-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HpmIWZeEZuT3E9478avbl9OVBvbMNS4VTeaz0AaL/UxHObvfara+UwWDiCNqbO9l nczNjQC5G3vx7UZabxIOVQ== 0000950123-00-011603.txt : 20001219 0000950123-00-011603.hdr.sgml : 20001219 ACCESSION NUMBER: 0000950123-00-011603 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20001218 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20001218 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PUBLICARD INC CENTRAL INDEX KEY: 0000081050 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER PERIPHERAL EQUIPMENT, NEC [3577] IRS NUMBER: 230991870 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-03315 FILM NUMBER: 790981 BUSINESS ADDRESS: STREET 1: 620 FIFTH AVENUE ROCKEFELLER CENTER STREET 2: 7TH FLOORR CITY: NEW YORK STATE: NY ZIP: 10020 BUSINESS PHONE: 2126513102 MAIL ADDRESS: STREET 1: 620 FIFTH AVENUE ROCKEFELLER CENTER STREET 2: FIFTH FLOOR CITY: NEW YORK STATE: NY ZIP: 10020 FORMER COMPANY: FORMER CONFORMED NAME: PUBLICKER INDUSTRIES INC DATE OF NAME CHANGE: 19920703 8-K 1 y43589e8-k.txt PUBLICARD, INC. 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report: December 18, 2000 PUBLICARD, INC. (Exact name of registrant as specified in its charter) PENNSYLVANIA 0-29794 23-0991870 - ------------------------------ -------- ----------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.)
620 FIFTH AVENUE, 7TH FLOOR, NEW YORK, NY 10020 ----------------------------------------- ----- (Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 651-3102 (Former name or former address, if changed since last report.) 2 Item 5. Other Events On December 6, 2000, PubliCARD, Inc., a Pennsylvania corporation ("PubliCARD"), completed a private placement of shares of common stock and Class A Preferred Stock, Second Series, a newly designated series of convertible preferred stock (having the rights set forth under the Certificate of Designation attached hereto as Exhibit 4.1), resulting in aggregate proceeds of $5.0 million to PubliCARD. The securities were sold to institutional investors and other accredited investors in the U.S. and Europe. 525,000 shares of common stock and 790 shares of preferred stock were issued. Each share of preferred stock is convertible into 2,500 shares of common stock. Therefore, the shares of common stock issued plus the shares of common stock issuable upon conversion of the convertible preferred stock are in the aggregate 2.5 million shares. On December 6, 2000, PubliCARD also completed its previously announced $5.0 million investment in TECSEC, Incorporated ("TECSEC"). TECSEC develops and markets smart card-based encryption products and solutions which will enable the next generation information security for the enterprise, multi-enterprise e-Business, and other markets. In connection with the private placement, the Company issued 100 rights under a newly-adopted Rights Plan attached hereto as Exhibit 4.2. Such rights entitle the holders thereof to receive an aggregate of ten percent of any increase in value of the TECSEC stock realized by PubliCARD. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (c) Exhibits
Exhibit No. Description of Document 4.1 Certificate of Designation, Preferences and Rights of Class A Preferred Stock, Second Series, of PubliCARD, Inc. filed with the Department of State of the Commonwealth of Pennsylvania on November 29, 2000. 4.2 PubliCARD, Inc. Rights Plan adopted as of November 1, 2000.
3 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. PUBLICARD, INC. (Registrant) December 18, 2000 /s/ Antonio L. DeLise -------------------------------------- Antonio L. DeLise, Vice President Chief Financial Officer, Secretary and Principal Accounting Officer 2 4 EXHIBIT INDEX
Exhibit No. Description of Document 4.1 Certificate of Designation, Preferences and Rights of Class A Preferred Stock, Second Series, of PubliCARD, Inc. filed with the Department of State of the Commonwealth of Pennsylvania on November 29, 2000. 4.2 PubliCARD, Inc. Rights Plan adopted as of November 1, 2000.
3 EX-4.1 2 y43589ex4-1.txt CERTIFICATE OF DESIGNATION 1 EXHIBIT 4.1 CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS OF CLASS A PREFERRED STOCK, SECOND SERIES OF PUBLICARD, INC. Pursuant to Section 1522 of the Business Corporation Law of 1988, as amended, of the Commonwealth of Pennsylvania ("BCL") PubliCARD, Inc. (the "Corporation"), a corporation organized and existing under the BCL, hereby certifies that, pursuant to the provisions of Section 1522 of the BCL, its Board of Directors, at a meeting duly called and held on November 1, 2000, at which a quorum was present and acting throughout, duly adopted the following resolution: WHEREAS, the Board of Directors of the Corporation is authorized by Article Fourth of the Amended and Restated Articles of Incorporation dated March 9, 1984, as amended, to issue up to 1,000,000 shares of Class A Preferred Stock in one or more series and, in connection with the creation of any series, to fix, by resolutions providing for, the issuance of shares, the powers, designations, preferences and relative, participating, optional or other rights of the series and the qualifications, limitations or restrictions thereof; and WHEREAS, it is the desire of the Board of Directors of the Corporation, pursuant to such authority, to authorize and fix the designations, voting rights, preferences, limitations and special rights of a series of Class A Preferred Stock; NOW, THEREFORE, BE IT RESOLVED, that there is hereby created, provided for and approved, a series of Class A Preferred Stock to be designated "Class A Preferred Stock, Second Series" on the terms and with the provisions herein set forth in the Certificate of Designations, Preferences and Rights of Class A Preferred Stock, Second Series of PubliCARD, Inc. attached to this resolution as Annex A ("Certificate of Designations"); and FURTHER RESOLVED, that the officers of this Corporation be, and they hereby are, authorized and empowered to make any changes they may deem necessary or appropriate in the Certificate of Designations and then to execute and file with the Secretary of State of the Exh. 4.1 - 1 2 Commonwealth of Pennsylvania such Certificate of Designations setting forth the designations, voting rights, preferences, limitations and special rights of the Class A Preferred Stock, Second Series. /s/ Antonio L. DeLise ------------------------------------------ Name: Antonio L. DeLise Title: Vice President, Chief Financial Officer, and Secretary Exh. 4.1 - 2 3 ANNEX A CLASS A PREFERRED STOCK, SECOND SERIES The powers, designations, preferences and relative, participating, optional or other rights of the Class A Preferred Stock, Second Series of PubliCARD, Inc. (the "Corporation") are as follows: 1. DESIGNATION AND AMOUNT. This series of preferred stock shall be designated as "Class A Preferred Stock, Second Series." The Class A Preferred Stock, Second Series shall have no par value per share. The number of authorized shares constituting the Class A Preferred, Second Series shall be 1,000 shares. Shares of the Class A Preferred, Second Series have a stated value of Five Thousand Dollars ($5,000.00) per share (the "Stated Value"). 2. DIVIDENDS. (a) Holders of Class A Preferred Stock, Second Series shall be entitled to receive dividends when, as and if declared by the Board of Directors of the Corporation (the "Board of Directors"); provided that Board of Directors has no present intention to declare any dividends. (b) In the event the Board of Directors shall elect to pay or declare and set apart for payment any dividend on any shares of common stock, par value $.10 per share, of the Corporation (the "Common Stock") in cash out of funds legally available therefor or in stock or other consideration, the holders of the Class A Preferred Stock, Second Series shall be entitled to receive dividends payable in the form and in an amount per share equal to the per share amount that would have been payable to such holders had such holders converted their Class A Preferred Stock, Second Series into Common Stock pursuant to Section 5 below prior to the record date with respect to such dividend. 3. LIQUIDATION PREFERENCE. (a) Subject to the rights, privileges, preferences and priorities of the holders of "Preferred Stock", no par value per share, of the Company, in the event of any bankruptcy, liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary, each holder of Class A Preferred Stock, Second Series at the time thereof shall be entitled to receive, prior and in preference to any distribution of any of the assets or funds of the Corporation to the holders of the Common Stock or any other class of stock ranking junior upon liquidation, dissolution or winding up to the Class A Preferred Stock, Second Series ("Junior Securities") by reason of their ownership of such stock, an amount per share of Class A Preferred Stock, Second Series equal to the applicable Stated Value (the "Liquidation Preference"). After the payment of the full Liquidation Preference on account of all shares of Class A Preferred Stock, Second Series as set forth in this Section 3, the remaining assets of the Corporation legally Exh. 4.1 - 3 4 available for distribution, if any, shall be distributed ratably to the holders of the Common Stock and/or holders of any Junior Securities in accordance with the terms thereof. If the assets and funds legally available for distribution among the holders of Class A Preferred Stock, Second Series shall be insufficient to permit the payment to the holders of the full aforesaid preferential amount, then the assets and funds shall be distributed ratably among holders of Class A Preferred Stock, Second Series in proportion to the number of shares of Class A Preferred Stock, Second Series owned by each holder. (b) A merger, recapitalization, reorganization, sale of voting control to a single buyer or a group of related buyers in one or a series of related transactions, or other business combination transaction involving the Corporation in which the shareholders of the Corporation immediately prior to the consummation of such transaction do not own at least a majority of the issued and outstanding shares of the surviving corporation or the Corporation (as applicable) immediately following the consummation of such transaction or sale of all or substantially all of the assets of the Corporation (collectively, a "Liquidation Event") shall be deemed to be a liquidation of the Corporation. (c) In any Liquidation Event, if the consideration received by the Corporation is other than cash, its value will be deemed its fair market value as determined in good faith by the Board of Directors. 4. VOTING RIGHTS. In addition to any other rights provided by law and except as otherwise provided herein, so long as at least two hundred and fifty (250) shares of Class A Preferred Stock, Second Series shall be outstanding (as adjusted for stock splits, combinations and the like), the Corporation shall not, without first obtaining the affirmative vote or written consent of the holders of at least a majority of the outstanding shares of Class A Preferred Stock, Second Series, voting together as a single class, authorize or issue shares of any class or series of stock (other than shares of Preferred Stock or shares of Class A Preferred Stock, First Series), or any other securities convertible into or exchangeable for shares of any class or series of stock having any preference or priority as to dividends or liquidation superior to any preference or priority of the shares of Class A Preferred Stock, Second Series. 5. CONVERSION. Shares of Class A Preferred Stock, Second Series may be converted into shares of Common Stock, on the terms and conditions set forth in this Section 5. (a) Optional Conversion. (i) At any time and from time to time, each holder of shares of Class A Preferred Stock, Second Series may, upon 30 days' prior written notice to the Corporation, convert each share held by such holder into Two Thousand Five Exh. 4.1 - 4 5 Hundred (2,500) shares of Common Stock, subject to adjustment as provided in Section 6 hereof. (ii) References in this Section 5 to "Common Stock" shall include all stock or other securities or property (including cash) into which Common Stock is converted following any merger, reorganization or reclassification of the capital stock of the Corporation. (b) Common Stock. The Common Stock to be issued upon conversion hereunder shall be fully paid and nonassessable. (c) Procedures for Conversion. (i) In order to convert shares of Class A Preferred Stock, Second Series into shares of Common Stock pursuant to Section 5(a), the holder shall surrender the certificate or certificates therefore, duly endorsed for transfer, at any time during normal business hours, to the Corporation at its principal or at such other office or agency then maintained by it for such purpose (the "Payment Office"), accompanied by written notice to the Corporation of such holder's election to convert and (if so required by the Corporation or any conversion agent) by an instrument of transfer, in form reasonably satisfactory to the Corporation and to any conversion agent, duly executed by the registered holder or by his duly authorized attorney, and any taxes required pursuant to Section 5(c)(iii). As promptly as practicable after the surrender for conversion of any share of Class A Preferred Stock, Second Series in the manner provided in the preceding sentence, and the payment in cash of any amount required by the provisions of Section 5(c)(iii), the Corporation will deliver or cause to be delivered at the Payment Office to or upon the written order of the holder of such shares, certificates representing the number of full shares of Common Stock issuable upon such conversion, issued in such name or names as such holder may direct. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the shares in proper order for conversion, and all rights of the holder of such shares as a holder of such shares shall cease at such time and the person or persons in whose name or names the certificates for such shares of Common Stock are to be issued shall be treated for all purposes as having become the record holder or holders thereof at such time; provided, however, that any such surrender and payment on any date when the stock transfer books of the Corporation shall be closed shall constitute the person or persons in whose name or names the certificates for such shares of Common Stock are to be issued as the record holder or holders thereof for all purposes immediately prior to the close of business on the next succeeding day on which such stock transfer books are opened. (ii) The Corporation shall not be required to issue fractional shares of Common Stock upon conversion of shares of Class A Preferred Stock, Exh. 4.1 - 5 6 Second Series. At the Corporation's discretion, in the event the Corporation determines not to issue fractional shares, in lieu of any fractional shares to which the holder would otherwise be entitled, the Corporation shall pay cash equal to such fraction multiplied by the fair market value of a share of Common Stock on the date of conversion (as determined in good faith by the Board of Directors). (iii) The issuance of certificates for shares of Common Stock upon conversion shall be made without charge for any issue, stamp or other similar tax in respect of such issuance. However, if any such certificate is to be issued in a name other than that of the holder of record of the shares converted, the person or persons requesting the issuance thereof shall pay to the Corporation the amount of any tax which may be payable in respect of any transfer involved in such issuance or shall establish to the satisfaction of the Corporation that such tax has been paid or is not payable. (d) Reservation of Stock Issuable Upon Conversion. The Corporation shall reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of the Class A Preferred Stock, Second Series, 2,500,000 shares of Common Stock. If at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of the Class A Preferred Stock, Second Series without regard to whether the holders of Class A Preferred Stock, Second Series are then entitled to convert, the Corporation will use its reasonable best efforts to take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purpose, including, without limitation, taking appropriate board action, recommending such an increase to the holders of Common Stock, holding shareholders meetings, soliciting votes and proxies in favor of such increase to obtain the requisite stockholder approval and upon such approval, the Corporation shall reserve and keep available such additional shares solely for the purpose of effecting the conversion of the shares of the Class A Preferred Stock, Second Series. (e) Merger, Etc. (i) Notwithstanding any other provision hereof, in case of any merger or other business combination transaction involving the Corporation, then, concurrently with the consummation of such transaction, provision shall be made so that each share of Class A Preferred Stock, Second Series shall thereafter be convertible into the number of shares of stock or other securities or property (including cash) to which a holder of the number of shares of Common Stock deliverable upon conversion of such share of Class A Preferred Stock, Second Series would have been entitled assuming conversion immediately prior to the closing of the transaction. (ii) In case of any merger or other business combination transaction involving the Corporation, in which the Corporation is not the Exh. 4.1 - 6 7 surviving entity, and the Corporation or the holders do not otherwise convert all outstanding shares of Class A Preferred Stock, Second Series, the Class A Preferred Stock, Second Series shall be converted into or exchanged for and shall become shares of the surviving corporation having, in respect of the surviving corporation, substantially the same powers, preferences and relative participating, optional or other special rights, and the qualifications, limitations or restrictions thereon, that the Class A Preferred Stock, Second Series had immediately prior to such transaction. 6. ADJUSTMENTS. The Corporation shall give holders of Series A Convertible Preferred Stock notice of any event described below which requires an adjustment pursuant to this Section 6 at the time of such event. (a) Definitions. As used in this Section 6, the following terms have the respective meanings set forth below: "Additional Shares of Common Stock" shall mean shares of Common Stock issued by the Corporation after the closing of the transactions contemplated by those certain Preferred Stock Purchase Agreements dated various dates from November 15 through 27, 2000 between the Corporation and the purchasers named therein. "Fully Diluted Outstanding" shall mean, when used with reference to Common Stock, at any date as of which the number of shares thereof is to be determined, all shares of Common Stock outstanding at such date and all shares of Common Stock issuable in respect of Class A Preferred Stock, Second Series outstanding on such date and other securities convertible into, or options or warrants to purchase, shares of Common Stock outstanding on such date, whether or not such options, warrants or other securities are presently convertible or exercisable. (b) Stock Dividends, Subdivisions and Combinations. If at any time the Corporation shall: (i) take a record of the holders of its Common Stock for the purpose of entitling them to receive a dividend payable in, or other distribution of, Additional Shares of Common Stock, (ii) subdivide its outstanding shares of Common Stock into a larger number of shares of Common Stock, or (iii) combine its outstanding shares of Common Stock into a smaller number of shares of Common Stock, then number of shares of Common Stock issuable upon conversion of a share of Class A Preferred Stock, Second Series shall be adjusted such that it will equal the applicable number of Exh. 4.1 - 7 8 shares issuable upon conversion of a share of Class A Preferred Stock, Second Series immediately prior to the occurrence of any such event multiplied by a fraction, the numerator of which shall be the number of Fully Diluted Outstanding shares of Common Stock immediately after the occurrence of such event and the denominator of which shall be the number of Fully Diluted Outstanding shares of Common Stock immediately prior to the occurrence of such event. (c) Other Provisions Applicable to Adjustments Under This Section. The following provisions shall be applicable to the making of adjustments provided for in this Section 6: (i) When Adjustments to Be Made. The adjustments required by this Section 6 shall be made whenever and as often as any specified event requiring an adjustment shall occur. For the purpose of any adjustment, any specified event shall be deemed to have occurred at the close of business on the date of its occurrence. (ii) When Adjustment Not Required. If the Corporation shall take a record of the holders of its Common Stock for the purpose of entitling them to receive a dividend or distribution or subscription or purchase rights and shall, thereafter and before the distribution to stockholders thereof, legally abandon its plan to pay or deliver such dividend, distribution, subscription or purchase rights, then thereafter no adjustment shall be required by reason of the taking of such record and any such adjustment previously made in respect thereof shall be rescinded and annulled. (d) Certain Limitations. Notwithstanding anything herein to the contrary, the Corporation shall not enter into any transaction which, by reason of any adjustment hereunder, would cause the applicable Conversion Price to be less than the par value per share of Common Stock. 7. NO REDEMPTION. The shares of Class A Preferred Stock, Second Series shall not be redeemable. Exh. 4.1 - 8 EX-4.2 3 y43589ex4-2.txt RIGHTS PLAN 1 Exhibit 4.2 PUBLICARD, INC. Rights Plan Exh. 4.2 - 1 2 RIGHTS PLAN TABLE OF CONTENTS
Page ---- Section 1. Certain Definitions....................................................................1 Section 2. Issuance of Right Certificates.........................................................3 Section 3. Form of Right Certificates.............................................................4 Section 4. Countersignature and Registration......................................................4 Section 5. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates................................4 Section 6. Distribution of Realization Event Proceeds.............................................5 Section 7. Cancellation and Destruction of Right Certificates.....................................5 Section 8. Consolidation or Merger................................................................5 Section 9. Agreement of Right Holders.............................................................5 Section 10. Rights Holder Not Deemed a Stockholder.................................................6 Section 11. Notices................................................................................6 Section 12. Supplements and Amendments.............................................................6 Section 13. Successors.............................................................................6 Section 14. Benefits of this Plan..................................................................6 Section 15. Severability...........................................................................6 Section 16. Governing Law..........................................................................6 Section 17. Descriptive Headings...................................................................7 EXHIBIT A Form of Right Certificate for U.S. Investors EXHIBIT B Form of Right Certificate for Foreign Investors
Exh. 4.2 - 2 3 RIGHTS PLAN Rights Plan (the "Plan"), adopted as of November 1, 2000, by PubliCARD, Inc., a Pennsylvania corporation (the "Company"). The Board of Directors of the Company has authorized the issuance of up to One Hundred (100) participation rights (each a "Right" and collectively the "Rights"), each representing the right to participate in the appreciation realized by the Company on its investment in TECSEC (as defined below), upon the terms and subject to the conditions set forth in this Plan. Accordingly, the Plan is hereby adopted with the following terms and conditions: Section 1. Certain Definitions. For purposes of this Plan, the following terms have the meanings indicated: (a) "Affiliate" shall have the meaning ascribed to such term in Rule 12b-2 of the General Rules and Regulations, as in effect on the date of this Plan, under the Exchange Act. (b) "Common Stock" shall mean the common stock, par value $0.10 per share, of the Company. (c) "Common Stock Purchase Agreement" shall mean that certain Common Stock Purchase Agreement dated various dates from November 15 through November 27, 2000 between the Company and the purchasers named therein. (d) "Company" shall have the meaning set forth in the Preamble hereof. (e) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. (f) "Fair Market Value" of any shares of capital stock shall mean the average of the daily closing prices per share for the 15 consecutive trading days immediately preceding the day as of which Fair Market Value is being determined. The closing price for each day shall be the last sale price regular way as reported in The Wall Street Journal 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 on the principal national securities exchange on which the shares are listed or admitted to trading, or if the shares are not so listed or admitted to trading, the average of the highest reported bid and lowest reported asked prices as furnished by the National Association of Securities Dealers, Inc. through The Nasdaq Stock Market or through a similar organization if The Nasdaq Stock Market is no longer reporting such information. If the shares are not listed or admitted to trading on a national securities exchange or The Nasdaq Stock Market or similar organization, the Fair Market Value of any shares of capital stock shall mean the fair market value per share as determined in good faith by the Board of Directors of the Company. Exh. 4.2 - 3 4 (g) "Independent Third Party" shall mean any Person other than the Company or any Affiliate thereof. (h) "Marketable Securities" shall mean freely tradable shares of a publicly traded company which (i) have either been registered for resale pursuant to an effective registration statement under the Securities Act or are eligible for sale pursuant to Rule 144(k) under the Securities Act and (ii) are not subject to an underwriter's lock-up or similar restriction on transfer. (i) "Person" shall mean any individual, firm, corporation, partnership, limited liability company or other entity, and shall include any successor (by merger or otherwise) of such entity. (j) "Plan" shall have the meaning set forth in the Preamble hereof. (k) "Preferred Stock" shall mean the Class A Preferred Stock, Second Series, no par value per share, of the Company. (l) "Preferred Stock Purchase Agreement" shall mean that certain Preferred Stock Purchase Agreement dated various dates from November 15 through November 27, 2000 between the Company and the purchasers named therein. (m) "Realization Event" shall mean (i) a Sale of TECSEC Stock in which the Company actually receives in respect of such TECSEC Stock cash and/or Marketable Securities for such TECSEC Stock or (ii) TECSEC Stock having become Marketable Securities. If a Sale of TECSEC Stock occurs in which the consideration per share of TECSEC Stock consists in whole or in part of securities or other assets or property other than Marketable Securities, such Sale of TECSEC shall not constitute a Realization Event and a Realization Event shall be deemed to have occurred at such time as such securities, assets or property other than Marketable Securities shall have been converted, exchanged or otherwise transferred for cash and/or Marketable Securities. (n) "Return Premium" with respect to each share of TECSEC Stock upon a Realization Event shall mean: (i) if such Realization Event occurs as a result of a Sale of TECSEC Stock, the cash and/or Marketable Securities actually received by the Company in respect of such share of TECSEC Stock, but only a portion thereof representing the excess of (A) the amount of such cash plus the Fair Market Value of such Marketable Securities over (B) $83.25 per share of TECSEC Stock; and (ii) if such Realization Event occurs as a result of such share of TECSEC Stock having become a Marketable Security, such share of TECSEC Stock, but only a portion thereof representing the excess of (A) the Fair Market Value of a share TECSEC Stock over (B) $83.25 per share of TECSEC Stock. Exh. 4.2 - 4 5 (o) "Right" or "Rights" shall have the meaning set forth in the Recitals hereto. (p) "Right Certificate" shall have the meaning set forth in Section 2 hereof. (q) "Sale of TECSEC Stock" means any transaction or series of related transactions pursuant to which an Independent Third Party acquires any TECSEC Stock, whether pursuant to a merger, stock purchase, recapitalization, reorganization or redemption or acquisition of assets constituting all or substantially all of the assets of TECSEC and its Subsidiaries on a consolidated basis (provided, that in such acquisition of assets, the proceeds thereof are distributed to TECSEC stockholders). (r) "Securities Act" shall mean the Securities Act of 1933, as amended. (s) "Subsidiary" of any Person shall mean any corporation or other entity of which a majority of the voting power of the voting equity securities or equity interests is owned, directly or indirectly, by such Person. (t) "TECSEC" shall mean TECSEC, Incorporated, a Virginia corporation, and its successors. (u) "TECSEC Common Stock" shall mean the common stock, par value $.10 per share, of TECSEC. (v) "TECSEC Preferred Stock" shall mean the Series A Preferred Stock, par value $.10 per share, of TECSEC acquired by the Company pursuant to that certain TECSEC, Incorporated Series A Preferred Stock Purchase Agreement, dated November 10, 2000 by and between TECSEC and the Company. (w) "TECSEC Stock" shall mean, collectively, the TECSEC Preferred Stock and the TECSEC Common Stock issued or issuable upon conversion of such TECSEC Preferred Stock. Section 2. Issuance of Right Certificates. (a) Rights will be evidenced by a Right Certificate, in substantially the form of Exhibit A or Exhibit B hereto, as applicable, evidencing the number of Rights set forth thereon (each, a "Right Certificate"). (b) Rights shall be issued with respect to (i) Preferred Stock issued pursuant to the Preferred Stock Purchase Agreement and (ii) Common Stock issued pursuant to the Common Stock Purchase Agreement. Exh. 4.2 - 5 6 Section 3. Form of Right Certificates. The Right Certificates shall be substantially the same as Exhibit A or Exhibit B hereto, as applicable, and may have such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Plan, or as may be required to comply with any applicable law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange on which the Rights may from time to time be listed, or to conform to usage. Section 4. Countersignature and Registration. (a) The Right Certificates shall be executed on behalf of the Company by its Chairman or Co-Chairman of the Board, President or any Vice President, either manually or by facsimile signature. No Right Certificate shall be valid for any purpose unless so signed. (b) The Company will keep or cause to be kept, at its principal office books for registration and transfer of the Right Certificates issued hereunder. Such books shall show the names and addresses of the respective holders of the Right Certificates, the number of Rights evidenced on its face by each of the Right Certificates and the date of each of the Right Certificates. Section 5. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. (a) Any Right Certificate or Certificates may be transferred, split up, combined or exchanged for another Right Certificate or Right Certificates, entitling the registered holder to a like number of Rights as the Right Certificate or Right Certificates surrendered then entitled such holder (or former holder in the case of a transfer). Any registered holder desiring to transfer, split up, combine or exchange any Right Certificate shall make such request in writing delivered to the Company, and shall surrender the Right Certificate or Right Certificates to be transferred, split up, combined or exchanged at the principal office of the Company. The Company shall not be obligated to take any action whatsoever with respect to the transfer, split up, combination or exchange of any such surrendered Right Certificate until the registered holder thereof shall have completed and signed the form of assignment on the reverse side of such Right Certificate and shall have provided such additional evidence of the identity of the beneficial owner thereof as the Company shall reasonably request. Thereupon the Company shall countersign and deliver to the Person entitled thereto a Right Certificate or Right Certificates, as the case may be, as so requested. The Company may require payment from the holders of Right Certificates of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer, split up, combination or exchange of such Right Certificates. (b) Upon receipt by the Company of (i) evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of a Right Certificate, and, (ii) in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it, and, (iii) at the Company's request, reimbursement to the Company of all reasonable expenses incidental thereto, and (iv) upon surrender to the Company and cancellation of the Right Certificate if mutilated, the Company will Exh. 4.2 - 6 7 make and deliver a new Right Certificate of like tenor for delivery to the registered owner in lieu of the Right Certificate so lost, stolen, destroyed or mutilated. Section 6. Distribution of Realization Event Proceeds. Upon a Realization Event with respect to any shares of TECSEC Stock, the holder of each Right shall be entitled to receive in respect of such Right One Tenth of One Percent (0.1%) of the Return Premium received by the Company in respect of each such share of TECSEC Stock. The Company shall deliver to each holder of a Right such portion of the Return Premium to which such holder is entitled in respect of such Right upon a Realization Event within sixty (60) days following receipt thereof by the Company. Subject to TECSEC's approval, the Company hereby grants a security interest in the TECSEC Stock in favor of the holders of Rights as security for the Company's obligations under this Section 6. Section 7. Cancellation and Destruction of Right Certificates. All Right Certificates surrendered to the Company for the purpose of transfer, split up, combination or exchange shall be canceled by it, and no Right Certificates shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Rights Plan. Section 8. Consolidation or Merger. The Rights shall survive any merger or other business combination. Section 9. Agreement of Right Holders. Every holder of a Right by accepting the same consents and agrees with the Company and with every other holder of a Right that: (a) the Right Certificates are transferable only on the registry books of the Company if surrendered at the principal office of the Company, duly endorsed or accompanied by a proper instrument of transfer, together with payment (in cash, or by certified check or bank draft payable to the order of the Company) of any applicable transfer tax; (b) the Company may deem and treat the person in whose name a Right Certificate is registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations of ownership or writing on the Right Certificates made by anyone other than the Company) for all purposes whatsoever, and the Company shall not be affected by any notice to the contrary; and (c) neither the Right nor any Right Certificate has been registered under the Securities Act. The holder of a Right, by acceptance thereof, represents that it is acquiring the Right Certificate and the Right evidenced thereby for its own account and not with a view to the distribution thereof, and agrees not to sell, transfer, pledge or hypothecate any Rights or Right Certificates unless a registration statement is effective for such Rights and/or Right Certificates under the Securities Act or in the opinion of the holder's counsel (which counsel and opinion shall be acceptable to the Company) such transaction is exempt from the registration requirements of the Securities Act. Exh. 4.2 - 7 8 Section 10. Rights Holder Not Deemed a Stockholder. No holder, as such, of any Rights shall be entitled to vote, receive dividends or be deemed for any purpose the holder of any securities of the Company, any Subsidiary thereof or TECSEC. Section 11. Notices. Notices or demands authorized by this Plan to be given or made by any holder of Rights to or on the Company shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until notice of another address is sent in writing to the holders of Rights in accordance with this Section 11) as follows: PubliCARD, Inc. 620 Fifth Avenue New York, New York 10020 Attention: Secretary Notices or demands authorized by this Plan to be given or made by the Company to any holder of Rights shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed to such holder at the address of such holder as shown on the registry books of the Company. Section 12. Supplements and Amendments. The Company may supplement or amend any provision of this Plan without the approval of any holders of Rights in order to (i) cure any ambiguity, (ii) correct or supplement any provision contained herein which may be defective or inconsistent with any other provisions herein, or (iii) make any other provisions in regard to matters or questions arising hereunder which the Company may deem necessary or desirable, and which shall not adversely affect the interests of the holders of Rights. Any other supplement or amendment to this Plan may be made by the Company if the Company and holders of a majority of the outstanding Rights shall agree on the terms and conditions of such supplement or amendment. Section 13. Successors. All the covenants and provisions of this Plan by or for the benefit of the Company and/or the holders of Rights shall bind and inure to the benefit of their respective successors and assigns hereunder. Section 14. Benefits of this Plan. Nothing in this Plan shall be construed to give to any Person other than the Company and the registered holders of the Right Certificates any legal or equitable right, remedy or claim under this Plan; but this Plan shall be for the sole and exclusive benefit of the Company and the registered holders of the Right Certificates. Section 15. Severability. If any term, provision, covenant or restriction of this Plan 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 Plan shall remain in full force and effect and shall in no way be affected, impaired or invalidated. Section 16. Governing Law. This Plan, each Right and each Right Certificate issued hereunder shall and for all purposes shall be governed by and construed in accordance with the laws of the State of New York without giving effect to the principles of conflicts of laws thereof. Exh. 4.2 - 8 9 Section 17. Descriptive Headings. Descriptive headings of the several sections of this Plan are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. [signature page follows] Exh. 4.2 - 9 10 IN WITNESS WHEREOF, the parties hereto have caused this Plan to be duly adopted as of the day and year first above written. PUBLICARD, INC. By: /s/ Antonio L. DeLise ----------------------------------------- Antonio L. DeLise, Vice President and Secretary Exh. 4.2 - 10 11 EXHIBIT A [Form of Right Certificate for U.S. Investors] THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 OR ANY STATE SECURITIES OR BLUE SKY LAWS. THESE SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT OR LAWS. Certificate No. R- ___________ Rights Right Certificate PUBLICARD, INC. This certifies that____________________, or registered assigns, is the registered owner of the number of Rights set forth above, each of which entitles the owner thereof, subject to the terms, provisions and conditions of the Rights Plan adopted as of November __, 2000 (the "Rights Plan") by PubliCARD, Inc., a Pennsylvania corporation (the "Company"), to receive that portion of the Return Premium payable in respect of a Right upon a Realization Event in accordance with the Plan upon presentation and surrender of this Right Certificate to the Company. Capitalized terms used but not defined in this Rights Certificate have the meanings given thereto in the Plan. This Right Certificate is subject to all of the terms, provisions and conditions of the Rights Plan which terms, provisions and conditions are hereby incorporated herein by reference and made a part hereof and to which Rights Plan reference is hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities hereunder of the Company and the holders of the Right Certificates. Copies of the Rights Plan are on file at the principal office of the Company. This Right Certificate, with or without other Right Certificates, upon surrender at the principal office of the Company, may be exchanged for another Right Certificate or Right Certificates of like tenor and date evidencing a like number of Rights evidenced by the Right Certificate or Right Certificates surrendered shall have entitled such holder. The Rights evidenced by this Right Certificate may be transferred, in whole or in part, upon surrender of this Right Certificate at the office of the Company, with the Form of Assignment duly executed by the registered holder. If the Rights evidenced by this Right Certificate shall be transferred or exercised in part, the holder shall be entitled to receive upon surrender hereof another Right Certificate or Right Certificates for the number of whole Rights not transferred. Exh. 4.2 - 11 12 No holder of this Right Certificate shall be entitled to vote, receive dividends or be deemed for any purpose the holder of any securities of the Company, any Subsidiary or TECSEC, Incorporated. WITNESS the facsimile signature of the proper officers of the Company and its corporate seal. Dated as of November __, 2000. ATTEST: PUBLICARD, INC. _____________________________ By______________________________ Secretary Title: [FORM OF REVERSE SIDE OF RIGHT CERTIFICATE] FORM OF ASSIGNMENT (To be executed by the registered holder if such holder desires to transfer the Rights represented by the Right Certificates.) FOR VALUE RECEIVED__________________________________ hereby sells, assigns and transfers unto _________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ (Please print name and address of transferee) Exh. 4.2 - 12 13 this Right Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint______________________Attorney, to transfer the within Right Certificate on the books of the within-named Company, with full power of substitution. Dated:__________________ , 20____ ------------------------------------------ Signature Signature Guaranteed: NOTICE The signature to the foregoing Assignment must correspond to the name as written upon the face of this Right Certificate in every particular, without alteration or enlargement or any change whatsoever. Exh. 4.2 - 13 14 EXHIBIT B [Form of Right Certificate for Foreign Investors] THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF OTHER JURISDICTIONS AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR THE ACCOUNT OR BENEFIT OF, "U.S. PERSONS " (AS DEFINED IN REGULATION S PROMULGATED UNDER THE SECURITIES ACT) EXCEPT IN ACCORDANCE WITH REGULATIONS UNDER THE SECURITIES ACT, PURSUANT TO REGISTRATION OF THE SECURITIES UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. Certificate No. R- ___________ Rights Right Certificate PUBLICARD, INC. This certifies that____________________, or registered assigns, is the registered owner of the number of Rights set forth above, each of which entitles the owner thereof, subject to the terms, provisions and conditions of the Rights Plan adopted as of November __, 2000 (the "Rights Plan") by PubliCARD, Inc., a Pennsylvania corporation (the "Company"), to receive that portion of the Return Premium payable in respect of a Right upon a Realization Event in accordance with the Plan upon presentation and surrender of this Right Certificate to the Company. Capitalized terms used but not defined in this Rights Certificate have the meanings given thereto in the Plan. This Right Certificate is subject to all of the terms, provisions and conditions of the Rights Plan which terms, provisions and conditions are hereby incorporated herein by reference and made a part hereof and to which Rights Plan reference is hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities hereunder of the Company and the holders of the Right Certificates. Copies of the Rights Plan are on file at the principal office of the Company. This Right Certificate, with or without other Right Certificates, upon surrender at the principal office of the Company, may be exchanged for another Right Certificate or Right Certificates of like tenor and date evidencing a like number of Rights evidenced by the Right Certificate or Right Certificates surrendered shall have entitled such holder. The Rights evidenced by this Right Certificate may be transferred, in whole or in part, upon surrender of this Right Certificate at the office of the Company, with the Form of Assignment duly executed by the registered holder. If the Rights evidenced by this Right Certificate shall be transferred or exercised in part, the holder shall be entitled to receive upon surrender hereof another Right Certificate or Right Certificates for the number of whole Rights not transferred. Exh. 4.2 - 14 15 No holder of this Right Certificate shall be entitled to vote, receive dividends or be deemed for any purpose the holder of any securities of the Company, any Subsidiary or TECSEC, Incorporated. WITNESS the facsimile signature of the proper officers of the Company and its corporate seal. Dated as of November __, 2000. ATTEST: PUBLICARD, INC. _____________________________ By______________________________ Secretary Title: [Form of Reverse Side of Right Certificate] FORM OF ASSIGNMENT (To be executed by the registered holder if such holder desires to transfer the Rights represented by the Right Certificates.) FOR VALUE RECEIVED__________________________________ hereby sells, assigns and transfers unto _________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ (Please print name and address of transferee) Exh. 4.2 - 15 16 this Right Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint______________________Attorney, to transfer the within Right Certificate on the books of the within-named Company, with full power of substitution. Dated:__________________ , 20____ --------------------------------------------- Signature Signature Guaranteed: NOTICE The signature to the foregoing Assignment must correspond to the name as written upon the face of this Right Certificate in every particular, without alteration or enlargement or any change whatsoever. Exh. 4.2 - 16 -----END PRIVACY-ENHANCED MESSAGE-----