SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A/A
AMENDMENT NO. 1
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
INSO CORPORATION
(Exact name of Registrant as specified in its Charter)
Delaware 04-3216243
(State of (I.R.S. Employer
incorporation or Identification No.)
organization)
31 St. James Avenue, Boston, 02116-4101
Massachusetts (Zip Code)
(Address of principal executive
offices)
If this Form relates to the registration of a class of
securities pursuant to Section 12(b) of the Exchange Act and is
effective pursuant to General Instruction A. (c), please check
the following box. []
If this Form relates to the registration of a class of
securities pursuant to Section 12(g) of the Exchange Act and is
effective pursuant to General Instruction A. (d), please check
the following box. [X]
Securities Act registration statement number to which this Form
relates: __________________________________
(If applicable)
Securities to be registered pursuant to Section 12(b) of the
Act:
None
Securities to be registered pursuant to Section 12(g) of the
Act:
Preferred Stock Purchase Rights
(Title of each class to be so registered)
EXPLANATORY NOTE:
This Amendment No. 1 to Registration Statement on Form 8-
A/A amends and restates the Registration Statement on Form 8-A
dated July 16, 1997 (the "Form 8-A"), filed by INSO Corporation
(the "Company") with respect to the Preferred Stock Purchase
Rights (the "Rights") issued pursuant to the Rights Agreement
dated as of July 11, 1997 between the Company and State Street
Bank & Trust Company, as Rights Agent (the "Rights Agent"). On
October 27, 1999, the Company and the Rights Agent entered into
Amendment No. 1 to the Rights Agreement ("Amendment No. 1"),
which is included as Exhibit 2 hereto and is incorporated herein
by reference. In general, Amendment No. 1 amended the Rights
Agreement, among other things, to: (i) eliminate provisions
related to "Continuing Directors," (ii) eliminate provisions
related to "Permitted Offers," (iii) amend the time period
during which the Rights may be redeemed, and (iv) make certain
other revisions. The Rights Agreement, as amended through the
date hereof, is referred to herein as the "Rights Agreement."
ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE
REGISTERED
On July 11, 1997, the Board of Directors of the Company
declared a dividend of one preferred stock purchase right (a
"Right") for each outstanding share of the Company's Common
Stock to stockholders of record at the close of business on July
24, 1997 (the "Record Date"). Each Right entitles the
registered holder to purchase from the Company a unit consisting
of one one-thousandth of a share (a "Unit") of Series A Junior
Participating Preferred Stock, $.01 par value per share (the
"Preferred Stock"), at a purchase price of $145 in cash per Unit
(the "Purchase Price"), subject to adjustment. The description
and terms of the Rights are set forth in the Rights Agreement.
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no
separate Rights Certificates will be distributed. The Rights
will separate from the Common Stock and a Distribution Date will
occur upon the earlier of (i) 10 business days (or such later
date as may be determined by the Board of Directors of the
Company) following a public announcement that a person or group
of affiliated or associated persons (an "Acquiring Person") has
acquired, or obtained the right to acquire, beneficial ownership
of 20% or more of the outstanding shares of Common Stock (the
"Stock Acquisition Date"), or (ii) 10 business days (or such
later date as may be determined by the Board of Directors of the
Company) following the commencement of a tender offer or
exchange offer that would result in a person or group
beneficially owning 30% or more of such outstanding shares of
Common Stock. Until the Distribution Date (or earlier
redemption or expiration of the rights), (i) the Rights will be
evidenced by the Common Stock certificates and will be
transferred with and only with such Common Stock certificates,
(ii) new Common Stock certificates issued after the Record Date
will contain a notation incorporating the Rights Agreement by
reference and (iii) the surrender for transfer of any
certificates for Common Stock outstanding, even without such
notation, will also constitute the transfer of the Rights
associated with the Common Stock represented by such
certificate.
Houghton Mifflin Company shall not be deemed to be an
"Acquiring Person" unless Houghton Mifflin Company becomes after
the close of business on the Record Date the beneficial owner of
more than the Grandfathered Percentage of the shares of Common
Stock then outstanding (other than as a result of an acquisition
of Common Stock by the Company which, by reducing the number of
shares of Common Stock outstanding, increases the proportionate
number of shares of Common Stock beneficially owned by Houghton
Mifflin Company). "Grandfathered Percentage" shall mean, with
respect to Houghton Mifflin Company, the percentage of the
outstanding shares of Common Stock that Houghton Mifflin Company
beneficially owns as of the close of business on the Record Date
plus an additional five percentage points; provided, that, in
the event Houghton Mifflin Company shall sell, transfer, or
otherwise dispose of any outstanding shares of Common Stock
after the close of business on the Record Date, the
Grandfathered Percentage shall, subsequent to such sale,
transfer or disposition, mean the lesser of (i) the
Grandfathered Percentage as in effect immediately prior to such
sale, transfer or disposition or (ii) the percentage of
outstanding shares of Common Stock that Houghton Mifflin Company
beneficially owns immediately following such sale, transfer or
disposition plus an additional five percentage points. No
Person (other than Houghton Mifflin Company) shall be deemed to
be the "beneficial owner" of shares of Common Stock that are
issuable upon the exchange or redemption of the 6% Exchangeable
Notes due 1999 of Houghton Mifflin Company (known as the "Stock
Appreciation Income Linked Securities" or "SAILS") until such
shares are issued upon such exchange or redemption.
The Rights are not exercisable until the Distribution Date
and will expire upon the earliest of the close of business on
July 24, 2007 (the "Final Expiration Date") or the redemption or
exchange of the Rights as described below.
As soon as practicable after the Distribution Date,
separate certificates evidencing the Rights ("Rights
Certificates") will be mailed to holders of record of the Common
Stock as of the close of business on the Distribution Date and,
thereafter, such separate Rights Certificates alone will
represent the Rights.
In the event that any Person becomes an Acquiring Person,
then, promptly following the first occurrence of such event,
proper provision shall be made so that each holder of a Right
(except as provided below and in Section 7(e) of the Rights
Agreement) shall thereafter have the right to receive, upon
exercise thereof at the then current Purchase Price, in lieu of
a number of one one-thousandths of a share of Preferred Stock,
such number of shares of Common Stock of the Company that equals
the result obtained by (x) multiplying the then current Purchase
Price by the then number of one one-thousandths of a share of
Preferred Stock for which a Right is then exercisable, and (y)
dividing that product by 50% of the current market price per
share of Common Stock on the date of such first occurrence.
Notwithstanding any of the foregoing, following the occurrence
of the event set forth in this paragraph, all Rights that are,
or (under certain circumstances specified in the Rights
Agreement) were, beneficially owned by any Acquiring Person will
be null and void. The event summarized in this paragraph is
referred to as "Section 11(a)(ii) Event."
In the event that, at any time after any Person becomes an
Acquiring Person, (i) the Company is acquired in certain merger
or other business combination transactions in which the Company
is not the surviving corporation or its Common Stock is changed
or exchanged, or (ii) 50% or more of the Company's assets or
earning power is sold or transferred, each holder of a Right
(except Rights which previously have been voided as set forth
above) shall thereafter have the right to receive, upon
exercise, that number of shares of common stock of the acquiring
company which equals the exercise price of the Right divided by
one-half of the current market price of such common stock at the
date of the occurrence of the event. The events summarized in
this paragraph are referred to as "Section 13 Events." A
Section 11(a)(ii) Event and Section 13 Events are collectively
referred to as "Triggering Events."
At any time after the occurrence of a Section 11(a)(ii)
Event, subject to certain conditions, the Board of Directors of
the Company may exchange the Rights (other than Rights owned by
such Acquiring Person which have become void), in whole or in
part, at an exchange ratio of one share of Common Stock, or one
one-thousandth of a share of Preferred Stock (or of a share of a
class or series of the Company's preferred stock having
equivalent rights, preferences and privileges), per Right
(subject to adjustment).
The Purchase Price payable, and the number of Units of
Preferred Stock or other securities or property issuable, upon
exercise of the Rights are subject to adjustment from time to
time to prevent dilution (i) in the event of a stock dividend
on, or a subdivision, combination or reclassification of, the
Preferred Stock, (ii) if holders of the Preferred Stock are
granted certain rights or warrants to subscribe for Preferred
Stock or convertible securities at less than the then-current
market price of the Preferred Stock, or (iii) upon the distribu-
tion to holders of the Preferred Stock of evidences of
indebtedness or assets (excluding regular periodic cash
dividends paid out of earnings or retained earnings) or of
subscription rights or warrants (other than those referred to
above).
The number of Rights associated with each share of Common
Stock is also subject to adjustment in the event of a stock
split of the Common Stock or a stock dividend on the Common
Stock payable in Common Stock or subdivisions, consolidations or
combinations of the Common Stock occurring, in any such case,
prior to the Distribution Date.
Preferred Stock purchasable upon exercise of the Rights
will not be redeemable. Each share of Preferred Stock will be
entitled to a minimum preferential quarterly dividend payment of
$10 per share and will be entitled to an aggregate dividend of
1000 times the dividend declared per share of Common Stock. In
the event of liquidation, the holders of the Preferred Stock
will be entitled to a minimum preferential liquidation payment
of $1000 per share and will be entitled to an aggregate payment
of 1000 times the payment made per share of Common Stock. Each
share of Preferred Stock will have 1000 votes, voting together
with the Common Stock. In the event of any merger,
consolidation or other transaction in which Common Stock is
exchanged, each share of Preferred Stock will be entitled to
receive 1000 times the amount received per share of Common
Stock. These rights are protected by customary antidilution
provisions.
Because of the nature of the Preferred Stock's dividend,
liquidation and voting rights, the value of one one-thousandth
of a share of Preferred Stock purchasable upon exercise of each
Right should approximate the value of one share of Common Stock.
With certain exceptions, no adjustment in the Purchase
Price will be required until cumulative adjustments amount to at
least 1% of the Purchase Price. No fractional Units will be
issued and, in lieu thereof, an adjustment in cash will be made
based on the market price of the Preferred Stock on the last
trading date prior to the date of exercise.
At any time prior to the earlier of (i) the Distribution
Date, or (ii) the Final Expiration Date, the Company may redeem
the Rights in whole, but not in part, at a price of $.01 per
Right (the "Redemption Price"), payable in cash, shares of
Common Stock or any other form of consideration, or any
combination of the foregoing, deemed appropriate by the Board of
Directors of the Company. Immediately upon the action of the
Board of Directors ordering redemption of the Rights, the Rights
will terminate and the only right of the holders of Rights will
be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such,
will have no rights as a stockholder of the Company, including,
without limitation, the right to vote or to receive dividends.
While the distribution of the Rights will not be taxable to
stockholders or to the Company, stockholders may, depending upon
the circumstances, recognize taxable income in the event that
the Rights become exercisable for Common Stock (or other
consideration) of the Company or for common stock of the
acquiring company as set forth above.
Subject to certain exceptions, any of the provisions of the
Rights Agreement may be amended by the Board of Directors of the
Company prior to such time as the Rights are no longer
redeemable.
A copy of the Rights Agreement dated as of July 11, 1997
between the Company and the Rights Agent specifying the terms of
the Rights, which includes as Exhibit A the Form of Certificate
of Designations, as Exhibit B the Form of Rights Certificate,
and as Exhibit C the Summary of Rights to Purchase Preferred
Stock, is filed as Exhibit 1 to the Company's Current Report on
Form 8-K, dated July 11, 1997, and is incorporated herein by
reference. Amendment No. 1 is filed as Exhibit 2 hereto and is
incorporated herein by reference. The foregoing description of
the Rights Agreement and the Rights does not purport to be
complete and is qualified in its entirety by reference to such
Exhibit.
ITEM 2. EXHIBITS.
Exhibit No. Description
1 Rights Agreement, dated as of July 11, 1997,
between INSO Corporation and State Street Bank &
Trust Company, as Rights Agent, is incorporated
herein by reference to Exhibit 4.1 to the
Company's Current Report on Form 8-K, dated July
11, 1997 and filed with the Commission on
July 16, 1997 (File No. 000-23384).
2 Amendment No. 1 to Rights Agreement, dated as of
October 27, 1999, by and between INSO Corporation
and State Street Bank & Trust Company (filed herewith).
SIGNATURE
Pursuant to the requirements of Section 12 of the
Securities Exchange Act of 1934, the registrant has duly caused
this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: October 27, 1999 INSO CORPORATION
By: /s/ Jonathan Levitt
Name: Jonathan Levitt
Title: Vice President, General Counsel and
Secretary
EXHIBIT INDEX
Exhibit No. Description
1 Rights Agreement, dated as of July 11, 1997,
between INSO Corporation and State Street Bank &
Trust Company, as Rights Agent, is incorporated
herein by reference to Exhibit 4.1 to the
Company's Current Report on Form 8-K, dated July
11, 1997 and filed with the Commission on July
16, 1997 (File No. 000-23384).
2 Amendment No. 1 to Rights Agreement, dated as of
October 27, 1999, by and between INSO Corporation
and State Street Bank & Trust Company (filed herewith).
AMENDMENT NO. 1
TO
RIGHTS AGREEMENT
This AMENDMENT NO. 1 (this "Amendment") to the Rights
Agreement (the "Rights Agreement") dated as of July 11, 1997
between INSO Corporation, a Delaware corporation (the
"Company"), and State Street Bank & Trust Company, as Rights
Agent (the "Rights Agent"), is entered into as of the 27th day
of October, 1999. Capitalized terms not otherwise defined
herein shall have the respective meanings given to them in the
Rights Agreement.
RECITALS
WHEREAS, the Board of Directors has determined that it is
in the best interests of the Company to amend the Rights
Agreement as set forth herein.
WHEREAS, the Company has requested that the Rights
Agreement be amended in accordance with Section 27 of the Rights
Agreement, as set forth herein, and the Rights Agent is willing
to amend the Rights Agreement as set forth herein.
AGREEMENT
NOW, THEREFORE, the parties, intending to be legally bound,
hereby agree as follows:
1. Section 1(i) of the Rights Agreement is hereby deleted in
its entirety and replaced with the following:
"(i) Intentionally omitted."
2. Section 1(q) of the Rights Agreement is hereby deleted in
its entirety and replaced with the following:
"(q) Intentionally omitted."
3. The penultimate sentence of Section 3(a) of the Rights
Agreement is hereby amended and restated to read in its
entirety as follows:
"In the event that an adjustment in the number of Rights
per share of Common Stock has been made pursuant to
Sections 11(i) or 11(p) hereof, at the time of distribution
of the Right Certificates, the Company shall make the
necessary and appropriate rounding adjustments (in
accordance with Section 14(a) hereof) so that Rights
Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional
Rights."
4. Section 4(b) of the Rights Agreement is hereby amended and
restated to read in its entirety as follows:
"(b) Any Rights Certificate issued pursuant to Section
3, Section 11(i) or Section 22 hereof that represents
Rights beneficially owned by persons known to be: (i) an
Acquiring Person or an Associate or Affiliate of an
Acquiring Person, (ii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or
(iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to
or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring
Person to holders of equity interests in such Acquiring
Person or to any Person with whom such Acquiring Person has
any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which
the Board of Directors of the Company has determined is
part of a plan, arrangement or understanding that has as a
primary purpose or effect avoidance of Section 7(e) hereof,
and any Rights Certificate issued pursuant to Section 6 or
Section 11 hereof upon transfer, exchange, replacement or
adjustment of any other Rights Certificate referred to in
this sentence, shall contain (to the extent feasible) the
following legend:
The Rights represented by this Rights Certificate are
or were beneficially owned by a Person who was or
became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly, this
Rights Certificate and the Rights represented hereby
may become null and void in the circumstances
specified in Section 7(e) of such Agreement."
5. Section 7(a) of the Rights Agreement is hereby amended and
restated to read in its entirety as follows:
"(a) Subject to Section 7(e) hereof, the registered
holder of any Rights Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein
including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section
11(a)(iii) and Section 23(a) hereof) in whole or in part at
any time after the Distribution Date upon surrender of the
Rights Certificate, with the form of election to purchase
and the certificate on the reverse side thereof duly
executed, to the Rights Agent at the office of the Rights
Agent designated for such purpose, together with payment of
the aggregate Purchase Price with respect to the total
number of one one-thousandths of a share (or other shares,
securities, cash or other assets, as the case may be) as to
which such surrendered Rights are then exercisable, at or
prior to the earliest of (i) the Final Expiration Date,
(ii) the time at which the Rights are redeemed as provided
in Section 23 hereof (the "Redemption Date") or (iii) the
time at which such Rights are exchanged as provided in
Section 24 hereof (the earliest of (i), (ii) and (iii)
being herein referred to as the "Expiration Date")."
6. Section 11(a)(ii) of the Rights Agreement is hereby amended
and restated to read in its entirety as follows:
"(ii) Subject to Section 24 of this Agreement, in
the event that any Person, alone or together with its
Affiliates or Associates, becomes an Acquiring Person,
then, promptly following the first occurrence of such
event, proper provision shall be made so that each holder
of a Right (except as provided below and in Section 7(e)
hereof) shall thereafter have the right to receive (subject
to the last sentence of Section 23(a)), upon exercise
thereof at the then current Purchase Price in accordance
with the terms of this Agreement, in lieu of a number of
one one-thousandths of a share of Preferred Stock, such
number of shares of Common Stock of the Company that equals
the result obtained by (x) multiplying the then current
Purchase Price by the then number of one one-thousandths of
a share of Preferred Stock for which a Right was
exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event, and (y) dividing that product
(which, following such first occurrence, shall thereafter
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 pursuant to Section 11(d) hereof)
per share of Common Stock on the date of such first
occurrence (such number of shares, the "Adjustment
Shares")."
7. Section 11(f) of the Rights Agreement is hereby amended and
restated to read in its entirety as follows:
"(f) If as a result of an adjustment made pursuant to
Section 11(a)(ii) or Section 13(a) hereof, the holder of
any Right thereafter exercised shall become entitled to
receive any securities other than Preferred Stock,
thereafter the number of such other securities 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 Preferred
Stock contained in Sections 11(a), (b), (c), (e), (g), (h),
(i), (j), (k) and (m), and the provisions of Sections 7, 9,
10, 13 and 14 hereof with respect to the Preferred Stock
shall apply on like terms to any such other securities;
provided, however, that the Company shall not be liable for
its inability to reserve and keep available for issuance
upon exercise of the Rights pursuant to Section 11(a)(ii) a
number of shares of Common Stock greater than the number
then authorized by the Company's certificate of
incorporation but not outstanding or reserved for other
purposes."
8. Section 13(a) of the Rights Agreement is hereby amended and
restated to read in its entirety as follows:
"(a) In the event that, at any time after a Person has
become an Acquiring Person, (x) the Company shall
consolidate with, or merge with and into, any other Person
(other than a Subsidiary of the Company in a transaction
that complies with Section 11(o) hereof), and the Company
shall not be the continuing or surviving corporation of
such consolidation or merger, (y) any Person (other than a
Subsidiary of the Company in a transaction that complies
with Section 11(o) hereof) shall consolidate with, or merge
with or into, the Company, and the Company shall be the
continuing or surviving corporation of such consolidation
or merger and, in connection with such consolidation or
merger, all or part of the outstanding shares of Common
Stock shall be changed into or exchanged for stock or other
securities of any other Person or cash or any other
property (other than a merger or consolidation in which the
shares of Common Stock of the Company outstanding
immediately prior to such merger or consolidation are
changed into or exchanged for shares of common stock
representing more than 75% of the voting power of such
other Person), or (z) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer), in one transaction or a series of
related transactions, assets or earning power aggregating
more than 50% of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to any Person or
Persons (other than the Company or any Subsidiary of the
Company in one or more transactions each of which complies
with Section 11(o) hereof), then, and in each such case,
proper provision shall be made so that: (i) each holder of
a Right, except as provided in Section 7(e) hereof, shall
thereafter have the right to receive, upon the exercise
thereof at the then current Purchase Price in accordance
with the terms of this Agreement, such number of validly
authorized and issued, fully paid, non-assessable and
freely tradeable shares of Common Stock of the Principal
Party (as such term is hereinafter defined), not subject to
any liens, encumbrances, rights of first refusal or other
adverse claims, as shall be equal to the result obtained by
(1) multiplying the then current Purchase Price by the
number of one one-thousandths of a share of Preferred Stock
for which a Right is exercisable immediately prior to the
first occurrence of a Section 13 Event (or, if a Section
11(a)(ii) Event has occurred prior to the first occurrence
of a Section 13 Event, multiplying the number of such one
one-thousandths of a share for which a Right was
exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event by the Purchase Price in effect
immediately prior to such first occurrence), and (2)
dividing that product (which, 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 pursuant to Section 11(d)(i) hereof) per share
of the Common Stock of such Principal Party on the date of
consummation of such 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" shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the
provisions of Section 11 hereof shall apply only to such
Principal Party following the first occurrence of a Section
13 Event; (iv) such Principal Party shall take such steps
(including, but not limited to, the reservation of a
sufficient number of shares of its Common Stock) 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 shares of Common Stock thereafter
deliverable upon the exercise of the Rights; and (v) the
provisions of Section 11(a)(ii) hereof shall be of no
effect following the first occurrence of any Section 13
Event."
9. Section 13(d) of the Rights Agreement is hereby deleted in
its entirety.
10. Section 22 of the Rights Agreement is hereby amended and
restated to add the following sentence at the end thereof:
"In addition, in connection with the issuance or sale of
shares of Common Stock following the Distribution Date and
prior to the redemption or expiration of the Rights, the
Company (a) shall, with respect to shares of Common Stock
so issued or sold pursuant to the exercise of stock options
or under any employee plan or arrangement, or upon the
exercise, conversion or exchange of securities issued by
the Company prior to the Distribution Date, and (b) may, in
any other case, if deemed necessary or appropriate by the
Board of Directors of the Company, issue Rights
Certificates representing the appropriate number of Rights
in connection with such issuance or sale; provided,
however, that (i) no such Rights Certificate shall be
issued 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 (ii) no such Rights Certificate shall
be issued if, and to the extent that, appropriate
adjustment shall otherwise have been made in lieu of the
issuance thereof."
11. Section 23(a) of the Rights Agreement is hereby amended and
restated to read in its entirety as follows:
"(a) The Board of Directors of the Company may, at its
option, at any time prior to the earlier of (i) the
Distribution 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
hereof (such redemption price being hereinafter referred to
as the "Redemption Price"). The redemption of the Rights
by the Board may be made effective at such time, on such
basis and with such conditions as the Board of Directors in
its sole discretion may establish. The Company may, at its
option, pay the Redemption Price in cash, shares of Common
Stock (based on the "current market price," as defined in
Section 11(d)(i) hereof, of the Common Stock at the time of
redemption) or any other form of consideration, or any
combination of any of the foregoing, deemed appropriate by
the Board of Directors of the Company. Notwithstanding
anything contained in this Agreement to the contrary, the
Rights shall not be exercisable after the first occurrence
of a Section 11(a)(ii) Event until such time as the
Company's right of redemption hereunder has expired."
12. Section 23(c) of the Rights Agreement is hereby amended and
restated to read in its entirety as follows:
"(c) In the event of a redemption of the Rights in
accordance with this Agreement, the Company may, at its
option, discharge all of its obligations with respect to
the Rights by (i) issuing a press release announcing the
manner of redemption of the Rights in accordance with this
Agreement and (ii) mailing payment of the Redemption Price
to the registered holders of the Rights at their last
addresses as they appear on 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,
and upon such action, all outstanding Rights and Right
Certificates shall be null and void without any further
action by the Company."
13. Section 27 of the Rights Agreement is hereby amended and
restated to read in its entirety as follows:
"Section 27. Supplements and Amendments. Except as
provided in the penultimate sentence of this Section 27,
for so long as the Rights are then redeemable, the Company
may, in its sole and absolute discretion, and the Rights
Agent shall, if the Company so directs, supplement or amend
any provision of this Agreement in any respect without the
approval of any holders of the Rights. At any time when
the Rights are no longer redeemable, except as provided in
the penultimate sentence of this Section 27, the Company
may, and the Rights Agent shall, if the Company so directs,
supplement or amend this Agreement without the approval of
any holders of Rights in order (i) to cure any ambiguity or
(ii) to correct or supplement any provision contained
herein which may be defective or inconsistent with any
other provisions herein, provided that no such supplement
or amendment shall adversely affect the interests of the
holders of Rights as such (other than an Acquiring Person
or an Affiliate or Associate of an Acquiring Person). Upon
the delivery of a certificate from an appropriate officer
of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section
27, the Rights Agent shall execute such supplement or
amendment. Notwithstanding anything contained in this
Agreement to the contrary, no supplement or amendment shall
be made which changes the Redemption Price or the Final
Expiration Date. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common
Stock."
14. Section 31 of the Rights Agreement is hereby amended and
restated to read in its entirety as follows:
"Section 31. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a
court of competent jurisdiction or other authority to be
invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way
be affected, impaired or invalidated; provided, however,
that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or
restriction is held by such court or authority to be
invalid, void or unenforceable and the Board determines in
its good faith judgment that severing the invalid, void or
unenforceable language from this Agreement would adversely
affect the purpose or effect of this Agreement, the right
of redemption set forth in Section 23 hereof shall be
reinstated and shall not expire until the close of business
on the tenth day following the date of such determination
by the Board of Directors of the Company."
15. The first sentence of the first paragraph of Exhibit B to
the Rights Agreement is hereby amended and restated to read
as follows:
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 July 11, 1997, and as amended
as of October 27, 1999 (the "Rights Agreement"), between
INSO Corporation, a Delaware corporation (the "Company"),
and State Street Bank & Trust Company (the "Rights Agent"),
to purchase from the Company after the Distribution Date
(as such term is defined on the Rights Agreement) and at
any time prior to 5:00 p.m. (Boston time) on July 24, 2007
at the office of the Rights Agent designated for such pur-
pose, or its successors as Rights Agent, one one-thousandth
of a fully paid, non-assessable share of Series A Junior
Participating Preferred Stock (the "Preferred Stock") of
the Company, $.01 par value per share, at a purchase price
of $145 in cash per one one-thousandth of a share (the
"Purchase Price"), upon presentation and surrender of this
Rights Certificate with the Form of Election to Purchase
and related Certificate duly executed.
16. Exhibit C to the Rights Agreement ("Exhibit C") is hereby
amended and restated to read in its entirety as follows:
"SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On July 11, 1997, the Board of Directors of INSO
Corporation (the "Company"), declared a dividend of one
preferred stock purchase right (a "Right") for each
outstanding share of the Company's Common Stock to
stockholders of record at the close of business on July 24,
1997 (the "Record Date"). Each Right entitles the
registered holder to purchase from the Company a unit
consisting of one one-thousandth of a share (a "Unit") of
Series A Junior Participating Preferred Stock, $.01 par
value per share (the "Preferred Stock"), at a purchase
price of $145 in cash per Unit (the "Purchase Price"),
subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement dated as of July
11, 1997, and as amended as of October 27, 1999 (the
"Rights Agreement"), between the Company and State Street
Bank & Trust Company, as Rights Agent.
Initially, the Rights will be attached to all Common
Stock certificates representing shares then outstanding,
and no separate Rights Certificates will be distributed.
The Rights will separate from the Common Stock and a
Distribution Date will occur upon the earlier of (i) 10
business days (or such later date as may be determined by
the Board of Directors of the Company) following a public
announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired, or
obtained the right to acquire, beneficial ownership of 20%
or more of the outstanding shares of Common Stock (the
"Stock Acquisition Date"), or (ii) 10 business days (or
such later date as may be determined by the Board of
Directors of the Company) following the commencement of a
tender offer or exchange offer that would result in a
person or group beneficially owning 30% or more of such
outstanding shares of Common Stock. Until the Distribution
Date (or earlier redemption or expiration of the rights),
(i) the Rights will be evidenced by the Common Stock
certificates and will be transferred with and only with
such Common Stock certificates, (ii) new Common Stock
certificates issued after the Record Date will contain a
notation incorporating the Rights Agreement by reference
and (iii) the surrender for transfer of any certificates
for Common Stock outstanding, even without such notation,
will also constitute the transfer of the Rights associated
with the Common Stock represented by such certificate.
Houghton Mifflin Company shall not be deemed to be an
"Acquiring Person" unless Houghton Mifflin Company becomes
after the close of business on the Record Date the
beneficial owner of more than the Grandfathered Percentage
of the shares of Common Stock then outstanding (other than
as a result of an acquisition of Common Stock by the
Company which, by reducing the number of shares of Common
Stock outstanding, increases the proportionate number of
shares of Common Stock beneficially owned by Houghton
Mifflin Company). "Grandfathered Percentage" shall mean,
with respect to Houghton Mifflin Company, the percentage of
the outstanding shares of Common Stock that Houghton
Mifflin Company beneficially owns as of the close of
business on the Record Date plus an additional five
percentage points; provided, that, in the event Houghton
Mifflin Company shall sell, transfer, or otherwise dispose
of any outstanding shares of Common Stock after the close
of business on the Record Date, the Grandfathered
Percentage shall, subsequent to such sale, transfer or
disposition, mean the lesser of (i) the Grandfathered
Percentage as in effect immediately prior to such sale,
transfer or disposition or (ii) the percentage of
outstanding shares of Common Stock that Houghton Mifflin
Company beneficially owns immediately following such sale,
transfer or disposition plus an additional five percentage
points. No Person (other than Houghton Mifflin Company)
shall be deemed to be the "beneficial owner" of shares of
Common Stock that are issuable upon the exchange or
redemption of the 6% Exchangeable Notes due 1999 of
Houghton Mifflin Company (known as the "Stock Appreciation
Income Linked Securities" or "SAILS") until such shares are
issued upon such exchange or redemption.
The Rights are not exercisable until the Distribution
Date and will expire upon the earliest of the close of
business on July 24, 2007 (the "Final Expiration Date") or
the redemption or exchange of the Rights as described
below.
As soon as practicable after the Distribution Date,
separate certificates evidencing the Rights ("Rights
Certificates") will be mailed to holders of record of the
Common Stock as of the close of business on the
Distribution Date and, thereafter, such separate Rights
Certificates alone will represent the Rights.
In the event that any Person becomes an Acquiring
Person, then, promptly following the first occurrence of
such event, proper provision shall be made so that each
holder of a Right (except as provided below and in
Section 7(e) of the Rights Agreement) shall thereafter have
the right to receive, upon exercise thereof at the then
current Purchase Price, in lieu of a number of one one-
thousandths of a share of Preferred Stock, such number of
shares of Common Stock of the Company that equals the
result obtained by (x) multiplying the then current
Purchase Price by the then number of one one-thousandths of
a share of Preferred Stock for which a Right is then
exercisable, and (y) dividing that product by 50% of the
current market price per share of Common Stock on the date
of such first occurrence. Notwithstanding any of the
foregoing, following the occurrence of the event set forth
in this paragraph, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person will be null and
void. The event summarized in this paragraph is referred
to as "Section 11(a)(ii) Event."
In the event that, at any time after any Person
becomes an Acquiring Person, (i) the Company is acquired in
certain merger or other business combination transactions
in which the Company is not the surviving corporation or
its Common Stock is changed or exchanged, or (ii) 50% or
more of the Company's assets or earning power is sold or
transferred, each holder of a Right (except Rights which
previously have been voided as set forth above) shall
thereafter have the right to receive, upon exercise, that
number of shares of common stock of the acquiring company
which equals the exercise price of the Right divided by
one-half of the current market price of such common stock
at the date of the occurrence of the event. The events
summarized in this paragraph are referred to as "Section 13
Events." A Section 11(a)(ii) Event and Section 13 Events
are collectively referred to as "Triggering Events."
At any time after the occurrence of a
Section 11(a)(ii) Event, subject to certain conditions, the
Board of Directors of the Company may exchange the Rights
(other than Rights owned by such Acquiring Person which
have become void), in whole or in part, at an exchange
ratio of one share of Common Stock, or one one-thousandth
of a share of Preferred Stock (or of a share of a class or
series of the Company's preferred stock having equivalent
rights, preferences and privileges), per Right (subject to
adjustment).
The Purchase Price payable, and the number of Units of
Preferred Stock or other securities or property issuable,
upon exercise of the Rights are subject to adjustment from
time to time to prevent dilution (i) in the event of a
stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Stock, (ii) if holders
of the Preferred Stock are granted certain rights or
warrants to subscribe for Preferred Stock or convertible
securities at less than the then-current market price of
the Preferred Stock, or (iii) upon the distribution to
holders of the Preferred Stock of evidences of indebtedness
or assets (excluding regular periodic cash dividends paid
out of earnings or retained earnings) or of subscription
rights or warrants (other than those referred to above).
The number of Rights associated with each share of
Common Stock is also subject to adjustment in the event of
a stock split of the Common Stock or a stock dividend on
the Common Stock payable in Common Stock or subdivisions,
consolidations or combinations of the Common Stock
occurring, in any such case, prior to the Distribution
Date.
Preferred Stock purchasable upon exercise of the
Rights will not be redeemable. Each share of Preferred
Stock will be entitled to a minimum preferential quarterly
dividend payment of $10 per share and will be entitled to
an aggregate dividend of 1000 times the dividend declared
per share of Common Stock. In the event of liquidation,
the holders of the Preferred Stock will be entitled to a
minimum preferential liquidation payment of $1000 per share
and will be entitled to an aggregate payment of 1000 times
the payment made per share of Common Stock. Each share of
Preferred Stock will have 1000 votes, voting together with
the Common Stock. In the event of any merger,
consolidation or other transaction in which Common Stock is
exchanged, each share of Preferred Stock will be entitled
to receive 1000 times the amount received per share of
Common Stock. These rights are protected by customary
antidilution provisions.
Because of the nature of the Preferred Stock's
dividend, liquidation and voting rights, the value of one
one-thousandth of a share of Preferred Stock purchasable
upon exercise of each Right should approximate the value of
one share of Common Stock.
With certain exceptions, no adjustment in the Purchase
Price will be required until cumulative adjustments amount
to at least 1% of the Purchase Price. No fractional Units
will be issued and, in lieu thereof, an adjustment in cash
will be made based on the market price of the Preferred
Stock on the last trading date prior to the date of
exercise.
At any time prior to the earlier of (i) the
Distribution Date, or (ii) the Final Expiration Date, the
Company may redeem the Rights in whole, but not in part, at
a price of $.01 per Right (the "Redemption Price"), payable
in cash, shares of Common Stock or any other form of
consideration, or any combination of the foregoing, deemed
appropriate by the Board of Directors of the Company.
Immediately upon the action of the Board of Directors
ordering redemption of the Rights, the Rights will
terminate and the only right of the holders of Rights will
be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as
such, will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to
receive dividends. While the distribution of the Rights
will not be taxable to stockholders or to the Company,
stockholders may, depending upon the circumstances,
recognize taxable income in the event that the Rights
become exercisable for Common Stock (or other
consideration) of the Company or for common stock of the
acquiring company as set forth above.
Subject to certain exceptions, any of the provisions
of the Rights Agreement may be amended by the Board of
Directors of the Company prior to such time as the Rights
are no longer redeemable.
A copy of the original Rights Agreement has been filed
with the Securities and Exchange Commission as an Exhibit
to the Company's Current Report on Form 8-K dated July 11,
1997. A copy of Amendment No. 1 to the Rights Agreement
has been filed with the Securities and Exchange Commission
as an Exhibit to the Company's Current Report on Form 8-K
dated October 27, 1999. A copy of the Rights Agreement and
of Amendment No. 1 thereto are available free of charge
from the Company. This summary description of the Rights
does not purport to be complete and is qualified in its
entirety by reference to the Rights Agreement, as amended,
which is incorporated herein by reference."
17. Except as amended hereby, the Rights Agreement shall remain
unchanged and shall remain in full force and effect.
18. This Amendment may be executed in any number of
counterparts, each of which shall be an original, but all
of which together shall constitute one instrument.
[signatures on following page]
IN WITNESS WHEREOF, the parties have caused this Amendment
to be executed by their respective duly authorized
representatives as of the date first above written.
INSO CORPORATION
By: /s/ Jonathan Levitt
Name: Jonathan Levitt
Title: Vice President, General
Counsel and Secretary
STATE STREET BANK & TRUST COMPANY
By: /s/ Charles Rossi
Name: Charles Rossi
Title: President
