Document:

Exhibit 4.4

 

RIGHTS AGREEMENT

 

by and between

 

BANCTEC, INC.

 

and

 

AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC

 

as Rights Agent

 

 

Dated as of

 

October 1, 2010

 

 

	
Section 1.
    	
Certain   Definitions
    	
1
    
	
 
    	
 
    	
 
    
	
Section 2.
    	
Appointment   of Rights Agent
    	
7
    
	
 
    	
 
    	
 
    
	
Section 3.
    	
Issuance   of Right Certificates
    	
7
    
	
 
    	
 
    	
 
    
	
Section 4.
    	
Form of   Right Certificates
    	
8
    
	
 
    	
 
    	
 
    
	
Section 5.
    	
Countersignature   and Registration
    	
9
    
	
 
    	
 
    	
 
    
	
Section 6.
    	
Transfer,   Split Up, Combination and Exchange of Right Certificates; Mutilated,   Destroyed, Lost or Stolen Right Certificates
    	
9
    
	
 
    	
 
    	
 
    
	
Section 7.
    	
Exercise   of Rights; Exercise Price; Expiration Date of Rights; Invalidation of Certain   Rights
    	
10
    
	
 
    	
 
    	
 
    
	
Section 8.
    	
Cancellation   and Destruction of Right Certificates
    	
13
    
	
 
    	
 
    	
 
    
	
Section 9.
    	
Reservation   and Availability of Shares of Preferred Stock
    	
13
    
	
 
    	
 
    	
 
    
	
Section 10.
    	
Preferred   Stock Record Date
    	
14
    
	
 
    	
 
    	
 
    
	
Section 11.
    	
Adjustment   of Exercise Price or Number of Shares
    	
14
    
	
 
    	
 
    	
 
    
	
Section 12.
    	
Certification   of Adjusted Exercise Price or Number of Shares
    	
19
    
	
 
    	
 
    	
 
    
	
Section 13.
    	
Consolidation,   Merger or Sale or Transfer of Assets or Earning Power
    	
20
    
	
 
    	
 
    	
 
    
	
Section 14.
    	
Fractional   Rights and Fractional Shares
    	
21
    
	
 
    	
 
    	
 
    
	
Section 15.
    	
Rights   of Action
    	
22
    
	
 
    	
 
    	
 
    
	
Section 16.
    	
Agreement   of Right Holders
    	
22
    
	
 
    	
 
    	
 
    
	
Section 17.
    	
Right   Certificate Holder Not Deemed a Shareholder
    	
23
    
	
 
    	
 
    	
 
    
	
Section 18.
    	
Concerning   the Rights Agent
    	
23
    
	
 
    	
 
    	
 
    
	
Section 19.
    	
Merger   or Consolidation of, or Change in Name of, the Rights Agent
    	
24
    
	
 
    	
 
    	
 
    
	
Section 20.
    	
Duties   of Rights Agent
    	
24
    
	
 
    	
 
    	
 
    
	
Section 21.
    	
Change   of Rights Agent
    	
26
    
	
 
    	
 
    	
 
    
	
Section 22.
    	
Issuance   of New Right Certificates
    	
27
    
	
 
    	
 
    	
 
    
	
Section 23.
    	
Redemption
    	
27
    
	
 
    	
 
    	
 
    
	
Section 24.
    	
Notice   of Proposed Actions
    	
28
    
	
 
    	
 
    	
 
    
	
Section 25.
    	
Notices
    	
29
    
	
 
    	
 
    	
 
    
	
Section 26.
    	
Supplements   and Amendments
    	
30
    
	
 
    	
 
    	
 
    
	
Section 27.
    	
Exchange
    	
30
    
	
 
    	
 
    	
 
    
	
Section 28.
    	
Successors
    	
31
    

 

i

 

	
Section 29.
    	
Benefits   of this Agreement
    	
31
    
	
 
    	
 
    	
 
    
	
Section 30.
    	
Governing   Law
    	
32
    
	
 
    	
 
    	
 
    
	
Section 31.
    	
Counterparts
    	
32
    
	
 
    	
 
    	
 
    
	
Section 32.
    	
Descriptive   Headings
    	
32
    
	
 
    	
 
    	
 
    
	
Section 33.
    	
Severability
    	
32
    
	
 
    	
 
    	
 
    
	
Section 34.
    	
Determinations   and Actions by the Board of Directors
    	
32
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Exhibit A
    	
-
    	
Summary   of Rights
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Exhibit B
    	
-
    	
Form of   Right Certificate
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Exhibit C
    	
-
    	
Form of   Certificate of Designations
    	
 
    
					

 

ii

 

RIGHTS AGREEMENT

 

Rights Agreement (this “Agreement”), dated as of October 1, 2010, by and between BANCTEC, INC., a Delaware corporation (the “Corporation”), and AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC, a New York limited liability company (the “Rights Agent”).

 

W I T N E S S E T H :

 

WHEREAS, on September 20, 2010 (the “Declaration Date”), the Board of Directors of the Corporation authorized the issuance of, and declared a dividend payable, in one right (a “Right”) for each share of common stock, par value $.01 per share (“Common Stock”), of the Corporation outstanding as of close of business on October 1, 2010 (the “Record Date”), each such Right representing the right to purchase, upon the terms and subject to the conditions herein set forth, one one-thousandth of a share of Series A Junior Participating Preferred Stock of the Corporation, par value $.01 per share (“Preferred Stock”), having the rights and preferences set forth in the form of Certificate of Designations attached hereto as Exhibit C; and

 

WHEREAS, on such date, the Board of Directors of the Corporation further authorized and directed the issuance of one Right (subject to adjustment) with respect to each share of Common Stock which may be issued between the Record Date and the earliest to occur of the Distribution Date, the Expiration Date or the Final Expiration Date (as such terms are hereinafter defined);

 

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 shall have the meanings provided by this Section 1, any capitalized term defined in this Section 1 and used in the following definitions having the meaning provided by this Section 1:

 

(a)           “Acquiring Person” shall mean any Person who or which, together with all Affiliates and Associates of such Person, shall be the Beneficial Owner of 15% or more of the Voting Stock then outstanding; provided, however, that an Acquiring Person shall not include: (i) an Exempt Person; or (ii) any Person who or which, together with all Affiliates and Associates of such Person, would be an Acquiring Person solely by reason of (A) being the Beneficial Owner of Voting Stock, the Beneficial Ownership of which was acquired by such Person (together with all Affiliates and Associates of such Person) pursuant to any action or transaction or series of related actions or transactions approved by the Board of Directors of the Corporation before such Person (together with all Affiliates and Associates of such Person) otherwise became an

 

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Acquiring Person or (B) a reduction in the number of issued and outstanding Voting Stock pursuant to a transaction or a series of related transactions approved by the Board of Directors of the Corporation; provided, further, that in the event a Person described in this clause (ii) does not become an Acquiring Person by reason of subclause (A) or (B) of this clause (ii), such Person nonetheless shall become an Acquiring Person in the event such Person (together with all Affiliates and Associates of such Person) thereafter acquires Beneficial Ownership of an additional 1% or more of the Voting Stock, unless the acquisition of such additional Voting Stock would not result in such Person becoming an Acquiring Person by reason of subclause (A) or (B) of this clause (ii).  Notwithstanding the foregoing, if the Board of Directors of the Corporation 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), (x) has become such inadvertently or (y) has become such as the result of contractual obligations that are or purport to be legally binding entered into prior to, and not materially amended or modified after, the date of this Agreement and has not acquired 1% or more of the Voting Stock then outstanding by means other than such contractual obligations since the date of this Agreement, and in case of either clause (x) or (y), 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,” as defined pursuant to the foregoing provisions of this paragraph (a) (or, in the case solely of Derivative Shares (as such term is hereinafter defined), such Person terminates the subject derivative transaction or transactions or disposes of the subject derivative security or securities, or establishes to the satisfaction of the Board of Directors that such Derivative Shares are not held with any intention of changing or influencing control of the Corporation), then such Person shall not be deemed to be an “Acquiring Person” for any purposes of this Agreement.  For the avoidance of doubt, if any Person may avoid being an Acquiring Person by divesting Voting Stock as described above, then such Person shall not be considered to become an Acquiring Person until the date that the Board of Directors of the Corporation determines in good faith that such divestiture has not occurred as promptly as practicable.

 

(b)           “Affiliate” shall have the meaning ascribed to such term in Rule 12b-2 of the General Rules and Regulations under the Exchange Act, as in effect on the date of this Agreement.

 

(c)           “Associate” of a Person shall mean (i) with respect to a corporation, any officer or director thereof or any Associate of any Subsidiary thereof, or any Beneficial Owner of 10% or more of any class of equity security thereof, (ii) with respect to an association, any officer or director thereof or any Associate of a Subsidiary thereof, (iii) with respect to a partnership, any general partner thereof or any limited partner thereof

 

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who is, directly or indirectly, the Beneficial Owner of a 10% or greater ownership interest therein, and any Associate of any Subsidiary thereof, (iv) with respect to a limited liability company, any manager or managing member thereof and any Beneficial Owner of 10% or more or any class of membership interest therein or other equity security thereof, and any Associate of any Subsidiary thereof, (v) with respect to a business trust, any officer or trustee thereof or any Associate of any Subsidiary thereof, (vi) with respect to any other trust or an estate, any trustee, executor or similar fiduciary and any Person who has a 10% or greater interest as a beneficiary in the income from or principal of such trust or estate, (vii) with respect to a natural person, the parents and children thereof and any spouse or relative thereof, or any relative of such spouse, who has the same home as such person, and (viii) any Affiliate of such Person.

 

(d)           A person shall be deemed the “Beneficial Owner” of, or to “Beneficially Own”, any securities (and correlative terms shall have correlative meanings):

 

(i)            which such Person or any of such Person’s Affiliates or Associates beneficially owns, directly or indirectly, for purposes of Section 13(d) of the Exchange Act and Regulations 13D and 13G thereunder, in each case as in effect on the date of this Agreement; or

 

(ii)           which such Person or any of such Person’s Affiliates or Associates has (A) the right to acquire (whether such right is exercisable immediately or only after the passage of time or the fulfillment of a condition or both) pursuant to any agreement, arrangement or understanding (whether or not in writing), or upon the exercise of conversion rights, exchange rights, other rights (other than the Rights), warrants or options, or otherwise; provided, however, that a Person shall not be deemed the “Beneficial Owner” of, or to “Beneficially Own”, securities tendered pursuant to a tender or exchange offer made by such Person or any of such Person’s Affiliates or Associates until such tendered securities are accepted for purchase or exchange or (B) the right to vote, alone or in concert with others, pursuant to any agreement, arrangement or understanding (whether or not in writing); provided, however, that a Person shall not be deemed the “Beneficial Owner” of, or to “Beneficially Own”, any securities if the agreement, arrangement or understanding to vote such security (1) arises solely from a revocable proxy or consent given in response to a proxy or consent solicitation made pursuant to, and in accordance with, the applicable rules and regulations under the Exchange Act and (2) is not at the time reportable by such Person on a Schedule 13D report under the Exchange Act (or any

 

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comparable or successor report), other than by reference to a proxy or consent solicitation being conducted by such Person;

 

(iii)          which are beneficially owned, directly or indirectly, by any other Person with which such Person or any of such Person’s Affiliates or Associates has any agreement, arrangement or understanding (whether or not in writing) for the purpose of acquiring, holding, voting (except as described in clause (B) of subparagraph (ii) of this paragraph (d)) or disposing of any securities of the Corporation; provided, however, that for purposes of determining Beneficial Ownership of securities under this Agreement, officers and directors of the Corporation solely by reason of their status as such shall not constitute a group (notwithstanding that they may be Associates of one another or may be deemed to constitute a group for purposes of Section 13(d) the Exchange Act) and shall not be deemed to own shares owned by another officer or director of the Corporation; or

 

(iv)          which are the subject of a derivative transaction entered into by such Person, or derivative security acquired by such Person, which gives such Person the economic equivalent of ownership of an amount of such securities due to the fact that the value of the derivative is explicitly determined by reference to the price or value of such securities, without regard to whether (a) such derivative conveys any voting rights in such securities to such Person, (b) the derivative is required to be, or capable of being, settled through delivery of such securities, or (c) such Person may have entered into other transactions that hedge the economic effect of such derivative.  In determining the number of shares of Voting Stock deemed Beneficially Owned by virtue of the operation of this Section 1(d)(iv), the subject Person shall be deemed to Beneficially Own (without duplication) the number of shares of Voting Stock that are synthetically owned pursuant to such derivative transactions or such derivative securities. Such shares of Voting Stock that are deemed so Beneficially Owned pursuant to the operation of this Section 1(d)(iv) shall be referred to herein as “Derivative Shares.”

 

Notwithstanding anything in this paragraph (d) to the contrary, a Person engaged in the business of underwriting securities shall not be deemed the “Beneficial Owner” of, or to “Beneficially Own,” any securities acquired or otherwise beneficially owned in good faith in a firm commitment underwriting (until the expiration of forty days after the date of the sale of securities to the public pursuant to such firm commitment underwriting.)

 

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Notwithstanding anything in this definition of Beneficial Ownership to the contrary, the phrase “then outstanding,” when used with reference to a Person’s Beneficial Ownership of securities of the Corporation, shall mean the number of such securities then issued and outstanding together with the number of such securities not then actually issued and outstanding which such Person would be deemed to own beneficially hereunder.

 

(e)           “Business Day” shall mean any day other than a Saturday, Sunday, or a day on which banking institutions in the State of New York or the State of Texas 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., New York City time, on such date; provided, however, that if such date is not a Business Day it shall mean 5:00 P.M., New York City time, on the next succeeding Business Day.

 

(g)           “Common Stock” when used with reference to the Corporation shall collectively mean the Common Stock of the Corporation as defined in the first recital hereof and any other common stock of the Corporation into or for which it is changed, converted or exchanged.  “Common Stock” when used with reference to any Person other than the Corporation shall mean the capital stock (or equity interest) with the greatest voting power of such other Person or, if such other Person is a Subsidiary of another Person, the Person or Persons which ultimately control such first-mentioned Person.

 

(h)           “Distribution Date” shall have the meaning set forth in Section 3(b) hereof.

 

(i)            “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

 

(j)            “Exchange Ratio” shall have the meaning set forth in Section 27 hereof.

 

(k)           “Exempt Person” shall mean (i) the Corporation, (ii) any Subsidiary of the Corporation, or (iii) any employee benefit plan or employee stock plan of the Corporation or any Subsidiary of the Corporation, or any trust or other entity organized, appointed, established or holding Voting Stock for or pursuant to the terms of any such plan.

 

(l)            “Exercise Price” shall have the meaning set forth in Section 4 hereof.

 

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(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)           “NASDAQ” shall mean the National Association of Securities Dealers, Inc. Automated Quotation System.

 

(p)           “Person” shall mean any individual, partnership, firm, corporation, limited liability company, association, trust, unincorporated organization or other entity, and shall include any successor (by merger or otherwise) of such entity, as well as any group under Rule 13d-5(b)(1) of the Exchange Act.

 

(q)           “Redemption Price” shall have the meaning set forth in Section 23(a) hereof.

 

(r)            “Right Certificate” shall have the meaning set forth in Section 3(d) hereof.

 

(s)           “Securities Act” shall mean the Securities Act of 1933, as amended.

 

(t)            “Stock Acquisition Date” shall mean the first date on which there shall be a public announcement by the Corporation or an Acquiring Person that an Acquiring Person has become such.

 

(u)           “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 interest is owned, directly or indirectly, by such Person.

 

(v)           “Summary of Rights” shall have the meaning set forth in Section 3(a) hereof.

 

(w)          “Trading Day” shall have the meaning set forth in Section 11(d) hereof.

 

(x)            “Transfer Tax” shall mean any tax or charge, including any documentary stamp tax, imposed or collected by any governmental or regulatory authority in respect of any transfer of any security, instrument or right, including the Rights, shares of the Common Stock and shares of the Preferred Stock.

 

(y)           “Voting Stock” shall mean (i) the Common Stock of the Corporation and (ii) any other shares of capital stock of the Corporation

 

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entitled to vote generally in the election of directors or entitled generally to vote together with the Common Stock in respect of a merger, consolidation, sale of all or substantially all of the Corporation’s assets, liquidation, dissolution or winding up.  For purposes of this Agreement, a stated percentage of the Voting Stock shall mean a number of Voting Stock as shall equal in voting power that stated percentage of the total voting power of the then outstanding Voting Stock in the election of a majority of the Board of Directors of the Corporation or in respect of a merger, consolidation, sale of all or substantially all of the Corporation’s assets, liquidation, dissolution or winding up.

 

Any determination required to be made by the Board of Directors of the Corporation for purposes of applying the definitions contained in this Section 1 shall be made by a majority of the Board of Directors of the Corporation in its good faith judgment, which determination shall be binding on the Rights Agent and the holders of the Rights.

 

Section 2.               Appointment of Rights Agent.  The Corporation hereby appoints the Rights Agent to act as agent for the Corporation in accordance with the terms and conditions hereof, and the Rights Agent hereby accepts such appointment.  The Corporation may from time to time appoint such co-rights agents as it may deem necessary or desirable upon ten (10) days prior written notice to the Rights Agent.  If the Corporation appoints one or more co-rights agents, the respective duties of the Rights Agent and any co-rights agents shall be as the Corporation shall determine, and the Corporation will notify, in writing, the Rights Agent and any co-rights agents of any such respective duties.  The Rights Agent shall have no duty to supervise, and shall in no event be liable for, the acts or omissions of any such co-rights agent.

 

Section 3.               Issuance of Right Certificates.

 

(a)           On the Record Date (or as soon as practicable thereafter), the Corporation or the Rights Agent shall send a copy of a Summary of Rights, in substantially the form attached hereto as Exhibit A (the “Summary of Rights”), by first class mail, postage prepaid, to each record holder of the Common Stock as of the Record Date, at the address of such holder shown on the records of the Corporation.

 

(b)           Until the Close of Business on the day which is the earlier of (i) the tenth Business Day after the Stock Acquisition Date or (ii) the tenth Business Day (or such later date as may be determined by action of the Board of Directors of the Corporation prior to such time as any Person becomes an Acquiring Person) after the date of the commencement by any Person (other than an Exempt Person) of a tender or exchange offer upon the successful consummation of which any Person would result in any Person becoming an Acquiring Person (including any such date which is after the date of this Agreement and prior to the issuance of the Rights; the earlier of such dates being herein referred to as the “Distribution Date”), (x) the Rights shall be evidenced by the certificates for Common Stock (or in the case of uncertificated shares of Common

 

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Stock, by the book-entry account that evidences record ownership for such shares) registered in the names of the holders of Common Stock (together with, in the case of certificates for Common Stock outstanding as of the Record Date, the Summary of Rights) and not by separate Right certificates and the record holders of such certificates (or such book-entry accounts) for Common Stock shall be the record holders of the Rights represented thereby and (y) each Right shall be transferable only simultaneously and together with the transfer of a share of Common Stock.  Until the Distribution Date (or, if earlier, the Expiration Date or Final Expiration Date), the surrender for transfer of any certificate for Common Stock (or the effectuation of a book-entry transfer of shares of Common Stock) shall constitute the surrender for transfer of the Right or Rights associated with the Common Stock evidenced thereby, whether or not accompanied by a copy of the Summary of Rights.

 

(c)           Rights shall be issued in respect of all shares of Common Stock that become outstanding after the Record Date but prior to the earliest of the Distribution Date, the Expiration Date or the Final Expiration Date.  Certificates for Common Stock (including, without limitation, certificates issued upon original issuance, disposition from the Corporation’s treasury or transfer or exchange of Common Stock) after the Record Date but prior to the earliest of the Distribution Date, the Expiration Date, or the Final Expiration Date shall have impressed, printed, written or stamped thereon or otherwise affixed thereto the following legend:

 

This certificate also evidences and entitles the holder hereof to the same number of Rights (subject to adjustment) as the number of shares of common stock represented by this certificate, such Rights being on the terms provided under the Rights Agreement by and between BancTec, Inc. and American Stock Transfer & Trust Company, LLC (the “Rights Agent”), dated as of October 1, 2010, as it may be amended from time to time (the “Agreement”), the terms of which are incorporated herein by reference and a copy of which is on file at the principal executive offices of BancTec, Inc.  Under certain circumstances, as set forth in the Agreement, such Rights shall be evidenced by separate certificates and shall no longer be evidenced by this certificate.  BancTec, Inc.  shall mail to the registered holder of this certificate a copy of the Agreement without charge after receipt of a written request therefor.  As provided in Section 7(e) of the Agreement, Rights issued to or Beneficially Owned by Acquiring Persons or their Affiliates or Associates (as such terms are defined in the Agreement) or any subsequent holder of such Rights shall be null and void and may not be exercised by or transferred to any Person.

 

With respect to such certificates containing the foregoing legend, until the Distribution Date the Rights associated with the Common Stock represented by such certificates shall be evidenced by such certificates alone, and the surrender for transfer of any such certificate, except as otherwise provided herein, shall also constitute the transfer of the

 

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Rights associated with the Common Stock represented thereby.  In the event that the Corporation purchases or otherwise acquires any Common Stock after the Record Date but prior to the Distribution Date, any Rights associated with such Common Stock shall be deemed canceled and retired so that the Corporation shall not be entitled to exercise any Rights associated with the Common Stock which are no longer outstanding.  Notwithstanding this paragraph (c), the omission of a legend shall not affect the enforceability of any part of this Agreement or the rights of any holder of the Rights.

 

(d)           As soon as practicable after the Distribution Date, the Corporation will prepare and execute, the Rights Agent will countersign, and the Corporation will send or cause to be sent (and the Rights Agent will, if requested, send), by first class mail, postage prepaid, to each record holder of the Common Stock as of the Close of Business on the Distribution Date, as shown by the records of the Corporation, at the address of such holder shown on such records, a certificate in the form provided by Section 4 hereof (a “Right Certificate”), evidencing one Right (subject to adjustment as provided herein) for each share of Common Stock so held.  As of and after the Distribution Date, the Rights shall be evidenced solely by Right Certificates and may be transferred by the transfer of the Right Certificate as permitted hereby, separately and apart from any transfer of one or more shares of Common Stock.

 

Section 4.               Form of Right Certificates.  The Right Certificates (and the forms of election to purchase shares, certificate and assignment to be printed on the reverse thereof), when, as and if issued, shall be substantially in the form set forth in Exhibit B hereto and may have such marks of identification or designation and such legends, summaries or endorsements printed thereon as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange on which the Common Stock or the Rights may from time to time be listed or the Financial Industry Regulatory Authority or as the Corporation may deem appropriate to conform to usage or otherwise and as are not inconsistent with the provisions of this Agreement.  Subject to the provisions of Section 22 hereof, Right Certificates evidencing Rights whenever issued, (i) shall be dated as of the date of issuance of the Rights they represent and (ii) subject to adjustment from time to time as provided herein, on their face shall entitle the holders thereof to purchase such number of one one-thousandths of a share (including fractional shares which are integral multiples of one one-thousandth of a share) of Preferred Stock as shall be set forth thereon at the price per one one-thousandth of a share of Preferred Stock payable upon exercise of a Right provided by Section 7(b) hereof, as the same may from time to time be adjusted as provided herein (the “Exercise Price”).

 

Section 5.               Countersignature and Registration.

 

(a)           Each Right Certificate shall be executed on behalf of the Corporation by its Chairman of the Board, Chief Executive Officer, President or any Vice President, either manually or by facsimile signature, and have affixed thereto the Corporation’s seal or a facsimile thereof which shall be attested by the Secretary or an Assistant Secretary of the Corporation, either manually or by facsimile signature.  Each

 

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Right Certificate shall be countersigned by the Rights Agent either manually or by facsimile signature and shall not be valid for any purpose unless so countersigned.  In case any officer of the Corporation who shall have signed any Right Certificate shall cease to be such officer of the Corporation before countersignature by the Rights Agent and issuance and delivery of the certificate by the Corporation, such Right Certificate, nevertheless, may be countersigned by the Rights Agent and issued and delivered with the same force and effect as though the person who signed such Right Certificates had not ceased to be such officer of the Corporation.  Any Right Certificate may be signed on behalf of the Corporation by any person who, on the date of the execution of such Right Certificate, shall be a proper officer of the Corporation to sign such Right Certificate, although at the date of the execution of this Agreement any such person was not such an officer.

 

(b)           Following the Distribution Date, the Rights Agent will keep or cause to be kept, at its principal office or one or more offices designated as the appropriate place for surrender of Right Certificates upon exercise or transfer, and in such other locations as may be required by law, books for registration and transfer of the Right Certificates issued hereunder.  Such books shall show the names and addresses of the respective holders of the Right Certificates, the number of Rights evidenced on its face by each of the Right Certificates and the date of each of the Right Certificates.

 

Section 6.               Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.

 

(a)           Subject to the provisions of Sections 7(e), 7(f) and 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 the Final Expiration Date, any Right Certificate, may be (i) transferred or (ii) split up, combined or exchanged for one or more other Right Certificates, entitling the registered holder to purchase a like number of one one-thousandths of a share of Preferred Stock as the Right Certificate or Rights Certificates surrendered then entitled such holder to purchase.  Any registered holder desiring to transfer, split up, combine or exchange any Right Certificate shall surrender the Right Certificate at the office of the Rights Agent designated for the surrender of Right Certificates with the form of certificate and assignment on the reverse side thereof duly endorsed (or enclose with such Right Certificate a written instrument of transfer in form satisfactory to the Corporation and the Rights Agent), duly executed by the registered holder thereof or his attorney duly authorized in writing, and with such signature duly guaranteed.  Any registered holder desiring to split up, combine or exchange any Right Certificate shall make such request in writing delivered to the Rights Agent, and shall surrender the Right Certificate to be split up, combined or exchanged at the office of the Rights Agent designated therefor.  Thereupon, the Rights Agent shall countersign and deliver to the person entitled thereto a Right Certificate or Right Certificates, as the case may be, as so requested.  The Corporation may require payment of a sum sufficient to cover any Transfer Tax that may be imposed in connection with any transfer, split up, combination or exchange of any Right Certificates.

 

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(b)           Subject to the provisions of Sections 7(e), 7(f) and 14 hereof, at any time after the Distribution Date and prior to the Expiration Date, upon receipt by the Corporation and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Right Certificate, and, in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to them and, if requested by the Corporation, reimbursement to the Corporation and the Rights Agent of all reasonable expenses incidental thereto, or upon surrender to the Rights Agent and cancellation of the Right Certificate if mutilated, the Corporation shall cause a new Right Certificate of like tenor to be issued and delivered to the registered owner in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.

 

(c)           Notwithstanding any other provisions hereof, the Corporation and the Rights Agent may amend this Rights Agreement to provide for uncertificated Rights in addition to or in place of Rights evidenced by Rights Certificates.

 

Section 7.               Exercise of Rights; Exercise Price; Expiration Date of Rights; Invalidation of Certain Rights.

 

(a)           The Rights shall not be exercisable until, and shall become exercisable on, the Distribution Date (unless otherwise provided herein).  Except as otherwise provided herein, the Rights may be exercised, in whole or in part, at any time commencing with the Distribution Date upon surrender of the Right Certificate, with the form of election to purchase and certificate on the reverse side thereof duly executed (with signatures duly guaranteed), to the Rights Agent at the office or offices of the Rights Agent designated for such purpose, together with payment of the Exercise Price for each Right exercised (as the same may have been adjusted as hereinafter provided), at or prior to the Close of Business on the earlier of (i) December 31, 2014 (the “Final Expiration Date”) or (ii) the date on which the Rights are redeemed as provided in Section 23 hereof or the date on which the Rights are exchanged as provided in Section 27 hereof (such earlier date being herein referred to as the “Expiration Date”).

 

(b)           The Exercise Price shall initially be $20.00 for each one one-thousandth (1/1000) of a share of Preferred Stock issued pursuant to the exercise of a Right.  The Exercise Price and the number of one one-thousandths of a share of Preferred Stock or other securities or property to be acquired upon exercise of a Right shall be subject to adjustment from time to time as provided in Sections 11 and 13 hereof.  The Exercise Price shall be payable in lawful money of the United States of America, in accordance with paragraph (c) below.

 

(c)           Except as otherwise provided herein, upon receipt of a Right Certificate representing exercisable Rights with the form of election to purchase and certificate duly executed, accompanied by payment by certified check, cashier’s check, bank draft or money order payable to the Corporation or the Rights Agent of the Exercise Price for the shares of Preferred Stock to be purchased and an amount equal to any applicable Transfer Tax required to be paid by the holder of the Right Certificate in accordance with Section 9(d) hereof, the Rights Agent shall thereupon promptly

 

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(i) requisition from any transfer agent of the Preferred Stock of the Corporation one or more certificates representing the number of shares of Preferred Stock to be so purchased, and the Corporation hereby authorizes and directs such transfer agent to comply with all such requests, (ii) as provided in Section 14(b) hereof, at the election of the Corporation, cause depositary receipts to be issued in lieu of fractional shares of Preferred Stock, (iii) if the election provided for in the immediately preceding clause (ii) has not been made, requisition from the Corporation the amount of cash to be paid in lieu of the issuance of fractional shares (other than fractions that are integral multiples of one one-thousandth of a share) in accordance with Section 14(b) hereof, (iv) after receipt of such Preferred Stock certificates and, if applicable, depositary receipts, cause the same to be delivered to or upon the order of the registered holder of such Right Certificate, registered in such name or names as may be designated by such holder and (v) when appropriate, after receipt, promptly deliver such cash to or upon the order of the registered holder of such Right Certificate; provided, however, that in the case of a purchase of securities other than Preferred Stock, pursuant to Section 13 hereof, the Rights Agent shall promptly take the appropriate actions corresponding in such case to that referred to in the foregoing clauses (i) through (v) of this Section 7(c).  Notwithstanding the foregoing provisions of this Section 7(c), the Corporation may suspend the issuance of shares of Preferred Stock and other securities upon exercise of a Right for a reasonable period, not in excess of 90 days, during which the Corporation seeks to register under the Securities Act, and any applicable securities law of any other jurisdiction, the shares of Preferred Stock or other securities to be issued pursuant to the Rights; provided, however, that nothing contained in this Section 7(c) shall relieve the Corporation of its obligations under Section 9(d) hereof.  Upon any such suspension, the Corporation 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.

 

(d)           In case the registered holder of any Right Certificate shall exercise less than all the Rights evidenced thereby, a new Right Certificate evidencing Rights equivalent to the Rights remaining unexercised shall be issued by the Rights Agent to the registered holder of such Right Certificate or his assign, subject to the provisions of Section 14(b) hereof.

 

(e)           Notwithstanding any provision of this Agreement to the contrary, from and after the time (the “invalidation time”) when any Person first becomes an Acquiring Person, any Rights that are Beneficially Owned by (x) such Acquiring Person (or any Associate or Affiliate of such Acquiring Person), (y) a transferee of such Acquiring Person (or any such Associate or Affiliate) who becomes a transferee after the invalidation time or (z) a transferee of such Acquiring Person (or any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the invalidation time pursuant to either (I) a transfer from the Acquiring Person (or any such Associate or Affiliate) to holders of its equity securities or to any Person with whom it has any continuing agreement, arrangement or understanding regarding the transferred Rights or (II) a transfer which the Board of Directors of the Corporation has determined is part of a plan, arrangement or understanding which has the purpose or effect of avoiding the provisions of this Section 7(e), and subsequent transferees of such Persons referred to in

 

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clause (y) and (z) above, shall be null and void without any further action and any holder of such Rights shall thereafter have no rights whatsoever with respect to such Rights under any provision of this Agreement.  No Right Certificate shall be issued pursuant to Section 3 hereof that represents Rights beneficially owned by an Acquiring Person or any Affiliate or Associate thereof whose Rights would be null and void pursuant to the provisions of this Section 7(e); no Right Certificate shall be issued at any time upon the transfer of any Rights to an Acquiring Person (or an Affiliate or Associate of such Acquiring Person) whose Rights would be null and void pursuant to the provisions of this Section 7(e) or any Associate or Affiliate thereof or to any nominee of such Acquiring Person, Associate or Affiliate; and any Right Certificate delivered to the Rights Agent for transfer to an Acquiring Person (or an Associate or Affiliate of such Acquiring Person) whose Rights would be void pursuant to the provisions of this Section 7(e) shall be cancelled.  The Corporation shall use all reasonable efforts to ensure that the provisions of this Section 7(e) are complied with, but it shall have no liability to any holder of Right Certificates or any other Person as a result of its failure to make any determination with respect to an Acquiring Person or its Affiliates, Associates or transferees hereunder.

 

(f)            Notwithstanding anything in this Agreement to the contrary, neither the Rights Agent nor the Corporation 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 following the form of election to purchase set forth on the reverse side of the Right 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 and such other information as the Corporation or the Rights Agent shall reasonably request.

 

Section 8.               Cancellation and Destruction of Right Certificates.  All Right Certificates surrendered for the purpose of exercise, transfer, split up, combination or exchange shall, if surrendered to the Corporation or to any of its agents, be delivered to the Rights Agent for cancellation or in cancelled form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right Certificates shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Agreement.  The Corporation shall deliver to the Rights Agent for cancellation and retirement, and the Rights Agent shall cancel and retire, any Right Certificate purchased or acquired by the Corporation otherwise than upon the exercise thereof.  The Rights Agent shall deliver all cancelled Right Certificates to the Corporation, or shall, at the written request of the Corporation, destroy such cancelled Right Certificates, and in such case shall deliver a certificate of destruction thereof to the Corporation.

 

Section 9.               Reservation and Availability of Shares of Preferred Stock.

 

(a)           The Corporation covenants and agrees that it will cause to be reserved and kept available out of the authorized and unissued shares of Preferred Stock or out of authorized and issued shares of Preferred Stock held in its treasury, such number

 

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of shares of Preferred Stock as will from time to time be sufficient to permit the exercise in full of all outstanding Rights.

 

(b)           The Corporation shall use its best efforts to cause, from and after such time as the Rights become exercisable, all shares of Preferred Stock issued or reserved for issuance in accordance with this Agreement to be listed, upon official notice of issuance, upon the principal national securities exchange or automated quotation system, if any, upon which the Common Stock is listed.

 

(c)           The Corporation covenants and agrees that it will take all such action as may be necessary to ensure that all shares of Preferred Stock delivered upon exercise of Rights shall, at the time of delivery of the certificates for such shares (subject to payment of the Exercise Price in respect thereof), be duly and validly authorized and issued and fully paid and nonassessable shares.

 

(d)           The Corporation covenants and agrees that it will pay when due and payable any and all United States federal and state Transfer Taxes which may be payable in respect of the issuance or delivery of the Right Certificates or of any shares of Preferred Stock issued or delivered upon the exercise of Rights.  The Corporation shall not, however, be required to pay any Transfer Tax which may be payable in respect of any transfer or delivery of a Right Certificate to a Person other than, or the issuance or delivery of certificates for Preferred Stock upon exercise of Rights in a name other than that of, the registered holder of the Right Certificate, and the Corporation shall not be required to issue or deliver a Right Certificate or certificate for Preferred Stock to a Person other than such registered holder until any such Transfer Tax shall have been paid (any such Transfer Tax being payable by the holder of such Right Certificate at the time of surrender) or until it has been established to the Corporation’s satisfaction that no such Transfer Tax is due.

 

Section 10.             Preferred Stock Record Date.  Each Person in whose name any certificate for shares of Preferred Stock is issued upon the exercise of Rights shall for all purposes be deemed to have become the holder of record of the Preferred Stock represented thereby on, and such certificate shall be dated as of, the date upon which the Right Certificate evidencing such Rights was duly surrendered and payment of the Exercise 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 transfer books of the Corporation are closed, such Person shall be deemed to have become the record holder of such shares on, and such certificate shall be dated as of, the next succeeding Business Day on which the Preferred Stock transfer books of the Corporation are open.  Prior to the exercise of the Rights evidenced thereby, the holder of a Right Certificate shall not be entitled to any rights of a holder of Preferred 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 Corporation, except as provided herein.

 

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Section 11.             Adjustment of Exercise Price or Number of Shares.  The Exercise Price, the number of Preferred 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 Corporation shall at any time after the date of this Agreement (A) declare a dividend on the shares of Preferred Stock payable in shares of Preferred Stock, (B) subdivide the outstanding shares of Preferred Stock, (C) combine the outstanding shares of Preferred Stock into a smaller number of shares of Preferred Stock or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (including any such reclassification in connection with a share exchange, consolidation or merger in which the Corporation is the continuing or surviving corporation), except as otherwise provided in this Section 11(a), the Exercise Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of capital stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of capital stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Corporation were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification.

 

(ii)           Subject to Section 27 hereof, in the event any Person becomes an Acquiring Person, each holder of a Right shall thereafter have a right to receive, upon exercise thereof at a price equal to the then current Exercise Price multiplied by the number of one one-thousandths of a share of Preferred Stock for which a Right is then exercisable, in accordance with the terms of this Agreement and in lieu of shares of Preferred Stock, such number of shares of Common Stock of the Corporation as shall equal the result obtained by (A) multiplying the then current Exercise Price by the number of one one-thousandths of a share of Preferred Stock for which a Right is then exercisable and dividing that product by (B) 50% of the then current per share market price of the Common Stock of the Corporation (determined pursuant to Section 11(d) hereof) on the date of the occurrence of such event.  In the event that any Person shall become an Acquiring Person and the Rights shall then be outstanding, the Corporation shall not take any action which would eliminate or diminish the benefits intended to be afforded by the Rights.  The Corporation shall give the Rights Agent written notice of the identity of any Acquiring Person, any Associate or Affiliate of such Acquiring Person known to the Corporation, and any nominee of any of the foregoing known to the Corporation, and the Rights Agent may rely on such notice in carrying out its duties under this Agreement and shall be deemed not to have any

 

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knowledge of the identity of any such Acquiring Person, Associate or Affiliate, or the nominee of any of the foregoing unless and until it shall have received such notice.

 

(iii)          In the event that there shall not be sufficient shares of Common Stock authorized but unissued to permit the exercise in full of the Rights in accordance with subparagraph (ii) above, the Corporation shall take all such action as may be necessary to authorize additional shares of Common Stock for issuance upon exercise of the Rights.  In the event the Corporation shall, after good faith effort, be unable to take all such action as may be necessary to authorize such additional shares of Common Stock, the Corporation shall substitute, for each share of Common Stock that would otherwise be issuable upon exercise of a Right, a number of shares of Preferred Stock or fraction thereof such that the current per share market price of one share of Preferred Stock multiplied by such number or fraction is equal to the current per share market price of one share of Common Stock as of the date of issuance of such shares of Preferred Stock or fraction thereof.

 

(b)           In case the Corporation shall fix a record date for the issuance of rights, options or warrants to all holders of shares of Preferred Stock entitling them (for a period expiring within 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 Preferred Stock (“equivalent preferred shares”)) or securities convertible into Preferred Stock or equivalent preferred shares at a price per share of Preferred Stock or equivalent preferred share (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred shares) less than the then current per share market price of the Preferred Stock (as defined in Section 11(d)) on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise 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 shares 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 shares to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible).   In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Corporation, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and holders of the Rights.  Preferred Stock owned by or held for the account of the Corporation or any Subsidiary of the Corporation shall not be deemed outstanding for the purpose of any such computation.  Such adjustment shall be made successively whenever

 

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such a record date is fixed; and, in the event that such rights, options or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise Price which would then be in effect if such record date had not been fixed.

 

(c)           In case the Corporation shall fix a record date for the making of a distribution to all holders of the Preferred Stock (including any such distribution made in connection with a share exchange, consolidation or merger in which the Corporation is the continuing or surviving corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in Preferred Stock) or subscription rights or warrants (excluding those referred to in Section 11(b) hereof), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the then-current per share market price of a share of the Preferred Stock on such record date, less the fair market value (as determined in good faith by the Board of Directors of the Corporation, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and holders of the Rights) of the portion of the assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one share of Preferred Stock and the denominator of which shall be such then-current per share market price of the Preferred Stock on such record date.  Such adjustments shall be made successively whenever such a record date is fixed; and, in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise 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 per share market price” of any security (a “Security” for the purpose of this Section 11(d)(i)) on any date shall be deemed to be the average of the daily closing prices per share of such Security for the 30 consecutive Trading Days immediately prior to such date; provided, however, that, in the event that the current per share market price of the Security is determined during a period following the announcement by the issuer of such Security of (A) a dividend or distribution on such Security payable in shares of such Security or Securities convertible into such shares, or (B) any subdivision, combination or reclassification of such Security and prior to the expiration of 30 Trading Days after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the current per share market price shall be appropriately adjusted to reflect the current market price per share equivalent of such Security.  The closing price for each day shall be the last sale price, regular way, reported at or prior to 4:00 P.M. Eastern time or, in case no such sale takes place on such day, the average of the bid and asked prices, regular way, reported as of 4:00 P.M. Eastern time, in either case, as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the Security is not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Security is listed or admitted to trading or, if the Security is not listed or admitted to trading on any national securities exchange, the last quoted price reported at

 

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or prior to 4:00 P.M. Eastern time or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported as of 4:00 P.M. Eastern time by NASDAQ or such other system then in use, or, if on any such date the Security is not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Security selected by the Board of Directors of the Corporation.   The term “Trading Day” shall mean a day on which the principal national securities exchange on which the Security is listed or admitted to trading is open for the transaction of business, or, if the Security is not listed or admitted to trading on any national securities exchange, a Business Day.

 

(ii)           For the purpose of any computation hereunder, the “current per share market price” of the Preferred Stock shall be determined in accordance with the method set forth in Section 11(d)(i).  If the Preferred Stock is not publicly traded, the “current per share market price” of the Preferred Stock shall be conclusively deemed to be the current per share market price of the Common Stock as determined pursuant to Section 11(d)(i) hereof (appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof), multiplied by one thousand.  If neither the Common Stock nor the Preferred Stock is publicly held or so listed or traded, “current per share market price” shall mean the fair value per share as determined in good faith by the Board of Directors of the Corporation, whose determination shall be described in a statement filed with the Rights Agent.

 

(e)           No adjustment in the Exercise Price shall be required unless such adjustment would require an increase or decrease of at least one percent (1%) in the Exercise Price; provided, however, that any adjustments which by reason of this Section 11(e) are not required to be made shall be carried forward and taken into account in any subsequent adjustment.  All calculations under this Section 11 shall be made to the nearest cent or to the nearest one one-millionth of a share of Preferred Stock or one ten-thousandth of any other share or security as the case may be.  Notwithstanding the first sentence of this Section 11(e), any adjustment required by this Section 11 shall be made no later than the earlier of (i) three years from the date of the transaction which requires such adjustment or (ii) the date of the expiration of the right to exercise any Rights.

 

(f)            If, as a result of an adjustment made pursuant to Section 11(a) hereof, the holder of any Right thereafter exercised shall become entitled to receive any shares of capital stock of the Corporation other than Preferred Stock, thereafter the number of such other shares so receivable upon exercise of any Right shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Preferred Shares contained in Section 11(a) through (c) hereof, inclusive, and the provisions of Sections 7, 9, 10 and 13 hereof with respect to the Preferred Stock shall apply on like terms to any such other shares.

 

(g)           All Rights originally issued by the Corporation subsequent to any adjustment made to the Exercise Price hereunder shall evidence the right to purchase, at the adjusted Exercise Price, the number of one one-thousandths of a share of Preferred

 

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Stock purchasable from time to time hereunder upon exercise of the Rights, all subject to further adjustment as provided herein.

 

(h)           Unless the Corporation shall have exercised its election as provided in Section 11(i) hereof, upon each adjustment of the Exercise Price as a result of the calculations made in Sections 11(b) and (c) hereof, each Right outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Exercise Price, that number of one one-thousandths of a shares of Preferred Stock (calculated to the nearest one one-millionth of a share of Preferred Stock) obtained by (A) multiplying (x) the number of one one-thousandths of a share of Preferred Stock covered by a Right immediately prior to this adjustment by (y) the Exercise Price in effect immediately prior to such adjustment of the Exercise Price and (B) dividing the product so obtained by the Exercise Price in effect immediately after such adjustment of the Exercise Price.

 

(i)            The Corporation may elect, on or after the date of any adjustment of the Exercise Price, to adjust the number of Rights in substitution for any adjustment in the number of one one-thousandths of a share of Preferred Stock purchasable 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 one ten-thousandth) obtained by dividing the Exercise Price in effect immediately prior to adjustment of the Exercise Price by the Exercise Price in effect immediately after adjustment of the Exercise Price.  The Corporation shall make a public announcement (with prompt written notice thereof to the Rights Agent) 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 Exercise Price is adjusted or any day thereafter, but, if the Right Certificates have been issued, shall be at least 10 days later than the date of the public announcement.  If Right Certificates have been issued, upon each adjustment of the number of Rights pursuant to this Section 11(i), the Corporation shall, as promptly as practicable, cause to be distributed to holders of record of Right Certificates on such record date Right Certificates evidencing, subject to Section 14 hereof, the additional Rights to which such holders shall be entitled as a result of such adjustment, or, at the option of the Corporation, shall cause to be distributed to such holders of record in substitution and replacement for the Right Certificates held by such holders prior to the date of adjustment, and upon surrender thereof, if required by the Corporation, new Right Certificates evidencing all the Rights to which such holders shall be entitled after such adjustment.  Right Certificates so to be distributed shall be issued, executed and countersigned in the manner provided for herein, and shall be registered in the names of the holders of record of Right Certificates on the record date specified in the public announcement.

 

(j)            Irrespective of any adjustment or change in the Exercise Price or in the number of one one-thousandths of a share of Preferred Stock issuable upon the

 

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exercise of the Rights, the Right Certificates theretofore and thereafter issued may continue to express the Exercise Price and the number of one one-thousandths of a share of Preferred Stock which were expressed in the initial Right Certificates issued hereunder.

 

(k)           In any case in which this Section 11 shall require that an adjustment in the Exercise Price be made effective as of a record date for a specified event, the Corporation may elect to defer (with prompt written notice thereof to the Rights Agent) until the occurrence of such event the issuing to the holder of any Right exercised after such record date of the Preferred Stock and other capital stock or securities of the Corporation, if any, issuable upon such exercise over and above the Preferred Stock and other capital stock or securities of the Corporation, if any, issuable upon such exercise on the basis of the Exercise Price in effect prior to such adjustment; provided, however, that the Corporation 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.

 

(l)            Anything in this Section 11 to the contrary notwithstanding, the Corporation shall be entitled to make such reductions in the Exercise Price, in addition to those adjustments expressly required by this Section 11, as and to the extent that it, in its sole discretion, shall determine to be advisable in order that any consolidation or subdivision of the Preferred Stock, issuance wholly for cash of any Preferred Stock at less than the current market price, issuance wholly for cash of Preferred Stock or securities which by their terms are convertible into or exchangeable for Preferred Stock, dividends on Preferred Stock payable in Preferred Stock or issuance of rights, options or warrants referred to in Section 11(b) hereof, hereafter made by the Corporation to holders of the Preferred Stock shall not be taxable to such shareholders.

 

(m)          In the event that, at any time after the date of this Agreement and prior to the Distribution Date, the Corporation shall (i) declare or pay any dividend on the Common Stock payable in Common Stock, or (ii) effect a subdivision, combination or consolidation of the Common Stock (by reclassification or otherwise than by payment of dividends in Common Stock) into a greater or lesser number of shares of Common Stock, then, in any such case, (A) the number of one one-thousandths of a share of Preferred Stock purchasable after such event upon proper exercise of each Right shall be determined by multiplying the number of one one-thousandths of a share of Preferred Stock so purchasable immediately prior to such event by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately before such event and the denominator of which is the number of shares of Common Stock outstanding immediately after such event, and (B) each share of Common Stock outstanding immediately after such event shall have issued with respect to it that number of Rights which each share of Common Stock outstanding immediately prior to such event had issued with respect to it.  The adjustments provided for in this Section 11(m) shall be made successively whenever such a dividend is declared or paid or such a subdivision, combination or consolidation is effected.

 

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Section 12.             Certification of Adjusted Exercise Price or Number of Shares.  Whenever an adjustment is made as provided in Section 11 or 13 hereof, the Corporation shall (a) promptly prepare a certificate setting forth such adjustment, and a brief statement of the facts giving rise to such adjustment, (b) promptly file with the Rights Agent and with the transfer agent for the Preferred Stock a copy of such certificate and (c) if such adjustment occurs at any time after the Distribution Date, mail a brief summary thereof to each holder of a Right Certificate in accordance with Section 25.  Notwithstanding the foregoing sentence, the failure of the Corporation to make such certification or give such notice shall not affect the validity of or the force or effect of the requirement for such adjustment.  The Rights Agent shall be fully protected in relying on any such certificate and on any adjustment therein contained and shall not be deemed to have knowledge of any adjustment unless and until it shall have received such certificate.

 

Section 13.             Consolidation, Merger or Sale or Transfer of Assets or Earning Power.  In the event, directly or indirectly, at any time after a Person has become an Acquiring Person, (a) the Corporation shall effect a share exchange, consolidate with, or merge with and into, any other Person, (b) any Person shall effect a share exchange, consolidate with the Corporation, or merge with and into the Corporation and the Corporation shall be the continuing or surviving corporation of such share exchange or merger and, in connection with such merger, all or part of the Common Stock shall be changed into or exchanged for stock or other securities of any other Person (or the Corporation) or cash or any other property, or (c) the Corporation shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise transfer), in one or more transactions, assets or earning power aggregating 50% or more of the assets or earning power of the Corporation and its Subsidiaries (taken as a whole) to any other Person other than the Corporation or one or more of its wholly-owned Subsidiaries, then, and in each such case, proper provision shall be made so that (i) each holder of a Right (except as otherwise provided herein) shall thereafter have the right to receive, upon the exercise thereof at a price equal to the then current Exercise Price multiplied by the number of one one-thousandths of a share of Preferred Stock for which a Right is then exercisable, in accordance with the terms of this Agreement and in lieu of Preferred Stock, such number of shares of Common Stock of such other Person (including the Corporation as successor thereto or as the surviving corporation) as shall equal the result obtained by (A) multiplying the then current Exercise Price by the number of one one-thousandths of a share of Preferred Stock for which a Right is then exercisable and dividing that product by (B) 50% of the then current per share market price of the Common Stock of such other Person (determined pursuant to Section 11(d) hereof) on the date of consummation of such consolidation, merger, sale or transfer; (ii) the issuer of such Common Stock shall thereafter be liable for, and shall assume, by virtue of such consolidation, merger, sale or transfer, all the obligations and duties of the Corporation pursuant to this Agreement; (iii) the term “Corporation” shall thereafter be deemed to refer to such issuer; and (iv) such issuer shall take such steps (including, but not limited to, the reservation of a sufficient number of its shares of Common Stock in accordance with Section 9 hereof) in connection with such consummation as may be necessary to assure that the provisions hereof shall thereafter be applicable, as nearly as reasonably may be, in relation to the Common Stock of the Corporation thereafter deliverable upon the exercise of the Rights.

 

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The Corporation shall not consummate any such consolidation, merger, sale or transfer unless, prior thereto, the Corporation and such issuer shall have executed and delivered to the Rights Agent a supplemental agreement so providing.  The Corporation shall not enter into any transaction of the kind referred to in this Section 13 if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements or arrangements which, as a result of the consummation of such transaction, would eliminate or substantially diminish the benefits intended to be afforded by the Rights.  The provisions of this Section 13 shall similarly apply to successive mergers, share exchanges, or consolidations or sales or other transfers.

 

Section 14.             Fractional Rights and Fractional Shares.

 

(a)           The Corporation shall not be required to issue fractions of Rights or to distribute Right Certificates which evidence fractional Rights (i.e., Rights to acquire less than one one-thousandth of a share of Preferred Stock).  If the Corporation shall determine not to issue such fractional Rights, then, in lieu of such fractional Rights, there shall be paid to the holders of record of the Right Certificates with regard to which such fractional Rights would otherwise be issuable, an amount in cash equal to the same fraction of the current market value of a whole Right.  For the purpose 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, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case, as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the Rights are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Rights are listed or admitted to trading or, if the Rights are not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by NASDAQ or such other system then in use or, if on any such date the Rights are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Rights selected by the Board of Directors of the Corporation.  If on any such date no such market maker is making a market in the Rights, the fair value of the Rights on such date as determined in good faith by the Board of Directors of the Corporation shall be used.

 

(b)           The Corporation shall not be required to issue fractions of shares of Preferred Stock (other than fractions that are integral multiples of one one-thousandth of a share) upon exercise of the Rights or to distribute certificates which evidence fractional shares (other than fractions that are integral multiples of one one-thousandth of a share).  In lieu of issuing fractions of shares of Preferred Stock, the Corporation may, at its election, issue depositary receipts evidencing fractions of shares pursuant to an appropriate agreement between the Corporation and a depositary selected by it, provided that such agreement shall provide that the holders of such depositary receipts shall have

 

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all of the rights, privileges and preferences to which they would be entitled as owners of the Preferred Stock.  With respect to fractional shares that are not integral multiples of one one-thousandth of a share, if the Corporation does not issue such fractional shares or depositary receipts in lieu thereof, there shall be paid to the holders of record of Right Certificates at the time such Right Certificates are exercised as herein provided an amount in cash equal to the same fraction of the current market value of a share of Preferred Stock.  For the purposes of this Section 14(b), the current market value of one share of Preferred Stock shall be the closing price of one share of Preferred Stock (as determined pursuant to the second sentence of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of such exercise.

 

(c)           The holder of a Right by the acceptance of a Right expressly waives his right to receive any fractional Right or any fractional shares of Preferred Stock (other than fractions which are integral multiples of one one-thousandth of a share) upon exercise of a Right.

 

(d)           Whenever a payment for a fractional Right or fractional share is to be made by the Rights Agent, the Corporation shall (i) promptly prepare and deliver to the Rights Agent a certificate setting forth in reasonable detail the facts related to such payment and the prices and/or formulas utilized in calculating such payments, and (ii) provide sufficient monies to the Rights Agent in the form of fully collected funds to make such payments.  The Rights Agent shall be fully protected in relying upon such a certificate and shall have no duty with respect to, and shall not be deemed to have knowledge of any payment for fractional Rights or fractional shares under any section of this Agreement relating to the payment of fractional Rights or fractional shares unless and until the Rights Agent shall have received such a certificate and sufficient monies.

 

Section 15.             Rights of Action.  All rights of action in respect of this Agreement, except the rights of action given to the Rights Agent in Section 18 hereof, are vested in the respective registered holders of the Right Certificates (and, prior to the Distribution Date, the holders of record of the Common Stock), and any holder of record of any Right 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 Right Certificate (or, prior to the Distribution Date, of the Common Stock), may, in his own behalf and for his own benefit, enforce, and may institute and maintain any suit, action or proceeding against the Corporation to enforce, or otherwise act in respect of, his right to exercise the Rights evidenced by such Right Certificate in the manner provided in such Right Certificate and in this 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 of any Person subject to this Agreement.

 

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Section 16.             Agreement of Right Holders.  Each holder of a Right, by accepting the same, consents and agrees with the Corporation and the Rights Agent and with every other holder of a Right that:

 

(a)           prior to the Distribution Date, the Rights shall be evidenced by the certificates for Common Stock (or in the case of uncertificated shares of Common Stock, by the book-entry account that evidences record ownership of such shares) registered in the name of the holders of Common Stock (together, as applicable, with the Summary of Rights), which certificates for Common Stock (or book-entry account) shall also constitute certificates for Rights, and not by separate Right Certificates, and each Right shall be transferable only simultaneously and together with the transfer of shares of Common Stock;

 

(b)           after the Distribution Date, the Right Certificates are transferable only on the registry books of the Rights Agent if surrendered at the office of the Rights Agent designated for such purpose, duly endorsed or accompanied by a proper instrument of transfer; and

 

(c)           the Corporation and the Rights Agent may deem and treat the Person in whose name the Right Certificate (or, prior to the Distribution Date, the associated Common Stock certificate or, in the case of uncertificated shares of Common Stock, the book-entry account evidencing record ownership of such shares) is registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations of ownership or writing on the Right Certificates or the associated Common Stock certificate made by anyone other than the Corporation or the Rights Agent) for all purposes whatsoever, and neither the Corporation nor the Rights Agent shall be affected by any notice to the contrary.

 

Section 17.             Right Certificate Holder Not Deemed a Shareholder.  No holder, as such, of any Right Certificate shall be entitled to vote, receive dividends or be deemed for any purpose the holder of Preferred Stock or any other securities which may at any time be issuable on the exercise of the Rights represented thereby, nor shall anything contained herein or in any Right Certificate be construed to confer upon the holder of any Right Certificate, as such, any of the rights of a shareholder or other securityholder of the Corporation or of a securityholder of any other Person 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 securityholder action, or to receive notice of meetings or other actions affecting shareholders or securityholders (except as provided in Section 24 hereof), or to receive dividends or subscription rights, or otherwise, except in any such case the rights, if any, in respect thereof provided by this Agreement, until the Right or Rights evidenced by such Right Certificate shall have been exercised in accordance with the provisions hereof for such stock or other security.

 

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Section 18.             Concerning the Rights Agent.

 

(a)           The Corporation agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder and, from time to time, on demand of the Rights Agent, 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 Corporation also agrees to indemnify the Rights Agent for, and to hold it harmless against, any loss, liability, or expense, incurred without gross negligence, bad faith or willful misconduct on the part of the Rights Agent, for anything done or omitted to be done by the Rights Agent in connection with the acceptance and administration of this Agreement, including the cost and expenses of defending against any claim of liability relating to the Rights or this Agreement.  The indemnity provided herein shall survive the termination of this Agreement and the termination and expiration of the Rights.  The costs and expenses incurred by the Rights Agent in enforcing this indemnification shall be paid by the Corporation.  Anything to the contrary notwithstanding, in no event shall the Rights Agent be liable for special, indirect, consequential or incidental loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Rights Agent has been advised of the likelihood of such loss or damage.

 

(b)           The Rights Agent shall be protected against, and shall incur no liability for or in respect of, any action taken, suffered or omitted by it in connection with its administration of this Agreement in reliance upon any Right Certificate or certificate for Preferred Stock or for other securities of the Corporation, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement or other paper or document believed by it to be genuine and to be signed, executed and, where necessary, verified or acknowledged, by the proper person or persons, or otherwise upon the advice of counsel as set forth in Section 20.

 

Section 19.             Merger or Consolidation of, or Change in Name of, the Rights Agent.

 

(a)           Any corporation into which the Rights Agent or any successor Rights Agent may be merged or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or any corporation succeeding to the corporate trust or stock transfer business of the Rights Agent or any successor Rights Agent, shall be the successor to the Rights Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto, provided 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 Right Certificates so countersigned; and in case at that time any of the Right Certificates shall not have been countersigned, any successor Rights Agent may countersign such Right Certificates

 

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either in the name of the predecessor Rights Agent or in the name of the successor Rights Agent; and in all such cases such Right Certificates shall have the full force provided in the Right Certificates and in this Agreement.

 

(b)           In case at any time the name of the Rights Agent shall be changed and at such time any of the Right Certificates shall have been countersigned but not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Right Certificates so countersigned; in case at that time any of the Right Certificates shall not have been countersigned, the Rights Agent may countersign such Right Certificates either in its prior name or in its changed name; in all such cases such Right Certificates shall have the full force provided in the Right Certificates and in this Agreement.

 

Section 20.             Duties of Rights Agent.  The Rights Agent undertakes the duties and obligations imposed by this Agreement upon the following terms and conditions, by all of which the Corporation and the holders of Right Certificates by their acceptance thereof shall be bound:

 

(a)           The Rights Agent may consult with legal counsel (who may be an employee of or outside legal counsel for the Corporation or the Rights Agent), and the opinion of such counsel shall be full and complete authorization and protection to the Rights Agent as to any action taken or omitted by it in good faith and in accordance with such opinion.

 

(b)           Whenever in the performance of its duties under this Agreement the Rights Agent shall deem it necessary or desirable that any fact or matter be proved or established by the Corporation prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by the Chairman of the Board, Chief Executive Officer, President or any Vice President and by the Treasurer or any Assistant Treasurer or the Secretary or any Assistant Secretary of the Corporation and delivered to the Rights Agent.  Any 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 Right Certificates (except its countersignature thereof) or be required to verify the same, but all such statements and recitals are and shall be deemed to have been made by the Corporation only.

 

(e)           The Rights Agent shall not be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the due

 

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execution hereof by the Rights Agent) or in respect of the validity or execution of any Right Certificate (except its countersignature thereof); nor shall it be responsible for any breach by the Corporation of any covenant or condition contained in this Agreement or in any Right Certificate; nor shall it be responsible for any adjustment required under the provisions of Section 11 or 13 hereof or responsible for the manner, method or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment (except with respect to the exercise of Rights evidenced by Right Certificates after receipt of a certificate describing any such adjustment); nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of Preferred Stock or other security to be delivered pursuant to the exercise of any Right or as to whether any shares of Preferred Stock or other security will, when issued, be validly authorized and issued, fully paid and nonassessable.

 

(f)            The Corporation agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the Rights Agent for the carrying out or performing by the Rights Agent of the provisions of the Agreement.

 

(g)           The Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from the Chairman of the Board, Chief Executive Officer, President or any Vice President or the Secretary or the Treasurer of the Corporation, 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 or for any delay in acting while waiting for those instructions.  Any application by the Rights Agent for written instructions from the Corporation 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 Agreement and the date on and/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 three Business Days after the date any officer of the Corporation 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 instructions 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 Corporation or become pecuniarily interested in any transaction in which the Corporation may be interested, or contract with or lend money to the Corporation or otherwise act as fully and freely as though it were not the Rights Agent under this Agreement.  Nothing herein shall preclude the Rights Agent from acting in any other capacity for the Corporation or for any other legal entity.

 

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(i)            The Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorneys or agents, and the Rights Agent shall not be answerable or accountable for any act, default, neglect or misconduct of any such attorneys or agents or for any loss to the Corporation resulting from any such act, default, neglect or misconduct, provided reasonable care was exercised in the selection and continued employment thereof.

 

(j)            If, with respect to any Rights Certificate surrendered to the Rights Agent for exercise or transfer, the certificate contained in the form of assignment or the form of election to purchase set forth on the reverse thereof, as the case may be, has not been completed to certify the holder is not an Acquiring Person (or an Affiliate or Associate thereof), a Rights Agent shall not take any further action with respect to such requested exercise or transfer without first consulting with the Corporation.

 

Section 21.             Change of Rights Agent.  The Rights Agent or any successor Rights Agent may resign and be discharged from its duties under this Agreement upon 30 days’ notice in writing mailed to the Corporation and to each transfer agent of the Common Stock and the Preferred Stock by registered or certified mail.  The Corporation may remove the Rights Agent or any successor Rights Agent (with or without cause) upon 30 days’ notice in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each transfer agent of the Common Stock and the Preferred Stock by registered or certified mail.  If the Rights Agent shall resign or be removed or shall otherwise become incapable of acting, the Corporation shall appoint a successor to the Rights Agent.  If the Corporation shall fail to make such appointment within a period of 30 days after such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the holder of a Right Certificate (who shall, with such notice, submit his Right Certificate for inspection by the Corporation), then the incumbent Rights Agent or the holder of record of any Right Certificate may apply to any court of competent jurisdiction for the appointment of a new Rights Agent.  Any successor Rights Agent, whether appointed by the Corporation or by such a court, shall be (a) a corporation organized and doing business under the laws of the United States or of the State of Delaware or the State of New York (or of any other state of the United States or the District of Columbia so long as such corporation is authorized to do business in the State of Delaware or the State of New York), in good standing, having an office or agency in the State of Delaware or the State of New York, which is authorized under such laws to exercise corporate trust or stock transfer powers and is subject to supervision or examination in the conduct of its corporate trust or stock transfer business by federal or state authorities and which has at the time of its appointment as Rights Agent a combined capital and surplus of at least $50,000,000 or (b) an Affiliate controlled by or under common control with one or more corporations described in clause (a) of this sentence.  After appointment, the successor Rights Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without further act or deed, but the predecessor Rights Agent shall deliver and transfer to the successor Rights Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose.  Not later than the effective date of

 

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any such appointment, the Corporation shall file notice thereof in writing with the predecessor Rights Agent and each transfer agent of the Common Stock and Preferred Stock, and mail a notice thereof in writing to the registered holders of the Right Certificates.  Failure to give any notice provided for in this Section 21, however, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be.  Notwithstanding the foregoing provisions, in the event of resignation, removal or incapacity of the Rights Agent, the Corporation shall have the authority to act as the Rights Agent until a successor Rights Agent shall have assumed the duties of the Rights Agent hereunder.

 

Section 22.             Issuance of New Right Certificates.  Notwithstanding any of the provisions of this Agreement or of the Rights to the contrary, the Corporation may, at its option, issue new Right Certificates evidencing Rights in such form as may be approved by its Board of Directors to reflect any adjustment or change in the Exercise Price per share and the number or kind or class of shares of stock or other securities or property purchasable under the Right Certificates made in accordance with the provisions of this Agreement.  In addition, in connection with the issuance or sale of Voting Stock following the Distribution Date and prior to the Expiration Date, the Corporation may with respect to Voting Stock so issued or sold pursuant to (i) the exercise of stock options, (ii) under any employee plan or arrangement, (iii) upon the exercise, conversion or exchange of securities, notes or debentures issued by the Corporation or (iv) a contractual obligation of the Corporation, in each case existing prior to the Distribution Date, issue Rights Certificates representing the appropriate number of Rights in connection with such issuance or sale.

 

Section 23.             Redemption.

 

(a)           The Corporation may, at its option, at any time prior to such time as any Person becomes an Acquiring Person, but only by the vote of a majority of its Board of Directors, redeem all but not less than all of the then outstanding Rights at a redemption price of $0.001 per Right, subject to adjustment as provided in Section 23(c) hereof (the “Redemption Price”).  The redemption of the Rights by the Board of Directors of the Corporation may be made effective at such time after the Board’s action to redeem the Rights on such basis and subject to such conditions, as the Board of Directors of the Corporation in its sole and absolute discretion may establish.  Notwithstanding anything contained in this Agreement to the contrary, the Rights shall not be exercisable prior to the expiration of the Corporation’s right of redemption hereunder.

 

(b)           Without any further action and without any notice, the right to exercise the Rights will terminate effective at the time so designated by action of the Board of Directors of the Corporation ordering the redemption of the Rights and the only right thereafter of the holders of Rights shall be to receive the Redemption Price.  Within 10 days after the effective time of the action of the Board of Directors of the Corporation ordering the redemption of the Rights, the Corporation shall give notice of such

 

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redemption to the holders of the then outstanding Rights by mailing such notice to all such holders at their last addresses as they appear upon the registry books of the Rights Agent or, prior to the Distribution Date, on the registry books of the transfer agent for the Common Stock; provided, however, that the failure to give, or any defect in, any such notice shall not affect the validity of such redemption.  Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice.  Each notice of redemption will state the method by which the payment of the Redemption Price will be made.  At the option of the Board of Directors of the Corporation, the Redemption Price may be paid in cash to each Rights holder or by the issuance of shares (and, at the Corporation’s election pursuant to Section 14(b) hereof, cash or depositary receipts in lieu of fractions of shares other than fractions which are integral multiples of one one-thousandth of a share) of Preferred Stock or Common Stock having a current market value equal to such cash payment.

 

(c)           In the event the Corporation shall at any time after the date of this Agreement but before such time as any Person becomes an Acquiring Person (A) pay any dividend on Common Stock in shares of Common Stock, (B) subdivide or split the outstanding shares of Common Stock into a greater number of shares or (C) combine or consolidate the outstanding shares of Common Stock into a smaller number of shares or effect a reverse split of the outstanding shares of Common Stock and as a consequence thereof the number of Rights outstanding shall change, then, and in each such event, the Redemption Price may, by action of the Board of Directors of the Corporation in its discretion, be appropriately adjusted in respect of such transaction so as to maintain the aggregate Redemption Price of all Rights after such transaction at the same amount, insofar as practicable, as before the transaction.

 

Section 24.             Notice of Proposed Actions.

 

(a)           In case the Corporation, after the Distribution Date, shall propose (i) to effect any of the transactions referred to in Section 11(a)(i) hereof or to pay any dividend to the holders of record of its shares of Common Stock payable in shares of capital stock of any class or to make any other distribution to the holders of record of its Common Stock (other than a regular periodic cash dividend at a rate not in excess of 150% of the rate of the last cash dividend theretofore paid), or (ii) to offer to the holders of record of its Common Stock options, warrants, or other rights to subscribe for or to purchase shares of Common Stock (including any security convertible into or exchangeable for Common Stock) or shares of stock of any class or any other securities, options, warrants, convertible or exchangeable securities or other rights, or (iii) to effect any reclassification of its Preferred Stock or Common Stock or any recapitalization or reorganization of the Corporation, or (iv) to effect any consolidation or merger with or into, or to effect any sale or other transfer (or to permit one or more of its Subsidiaries to effect any sale or other transfer), in one or more transactions, of more than 50% of the assets or earning power of the Corporation and its Subsidiaries (taken as a whole) to, any other Person or Persons, or (v) to effect the liquidation, dissolution or winding up of the Corporation, then, in each such case, the Corporation shall give to each holder of record of a Right Certificate, in accordance with Section 25 hereof, notice of such proposed

 

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action, which shall specify the record date for the purposes of such transaction referred to in Section 11(a)(i) or such dividend or distribution, or the date on which such reclassification, recapitalization, reorganization, consolidation, merger, sale or transfer of assets, liquidation, dissolution, or winding up is to take place and the record date for determining participation therein by the holders of record of Common Stock or 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 10 days prior to the record date for determining holders of record of the Preferred Stock for purposes of such action, and in the case of any such other action, at least 10 days prior to the date of the taking of such proposed action or the date of participation therein by the holders of record of Common Stock or Preferred Stock, whichever shall be the earlier.  The failure to give notice required by this Section 24 or any defect therein shall not affect the legality or validity of the action taken by the Corporation or the vote upon any such action.

 

(b)           In case the event referred to in Section 11(a)(ii) hereof shall occur, then the Corporation shall as soon as practicable thereafter, in accordance with Section 25 hereof, give to each holder of a Right notice of the occurrence of such event, which notice shall describe the event and the consequences of the event to holders of Rights under Section 11(a)(ii) hereof.

 

Section 25.             Notices.  Notices or demands authorized by this Agreement to be given or made by the Rights Agent or by the holder of record of any Right Certificate or Right to or on the Corporation shall be in writing and shall be considered given upon receipt or seven Business Days after being sent by first-class mail, postage prepaid, in any case addressed (until another address is filed in writing with the Rights Agent) as follows:

 

BancTec, Inc.
 2701 E. Grauwyler Road
 Irving, Texas 75061
 Attention:  General Counsel

 

Subject to the provisions of Section 21, any notice or demand authorized by this Agreement to be given or made by the Corporation or by the holder of record of any Right Certificate or Right to or on the Rights Agent shall be in writing and shall be considered given upon receipt or seven Business Days after being sent by first-class mail, postage prepaid, in any case addressed (until another address is filed in writing with the Corporation) as follows:

 

American Stock Transfer & Trust Company, LLC
 6201 15th Avenue
 Brooklyn, NY 11219

 

Notices or demands authorized by this Agreement to be given or made by the Corporation or the Rights Agent to the holder of record of any Right Certificate or Right shall be in writing and shall be considered given upon receipt or seven Business Days

 

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after being sent by first-class mail, postage prepaid, addressed to such holder at the address of such holder as shown on the registry books of the Corporation.

 

Section 26.             Supplements and Amendments.  The Corporation may from time to time supplement or amend this Agreement without the approval of any holders of Right Certificates in order to cure any ambiguity, to correct or supplement any provision contained herein which may be defective or inconsistent with any other provisions herein, or to make any other provisions with respect to the Rights which the Corporation may deem necessary or desirable, any such supplement or amendment to be evidenced by a writing signed by the Corporation and the Rights Agent; provided, however, that, from and after such time as any Person becomes an Acquiring Person, this Agreement shall not be amended in any manner which would adversely affect the interests of the holders of Rights.  Without limiting the foregoing, the Corporation may at any time prior to such time as any Person becomes an Acquiring Person amend this Agreement to lower the thresholds set forth in Section 1(a) hereof to not less than 10% (the “Reduced Threshold”); provided, however, that no Person who beneficially owns a number of shares of Common Stock equal to or greater than the Reduced Threshold shall become an Acquiring Person unless such Person shall, after the public announcement of the Reduced Threshold, increase its beneficial ownership of the then outstanding Common Stock (other than as a result of an acquisition of Common Stock by the Corporation) to an amount equal to or greater than the greater of (x) the Reduced Threshold or (y) the sum of (i) the lowest beneficial ownership of such Person as a percentage of the outstanding Common Stock as of any date on or after the date of the public announcement of such Reduced Threshold plus (ii) .001 %.  Upon delivery of a certificate from an appropriate officer of the Corporation that states that the proposed supplement or amendment is in compliance with the terms of this Section 26, the Rights Agent shall execute such supplement or amendment; provided, however, that the Rights Agent may, but shall not be obligated to, enter into any such supplement or amendment that affects the Rights Agent’s own rights, duties, obligations or immunities under this Agreement and shall not be bound by any such supplement or amendment not executed by it.

 

Section 27.             Exchange.

 

(a)           The Board of Directors of the Corporation may, at its option, at any time after any Person becomes an Acquiring Person, exchange all or part of the then outstanding and exercisable Rights (which shall not include Rights that have become null and void pursuant to the provisions of Section 7(e) hereof) by exchanging for each such Right one share of Common Stock of the Corporation, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (such number of shares of Common Stock per Right being hereinafter referred to as the “Exchange Ratio”).  Notwithstanding the foregoing, the Board of Directors of the Corporation shall not be empowered to effect such exchange at any time after any Person (other than an Exempt Person), together with all Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or more of the Voting Stock then outstanding.

 

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(b)           Immediately upon the action of the Board of Directors of the Corporation ordering the exchange of any Rights pursuant to paragraph (a) of this Section 27 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 Corporation 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 Corporation promptly shall mail a notice of any such exchange to all of the holders of such Rights at their last addresses as they appear upon the registry books of the Rights Agent.  Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice.  Each such notice of exchange will state the method by which the exchange of the shares 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 null and void pursuant to the provisions of Section 7(e) hereof) held by each holder of Rights.

 

(c)           In the event that there shall not be sufficient shares of Common Stock issued but not outstanding or authorized but unissued to permit any exchange of Rights as contemplated in accordance with this Section 27, the Corporation shall substitute to the extent of such insufficiency, for each share of Common Stock that would otherwise be issuable upon exchange of a Right, a number of shares of Preferred Stock or fractions thereof having an aggregate current market value equal to the current market value of one share of Common Stock as of the date any Person becomes an Acquiring Person.

 

(d)           The Corporation shall not be required to issue fractions of shares of Common Stock or to distribute certificates which evidence fractional shares.  In lieu of such fractional shares, the Corporation shall pay to the registered holders of the Right Certificates with regard to which such fractional shares of Common Stock 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 for the Trading Day immediately prior to the date of exchange pursuant to this Section 27.

 

Section 28.             Successors.  All of the covenants and provisions of this Agreement by or for the benefit of the Corporation or the Rights Agent shall bind and inure to the benefit of their respective successors and assigns hereunder.

 

Section 29.             Benefits of this Agreement.  Nothing in this Agreement shall be construed to give to any Person other than the Corporation, the Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution Date, the holders of Common Stock in their capacity as holders of the Rights) any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall be for

 

33

 

the sole and exclusive benefit of the Corporation, the Rights Agent and the holders of record of the Right Certificates (and, prior to the Distribution Date, the holders of Common Stock in their capacity as holders of the Rights).

 

Section 30.             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 State of Delaware and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts made and to be performed entirely within such state; provided, however, that the rights, privileges, protections and immunities of the Rights Agent pursuant to Section 18, Section 19, Section 20 and Section 21 shall be governed by and construed in accordance with the laws of the State of New York.

 

Section 31.             Counterparts.  This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

 

Section 32.             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.

 

Section 33.             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.

 

Section 34.             Determinations and Actions by the Board of Directors.  The Board of Directors of the Corporation shall have the exclusive power and authority to administer, interpret and apply this Agreement and to exercise the rights and powers specifically granted to the Board of Directors of the Corporation or to the Corporation by this Agreement or by law and may take such action as may be necessary or advisable in the administration of this Agreement or to amend or supplement this Agreement in accordance with its terms, including, without limitation, the right and power (i) to make all determinations deemed necessary or advisable for the administration of this Agreement, (ii) to decide to redeem the Rights and (iii) to decide to amend or supplement this Agreement.  All such actions, calculations, interpretations and determinations (including any decision not to take any action) done or made by the Board of Directors of the Corporation in good faith shall (x) be final, conclusive and binding on the Corporation, the Rights Agent, the holders of the Rights, as such, and all other Persons and (y) not subject any member of the Board of Directors of the Corporation to any liability to the holders of Rights.  Notwithstanding anything contained herein to the contrary, the Rights Agent is entitled always to assume that the Corporation’s Board of Directors acted in good faith and shall be fully protected and incur no liability in reliance thereon.

 

34

 

[signature page follows]

 

35

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, all as of the day and year first above written.

 

 

	
Attest:
    	
BANCTEC, INC.
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Robert R. Robinson
    	
 
    	
By:
    	
/s/   J. Coley Clark
    
	
Name:
    	
Robert   R. Robinson
    	
Name:
    	
J.   Coley Clark
    
	
Title:
    	
Vice   President and General Counsel
    	
Title:
    	
Chairman   and Chief Executive Officer
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Attest:
    	
AMERICAN   STOCK TRANSFER
   & TRUST COMPANY, LLC.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
By:
    	
/s/   Herbert J. Lemmer
    
	
Name:
    	
 
    	
Name:
    	
Herbert   J. Lemmer
    
	
Title:
    	
 
    	
Title:
    	
Vice   President
    

 

36Exhibit 10.10

 

TERMINATION OF EMPLOYMENT AGREEMENT,

CONFIDENTIAL SETTLEMENT AGREEMENT AND RELEASE OF ALL CLAIMS

 

The following documents the Termination of Employment Agreement and Confidential Settlement Agreement and Release of All Claims (“Agreement”) by and between Michael D. Fallin (“Executive”), and BancTec, Inc. (“BancTec”) (together, the “Contracting Parties”) regarding any and all past and present claims and their future effects that have arisen or could arise out of the Executive’s employment relationship with BancTec or his separation therefrom.  This Agreement is binding upon and extends to the Parties hereto and their: individual officers; directors; shareholders; stockholders; employees; parents; subsidiaries; affiliates; corporations; companies; divisions; partners; representatives; heirs; executors; assigns; administrators; successors; predecessors; d/b/a’s and assumed names; and insurers -- whether specifically mentioned hereafter or not.  This Agreement will become effective upon the date specified in subsection 14.d. below (the “Effective Date”).

 

RECITALS

 

WHEREAS, Executive and BancTec entered into that certain Employment Agreement dated May 27, 2007, as amended (the “Employment Agreement”); and

 

WHEREAS, BancTec wishes to terminate the Employment Agreement and the parties agree that such termination is without cause as defined in the Employment Agreement and that the Employment Agreement controls the Contracting Parties’ rights and obligations regarding the termination;

 

WHEREAS, Executive and BancTec desire to settle fully and finally all differences between them, including, but in no way limited to, those differences raised or that could have been raised in connection with the Executive’s employment with BancTec and the Employment Agreement, which settlement constitutes the good faith settlement of any potential claims in any manner arising from or connected with Executive’s employment relationship with BancTec and/or the termination of his employment.

 

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual promises contained in this Agreement, the sufficiency of which is hereby acknowledged, the Contracting Parties do hereby agree as follows:

 

1.                                      Settlement Amount.

 

a.               BancTec and Executive mutually agree that February 11, 2011 (the “Separation Date”) shall be the Executive’s last day of employment with BancTec; as of the Separation Date the Executive shall be considered to have resigned for Good Reason from all offices and positions held by Executive in BancTec and its subsidiaries upon terms and conditions set forth in this Agreement.

 

b.              Until and including the Separation Date, Executive shall continue to serve BancTec in Executive’s current capacity and, except as modified hereby, Executive and BancTec will remain subject to the terms and conditions of Executive’s Employment Agreement until the Separation Date.

 

c.               In connection with Executive’s resignation for Good Reason, BancTec agrees to the following:

 

i.      BancTec will pay to Executive one (1) year’s base salary (which the parties agree is $325,000) and Executive’s target bonus (which the parties agree is an additional $325,000) said payments to be paid in accordance with BancTec’s customary payroll practice starting on the Effective Date, provided, however, that Executive’s target bonus amount shall be paid on or about the earlier of (A) when bonuses under the then-current 2011 Bonus Plan are generally paid to the executive staff, or (B) June 30, 2012;

 

ii.   Executive shall have the right to participate at BancTec’s expense, for a period of 18 months after the Separation Date, in BancTec’s Employee Benefits (other than vacation rights) for which the Executive is eligible; provided however, that this right shall terminate upon Executive’s employment by a company offering welfare benefits, whether or not the Executive elects to receive such benefits; and

 

iii. Executive is also entitled to certain accrued rights as follows:

 

A.           Any accrued but unpaid salary for any period of time worked prior to (and including) the Separation Date and other amounts to which the Executive 

 

2

 

otherwise is entitled hereunder prior to the date of the Executive’s termination of employment;

 

B.             Any bonus compensation earned but not paid that relates to any calendar year ended prior to the date of termination of employment, in accordance with the terms of the Bonus Plan, which, if any, will be paid on or about the same date as other payments under such prior year Bonus Plan are made;

 

C.             Accrued and unused vacation pay, equivalent to $4,806.25;

 

D.            Reimbursement for any unreimbursed business expenses properly incurred by the Executive in accordance with BancTec policy prior to the date of the Executive’s termination;

 

E.              The Employee Benefits as to which to the Executive (or his dependents or beneficiaries, as applicable) are entitled under the employee benefit plans of BancTec or its affiliates pursuant to the terms of such plans, for the timeframe specified in 1.c.(ii) above, structured as follows:

 

1)              Medical, dental and vision coverage under COBRA, the premiums for which will be paid directly by BancTec; and

 

2)              Basic, supplemental and spousal CIGNA life insurance, Provident long term disability insurance, and Aflac Specified Health and Cancer Policies, which each must be ported or, if porting is unavailable, converted by the Executive to personal policies as of the Separation Date.  BancTec will pay to the Executive a lump sum of $6103.85 on or about the Separation Date and on or about every third month thereafter, which Executive acknowledges and agrees is reimbursement in full by BancTec of the estimated premiums for such benefits that are converted to personal accounts and not provided under COBRA.

 

F.              Vesting of equity incentive awards as follows:

 

1)              All equity incentive awards granted to Executive under BancTec’s Second Amended and Restated 2007 Equity Incentive Plan, Amended and Restated 2008 Equity Incentive Plan and 2009 

 

3

 

Equity Incentive Plan, whether vested or unvested as of the Separation Date, will immediately vest on the Separation Date.

 

2)              Option awards (if any) will become immediately exercisable and shall be exercisable until the earlier to occur of (1) the end of the award term as set forth in the applicable award agreement(s) or (2) ninety (90) days after the Separation Date, after which all such option awards shall expire and be of no further force or effect.  However, notwithstanding any other provision of this Agreement, the vesting and exercisability provided for in this Subsection 1.c.iii.F.2) shall be subject to all provisions relating to post-employment exercises set forth in the relevant equity plan and related award agreements.

 

2.                                      GENERAL RELEASE AND COVENANT NOT TO SUE.

 

a.               IN RETURN FOR THE CONSIDERATION REFERENCED IN THIS AGREEMENT, THE EXECUTIVE, ON BEHALF OF HIMSELF, HIS SPOUSE, ATTORNEYS, HEIRS, EXECUTORS, ADMINISTRATORS AND ASSIGNS (TOGETHER THE “EXECUTIVE PARTIES”), HEREBY GENERALLY RELEASES AND FOREVER DISCHARGES BANCTEC AND ITS RESPECTIVE PREDECESSORS, SUCCESSORS, ASSIGNS, PARENTS, SUBSIDIARIES AND AFFILIATES AND ITS RESPECTIVE PAST AND PRESENT SHAREHOLDERS, DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, REPRESENTATIVES, PRINCIPALS, INSURERS, ACCOUNTANTS, AND ATTORNEYS (TOGETHER THE “RELEASED PARTIES”) FROM ANY AND ALL CLAIMS, DEMANDS, LIABILITIES, SUITS, DAMAGES, LOSSES, EXPENSES, ATTORNEYS’ FEES, OBLIGATIONS OR CAUSES OF ACTION, KNOWN OR UNKNOWN OF ANY KIND AND EVERY NATURE WHATSOEVER, AND WHETHER OR NOT ACCRUED OR MATURED, WHICH ANY OF THEM MAY HAVE, ARISING OUT OF OR RELATING TO ANY TRANSACTION, DEALING, RELATIONSHIP, CONDUCT, ACT OR OMISSION, OR ANY OTHER MATTERS OR THINGS OCCURRING OR EXISTING AT ANY TIME PRIOR TO AND INCLUDING THE SEPARATION DATE (INCLUDING, BUT NOT LIMITED TO, ANY CLAIM AGAINST THE RELEASED PARTIES BASED 

 

4

 

ON, RELATING TO OR ARISING UNDER WRONGFUL DISCHARGE, BREACH OF CONTRACT (WHETHER ORAL OR WRITTEN), TORT, FRAUD, FRAUDULENT INDUCEMENT, DEFAMATION, SLANDER, UNJUST ENRICHMENT, COMPENSATION, EQUITY INTEREST, NEGLIGENCE, PROMISSORY ESTOPPEL, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED, ANY OTHER CIVIL OR HUMAN RIGHTS LAW, THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, THE OLDER WORKERS BENEFIT PROTECTION ACT, AMERICANS WITH DISABILITIES ACT, EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, THE EQUAL PAY ACT, AS AMENDED, THE WORKER ADJUSTMENT AND RETRAINING NOTIFICATION ACT, THE FAMILY AND MEDICAL LEAVE ACT, AS AMENDED, THE FAIR LABOR STANDARDS ACT, AS AMENDED, THE SARBANES-OXLEY ACT, OR ANY OTHER FEDERAL, STATE OR LOCAL LAW RELATING TO EMPLOYMENT OR DISCRIMINATION IN EMPLOYMENT, INCLUDING THE TEXAS COMMISSION ON HUMAN RIGHTS ACT) IN ALL CASES ARISING OUT OF OR RELATING TO THE EXECUTIVE’S EMPLOYMENT BY BANCTEC OR INVESTMENT IN BANCTEC OR HIS SERVICES AS AN OFFICER OR EMPLOYEE OF BANCTEC OR ITS SUBSIDIARIES, OR OTHERWISE RELATING TO THE TERMINATION OF SUCH EMPLOYMENT OR SERVICES; PROVIDED, HOWEVER, THAT SUCH GENERAL RELEASE WILL NOT LIMIT OR RELEASE (i) ANY OF THE RELEASED PARTIES FROM ANY OF THEIR RESPECTIVE OBLIGATIONS UNDER THIS AGREEMENT, (ii) ANY OF THE RELEASED PARTIES’ RESPECTIVE OBLIGATIONS TO INDEMNIFY THE EXECUTIVE FROM BANCTEC IN RESPECT OF HIS SERVICES AS AN EMPLOYEE, OFFICER OR DIRECTOR OF BANCTEC OR ANY OF ITS SUBSIDIARIES AS PROVIDED BY LAW OR THE CERTIFICATES OF INCORPORATION OR BY-LAWS (OR LIKE CONSTITUTIVE DOCUMENTS) OF BANCTEC OR ANY SUBSIDIARY THEREOF, (iii) ANY OF THE RELEASED PARTIES’ RESPECTIVE OBLIGATIONS UNDER ANY STOCK OPTION AND RESTRICTED STOCK GRANT AGREEMENTS THAT MAY BE IN EFFECT WITH RESPECT TO STOCK OPTION, RESTRICTED STOCK OR SIMILAR AWARDS 

 

5

 

THAT HAVE BEEN GRANTED TO EXECUTIVE PRIOR TO THE SEPARATION DATE, (iv) CLAIMS OR RIGHTS THE EXECUTIVE MIGHT HAVE UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967 (AND ANY AMENDMENTS THERETO) THAT ARISE AFTER THE DATE THE EXECUTIVE SIGNS THE RELEASE OR (v) CLAIMS ARISING SOLELY AFTER THE SEPARATION DATE.

 

b.              THE EXECUTIVE, ON BEHALF OF HIMSELF AND THE EXECUTIVE PARTIES, HEREBY COVENANT FOREVER NOT TO ASSERT, FILE, PROSECUTE, MAINTAIN, COMMENCE, INSTITUTE (OR SPONSOR OR FACILITATE ANY PERSON IN CONNECTION WITH THE FOREGOING), ANY COMPLAINT OR LAWSUIT OR ANY LEGAL, EQUITABLE OR ADMINISTRATIVE PROCEEDING OF ANY NATURE, AGAINST ANY OF THE RELEASED PARTIES IN CONNECTION WITH ANY MATTER RELEASED IN THIS RELEASE, AND REPRESENT AND WARRANT THAT NO OTHER PERSON OR ENTITY HAS INITIATED OR, TO THE EXTENT WITHIN HIS CONTROL, WILL INITIATE ANY SUCH PROCEEDING ON HIS BEHALF.  EVEN IF A COURT RULES THAT EXECUTIVE, OR ANOTHER PARTY ON HIS BEHALF, MAY FILE A LAWSUIT AGAINST BANCTEC OR ANY OF THE RELEASED PARTIES ARISING FROM EXECUTIVE’S EMPLOYMENT AT BANCTEC OR ANY OF THE RELEASED PARTIES, OR THE SEPARATION THEREOF, OR BASED ON ANY OTHER SET OF FACTS OR EVENTS OCCURRING PRIOR TO THE EFFECTIVE DATE, EXECUTIVE AGREES NOT TO ACCEPT ANY MONEY DAMAGES OR ANY OTHER RELIEF IN CONNECTION WITH ANY SUCH LAWSUIT.  EXECUTIVE UNDERSTANDS THAT THIS RELEASE EFFECTIVELY RELEASES AND WAIVES ANY RIGHT HE MIGHT HAVE TO SUE BANCTEC OR ANY OF THE RELEASED PARTIES FOR ANY CLAIM ARISING OUT OF OR RELATED TO HIS EMPLOYMENT AT BANCTEC OR ANY OF THE RELEASED PARTIES, THE SEPARATION OF HIS EMPLOYMENT, ANY AGREEMENTS BETWEEN BANCTEC OR THE RELEASED PARTIES AND EXECUTIVE (INCLUDING, BUT NOT LIMITED TO, THE EMPLOYMENT AGREEMENT BETWEEN THE EXECUTIVE AND BANCTEC DATED MAY 27, 2007), AS AMENDED, OR BASED 

 

6

 

ON ANY OTHER SET OF FACTS OR EVENTS OCCURRING PRIOR TO THE EFFECTIVE DATE. PROVIDED HOWEVER THAT THE COVENANTS NOT TO SUE CONTAINED HEREIN DO NOT APPLY TO THE SAME FOUR EXCEPTIONS SET FORTH IMMEDIATELY ABOVE IN SECTION 2(a) (i), (ii), (iii) AND (iv).

 

c.               EXECUTIVE REPRESENTS THAT EXECUTIVE KNOWS OF NO CLAIM THAT EXECUTIVE HAS THAT HAS NOT BEEN RELEASED BY THIS SECTION 2.

 

3.                                      Survival of Employment Agreement Provisions.  The provisions of Sections V, VIII, IX and X of the Employment Agreement are incorporated herein by reference, shall survive after the Effective Date and expiration of the Employment Agreement and shall continue in full force and effect as though expressly set forth in this Agreement.  Executive and BancTec each hereby ratify Sections V, VIII, IX and X of the Employment Agreement.  Notwithstanding the foregoing, if BancTec involuntarily terminates an officer or employee, then the Executive shall not be prohibited from soliciting such terminated officer or employee under Section IX of the Employment Agreement.  Executive further acknowledges and agrees that (a) Executive has received Protected Information (defined in the Employment Agreement); (b) that BancTec is relying on Executive’s continuing agreement to comply with Sections VIII, IX and X of the Employment Agreement in entering into this Agreement; and (c) Executive is receiving consideration for his agreement to continue to comply with Sections VIII, IX and X of the Employment Agreement.  In addition, Executive and BancTec agree to keep completely confidential the amount and terms of this Agreement and the circumstances giving rise to this Agreement, and will not disclose, directly or indirectly, any such information to any person or entity (unless the terms hereof have been made public by BancTec) with the exception that the Contracting Parties may disclose information regarding this Agreement to their attorneys, spouses, and to a professional tax advisor or tax return preparer for the limited purpose of obtaining advice regarding or preparing such tax return or returns as may be necessary and BancTec may advise its corporate officers and HR management personnel.  In the event that the Contracting Parties make such limited disclosure to such persons as authorized by this Agreement, the Contracting Party making such disclosure shall affirmatively instruct such persons to abide strictly by the conditions of confidentiality imposed hereunder.

 

7

 

4.                                      Reimbursement of Legal Expenses.  The BancTec shall reimburse Executive for up to $5,000 of Executive’s costs, expert fees, attorneys’ fees, expenses, and other fees incurred in connection with this Agreement.  Otherwise, the Contracting Parties shall each bear their own costs, expert fees, attorneys’ fees, expenses, and other fees incurred in connection with this Agreement.  Executive acknowledges that BancTec’s payment of the legal expenses provided for in this Section 4 is consideration that Executive is not already entitled to and is partial consideration for his signing the Agreement.

 

5.                                      Tax Consequences of Settlement Payment and Survival of Section III(D).  Subject to Section V of the Employment Agreement, which provision shall control in the event of conflict, Executive acknowledges that he is and shall be solely responsible for all federal, state and local taxes that he may owe by virtue of receipt of any portion of the monetary payment provided under this Agreement.  Subject to the provisions of Section V of the Employment Agreement, Executive agrees to indemnify and hold BancTec harmless from any and all liability, including, without limitations, all penalties, interest and other costs that may be imposed by the Internal Revenue Service or other governmental agencies regarding any of his tax obligations that may arise from the monetary consideration made to BancTec under this Agreement.  The provisions of Section III(D) of the Employment Agreement are incorporated herein by reference, shall survive after the Effective Date and shall continue in full force and effect as though expressly set forth in this Agreement.

 

6.                                      Return of Property.  Except documentation related to this and Executive’s other individual agreements with BancTec, Executive’s mobile phone and Executive’s laptop computer, on, before, or promptly after the Separation Date, Executive will turn over to BancTec all papers, files, notes, memoranda, keys, access cards, customer lists, records, reports, pagers, other tangible and intangible property, computer programs, computer files, data and all other documents and materials, and all copies thereof whether prepared by Executive or others, which contain BancTec information or relate or belong to BancTec of which Executive obtained possession during the course of his employment with BancTec, other than this Agreement, other documentation reflecting Executive’s employment arrangement with BancTec and documentation pertaining to the Executive’s executive benefits.  By executing and delivering this Agreement, Executive represents 

 

8

 

and warrants to BancTec that Executive will not retain in his possession copies or notes or other extracts, whether in paper or electronic form, of or from any information pertaining or belonging to BancTec or any business or property of BancTec, other than as specified above.  This representation and warranty survives the execution of the Agreement indefinitely.

 

7.                                      Non-disparagement.  The Executive and BancTec shall not, directly or indirectly, make or cause to be made any disparaging, denigrating, derogatory or other negative, misleading or false statement orally or in writing to any person or entity, including, without limitation, members of the investment community, press, suppliers, customers, competitors, employees, agents, lenders and advisors to BancTec or its subsidiaries or affiliates, about the other or any Released Party or the business strategy or plans, policies, practices or operations of BancTec or its subsidiaries or affiliates.

 

8.                                      Governing Law.  This Agreement is made and delivered in the State of Texas, and shall in all respects be interpreted, enforced, and governed under the laws of said state.

 

9.                                      Arbitration and Venue Provisions.

 

a.               To the extent permitted by law, all claims or disputes arising out of or relating to the construction, meaning or effect of any provision of the Agreement, the Executive’s employment relationship with BancTec, or the termination or cessation of such employment relationship (collectively, “Disputes”), shall be resolved by binding and confidential arbitration in accordance with the procedures set forth in this Section 9, including, but not limited to, any claims:

 

i.      that Executive may have against or with BancTec, the Released Parties or any of their parent companies, subsidiaries, affiliates, predecessors, successors, and all of their present or former officers, trust managers, directors, managers, representatives, employees, agents, attorneys, employee benefit programs, and the trustees, administrators, fiduciaries and insurers of such programs, as well as all representatives of any of the foregoing entities; or

 

ii.   that BancTec may have against or with Executive.

 

b.              All arbitrations shall be administered by a single arbitrator (the “Arbitrator”) admitted to practice law in Texas for ten years or more chosen in accordance with the American Arbitration Association Rules, or any successor thereto.  Any such arbitration proceeding 

 

9

 

shall take place in Dallas County, Texas.  The arbitration proceeding and all related documents will be confidential, unless disclosure is required by law. The Arbitrator will have the authority to award the same remedies, damages, and costs that a court could award, including but not limited to the right to award injunctive relief in accordance with the other provisions of this Agreement.  Further, the Contracting Parties specifically agree that, in the interest of minimizing expenses and promoting early resolution of claims, the filing of dispositive motions shall be permitted and that prompt resolution of such motions by the Arbitrator shall be encouraged.  The Arbitrator shall issue a written reasoned award explaining the decision within 180 days after initiation of the arbitration pursuant to this Section 9, the reasons for the decision, and any damages awarded.  The Arbitrator’s decision will be final and binding.  The judgment on the award rendered by the Arbitrator may be entered in any court having jurisdiction thereof.  This provision can be enforced under the Federal Arbitration Act.  The Arbitrator shall determine the prevailing Party in the arbitration.  Each Contracting Party shall be required to bear their own costs and attorneys’ fees and expenses incurred in arbitration, but BancTec shall pay the American Arbitration Association fees and the Arbitrator’s fees in any arbitration.

 

c.               As the sole exception to the exclusive and binding nature of the arbitration commitment set forth above, the Contracting Parties agree that BancTec may resort to Texas state courts having equity jurisdiction in and for Dallas County, Texas and the United States District Court for the Northern District of Texas, Dallas Division in order to request temporary, preliminary, and permanent injunctive, specific performance, or other equitable relief, including, without limitation, specific performance, to enforce the terms of Sections 3 and 7 of this Agreement, without the necessity of proving inadequacy of legal remedies or irreparable harm or posting bond or giving notice to the maximum extent permitted by law.  However, nothing in this Section 9.c. should be construed to constitute a waiver of any Parties’ rights and obligations to arbitrate regarding all matters other than those specifically addressed in this Section 9.c. or to seek injunctive relief, specific performance, or any other equitable relief from the Arbitrator.

 

d.              Should a court of competent jurisdiction determine that the scope of the arbitration and related provisions of this Agreement are too broad to be enforced as written, the Contracting Parties intend that the court reform the provision in question to such 

 

10

 

narrower scope as it determines to be reasonable and enforceable.

 

10.                               Severability of Provisions.  The Contracting Parties agree that, should any part, term or provision of this Agreement be declared or determined by any agency or court of competent jurisdiction to be illegal or invalid, the validity of the remaining parts, terms, or provisions shall not be affected thereby, and said illegal or invalid part, term or provision shall be deemed not to be a part of this Agreement.

 

11.                               Recommendation.  J. Coley Clark shall be allowed to respond to reference inquiries about Executive..

 

12.                               Entire Agreement.  This Agreement contains the entire agreement and understanding between Executive and BancTec with respect to any and all disputes or claims that Executive has, or could have had, against BancTec as of the date this Agreement is executed, and supersedes all other agreements between Executive and BancTec with regard to such disputes or claims.  This Agreement shall not be changed unless in writing and signed by Executive and BancTec.

 

13.                               Full Knowledge and Volition.  Executive acknowledges that no representation, promise or inducement has been made other than as set forth in this Agreement, and that Executive enters into this Agreement without reliance upon any other representation, promise or inducement not set forth herein.  Executive also acknowledges that: (a) he has been advised to consult an attorney prior to signing this Agreement; (b) he has read carefully and had received appropriate time to consider this Agreement and to consult with his attorney concerning its contents and effect; (c) he understands the Agreement and acknowledges that he knowingly and voluntarily waived the rights identified herein; and (e) he has determined that entering into this Agreement is in his best interests.

 

14.                               Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which shall constitute one and the same instrument.

 

15.                               Additional Acknowledgments and Right to Revoke.

 

a.               Executive hereby represents and warrants that he has not heretofore assigned or transferred or purported to assign or transfer to anyone any claim, demand, action or cause of action based upon or arising out of or pertaining to or concerning to connected 

 

11

 

with any of the matters or things released herein and will not do so during the term of the Employment Agreement.

 

b.              Executive acknowledges that (a) he has read and understands each of the provisions of this agreement; (b) he is hereby advised to consult with an attorney prior to executing this Agreement; (c) he has twenty-one days from his receipt of this Agreement to review it and to consider his decision to sign it, although, he may execute and return it to the undersigned prior to that time if he desires; (d) he is entering into this Agreement of his own free will; and (e) this Agreement is not intended to be a waiver of claims arising after the Effective Date of this Agreement.

 

c.               Executive’s failure to sign and return this Agreement to the undersigned by the close of business the twenty-first day from his receipt of this Agreement will cause this offer to expire.  With the written consent of the undersigned, such period may be extended.

 

d.              Executive acknowledges that Executive may, for a period of seven days following the execution of this Agreement, revoke acceptance thereof.  This revocation must be in writing and delivered to J. Coley Clark before the close of business on the seventh day.  This Agreement shall not become effective until the day following such seven-day revocation period (the “Effective Date”) provided that Executive has not revoked it during the seven-day revocation period.

 

*** Remainder of page intentionally left blank. ***

 

12

 

WHEREFORE, Executive and BancTec have caused this Confidential Settlement Agreement and Release of All Claims to be executed on the dates indicated below:

 

	
 
    	
Executive
    
	
 
    	
 
    
	
 
    	
/s/ Michael D. Fallin
    
	
 
    	
Signature
    
	
 
    	
 
    	
 
    
	
 
    	
Date:
    	
February 11, 2011
    
	
 
    	
 
    	
 
    
	
 
    	
and
    
	
 
    	
 
    
	
 
    	
BancTec, Inc.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ J. Coley Clark
    
	
 
    	
 
    	
J.   Coley Clark
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
Chairman   & Chief Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
Date:
    	
February 11, 2011
    

 

13

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