Exhibit 99.2
July 18, 2001
To Our Stockholders:
Your Board of Directors has approved a rights plan under which Optika
Inc. (the "Company") has declared a dividend of Rights on its Common Stock. We
believe that this rights plan will provide protection to the stockholders from
takeover abuses prevalent today. The Rights Agreement is more fully described
in the Summary of Rights attached to this letter.
The Rights contain provisions to protect stockholders in the event of an
unsolicited attempt to acquire the Company, including a gradual accumulation in
the open market of shares, a partial or two-tier tender offer that does not
treat all stockholders equally, a squeeze-out merger and other abusive takeover
tactics which are currently prevalent and which the Board believes are not in
the best interests of stockholders. These tactics unfairly pressure
stockholders, squeeze them out of their investment without giving them any real
choice and deprive them of the full value of their shares. Over 2,000 other
companies have issued rights to protect stockholders against these tactics. We
consider the rights to be the best available means of protecting both your right
to retain your equity investment in the Company and the full value of that
investment, while not foreclosing a fair acquisition bid for the Company.
The Rights are not intended to prevent a takeover of the Company and will
not do so. However, they should deter any attempt to acquire the Company in a
manner or on terms not approved by the Board. The Rights are designed to deal
with the very serious problem of another person or company using abusive tactics
to deprive the Company's Board of any real opportunity to determine the destiny
of the Company.
The Rights will trade automatically with shares of the Company's Common
Stock and are not exercisable except as provided in the Rights Agreement.
However, as more fully described in the Summary of Rights attached to this
letter, ten business days after the announcement that a person or group has
acquired 15% or more of the Company's shares, or ten business days (unless such
date has been extended by a majority of the Board who are unaffiliated with the
acquiring person) after the announcement that a person or group has commenced a
tender offer, the consummation of which would result in such person or group
owning 15% or more of the shares (even if no purchases actually occur), the
Rights will become exercisable, and separate certificates representing the
Rights will be distributed. We expect that the Rights will begin to trade
independently from the Company's Common Stock at that time. At no time will the
Rights have any voting power.
In instituting this rights plan we have expressed our continued
confidence in the future of the Company and our continued determination that
you, our stockholders, be given every opportunity to participate fully in that
future.
On behalf of the Board of Directors,
/s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
President, CEO and Chairman
SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK
UNDER CERTAIN CIRCUMSTANCES
(SPECIFIED IN THE RIGHTS AGREEMENT),
RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS
(AS DEFINED IN THE RIGHTS AGREEMENT)
OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS
MAY BECOME NULL AND VOID.
On July 12, 2001 the Board of Directors of Optika Inc. (the "Company")
authorized and declared a dividend distribution of one Right for each
outstanding share of its Common Stock, par value $.001 per share (the "Company
Common Stock"), to stockholders of record at the close of business on July 18,
2001 (the "Record Date"), and authorized the issuance of one Right with each
share of Company Common Stock issued (including shares distributed from
Treasury) by the Company thereafter between the Record Date and the Distribution
Date (as defined below). Each Right entitles the registered holder, subject to
the terms of the Rights Agreement (as defined below), to purchase from the
Company one one-hundredth of a share (a "Unit") of Series B Preferred Stock, par
value $.001 per share (the "Preferred Stock"), at a purchase price of $30 per
Unit, subject to adjustment. The purchase price is payable in cash or by
certified or bank check or money order payable to the order of the Company. The
description and terms of the Rights are set forth in a Rights Agreement between
the Company and Fleet National Bank, as Rights Agent, dated as of July 18, 2001,
as amended from time to time (the "Rights Agreement").
Copies of the Rights Agreement and the Certificate of Designation for the
Preferred Stock have been filed with the Securities and Exchange Commission as
exhibits to a Registration Statement on Form 8-A dated July 18, 2001. Copies of
the Rights Agreement and the Certificate of Designation are available free of
charge from the Company. This summary description of the Rights and the
Preferred Stock does not purport to be complete and is qualified in its entirety
by reference to all of the provisions of the Rights Agreement and the
Certificate of Designation, including the definitions therein of certain terms,
which Rights Agreement and Certificate of Designation are incorporated herein by
reference.
The Rights Agreement
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Initially, the Rights will attach to all certificates representing shares
of outstanding Company Common Stock, and no separate Rights Certificates will be
distributed. The Rights will separate from the Company Common Stock and the
"Distribution Date" will occur upon the earlier of (i) ten business days
following a public announcement (the date of such announcement being the "Stock
Acquisition Date") that a person or group of affiliated or associated persons
has acquired or otherwise obtained beneficial ownership of 15% or more of the
then outstanding shares of Company Common Stock (an "Acquiring Person"), and
(ii) ten business days (or such later date as may be determined by action of the
Board of Directors prior to such time as any person becomes an Acquiring Person)
following the commencement of a tender offer or exchange offer that would result
in a person or group beneficially owning 15% or more of the
then outstanding shares of Company Common Stock. Until the Distribution Date,
(i) the Rights will be evidenced by Company Common Stock certificates and will
be transferred with and only with such Company Common Stock certificates, (ii)
new Company Common Stock certificates issued after the Record Date (also
including shares distributed from Treasury) will contain a notation
incorporating the Rights Agreement by reference, and (iii) the surrender for
transfer of any certificates representing outstanding Company Common Stock will
also constitute the transfer of the Rights associated with the Company Common
Stock represented by such certificates.
An "Acquiring Person" does not include (A) the Company; (B) any Subsidiary
of the Company; (C) any employee benefit plan maintained by the Company or any
of its Subsidiaries; (D) any trustee or fiduciary with respect to such employee
benefit plan acting in such capacity or a trustee or fiduciary holding shares of
Company Common Stock for the purpose of funding any such plan or employee
benefits; (E) any Person if the Board of Directors of the Company determines in
good faith that such Person who would otherwise be an "Acquiring Person" became
such inadvertently (including, without limitation, because (x) such Person was
unaware that it beneficially owned a percentage of Company Common Stock that
would otherwise cause such Person to be an "Acquiring Person" or (y) such Person
was aware of the extent of its Beneficial Ownership of Company Common Stock but
had no actual knowledge of the consequences of such Beneficial Ownership under
this Agreement) and without any intention of changing or influencing control of
the Company, and if such Person does not acquire any additional shares of
Company Common Stock and as promptly as practicable divested or divests itself
of Beneficial Ownership of a sufficient number of shares of Company Common Stock
so that such Person would no longer be an "Acquiring Person;" or (F) any Person
who is or becomes the Beneficial Owner of 15% or more of the then outstanding
shares of Company Common Stock as a result of the acquisition of shares of
Company Common Stock in one or more transactions approved by a majority of the
Board of Directors, and (ii) no Person shall be deemed an "Acquiring Person" as
a result of the acquisition of shares of Company Common Stock by the Company
which, by reducing the number of shares of Company Common Stock outstanding,
increases the proportional number of shares beneficially owned by such Person;
provided, however, that if (A) a Person would become an Acquiring Person (but
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for the operation of this subclause (ii)) as a result of the acquisition of
shares of Company Common Stock by the Company and (B) after such share
acquisition by the Company, such Person becomes the Beneficial Owner of any
additional shares of Company Common Stock, then such Person shall be deemed an
Acquiring Person unless upon becoming the Beneficial Owner of such additional
shares such Person is the Beneficial Owner of less than 15% of the then
outstanding shares of Company Common Stock.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on the tenth anniversary of the Rights Agreement unless
earlier redeemed or exchanged by the Company as described below. Under certain
circumstances the exercisability of the Rights may be suspended. In no event,
however, will the Rights be exercisable prior to the expiration of the period in
which the Rights may be redeemed.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of Company Common Stock as of the close of
business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights.
In the event that a person becomes an Acquiring Person, then, in such case,
each holder of a Right will thereafter have the right to receive, upon exercise,
shares of Company Common Stock (or, in certain circumstances, cash, property or
other securities of the Company) having a value equal to two times the exercise
price of the Right. The exercise price is the purchase price multiplied by the
number of Units of Preferred Stock issuable upon exercise of a Right prior to
the event described in this paragraph. Notwithstanding any of the foregoing,
following the occurrence of the event set forth in this paragraph, all Rights
that are, or (under certain circumstances specified in the Rights Agreement)
were, beneficially owned by any Acquiring Person will be null and void.
In the event that, at any time following the date that any person becomes
an Acquiring Person, (i) the Company is acquired in a merger or other business
combination transaction and the Company is not the surviving corporation, (ii)
any person merges with the Company and all or part of the Company Common Stock
is converted or exchanged for securities, cash or property of the Company or any
other person or (iii) 50% or more of the Company's assets or earning power is
sold or transferred, each holder of a Right (except Rights which previously have
been voided as described above) shall thereafter have the right to receive, upon
exercise, common stock of the Acquiring Person having a value equal to two times
the exercise price of the Right unless such transaction is approved by the Board
of Directors (including a majority of the Independent Directors).
The purchase price payable, and the number of Units of Preferred Stock
issuable, upon exercise of the Rights are subject to adjustment from time to
time to prevent dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Preferred Stock, (ii) if
holders of the Preferred Stock are granted certain rights or warrants to
subscribe for Preferred Stock or convertible securities at less than the current
market price of the Preferred Stock, or (iii) upon the distribution to the
holders of the Preferred Stock of evidences of indebtedness, cash or assets
(excluding regular quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above).
With certain exceptions, no adjustment in the purchase price will be
required until cumulative adjustments amount to at least 1% of the purchase
price. The Company is not required to issue fractional shares of Preferred Stock
(other than fractions which are integral multiples of one one-hundredth of a
share of Preferred Stock which may be evidenced by depositary receipts). In lieu
thereof, an adjustment in cash may be made based on the current market price of
a share of Preferred Stock on the day of exercise.
At any time until ten business days following the Stock Acquisition Date, a
majority of the Board of Directors (including, following the date on which there
is an Acquiring Person, the majority of the Independent Directors) may redeem
the Rights in whole, but not in part, at a price of $.001 per Right (subject to
adjustment in certain events) (the "Redemption Price") payable, at the election
of the majority of the Board of Directors (including a majority of the
Independent
Directors), in cash or shares of Company Common Stock. Immediately upon the
action of a majority of the Board of Directors (including, following the date on
which there is an Acquiring Person, a majority of the Independent Directors)
ordering the redemption of the Rights, the Rights will terminate and the only
right of the holders of Rights will be to receive the Redemption Price.
The Company may at any time after there is an Acquiring Person, by action
of a majority of the Board of Directors (including a majority of the Independent
Directors), exchange all or part of the then outstanding and exercisable Rights
(other than Rights that shall have become null and void) for shares of Company
Common Stock pursuant to a one-for-one exchange ratio, as adjusted.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to stockholders or to the Company, stockholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for Units of Preferred Stock (or other consideration).
Any of the provisions of the Rights Agreement may be amended without the
approval of the holders of Company Common Stock at any time prior to the
Distribution Date, including an amendment to lower certain thresholds described
above to not less than the greater of (i) the sum of .001% and the largest
percentage of the outstanding shares of Company Common Stock then known to the
Company to be beneficially owned by any person or group of affiliated or
associated persons, and (ii) 10%. After the Distribution Date, the provisions of
the Rights Agreement may be amended in order to cure any ambiguity, defect or
inconsistency, to make changes which do not adversely affect the interests of
holders of Rights (excluding the interests of any Acquiring Person), or to
shorten or lengthen any time period under the Rights Agreement; provided,
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however, that no amendment to adjust (i) the time period governing redemption
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shall be made at such time as the Rights are not redeemable or (ii) any other
time period unless such lengthening is for the purpose of protecting, enhancing
or clarifying the Rights of and/or benefiting, the holders of Rights. In
addition, after a person becomes an Acquiring Person, no amendment or supplement
may be made without the approval of a majority of the Board of Directors
(including a majority of the Independent Directors).
Description of Preferred Stock
------------------------------
The Units of Preferred Stock that may be acquired upon exercise of the
Rights will be nonredeemable and subordinate to any other shares of preferred
stock that may be issued by the Company.
Each Unit of Preferred Stock will have a minimum preferential quarterly
dividend of $.01 per Unit or any higher per share dividend declared on the
Company Common Stock.
In the event of liquidation, the holder of a Unit of Preferred Stock will
receive a preferred liquidation payment equal to the greater of $.01 per Unit
and the per share amount paid in respect of a share of the Company Common Stock.
Each Unit of Preferred Stock will have one vote, voting together with the
Company Common Stock.
In the event of any merger, consolidation or other transaction in which
shares of Company Common Stock are exchanged, each Unit of Preferred Stock will
be entitled to receive the per share amount paid in respect of each share of
Company Common Stock.
The rights of holders of the Preferred Stock with respect to dividends,
liquidation and voting, and in the event of mergers and consolidations, are
protected by customary antidilution provisions.
Because of the nature of the Preferred Stock's dividend, liquidation and
voting rights, the economic value of one Unit of Preferred Stock that may be
acquired upon the exercise of each Right should approximate the economic value
of one share of Company Common Stock.
