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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 02549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
PROJECT SOFTWARE & DEVELOPMENT, INC.
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(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-2448516
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(State of incorporation or organization) (IRS Employer
Identification No.)
100 CROSBY DRIVE, BEDFORD, MASSACHUSETTS 01730
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(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
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None.
Securities to be registered pursuant to Section 12(g) of the Act:
Rights to Purchase Series A
Junior Participating Preferred Stock
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(Title of Class)
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Item 1. DESCRIPTION OF SECURITIES TO BE REGISTERED.
On January 27, 1998, the Board of Directors (the "Board") of Project
Software & Development, Inc. (the "Company") declared a dividend distribution of
one preferred stock purchase right (one "Right") for each outstanding share of
common stock, par value $.01 per share, of the Company (the "Common Stock") to
holders of record of the Common Stock at the close of business on January 27,
1998 (the "Record Date"). Each Right entitles the registered holder to purchase
from the Company a unit (a "Unit") consisting of one one-thousandth of a share
of Series A Junior Participating Preferred Stock, par value $.01 per share, of
the Company (the "Preferred Stock") or, in certain circumstances, to receive
cash, property, Common Stock or other securities of the Company, at a purchase
price of $140 per Unit, subject to adjustment (the "Purchase Price"). The full
description and terms of the Rights are set forth in the Rights Agreement (the
"Rights Agreement"), dated as of January 27, 1998, between the Company and
BankBoston, N.A., as Rights Agent (the "Rights Agent").
Initially, the Rights will be attached to all certificates
representing shares of Common Stock then outstanding, and no separate Rights
Certificates will be distributed. The Rights will separate from the Common Stock
upon the earlier of (i) 10 business days (subject to extension by the Board)
following a public announcement by the Company (the date of such public
announcement being the "Stock Acquisition Date") that a person or group of
affiliated or associated persons, other than an Exempt Person (as defined
below), has acquired, or obtained the right to acquire, beneficial ownership of
more than 15% of the outstanding shares of Common Stock (an "Acquiring Person")
or (ii) 10 business days (subject to extension by the Board) following the
commencement of a tender offer or exchange offer that would result in a person
or group, other than an Exempt Person, beneficially owning more than 15% of such
outstanding shares of Common Stock (the earlier of (i) and (ii) being the
"Distribution Date"). Until the Distribution Date, (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
subsequent to the Record Date will contain a notation incorporating the Rights
Agreement by reference and (iii) the surrender for transfer of any certificates
for outstanding Common Stock will also constitute the transfer of the Rights
associated with the Common Stock represented by such certificates. Pursuant to
the Rights Agreement, the Company reserves the right to require prior to the
occurrence of a Triggering Event (as defined below) that, upon the exercise of
Rights, a number of Rights be exercised so that only whole shares of Preferred
Stock will be issued. The term "Exempt
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Person" includes, among others, the Company, any subsidiary of the Company and,
in certain circumstances, a person or group beneficially owning 15% or more of
the outstanding shares of Common Stock as of the Record Date but only if the
percentage of outstanding Common Stock owned by such person or group does not at
any time exceed the sum of (A) the lowest percentage of the outstanding Common
Stock owned by such person or group at any time after the Record Date and (B) 1%
of the shares of Common Stock then outstanding.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on January 27, 2008 unless earlier redeemed,
extended or terminated by the Company as described below. At no time will the
Rights have any voting power.
As soon as practicable after the Distribution Date, separate 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, the Rights will
trade separately, and the Rights Certificates alone will represent the Rights.
Except as otherwise determined by the Board, only shares of Common Stock issued
prior to the Distribution Date will be issued with Rights.
In the event (a "Section 11(a)(ii) Event") that any person or group
becomes an Acquiring Person, each holder of a Right will thereafter have the
right to receive, upon exercise thereof, Common Stock or, in the discretion of
the Board, Units, (or, in certain circumstances, cash, property or other
securities of the Company) having a Current Market Price (as defined in the
Rights Agreement) equal to two times the Purchase Price of the Right.
Notwithstanding any of the foregoing, following the occurrence of any Section
11(a)(ii) Event, all Rights that are, or (under certain circumstances specified
in the Rights Agreement) were, beneficially owned by specified Acquiring Persons
(or by certain related persons) will be null and void. However, Rights are not
exercisable following the occurrence of any Section 11(a)(ii) Event until such
time as the Rights are no longer redeemable by the Company as set forth below.
For example, at an exercise price of $140 per Right, each Right not
owned by a specified Acquiring Person (or by certain related persons) following
a Section 11(a)(ii) Event would entitle its holder to purchase $280 worth of
Common Stock (or other consideration, as noted above) for $140. Assuming that
the Common Stock had a Current Market Price of $20 at such time, the holder of
each valid Right would be entitled to purchase 14 shares of Common Stock for
$140.
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In the event (a "Section 13 Event") that, at any time on or after the
Stock Acquisition Date, (i) the Company shall take part in a merger or other
business combination transaction in which the Company is not the surviving
entity or in which the Common Stock is changed into or exchanged for other
securities, cash or any other property of any other person 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 payment of the exercise price,
common stock of the acquiring company having a Current Market Price equal to two
times the exercise price of the Right. Section 11(a)(ii) Events and Section 13
Events are collectively referred to as "Triggering Events."
The Purchase Price payable and the number of Units of Preferred Stock
(or the amount of cash, property or other securities) 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) in the event that holders of the
Preferred Stock are granted certain rights or warrants to subscribe for
Preferred Stock or convertible securities at less than the 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
quarterly cash dividends) or of subscription rights or warrants (other than
those referred to above).
With certain exceptions, no adjustments in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. The Company may, but is not required to, issue fractional shares of
Preferred Stock upon the exercise of any Right or Rights. In lieu thereof, an
adjustment in cash will be made based on the Current Market Price of the
Preferred Stock.
At any time until 10 business days following the Stock Acquisition
Date (or such later date as the Board may determine before the Rights become
nonredeemable), the Company may redeem the Rights in whole, but not in part, at
a price of $.001 per Right (payable, at the option of the Company, in cash,
Common Stock or such other consideration deemed appropriate by the Board).
Immediately upon the effectiveness of any action of the Board 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 of $.001 per Right.
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
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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 cash, property or other securities) of the
Company or for common stock of the acquiring company as set forth above.
The terms of the Rights may be amended by the Company (a) in any
manner prior to the time the Rights separate and are distributed and (b) after
the time the Rights separate and are distributed, in order to (i) cure any
ambiguity, (ii) correct or supplement provisions which may be defective or
inconsistent, (iii) make changes which do not adversely affect interests of
holders of Rights (other than those of an Acquiring Person and certain related
persons) or (iv) shorten or lengthen any time period under the Rights Agreement
for the purpose of protecting, enhancing or clarifying the rights of, or the
benefits to, the holders of Rights (other than an Acquiring Person and certain
related persons); provided, however, that no extension or amendment to adjust
the time period for redemption is permitted after the Rights become
nonredeemable.
The Rights have certain antitakeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
without conditioning the offer on substantially all the Rights being acquired.
The Rights will not interfere with any merger or other business combination or
with a third party approved by the Board of Directors of the Company since the
Board of Directors of the Company may, at its option, at any time prior to any
person becoming an Acquiring Person, redeem all but not less than all of the
then outstanding Rights at the Redemption Price.
The Rights Agreement specifying the terms of the Rights, the
Certificate of Designation of the Preferred Shares specifying the terms of the
Preferred Shares (Exhibit A to the Rights Agreement) and the form of Right
Certificate (Exhibit B to the Rights Agreement) are filed herewith as exhibits.
The foregoing description of the Rights does not purport to be complete and is
qualified in its entirety by reference to such exhibits, which are incorporated
herein by reference.
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Item 2. EXHIBITS.
1. Rights Agreement dated as of January 27, 1998, between Project
Software & Development, Inc. and BankBoston, N.A., as Rights Agent.
2. Form of Certificate of Designation of Series A Junior Participating
Preferred Stock of Project Software & Development, Inc.(which is
attached as Exhibit A to the Rights Agreement filed as Exhibit 1
hereto).
3. Form of Rights Certificate (which is attached as Exhibit B to the
Rights Agreement filed as Exhibit 1 hereto).
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized.
PROJECT SOFTWARE & DEVELOPMENT, INC.
Dated: February 2, 1998 By: /s/ DAVID M. SAMPLE
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David M. Sample
President, Chairman and
Chief Executive Officer
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Exhibit 1
PROJECT SOFTWARE & DEVELOPMENT, INC.
and
BANKBOSTON, N.A.,
Rights Agent
Rights Agreement
Dated as of January 27, 1998
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TABLE OF CONTENTS
Section Page
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1. Certain Definitions............................................. 1
2. Appointment of Rights Agent..................................... 9
3. Issuance of Rights Certificates................................. 9
4. Form of Rights Certificates..................................... 12
5. Countersignature and Registration............................... 14
6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates.................................................... 15
7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.......................................................... 16
8. Cancellation and Destruction of Rights Certificates............. 19
9. Reservation and Availability of Capital
Stock........................................................... 20
10. Record Date for Securities Issued Upon Exercise................. 22
11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights................................................ 23
12. Certificate of Adjusted Purchase Price or Number of Shares...... 37
13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power................................................... 37
14. Fractional Rights and Fractional Shares......................... 42
15. Rights of Action................................................ 44
16. Agreement of Rights Holders..................................... 44
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17. Rights Certificate Holder Not Deemed a Stockholder.............. 45
18. Concerning the Rights Agent..................................... 46
19. Merger or Consolidation or Change of Name of Rights Agent....... 47
20. Duties of Rights Agent.......................................... 48
21. Change of Rights Agent.......................................... 51
22. Issuance of New Rights Certificates............................. 52
23. Redemption and Termination...................................... 53
24. Notice of Certain Events........................................ 54
25. Notices......................................................... 55
26. Supplements and Amendments...................................... 56
27. Successors...................................................... 57
28. Determinations and Actions by the Board, etc.................... 57
29. Benefits of this Agreement...................................... 58
30. Severability.................................................... 58
31. Governing Law................................................... 58
32. Counterparts.................................................... 59
33. Descriptive Headings............................................ 59
EXHIBIT A -- Form of Certificate of Vote of Directors
EXHIBIT B -- Form of Rights Certificate
EXHIBIT C -- Summary of Rights to Purchase Series A Junior
Participating Preferred Stock
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RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of January 27, 1998, between
Project Software & Development, Inc., a Massachusetts corporation (the
"Company"), and BankBoston, N.A., a national banking association (the "Rights
Agent").
W I T N E S S E T H
WHEREAS, on January 27, 1998, (the "Rights Dividend
Declaration Date"), the Board of Directors of the Company (the "Board")
authorized and declared a dividend distribution of one Right (as hereinafter
defined) for each share of Common Stock (as hereinafter defined) of the Company
outstanding on January 27, 1998 (the "Record Date") and authorized the issuance
of one Right (as such number may hereafter be adjusted pursuant to the
provisions of Section 11(i) or Section 11(p) hereof) for each share of Common
Stock of the Company issued between the Record Date (whether originally issued
or delivered from the Company's treasury) and the Distribution Date (as
hereinafter defined), and under certain circumstances thereafter, each Right
initially representing the right to purchase one one-thousandth of a share of
Preferred Stock (as hereinafter defined), upon the terms and subject to the
conditions hereinafter set forth (the "Rights");
NOW, THEREFORE, in consideration of the premises and the
mutual agreements hereinafter set forth, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement
(as hereinafter defined), the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as hereinafter
defined) who or which, alone or together with all Affiliates and
Associates (as hereinafter defined) of such Person, shall be the
Beneficial Owner (as hereinafter defined) of 15% or more of the shares
of Common Stock of the Company then outstanding, but shall not include
an Exempt Person (as hereinafter defined).
(b) "Act" shall mean the Securities Act of 1933, as amended.
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(c) "Adjustment Shares" shall have the meaning set forth in
Section 11(a)(ii) hereof.
(d) "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 hereinafter defined).
(e) "Agreement" shall mean this Rights Agreement as
originally executed or as it may from time to time be supplemented,
amended, renewed, restated or extended pursuant to the applicable
provisions hereof.
(f) 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, directly or indirectly, owns or has 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) or upon the exercise of
conversion rights, exchange rights, rights, warrants, options or
otherwise; PROVIDED, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," (A) securities
tendered pursuant to a tender or exchange offer made by or on behalf of
such Person or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange, or (B)
securities issuable upon exercise of Rights at any time prior to the
occurrence of a Triggering Event (as hereinafter defined), or (C)
securities issuable upon exercise of Rights from and after the
occurrence of a Triggering Event which Rights are Original Rights (as
hereinafter defined) or securities issued pursuant to Section 11(i) or
Section 11(p) hereof in connection with an adjustment made with respect
to any Original Rights;
(ii) which such Person or any of such Person's
Affiliates or Associates, di-
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rectly or indirectly, has the right to vote or dispose of or has
"beneficial ownership" of (as determined pursuant to Rule 13d-3 of the
General Rules and Regulations under the Exchange Act), 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 security under
this subparagraph (ii) as a result of an agreement, arrangement or
understanding (whether or not in writing) to vote such security if such
agreement, arrangement or understanding: (A) arises solely from a
revocable proxy or consent given in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the
applicable provisions of the General Rules and Regulations under the
Exchange Act and (B) is not also then reportable by such Person on
Schedule 13D under the Exchange Act (or any comparable or successor
statement); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate thereof)
with which such Person (or any of such Person's Affiliates or
Associates) has any agreement, arrangement or understanding (whether or
not in writing), for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy as described in clause (A) of the proviso
to subparagraph (ii) of this paragraph (f)) or disposing of any voting
securities of the Company;
PROVIDED, however, that nothing in this paragraph (f) shall cause a Person
engaged in business as an underwriter of securities to be the "Beneficial
Owner" of, or to be deemed to "beneficially own," any securities acquired or
which that Person has the right to acquire through such Person's participation
in good faith in a firm commitment underwriting until the expiration of 40 days
after the date of such acquisition.
(g) "Board" shall have the meaning set forth in the "WHEREAS"
clause at the beginning of this Agreement.
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(h) "Business Day" shall mean any day other than a Saturday,
Sunday or day on which banking institutions in the Commonwealth of
Massachusetts are authorized or obligated by law or executive order to
close.
(i) "Certificate of Vote" shall mean the Certificate of Vote
of Directors Establishing a Series of a Class of Stock substantially in
the form attached hereto as Exhibit A.
(j) "Close of Business" on any given date shall mean 5:00
P.M., Boston, Massachusetts time, on such date; PROVIDED, however, that
if such date is not a Business Day, it shall mean 5:00 P.M., Boston,
Massachusetts time, on the next succeeding Business Day.
(k) "Common Stock" when used in reference to the Company shall
mean the common stock, par value $.01 per share, of the Company or any
other shares of capital stock of the Company into which such stock
shall be reclassified or changed. "Common Stock" when used with
reference to any Person other than the Company organized in corporate
form shall mean (i) the capital stock or other equity interest in such
Person with the greatest voting power, (ii) the equity securities or
other equity interest having power to control or direct the management
of such Person or (iii) if such Person is a Subsidiary (as hereinafter
defined) of another Person, the capital stock, equity securities of or
other equity interest in the Person or Persons which ultimately control
such first-mentioned Person and which has issued any such outstanding
capital stock, equity securities or equity interest. "Common Stock"
when used with reference to any Person not organized in corporate form
shall mean units of beneficial interest which (x) represent the right
to participate generally in the profits and losses of such Person
(including without limitation any flow-through tax benefits resulting
from an ownership interest in such Person) and (y) are entitled to
exercise the greatest voting power of such Person or, in the case of a
limited partnership, have the power to remove the general partner or
partners.
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(l) "Common Stock Equivalents" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(m) "Company" shall have the meaning set forth in the first
paragraph of this Agreement until a successor corporation or entity
shall have become such or until a Principal Party (as hereinafter
defined) shall assume, and thereafter be liable for, all obligations
and duties of the Company hereunder pursuant to the applicable
provisions of this Agreement, and thereafter, "Company" shall mean
such successor or Principal Party, respectively.
(n) "Current Market Price" shall have the meaning set forth in
Section 11(d)(i) hereof.
(o) "Current Value" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(p) "Distribution Date" shall have the meaning set forth in
Section 3(a) hereof.
(q) "Equivalent Preferred Stock" shall have the meaning set
forth in Section 11(b) hereof.
(r) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(s) "Exempt Person" shall mean: (i) the Company; (ii) any
Subsidiary of the Company; (iii) any employee benefit plan or employee
stock plan of the Company or of any Subsidiary of the Company; (iv) any
Person or entity organized, appointed, established or holding Common
Stock of the Company by the Company for or pursuant to the terms of any
employee benefit plan or employee stock plan; (v) any Person who is, as
of the date of this Agreement, alone or together with all Affiliates or
Associates of any such Person, the Beneficial Owner of 15% or more of
the shares of outstanding Common Stock of the Company, but only if the
percentage of outstanding Common Stock of the Company beneficially
owned by such Person does not at any time on or after the date of this
Agreement exceed the sum of (A)the lowest percentage of the outstanding
Common Stock of the Company beneficially owned by such Person at any
time on or after the date of this Agreement and (B)
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1% of the shares of Common Stock then outstanding; (vi) any Person who
(A) is the Beneficial Owner of less than 25% of the Common Stock of the
Company then outstanding and has reported such ownership on Schedule
13G under the Exchange Act (as defined herein) (or any comparable or
successor report) or on Schedule 13D under the Exchange Act (or any
comparable or successor report) which Schedule 13D does not state any
intention to or reserve the right to control or influence the
management or policies of the Company or engage in any of the actions
specified in Item 4 of such Schedule (other than the disposition of the
Common Stock of the Company), (B) within 10 Business Days of being
requested by the Company to advise the Company regarding its
intentions, certifies to the Company that such Person acquired shares
of Common Stock of the Company in excess of 14.99% inadvertently or
without knowledge of the terms of the Rights, (C) the Company
determines acquired in excess of 14.99% inadvertently or without
knowledge of the terms of the Rights and (D) together with its
Affiliates and Associates, thereafter does not acquire additional
shares of Common Stock of the Company while the Beneficial Owner of 15%
or more of the shares of Common Stock of the Company then outstanding;
or (vii) a Person who, together with its Affiliates and Associates,
becomes the Beneficial Owner of 15% or more of the shares of Common
Stock of the Company then outstanding or would otherwise be deemed to
be an Acquiring Person solely as a result of a reduction in the number
of shares of Common Stock of the Company outstanding due to the
repurchase of shares of Common Stock of the Company by the Company,
unless and until such time as such Person shall purchase or otherwise
become (as a result of actions taken by such Person or its Affiliates
or Associates) the Beneficial Owner of additional shares of Common
Stock of the Company constituting 1% or more of the then outstanding
shares of Common Stock of the Company.
(t) "Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(u) "Final Expiration Date" shall mean the Close of Business
on January 27, 2008.
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(v) "Original Rights" shall mean Rights acquired by a Person
or such Person's Affiliates or Associates prior to the Distribution
Date or securities issued pursuant to Section 3(a) or Section 22
hereof.
(w) "Person" shall mean any individual, firm, corporation,
partnership, trust or other entity and includes without limitation an
unincorporated group of persons who, by formal or informal agreement or
arrangement (whether or not in writing), have embarked on a common
purpose or act.
(x) "Preferred Stock" shall mean shares of Series A Junior
Participating Preferred Stock, par value $.01 per share, of the Company
having the rights, powers and preferences set forth in the Certificate
of Vote, and, to the extent that there are not a sufficient number of
shares of Series A Junior Participating Preferred Stock authorized to
permit the full exercise of the Rights, any other series of Preferred
Stock, par value $.01 per share, of the Company designated for such
purpose containing terms substantially similar to the terms of the
Series A Junior Participating Preferred Stock.
(y) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
(z) "Purchase Price" shall have the meaning set forth in
Section 4(a) hereof.
(aa) "Record Date" shall have the meaning set forth in the
"WHEREAS" clause at the beginning of this Agreement.
(bb) "Redemption Price" shall have the meaning set forth in
Section 23(a) hereof.
(cc) "Rights" shall have the meaning set forth in the
"WHEREAS" clause at the beginning of this Agreement.
(dd) "Rights Agent" shall mean the Person named as the "Rights
Agent" in the first paragraph of this Agreement until a successor
Rights Agent shall have become such pursuant to the applicable
provisions
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hereof, and thereafter "Rights Agent" shall mean such successor Rights
Agent. If at any time there is more than one Person appointed by the
Company as Rights Agent pursuant to the applicable provisions of this
Agreement, "Rights Agent" shall mean and include each such Person.
(ee) "Rights Certificate" shall have the meaning set forth in
Section 3(a) hereof.
(ff) "Rights Dividend Declaration Date" shall have the meaning
set forth in the "WHEREAS" clause at the beginning of this Agreement.
(gg) "Section 11(a)(ii) Event" shall have the meaning set
forth in Section 11(a)(ii) hereof.
(hh) "Section 11(a)(ii) Trigger Date" shall have the meaning
set forth in Section 11(a)(iii) hereof.
(ii) "Section 13 Event" shall have the meaning set forth in
Section 13(a) hereof.
(jj) "Spread" shall have the meaning set forth in Section
11(a)(iii) hereof.
(kk) "Stock Acquisition Date" shall mean the first date of
public announcement by the Company that an Acquiring Person has become
such.
(ll) "Subsidiary" shall mean, with reference to any Person,
any corporation or other entity of which securities or other ownership
interest having ordinary voting power sufficient, in the absence of
contingencies, to elect a majority of the board of directors or other
persons performing similar functions of such corporation or other
entity are at the time directly or indirectly beneficially owned or
otherwise controlled by such Person and any Affiliate or Associate of
such Person.
(mm) "Substitution Period" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(nn) "Summary of Rights" shall have the meaning set forth in
Section 3(b) hereof.
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(oo) "Trading Day" shall have the meaning set forth in Section
11(d)(i) hereof.
(pp) "Triggering Event" shall mean any Section 11(a)(ii) Event
or any Section 13 Event.
(qq) "Unit" shall mean one one-thousandth of a share of
Preferred Stock.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company has
appointed the Rights Agent to act as agent for the Company and the holders of
the Rights (who, in accordance with Section 3 hereof, shall prior to the
Distribution Date also be the holders of the Common Stock of the Company) in
accordance with the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company may from time to time appoint such
Co-Rights Agents as it may deem necessary or desirable, upon ten days' prior
written notice to the Rights Agent. The Rights Agent shall have no duty to
supervise, and in no event shall be liable for, the acts or omissions of any
such Co-Rights Agent. In the event that 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, and any actions which may be
taken by the Rights Agent pursuant to the terms of this Agreement may be taken
by any such Co-Rights Agent.
Section 3. ISSUANCE OF RIGHTS CERTIFICATES.
(a) Until the earlier of (i) the Close of Business on the
tenth Business Day (or such specified or unspecified later date as may
be determined by the Board before the occurrence of a Distribution
Date) after the Stock Acquisition Date (or, if the tenth Business Day
after the Stock Acquisition Date (or such later 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 specified or
unspecified later date as may be determined by the Board before the
occurrence of a Distribution Date) after the date that a tender or
exchange offer by any Person (other than an Exempt Person) is first
published or sent or given within the meaning of Rule 14d-2(a) of the
General Rules and Regulations under the Exchange Act if upon con-
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<PAGE> 13
summation thereof such Person would be the Beneficial Owner of 15% or
more of the Common Stock of the Company then outstanding (the earlier
of (i) and (ii) being herein referred to as the "Distribution Date"),
(x) the Rights will be evidenced (subject to the provisions of
paragraphs (b) and (c) of this Section 3) by the certificates for the
Common Stock of the Company registered in the names of the holders
thereof either with the Summary of Rights attached or bearing the
legend set forth in Section 3(c) hereof (which certificates shall be
deemed also to be certificates for Rights) and not by separate
certificates and (y) the Rights will be transferable only in connection
with the transfer of the underlying shares of Common Stock of the
Company (including a transfer to the Company). As soon as practicable
after the Distribution Date, the Rights Agent will send by first-class,
insured, postage prepaid mail, to each record holder of the Common
Stock of the Company as of the Close of Business on the Distribution
Date, at the address of such holder shown on the records of the
Company, one or more rights certificates, substantially in the form
attached hereto as Exhibit B (the "Rights Certificates"), evidencing
one Right for each share of Common Stock of the Company so held,
subject to adjustment as provided herein. In the event that an
adjustment in the number of Rights per share of Common Stock of the
Company has been made pursuant to Section 11(i) or Section 11(p)
hereof, at the time of distribution of the Rights Certificates, the
Company shall not be required to issue Rights Certificates evidencing
fractional Rights, but may, in lieu thereof, 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. As of and after the Distribution Date, the Rights will be
evidenced solely by such Rights Certificates.
(b) As promptly as practicable following the Record Date, the
Company will send a copy of a Summary of Rights, in substantially the
form attached hereto as Exhibit C (the "Summary of Rights"), by
first-class, postage prepaid mail, to each record holder of the Common
Stock of the Company as of the
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<PAGE> 14
Close of Business on the Record Date, at the address of such holder
shown on the records of the Company. With respect to certificates for
the Common Stock of the Company outstanding as of the Record Date, as
set forth in paragraph (a) above, until the earlier of the Distribution
Date or the Expiration Date, the Rights will be evidenced by such
certificates for the Common Stock of the Company with or without a copy
of the Summary of Rights attached, and the registered holders of the
Common Stock of the Company shall also be the registered holders of
the associated Rights. Until the earlier of the Distribution Date or
the Expiration Date, the transfer of any certificates representing
shares of Common Stock of the Company in respect of which Rights have
been issued shall also constitute the transfer of the Rights associated
with such shares of Common Stock of the Company.
(c) Rights shall be issued in respect of all shares of Common
Stock of the Company which are issued (whether originally issued or
from the Company's treasury) after the Record Date but prior to the
earlier of the Distribution Date or the Expiration Date, and to the
extent provided in Section 22 hereof, in respect of shares of Common
Stock of the Company issued after the Distribution Date and prior to
the Expiration Date. Certificates representing such shares of Common
Stock of the Company shall also be deemed to be certificates for
Rights, and shall, as promptly as practicable following the Record
Date, bear the following legend:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in the Rights Agreement between
Project Software & Development, Inc. (the "Company") and BankBoston,
N.A. (the "Rights Agent") dated as of January 27, 1998, as the same may
be amended, restated, renewed or extended from time to time (the
"Rights Agreement"), the terms of which are hereby incorporated herein
by reference and a copy of which is on file at the principal offices of
the Company. Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate certificates and
will no longer be
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<PAGE> 15
evidenced by this certificate. The Company will mail to the holder of
this certificate a copy of the Rights Agreement, as in effect on the
date of mailing, without charge, promptly after receipt of a written
request therefor. Under certain circumstances set forth in the Rights
Agreement, Rights beneficially owned (as such term is defined in the
Rights Agreement) by any Person who is, was or becomes an Acquiring
Person or any Affiliate or Associate thereof (as such terms are defined
in the Rights Agreement), whether currently held by or on behalf of
such Person or by any subsequent holder, may become null and void. The
Rights shall not be exercisable, and shall be void so long as held, by
a holder in any jurisdiction where the requisite qualification to the
issuance to such holder, or the exercise by such holder, of the Rights
in such jurisdiction shall not have been obtained or be obtainable.
With respect to such certificates containing the foregoing legend, until the
earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights
associated with the Common Stock of the Company represented by such certificates
shall be evidenced by such certificates alone, and registered holders of Common
Stock of the Company shall also be the registered holders of the associated
Rights, and the transfer of any of such certificates shall also constitute the
transfer of the Rights associated with the Common Stock of the Company
represented by such certificates.
Section 4. FORM OF RIGHTS CERTIFICATES.
(a) The Rights Certificates (and the forms of election to
purchase, assignment and certificate contained therein to be printed on
the reverse thereof) shall each be substantially in the form attached
hereto as Exhibit B and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon
as the Company may deem appropriate and as are not inconsistent with
the provisions of this Agreement, or as may be required to comply with
any applicable law or with any rule or regulation made pursuant thereto
or with any rule or regulation of any stock exchange on
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<PAGE> 16
which the Rights may from time to time be listed, or to conform to
usage. Subject to the provisions of Section 11 and Section 22 hereof,
the Rights Certificates, whenever distributed, shall be dated as of
the Record Date and on their face shall entitle the holders thereof to
purchase such number of Units as shall be set forth therein at the
exercise price set forth therein (such exercise price per Unit, as
adjusted from time to time hereunder, the "Purchase Price"), but the
amount and type of securities purchasable upon the exercise of each
Right and the Purchase Price thereof shall be subject to adjustment as
provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights beneficially owned by: (i) an
Acquiring Person or any Associate or Affiliate of an Acquiring Person,
(ii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person becomes
such or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests
in the Acquiring Person or to any Person with whom the Acquiring Person
has any continuing agreement, arrangement or understanding (whether or
not in writing) regarding the transferred Rights or (B) a transfer
which the Board, in its sole discretion, has determined is part of a
plan, arrangement or understanding which has as a primary purpose or
effect avoidance of the provisions 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 Renewed
13
<PAGE> 17
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.
Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Rights Certificates shall be executed under seal on
behalf of the Company by its Chairman of the Board, its President or
any Vice President, either manually or by facsimile signature, and by
the Treasurer or any Assistant Treasurer of the Company, either
manually or by facsimile signature. The Rights Certificates shall be
manually countersigned by an authorized signatory of the Rights Agent
and shall not be valid for any purpose unless so countersigned. In case
any officer of the Company who shall have signed any of the Rights
Certificates shall cease to be such officer of the Company before
countersignature by an authorized signatory of the Rights Agent and
issuance and delivery by the Company, such Rights Certificates,
nevertheless, may be countersigned by an authorized signatory of 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, the Rights Agent will
keep or cause to be kept, at its principal office or offices designated
as the appropriate place for surrender of Rights Certificates upon
exercise or transfer, books for registration and transfer of the Rights
Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Rights Certificates, the
number of Rights evidenced on its face by each of the Rights
Certificates and the date of each of the Rights Certificates.
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<PAGE> 18
Section 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)
and Section 14 hereof, at any time after the Close of Business on the
Distribution Date, and at or prior to the Close of Business on the
Expiration Date, any Rights Certificate or Rights Certificates may be
transferred, split up, combined or exchanged for another Rights
Certificate or Rights Certificates, entitling the registered holder to
purchase a like number of Units (or, following the occurrence of a
Triggering Event, Common Stock of the Company, Units, other securities,
cash or other assets, as the case may be) as the Rights Certificate or
Rights Certificates surrendered then entitled such holder (or former
holder in the case of a transfer) to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Rights
Certificate or Rights Certificates shall make such request in writing
delivered to the Rights Agent and shall surrender the Rights
Certificate or Rights Certificates to be transferred, split up,
combined or exchanged, with the forms of assignment and certificate
contained therein duly executed, at the principal office or offices of
the Rights Agent designated for such purpose. Neither the Rights Agent
nor the Company shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Rights Certificate or
Rights Certificates until the registered holder shall have completed
and signed the certificate contained in the form of assignment on the
reverse side of such Rights Certificate or Rights Certificates and
shall have provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request. Thereupon,
the Rights Agent shall, subject to Section 4(b), Section 7(e) and
Section 14 hereof, countersign and deliver to the Person entitled
thereto a Rights Certificate or Rights Certificates, as the case may
be, as so requested. The Company may require payment from the holder of
a Rights Certificate of a sum sufficient to cover any tax or
governmental charge that may be
15
<PAGE> 19
imposed in connection with any transfer, split up, combination or
exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a valid Rights Certificate and, in case of
loss, theft or destruction, of indemnity or security reasonably
satisfactory to them and 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 will execute and deliver a new Rights
Certificate of like tenor to the Rights Agent for countersignature and
delivery to the registered owner in lieu of the Rights Certificate so
lost, stolen, destroyed or mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE
OF RIGHTS.
(a) Subject to Section 7(e) hereof, the registered holder of
any 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 contained
therein duly executed, to the Rights Agent at the principal office or
offices of the Rights Agent designated for such purpose, together with
payment of the aggregate Purchase Price with respect to the total
number of Units (or, following the occurrence of a Triggering Event,
Common Stock of the Company, other 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 and (iii) the time at which the Rights expire
pursuant to Section 13(d) hereof (the earliest of (i), (ii) and (iii)
being herein referred to as the "Expiration Date").
16
<PAGE> 20
(b) The Purchase Price for each Unit pursuant to the exercise
of a Right shall initially be $140, shall be subject to adjustment from
time to time as provided in Sections 11 and 13(a) hereof and shall be
payable in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the
certificate contained therein duly executed, accompanied by payment,
with respect to each Right so exercised, of the Purchase Price, as such
amount may be reduced pursuant to Section 11(a)(iii) hereof, per Unit
(or, following a Triggering Event, for Common Stock of the Company,
other securities, cash or other assets, as the case may be) to be
purchased as set forth below and an amount equal to any applicable
transfer tax, the Rights Agent shall, subject to Sections 7(f) and
20(k) hereof, thereupon promptly (i) (A) requisition from any transfer
agent of the shares of Preferred Stock (or make available, if the
Rights Agent is the transfer agent for such shares) certificates for
the total number of Units to be purchased and the Company hereby
irrevocably authorizes its transfer agent to comply with all such
requests or (B) if the Company shall have elected to deposit the total
number of shares of Preferred Stock issuable upon exercise of the
Rights hereunder with a depositary agent, requisition from the
depositary agent depositary receipts representing such number of Units
as are to be purchased (in which case certificates for the shares of
Preferred Stock represented by such receipts shall be deposited by the
transfer agent with the depositary agent) and the Company will direct
the depositary agent to comply with such request, (ii) requisition from
the Company the amount of cash, if any, to be paid in lieu of
fractional shares in accordance with Section 14 hereof, (iii) after
receipt of such certificates or depositary receipts, cause the same to
be delivered to, or upon the order of, the registered holder of such
Rights Certificate, registered in such name or names as may be
designated by such holder, and (iv) after receipt thereof, deliver such
cash, if any, to, or upon the order of, the registered holder of such
Rights Certificate. The payment of the Purchase Price (as such amount
may be reduced pursuant to
17
<PAGE> 21
Section 11(a)(iii) hereof) shall be made in cash or by certified check,
cashier's check or bank draft payable to the order of the Company. In
the event that the Company is obligated to issue other securities
(including Common Stock) of the Company, pay cash or distribute other
property pursuant to Section 11(a) hereof, the Company will make all
arrangements necessary so that such other securities, cash or other
property are available for distribution by the Rights Agent, if and
when appropriate. The Company reserves the right to require prior to
the occurrence of a Triggering Event that, upon any exercise of Rights,
a number of Rights be exercised so that only whole shares of Preferred
Stock would be issued.
(d) In case the registered holder of any Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and delivered to, or
upon the order of, the registered holder of such Rights Certificate,
registered in such name or names as may be designated by such holder,
subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section 11(a)(ii)
Event, any Rights beneficially owned by (i) an Acquiring Person or an
Affiliate or Associate of an Acquiring Person, which Affiliate or
Associate the Board, in its sole discretion, determines is or was
involved in or caused or facilitated, directly or indirectly (including
through any change in the Board), such Section 11(a)(ii) Event, (ii) a
transferee of any such Acquiring Person (or of any such Affiliate or
Associate) who becomes a transferee after such Acquiring Person
becomes such or (iii) a transferee of any such Acquiring Person (or of
any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with such Acquiring Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether or not for
consideration) from such Acquiring Person to holders of equity
interests in such Acquiring Person or to any Person with whom
18
<PAGE> 22
such Acquiring Person has any continuing agreement, arrangement or
understanding (whether or not in writing) regarding the transferred
Rights or (B) a transfer which the Board has determined is part of a
plan, arrangement or understanding which has as a primary purpose or
effect the avoidance of this Section 7(e), shall become null and void
without any further action, and no holder of such Rights shall have any
rights whatsoever with respect to such Rights, whether under any
provision of this Agreement or otherwise. The Company shall use all
reasonable efforts to ensure that the provisions of this Section 7(e)
and Section 4(b) hereof are complied with, but shall have no liability
to any holder of Rights Certificates or other Person as a result of its
failure to make any determinations with respect to an Acquiring Person
or any of their respective 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 registered holder of any
Rights Certificate upon the occurrence of any purported assignment or
exercise as set forth in this Section 7 unless such registered holder
shall have (i) completed and signed the certificate contained in the
form of assignment or election to purchase set forth on the reverse
side of the Rights Certificate surrendered for such assignment or
exercise and (ii) provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHTS
CERTIFICATES.
All Rights Certificates surrendered for the purpose of
exercise, transfer, split up, combination or exchange shall, if
surrendered to the Company or 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 of this Agreement. The Company shall
deliver to the Rights Agent for cancellation and retirement, and the
Rights Agent
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<PAGE> 23
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 such canceled Rights Certificates, and
in such case shall deliver a certificate of destruction thereof to the Company.
Section 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 its authorized and unissued shares
of Preferred Stock (and, following the occurrence of a Triggering
Event, out of its authorized and unissued shares of Common Stock or
other securities or out of its authorized and issued shares held in
its treasury), the number of shares of Preferred Stock (and, following
the occurrence of a Triggering Event, Common Stock of the Company or
other securities, as the case may be) that, as provided in this
Agreement (including Section 11(a)(iii) hereof), will be sufficient to
permit the exercise in full of all outstanding Rights.
(b) So long as the shares of Preferred Stock (and, following
the occurrence of a Triggering Event, Common Stock or other securities,
as the case may be) issuable and deliverable upon the exercise of the
Rights may be listed on any national securities exchange, the Company
shall use all reasonable efforts to cause, from and after such time as
the Rights become exercisable, all shares reserved for such issuance to
be listed on such exchange upon official notice of issuance upon such
exercise.
(c) The Company shall use all reasonable efforts to (i) file,
as soon as practicable following the earliest date after the first
occurrence of a Triggering Event in which the consideration to be
delivered by the Company upon exercise of the Rights has been
determined in accordance with this Agreement, or as soon as required by
law following the Distribution Date, as the case may be, a registration
statement under the Act on an appropriate form with respect to the
Common Stock, Preferred Stock or
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<PAGE> 24
other securities purchasable upon exercise of the Rights, (ii) cause
such registration statement to become effective as soon as practicable
after such filing and (iii) cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements of
the Act) until the earlier of (A) the date as of which the Rights are
no longer exercisable for such securities and (B) the Expiration Date.
The Company will also take such action as may be appropriate under, or
to ensure compliance with, the securities or "blue sky" laws of the
various states and other jurisdictions in connection with the
exercisability of the Rights. The Company may, acting by resolution of
the Board, temporarily suspend, for a period of time not to exceed 90
days after the date set forth in clause (i) of the first sentence of
this Section 9(c), the exercisability of the Rights in order to prepare
and file such registration statement and permit it to become effective.
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 and shall issue a public announcement at such
time as the suspension is no longer in effect. In addition, if the
Company shall determine that a registration statement is required in
other circumstances following the Distribution Date, the Company may
similarly temporarily suspend the exercisability of the Rights until
such time as a registration statement has been declared effective.
Notwithstanding any provision of this Agreement to the contrary, the
Rights shall not be exercisable in any jurisdiction if the requisite
qualification in such jurisdiction shall not have been obtained, or
the exercise thereof shall not otherwise be permitted under applicable
law or a registration statement shall not have been declared
effective.
(d) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all Units (and,
following the occurrence of a Triggering Event, Common Stock or other
securities, as the case may be) delivered upon exercise of Rights
shall, at the time of delivery of the certificates for such shares
(subject to payment of the
21
<PAGE> 25
Purchase Price), be duly and validly authorized and issued and fully
paid and nonassessable.
(e) The Company further covenants and agrees that, except as
set forth in Section 6(a) hereof and this Section 9(e), it will pay
when due and payable any and all federal and state transfer taxes and
charges which may be payable in respect of the issuance or delivery of
the Rights Certificates and of any certificates for a number of Units
(or Common Stock or other securities, as the case may be) upon the
exercise of Rights. The Company shall not, however, be required to pay
any transfer tax 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 a number of Units (or Common Stock or other
securities, as the case may be) in respect of a name other than that
of, the registered holder of the Rights Certificates evidencing Rights
surrendered for exercise, nor shall the Company be required to issue or
deliver any certificates for a number of Units (or Common Stock or
other securities, as the case may be) in a name other than that of the
registered holder upon the exercise of any Rights until such tax shall
have been paid (any such tax being payable by the holder of such Rights
Certificate at the time of surrender) or until it has been established
to the Company's satisfaction that no such tax is due.
Section 10. RECORD DATE FOR SECURITIES ISSUED UPON EXERCISE.
Each Person in whose name any certificate for a number of Units (or Common Stock
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 such
fractional shares of Preferred Stock (or Common Stock 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 all applicable transfer
taxes) was made; PROVIDED, however, that if the date of such surrender and
payment is a date upon which the transfer books for the Preferred Stock (or
Common Stock or other securities, as the case may be) of the Company are closed,
such Person shall be deemed to have become the record holder of such shares
(fractional or other-
22
<PAGE> 26
wise) on, and such certificate shall be dated, the next succeeding Business Day
on which the transfer books for the Preferred Stock (or Common Stock or other
securities, as the case may be) of the Company are open. Prior to the exercise
of the Rights evidenced thereby, the holder of a Rights Certificate, as such,
shall not be entitled to any rights of a stockholder of the Company (or the
Principal Party) 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
(or the Principal Party), except as provided herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF
SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares,
or fractions thereof, purchasable upon exercise of each Right and the number of
Rights outstanding are subject to adjustment from time to time as provided in
this Section 11.
(a) (i) In the event that the Company shall at any time after
the date of this Agreement (A) declare a dividend on the Preferred
Stock payable in shares of Preferred Stock, (B) subdivide or split the
outstanding Preferred Stock, (C) combine or consolidate the outstanding
Preferred Stock into a smaller number of shares or (D) issue any shares
of its capital stock in a reclassification of the Preferred Stock
(including any such reclassification in connection with a consolidation
or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a) and
Section 7(e) hereof, the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of such
subdivision, split, combination, consolidation or reclassification, and
the number and kind of shares of Preferred Stock (or other capital
stock, as the case may be) issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised
after such time shall be entitled to receive, upon payment of the
Purchase Price then in effect, the aggregate number and kind of shares
of Preferred Stock or capital stock, as the case may be, which,
23
<PAGE> 27
if such Right had been exercised immediately prior to such date,
whether or not such Right was then exercisable, and at a time when the
transfer books for the Preferred Stock (or other capital stock, as the
case may be) of the Company were open, he would have owned upon such
exercise and been entitled to receive by virtue of such dividend,
subdivision, split, combination, consolidation or reclassification. If
an event occurs which would require an adjustment under both this
Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided
for in this Section 11(a)(i) shall be in addition to, and shall be made
prior to, any adjustment required pursuant to Section 11(a)(ii)
hereof.
(ii) In the event (a "Section 11(a)(ii) Event") that
any Person, alone or together with its Affiliates and Associates,
shall, at any time after the Rights Dividend Declaration Date, become
an Acquiring Person, unless the event causing such Person to become an
Acquiring Person is a transaction set forth in Section 13(a) hereof,
then, promptly after the date of the occurrence of such Section
11(a)(ii) 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, upon exercise thereof at the then
current Purchase Price in accordance with the terms of this Agreement,
in lieu of the number of Units for which such Right was theretofore
exercisable (whether or not such Right was then exercisable), such
number of shares of Common Stock of the Company or, in the discretion
of the Board, such number of Units, as shall equal the result obtained
by (x) multiplying the then current Purchase Price by the then number
of Units for which a Right was exercisable immediately prior to the
first occurrence of a Section 11(a)(ii) Event (whether or not such
Right was then exercisable) 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 per share of Common Stock of the
Company on the
24
<PAGE> 28
date of such first occurrence (such number of shares or Units being
referred to as the "Adjustment Shares").
(iii) In lieu of issuing any shares of Common Stock
of the Company or Units in accordance with Section 11(a)(ii) hereof,
the Company, acting by resolution of the Board, may, and in the event
that the number of shares of Common Stock of the Company or Preferred
Stock which are authorized by the Company's articles of organization
but 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 the foregoing subparagraph (ii)
of this Section 11(a), the Company, acting by resolution of the Board,
shall: (A) determine the excess of (1) the value of the Adjustment
Shares issuable upon the exercise of a Right (the "Current Value") over
(2) the Purchase Price attributable to each Right (such excess being
referred to as the "Spread"), and (B) with respect to all or a portion
of each Right (subject to Section 7(e) hereof), make adequate provision
to substitute for the Adjustment Shares, upon payment of the
applicable Purchase Price, (1) cash, (2) a reduction in the Purchase
Price, (3) equity securities of the Company other than Common Stock of
the Company (including without limitation shares, or units of shares,
of preferred stock which the Board has deemed to have the same value as
shares of Common Stock of the Company (such shares of preferred stock
being referred to as "Common Stock Equivalents")), (4) debt securities
of the Company, (5) other assets or (6) any combination of the
foregoing which, when added to any shares of Common Stock of the
Company or Units issued upon such exercise, has an aggregate value
equal to the Current Value, where such aggregate value has been
determined by the Board based upon the advice of a nationally
recognized investment banking firm selected by the Board; PROVIDED,
however, that if the Company shall not have made adequate provision to
deliver value pursuant to clause (B)
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above within 30 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) hereof, as such date may be
delayed pursuant to Section 23(a) hereof or otherwise amended pursuant
to Section 26 hereof, expires (the later of (x) and (y) being referred
to herein as the "Section 11(a)(ii) Trigger Date"), then the Company
shall be obligated to deliver, upon the surrender for exercise of a
Right and without requiring payment of the Purchase Price, shares of
Common Stock of the Company (to the extent available) and then, if
necessary, Units (to the extent available) and then, if necessary,
cash, which shares, Units and cash have an aggregate value equal to the
Spread. If the Board shall determine in good faith that it is likely
that sufficient additional shares of Common Stock of the Company or
Preferred Stock could be authorized for issuance upon exercise in full
of the Rights, the 30-day period set forth above may be extended to the
extent necessary, but not more than 90 days after the Section
11(a)(ii) Trigger Date, in order that the Company may seek stockholder
approval for the authorization of such additional shares (such period,
as it may be extended, the "Substitution Period"). To the extent that
the Company determines that some action need be taken pursuant to the
first or second sentences of this Section 11(a)(iii), the Company (x)
shall provide, subject to Section 7(e) hereof, that such action shall
apply uniformly to all outstanding Rights and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution
Period in order to seek any authorization of additional shares or to
decide the appropriate form of distribution to be made pursuant to such
first sentence and to determine the value thereof. In the event of any
such suspension, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily suspended
and a public announcement at such time as the suspension is no longer
in effect. For purposes of this Section
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<PAGE> 30
11(a)(iii), the value of the Common Stock of the Company shall be the
Current Market Price per share of the Common Stock of the Company on
the Section 11(a)(ii) Trigger Date and the value of any Common Stock
Equivalent shall be deemed to have the same value as the Common Stock
of the Company on such date.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred
Stock entitling them to subscribe for or purchase (for a period
expiring within 45 calendar days after such record date) Preferred
Stock (or shares having the same rights, privileges and preferences as
the shares of Preferred Stock ("Equivalent Preferred Stock")) or
securities convertible into Preferred Stock or Equivalent Preferred
Stock at a price per share of Preferred Stock or per share of
Equivalent Preferred Stock (or having a conversion price per share, if
a security convertible into Preferred Stock or Equivalent Preferred
Stock) less than the Current Market Price per share of Preferred Stock
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 sum of (i) the number of shares of
Preferred Stock or Equivalent Preferred Stock outstanding on such
record date, (ii) the number of shares of Preferred Stock or Equivalent
Preferred Stock underlying securities outstanding on such record date
which are convertible into Preferred Stock or Equivalent Preferred
Stock and (iii) the number of shares of Preferred Stock which the
aggregate subscription price of the total number of shares of Preferred
Stock or Equivalent Preferred Stock so to be offered (or the aggregate
initial conversion price of the convertible securities so to be
offered) would purchase at such Current Market Price, and the
denominator of which shall be the sum of (i) the number of shares of
Preferred Stock outstanding on such record date, (ii) the number of
shares of Preferred Stock or Equivalent Preferred Stock underlying
securities outstanding on such record date which are convertible into
Preferred Stock or Equivalent Preferred Stock and (iii) the
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<PAGE> 31
number of additional shares of Preferred Stock or Equivalent Preferred
Stock to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible). In
case such subscription price may be paid 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,
which determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes. Shares of
Preferred Stock owned by or held for the account of the Company shall
not be deemed outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date is
fixed, and in the event that such rights, options or warrants are not
so issued, the Purchase Price shall be adjusted to be the Purchase
Price which would then be in effect if such record date had not been
fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation) of evidences of
indebtedness, cash (other than a regular, periodic cash dividend out of
the earnings or retained earnings of the Company), assets (other than a
dividend payable in Preferred Stock, but including any dividend payable
in stock other than Preferred Stock) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the Purchase
Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the Current
Market Price per share of Preferred Stock on such record date, less the
fair market value (as determined in good faith by the Board, which
determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes) of the portion of the
cash, assets or evidences of indebtedness so to be distributed or of
such subscription rights or warrants applicable to a share of Preferred
Stock and the denominator of which shall be such Current Mar-
28
<PAGE> 32
ket Price per share of Preferred Stock. Such adjustments shall be made
successively whenever such a record date is fixed, and in the event
that such distribution is not so made, the Purchase Price shall 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 hereunder, other
than computations made pursuant to Section 11(a)(iii) hereof, the
"Current Market Price" per share of Common Stock on any date shall be
deemed to be the average of the daily closing prices per share of such
Common Stock for the 30 consecutive Trading Days immediately prior to
such date, and for purposes of computations made pursuant to Section
11(a)(iii) hereof, the Current Market Price per share of Common Stock
on any date shall be deemed to be the average of the daily closing
prices per share of such Common Stock for the 10 consecutive Trading
Days immediately following such date; PROVIDED, however, that in the
event that the Current Market Price per share of the Common Stock is
determined during a period following the announcement by the issuer of
such Common Stock of (A) a dividend or distribution on such Common
Stock payable in shares of such Common Stock or securities convertible
into shares of such Common Stock (other than the Rights) or (B) any
subdivision, combination, consolidation, reverse stock split or
reclassification of such Common Stock, and prior to the expiration of
the requisite 30-Trading Day or 10-Trading Day period, as set forth
above, after the ex-dividend date for such dividend or distribution, or
the record date for such subdivision, combination, consolidation,
reverse stock split or reclassification, then, and in each such case,
the Current Market Price shall be properly 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 New York Stock Exchange, or, if the shares
of Common Stock are not listed or admitted to trading
29
<PAGE> 33
on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system or as quoted by the Nasdaq
National Market with respect to securities listed or admitted to
trading on another national securities exchange or quoted by the Nasdaq
National Market, respectively, or, if the shares of Common Stock are
not listed or admitted to trading on any national securities exchange
or quoted by the Nasdaq National Market, the last quoted price or, if
not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by The Nasdaq Stock Market or such
other quotation system then in use, or, if on any such date the shares
of Common Stock 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 Stock selected by the Board. If on
any such date the Common Stock is not publicly held or not so listed,
admitted to trading or quoted, and no market maker is making a market
in such Common Stock, Current Market Price shall mean the fair value
of such shares on such date as determined in good faith by the Board,
which determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes. The term
"Trading Day" shall mean a day on which the principal national
securities exchange on which the shares of Common Stock are listed or
admitted to trading is open for the transaction of business or, if the
shares of Common Stock are not listed or admitted to trading on any
national securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder,
the Current Market Price per share of Preferred Stock shall be
determined in the same manner as set forth above for the Common Stock
in clause (i) of this Section 11(d) (other than the penultimate
sentence thereof). If the Current Market Price per share of Preferred
Stock cannot be determined in the manner provided above or if the
Preferred Stock is not publicly held or listed or admitted to trading
or quoted in a manner described in clause (i) of this Section 11(d),
the Current Market Price per share of Preferred Stock shall be
conclusively deemed to be an
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<PAGE> 34
amount equal to 1,000 (as such number may be appropriately adjusted for
such events as stock splits, stock dividends and recapitalization with
respect to the Common Stock occurring after the date of this Agreement)
multiplied by the Current Market Price per share of the Common Stock.
If neither the Common Stock nor the Preferred Stock is publicly held or
so listed or admitted to trading or quoted, the Current Market Price
per share of the Preferred Stock shall mean the fair value per share as
determined in good faith by the Board, which 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 a Unit shall be equal to the Current Market
Price of one share of Preferred Stock divided by 1,000.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease in the Purchase Price
of at least one percent; 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 one
cent or to the nearest one one-thousandth of a share of Common Stock or
other share or one one-ten-millionth of a share of Preferred Stock, 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.
(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 shares of capital stock
other than Preferred Stock, thereafter the number of such other shares
so receivable upon exercise of any Right and the Purchase Price
thereof (or the number of Rights) shall be subject to adjustment
31
<PAGE> 35
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),
(l) and (m) hereof, and the provisions of Sections 7, 9, 10, 13 and 14
hereof with respect to the Preferred Stock shall apply on like terms to
any such other shares; 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) hereof a
number of shares of Common Stock of the Company greater than the number
then authorized by the Company's articles of organization, but not
outstanding or reserved for any other purpose.
(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 Units
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) hereof, upon each adjustment of the Purchase
Price as a result of the calculations made in Sections 11(b) and (c)
hereof, each Right outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase, at the
adjusted Purchase Price, that number of Units (calculated to the
nearest one one-ten-millionth of a share of Preferred Stock) obtained
by (i) multiplying (x) the number of Units covered by a Right
immediately prior to this adjustment by (y) the Purchase Price in
effect immediately prior to such adjustment of the Purchase Price, and
(ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in
lieu of any adjustment in the number of Units purchasable upon the
exercise of a Right. Each of the Rights outstanding after the
adjustment in the number of Rights shall be exercis-
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<PAGE> 36
able for the number of Units for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior
to such adjustment of that number of Rights shall become the number of
Rights (calculated to the nearest one ten-thousandth of a Right)
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 hereof, the additional Rights to
which such holders shall be entitled as a result of such adjustment or,
at the option of the Company, shall cause to be distributed to such
holders of record in substitution and replacement for the Rights
Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Rights
Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and countersigned in the manner
provided for herein (and may bear, at the option of the Company, the
adjusted Purchase Price) and shall be registered in the names of the
holders of record of Rights Certificates on the record date specified
in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of Units issuable upon the exercise of the Rights,
the Rights Certificates theretofore and thereafter issued may continue
to express the Purchase Price per Unit and
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<PAGE> 37
the number of Units 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 stated value, if any, of the
number of Units issuable upon exercise of the Rights, the Company shall
use all reasonable efforts to take any corporate action which may, in
the opinion of its counsel, be necessary in order that the Company may
validly and legally issue, fully paid and nonassessable, such number of
Units at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date
for a specified event, the Company may elect to defer until the
occurrence of such event the issuance to the holder of any Right
exercised after such record date of the number of Units and other
capital stock or securities of the Company, if any, issuable upon such
exercise over and above the number of Units 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 adjustments
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 shall determine to be advisable in order that
any (i) consolidation or subdivision of the Preferred Stock, (ii)
issuance wholly for cash of any shares of Preferred Stock at less than
the Current Market Price, (iii) issuance wholly for cash of shares of
Preferred Stock or securities which by their terms are convertible into
or exchangeable for shares of Preferred Stock, (iv) stock dividends or
(v) issuance of rights, options
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<PAGE> 38
or warrants referred to in this Section 11, hereafter made by the
Company to holders of its Preferred Stock 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) hereof), (ii) merge with or into any other Person
(other than a Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof) or (iii) sell or transfer (or permit any
Subsidiary to sell or 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 other Person or Persons (other than the
Company or any of its Subsidiaries in one or more transactions each of
which complies with Section 11(o) hereof) if (x) at the time of or
immediately after such consolidation, merger, sale or transfer there
are any rights, warrants or other instruments or securities
outstanding or agreements ineffect which would substantially diminish
or otherwise eliminate the benefits in tended to be afforded by the
Rights or (y) prior to, simultaneously with or immediately after such
consolidation, merger, sale or transfer, the stockholders of the
Person who constitutes, or would constitute, the "Principal Party" for
purposes of Section 13(a) hereof shall have received a distribution of
Rights previously owned by such Person or any of its Affiliates and
Associates.
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<PAGE> 39
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23 or
Section 26 hereof, take (or permit any Subsidiary to take) any action
if at the time such action is taken it is reasonably foreseeable that
such action will diminish substantially or otherwise eliminate the
benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after
the Rights Dividend Declaration Date and prior to the Distribution Date
(i) declare a dividend on the outstanding shares of Common Stock of the
Company payable in shares of Common Stock of the Company, (ii)
subdivide the outstanding shares of Common Stock of the Company in a
manner not covered by clause (i) of this Section 11(p) or (iii) combine
or consolidate the outstanding shares of Common Stock of the Company
into a smaller number of shares, the number of Rights associated with
each share of Common Stock of the Company 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 share of Common Stock of the Company following any
such event shall equal the result obtained by multiplying the number of
Rights associated with each share of Common Stock of the Company
immediately prior to such event by a fraction, the numerator of which
shall be the total number of shares of Common Stock of the Company
outstanding immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares of Common
Stock of the Company outstanding immediately following the occurrence
of such event. The adjustments provided for in this Section 11(p) shall
be made successively whenever such a dividend is declared or paid or
such a subdivision, combination or consolidation is effected. If an
event occurs which would require an adjustment under Section 11(a)(ii)
hereof and this Section 11(p), the adjustments provided for in this
Section 11(p) shall be in addition and prior to any adjustment required
pursuant to Section 11(a)(ii) hereof.
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<PAGE> 40
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER
OF SHARES. Whenever an adjustment is made as provided in Section 11 and Section
13 hereof, the Company shall (a) promptly prepare a certificate setting forth
such adjustment and a brief statement of the facts accounting for such
adjustment, (b) promptly file with the Rights Agent, and with each transfer
agent for the Preferred Stock and the Common Stock of the Company, a copy of
such certificate and (c) mail a brief summary thereof to each record holder of a
Rights Certificate (or, if prior to the Distribution Date, to each record holder
of a certificate representing shares of Common Stock of the Company) in
accordance with Section 25 hereof. Notwithstanding the foregoing sentence, the
failure of the Company to prepare such certificate or statement or make such
filings or mailings shall not affect the validity of, or the force or effect of,
the requirement for such adjustment. The Rights Agent shall be fully protected
in relying on any such certificate and on any adjustment therein contained and
shall not be deemed to have knowledge of any such adjustment unless and until it
shall have received such certificate.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF
ASSETS OR EARNING POWER.
(a) In the event (a "Section 13 Event") that, on or after the
Stock Acquisition Date, directly or indirectly, (x) the Company shall
consolidate or otherwise combine with, or merge with or into, any other
Person or Persons (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof) and the Company
shall not be the continuing or surviving corporation of such
consolidation, combination or merger, (y) any Person or Persons (other
than a Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof) shall consolidate or otherwise combine with, or
merge with or into, the Company and the Company shall be the continuing
or surviving corporation of such consolidation, combination or merger
and, in connection with such consolidation, combination or merger, all
or part of the outstanding shares of Common Stock of the Company shall
be changed into or exchanged for stock or other securities of any other
Person or Persons or cash or any other property or (z) the Company
shall sell or otherwise transfer (or
37
<PAGE> 41
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 and calculated on the
basis of the Company's most recent regularly prepared financial
statements) 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); PROVIDED, however, that this
clause (z) of Section 13(a) hereof shall not apply to the pro rata
distribution by the Company of assets (including securities) of the
Company or any of its Subsidiaries to all holders of Common Stock of
the Company; then, and in each such case (except as may be contemplated
by Section 13(d) hereof), proper provision shall be made so that: (i)
each holder of a Right, except as provided in Section 7(e) hereof,
shall, on or after the later of (A) the date of the first occurrence of
any such Section 13 Event or (B) the date of the expiration of the
period within which the Rights may be redeemed pursuant to Section 23
hereof (as the same may be extended or amended as provided in Section
26 hereof), 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, nonassessable and freely tradeable shares of Common Stock of the
Principal Party, 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 Units 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 Units 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 per
38
<PAGE> 42
share of the Common Stock of such Principal Party on the date of
consummation of such Section 13 Event; (ii) the shares of Common Stock
of such Principal Party received by each holder of a Right upon
exercise of that Right shall be fully paid and nonassessable; (iii)
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; (iv) 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; (v) such Principal Party shall take such steps
(including without limitation 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 (vi) the provisions of Section
11(a)(ii) hereof 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) hereof, (A)
the Person that is the issuer of any securities into which shares of
Common Stock of the Company are converted, changed or exchanged in
such merger, consolidation or combination (or, if there is more than
one such issuer, the issuer the Common Stock of which has the greatest
market value) or (B) if no securities are so issued, the Person that is
the other party to such merger (and survives the merger), consolidation
or combination (or, if there is more than one such Person, the Person
the Common Stock of which has the greatest market value), or if the
other party to the merger does not survive the merger, the Person that
does sur-
39
<PAGE> 43
vive the merger (including the Company, if it survives); and
(ii) in the case of any transaction described in
clause (z) of the first sentence of Section 13(a) hereof, the Person
that is the party receiving the greatest portion of the assets or
earning power transferred pursuant to such transaction or transactions
or, if each Person that is a party to such transaction or transactions
receives the same portion of the assets or earning power so transferred
or if the Person receiving the greatest portion of the assets or
earning power cannot be determined, whichever of such Persons is the
issuer of Common Stock having the greatest market value;
PROVIDED, however, that in any such case, (1) if the Common Stock of such Person
is not at such time and has 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 Stock of which is and
has been so registered, "Principal Party" shall refer to such other Person; (2)
if the Common Stock of such Person is not and has not been so registered and
such Person is a Subsidiary, directly or indirectly, of more than one Person,
the Common Stocks of two or more of which are and have been so registered,
"Principal Party" shall refer to whichever of such Persons is the issuer of the
Common Stock having the greatest aggregate market value; and (3) if the Common
Stock of such Person is not and has not been so registered and such Person is
owned, directly or indirectly, by a joint venture formed by two or more Persons
that are not owned, directly or indirectly, by the same Person, the rules set
forth in (1) and (2) above shall apply to each of the chains of ownership having
an interest in such joint venture as if such party were a Subsidiary of both or
all of such joint venturers, and the Principal Parties in each such chain shall
bear the obligations set forth in this Section 13 in the same ratio as their
direct or indirect interests in such Person bear to the total of such interests.
(c) The Company shall not consummate any such Section 13 Event
unless the Principal Party shall
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have a sufficient number of authorized shares of its Common Stock 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 such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement confirming that
the requirements of Section 13(a) and Section 13(b) hereof shall
promptly be performed in accordance with their terms and that such
Section 13 Event shall not result in a default by the Principal Party
under this Agreement as the same shall have been assumed by the
Principal Party pursuant to Section 13(a) and Section 13(b) hereof and
further providing that, as soon as practicable after the date of any
such Section 13 Event, the Principal Party will:
(i) prepare and file a registration statement
under the Act, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, and
will use its best efforts to cause such registration statement to (A)
become effective as soon as practicable after such filing and (B)
remain effective (with a prospectus at all times meeting the
requirements of the Act) until the Expiration Date and to similarly
comply with applicable state securities laws;
(ii) use its best efforts to list or obtain
quotation of (or continue the listing or quotation of) the Rights and
the securities purchasable upon exercise of the Rights on a national
securities exchange or by an automated quotation service;
(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) use its best efforts to obtain waivers of
any rights of first refusal or preemptive rights in respect of the
shares of Common Stock of the Principal Party subject
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to purchase upon exercise of outstanding Rights.
The provisions of this Section 13 shall similarly apply to successive mergers,
consolidations, combinations or sales or other transfers. In the event that a
Section 13 Event shall occur at any time after the occurrence of a Section
11(a)(ii) Event, the Rights which have not theretofore been exercised shall
thereafter become exercisable in the manner described in Section 13(a) hereof.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of
Rights, except prior to the Distribution Date as provided in Section
11(i) and Section 11(p) hereof, or to distribute Rights Certificates
which evidence fractional Rights. In lieu of any such fractional
Rights, there shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of
the current market value of a whole Right. For purposes of this Section
14(a), the current market value of a whole Right shall be the closing
price of the Rights for the Trading Day immediately prior to the date
on which such fractional Rights would have been otherwise issuable. The
closing price of the Rights for any Trading Day shall be the last sale
price, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the
New York Stock Exchange or, if the Rights are not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system or the Nasdaq National Market
with respect to securities listed on another national securities
exchange or quoted by the Nasdaq National Market, respectively, or if
the Rights are not listed or admitted to trading on any national
securities exchange or quoted by the Nasdaq National Market, the last
quoted price or, if not so quoted, the average of the high bid and low
asked
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prices in the over-the-counter market, as reported by The Nasdaq Stock
Market or such other quotation system then in use or, if on any such
date the Rights are not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market
maker making a market in the Rights selected by the Board. If on any
such date no such market maker is making a market in the Rights, the
fair value of the Rights on such date as determined in good faith by
the Board shall be used.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than fractions which are integral
multiples of one Unit) upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one Unit). In
lieu of fractional shares of Preferred Stock that are not integral
multiples of one Unit, 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
market value of one Unit. For purposes of this Section 14(b), the
current market value of one Unit shall be one one-thousandth of the
closing price of a share of Preferred Stock, or if unavailable, the
appropriate alternative price (in each case, as determined pursuant to
Section 11(d)(ii) hereof) for the Trading Day immediately prior to the
date of such exercise.
(c) Following the occurrence of a Triggering Event, the
Company shall not be required to issue fractions of shares of Common
Stock of the Company upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Common Stock of the
Company. In lieu of fractional shares of Common Stock of the Company,
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 market value of one
share of Common Stock of the Company. For purposes of this Section
14(c), the current market value of one share of Common Stock of the
Company shall be the closing
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price of one share of Common Stock of the Company or, if unavailable,
the appropriate alternative price (in each case, 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 that Right
expressly waives such holder's right to receive any fractional Rights
or any fractional shares upon exercise of a Right, except as permitted
by this Section 14.
Section 15. RIGHTS OF ACTION. All rights of action in respect
of this Agreement, other than rights of action vested in the Rights Agent in
Section 18 hereof, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock of the Company); and any registered holder of any Rights
Certificate (or, prior to the Distribution Date, of the Common Stock of the
Company), 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 Stock of
the Company), may, in the holder's own behalf and for the holder's own benefit,
enforce, and may institute and maintain any suit, action or proceeding against
the Company to enforce, or otherwise act in respect of, the holder's right to
exercise the Rights evidenced by such Rights Certificate 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 shall be entitled to specific performance
of the obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this Agreement.
Section 16. AGREEMENT OF RIGHTS HOLDERS. Every holder of a
Right, by accepting the same, consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of shares of Common
Stock of the Company;
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(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the principal office or offices of the Rights Agent
designated for such purposes, duly endorsed or accompanied by a proper
instrument of transfer and with the appropriate forms and certificates
contained therein duly executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the
Company and the Rights Agent may deem and treat the person in whose
name a Rights Certificate (or, prior to the Distribution Date, the
associated certificate for Common Stock of the Company) 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 certificate for Common Stock of the
Company made by anyone other than the Company or the Rights Agent) for
all purposes whatsoever, and neither the Company nor the Rights Agent,
subject to the last sentence of Section 7(e) hereof, shall be required
to be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any
liability to any holder of a Right or other Person as a result of its
inability to perform any of its obligations under this Agreement by
reason of any preliminary or permanent in junction or other order,
decree or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, or
by reason of 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 reasonable efforts to have any
such order, decree or ruling lifted or otherwise overturned as soon as
possible.
Section 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A
STOCKHOLDER. No holder, as such, of any Rights Certificate shall be entitled to
vote, receive dividends or be deemed for any purpose the holder of the number of
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Units or any other securities of the Company which may at any time be issuable
upon the exercise of the Rights represented thereby, nor shall anything
contained herein or in any Rights Certificate be construed to confer upon the
holder of any Rights Certificate, as such, any of the rights of a stockholder of
the Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in Section 24 hereof), or to
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Rights Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time
to time, on demand of the Rights Agent, reimbursement for its
reasonable expenses and counsel fees and disbursements and other
disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and to hold it
harmless against, any loss, liability, or expense, incurred without
gross negligence, bad faith or willful misconduct on the part of the
Rights Agent, for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement,
including the costs and expenses of defending against any claim of
liability in the premises.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by
it in good faith in connection with its administration of this
Agreement in reliance upon any Rights Certificate or certificate for
Common Stock of the Company or for other securities of the Company or
upon any instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document reasonably believed
by it to be genuine and
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to be signed, executed and, where necessary, verified or acknowledged,
by the proper Person or Persons.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF
RIGHTS AGENT.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights Agent
shall be a party, or any corporation succeeding to the corporate trust
or stock transfer business of the Rights Agent or any successor Rights
Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the
part of any of the parties hereto; PROVIDED, however, that such
corporation would be eligible for appointment as a successor Rights
Agent under the provisions of Section 21 hereof. 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
the predecessor 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 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
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Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Rights Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel
shall be full and complete authorization and protection to the Rights
Agent as to any action taken or omitted by it in good faith and in
accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that
any fact or matter (including without limitation the identity of any
Acquiring Person and the determination of Current Market Price) be
proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by the
Chairman of the Board, the President, any Vice President, the
Treasurer, any Assistant Treasurer, the Clerk or any Assistant Clerk of
the Company and delivered to the Rights Agent; and such certificate
shall be full authorization to the Rights Agent for any action taken or
suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement
or in the Rights Certificates, nor shall it be required to verify the
same (except as to its countersignature
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on such Rights Certificates), but all such statements and recitals are
and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Rights Certificate (except
its countersignature thereon); 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 adjustment required under the provisions of Section 11 or Section
13 hereof or responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that would
require any such adjustment (except with respect to the exercise of
Rights evidenced by Rights Certificates after receipt of a certificate
describing any such adjustment); nor shall it by any act hereunder be
deemed to make any representation or warranty as to the authorization
or reservation of any shares of Common Stock of the Company or
Preferred Stock to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any shares of Common Stock of the Company
or Preferred Stock will, when so issued, be validly authorized and
issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts, instruments
and assurances as may reasonably be required by the Rights Agent for
the carrying out or performing by the Rights Agent of the provisions of
this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from the Chairman of the Board, the President, any Vice
President, the Treasurer, any Assistant Treasurer, the Clerk or any
Assistant Clerk 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
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any action taken or suffered to be taken by it in good faith in
accordance with instructions of any such officer. Any application by
the Rights Agent for written instructions from the Company may, at the
option of the Rights Agent, set forth in writing any action proposed to
be taken by, or omission of, the Rights Agent under this Agreement and
the date on or after which such action shall be taken or such omission
shall be effective. The Rights Agent shall not be liable for any action
taken by, or omission of, the Rights Agent in accordance with a
proposal included in any such application on or after the date
specified in such application (which date shall not be less than five
Business Days after the date the Company actually receives such
application, unless the Company shall have consented in writing to an
earlier date) unless, prior to taking any such action (or prior to the
effective date in the case of an omission), the Rights Agent shall have
received written instructions in response to such application
specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights
or other securities of the Company, become pecuniarily interested in
any transaction in which the Company may be interested, contract with
or lend money to the Company or otherwise act as fully and freely as
though the Rights Agent were not Rights Agent under this Agreement.
Nothing herein shall preclude the Rights Agent from acting in any other
capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the Rights
Agent shall not be answerable or accountable for any act, default,
neglect or misconduct of any such attorneys or agents or for any loss
to the Company resulting from any such act, default, neglect or
misconduct; PROVIDED, however, reasonable care was exercised in the
selection and continued employment thereof.
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(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder (other than
internal costs incurred by the Rights Agent in providing services to
the Company in the ordinary course of its business as Rights Agent) or
in the exercise of its rights if there shall be reasonable grounds for
believing that repayment of such funds or adequate indemnification
against such risk or liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate contained in
the form of assignment or form of election to purchase, as the case may
be, has either not been completed or indicates an affirmative response
to clause 1 or clause 2 thereof, the Rights Agent shall not take any
further action with respect to such requested exercise or transfer
without first consulting with the Company.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Stock of the Company and Preferred Stock by
registered or certified mail and to the holders of the Rights Certificates, if
any, by first-class mail. The Company may remove the Rights Agent or any
successor Rights Agent upon 30 days' notice in writing mailed to the Rights
Agent or successor Rights Agent, as the case may be, and to each transfer agent
of the Common Stock of the Company and Preferred Stock by registered or
certified mail and to the holders of the Rights Certificates, if any, by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Rights Certificate (who shall,
with such notice, submit his Rights Certificate for inspection by the Company),
then any registered holder of any Rights
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Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. If no successor Rights Agent shall have been
appointed within 30 days from the effectiveness of such removal, resignation or
incapacity and no registered holder of any Rights Certificate has applied
pursuant to this Agreement for the appointment of a new Rights Agent, the
Company automatically shall be designated as successor Rights Agent. Any
successor Rights Agent appointed by the Company or by such a court shall be (a)
a corporation organized and doing business under the laws of the United States
or of any state of the United States, in good standing, which is authorized to
do business as a banking institution in such state, is authorized under such
laws to exercise corporate trust powers, is subject to supervision or
examination by federal or state authority and has at the time of its appointment
as Rights Agent a combined capital and surplus of at least $100,000,000 or (b)
an Affiliate of a corporation 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 hereunder and shall execute and deliver any further assurance, conveyance,
act or deed necessary for that purpose. Not later than the effective date of any
such appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Stock of the
Company and the Preferred Stock, and shall mail a notice thereof in writing to
the registered holders of the Rights Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. ISSUANCE OF NEW RIGHTS CERTIFICATES.
Notwithstanding any of the provisions of this Agreement or of the Rights
Certificates 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 to
reflect any adjustment or change in the Purchase Price and the number or kind or
class of shares or other securities or property purchasable under the
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Rights Certificates made in accordance with the provisions of this Agreement.
In addition, in connection with the issuance or sale of shares of Common Stock
of the Company 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 of the Company 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 hereafter issued by the Company, and (b)
may, in any other case, if deemed necessary or appropriate by the Board, 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.
Section 23. REDEMPTION AND TERMINATION.
(a) The Board may, at its option, at any time prior
to the earlier of (i) the Close of Business on the tenth Business Day (or such
specified or unspecified later date as may be determined by the Board before the
Rights cease being redeemable) following the Stock Acquisition Date (or, if the
Stock Acquisition Date shall have occurred prior to the Record Date, the Close
of Business on the tenth Business Day following the Record Date) or (ii) the
Final Expiration Date, direct the Company to, and if directed, the Company
shall, redeem all but not less than all of the then outstanding Rights at a
redemption price of $.001 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 Company may, at its option, pay the
Redemption Price in shares of Common Stock of the Company (based on the Current
Market Price of the Common Stock of the Company at the time of redemption),
cash or any other form of consideration deemed appropriate by the Board. In the
event that the Redemption Price is paid in cash, each holder of a Right shall
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be entitled to receive, in redemption of all Rights held by such holder, an
aggregate amount therefor equal to the product of (i) the aggregate number of
Rights held by such holder and (ii) the Redemption Price, rounded up to the
nearest whole cent. 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.
(b) Immediately upon the action of the Board
directing the Company to make the redemption of the Rights, evidence of which
shall have been filed with the Rights Agent, and without any further action and
without any notice, the right to exercise the Rights will terminate, and the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right so held. Promptly after the action of the Board
directing the Company to make 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 each record holder of the Common
Stock of the Company at the address of such holder shown on the records of the
Company. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption Price
will be made.
Section 24. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose, at any time
after the Distribution Date, (i) to pay any dividend payable in stock of any
class to the holders of Preferred Stock or to make any other distribution to the
holders of Preferred Stock (other than a regular periodic cash dividend out of
earnings or retained earnings of the Company), (ii) to offer to the holders of
Preferred Stock rights or warrants to subscribe for or to purchase any
additional shares of Preferred Stock or shares of stock of any class or any
other securities, rights or options, (iii) to effect any reclassification of the
Preferred Stock (other than a reclassification involving only the subdivision or
split of outstanding shares of Preferred Stock), (iv) to effect any
consolidation, combination or merger into or with any other Person or Persons
(other
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than a Subsidiary of the Company in a transaction which complies with Section
11(o) hereof), 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, 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 (other than the Company or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o) hereof) or (v) to effect
the liquidation, dissolution or winding up of the Company, then, in each such
case, the Company shall give to each holder of a Rights Certificate, to the
extent feasible and in accordance with Section 25 hereof, a notice of such
proposed action, which shall specify the record date for the purposes of such
stock dividend, distribution of rights or warrants, or the date on which such
reclassification, consolidation, combination, merger, sale, transfer,
liquidation, dissolution or winding up is to take place and the date of
participation therein by the holders of the shares of Preferred Stock, if any
such date is to be fixed, and such notice shall be so given in the case of any
action covered by clause (i) or (ii) above at least 20 days prior to the record
date for determining holders of the shares of Preferred Stock for purposes of
such action, and in the case of any such other action, at least 20 days prior to
the date of the taking of such proposed action or the date of participation
therein by the holders of the shares of Preferred Stock, whichever shall be the
earlier.
(b) In case any Section 11(a)(ii) Event shall occur,
then, in any such case, (i) the Company shall as soon as practicable thereafter
give to each holder of a Rights Certificate, to the extent feasible in
accordance with Section 25 hereof, a notice of the occurrence of such event,
which shall specify the event and the consequences of the event to holders of
Rights under Section 11(a)(ii) hereof, and (ii) all references in the preceding
paragraph to Preferred Stock shall be deemed thereafter to refer to Common Stock
of the Company or, if appropriate, Units or other securities.
Section 25. NOTICES. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any Rights
Certificate to or on the Company shall be sufficiently given or made
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if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Rights Agent) as follows:
Project Software & Development, Inc.
100 Crosby Drive
Bedford, Massachusetts 01730
Attention: Corporate Clerk
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Rights Certificate to or on the Rights Agent shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
BankBoston, N.A.
c/o Boston EquiServe Limited Partnership
150 Royall Street
Canton, Massachusetts 02021
Attention: Client Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of any certificate representing
shares of Common Stock of the Company) shall be sufficiently given or made if
sent by first-class mail, insured, postage prepaid, addressed to such holder at
the address of such holder as shown on the registry books of the Company.
Section 26. SUPPLEMENTS AND AMENDMENTS. Prior to the
Distribution Date, the Company and the Rights Agent shall, if the Board so
directs, supplement or amend any provision of this Agreement without the
approval of any holders of certificates representing shares of Common Stock of
the Company. From and after the Distribution Date, the Company and the Rights
Agent shall, if the Board so directs, supplement or amend this Agreement without
the approval of any holders of Rights Certificates in order (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained herein which
may be defective or inconsistent with any other provisions herein, (iii) to
shorten or lengthen any time period hereunder or (iv) to change or supplement
the provisions
56
<PAGE> 60
hereunder in any manner which the Company may deem necessary or desirable and
which shall not adversely affect the interests of the holders of Rights
Certificates (other than an Acquiring Person or an Affiliate or Associate of an
Acquiring Person); PROVIDED, that this Agreement may not be supplemented or
amended to lengthen, pursuant to clause (iii) of this sentence, (A) a time
period relating to when the Rights may be redeemed or to modify the ability (or
inability) of the Board to redeem the Rights, in either case at such time as the
Rights are not then redeemable or (B) any other time period unless such
lengthening is for the purpose of protecting, enhancing or clarifying the
rights of, or the benefits to, the holders of Rights (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 26, the Rights Agent shall execute such supplement or amendment. Prior
to the Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Stock of the Company.
Section 27. SUCCESSORS. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 28. DETERMINATIONS AND ACTIONS BY THE BOARD, ETC. For
all purposes of this Agreement, any calculation of the number of shares of
Common Stock of the Company outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding shares of
Common Stock of the Company of which any Person is the Beneficial Owner, shall
be made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of the
General Rules and Regulations under the Exchange Act. The Board shall have the
exclusive power and authority to administer this Agreement and to exercise all
rights and powers specifically granted to the Board 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 (a) interpret the provisions of this
Agreement and (b) make all determinations deemed necessary or advisable for the
adminis-
57
<PAGE> 61
tration of this Agreement (including without limitation a determination to
redeem or not redeem the Rights or to amend this Agreement). All such actions,
calculations, interpretations and determinations (including without limitation
for purposes of clause (y) below, all omissions with respect to the foregoing)
which are done or made by the Board or the Company 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 to any liability
to the holders of the Rights.
Section 29. BENEFITS OF THIS AGREEMENT. Nothing in this
Agreement shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Rights Certificates (and, prior
to the Distribution Date, registered holders of the Common Stock of the Company)
any legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Company, the Rights
Agent and the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock of the Company).
Section 30. 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 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 Business Day following
the date of such determination by the Board.
Section 31. GOVERNING LAW. This Agreement, each Right and each
Rights Certificate issued hereunder shall be deemed to be a contract under seal
made under
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<PAGE> 62
the laws of the Commonwealth of Massachusetts, and for all purposes this
Agreement shall be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts applicable to contracts made and to be performed
entirely within the Commonwealth of Massachusetts.
Section 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.
Section 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
hereof.
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<PAGE> 63
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
ATTEST: PROJECT SOFTWARE &
DEVELOPMENT, INC.
By /s/ Paul D. Birch By /s/ David M. Sample
-------------------------------- -------------------------------
Name: Paul D. Birch Name: David M. Sample
Title: Clerk Title: President
Attest: BANKBOSTON, N.A., as Rights Agent
By /s/ Lisa Quinn By /s/ Margaret Prentice
-------------------------------- -------------------------------
Name: Lisa Quinn Name: Margaret Prentice
Title: Account Manager Title: Director
60
<PAGE> 64
EXHIBIT A
THE COMMONWEALTH OF MASSACHUSETTS
William Francis Galvin
Secretary of the Commonwealth FEDERAL IDENTIFICATION
Corporations Division NO. 04-2448516
One Ashburton Place, Boston, MA 02108-1512
CERTIFICATE OF VOTE OF DIRECTORS ESTABLISHING
A SERIES OF A CLASS OF STOCK
General Laws, Chapter 156B, Section 26
-----------------
We, David M. Sample, President, and
Paul D. Birch, Clerk of
Project Software & Development, Inc.
(Name of Corporation)
located at 100 Crosby Drive, Bedford, Massachusetts 01730
do hereby certify that at a meeting of the directors of the corporation held on
January 27, 1998, the following vote establishing and designating a series of a
class of stock and determining the relative rights and preferences thereof was
duly adopted:-
See Continuation Sheets 2A through 2L
NOTE: Votes for which the space provided above is not sufficient should be
set out on continuation sheets to be numbered 2A, 2B, etc. Continuation
sheets must have a left-hand margin 1 inch wide for binding and shall
be 8 1/2" x 11". Only one side should be used.
<PAGE> 65
VOTED, that a new series of preferred stock of the Corporation is
hereby created, pursuant to the authority vested in the Board of Directors of
this Corporation in accordance with the provisions of its Restated Articles of
Organization, as amended, and that the designation and amount of the series of
preferred stock and the voting powers, preferences and relative, participating,
optional and other special rights of the shares of such series, and the
qualifications, limitations or restrictions thereof are as follows:
DESIGNATION AND AMOUNT. The shares of such series shall be designated as "Series
A Junior Participating Preferred Stock" and the number of shares constituting
such series shall be 16,000.
DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the prior and superior rights of the holders of
any shares of any series of preferred stock of the Corporation ("Preferred
Stock") ranking prior and superior to the shares of Series A Junior
Participating Preferred Stock with respect to dividends, the holders of shares
of Series A Junior Participating Preferred Stock 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 15th day
of March, June, September and December in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"), commencing on the
first Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series A Junior Participating Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to the greater of (a)
$50.00 or (b) subject to the provision for adjustment hereinafter set forth,
1,000 times the aggregate per share amount of all cash dividends, and 1,000
times the aggregate per share amount (payable in kind) of all non-cash dividends
or other distributions other than a dividend payable in shares of common stock,
par value $.01 per share, of the Corporation (the "Common Stock") or a
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock, since the immediately preceding
Quarterly Dividend Payment Date, or, with respect to the first Quarterly
Dividend Payment Date, since the first issu-
2A
<PAGE> 66
ance of any share or fraction of a share of Series A Junior Participating
Preferred Stock. In the event the Corporation shall at any time after January
[ ], 1998 (the "Rights Dividend Declaration Date") (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock, or (iii) combine the outstanding Common Stock into a smaller
number of shares, then in each such case the amount of which holders of shares
of Series A Junior Participating 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 Series A Junior Participating Preferred Stock as provided in paragraph (A)
above immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); provided that,
in the event no dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $50.00 per share on
the Series A Junior Participating Preferred Stock shall nevertheless be payable
on such subsequent Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Junior Participating Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of issue of such shares
of Series A Junior Participating Preferred Stock, unless the date of issue of
such shares is prior to the record date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin to accrue from the date
of issue of such shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the determination of holders
of shares of Series A Junior Participating Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment Date, in either of
which events such dividends
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shall begin to accrue and be cumulative from such Quarterly Dividend Payment
Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on
the shares of Series A Junior Participating Preferred Stock in an amount less
than the total amount of such dividends at the time accrued and payable on such
shares shall be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may fix a record date for
the determination of holders of shares of Series A Junior Participating
Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be no more than 30 days prior to the
date fixed for the payment thereof.
3. VOTING RIGHTS. The holders of shares of Series A Junior
Participating Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Junior Participating Preferred Stock shall entitle
the holder thereof to 1,000 votes on all matters submitted to a vote of the
stockholders of the Corporation. In the event the Corporation shall at any time
after the Rights Dividend Declaration Date (i) declare any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common
Stock, or (iii) combine the outstanding Common Stock into a smaller number of
shares, then in each such case the number of votes per share to which holders of
shares of Series A Junior Participating Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such number by
a fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
(B) Except as otherwise provided herein or as required by law,
the holders of shares of Series A Junior Participating Preferred Stock and the
holders of shares of Common Stock shall vote together as one class on all
matters submitted to a vote of stockholders of the Corporation.
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<PAGE> 68
(C) (i) If at any time dividends on any Series A Junior
Participating Preferred Stock shall be in arrears in an amount equal to
six quarterly dividends thereon, the occurrence of such contingency
shall mark the beginning of a period (herein called a "default period")
which shall extend until such time when all accrued and unpaid
dividends for all previous quarterly dividend periods and for the
current quarterly dividend period on all shares of Series A Junior
Participating Preferred Stock then outstanding shall have been declared
and paid or set apart for payment. During each default period, all
holders of preferred stock (including holders of the Series A Junior
Participating Preferred Stock) with dividends in arrears in an amount
equal to six quarterly dividends thereon, voting as a class,
irrespective of series, shall have the right to elect two Directors.
(ii) During any default period, such voting right of the
holders of Series A Junior Participating Preferred Stock may be
exercised initially at a special meeting called pursuant to
subparagraph (iii) of this Section 3(c) or at any annual meeting of
stockholders or special meeting in lieu of an annual meeting, and
thereafter at annual meetings of stockholders or special meetings in
lieu of an annual meeting, provided that neither such voting right nor
the right of the holders of any other series of Preferred Stock, if
any, to increase, in certain cases, the authorized number of Directors
shall be exercised unless the holders of a majority in number of shares
of Preferred Stock outstanding shall be present in person or by proxy.
The absence of a quorum of the holders of Common Stock shall not affect
the exercise by the holders of Preferred Stock of such voting right. At
any meeting at which the holders of Preferred Stock shall exercise such
voting right initially during an existing default period, they shall
have the right, voting as a class, to elect Directors to fill such
vacancies, if any, in the Board of Directors as may
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then exist up to two Directors or, if such right is exercised at an
annual meeting or special meeting in lieu of an annual meeting, to
elect two Directors. If the number which may be so elected at any
special meeting (other than a special meeting in lieu of an annual
meeting) does not amount to the required number, the holders of the
Preferred Stock shall have the right to make such increase in the
number of Directors as shall be necessary to permit the election by
them of the required number. After the holders of the Preferred Stock
shall have exercised their right to elect Directors in any default
period and during the continuance of such period, the number of
Directors shall not be increased or decreased except by vote of the
holders of Preferred Stock as herein provided or pursuant to the rights
of any equity securities ranking senior to or PARI PASSU with the
Series A Junior Participating Preferred Stock.
(iii) Unless the holders of Preferred Stock shall, during
an existing default period, have previously exercised their right to
elect Directors, the Board of Directors may order, or any stockholder
or stockholders owning in the aggregate not less than ten percent of
the total number of shares of Preferred Stock outstanding, irrespective
of series, may request, the calling of a special meeting of the holders
of Preferred Stock, which meeting shall thereupon be called by the
President of the Corporation or the Board of Directors. Notice of such
meeting and of any annual meeting or special meeting in lieu of an
annual meeting at which holders of Preferred Stock are entitled to vote
pursuant to this paragraph (C)(iii) shall be given to each holder of
record of Preferred Stock by mailing a copy of such notice to him at
his last address as the same appears on the books of the Corporation.
Such meeting shall be called for a time not earlier than 20 days and
not later than 60 days after such order or request or in default of the
calling of such meeting within 60 days after such order or request,
such meeting may
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<PAGE> 70
be called on similar notice by any stockholder or stockholders owning
in the aggregate not less than ten percent of the total number of
shares of Preferred Stock outstanding. Notwithstanding the provisions
of this paragraph (C)(iii), such holders of the Preferred Stock shall
not have the right to call such a special meeting during the period
within 60 days immediately preceding the date fixed for the next annual
meeting of the stockholders.
(i) In any default period, the holders of Common Stock,
and other classes of stock of the Corporation if applicable, shall
continue to be entitled to elect the whole number of Directors until
the holders of Preferred Stock shall have exercised their right to
elect two Directors voting as a class, after the exercise of which
right (x) the Directors so elected by the holders of Preferred Stock
shall continue in office until their successors shall have been elected
by such holders or until the expiration of the default period, and (y)
any vacancy in the Board of Directors may (except as provided in
paragraph (C) (ii) of this Section 3) be filled by vote of a majority
of the remaining Directors theretofore elected by the holders of the
class of stock which elected the Director whose office shall have
become vacant. References in this paragraph (C) to Directors elected by
the holders of a particular class of stock shall include Directors
elected by such Directors to fill vacancies as provided in clause (y)
of the foregoing sentence.
(ii) Immediately upon the expiration of a default period,
(x) the right of the holders of Preferred Stock as a class to elect
Directors shall cease, (y) the term of any Directors elected by the
holders of Preferred Stock as a class shall terminate, and (z) the
number of Directors shall be such number as may be provided for in the
articles of organization or by-laws as then in effect irrespective of
any increase made pursuant to the provisions of paragraph (C)(ii) of
this
2F
<PAGE> 71
Section 3 (such number being subject, however, to change thereafter in
any manner provided by law or in the articles of organization or bylaws
as then in effect). Any vacancies in the Board of Directors affected by
the provisions of clauses (y) and (z) in the preceding sentence may be
filled by a majority of the remaining Directors.
(C) Except as set forth herein, holders of Series A Junior
Participating Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking any corporate
action.
4. CERTAIN RESTRICTIONS.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Junior Participating Preferred Stock as
provided in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on shares of Series
A Junior Participating Preferred Stock outstanding shall have been paid in full,
the Corporation shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series
A Junior Participating Preferred Stock; or
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Junior Participating Preferred Stock, except dividends paid
rateably on the Series A Junior Participating Preferred Stock and all
such parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such shares
are then entitled; or
2G
<PAGE> 72
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Junior Participating Preferred Stock, provided that the
Corporation may at any time redeem, purchase or otherwise acquire
shares of any such parity stock in exchange for shares of any stock of
the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A Junior
Participating Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series A Junior Participating Preferred Stock, or any shares
of stock ranking on a parity with the Series A Junior Participating
Preferred Stock, except pursuant to Section 8 or in accordance with a
purchase offer made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such terms as
the Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series or
classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
5. REACQUIRED SHARES. Any shares of Series A Junior Participating
Preferred Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and 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 to be created by resolution or resolutions of the Board of
Directors, subject to the
2H
<PAGE> 73
conditions and restrictions on issuance set forth herein.
6. LIQUIDATION, DISSOLUTION OR WINDING UP.
(A) Upon any liquidation (voluntary or otherwise), dissolution
or winding up of the Corporation, no distribution shall be made to the holders
of shares of stock ranking junior (either as to dividends or upon liquidations,
dissolution or winding up) to the Series A Junior Participating Preferred Stock
unless, prior thereto, the holders of shares of Series A Junior Participating
Preferred Stock shall have received $1,000.00 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment (the "Series A Liquidation Preference"). Following
the payment of the full amount of the Series A Liquidation Preference, no
additional distributions shall be made to the holders of shares of Series A
Junior Participating Preferred Stock unless, prior thereto, the holders of
shares of Common Stock shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i) the Series A
Liquidation Preference by (ii) 1,000 (as appropriately adjusted as set forth in
subparagraph C below to reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock)(such number in clause (ii)
immediately above being referred to as the "Adjustment Number"). Following the
payment of the full amount of the Series A Liquidation Preference and the Common
Adjustment in respect of all outstanding shares of Series A Junior Participating
Preferred Stock and Common Stock, respectively, holders of Series A Junior
Participating Preferred Stock and holders of shares of Common Stock shall
receive their rateable and proportionate share of the remaining assets to be
distributed in the ratio of the Adjustment Number to one with respect to such
Preferred Stock and Common Stock, on a per share basis, respectively.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation Preference and
the liquidation preferences of all other series of preferred stock, if any,
which rank on a parity with the Series A Junior Participating Preferred Stock,
then such remaining assets shall be distributed rateably to the holders of such
2I
<PAGE> 74
parity shares in proportion to their respective liquidation preferences. In the
event, however, that there are not sufficient assets available to permit payment
in full of the Common Adjustment, then such remaining assets shall be
distributed rateably to the holders of Common Stock.
(C) In the event the Corporation shall at any time after the
Rights Dividend Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the Adjustment Number in effect immediately prior to such
event shall be adjusted by multiplying such Adjustment Number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
7. CONSOLIDATION, MERGER, ETC. In case the Corporation shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Series A Junior Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to 1,000 times the aggregate amount
of stock, securities, cash or any other property (payable in kind), as the case
may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time after the Rights
Dividend Declaration Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the amount set forth in the preceding sentence with respect to
the exchange or change of shares of Series A Junior Participating 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
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number of shares of Common Stock that were outstanding immediately prior to such
event.
8. REDEMPTION. The outstanding shares of Series A Junior
Participating Preferred Stock may be redeemed at the option of the Board of
Directors as a whole, but not in part, at any time, or from time to time, at a
cash price per share equal to 105 percent of (i) the product of the Adjustment
Number times the Average Market Value (as such term is hereinafter defined) of
the Common Stock, plus (ii) all dividends which on the redemption date have
accrued on the shares to be redeemed and have not been paid, or declared and a
sum sufficient for the payment thereof set apart, without interest. The "Average
Market Value" is the average of the closing sale prices of the Common Stock
during the 30 day period immediately preceding the date before the redemption
date on the Composite Tape for New York Stock Exchange Listed Stocks, or, if
such stock is not quoted on the Composite Tape, on the New York Stock Exchange,
or, if such stock is not listed on such Exchange, on the principal United States
securities exchange registered under the Securities Exchange Act of 1934, as
amended, on which such stock is listed, or, if such stock is not listed on any
such exchange, the average of the closing sale prices with respect to a share of
Common Stock during such 30 day period, as quoted on the National Association of
Securities Dealers, Inc. Automated Quotations System or any system then in use,
or if no such quotations are available, the fair market value of the Common
Stock as determined by the Board of Directors in good faith.
9. Ranking. The Series A Junior Participating Preferred Stock shall
rank junior to all other series of the Corporation's Preferred Stock as to the
payment of dividends and the distribution of assets, unless the terms of any
such series shall provide otherwise.
10. AMENDMENT. The articles of organization of the Corporation shall
not be further amended in any manner which would materially alter or change the
powers, preferences or special rights of the Series A Junior Participating
Preferred Stock so as to affect them adversely without the affirmative vote of
the holders of a majority or more of the outstanding shares of Series A
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<PAGE> 76
Junior Participating Preferred Stock, voting separately as a class.
11. FRACTIONAL SHARES. Series A Junior Participating Preferred Stock
may be issued in fractions of a share which shall entitle the holder, in
proportion to such holders fractional shares, to exercise voting rights, receive
dividends, participate in distributions and to have the benefit of all other
rights of holders of Series A Junior Participating Preferred Stock.
2L
<PAGE> 77
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereto signed our
names this day of in the year 1998
....................................................................., President
........................................................................, Clerk
<PAGE> 78
THE COMMONWEALTH OF MASSACHUSETTS
Certificate of Vote of Directors Establishing
A Series of a Class of Stock
(General Laws, Chapter 156B, Section 26)
I hereby approve the within certificate and,
the filing fee in the amount of $
having been paid, said certificate is hereby filed this
day of ,
19 .
MICHAEL JOSEPH CONNOLLY
Secretary of State
TO BE FILLED IN BY CORPORATION
PHOTOCOPY OF CERTIFICATE TO BE SENT
TO:
................................................................................
................................................................................
................................................................................
Copy Mailed
<PAGE> 79
EXHIBIT B
[Form of Rights Certificate]
Certificate No. R- Rights
NOT EXERCISABLE AFTER JANUARY 27, 2008, SUBJECT TO EARLIER REDEMPTION,
EXTENSION OR EXPIRATION PURSUANT TO THE RENEWED RIGHTS AGREEMENT. THE RIGHTS ARE
SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.001 PER RIGHT ON THE
TERMS SET FORTH IN THE RENEWED RIGHTS AGREEMENT. THE RIGHTS EVIDENCED BY THIS
CERTIFICATE SHALL NOT BE EXERCISABLE, AND SHALL BE VOID SO LONG AS HELD, BY A
HOLDER IN ANY JURISDICTION WHERE THE REQUISITE QUALIFICATION FOR THE ISSUANCE
TO SUCH HOLDER, OR THE EXERCISE BY SUCH HOLDER, OF THE RIGHTS IN SUCH
JURISDICTION SHALL NOT HAVE BEEN OBTAINED OR BE OBTAINABLE. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE
OR ASSOCIATE OF ANY SUCH PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
[THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY
OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RENEWED
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. ]*
Rights Certificate
PROJECT SOFTWARE & DEVELOPMENT, 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
- ---------------------
* The portion of the legend in brackets shall be inserted only if applicable and
shall replace the preceding sentence.
<PAGE> 80
conditions of the Rights Agreement, dated as of January 27, 1998, as amended,
restated, renewed or extended from time to time (the "Rights Agreement"),
between Project Software & Development, Inc., a Massachusetts corporation (the
"Company"), and BankBoston, N.A., a national banking association (the "Rights
Agent"), to purchase from the Company at any time prior to 5:00 P.M. (Boston,
Massachusetts time) on ___________, _________, at the office or offices of the
Rights Agent, or its successors as Rights Agent, designated for such purpose,
one one-thousandth of a fully paid, nonassessable share (a "Unit") of Series A
Junior Participating Preferred Stock of the Company (the "Preferred Stock"), at
a purchase price of $_______ per Unit (the "Purchase Price"), upon presentation
and surrender of this Rights Certificate with the Form of Election to Purchase
and included Certificate duly completed and executed. The number of Rights
evidenced by this Rights Certificate (and the number of Units which may be
purchased upon exercise thereof) set forth above, and the Purchase Price set
forth above, are the number and Purchase Price as of ____________ ______,
________, based on the Preferred Stock as constituted at such date. The Company
reserves the right to require prior to the occurrence of a Triggering
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Event (as such term is defined in the Rights Agreement) that a number of Rights
be exercised so that only whole shares of Preferred Stock will be issued.
As more fully set forth in the Rights Agreement, from and after the
first occurrence of a Section 11(a) (ii) Event (as such term is defined in the
Rights Agreement), if the Rights evidenced by this Rights Certificate are
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of an
Acquiring Person (as such terms are defined in the Rights Agreement), which
Affiliate or Associate the Board (as defined in the Rights Agreement) in its
sole discretion, determines is or was involved in or caused or facilitated,
directly or indirectly (including through a change in the Board), such Section
11(a) (ii) Event, (ii) a transferee of such Acquiring Person (or of any such
Associate or Affiliate) or (iii) under certain circumstances specified in the
Rights Agreement, a transferee of such Acquiring Person (or of any such
Associate or Affiliate who becomes a transferee prior to or concurrently with
such Acquiring Person becoming such, such Rights shall become null and void
without any further action, and no holder hereof shall have any
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<PAGE> 82
right with respect to such Rights whether under the Rights Agreement or
otherwise.
As provided in the Rights Agreement, the Purchase Price and the number
and kind of shares of Preferred Stock or other securities 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, including
Triggering Events (as defined in 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
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Reference is also made to the Rights Agreement for definitions of capitalized
terms used and not defined herein. Copies of the Rights Agreement are on file at
the above-mentioned office of the Rights
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<PAGE> 83
Agent and are also available upon written request to the Rights Agent.
This Rights Certificate, with or without other Rights Certificates upon
surrender at the office or offices of the Rights Agent designated for such
purpose, may be exchanged for another Rights Certificate or Rights Certificates
of like tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of Units 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 may be redeemed by the Company at its option at a redemption
price of $.001 per Right at any time prior to the earlier of (i) the Close of
Business on the tenth Business Day following the Stock Acquisition Date (as such
time period may be extended pursuant to the Rights Agreement) and (ii) the Final
Expiration Date (as defined in the Rights Agreement).
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<PAGE> 84
If the Company so determines, no fractional shares of Preferred Stock
will be issued upon the exercise of any Right or Rights evidenced hereby (other
than fractions which are integral multiples of one Unit, which may, at the
election of the Company, be evidenced by depositary receipts), but in lieu
thereof, a cash payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of shares of
Preferred Stock or of any other securities of the Company which may at any time
be issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or, to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividend or subscription
rights, or otherwise, until the Right or Rights
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<PAGE> 85
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: PROJECT SOFTWARE &
DEVELOPMENT, INC.
By ________________________________ By _________________________________
Secretary Title:
Countersigned:
BANKBOSTON, N.A.
By ________________________________
Authorized Signature
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<PAGE> 87
[Form of Reverse Side of Rights Certificate]
ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED _____________________________________________________________
hereby sells, assigns and transfers unto _______________________________________
________________________________________________________________________________
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest herein, 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:
<PAGE> 88
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights Certificate [] is [] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned,
the undersigned [] did [] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
Dated: __________ ____, _____ _________________________________
Signature
Signature Guaranteed:
NOTICE
The signatures to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
<PAGE> 89
ELECTION TO PURCHASE
(To be executed if holder desires to
exercise Rights represented by the
Rights Certificate.)
To PROJECT SOFTWARE & DEVELOPMENT, INC.:
The undersigned hereby irrevocably elects to exercise Rights
represented by this Rights Certificate to purchase the shares of Preferred Stock
issuable upon the exercise of the Rights (or such other securities of the
Company or of any other Person which may be issuable or such other assets which
may be deliverable upon the exercise of the Rights) and requests that
certificates for any such shares or securities be issued in the name of and
delivered to:
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
Please insert social security
or other identifying number: ___________________________________________________
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
Please insert social security
or other identifying number:___________________________________________________
Dated: __________ ____, _____
_________________________________
Signature
Signature Guaranteed:
<PAGE> 90
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 in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned,
the undersigned [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: __________ ____, _____ _________________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Rights Certificate
in every particular, without alteration or enlargement or any change whatsoever.
<PAGE> 91
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
On January 27, 1998, the Board of Directors (the "Board") of Project
Software & Development, Inc. (the "Company") declared a dividend distribution of
one preferred stock purchase right (one "Right") for each outstanding share of
common stock, par value $.01 per share, of the Company (the "Common Stock") to
holders of record of the Common Stock at the close of business on January 27,
1998 (the "Record Date"). Each Right entitles the registered holder to purchase
from the Company a unit (a "Unit") consisting of one one-thousandth of a share
of Series A Junior Participating Preferred Stock, par value $.01 per share, of
the Company (the "Preferred Stock") or, in certain circumstances, to receive
cash, property, Common Stock or other securities of the Company, at a purchase
price of $140 per Unit, subject to adjustment (the "Purchase Price"). The full
description and terms of the Rights are set forth in the Rights Agreement (the
"Rights Agreement"), dated as of January 27, 1998, between the Company and
BankBoston, N.A., as Rights Agent (the "Rights Agent").
Initially, the Rights will be attached to all certificates representing
shares of Common Stock then outstanding, and no separate Rights Certificates
will be distributed. The Rights will separate from the Common Stock upon the
earlier of (i) 10 business days (subject to extension by the Board) following a
public announcement by the Company (the date of such public announcement being
the "Stock Acquisition Date") that a person or group of affiliated or associated
persons, other than an Exempt Person (as defined below), has acquired, or
obtained the right to acquire, beneficial ownership of more than 15% of the
outstanding shares of Common Stock (an "Acquiring Person") or (ii) 10 business
days (subject to extension by the Board) following the commencement of a tender
offer or exchange offer that would result in a person or group, other than an
Exempt Person, beneficially owning more than 15% of such outstanding shares of
Common Stock (the earlier of (i) and (ii) being the "Distribution Date"). Until
the Distribution Date, (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 subsequent to the Record
Date will contain a notation incorporating the Rights Agreement by reference and
(iii) the surrender for transfer of any certificates for outstanding Common
Stock will also constitute the transfer of the Rights associated with the Common
Stock represented by such certificates.
<PAGE> 92
Pursuant to the Rights Agreement, the Company reserves the right to require
prior to the occurrence of a Triggering Event (as defined below) that, upon the
exercise of Rights, a number of Rights be exercised so that only whole shares of
Preferred Stock will be issued. The term "Exempt Person" includes, among others,
the Company, any subsidiary of the Company and, in certain circumstances, a
person or group beneficially owning 15% or more of the outstanding shares of
Common Stock as of the Record Date but only if the percentage of outstanding
Common Stock owned by such person or group does not at any time exceed the sum
of (A) the lowest percentage of the outstanding Common Stock owned by such
person or group at any time after the Record Date and (B) 1% of the shares of
Common Stock then outstanding.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on January 27, 2008 unless earlier redeemed,
extended or terminated by the Company as described below. At no time will the
Rights have any voting power.
As soon as practicable after the Distribution Date, separate 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, the Rights will
trade separately, and the Rights Certificates alone will represent the Rights.
Except as otherwise determined by the Board, only shares of Common Stock issued
prior to the Distribution Date will be issued with Rights.
In the event (a "Section 11(a)(ii) Event") that any person or group
becomes an Acquiring Person, each holder of a Right will thereafter have the
right to receive, upon exercise thereof, Common Stock or, in the discretion of
the Board, Units, (or, in certain circumstances, cash, property or other
securities of the Company) having a Current Market Price (as defined in the
Rights Agreement) equal to two times the Purchase Price of the Right.
Notwithstanding any of the foregoing, following the occurrence of any Section
11(a)(ii) Event, all Rights that are, or (under certain circumstances specified
in the Rights Agreement) were, beneficially owned by specified Acquiring Persons
(or by certain related persons) will be null and void. However, Rights are not
exercisable following the occurrence of any Section 11(a)(ii) Event until such
time as the Rights are no longer redeemable by the Company as set forth below.
For example, at an exercise price of $140 per Right, each Right not
owned by a specified Acquiring
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Person (or by certain related persons) following a Section 11(a)(ii) Event would
entitle its holder to purchase $280 worth of Common Stock (or other
consideration, as noted above) for $140. Assuming that the Common Stock had a
Current Market Price of $20 at such time, the holder of each valid Right would
be entitled to purchase 14 shares of Common Stock for $140.
In the event (a "Section 13 Event") that, at any time on or after the
Stock Acquisition Date, (i) the Company shall take part in a merger or other
business combination transaction in which the Company is not the surviving
entity or in which the Common Stock is changed into or exchanged for other
securities, cash or any other property of any other person 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 payment of the exercise price,
common stock of the acquiring company having a Current Market Price equal to two
times the exercise price of the Right. Section 11(a) (ii) Events and Section 13
Events are collectively referred to as "Triggering Events."
The Purchase Price payable and the number of Units of Preferred Stock
(or the amount of cash, property or other securities) 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) in the event that holders of the
Preferred Stock are granted certain rights or warrants to subscribe for
Preferred Stock or convertible securities at less than the 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
quarterly cash dividends) or of subscription rights or warrants (other than
those referred to above).
With certain exceptions, no adjustments in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. The Company may, but is not required to, issue fractional shares of
Preferred Stock upon the exercise of any Right or Rights. In lieu thereof, an
adjustment in cash will be made based on the Current Market Price of the
Preferred Stock.
At any time until 10 business days following the Stock Acquisition Date
(or such later date as the Board may determine before the Rights become
nonredeemable), the
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<PAGE> 94
Company may redeem the Rights in whole, but not in part, at a price of $.001 per
Right (payable, at the option of the Company, in cash, Common Stock or such
other consideration deemed appropriate by the Board). Immediately upon the
effectiveness of any action of the Board 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 of $.001 per Right.
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 cash, property or other securities) of the
Company or for common stock of the acquiring company as set forth above.
The terms of the Rights may be amended by the Company (a) in any manner
prior to the time the Rights separate and are distributed and (b) after the time
the Rights separate and are distributed, in order to (i) cure any ambiguity,
(ii) correct or supplement provisions which may be defective or inconsistent,
(iii) make changes which do not adversely affect interests of holders of Rights
(other than those of an Acquiring Person and certain related persons) or (iv)
shorten or lengthen any time period under the Rights Agreement for the purpose
of protecting, enhancing or clarifying the rights of, or the benefits to, the
holders of Rights (other than an Acquiring Person and certain related persons);
provided, however, that no extension or amendment to adjust the time period for
redemption is permitted after the Rights become nonredeemable.
A copy of the Rights Agreement is being filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A. A
copy of the Rights Agreement is available free of charge from the Company or the
Rights Agent. 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 herein by reference.
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