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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 (DATE OF EARLIEST EVENT REPORTED) SEPTEMBER 16, 1998
BTG, INC.
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(Exact name of registrant as specified in its charter)
Virginia 000-25094 54-1194161
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(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification No.)
incorporation)
3877 Fairfax Ridge Road, Fairfax, Virginia 22030
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (703) 383-8000
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Not Applicable
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(Former name or former address, if changed since last report)
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Item 5. Other Events
On September 16, 1998, the Board of Directors of BTG, Inc. (the
"Company") declared a dividend distribution of one Right for each outstanding
share of common stock of the Company (the "Common Stock"). The distribution is
payable to stockholders of record on September 28, 1998. Each Right, when
exercisable, entitles the registered holder to purchase from the Company one
one-thousandth of a share of Class A Preferred Stock ("Preferred Stock") at a
price of $65 (the "Purchase Price"), subject to adjustment. The description and
terms of the Rights are set forth in a Rights Agreement (the "Rights Agreement")
between the Company and First Union National Bank as Rights Agent.
Initially, the Rights will be deemed to be attached to all
certificates representing shares of Common Stock outstanding, and no separate
certificates evidencing the Rights will be distributed. The Rights will
separate from the Common Stock and a distribution of Rights Certificates will
occur upon the earlier to occur of (i) 10 days following a public announcement
that a person or group of affiliated or associated persons (an "Acquiring
Person") has acquired, or obtained the right to acquire, beneficial ownership
of 15% or more of the outstanding shares of Common Stock (the "Stock
Acquisition Date") or (ii) 10 business days (or such later date as the
Company's Board of Directors may determine) following the commencement of a
tender offer or exchange offer the consummation of which would result in the
beneficial ownership by a person of 15% or more of the outstanding shares of
Common Stock (the earlier of such dates being called the "Distribution Date").
Notwithstanding the foregoing, the term "Acquiring Person" will not include (i)
Dr. Edward H. Bersoff, Chairman of the Board, President and Chief Executive
Officer of the Company, who beneficially owns 15.1% of the outstanding shares
of Common Stock, and (ii) another shareholder (the "Qualified Exempt Person")
who, as of the date of the adoption of the Rights Agreement, beneficially owned
1,696,200 shares of Common Stock, or approximately 19.2% of the
outstanding shares of Common Stock, unless the Qualified Exempt Person
acquires beneficial ownership of an additional 50,000 shares of the Company in
excess of the amount beneficially owned by the Qualified Exempt Person on
September 16, 1998 and the Qualified Exempt Person beneficially owns 15% or
more of the Company's outstanding Common Stock.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on March 31, 2008, unless earlier redeemed or
exchanged by the Company as described below.
If any person becomes the beneficial owner of 15% or more of the
outstanding shares of Common Stock (except as provided below), each holder of a
Right will have the right to exercise the Right for the Purchase Price and
purchase Common Stock (or, in certain circumstances, cash, property or other
securities of
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the Company) having a value equal to two times such amount. Rights
beneficially owned by the 15% owner, however, will be null and void. Further,
holders of Rights will not be able to exercise if the 15% beneficial owner
became same by an offer for all outstanding shares of Common Stock which
two-thirds of the directors determine to be fair to and otherwise in the best
interests of the Company and its shareholders.
In the event that, at any time following the Stock Acquisition Date,
(i) the Company is acquired in a merger or other business combination
transaction in which the Company is not the surviving corporation (other than by
an offer as described above, or (ii) 50% or more of the Company's assets or
earning power is sold or transferred, then each holder of a Right (except Rights
which previously have been voided as set forth above), shall have the right to
receive, upon exercise, common stock of the acquiring company having a value
equal to two times the Purchase Price.
At any time after a person or group of affiliated or associated
persons becomes an Acquiring Person, the Board of Directors of the Company may
exchange the Rights, in whole and in part, at an exchange ratio of one share of
Common Stock per Right (subject to adjustment). The Purchase Price payable, and
the number of one one-thousandth of a share of Preferred Stock or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time and in certain circumstances to prevent dilution.
In general, the Board of Directors of the Company may cause the
Company to redeem the Rights in whole, but not in part, at any time up to the
10th day following the Stock Acquisition Date, as such period may be extended or
shortened by the Board of Directors at a price of $.005 per Right (payable in
cash, Common Stock or other consideration deemed appropriate by the Board of
Directors).
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
in a manner or on terms not approved by the Board of Directors. The Rights,
however, should not deter any prospective offeror willing to negotiate in good
faith with the Board of Directors. Nor should the Rights interfere with any
merger or other business combination approved by the Board of Directors.
The Rights Agreement between the Company and the Rights Agent
specifying the terms of the Rights is attached hereto as Exhibit 99.1 and is
incorporated herein by reference. The exhibits to the Rights Agreement: (i) the
Articles of Amendment to the Amended and Restated Articles of Incorporation of
BTG, Inc. (Exhibit A thereto); (ii) a Summary of Rights to Purchase Class A
Preferred Stock (Exhibit B thereto); and (iii) the form of Rights Certificate
(Exhibit C), and the press release announcing the declaration of the Rights
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dividend are attached hereto as Exhibits 99.2, 99.3, 99.4 and 99.5,
respectively, and are incorporated herein by reference. The foregoing
description of the Rights does not purport to be complete and is qualified in
its entirety by reference to Exhibits 99.1 through 99.4 hereto.
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Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
99.1. Rights Agreement dated as of September 16, 1998 between
the Company and First Union National Bank as Rights
Agent.
99.2. Articles of Amendment to the Amended and Restated Articles
of Incorporation of BTG, Inc.
99.3. Summary of Rights to Purchase Class A Preferred Stock.
99.4. Form of Rights Certificate.
99.5. Press Release dated September 17, 1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned thereunto duly authorized.
BTG, Inc.
Date: September 25, 1998 By: /s/ Todd Stottlemyer
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Name: Todd Stottlemyer
Title: Senior Vice President
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description Page
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<S> <C> <C>
99.1. Rights Agreement dated as of September 16, 1998 between
the Company and First Union National Bank as Rights
Agent.
99.2. Articles of Amendment to the Amended and Restated
Articles of Incorporation of BTG, Inc.
99.3. Summary of Rights to Purchase Class A Preferred Stock.
99.4. Form of Rights Certificate.
99.5. Press Release dated September 17, 1998.
</TABLE>
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EXHIBIT 99.1
BTG, INC.
AND
FIRST UNION NATIONAL BANK
AS RIGHTS AGENT
RIGHTS AGREEMENT
DATED AS OF SEPTEMBER 16, 1998
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TABLE OF CONTENTS
<TABLE>
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Page
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<S> <C>
Section 1. Certain Definitions............................................1
Section 2. Appointment of Rights Agent....................................6
Section 3. Issue of Rights Certificates...................................6
Section 4. Form of Rights Certificates....................................8
Section 5. Countersignature and Registration..............................9
Section 6. Transfer, Split Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost or Stolen
Rights Certificates.................................................10
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights..............................................................11
Section 8. Cancellation and Destruction of RightsCertificates............13
Section 9. Reservation and Availability of Capital Stock.................13
Section 10. Preferred Stock Record Date..................................15
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights..........................................16
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares..............................................................25
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.......................................................25
Section 14. Fractional Rights and Fractional Shares......................28
Section 15. Rights of Action.............................................30
Section 16. Agreement of Rights Holders..................................30
Section 17. Rights Certificate Holder Not Deemed a
Shareholder.........................................................31
Section 18. Duties of Rights Agent.......................................31
Section 19. Compensation and Indemnification of the Rights
Agent...............................................................34
Section 20. Merger or Consolidation or Change of Name of Rights
Agent...............................................................35
Section 21. Change of Rights Agent.......................................36
Section 22. Issuance of New Rights Certificates..........................37
Section 23. Redemption...................................................37
Section 24. Exchange.....................................................38
Section 25. Notice of Certain Events.....................................39
Section 26. Notices......................................................40
Section 27. Supplements and Amendments...................................41
Section 28. Successors...................................................42
Section 29. Determinations and Actions by the Board, etc.................42
Section 30. Benefits of this Agreement...................................43
Section 31. Severability.................................................43
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<TABLE>
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Section 32. Governing Law................................................43
Section 33. Counterparts.................................................43
Section 34. Descriptive Headings.........................................44
</TABLE>
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RIGHTS AGREEMENT
Rights Agreement, dated as of September 16, 1998 (the "Agreement"),
between BTG, INC., a Virginia corporation (the "Company"), and First Union
National Bank, a North Carolina banking institution (the "Rights Agent").
WHEREAS, on September 16, 1998 (the "Rights Dividend Declaration
Date"), the Board of Directors of the Company authorized and declared a dividend
of one Right for each share of Common Stock (as hereinafter defined) of the
Company outstanding at the Close of Business (as defined herein) on the Record
Date (as defined herein), and has authorized the issuance of one Right with
respect to each share of Common Stock of the Company issued between the Record
Date (whether originally issued or delivered from the Company's treasury) and
the Distribution Date (as hereinafter defined), each Right initially
representing the right to purchase one one-thousandth of a share of Preferred
Stock (as hereinafter defined), of the Company having the rights, powers and
preferences set forth in the form of the Amendment to the Company's Amended and
Restated Articles of Incorporation 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 Agreement, the following terms have the
meanings indicated:
(a) "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 fifteen percent (15%) or more of the shares of Common Stock then
outstanding, but shall not include (i) the Company, (ii) any
Subsidiary of the Company, or (iii) any employee benefit plan of the
Company or any Subsidiary of the Company, or any Person or entity
holding shares of Common Stock for or pursuant to the terms of any
such plan to the extent, and only to the extent, of such shares so
held. Notwithstanding the foregoing, Edward H. Bersoff (together with
his Affiliates, Associates and Estate the "Exempt Person") shall not
be deemed an "Acquiring Person" at any time. Additionally,
notwithstanding the foregoing, Heartland Advisors, Inc. (Heartland,
together with its Affiliates and Associates, the "Qualified Exempt
Person") shall not be
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deemed an "Acquiring Person"; provided, however, that if after the
date hereof, at any time, the Qualified Exempt Person shall become
the Beneficial Owner of an additional fifty thousand (50,000) shares
of Common Stock of the Company in excess of the amount the Qualified
Exempt Person beneficially owned as of the date hereof and the
Qualified Exempt Person is the Beneficial Owner of fifteen percent
(15%) or more of the Common Stock of the Company then outstanding,
then the Qualified Exempt Person shall be deemed an "Acquiring
Person." Additionally, notwithstanding the foregoing, no Person shall
become an "Acquiring Person" as the result of an acquisition of
shares of Common Stock by the Company which, by reducing the number
of shares of Common Stock outstanding, increases the proportionate
number of shares of Common Stock beneficially owned by such Person to
fifteen percent (15%) or more of the shares of Common Stock of the
Company then outstanding; provided, however, that if a Person shall
become the Beneficial Owner of fifteen percent (15%) or more of the
Common Stock of the Company then outstanding by reason of share
purchases by the Company and shall, after such share purchases by the
Company, become the Beneficial Owner of any additional shares of
Common Stock of the Company, then such Person shall be deemed to be
an "Acquiring Person" if such Person is then the Beneficial Owner of
fifteen percent (15%) or more of the Common Stock then outstanding.
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 paragraph (a), has become such inadvertently, and
such Person divests as promptly as practicable a sufficient number of
shares of Common Stock so that such Person would no longer be an
"Acquiring Person", then such Person shall not be deemed an
"Acquiring Person" for any purposes of this Agreement unless and
until such Person shall again become an "Acquiring Person".
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act.
(c) A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire
(whether such right is exercisable immediately or only after
the passage of time) pursuant to any agreement, arrangement or
understanding (whether or not in writing), or upon the exercise
of
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conversion rights, exchange rights, other rights (other than
these Rights), warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the "Beneficial
Owner" of, or to "beneficially own", (A) securities tendered
pursuant to a tender or exchange offer made by or on behalf of
such Person or any of such Person's Affiliates or Associates
until such tendered securities are accepted for purchase or
exchange; or (B) securities issuable upon exercise of Rights at
any time prior to the occurrence of a Triggering Event; or (C)
securities issuable upon exercise of Rights from and after the
occurrence of a Triggering Event which 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(a) or
Section 22 hereof (the "Original Rights") or pursuant to
Section 11(i) hereof in connection with an adjustment made with
respect to any Original Rights;
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or
dispose of or has "beneficial ownership" of (as determined
pursuant to Rule 13d-3 of the General Rules and Regulations
under the Exchange Act), including pursuant to any agreement,
arrangement or understanding, whether or not in writing;
provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to beneficially own, any security
under this subparagraph (ii) as a result of an agreement,
arrangement or understanding to vote such security if such
agreement, arrangement or understanding: (A) arises solely from
a revocable proxy given in response to a public proxy or
consent solicitation made pursuant to, and in accordance with,
the applicable provisions of the General Rules and Regulations
under the Exchange Act, and (B) is not also then reportable by
such Person on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate thereof) with
which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding
(whether or not in writing), for the purpose of acquiring,
holding, voting (except pursuant to a revocable proxy as
described in the proviso to subparagraph (ii) of this paragraph
(c)) or disposing of any voting securities of the Company.
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provided, however, that nothing in this paragraph (c) shall cause a
Person engaged in business as an underwriter of securities to be the
"Beneficial Owner" of, or to "beneficially own," any securities
acquired through such Person's participation in good faith in a firm
commitment underwriting until the expiration of forty (40) days after
the date of such acquisition.
(d) "Board" shall mean the Board of Directors of the Company.
(e) "Business Day" shall mean any day other than a Saturday, Sunday,
or a day on which banking institutions in the Commonwealth of
Virginia are authorized or obligated by law or executive order to
close.
(f) "Close of Business" on any given date shall mean 5:00 P.M.,
Fairfax, Virginia time, on such date; provided, however, that if such
date is not a Business Day it shall mean 5:00 P.M., Fairfax, Virginia
time, on the next succeeding Business Day.
(g) "Common Stock" when used with reference to the Company shall
mean the shares of common stock of the Company. "Common Stock" when
used with reference to any Person other than the Company shall mean
the class of capital stock with the greatest aggregate voting power,
or the class of equity securities or other equity interests having
power to control or direct the management, of such Person.
(h) "Company" shall mean BTG, Inc., a Virginia corporation.
(i) "Distribution Date" shall mean the earlier of (i) the Close of
Business on the tenth (10th) day after the Stock Acquisition Date
(or, if the tenth (10th) day after the Stock Acquisition Date occurs
before the Record Date, the close of business on the Record Date), or
(ii) the Close of Business on the tenth (10th) Business Day (or, if
such tenth (10th) Business Day occurs before the Record Date, the
Close of Business on the Record Date), or such specified or
unspecified later date on or after the Record Date as may be
determined by action of the Board of Directors prior to such time as
any Person becomes an Acquiring Person, after the date that a tender
or exchange offer by any Person (other than the Company, any
Subsidiary of the Company or any employee benefit plan of the Company
or of any Subsidiary of the Company or any Person or entity holding
shares of Common Stock for or pursuant to the terms of any such plan)
is first published or sent or given within the meaning of Rule
14d-2(a) of the General Rules and Regulations under the Exchange Act,
if upon consummation thereof,
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such Person would be the beneficial owner of fifteen percent (15%) or
more of the outstanding shares of Common Stock.
(j) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, as in effect on the date of this Agreement.
(k) "Exchange Date" shall have the meaning set forth in Section 7(a)
hereof.
(l) "Exempt Person" shall have the meaning set forth in Section 1(a)
hereof.
(m) "Expiration Date" shall have the meaning set forth in Section
7(a) hereof.
(n) "Final Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(o) "Person" shall mean any individual, firm, corporation,
partnership or other entity, and shall include any successor (by
merger or otherwise) of such entity.
(p) "Preferred Stock" shall mean shares of Class A Preferred Stock,
par value $.01 per share, of the Company.
(q) "Principal Party" shall have the meaning set forth in Section
13(b) hereof.
(r) "Purchase Price" shall have the meaning set forth in Section
4(a) and 11(a)(ii) hereof.
(s) "Qualified Exempt Person" shall have the meaning set forth in
Section 1(a) hereof.
(t) "Record Date" shall mean the close of business on September 28,
1998.
(u) "Redemption Period" shall have the meaning set forth in Section
23(a) hereof.
(v) "Rights Agent" shall mean First Union National Bank.
(w) "Rights Certificate" shall have the meaning set forth in Section
3 hereof.
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(x) "Rights Dividend Declaration Date" shall mean the Close of
Business on September 16, 1998.
(y) "Section 11(a)(ii) Event" shall mean any event described in
Section 11(a)(ii) hereof.
(z) "Section 13 Event" shall mean any event described in clauses
(w), (x), (y) or (z) of Section 13(a) hereof.
(aa) "Securities Act" shall mean the Securities Act of 1933, as
amended, and as in effect on the date of this Agreement.
(bb) "Stock Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) of the
Exchange Act) by the Company or an Acquiring Person that an Acquiring
Person has become such.
(cc) "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, directly or indirectly, by
such Person, or is otherwise controlled by such Person.
(dd) "Triggering Event" shall mean any Section 11(a)(ii) Event or
any Section 13 Event.
SECTION 2. APPOINTMENT OF RIGHTS AGENT.
The Company hereby appoints the Rights Agent to act as agent for the
Company and the holders of the Rights (who, in accordance with Section 3 hereof,
shall prior to the Distribution Date also be the holders of the Common Stock of
the Company) in accordance with the terms and conditions hereof, and the Rights
Agent hereby accepts such appointment. The Company may from time to time appoint
such Co-Rights Agents as the Company may deem necessary or desirable.
SECTION 3. ISSUE OF RIGHTS CERTIFICATES.
(a) As promptly as practicable following the Record Date, the
Company will send or deliver a copy of a Summary of Rights to Purchase Preferred
Stock, in substantially the form attached hereto as Exhibit B (the "Summary of
Rights"), to each record holder of Common Stock of the Company as of the Close
of Business on the Record Date at the address of such holder shown on the
records of
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the Company. With respect to certificates for shares of Common Stock of the
Company outstanding as of the Record Date, until the Distribution Date, the
Rights will be evidenced by such certificates for the Common Stock and the
registered holders of the Common Stock shall also be the registered holders of
the associated Rights. Until the Distribution Date (or the earlier Expiration
Date or Final Expiration Date), the transfer of any certificate representing
shares of Common Stock in respect of which Rights have been issued shall also
constitute the transfer of the Rights associated with the shares of Common Stock
represented thereby.
(b) Rights shall be issued in respect of all shares of Common Stock
of the Company issued (whether originally issued or from the Company's treasury)
after the Record Date but prior to the earlier of the Distribution Date or the
Expiration Date or the Final Expiration Date. Rights shall also be issued to the
extent provided in Section 22 in respect of all shares of Common Stock which are
issued (whether originally issued or from the Company's treasury) after the
Distribution Date and prior to the Expiration Date. Certificates representing
such shares of Common Stock shall also be deemed to be certificates for Rights,
and shall bear the following legend (in addition to any other legends that may
be required):
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between BTG, Inc.
(the "Company") and First Union National Bank (the "Rights Agent")
dated as of September 16, 1998 (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 the Company. Under
certain circumstances, as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and will no longer
be evidenced by this certificate. The Company will mail to the holder
of this certificate a copy of the Rights Agreement as in effect on
the date of mailing without charge after receipt of a written request
therefor.
Under certain circumstances set forth in the Rights Agreement, Rights
issued to, or held by, any Person who is, was or becomes an Acquiring
Person or any Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement), whether currently held by or on
behalf of such Person or by any subsequent holder, may become null
and void. The Rights shall not be exercisable, and shall be void so
long as held, by a holder in any jurisdiction where the requisite
qualification of the issuance to such holder, or the exercise by such
holder, of the Rights in such jurisdiction shall not have been
obtained or be obtainable.
With respect to such certificates containing the foregoing legend, until the
earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights
associated with the Common Stock represented by such
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certificates shall be evidenced by such certificates alone and registered
holders of Common Stock shall also be the registered holders of the associated
Rights, and the transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Stock represented thereby.
(c) Until the Distribution Date (i) the Rights will be evidenced
(subject to the provisions of paragraph (a) of this Section 3) by the
certificates for Common Stock registered in the names of the holders thereof
(which certificates for Common Stock shall also be deemed to be Rights
Certificates) and not by separate Rights Certificates, and (ii) the Rights will
be transferable only in connection with the transfer of the underlying shares of
Common Stock (including a transfer to the Company).
(d) As soon as practicable after the Distribution Date, the Rights
Agent will send by first-class, insured, postage prepaid mail, to each record
holder of Common Stock as of the Close of Business on the Distribution Date, at
the address of such holder shown on the records of the Company, a rights
certificate, in substantially the form of Exhibit C hereto (the "Rights
Certificate"), evidencing one Right for each share of Common Stock so held,
subject to adjustment as provided herein. In the event that an adjustment in the
number of Rights per share of Common Stock has been made pursuant to Section
11(p) hereof, at the time of distribution of the Rights Certificates, the
Company shall make necessary and appropriate rounding adjustments (in accordance
with Section 14(a) hereof) so that Rights Certificates representing only whole
numbers of Rights are distributed and cash is paid in lieu of any fractional
Rights. As of and after the Distribution Date, the Rights will be evidenced
solely by such Rights Certificates.
SECTION 4. FORM OF RIGHTS CERTIFICATES.
(a) The Rights Certificates (and the forms of election to purchase
and of assignment to be printed on the reverse thereof) shall be substantially
the same as Exhibit C hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as the
Company may deem appropriate and as are not inconsistent with the provisions of
this Agreement, or as may be required to comply with any applicable law or with
any rule or regulation made pursuant thereto or with any rule or regulation of
any stock exchange on which the Rights may from time to time be listed, or to
conform to usage. Subject to the provisions of Section 11 and Section 22 hereof,
the Rights Certificates, whenever issued, shall be dated as of the Distribution
Date, and on their face shall entitle the holders thereof to purchase such
number of one one-thousandths of a share of Preferred Stock as shall be set
forth therein at the price set forth therein (such exercise price per one
one-thousandths of a share, the "Purchase Price"), but the amount and type of
securities purchasable upon exercise
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of each Right and the Purchase Price thereof shall be subject to adjustment as
provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(d) or
Section 22 hereof that represents Rights beneficially owned by: (i) an Acquiring
Person or any Associate or Affiliate of an Acquiring Person; (ii) a transferee
of an Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such; or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which a majority of the Directors has determined is
part of a plan, arrangement or understanding which has as a primary purpose or
effect avoidance of Section 7(e) hereof, and any Rights Certificate issued
pursuant to Section 6 or Section 11 hereof upon transfer, exchange, replacement
or adjustment of any other Rights Certificate referred to in this sentence,
shall contain (to the extent feasible) the following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person (as such terms
are defined in the Rights Agreement). Accordingly, this Rights
Certificate and the Rights represented hereby may become null and
void in the circumstances specified in Section 7(e) of such Rights
Agreement.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Rights Certificates shall be executed on behalf of the
Company by the President or a Vice President of the Company either manually or
by facsimile signature, and have affixed thereto the Company's seal or a
facsimile thereof which shall be attested by the Secretary or an Assistant
Secretary or the Treasurer or an Assistant Treasurer of the Company, either
manually or by facsimile signature. The Rights Certificates shall be manually
countersigned by the Rights Agent and shall not be valid for any purpose unless
so countersigned. In case any officer of the Company who shall have signed any
of the Rights Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Rights Certificates, nevertheless, may be countersigned by the Rights
Agent, and issued and delivered by the Company with the same force and effect as
though the person who signed such Rights Certificates had not ceased to be such
officer of the Company; and any
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Rights Certificate may be signed on behalf of the Company by any person who, at
the actual date of the execution of such Rights Certificate, shall be a proper
officer of the Company to sign such Rights Certificate, although at the date of
the execution of this Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at the principal office or offices of the Rights Agent
designated as the appropriate place for surrender of Rights Certificates upon
exercise or transfer, books for registration and transfer of the Rights
Certificates issued hereunder. Such books shall show the names and addresses of
the respective holders of the Rights Certificates, the number of Rights
evidenced on its face by each of the Rights Certificates and the date of each of
the Rights Certificates.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS
CERTIFICATES.
(a) Subject to the provisions of Section 4(b), Section 7(e) and
Section 14 hereof, at any time after the Close of Business on the Distribution
Date, and at or prior to the Close of Business on the earlier of the Expiration
Date or Final Expiration Date, any Rights Certificate or Certificates may be
transferred, split up, combined or exchanged for another Rights Certificate or
Certificates, entitling the registered holder to purchase a like number of one
one-thousandth of a share of Preferred Stock (or, following a Triggering Event,
Common Stock of the Company, other securities, cash, or other assets, as the
case may be) as the Rights Certificate or Certificates surrendered then entitled
such holder (or former holder in the case of a transfer) to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any Rights
Certificate shall make such request in writing delivered to the Rights Agent,
and shall surrender the Rights Certificate or Certificates to be transferred,
split up, combined or exchanged at the principal office of the Rights Agent.
Neither the Rights Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such surrendered Rights
Certificate until the registered holder shall have completed and signed the
certificate contained in the form of assignment on the reverse side of such
Rights Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request. Thereupon the Rights
Agent shall, subject to Section 4(b), Section 7(e) and Section 14 hereof,
countersign and deliver to the person entitled thereto a Rights Certificate or
Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or exchange of
Rights Certificates.
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<PAGE> 14
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Rights Certificate, and, in case of loss, theft or destruction, of indemnity
or security reasonably satisfactory to them, and, 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 Rights Certificate if mutilated, the Company will execute and deliver a new
Rights Certificate of like tenor to the Rights Agent for countersignature and
delivery to the registered owner in lieu of the Rights Certificate so lost,
stolen, destroyed, or mutilated.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS.
(a) Subject to Section 7(e) hereof, the registered holder of any
Rights Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section 11(a)(iii) and Section 23(a)
hereof) in whole or in part at any time after the Distribution Date upon
surrender of the Rights Certificate, with the form of election to purchase and
the certificate on the reverse side thereof duly executed, to the Rights Agent
at the principal office of the Rights Agent, together with payment of the
Purchase Price for each one one-thousandth of a share of Preferred Stock (or
other securities, cash or other assets, as the case may be) as to which the
Rights are exercised, at or prior to the earlier of (i) the close of business on
March 31, 2008 (the "Final Expiration Date"), (ii) the time at which the Rights
are redeemed as provided in Section 23 hereof, (iii) the time at which such
Rights are exchanged (the "Exchange Date") as provided in Section 24 hereof, or
(iv) the time at which the Rights expire pursuant to Section 13(d) hereof (the
earliest of (i), (ii), (iii) and (iv) being herein referred to as the
"Expiration Date").
(b) Each Right shall entitle the registered holder thereof to
purchase one one-thousandth of a share of Preferred Stock and the Purchase Price
for each one one-thousandth of a share of Preferred Stock pursuant to the
exercise of a Right shall initially be sixty-five dollars ($65), and shall be
subject to adjustment from time to time as provided in Sections 11 and 13 hereof
and shall be payable in lawful money of the United States of America in
accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly executed,
accompanied by payment, with respect to each Right so exercised, of the Purchase
Price per one one-thousandth of a share of Preferred Stock (or Common Stock of
the Company, other securities, cash or other assets, as the case may be) to be
purchased and an amount equal to any applicable transfer tax in cash, or by
certified check,
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<PAGE> 15
cashier's check or bank draft payable to the order of the Company, the Rights
Agent shall, subject to Section 18(k) hereof, thereupon promptly (i) (A)
requisition from any transfer agent of the shares of Preferred Stock (or make
available, if the Rights Agent is the transfer agent) certificates for the total
number of one one-thousandth of a share of Preferred Stock to be purchased and
the Company hereby irrevocably authorizes its transfer agent to comply with all
such requests, or (B) if the Company shall have elected to deposit the total
number of shares of Preferred Stock issuable upon exercise of the Rights
hereunder with a depository agent, requisition from the depository agent
depository receipts representing such number of shares of Preferred Stock as are
to be purchased (in which case certificates for the shares of Preferred Stock
represented by such receipts shall be deposited by the transfer agent with the
depository agent) and the Company will direct the depository to comply with such
request, (ii) requisition from the Company the amount of cash, if any, to be
paid in lieu of issuance of fractional shares in accordance with Section 14,
(iii) promptly after receipt of such certificates or depository receipts, cause
the same to be delivered to or upon the order of the registered holder of such
Rights Certificate, registered in such name or names as may be designated by
such holder and (iv) after receipt thereof, promptly deliver such cash, if any,
to or upon the order of the registered holder of such Rights Certificate. In the
event that the Company is obligated to issue other securities (including Common
Stock) of the Company, pay cash and/or distribute other property pursuant to
Section 11(a) hereof, the Company will make all arrangements necessary so that
such securities, cash and/or other property are available for distribution by
the Rights Agent, if and when appropriate.
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent and delivered to, or upon the order of, the registered
holder of such Rights Certificate, registered in such name or names as may be
designated by such holder, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of a Section 11(a)(ii) Event, any Rights
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of an
Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person with whom
such Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which a majority of the
Directors has determined is part of
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<PAGE> 16
a plan, arrangement or understanding which has as a primary purpose or effect
the avoidance of this Section 7(e), shall become null and void without any
further action, and no holder of such Rights shall have any rights whatsoever
with respect to such Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to ensure that the
provisions of this Section 7(e) and Section 4(b) hereof are complied with, but
shall have no liability to any holder of Rights Certificates or other Person as
a result of a failure by the Rights Agent to make any determinations with
respect to an Acquiring Person or the Affiliates, Associates or transferees of
an Acquiring Person hereunder.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered holder shall have
(i) completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Rights Certificate surrendered for
such exercise, and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES.
All Rights Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the Company
or to any agents of the Company, be delivered to the Rights Agent for
cancellation or in canceled form, or, if surrendered to the Rights Agent, shall
be canceled by the Rights Agent, and no Rights Certificates shall be issued in
lieu thereof except as expressly permitted by any provisions of this Agreement.
The Company shall deliver to the Rights Agent for cancellation and retirement,
and the Rights Agent shall so cancel and retire, any other Rights Certificate
purchased or acquired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all canceled Rights Certificates to the Company,
or shall, at the written request of the Company, destroy such canceled Rights
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
SECTION 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK.
(a) The Company covenants and agrees that the Company will cause to
be reserved and kept available out of the authorized and unissued shares of
Preferred Stock of the Company (and, following the occurrence of a Triggering
Event, shares of the authorized and unissued shares of Common Stock of the
Company and/or other securities), the number of shares of Preferred Stock (and,
following the occurrence of a Triggering Event, shares of Common Stock of the
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<PAGE> 17
Company and/or other securities) that, as provided in this Agreement, including
Section 11(a)(iii) hereof, will be sufficient to permit the exercise in full of
all outstanding Rights.
(b) In the event that shares of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock of the Company and/or other
securities) issuable upon the exercise of Rights are listed on any national
securities exchange, the Company shall use 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 upon official notice of issuance upon
such exercise.
(c) The Company shall use best efforts to (i) file, as soon as
practicable following the earliest date after the first occurrence of a Section
11(a)(ii) Event on which the consideration to be delivered by the Company upon
exercise of the Rights has been determined in accordance with this Agreement or
as soon as is required by law following the Distribution Date, as the case may
be, a registration statement under the Securities Act with respect to the Common
Stock or other securities purchasable upon exercise of the Rights on an
appropriate form, (ii) cause such registration statement to become effective as
soon as practicable after such filing, and (iii) cause such registration
statement to remain effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the earlier of (A) the date as of
which the Rights are no longer exercisable for such securities, and (B) the
Expiration Date. The Company will also take such action as may be appropriate
under, or to ensure compliance with, the securities or "blue sky" laws of the
various states in connection with the exercisability of the Rights. The Company
may temporarily suspend, for a period of time not to exceed ninety (90) days
after the date set forth in clause (i) of the first sentence of this Section
9(c), the exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. In addition, if the
Company shall determine that a registration statement is required following the
Distribution Date, the Company may temporarily suspend the exercisability of the
Rights until such time as a registration statement has been declared effective.
Upon any suspension of exercisability of Rights referred to in this Section
9(c), 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 and shall be void so long as held by a holder in any
jurisdiction where the requisite qualification to the issuance to such holder,
or the exercise by such holder, of the Rights in such jurisdiction shall not
have been obtained or be obtainable, or the exercise thereof shall not be
permitted under applicable law or a registration statement shall not have been
declared effective.
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<PAGE> 18
(d) The Company covenants and agrees that the Company will take all
such action as may be necessary to ensure that all one one-thousandths of a
share of Preferred Stock (and, following the occurrence of a Triggering Event,
Common Stock of the Company 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 non-assessable.
(e) The Company further covenants and agrees that the Company will
pay when due and payable any and all federal and state transfer taxes and
charges which may be payable in respect of the issuance or delivery of the
Rights Certificates or of any certificates for a number of one one-thousandths
of a share of Preferred Stock (or Common Stock of the Company 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 Rights Certificates to a Person other
than, or the issuance or delivery of certificates for a number of shares of
Preferred Stock (or Common Stock of the Company and/or other securities, as the
case may be) in a name other than that of, the registered holder of the Rights
Certificate evidencing Rights surrendered for exercise or to issue or deliver
any certificates for a number one one-thousandths of a share of Preferred Stock
(or Common Stock of the Company 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 Rights Certificate at the time of surrender) or until it has been
established to the Company's satisfaction that no such tax is due.
SECTION 10. PREFERRED STOCK RECORD DATE.
Each person in whose name any certificate for a number of one
one-thousandths of a share of Preferred Stock (or Common Stock of the Company
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
such fractional shares of Preferred Stock (or Common Stock of the Company and/or
other securities, as the case may be) represented thereby on, and such
certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Preferred Stock (or
Common Stock of the Company 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 Stock
(or Common Stock of the Company and/or other securities as the case may be)
transfer books of the Company are open. Prior to the
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<PAGE> 19
exercise of the Rights evidenced thereby, the holder of a Rights Certificate
shall not be entitled to any rights of a stockholder of the Company with respect
to shares for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided herein.
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES OR
NUMBER OF RIGHTS.
The Purchase Price, the number and kind of shares covered by each
Right and the number of Rights outstanding are subject to adjustment from time
to time as provided in this Section 11.
(a)(i) In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Preferred Stock payable in shares
of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine
the outstanding Preferred Stock into a smaller number of shares or (D) issue any
shares of its capital stock in a reclassification of the Preferred Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), except
as otherwise provided in this Section 11(a) and Section 7(e) hereof, the
Purchase Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or reclassification, and the
number and kind of shares of Preferred Stock or the number and kind of shares of
capital stock issuable on such date, as the case may be, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive, upon payment of the aggregate adjusted
Purchase Price then in effect necessary to exercise a Right in full, the
aggregate number and kind of shares of Preferred Stock or the number and kind of
shares of capital stock, as the case may be, which, if such Right had been
exercised immediately prior to such date and at a time when the Preferred Stock
(or other capital stock, as the case may be) 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 this Section 11(a)(i)
and Section 11(a)(ii) hereof, the adjustment provided for in this Section
11(a)(i) shall be in addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Sections 23 and 24 of this Agreement, in the
event that 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 Person or entity organized, appointed or established by the Company for or
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<PAGE> 20
pursuant to the terms of any such plan), alone or together with its Affiliates
and Associates, shall, at any time after the Rights Dividend Declaration Date,
become an Acquiring Person, unless the event causing such Person to become an
Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an
acquisition of shares of Common Stock of the Company pursuant to a cash tender
offer made pursuant to Section 14(d) of the Exchange Act for all outstanding
shares of Common Stock of the Company (other than shares of Common Stock of the
Company beneficially owned by the Person making the offer or by its Affiliates
or Associates) at a price and on terms determined by at least two-thirds of the
Directors, after receiving advice from one or more investment banking firms, to
be (a) fair to shareholders (taking into account all factors which such members
of the Board deem relevant including, without limitation, prices which could
reasonably be achieved if the Company or its assets were sold on an orderly
basis designed to realize maximum value) and (b) otherwise in the best interests
of the Company and its shareholders, proper provision shall be made so that
promptly following the Redemption Period (as defined in Section 23(a)), each
holder of a Right (except as provided below and in Section 7(e) hereof) shall
thereafter have the right to receive, upon exercise thereof and payment of an
amount equal to the then current Purchase Price in accordance with the terms of
this Agreement, in lieu of a number of one one-thousandths of a share of
Preferred Stock, such number of shares of Common Stock of the Company as shall
equal the result obtained by (x) multiplying the then current Purchase Price by
the then number of one one-thousandths of a share of Preferred Stock for which a
Right was or would have been exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event, whether or not such Right was then
exercisable, and (y) dividing that product (which, following such first
occurrence, shall thereafter be referred to as the "Purchase Price" for each
Right and for all purposes of this Agreement except to the extent set forth in
Section 13 thereof) by fifty percent (50%) of the current market price per share
of Common Stock of the Company (determined pursuant to Section 11(d) hereof) on
the date of such first occurrence (such number of shares, the "Adjustment
Shares").
(iii) The Company may at its option substitute for a share of
Common Stock of the Company issuable upon the exercise of Rights in accordance
with the foregoing subparagraph (ii) such number or fractions of shares of
Preferred Stock having an aggregate market value equal to the current per share
market price of a share of Common Stock of the Company. In the event that the
number of shares of Common Stock of the Company which is authorized by the
Company's Amended and Restated Articles of Incorporation but not outstanding, or
reserved for issuance for purposes other than upon exercise of the Rights, is
not sufficient to permit the exercise in full of the Rights in accordance with
the foregoing subparagraph (ii), the Board shall to the extent permitted by
applicable law and by material agreements then in effect to which the Company is
a party, and subject to any limitations contained in Section 13.1-653 of the
Virginia Stock Corporation Act, (A) determine the excess of (1) the value of the
Adjustment Shares issuable upon
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<PAGE> 21
the exercise of a Right (the "Current Value") over (2) the Purchase Price (such
excess, the "Spread"), and (B) with respect to each Right (subject to Section
7(e) hereof), make adequate provision to substitute for some or all of the
Adjustment Shares, upon exercise of a Right and payment of the applicable
Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common
Stock of the Company or other equity securities of the Company (including,
without limitation, shares, or units of shares, of Preferred Stock which the
Board has deemed to have the same value as shares of Common Stock of the
Company) (such shares of equity securities are herein called "common stock
equivalents"), (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 based upon
the advice of an investment banking firm selected by the Board; provided,
however, if the Company shall not have made adequate provision to deliver value
pursuant to clause (B) above within thirty (30) days following the later of (x)
the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the
Company's right of redemption pursuant to Section 23(a) expires (the later of
(x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"),
then the Company shall be obligated to deliver, upon the surrender for exercise
of a Right and without requiring payment of the Purchase Price, shares of Common
Stock of the Company (to the extent available) and then, if necessary, cash,
which shares and/or cash have an aggregate value equal to the Spread.
If, upon the occurrence of a Section 11(a)(ii) Event, the Board
shall determine in good faith that it is likely that sufficient additional
shares of Common Stock of the Company could be authorized for issuance upon
exercise in full of the Rights, then if the Board so elects, the thirty (30) day
period set forth above may be extended to the extent necessary, but not more
than ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that
the Company may seek shareholder approval for the authorization of such
additional shares (such period, as it may be extended, the "Substitution
Period"). To the extent that action is to be taken pursuant to the preceding
provisions of this Section 11(a)(iii), the Company (x) shall provide, subject to
Section 7(e) hereof, that such action shall apply uniformly to all outstanding
Rights, and (y) may suspend the exercisability of the Rights until the
expiration of the Substitution Period in order to seek any authorization of
additional shares and/or to decide the appropriate form of distribution to be
made pursuant to the first sentence of this Section 11(a)(iii) and to determine
the value thereof. In the event of any such suspension, the Company shall issue
a public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. For purposes of this Section 11(a)(iii), the
value of the Common Stock of the Company shall be the current market price (as
determined pursuant to Section 11(d) hereof) per share of the Common Stock of
the Company on the Section 11(a)(ii) Trigger Date and the value of any "common
stock equivalent" shall be deemed to have the same value as the Common Stock of
the Company on such
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<PAGE> 22
date. The Board may, but shall not be required to, establish procedures to
allocate the right to receive shares of Common Stock of the Company upon the
exercise of the Rights among holders of Rights pursuant to this Section
11(a)(iii).
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Stock entitling them
(for a period expiring within forty-five (45) calendar days after such record
date) to subscribe for or purchase Preferred Stock (or shares having the same
rights, privileges and preferences as the shares of Preferred Stock ("equivalent
preferred stock") or securities convertible into Preferred Stock at a price per
share of Preferred Stock or per share of "equivalent preferred stock" (or having
a conversion price per share of Preferred Stock, if a security convertible into
Preferred Stock) less than the current per share market price of the Preferred
Stock (as defined in Section 11(d)) on such record date, the Purchase Price to
be in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the number of shares of Preferred Stock
outstanding on such record date, plus the number of shares of Preferred Stock
which the aggregate offering price of the total number of shares of Preferred
Stock and/or equivalent preferred stock so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be offered) would
purchase at such current market price, and the denominator of which shall be the
number of shares of Preferred Stock outstanding on such record date, plus the
number of additional shares of Preferred Stock and/or equivalent preferred stock
to be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible). 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, whose determination shall be described in
a statement filed with the Rights Agent and shall be conclusive for all
purposes. Shares of Preferred Stock owned by or held for the account of the
Company shall not be deemed outstanding for the purpose of any such computation.
Such adjustment shall be made successively whenever such a record date is fixed;
and in the event that such rights or warrants are not so issued, the Purchase
Price shall be adjusted to be the Purchase Price which would then be in effect
if such record date had not been fixed.
(c) In case the Company shall fix a record date for a distribution
to all holders of Preferred Stock (including any such distribution made in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation) of evidences of indebtedness, cash (other than a
regular quarterly cash dividend of the Company in compliance with Section
13.1-653 of the Virginia Stock Corporation Act), assets (other than a dividend
payable in Preferred Stock, but including any dividend payable in stock other
than Preferred Stock), or subscription rights or warrants (excluding those
referred to in Section 11(b)), the Purchase Price to be in effect after such
record date shall be determined by multiplying the
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<PAGE> 23
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 Stock (as defined in Section 11(d)) on such record date, less the fair
market value (as determined in good faith by the Board, whose determination
shall be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes) of the portion of the cash, assets or evidences of
indebtedness so to be distributed or of such subscription rights or warrants
applicable to a share of Preferred Stock and the denominator of which shall be
such current per share market price of the Preferred Stock. Such adjustment
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.
(d) (i) For the purpose of any computation hereunder, the "current
market price" of the Common Stock of the Company on any date shall be deemed to
be the average of the daily closing prices per share of such Common Stock of the
Company for the thirty (30) consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date, and for purposes of
computations made pursuant to Section 11(a)(iii) hereof, the "current market
price" per share of Common Stock of the Company on any date shall be deemed to
be the average of the daily closing prices per share of Common Stock of the
Company for the ten (10) consecutive Trading Days immediately following such
date; provided, however, that in the event that the current market price of the
Common Stock is determined during a period following the announcement by the
issuer of such Common Stock of (i) a dividend or distribution on such Common
Stock payable in shares of such Common Stock or securities convertible into such
Common Stock (other than the Rights), or (ii) any subdivision, combination or
reclassification of such Common Stock, and prior to the expiration of the
requisite thirty (30) Trading Day or ten (10) Trading Day period, as set forth
above, after the ex-dividend date for such dividend or distribution, or the
record date for such subdivision, combination or reclassification, then, and in
each such case, the "current market price" shall be appropriately adjusted to
take into account ex-dividend trading. The closing price for each day shall be
the last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the shares of Common Stock of the Company 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 shares of Common Stock
are listed or admitted to trading or, if the shares of Common Stock of the
Company 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 the
National Association of Securities
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<PAGE> 24
Dealers, Inc. Automated Quotations System ("NASDAQ") or such other system then
in use, or, if on any such date the shares of Common Stock of the Company 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 shares
of Common Stock selected by the Board. If on any such date no market maker is
making a market in the Common Stock, the fair value of such shares on such date
as determined in good faith by the Board shall be used. The term "Trading Day"
shall mean a day on which the principal national securities exchange on which
the shares of Common Stock are listed or admitted to trading is open for the
transaction of business, or, if the shares of Common Stock are not listed or
admitted to trading on any national securities exchange, the term "Trading Day"
shall mean a Monday, Tuesday, Wednesday, Thursday or Friday on which banking
institutions in the Commonwealth of Virginia are not authorized or obligated by
law or executive order to close. If the Common Stock is not publicly held or not
listed or traded, "current market price" shall mean the fair value per share as
determined in good faith by the Board, whose determination shall be described in
a statement filed with the Rights Agent and shall be conclusive for all
purposes.
(ii) For the purpose of any computation hereunder, the
"current market price" per share of Preferred Stock shall be determined in the
same manner as set forth above for the Common Stock of the Company in clause (i)
of this Section 11(d) (other than the last sentence thereof). If the current
market price per share of Preferred Stock cannot be determined in the manner
provided above or if the Preferred Stock is not publicly held or listed or
traded in a manner described in clause (i) of this Section 11(d), the "current
market price" per share of Preferred Stock shall be conclusively deemed to be an
amount equal to one thousand (1000) (as such number may be appropriately
adjusted for such events as stock splits, stock dividends and recapitalizations
with respect to the Common Stock of the Company occurring after the date of this
Agreement) multiplied by the current market price per share of the Common Stock.
If neither the Common Stock of the Company nor the Preferred Stock is publicly
held or so listed or traded, "current market price" per share of the Preferred
Stock shall mean the fair value per share as determined in good faith by the
Board, whose determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes. For all purposes of this
Agreement, the "current market price" of one one-thousandth of a share of
Preferred Stock shall be equal to the "current market price" of one (1) share of
Preferred Stock divided by one thousand (1,000).
(e) Anything herein to the contrary notwithstanding, no adjustment
in the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least one percent (1%) in such price; provided,
however, that any adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall be made to
the nearest
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<PAGE> 25
cent or to the nearest ten-thousandth of a share of Common Stock or other share
or one-millionth of a share of Preferred Stock, as the case may be.
Notwithstanding the first sentence of this Section 11(e), an adjustment required
by this Section 11 shall be made no later than the earlier of (i) three (3)
years from the date of the transaction which requires such adjustment or (ii)
the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock of the Company
other than Preferred Stock, thereafter the number of such other shares so
receivable upon exercise of any Right and the Purchase Price thereof shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Preferred Stock
contained in Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m), and
the provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the
Preferred Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-thousandths of a
share of Preferred Stock purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided
in Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of one one-thousandths of
a share of Preferred Stock (calculated to the nearest one-millionth) obtained by
(i) multiplying (x) the number of one one-thousandths of a share covered by a
Right immediately prior to this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in lieu of any adjustment in
the number of one one-thousandths of a share of Preferred Stock 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-thousandths
of a share of Preferred Stock for which a Right was exercisable immediately
prior to such adjustment. Each Right held of record prior to such adjustment of
the number of Rights shall become that number of Rights (calculated to the
nearest ten-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to
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<PAGE> 26
adjustment of the Purchase Price by the Purchase Price in effect immediately
after adjustment of the Purchase Price. The Company shall make a public
announcement of its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Rights Certificates have
been issued, shall be at least ten (10) days later than the date of the public
announcement. If Rights Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of Rights
Certificates on such record date Rights Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and replacement for the
Rights Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Rights Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein (and may bear, at the option
of the Company, the adjusted Purchase Price) and shall be registered in the
names of the holders of record of Rights Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of one one-thousandths of a share of Preferred Stock issuable upon
the exercise of the Rights, the Rights Certificates theretofore and thereafter
issued may continue to express the Purchase Price per one one-thousandth of a
share and the number of shares which were expressed in the initial Rights
Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then-par value, if any, of the number of one
one-thousandths of a share of Preferred Stock 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 non-assessable such number of one one-thousandths of a
share of Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the number of shares of one one-thousandths of a share of Preferred Stock and
other capital stock or securities
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<PAGE> 27
of the Company, if any, issuable upon such exercise over and above the number of
shares of Preferred Stock and other capital stock or securities of the Company,
if any, issuable upon such exercise on the basis of the Purchase Price in effect
prior to such adjustment; provided, however, that the Company shall deliver to
such holder a due bill or other appropriate instrument evidencing such holder's
right to receive such additional shares upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that the Company in its sole discretion shall determine to be
advisable in order that any (i) consolidation or subdivision of the Preferred
Stock, (ii) issuance wholly for cash of any shares of Preferred Stock at less
than the current market price, (iii) issuance wholly for cash of shares of
Preferred Stock or securities which by their terms are convertible into or
exchangeable for Preferred Stock, (iv) stock dividends or (v) issuance of
rights, options or warrants referred to hereinabove in this Section 11,
hereafter made by the Company to holders of the Preferred Stock of the Company
shall not be taxable to such shareholders.
(n) The Company covenants and agrees that the Company shall not, at
any time after the Distribution Date, (i) consolidate with any other Person
(other than a Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof), (ii) merge with or into any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)
hereof), or (iii) sell or transfer (or permit any Subsidiary to sell or
transfer), in one transaction, or a series of related transactions, assets or
earning power aggregating more than fifty percent (50%) of the assets or earning
power of the Company and its Subsidiaries (taken as a whole) to any other Person
or Persons (other than the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o) hereof), if (x) at the
time of or immediately after such consolidation, merger or sale there are any
rights, warrants or other instruments or securities outstanding or agreements in
effect which would substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights or (y) prior to, simultaneously with or
immediately after such consolidation, merger or sale, the stockholders of the
Person who constitutes, or would constitute, the "Principal Party" for purposes
of Section 13(a) hereof shall have received a distribution of Rights previously
owned by such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23 or Section 27 hereof, take
(or permit any Subsidiary to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will diminish substantially
or otherwise eliminate the benefits intended to be afforded by the Rights.
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<PAGE> 28
(p) Anything in this Agreement to the contrary notwithstanding, in
the event that the Company shall at any time after the Rights Dividend
Declaration Date and prior to the Distribution Date (i) declare a dividend on
the outstanding shares of Common Stock of the Company payable in shares of
Common Stock, (ii) subdivide the outstanding shares of Common Stock, or (iii)
combine the outstanding shares of Common Stock into a smaller number of shares,
the number of Rights associated with each share of Common Stock then
outstanding, or issued or delivered thereafter but prior to the Distribution
Date, shall be proportionately adjusted so that the number of Rights thereafter
associated with each share of Common Stock following any such event shall equal
the result obtained by multiplying the number of Rights associated with each
share of Common Stock immediately prior to such event by a fraction the
numerator of which shall be the total number of shares of Common Stock of the
Company outstanding immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares of Common Stock of the
Company outstanding immediately following the occurrence of such event.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF
SHARES.
Whenever an adjustment is made as provided in Sections 11 and 13
hereof, the Company shall (a) promptly prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent and with each transfer agent for the
Preferred Stock and Common Stock a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Rights Certificate (or, if prior to the
Distribution Date, to each holder of a certificate representing shares of Common
Stock) in accordance with Section 25 hereof. 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 adjustment unless and
until it shall have received such certificate.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.
(a) Subject to Section 23 of this Agreement, in the event that,
following the Stock Acquisition Date, directly or indirectly, (w) the Company
shall consolidate with, or merge with and into, any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)
hereof), and the Company shall not be the continuing or surviving corporation
of such consolidation or merger, (x) any Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o) hereof) shall
consolidate with, or merge with or into, the Company, and the Company shall be
the continuing or surviving
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<PAGE> 29
corporation of such consolidation or merger and, in connection with such
consolidation or merger, all or part of the outstanding shares of Common Stock
of the Company shall be changed into or exchanged for stock or other securities
of any other Person or cash or any other property, (y) the Company shall be a
party to a statutory share exchange with any other person (other than a
Subsidiary of the Company in a transaction that complies with Section 11(o)
hereof) or (z) the Company shall sell or otherwise transfer (or one or more of
its Subsidiaries shall sell or otherwise transfer), in one transaction or a
series of related transactions, assets or earning power aggregating more than
fifty percent (50%) of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or Persons (other than the
Company or any Subsidiary of the Company in one or more transactions each of
which complies with Section 11(o) hereof), then, and in each such case (except
as may be contemplated by Section 13(d) hereof), proper provision shall be made
so that: (i) each holder of a Right, except as provided in Section 7(e) hereof,
shall, upon the expiration of the Redemption Period (as defined in Section
23(a)), thereafter have the right to receive, upon the exercise thereof at the
then current Purchase Price in accordance with the terms of this Agreement,
such number of validly authorized and issued, fully paid, non-assessable and
freely tradable shares of Common Stock of the Principal Party (as such term is
hereinafter defined), not subject to any liens, encumbrances, rights of first
refusal or other adverse claims, as shall be equal to the result obtained by
(1) multiplying the then current Purchase Price by the number of one
one-thousandths of a share of Preferred Stock for which a Right was exercisable
immediately prior to the first occurrence of a Section 13 Event (or, if a
Section 11(a)(ii) Event has occurred prior to the first occurrence of a Section
13 Event, multiplying the number of one one-thousandths of a share of Preferred
Stock for which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event by the Purchase Price in effect
immediately prior to such first occurrence), and (2) dividing that product
(which product, following the first occurrence of a Section 13 Event, shall be
referred to as the "Purchase Price" for each Right and for all purposes of this
Agreement) by fifty percent (50%) of the current market price per share of the
shares of Common Stock of such Principal Party on the date of consummation of
such Section 13 Event (or the fair market value on such date or other
securities or property of the Principal Party, as provided for herein); (ii)
such Principal Party shall thereafter be liable for, and shall assume, by
virtue of such Section 13 Event, all the obligations and duties of the Company
pursuant to this Agreement; (iii) the term "Company" shall thereafter be deemed
to refer to such Principal Party, it being specifically intended that the
provisions of Section 11 hereof (other than Sections 11(a)(ii) and 11(a)(iii))
shall apply only to such Principal Party following the first occurrence of a
Section 13 Event; (iv) such Principal Party shall take such steps (including,
but not limited to, the reservation of a sufficient number of shares of Common
Stock of such Principal Party) in connection with the consummation of any such
transaction as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as
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<PAGE> 30
reasonably may be, in relation to such Principal Party's shares of Common Stock
thereafter deliverable upon the exercise of the Rights; and (v) the provisions
of Section 11(a)(ii) and Section 11(a)(iii) hereof shall be of no effect
following the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (w),
(x) or (y) of the first sentence of Section 13(a), the Person that is
the issuer of any securities into which shares of Common Stock of the
Company are converted in such merger, consolidation or statutory
share exchange, and if no securities are so issued, the Person that
is the other party to such merger, consolidation or statutory share
exchange; and
(ii) in the case of any transaction described in clause (z) of
the first sentence of Section 13(a), the Person that is the party
receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions; provided,
however, that in any such case, (1) if the Common Stock of such
Person is not at such time and has not been continuously over the
preceding twelve (12) month period registered under Section 12 of the
Exchange Act, and such Person is a direct or indirect Subsidiary of
another Person the Common Stock of which is and has been so
registered, "Principal Party" shall refer to such other Person; and
(2) in case such Person is a Subsidiary, directly or indirectly, of
more than one Person, the Common Stocks of two or more of which are
and have been so registered, "Principal Party" shall refer to
whichever of such Persons is the issuer of the Common Stock having
the greatest aggregate market value.
(c) The Company shall not consummate any Section 13 Event unless the
Principal Party shall have a sufficient number of authorized shares of such
Principal Party's Common Stock which have not been issued or reserved for
issuance to permit the exercise in full of the Rights in accordance with this
Section 13 and unless prior thereto the Company and such Principal Party shall
have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in paragraphs (a) and (b) of this Section 13
and further providing that, as soon as practicable after the date of any such
Section 13 Event, the Principal Party will:
(i) prepare and file a registration statement under the
Securities Act, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, and
will use best efforts to cause such registration statement to (A)
become effective as soon as practicable after such filing and (B)
remain effective (with a
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<PAGE> 31
prospectus at all times meeting the requirements of the Act) until
the Expiration Date; and
(ii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form
10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or statutory share exchanges or sales or other transfers. In the
event that a Section 13 Event shall occur at any time after the occurrence of a
Section 11(a)(ii) Event, the Rights which have not theretofore been exercised
shall thereafter become exercisable in the manner described in Section 13(a)
hereof.
(d) Notwithstanding anything in this Agreement to the contrary,
Section 13 shall not be applicable to a transaction described in subparagraphs
(w), (x) and (y) of Section 13(a) if (i) such transaction is consummated with a
Person or Persons (or a wholly owned subsidiary of any such Person or Persons)
who acquired shares of Common Stock of the Company pursuant to a cash tender
offer for all outstanding shares of Common Stock of the Company which complies
with the provisions of Section 11(a)(ii) hereof, (ii) the price per share of
Common Stock offered in such transaction is not less than the price per share of
Common Stock paid to all holders of Common Stock whose shares were purchased
pursuant to such cash tender offer and (iii) the form of consideration being
offered to the remaining holders of shares of Common Stock pursuant to such
transaction is the same as the form of consideration paid pursuant to such cash
tender offer. Upon consummation of any such transaction contemplated by this
Section 13(d), all Rights hereunder shall expire.
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights
except prior to the Distribution Date as provided in Section 11(p) hereof, or to
distribute Rights Certificates which evidence fractional Rights. In lieu of such
fractional Rights, there shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of the whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price for any day shall be the last
sale price, or, in case no such sale takes place on such day, the average of the
high bid and low asked prices, in either case as reported by NASDAQ or such
other system then in use or, if
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<PAGE> 32
on any such date the Rights are not quoted by any such organization, the average
of the closing bid and asked prices as furnished by a professional market maker
making a market in the Rights selected by the Board. If on any such date no such
market maker is making a market in the Rights the fair value of the Rights on
such date as determined in good faith by the Board shall be used. In the event
the Rights are listed or admitted to trading on a national securities exchange,
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 high bid and low
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to the national
securities exchange on which the Rights are listed or admitted to trading.
(b) The Company shall not be required to issue fractions of shares
of Preferred Stock (other than fractions which are integral multiples of one
one-thousandth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates which evidence fractional shares of Common Stock. In
lieu of fractional shares of Preferred Stock that are not integral multiples of
one one-thousandth of a share of Preferred Stock, the Company may pay to the
registered holders of Rights Certificates at the time such Rights are exercised
as herein provided an amount in cash equal to the same fraction of the current
market value of one one-thousandth of a share of Preferred Stock. For purposes
of this Section 14(b), the current market value of one one-thousandth of a share
of Preferred Stock shall be one one-thousandth of the closing price of a share
of Preferred Stock (as determined pursuant to Section 11(d)(ii) hereof) for the
Trading Day immediately prior to the date of such exercise.
(c) Following the occurrence of one of the events specified in
Section 11 giving rise to the right of holders of Rights to receive Common Stock
of the Company, common stock equivalents or other securities upon the exercise
of a Right, the Company shall not be required to issue fractions of shares of
Common Stock, common stock equivalents or other securities upon exercise of the
Rights or to distribute certificates which evidence fractional shares of Common
Stock, common stock equivalents or other securities. In lieu of fractional
shares of Common Stock, common stock equivalents or other securities the Company
may pay to the registered holders of Rights Certificates at the time such Rights
are exercised as herein provided an amount in cash equal to the same fraction of
the current market value of one (1) share of Common Stock, common stock
equivalents or other securities. For purposes of this Section 14(c), the current
market value of one (1) share of Common Stock of the Company shall be the
closing price of one (1) share of Common Stock of the Company (as determined
pursuant to Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise.
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<PAGE> 33
(d) 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 Agreement, except the rights
of action vested in the Rights Agent pursuant to Section 18 and Section 20
hereof, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Rights Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), may enforce, and may institute and
maintain any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, such holder's right to exercise the Rights
evidenced by such Rights Certificate in the manner provided in such Rights
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened violations
of, the obligations hereunder of any Person subject to this Agreement.
SECTION 16. AGREEMENT OF RIGHTS HOLDERS.
Every holder of a Right by accepting the same consents and agrees
with the Company and the Rights Agent and with every other holder of a Right
that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Stock of the Company;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer and with the appropriate form of assignment and
the certificate contained therein duly completed and executed;
(c) any restriction on transfer imposed or deemed to be imposed by
this Agreement is valid and enforceable against the holder and any transferee of
the holder in accordance with Section 13.1-649 of the Virginia Stock Corporation
Act;
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<PAGE> 34
(d) subject to Section 6(a) and Section 7(f) hereof, the Company and
the Rights Agent may deem and treat the Person in whose name the Rights
Certificate (or, prior to the Distribution Date, the associated Common Stock of
the Company certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or writing
on the Rights Certificates or the associated Common Stock certificate made by
anyone other than the Company or the Rights Agent) for all purposes whatsoever,
and neither the Company nor the Rights Agent, subject to the last sentence of
Section 7(e) hereof, shall be affected by any notice to the contrary; and
(e) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any government authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use its best
efforts to have any such order, decree or ruling lifted or otherwise overturned
as soon as possible.
SECTION 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER.
No holder, as such, of any Rights Certificate shall be entitled to
vote, receive dividends or be deemed for any purpose the holder of the Preferred
Stock 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 contained
herein or in any Rights Certificate be construed to confer upon the holder of
any Rights Certificate, as such, any of the rights of a shareholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to shareholders at any meeting thereof, or to give or withhold consent
to any corporate action, or to receive notice of meetings or other actions
affecting shareholders (except as provided in Section 25 hereof), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by such Rights Certificate shall have been exercised in accordance
with the provisions hereof.
SECTION 18. DUTIES OF RIGHTS AGENT.
The Rights Agent undertakes the duties and obligations imposed by
this Agreement upon the following terms and conditions, by all of which the
Company and the holders of Rights Certificates, by their acceptance thereof,
shall be bound:
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(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the advice or opinion of such counsel shall
be full and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such advice
or opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and the
determination of "current market price") be proved or established by the Company
prior to taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a certificate signed by any
person believed by the Rights Agent to be any one of the Chairman of the Board,
President, a Vice President, the Treasurer or the Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be full authorization
to the Rights Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
gross negligence, bad faith, or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the Rights
Certificates (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.
(e) The Rights Agent is serving as an administrative agent and shall
not be under any responsibility in respect of the validity of any provision of
this Agreement or the execution and delivery of this Agreement (except the due
execution hereof by the Rights Agent) or in respect of the validity or execution
of any Rights Certificate (except its countersignature thereof); nor shall the
Rights Agent be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights Certificate; nor shall
the Rights Agent be responsible for any change in the exercisability of the
Rights (including the Rights becoming void pursuant to Section 7(e) hereof) or
any adjustment required under any of the provisions hereof or responsible for
the manner, method, or amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment (except with respect
to the exercise of Rights evidenced by Rights Certificates after actual notice
of any such adjustment); nor shall the Rights Agent by any act hereunder be
deemed to make any representation or warranty as to the authorization or
reservation of any shares of Common Stock or shares of Preferred Stock to be
issued pursuant to this Agreement or any Rights Certificate or as to whether
any shares of Common Stock or shares of Preferred
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Stock will, when so issued, be validly authorized and issued, fully paid and
non-assessable.
(f) The Company agrees that the Company will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of duties hereunder from any person
believed by the Rights Agent to be any one of the Chairman of the Board, the
Chief Executive Officer, the President, a Vice President, the Secretary or the
Treasurer of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer. Any application by the Rights Agent for
written instructions from the Company may, at the option of the Rights Agent,
set forth in writing any action proposed to be taken or omitted by the Rights
Agent under this Rights Agreement and the date on or after which such action
shall be taken or such omission shall be effective. The Rights Agent shall not
be liable for any action taken by, or omission of, the Rights Agent in
accordance with a proposal included in any such application on or after the date
specified in such application (which date shall not be less than five Business
Days after the date any officer of the Company actually receives such
application, unless any such officer shall have consented in writing to an
earlier date) unless, prior to taking any such action (or the effective date in
the case of an omission), the Rights Agent shall have received written
instruction in response to such application specifying the action to be taken or
omitted.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in the Rights Agent or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights Agent shall not
be answerable or accountable for any act, default, neglect, or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect, or misconduct; provided, however, the Rights Agent was
not grossly negligent in the selection and continued employment thereof.
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(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise of transfer without first consulting with the Company.
(l) The Rights Agent undertakes only the express duties and
obligations imposed on it by this Agreement and no implied duties or obligations
shall be read into this Agreement against the Rights Agent.
SECTION 19. COMPENSATION AND INDEMNIFICATION OF THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by the Rights Agent hereunder and, from
time to time, on demand of the Rights Agent, its reasonable expenses and counsel
fees and other disbursements incurred in the administration and execution of
this Agreement and the exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent, its officers, employees,
agents and directors for, and to hold each of them harmless against, any loss,
liability, or expense, incurred without gross negligence, bad faith or willful
misconduct on the part of the Rights Agent, for anything done or omitted by the
Rights Agent or such other indemnified party in connection with the acceptance
and administration of this Agreement and the exercise of its duties hereunder,
including the costs and expenses of defending against any claim of liability in
the premises. The indemnity provided for hereunder shall survive the expiration
of the Rights and the termination of this Agreement.
(b) The Rights Agent shall be protected and shall incur no liability
for or in respect of any action taken, suffered or omitted by the Rights Agent
in connection with its administration of this Agreement or the exercise of
duties hereunder in reliance upon any Rights Certificate or certificate for
Common Stock or for other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement, or other paper or document believed by the
Rights Agent to be genuine
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and to be signed, executed and, where necessary, verified or acknowledged, by
the proper person or persons.
(c) Anything in this Agreement to the contrary notwithstanding, in
no event shall the Rights Agent be liable for special, indirect or consequential
loss or damage of any kind whatsoever (including but not limited to lost
profits), even if the Rights Agent has been advised of the likelihood of such
loss or damage and regardless of the form of the action unless such loss or
damage results from the gross negligence, bad faith or willful misconduct of the
Rights Agent.
SECTION 20. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS
AGENT.
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which the Rights Agent may be consolidated,
or any corporation resulting from any merger or consolidation to which the
Rights Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto; provided, however, that such corporation would be
eligible for appointment as a successor Rights Agent under the provisions of
Section 21 hereof. In case at the time such successor Rights Agent shall succeed
to the agency created by this Agreement, any of the Rights Certificates shall
have been countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of the predecessor Rights Agent and deliver such
Rights Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all such cases
such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at any such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
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SECTION 21. CHANGE OF RIGHTS AGENT.
The Rights Agent or any successor Rights Agent may resign and be
discharged from its duties under this Agreement upon thirty (30) days' notice in
writing mailed to the Company and to each transfer agent of the Preferred Stock
and the Common Stock by registered or certified mail, and to the holders of the
Rights Certificates by first-class mail. The Company may remove the Rights Agent
or any successor Rights Agent 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 Preferred Stock and the Common Stock by registered or
certified mail, and to the holders of the Rights Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent.
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 Rights Certificate (who shall, with such
notice, submit his Rights Certificate for inspection by the Company), then the
registered holder of any Rights Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the United States or
of the Commonwealth of Virginia or the State of New York (or of any other state
of the United States so long as such corporation is authorized to do business as
a banking institution in the Commonwealth of Virginia or the State of New York),
in good standing, having a principal office in the Commonwealth of Virginia or
the State of New York which is authorized under such laws to exercise corporate
trust power 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 fifty million dollars ($50,000,000).
After appointment, the successor Rights Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally named
as Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Preferred Stock
and the Common Stock, and mail a notice thereof in writing to the registered
holders of the Rights Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.
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SECTION 22. ISSUANCE OF NEW RIGHTS CERTIFICATES.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new Rights
Certificates evidencing Rights in such form as may be approved by the Board to
reflect any adjustment or change in the Purchase Price per share and the number
or kind of class of shares or other securities or property purchasable under the
Rights Certificates made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of shares of Common Stock of
the Company following the Distribution Date (other than upon exercise of a
Right) and prior to the redemption or expiration of the Rights, the Company (a)
shall, with respect to shares of Common Stock of the Company so issued or sold
pursuant to the exercise of stock options or under any employee plan or
arrangement, or upon the exercise, conversion or exchange of securities
hereinafter issued by the Company, and (b) may, in any other case, if deemed
necessary or appropriate by the Board, issue Rights Certificates representing
the appropriate number of Rights in connection with such issuance or sale;
provided, however, that (i) no such Rights Certificate shall be issued if, and
to the extent that, the Company shall be advised by counsel that such issuance
would create a significant risk of material adverse tax consequences to the
Company or the Person to whom such Rights Certificate would be issued, and (ii)
no such Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.
SECTION 23. REDEMPTION.
(a) The Board may, at its option, at any time during the period
commencing on the Rights Dividend Declaration Date and ending on the earlier of
(i) the Close of Business on the tenth (10th) day following the Stock
Acquisition Date (or, if the Stock Acquisition Date shall have occurred prior to
the Record Date, the Close of Business on the tenth (10th) day following the
Record Date), as such period may be extended or shortened in the discretion of
the Board (the "Redemption Period") or (ii) the Final Expiration Date, cause the
Company to redeem all but not less than all the then outstanding Rights at a
redemption price of one half cent ($.005) per Right, as such amount may be
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"); provided, however, that, if
the Board authorizes redemption of the Rights or a change in the Redemption
Period on or after the time a Person becomes an Acquiring Person, then such
authorization shall require the concurrence of two-thirds of the Directors. If,
following the occurrence of a Stock Acquisition Date and following the
expiration of the Company's right of redemption hereunder (i) a Person who is an
Acquiring Person shall have transferred or otherwise disposed of a
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<PAGE> 41
number of shares of Common Stock of the Company in one transaction or series of
transactions, not directly or indirectly involving the Company or any of its
Subsidiaries, which did not result in the occurrence of a Triggering Event such
that such Person is thereafter a Beneficial Owner of ten percent (10%) or less
of the outstanding shares of Common Stock of the Company, (ii) there are no
other Persons, immediately following the occurrence of the event described in
clause (i), who are Acquiring Persons, and (iii) the Board, by a vote of
two-thirds of the Board, shall so approve, then the Company's right of
redemption shall be reinstated and thereafter be subject to the provisions of
this Section 23. Notwithstanding anything contained in this Agreement to the
contrary, the Rights shall not be exercisable after the first occurrence of a
Section 11(a)(ii) Event or a Section 13 Event until such time as the Company's
right of redemption hereunder has expired. The Company may, at its option, pay
the Redemption Price in cash, shares of Common Stock of the Company (based on
the current market price of the Common Stock at the time of redemption) or any
other form of consideration deemed appropriate by the Board.
(b) Immediately upon the action of the Board ordering the redemption
of the Rights, evidence of which shall have been filed with the Rights Agent and
without any further action and without any notice, the right to exercise the
Rights will terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price. Promptly after the action of the Board
ordering the redemption of the Rights, the Company shall give notice of such
redemption to the Rights Agent and the holders of the then outstanding Rights by
mailing such notice to all such holders at their last addresses as they appear
upon the registry books of the Rights Agent or, prior to the Distribution Date,
on the registry books of the transfer agent for the Common Stock. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of redemption will state
the method by which the payment of the Redemption Price will be made.
SECTION 24. EXCHANGE.
(a) The Board may, at its option, at any time after any Person
becomes an Acquiring Person, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 11(a)(ii) or Section 7(e) hereof) for
shares of Common Stock at an exchange ratio of one (1) share of Common Stock per
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio").
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<PAGE> 42
(b) Immediately upon the action of the Board ordering the exchange
of any Rights pursuant to subsection (a) of this Section 24 and without any
further action and without any notice, the right to exercise such Rights shall
terminate and the only right thereafter of a holder of such Rights shall be to
receive that number of shares of Common Stock equal to the number of such Rights
held by such holder multiplied by the Exchange Ratio. The Company shall promptly
give public notice of any such exchange; provided, however, that the failure to
give, or any defect in, such notice shall not affect the validity of such
exchange. The Company 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 Common Stock 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 Rights
which have become void pursuant to the provisions of Section 11(a)(ii) or
Section 7(e) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient Common Stock
issued but not outstanding or authorized but unissued to permit any exchange of
Rights as contemplated in accordance with this Section 24, the Company shall
take all such action as may be necessary to authorize additional shares of
Common Stock for issuance upon exchange of the Rights.
(d) The Company shall not be required to issue fractions of shares
of Common Stock or to distribute certificates which evidence fractional shares
of Common Stock. In lieu of such fractional shares, the Company shall pay to the
registered holders of the Right Certificates with regard to which such
fractional shares would otherwise be issuable an amount in cash equal to the
same fraction of the current market value of a whole share of Common Stock. For
the purposes of this paragraph (d), the current market value of a whole share of
Common Stock shall be the closing price of a share of Common Stock (as
determined pursuant to the second sentence of Section 11(d) hereof) for the
Trading Day immediately prior to the date of exchange pursuant to this Section
24.
SECTION 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose, at any time after the
Distribution Date (i) to pay any dividend payable in stock of any class to the
holders of Preferred Stock or to make any other distribution to the holders of
Preferred Stock (other than a regular quarterly cash dividend of the Company in
compliance with Section 13.1-653 of the Virginia Stock Corporation Act) or (ii)
to offer to the holders of Preferred Stock rights or warrants to subscribe for
or to purchase any
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<PAGE> 43
additional shares of Preferred Stock or shares of stock of any class or any
other securities, rights or options, or (iii) to effect any reclassification of
its Preferred Stock (other than a reclassification involving only the
subdivision of outstanding Preferred Stock), or (iv) to effect any consolidation
or merger into or with, or to effect a statutory share exchange 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 more than
fifty percent (50%) of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to, any other Person, or (v) to effect the
liquidation, dissolution or winding up of the Company, then, in each such case,
the Company shall give to each holder of a Rights Certificate, to the extent
feasible and in accordance with Section 26 hereof, a notice of such proposed
action, which shall specify the record date for the purposes of such stock
dividend, distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, statutory share exchange, sale,
transfer, liquidation, dissolution, or winding up is to take place and the date
of participation therein by the holders of the shares of Preferred Stock, if any
such date is to be fixed, and such notice shall be so given in the case of any
action covered by clause (i) or (ii) above at least twenty (20) days prior to
the record date for determining holders of the shares of Preferred Stock for
purposes of such action and in the case of any such other action, at least
twenty (20) days prior to the date of the taking of such proposed action or the
date of participation therein by the holders of the shares of Preferred Stock
whichever shall be the earlier.
(b) In case any Section 11(a)(ii) Event shall occur, then, in any
such case, (i) the Company shall as soon as practicable thereafter give to each
holder of a Rights Certificate, to the extent feasible and in accordance with
Section 26 hereof, a notice of the occurrence of such event which shall specify
the event and the consequences of the event to holders of Rights under Section
11(a)(ii) hereof, and (ii) all references in the preceding paragraph to
Preferred Stock shall be deemed thereafter to refer to Common Stock and/or, if
appropriate other securities.
SECTION 26. NOTICES.
Notices or demands authorized by this Agreement to be given or made
by the Rights Agent or by the holder of any Rights 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:
BTG, Inc.
3877 Fairfax Ridge Road
Fairfax, Virginia 22030
Attention: Deborah Fox
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<PAGE> 44
Vice President, General Counsel
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Rights Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
First Union National Bank
1525 West W.T. Harris Boulevard
3C3, NC1153
Charlotte, North Carolina 28288-1153
Attention: Victor LaTessa
With a Copy to:
Robinson, Bradshaw & Hinson
101 North Tryon Street
Suite 1900
Charlotte, North Carolina 28246
Attention: Kent McCready, Esq.
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to any such holder at the address of such holder as shown on the
registry books of the Company.
SECTION 27. SUPPLEMENTS AND AMENDMENTS.
Prior to the Distribution Date and subject to the penultimate
sentence of this Section 27, the Company may, and the Rights Agent shall, if the
Company so directs, supplement or amend any provision of this Agreement without
the approval of any holders of certificates representing shares of Common Stock.
From and after the Distribution Date and subject to the penultimate sentence of
this Section 27, the Company may, and the Rights Agent shall at any time and
from time to time, if the Company so directs, supplement or amend this Agreement
without the approval of any holders of Rights Certificates in order (i) to cure
any ambiguity, (ii) to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provisions herein, (iii)
to shorten or lengthen any time period hereunder or (iv) to change or supplement
the provisions hereunder in any manner which the Company may deem necessary or
desirable and which shall not adversely affect the interests of the holders of
Rights Certificates (other than an
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<PAGE> 45
Acquiring Person or an Affiliate or Associate of any such Person); provided,
however, that this Agreement may not be supplemented or amended (A) to lengthen
a time period relating to when the Rights may be redeemed at such time as the
Rights are not then redeemable, or (B) to lengthen any other time period unless
such lengthening is for the purpose of protecting, enhancing or clarifying the
rights of, and/or the benefits to, the holders of Rights (other than an
Acquiring Person or an Affiliate or Associate of any such Person). Upon the
delivery of a certificate from an appropriate officer of the Company which
states that the proposed supplement or amendment is in compliance with the terms
of this Section 27, the Rights Agent shall execute such supplement or amendment.
In addition, no supplement or amendment that changes the rights and duties of
the Rights Agent under this Agreement shall be effective without the consent of
the Rights Agent. Notwithstanding anything contained in this Agreement to the
contrary, no supplement or amendment shall be made which changes the Redemption
Price, the Final Expiration Date, the number of one one-thousandths of a share
of Preferred Stock for which a Right is exercisable, or the Purchase Price;
provided however, that at any time prior to the Distribution Date, the Company
may amend this Agreement to increase the Purchase Price. Prior to the
Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of shares of Common Stock.
SECTION 28. SUCCESSORS.
All the covenants and provisions of this Agreement by or for the
benefit of the Company or the Rights Agent shall bind and inure to the benefit
of their respective successors and assigns hereunder.
SECTION 29. DETERMINATIONS AND ACTIONS BY THE BOARD, ETC.
For all purposes of this Agreement, any calculation of the number of
shares of Common Stock outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding shares of
Common Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules
and Regulations under the Exchange Act. The Board shall have the exclusive power
and authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board or to the Company, or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including without limitation a
determination to redeem or not redeem the Rights or to amend the Agreement). All
such actions, calculations, interpretations and determinations (including, for
purposes of clause (y) below, all
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<PAGE> 46
omissions with respect to the foregoing) which are done or made by the Board in
good faith, shall (x) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights and all other parties, and (y) not
subject any director to any liability to the holders of the Rights.
SECTION 30. BENEFITS OF THIS AGREEMENT.
Nothing in this Agreement shall be construed to give to any Person
other than the Company, the Rights Agent and the registered holders of the
Rights Certificates (and, prior to the Distribution Date, the registered holders
of the Common Stock) any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of the Rights Certificates
(and, prior to the Distribution Date, registered holders of Common Stock).
SECTION 31. SEVERABILITY.
If any term, provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction or other authority to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated; provided, however, that
notwithstanding anything in this Agreement to the contrary, if any such term,
provision, covenant or restriction is held by such court or authority to be
invalid, void or unenforceable and the Board determines in its good faith
judgment that severing the invalid language from this Agreement would materially
and adversely affect the purpose or effect of this Agreement, the right of
redemption set forth in Section 23 hereof shall be reinstated and shall not
expire until the Close of Business on the tenth (10th) day following the date of
such determination by the Board.
SECTION 32. GOVERNING LAW.
This Agreement, each Right and each Rights Certificate issued
hereunder shall be deemed to be a contract made under the laws of the
Commonwealth of Virginia and for all purposes shall be governed by and construed
in accordance with laws of such Commonwealth applicable to contracts made and
performed entirely within such Commonwealth.
SECTION 33. COUNTERPARTS.
This Agreement may be executed in any number of counterparts. It
shall not be necessary that the signature of or on behalf of each party appears
on each counterpart, but it shall be sufficient that the signature of or on
behalf of each
- 43 -
<PAGE> 47
party appears on one or more of the counterparts. All counterparts shall
collectively constitute a single agreement. It shall not be necessary in any
proof of this Agreement to produce or account for more than a number of
counterparts containing the respective signatures of or on behalf of all of the
parties.
SECTION 34. DESCRIPTIVE HEADINGS.
Descriptive headings of the several Sections of this Agreement are
inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
[The rest of this page has been left blank intentionally.]
- 44 -
<PAGE> 48
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
BTG, INC.
Attest:
By: /s/ Dennis A. Adelson By: /s/ Todd Stottlemyer
--------------------- ---------------------
Name: Dennis A. Adelson Name: Todd Stottlemyer
--------------------- ---------------------
Title: Asst. General Counsel Title: Senior Vice President
--------------------- ---------------------
FIRST UNION NATIONAL BANK
Attest:
By: /s/ Kristin N. Knapp By: /s/ Victor W. LaTessa
--------------------- ---------------------
Name: Kristin N. Knapp Name: Victor W. LaTessa
--------------------- ---------------------
Title: Asst. Vice President Title: Vice President
--------------------- ---------------------
- 45 -
<PAGE> 49
EXHIBITS
Exhibit A - Form of Amendment to the Amended and Restated Articles of
Incorporation
Exhibit B - Summary of Rights to Purchase Preferred Stock
Exhibit C - Form of Rights Certificate
<PAGE> 1
EXHIBIT 99.2
EXHIBIT A
ARTICLES OF AMENDMENT
TO
THE AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
BTG, INC.
1. The name of the corporation is BTG, Inc.
2. On September 16, 1998, pursuant to Section 13.1-639 of the
Virginia Stock Corporation Act and the authority conferred upon the Board of
Directors by the Amended and Restated Articles of Incorporation of the
Corporation, the Board of Directors of the Corporation (the "Board") duly
adopted the following resolutions creating a class of 17,500 shares of preferred
stock designated as Class A Preferred Stock:
RESOLVED, that it is hereby declared to be in the best
interests of the Corporation that the Amended and Restated Articles
of Incorporation of the Corporation be amended to create a new class
of Preferred Stock to consist of 17,500 shares and to be designated
as Class A Preferred Stock, par value $.01 per share (the "Class A
Preferred Stock") and to determine the preferences, limitations and
relative rights of the Class A Preferred Stock by adding to Article
3 of such Amended and Restated Articles of Incorporation, a new
section entitled "Class A Preferred Stock", to read in the form
attached hereto as Appendix I.
RESOLVED, that the amendment to the Amended and Restated
Articles of Incorporation of the Corporation attached hereto as
Appendix I is hereby adopted and that the appropriate officers of
the Corporation are authorized and directed to prepare and to file
with the State Corporation Commission of the Commonwealth of
Virginia this amendment to the Amended and Restated Articles of
Incorporation to give effect thereto.
3. That Appendix I hereto constitutes the amendment referred to in
the following resolutions.
4. That such amendment to the Amended and Restated Articles of
Incorporation of the Corporation was adopted by the Board of Directors of the
Corporation on September 16, 1998. Shareholder action was not required.
<PAGE> 2
Dated: September 16, 1998
ATTEST: BTG, INC.
/s/ Dennis A. Adelson By: /s/ Todd Stottlemyer
- --------------------- --------------------
Name: Dennis A. Adelson Name: Todd Stottlemyer
Title: Asst. General Counsel Title: Senior Vice President
-2-
<PAGE> 3
Appendix I
Section 1. Designation and Amount. The shares of such class, par
value $.01 per share, shall be designated as "Class A Preferred Stock" and the
number of shares constituting such class shall be 17,500. 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 Class 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 Class A Preferred Stock.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of any
shares of any class of Preferred Stock ranking prior and superior to the shares
of Class A Preferred Stock with respect to dividends, the holders of shares of
Class A Preferred Stock shall be entitled to receive, when, as and if declared
by the Board of Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on the 15th day of April, July, October and
January, 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 first issuance of a share or fraction of a share of Class A Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the greater
of (a) $10.00 or (b) subject to the provision for adjustment hereinafter set
forth, 1,000 times the aggregate per share amount of all cash dividends, and
1,000 times the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions, other than a dividend payable in shares of
common stock, par value $.01 per share, of the Corporation (the "Common Stock"),
or a subdivision of the outstanding shares of Common Stock (by reclassification
or otherwise), declared on the Common Stock, since the immediately preceding
Quarterly Dividend Payment Date, or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share or fraction of a
share of Class A Preferred Stock. In the event the Corporation shall at any time
after September 16, 1998 (the "Rights Declaration Date") (i) declare or pay any
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the amount to which holders of
shares of Class 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
<PAGE> 4
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
Class A Preferred Stock as provided in paragraph (A) above immediately after the
Corporation 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 $10.00 per share on the Class 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 Class A Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Class A Preferred Stock, unless
the date of issue of such shares is prior to the record date set 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 Class A Preferred Stock entitled
to receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which event 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 Class 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 Class A Preferred
stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be no more than 60 days prior to the date fixed
for the payment thereof.
Section 3. Voting Rights. The holders of shares of Class A
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Class A Preferred Stock shall entitle the holder thereof to 1,000
votes on all matters submitted to a vote of the shareholders of the Corporation.
In the event the Corporation shall at any time after the Rights Declaration Date
(i) declare any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the number of
votes per share to which holders of shares of Class A Preferred Stock were
entitled immediately prior to such event shall be adjusted by multiplying
-2-
<PAGE> 5
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 by law, the holders of shares of
Class A Preferred Stock and the holders of shares of Common Stock shall vote
together as one class on all matters submitted to a vote of stockholders of the
Corporation.
(C) Except as set forth herein, holders of Class 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.
Section 4. Certain Restrictions.
(A) Whenever dividends or distributions payable on the Class A
Preferred Stock as provided in Section 2 are not paid, thereafter and until such
dividends and distributions, whether or not declared, on shares of Class A
Preferred Stock outstanding shall have been paid in full, the Corporation shall
not:
(i) declare or pay dividends on, or make any other
distributions on, or redeem or purchase or otherwise acquire for consideration
any shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Class A Preferred Stock; or
(ii) declare or pay dividends on, or make any other
distributions on, any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Class A
Preferred Stock, except dividends paid ratably on the Class A Preferred Stock
and all such parity stock on which dividends are payable in proportion to the
total amounts to which the holders of all such shares are then entitled; or
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Class A Preferred Stock,
provided that the Corporation may at any time redeem, purchase or otherwise
acquire shares of any such parity stock in exchange for shares of any stock of
the Corporation ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Class A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration
any shares of Class A Preferred Stock, or any shares of stock
-3-
<PAGE> 6
ranking on a parity with the Class 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 Class 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 authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
to be created by resolution or resolutions of the Board of Directors, subject to
the conditions and restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation (voluntary or otherwise), dissolution or
winding up of the Corporation, no distribution shall be made to the holders of
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Class A Preferred Stock unless, prior thereto,
the holders of shares of Class A Preferred Stock shall have received (.01) per
share, plus any unpaid dividends and distributions payable thereon, whether or
not declared, to the date of such payment (the "Class A Liquidation
Preference"). Following the payment of the full amount of the Class A
Liquidation Preference, no additional distributions shall be made to the holders
of Class A Preferred Stock unless, prior thereto, the holders of shares of
Common Stock shall have received an amount per share (the "Common Adjustment")
equal to the quotient obtained by dividing (i) the Class A Liquidation
Preference by (ii) 1,000 (as appropriately adjusted as set forth in subparagraph
(C) below to reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such number in clause (ii)
immediately above being referred to as the "Adjustment Number"). Following the
payment of the full amount of the Class A Liquidation Preference and the Common
Adjustment in respect of all outstanding shares of Class A Preferred Stock and
Common Stock, respectively, holders of Class A Preferred Stock and holders of
shares of Common Stock shall receive their ratable and proportionate share of
the remaining assets to be distributed in the ratio of the
-4-
<PAGE> 7
Adjustment Number to one (1) with respect to such Preferred Stock and Common
Stock, on a per share basis, respectively.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Class A Liquidation Preference and
the liquidation preferences of all other series of preferred stock, if any,
which rank on a parity with the Class A Preferred Stock, then such remaining
assets shall be distributed ratably to the holders of such parity shares in
proportion to their respective liquidation preferences. In the event, however,
that there are sufficient assets available to permit payment in full of the
Common Adjustment, then such remaining assets shall be distributed ratably to
the holders of Common Stock.
(C) In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the Adjustment Number in effect immediately prior to such event shall be
adjusted by multiplying such Adjustment Number by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
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 the shares of
Class A Preferred Stock shall at the same time be similarly exchanged or changed
in an amount per share (subject to the provision for adjustment hereinafter set
forth) equal to 1,000 times the aggregate amount of stock, securities, cash
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 after the Rights Declaration Date (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of shares of Class 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.
-5-
<PAGE> 8
Section 8. Redemption. The outstanding shares of Class A Preferred
Stock may be redeemed as a whole, but not in part, at any time, or from time to
time, at the option of the Board, at a cash price per share equal to 105 percent
of (i) the product of the Adjustment Number times the Average Market Value (as
such term is hereinafter defined) of the Common Stock, plus (ii) all dividends
which on the redemption date are payable on the shares to be redeemed and have
not been paid or declared, and a sum sufficient for the payment thereof set
apart, without interest. The "Average Market Value" is the average of the
closing sale prices of the Common Stock during the 30 day period immediately
preceding the date before the redemption date on the Composite Tape for New York
Stock Exchange Listed Stocks, or, if such stock is not quoted on the Composite
Tape, on the New York Stock Exchange, or, if such stock is not listed on such
Exchange, on the principal United States securities exchange registered under
the Securities Exchange Act of 1934, as amended, on which such stock is listed,
or, if such stock is not listed on any such exchange, the average of the closing
sale prices with respect to a share of Common Stock during such 30 day period,
as quoted on the National Association of Securities Dealers, Inc. Automated
Quotations System or any system then in use, or if no such quotations are
available, the fair market value of the Common Stock as determined by the Board
in good faith.
Section 9. Ranking. Notwithstanding anything contained herein to the
contrary, the Class A Preferred Stock shall rank junior to all other classes of
the Corporation's Preferred Stock as to voting rights, the payment of dividends
and the distribution of assets in liquidation, unless the terms of any such
class shall provide otherwise.
Section 10. Amendment. The Amended and Restated Articles of
Incorporation of the Corporation shall not be further amended in any manner
which would materially alter or change the powers, preferences or special rights
of the Class A Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of at least a majority of the outstanding shares
of Class A Preferred Stock, voting separately as a class.
Section 11. Fractional Shares. Class A Preferred Stock may be issued
in fractions of a share which shall entitle the holders, in proportion to such
holders fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Class A Preferred Stock.
-6-
<PAGE> 9
IN WITNESS WHEREOF, I have executed and subscribed this Amendment to
the Amended and Restated Articles of Incorporation and do affirm the foregoing
as true under the penalties of perjury this 16th day of September, 1998.
Attest: BTG, INC.
By: /s/ Dennis A. Adelson By: /s/ Todd Stottlemyer
------------------------- --------------------
Name: Dennis A. Adelson Name: Todd Stottlemyer
---------------------- Title: Senior Vice President
Title: Asst. General Counsel
----------------------
-7-
<PAGE> 1
EXHIBIT 99.3
EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE
CLASS A PREFERRED STOCK
On September 16, 1998, the Board of Directors of BTG, Inc. (the
"Corporation") declared a dividend distribution of one Right for each
outstanding share of Common Stock of the Corporation. The distribution is
payable to shareholders of record on September 28, 1998. Each Right, when
exercisable, entitles the registered holder to purchase from the Corporation one
one-thousandth of a share of Class A Preferred Stock, par value $.01 per share
("Preferred Stock") at a price of $65 per one one-thousandth of a share (the
"Purchase Price"), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement (the "Rights Agreement") between the
Corporation and First Union National Bank as Rights Agent (the "Rights Agent").
Initially, the Rights will be deemed to be attached to all Common
Stock outstanding certificates, and no separate certificates evidencing the
Rights will be distributed. The Rights will separate from the Common Stock and a
distribution of Rights Certificates will occur upon the earlier to occur of (i)
10 days following a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired, or obtained the right
to acquire, beneficial ownership of 15% or more of the outstanding shares of
Common Stock (the "Stock Acquisition Date") or (ii) 10 business days (or such
later date as the Directors may determine) following the commencement of a
tender offer or exchange offer the consummation of which would result in the
beneficial ownership by a person of 15% or more of the outstanding shares of
Common Stock (the earlier of such dates being called the "Distribution Date").
Notwithstanding the foregoing, the term "Acquiring Person" will not include (i)
Dr. Edward H. Bersoff, Chairman of the Board, President and Chief Executive
Officer of the Corporation, who beneficially owns in excess of 15% of the
Corporation's Common Stock, and (ii) another shareholder (the "Qualified Exempt
Person") who, as of the date of the adoption of the Rights Agreement,
beneficially owned shares of the Corporation's Common Stock in excess of 19.2%
of the outstanding shares of Common Stock, unless the Qualified Exempt Person
acquires beneficial ownership of an additional 50,000 shares of the Corporation
in excess of the amount beneficially owned by the Qualified Exempt Person on
September 16, 1998 and the Qualified Exempt Person beneficially owns 15% or more
of the Corporation's outstanding Common Stock.
Until the Distribution Date, (i) the Rights will be evidenced by the
Common Stock certificates, and will be transferred only with the Common Stock
<PAGE> 2
certificates, (ii) new Common Stock certificates issued after September 28,
1998, upon transfer or new issuance of the Common Stock will contain a notation
incorporating the Rights Agreement by reference, and (iii) the surrender for
transfer of any certificates for Common Stock outstanding will also constitute
the transfer of the Rights associated with the Common Stock represented by such
certificate.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on March 31, 2008, unless earlier redeemed or
exchanged by the Corporation as described below. The Rights will not be
exercisable by a holder in any jurisdiction where the requisite qualification to
the issuance to such holder, or the exercise by such holder, of the Rights has
not been obtained or is not obtainable.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights will be mailed to holders of record of the
Common Stock as of the close of business on the Distribution Date and,
thereafter, the separate Rights Certificates alone will evidence the Rights.
Except as otherwise determined by the Board of Directors, only shares of Common
Stock issued prior to the Distribution Date will be issued with Rights.
If any Person becomes the beneficial owner of 15% or more of the
Corporation's outstanding Common Stock (except as provided below), each holder
of a Right will have the right, after the end of the redemption period below, to
exercise the Right by purchasing for the Purchase Price, Common Stock (or, in
certain circumstances, cash, property or other securities of the Corporation)
having a value equal to two times such amount. Holders of such Rights will not
be able to exercise however, if the 15% beneficial owner became same by an offer
for all outstanding shares of Common Stock which two-thirds of the Directors
determine to be fair to and otherwise in the best interests of the Corporation
and its shareholders. Following the occurrence of the events set forth in this
paragraph, all Rights that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by any Acquiring Person will be null
and void.
For example, at a Purchase Price of $100 per Right, each Right not
owned by an Acquiring Person (or by certain related parties) following an event
set forth in the preceding paragraph would entitle its holder to purchase $200
worth of Common Stock (or other consideration, as noted above) for $100.
Assuming that the Common Stock had a per share value of $25 at such time, the
holder of each valid Right would be entitled to purchase 8 shares of Common
Stock for $12.50 per share.
In the event that, at any time following the Stock Acquisition Date,
(i) the Corporation is acquired in a merger or other business combination
transaction in which the Corporation is not the surviving corporation (other
than a
- 2 -
<PAGE> 3
merger which follows an offer described in the second preceding paragraph), or
(ii) 50% or more of the Corporation's assets or earning power is sold or
transferred, each holder of a Right (except Rights which previously have been
voided as set forth above), after the expiration of the redemption period
referred to below, shall have the right to receive, upon exercise, common stock
of the acquiring company having a value equal to two times the Purchase Price of
the Right (e.g., common stock of the acquiring company having a value of $200
for the $100 Purchase Price).
At any time after a person or group of affiliated or associated
persons becomes an Acquiring Person, the Board of Directors of the Corporation
may exchange the Rights (other than Rights owned by such person or group which
have become void), in whole or in part, at an exchange ratio of one share of
Common Stock per Right (subject to adjustment).
The Purchase Price payable, and the number of one one-thousandth of
a share of Preferred Stock or other securities or property issuable, upon
exercise of the Rights are subject to adjustment from time to time to prevent
dilution (i) in the event of a stock dividend on, or a subdivision, combination
or reclassification of the Preferred Stock (ii) upon the grant to holders of the
Preferred Stock of certain rights or warrants to subscribe for Preferred Stock
or convertible securities at less than the current market price of the Preferred
Stock or (iii) upon the distribution to holders of the Common Stock of evidences
of indebtedness or assets (excluding regular quarterly cash dividends) or of
subscription rights or warrants (other than those referred to above). With
certain exceptions, no adjustment in the Purchase Price will be required until
cumulative adjustments require an adjustment of at least one percent in such
Purchase Price. The Corporation is not required to issue fractional shares and
in lieu thereof, an adjustment in cash will be made based on the market price of
the Preferred Stock on the last trading date prior to the date of exercise.
In general, the Board of Directors of the Corporation may cause the
Corporation to redeem the Rights in whole, but not in part, at any time up to
the 10th day following the Stock Acquisition Date, as such period may be
extended or shortened by the Board of Directors (the "Redemption Period") at a
price of $.005 per Right (payable in cash, Common Stock or other consideration
deemed appropriate by the Board of Directors). Under certain circumstances set
forth in the Rights Agreement, the decision to redeem the Rights will require
the concurrence of two-thirds of the Directors. After the Redemption Period has
expired, the Corporation's right of redemption may be reinstated (with the
concurrence of two-thirds of the Directors) if an Acquiring Person reduces his
beneficial ownership to 10% or less of the outstanding shares of Common Stock in
a transaction or series of transactions not involving the Corporation and there
are no other Acquiring Persons. Immediately upon the action of the Board of
Directors of the Corporation
- 3 -
<PAGE> 4
ordering redemption of the Rights, the Rights will terminate and the only right
of the holders of Rights will be to receive the $.005 redemption price.
Until a Right is exercised, the holder thereof, as such, will have
no rights as a shareholder of the Corporation, including, without limitation,
the right to vote or to receive dividends. While the distribution of the Rights
will not be subject to federal taxation to shareholders or to the Corporation,
shareholders may, depending upon the circumstances, recognize taxable income in
the event that the Rights become exercisable for Common Stock (or other
consideration) of the Corporation or for common stock of the acquiring company
as set forth above.
Other than those provisions relating to the principal economic terms
of the Rights (except that under certain circumstances the Purchase Price may be
increased), any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Corporation prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement may be amended by the
Board in order to cure any ambiguity, defect or inconsistency or to make changes
which do not adversely affect the interests of holders of Rights (excluding the
interests of any Acquiring Person), or to shorten or lengthen any time period
under the Rights Agreement; provided however, no amendment to adjust the time
period governing redemption may be made at such time as the Rights are not
redeemable.
* * *
- 4 -
<PAGE> 1
EXHIBIT 99.4
EXHIBIT C
[FORM OF RIGHTS CERTIFICATE]
Certificate No. R-_________ ______________ Rights
NOT EXERCISABLE AFTER MARCH 31, 2008, OR EARLIER IF REDEEMED OR EXCHANGED
BY THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $.005 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF ANY SUCH PERSON (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF
SUCH RIGHTS MAY BECOME NULL AND VOID. THE RIGHTS SHALL NOT BE EXERCISABLE,
AND SHALL BE VOID SO LONG AS HELD, BY A HOLDER IN ANY JURISDICTION WHERE
THE REQUISITE QUALIFICATION TO THE ISSUANCE TO SUCH HOLDER, OR THE
EXERCISE BY SUCH HOLDER, OF THE RIGHTS IN SUCH JURISDICTION SHALL NOT HAVE
BEEN OBTAINED OR BE OBTAINABLE. [THE RIGHTS REPRESENTED BY THIS RIGHTS
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME
AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON
(AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS
RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND
VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.] *
- --------
* The portion of the legend in brackets shall be inserted only if applicable and
shall replace the preceding sentence.
<PAGE> 2
RIGHTS CERTIFICATE
BTG, INC.
This certifies that _____________, or its 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 September 16, 1998 (the "Rights Agreement"), between BTG,
Inc., a Virginia corporation (the "Company"), and First Union National Bank (the
"Rights Agent"), to purchase from the Company at any time prior to March 31,
2008, at the office or offices of the Rights Agent designated for such purpose,
or its successors as Rights Agent, one one-thousandth of a fully paid,
non-assessable share of Class A Preferred Stock, $.01 par value per share (the
"Preferred Stock") of the Company, at a purchase price of $65 per one
one-thousandth share (the "Purchase Price"), upon presentation and surrender of
this Rights Certificate with the Form of Election to Purchase and related
Certificate duly executed. The number of Rights evidenced by this Rights
Certificate (and the number of shares which may be purchased upon exercise
thereof) set forth above, and the Purchase Price per one one-thousandth of a
share set forth above, are the number and Purchase Price as of September 16,
1998, based on the Preferred Stock as constituted at such date, and are subject
to adjustment upon the happening of certain events as provided in the Rights
Agreement.
This Rights Certificate is subject to all of the terms, provisions
and conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned office of the
Rights Agent and are also available upon written request to the Rights Agent.
From and after the occurrence of an event described in Section
11(a)(ii) of the Rights Agreement, the Rights evidenced by this Rights
Certificate, which are beneficially owned by (i) an Acquiring Person or an
Affiliate or Associate of any such Person (as such terms are defined in the
Rights Agreement), (ii) a transferee of any such Acquiring Person, Associate or
Affiliate, or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of a person who, concurrently with or after such
transfer, became an Acquiring Person or an Affiliate or Associate of an
Acquiring Person, shall become null and void, and no holder hereof shall have
any right with respect to such Rights from and after the occurrence of such
Section 11(a)(ii) Event.
- 2 -
<PAGE> 3
The Rights evidenced by this Rights Certificate shall not be
exercisable, and shall be void so long as held, by a holder in any jurisdiction
where the requisite qualification to the issuance to such holder, or the
exercise by such holder, of the Rights in such jurisdiction shall not have been
obtained or be obtainable.
As provided in the Rights Agreement, the Purchase Price and the
number and kind of shares of Preferred Stock or other securities, which may be
purchased upon the exercise of the Rights evidenced by this Rights Certificate
are subject to modification and adjustment upon the happening of certain events,
including Triggering Events (as such term is defined in the Rights Agreement).
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the office or offices of the Rights Agent designated for such
purpose, may be exchanged for another Rights Certificate or Right Certificates
of like tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of one one-thousandth of a share of Preferred Stock as the
Rights evidenced by the Rights Certificate or Rights Certificates surrendered
shall have entitled such holder to purchase. If this Rights Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender hereof
another Rights Certificate or Rights Certificates for the number of whole Rights
not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option at a
redemption price of $.005 per Right at any time prior to the earlier of the
close of business on (i) the 10th day following the Stock Acquisition Date (as
such time period may be changed in the discretion of the Board of Directors
pursuant to the Rights Agreement), and (ii) the Final Expiration Date (as
defined in the Rights Agreement). Under certain circumstances set forth in the
Rights Agreement, the decision to redeem shall require the concurrence of
two-thirds of the Directors. After the expiration of the redemption period, the
Company's right of redemption may be reinstated if an Acquiring Person reduces
his beneficial ownership to ten percent (10%) or less of the outstanding shares
of Common Stock in a transaction or series of transactions not involving the
Company, and such reinstatement is approved by the Company's Board of Directors.
At any time after a person becomes an Acquiring Person, the Board of
Directors of the Company may exchange the Rights (other than Rights owned by
such Acquiring Person which have become void), in whole or in part, at an
exchange ratio of one share of Common Stock per Right (subject to adjustment).
No fractional shares of Preferred Stock will be issued upon exercise
of any Right or Rights evidenced hereby (other than fractions which are integral
- 3 -
<PAGE> 4
multiples of one one-thousandth of a share Preferred Stock, 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 Rights Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of shares of
Common Stock or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a shareholder of the Company or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
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<PAGE> 5
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Dated as of
------------------- ------, -----
ATTEST: BTG, INC.
By:
- --------------------- -----------------------------------
Name:
--------------------------------
Title:
--------------------------------
Countersigned:
- -----------------------------
- -----------------------------
By:
--------------------------
Authorized Signature
- 5 -
<PAGE> 6
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if
such holder desires to transfer the
Rights Certificate.)
FOR VALUE RECEIVED
-----------------------------------------------------------
hereby sells, assigns and transfers unto
--------------------------------------
- ------------------------------------------------------------------------------
(Please print name and address of transferee)
- ------------------------------------------------------------------------------
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ________________ Attorney, to
transfer the within Rights Certificate on the books of the within-named Company,
with full power of substitution.
Dated: ,
-------------------- -----
--------------------------------
Signature
Signature Guaranteed:
<PAGE> 7
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned
and transferred by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Person (as such terms are defined pursuant
to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned,
it [ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate
from any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of any such Person.
Dated: ,
--------------- --------- -----
--------------------------------
Signature
Signature Guaranteed:
<PAGE> 8
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
<PAGE> 9
FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder
desires to exercise Rights represented
by the Rights Certificate.)
To:
----------------
The undersigned hereby irrevocably elects to exercise _______ Rights
represented by this Rights Certificate to purchase the shares of Preferred Stock
issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person which may be issuable upon the exercise of the
Rights) and requests that certificates for such shares be issued in the name of
and delivered to:
- --------------------------------------------------------------------------------
(Please print name and address)
- --------------------------------------------------------------------------------
Please insert social security
or other identifying number:
--------------------------
If such number of Rights shall not be all the Rights evidenced by
this Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
- --------------------------------------------------------------------------------
(Please print name and address)
- --------------------------------------------------------------------------------
Please insert social security
or other identifying number:
--------------------------
- ------------------------------------
Dated: ,
------------------ ----
--------------------------------------
Signature
Signature Guaranteed:
<PAGE> 10
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Person (as such terms are
defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned,
it [ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate
from any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of any such Person.
Dated: ,
------------------ --------- -------------------------------------
Signature
Signature Guaranteed:
<PAGE> 11
NOTICE
The signature to the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Rights Certificate
in every particular, without alteration or enlargement or any change whatsoever.
<PAGE> 1
EXHIBIT 99.5
[BTG LETTERHEAD]
BTG ADOPTS SHAREHOLDER RIGHTS PLAN
Fairfax, Virginia, September 17, 1998 -- The Board of Directors of BTG, Inc.
(Nasdaq: BTGI), an information systems and services company, has adopted a
shareholder rights plan to protect its shareholders from potential inequitable
takeover tactics and preserve the future value of the Company.
Dr. Edward H. Bersoff, Chairman of the BTG Board of Directors, said: "The Rights
are designed to serve the best interests of our shareholders, to assure that all
of them receive fair and equal treatment in the event of any proposed takeover
of the Company. It is also designed to encourage any potential acquirers to
negotiate with the Board of Directors prior to attempting a takeover, thus
allowing the board to negotiate a fair price for all shareholders."
Bersoff said the Rights plan is not being authorized in response to any specific
effort to acquire the Company. "The Board of Directors of the Company believes
this measure to be prudent in the current environment of consolidation in the
industry and in the best interests of BTG and its shareholders. More than 1,700
other public corporations also have adopted shareholder rights plans."
The Board declared a dividend distribution of one Preferred Share Purchase Right
on each outstanding share of its Common Stock. Each Right will entitle
shareholders to buy one one-thousandth of a share of newly created Class A
Preferred Stock of the Company at an exercise price of $65. The Rights will be
exercisable if a person or group hereafter acquires 15% or more of the Common
Stock of the Company or announces a tender offer for 15% or more of the Common
Stock. The Board of Directors will be entitled to redeem the Rights at $.005 per
Right at any time before the close of business ten days after any such person or
group acquires 15% or more of BTG's outstanding Common Stock. If a person
hereafter acquires 15% or more of the outstanding Common Stock of the Company,
each Right will entitle its holder to purchase, at the Right's exercise price, a
number of shares of Common Stock having a market value at that time of twice the
Right's exercise price. If the Company is acquired in a merger or other business
combination transaction after a person or group acquires 15% or more of the
Company's Common Stock, 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.
In either case, Rights held by the holder of 15% or more of the Company's
outstanding shares will become void and will not be exercisable to purchase
shares at the lower purchase price.
The dividend distribution will be payable to shareholders of record on September
28, 1998. The Rights will expire on March 31, 2008. The Rights distribution is
not taxable to shareholders.
BTG is a systems integration and engineering services firm that provides
solutions to complex information technology issues for government and commercial
clients. The company specializes in intelligence systems, knowledge management,
and information and network security. More information about BTG is available on
the Web at www.btg.com, by e-mail at [email protected], or by calling 703-383-8000.
