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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report: May 6, 1997
(Date of earliest event reported)
THOMPSON PBE, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-25038 95-4215913
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(State or Other (Commission File Number) (IRS Employer
Jurisdiction of Identification No.)
Incorporation)
4553 Glencoe Avenue, Suite 200, Marina del Rey, California 90292
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(Address of principal executive offices) (Zip Code)
(310) 306-7112
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(Registrant's telephone number, including area code)
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Item 5. Other Events.
On May 6, 1997 the Board of Directors of Thompson PBE, Inc. (the
"Company") adopted a Rights Plan, effective as of May 29, 1997 (the "Rights
Plan"). In connection with the Rights Plan, the Board of Directors of the
Company declared a dividend of one preferred share purchase right (the "Rights")
for each outstanding share of common stock, par value $.001 per share (the
"Common Shares"), of the Company outstanding at the close of business on May 29,
1997 (the "Record Date"). Each Right will entitle the registered holder thereof,
after the Rights become exercisable and until May 6, 2007 (or the earlier
redemption, exchange or termination of the Rights), to purchase from the Company
one one-hundredth (1/100th) of a share of Series A Junior Participating
Preferred Stock, par value $.001 per share (the "Preferred Shares"), at a price
of $25.00 per one one-hundredth (1/100th) of a Preferred Share, subject to
certain anti-dilution adjustments (the "Purchase Price"). Until the earlier to
occur of (i) ten (10) days following a public announcement that a person or
group of affiliated or associated persons has acquired, or obtained the right to
acquire, beneficial ownership of 20% or more of the Common Shares (other than
certain exempt persons) (an "Acquiring Person") or (ii) ten business days (or
such later date as may be determined by action of the Board of Directors of the
Company prior to such time as any person or group of affiliated persons becomes
an Acquiring Person) following the commencement or announcement of an intention
to make a tender offer or exchange offer the consummation of which would result
in the beneficial ownership by a person or group of 20% or more of the Common
Shares (the earlier of (i) and (ii) being called the "Distribution Date"), the
Rights will be evidenced, with respect to any of the Common Share certificates
outstanding as of the Record Date, by such Common Share certificate. The Rights
will be transferred with and only with the Common Shares until the Distribution
Date or earlier redemption or expiration of the Rights. As soon as practicable
following the Distribution Date, separate certificates evidencing the Rights
("Right Certificates") will be mailed to holders of record of the Common Shares
as of the close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights. The Rights will at no time have any
voting rights.
Each Preferred Share purchasable upon exercise of the Rights will be
entitled to a minimum preferential quarterly dividend payment of the greater of:
(a) $1.00 or (b) subject to adjustment, 100 times the aggregate per share amount
of all cash dividends, and 100 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions, other than a dividend
payable in Common Shares or a subdivision of the outstanding Common Shares (by
reclassification or otherwise), declared on the Common Shares since the
immediately preceding first day of March, June, September and December in each
year (each such date being referred to herein as a "Quarterly Dividend Payment
Date"), or, with respect to the first Quarterly Dividend Payment Date, since the
first issuance of any share or fraction of a share of Series A Preferred Stock.
In the event of liquidation, the holders of the Preferred Shares will be
entitled to a preferential liquidation payment of $100 per share plus accrued
and unpaid dividends and distributions thereon, but will be entitled to an
aggregate payment of 100 times the payment made per Common Share. Each Preferred
Share will have 100 votes and will vote together with the Common Shares.
Finally, in the event of any merger, consolidation or other transaction in which
Common Shares are exchanged, each Preferred Share will be entitled to receive
100 times the amount received per Common Share. These Rights are protected by
customary anti-dilution provisions. Because of the nature of the Preferred
Share's dividend, liquidation and voting rights, the value of one one-hundredth
of a Preferred Share purchasable upon exercise of each Right should approximate
the value of one Common Share.
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In the event that a Person becomes an Acquiring Person or if the
Company were the surviving corporation in a merger with an Acquiring Person or
any affiliate or associate of an Acquiring Person and the Common Shares were not
changed or exchanged, each holder of a Right, other than Rights that are or were
acquired or beneficially owned by the Acquiring Person (which Rights will
thereafter be void), will thereafter have the right to receive upon exercise
that number of Common Shares having a market value of two times the then current
Purchase Price of one Right. With certain exceptions, in the event that the
Company were acquired in a merger or other business combination transaction or
more than 50% of its assets or earning power were sold, proper provision shall
be made so that each holder of a Right shall thereafter have the right to
receive, upon the exercise thereof at the then current Purchase Price of the
Right, that number of shares of common stock of the acquiring company which at
the time of such transaction would have a market value of two times the then
current Purchase Price of one Right.
At any time after a Person becomes an Acquiring Person and prior to the
acquisition by such Acquiring Person of 50% or more of the then outstanding
Common Shares, the Board of Directors may cause the Company to acquire the
Rights (other than Rights owned by an Acquiring Person which have become void),
in whole or in part, in exchange for one Common Share per Right (subject to
adjustment).
The Rights may be redeemed in whole, but not in part, at a price of
$.01 per Right (the "Redemption Price") by the Board of Directors at any time
prior to the time that an Acquiring Person has become such. The redemption of
the Rights may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish. The
Company may, at its option, pay the Redemption Price in cash, Common Shares
(based on the current per share market price at the time of the redemption) or
any other form of consideration deemed appropriate by the Board of Directors.
Immediately upon any redemption of the Rights, the right to exercise the Rights
will terminate and the only right of the holders of Rights will be to receive
the Redemption Price.
The Rights will expire on May 6, 2007 (the "Final Expiration Date")
(unless earlier redeemed, exchanged or terminated). ChaseMellon Shareholder
Services, L.L.C. is the Rights Agent.
The Purchase Price payable, and the number of one one-hundredths of a
Preferred Share or other securities or property issuable, upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution (i) in
the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Shares, (ii) upon the grant to holders of the
Preferred Shares of certain rights or warrants to subscribe for or purchase
Preferred Shares or convertible securities at less than the current market price
of the Preferred Shares or (iii) upon the distribution to holders of the
Preferred Shares of evidences of indebtedness, cash, securities or assets
(excluding regular periodic cash dividends at a rate not in excess of 125% of
the rate of the last regular periodic cash dividend theretofore paid or, in case
regular periodic cash dividends have not theretofore been paid, at a rate not in
excess of 50% of the average net income per share of the Company for the four
quarters ended immediately prior to the payment of such dividend, or dividends
payable in Preferred Shares (which dividends will be subject to the adjustment
described in clause (i) above)) or of subscription rights or warrants (other
than those referred to above).
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company beyond those as an existing stockholder,
including, without limitation, the right to vote or to receive dividends.
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Subject to the last sentence of this paragraph, any of the provisions
of the Rights Agreement dated as of May 6, 1997 between the Company and the
Rights Agent (the "Rights Agreement") may be amended by the Board of Directors
of the Company for so long as the Rights are then redeemable, and after the
Rights are no longer redeemable, the Company may amend or supplement the Rights
Agreement in any manner that does not adversely affect the interests of the
holder of the Rights.
One Right will be distributed to stockholders of the Company for each
Common Share owned of record by them on May 29, 1997. As long as the Rights are
attached to the Common Shares, the Company will issue one Right with each new
Common Share so that all such shares will have attached Rights. The Company has
agreed that, from and after the Distribution Date, the Company will reserve
250,000 Preferred Shares initially for issuance upon exercise of the Rights.
The new Rights are designed to assure that all of the Company's
stockholders receive fair and equal treatment in the event of any proposed
takeover of the Company and to guard against partial tender offers, open market
accumulations and other abusive tactics to gain control of the Company without
paying all stockholders a control premium. Subject to certain exceptions for any
exempt person, the Rights will cause substantial dilution to a person or group,
that acquires 20% or more of the Company's stock on terms not approved by the
Company's Board of Directors. The Rights should not interfere with any merger or
other business combination approved by the Board of Directors at any time prior
to the first date that a Person or group has become an Acquiring Person.
The Rights Agreement specifying the terms of the Rights and the text of
the press release announcing the declaration of the Rights are incorporated
herein by reference as exhibits to this Current Report. The foregoing
description of the Rights is qualified in its entirety by reference to such
exhibits.
Item 7. Exhibits.
4.1 Rights Agreement, dated as of May 6, 1997, between Thompson
PBE, Inc. and ChaseMellon Shareholder Services, L.L.C., which
includes the form of Certificate of Designations of the Series
A Junior Participating Preferred Stock of Thompson PBE, Inc.
as Exhibit A, the form of Right Certificate as Exhibit B and
the Summary of Rights to Purchase Preferred Shares as Exhibit
C.
99.1 Text of Press Release, dated May 6, 1997.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: May 6, 1997
THOMPSON PBE, INC.
By: /S/ MICHAEL O'DONOVAN
------------------------------
Name: Michael O'Donovan
Title: Chief Financial Officer
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EXHIBIT INDEX
4.1 Rights Agreement, dated as of May 6, 1997, between Thompson
PBE, Inc. and ChaseMellon Shareholder Services, L.L.C., which
includes the form of Certificate of Designations of the Series
A Junior Participating Preferred Stock of Thompson PBE, Inc.
as Exhibit A, the form of Right Certificate as Exhibit B and
the Summary of Rights to Purchase Preferred Shares as Exhibit
C.
99.1 Text of Press Release, dated May 6, 1997.
<PAGE> 1
EXHIBIT 4.1
================================================================================
THOMPSON PBE, INC.
and
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
as Rights Agent
Rights Agreement
Dated as of May 6, 1997
================================================================================
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RIGHTS AGREEMENT
Agreement, dated as of May 6, 1997, between Thompson PBE,
Inc., a Delaware corporation (the "Company"), and ChaseMellon Shareholder
Services, L.L.C., a limited liability company, as Rights Agent (the "Rights
Agent").
RECITALS
The Board of Directors of the Company has authorized and
declared a dividend of one preferred share purchase right (a "Right") for each
Common Share (as defined in Section 1.6) of the Company outstanding at the
close of business on May 29, 1997 (the "Record Date") and has authorized the
issuance of one Right (subject to adjustment as provided herein) with respect
to each Common Share that shall become outstanding between the Record Date and
the earliest of the Distribution Date, the Redemption Date and the Final
Expiration Date (as such terms are defined in Sections 3.1 and 7.1), each Right
initially representing the right to purchase one one-hundredth of a share of
Series A Junior Participating Preferred Stock (the "Preferred Shares") of the
Company having the rights, powers and preferences set forth in the form of
Certificate of Designation attached hereto as Exhibit A, upon the terms and
subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Rights
Agreement, the following terms have the meanings indicated:
1.1 "Acquiring Person" shall mean any Person (as such
term is hereinafter defined) who or which, together with all Affiliates and
Associates (as such terms are hereinafter defined) of such Person, shall be the
Beneficial Owner (as such term is hereinafter defined) of 20% or more of the
Common Shares of the Company then outstanding but shall not include (i) the
Company; (ii) any Subsidiary of the Company; (iii) any employee benefit plan of
the Company or of any Subsidiary of the Company or any entity holding shares of
capital stock of the Company for or pursuant to the terms of any such plan, in
its capacity as an agent or trustee for any such plan; or (iv) any Exempt
Person, unless such Exempt Person after May 6, 1997 becomes the Beneficial
Owner of more than the Exempt Ownership the Common Shares. "Exempt Ownership"
shall mean, with respect to any Exempt Person, the aggregate percentage of the
outstanding Common Shares that such Exempt Person beneficially owned as of May
6, 1997, plus 0.25%. "Exempt Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, was, on May 6,
1997, the Beneficial Owner of 20% or more of the Common Shares outstanding on
such date; provided, however, that such Exempt Person shall in any event cease
to be an Exempt Person upon such Exempt Person becoming the Beneficial Owner of
less than 20%. Notwithstanding the foregoing, no Person shall become an
"Acquiring Person" as the result of an acquisition of Common Shares by the
Company which, by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to 20% or more
of the Common Shares of the Company then
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outstanding (or, in the case of an Exempt Person, the Exempt Ownership);
provided, however, that if a Person shall become the Beneficial Owner of 20% or
more of the Common Shares of the Company then outstanding (or, in the case of
an Exempt Person, the Exempt Ownership) solely by reason of share purchases by
the Company and shall, after such share purchases by the Company, become the
Beneficial Owner of any additional Common Shares of the Company, then such
Person shall be deemed to be an "Acquiring Person." Notwithstanding the
foregoing, if the Board of Directors of the Company determines in good faith
that a Person who would otherwise be an "Acquiring Person," as defined pursuant
to the foregoing provisions of this Section 1.1, has become such inadvertently
and without any intention of changing or influencing control of the Company,
and such Person divests as promptly as practicable a sufficient number of
Common Shares so that such Person would no longer be an Acquiring Person, as
defined pursuant to the foregoing provisions of this Section 1.1, then such
Person shall not be deemed to be or have become an "Acquiring Person" at any
time for any purpose of this Agreement.
1.2 "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations, as in effect on the date of this Rights Agreement, under the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
1.3 A Person shall be deemed the "Beneficial Owner" of
and shall be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or indirectly (as
determined pursuant to Rule 13d-3 of the General Rules and Regulations
under the Exchange Act as in effect on the date of this Agreement);
(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has (A) the right to
acquire (whether such right is exercisable immediately, or only after
the passage of time, compliance with regulatory requirements,
fulfillment of a condition or otherwise) pursuant to any agreement,
arrangement or understanding, whether or not in writing (other than
customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities), or
upon the exercise of conversion rights, exchange rights, rights (other
than the Rights), warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the Beneficial Owner of, or
to beneficially own, (w) 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 (x) securities which such Person has
a right to acquire upon the exercise of Rights at any time prior to
the time that any Person becomes an Acquiring Person, (y) securities
issuable upon the exercise of Rights from and after the time that any
Person becomes an Acquiring Person if such Rights were acquired by
such Person or any of such Person's Affiliates or Associates prior to
the Distribution Date or pursuant to Section 3.1 or Section 22 hereof
("Original
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Rights") or pursuant to Section 11.9 or Section 11.15 with respect to
an adjustment to Original Rights; or (z) securities which such Person
or any of such Person's Affiliates or Associates may acquire, does or
do acquire or may be deemed to have the right to acquire, pursuant to
any merger or other acquisition agreement between the Company and such
Person (or one or more of his Affiliates or Associates) if such
agreement has been approved by the Board of Directors of the Company
prior to such Person's becoming an Acquiring Person; or (B) the right
to vote 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 clause (B) if the agreement, arrangement or
understanding to vote such security (1) arises solely from a revocable
proxy or consent given to such Person in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the
applicable rules and regulations of the Exchange Act and (2) is not
also then reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate
thereof) with respect to which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide
public offering of securities), whether or not in writing, for the
purpose of acquiring, holding, voting (except pursuant to a revocable
proxy as described in the proviso to Section 1.3(ii)(B)) or disposing
of any securities of the Company.
1.4 "Business Day" shall mean any day other than a
Saturday, Sunday, or a day on which banking institutions in the State of New
York are authorized or obligated by law or executive order to close.
1.5 "close of business" on any given date shall mean 5:00
p.m., Los Angeles time, on such date; provided, however, that if such date is
not a Business Day it shall mean 5:00 p.m., Los Angeles time, on the next
succeeding Business Day.
1.6 "Common Shares" when used with reference to the
Company shall mean the shares of common stock, par value $.001 per share, of
the Company. "Common Shares" when used with reference to any Person other than
the Company shall mean the capital stock with the greatest voting power, or the
equity securities or other equity interest having power to control or direct
the management, of such other Person or, if such Person is a Subsidiary of
another Person, the Person or Persons which ultimately control such
first-mentioned Person, and which has issued and outstanding such capital
stock, equity securities or equity interest.
1.7 "Continuing Director" shall mean (i) any member of
the Board of Directors of the Company, while such Person is a member of the
Board, who is not an Acquiring Person, or an Affiliate or Associate of an
Acquiring Person, or an employee, director,
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representative, nominee or designee of any Acquiring Person or of any such
Affiliate or Associate, and was a member of the Board prior to the time that
any Person becomes an Acquiring Person or (ii) any Person (during such period
in which such Person is a member of the Board) who, after the time that any
Person becomes an Acquiring Person, becomes a member of the Board and who is
not an Acquiring Person, or an Affiliate or Associate of an Acquiring Person,
or an employee, director, representative, nominee or designee of an Acquiring
Person or of any such Affiliate or Associate, if such Person's nomination for
election or election to the Board is recommended or approved by a majority of
the Continuing Directors.
1.8 "Person" shall mean any individual, partnership,
joint venture, limited liability company, firm, corporation, unallocated
association, trust or other entity, and shall include any successor (by merger
or otherwise) of such entity.
1.9 "Shares Acquisition Date" shall mean the first date
of public announcement (which, for purposes of this definition, shall include,
without limitation, the filing of a report pursuant to Section 13(d) of the
Exchange Act or pursuant to a comparable successor statute) by the Company or
an Acquiring Person that an Acquiring Person has become such or that discloses
information which reveals the existence of an Acquiring Person or such earlier
date as a majority of the Board of Directors shall become aware of the
existence of an Acquiring Person.
1.10 "Subsidiary" of any Person shall mean any corporation
or other entity of which a majority of the voting power of the voting equity
securities or equity interests is owned, of record or beneficially, directly or
indirectly, by such Person.
1.11 A "Trigger Event" shall be deemed to have occurred
upon any Person becoming an Acquiring Person.
1.12 The following terms shall have the meanings defined
for such terms in the Sections set forth below:
<TABLE>
<CAPTION>
Term Section
---- -------
<S> <C>
Adjustment Shares 11.1.2
common stock equivalent 11.1.3
Company Recitals
current per share market price 11.4
Current Value 11.1.3
Distribution Date 3.1
equivalent preferred stock 11.2
Exchange Act 1.2
Exchange Consideration 27
Final Expiration Date 7.1
Nasdaq 9
Preferred Shares
Recitals
Purchase Price 4
</TABLE>
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<TABLE>
<S> <C>
Record Date Recitals
Redemption Date 7.1
Redemption Price 23.1
Right Recitals
Right Certificate 3.1
Rights Agent Recitals
Security 11.4
Spread 11.1.3
Substitution Period 11.1.3
Summary of Rights 3.2
Trading Day 11.4
</TABLE>
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company in accordance with
the terms and conditions 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. In the event the Company appoints one
or more co-Rights Agents, the respective duties of the Rights Agent and any
co-Rights Agent shall be as the Company shall determine. Contemporaneously
with such appointment, if any, the Company shall notify the Rights Agent
thereof.
Section 3. Issuance of Right Certificates.
3.1 Rights Evidenced by Share Certificates. Until the
earlier of (i) the tenth day after the Shares Acquisition Date or (ii) the
tenth business day after the date of the commencement of, or first public
announcement of the intent of any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company or any entity holding shares of capital stock of the
Company for or pursuant to the terms of any such plan, in its capacity as an
agent or trustee for any such plan) to commence a tender or exchange offer the
consummation of which would result in any Person becoming the Beneficial Owner
of Common Shares aggregating 20% or more of the then outstanding Common Shares
of the Company (the earlier of (i) and (ii) being herein referred to as the
"Distribution Date"), (x) the Rights (unless earlier expired, redeemed or
terminated) will be evidenced (subject to the provisions of Section 3.2) by the
certificates for Common Shares registered in the names of the holders thereof
(which certificates for Common Shares shall also be deemed to be Right
Certificates) and not by separate certificates, and (y) the Rights (and the
right to receive certificates therefor) will be transferable only in connection
with the transfer of the underlying Common Shares. The preceding sentence
notwithstanding, prior to the occurrence of a Distribution Date specified as a
result of an event described in clause (ii) (or such later Distribution Date as
the Board of Directors of the Company may select pursuant to this sentence),
the Board of Directors may postpone, one or more times, the Distribution Date
which would occur as a result of an event described in clause (ii) beyond the
date set forth in such clause (ii). Nothing herein shall permit such a
postponement of a Distribution Date after a Person becomes an Acquiring Person.
As soon as practicable after the Distribution Date, the Rights Agent will send,
by first-class, postage-prepaid mail, to each record holder of Common Shares as
of the close of business on the Distribution Date, at the address of such
holder shown
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on the records of the Company, one or more certificates for Rights, in
substantially the form of Exhibit B hereto (a "Right Certificate"), evidencing
one Right (subject to adjustment as provided herein) for each Common Share so
held. As of the Distribution Date, the Rights will be evidenced solely by such
Right Certificates.
3.2 Summary of Rights. On the Record Date or as soon as
practicable thereafter, the Company will send or cause to be sent a copy of a
Summary of Rights to Purchase Preferred Shares, in substantially the form
attached hereto as Exhibit C (the "Summary of Rights"), by first-class,
postage-prepaid mail, to each record holder of Common Shares as of the close of
business on the Record Date at the address of such holder shown on the records
of the Company. With respect to certificates for Common Shares outstanding as
of the close of business on the Record Date, until the Distribution Date (or
the earlier Redemption Date or Final Expiration Date), the Rights will be
evidenced by such certificates for Common Shares registered in the names of the
holders thereof together with a copy of the Summary of Rights and the
registered holders of the Common Shares shall also be registered holders of the
associated Rights. Until the Distribution Date (or the earlier Redemption Date
or Final Expiration Date), the surrender for transfer of any certificate for
Common Shares outstanding at the close of business on the Record Date, with or
without a copy of the Summary of Rights, shall also constitute the transfer of
the Rights associated with the Common Shares represented thereby.
3.3 New Certificates After Record Date. Certificates for
Common Shares which become outstanding (whether upon issuance out of authorized
but unissued Common Shares, issuance out of treasury or transfer or exchange of
outstanding Common Shares) after the Record Date but prior to the earliest of
the Distribution Date, the Redemption Date or the Final Expiration Date, shall
be deemed also to be certificates for Rights, and shall have impressed,
printed, stamped, written or otherwise affixed onto them the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between Thompson
PBE, Inc. and ChaseMellon Shareholder Services, L.L.C., dated as of
May 6, 1997, as the same may be amended from time to time (the "Rights
Agreement"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal executive
offices of Thompson PBE, Inc. Under certain circumstances, as set
forth in the Rights Agreement, such Rights will be evidenced by
separate certificates and will no longer be evidenced by this
certificate. Thompson PBE, Inc. will mail to the holder of this
certificate a copy of the Rights Agreement without charge after
receipt of a written request therefor. AS DESCRIBED IN THE RIGHTS
AGREEMENT, RIGHTS WHICH ARE HELD BY OR HAVE BEEN HELD BY ACQUIRING
PERSONS OR ASSOCIATES OR AFFILIATES THEREOF (AS DEFINED IN THE RIGHTS
AGREEMENT) SHALL BECOME NULL AND VOID.
With respect to such certificates containing the foregoing legend, until the
Distribution Date (or the earlier Redemption Date or Final Expiration Date),
the Rights associated with the Common Shares represented by such certificates
shall be evidenced by such certificates (alone), and the surrender for transfer
of any such certificates shall also constitute the transfer of the Rights
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associated with the Common Shares represented thereby. In the event that the
Company purchases or acquires any Common Shares after the Record Date but prior
to the Distribution Date, any Rights associated with such Common Shares shall
be deemed canceled and retired so that the Company shall not be entitled to
exercise any Rights associated with the Common Shares which are no longer
outstanding.
Section 4. Form of Right Certificates. The Right
Certificates (and the forms of election to purchase shares, certification and
assignment to be printed on the reverse thereof) shall be substantially the
same as Exhibit B hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as the
Company may deem appropriate and as are not inconsistent with the provisions of
this Rights Agreement, or as may be required to comply with any applicable law
or with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange or trading system on which the Rights may from
time to time be listed or quoted, or to conform to usage. Subject to the terms
and conditions hereof, the Right Certificates, whenever issued, shall be dated
as of the Record Date, and shall show the date of countersignature by the
Rights Agent, and on their face shall entitle the holders thereof to purchase
such number of one one-hundredths of a Preferred Share as shall be set forth
therein at the price per one one-hundredth of a Preferred Share set forth
therein (the "Purchase Price"), but the number of such one one-hundredths of a
Preferred Share and the Purchase Price shall be subject to adjustment as
provided herein.
Section 5. Countersignature and Registration. The Right
Certificates shall be executed on behalf of the Company by its Chairman of the
Board of Directors, the Chief Executive Officer, President or any Vice
President, either manually or by facsimile signature, and shall have affixed
thereto the Company's seal or a facsimile thereof which shall be attested by
the Secretary or any Assistant Secretary of the Company, either manually or by
facsimile signature. The Right Certificates shall be countersigned, either
manually by facsimile signature, by an authorized signatory of the Rights
Agent, but it shall not be necessary for the same signatory to countersign all
of the Right Certificates hereunder. No Right Certificate shall be valid for
any purpose unless so countersigned. In case any officer of the Company who
shall have signed any of the Right Certificates shall cease to be such officer
of the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Right Certificates, nevertheless, may be
countersigned by the Rights Agent, and issued and delivered by the Company with
the same force and effect as though the Person who signed such Right
Certificates had not ceased to be such officer of the Company; and any Right
Certificate may be signed on behalf of the Company by any Person who, at the
actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Rights Agreement any such person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office, books for registration and transfer
of the Right Certificates issued hereunder. Such books shall show the names
and addresses of the respective holders of the Right Certificates, the number
of Rights evidenced on its face by each of the Right Certificates,
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the certificate number of each of the Right Certificates and the date of each
of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
Subject to the provisions of Section 7.5, Section 11.1.2 and Section 14, at any
time after the close of business on the Distribution Date, and at or prior to
the close of business on the earlier of the Redemption Date or the Final
Expiration Date, any Right Certificate or Right Certificates (other than Right
Certificates representing Rights that have become void pursuant to Section
11.1.2 or that have been exchanged pursuant to Section 27) may be transferred,
split up or combined or exchanged for another Right Certificate or Right
Certificates, entitling the registered holder to purchase a like number of one
one-hundredths of a Preferred Share as the Right Certificate or Right
Certificates surrendered then entitled such holder to purchase. Any registered
holder desiring to transfer, split up or combine or exchange any Right
Certificate shall make such request in writing delivered to the Rights Agent,
and shall surrender, together with any required form of assignment and
certificate duly completed, the Right Certificate or Right Certificates to be
transferred, split up or combined or exchanged at the office of the Rights
Agent designated for such purpose. Neither the Rights Agent nor the Company
shall be obligated to take any action whatsoever with respect to the transfer
of any such surrendered Right Certificate or Right Certificates until the
registered holder shall have completed and signed the certificate contained in
the form of assignment on the reverse side of such Right Certificate or Right
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 countersign and deliver to the person entitled thereto a
Right Certificate or Right Certificates, as the case may be, as so requested.
The Company may require payment from the holders of Right Certificates of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up or combination or exchange of such Right
Certificates.
Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation
of a Right Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and, at the Company's
request, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate if mutilated, the Company will make and
deliver a new Right Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights.
7.1 Exercise of Rights. Subject to Section 11.1.2 and
except as otherwise provided herein, the registered holder of any Right
Certificate may exercise the Rights evidenced thereby in whole or in part at
any time after the Distribution Date upon surrender of the Right Certificate,
with the form of election to purchase and certification on the reverse side
thereof duly executed, to the Rights Agent at the office of the Rights Agent
designated for such purpose,
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together with payment of the aggregate Purchase Price for the total number of
one one-hundredths of a Preferred Share (or other securities, cash or other
assets) as to which the Rights are exercised, at or prior to the earliest of
(i) the close of business on May 6, 2007 (the "Final Expiration Date"), (ii)
the time at which the Rights are redeemed as provided in Section 23 (the
"Redemption Date"), (iii) the closing of any merger or other acquisition
transaction involving the Company pursuant to an agreement of the type
described in Sections 1.3(ii)(A)(z) and 13.2, at which time the Rights are
deemed terminated, or (iv) the time at which the Rights are exchanged as
provided in Section 27.
7.2 Purchase. The Purchase Price for each one
one-hundredth of a Preferred Share pursuant to the exercise of a Right shall
initially be $25.00, shall be subject to adjustment from time to time as
provided in Sections 11, 13 and 26 and shall be payable in lawful money of the
United States of America in accordance with Section 7.3.
7.3 Payment Procedures. Upon receipt of a Right
Certificate representing exercisable Rights, with the form of election to
purchase and certification duly executed, accompanied by payment of the
aggregate Purchase Price for the shares to be purchased and an amount equal to
any applicable transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9, by certified or cashier's check or
money order payable to the order of the Company, the Rights Agent shall
thereupon promptly (i)(A) requisition from any transfer agent of the Preferred
Shares (or make available, if the Rights Agent is the transfer agent)
certificates for the number of Preferred Shares 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 Preferred Shares issuable upon exercise of the Rights hereunder with a
depositary agent, requisition from the depositary agent depositary receipts
representing such number of one one-hundredths of a Preferred Share as are to
be purchased (in which case certificates for the Preferred Shares represented
by such receipts shall be deposited by the transfer agent with the depositary
agent) and the Company hereby directs the depositary agent to comply with all
such requests, (ii) when appropriate, requisition from the Company the amount
of cash to be paid in lieu of the issuance of fractional shares in accordance
with Section 14, (iii) promptly after receipt of such certificates or
depositary receipts, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name or names
as may be designated by such holder and (iv) when appropriate, after receipt,
promptly deliver such cash to or upon the order of the registered holder of
such Right Certificate. In the event that the Company is obligated to issue
other securities of the Company, pay cash and/or distribute other property
pursuant to Section 11.1.3, the Company will make all arrangements necessary so
that such other securities, cash and/or other property are available for
distribution by the Rights Agent, if and when appropriate.
7.4 Partial Exercise. In case the registered holder of
any Right Certificate shall exercise less than all the Rights evidenced
thereby, a new Right Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent and delivered to the
registered holder of such Right Certificate or to his duly authorized assigns,
subject to the provisions of Section 14.
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7.5 Full Information Concerning Ownership.
Notwithstanding anything in this Rights Agreement to the contrary, neither the
Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder of Rights upon the occurrence of any purported
exercise as set forth in this Section 7 unless the certificate contained in the
form of election to purchase set forth on the reverse side of the Right
Certificate surrendered for such exercise shall have been duly completed and
signed by the registered holder thereof and the Company shall have been
provided with 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 Right
Certificates. All Right Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the
Company or to any of its agents, be delivered to the Rights Agent for
cancellation or in canceled form, or, if surrendered to the Rights Agent, shall
be canceled by it, and no Right Certificates shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Rights
Agreement. The Company shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall so cancel and retire, any other Right
Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all canceled Right
Certificates to the Company, or shall, at the written request of the Company,
destroy such canceled Right Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
The Company covenants and agrees that from and after the Distribution Date it
will cause to be reserved and kept available out of its authorized and unissued
Preferred Shares (and, following the occurrence of a Trigger Event, out of its
authorized and unissued Common Shares or other securities or out of its shares
held in its treasury) the number of Preferred Shares (and, following the
occurrence of a Trigger Event, Common Shares and/or other securities) that will
be sufficient to permit the exercise in full of all outstanding Rights.
So long as the Preferred Shares (and, following the occurrence
of a Trigger Event, Common Shares and/or other securities) issuable upon the
exercise of Rights may be listed on any national securities exchange or traded
in the over-the-counter market and quoted on the National Association of
Securities Dealers, Inc. Automated Quotation System ("Nasdaq") (including the
National Market or Small Cap Market), the Company shall use its best efforts to
cause, from and after such time as the Rights become exercisable, all shares
reserved for such issuance to be listed on such exchange or so traded in such
over-the-counter market, upon official notice of issuance upon such exercise.
The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Preferred Shares (and, following
the occurrence of a Trigger Event, Common Shares and/or other securities)
delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such shares (subject to payment of the Purchase Price), be
duly and validly authorized and issued and fully paid and nonassessable shares.
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From and after such time as the Rights become exercisable, the
Company shall use its best efforts, if then necessary to permit the issuance of
Preferred Shares upon the exercise of Rights, to register and qualify such
shares of Preferred Stock under the Securities Act and any applicable state
securities or "Blue Sky" laws (to the extent exemptions therefrom are not
available), cause such registration statement and qualifications to become
effective as soon as possible after such filing and keep such registration and
qualifications effective until the earlier of the date as of which the Rights
are no longer exercisable for such securities and the Expiration Date. The
Company may temporarily suspend, for a period of time not to exceed 90 days,
the exercisability of the Rights in order to prepare and file a registration
statement under the Securities Act and permit it to become effective. Upon any
such suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction unless the requisite qualification
in such jurisdiction shall have been obtained and until a registration
statement under the Securities Act (if required) shall have been declared
effective.
The Company further covenants and agrees that it will pay when
due and payable any and all Federal and state transfer taxes and charges which
may be payable in respect of the issuance or delivery of the Right Certificates
or of any Preferred Shares (or Common Shares and/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 Right Certificates to a person other than, or the
issuance or delivery of certificates for the Preferred Shares (or Common Shares
and/or other securities, as the case may be) in a name other than that of, the
registered holder of the Right Certificate evidencing Rights surrendered for
exercise or to issue or deliver any certificates for Preferred Shares (or
Common Shares and/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 any such
tax shall have been paid (any such tax being payable by the holder of such
Right Certificate at the time of surrender) or until it has been established to
the Company's satisfaction that no such tax is due.
Section 10. Preferred Shares Record Date. Each person in
whose name any certificate for Preferred Shares (or Common Shares and/or other
securities, as the case may be) is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the Preferred
Shares (or Common Shares and/or other securities, as the case may be)
represented thereby on, and such certificate shall be dated, the date upon
which the Right Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (and any applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date
upon which the Preferred Shares (or Common Shares and/or other securities, as
the case may be) transfer books of the Company are closed, such person shall be
deemed to have become the record holder of such shares (fractional or
otherwise) on, and such certificate shall be dated, the next succeeding
Business Day on which the Preferred Shares (or Common Shares and/or other
securities, as the case may be) transfer books of the Company are open.
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Section 11. Adjustment of Purchase Price, Number of Shares or
Number of Rights. The Purchase Price, the number of shares covered by each
Right and the number of Rights outstanding are subject to adjustment from time
to time as provided in this Section 11.
11.1 Post Execution Events.
11.1.1 Corporate Dividends, Reclassifications, Etc. In the
event the Company shall at any time after the date of this Rights Agreement (A)
declare and pay a dividend on the Preferred Shares payable in Preferred Shares,
(B) subdivide the outstanding Preferred Shares, (C) combine the outstanding
Preferred Shares into a smaller number of Preferred Shares or (D) issue any
shares of its capital stock in a reclassification of the Preferred Shares
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), except
as otherwise provided in this Section 11.1, the Purchase Price in effect at the
time of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of shares
of capital stock issuable on such date, shall be proportionately adjusted so
that the holder of any Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of capital stock which, if such
Right had been exercised immediately prior to such date and at a time when the
Preferred Shares transfer books of the Company were open, he would have owned
upon such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification. If an event occurs which would
require an adjustment under both Section 11.1.1 and Section 11.1.2, the
adjustment provided for in this Section 11.1.1 shall be in addition to, and
shall be made prior to, the adjustment required pursuant to, Section 11.1.2.
11.1.2 Acquiring Person Events; Triggering Events. Subject
to Sections 23.1 and 27 of this Agreement, in the event that:
(A) any Acquiring Person or any Associate or
Affiliate of any Acquiring Person, at any time after the date of this
Rights Agreement, directly or indirectly, shall merge into the Company
or otherwise combine with the Company and the Company shall be the
continuing or surviving corporation of such merger or combination and
the Common Shares of the Company shall remain outstanding and not
changed into or exchanged for stock or other securities of any other
Person or the Company or cash or any other property, or
(B) a Trigger Event occurs,
then, from and after the first occurrence of such event, each holder of a
Right, except as provided below, shall thereafter have a right to receive, upon
exercise thereof at a price per Right equal to the then current Purchase Price
multiplied by the number of one one-hundredths of a Preferred Share for which a
Right is then exercisable
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(without giving effect to this Section 11.1.2), in accordance with the terms of
this Rights Agreement, such number of Common Shares as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the then number
of one one-hundredths of a Preferred Share for which a Right is then
exercisable (without giving effect to this Section 11.1.2) and (y) dividing
that product by 50% of the current per share market price of the Common Shares
(determined pursuant to Section 11.4) on the first of the date of the
occurrence of, or the date of the first public announcement of, one of the
events listed above in this Section 11.1.2 (the "Adjustment Shares"); provided,
however, that if the transaction that would otherwise give rise to the
foregoing adjustment is also subject to the provisions of Section 13, then only
the provisions of Section 13 shall apply and no adjustment shall be made
pursuant to this Section 11.1.2; provided, further, that nothing contained in
this Section 11.1.2 shall limit or otherwise diminish the power of the Board of
Directors to postpone the Distribution Date pursuant to Section 3.1 or to
extend the period during which the Rights may be redeemed pursuant to Section
23.1; provided, further, that the Purchase Price and the number of Adjustment
Shares shall thereafter be subject to further adjustment pursuant to Section
11.6 hereof. Notwithstanding the foregoing, upon the occurrence of either of
the events listed above in this Section 11.1.2, any Rights that are or were
acquired or beneficially owned by (1) an Acquiring Person or any Associate or
Affiliate thereof, (2) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such, or (3) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person with whom
the Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board of Directors
of the Company has determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect avoidance of this Section 11.1.2,
shall become void, and any holder (whether or not such holder is an Acquiring
Person or an Associate or Affiliate of an Acquiring Person) of such Rights
shall thereafter have no right to exercise such Rights under any provision of
this Rights Agreement or otherwise. The Company shall not enter into any
transaction of the type described in this Section 11.1.2 if at the time of such
transaction there are any rights, warrants, instruments or securities
outstanding or any arrangements which, as a result of the consummation of such
transaction, would eliminate or substantially diminish the benefits intended to
be afforded by the Rights. Any Right Certificate issued pursuant to Section 3
or Section 22 that represents Rights beneficially owned by: (1) an Acquiring
Person or any Associate or Affiliate thereof, (2) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee after
the Acquiring Person becomes such, or (3) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or to
any Person with whom the Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer
which the Board of Directors of the Company has determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect avoidance
of this Section 11.1.2, and any Right Certificate issued pursuant to Section 6,
7.4 or 22 or this Section 11 upon transfer, exchange, replacement or adjustment
of any other Right Certificate referred to in this sentence, shall contain the
following legend (provided, however, that the Rights Agent shall not be
responsible for affixing such legend unless it has actual
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<PAGE> 15
knowledge as to the foregoing circumstances or the Company has notified the
Rights Agent in writing thereof):
THE RIGHTS REPRESENTED BY THIS RIGHT CERTIFICATE ARE HELD OR
HAVE BEEN HELD BY A PERSON WHO IS OR WAS AN ACQUIRING PERSON
OR AN AFFILIATE OR AN ASSOCIATE OF AN ACQUIRING PERSON OR A
NOMINEE THEREOF. THIS RIGHT CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY HAVE BECOME NULL AND VOID AS SPECIFIED IN
SECTION 11.1.2 OF THE RIGHTS AGREEMENT.
The Company shall use all reasonable efforts to insure that
the provisions of this Section 11.1.2 are complied with, but shall have no
liability to any holder of Right Certificates or other Person as a result of
its failure to make any determinations with respect to any Acquiring Person or
its Affiliates, Associates or transferees hereunder.
11.1.3 Insufficient Shares. In the event that upon the
occurrence of one or more of the events listed in Section 11.1.2 above there
shall be insufficient Common Shares authorized but unissued, or held by the
Company as treasury shares, to permit the exercise in full of the Rights in
accordance with the foregoing Section 11.1.2, the Company shall take all such
action as may be necessary to authorize additional Common Shares for issuance
upon exercise of the Rights, provided, however, that if the Company determines
that it is unable to cause the authorization of a sufficient number of
additional Common Shares, then, in the event the Rights become exercisable, the
Company, with respect to each Right and to the extent necessary and permitted by
applicable law and any agreements or instruments in effect on the date hereof to
which it is a party, 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 (such excess, the "Spread") and (B) with respect to
each Right, 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) Common Shares or other equity securities of the Company
(including, without limitation, shares, or units of shares, of preferred stock
which the Board of Directors of the Company has deemed to have the same value as
Common Shares) (each such share of preferred stock constituting a "common stock
equivalent"), (4) debt securities of the Company, (5) other assets or (6) any
combination of the foregoing having an aggregate value equal to the Current
Value, where such aggregate value has been determined by the Board of Directors
of the Company based upon the advice of a nationally recognized investment
banking firm selected by the Board of Directors of the Company; provided,
however, that if the Company shall not have made adequate provision to deliver
value pursuant to clause (B) above within thirty (30) days following the first
occurrence of one of the events listed in Section 11.1.2 above, then the Company
shall be obligated to deliver, upon the surrender for exercise of a Right and
without requiring payment of the Purchase Price, Common Shares (to the extent
available) and then, if necessary, cash, which in the aggregate are equal to the
Spread. If the Board of Directors of the Company shall determine in good faith
that it is unlikely that sufficient additional Common Shares could be authorized
for issuance upon exercise in full of the Rights, the thirty (30) day period set
forth above may be extended and re-extended to the extent necessary, but not
more than ninety (90) days following the first occurrence of one of the events
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<PAGE> 16
listed in Section 11.1.2 above, in order that the Company may seek stockholder
approval for the authorization of such additional shares (such period as may be
extended, the "Substitution Period"). To the extent that the Company determines
that some action need be taken pursuant to the first and/or second sentences of
this Section 11.1.3, the Company (x) shall provide that such action shall apply
uniformly to all outstanding Rights, and (y) may suspend the exercisability of
the Rights until the expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to determine the
value thereof. In the event of any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended as well as a public announcement at such time as the
suspension is no longer in effect. For purposes of this Section 11.1.3, the
value of a Common Share shall be the current per share market price (as
determined pursuant to Section 11.4) on the date of the first occurrence of one
of the events listed in Section 11.1.2 above and the value of any "common stock
equivalent" shall be deemed to have the same value as the Common Shares on such
date.
11.2 Dilutive Rights Offering. In case the Company shall fix
a record date for the issuance of rights, options or warrants to all holders of
Preferred Shares entitling them (for a period expiring within 45 calendar days
after such record date) to subscribe for or purchase Preferred Shares (or
securities having the same rights, privileges and preferences as the Preferred
Shares ("equivalent preferred stock")) or securities convertible into Preferred
Shares or equivalent preferred stock at a price per share of Preferred Shares
or per share of equivalent preferred stock (or having a conversion or exercise
price per share, if a security convertible into or exercisable for Preferred
Shares or equivalent preferred stock) less than the current per share market
price of the Preferred Shares (as defined in Section 11.4) on such record date,
the Purchase Price to be in effect after such record date shall be determined
by multiplying the Purchase Price in effect immediately prior to such record
date by a fraction, the numerator of which shall be the number of Preferred
Shares outstanding on such record date plus the number of Preferred Shares
which the aggregate offering price of the total number of Preferred Shares
and/or equivalent preferred stock to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would purchase
at such current per share market price and the denominator of which shall be
the number of Preferred Shares outstanding on such record date plus the number
of additional Preferred Shares and/or equivalent preferred stock to be offered
for subscription or purchase (or into which the convertible securities so to be
offered are initially convertible). In case such subscription price may be
paid in a consideration part or all of which shall be in a form other than
cash, the value of such consideration shall be as determined in good faith by
the Board of Directors of the Company, whose determination shall be described
in a statement filed with the Rights Agent and shall be binding on the Rights
Agent and the holders of the Rights. Preferred Shares owned by or held for the
account of the Company or any Subsidiary of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustments shall be
made successively whenever such a record date is fixed; and in the event that
such rights or warrants are not so issued, the Purchase Price shall be adjusted
to be the Purchase Price which would then be in effect if such record date had
not been fixed.
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11.3 Distributions. In case the Company shall fix a record
date for the making of a distribution to all holders of the Preferred Shares
(including any such distribution made in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation) of
evidences of indebtedness, cash, securities or assets (other than a regular
periodic cash dividend at a rate not in excess of 125% of the rate of the last
regular periodic cash dividend theretofore paid or, in case regular periodic
cash dividends have not theretofore been paid, at a rate not in excess of 50%
of the average net income per share of the Company for the four quarters ended
immediately prior to the payment of such dividend, or a dividend payable in
Preferred Shares (which dividend, for purposes of this Agreement, shall be
subject to the provisions of Section 11.1.1(A) hereof) or convertible
securities, or subscription rights or warrants (excluding those referred to in
Section 11.2), 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 per
share market price of the Preferred Shares (as defined in Section 11.4) on such
record date, less the fair market value (as determined in good faith by the
Board of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent) of the portion of the cash, assets,
securities or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to one Preferred Share and the
denominator of which shall be such current per share market price of the
Preferred Shares. Such adjustments shall be made successively whenever such a
record date is fixed; and in the event that such distribution is not so made,
the Purchase Price shall again be adjusted to be the Purchase Price which would
then be in effect if such record date had not been fixed.
11.4 Current Per Share Market Value.
11.4.1 General. For the purpose of any computation
hereunder, the "current per share market price" of any security (a "Security"
for the purpose of this Section 11.4.1) on any date shall be deemed to be the
average of the daily closing prices per share of such Security for the thirty
(30) consecutive Trading Days (as such term is hereinafter defined) immediately
prior to such date; provided, however, that in the event that the current per
share market price of the Security is determined during any period following
the announcement by the issuer of such Security of (i) a dividend or
distribution on such Security payable in shares of such Security or securities
convertible into such shares or (ii) any subdivision, combination or
reclassification of such Security, and prior to the expiration of thirty (30)
Trading Days after the ex-dividend date for such dividend or distribution, or
the record date for such subdivision, combination or reclassification, then,
and in each such case, the "current per share market price" shall be
appropriately adjusted to reflect the current market price per share equivalent
of such Security. The closing price for each day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either case as reported in
the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange or, if
the Security is not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national securities
exchange on which the Security is listed or admitted to trading or, if the
Security is not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not
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so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by Nasdaq or such other system then in
use, or, if on any such date the Security is not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Security selected by the Board
of Directors of the Company. If on any such date no such market maker is
making a market in the Security, the fair value of the Security on such date as
determined in good faith by the Board of Directors of the Company shall be
used. The term "Trading Day" shall mean a day on which the principal national
securities exchange on which the Security is listed or admitted to trading is
open for the transaction of business or, if the Security is not listed or
admitted to trading on any national securities exchange, a Business Day. If
the Security is not publicly held or not so listed or traded, "current per
share market price" shall mean the fair value per share as determined in good
faith by the Board of Directors of the Company or, if at the time of such
determination there is an Acquiring Person, by a majority of the Continuing
Directors then in office, or if there are no Continuing Directors, by a
nationally recognized investment banking firm selected by the Board of
Directors, which shall have the duty to make such determination in a reasonable
and objective manner, whose determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all purposes.
11.4.2 Preferred Shares. Notwithstanding Section 11.4.1, for
the purpose of any computation hereunder, the "current per share market price"
of the Preferred Shares shall be determined in the same manner as set forth
above in Section 11.4.1 (other than the last sentence thereof). If the current
per share market price of the Preferred Shares cannot be determined in the
manner described in Section 11.4.1, the "current per share market price" of the
Preferred Shares shall be conclusively deemed to be an amount equal to 100 (as
such number may be appropriately adjusted for such events as stock splits,
stock dividends and recapitalizations with respect to the Common Shares
occurring after the date of this Agreement) multiplied by the current per share
market price of the Common Shares. If neither the Common Shares nor the
Preferred Shares is publicly held or so listed or traded, "current per share
market price" of the Preferred Shares shall mean the fair value per share as
determined in good faith by the Board of Directors of the Company, or, if at
the time of such determination there is an Acquiring Person, by a majority of
the Continuing Directors then in office, or if there are no Continuing
Directors, by a nationally recognized investment banking firm selected by the
Board of Directors of the Company, which shall have the duty to make such
determination in a reasonable and objective manner, which determination shall
be described in a statement filed with the Rights Agent and shall be conclusive
for all purposes. For purposes of this Agreement, the "current per share
market price" of one one-hundredth of a Preferred Share shall be equal to the
"current per share market price" of one Preferred Share divided by 100.
11.5 Insignificant Changes. No adjustment in the Purchase
Price shall be required unless such adjustment would require an increase or
decrease of at least 1% in such price. Any adjustments which by reason of this
Section 11.5 are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section
11 shall be made to the nearest cent or to the nearest one-hundred thousandth
of a Preferred Share or the nearest one-hundredth of a Common Share, as the
case may be.
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11.6 Shares Other Than Preferred Shares. If as a result of
an adjustment made pursuant to Section 11.1, the holder of any Right thereafter
exercised shall become entitled to receive any shares of capital stock of the
Company other than Preferred Shares, thereafter the number of such other shares
so receivable upon exercise of any Right shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to
the provisions with respect to the Preferred Shares contained in Sections 11.1
through 11.3, inclusive, and the provisions of Sections 7, 9, 10, 13 and 14
with respect to the Preferred Shares shall apply on like terms to any such
other shares.
11.7 Rights Issued Prior to Adjustment. All Rights
originally issued by the Company subsequent to any adjustment made to the
Purchase Price hereunder shall evidence the right to purchase, at the adjusted
Purchase Price, the number of one one-hundredths of a Preferred Share
purchasable from time to time hereunder upon exercise of the Rights, all
subject to further adjustment as provided herein.
11.8 Effect of Adjustments. Unless the Company shall have
exercised its election as provided in Section 11.9, upon each adjustment of the
Purchase Price as a result of the calculations made in Sections 11.2 and 11.3,
each Right outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price, that
number of one one-hundredths of a Preferred Share (calculated to the nearest
one-hundred thousandth of a Preferred Share) obtained by (i) multiplying (x)
the number of one one-hundredths of a Preferred Share 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.
11.9 Adjustment in Number of Rights. The Company may elect
on or after the date of any adjustment of the Purchase Price to adjust the
number of Rights, in substitution for any adjustment in the number of one
one-hundredths of a Preferred Share issuable upon the exercise of a Right.
Each of the Rights outstanding after such adjustment of the number of Rights
shall be exercisable for the number of one one-hundredths of a Preferred Share
for which a Right was exercisable immediately prior to such adjustment. Each
Right held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest one-hundredth) 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 Right Certificates have been issued, shall be at
least ten (10) days later than the date of the public announcement. If Right
Certificates have been issued, upon each adjustment of the number of Rights
pursuant to this Section 11.9, the Company may, as promptly as practicable,
cause to be distributed to holders of record of Right Certificates on such
record date Right Certificates evidencing, subject to Section 14, the
additional Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be distributed to
such holders of record in substitution and
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replacement for the Right Certificates held by such holders prior to the date
of adjustment, and upon surrender thereof, if required by the Company, new
Right Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Right Certificates so to be distributed shall
be issued, executed and countersigned in the manner provided for herein (and
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 Right Certificates on
the record date specified in the public announcement.
11.10 Right Certificates Unchanged. Irrespective of any
adjustment or change in the Purchase Price or the number of one one-hundredths
of a Preferred Share issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to express the
Purchase Price per share and the number of one one-hundredths of a Preferred
Share which were expressed in the initial Right Certificates issued hereunder.
11.11 Par Value Limitations. Before taking any action that
would cause an adjustment reducing the Purchase Price below one one-hundredth
of the then par value, if any, of the Preferred Shares issuable upon exercise
of the Rights, the Company shall take any corporate action which may, in the
opinion of its counsel, be necessary in order that the Company may validly and
legally issue fully paid and nonassessable Preferred Shares at such adjusted
Purchase Price.
11.12 Deferred Issuance. In any case in which this Section
11 shall require that an adjustment in the Purchase Price be made effective as
of a record date for a specified event, the Company may elect to defer until
the occurrence of such event the issuing to the holder of any Right exercised
after such record date of the Preferred Shares and other capital stock or
securities of the Company, if any, issuable upon such exercise over and above
the Preferred Shares and other capital stock or securities of the Company, if
any, issuable upon such exercise on the basis of the Purchase Price in effect
prior to such adjustment; provided, however, that the Company shall deliver to
such holder a due bill or other appropriate instrument evidencing such holder's
right to receive such additional shares upon the occurrence of the event
requiring such adjustment.
11.13 Reduction in Purchase Price. Anything in this Section
11 to the contrary notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that it in its sole
discretion shall determine to be advisable in order that any consolidation or
subdivision of the Preferred Shares, issuance wholly for cash of any of the
Preferred Shares at less than the current market price, issuance wholly for
cash of Preferred Shares or securities which by their terms are convertible
into or exchangeable for Preferred Shares, dividends on Preferred Shares
payable in Preferred Shares or issuance of rights, options or warrants referred
to hereinabove in this Section 11, hereafter made by the Company to holders of
its Preferred Shares shall not be taxable to such stockholders.
11.14 Company not to Diminish Benefits of Rights. The
Company covenants and agrees that after the earlier of the Shares Acquisition
Date or the Distribution Date it will
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not, except as permitted by Section 23, Section 26 or Section 27, take (or
permit any Subsidiary to take) any action if at the time such action is taken
it is reasonably foreseeable that such action will substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights.
11.15 Adjustment of Rights Associated with Common Shares.
Notwithstanding anything contained in this Agreement to the contrary, in the
event that the Company shall at any time after the date hereof and prior to the
Distribution Date (i) declare or pay any dividend on the outstanding Common
Shares payable in Common Shares, (ii) effect a subdivision or consolidation of
the outstanding Common Shares (by reclassification or otherwise than by the
payment of dividends payable in Common Shares), or (iii) combine the
outstanding Common Shares into a greater or lesser number of Common Shares,
then in any such case, the number of Rights associated with each Common Share
then outstanding, or issued or delivered thereafter but prior to the
Distribution Date, shall be proportionately adjusted so that the number of
Rights thereafter associated with each Common Share following any such event
shall equal the result obtained by multiplying the number of Rights associated
with each Common Share immediately prior to such event by a fraction, the
numerator of which shall be the total number of Common Shares outstanding
immediately prior to the occurrence of the event and the denominator of which
shall be the total number of Common Shares outstanding immediately following
the occurrence of such event. The adjustments provided for in this Section
11.15 shall be made successively whenever such a dividend is declared or paid
or such a subdivision, combination or consolidation is effected.
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares. Whenever an adjustment is made as provided in Sections 11 or 13,
the Company shall (i) promptly prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment,
(ii) promptly file with the Rights Agent and with each transfer agent for the
Common Shares or the Preferred Shares a copy of such certificate and (iii) mail
a brief summary thereof to each holder of a Right Certificate in accordance
with Section 25. 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.
13.1 General. In the event that, from and after the first
occurrence of a Trigger Event, directly or indirectly, (A) the Company shall
consolidate with, or merge with and into, any other Person and the Company
shall not be the continuing or surviving corporation, (B) any Person shall
consolidate with the Company, or merge with and into the Company and the
Company shall be the continuing or surviving corporation of such merger and, in
connection with such merger, all or part of the Common Shares shall be changed
into or exchanged for stock or other securities of the Company or any other
Person or cash or any other property, or (C) the Company shall sell, exchange,
mortgage or otherwise transfer (or one or more of its Subsidiaries shall sell,
exchange, mortgage or otherwise transfer), in one or more transactions,
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<PAGE> 22
assets or earning power aggregating 50% or more of the assets or earning power
of the Company and its Subsidiaries (taken as a whole) to any other Person or
Persons, then, and in each such case, proper provision shall be made so that
(i) each holder of a Right (except as provided in Section 11.1.2 and as
otherwise provided herein) shall thereafter have the right to receive, upon the
exercise thereof at a price per Right equal to the then current Purchase Price
multiplied by the number of one one-hundredths of a Preferred Share for which a
Right was exercisable immediately prior to the first occurrence of a Trigger
Event (as subsequently adjusted pursuant to Sections 11.1.1, 11.2, 11.3, 11.8,
11.9 and 11.12), in accordance with the terms of this Rights Agreement and in
lieu of Preferred Shares, such number of Common Shares of such other Person
(including the Company as successor thereto or as the surviving corporation) as
shall be equal to the result obtained by (x) multiplying the then current
Purchase Price by the number of one one-hundredths of a Preferred Share for
which a Right was exercisable immediately prior to the first occurrence of a
Trigger Event (as subsequently adjusted pursuant to Sections 11.1.1, 11.2,
11.3, 11.8, 11.9 and 11.12) and (y) dividing that product by 50% of the then
current per share market price of the Common Shares of such other Person
(determined pursuant to Section 11.4) on the date of consummation of such
consolidation, merger, sale or transfer; provided, that the price per Right so
payable and the number of Common Shares of such Person so purchasable shall
thereafter be adjusted in accordance with Section 11.6 by reason of such
subsequent events covered thereby occurring in respect of such Person; (ii) the
issuer of such Common Shares shall thereafter be liable for, and shall assume,
by virtue of such consolidation, merger, sale or transfer, all the obligations
and duties of the Company pursuant to this Rights Agreement; (iii) the term
"Company" shall thereafter be deemed to refer to such issuer; and (iv) such
issuer shall take such steps (including, but not limited to, the reservation of
a sufficient number of its Common Shares in accordance with Section 9) in
connection with such consummation as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably may
be, in relation to its Common Shares thereafter deliverable upon the exercise
of the Rights. The Company shall not enter into any transaction of the kind
referred to in this Section 13 if at the time of such transaction there are any
rights, warrants, instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such transaction, would
eliminate or substantially diminish the benefits intended to be afforded by the
Rights. The Company shall not consummate any such consolidation, merger, sale
or transfer unless prior thereto the Company and such issuer shall have
executed and delivered to the Rights Agent a supplemental agreement so
providing. The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.
13.2 Approved Acquisitions. Notwithstanding anything
contained herein to the contrary, in the event of any merger or other
acquisition transaction involving the Company pursuant to a merger or other
acquisition agreement between the Company and any Person (or one or more of
such Person's Affiliates or Associates) which agreement has been approved by
the Board of Directors of the Company prior to any Person becoming an Acquiring
Person, this Rights Agreement and the rights of holders of Rights hereunder
shall be terminated in accordance with Section 7.1.
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Section 14. Fractional Rights and Fractional Shares.
14.1 Cash in Lieu of Fractional Rights. The Company shall
not be required to issue fractions of Rights or to distribute Right
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Right Certificates
with regard to which such fractional Rights would otherwise be issuable an
amount in cash equal to the same fraction of the current market value of a
whole Right. For the purposes of this Section 14.1, 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 for any day shall be the last sale
price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the Rights are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Rights are listed or admitted to trading or,
if the Rights are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by Nasdaq
or such other system then in use or, if on any such date the Rights are not
quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the
Rights selected by the Board of Directors of the Company. If on any such date
no such market maker is making a market in the Rights, the fair value of the
Rights on such date as determined in good faith by the Board of Directors of
the Company shall be used.
14.2 Cash in Lieu of Fractional Shares. The Company shall
not be required to issue fractions of Preferred Shares (other than fractions
which are integral multiples of one one-hundredth of a Preferred Share) upon
exercise of the Rights or to distribute certificates which evidence fractional
Preferred Shares (other than fractions which are integral multiples of one
one-hundredth of a Preferred Share). Fractions of Preferred Shares in integral
multiples of one one-hundredth of a Preferred Share may, at the election of the
Company, be evidenced by depositary receipts, pursuant to an appropriate
agreement between the Company and a depositary selected by it; provided, that
such agreement shall provide that the holders of such depositary receipts shall
have all the rights, privileges and preferences to which they are entitled as
beneficial owners of the Preferred Shares represented by such depositary
receipts. In lieu of fractional Preferred Shares that are not integral
multiples of one one-hundredth of a Preferred Share, the Company shall pay to
the registered holders of Right Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of
the current per share market price of one Preferred Share. For purposes of
this Section 14.2, the current per share market price of a Preferred Share
shall be the closing price of a Preferred Share (as determined pursuant to the
second sentence of Section 11.4.2) for the Trading Day immediately prior to the
date of such exercise.
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14.3 Waiver of Right to Receive Fractional Rights or Shares.
The holder of a Right by the acceptance of the Rights expressly waives his
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 Rights Agreement, except the rights of action given to the
Rights Agent under Section 18, are vested in the respective registered holders
of the Right Certificates (and, prior to the Distribution Date, the registered
holders of the Common Shares); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Shares), without
the consent of the Rights Agent or of the holder of any other Right Certificate
(or, prior to the Distribution Date, of the Common Shares), may, in his own
behalf and for his own benefit, enforce this Rights Agreement, and may
institute and maintain any suit, action or proceeding against the Company to
enforce this Rights Agreement, or otherwise enforce or act in respect of his
right to exercise the Rights evidenced by such Right Certificate in the manner
provided in such Right Certificate and in this Rights 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 Rights Agreement and shall be
entitled to specific performance of the obligations under, and injunctive
relief against actual or threatened violations of, the obligations of any
Person (including, without limitation, the Company) subject to this Rights
Agreement.
Section 16. Agreement of Right Holders. Every holder of a
Right by accepting the same consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights
will be transferable only in connection with the transfer of the
Common Shares;
(b) as of and after the Distribution Date, the
Right Certificates are transferable only on the registry books of the
Rights Agent if surrendered at the office of the Rights Agent
designated for such purpose, duly endorsed or accompanied by a proper
instrument of transfer with all required certifications completed; and
(c) the Company and the Rights Agent may deem and
treat the Person in whose name the Right Certificate (or, prior to the
Distribution Date, the associated Common Shares certificate) is
registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on the
Right Certificates or the associated Common Shares certificate made by
anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Right Certificate shall be entitled to
vote, receive dividends or be deemed for any purpose the holder of the
Preferred Shares or any other securities of the Company which may at any time
be issuable on the exercise of the Rights represented thereby, nor shall
anything
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contained herein or in any Right Certificate be construed to confer upon the
holder of any Right Certificate, as such, any of the rights of a stockholder of
the Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in Section 24), or to
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. The Company agrees
to pay to the Rights Agent reasonable compensation for all services rendered by
it hereunder in accordance with a fee schedule to be mutually agreed upon and,
from time to time, on demand of the Rights Agent, its reasonable expenses and
counsel fees and other disbursements incurred in the administration and
execution of this Rights 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 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 Rights Agreement, including the costs and
expenses of defending against any claim of liability in the premises.
The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Rights Agreement in reliance upon
any Right Certificate or certificate for the Preferred Shares or the Common
Shares or for other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice,
instruction, direction, consent, certificate, statement, or other paper or
document believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons. In no
case shall the Rights Agent be liable for special, indirect, incidental, or
consequential loss or damage of any kind whatsoever, even if the Rights Agent
has been advised of the possibility of such loss or damage.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent. Any corporation or limited liability company into which the
Rights Agent or any successor Rights Agent may be merged or with which it may
be consolidated, or any corporation or limited liability company resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation or limited liability company
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 Rights Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such
corporation or limited liability company would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21. In case at the time
such successor Rights Agent shall succeed to the agency created by this Rights
Agreement, any of the Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of
the predecessor Rights Agent and deliver such Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall not
have been countersigned, any successor Rights Agent may countersign such Right
Certificates either
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<PAGE> 26
in the name of the predecessor Rights Agent or in the name of the successor
Rights Agent; and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Rights Agreement.
In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall not
have been countersigned, the Rights Agent may countersign such Right
Certificates either in its prior name or in its changed name; and in all such
cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Rights Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Rights Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Right Certificates, by their acceptance thereof, shall be bound:
20.1 Legal Counsel. The Rights Agent may consult with legal
counsel selected by it (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.
20.2 Certificates as to Facts or Matters. Whenever in the
performance of its duties under this Rights Agreement the Rights Agent shall
deem it necessary or desirable that any fact or matter be proved or established
by the Company prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by any one of the Chairman of the Board of Directors, the
Chief Executive Officer, the President, the Chief Financial Officer, any Vice
President, the Treasurer, the Secretary or any Assistant Treasurer or Assistant
Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any action
taken or suffered in good faith by it under the provisions of this Rights
Agreement in reliance upon such certificate.
20.3 Standard of Care. The Rights Agent shall be liable
hereunder only for its own negligence, bad faith or willful misconduct.
20.4 Reliance on Rights Agreement and Right Certificates.
The Rights Agent shall not be liable for or by reason of any of the statements
of fact or recitals contained in this Rights Agreement or in the Right
Certificates (except as to its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed
to have been made by the Company only.
20.5 No Responsibility as to Certain Matters. The Rights
Agent shall not be under any responsibility in respect of the validity of this
Rights Agreement or the execution and delivery hereof (except the due execution
hereof by the Rights Agent) or in respect of the validity
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<PAGE> 27
or execution of any Right Certificate (except its countersignature thereof);
nor shall it be responsible for any breach by the Company of any covenant or
condition contained in this Rights Agreement or in any Right Certificate; nor
shall it be responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 11.1.2) or any
adjustment required under the provisions of Sections 3, 11, 13, 23 or 27 or
responsible for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such adjustment
(except with respect to the exercise of Rights evidenced by Right Certificates
after actual notice of 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 Preferred Shares to be issued pursuant to this Rights
Agreement or any Right Certificate or as to whether any Preferred Shares will,
when so issued, be validly authorized and issued, fully paid and nonassessable.
20.6 Further Assurance by Company. 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 Rights Agreement.
20.7 Authorized Company Officers. The Rights Agent is hereby
authorized and directed to accept instructions with respect to the performance
of its duties hereunder from any one of the Chairman of the Board of Directors,
the Chief Executive Officer, the President, the Chief Financial Officer, any
Vice President, the Treasurer, the Secretary or any Assistant Treasurer or
Assistant Secretary of the Company, and to apply to such officers for advice or
instructions in connection with its duties under this Rights Agreement, and it
shall not be liable for any action taken or suffered to be taken by it in good
faith in accordance with instructions of any such officer or for any delay in
acting while waiting for these instructions. Any application by the Rights
Agent for written instructions from the Company may, at the option of the
Rights Agent, set forth in writing any action proposed to be taken or omitted
by the Rights Agent with respect to its duties or obligations under this Rights
Agreement and the date on and/or after which such action shall be taken or
omitted. The Rights Agent shall not be liable to the Company for any action
taken or omitted in accordance with a proposal included in any such application
on or after the date specified therein (which date shall not be less than three
business days after the date any such officer actually receives such
application, unless any such officer shall have consented in writing to an
earlier date) unless, prior to taking of any such action (or the effective date
in the case of omission), the Rights Agent shall have received written
instructions in response to such application specifying the action to be taken
or omitted.
20.8 Freedom to Trade in Company Securities. The Rights
Agent and any stockholder, director, officer or employee of the Rights Agent
may buy, sell or deal in any of the Rights or other securities of the Company
or become pecuniarily interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or otherwise act as
fully and freely as though it were not Rights Agent under this Rights
Agreement. Nothing herein shall preclude the Rights Agent from acting in any
other capacity for the Company or for any other legal entity.
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20.9 Reliance on Attorneys and Agents. 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, omission,
default, neglect or misconduct of any such attorneys or agents or for any loss
to the Company resulting from any such act, omission, default, neglect or
misconduct, provided that reasonable care was exercised in the selection and
continued employment thereof.
20.10 Rights Holders List. At any time and from time to time
after the Distribution Date, upon the request of the Company, the Rights Agent
shall promptly deliver to the Company a list, as of the most recent practicable
date (or as of such earlier date as may be specified by the Company), of the
holders of record of Rights.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Rights Agreement upon thirty (30) days' notice in writing mailed to the Company
and to each transfer agent of the Common Shares and/or Preferred Shares, as
applicable, by registered or certified mail. Following the Distribution Date,
the Company shall promptly notify the holders of the Right Certificates by
first-class mail of any such resignation. The Company may remove the Rights
Agent or any successor Rights Agent upon thirty (30) days' notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the case may be, and
to each transfer agent of the Common Shares and/or Preferred Shares, as
applicable, by registered or certified mail, and to the holders of the Right
Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the resigning, removed,
or incapacitated Rights Agent shall remit to the Company, or to any successor
Rights Agent designated by the Company, all books, records, funds, certificates
or other documents or instruments of any kind then in its possession which were
acquired by such resigning, removed or incapacitated Rights Agent in connection
with its services as Rights Agent hereunder, and shall thereafter be discharged
from all duties and obligations hereunder. Following notice of such removal,
resignation or incapacity, the Company shall appoint a successor to such Rights
Agent. If the Company shall fail to make such appointment within a period of
thirty (30) days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by the Company),
then the registered holder of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be a corporation organized and doing business under the laws of the
United States or of the State of New York or the State of California (or any
other state of the United States so long as such corporation is authorized to
do business as a banking institution in the State of New York or California) in
good standing, having an office in the State of New York or the State of
California, which is authorized under such laws to exercise stock transfer or
corporate trust powers and is subject to supervision or examination by Federal
or state authority and which has at the time of its appointment as Rights Agent
a combined capital and surplus of at least $10 million. After appointment, the
successor Rights Agent shall be vested with the same powers,
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<PAGE> 29
rights, duties and responsibilities as if it had been originally named as
Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the
effective date of any such appointment the Company shall file notice thereof in
writing with the predecessor Rights Agent and each transfer agent of the Common
Shares and/or Preferred Shares, as applicable, and, following the Distribution
Date, mail a notice thereof in writing to the registered holders of the Right
Certificates. Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity of
the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Rights Agreement or of the Rights
to the contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the Purchase Price and the number or kind
or class of shares or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this Rights Agreement.
In addition, in connection with the issuance or sale of Common Shares following
the Distribution Date and prior to the redemption, exchange, termination or
expiration of the Rights, the Company (a) shall, with respect to Common Shares
so issued or sold pursuant to the exercise of stock options or under any
employee plan or arrangement, granted or awarded as of the Distribution Date,
or upon exercise, conversion or exchange of securities hereinafter issued by
the Company, and (b) may, in any other case, if deemed necessary or appropriate
by the Board of Directors of the Company, issue Right Certificates representing
the appropriate number of Rights in connection with such issuance or sale;
provided, however, that (i) no such Right 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 Right Certificate would be issued, (ii) no
such Right Certificate shall be issued if, and to the extent that, appropriate
adjustment shall otherwise have been made in lieu of the issuance thereof and
(iii) at the time of a determination by the Board of Directors to cause the
Company to issue a Right Certificate under clause (b) above, there must be
Continuing Directors then in office and any such determination shall require
the approval of at least a majority of such Continuing Directors.
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Section 23. Redemption.
23.1 Right to Redeem. The Board of Directors of the Company
may, at its option, at any time prior to the close of business on the tenth day
following the Shares Acquisition Date, redeem all but not less than all of the
then outstanding Rights at a redemption price of $.01 per Right, appropriately
adjusted to reflect any stock split, stock dividend, recapitalization or
similar transaction occurring after the date hereof (such redemption price
being hereinafter referred to as the "Redemption Price"), and the Company may,
at its option, pay the Redemption Price in Common Shares (based on the "current
per share market price," as defined in Section 11.4 hereof, of the Common
Shares at the time of redemption), cash or any other form of consideration
deemed appropriate by the Board of Directors, PROVIDED, HOWEVER, that if the
Board of Directors of the Company authorizes redemption of the Rights after the
time a Person becomes an Acquiring Person, then there must be Continuing
Directors then in office and such authorization shall require the approval of
at least a majority of such Continuing Directors. The preceding sentence
notwithstanding, prior to the expiration of the period during which the Rights
may be redeemed as specified therein (or such longer period as the Board of
Directors of the Company may select pursuant to this sentence), the Board of
Directors of the Company may extend, one or more times, the period during which
the Rights may be redeemed beyond the close of business on the tenth day
following the Shares Acquisition Date; PROVIDED, HOWEVER, that there must be
Continuing Directors then in office and any such extension shall require the
approval of at least a majority of such Continuing Directors. The redemption
of the Rights by the Board of Directors may be made effective at such time, on
such basis and subject to such conditions as the Board of Directors in its sole
discretion may establish. Notwithstanding anything contained in this Rights
Agreement to the contrary notwithstanding, the Rights shall not be exercisable
following a transaction or event described in Section 11.1.2 prior to the
expiration or termination of the Company's right of redemption hereunder.
23.2 Redemption Procedures. Immediately upon the action of
the Board of Directors of the Company ordering the redemption of the Rights (or
at such later time as the Board of Directors may establish for the
effectiveness of such redemption), and without any further action and without
any notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price
for each Right so held. The Company shall promptly give public notice of such
redemption; provided, however, that the failure to give, or any defect in, any
such notice shall not affect the validity of such redemption. The Company
shall promptly give, or cause the Rights Agent to give, notice of such
redemption to the holders of the then outstanding Rights by mailing such notice
to all such holders at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agent for the Common Shares. Any notice which is mailed
in the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state the method by
which the payment of the Redemption Price will be made. Neither the Company
nor any of its Affiliates or Associates may redeem, acquire or purchase for
value any Rights at any time in any manner other than that specifically set
forth in this Section 23 or in Section 27, and
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other than in connection with the purchase, acquisition or redemption of Common
Shares prior to the Distribution Date.
Section 24. Notice of Certain Events. In case the Company
shall propose at any time after the earlier of the Shares Acquisition Date or
the Distribution Date (a) to pay any dividend payable in stock of any class to
the holders of Preferred Shares or to make any other distribution to the
holders of Preferred Shares (other than a regular periodic cash dividend at a
rate not in excess of 125% of the rate of the last regular periodic cash
dividend theretofore paid or, in case regular periodic cash dividends have not
theretofore been paid, at a rate not in excess of 50% of the average net income
per share of the Company for the four quarters ended immediately prior to the
payment of such dividends, or a stock dividend on, or a subdivision,
combination or reclassification of, the Common Shares), or (b) to offer to the
holders of Preferred Shares rights or warrants to subscribe for or to purchase
any additional Preferred Shares or shares of stock of any class or any other
securities, rights or options, or (c) to effect any reclassification of its
Preferred Shares (other than a reclassification involving only the subdivision
of outstanding Preferred Shares), or (d) to effect any consolidation or merger
into or with, or to effect any sale or other transfer (or to permit one or more
of its Subsidiaries to effect any sale or other transfer), in one or more
transactions, of 50% or more of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to, any other Person (other than pursuant
to a merger or other acquisition agreement of the type described in Section
1.3(ii)(A)(z)), or (e) to effect the liquidation, dissolution or winding up of
the Company, or (f) to declare or pay any dividend on the Common Shares payable
in Common Shares or to effect a subdivision, combination or consolidation of
the Common Shares (by reclassification or otherwise than by payment of
dividends in Common Shares), then, in each such case, the Company shall give to
the Rights Agent and to each holder of a Right Certificate, in accordance with
Section 25, 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, merger,
sale, transfer, liquidation, dissolution, or winding up is to take place and
the date of participation therein by the holders of the Preferred Shares and/or
Common Shares, if any such date is to be fixed, and such notice shall be so
given in the case of any action covered by clause (a) or (b) above at least ten
(10) days prior to the record date for determining holders of the Preferred
Shares for purposes of such action, and in the case of any such other action,
at least ten (10) days prior to the date of the taking of such proposed action
or the date of participation therein by the holders of the Preferred Shares
and/or Common Shares, whichever shall be the earlier.
In case any event set forth in Section 11.1.2 or Section 13
shall occur, then, in any such case, (i) the Company shall as soon as
practicable thereafter give to the Rights Agent and to each holder of a Right
Certificate, in accordance with Section 25, a notice of the occurrence of such
event, which notice shall describe the event and the consequences of the event
to holders of Rights under Section 11.1.2 and Section 13, and (ii) all
references in this Section 24 to Preferred Shares shall be deemed thereafter to
refer to Common Shares and/or, if appropriate, other securities.
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Notwithstanding anything in this Rights Agreement to the
contrary, prior to the Distribution Date a filing by the Company with the
Securities and Exchange Commission shall constitute sufficient notice to the
holders of securities of the Company, including the Rights, for purposes of
this Rights Agreement and no other notice need be given.
Section 25. Notices. Notices or demands authorized by this
Rights Agreement to be given or made by the Rights Agent or by the holder of
any Right Certificate to or on the Company shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Rights Agent) as follows:
Thompson PBE, Inc.
4553 Glencoe Avenue, Suite 200
Marina del Rey, California 90292
Attention: Chief Financial Officer
Subject to the provisions of Section 21, any notice or demand authorized by
this Rights Agreement to be given or made by the Company or by the holder of
any Right 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:
ChaseMellon Shareholder Services, L.L.C.
400 South Hope Street, 4th Floor
Los Angeles, California 90071
Attention: Ms. Mary Ann McElroy
Notices or demands authorized by this Rights Agreement to be given or made by
the Company or the Rights Agent to the holder of any Right Certificate (or,
prior to the Distribution Date, to the holder of any certificate representing
Common Shares) shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such holder as
shown on the registry books of the Company.
Section 26. Supplements and Amendments. For so long as
the Rights are then redeemable, the Company may in its sole and absolute
discretion, and the Rights Agent shall, if the Company so directs, supplement
or amend any provision of this Rights Agreement in any respect without the
approval of any holders of Rights or Common Shares. From and after the time
that the Rights are no longer redeemable, the Company may, and the Rights Agent
shall, if the Company so directs, from time to time supplement or amend this
Rights Agreement without the approval of any holders of Rights (i) to cure any
ambiguity or to correct or supplement any provision contained herein which may
be defective or inconsistent with any other provisions herein, (ii) to shorten
or lengthen any time period hereunder (which shortening or lengthening, after
the time a Person becomes an Acquiring Person, shall be effective only if there
are Continuing Directors and shall require the approval of at least a majority
of such Continuing Directors) or (iii) to make any other changes or provisions
in regard to matters or questions arising hereunder which the Company may deem
necessary or desirable, including but not limited to extending the Final
Expiration Date; provided, however, that no such supplement or
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amendment shall adversely affect the interests of the holders of Rights as such
(other than an Acquiring Person or an Affiliate or Associate of an Acquiring
Person) and no such supplement or amendment may cause the Rights again to
become redeemable or cause this Rights Agreement again to become amendable
other than in accordance with this sentence; provided further, that the right
of the Board of Directors to extend the Distribution Date shall not require any
amendment or supplement hereunder. 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. Without limiting the foregoing, at
any time prior to such time as any Person becomes an Acquiring Person, the
Company and the Rights Agent may amend this Agreement to lower the thresholds
set forth in Sections 1.1 and 3.1 to not less than the greater of (i) any
percentage greater than the largest percentage of the outstanding Common Shares
then known by the Company to be beneficially owned by any Person (other than
the Company, any Subsidiary of the Company, any employee benefit plan of the
Company or any Subsidiary of the Company, or any entity holding Common Shares
for or pursuant to the terms or any such plan) and (ii) 10%.
Section 27. Exchange.
27.1 Exchange of Common Shares for Rights. The Board of
Directors of the Company may, at its option, at any time after the occurrence
of a Trigger Event, exchange Common Shares for all or part of the then
outstanding and exercisable Rights (which shall not include Rights that have
become void pursuant to the provisions of Section 11.1.2) by exchanging one
Common Share per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such
amount per Right being hereinafter referred to as the "Exchange
Consideration"). Notwithstanding the foregoing, (i) the Board of Directors
shall not be empowered to effect such exchange at any time after any Person
(other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or any such Subsidiary, or any entity holding Common Shares
for or pursuant to the terms of any such plan), together with all Affiliates
and Associates of such Person, becomes the Beneficial Owner of 50% or more of
the Common Shares then outstanding and (ii) the Board shall not be empowered to
effect an exchange for more than that number of Rights for which there are
sufficient Common Shares authorized but unissued, or held by the Company as
treasury shares, to permit the exchange for Rights. From and after the
occurrence of an event specified in Section 13.1 hereof, any Rights that
theretofore have not been exchanged pursuant to this Section 27.1 shall
thereafter be exerciseable only in accordance with Section 13 and may not be
exchanged pursuant to this Section 27.1. The exchange of the Rights by the
Board of Directors may be made effective at such time, on such basis and with
such conditions as the Board of Directors in its sole discretion may establish.
27.2 Exchange Procedures. Immediately upon the action of the
Board of Directors of the Company ordering the exchange for any Rights pursuant
to Section 27.1 and without any further action and without any notice, the
right to exercise such Rights shall
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terminate and the only right thereafter of a holder of such Rights shall be to
receive one Common Share. The Company shall promptly give public notice of any
such exchange; provided, however, that the failure to give, or any defect in,
such notice shall not affect the validity of such exchange. The Company
promptly shall mail a notice of any such exchange to all of the holders of such
Rights at their last addresses as they appear upon the registry books of the
Rights Agent. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice
of exchange will state the method by which the exchange of the Common Shares
for Rights will be effected and, in the event of any partial exchange, the
number of Rights which will be exchanged. Any partial exchange shall be
effected pro rata based on the number of Rights (other than the Rights which
have become void pursuant to the provisions of Section 11.1.2) held by each
holder of Rights.
27.3 Insufficient Common Shares. The Company may at its
option substitute, and, in the event that there shall be insufficient Common
Shares issued but not outstanding or authorized but unissued to permit an
exchange of Rights for Common Shares as contemplated in accordance with this
Section 27, the Company shall substitute to the extent of such insufficiency,
for each Common Share that would otherwise be issuable upon exchange of a
Right, a number of Preferred Shares or fraction thereof (or equivalent
preferred shares, as such term is defined in Section 11.2) such that the
current per share market price (determined pursuant to Section 11.4 hereof) of
one Preferred Share (or equivalent preferred share) multiplied by such number
or fraction is equal to the current per share market price of one Common Share
(determined pursuant to Section 11.4) as of the date of such exchange.
Section 28. Successors. All the covenants and provisions of
this Rights Agreement by or for the benefit of the Company or the Rights Agent
shall bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 29. Benefits of this Rights Agreement. Nothing in
this Rights Agreement shall be construed to give to any Person or corporation
other than the Company, the Rights Agent and the registered holders of the
Right Certificates (and, prior to the Distribution Date, the Common Shares) any
legal or equitable right, remedy or claim under this Rights Agreement; but this
Rights Agreement shall be for the sole and exclusive benefit of the Company,
the Rights Agent and the registered holders of the Right Certificates (and,
prior to the Distribution Date, the Common Shares).
Section 30. Determinations and Actions by the Board of
Directors. The Board of Directors of the Company shall have the exclusive
power and authority to administer this Agreement and to exercise the rights and
powers specifically granted to the Board of Directors of the Company or to the
Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i) interpret
the provisions of this Agreement and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement (including,
without limitation, a determination to redeem or not redeem the Rights or amend
this Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions with
respect to the foregoing) that are done or made by the Board of Directors of
the Company in good faith, shall
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(x) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights, as such, and all other parties, and (y) not subject the
Board of Directors to any liability to the holders of the Rights.
Section 31. Severability. If any term, provision, covenant
or restriction of this Rights 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 Rights
Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
Section 32. Governing Law. This Rights Agreement and each
Right Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State.
Section 33. Counterparts. This Rights Agreement may be
executed in any number of counterparts and each of such counterparts shall for
all purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
Section 34. Descriptive Heading. Descriptive headings of the
several Sections of this Rights Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
* * * * *
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed and their respective corporate seals to be
hereunto affixed, all as of the day and year first above written.
THOMPSON PBE, INC.
By: /s/ MORTIMER A. KLINE
--------------------------------
Name: Mortimer A. Kline, III
Title: Chief Executive Officer
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CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By: /s/ MARY ANN MCELROY
------------------------------------
Name: Mary Ann McElroy
Title: Relationship Manager
<PAGE> 37
EXHIBIT A
CERTIFICATE OF DESIGNATIONS
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
THOMPSON PBE, INC.
Pursuant to Section 151 of the
Delaware General Corporation Law
_____________________________
Thompson PBE, Inc., a corporation organized and existing under the
General Corporation Law of the State of Delaware (hereinafter called the
"Corporation"), hereby certifies that the following resolution was adopted by
the Board of Directors of the Corporation as required by Section 151 of the
General Corporation Law at a meeting duly called and held on May 6, 1997.
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Corporation (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the Certificate
of Incorporation, the Board of Directors hereby creates a series of Preferred
Stock, par value $.001 per share (the "Preferred Stock"), of the Corporation
and hereby states the designation and number of shares, and fixes the relative
rights, powers and preferences, and qualifications, limitations and
restrictions thereof as follows:
Section 1. Designation and Amount. The shares of such series shall
be designated as "Series A Junior Participating Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting the Series A Preferred
Stock shall be 250,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided, that no decrease shall reduce
the number of shares of Series A Preferred Stock to a number less than the
number of shares then outstanding plus the number of shares reserved for
issuance upon the exercise of outstanding options, rights or warrants or upon
the conversion of any outstanding securities issued by the Corporation
convertible into Series A Preferred Stock.
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<PAGE> 38
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of any
class or series of stock of this Corporation ranking prior and
superior to the Series A Preferred Stock with respect to dividends,
the holders of shares of Series A Preferred Stock, in preference to
the holders of Common Stock, par value $.001 per share (the "Common
Stock"), of the Corporation, and of any other junior stock, shall be
entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the first day of March, June, September
and December in each year (each such date being referred to herein as
a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series A Preferred Stock, in an amount per
share (rounded to the nearest cent) equal to the greater of (a) $1.00
or (b) subject to the provision for adjustment hereinafter set forth,
100 times the aggregate per share amount of all cash dividends, and
100 times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions, other than a dividend
payable in shares of Common Stock or a subdivision of the outstanding
shares of Common Stock (by reclassification or otherwise), declared on
the Common Stock since the immediately preceding Quarterly Dividend
Payment Date or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of
Series A Preferred Stock. In the event the Corporation shall at any
time declare or pay any dividend on the Common Stock payable in shares
of Common Stock, or effect a subdivision, combination or consolidation
of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock)
into a greater or lesser number of shares of Common Stock, then in
each such case the amount to which holders of shares of Series A
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 Preferred Stock as provided in paragraph (A) of this
Section 2 immediately after it declares a dividend or distribution on
the Common Stock (other than a dividend payable in shares of Common
Stock); provided that, in the event no dividend or distribution shall
have been declared on the Common Stock during the period between any
Quarterly Dividend Payment Date and the next subsequent Quarterly
Dividend Payment Date, a dividend of $1.00 per share on the Series A
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 Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares,
unless the date of issue of such shares is prior to the record
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<PAGE> 39
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 Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but
unpaid dividends shall not bear interest. Dividends paid on the
shares of Series A 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
Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be not more
than 60 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Preferred Stock shall entitle the holder
thereof to 100 votes on all matters submitted to a vote of the
stockholders of the Corporation. In the event the Corporation shall
at any time declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision, combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the number of votes per share to which
holders of shares of Series A Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the number of shares
of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in any other
Certificate of Designations creating a series of Preferred Stock or
any similar stock, or by law, the holders of shares of Series A
Preferred Stock and the holders of shares of Common Stock and any
other capital stock of the Corporation having general voting rights
shall vote together as one class on all matters submitted to a vote of
stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise provided by
law, holders of Series A 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.
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Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A 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 Preferred Stock outstanding shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding
up) to the Series A Preferred Stock;
(ii) declare or pay dividends, 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 Preferred Stock, except
dividends paid ratably on the Series A Preferred Stock and all
such parity stock on which dividends are payable or in arrears
in proportion to the total amounts to which the holders of all
such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to
the Series A Preferred Stock, provided that the Corporation
may at any time redeem, purchase or otherwise acquire shares
of any such junior stock in exchange for shares of any stock
of the Corporation ranking junior (either as to dividends or
upon dissolution, liquidation or winding up) to the Series A
Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock, or any
shares of stock ranking on a parity with the Series A
Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the Board
of Directors) to all holders of such shares upon such terms as
the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and
preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(B) The Corporation shall not permit any Subsidiary of the
Corporation to purchase or otherwise acquire for consideration any
shares of stock of the Corporation unless the Corporation could, under
paragraph (A) of this Section 4, purchase or otherwise acquire such
shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A 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
A-4
<PAGE> 41
authorized but unissued shares of Preferred Stock and may be reissued as part
of a new series of Preferred Stock subject to the conditions and restrictions
on issuance set forth herein, in the Certificate of Incorporation, or in any
other Certificate of Designations creating a series of Preferred Stock or any
similar stock or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation, dissolution or winding up of
the Corporation, no distribution shall be made (1) to the holders of
shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received an amount per share (the "Series A
Liquidation Preference") equal to $100 per share, plus an amount equal
to accrued and unpaid dividends and distributions thereon, whether or
not declared, to the date of such payment, provided that the holders
of shares of Series A Preferred Stock shall be entitled to receive an
aggregate amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount to be
distributed per share to holders of shares of Common Stock, or (2) to
the holders of shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, except distributions made ratably on the
Series A Preferred Stock and all such parity stock in proportion to
the total amounts to which the holders of all such shares are entitled
upon such liquidation, dissolution or winding up. In the event the
Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a
subdivision, combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then in each such case the aggregate amount to
which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under the proviso in clause (1) of the
preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that are outstanding
immediately prior to such event.
(B) In the event, however, that there are not sufficient
assets available to permit payment in full of the Series A Liquidation
Preference and the liquidation preferences of all other classes and
series of stock of the Corporation, if any, that rank on a parity with
the Series A Preferred Stock in respect thereof, then the assets
available for such distribution shall be distributed ratably to the
holders of the Series A Preferred Stock and the holders of such parity
shares in proportion to their respective liquidation preferences.
(C) Neither the merger or consolidation of the
Corporation into or with another corporation nor the merger or
consolidation of any other corporation into or with
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<PAGE> 42
the Corporation shall be deemed to be a liquidation, dissolution or
winding up of the Corporation within the meaning of this Section 6.
Section 7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each share of
Series A Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision,
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Series A Preferred Stock
shall not be redeemable.
Section 9. Rank. The Series A Preferred Stock shall rank, with
respect to the payment of dividends and the distribution of assets upon
liquidation, dissolution or winding up, junior to all series of any other class
of the Corporation's Preferred Stock, except to the extent that any such other
series specifically provides that it shall rank on a parity with or junior to
the Series A Preferred Stock.
Section 10. Amendment. At any time any shares of Series A Preferred
Stock are outstanding, the Certificate of Incorporation of the Corporation
shall not be amended in any manner which would materially alter or change the
powers, preferences or special rights of the Series A Preferred Stock so as to
affect them adversely without the affirmative vote of the holders of at least
two-thirds of the outstanding shares of Series A Preferred Stock, voting
separately as a single class.
Section 11. Fractional Shares. Series A Preferred Stock may be
issued in fractions of a share that shall entitle the holder, in proportion to
such holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.
* * * * *
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<PAGE> 43
IN WITNESS WHEREOF, this Certificate of Designations is executed on
behalf of the Corporation by its Chairman of the Board and attested by its
Secretary this ___ day of May, 1997.
______________________________
Chief Executive Officer
and President
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<PAGE> 44
EXHIBIT B
[Form of Right Certificate]
Certificate No. R- _______ Rights
NOT EXERCISABLE AFTER MAY, 2007 OR EARLIER IF NOTICE OF REDEMPTION OR
EXCHANGE IS GIVEN OR IF THE COMPANY IS MERGED OR ACQUIRED PURSUANT TO
AN AGREEMENT OF THE TYPE DESCRIBED IN SECTION 1.3(ii)(A)(2) OF THE
RIGHTS AGREEMENT. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER
RIGHT OR EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES (SPECIFIED IN SECTION 11.1.2 OF THE RIGHTS
AGREEMENT), RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON, OR ITS
AFFILIATES OR ASSOCIATES, OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS CERTIFICATE ARE
HELD OR HAVE BEEN HELD BY A PERSON WHO IS OR WAS AN ACQUIRING PERSON
OR AN ASSOCIATE OR AFFILIATE OF AN ACQUIRING PERSON OR A NOMINEE
THEREOF. THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY
HAVE BECOME NULL AND VOID AS SPECIFIED IN SECTION 11.1.2 OF THE RIGHTS
AGREEMENT.]
Right Certificate
THOMPSON PBE, INC.
This certifies that , or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated as of May, 1997, as the same may be
amended from time to time (the "Rights Agreement"), between Thompson PBE, Inc.,
a Delaware corporation (the "Company"), and ChaseMellon Shareholders Services,
L.L.C., a limited liability company, as Rights Agent (the "Rights Agent"), to
purchase from the Company at any time after the Distribution Date and prior to
5:00 P.M. (Los Angeles) on May 6, 2007, at the offices of the Rights Agent, or
its successors as Rights Agent, designated for such purpose, one one-hundredth
of a fully paid, nonassessable share of Series A Junior Participating Preferred
Stock, par value $.001 per share (the "Preferred Shares") of the Company, at a
purchase price of $25.00 per one one- hundredth of a Preferred Share, subject
to adjustment (the "Purchase Price"), upon presentation and surrender of this
Right Certificate with the Form of Election to Purchase and certification duly
executed. The number of Rights evidenced by this Right Certificate (and the
number of one one-hundredths of a Preferred Share 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 May ____, 1997 based on the Preferred
Shares as constituted at
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<PAGE> 45
such date. Capitalized terms used in this Right Certificate without definition
shall have the meanings ascribed to them in the Rights Agreement. As provided
in the Rights Agreement, the Purchase Price and the number of Preferred Shares
which may be purchased upon the exercise of the Rights evidenced by this Right
Certificate are subject to modification and adjustment upon the happening of
certain events.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description
of the rights, limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the Right
Certificates. Copies of the Rights Agreement are on file at the principal
offices of the Company and the Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the offices of the Rights Agent designated for
such purpose, may be exchanged for another Right Certificate or Right
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of one one-hundredths of a Preferred Share as
the Rights evidenced by the Right Certificate or Right Certificates surrendered
shall have entitled such holder to purchase. If this Right Certificate shall
be exercised in part, the holder shall be entitled to receive upon surrender
hereof another Right Certificate or Right Certificates for the number of whole
Rights not exercised.
Subject to the provisions of the Rights Agreement, the Board
of Directors may, at its option at any time prior to ten (10) days after the
Shares Acquisition Date, (i) redeem the Rights evidenced by this Right
Certificate at a redemption price of $.01 per Right or (ii) exchange Common
Shares for the Rights evidenced by this Certificate, in whole or in part. The
period during which redemption of the Rights is permitted may be extended by
the Board of Directors of the Company, but such an extension shall require the
concurrence of a majority of the Continuing Directors. Under certain
circumstances set forth in the Rights Agreement, the decision to redeem shall
require the concurrence of a majority of the Continuing Directors.
No fractional Preferred Shares will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions of
Preferred Shares which are integral multiples of one one-hundredth of a
Preferred Share, which may, at the election of the Company, be evidenced by
depository receipts), but in lieu thereof a cash payment will be made, as
provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder
of the Preferred Shares or of any other securities of the Company which may at
any time be issuable on the exercise hereof, nor shall anything contained in
the Rights Agreement or herein be construed to confer upon the holder hereof,
as such, any of the rights of a stockholder of the Company or any right to vote
for the election of directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other
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<PAGE> 46
actions affecting stockholders (except as provided in the Rights Agreement), or
to receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by this Right Certificate shall have been exercised as
provided in the Rights Agreement.
If any term, provision, covenant or restriction of the Rights
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 the Rights Agreement shall remain in full force
and effect and shall in no way be affected, impaired or invalidated.
This Right Certificate shall not be valid or binding for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of May __, 1997.
Attest: THOMPSON PBE, INC.
By ______________________ By_________________________________
Title: Secretary Title: Chief Executive Officer
Countersigned:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By_____________________________
Authorized Signatory
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<PAGE> 47
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Right Certificate.)
FOR VALUE RECEIVED _________________________________________
hereby sells, assigns and transfers unto _______________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print name and address
of transferee)
Rights evidenced by this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint
__________________________ Attorney, to transfer the within Right Certificate
on the books of the within-named Company, with full power of substitution.
Dated: __________________
_____________________________________
Signature
Signature Guaranteed:
_______________________________
Signatures must be guaranteed by an "eligible guarantor institution" as defined
in Rule 17Ad-15 promulgated under the Securities Exchange Act of 1934, as
amended.
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<PAGE> 48
- ------------------------------------------------------------------------------
The undersigned hereby certifies that:
(1) the Rights evidenced by this Right Certificate are
not beneficially owned by and are not being assigned to an Acquiring Person or
an Affiliate or an Associate thereof; and
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned did not acquire the Rights evidenced by this Right
Certificate from any person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate thereof.
Dated: __________________
_________________________________
Signature
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<PAGE> 49
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To: THOMPSON PBE, INC.
The undersigned hereby irrevocably elects to exercise
__________________ Rights represented by this Right Certificate to purchase the
Preferred Shares issuable upon the exercise of such Rights (or such other
securities or property of the Company or of any other Person which may be
issuable upon the exercise of the Rights) and requests that certificates for
such shares be issued in the name of:
____________________________________________________________
(Please print name and address)
____________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
____________________________________________________________
(Please print name and address)
____________________________________________________________
Dated: __________________
______________________________
Signature
Signature Guaranteed:
_____________________________________
Signatures must be guaranteed by an "eligible guarantor
institution" as defined in Rule 17Ad-15 promulgated under the Securities
Exchange Act of 1934, as amended.
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<PAGE> 50
The undersigned hereby certifies that:
(1) the Rights evidenced by this Right Certificate are not
beneficially owned by and are not being assigned to an Acquiring Person or an
Affiliate or an Associate thereof; and
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned did not acquire the Rights evidenced by this Right
Certificate from any person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate thereof.
Dated:_______________
________________________
Signature
________________________________________________________________________________
NOTICE
The signature in the foregoing Form of Assignment and Form of
Election to Purchase must conform to the name as written upon the face of this
Right Certificate in every particular, without alteration or enlargement or any
change whatsoever.
In the event the certification set forth above in the Form of
Assignment or Form of Election to Purchase is not completed, the Company will
deem the beneficial owner of the Rights evidenced by this Right Certificate to
be an Acquiring Person or an Affiliate or Associate hereof and, in the case of
an Assignment, will affix a legend to that effect on any Right Certificates
issued in exchange for this Right Certificate.
B-7
<PAGE> 51
EXHIBIT C
As described in the Rights Agreement, Rights which are held by
or have been held by Acquiring Persons or Associates or Affiliates
thereof (as defined in the Rights Agreement) shall become null and void.
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On May 6, 1997 the Board of Directors of Thompson PBE, Inc. (the
"Company") declared a dividend of one preferred share purchase right (a
"Right") for each share of common stock, $.001 par value (the "Common Shares"),
of the Company outstanding at the close of business on May 29, 1997 (the
"Record Date"). As long as the Rights are attached to the Common Shares, the
Company will issue one Right (subject to adjustment) with each new Common Share
so that all such shares will have attached Rights. When exercisable, each
Right will entitle the registered holder to purchase from the Company one
one-hundredth of a share of Series A Junior Participating Preferred Stock (the
"Preferred Shares") at a price of $25.00 per one one-hundredth of a Preferred
Share, subject to adjustment (the "Purchase Price"). The description and terms
of the Rights are set forth in a Rights Agreement, dated as of May, 1997, as
the same may be amended from time to time (the "Rights Agreement"), between the
Company and ChaseMellon Shareholder Services, L.L.C., as Rights Agent (the
"Rights Agent").
Until the earlier to occur of (i) ten (10) days following a public
announcement that a person or group of affiliated or associated persons has
acquired, or obtained the right to acquire, beneficial ownership of 20% or more
of the Common Shares (an "Acquiring Person") or (ii) ten business (10) days (or
such later date as may be determined by action of the Board of Directors prior
to such time as any person or group of affiliated person becomes an Acquiring
Person) following the commencement or announcement of an intention to make a
tender offer or exchange offer the consummation of which would result in the
beneficial ownership by a person or group of 20% or more of the Common Shares
(the earlier of (i) and (ii) being called the "Distribution Date"), the Rights
will be evidenced, with respect to any of the Common Share certificates
outstanding as of the Record Date, by such Common Share certificate together
with a copy of this Summary of Rights.
The Rights Agreement provides that until the Distribution Date (or
earlier redemption, exchange, termination or expiration of the Rights), the
Rights will be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates issued after the close of business on the Record Date
upon transfer or new issuance of the Common Shares will contain a notation
incorporating the Rights Agreement by reference. Until the Distribution Date
(or earlier redemption, exchange, termination or expiration of the Rights), the
surrender for transfer of any certificates for Common Shares, with or without
such notation or a copy of this Summary of Rights, will also constitute the
transfer of the Rights associated with the Common Shares represented by such
certificate. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date and such separate Right Certificates alone will evidence the
Rights.
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<PAGE> 52
The Rights are not exercisable until the Distribution Date. The
Rights will expire on May 6, 2007, subject to the Company's right to extend such
date (the "Final Expiration Date"), unless earlier redeemed or exchanged by the
Company or terminated.
Each Preferred Share purchasable upon exercise of the Rights will
be entitled to a minimum preferential quarterly dividend payment of $1.00 per
share but will be entitled to an aggregate dividend of 100 times the dividend,
if any, declared per Common Share. In the event of liquidation, dissolution or
winding up of the Company, the holders of the Preferred Shares will be entitled
to a minimum preferential liquidation payment of $100 per share but will be
entitled to an aggregate payment of 100 times the payment made per Common
Share. Each Preferred Share will have 100 votes and will vote together with
the Common Shares. Finally, in the event of any merger, consolidation or other
transaction in which Common Shares are exchanged, each Preferred Share will be
entitled to receive 100 times the amount received per Common Share. Preferred
Shares will not be redeemable. These rights are protected by customary
antidilution provisions. Because of the nature of the Preferred Share's
dividend, liquidation and voting rights, the value of one one-hundredth of a
Preferred Share purchasable upon exercise of each Right should approximate the
value of one Common Share.
The Purchase Price payable, and the number of Preferred Shares or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of the Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of certain
rights or warrants to subscribe for or purchase Preferred Shares or convertible
securities at less than the current market price of the Preferred Shares or
(iii) upon the distribution to holders of the Preferred Shares of evidences of
indebtedness, cash, securities or assets (excluding regular periodic cash
dividends at a rate not in excess of 125% of the rate of the last regular
periodic cash dividend theretofore paid or, in case regular periodic cash
dividends have not theretofore been paid, at a rate not in excess of 50% of the
average net income per share of the Company for the four quarters ended
immediately prior to the payment of such dividend, or dividends payable in
Preferred Shares (which dividends will be subject to the adjustment described
in clause (i) above)) or of subscription rights or warrants (other than those
referred to above).
In the event that a Person becomes an Acquiring Person or if the
Company were the surviving corporation in a merger with an Acquiring Person or
any affiliate or associate of an Acquiring Person and the Common Shares were
not changed or exchanged, each holder of a Right, other than Rights that are or
were acquired or beneficially owned by the Acquiring Person (which Rights will
thereafter be void), will thereafter have the right to receive upon exercise
that number of Common Shares having a market value of two times the then
current Purchase Price of the Right. In the event that, after a person has
become an Acquiring Person, the Company were acquired in a merger or other
business combination transaction or more than 50% of its assets or earning
power were sold, proper provision shall be made so that each holder of a Right
shall thereafter have the right to receive, upon the exercise thereof at the
then current Purchase Price of the Right, that number of shares of common stock
of the acquiring company which at the time of such transaction would have a
market value of two times the then current Purchase Price of the Right.
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<PAGE> 53
At any time after a Person becomes an Acquiring Person and prior to
the earlier of one of the events described in the last sentence of the previous
paragraph, the acquisition by such Acquiring Person of 50% or more of the
outstanding Common Shares, the Board of Directors may cause the Company to
exchange the Rights (other than Rights owned by an Acquiring Person which have
become void), in whole or in part, for Common Shares at an exchange ratio of
one Common Share per Right (subject to adjustment).
No adjustment in the Purchase Price will be required until
cumulative adjustments require an adjustment of at least 1% in such Purchase
Price. No fractional Preferred Shares or Common Shares will be issued (other
than fractions of Preferred Shares which are integral multiples of one
one-hundredth of a Preferred Share, which may, at the election of the Company,
be evidenced by depositary receipts), and in lieu thereof, a payment in cash
will be made based on the market price of the Preferred Shares or Common Shares
on the last trading date prior to the date of exercise.
The Rights may be redeemed in whole, but not in part, at a price of
$.01 per Right (the "Redemption Price") by the Board of Directors at any time
prior to the close of business on the tenth day following the first date of
public announcement that a Person has become an Acquiring Person. The Board of
Directors, with the concurrence of a majority of the Continuing Directors (as
defined below), may extend the period during which the Rights are redeemable
beyond the ten (10) days following the public announcement that a Person has
become an Acquiring Person, such amount payable in cash or Common Shares.
Under certain circumstances set forth in the Rights Agreement, the decision to
redeem shall require the concurrence of a majority of the Continuing Directors.
The redemption of the Rights may be made effective at such time, on such basis
and with such conditions as the Board of Directors in its sole discretion may
establish. Immediately upon any redemption of the Rights, the right to
exercise the Rights will terminate and the only right of the holders of Rights
will be to receive the Redemption Price.
The term "Continuing Directors" means any member of the Board of
Directors of the Company who was a member of the Board prior to the time that
any Person becomes an Acquiring Person, and any person who is subsequently
elected to the Board if such person is recommended or approved by a majority of
the Continuing Directors. Continuing Directors do not include an Acquiring
Person, or an affiliate or associate of an Acquiring Person, or any
representation of the foregoing.
Until a Right is exercised, the holder thereof, as such, will have
no rights as a stockholder of the Company beyond those as an existing
stockholder, including, without limitation, the right to vote or to receive
dividends.
Any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company for so long as the Rights are then
redeemable, and after the Rights are no longer redeemable, the Company may
amend or supplement the Rights Agreement in any manner that does not adversely
affect the interests of the holders of the Rights.
A copy of the Rights Agreement has been filed with the Securities
and Exchange Commission as an Exhibit to a Current Report on Form 8-K. A copy
of the Rights Agreement is
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<PAGE> 54
available free of charge from the Company. This summary description of the
Rights does not purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, which is incorporated herein by reference.
C-4
<PAGE> 1
Exhibit 99.1
Thompson PBE reports second quarter March 29, 1997, financial results and
distribution of preferred stock purchase rights.
MARINA DEL REY, Calif.--May 6, 1997--Thompson PBE Inc. (NASDAQ/NM:THOM)
reported its financial results for the 13 weeks ended March 29, 1997.
Net sales for the quarter totaled $51,441,000, an increase of 23
percent from the prior year. For the six months ended March 29, 1997, revenues
increased 25 percent from the comparable prior year period to $99,209,000. The
increases were attributable to the acquisition of 15 businesses since Dec. 31,
1995, including two businesses acquired during the current fiscal year. No
businesses were acquired during the quarter ended March 29, 1997.
Net income for the quarter was $321,000, or 4 cents per share, as
compared with net income of $1,034,000, or 12 cents per share, in the second
quarter of fiscal 1996. Net income for the six months ended March 29, 1997, was
$543,000, or 6 cents per share, as compared with $1,901,000, or 21 cents per
share, in the comparable prior year period.
The reduction in net income was primarily the result of lower gross
margins and higher interest expense during the current fiscal periods as
compared with the year earlier periods. The decrease in gross profit margins
was in part the result of a change in the company's inventory purchasing
patterns and, to a lesser extent, competitive pressures and increased customer
support costs.
Mortimer A. Kline, president and chief executive officer, commented:
"We continue to focus on the basic elements of our business. During the initial
quarters of the current fiscal year, we changed certain discretionary
purchasing patterns to reduce inventory levels and improve efficiencies.
Although margins dropped during the periods as a result, reductions in
inventory levels and expense savings were achieved.
"The company expects to realize the full benefits of these actions
during future periods. Our focus continues to remain on improving profitability
of our core business and standardizing systems and procedures."
Separately, the company also announced that its board of directors
Tuesday declared a dividend distribution of one Preferred Share Purchase Right
on each outstanding share of Thompson PBE common stock. If and when the rights
become exercisable, each right will entitle stockholders to buy one
one-hundredth of a share of newly created Series A Junior Participating
Preferred Stock of the company at an initial exercise price of $25 per right.
The rights will, subject to certain exceptions, be exercisable if a
person or group acquires 20 percent or more of the company's common stock or
announces a tender offer for 20 percent or more of the common stock. The
company's board will be entitled to redeem the rights at 1 cent per right,
payable in cash or stock.
The rights are designed to assure that all Thompson stockholders
receive fair and equal treatment in the event of any proposed takeover of the
company and to guard against partial tender offers, open market accumulations
and other abusive tactics to gain control of the company without paying all
stockholders a control premium.
If a person acquires 20 percent or more of the outstanding common stock
of Thompson PBE (other than certain exempt persons), each right will entitle
its holder to purchase, at the right's then-current exercise price, a number of
common shares of Thompson PBE having a market value at that time of twice the
right's exercise price.
Rights held by the 20 percent holder will become void and will not
<PAGE> 2
be exercisable to purchase shares at the bargain purchase price. If Thompson is
acquired in a merger or other business combination transaction which has not
been approved by the board of directors, each right will entitle its holder to
purchase, at the right's then-current exercise price, a number of the acquiring
company's common shares having a market value at that time of twice the right's
exercise price.
The exercisability of the rights will not be triggered by any person
who beneficially owns more than 20 percent of the company's common stock at the
close of business on May 6, 1997, provided such exempt person acquires no more
than an additional 0.25 percent of the outstanding common stock (presently,
slightly more than 21,000 shares) after such date.
Kline commented: "The rights do not prevent a takeover, but should
encourage anyone seeking to acquire the company to negotiate with the board of
directors prior to attempting a takeover. Over 1,500 other public companies
have adopted rights plans in recent years." Kline also stated, "The board
believes that the adoption of this plan is in the best interests of the company
and our stockholders."
The dividend distribution will be payable to stockholders of record on
May 29, 1997. The rights will expire on May 6, 2007. The rights distribution is
not taxable to stockholders.
The company also announced that D. Hunt Ramsbottom Jr. resigned from the
board of directors in order to devote his time to a new business venture.
Ramsbottom was a co-founder of the company. Kline commented, "We will miss
Hunt's participation and contributions as a director and wish him all the best
in his new enterprise."
Thompson PBE is the nation's leading independent aftermarket
distributor of paint and related supplies to the automotive collision repair
industry. The company operates more than 100 distribution sites located in
Alabama, Arizona, California, Colorado, Connecticut, Florida, Georgia,
Massachusetts, North Carolina, South Carolina and Virginia.
The statements contained in this news release include forward-looking
statements that involve a number of risks and uncertainties. Among these risks
are business risks related to the company's rapid growth and acquisition
program, competition, the consolidation of the company's customer base, general
industry conditions and the company's dependence on key suppliers.
These and certain other significant business risks faced by the company
are discussed in additional detail under the caption "Business -- Business
Risks" in the company report on Form 10-K for the 1996 fiscal year. Any
recipient of this news release may receive a copy of such report by request
directed to the chief financial officer of Thompson PBE.
<PAGE> 3
THOMPSON PBE INC.
SUMMARY OF FINANCIAL RESULTS
(in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
---------------------- ----------------------
March 29, March 31, March 29, March 31,
1997 1996 1997 1996
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net Sales $51,441 $41,981 $99,209 $79,126
Cost of Sales 33,727 26,479 64,300 49,678
Gross Profit 17,714 15,502 34,909 29,448
Selling, General and
Administrative
Expenses 14,806 12,231 29,374 23,449
Depreciation 545 436 1,032 855
Amortization 735 525 1,442 1,008
Interest Expense 1,055 542 2,102 886
Income Before Provision
for Income Taxes 573 1,768 959 3,250
Provision for
Income Taxes 252 734 416 1,349
Net Income $ 321 $ 1,034 $ 543 $ 1,901
Earnings Per Share $ 0.04 $ 0.12 $ 0.06 $ 0.21
Weighted Average
Share of Common
Stock & Equivalents 8,693 8,903 8,732 8,861
</TABLE>
CONTACT: Thompson PBE, Inc., Marina del Rey
Mortimer A. Kline, 310/306-7112
or
Investor Relations Line: 800/872-3196
