EXHIBIT 1-A
AMENDMENT TO CLASS A RIGHTS AGREEMENT
THIS AMENDMENT between Rural Cellular Corporation, a Minnesota
corporation (the "Company"), and Norwest Bank Minnesota, National Association
(the "Rights Agent"), dated as of March 31, 2000 (this "Amendment"), to the
Class A Share Rights Agreement dated as of April 30, 1999 (the "Original
Agreement") between the Company and the Rights Agent.
WHEREAS, the Company and the Rights Agent have entered into the
Original Agreement; and
WHEREAS, the Board of Directors of the Company has determined to
amend the Original Agreement in accordance with Section 27 thereof.
ACCORDINGLY, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
1. Section l(a) of the Original Agreement is hereby amended
in its entirety to read as follows:
(a) "Acquiring Person" shall mean any Person (as such term is
defined in this Agreement) who or which, together with all Affiliates
and Associates (as such terms are defined in this Agreement) of such
Person, shall be the Beneficial Owner (as such term is defined in this
Agreement) of the Threshold Percentage (as such term is defined in this
Agreement) or more of the Common Shares of the Company then
outstanding, but shall not include (i) an Exempt Person (as such term
is defined in this Agreement) or (ii) Madison Dearborn Capital Partners
III, L.P., Madison Dearborn Special Equity III, L.P., Special Advisors
Fund I, LLC, Boston Ventures Limited Partnership V, and Toronto
Dominion Investments, Inc. (individually a "Class M Investor" and
together the "Class M Investors"), provided, however, that if a Class M
Investor shall become the Beneficial Owner of 16.5% or more of the
Common Shares of the Company then outstanding (regardless of whether
such Common Shares were acquired before or after the date hereof), then
that Class M Investor shall be deemed to be an "Acquiring Person."
Notwithstanding the foregoing, no Person shall become an "Acquiring
Person" (including any Class M Investor) as the result of an
acquisition of Common Shares by the Company which, by reducing the
number of Common Shares outstanding, increases the proportionate number
of shares beneficially owned by such Person to at least the Threshold
Percentage (or with respect to a Class M Investor, at least 16.5%) of
the Common Shares of the Company then outstanding; PROVIDED, HOWEVER,
that if a Person shall, together with all Affiliates or Associates of
such Person, become the Beneficial
Owner of at least the Threshold Percentage (or with respect to a
Class M Investor, at least 16.5% ) of the Common Shares of the
Company then outstanding by reason of share acquisitions by the
Company and if such Person or such Person's Affiliates or Associates
shall, after such share acquisitions by the Company, become the
Beneficial Owner of any additional Common Shares of the Company,
and, immediately after becoming the Beneficial Owner of such
additional Common Shares, such Person shall, together with all
Affiliates and Associates of such Person, be the Beneficial Owner of
at least the Threshold Percentage (or with respect to a Class M
Investor, at least 16.5%) of the Common Shares of the Company then
outstanding, then such Person (unless such Person shall be an Exempt
Person) shall be deemed an "Acquiring Person." An entity other than
the Company or any Subsidiary of the Company holding Common Shares
for or pursuant to the terms of an employee benefit plan of the
Company or of any Subsidiary of the Company and in addition being
the Beneficial Owner of Common Shares that are not held for or
pursuant to the terms of any such plan shall be deemed to constitute
an Acquiring Person, notwithstanding anything herein stated, if, but
only if, it, together with its Affiliates and Associates, shall be
the Beneficial Owner of at least the Threshold Percentage, exclusive
of those Common Shares held by it for or pursuant to the terms of
any such plan, of the Common Shares then outstanding.
Notwithstanding the foregoing, if the Board of Directors of the
Company determines in good faith that a Person who would otherwise
be an "Acquiring Person," as defined pursuant to the foregoing
provisions of this paragraph, has become such inadvertently
(including, without limitation, because (A) such Person was unaware
that it beneficially owned a percentage of the Common Shares that
would otherwise cause such Person to be an "Acquiring Person" or (B)
such Person was aware of the extent of its beneficial ownership 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 such Person
divests as promptly as practical a sufficient number of Common
Shares so that such Person would no longer be an "Acquiring Person,"
as defined pursuant to the foregoing provisions of this paragraph,
then such Person shall not be deemed to be an "Acquiring Person" for
any purposes of this Agreement.
2. Section 3(a) of the Original Agreement is hereby amended in its
entirety to read as follows:
(a) Until the earlier of (i) the Close of Business on the 15th
day after the Shares Acquisition Date or (ii) the Close of Business on
the 15th day (or such later date as may be determined by action of the
Board of Directors of the Company prior to such time as any Person
becomes an Acquiring Person) after the date of the first public
announcement (as defined in Rule 14d-2 of the General Rules and
Regulations under the Exchange Act) by any Person (other than an Exempt
Person) relating to a tender offer or an exchange offer the
consummation of which would result in beneficial ownership by a Person
(other than an Exempt Person) of at least the Threshold Percentage (or
by a Class M Investor of at least 16.5%) of the then outstanding Common
Shares (including any such date that is after the date of this
Agreement and prior to the issuance of the Class A Rights, the earlier
of such dates being herein referred to as the "Distribution Date"), (x)
the Class A Rights will be evidenced (subject to the provisions of
Section 3(b) hereof) by
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the certificates for Class A Shares registered in the names of the
holders thereof (which certificates shall also be deemed to be Class
A Right Certificates where the context so requires) and not by
separate Class A Right Certificates, and (y) the right to receive
Class A Right Certificates will be transferable only in connection
with the transfer of Class A Shares. As soon as practicable after
the Distribution Date, the Company will prepare and execute, the
Rights Agent will countersign, and the Company will send or cause to
be sent (and the Rights Agent will, if requested, send) by
first-class, postage-prepaid mail, to each record holder of Class A
Shares as of the close of business on the Distribution Date, at the
address of such holder shown on the records of the Company, one or
more Class A Right Certificates, in substantially the form of
Exhibit B hereto (the "Class A Right Certificates"), evidencing one
Class A Right for each Class A Share so held, subject to adjustment
pursuant to Section 11(i). In the event that an adjustment in the
number of Class A Rights per Class A Share has been made pursuant to
Section 11(i), at the time Class A Right Certificates are
distributed, the Company may, to the extent provided in Section
14(a), make the necessary and appropriate adjustments (as set forth
in Section 14(a)) so that Class A Right Certificates are distributed
representing only whole numbers of Class A Rights and pay cash in
lieu of fractional Class A Rights pursuant to Section 14(a). As of
and after the Distribution Date, the Class A Rights will be
evidenced solely by such Class A Right Certificates.
3. Section 27 of the Original Agreement is hereby amended in its
entirety to read as follows:
Section 27. SUPPLEMENTS AND AMENDMENTS. The Company may and
the Rights Agent shall, if so directed by the Company, from time to
time supplement or amend this Agreement without the approval of any
holders of Class A Shares or Class A Right Certificates in order (i) to
extend the Final Expiration Date, (ii) to cure any ambiguity, or to
correct or supplement any provision contained in this Agreement which
may be defective or inconsistent with any other provisions in this
Agreement, (iii) prior to the Distribution Date, to otherwise change or
supplement any provision in this Agreement in any manner which the
Company may deem necessary or desirable, or (iv) following the
Distribution Date, to otherwise change or supplement any provision in
this Agreement in any manner which the Company may deem necessary or
desirable and which shall not adversely affect the interests of the
holders of Class A Right Certificates (other than Class A Right
Certificates evidencing Class A Rights that shall have become null and
void pursuant to Section 11(a)(ii)). Without limiting the foregoing,
the Company may at any time prior to such time as any Person becomes an
Acquiring Person amend this Agreement to lower the Threshold Percentage
set forth in Sections l(s) and 3(a) hereof to not less than the greater
of (i) the sum of .001% and the largest percentage of the outstanding
Class A Shares then known by the Company to be beneficially owned by
any Person (other than an Exempt Person or the Class M Investors) or
(ii) 10%.
4. Notwithstanding the provisions herein, in the event that after the
date hereof no Class M Investor, individually or as a member of a group, is the
Beneficial Owner of the
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Threshold Percentage or more of the Common Shares of the Company then
outstanding, the amendments to Sections 1(a), 3(a) and 27 effected hereby
with regard to the ownership of the Class M Investors shall, without any
action of the Company or the Rights Agent, be of no further force or effect.
5. The Certificate of Designation, Preferences and Rights of Series
A Junior Participating Preferred Shares, attached to the Original Agreement
as Exhibit A, shall be amended to increase the number of shares of "Series A
Junior Participating Preferred Shares" to two million (2,000,000), and the
officers of the Company shall take all appropriate steps to file such
amendment with the Minnesota Secretary of State.
The Original Agreement shall remain in full force and effect
without amendment except this Amendment and any other amendment made in
accordance with Section 27 of the Agreement. All references in the Original
Agreement to "this Agreement" or the "Agreement" or "hereof" and all
references in this Amendment to the Agreement shall hereafter be deemed to be
references to the Original Agreement as amended by this Amendment and any
other amendment made in accordance with Section 27 of the Agreement. All
terms used in this Amendment that are defined in the Original Agreement but
are not defined herein shall have the meanings ascribed to them in the
Original Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the day and year first above written.
RURAL CELLULAR CORPORATION
By /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
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Its Secretary
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NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
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Its Account Manager
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EXHIBIT A
AMENDMENT TO CERTIFICATE OF DESIGNATION, PREFERENCES AND
RIGHTS OF SERIES A JUNIOR PARTICIPATING PREFERRED SHARES OF
RURAL CELLULAR CORPORATION
I, ▇▇▇ ▇. ▇▇▇▇▇▇▇, the Secretary of Rural Cellular Corporation, a
corporation organized and existing under the Business Corporation Act of the
State of Minnesota, in accordance with the provisions of Section 302A.401
thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors
by the Restated Articles of Incorporation of the corporation, as amended (the
"Articles of Incorporation"), the Board of Directors on March 23, 2000,
adopted the following resolution amending the Certificate of Designation,
Preferences and Rights of Series A Junior Participating Preferred Shares
filed on May 19, 1999:
RESOLVED, that pursuant to the authority granted and vested in the
Board of Directors of the corporation in accordance with the provisions of
its Restated Articles of Incorporation, as amended, Section 1 of the
Certificate of Designation, Preferences and Rights of Series A Junior
Participating Preferred Shares of Rural Cellular Corporation, filed May 19,
1999, with the Minnesota Secretary of State, is hereby amended as follows:
1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Series A Junior Participating Preferred Shares" (the "Series A
Preferred Shares"), the par value of the shares constituting such series
shall be $.01 per share and the number of shares constituting such series
shall be two million (2,000,000). The number of shares constituting such
series may, unless prohibited by the Articles of Incorporation or by
applicable law of the State of Minnesota, be increased or decreased by
resolution of the Board of Directors; PROVIDED, that no decrease shall reduce
the number of Series A Preferred Shares to a number less than the number of
shares then outstanding plus the number of shares issuable upon the exercise
of outstanding options, rights or warrants or upon the conversion of any
outstanding securities issued by the corporation convertible into Series A
Preferred Shares.
RESOLVED FURTHER, that all other terms of the Certificate of
Designation, Preferences and Rights shall remain unchanged.
IN WITNESS WHEREOF, I have executed this Amendment to Certificate of
Designation, Preferences and Rights this __ day of ___________, 2000.
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▇▇▇ ▇. ▇▇▇▇▇▇▇, Secretary