of such Persons is the issuer of the Common Stock having the greatest
aggregate market value of shares outstanding.
(c) The Company shall not consummate any consolidation, merger, sale
or transfer referred to in Section 13(a) hereof unless the Principal Party
shall have a sufficient number of authorized shares of its Common Stock that
have not been issued or reserved for issuance to permit the exercise in full of
the Rights in accordance with this Section 13 and unless prior thereto the
Company and such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement providing for the terms set forth in
Sections 13(a) and (b) hereof and further providing that, as soon as
practicable after the date of such consolidation, merger, sale or transfer, the
Principal Party will:
(i) prepare and file a registration statement under the
Securities Act with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, use
its best efforts to cause such registration statement to become
effective as soon as practicable after such filing, and use its best
efforts to cause such registration statement to remain effective (with
a prospectus at all times meeting the requirements of the Securities
Act) until the Expiration Date and similarly comply with applicable
state securities laws;
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<PAGE> 42
(ii) use its best efforts, if the Common Stock of the
Principal Party shall be listed or admitted to trading on the New York
Stock Exchange, on another national securities exchange or on the
NASDAQ Stock Market, to list or admit to trading (or continue the
listing of) the Rights and the securities purchasable upon exercise of
the Rights on the New York Stock Exchange, such other securities
exchange or the NASDAQ Stock Market, or, if the Common Stock of the
Principal Party shall not be listed or admitted to trading on a
national securities exchange or on the NASDAQ Stock Market, to cause
the Rights and the securities receivable upon exercise of the Rights
to be authorized for quotation on or reported by NASDAQ or such other
system then in use;
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party and its Affiliates that comply in
all respects with the requirements for registration on Form 10 (or any
successor form) under the Exchange Act; and
(iv) obtain waivers of any rights of first refusal or
preemptive rights in respect of the Common Stock of the Principal
Party subject to purchase upon exercise of outstanding Rights.
The provisions of this Section 13 shall similarly apply to successive such
mergers, consolidations, sales or transfers. In the event that a Section 13
Event shall occur at any time after the occurrence of a Section 11(a)(ii)
Event, the Rights that have not theretofore been exercised shall thereafter
become exercisable in the manner described in Section 13(a).
(d) The Company covenants and agrees that it will not, at any time
after the Stock Acquisition Date, enter into any transaction of the type
described in clauses (i) through (iii) of Section 13(a) hereof if at the time
of or after such consolidation, merger, sale, transfer or other transaction
there are any charter or bylaw provisions or any rights, warrants or other
instruments
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<PAGE> 43
or securities outstanding or agreements in effect that would substantially
diminish or otherwise eliminate the benefits intended to be afforded by the
Rights.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights or
to distribute Right Certificates that evidence fractional Rights. In lieu of
such fractional Rights, there shall be paid to the registered holders of the
Right 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. The closing price of the Rights for any 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 Rights are 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 Rights are listed or admitted to trading (or
on the NASDAQ Stock Market, if the Security is listed or admitted to trading
thereon), or, if the Rights are not listed or admitted to trading on any
national securities exchange or on the NASDAQ Stock Market, the last quoted
price or, if not so quoted, the average of the high bid and low asked prices in
the over-the-counter market, as reported by NASDAQ or such other system then in
use or, if on any such date the Rights are 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 Rights selected by the
40
<PAGE> 44
Board of Directors. If on any such date no such market maker is making a market
in the Rights, the fair value of the Rights on such date as determined in good
faith by the Board of Directors shall be used.
(b) The Company shall not be required to issue fractions of Preferred
Stock (other than fractions that are integral multiples of one one-hundredth of
a share of Preferred Stock) upon exercise of the Rights or to distribute
certificates that evidence fractional shares of Preferred Stock (other than
fractions that are integral multiples of one one-hundredth of a share of
Preferred Stock). Interests in fractions of Preferred Stock in integral
multiples of one one-hundredth of a share of Preferred Stock may, at the
election of the Company, be evidenced by depositary receipts, pursuant to an
appropriate agreement between the Company and a depositary selected by it,
provided that such agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences to which they
are entitled as beneficial owners of the Preferred Stock represented by such
depositary receipts. In lieu of fractional shares of Preferred Stock that are
not integral multiples of one one-hundredth of a share of Preferred Stock, the
Company may pay to the registered holders of Right 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 one share of Preferred Stock. For
the purposes of this Section 14(b), the current market value of a share of
Preferred Stock shall be the closing price of a share of Preferred Stock (as
determined pursuant to 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 right to receive any fractional Rights or any fractional shares upon
exercise of a Right (except as provided above).
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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 Right
Certificates (and, prior to the Distribution Date, the registered holders of
the Common Stock); and any registered holder of any Right Certificate (or,
prior to the Distribution Date, of the Common Stock), without the consent of
the Rights Agent or of the holder of any other Right Certificate (or, prior to
the Distribution Date, of the Common Stock), may, on his own behalf and for his
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
right to exercise the Rights evidenced by such Right Certificate in the manner
provided therein and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and shall be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened
violations of, the obligations of any Person subject to this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer and with the appropriate forms
and certificates duly executed;
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(c) the Company and the Rights Agent may deem and treat the Person in
whose name a Right Certificate (or, prior to the Distribution Date, a Common
Stock certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or writing
on the Right Certificate or the Common Stock certificate made by anyone other
than the Company or the Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent shall be affected by any notice to the
contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use its
best efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of Preferred Stock or any
other securities of the Company that may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
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
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stockholders (except as provided in this Agreement), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by such
Right Certificate shall have been exercised in accordance with the provisions
hereof.
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,
its officers, employees, agents and directors for, and to hold each of them
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 or such indemnified party 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 by the Company and shall incur
no liability for, or in respect of any action taken, suffered or omitted by it
in connection with, its administration of this Agreement in reliance upon any
Right Certificate or certificate for Preferred Stock or Common Stock 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
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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 stock transfer or 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 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 Right Certificates shall have been countersigned but
not delivered, any such successor Rights Agent may adopt the countersignature
of the predecessor Rights Agent and deliver such Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall not
have been countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Right Certificates so countersigned; and in case at that
time any of the Right Certificates shall not have been countersigned, the
Rights Agent may countersign such Right Certificates either in its prior name
or in its changed name; and in all such cases such Right Certificates shall
have the full force provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations expressly imposed by this Agreement (and no implied
duties or obligations shall be
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read into this Agreement against the Rights Agent) upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person or
Affiliate or Associate thereof 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 a person
believed in good faith by the Rights Agent to be the Chairman of the Board, the
Chief Executive Officer, the President, any Vice President, the Treasurer, any
Assistant Treasurer, the Secretary or any Assistant Secretary of the Company
and delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any
other Person only for its own gross negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its
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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 any provision 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 Right 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
Right Certificate; nor shall it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void pursuant to
Section 7(e) hereof) or any adjustment required under the provisions of Section
11 or Section 13 hereof or responsible for the manner, method or amount of any
such adjustment or the ascertaining of the existence of facts that would
require any such adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after receipt 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 shares of Preferred Stock or other
securities to be issued pursuant to this Agreement or any Right Certificate or
as to whether any shares of Preferred Stock or other securities will, when
issued, be duly and 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
person believed in good faith by the
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Rights Agent to be the Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Secretary, any Assistant Secretary, the
Treasurer or any Assistant Treasurer 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 with respect to its obligations under this Agreement and the date on
and/or after which such action shall be taken or such omission shall be
effective. The Rights Agent shall not be liable for any action taken by, or
omission of, the Rights Agent in accordance with a proposal included in any
such application on or after the date specified in such application (which date
shall not be less than five 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.
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(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable
or accountable for any act, default, neglect or misconduct of any such
attorneys or agents or for any loss to the Company resulting from any such act,
default, neglect or misconduct, provided reasonable care was exercised in the
selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate contained in the form of
assignment or the form of election to purchase set forth on the reverse
thereof, 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 30 days' notice in writing mailed to the Company and to each transfer
agent of the Common Stock and the Preferred Stock by registered or certified
mail, and, following the Distribution Date, to the holders of the Right
Certificates by first-class mail. The Company may remove the Rights Agent or
any successor Rights Agent upon 30 days' notice in writing, mailed to the
Rights Agent or successor
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Rights Agent, as the case may be, and to each transfer agent of the Common
Stock and the Preferred Stock by registered or certified mail, and, following
the Distribution Date, to the holders of the Right Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent.
If the Company shall fail to make such appointment within a period of 30 days
after giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent
or by the holder of a Right Certificate (who shall, with such notice, submit
his Right Certificate for inspection by the Company), then the registered
holder of any Right 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
any state thereof, in good standing, that is authorized under such laws to
exercise corporate trust or stock transfer powers and is subject to supervision
or examination by federal or state authority and that has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$100,000,000. 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 Common Stock and the Preferred Stock, and, following the
Distribution Date, mail a notice thereof in writing to the registered holders
of the Right Certificates. Failure to give any notice provided for in this
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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 Right Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such
forms 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 Right Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of Common Stock following the Distribution Date and
prior to the Expiration Date, the Company shall, with respect to shares of
Common Stock so issued or sold pursuant to (i) the exercise of stock options,
(ii) under any employee plan or arrangement, (iii) upon the exercise,
conversion or exchange of securities, notes or debentures issued by the
Company, or (iv) a contractual obligation of the Company, in each case existing
prior to the Distribution Date, and may, in any other case if deemed necessary
or appropriate by the Board of Directors, issue Right Certificates representing
the appropriate number of Rights in connection with such issuance or sale;
provided, however, that (x) no such Right Certificates shall be issued, if, and
to the extent that, the Company shall be advised by counsel that such issuance
would create a significant risk of material adverse tax consequences to the
Company or to the Person to whom such Right Certificates would be issued, and
(y) no such Right Certificates shall be issued if, and to the extent that,
appropriate adjustment shall have otherwise been made in lieu of the issuance
thereof.
Section 23. Redemption. (a) The Board of Directors may, by resolution
adopted at any time prior to the earlier of (i) the Close of Business on the
tenth day following the Stock
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Acquisition Date (subject to extension by the Board of Directors as provided in
Section 27 hereof) and (ii) the Final Expiration Date, elect to cause the
Company to redeem all but not less than all the then outstanding Rights at a
redemption price of $.01 per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date hereof
(such redemption price being hereinafter referred to as the "Redemption
Price"). The redemption of the Rights may be made effective at such time, on
such basis and with such conditions as the Board of Directors in its sole
discretion may establish. The Company may, at its option, pay the Redemption
Price in cash, shares of Common Stock (based on the current per share market
price of the Common Stock at the time of redemption) or any other form of
consideration deemed appropriate by the Board of Directors.
(b) Immediately upon the action of the Board of Directors ordering the
redemption of the Rights pursuant to paragraph (a) of this Section 23 (or at
such later time as the Board of Directors may establish for the effectiveness
of such redemption), and without any further action and without any notice, the
right to exercise the Rights shall terminate and the only right thereafter of
the holders of Rights shall be to receive the Redemption Price. The Company
shall promptly give public notice of any such redemption; provided, however,
that the failure to give, or any defect in, any such notice shall not affect
the validity of such redemption. Within 10 days after such action of the Board
of Directors ordering the redemption of the Rights (or such later time as the
Board of Directors may establish for the effectiveness of such redemption), the
Company shall mail a notice of redemption to all the holders of the then
outstanding Rights 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 Stock. Any notice that is mailed in
the manner herein provided shall be deemed given, whether or not the holder
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receives the notice. Each such notice of redemption shall state the method by
which the payment of the Redemption Price will be made.
Section 24. Exchange. (a) The Board of Directors may, at its option,
by resolution adopted at any time after any Person becomes an Acquiring Person,
cause the Company to 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 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 the date hereof (such exchange ratio being hereinafter referred
to as the "Exchange Ratio"). Notwithstanding the foregoing, the Board of
Directors shall not be empowered to effect such exchange at any time after any
Person (other than an Exempt Person), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of shares of Common
Stock aggregating 50% or more of the shares of Common Stock then outstanding.
(b) Immediately upon the action of the Board of Directors ordering the
exchange of any Rights pursuant to paragraph (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 shares of Common Stock equal to the number of
Rights held by such holder multiplied by the Exchange Ratio. The Company shall
promptly give public notice of any such exchange; provided, however, that the
failure to give, or any defect in, such notice shall not affect the validity of
such exchange. The Company shall promptly mail a notice of any such exchange to
all of the holders of the Rights so exchanged at their last addresses as they
appear upon the registry books of the Rights Agent. Any notice that is mailed
in the manner herein provided shall be deemed given, whether or not the holder
receives
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the notice. Each such notice of exchange will state the method by
which the exchange of the shares of Common Stock for Rights will be effected
and, in the event of any partial exchange, the number of Rights that will be
exchanged. Any partial exchange shall be effected pro rata based on the number
of Rights (other than Rights that have become void pursuant to the provisions
of Section 7(e) hereof) held by each holder of Rights.
(c) The Company may at its option substitute, and, in the event that
there shall not be sufficient shares of Common Stock issued but not outstanding
or authorized but unissued to permit any exchange of Rights as contemplated in
accordance with this Section 24, the Company shall substitute to the extent of
such insufficiency, for each share of Common Stock that would otherwise be
issuable upon exchange of a Right, a number of shares of Preferred Stock or
fractions thereof (or equivalent preferred stock, as such term is defined in
Section 11(b) hereof) having an aggregate current per share market price
(determined pursuant to Section 11(d) hereof) equal to the current per share
market price of one share of Common Stock (determined pursuant to Section 11(d)
hereof) as of the effective date of such exchange.
(d) The Company shall not, in connection with any exchange pursuant to
this Section 24, be required to issue fractions of shares of Common Stock or to
distribute certificates that evidence fractional shares of Common Stock. In
lieu of such fractional shares of Common Stock, the Company shall pay to the
registered holders of the Right Certificates with regard to which such
fractional shares of Common Stock would otherwise be issuable an amount in cash
equal to the same fraction of the current market value of a whole share of
Common Stock. For the purposes of this paragraph (d), the current market value
of a whole share of Common Stock shall be the closing price of a share of
Common Stock (as determined pursuant to Section 11(d) hereof) for the Trading
Day immediately prior to the date of exchange pursuant to this Section 24.
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(e) In the event that there shall not be sufficient shares of Common
Stock or Preferred Stock issued but not outstanding or authorized but unissued
to permit any exchange of Rights as contemplated in accordance with this
Section 24, the Company shall take all such action as may be necessary to
authorize additional shares of Common Stock or Preferred Stock for issuance
upon exchange of the Rights.
Section 25. Notice of Certain Events. (a) In case the Company shall,
at any time after the Distribution Date, propose (i) to pay any dividend
payable in stock of any class to the holders of the Preferred Stock or to make
any other distribution to the holders of the Preferred Stock (other than a
regular quarterly cash dividend), (ii) to offer to the holders of the Preferred
Stock rights or warrants to subscribe for or to purchase any additional shares
of Preferred Stock or shares of stock of any class or any other securities,
rights or options, (iii) to effect any reclassification of the Preferred Stock
(other than a reclassification involving only the subdivision of outstanding
Preferred Stock), (iv) to effect any consolidation or merger into or with any
other Person, or to effect any sale or other transfer (or to permit one or more
of its Subsidiaries to effect any sale or other transfer), in one or more
transactions, of 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, or (v) to
effect the liquidation, dissolution or winding up of the Company, then, in each
such case, the Company shall give to each holder of a Right Certificate, in
accordance with Section 26 hereof, a notice of such proposed action, which
shall specify the record date for the purposes of such stock dividend or
distribution of rights or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution or winding up
is to take place and the date of participation therein by the holders of the
Preferred Stock, if any such date is to be fixed, and such notice shall be so
given in the case of any action covered by clause (i)
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or (ii) above at least 10 days prior to the record date for determining holders
of the Preferred Stock for purposes of such action, and in the case of any such
other action, at least 10 days prior to the date of the taking of such proposed
action or the date of participation therein by the holders of the Preferred
Stock, whichever shall be the earlier. The failure to give notice required by
this Section 25 or any defect therein shall not affect the legality or validity
of the action taken by the Company or the vote upon any such action.
(b) In case any event described in Section 11(a)(ii) shall occur, then
(i) the Company shall as soon as practicable thereafter give to each holder of
a Right Certificate (or if occurring prior to the Distribution Date, the
holders of the Common Stock), in accordance with Section 26 hereof, a notice of
the occurrence of such event, which notice shall describe such event and the
consequences of such event to holders of Rights under Section 11(a)(ii) hereof,
and (ii) all references in Section 25(a) to Preferred Stock shall be deemed
thereafter to refer also to Common Stock and, if appropriate, other securities
issuable in respect of the Rights.
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 Right
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Broadway & Seymour, Inc.
128 South Tryon Street
Charlotte, North Carolina 28202
Attention: General Counsel
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
Right Certificate to or on
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the Rights Agent shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing
with the Company) as follows:
EquiServe Trust Company, N.A.
c/o EquiServe Limited Partnership
150 Royall Street
Canton, Massachusetts 02021
Attention: Client Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. Supplements and Amendments. Except as otherwise provided
in this Section 27, for so long as the Rights are then redeemable, the Company
may in its sole and absolute discretion, and the Rights Agent shall if the
Company so directs, supplement or amend any provision of this Agreement in any
respect without the approval of any holders of the Rights. Without limiting the
foregoing, the Company may at any time for so long as the Rights are then
redeemable, amend this Agreement to lower the thresholds set forth in Sections
1(a) and 3(a) to not less than the greater of (x) the sum of .001% and the
largest percentage of the outstanding shares of Common Stock then known by the
Company to be beneficially owned by any Person (other than the Company or an
Exempt Person) and (y) 10%. At any time when the Rights are no longer
redeemable, except as otherwise provided in this Section 27, the Company may,
and the Rights Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Right Certificates in order to
(i) cure any ambiguity, (ii) correct or supplement any provision contained
herein that may be defective or inconsistent with any other provisions herein,
(iii) shorten or lengthen any time period hereunder, or (iv) change or
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supplement the provisions hereunder in any manner that the Company may deem
necessary or desirable; provided that no such supplement or amendment shall
adversely affect the interests of the holders of Rights as such, and no such
amendment may cause the Rights again to become redeemable or cause this
Agreement again to become amendable other than in accordance with this
sentence. Notwithstanding anything contained in this Agreement to the contrary,
(1) no supplement or amendment shall be made that decreases the Redemption
Price and (2) no supplement or amendment that changes the rights or duties of
the Rights Agent shall be made without the consent of the Rights Agent. 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.
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. 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 Right Certificates (and, prior to the
Distribution Date, the Common Stock) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders
of the Right Certificates (and, prior to the Distribution Date, the Common
Stock).
Section 30. Determinations and Actions by the Board of Directors. The
Board of Directors shall have the exclusive power and authority to administer
this Agreement and to exercise the rights and powers specifically granted to
the Board of Directors or to the Company, or as may be necessary or advisable
in the administration of this Agreement, including, without
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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, without limitation, a
determination to redeem or not redeem the Rights or to amend this Agreement).
All such actions, calculations, interpretations and determinations (including,
for purposes of clause (y) below, all omissions with respect to the foregoing)
that are done or made by the Board of Directors in good faith shall (x) be
final, conclusive and binding on the Company, the Rights Agent, the holders of
the Rights and all other parties, and (y) not subject the Board of Directors to
any liability to the holders of the Rights. For all purposes of this Agreement,
any calculation of the number of shares of Common Stock or other securities
outstanding at any particular time, including for purposes of determining the
particular percentage of such outstanding shares of Common Stock or any other
securities 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.
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 32. Governing Law. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of 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.
59
<PAGE> 63
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.
[signature page follows]
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<PAGE> 64
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, all as of the day and year first above written.
BROADWAY & SEYMOUR, INC.
By: /s/ Alan C. Stanford
------------------------------------------
Alan C. Stanford, Chief Executive Officer
EQUISERVE TRUST COMPANY, N.A.
/s/ Darlene M. DioDato
By: __________________________________________
Title: Managing Director
__________________________________________
61
<PAGE> 65
Exhibit A
FORM OF
CERTIFICATE OF DESIGNATIONS
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
Broadway & Seymour, Inc.
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
Broadway & Seymour, Inc. (the "Corporation"), a corporation organized
and existing under the General Corporation Law of the State of Delaware, in
accordance with the provisions of Section 103 thereof, DOES HEREBY CERTIFY:
That pursuant to the authority vested in the Board of Directors in
accordance with the provisions of the Certificate of Incorporation of the
Corporation and in accordance with the provisions of Section 151 of the General
Corporation Law of the State of Delaware, the Board of Directors on April 13,
1999 adopted the following resolution creating a series of Preferred Stock
designated as "Series A Junior Participating Preferred Stock":
RESOLVED, that pursuant to the authority vested in the Board of
Directors of the Corporation in accordance with the provisions of the
Certificate of Incorporation, a series of Preferred Stock designated as Series
A Junior Participating Preferred Stock, $0.01 par value per share, be, and it
hereby is, created, and that the designation and amount thereof and the powers,
preferences and relative, participating, optional and other special rights of
the shares of such series, and the qualifications, limitations or restrictions
thereof (in addition to the provisions in the Certificate of Incorporation that
are applicable to the Preferred Stock of all classes and series) are as
follows:
Series A Junior Participating Preferred Stock
1. Designation and Amount. The shares of such series of Preferred
Stock shall be designated as "Series A Junior Participating Preferred Stock,"
par value $0.01 per share, and the number of shares constituting such series
shall be 400,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided, however, that no decrease shall
reduce the number of shares of Series A Junior Participating Preferred Stock to
less than the number of shares then issued and outstanding plus the number of
shares issuable upon
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exercise of outstanding rights, options or warrants or upon conversion of
outstanding securities issued by the Corporation.
2. Dividends and Distribution.
(A) Subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock ranking prior and superior to the
shares of Series A Junior Participating Preferred Stock with respect to
dividends, the holders of shares of Series A Junior Participating Preferred
Stock, in preference to the holders of shares of the Corporation's Common
Stock, par value $0.01 per share ("Common Stock"), and of any other shares of
any class or series of stock of the Corporation ranking junior to the Series A
Junior Participating Preferred Stock, shall be entitled to receive, when, as
and if declared by the Board of Directors out of funds legally available for
the purpose, quarterly dividends payable in cash on the first day of January,
April, July and October in each year (each such date being referred to herein
as a "Quarterly Dividend Payment Date"), commencing on the first Quarterly
Dividend Payment Date after the first issuance of a share or fraction of a
share of Series A Junior Participating Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $1.00 or (b) the sum
of (x) the Adjustment Number (as defined below) times the aggregate per share
amount of all cash dividends, and (y) the Adjustment Number times the aggregate
per share amount (payable in kind) of all non-cash dividends or other
distributions, other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date, or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share or fraction of a
share of Series A Junior Participating Preferred Stock. The "Adjustment Number"
shall initially be one hundred (100). In the event the Corporation shall at any
time after April 26, 1999, declare or pay any dividend on Common Stock payable
in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding Common Stock (by reclassification or otherwise
than by payment of a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such case the Adjustment
Number in effect immediately prior to such event shall be adjusted by
multiplying such Adjustment Number by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the
Series A Junior Participating Preferred Stock as provided in paragraph (A)
above immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); provided that,
in the event no dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment Date and the
next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share
on the Series A Junior Participating Preferred Stock shall nevertheless be
payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Junior Participating Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares of Series
A Junior Participating Preferred Stock, unless the date of
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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 Participating Preferred
Stock entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall begin to
accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but
unpaid dividends shall not bear interest. Dividends paid on the shares of
Series A Junior Participating Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such shares shall
be allocated pro rata on a share-by-share basis among all such shares at the
time outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of Series A Junior Participating Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be no more than 30 days prior to the date
fixed for the payment thereof.
3. Voting Rights. The holders of shares of Series A Junior
Participating Preferred Stock shall have the following voting rights:
(A) Each share of Series A Junior Participating Preferred Stock shall
entitle the holder thereof at any time to a number of votes equal to the
Adjustment Number (as in effect at such time) on all matters submitted to a
vote of the stockholders of the Corporation.
(B) Except as otherwise provided herein, in the Certificate of
Incorporation as from time to time amended, or by law, the holders of Series A
Junior Participating Preferred Stock and the holders of Common Stock and any
other capital stock of the Corporation having general voting rights shall vote
together as one class on all matters submitted to a vote of stockholders of the
Corporation.
(C) Except as otherwise provided herein, in the Certificate of
Incorporation as from time to time amended, or by law, holders of Series A
Junior Participating Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled to
vote with holders of Common Stock as set forth herein) for taking any corporate
action.
4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Junior Participating Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid dividends
and distributions, whether or not declared, on shares of Series A Junior
Participating Preferred Stock outstanding shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Junior Participating Preferred Stock;
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<PAGE> 68
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Junior Participating Preferred Stock, except dividends paid
ratably on the Series A Junior Participating Preferred Stock and all
such parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such
shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Junior Participating Preferred Stock, provided that the
Corporation may at any time redeem, purchase or otherwise acquire
shares of any such junior stock in exchange for shares of any stock of
the Corporation ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Junior
Participating Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series A Junior Participating Preferred
Stock, or any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Junior Participating Preferred Stock, except in accordance
with a purchase offer made in writing or by publication (as determined
by the Board of Directors) to all holders of Series A Junior
Participating Preferred Stock, or to such holders and holders of any
such shares ranking on a parity therewith, upon such terms as the
Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series or
classes.
(B) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (A) of this Section
4, purchase or otherwise acquire such shares at such time and in such manner.
5. Reacquired Shares. Any shares of Series A Junior Participating
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 retirement and 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 any conditions and restrictions on
issuance set forth herein.
6. Liquidation, Dissolution or Winding Up.
(A) Upon any voluntary or involuntary liquidation, 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 Participating Preferred Stock
unless, prior thereto, the holders of shares of Series A Junior Participating
Preferred Stock shall have received $100.00 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment
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(the "Series A Liquidation Preference"). Following the payment of the full
amount of the Series A Liquidation Preference, no additional distributions
shall be made to the holders of shares of Series A Junior Participating
Preferred Stock unless, prior thereto, the holders of shares of Common Stock
shall have received an amount per share (the "Common Adjustment") equal to the
quotient obtained by dividing (i) the Series A Liquidation Preference by (ii)
the Adjustment Number. Following the payment of the full amount of the Series A
Liquidation Preference and the Common Adjustment in respect of all outstanding
shares of (1) Series A Junior Participating Preferred Stock and (2) Common
Stock, respectively, (a) holders of Series A Junior Participating Preferred
Stock and (b) holders of shares of Common Stock shall, subject to the prior
rights of all other series of Preferred Stock, if any, ranking prior thereto,
receive their ratable and proportionate share of the remaining assets to be
distributed in the ratio of the Adjustment Number to 1 with respect to (x) the
Series A Junior Participating Preferred Stock and (y) the Common Stock, on a
per share basis, respectively.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation Preference and
the liquidation preferences of all other series of Preferred Stock, if any,
that rank on a parity with the Series A Junior Participating Preferred Stock,
then such remaining assets shall be distributed ratably to the holders of such
parity shares in proportion to their respective liquidation preferences. In the
event, however, that there are not sufficient assets available to permit
payment in full of the Common Adjustment, then such remaining assets shall be
distributed ratably to the holders of Common Stock.
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 each share of
Series A Junior Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share equal to the Adjustment
Number 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.
8. No Redemption. Shares of Series A Junior Participating Preferred
Stock shall not be subject to redemption by the Company.
9. Ranking. The Series A Junior Participating Preferred Stock shall
rank junior to all other series of the Corporation's Preferred Stock as to the
payment of dividends and the distribution of assets, unless the terms of any
such series shall provide otherwise, and shall rank senior to the Common Stock
as to such matters.
10. Amendment. At any time that any shares of Series A Junior
Participating Preferred Stock are outstanding, the Certificate of Incorporation
of the Corporation shall not be amended in any manner which would materially
alter or change the powers, preferences or special rights of the Series A
Junior Participating Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of at least two-thirds of the outstanding
shares of Series A Junior Participating Preferred Stock, voting separately as a
single class.
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<PAGE> 70
11. Fractional Shares. Series A Junior Participating Preferred Stock
may be issued in fractions of a share that shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of all
other rights of holders of Series A Junior Participating Preferred Stock.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate
and do affirm the foregoing as true under the penalties of perjury this 14th
day of April, 1999.
BROADWAY & SEYMOUR, INC.
By: _________________________________________
Alan C. Stanford, Chief Executive Officer
Attest:
- ----------------------------------
Lillian N. Wilson, Secretary
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<PAGE> 71
Exhibit B
Form of Right Certificate
Certificate No. R- ______ Rights
NOT EXERCISABLE AFTER APRIL 14, 2009 OR EARLIER IF REDEMPTION OR
EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER
RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT (AS
REFERRED TO BELOW), RIGHTS BENEFICIALLY OWNED BY OR TRANSFERRED TO ANY
PERSON WHO IS OR BECOMES AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT)
AND CERTAIN TRANSFEREES THEREOF MAY BECOME NULL AND VOID AND MAY NO
LONGER BE TRANSFERABLE. [THE RIGHTS REPRESENTED BY THIS RIGHT
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 RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY
MAY BECOME NULL AND VOID UNDER THE CIRCUMSTANCES SPECIFIED IN SECTION
7(E) OF THE RIGHTS AGREEMENT.](1)
Right Certificate
BROADWAY & SEYMOUR, INC.
This certifies that _________________________, or registered assigns,
is the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement, dated as of April 14, 1999, as the same may be amended
from time to time (the "Rights Agreement"), between Broadway & Seymour, Inc., a
Delaware corporation (the "Company"), and EquiServe Trust Company, N.A. (the
"Rights Agent"), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights Agreement) and prior
to 5:00 p.m., Boston, Massachusetts time, on April 14, 2009 at the office of
the Rights Agent designated for such purpose, or of its successor as Rights
Agent, one one-hundredth of a fully paid nonassessable share of Series A Junior
Participating Preferred Stock, par value $0.01 per share (the "Preferred
Stock"), of the Company, at a purchase price of $22.00 per one one-hundredth of
a share of Preferred Stock (the
- ---------------
(1) The bracketed language shall be inserted only if applicable.
B-1
<PAGE> 72
"Purchase Price"), upon presentation and surrender of this Right Certificate
with the Form of Election to Purchase and related certificate duly executed.
The number of Rights evidenced by this Right Certificate (and the number of one
one-hundredths of a share of Preferred Stock which may be purchased upon
exercise hereof) set forth above, and the Purchase Price set forth above, are
the number and Purchase Price as of April 26, 1999 based on the Preferred Stock
as constituted at such date. As provided in the Rights Agreement, the Purchase
Price, the number of one one-hundredths of a share of Preferred Stock (or other
securities or property) which may be purchased upon the exercise of the Rights
and the number of Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events, including
Section 11(a)(ii) Events and Section 13 Events (as such terms are defined in
the Rights Agreement).
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the above-mentioned office of the Rights Agent. The Company will
mail to the holder of this Right Certificate a copy of the Rights Agreement
without charge after receipt of a written request therefor.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office of the Rights Agent designated for such purpose, may be
exchanged for another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder to purchase a like aggregate number
of shares of Preferred Stock as the Rights evidenced by the Right Certificate
or Right Certificates surrendered shall have entitled such holder to purchase.
If this Right Certificate shall be exercised in part, the holder shall be
entitled to receive upon surrender hereof another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at a
redemption price of $.01 per Right or (ii) may be exchanged in whole or in part
for shares of the Company's Common Stock, par value $0.01 per share, or shares
of Preferred Stock.
No fractional shares of Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions which
are integral multiples of one one-hundredth of a share of Preferred Stock,
which may, at the election of the Company, be evidenced by depositary
receipts), but in lieu thereof a cash payment will be made, as provided in the
Rights Agreement.
No holder of this Right Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of the
Preferred Stock 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
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<PAGE> 73
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 Right Certificate shall have been
exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of _________________.
ATTEST: BROADWAY & SEYMOUR, INC.
By: __________________________ By: _______________________________
Name: __________________________ Name: _______________________________
Title: __________________________ Title: _______________________________
Countersigned:
EQUISERVE TRUST COMPANY, N.A., as Rights Agent
By: __________________________
Authorized Signature
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<PAGE> 74
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires
to transfer the Right Certificate)
FOR VALUE RECEIVED _______________________ hereby sells, assigns and
transfers unto ______________________________________________________________
_____________________________________________________________________________
(Please print name and address of transferee)
____________________________________ Rights represented by this Right
Certificate, together with all right, title and interest therein, and does
hereby irrevocably constitute and appoint ___________________________ Attorney,
to transfer the within Right Certificate on the books of the within-named
Company, with full power of substitution.
Dated: _______________________
______________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by an eligible guarantor institution
(including banks, stockbrokers, savings and loan associations, clearing
agencies and credit unions with membership in an approved signature guarantee
medallion program) pursuant to Rule 17Ad-15 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended.
B-4
<PAGE> 75
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) This Right Certificate [ ] is [ ] is not being sold,
assigned or transferred by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Acquiring
Person (as such terms are defined in the Rights Agreement); and
(2) After due inquiry and to the best knowledge of the
undersigned, the undersigned [ ] did [ ] did not acquire the Rights
evidenced by this Right Certificate from any Person who is, was or
subsequently became an Acquiring Person or an Affiliate or Associate
thereof (as such terms are defined in the Rights Agreement).
Dated: _______________________
_______________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by an eligible guarantor institution
(including banks, stockbrokers, savings and loan associations, clearing
agencies and credit unions with membership in an approved signature guarantee
medallion program) pursuant to Rule 17Ad-15 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended.
NOTICE
The signatures to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
B-5
<PAGE> 76
Form of Reverse Side of Right Certificate - continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights represented
by the Right Certificate)
To: BROADWAY & SEYMOUR, INC.
The undersigned hereby irrevocably elects to exercise Rights
represented by this Right Certificate to purchase the shares of Preferred Stock
(or other securities or property) issuable upon the exercise of such Rights and
requests that certificates for such shares be issued in the name of:
Please insert social security
or other identifying number: _____________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number: _____________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print name and address)
Dated: ________________________
______________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by an eligible guarantor institution
(including banks, stockbrokers, savings and loan associations, clearing
agencies and credit unions with membership in an approved signature guarantee
medallion program) pursuant to Rule 17Ad-15 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended.
B-6
<PAGE> 77
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) The Rights evidenced by the attached Right Certificate [
] are [ ] are not being exercised by or on behalf of a Person who is
or was an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined in the Rights Agreement);
and
(2) After due inquiry and to the best knowledge of the
undersigned, the undersigned [ ] did [ ] did not acquire the Rights
evidenced by this Right Certificate from any Person who is, was or
subsequently became an Acquiring Person or an Affiliate or Associate
thereof (as such terms are defined in the Rights Agreement).
Dated: ___________________
__________________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by an eligible guarantor institution
(including banks, stockbrokers, savings and loan associations, clearing
agencies and credit unions with membership in an approved signature guarantee
medallion program) pursuant to Rule 17Ad-15 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended.
NOTICE
The signatures to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
B-7
<PAGE> 78
Exhibit C
UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT (REFERRED TO
BELOW), RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS OR BECOMES AN
ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES THEREOF MAY BECOME
NULL AND VOID AND MAY NO LONGER BE TRANSFERABLE.
BROADWAY & SEYMOUR, INC.
SUMMARY OF RIGHTS TO PURCHASE
SHARES OF SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
On April 13, 1999, the Board of Directors of Broadway & Seymour, Inc.
(the "Company") declared a dividend of one preferred share purchase right (a
"Right") for each outstanding share of common stock, par value $0.01 per share,
of the Company (the "Common Stock"). The dividend is payable on April 26, 1999
(the "Record Date") to the stockholders of record on that date. Each Right
entitles the registered holder to purchase from the Company one one-hundredth
of a share of Series A Junior Participating Preferred Stock, par value $0.01
per share, of the Company (the "Preferred Stock") at a price of $22.00 per one
one-hundredth of a share of Preferred Stock (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set forth in a Rights
Agreement, dated as of April 14, 1999, as the same may be amended from time to
time (the "Rights Agreement"), between the Company and EquiServe Trust Company,
N.A., as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person"), with certain exceptions set forth below, has acquired
beneficial ownership of 20% or more of the outstanding shares of Common Stock
or (ii) 10 business days (or such later date as may be determined by action of
the Board of Directors prior to such time as any person or group of affiliated
persons becomes an Acquiring Person) following the commencement of, or
announcement of an intention to make, a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a person or
group of 20% or more of the outstanding shares of Common Stock (the earlier of
such dates being called the "Distribution Date"), the Rights will be evidenced,
with respect to any of the Common Stock certificates outstanding as of the
Record Date, by such Common Stock certificate. An Acquiring Person does not
include (A) the Company, any subsidiary of the Company, any employee benefit
plan of the Company or of any subsidiary of the Company, or any entity or
trustee holding Common Stock for or pursuant to the terms of any such plan or
for the purpose of funding any such plan or funding other employee benefits for
employees of the Company or of any subsidiary of the Company, (B) any person
that would be deemed an "Acquiring Person" upon the adoption of the Rights
Agreement, unless and until such person acquires beneficial ownership of any
additional shares of Common Stock after the date of
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the Rights Agreement, or (C) any person whose beneficial ownership of 20% or
more of the outstanding shares of Common Stock results from an acquisition of
shares of Common Stock by the Company that, by reducing the number of shares
outstanding, increases the proportionate number of shares of Common Stock
beneficially owned by such person to 20% or more of the shares of Common Stock
then outstanding, unless such person thereafter become the beneficial owner of
any additional shares of Common Stock and upon the consummation of such
acquisition such person beneficially owns 20% or more of the shares of Common
Stock then outstanding.
The Rights Agreement provides that, until the Distribution Date (or
earlier redemption or expiration of the Rights), the Rights will be transferred
with and only with the Common Stock. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Stock certificates issued
after the Record Date upon transfer or new issuances of Common Stock will
contain a legend incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any certificates for shares of Common Stock
outstanding as of the Record Date, even without such notation or a copy of this
Summary of Rights, will also constitute the transfer of the Rights associated
with the shares of Common Stock represented by such certificate. As soon as
practicable following the Distribution Date, separate certificates evidencing
the Rights ("Right Certificates") will be mailed to holders of record of the
Common Stock as of the close of business on the Distribution Date, and such
separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on April 14, 2009 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or unless the Rights are earlier redeemed or
exchanged by the Company, in each case as described below.
The Purchase Price payable, and the number of shares of 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
Preferred Stock, (ii) upon the grant to holders of the Preferred Stock of
certain rights or warrants to subscribe for or purchase Preferred Stock at a
price, or securities convertible into Preferred Stock with a conversion price,
less than the then current market price of the Preferred Stock or (iii) upon
the distribution to holders of the Preferred Stock of evidences of indebtedness
or assets (excluding regular periodic cash dividends or dividends payable in
Preferred Stock) or of subscription rights or warrants (other than those
referred to above).
The number of outstanding Rights and the number of one one-hundredths
of a share of Preferred Stock issuable upon exercise of each Right are also
subject to adjustment in the event of a stock split of the Common Stock or a
dividend on the Common Stock payable in shares of Common Stock or subdivisions,
consolidations or combinations of the Common Stock occurring, in any such case,
prior to the Distribution Date.
Shares of Preferred Stock purchasable upon exercise of the Rights will
not be redeemable. Unless otherwise provided in connection with the creation of
a subsequent series of preferred stock, the Preferred Stock will be subordinate
to any other series of the Company's preferred stock. Each share of Preferred
Stock will be entitled, when, as and if declared, to a minimum
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quarterly dividend payment of $1.00 per share but will be entitled to an
aggregate dividend of 100 times the dividend declared per share of Common
Stock. In the event of the liquidation of the Company, the holders of the
Preferred Stock will be entitled to receive a minimum liquidation payment of
$100.00 per share (plus any accrued but unpaid dividends) but will be entitled
to an aggregate payment of 100 times the payment made per share of Common
Stock. Each share of Preferred Stock will have 100 votes, voting together with
the Common Stock. In the event of any merger, consolidation or other
transaction in which shares of Common Stock are converted or exchanged, each
share of Preferred Stock will be entitled to receive 100 times the amount
received per share of Common Stock. The rights of Preferred Stock as to
dividends, liquidation and voting are protected by customary antidilution
provisions. Because of the nature of the Preferred Stock's dividend,
liquidation and voting rights, the value of the one one-hundredth interest in a
share of Preferred Stock purchasable upon exercise of each Right should
approximate the value of one share of Common Stock.
In the event that any person or group of affiliated or associated
persons becomes an Acquiring Person, each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will thereupon become void),
will thereafter have the right to receive, upon exercise of a Right at the then
current Purchase Price, that number of shares of Common Stock (or other
securities or property) having a market value of two times the Purchase Price.
In the event that, after a person or group of affiliated or associated
persons has become an Acquiring Person, the Company is acquired in a merger or
other business combination transaction or 50% or more of its consolidated
assets or earning power are sold, proper provision will be made so that each
holder of a Right (other than Rights beneficially owned by an Acquiring Person,
which will have become void) will thereafter have the right to receive, upon
the exercise thereof at the then current Purchase Price, that number of shares
of common stock of the person with whom the Company has engaged in the
foregoing transaction (or its parent), which number of shares at the time of
such transaction will have a market value of two times the Purchase Price.
At any time after any person or group of affiliated or associated
persons becomes an Acquiring Person and prior to the acquisition by such person
or group of 50% or more of the outstanding shares of Common Stock, the Board of
Directors of the Company may cause the Company to exchange the Rights (other
than Rights owned by such person or group, which will have become void), in
whole or in part, at an exchange ratio of one share of Common Stock (or one
one-hundredth of a share of Preferred Stock, or shares of a class or series of
the Company's preferred stock having equivalent rights, preferences and
privileges) per Right, subject to adjustment.
No fractional shares of Preferred Stock will be issued (other than
fractions that are integral multiples of one one-hundredth of a share of
Preferred Stock, which may, at the election of the Company, be evidenced by
depositary receipts), and in lieu thereof an adjustment in cash will be made
based on the market price of the Preferred Stock on the last trading day prior
to the date of exercise.
At any time prior to the earlier of (i) the tenth day after the time
that a person or group of affiliated or associated persons has become an
Acquiring Person (subject to extension by the
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Board of Directors) and (ii) the Final Expiration Date, the Board of Directors
may cause the Company to redeem the Rights in whole, but not in part, at a
price of $.01 per Right (the "Redemption Price"). The redemption of the Rights
may be made effective at such time, on such basis and with such conditions as
the Board of Directors in its sole discretion may establish. Immediately upon
any redemption of the Rights, the right to exercise the Rights will terminate
and the only right of the holders of Rights will be to receive the Redemption
Price.
For so long as the Rights are then redeemable, the Company may, except
with respect to the Redemption Price, amend the Rights in any manner, including
an amendment to lower certain thresholds described above to not less than the
greater of (i) the sum of 0.001% and the largest percentage of the outstanding
shares of Common Stock then known to the Company to be beneficially owned by
any person or group of affiliated or associated persons and (ii) 10%. After the
Rights are no longer redeemable, the Company may, except with respect to the
Redemption Price, amend the Rights in any manner that does not adversely affect
the interests of holders of the Rights.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated
________________, 1999. A copy of the Rights Agreement is available free of
charge from the Company. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, as the same may be amended from time to time, which is hereby
incorporated herein by reference.
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