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EXHIBIT 1
FRITZ COMPANIES, INC.
AND
MELLON INVESTOR SERVICES LLC
RIGHTS AGENT
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RIGHTS AGREEMENT
DATED AS OF JANUARY 16, 2001
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TABLE OF CONTENTS
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1. Certain Definitions.................................................................2
2. Appointment of Rights Agent.........................................................9
3. Issuance of Rights Certificates....................................................10
4. Form of Rights Certificates........................................................13
5. Countersignature and Registration..................................................14
6. Transfer, Split-Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates...........................16
7. Exercise of Rights; Purchase Price; Expiration Date of Rights......................18
8. Cancellation and Destruction of Rights Certificates................................21
9. Reservation and Availability of Capital Stock......................................22
10. Preferred Shares Record Date.......................................................24
11. Adjustments to Number and Kind of Shares; Number of Rights or Purchase
Price..............................................................................25
12. Certification of Adjustments.......................................................39
13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power...............40
14. Fractional Rights and Fractional Shares............................................46
15. Rights of Action...................................................................48
16. Agreement of Right Holders.........................................................49
17. Rights Certificate Holder Not Deemed a Stockholder.................................50
18. Concerning the Rights Agent........................................................50
19. Merger or Consolidation or Change of Name of Rights Agent..........................51
20. Duties of Rights Agent.............................................................52
21. Change of Rights Agent.............................................................56
22. Issuance of New Rights Certificates................................................58
23. Redemption and Termination.........................................................58
24. Exchange...........................................................................60
25. Notice of Proposed Actions.........................................................61
26. Notices............................................................................63
27. Supplements and Amendments.........................................................64
28. Determinations and Actions by the Board............................................65
29. Successors.........................................................................66
30. Benefits of this Agreement.........................................................66
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TABLE OF CONTENTS
(CONTINUED)
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31. Governing Law......................................................................66
32. Counterparts.......................................................................66
33. Descriptive Headings...............................................................66
34. Severability.......................................................................67
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RIGHTS AGREEMENT
THIS AGREEMENT (this "Agreement"), dated as of January 16, 2001, between
Fritz Companies, Inc., a Delaware corporation (the "Company"), and Mellon
Investor Services LLC, a New Jersey limited liability company, as rights agent
(the "Rights Agent");
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company has (i) authorized and
declared a dividend distribution of one preferred share purchase right (a
"Right") for each Common Share (as defined herein) outstanding as of the Close
of Business (as defined herein) on January 29, 2001 (the "Record Date"), each
Right initially representing the right to purchase one one-thousandth of a
Junior Preferred Share (as defined herein), upon the terms and subject to the
conditions set forth in this Agreement, and (ii) further authorized the issuance
of one Right with respect to each Common Share (as such number may hereinafter
be adjusted pursuant to the provisions of Section 11(p)), in each case that
shall become outstanding between the Record Date, and the earliest of the
Distribution Date, the Expiration Date or the Final Expiration Date (each such
term as defined in this Agreement).
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
1. Certain Definitions. For purposes of this Agreement, the following terms have
the meanings indicated:
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(a) "Acquiring Person" shall mean any Person who or which, together with
all Affiliates and Associates of such Person, shall be the Beneficial Owner of
15% or more of the Voting Power of the Common Shares of the Company then
outstanding; provided, however, that:
(i) the term "Acquiring Person" shall not include an Exempt Person
(so long as such Person remains an Exempt Person);
(ii) a Person shall not be deemed to have become an "Acquiring
Person" solely as a result of the acquisition by the Company of Common Shares of
the Company which, by reducing the number or Voting Power of shares outstanding,
increases the Voting Power of the shares beneficially owned by such Person to
15% or more of the Voting Power of the Common Shares; provided, however, that if
a Person shall so become the Beneficial Owner of Common Shares of the Company
representing 15% or more of the Voting Power of the Common Shares of the Company
then outstanding by reason of the acquisition by the Company of Common Shares of
the Company and shall, after such share purchases by the Company, purchase or
otherwise take action to cause it to become the Beneficial Owner of any
additional Common Shares of the Company, then such Person shall be an Acquiring
Person;
(iii) a Person shall not be deemed to have become an "Acquiring
Person" if the Board of Directors of the Company in its good faith judgment
determines that a Person has inadvertently become the Beneficial Owner of 15% or
more of the Voting Power of the outstanding Common Shares of the Company then
outstanding and within 10 days after the date upon which the Company shall first
become aware of the occurrence of such an event, the Board of Directors in its
sole discretion provides such Person with a 15-day period to divest a sufficient
number of shares so that such Person no longer is the Beneficial Owner of 15%,
or more of the
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Voting Power of the outstanding Common Shares of the Company, and such Person
has so divested such Common Shares or at the end of any such 15-day period and
has not acquired any additional Common Shares of the Company prior to the end of
such 15-day period; and
(iv) Common Shares of the Company Beneficially Owned by the
Company or any Subsidiary of the Company shall not be considered outstanding for
purposes of calculating any Person's percentage ownership of the Voting Power of
the outstanding Common Shares of the Company.
(b) "Adjustment Shares" shall have the meaning set forth in Section
11(a)(ii).
(c) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act, as in effect on the date of this Agreement.
(d) A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "Beneficially Own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates
or Associates, directly or indirectly, has (A) the right to acquire (whether
such right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding, 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
(other than the Rights),
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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 pursuant to, and in accordance
with the General Rules and Regulations promulgated under the Exchange Act, until
such tendered securities are accepted for purchase or exchange; or (B) the right
to vote or dispose of or "beneficial ownership" (as defined in Rule 13d-3 of the
General Rules and Regulations under the Exchange Act as in effect on the date of
this Agreement) of (including 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
securities if the agreement, arrangement or understanding to vote such security
(1) arises solely from a revocable proxy or consent given to such Person in
response to a public proxy or consent solicitation made pursuant to, and in
accordance with, the General Rules and Regulations under the Exchange Act, (2)
is not also then reportable by such Person on Schedule 13D under the Exchange
Act (or any comparable or successor report) and (3) does not constitute a trust,
proxy, power of attorney or other device with the purpose or effect of allowing
two or more persons, acting in concert, to avoid being deemed "Beneficial
Owners" of such security or otherwise avoid the status of "Acquiring Person"
under the terms of this Agreement or as part of a plan or scheme to avoid the
reporting requirements under Schedule 13D or Sections 13(d) or 13(g) of the
Exchange Act; or
(iii) which are beneficially owned, directly or indirectly,
by any other Person (or any Affiliates or Associates 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) for the purpose of
acquiring, holding, voting (except as described in the proviso to
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clause (B) of subparagraph (ii) of this Section 1(d)) or disposing of any
securities of the Company.
Notwithstanding anything in this definition of Beneficial Ownership to
the contrary, the phrase "then outstanding," when used with reference to a
Person's Beneficial Ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the number
of such securities not then actually issued and outstanding which such Person
would be deemed to Beneficially Own under this Agreement.
(e) "Business Day" shall mean any day other than a Saturday, Sunday, or a
day on which banking institutions in the State of Delaware, the State of
California or the State of New York are authorized or obligated by law or
executive order to close.
(f) "Close of Business" on any given date shall mean 5:00 P.M., Pacific
Standard time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Pacific Standard time, on the next
succeeding Business Day.
(g) "Common Shares," when used with reference to the Company, shall mean
shares of the common stock, par value $0.01 per share, of the Company. "Common
Shares," when used with reference to any Person other than the Company, shall
mean the capital stock or other equity interests with the greatest per share or
per unit voting power of such other Person or, if such other Person is a
Subsidiary of or is controlled by another Person, the Person or Persons which
ultimately control such first-mentioned Person.
(h) "Common Share Equivalents" shall have the meaning set forth in
Section 11(a)(iii).
(i) "Current Market Price" shall have the meaning set forth in Section
11(d).
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(j) "Current Value" shall have the meaning set forth in Section
11(a)(iii).
(k) "Distribution Date" shall have the meaning set forth in Section 3(a).
(l) "Effective Time" shall mean the time the Certificate of Merger (as
such term is defined in the Merger Agreement), is duly filed with the Secretary
of State of the State of Delaware, or at such other time as the parties to the
Merger Agreement agree shall be specified in such Certificate of Merger.
(m) "Equivalent Preferred Share" shall have the meaning set forth in
Section 11(b).
(n) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(o) "Exchange Ratio" shall have the meaning set forth in Section 24(a).
(p) "Exempt Person" shall mean (i) the Company, (ii) any Subsidiary of
the Company, (iii) any employee benefit plan of the Company or of any Subsidiary
of the Company, (iv) any Person or entity organized, appointed, established or
holding Common Shares of the Company for or pursuant to the terms of any such
plan, (v) Lynn C. Fritz, his Affiliates and Associates, his heirs, immediate
family, the Lynn C. Fritz 1999 Grantor Retained Annuity Trust, the Tamara Fritz
1999 Grantor Retained Annuity Trust and any trust of which Lynn C. Fritz, his
heirs or immediate family is the sole beneficiary, and to which he or members of
his immediate family has transferred or may transfer shares of Common Stock
(collectively, "Lynn C. Fritz"); provided, however, that Lynn C. Fritz shall not
be an "Exempt Person" pursuant to this clause (v) if Lynn C. Fritz shall
increase the number of shares of the then outstanding shares of Common Stock
Beneficially Owned by it (other than as a result of an acquisition of shares of
Common Stock by the Company) to an amount greater than the sum of (x) the lowest
aggregate
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number of shares Beneficially Owned by Lynn C. Fritz as a percentage of the
outstanding shares of Common Stock as of any date on or after the Distribution
Date plus (y) 1%; and (vi) United Parcel Service, Inc., VND Merger Sub, Inc. and
their permitted assigns pursuant to the Merger Agreement, with respect to the
execution and delivery of the Merger Agreement and the Option Agreements and
with respect to any shares of Common Stock acquired by them pursuant to the
transactions contemplated by the Merger Agreement and the Option Agreements.
(q) "Expiration Date" shall have the meaning set forth in Section 7(a).
(r) "Final Expiration Date" shall have the meaning set forth in Section
7(a).
(s) "Junior Preferred Shares" shall mean shares of Junior Participating
Preferred Stock, par value $.01 per share, of the Company, having the rights,
preferences and limitations set forth in the Certificate of Designations
attached to this Agreement as Exhibit A, and, to the extent there are not a
sufficient number of shares of Junior Participating Preferred Stock authorized
to permit the full exercise of the then outstanding Rights, any other series of
preferred stock of the Company designated for such purpose by the Board of
Directors of the Company containing terms substantially similar to the terms of
the Junior Participating Preferred Stock.
(t) "Merger Agreement" shall mean the Agreement and Plan of Merger by and
among United Parcel Service, Inc., VND Merger Sub, Inc., and the Company, dated
as of January 10, 2001, as amended from time to time.
(u) "Nasdaq National Market" shall have the meaning set forth in Section
9(b).
(v) "Option Agreements" has the meaning set forth in the Recitals of the
Merger Agreement, as such agreements may be amended from time to time.
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(w) "Person" shall mean any individual, firm, corporation, partnership,
limited liability company, or other entity, and shall include any successor (by
merger or otherwise) of such entity.
(x) "Principal Party" shall have the meaning set forth in Section 13(b).
(y) "Purchase Price" shall have the meaning set forth in Section 4(a).
(z) "Record Date" shall have the meaning set forth in the recitals clause
at the beginning of this Agreement.
(aa) "Redemption Date" shall mean the date on which the Rights are
redeemed as provided in Section 23.
(bb) "Redemption Price" shall have the meaning set forth in Section
23(a).
(cc) "Rights" shall have the meaning set forth in the recitals clause at
the beginning of this Agreement.
(dd) "Rights Certificates" shall have the meaning set forth in Section
3(a).
(ee) "Section 11(a)(ii) Event" shall have the meaning set forth in
Section 11(a)(ii).
(ff) "Section 11(a)(ii) Trigger Date" shall have the meaning set forth in
Section 11(a)(iii).
(gg) "Section 13 Event" shall mean any event described in clause (x), (y)
or (z) of Section 13(a).
(hh) "Securities Act" shall mean the Securities Act of 1933, as amended.
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(ii) "Stock Acquisition Date" shall mean the first date of a 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;
provided, however, that if such Person is determined not to have become an
Acquiring Person pursuant to Section 1(a), then no Stock Acquisition Date shall
be deemed to have occurred. For the avoidance of doubt, no "Stock Acquisition
Date" shall occur as a result of the Merger Agreement, the Option Agreements, or
the merger or the consummation of the other transactions contemplated by the
Merger Agreement and the Option Agreements.
(jj) "Subsidiary" of a Person shall mean 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 Beneficially Owned, directly or indirectly, or
otherwise controlled by such Person.
(kk) "Substitution Period" shall have the meaning set forth in Section
11(a)(iii).
(ll) "Summary of Rights" shall have the meaning set forth in Section
3(b).
(mm) "Trading Day" shall have the meaning set forth in Section 11(d).
(nn) "Triggering Event" shall mean any Section 11(a)(ii) Event or Section
13 Event.
(oo) "Voting Power" shall mean the total number of votes entitled to be
cast generally by the holders of the Common Shares of the Company then
outstanding.
2. Appointment of Rights Agent. The Company hereby appoints the Rights Agent to
act as agent for the Company in accordance with the terms and conditions of this
Agreement, and the
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Rights Agent hereby accepts such appointment. The Company from time to time may
appoint such co-Rights Agents as it may deem necessary or desirable. If the
Company appoints one or more co-Rights Agents, the respective duties of the
Rights Agent and any co-Rights Agents shall be as the Company shall determine.
The Rights Agent shall have no duty to supervise, and in no event shall it be
liable for, the acts or omissions of any such co-Rights Agent.
3. Issuance of Rights Certificates.
(a) Until the earlier of (i) the Close of Business on the tenth day after
the Stock Acquisition Date (or if the tenth day after the Stock Acquisition Date
occurs before the Record Date, the Close of Business on the Record Date) or (ii)
the Close of Business on the tenth Business Day (or such later date as may be
determined by action of the Board of Directors of the Company 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 intent of any Person (other than an Exempt Person) to commence, a tender
or exchange offer the consummation of which would result in any Person (other
than an Exempt Person), together with its Affiliates and Associates, becoming
the Beneficial Owner of 15% or more of either the Voting Power of the then
outstanding Common Shares of the Company (irrespective of whether any shares are
actually purchased pursuant to such offer) (the earlier of such dates described
in clauses (i) and (ii) being referred to in this Agreement as the "Distribution
Date"), (x) the Rights will be evidenced (subject to the provisions of Section
3(c)) by the certificates for the Common Shares, registered in the names of the
holders thereof (which certificates for such Common Shares of the Company shall
be deemed also to be certificates for such Rights other than for purposes of
this Section 3 and any provision of this Agreement referring to the issuance or
distribution of Rights Certificates) and not by separate Rights
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Certificates, and (y) the Rights (and the right to receive separate Rights
Certificates) will be transferable only in connection with the transfer of the
underlying Common Shares of the Company (including a transfer to the Company).
For the avoidance of doubt, no "Distribution Date" shall occur as a result of
the Merger Agreement or the Option Agreements (as defined in the Merger
Agreement), as the same may be amended from time to time, or the merger or the
consummation of the other transactions contemplated by the Merger Agreement and
the Option Agreements. As soon as practicable after the Distribution Date, the
Company will prepare and execute, the Rights Agent will countersign, and the
Company will send or cause to be sent (and the Rights Agent will, if requested
and provided with all necessary information, send) by first class, insured,
postage prepaid mail, to each record holder of Common Shares, as of the Close of
Business on the Distribution Date, as shown by the records of the Company, at
the address of such holder shown on such records, one or more rights
certificates in substantially the form of Exhibit B hereto, evidencing one Right
for each Common Share (a "Rights Certificate"), so held, subject to adjustment
as provided in this Agreement. As of and after the Distribution Date, the Rights
will be evidenced solely by such Rights Certificates and will be transferable
separately from the Common Shares of the Company.
(b) As promptly as practicable following the Record Date, the Company
will send a copy of a Summary of Rights to Purchase Preferred Shares,
substantially in the form attached hereto as Exhibit C ("Summary of Rights"), by
first-class, postage prepaid mail, to each record holder of Common Shares of the
Company as of the Close of Business on the Record Date, at the address of such
holder shown on the records of the Company. The Rights Agent will mail to any
holder of a Rights Certificate a copy of this Agreement without charge to the
holder but at the expense of the Company after receipt of a written request
therefor.
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(c) With respect to certificates for Common Shares of the Company
outstanding as of the Close of Business on the Record Date, until the
Distribution Date (or, if earlier, the Expiration Date or the Final Expiration
Date), the Rights will be evidenced by certificates for Common Shares of the
Company registered in the names of the holders thereof together with a copy of
the Summary of Rights. Until the Distribution Date (or, if earlier, the
Expiration Date or Final Expiration Date), the surrender for transfer of any
certificate for Common Shares of the Company outstanding on the Record Date,
with or without a copy of the Summary of Rights, also shall constitute the
surrender for transfer of the Rights associated with the Common Shares of the
Company represented thereby.
(d) Rights shall be issued in respect of all Common Shares of the Company
which are issued (whether originally issued or from the Company's treasury)
after the Record Date but prior to the earliest of the Distribution Date, the
Expiration Date or the Final Expiration Date. Until the Distribution Date,
certificates representing Common Shares also shall be deemed to be certificates
for the associated Rights, and shall have impressed on, printed on, written on
or otherwise affixed to them substantially the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between Fritz
Companies, Inc. and Mellon Investor Services LLC, as Rights Agent,
dated as of January 16, 2001 (the "Rights Agreement"), the terms
of which are incorporated herein by reference and a copy of which
is on file at the principal executive offices of Fritz Companies,
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. Fritz
Companies, Inc. will mail to the holder of this certificate a copy
of the Rights Agreement, as in effect on the date of mailing,
without charge, after receipt by it of a written request therefor.
Under certain circumstances as provided in the Rights Agreement,
Rights issued to, held by or Beneficially Owned by Acquiring
Persons or their Associates or Affiliates (as such terms are
defined
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in the Rights Agreement) or any subsequent holder of such Rights
will become null and void.
With respect to such certificates containing the foregoing legends, the Rights
associated with the Common Shares of the Company represented by such
certificates shall, until the earliest of the Expiration Date, the Final
Expiration Date or the Distribution Date, be evidenced by such certificates
alone and holders of record of Common Shares of the Company also shall be the
holders of record of the associated Rights, and the surrender for transfer of
any such certificate shall also constitute the surrender for transfer of the
Rights associated with the Common Shares of the Company represented thereby. If
the Company purchases or acquires any Common Shares of the Company after the
Record Date but prior to the Distribution Date, any Rights associated with such
Common Shares shall be deemed canceled and retired so that the Company shall not
be entitled to exercise any Rights associated with the Common Shares of the
Company which are no longer outstanding.
4. Form of Rights Certificates.
(a) Rights Certificates (and the forms of election to purchase shares and
of assignment to be printed on the reverse thereof), when, as and if issued,
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 (but which do
not affect the rights, duties or responsibilities of the Rights Agent) and as
are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange or trading
system on which the Rights may from time to time be listed or traded, or to
conform to usage. Subject to the provisions of Sections 11 and 22, the
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Rights Certificates, whenever distributed, shall entitle the holders thereof to
purchase such number of one one-thousandths of a Junior Preferred Share, as
shall be set forth therein at the price per one one-thousandth of a Junior
Preferred Share 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 therein and in this
Agreement.
(b) Notwithstanding any other provision of this Agreement, any Rights
Certificate that represents Rights that are or were at any time on or after the
Distribution Date Beneficially Owned by an Acquiring Person or any Affiliate or
Associate thereof (or any transferee of such Rights) shall have impressed on,
printed on, written on or otherwise affixed to it (if the Company or the Rights
Agent has knowledge that such Person is an Acquiring Person or an Associate or
Affiliate thereof or transferee of such Person or a nominee of any of the
foregoing) the following legend:
The Beneficial Owner of the Rights represented by this Rights
Certificate is an Acquiring Person or an Affiliate or Associate
(as such terms are defined in the Rights Agreement) of an
Acquiring Person or a subsequent holder of such Rights Certificate
Beneficially Owned by such Persons. Accordingly, under
circumstances specified in the Rights Agreement, this Rights
Certificate and the Rights represented hereby will become null and
void.
Notwithstanding the above provision, failure to place such legend on any Rights
Certificate representing Rights which are otherwise null and void pursuant to
the terms of this Agreement shall not affect the null and void status of such
Rights.
5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of the Company by
its Chairman of the Board, Chief Executive Officer, President or any Vice
President, either
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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 an
Assistant Secretary of the Company, either manually or by facsimile signature.
The Rights Certificates shall be countersigned by the Rights Agent and shall not
be valid for any purpose unless so countersigned. If any officer of the Company
who shall have signed any of the Rights Certificates shall cease to be such
officer of the Company before countersignature by the Rights Agent and issuance
and delivery by the Company, such Rights Certificates, nevertheless, may be
countersigned by the Rights Agent, and issued and delivered by the Company with
the same force and effect as though the person who signed such Rights
Certificates had not ceased to be such officer of the Company; and any Rights
Certificate may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Rights Certificate, shall be a proper
officer of the Company to sign such Rights Certificate, although at the date of
the execution of this Agreement any such person was not such an officer.
(b) Following the Distribution Date and receipt by the Rights Agent of
all relevant information, the Rights Agent will keep or cause to be kept, at its
office designated for such purposes, books for registration and transfer of the
Rights Certificates issued under this Agreement. Such books shall show the names
and addresses of the respective holders of the Rights Certificates, the number
of Rights evidenced on its face by each of the Rights Certificates, the date of
each of the Rights Certificates, and the certificate numbers for each of the
Rights Certificates.
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6. Transfer, Split-Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Section 4(b), Section 7(e), Section 14
and Section 24, at any time after the Close of Business on the Distribution Date
and at or prior to the Close of Business on the earlier of the Expiration Date
or the Final Expiration Date, any Rights Certificate or Rights Certificates
(other than such Rights Certificates representing Rights that have become null
and void pursuant to this Agreement or that have been exchanged pursuant to
Section 24) may be transferred, split up, combined or exchanged for another
Rights Certificate or Rights Certificates, entitling the holder of record to
purchase a like number of one one-thousandths of a Junior Preferred Share (or,
following a Triggering Event, Common Shares of the Company, other securities,
cash or other assets, as the case may be) as the Rights Certificate or Rights
Certificates surrendered then entitles such holder (or former holder in the case
of a transfer) to purchase. Any holder of record desiring to transfer any Rights
Certificate or Rights Certificates shall surrender the Rights Certificate or
Rights Certificates at the office of the Rights Agent designated for such
purposes with the form of assignment on the reverse side thereof (or enclose
with such Rights Certificate or Rights Certificates a written instrument of
transfer in a form satisfactory to the Company and the Rights Agent), duly
executed by the holder of record thereof or his attorney duly authorized in
writing, and with such signature duly guaranteed. Any holder of record desiring
to split up, combine or exchange any Rights Certificate or Rights Certificates
shall make such request in writing delivered to the Rights Agent, and shall
surrender the Rights Certificate or Rights Certificates to be split up, combined
or exchanged at the office of the Rights Agent designated for such purposes.
Neither the Rights Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such surrendered
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Rights Certificate until the holder of record shall have properly completed and
signed the certificate contained in the form of assignment on the reverse side
of such Rights Certificate and shall have provided such additional evidence of
the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates
of Associates thereof as the Company or the Rights Agent shall request.
Thereupon the Rights Agent (subject to Section 4(b), Section 7(e), Section 14
and Section 24) shall countersign and deliver to the person entitled thereto a
Rights Certificate or Rights Certificates, as the case may be, as so requested.
The Company may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer, split
up, combination or exchange of Rights Certificates. The Rights Agent shall have
no duty or obligation to take any action under any Section of this Agreement
which requires the payment by a Rights holder of applicable taxes or
governmental charges unless and until the Rights Agent is satisfied that all
such taxes and/or charges have been paid.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Rights Certificate, and, in case of loss, theft or destruction, of indemnity
or security reasonably satisfactory to them, and, if requested by the Company,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Rights Certificate if mutilated, the Company, subject to the provisions of
Section 4(b), Section 7(e), Section 14 and Section 24, will execute and deliver
a new Rights Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Rights Certificate so lost, stolen, destroyed
or mutilated.
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7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) Subject to Section 7(e), at any time after the Distribution Date, the
holder of record of any Rights Certificate may exercise the Rights evidenced
thereby (except as otherwise provided in this Agreement, including without
limitation, the restrictions on exercisability set forth in Section 9(b),
Section 11(a)(iii) and Section 23(a)), in whole or in part upon surrender of the
Rights Certificate, with the form of election to purchase and the certificate
contained in the form of election to purchase on the reverse side thereof duly
executed (with such signature duly guaranteed), 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-thousandths of a Junior Preferred Share (or other securities, cash or other
assets, as the case may be, as to which such surrendered Rights are then
exercisable), subject to adjustment as provided in this Agreement, at or prior
to the earlier of (i) the earlier of the Close of Business on February 1, 2010
or the Effective Time (the "Final Expiration Date"), (ii) the time at which the
Rights are redeemed as provided in Section 23 (such date being herein referred
to as the "Expiration Date"), or (iii) the time at which such Rights are
exchanged as provided in Section 24.
(b) The Purchase Price with respect to each Right shall initially be
$28.125 for each one one-thousandth of a Junior Preferred Share issued pursuant
to the exercise of a Right. The Purchase Price and the number of one
one-thousandths of a Junior Preferred Share or other securities or consideration
to be acquired upon exercise of a Right shall be subject to adjustment from time
to time as provided in Sections 11 and 13. The Purchase Price shall be payable
in lawful money of the United States of America in accordance with Section 7(c).
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<PAGE> 22
(c) Except as provided in Section 7(e), upon receipt of a Rights
Certificate representing exercisable Rights, with the form of election to
purchase and the certificate contained in the form of election to purchase duly
executed, accompanied by payment of the Purchase Price for the shares or other
securities or assets to be purchased and an amount equal to any applicable tax
or governmental charge, by cash, certified check or official bank check payable
to the order of the Company, the Rights Agent, subject to Section 20(j), shall
thereupon promptly (i) (A) requisition from any transfer agent of the Junior
Preferred Shares (or make available, if the Rights Agent is the transfer agent
for such shares) certificates for the total number of Junior Preferred Shares so
elected to be purchased and the Company will comply and hereby authorizes and
directs such transfer agent to comply with all such requests, or (B) if the
Company shall have elected to deposit the total number of Junior Preferred
Shares issuable upon exercise of the Rights hereunder with a depositary agent,
requisition from the depositary agent depositary receipts representing such
number of one one-thousandths of a Junior Preferred Share as are to be purchased
(in which case certificates for the Junior Preferred Shares represented by such
receipts shall be deposited by the transfer agent with the depositary agent) and
the Company hereby directs the depositary agent to comply with such request,
(ii) when appropriate, requisition from the Company the amount of cash, if any,
to be paid in lieu of issuance of fractional shares in accordance with Section
14, (iii) promptly after receipt of such certificates or depositary receipts,
cause the same to be delivered to or upon the order of the holder of record of
such Rights 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 holder of record of such Rights Certificate;
provided, however, that in the case of a purchase of securities, other than
Junior Preferred Shares, pursuant to Section 13, the Rights Agent shall
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<PAGE> 23
promptly take the appropriate actions corresponding to the foregoing clauses (i)
through (iv). If the Company is obligated to issue other securities (including
Common Shares) of the Company, pay cash and/or distribute other property
pursuant to Section 11(a), 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 necessary to comply with this
Agreement. The Company reserves the right to require prior to the occurrence of
a Triggering Event that, upon an exercise of Rights, a number of Rights be
exercised so that only whole Junior Preferred Shares would be issued.
(d) If the holder of record of any Rights Certificate shall exercise less
than all the Rights evidenced thereby, a new Rights Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent to the registered holder of such Rights Certificate or to his duly
authorized assigns, subject to the provisions of Section 6 and Section 14.
(e) Notwithstanding anything in this Agreement to the contrary, from and
after the occurrence of a Triggering Event, any Rights Beneficially Owned by (i)
an Acquiring Person or an Associate or Affiliate of an Acquiring Person, (ii) a
transferee from an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person becomes such (and any subsequent
transferees of such transferee), or (iii) a transferee of an Acquiring Person
(or such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or to
any Person with whom the Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer
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<PAGE> 24
which the Board has determined is part of a plan, arrangement or understanding
which has a primary purpose or effect the avoidance of this Section 7(e), shall
become null and void without any further action, and any holder (including any
subsequent holder) of such Rights shall thereupon have no rights whatsoever with
respect to such Rights, whether under any provision of this Agreement or
otherwise. The Company shall promptly notify the Rights Agent of the
applicability of this Section 7(e), and the Company shall use all reasonable
efforts to insure that the provisions of this Section 7(e) are complied with,
but neither the Company nor the Rights Agent shall have any liability to any
holder of Right Certificates or other Person as a result of their failure or
inability to make any determinations with respect to an Acquiring Person or its
Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company shall be obligated to undertake any action with
respect to a holder of record upon the occurrence of any purported exercise as
set forth in this Section 7 unless such holder of record shall have (i) properly
completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Rights Certificate surrendered for
such exercise and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company or the Rights Agent shall request.
8. Cancellation and Destruction of Rights Certificates. All Rights Certificates
surrendered for the purpose of exercise, transfer, split up, combination or
exchange shall, if surrendered to the Company or to any of its agents, be
delivered to the Rights Agent for cancellation or in canceled form, or, if
surrendered to the Rights Agent, shall be canceled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions
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<PAGE> 25
of this Agreement. The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel and retire,
any other Rights Certificate purchased or acquired by the Company otherwise than
upon the exercise thereof. The Rights Agent shall deliver all canceled Rights
Certificates to the Company, or shall, at the written request of the Company,
destroy or cause to be destroyed such canceled Rights Certificates, and in such
case shall deliver a certificate of destruction thereof to the Company.
9. Reservation and Availability of Capital Stock.
(a) The Company covenants and agrees that it will cause to be reserved
and kept available, out of and to the extent of its authorized and unissued
Junior Preferred Shares not reserved for another purpose (and, following the
occurrence of a Triggering Event, out of its authorized and unissued Common
Shares or other securities) or shares held in its treasury, the number of Junior
Preferred Shares (and, following the occurrence of a Triggering Event, Common
Shares or other securities) that, as provided in this Agreement, including
Section 11(a)(iii), will be sufficient to permit the exercise in full of all
outstanding Rights. Prior to the occurrence of a Triggering Event, the Company
shall not be obligated to cause to be reserved and kept available out of its
authorized and unissued Common Shares or shares of preferred stock (other than
Junior Preferred Shares), any such Common Shares or any shares of preferred
stock (other than Junior Preferred Shares) to permit exercise of outstanding
Rights.
(b) The Company shall (i) cause, from and after such time as the Rights
become exercisable, the Rights and all Junior Preferred Shares (and following
the occurrence of a Triggering Event, Common Shares, issued or reserved for
issuance upon exercise thereof) to be listed or admitted for trading by the
Nasdaq National Market System ("Nasdaq National
22
<PAGE> 26
Market") or any other national securities exchange upon notice of issuance upon
such exercise and (ii) if then necessary to permit the offer and issuance of
such Junior Preferred Shares (and, following the occurrence of a Triggering
Event, Common Shares or other securities), register and qualify such Junior
Preferred Shares (and, following the occurrence of a Triggering Event, Common
Shares or other securities) 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 until the earlier of the Expiration Date or the Final
Expiration Date. The Company may temporarily suspend, for a period of time not
to exceed ninety 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 or to comply with such blue sky laws. 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. The Company will promptly notify
the Rights Agent in writing whenever it makes a public announcement pursuant to
this Section 9(b).
(c) The Company covenants and agrees that it will take all such action as
may be necessary to insure that all Junior Preferred Shares (and following the
occurrence of a Triggering Event, Common Shares or other securities) delivered
upon exercise of Rights shall, at the time of delivery of the certificates for
such shares (subject to payment of the Purchase Price in respect thereof), be
duly and validly authorized and issued and fully paid and nonassessable shares
in accordance with applicable law.
(d) The Company further covenants and agrees that it will pay when due
and payable any and all taxes and charges which may be payable in respect of the
issuance or delivery of the
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<PAGE> 27
Rights Certificates or of any Junior Preferred Shares (or Common Shares or other
securities, as the case may be) upon the exercise of Rights. The Company shall
not, however, be required to pay any tax or charge which may be payable in
respect of any transfer or delivery of Rights Certificates to a Person other
than, or the issuance or delivery of certificates for Junior Preferred Shares
(or Common Shares or other securities, as the case may be) upon exercise of
Rights in a name other than that of, the holder of record of the Rights
Certificate, and the Company shall not be required to issue or deliver a Rights
Certificate or certificate for Junior Preferred Shares (or Common Shares or
other securities, as the case may be) to a Person other than such holder of
record, until any such tax or charge shall have been paid (any such tax or
charge being payable by the holder of such Rights Certificate at the time of
surrender) or until it has been established to the Company's satisfaction that
no such tax or charge is due.
10. Preferred Shares Record Date. Each Person in whose name any certificate
for Junior Preferred Shares (or Common Shares 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 Junior Preferred Shares (or Common
Shares or other securities, as the case may be) represented thereby on, and such
certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable taxes or governmental charges) was made; provided, however,
that if the date of such surrender and payment is a date upon which the Junior
Preferred Shares (or Common Shares 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 succeeding Business Day on which the Junior Preferred Shares (or Common
Shares or other securities) transfer books of the Company are open. Prior to the
exercise of the
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<PAGE> 28
Rights evidenced thereby, the holder of a Rights 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, 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 otherwise provided in this Agreement.
11. Adjustments to Number and Kind of Shares; Number of Rights or Purchase
Price. The number and kind of shares subject to purchase upon the exercise of
each Right, the number of Rights outstanding and the Purchase Price are subject
to adjustment from time to time as provided in this Section 11.
(a) (i) If the Company shall at any time after the date of this
Agreement (A) declare or pay any dividend on Junior Preferred Shares payable in
Junior Preferred Shares, (B) subdivide or split the outstanding Junior Preferred
Shares into a greater number of shares, (C) combine or consolidate the
outstanding Junior Preferred Shares into a smaller number of shares or effect a
reverse split of the outstanding Junior Preferred Shares or (D) issue any shares
of its capital stock in a reclassification of the Junior Preferred Shares
(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 Section 7(e) or 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 Junior Preferred Shares or 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 Junior Preferred
Shares or capital stock, as the case may be, which, if such Right had been
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<PAGE> 29
exercised immediately prior to such date and at a time when the Junior Preferred
Shares transfer books of the Company were open, the holder thereof 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 such
Right be less than the per share par value of the shares of capital stock of the
Company issuable upon exercise of the Right. If an event occurs which 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 23(a) and Section 24, if any Person shall
at any time after the date of this Agreement become an Acquiring Person (a
"Section 11(a)(ii) Event"), then, except as otherwise provided in this Section
11, promptly following the occurrence of such event, proper provision shall be
made so that each holder of a Right (except as provided in Section 7(e)) shall
thereafter have the right to receive, upon exercise thereof at the then current
Purchase Price in accordance with the terms of this Agreement in lieu of the
number of one one-thousandths of a Junior Preferred Share, such number of Common
Shares, as shall equal the result obtained by (x) multiplying the then current
Purchase Price by the then number of one one-thousandths of a Junior Preferred
Share for which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (such
product, following such first occurrence, shall be referred to as the "Purchase
Price" with respect to each Right for all purposes of this Agreement) by 50% of
the Current Market Price (determined pursuant to Section 11(d)) per share of
such class of Common Shares for which a Right is exercisable on the date of such
first occurrence (such number of shares is herein called the
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<PAGE> 30
"Adjustment Shares"); provided that the Purchase Price and the number of
Adjustment Shares shall be further adjusted as provided in this Agreement to
reflect any events occurring after the date of such first occurrence; and
provided, further, that if the transaction that would otherwise give rise to the
foregoing adjustment is also subject to the provisions of Section 13, then only
the provisions of Section 13 shall apply and no adjustment shall be made
pursuant to this Section 11(a)(ii).
(iii) If the number of Common Shares which are authorized by the
Company's certificate of incorporation but which are not outstanding or reserved
for issuance for purposes other than upon exercise of the Rights, is not
sufficient to permit the exercise in full of the Rights in accordance with
Section 11(a)(ii) and the Rights shall become so exercisable, the Company shall
take all such action as may be necessary (including seeking stockholder approval
for the authorization of additional shares) to authorize additional Common
Shares for issuance upon exercise in full of the Rights; provided, however, that
if the Company after using its reasonable best efforts to do so is unable to
cause the authorization of a sufficient number of additional Common Shares
within 120 days (the "Substitution Period"), the Company shall: (A) determine
the value of the Adjustment Shares issuable upon the exercise of a Right (the
"Current Value") and (B) with respect to each Right (subject to Section 7(e)),
upon the exercise of such Right and payment of the applicable Purchase Price,
make adequate provision to substitute for the Adjustment Shares (1) cash, (2) a
reduction in the Purchase Price, (3) Common Shares or other equity securities of
the Company (including, without limitation, shares, or units of shares, of
preferred stock of the Company which, by virtue of having dividend, voting and
liquidation rights substantially comparable to the class of Common Shares of the
Company for which a Right is exercisable are deemed in good faith by the Board
of Directors of the Company
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<PAGE> 31
to have essentially the same value as the class of Common Shares of the Company
for which a Right is exercisable (such shares or units of shares of preferred
stock are herein called "Common Share Equivalents")), (4) debt securities of the
Company, (5) other assets, or (6) any combination of the foregoing, having an
aggregate value which, when added to the value of the class of Common Shares of
the Company actually issued upon exercise of such Right, shall have an aggregate
value equal to the Current Value (less the amount of any reduction in the
Purchase Price), where such aggregate value has been determined in good faith by
the Board of Directors of the Company based upon the advice of a nationally
recognized independent investment banking firm selected in good faith by the
Board of Directors of the Company; provided, however, that if the Company shall
not have made adequate provision to deliver value pursuant to clause (B) above
within 120 days following the later of (x) the first occurrence of a Section
11(a)(ii) Event and (y) the date on which the Company's right of redemption
pursuant to Section 23(a) expires (the later of (x) and (y) being referred to as
the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to
deliver, upon the surrender for exercise of a Right and without requiring
payment of the Purchase Price, Common Shares of the Company for which a Right is
exercisable (to the extent available) and then, if necessary, cash or shares of
capital stock of the Company, which shares and/or cash have an aggregate value
equal to the excess of the Current Value over the Purchase Price. To the extent
that the Company determines that some action need be taken pursuant to the first
and/or second sentence of this Section 11(a)(iii), the Company (x) shall
provide, subject to Section 7(e), 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 such first
28
<PAGE> 32
sentence and to determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect (with prompt
written notice by the Company of such announcement to the Rights Agent). For
purposes of this Section 11(a)(iii), the value of each Adjustment Share shall be
the Current Market Price per share of the Common Shares on the Section 11(a)(ii)
Trigger Date and the per share or per unit value of any Common Share Equivalent
shall be deemed to equal the Current Market Price per share of the Common Shares
of the Company on such date.
(b) If the Company shall fix a record date for the issuance of rights
(other than the Rights), options or warrants to all holders of Junior Preferred
Shares entitling them to subscribe for or purchase (for a period expiring within
45 calendar days after such record date) Junior Preferred Shares, shares having
the same rights, privileges and preferences as the Junior Preferred Shares
("Equivalent Preferred Shares") or securities convertible into Junior Preferred
Shares or Equivalent Preferred Shares at a price per Junior Preferred Share or
Equivalent Preferred Share (or having a conversion price per share, if a
security convertible into Junior Preferred Shares or Equivalent Preferred
Shares) less than the Current Market Price (as determined pursuant to Section
11(d)) per Junior Preferred Share 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 Junior Preferred Shares outstanding on
such record date, plus the number of Junior Preferred Shares which the aggregate
offering price of the total number of Junior Preferred Shares and/or Equivalent
Preferred Shares so to be offered (and/or the aggregate initial conversion price
of the convertible securities so to be offered) would purchase at such
29
<PAGE> 33
Current Market Price, and the denominator of which shall be the number of Junior
Preferred Shares outstanding on such record date, plus the number of additional
Junior Preferred Shares and/or Equivalent Preferred Shares to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible). If such subscription price may be paid by
delivery of consideration, part or all of which may be in a form other than
cash, the value of such consideration shall be as determined in good faith by
the Board of Directors of the Company, whose determination shall be described in
a statement filed with the Rights Agent and shall be binding on the Rights Agent
and the holders of the Rights. Junior Preferred Shares owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively whenever such a
record date is fixed, and if such rights or warrants are not so issued, the
Purchase Price shall be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(c) If the Company shall fix a record date for a distribution to all
holders of Junior Preferred Shares (including any such distribution made in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation) of evidences of indebtedness, cash (other than a
regular quarterly cash dividend out of the earnings or retained earnings of the
Company), assets (other than a dividend payable in Junior Preferred Shares, but
including any dividend payable in stock other than Junior Preferred Shares) or
subscription rights or warrants (excluding those referred to in Section 11(b)),
the Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the Current Market Price (as
determined pursuant to Section 11(d)) per Junior Preferred Share on such record
date, less the
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<PAGE> 34
fair market value (as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent) of the portion of the cash, assets or evidences of indebtedness so
to be distributed or of such subscription rights or warrants applicable to one
Junior Preferred Share and the denominator of which shall be such Current Market
Price (as determined pursuant to Section 11(d)) per Junior Preferred Share. Such
adjustments shall be made successively whenever such a record date is fixed; and
if such distribution is not so made, the Purchase Price shall be adjusted to be
the Purchase Price which would have been in effect if such record date had not
been fixed.
(d) (i) For the purpose of any computation under this Agreement, other
than computations made pursuant to Section 11(a)(iii), the "Current Market
Price" per Common Share on any date shall be deemed to be the average of the
daily closing prices per share of the Common Shares for the 30 consecutive
Trading Days (as such term is hereinafter defined) immediately prior to but not
including such date, and for purposes of computations made pursuant to Section
11(a)(iii), the "Current Market Price" per Common Share on any date shall be
deemed to be the average of the daily closing prices per share of the Common
Shares for the 10 consecutive Trading Days immediately following but not
including such date; provided, however, that if the Current Market Price per
Common Share is determined during a period following the announcement by the
issuer of such Common Shares of (A) any dividend or distribution on such Common
Shares payable in Common Shares or securities convertible into Common Shares
(other than a regular quarterly cash dividend and other than the Rights), or (B)
any subdivision, combination or reclassification of such Common Shares, and
prior to the expiration of the requisite 30 Trading Day or 10 Trading Day
period, as set forth above, the ex-dividend date for such dividend or
distribution, or the record date for such subdivision,
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<PAGE> 35
combination or reclassification occurs, then, and in each such case, the Current
Market Price shall be appropriately adjusted to take into account ex-dividend
trading. The closing price for each day shall be the last sale price, regular
way, or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the Nasdaq National Market or, if the Common
Shares are not listed or admitted to trading on the Nasdaq National Market, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
Common Shares are listed or admitted to trading or, if the Common Shares are not
listed or admitted to trading on any national securities exchange, the last
quoted sale 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 the National
Association of Securities Dealers, Inc., Automated Quotations System or such
other system then in use, or, if on any such date the Common Shares 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 Common Shares
selected by the Board of Directors of the Company. If on any such date no market
maker is making a market in the Common Shares, the fair value of such shares on
such date as determined in good faith by the Board of Directors of the Company
shall be used. The term "Trading Day" shall mean a day on which the principal
national securities exchange or national market system on which the Common
Shares are listed or admitted to trading is open for the transaction of business
or, if the Common Shares are not listed or admitted to trading on any national
securities exchange or national market system, a Business Day. If the Common
Shares are not publicly held or not so listed or traded, "Current Market Price"
per share shall mean the fair value per share as
32
<PAGE> 36
determined in good faith by the Board of Directors of the Company whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.
(ii) For the purpose of any computation under this Agreement, the
"Current Market Price" of the Junior Preferred Shares shall be determined in the
same manner as set forth above for the Common Shares in Section 11(d)(i) hereof
(other than the last 2 sentences thereof). If the Current Market Price per
Junior Preferred Share cannot be determined in the manner provided above, the
"Current Market Price" per Junior Preferred Share shall be conclusively deemed
to be an amount equal to 1000 (as such number may be appropriately adjusted for
such events as stock splits, stock dividends and recapitalizations with respect
to the Common Shares of the Company occurring after the date of this Agreement)
multiplied by the Current Market Price per share of the Common Shares. If
neither the Common Shares nor the Junior Preferred Shares are publicly held or
so listed or traded, "Current Market Price" per share of the Junior Preferred
Shares shall mean the fair value per share as determined in good faith by the
Board of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all purposes.
For all purposes of this Agreement, the "Current Market Price" of one
one-thousandth of a Junior Preferred Share shall be equal to the "Current Market
Price" of one Junior Preferred Share divided by 1000.
(e) Anything in this Agreement to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least one percent in the Purchase Price;
provided, however, that any adjustments which by reason of this Section 11(e)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest ten-thousandth of a Common Share or other
security or one-
33
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millionth of a Junior Preferred Share, as the case may be. Notwithstanding the
first sentence of this Section 11(e), any adjustment required by this Section 11
shall be made no later than the earlier of (i) three years from the date of the
transaction which mandates such adjustment, or (ii) the Expiration Date or the
Final Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a) or
Section 13(a), the holder of any Right thereafter exercised shall become
entitled to receive any property or shares of capital stock other than Junior
Preferred Shares, thereafter the amount of such property and the number of such
other shares so receivable upon exercise of any 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
Junior Preferred Shares contained in this Section 11, and the provisions of
Sections 7, 9, 10, 13 and 14 with respect to the Junior Preferred Shares shall
apply on like terms to any such other property or 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-thousandths of a
Junior Preferred Share purchasable from time to time hereunder upon exercise of
the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of one one-thousandths of
a Junior Preferred Share (calculated to the nearest one-millionth) obtained by
(i) multiplying (x) the number of one one-thousandths of a share covered by a
Right immediately
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prior to this adjustment, by (y) the Purchase Price in effect immediately prior
to such adjustment of the Purchase Price, and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such adjustment of
the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price or any adjustment to the number of one one-thousandths of a
Junior Preferred Share for which a Right may be exercised, to adjust the number
of Rights, in lieu of any adjustment in the number of one one-thousandths of a
Junior Preferred Share purchasable upon the exercise of a Right. Each of the
Rights outstanding after the adjustment in the number of Rights shall be
exercisable for the number of one one-thousandths of a Junior Preferred Share
for which such 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 or any day thereafter, but, if the Rights Certificates have
been issued, shall be at least 10 days later than the date of the public
announcement. If Rights Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of Rights
Certificates on such record date Rights Certificates evidencing, subject to
Section 14, 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
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replacement for the Rights Certificates held by such holders prior to the date
of adjustment, and upon surrender thereof, if required by the Company, new
Rights Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Rights Certificates so to be distributed shall
be issued, executed and countersigned in the manner provided for herein (and may
bear, at the option of the Company, the adjusted Purchase Price) and shall be
registered in the names of the holders of record of Rights Certificates on the
record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of one one-thousandths of a Junior Preferred Share issuable upon the
exercise of the Rights, the Rights Certificates theretofore and thereafter
issued may continue to express the Purchase Price per one one-thousandths of a
Junior Preferred Share and the number of one one-thousandths of a share which
were expressed in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then par value, if any, of the number of one
one-thousandths of a Junior Preferred Share issuable upon exercise of the
Rights, the Company shall take any corporate action, including using its best
efforts to obtain any required stockholder approvals, which may, in the opinion
of its counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable one one-thousandths of a Junior Preferred
Share at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer (with prompt written notice of
such election to the Rights Agent) until the
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occurrence of such event the issuance to the holder of any Right exercised after
such record date of the number of one one-thousandths of a Junior Preferred
Share and other capital stock or securities of the Company, if any, issuable
upon such exercise over and above the number of one one-thousandths of a Junior
Preferred Share and other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price in effect prior
to such adjustment; provided, however, that the Company shall deliver to such
holder a due bill or other appropriate instrument evidencing such holder's right
to receive such additional shares (fractional or otherwise) or securities 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 in its good faith judgment the Board of Directors of the Company
shall determine to be advisable in order that any (i) consolidation or
subdivision of the Junior Preferred Shares, (ii) issuance wholly for cash of any
Junior Preferred Shares at less than the Current Market Price, (iii) issuance
wholly for cash of Junior Preferred Shares or securities which by their terms
are convertible into or exchangeable for Junior Preferred Shares, (iv) stock
dividends or (v) issuance of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to holders of its Junior Preferred
Shares shall not be taxable to such stockholders.
(n) The Company covenants and agrees that it shall not, at any time
after the Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)),
(ii) merge with or into any other Person (other than a Subsidiary of the Company
in a transaction which complies with Section 11(o)), or
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(iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction or a series of related transactions not in the ordinary course of
the Company's business, assets, cash flow or earning power aggregating more than
50% of the assets, cash flow or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(o)), if (x) at the time of or immediately after such
consolidation, merger or sale there are any rights, warrants or other
instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately after
such consolidation, merger or sale, the stockholders of the Person who
constitutes, or would constitute, the "Principal Party" for purposes of Section
13(a) shall have received a distribution of Rights previously owned by such
Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the Distribution Date,
it will not, except as permitted by Section 23 or Section 27, 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 otherwise
eliminate the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding, if the
Company shall at any time after the date of this Agreement and prior to the
Distribution Date (i) declare a dividend on the outstanding Common Shares
payable in Common Shares, (ii) subdivide the outstanding Common Shares, or (iii)
combine the outstanding Common Shares into a smaller number of shares, the
number of Rights associated with each Common Share then outstanding, or issued
or delivered thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter associated with
each Common Share following
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any such event shall equal the result obtained by multiplying the number of
Rights associated with each Common Share immediately prior to such event by a
fraction the numerator which shall be the aggregate number of Common Shares
outstanding immediately prior to the occurrence of the event and the denominator
of which shall be the aggregate number of Common Shares outstanding immediately
following the occurrence of such event.
12. Certification of Adjustments. Whenever an adjustment is made as provided
in Sections 11 and 13, the Company shall (a) promptly prepare a certificate
setting forth such adjustment and a brief statement of the facts and
computations giving rise to such adjustment, (b) promptly file with the Rights
Agent and with each transfer agent for the Common Shares or Junior Preferred
Shares a copy of such certificate and (c) if a Distribution Date has occurred,
mail a brief summary thereof to each holder of a Rights Certificate (or, if
prior to the Distribution Date, to each holder of a certificate representing
Common Shares) in accordance with Section 26. Notwithstanding the foregoing
sentence, the failure of the Company to give such notice shall not affect the
validity of or the force or effect of or the requirement for such adjustment.
The Rights Agent shall be fully protected in relying on any certificate prepared
by the Company pursuant to Sections 11 and 13 and on any adjustment therein
contained, and the Rights Agent shall have no duty with respect to and shall not
be deemed to have knowledge of any adjustment unless and until it shall have
received such certificate. Any adjustment to be made pursuant to Sections 11 and
13 of this Agreement shall be effective as of the date of the event giving rise
to such adjustment.
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13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power.
(a) If at any time following the time an Acquiring Person becomes such,
directly or indirectly, (x) the Company shall consolidate with, or merge with
and into, any other Person or Persons (other than a Subsidiary of the Company in
a transaction which complies with Section 11(o)), and the Company shall not be
the surviving or continuing corporation of such consolidation or merger, (y) any
Person or Persons (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o)), shall consolidate with, or merge with and into,
the Company, and the Company shall be the continuing or surviving corporation of
such consolidation or merger and, in connection with such consolidation or
merger, all or part of the outstanding Common Shares 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 (z) the Company or one or more of its
Subsidiaries shall sell or otherwise transfer to any other Person or any
Affiliate or Associate of such Person (other than the Company or any Subsidiary
of the Company in one or more transactions each of which complies with Section
11(o)), in one transaction or a series of related transactions not in the
ordinary course of the Company's business, assets, cash flow, or earning power
aggregating more than 50% of the assets, cash flow or earning power of the
Company and its Subsidiaries (taken as a whole), then, on the first occurrence
of any such event, proper provision shall be made so that (i) each holder of
record of a Right, except as provided in Section 7(e), 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 shares of validly
issued, fully paid and nonassessable and freely tradable Common Shares of the
Principal Party (as defined herein) 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
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<PAGE> 44
Purchase Price by the number of one one-thousandths of a Junior Preferred Share
for which a Right was 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 Purchase Price in effect
immediately prior to the first occurrence of a Section 11(a)(ii) Event by the
number of one one-thousandths of a Junior Preferred Share for which a Right was
exercisable immediately prior to such first occurrence of a Section 11(a)(ii)
Event) and (2) dividing that product (such product, following the first
occurrence of a Section 13 Event, shall be referred to as the "Purchase Price"
for each Right and for all purposes of this Agreement) by 50% of the Current
Market Price (determined as provided in Section 11(d)) per Common Share of such
Principal Party on the date of consummation of such Section 13 Event (or the
fair market value on such date of other securities or property of the Principal
Party, as provided for herein); provided that the Purchase Price and the number
of Common Shares of such Principal Party issuable upon exercise of each Right
shall be further adjusted as provided in this Agreement to reflect any events
occurring after the date of the first occurrence of a Section 13 Event; (ii)
such Principal Party shall thereafter be liable for, and shall assume, by virtue
of such Section 13 Event, all the obligations and duties of the Company pursuant
to this Agreement; (iii) the term "Company" for all purposes of this Agreement
shall thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11 shall only apply to such
Principal Party following the first occurrence of a Section 13 Event; and (iv)
such Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of its Common Shares in accordance with
Section 9) in connection with the consummation of any such transaction as may be
necessary to assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to its
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<PAGE> 45
Common Shares thereafter deliverable upon the exercise of the Rights; provided,
however, that, upon the subsequent occurrence of any merger, consolidation, sale
of all or substantially all assets, recapitalization, reclassification of
shares, reorganization or other extraordinary transaction in respect of such
Principal Party, each holder of a Right shall thereupon be entitled to receive,
upon exercise of a Right and payment of the Purchase Price, such cash, shares,
rights, warrants and other property which such holder would have been entitled
to receive had he, at the time of such transaction, owned the Common Shares of
the Principal Party purchasable upon the exercise of a Right, and such Principal
Party shall take such steps (including, but not limited to, reservation of
shares of stock) as may be necessary to permit the subsequent exercise of the
Rights in accordance with the terms hereof for such cash, shares, rights,
warrants and other property. The provisions of Section 11(a)(ii) shall be of no
effect following the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in clause (x) or (y)
of the first sentence of Section 13(a): (A) the Person that is the issuer of any
securities into which Common Shares of the Company are converted in such merger
or consolidation, or, if there is more than one such issuer, the issuer the
Common Shares of which has the greatest market value or (B) if no securities are
so issued, (x) the Person that is the other party to the merger or consolidation
and that survives said merger or consolidation, or, if there is more than one
such Person, the Person the Common Shares of which has the greatest market value
or (y) if the Person that is the other party to the merger or consolidation does
not survive the merger or consolidation, the Person that does survive the merger
or consolidation (including the Company if it survives); and
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(ii) in the case of any transaction described in clause (z) of
the first sentence in Section 13(a), 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 Shares having the greatest market value of shares
outstanding; provided, however, that in any such case described in the foregoing
(b)(i) or (b)(ii), if the Common Shares of such Person are not at such time and
have not been continuously over the preceding 12-month period registered under
Section 12 of the Exchange Act, and such Person is a direct or indirect
Subsidiary of another Person the Common Shares of which are and have been so
registered, the term "Principal Party" shall refer to such other Person, or if
such Person is a Subsidiary, directly or indirectly, of more than one Person,
the Common Shares of which are and have been so registered, the term "Principal
Party" shall refer to whichever of such Persons is the issuer of the Common
Shares having the greatest market value of shares outstanding.
(c) The Company shall not consummate any consolidation, merger, sale or
transfer referred to in Section 13(a) unless the Principal Party shall have a
sufficient number of authorized Common Shares which 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 the Principal
Party involved therein shall have executed and delivered to the Rights Agent an
agreement confirming that the requirements of Sections 13(a) and (b) shall
promptly be performed in accordance with their terms and that such
consolidation, merger, sale or transfer shall not result in a default by the
Principal Party under this Agreement as the same
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shall have been assumed by the Principal Party pursuant to Sections 13(a) and
(b) hereof and further providing that, as soon as practicable after executing
such agreement pursuant to this Section 13, the Principal Party will:
(i) prepare and file a registration statement under the
Securities Act, if necessary, 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 date of expiration of
the Rights, and similarly comply with applicable state securities laws;
(ii) use its best efforts, if the Common Shares of the Principal
Party shall become listed on a national securities exchange, to list (or
continue the listing of) the Rights and the securities purchasable upon exercise
of the Rights on such securities exchange and, if the Common Shares of the
Principal Party shall not be listed on a national securities exchange, to cause
the Rights and the securities purchasable upon exercise of the Rights to be
listed by a national securities exchange or admitted for trading on the Nasdaq
National Market;
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which 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 Shares of the Principal Party subject to
purchase upon exercise of outstanding Rights.
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If any of the transactions described in Section 13(a) shall occur at any time
after the occurrence of a transaction described in Section 11(a)(ii), the Rights
which have not theretofore been exercised shall thereafter be exercisable in the
manner described in Section 13(a). The provisions of this Section 13 shall
similarly apply to all successive mergers, consolidations, sales, transfers or
other Section 13 Events.
(d) Furthermore, if the Principal Party which is to be a party to a
transaction referred to in this Section 13 has a provision in any of its
authorized securities or in its certificate of incorporation, articles of
incorporation, bylaws or other instrument governing its corporate affairs, which
provision would have the effect of (i) causing such Principal Party to issue, in
connection with, or as a consequence of, the consummation of a transaction
referred to in this Section 13, Common Shares of such Principal Party at less
than the then Current Market Price per share (determined pursuant to Section
11(d)(i)) or securities exercisable for, or convertible into, Common Shares of
such Principal Party at less than such then Current Market Price (other than to
holders of Rights pursuant to this Section 13) or (ii) providing for any special
payment, tax or similar provisions in connection with the issuance of Common
Shares of such Principal Party pursuant to the provisions of this Section 13;
then, in such event, the Company hereby agrees with each holder of Rights that
it shall not consummate any such transaction unless prior thereto the Company
and such Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing that the provision in question of such
Principal Party shall have been canceled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction.
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(e) For the avoidance of doubt and notwithstanding the foregoing, this
Section 13 shall not apply as a result of the Merger Agreement, the Option
Agreements, or the Merger or the consummation of the other transactions
contemplated by the Merger Agreement and the Option Agreements.
14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights or to
distribute Rights Certificates which evidence fractional Rights. In lieu of such
fractional Rights, there shall be paid to the holders of record of the Rights
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the then current
market value of a whole Right. For the purposes of this Section 14(a), the then
current market value of a whole Right shall be the closing price of the Rights
for the Trading Day immediately prior to but not including the date on which
such fractional Rights would have been otherwise issuable.
(b) The Company shall not be required to issue fractions of Junior
Preferred Shares (other than fractions which are integral multiples of one
one-thousandths of a Junior Preferred Share) upon exercise of the Rights, or to
exchange the Rights pursuant to Section 24 of this Agreement for fractions of
Common Shares. Fractions of Junior Preferred Shares in integral multiples of one
one-thousandth of a Junior Preferred Share may, at the election of the Company,
be evidenced by depositary receipts, pursuant to an appropriate agreement
between the Company and a depositary selected by it, provided that such
agreement shall provide that the holders of such depositary receipts shall have
all the rights, privileges and preferences to which they are entitled as
beneficial owners of the Junior Preferred Shares. With respect to fractional
Junior
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<PAGE> 50
Preferred Shares that are not integral multiples of one one-thousandth of a
Junior Preferred Share, if the Company does not issue fractional shares or
depositary receipts in lieu thereof, the Company shall pay to the registered
holders of Rights Certificates at the time such Rights Certificates are
exercised as herein provided an amount in cash equal to the same fraction of the
current market value of one one-thousandth of a Junior Preferred Share. For
purposes of this Section 14(b), the current market value of one one-thousandth
of a Junior Preferred Share shall be the Current Market Price of one
one-thousandth of a Junior Preferred Share (as determined pursuant to Section
11(d)(ii)).
(c) Following the occurrence of a Triggering Event, the Company shall
not be required to issue fractions of Common Shares upon exercise of the Rights
or to distribute certificates which evidence fractional Common Shares. In lieu
of fractional Common Shares, the Company may pay to the registered holders of
Rights Certificates at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current per share market value
of one share of such class of Common Shares for which a Right is exercisable.
For the purposes of this Section 14(c), the current per share market value of
one Common Share for which a Right is exercisable shall be the closing price of
one share of such class of Common Shares (as determined pursuant to Section
11(d)(i) hereof) for the Trading Day immediately prior to the date of such
exercise.
(d) The holder of a Right by the acceptance of a Right expressly waives
his right to receive any fractional Right or any fractional shares (other than
fractions which are integral multiples of one one-thousandths of a Junior
Preferred Share) upon exercise of a Right.
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(e) Whenever a payment for fractional Rights or fractional shares is to
be made by the Rights Agent, the Company shall (i) promptly prepare and deliver
to the Rights Agent a certificate setting forth in reasonable detail the facts
related to such payment and the prices and/or formulas utilized in calculating
such payments, and (ii) provide sufficient monies to the Rights Agent in the
form of fully collected funds to make such payments. The Rights Agent shall be
fully protected in relying upon such a certificate and shall have no duty with
respect to, and shall not be deemed to have knowledge of any payment for
fractional Rights or fractional shares under any Section of this Agreement
relating to the payment of fractional Rights or fractional shares unless and
until the Rights Agent shall have received such a certificate and sufficient
monies.
15. Rights of Action. All rights of action in respect of this Agreement,
except the rights of action given to the Rights Agent under Section 18, are
vested in the respective holders of record of the Rights Certificates (and,
prior to the Distribution Date, the holders of record of the Common Shares); and
any holder of record of any Rights Certificate (or, prior to the Distribution
Date, of the Common Shares), without the consent of the Rights Agent or of the
holder of any other Rights Certificate (or, prior to the Distribution Date, of
the Common Shares), may, in his own behalf and for his own benefit, enforce, and
may institute and maintain any suit, action or proceeding against the Company or
any other Person to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Rights Certificate (or prior to the
Distribution Date, certificates for Common Shares) in the manner provided in
such Rights Certificate and in this Agreement. Without limiting the foregoing or
any remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and, accordingly, that they will be entitled to
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specific performance of the obligations under, and injunctive relief against
actual or threatened violations of the obligations of any Person subject to this
Agreement.
16. Agreement of 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 not be evidenced by
a Rights Certificate and will be transferable only in connection with the
transfer of Common Shares;
(b) after the Distribution Date, the Rights Certificates will be
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer and with the appropriate forms and certificates
fully executed;
(c) subject to Section 6 and Section 7(f), the Company and the
Rights Agent may deem and treat the Person in whose name the Rights Certificate
(or, prior to the Distribution Date, the associated Common Shares certificate)
is registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Rights Certificate
or the associated Common Shares certificate made by anyone other than the
Company or the Rights Agent or the transfer agent of the Common Shares of the
Company) for all purposes whatsoever, and, subject to Section 7(e), 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 a beneficial interest in 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,
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judgment, 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, that the Company must use its best efforts to have any such
order, judgment, decree or ruling lifted or otherwise overturned as soon as
possible.
17. Rights Certificate Holder Not Deemed a Stockholder. No holder of a Right
or a Rights Certificate, as such, shall be entitled to vote, receive dividends
in respect of or be deemed for any purpose to be the holder of Junior Preferred
Shares or any other securities of the Company which may at any time be issuable
upon the exercise of the Rights, nor shall anything contained in this Agreement
or in any Rights Certificate be construed to confer upon the holder of any
Rights Certificate, as such, any of the rights of a stockholder of the Company
or any right to vote for the election of directors or upon any matter submitted
to stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as set forth in Section 25), or to receive dividends or
subscription rights in respect of any such stock or securities, or otherwise,
until the Right or Rights evidenced by such certificate for Common Shares or
Rights Certificate, as the case may be, shall have been exercised in accordance
with the provisions of this Agreement.
18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it under this Agreement and, from time
to time, on demand of the Rights Agent, its reasonable expenses and counsel fees
and other disbursements incurred in the preparation, delivery, administration,
execution and any amendment of this Agreement and the
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exercise and performance of its duties under this Agreement. The Company also
agrees to indemnify the Rights Agent for, and to hold it harmless against, any
loss, liability, damage, judgment, fine, penalty, claim, demand, settlement,
cost or expense incurred without gross negligence, bad faith or willful
misconduct on the part of the Rights Agent (each as finally determined by a
court of competent jurisdiction) for any action taken, suffered or omitted by
the Rights Agent in connection with the acceptance and administration of this
Agreement, including without limitation the costs and expenses of defending
against any claim of liability in the premises. The indemnity provided herein
shall survive the termination of this Agreement and the expiration of the
Rights. The costs and expenses incurred by the Rights Agent in enforcing this
right of indemnification shall be paid by the Company.
(b) The Rights Agent shall be protected and shall incur no liability for
or in respect of any action taken, suffered or omitted by it in connection with
its acceptance and administration of this Agreement in reliance upon any Rights
Certificate, certificate for Common Shares or other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement or other paper or
document believed by it to be genuine and to be signed, executed and, where
necessary, guaranteed, verified or acknowledged, by the proper Person or
Persons.
19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any Person into which the Rights Agent or any successor Rights Agent
may be merged or with which it may be consolidated, or any Person resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any Person succeeding to the stock transfer business
of the Rights Agent or any successor Rights
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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 to this Agreement; provided that such Person would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21. If
at the time such successor Rights Agent shall succeed to the agency created by
this Agreement, any of the Rights Certificates shall have been countersigned but
not delivered, any such successor Rights Agent may adopt the countersignature of
a predecessor Rights Agent and deliver such Rights Certificates so
countersigned; and if at that time any of the Rights Certificates shall not have
been countersigned, any successor Rights Agent may countersign such Rights
Certificates either in the name of a predecessor Rights Agent or in the name of
the successor Rights Agent; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this Agreement.
(b) If at any time the name of the Rights Agent shall be changed and at
such time any of the Rights Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver such Rights Certificates so countersigned; and if at that time any
of the Rights Certificates shall not have been countersigned, the Rights Agent
may countersign such Rights Certificates either in its prior name or in its
changed name; and in all such cases such Rights Certificates shall have the full
force provided in the Rights Certificates and in this Agreement.
20. Duties of Rights Agent. The Rights Agent undertakes only the duties and
obligations expressly imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
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<PAGE> 56
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the advice or opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to any
action taken, suffered or omitted by it in good faith and in accordance with
such advice or opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking, suffering or omitting to
take any action under this Agreement (including without limitation the identity
of an Acquiring Person and the determination of the Current Market Price), such
fact or matter (unless other evidence in respect thereof be specifically
prescribed in this Agreement) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the
Chief Executive Officer, the President, any Vice President, the 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
and protection to the Rights Agent for any action taken, suffered or omitted to
be taken in good faith by it under the provisions of this Agreement in reliance
upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith or willful misconduct (each as finally determined by a
court of competent jurisdiction). Anything to the contrary notwithstanding, in
no event shall the Rights Agent be liable for special, punitive, indirect,
consequential or incidental loss or damage of any kind whatsoever (including but
not limited to lost profits), even if the Rights Agent has been advised of the
likelihood of such loss or damage. Any liability of the Rights Agent under this
Rights Agreement will be limited to the amount of fees paid by the Company to
the Rights Agent.
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(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Rights
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not have any liability or be under any
responsibility in respect of the validity of this Agreement or the execution and
delivery of this Agreement (except the due execution of this Agreement by the
Rights Agent) or in respect of the validity or execution of any Rights
Certificate (except its countersignature thereof); nor shall it be responsible
for any breach by the Company of any covenant or condition contained in this
Agreement or in any Rights Certificate; nor shall it be responsible for any
change in the exercisability of the Rights or any adjustment required under the
provisions of this Agreement or responsible for the manner, method or amount of
any such change or adjustment or the ascertaining of the existence of facts that
would require any such change in the exercisability of the Rights or any change
or adjustment (except with respect to the exercise of Rights evidenced by Rights
Certificates after actual notice of any such change or adjustment); nor shall it
by any act under this Agreement be deemed to make any representation or warranty
as to the authorization or reservation of any Common Shares or Junior Preferred
Shares or other securities to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any Common Shares or Junior Preferred Shares or
other securities will, when issued, be validly authorized and issued, fully paid
and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts,
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instruments and assurances as may reasonably be required by the Rights Agent for
the carrying out or performing by the Rights Agent of the provisions of this
Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the Chief Executive Officer, the President,
any Vice President, the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken, suffered or omitted to be taken by it in good faith in accordance
with the instructions of any such officer or for any delay in acting while
waiting for those instructions.
(h) The Rights Agent and any stockholder, affiliate, 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
the Rights Agent under this Agreement. Nothing in this Agreement shall preclude
the Rights Agent from acting in any other capacity for the Company or for any
other Person.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty under this Agreement 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, absent gross negligence, bad faith or
willful misconduct (each as finally determined by a court of competent
jurisdiction) in the selection and continued employment thereof.
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(j) If, with respect to any Rights Certificate surrendered to the Rights
Agent for exercise or transfer, split up, combination or exchange, 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.
(k) 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
it believes that repayment of such funds or adequate indemnification against
such risk or liability is not assured to it.
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
Shares and the Junior Preferred Shares by registered or certified mail, and to
the holders of the Rights Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent (with or without cause)
upon 30 days' notice in writing, mailed to the Rights Agent or any successor
Rights Agent, as the case may be, and to each transfer agent of the Common
Shares and the Junior Preferred Shares by registered or certified mail, and to
the holders of the Rights Certificates by first-class mail. If the Rights Agent
shall resign or be removed or shall otherwise become incapable of acting, the
Company shall appoint a successor to the Rights Agent. Notwithstanding the
foregoing provisions of this Section 21, in no event shall the resignation or
removal of a Rights Agent be effective until a successor Rights Agent shall have
been appointed and have accepted such appointment. If the Company shall fail to
make such appointment within
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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 Rights Certificate (who shall,
with such notice, submit his Rights Certificate for inspection by the Company),
then the incumbent Rights Agent or the holder of record of any Rights
Certificate may apply to any court of competent jurisdiction for the appointment
of a new Rights Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be (a) a Person organized and doing business
under the laws of the United States or any State thereof, in good standing,
which is authorized under such laws to exercise stock transfer powers and is
subject to supervision or examination by federal or state authority and which
has, or together with its parent entity has, at the time of its appointment as
Rights Agent a combined capital and surplus of at least $100 million or (b) an
affiliate or subsidiary of a Person described in clause (a) of this sentence.
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 under this Agreement, 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
Shares and the Junior Preferred Shares, and mail a notice thereof in writing to
the holders of record of the Rights Certificates or, if prior to the
Distribution Date, the holders of record of the Common Shares. Failure to give
any notice provided for in this Section 21, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal of the
Rights Agent or the appointment of the successor Rights Agent, as the case may
be.
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22. Issuance of New Rights Certificates. Notwithstanding any of the provisions
of this Agreement or of the Rights to the contrary, the Company may, at its
option, issue new Rights Certificates evidencing Rights in such form as may be
approved by the Board of Directors to reflect any adjustment or change in the
Expiration Date, the Purchase Price and the number or kind or class of shares of
stock or other securities or property purchasable under the Rights Certificates
made in accordance with the provisions of this Agreement. In addition, in
connection with the issuance or sale of Common Shares following the Distribution
Date and prior to the redemption or expiration of the Rights, the Company (i)
shall, with respect to Common Shares so issued or sold pursuant to the exercise
of stock options or under any employee plan or arrangement, granted or awarded
as of the Distribution Date, or upon the exercise, conversion or exchange of
securities issued by the Company hereinafter but prior to the Distribution Date,
and (ii) may, in any other case, if deemed necessary or appropriate by the Board
of Directors of the Company, issue Rights Certificates representing the
appropriate number of Rights in connection with such issuance or sale; provided,
however, that (x) no such Rights Certificate 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
the Person to whom such Rights Certificate would be issued, and (y) no such
Rights Certificate shall be issued if, and to the extent that, appropriate
adjustment shall otherwise have been made in lieu of the issuance thereof.
23. Redemption and Termination.
(a) The Board of Directors of the Company may, at its option, at any
time prior to the earlier of (i) the Close of Business on the tenth day
following the Stock Acquisition Date (or, if the Stock Acquisition Date shall
have occurred prior to the Record Date, the Close of
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Business on the tenth day following the Record Date), or (ii) the Final
Expiration Date, redeem all but not less than all the then outstanding Rights at
a redemption price of $.01 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date of this Agreement (such redemption price being referred
to in this Agreement as the "Redemption Price"). The redemption of the Rights by
the Board of Directors of the Company may be made effective at such time, on
such basis and with such conditions as the Board of Directors of the Company may
establish in good faith.
(b) Immediately upon the action of the Board of Directors of the Company
ordering the redemption of the Rights pursuant to Section 23(a), and without any
further action and without any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of Rights shall be to
receive the Redemption Price. Promptly after such action of the Board of
Directors ordering the redemption of the Rights, the Company shall give notice
of such redemption to the Rights Agent and the holders of the then outstanding
Rights by mailing such notice to all such holders at each holder's last address
as it appears upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent of the Common
Shares. Any notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption Price
will be made. The failure to give notice required by this Section 23 or any
defect therein shall not affect the legality or validity of any redemption
hereunder. Neither the Company nor any of its Affiliates or Associates may
redeem, acquire or purchase for value any Rights at any time in any manner other
than that specifically set forth in this Section 23 or in Section 24, and other
than in connection with the purchase of Common Shares prior to the Distribution
Date.
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24. Exchange.
(a) The Board of Directors of the Company may, at its option, at any
time after any Person becomes an Acquiring Person, exchange all or part of the
then outstanding and exercisable Rights (which shall not include Rights that
have become null and void pursuant to the provisions of Section 7(e)) for Common
Shares at an exchange ratio of one Common Share per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date of this Agreement (such exchange ratio being referred
to in this Agreement 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 50% or
more of the Voting Power of the Common Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to Section 24(a) and without any
further action and without any notice, the right to exercise such Rights shall
terminate and the only right thereafter of a holder of such Rights shall be to
receive that number of Common Shares equal to the number of such Rights held by
such holder multiplied by the Exchange Ratio. The Company shall promptly give
public notice of any such exchange (with prompt written notice thereof to the
Rights Agent); 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 such Rights
at the last addresses of the holders as they appear upon the registry books of
the Rights Agent. Any notice which is mailed in the manner herein provided shall
be deemed given, whether or not the holder receives the notice. Each such notice
of exchange will state the method by which the exchange of the Common Shares for
Rights will
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be effected and, in the event of any partial exchange, the number and kind of
Rights which will be exchanged. The failure to give notice required by this
Section 24 or any defect therein shall not affect the legality or validity of
any exchange hereunder.
(c) Any partial exchange shall be effected pro rata based on the number
of Rights being exchanged (other than Rights which have become null and void
pursuant to the provisions of Section 7(e)) held by each holder of Rights.
(d) If there shall not be sufficient Common Shares issued but not
outstanding or authorized but unissued to permit any exchange of Rights as
contemplated in accordance with this Section 24, the Company shall take all such
action as may be necessary to authorize additional Common Shares for issuance
upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional Common Shares. In
lieu of such fractional Common Shares, the Company shall pay to the registered
holders of the Rights Certificates with regard to which such fractional Common
Shares would otherwise be issuable, an amount in cash equal to the same fraction
of the current market value of such whole Common Shares. For purposes of this
Section 24(e), the current market value of a whole Common Share shall be the
closing price of a Common Share (as determined pursuant to the second sentence
of Section 11(d) (i)) for the Trading Day immediately prior to the date of
exchange pursuant to this Section 24.
25. Notice of Proposed Actions.
(a) If the Company, at any time after the Distribution Date, shall
propose to (i) effect any of the transactions referred to in Section 11(a)(i) or
to pay any dividend to the holders of record of its Junior Preferred Shares
payable in stock of any class or to make any other
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distribution to the holders of record of its Junior Preferred Shares (other than
a regular quarterly cash dividend out of earnings or retained earnings of the
Company), (ii) offer to the holders of record of its Junior Preferred Shares
options, warrants or other rights to subscribe for or to purchase Junior
Preferred Shares (including any security convertible into or exchangeable for
Junior Preferred Shares) or shares of stock of any class or any other
securities, options, warrants, convertible or exchangeable securities or other
rights, (iii) effect any reclassification of its Junior Preferred Shares or any
recapitalization or reorganization of the Company, (iv) effect any consolidation
or merger with or into, 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
transaction or a series of related transactions not in the ordinary course of
the Company's business, of more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to, any other Person or Persons,
or (v) effect the liquidation, dissolution or winding up of the Company, then,
in each such case, the Company shall give to the Rights Agent and each holder of
record of Rights, in accordance with Section 26, notice of such proposed action,
which shall specify the record date for the purposes of such transaction
referred to in Section 11(a)(i), or such dividend or distribution, or the date
on which such reclassification, recapitalization, reorganization, consolidation,
merger, sale or transfer of assets, liquidation, dissolution, or winding up is
to take place and the record date for determining participation therein by the
holders of record of Junior Preferred Shares, 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) or (ii) above at least 10 days prior to the record date for determining
holders of record of the Junior Preferred Shares 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
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action or the date of participation therein by the holders of record of Junior
Preferred Shares, whichever shall be the earlier.
(b) If any of the transactions referred to in Section 11(a)(ii) or
Section 13 of this Agreement are proposed, then, in any such case, the Company
shall give to each holder of Rights, in accordance with Section 26, notice of
the proposal of such transaction at least 10 days prior to consummating such
transaction, which notice shall specify the proposed event and the consequences
of the event to holders of Rights under Section 11(a)(ii) or Section 13, as the
case may be, and, upon consummating such transaction, shall similarly give
notice thereof to each holder of Rights.
(c) If any Section 11(a)(ii) Event shall occur, then all references in
this Section 25 to Junior Preferred Shares shall be deemed thereafter to refer
to the class of Common Shares or other securities for which the Rights are then
exercisable. 26. Notices. Except as provided in Section 21, notices or demands
authorized by this Agreement to be given or made by the Rights Agent or by the
holder of record of any Rights Certificate or Right 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:
Fritz Companies, Inc.
706 Mission Street, Suite 600
San Francisco, CA 94103
Attention: General Counsel
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of record of any
Rights Certificate or Right to or
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on the Rights Agent shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Company) as follows:
Mellon Investor Services LLC
44 Wall Street, 6th Floor
New York, NY 10005
Attention: Relationship Manager
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of record of any Rights Certificate or
Right (or, if prior to the Distribution Date, to the holder of certificates
representing Common Shares) 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 it appears upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the transfer agent of the
Company.
27. Supplements and Amendments. Prior to the Distribution Date, the Company may
and the Rights Agent shall (subject to the third to last sentence of this
Section), if the Company so directs, supplement or amend any provision of this
Agreement without the approval of any holders of the Rights or the Common
Shares. From and after the Distribution Date, 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 Rights in order to (i) cure any
ambiguity, (ii) correct or supplement any provision contained in this Agreement
which may be defective or inconsistent with any other provisions in this
Agreement, or (iii) change or supplement the provisions hereunder in any manner
which the Company may deem necessary or desirable; provided, that no such
supplement or amendment shall adversely affect the interests of the holders of
Rights (other than any interest of an Acquiring Person or an Affiliate or
Associate of an Acquiring Person). Upon the delivery of a certificate from an
appropriate officer of the
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Company which states that the proposed supplement or amendment is in compliance
with the terms of this Section 27 and provided that such amendment or supplement
does not change or increase the Rights Agent's rights, duties, liabilities or
obligations, the Rights Agent shall execute such supplement or amendment. Prior
to the Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of the corresponding class of
Common Shares. Notwithstanding anything contained in this Agreement to the
contrary, this Agreement may not be amended at a time when the Rights are not
redeemable.
28. Determinations and Actions by the Board. The Board of Directors of the
Company shall have the exclusive power and authority to administer this
Agreement and to exercise all rights and powers specifically granted to the
Board of Directors or to the Company or as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the right and
power to (i) interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the Rights or to
amend this Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions with
respect to the foregoing) which are done or made by the Board in good faith
shall (x) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights and all other parties, and (y) not subject the Board of
Directors of the Company to any liability to the holders of the Rights. The
Rights Agent shall always be entitled to assume that the Company's Board of
Directors acted in good faith and shall be fully protected and shall incur no
liability in reliance thereon.
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29. Successors. All of 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 under this Agreement.
30. Benefits of this Agreement. Nothing in this Agreement shall be construed to
give to any Person other than the Company, the Rights Agent and the holders of
record of the Rights Certificates (and, prior to the Distribution Date, the
Common Shares) any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the holders of record of the Rights Certificates
(and, prior to the Distribution Date, the Common Shares).
31. Governing Law. This Agreement, each Right and each Rights Certificate issued
under this Agreement 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 made and to be
performed entirely within such State; provided, however, that all provisions
regarding the rights, duties and obligations of the Rights Agent shall be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed entirely within such State.
32. Counterparts. This Agreement may be executed in any number of counterparts
and each of such counterparts shall for all purposes be deemed to be an
original, and all such counterparts shall together constitute but one and the
same instrument.
33. Descriptive Headings. Descriptive headings of the several Sections of this
Agreement are inserted for convenience only and shall not control or affect the
meaning or construction of any of the provisions of this Agreement.
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34. 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, illegal, 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.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first above written.
Attest: FRITZ COMPANIES, INC.
By:/s/ Martin Phillips By: /s/ Jan H. Raymond
---------------------------- --------------------------------------
Name: Martin Phillips Name: Jan H. Raymond
Title: Title: Exec. V.P.
Attest: MELLON INVESTOR SERVICES LLC
By: /s/ Yvonne D. Benn By: /s/ Regina Brown
--------------------------- -------------------------------------
Name: Yvonne D. Benn Name: Regina Brown
Title: Relationship Manager Title: Vice President
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EXHIBIT A
FORM
of
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS OF THE TERMS OF
THE JUNIOR PARTICIPATING PREFERRED STOCK
of
FRITZ COMPANIES, INC.
(Pursuant to Section 151 of the
Delaware General Corporation Law)
Fritz Companies, Inc., a corporation organized and existing under the
General Corporation Law of the State of Delaware (hereinafter called the
"Corporation"), hereby certifies that the following resolution was adopted by
the Board of Directors of the Corporation as required by Section 151 of the
General Corporation Law at a meeting duly called and held on January 12, 2001:
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Corporation (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the
Corporation's Restated Certificate of Incorporation (the "Certificate of
Incorporation") the Board of Directors hereby creates a new series of Preferred
Stock, par value $0.01 per share (the "Junior Preferred Stock"), of the
Corporation and hereby states the designation and number of shares of each such
series, and fixes the relative rights, preferences, and limitations of each such
series as follows:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Junior Participating Preferred Stock" (the "Junior Preferred
Stock") and the number of shares constituting the Junior Preferred Stock shall
be 150,000. Such number of shares may be
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<PAGE> 73
increased or decreased by resolution of the Board of Directors; provided, that
no decrease shall reduce the number of shares of Junior Preferred Stock to a
number less than the number of shares then outstanding plus the number of shares
reserved for issuance upon the exercise of outstanding options, rights or
warrants or upon the conversion of any outstanding securities issued by the
Corporation convertible into Junior Preferred Stock.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of any
series of Junior Preferred Stock (or any similar stock) ranking prior
and superior to the Junior Preferred Stock with respect to dividends,
the holders of shares of Junior Preferred Stock, in preference to the
holders of the Common Stock, par value $0.01 per share (the "Common
Stock"), of the Corporation, and of any other junior 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 March, June, September and December
in each year (each such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share
of Junior Preferred Stock, in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $1.00 or (b) subject to the
provision for adjustment hereinafter set forth, 1000 times the aggregate
per share amount of all cash dividends, and 1000 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
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Quarterly Dividend Payment Date, since the first issuance of any share
or fraction of a share of Junior Preferred Stock. If the Corporation
shall at any time declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of 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 amount to which holders of
shares of Junior Preferred Stock were entitled immediately prior to such
event under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the
number of shares of Common Stock 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 Junior Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock);
provided that, if 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 Junior 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 Junior Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares, unless the
date of issue of such shares is prior to the record
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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 Junior Preferred Stock entitled to receive a quarterly
dividend and before such Quarterly Dividend Payment Date, in either of
which events such dividends shall begin to accrue and be cumulative from
such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Junior Preferred
Stock in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The
Board of Directors may fix a record date for the determination of
holders of shares of Junior Preferred Stock entitled to receive payment
of a dividend or distribution declared thereon, which record date shall
be not more than 60 days prior to the date fixed for the payment
thereof.
Section 3. Voting Rights. The holders of shares of Junior Preferred
Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Junior Preferred Stock shall entitle the holder
thereof to 1000 votes on all matters submitted to a vote of the
stockholders of the Corporation. If the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of 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,
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then in each such case the number of votes per share to which holders of
shares of Junior Preferred Stock were entitled immediately prior to such
event shall be adjusted by multiplying such number by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number
of shares of Common Stock that were outstanding immediately prior to
such event.
(B) Except as otherwise provided herein, in any other
Certificate of Designations creating a series of Junior Preferred Stock
or any similar stock, or by law, the holders of shares of Junior
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 set forth herein, or as otherwise provided by law,
holders of Junior Preferred Stock shall have no voting rights and their
consent shall not be required (except to the extent they are entitled to
vote with holders of Common Stock as set forth herein) for taking any
corporate action.
Section 4. Liquidation, Dissolution or Winding Up. Upon any liquidation,
dissolution or winding up of the Corporation, no distribution shall be made (1)
to the holders of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Junior Preferred Stock unless,
prior thereto, the holders of shares of Junior Preferred Stock shall have
received $1000 per share, plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the date of such payment,
provided that the holders of shares of Junior Preferred Stock shall be entitled
to receive an aggregate amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 1000 times the
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aggregate amount to be distributed per share to holders of shares of Common
Stock, or (2) to the holders of shares of stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with the Junior
Preferred Stock, except distributions made ratably on the Junior Preferred Stock
and all such parity stock in proportion to the total amounts to which the
holders of all such shares are entitled upon such liquidation, dissolution or
winding up. If the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of 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 aggregate amount to which holders of shares of Junior Preferred
Stock were entitled immediately prior to such event under the proviso in clause
(1) of the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
Section 5. Consolidation, Merger, etc. If 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 or any other property, then in any such case each share of
Junior Preferred Stock shall at the same time be similarly exchanged or changed
into an amount per share, subject to the provision for adjustment hereinafter
set forth, equal to 1000 times the aggregate amount of stock, securities, cash
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. If the Corporation
shall at any time declare or pay any dividend on the
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Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of 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 amount set forth in the preceding sentence with respect to the
exchange or change of shares of Junior Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 6. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Junior Preferred Stock are in arrears,
thereafter and until all accrued and unpaid dividends and distributions,
whether or not declared, on shares of Junior 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 Junior Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on parity (either
as to dividends or upon liquidation, dissolution or winding up)
with the Junior Preferred Stock, except dividends paid ratably
on the Junior Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to the total
amounts to which the holders of all such shares are then
entitled;
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(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
Junior 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
dissolution, liquidation or winding up) to the Junior Preferred
Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Junior Preferred Stock, or any
shares of stock ranking on a parity with the Junior Preferred
Stock, except in accordance with a purchase offer made in
writing or by publication (as determined by the Board of
Directors) to all holders of such shares upon such terms as the
Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith
will result in fair and equitable treatment among the respective
series or classes.
(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 1, purchase or otherwise acquire such
shares at such time and in such manner.
Section 7. Reacquired Shares. Any shares of Junior Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
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subject to the conditions and restrictions on issuance set forth herein, in the
Certificate of Incorporation, or in any other Certificate of Designations
creating a series of Preferred Stock or any similar stock or as otherwise
required by law.
Section 8. No Redemption. The shares of Junior Preferred Stock shall not
be redeemable.
Section 9. Rank. The Junior Preferred Stock shall rank, with respect to
the payment of dividends and the distribution of assets, junior to all series of
any other class of the Corporation's Preferred Stock.
Section 10. Amendment. The Certificate of Incorporation shall not be
amended in any manner which would alter or change the powers, preferences or
special rights of the Junior Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of at least two-thirds of the
outstanding Junior Preferred Stock.
Section 11. Fractional Shares. The Junior Preferred Stock may be issued
in fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of the Junior Preferred Stock.
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IN WITNESS WHEREOF, this Certificate of Designations is executed on behalf
of the Corporation by its President and attested by its Secretary this _____ day
of January, 2001.
-----------------------------------
President
Attest:
------------------------------
Secretary
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EXHIBIT B
[Form of Rights Certificate]
Certificate No. R-__ _______ Rights
NOT EXERCISABLE AFTER FEBRUARY 1, 2010 OR UNDER CERTAIN
CIRCUMSTANCES EARLIER. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT
THE OPTION OF THE COMPANY, AT $.01 PER RIGHT ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT. IF THE RIGHTS REPRESENTED BY THIS
CERTIFICATE ARE ISSUED TO A PERSON WHO IS AN ACQUIRING PERSON OR
AN ASSOCIATE OR AFFILIATE OF AN ACQUIRING PERSON OR A TRANSFEREE
OF THE RIGHTS PREVIOUSLY OWNED BY SUCH PERSONS, THIS RIGHTS
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY WILL BECOME NULL
AND VOID.
Rights Certificate
FRITZ COMPANIES, 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 January 16, 2001 (the "Rights Agreement") between Fritz
Companies, Inc., a Delaware corporation (the "Company"), and Mellon Investor
Services LLC, a New Jersey limited liability company (the "Rights Agent"), to
purchase from the Company at any time after the Distribution Date (as such term
is defined in the Rights Agreement) and prior to 5:00 P.M., _______ time, on
February 1, 2010, or if earlier, the effective time of the merger of the Company
and VND Merger Sub, Inc. pursuant to the Agreement and Plan of Merger, dated as
of January 10, 2001, by and among United Parcel Service, Inc., VND Merger Sub,
Inc., and the Company, at the office of the Rights Agent
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designated for such purpose, or its successors as Rights Agent, one
one-thousandth of a fully paid and nonassessable share of Junior Participating
Preferred Stock, $.01 par value per share ("Junior Preferred Shares"), of the
Company at a purchase price of $28.125 as the same may from time to time be
adjusted in accordance with the Rights Agreement ("Purchase Price"), upon
presentation and surrender of this Rights Certificate with the Form of Election
to Purchase duly executed. The number of Rights evidenced by this Rights
Certificate (and the number of Junior Preferred Shares 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 January 29, 2001 (the "Record Date")
based on the Junior Preferred Shares of the Company as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and the number of Junior
Preferred Shares which may be purchased upon the exercise of the Rights
evidenced by this Rights Certificate are subject to modification and adjustment
upon the happening of certain events and, upon the happening of certain events,
securities other than Junior Preferred Shares, or other property, may be
acquired upon exercise of the Rights evidenced by this Rights Certificate, as
provided by the Rights Agreement.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
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 of the Rights Agent,
the Company and the holders of record of the Rights Certificates. Copies of the
Rights Agreement are on file at the principal executive office of the Company
and the above-mentioned offices of the Rights Agent.
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This Rights Certificate, with or without other Rights Certificates, upon
surrender at the office of the Rights Agent designated for such purpose, may be
exchanged for another Rights Certificate or Rights Certificates of like tenor
and date evidencing Rights entitling the holder of record to purchase a like
aggregate number of one one-thousandths of a Junior Preferred Share as the
Rights evidenced by the Rights Certificate or Rights Certificates surrendered
shall have entitled such holder to purchase. If this Rights Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender
hereof, another Rights Certificate or Rights Certificates for the number of
whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate (i) may be redeemed by the Company at its option at a
redemption price of $.001 per Right or (ii) may be exchanged in whole or in part
for Common Shares of the Company or common stock equivalents.
No fractional Junior Preferred Shares will be issued upon the exercise
of any Rights evidenced hereby (other than, except as set forth above, fractions
that are integral multiples of one one-thousandth of a Junior Preferred Share,
which may, at the election of the Company, be evidenced by depositary receipts),
but in lieu thereof, cash payment will be made, as provided in the Rights
Agreement. No holder of this Rights Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Junior Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent
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to any corporate action or to receive notice of meetings or other actions
affecting stockholders (except as provided in the Rights Agreement) or to
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by this Rights Certificate shall have been exercised as
provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
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<PAGE> 86
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal, dated as of ______________ ____.
ATTEST: FRITZ COMPANIES, INC.
----------------------------- By:
Secretary --------------------------------------
Name:
Title:
Countersigned:
MELLON INVESTOR SERVICES LLC
By
--------------------------
Authorized signature
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<PAGE> 87
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires
to transfer the Rights Certificate.)
FOR VALUE RECEIVED _________________________ hereby sells, assigns and
transfers unto
________________________________________________________________________________
_____________________________________________________
(Please print name and address of transferee)
Rights evidenced by this Rights Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint
_____________________ Attorney to transfer the within Rights Certificate on the
books of the within-named Company, with full power of substitution.
Dated: ,
------------ -----
----------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
-----------------------------------
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Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ]
are not being sold, assigned and transferred by or on behalf of a Person who is
or was an Acquiring Person or an Affiliate or Associate of any such Acquiring
Person (as such terms are defined pursuant to the Rights Agreement); and (2)
after due inquiry and to the best knowledge of the undersigned, it [ ] did [ ]
did not acquire the Rights evidenced by this Rights Certificate from any Person
who is or was an Acquiring Person or an Affiliate or Associate of an Acquiring
Person or any transferee of such Persons.
Dated: ,
------------ ----
----------------------------------
Signature
NOTICE
The signature to the foregoing Assignment must correspond to the name as written
upon the face of this Rights Certificate in every particular, without alteration
or enlargement or any change whatsoever.
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FORM OF ELECTION TO PURCHASE
(To be executed if registered holder desires to
Exercise the Rights Certificate.)
To: Fritz Companies, Inc.
The undersigned hereby irrevocably elects to exercise
____________________ Rights represented by this Rights Certificate to purchase
the Junior Preferred Shares issuable upon the exercise of such Rights and
requests that certificates for such share(s) be issued in the name:
Please insert social security
or other identifying number
--------------------------------------------
(Please print name and address)
--------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
--------------------------------------------
(Please print name and address)
--------------------------------------------
Dated: ,
-------------- ----
----------------------------------
Signature
(Signature must conform in all respects
to name of holder as specified on the
face of this Rights Certificate)
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<PAGE> 90
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
-----------------------------------
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ]
are not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined pursuant to the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is or was an Acquiring Person or an Affiliate or
Associate of an Acquiring Person or any transferee of such Persons.
Dated: ,
-------------- -----
----------------------------------
Signature
B-9
<PAGE> 91
EXHIBIT C
FRITZ COMPANIES, INC.
SUMMARY OF RIGHTS TO PURCHASE
JUNIOR PREFERRED SHARES
On January 12, 2001, the Board of Directors (the "Board") of Fritz
Companies, Inc. (the "Company") adopted a Rights Agreement (the "Rights
Agreement") and authorized and declared a dividend of one preferred share
purchase right (a "Right") for each outstanding share of Common Stock, par value
$.01 per share ("Common Share"), of the Company. The dividend is payable on
January 29, 2001 to the stockholders of record on that date (the "Record Date"),
and with respect to Common Shares issued thereafter until the Distribution Date
(as hereinafter defined) or the expiration or earlier redemption or exchange of
the Rights. Except as set forth below, each Right entitles the holder of record
to purchase from the Company at any time after the Distribution Date one
one-thousandth of a share of Junior Participating Preferred Stock, par value
$.01 per share (the "Junior Preferred Shares"), at a price of $28.125 per one
one-thousandth of a share, subject to adjustment (the "Purchase Price"). The
description and terms of the Rights are set forth in the Rights Agreement.
Initially, the Rights will be attached to all certificates representing
Common Shares then outstanding, and no separate Rights Certificates will be
distributed. The Rights will become exercisable and separate from the Common
Shares upon the earlier to occur of (i) 10 days after the date (the "Stock
Acquisition Date") of a public announcement that a Person or group of affiliated
or associated Persons has acquired beneficial ownership of 15% or more of the
voting power of the outstanding Common Shares (such Person or group being
hereinafter referred to as an "Acquiring Person"), or (ii) 10 business days (or
such later date as the Board may determine) following the commencement of, or
announcement of an intention to make, a tender offer or exchange offer the
consummation of which would result in a Person or group becoming the beneficial
owner of 15% or more of the voting power of the outstanding Common Shares (the
earlier of such dates being called the "Distribution Date"). Common Shares
beneficially owned by the Company or any subsidiary of the Company will not be
considered outstanding for purposes of calculating the percentage ownership of
any Person.
The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred with, and only with, the Common Shares. Until the
Distribution Date (or earlier redemption or expiration), new Common Share
certificates issued after the Record Date upon transfer or new issuance of
Common Shares will contain a notation 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 of Common Shares
outstanding as of the Record Date, even without such notation, also will
constitute the transfer of the Rights associated with the Common Shares
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Rights
Certificates") will be mailed to holders of record of the Common Shares as of
the close of business on the Distribution Date, and such separate Rights
Certificates alone will evidence the Rights. The Rights are not exercisable
until the Distribution Date. The Rights will expire at the earlier of the close
of
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business on February 1, 2010 or the effective time of the merger of the Company
and VND Merger Sub, Inc., pursuant to the Agreement and Plan of Merger by and
among United Parcel Service, Inc., VND Merger Sub, Inc., and the Company, dated
as of January 10, 2001 (the "Merger Agreement"), unless earlier redeemed by the
Company as described below.
Each of the following Persons will not be deemed to be an Acquiring
Person even if they have acquired, or obtained the right to acquire, beneficial
ownership of 15% or more of the voting power of the outstanding Common Shares of
the Company: (i) the Company, any subsidiary of the Company, or any employee
benefit plan of the Company or of any subsidiary of the Company, (ii) any Person
who would otherwise become an Acquiring Person solely by virtue of a reduction
in the number of outstanding Common Shares unless and until such Person shall
become the beneficial owner of any additional Common Shares, (iii) Lynn C.
Fritz, his Affiliates and Associates, his heirs, immediate family, the Lynn C.
Fritz 199 Grantor Retained Annuity Trust, the Tamara Fritz 1999 Grantor Retained
Annuity Trust, and any trust of which Lynn C. Fritz, his heirs, or immediate
family is the sole beneficiary and to which he or members of his immediate
family has transferred or may transfer shares of Common Stock (collectively,
"Lynn C. Fritz"); unless Lynn C. Fritz increases its aggregate percentage
ownership of Common Stock in certain circumstances and (v) United Parcel
Service, Inc., VND Merger Sub, Inc. and their permitted assigns pursuant to the
Merger Agreement, with respect to the execution and delivery of the Merger
Agreement and the related option agreements and with respect to any shares of
Common Stock acquired by them pursuant to the transactions contemplated by the
Merger Agreement and related option agreements.
If any Person becomes an Acquiring Person, each holder of a Right will
thereafter have the right (the "Flip-In Right") to receive, in lieu of Junior
Preferred Shares and upon payment of the Purchase Price, Common Shares (or in
certain circumstances, cash, property or other securities of the Company) having
a value equal to two times the Purchase Price of the Right. Notwithstanding the
foregoing, all rights that are, or were, beneficially owned by an Acquiring
Person or any affiliate or associate thereof will be null and void and not
exercisable.
If, at any time on or after the Stock Acquisition Date, (i) the Company
is acquired in a merger or other business combination transaction in which the
holders of all of the outstanding Common Shares immediately prior to the
consummation of the transaction are not the holders of all of the surviving
corporation's voting power, or (ii) more than 50% of the Company's assets, cash
flow or earning power is sold or transferred other than in the ordinary course
of the Company's business, then each holder of a Right (except Rights which have
previously been voided as set forth above) shall thereafter have the right (the
"Flip-Over Right") to receive, in lieu of Junior Preferred Shares and upon
exercise and payment of the Purchase Price, common shares of the acquiring
company having a value equal to two times the Purchase Price. If a transaction
would otherwise result in a holder's having a Flip-In as well as a Flip-Over
Right, then only the Flip-Over Right will be exercisable; if a transaction
results in a holder's having a Flip-Over Right subsequent to a transaction
resulting in a holder's having a Flip-In Right, a holder will have Flip-Over
Rights only to the extent such holder's Flip-In Rights have not been exercised.
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The Purchase Price payable, and the number of Junior Preferred Shares or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Junior
Preferred Shares, (ii) upon the grant to holders of the Junior Preferred Shares
of certain rights or warrants to subscribe for Junior Preferred Shares or
convertible securities at less than the current market price of the Junior
Preferred Shares or (iii) upon the distribution to holders of the Junior
Preferred Shares of evidences of indebtedness or assets (excluding dividends
payable in Junior Preferred Shares) or of subscription rights or warrants (other
than those referred to above). However, no adjustment in the Purchase Price will
be required until cumulative adjustments require an adjustment of at least 1%.
The number of outstanding Rights and the number of one one-thousandths
of a Junior Preferred Share issuable upon exercise of each Right are also
subject to adjustment in the event of a stock split of the Common Shares or a
stock dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.
Junior Preferred Shares purchasable upon exercise of the Rights will not
be redeemable. Each Junior Preferred Share will be entitled to a minimum
preferential quarterly dividend payment of $1 per share but will be entitled to
an aggregate dividend of 1000 times the dividend declared per share of Common
Share. In the event of liquidation, the holders of Junior Preferred Shares will
be entitled to a minimum preferential liquidation payment of $1000 per share but
will be entitled to an aggregate payment of 1000 times the payment made per
Common Share. Each Junior Preferred Share will have 1000 votes, in each case
voting together with the Common Shares. Finally, in the event of any merger,
consolidation or other transaction in which the Common Shares are exchanged,
each Junior Preferred Share will be entitled to receive 1000 times the amount
received per Common Share. These rights are protected by customary antidilution
provisions.
Because of the nature of the dividend, liquidation and voting rights of
the Junior Preferred Shares, the value of the one one-thousandth interest in a
Junior Preferred Share purchasable upon exercise of each Right should
approximate the value of one Common Share.
If, after the triggering of Flip-In Rights, insufficient Common Shares
are available for the exercise in full of the Rights, the Company shall take all
such action as may be necessary to authorize additional Common Shares for
issuance upon exercise in full of the Rights. If, after the expiration of 120
days after the triggering of Flip-In Rights, insufficient Common Shares are
available for the exercise in full of the Rights, holders of Rights will receive
upon exercise Common Shares or to the extent available cash, property or other
securities of the Company, in proportions determined by the Company, so that the
aggregate value received is equal to twice the Purchase Price.
The Company is not required to issue fractional Junior Preferred Shares
(other than fractions which are integral multiples of one one-thousandth of a
Junior Preferred Share, which may, at the election of the Company be evidenced
by depositary receipts), and in lieu thereof, a payment in cash will be made to
the holder of such Rights equal to the same fraction of the
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current value of one one-thousandth of a Junior Preferred Share. Following the
triggering of the Flip-In Rights, the Company will not be required to issue
fractional Common Shares upon exercise of the Rights and, in lieu thereof, a
payment in cash will be made to the holder of such Rights equal to the same
fraction of the current market value of a Common Share.
In general, the Company may redeem the Rights at a price of $.001 per
Right (subject to adjustment), at any time before the close of business on the
tenth day following the Stock Acquisition Date.
At any time after any Person becomes an Acquiring Person and prior to
the acquisition by any Person of 50% or more of the outstanding Common Shares,
the Board of Directors of the Company may exchange the then outstanding and
exercisable Rights (other than Rights owned by an Acquiring Person, which will
have become null and void), in whole or in part, for Common Shares, each Right
being exchangeable for one Common Share or common share equivalents equal to one
Common Share, subject to adjustment.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.
The issuance of the Rights is not taxable to the Company or to
stockholders under presently existing federal income tax law, and will not
change the way in which stockholders can presently trade the Company's Common
Shares. If the Rights should become exercisable, stockholders, depending on then
existing circumstances, may recognize taxable income.
Prior to the Distribution Date, the Rights Agreement generally may be
amended by the Board of Directors of the Company. On or after the Distribution
Date, the Company may amend the Rights Agreement only to (i) cure any ambiguity,
(ii) correct or supplement any provision which may be defective or inconsistent
with the other provisions of the Rights Agreement, or (iii) change or supplement
the Rights Agreement in any other manner which the Company may deem necessary or
desirable, provided that no amendment shall adversely affect the interests of
the holders of Rights (other than any interest of an Acquiring Person or an
Affiliate or Associate of an Acquiring Person). However, no amendment may be
made at any time when the Rights are not redeemable.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a Person or group that attempts to acquire the Company
without conditioning the offer on a substantial number of Rights being acquired.
Accordingly, the existence of the Rights may deter certain acquirors from making
takeover proposals or tender offers. However, the rights plan helps ensure that
the Company's stockholders receive fair and equal treatment in the event of any
proposed takeover of the Company. The adoption of the plan is not in response to
any specific takeover threat or proposal, but is a precaution taken to protect
the rights of the Company's stockholders.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to the Company's Registration Statement on
Form 8-A with respect to the Rights filed with the Securities and Exchange
Commission (Commission File No. _______).
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A copy of the Rights Agreement is available free of charge from the Company, 706
Mission Street, San Francisco, California 94103, Attention: General Counsel.
This summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is
incorporated in this summary description by reference.
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