▇▇▇▇▇▇▇▇ COMMUNICATIONS, INC.
and
KEYCORP SHAREHOLDER SERVICES, INC.
as Rights Agent
RIGHTS AGREEMENT
Dated as of January 9, 1996
TABLE OF CONTENTS
Page
Section 1. Certain Definitions . . . . . . . . . . . . . .1
Section 2. Appointment of Rights Agent . . . . . . . . . .5
Section 3. Issue of Right Certificates . . . . . . . . . .5
Section 4. Form of Right Certificates. . . . . . . . . . .7
Section 5. Countersignature and Registration . . . . . . .7
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates. . . . . . . . . . . . . . . . . .8
Section 7. Exercise of Rights, Purchase Price; Expiration Date of
Rights. . . . . . . . . . . . . . . . . . . . .8
Section 8. Cancellation and Destruction of Right Certificates10
Section 9. Availability of Shares of Preferred Stock . . 10
Section 10. Preferred Stock Record Date. . . . . . . . . 11
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares and Number of Rights . . . . . . . . . 12
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. . . . . . . . . . . . . . . . . . . . 19
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earnings Power. . . . . . . . . . . . . . . . 19
Section 14. Fractional Rights and Fractional Shares. . . 23
Section 15. Rights of Action . . . . . . . . . . . . . . 24
Section 16. Agreement of Right Holders . . . . . . . . . 24
Section 17. Right Certificate Holder Not Deemed a Shareholder25
Section 18. Concerning the Rights Agent. . . . . . . . . 25
Section 19. Merger or Consolidation or Change of Name of Rights
Agent . . . . . . . . . . . . . . . . . . . . 25
Section 20. Duties of Rights Agent . . . . . . . . . . . 26
Section 21. Change of Rights Agent . . . . . . . . . . . 28
Section 22. Issuance of New Right Certificates . . . . . 29
Section 23. Redemption . . . . . . . . . . . . . . . . . 29
Section 24. Exchange . . . . . . . . . . . . . . . . . . 30
Section 25. Notice of Certain Events . . . . . . . . . . 31
Section 26. Notices. . . . . . . . . . . . . . . . . . . 32
Section 27. Supplements and Amendments . . . . . . . . . 32
Section 28. Successors . . . . . . . . . . . . . . . . . 33
Section 29. Benefits of this Agreement . . . . . . . . . 33
Section 30. Determinations and Actions by the Board
of Directors. . . . . . . . . . . . . . . . . . 33
Section 31. Severability . . . . . . . . . . . . . . . . 33
Section 32. Governing Law. . . . . . . . . . . . . . . . 33
Section 33. Counterparts . . . . . . . . . . . . . . . . 33
Section 34. Descriptive Headings . . . . . . . . . . . . 34
RIGHTS AGREEMENT
Rights Agreement, dated as of January 9, 1996 ("Agreement"),
between ▇▇▇▇▇▇▇▇ Communications, Inc., a Texas corporation (the
"Company"), and KeyCorp Shareholder Services, Inc., as Rights Agent
(the "Rights Agent").
The Board of Directors of the Company has authorized and
declared a dividend of one preferred share purchase right (a
"Right") for each share of Common Stock (as hereinafter defined) of
the Company outstanding as of the Close of Business (as defined
below) on January 22, 1996 (the "Record Date"), each Right
representing the right to purchase one one-hundredth (subject to
adjustment) of a share of Preferred Stock (as hereinafter defined),
upon the terms and subject to the conditions herein set forth, and
has further authorized and directed the issuance of one Right
(subject to adjustment as provided herein) with respect to each
share of Common Stock that shall become outstanding between the
Record Date and the earlier of the Distribution Date and the
Expiration Date (as such terms are hereinafter defined); provided,
however, that Rights may be issued with respect to shares of Common
Stock that shall become outstanding after the Distribution Date and
prior to the Expiration Date in accordance with Section 22.
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meaning indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which shall be the Beneficial Owner (as
such term is hereinafter defined) of 20% or more of the shares of
Common Stock then outstanding, but shall not include an Exempt
Person (as such term is hereinafter defined); provided, however,
that if the Board of Directors of the Company determines in good
faith that a Person who would otherwise be an "Acquiring Person"
became such inadvertently (including, without limitation, because
(i) such Person was unaware that it beneficially owned a percentage
of Common Stock that would otherwise cause such Person to be an
"Acquiring Person" or (ii) such Person was aware of the extent of
its Beneficial Ownership of 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 as promptly
as practicable divested or divests itself of Beneficial Ownership
of a sufficient number of shares of Common Stock so that such
Person would no longer be an "Acquiring Person," then such Person
shall not be deemed to be or to have become an "Acquiring Person"
for any purposes of this Agreement. Notwithstanding the foregoing,
no Person shall become an "Acquiring Person" as the result of an
acquisition of shares of Common Stock by the Company which, by
reducing the number of shares outstanding, increases the
proportionate number of shares of Common Stock beneficially owned
by such Person to 20% or more of the shares of Common Stock then
outstanding, provided, however, that if a Person shall become the
Beneficial Owner of 20% or more of the shares of Common Stock then
outstanding by reason of such share acquisitions by the Company and
shall thereafter become the Beneficial Owner of any additional
shares of Common Stock, then such Person shall be deemed to be an
"Acquiring Person" unless upon the consummation of the acquisition
of such additional shares of Common Stock such Person does not own
20% or more of the shares of Common Stock then outstanding. For
all purposes of this Agreement, any calculation of the number of
shares of Common Stock outstanding at any particular time,
including for purposes of determining the particular percentage of
such outstanding shares of Common Stock of which any Person is the
Beneficial Owner, shall be made in accordance with the last
sentence of Rule 13d-3(d)(1)(i) of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), as in effect on the date hereof.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules
and Regulations under the Exchange Act, as in effect on the date of
this Rights Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of, shall
be deemed to have "Beneficial Ownership" of and shall be deemed to
"beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates
or Associates is deemed to beneficially own, directly or
indirectly, within the meaning of Rule 13d-3 of the General Rules
and Regulations under the Exchange Act as in effect on the date of
this Rights Agreement;
(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) pursuant
to any agreement, arrangement or understanding (other than
customary agreements with and between underwriters and selling
group members with respect to a bona fide public offering of
securities), or upon the exercise of conversion rights, exchange
rights, rights, warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the Beneficial Owner of,
or to beneficially own, (x) securities tendered pursuant to a
tender or exchange offer made by or on behalf of such Person or any
of such Person's Affiliates or Associates until such tendered
securities are accepted for purchase, (y) securities which such
Person has a right to acquire upon the exercise of Rights at any
time prior to the time that any Person becomes an Acquiring Person
or (z) securities issuable upon the exercise of Rights from and
after the time that any Person becomes an Acquiring Person if such
Rights were acquired by such Person or any of such Person's
Affiliates or Associates prior to the Distribution Date or pursuant
to Section 3(a) or Section 22 hereof ("original Rights") or
pursuant to Section 11(i) or Section 11(n) with respect to an
adjustment to original Rights; or (B) the right to vote pursuant to
any agreement, arrangement or understanding; provided, however,
that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, any security by reason of such agreement,
arrangement or understanding if the agreement, arrangement or
understanding to vote such security (1) arises solely from a
revocable proxy or consent given to such Person in response to a
public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations promulgated
under the Exchange Act and (2) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or successor
report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any of
such Person's Affiliates or Associates has any agreement,
arrangement or understanding (other than customary agreements with
and between underwriters and selling group members with respect to
a bona fide public offering of securities) for the purpose of
acquiring, holding, voting (except to the extent contemplated by
the proviso to Section 1(c)(ii)(B)) or disposing of any securities
of the Company;
provided, however, that no Person who is an officer, director or
employee of an Exempt Person shall be deemed, solely by reason of
such Person's status or authority as such, to be the "Beneficial
Owner" of, to have "Beneficial Ownership" of or to "beneficially
own" any securities that are "beneficially owned" (as defined in
this Section 1(c)), including, without limitation, in a fiduciary
capacity, by an Exempt Person or by any other such officer,
director or employee of an Exempt Person.
(d) "Business Day" shall mean any day other than a Saturday,
a Sunday or a day on which banking institutions in the State of New
York are authorized or obligated by law or executive order to
close.
(e) "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.
(f) "Common Stock" when used with reference to the Company
shall mean the Common Stock, presently par value $.01 per share, of
the Company. "Common Stock" when used with reference to any Person
other than the Company shall mean the common stock (or, in the case
of an unincorporated entity, the equivalent 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.
(g) "Common Stock equivalents" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(h) "Current Value" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(i) "Distribution Date" shall have the meaning set forth in
Section 3 hereof.
(j) "equivalent preferred shares" shall have the meaning set
forth in Section 11(b) hereof.
(k) "Exempt Person" shall mean the Company or any Subsidiary
(as such term is hereinafter defined) of the Company, in each case
including, without limitation, in its fiduciary capacity, or any
employee benefit plan of the Company or of any Subsidiary of the
Company, or any entity or trustee holding Common Stock for or
pursuant to the terms of any such plan or for the purpose of
funding any such plan or funding other employee benefits for
employees of the Company or of any Subsidiary of the Company.
(l) "Exchange Consideration" shall have the meaning set forth
in Section 24 hereof.
(m) "Expiration Date" shall have the meaning set forth in
Section 7 hereof.
(n) "Flip-In Event" shall have the meaning set forth in
Section 11(a)(ii) hereof.
(o) "Final Expiration Date" shall have the meaning set forth
in Section 7 hereof.
(p) "NASDAQ" shall mean the National Association of
Securities Dealers, Inc. Automated Quotation System.
(q) "New York Stock Exchange" shall mean the New York Stock
Exchange, Inc.
(r) "Person" shall mean any individual, firm, corporation,
partnership, trust or other entity, and shall include any successor
(by merger or otherwise) to such entity.
(s) "Preferred Stock" shall mean the Series A Junior
Participating Preferred Stock, par value $.01 per share, of the
Company having the rights and preferences set forth in the Form of
Statement of Resolution attached to this Rights Agreement as
Exhibit A.
(t) "Principal Party" shall have the meaning set forth in
Section 13 hereof.
(u) "Redemption Date" shall have the meaning set forth in
Section 7 hereof.
(v) "Redemption Price" shall have the meaning set forth in
Section 23 hereof.
(w) "Right Certificate" shall have the meaning set forth in
Section 3 hereof.
(x) "Securities Act" shall mean the Securities Act of 1933,
as amended.
(y) "Section 11(a) (ii) Trigger Date" shall have the meaning
set forth in Section 11(a)(iii) hereof.
(z) "Spread" shall have the meaning set forth in Section
11(a)(iii) hereof.
(aa) "Stock Acquisition Date" shall mean the first date of
public announcement (which, for purposes of this definition, shall
include, without limitation, a report filed pursuant to Section
13(d) of the Exchange Act) by the Company or an Acquiring Person
that an Acquiring Person has become such, or such earlier date as
a majority of the Board of Directors shall become aware of the
existence of an Acquiring Person.
(bb) "Subsidiary" of any Person shall mean any corporation or
other entity of which securities or other ownership interests
having ordinary voting power sufficient to elect a majority of the
board of directors or other persons performing similar functions
are beneficially owned, directly or indirectly, by such Person, and
any corporation or other entity that is otherwise controlled by
such Person.
(cc) "Substitution Period" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(dd) "Summary of Rights" shall have the meaning set forth in
Section 3 hereof.
(ee) "Trading Day" shall have the meaning set forth in
Section 11(d) hereof.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and the
holders of the Rights (who, in accordance with Section 3 hereof,
shall prior to the Distribution Date be the holders of Common
Stock) in accordance with the terms and conditions hereof, and the
Rights Agent hereby accepts such appointment. The Company may from
time to time appoint such co-Rights Agents as it may deem necessary
or desirable.
Section 3. Issue of Right Certificates.
(a) Until the Close of Business on the earlier of (i) the
tenth 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 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, or of the first public
announcement of the intention of such Person (other than an Exempt
Person) to commence, a tender or exchange offer the consummation of
which would result in any Person (other than an Exempt Person)
becoming the Beneficial Owner of shares of Common Stock aggregating
20% or more of the Common Stock then outstanding (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 will be
evidenced (subject to the provisions of Section 3(b) hereof) by the
certificates for Common Stock registered in the names of the
holders thereof and not by separate Right Certificates, and (y) the
Rights will be transferable only in connection with the transfer of
Common Stock. 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, insured,
postage-prepaid mail, to each record holder of Common Stock as of
the close of business on the Distribution Date (other than any
Acquiring Person or any Associate or Affiliate of an Acquiring
Person), at the address of such holder shown on the records of the
Company, a Right Certificate, in substantially the form of Exhibit
B hereto (a "Right Certificate"), evidencing one Right (subject to
adjustment as provided herein) for each share of Common Stock so
held. As of the Distribution Date, the Rights will be evidenced
solely by such Right Certificates.
(b) On the Record Date, or as soon as practicable thereafter,
the Company will send a copy of a Summary of Rights to Purchase
Shares of Preferred Stock, in substantially the form of Exhibit C
hereto (the "Summary of Rights"), by first-class, postage-prepaid
mail, to each record holder of Common Stock as of the Close of
Business on the Record Date (other than any Acquiring Person or any
Associate or Affiliate of any Acquiring Person), at the address of
such holder shown on the records of the Company. With respect to
certificates for Common Stock outstanding as of the Record Date,
until the Distribution Date, the Rights will be evidenced by such
certificates registered in the names of the holders thereof
together with the Summary of Rights. Until the Distribution Date
(or, if earlier, the Expiration Date), the surrender for transfer
of any certificate for Common Stock outstanding on the Record Date,
with or without a copy of the Summary of Rights, shall also
constitute the transfer of the Rights associated with the Common
Stock represented thereby.
(c) Certificates issued for Common Stock (including, without
limitation, upon transfer of outstanding Common Stock, disposition
of Common Stock out of treasury stock or issuance or reissuance of
Common Stock out of authorized but unissued shares) after the
Record Date but prior to the earlier of the Distribution Date and
the Expiration Date shall have impressed on, printed on, written on
or otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder
hereof to certain rights as set forth in a Rights
Agreement between ▇▇▇▇▇▇▇▇ Communications, Inc. and
KeyCorp Shareholder Services, Inc., as Rights Agent,
dated as of January 9, 1996 as the same may be amended
from time to time (the "Rights Agreement"), the terms of
which are hereby incorporated herein by reference and a
copy of which is on file at the principal executive
offices of ▇▇▇▇▇▇▇▇ Communications, Inc. Under certain
circumstances, as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and
will no longer be evidenced by this certificate.
▇▇▇▇▇▇▇▇ Communications, Inc. will mail to the holder of
this certificate a copy of the Rights Agreement without
charge after receipt of a written request therefor.
Under certain circumstances, as set forth in the Rights
Agreement, Rights owned by or transferred to any Person
who is or becomes an Acquiring Person (as defined in the
Rights Agreement) and certain transferees thereof will
become null and void and will no longer be transferable.
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 Rights associated with the Common
Stock represented thereby. In the event that the Company 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
Company 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.
Section 4. Form of Right Certificates. The Right
Certificates (and the forms of election to purchase shares and of
assignment to be printed on the reverse thereof) 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 the Company may deem
appropriate and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable law
or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange or interdealer quotation
system on which the Rights may from time to time be listed or
quoted, or to conform to usage. Subject to the provisions of
Sections 11, 13 and 22 hereof, the Right Certificates shall entitle
the holders thereof to purchase such number of one one-hundredths
of a share of Preferred Stock as shall be set forth therein at the
price per one one-hundredth of a share of Preferred Stock set forth
therein (the "Purchase Price"), but the number of such one
one-hundredths of a share of Preferred Stock and the Purchase Price
shall be subject to adjustment as provided herein.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the
Company by the President of the Company, either manually or by
facsimile signature, shall have affixed thereto the Company's seal
or a facsimile thereof and shall be attested by the Secretary of
the Company, either manually or by facsimile signature. The Right
Certificates shall be manually countersigned by the Rights Agent
and shall not be valid for any purpose unless countersigned. In
case any officer of the Company who shall have signed any of the
Right Certificates shall cease to be such officer of the Company
before countersignature by the Rights Agent and issuance and
delivery by the Company, such Right Certificates, nevertheless, may
be countersigned by the Rights Agent and issued and delivered by
the Company with the same force and effect as though the Person who
signed such Right Certificates had not ceased to be such officer of
the Company; and any Right Certificate may be signed on behalf of
the Company by any Person who, at the actual date of the execution
of such Right Certificate, shall be a proper officer of the Company
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 an office or agency designated for
such purpose, 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), 11(a)(ii) and
14 hereof, at any time after the Distribution Date and prior to the
Expiration Date, any Right Certificate or Right Certificates may be
transferred, split up, combined or exchanged for another Right
Certificate or Right Certificates, entitling the registered holder
to purchase a like number of one one-hundredths of a share of
Preferred Stock as the Right Certificate or Right Certificates
surrendered then entitled such holder to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any
Right Certificate or Right Certificates shall make such request in
writing delivered to the Rights Agent, and shall surrender the
Right Certificate or Right Certificates to be transferred, split
up, combined or exchanged at the office or agency of the Rights
Agent designated for such purpose. 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 Company may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of
Right Certificates.
(b) Subject to the provisions of Section 11(a)(ii) hereof, at
any time after the Distribution Date and prior to the Expiration
Date, upon receipt by the Company 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, at the Company's request, reimbursement to the Company
and the Rights Agent of all reasonable expenses incidental thereto,
and upon surrender to the Rights Agent and cancellation of the
Right Certificate if mutilated, the Company will make and deliver
a new Right Certificate of like tenor to the Rights Agent for
delivery to the registered holder in lieu of the Right Certificate
so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights, Purchase Price; Expiration
Date of Rights.
(a) Except as otherwise provided herein, including, without
limitation, the restrictions on exercisability set forth in Section
9(c) and Section 11(a)(iii) hereof, the Rights shall become
exercisable on the Distribution Date, and thereafter the registered
holder of any Right Certificate may, subject to Section 11(a)(ii)
hereof and except as otherwise provided herein, exercise the Rights
evidenced thereby in whole or in part upon surrender of the Right
Certificate, with the form of election to purchase on the reverse
side thereof duly executed, to the Rights Agent at the office or
agency of the Rights Agent designated for such purpose, together
with payment of the aggregate Purchase Price with respect to the
total number of one one-hundredths of a share of Preferred Stock
(or other securities, cash or other assets, as the case may be) as
to which the Rights are exercised, at any time which is both after
the Distribution Date and prior to the time (the "Expiration Date")
that is the earliest of (i) the Close of Business on January 9,
2006 (the "Final Expiration Date"), (ii) the time at which the
Rights are redeemed as provided in Section 23 hereof (the
"Redemption Date") or (iii) the time at which such Rights are
exchanged as provided in Section 24 hereof.
(b) The Purchase Price shall be initially $80.00 for each one
one-hundredth of a share of Preferred Stock purchasable upon the
exercise of a Right. The Purchase Price and the number of one
one-hundredths 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 and shall be payable in lawful money of the United States of
America in accordance with paragraph (c) of this Section 7.
(c) Except as otherwise provided herein, upon receipt of a
Right Certificate representing exercisable Rights, with the form of
election to purchase duly executed, accompanied by payment of the
aggregate Purchase 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 such Right Certificate in
accordance with Section 9 hereof, in cash or by certified check,
cashier's check or money order payable to the order of the Company,
the Rights Agent shall thereupon promptly (i) (A) requisition from
any transfer agent of the Preferred Stock certificates for the
number of shares of Preferred Stock to be purchased and the Company
hereby irrevocably authorizes its transfer agent to comply with all
such requests, or (B) requisition from the depositary agent
depositary receipts representing interests in such number of one
one-hundredths of a share of Preferred Stock as are to be purchased
(in which case certificates for the Preferred Stock represented by
such receipts shall be deposited by the transfer agent with the
depositary agent) and the Company hereby directs the depositary
agent to comply with such request, (ii) when appropriate,
requisition from the Company the amount of cash to be paid in lieu
of issuance of fractional shares in accordance with Section 14
hereof, (iii) promptly after receipt of such certificates or
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 (iv) when appropriate, after receipt, promptly deliver
such cash to or upon the order of the registered holder of such
Right Certificate.
(d) Except as otherwise provided herein, in case the
registered holder of any Right Certificate shall exercise less than
all of the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the exercisable Rights remaining
unexercised shall be issued by the Rights Agent to the registered
holder of such Right Certificate or to his duly authorized assigns,
subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a registered
holder of Rights upon the occurrence of any purported transfer or
exercise of Rights pursuant to Section 6 hereof or this Section 7
unless such registered holder shall have (i) completed and signed
the certificate contained in the form of assignment or form of
election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such transfer or exercise and (ii)
provided such additional evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) thereof as the Company 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 Company or to any of its agents, be delivered to
the Rights Agent for cancellation or in canceled form, or, if
surrendered to the Rights Agent, 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 Agreement.
The Company shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall so cancel and retire, any
other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall
deliver all canceled Right Certificates to the Company, or shall,
at the written request of the Company, destroy such canceled Right
Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.
Section 9. Availability of Shares of Preferred Stock.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued
shares of Preferred Stock or any shares of Preferred Stock held in
its treasury, the number of shares of Preferred Stock that will be
sufficient to permit the exercise in full of all outstanding
Rights.
(b) So long as the shares of Preferred Stock (and, following
the time that any Person becomes an Acquiring Person, shares of
Common Stock and other securities) issuable upon the exercise of
Rights may be listed or admitted to trading on any national
securities exchange, or quoted on NASDAQ, the Company shall use its
best efforts to cause, from and after such time as the Rights
become exercisable, all shares reserved for such issuance to be
listed or admitted to trading on such exchange, or quoted on
NASDAQ, upon official notice of issuance upon such exercise.
(c) From and after such time as the Rights become
exercisable, the Company shall use its best efforts, if then
necessary to permit the issuance of shares of Preferred Stock (and,
following the time that any Person becomes an Acquiring Person,
shares of Common Stock and other securities) upon the exercise of
Rights, to register and qualify such shares of Preferred Stock
(and, following the time that any Person becomes an Acquiring
Person, shares of Common Stock and other securities) under the
Securities Act and any applicable state securities or "Blue Sky"
laws (to the extent exemptions therefrom are not available), cause
such registration statement and qualifications to become effective
as soon as possible after such filing and keep such registration
and qualifications effective until the earlier of the date as of
which the Rights are no longer exercisable for such securities and
the Expiration Date. The Company may temporarily suspend, for a
period of time not to exceed 90 days, the exercisability of the
Rights in order to prepare and file a registration statement under
the Securities Act and permit it to become effective. Upon any
such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the
suspension is no longer in effect. Notwithstanding any provision
of this Agreement to the contrary, the Rights shall not be
exercisable in any jurisdiction unless the requisite qualification
in such jurisdiction shall have been obtained and until a
registration statement under the Securities Act (if required) shall
have been declared effective.
(d) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all shares of
Preferred Stock (and, following the time that any Person becomes an
Acquiring Person, shares of Common Stock and other securities)
delivered upon exercise of Rights shall, at the time of delivery of
the certificates therefor (subject to payment of the Purchase
Price), be duly and validly authorized and issued and fully paid
and nonassessable shares.
(e) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes
and charges which may be payable in respect of the issuance or
delivery of the Right Certificates or of any shares of Preferred
Stock (or shares of Common Stock or other securities) upon the
exercise of Rights. The Company shall not, however, be required to
pay any transfer tax which may be payable in respect of any
transfer or delivery of Right Certificates to a Person other than,
or the issuance or delivery of certificates or depositary receipts
for the Preferred Stock (or shares of Common Stock or other
securities) in a name other than that of, the registered holder of
the Right Certificate evidencing Rights surrendered for exercise or
to issue or deliver any certificates or depositary receipts for
Preferred Stock (or shares of Common Stock or other securities)
upon the exercise of any Rights until any such tax shall have been
paid (any such tax being payable by that holder of such Right
Certificate at the time of surrender) or until it has been
established to the Company's reasonable satisfaction that no such
tax is due.
Section 10. Preferred Stock Record Date. Each Person in
whose name any certificate for Preferred Stock is issued upon the
exercise of Rights shall for all purposes be deemed to have become
the holder of record of the shares of Preferred Stock represented
thereby on, and such certificate shall be dated, the date upon
which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable
transfer taxes) was made; provided, however, that if the date of
such surrender and payment is a date upon which the Preferred Stock
transfer books of the Company are closed, such Person shall be
deemed to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day on
which the Preferred Stock transfer books of the Company 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 Stock for which the Rights shall be
exercisable, including, without limitation, the right to vote or to
receive dividends or other distributions, and shall not be entitled
to receive any notice of any proceedings of the Company, except as
provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares and Number of Rights. The Purchase Price, the number of
shares of Preferred Stock or other securities or property
purchasable upon exercise of each Right and the number of Rights
outstanding are subject to adjustment from time to time as provided
in this Section 11.
(a)(i) In the event the Company shall at any time
after the date of this Agreement (A) declare a dividend on the
Preferred Stock payable in shares of Preferred Stock, (B) subdivide
the outstanding Preferred Stock, (C) combine the outstanding
Preferred Stock into a smaller number of shares 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 consolidation or merger in which the Company is
the continuing or surviving corporation), except as otherwise
provided in this Section 11(a), the Purchase Price in effect at the
time of the record date for such dividend or of the effective date
of such subdivision, combination or reclassification, and the
number and kind of shares of 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 Company were
open, the holder would have owned upon such exercise and been
entitled to receive by virtue of such dividend, subdivision,
combination or reclassification; provided, however, that in no
event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of capital
stock of the Company issuable upon exercise of one Right.
(ii) Subject to Section 24 of this Agreement, in the
event any Person becomes an Acquiring Person (the first occurrence
of such event being referred to hereinafter as the "Flip-In
Event"), then (A) the Purchase Price shall be adjusted to be the
Purchase Price in effect immediately prior to the Flip-In Event
multiplied by the number of one one-hundredths of a share of
Preferred Stock for which a Right was exercisable immediately prior
to such Flip-In Event, whether or not such Right was then
exercisable, and (B) each holder of a Right, except as otherwise
provided in this Section 11(a)(ii) and Section 11(a)(iii) hereof,
shall thereafter have the right to receive, upon exercise thereof
at a price equal to the Purchase Price (as so adjusted), in
accordance with the terms of this Agreement and in lieu of shares
of Preferred Stock, such number of shares of Common Stock as shall
equal the result obtained by dividing the Purchase Price (as so
adjusted) by 50% of the current per share market price of the
Common Stock (determined pursuant to Section 11(d) hereof) on the
date of such Flip-In Event; provided, however, that the Purchase
Price (as so adjusted) and the number of shares of Common Stock so
receivable upon exercise of a Right shall, following the Flip-In
Event, be subject to further adjustment as appropriate in
accordance with Section 11(f) hereof. Notwithstanding anything in
this Agreement to the contrary, however, from and after the Flip-In
Event, any Rights that are beneficially owned by (x) any Acquiring
Person (or any Affiliate or Associate of any Acquiring Person), (y)
a transferee of any Acquiring Person (or any such Affiliate or
Associate) who becomes a transferee after the Flip-In Event or (z)
a transferee of any Acquiring Person (or any such Affiliate or
Associate) who became a transferee prior to or concurrently with
the Flip-In Event pursuant to either (I) a transfer from the
Acquiring Person 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 has determined is part of a plan,
arrangement or understanding which has the purpose or effect of
avoiding the provisions of this paragraph, and subsequent
transferees of such Persons, shall be 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. The Company shall use all reasonable efforts to
ensure that the provisions of this Section 11(a)(ii) are complied
with, but shall have no liability to any holder of Right
Certificates or other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or its
Affiliates, Associates or transferees hereunder. From and after the
Flip-In Event, no Right Certificate shall be issued pursuant to
Section 3 or Section 6 hereof that represents Rights that are or
have become void pursuant to the provisions of this paragraph, and
any Right Certificate delivered to the Rights Agent that represents
Rights that are or have become void pursuant to the provisions of
this paragraph shall be canceled. From and after the occurrence of
an event specified in Section 13(a) hereof, any Rights that
theretofore have not been exercised pursuant to this Section
11(a)(ii) shall thereafter be exercisable only in accordance with
Section 13 and not pursuant to this Section 11(a)(ii).
(iii) The Company may at its option substitute for a
share of Common Stock issuable upon the exercise of Rights in
accordance with the foregoing subparagraph (ii) such number or
fractions of shares of Preferred Stock having an aggregate current
market value equal to the current per share market price of a share
of Common Stock. In the event that there shall not be sufficient
shares of Common Stock issued but not outstanding or authorized but
unissued to permit the exercise in full of the Rights in accordance
with the foregoing subparagraph (ii), the Board of Directors shall,
to the extent permitted by applicable law and any material
agreements then in effect to which the Company is a party (A)
determine the excess (such excess, the "Spread") of (1) the value
of the shares of Common Stock issuable upon the exercise of a Right
in accordance with the foregoing subparagraph (ii) (the "Current
Value") over (2) the Purchase Price (as adjusted in accordance with
the foregoing subparagraph (ii)), and (B) with respect to each
Right (other than Rights which have become void pursuant to the
foregoing subparagraph (ii)), make adequate provision to substitute
for the shares of Common Stock issuable in accordance with the
foregoing subparagraph (ii) upon exercise of the Right and payment
of the Purchase Price (as adjusted in accordance therewith), (1)
cash, (2) a reduction in such Purchase Price, (3) shares of
Preferred Stock or other equity securities of the Company
(including, without limitation, shares or fractions of shares of
preferred stock which, by virtue of having dividend, voting and
liquidation rights substantially comparable to those of the shares
of Common Stock, are deemed in good faith by the Board of Directors
to have substantially the same value as the shares of Common Stock
(such shares of Preferred Stock and shares or fractions of shares
of preferred stock are hereinafter referred to as "Common Stock
equivalents")), (4) debt securities of the Company, (5) other
assets, or (6) any combination of the foregoing, having a value
which, when added to the value of the shares of Common Stock
actually issued upon exercise of such Right, shall have an
aggregate value equal to the Current Value (less the amount of any
reduction in such Purchase Price), where such aggregate value has
been determined by the Board of Directors upon the advice of a
nationally recognized investment banking firm selected in good
faith by the Board of Directors; provided, however, that if the
Company shall not make adequate provision to deliver value pursuant
to clause (B) above within thirty (30) days following the Flip-In
Event (the "Section 11(a) (ii) Trigger Date"), then the Company
shall be obligated to deliver, to the extent permitted by
applicable law and any material agreements then in effect to which
the Company is a party, upon the surrender for exercise of a Right
and without requiring payment of such Purchase Price, shares of
Common Stock (to the extent available), and then, if necessary,
such number or fractions of shares of Preferred Stock (to the
extent available) and then, if necessary, cash, which shares and/or
cash have an aggregate value equal to the Spread. If, upon the
occurrence of the Flip-In Event, the Board of Directors shall
determine in good faith that it is likely that sufficient
additional shares of Common Stock could be authorized for issuance
upon exercise in full of the Rights, then, if the Board of
Directors so elects, the thirty (30) day period set forth above may
be extended to the extent necessary, but not more than ninety (90)
days after the Section 11(a) (ii) Trigger Date, in order that the
Company may seek shareholder approval for the authorization of such
additional shares (such thirty (30) day period, as it may be
extended, is herein called the "Substitution Period"). To the
extent that the Company determines that some action need be taken
pursuant to the second and/or third sentence of this Section
11(a)(iii), the Company (x) shall provide, subject to Section
11(a)(ii) hereof and the last sentence of this Section 11(a)(iii)
hereof, that such action shall apply uniformly to all outstanding
Rights and (y) may suspend the exercisability of the Rights until
the expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the appropriate
form of distribution to be made pursuant to such second sentence
and to determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the
suspension is no longer in effect. For purposes of this Section
11(a) (iii), the value of the shares of Common Stock shall be the
current per share market price (as determined pursuant to Section
11(d)(i)) on the Section 11(a)(ii) Trigger Date and the per share
or fractional value of any "Common Stock equivalent" shall be
deemed to equal the current per share market price of the Common
Stock. The Board of Directors of the Company may, but shall not be
required to, establish procedures to allocate the right to receive
shares of Common Stock upon the exercise of the Rights among
holders of Rights pursuant to this Section 11(a)(iii).
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred
Stock entitling them (for a period expiring within 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 shares (or having a conversion price per share, if a
security convertible into shares of Preferred Stock or equivalent
preferred shares) less than the then current per share market price
of the Preferred Stock (determined pursuant to Section 11(d)
hereof) on such record date, the Purchase Price to be in effect
after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by
a fraction, the numerator of which shall be the number of shares of
Preferred Stock and equivalent preferred shares outstanding on such
record date plus the number of shares of Preferred Stock and
equivalent preferred shares 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 and
equivalent preferred shares 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); provided, however, that in no event
shall the consideration to be paid upon the exercise of one Right
be less than the aggregate par value of the shares of capital stock
of the Company issuable upon exercise of one Right. 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 Company, whose determination shall be described in
a statement filed with the Rights Agent. Shares of Preferred Stock
and equivalent preferred shares owned by or held for the account of
the Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively
whenever such a record date is fixed; and in the event that such
rights, options or warrants are not so issued, the Purchase Price
shall be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the
making of a distribution to all holders of the Preferred Stock
(including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation) of evidences of indebtedness 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 Purchase Price to
be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the then
current per share market price of the Preferred Stock (determined
pursuant to Section 11(d) hereof) on such record date, less the
fair market value (as determined in good faith by the Board of
Directors of the Company whose determination shall be described in
a statement filed with the Rights Agent) 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 current
per share market price (determined pursuant to Section 11(d)
hereof) of the Preferred Stock; provided, however, that in no event
shall the consideration to be paid upon the exercise of one Right
be less than the aggregate par value of the shares of capital stock
of the Company to be issued upon exercise of one Right. 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 Purchase Price shall again be adjusted to be the Purchase Price
which would then be in effect if such record date had not been
fixed.
(d) (i) Except as otherwise provided herein, 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 (as such term is hereinafter defined)
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, 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 by 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 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 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 Company.
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, if the
Preferred Stock is publicly traded, 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 but the Common Stock is 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) multiplied by one hundred (appropriately adjusted to
reflect any stock split, stock dividend or similar transaction
occurring after the date hereof). If neither the Common Stock nor
the Preferred Stock is publicly 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 Company, whose determination
shall be described in a statement filed with the Rights Agent.
(e) No adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or decrease of at
least 1% in the Purchase 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
ten-thousandth of a share of Preferred Stock or share of Common
Stock or 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 Expiration Date.
(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
Company other than the Preferred Stock, thereafter the Purchase
Price and the number of such other shares so receivable upon
exercise of a 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 Stock contained in
Sections 11(a), 11(b), 11(c), 11(e), 11(h), 11(i) and 11(m) hereof,
as applicable, and the provisions of Sections 7, 9 10, 13 and 14
hereof with respect to the Preferred Stock shall apply on like
terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence
the right to purchase, at the adjusted Purchase Price, the number
of one one-hundredths of a share of Preferred Stock purchasable
from time to time hereunder upon exercise of the Rights, all
subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase
Price as a result of the calculations made in Sections 11(b) and
(c), each Right outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase, at the
adjusted Purchase Price, that number of one one-hundredths of a
share of Preferred Stock (calculated to the nearest one ten-thousandth of a
share of Preferred Stock) obtained by (i) multiplying (x) the number of one
one-hundredths of a share covered by a Right immediately prior to such
adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so obtained
by the Purchase Price in effect immediately after such adjustment of the
Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price pursuant to Sections 11(a)(i),
11(b) or 11(c) hereof to adjust the number of Rights, in
substitution for any adjustment in the number of one one-hundredths
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-hundredths 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-hundredth)
obtained by dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Company shall make
a public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the time,
the amount of the adjustment to be made. This record date may be the date
on which the Purchase Price is adjusted or any day thereafter, but, if the
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 Company may, 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 Company, 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 Company, 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 Purchase
Price or the number of one one-hundredths of a share of Preferred
Stock issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to
express the Purchase Price and the number of one one-hundredths of
a share of Preferred Stock which were expressed in the initial
Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of
the Preferred Stock or other shares of capital stock issuable upon
exercise of the Rights, the Company shall take any corporate action
which may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue fully paid and
nonassessable shares of Preferred Stock or other such shares at
such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that
an adjustment in the Purchase Price be made effective as of a
record date for a specified event, the Company may elect to defer
until the occurrence of such event the issuing to the holder of any
Right exercised after such record date of the Preferred Stock and
other capital stock or securities of the Company, if any, issuable
upon such exercise over and above the Preferred Stock and other
capital stock or securities of the Company, if any, issuable upon
such exercise on the basis of the Purchase Price in effect prior to
such adjustment; provided, however, that the Company shall deliver
to such holder a due ▇▇▇▇ or other appropriate instrument
evidencing such holder's right to receive such additional shares
upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those adjustments
expressly required by this Section 11, as and to the extent that 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 shares of 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 shares of Preferred Stock or issuance of rights,
options or warrants referred to hereinabove in Section 11(b),
hereafter made by the Company to holders of its Preferred Stock
shall not be taxable to such shareholders.
(n) Anything in this Agreement to the contrary
notwithstanding, in the event that at any time after the date of
this Rights Agreement and prior to the Distribution Date, the
Company 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 a dividend payable in Common Stock)
into a greater or lesser number of shares of Common Stock, then in
such case, the number of Rights associated with each share of
Common Stock then outstanding, or issued or delivered thereafter,
shall be proportionately adjusted so that the number of Rights
thereafter associated with each share of Common Stock following any
such event shall equal the result obtained by multiplying the
number of Rights associated with each share of Common Stock
immediately prior to such event by a fraction the numerator of
which shall be the total number of shares of Common Stock
outstanding immediately prior to the occurrence of the event and
the denominator of which shall be the total number of shares of
Common Stock outstanding immediately following the occurrence of
such event.
(o) The Company agrees that, after the earlier of the
Distribution Date or the Stock Acquisition Date, it will not,
except as permitted by Sections 23, 24 or 27 hereof, take (or
permit any Subsidiary to take) any action if at the time such
action is taken it is reasonably foreseeable that such action will
diminish substantially or eliminate the benefits intended to be
afforded by the Rights.
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares. Whenever an adjustment is made as provided in Section
11 or 13 hereof, the Company shall promptly (a) prepare a
certificate setting forth such adjustment, and a brief statement of
the facts accounting for such adjustment, (b) file with the Rights
Agent and with each transfer agent for the Common Stock and the
Preferred Stock a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Right Certificate in accordance
with Section 25 hereof (if so required under Section 25 hereof).
The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment therein contained and shall not
be deemed to have knowledge of any such adjustment unless and until
it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earnings Power.
(a) In the event, directly or indirectly, at any time after
the Flip-In Event (i) the Company shall merge with and into any
other Person, (ii) any Person shall consolidate with the Company,
or any Person shall merge with and into the Company and the Company
shall be the continuing or surviving corporation of such 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 of the Company) or cash or any
other property, or (iii) the Company 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
Company and its Subsidiaries (taken as a whole) to any other Person
(other than the Company or one or more wholly owned Subsidiaries of
the Company), then upon the first occurrence of such event, proper
provision shall be made so that: (A) each holder of a Right (other
than Rights which have become void pursuant to Section 11(a)(ii)
hereof) shall thereafter have the right to receive, upon the
exercise thereof at the Purchase Price (as theretofore adjusted in
accordance with Section 11(a)(ii) hereof), in accordance with the
terms of this Agreement and in lieu of shares of Preferred Stock or
Common Stock of the Company, such number of validly authorized and
issued, fully paid, non-assessable and freely tradeable shares of
Common Stock of the Principal Party (as such term is hereinafter
defined), not subject to any liens, encumbrances, rights of first
refusal or other adverse claims, as shall equal the result obtained
by dividing the Purchase Price (as theretofore adjusted in
accordance with Section 11(a)(ii) hereof) by 50% of the current per
share market price of the Common Stock of such Principal Party
(determined pursuant to Section 11(d) hereof) on the date of
consummation of such consolidation, merger, sale or transfer;
provided, however, that the Purchase Price (as theretofore adjusted
in accordance with Section 11(a)(ii) hereof) and the number of
shares of Common Stock of such Principal Party so receivable upon
exercise of a Right shall be subject to further adjustment as
appropriate in accordance with Section 11(f) hereof to reflect any
events occurring in respect of the Common Stock of such Principal
Party after the occurrence of such consolidation, merger, sale or
transfer; (B) such Principal Party shall thereafter be liable for,
and shall assume, by virtue of such consolidation, merger, sale or
transfer, all the obligations and duties of the Company pursuant to
this Rights Agreement; (C) the term "Company" shall thereafter be
deemed to refer to such Principal Party; and (D) such Principal
Party 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 of any such transaction as may be necessary to assure
that the provisions hereof shall thereafter be applicable, as
nearly as reasonably may be, in relation to the shares of its
Common Stock thereafter deliverable upon the exercise of the
Rights; provided that, upon the subsequent occurrence of any
consolidation, merger, sale or transfer of assets or other
extraordinary transaction in respect of such Principal Party, each
holder of a Right shall thereupon be entitled to receive, upon
exercise of a Right and payment of the Purchase Price as provided
in this Section 13(a), such cash, shares, rights, warrants and
other property which such holder would have been entitled to
receive had such holder, at the time of such transaction, owned the
Common Stock of the Principal Party receivable upon the exercise of
a Right pursuant to this Section 13(a), and such Principal Party
shall take such steps (including, but not limited to, reservation
of shares of stock) as may be necessary to permit the subsequent
exercise of the Rights in accordance with the terms hereof for such
cash, shares, rights, warrants and other property.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in (i) or
(ii) of the first sentence of Section 13(a) hereof: (A) the Person
that is the issuer of the securities into which the shares of
Common Stock are converted in such merger or consolidation, or, if
there is more than one such issuer, the issuer the shares of Common
Stock of which have the greatest aggregate market value of shares
outstanding, or (B) if no securities are so issued, (x) the Person
that is the other party to the merger, if such Person survives said
merger, or, if there is more than one such Person, the Person the
shares of Common Stock of which have the greatest aggregate market
value of shares outstanding or (y) if the Person that is the other
party to the merger does not survive the merger, the Person that
does survive the merger (including the Company if it survives) or
(z) the Person resulting from the consolidation; and
(ii) in the case of any transaction described in (iii) of
the first sentence in Section 13(a) hereof, the Person that is the
party receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions, or, if
each Person that is a party to such transaction or transactions
receives the same portion of the assets or earning power so
transferred or if the Person receiving the greatest portion of the
assets or earning power cannot be determined, whichever of such
Persons as is the issuer of Common Stock having the greatest
aggregate market value of shares outstanding;
provided, however, that in any such case described in the foregoing
clause (b)(i) or (b)(ii), if the Common Stock of such Person is not
at such time or has not been continuously over the preceding
12-month period registered under Section 12 of the Exchange Act,
then (1) if such Person is a direct or indirect Subsidiary of
another Person the Common Stock of which is and has been so
registered, the term "Principal Party" shall refer to such other
Person, or (2) if such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Stock of all of
which is and has been so registered, the term "Principal Party"
shall refer to whichever of such Persons is the issuer of Common
Stock having the greatest aggregate market value of shares
outstanding, or (3) if such Person is owned, directly or
indirectly, by a joint venture formed by two or more Persons that
are not owned, directly or indirectly, by the same Person, the
rules set forth in clauses (1) and (2) above shall apply to each of
the owners having an interest in the venture as if the Person owned
by the joint venture was a Subsidiary of both or all of such joint
venturers, and the Principal Party in each such case shall bear the
obligations set forth in this Section 13 in the same ratio as its
interest in such Person bears to the total of such interests.
(c) The Company shall not consummate any consolidation,
merger, sale or transfer referred to in Section 13(a) hereof unless
prior thereto the Company and the Principal Party involved therein
shall have executed and delivered to the Rights Agent an agreement
confirming that the requirements of Sections 13(a) and (b) hereof
shall promptly be performed in accordance with their terms and that
such consolidation, merger, sale or transfer of assets shall not
result in a default by the Principal Party under this Agreement as
the same shall have been assumed by the Principal Party pursuant to
Sections 13(a) and (b) hereof and providing that, as soon as
practicable after executing such agreement pursuant to this Section
13, the Principal Party will:
(i) prepare and file a registration statement under the
Securities Act, if necessary, with respect to the Rights and the
securities purchasable upon exercise of the Rights on an
appropriate form, use its best efforts to cause such registration
statement to become effective as soon as practicable after such
filing and use its best efforts to cause such registration
statement to remain effective (with a prospectus at all times
meeting the requirements of the Securities Act) until the
Expiration Date and similarly comply with applicable state
securities laws;
(ii) use its best efforts, if the Common Stock of the
Principal Party shall be listed or admitted to trading on the New
York Stock Exchange or on another national securities exchange, to
list or admit to trading (or continue the listing of) the Rights
and the securities purchasable upon exercise of the Rights on the
New York Stock Exchange or such securities exchange, or, if the
Common Stock of the Principal Party shall not be listed or admitted
to trading on the New York Stock Exchange or a national securities
exchange, to cause the Rights and the securities receivable upon
exercise of the Rights to be authorized for quotation on NASDAQ or
on such other system then in use;
(iii) deliver to holders of the Rights historical
financial statements for the Principal Party which comply in all
respects with the requirements for registration on Form 10 (or any
successor form) under the Exchange Act; and
(iv) obtain waivers of any rights of first refusal or
preemptive rights in respect of the Common Stock of the Principal
Party subject to purchase upon exercise of outstanding Rights.
(d) In case the Principal Party has provision in any of its
authorized securities or in its certificate of incorporation or
by-laws or other instrument governing its corporate affairs, which
provision would have the effect of (i) causing such Principal Party
to issue (other than to holders of Rights pursuant to this Section
13), in connection with, or as a consequence of, the consummation
of a transaction referred to in this Section 13, shares of Common
Stock of such Principal Party at less than the then current market
price per share thereof (determined pursuant to Section 11(d)
hereof) or securities exercisable for, or convertible into, Common
Stock of such Principal Party at less than such then current market
price, or (ii) providing for any special payment, tax or similar
provision in connection with the issuance of the Common Stock of
such Principal Party pursuant to the provisions of Section 13,
then, in such event, the Company hereby agrees with each holder of
Rights that it shall not consummate any such transaction unless
prior thereto the Company and such Principal Party shall have
executed and delivered to the Rights Agent a supplemental agreement
providing that the provision in question of such Principal Party
shall have been canceled, waived or amended, or that the authorized
securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the
consummation of the proposed transaction.
(e) The Company covenants and agrees that it shall not, at
any time after the Flip-In Event, enter into any transaction of the
type described in clauses (i) through (iii) of Section 13(a) hereof
if (i) at the time of or immediately after such consolidation,
merger, sale, transfer or other transaction there are any rights,
warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the
Rights, (ii) prior to, simultaneously with or immediately after
such consolidation, merger, sale, transfer or other transaction,
the shareholders of the Person who constitutes, or would
constitute, the Principal Party for purposes of Section 13(a)
hereof shall have received a distribution of Rights previously
owned by such Person or any of its Affiliates or Associates or
(iii) the form or nature of organization of the Principal Party
would preclude or limit the exercisability of the Rights.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates which evidence
fractional Rights (except prior to the Distribution Date in
accordance with Section 11(n) hereof). In lieu of such fractional
Rights, there shall be paid to the registered holders 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 purposes of
this Section 14(a), the current market value of a whole Right shall
be the closing price of the Rights for the Trading Day immediately
prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price for any day shall be the last
sale price, 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 Company. 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 Company
shall be used.
(b) The Company shall not be required to issue fractions of
Preferred Stock (other than fractions which are integral multiples
of one one-hundredth of a share of Preferred Stock) upon exercise
of the Rights or to distribute certificates which evidence
fractional shares of Preferred Stock (other than fractions which
are integral multiples of one one-hundredth of a share of Preferred
Stock). Interests in fractions of Preferred Stock in integral
multiples of one one-hundredth of a share of Preferred Stock may,
at the election of the Company, be evidenced by depositary
receipts, pursuant to an appropriate agreement between the Company
and a depositary selected by it; provided, that such agreement
shall provide that the holders of such depositary receipts shall
have all the rights, privileges and preferences to which they are
entitled as beneficial owners of the Preferred Stock represented by
such depositary receipts. In lieu of fractional shares of Preferred
Stock that are not integral multiples of one one-hundredth of a
share of Preferred Stock, the Company shall pay to the registered
holders of Right Certificates at the time such Rights are exercised
as herein provided an amount in cash equal to the same fraction of
the current market value of one share of Preferred Stock. For the
purposes of this Section 14(b), the current market value of a share
of Preferred Stock shall be the closing price of a share of
Preferred Stock (as determined pursuant to Section 11(d) hereof)
for the Trading Day immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Rights or any
fractional shares upon exercise of a Right (except as provided
above).
Section 15. Rights of Action. All rights of action in
respect of this Agreement, excepting the rights of action given to
the Rights Agent under Section 18 hereof, are vested in the
respective registered holders of the Right Certificates (and, prior
to the Distribution Date, the registered holders of the Common
Stock); and any registered holder 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), on his own behalf and for his own benefit, may enforce, and
may institute and maintain any suit, action or proceeding against
the Company to enforce, or otherwise act in respect of, his right
to exercise the Rights evidenced by such Right Certificate (or,
prior to the Distribution Date, such Common Stock) in the manner
provided therein 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.
Section 16. Agreement of Right Holders. Every holder of a
Right, by accepting the same, consents and agrees with the Company
and the Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common
Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the office or agency of the Rights Agent designated
for such purpose, duly endorsed or accompanied by a proper
instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the
Person in whose name the Right Certificate (or, prior to the
Distribution Date, the Common Stock 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 or the Common Stock certificate made by anyone other
than the Company or the Rights Agent) for all purposes whatsoever,
and neither the Company nor the Rights Agent 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 the Preferred Stock or any other securities of the
Company which may at any time be issuable on the exercise of the
Rights represented thereby, nor shall anything contained herein or
in any Right Certificate be construed to confer upon the holder of
any Right Certificate, as such, any of the rights of a shareholder
of the Company or any right to vote for the election of directors
or upon any matter submitted to shareholders at any meeting
thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting
shareholders (except as provided in this Agreement), or to receive
dividends or subscription rights, or otherwise, until the Rights
evidenced by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company 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 Company also agrees to
indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability or expense, incurred without negligence, bad
faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the
costs and expenses of defending against any claim of liability
arising therefrom, directly or indirectly.
(b) The Rights Agent shall be protected 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
the Preferred Stock or Common Stock or for other securities of the
Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document believed by 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
hereof.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which 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 stock
transfer or corporate trust powers 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 Right
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 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; and 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 and 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
Company 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 legal counsel for the Company), 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 Company
prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved
and established by a certificate signed by the President and the
Secretary of the Company and delivered to the Rights Agent; and
such certificate shall be full authorization to the Rights Agent
for any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company
and any other Person only for its own 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
Company 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 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 Company of any covenant or
condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any change in the exercisability of
the Rights (including the Rights becoming void pursuant to Section
11(a) (ii) hereof) or any adjustment in the terms of the Rights
provided for in Sections 3, 11, 13, 23 and 24, or the ascertaining
of the existence of facts that would require any such change or
adjustment (except with respect to the exercise of Rights evidenced
by Right Certificates after receipt of a certificate furnished
pursuant to Section 12, describing such change or 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 securities to be issued pursuant to this
Agreement or any Right Certificate or as to whether any shares of
Preferred Stock or other securities will, when issued, be validly
authorized and issued fully paid and nonassessable.
(f) The Company 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 this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from any person reasonably believed by the Rights Agent
to be one of the President or the Secretary of the Company, and to
apply to such officers for advice or instructions in connection
with its duties, and it shall not be liable for any action taken or
suffered 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 Company may, at the option of the Rights
Agent, set forth in writing any action proposed to be taken or
omitted by the Rights Agent under this 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 five Business Days after the date any officer of the Company
actually receives such application unless any such officer shall
have consented in writing to an earlier date) unless, prior to
taking any such action (or the effective date in the case of an
omission), the Rights Agent shall have received written
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 Company or become pecuniarily
interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights
Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or
for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in 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 Company 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 of
transfer without first consulting with the Company.
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
Company and to each transfer agent of the Common Stock or Preferred
Stock by registered or certified mail, and, following the
Distribution Date, to the holders of the Right Certificates by
first-class mail. The Company may remove the Rights Agent or any
successor Rights Agent 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 or Preferred Stock by
registered or certified mail, and, following the Distribution Date,
to the holders of the Right Certificates by first-class mail. If
the Rights Agent shall resign or be removed or shall otherwise
become incapable of acting, the Company shall appoint a successor
to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such
removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights
Agent or by the holder of a Right Certificate (who shall, with such
notice, submit his Right Certificate for inspection by the
Company), then the registered holder 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 Company or by such a court, shall be a corporation organized
and doing business under the laws of the United States or the State
of Texas or the State of New York (or of any other state of the
United States so long as such corporation is authorized to do
business as a banking institution in the State of Texas or the
State of New York), in good standing, having an office in the State
of Texas 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 by federal or state authority
and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50 million. After
appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but
the predecessor Rights Agent shall deliver and transfer to the
successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than
the effective date of any such appointment the Company shall file
notice thereof in writing with the predecessor Rights Agent and
each transfer agent of the Common Stock or Preferred Stock, and,
following the Distribution Date, 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.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new
Right Certificates evidencing Rights in such forms as may be
approved by its Board of Directors to reflect any adjustment or
change in the Purchase Price and the number or kind or class of
shares 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
Common Stock following the Distribution Date and prior to the
Expiration Date, the Company may with respect to shares of Common
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 Company or (iv) a contractual obligation
of the Company, 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 Board of Directors of the Company may, at any time
prior to the Flip-In Event, redeem all but not less than all the
then outstanding Rights at a redemption price of $.01 per Right,
appropriately adjusted to reflect any stock split, stock dividend
or similar transaction occurring after the date hereof (the
redemption price being hereinafter referred to as the "Redemption
Price"). The redemption of the Rights may be made effective at
such time, on such basis and with such conditions as the Board of
Directors in its sole discretion may establish.
(b) Immediately upon the action of the Board of Directors
ordering the redemption of the Rights pursuant to paragraph (a) of
this Section 23 (or at such later time as the Board of Directors
may establish for the effectiveness of such redemption), and
without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter of
the holders of Rights shall be to receive the Redemption Price.
The Company shall promptly give public notice of any such
redemption; provided, however, that the failure to give, or any
defect in, any such notice shall not affect the validity of such
redemption. Within 10 days after such action of the Board of
Directors ordering the redemption of the Rights (or such later time
as the Board of Directors may establish for the effectiveness of
such redemption), the Company shall mail a notice of redemption to
all the holders of the then outstanding Rights at their last
addresses as they appear upon the registry books of the Rights
Agent or, prior to the Distribution Date, on the registry books of
the transfer agent for the Common Stock. Any notice which is
mailed in the manner herein provided shall be deemed given, whether
or not the holder receives the notice. Each such notice of
redemption shall state the method by which the payment of the
Redemption Price will be made.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its option,
at any time after the Flip-In Event, exchange all or part of the
then outstanding and exercisable Rights (which shall not include
Rights that have become void pursuant to the provisions of Section
11(a)(ii) hereof) by exchanging for each such Right a number of
shares of Common Stock having an aggregate current per share market
price (determined pursuant to Section 11(d) hereof) on the date of
the occurrence of the Flip-In Event equal to the Spread (as defined
in Section 11(a)(iii) hereof), appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring
after the date of such Flip-In Event (such amount per Right being
hereinafter referred to as the "Exchange Consideration").
Notwithstanding the foregoing, the Board of Directors 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 shares
of Common Stock aggregating 50% or more of the shares of Common
Stock then outstanding. From and after the occurrence of an event
specified in Section 13(a) hereof, any Rights that theretofore have
not been exchanged pursuant to this Section 24(a) shall thereafter
be exercisable only in accordance with Section 13 and may not be
exchanged pursuant to this Section 24(a).
(b) Immediately upon the action of the Board of Directors of
the Company ordering the exchange of any Rights pursuant to
paragraph (a) of this Section 24 and without any further action and
without any notice, the right to exercise such Rights shall
terminate and the only right thereafter of a holder of such Rights
shall be to receive the Exchange Consideration. The Company shall
promptly give public notice of any such exchange; provided,
however, that the failure to give, or any defect in, such notice
shall not affect the validity of such exchange. The Company shall
promptly mail a notice of any such exchange to all of the holders
of the Rights so exchanged 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 void pursuant to the
provisions of Section 11(a)(ii) hereof) held by each holder of
Rights.
(c) The Company may at its option substitute, and, 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
24, the Company 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 (or equivalent preferred
shares, as such term is defined in Section 11(b)) having an
aggregate current per share market price (determined pursuant to
Section 11(d) hereof) equal to the current per share market price
of one share of Common Stock (determined pursuant to Section 11(d)
hereof) as of the date of the Flip-In Event.
(d) The Company shall not, in connection with any exchange
pursuant to this Section 24, be required to issue fractions of
shares of Common Stock or to distribute certificates which evidence
fractional shares of Common Stock. In lieu of such fractional
shares of Common Stock, the Company 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 (as
determined pursuant to Section 11(d) hereof) for the Trading Day
immediately prior to the date of exchange pursuant to this Section
24.
Section 25. Notice of Certain Events.
(a) In case the Company shall at any time after the earlier
of the Distribution Date or the Stock Acquisition Date propose (i)
to pay any dividend payable in stock of any class to the holders of
its Preferred Stock or to make any other distribution to the
holders of its Preferred Stock (other than a regular quarterly cash
dividend), (ii) to offer to the holders of its Preferred Stock
rights or warrants to subscribe for or to purchase any additional
shares of Preferred Stock or shares of stock of any class or any
other securities, rights or options, (iii) to effect any
reclassification of its Preferred Stock (other than a
reclassification involving only the subdivision of outstanding
Preferred Stock), (iv) to effect the liquidation, dissolution or
winding up of the Company, or (v) to declare or pay any dividend on
the Common Stock payable in Common Stock or to effect a
subdivision, combination or consolidation of the Common Stock (by
reclassification or otherwise than by payment of dividends in
Common Stock), then, in each such case, the Company shall give to
each holder of a Right Certificate, in accordance with Section 26
hereof, a notice of such proposed action, which shall specify the
record date for the purposes of such stock dividend, or
distribution of rights or warrants, or the date on which such
liquidation, dissolution or winding up is to take place and the
date of participation therein by the holders of the Common Stock
and/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 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 the Common Stock and/or
Preferred Stock, whichever shall be the earlier.
(b) In case any event described in Section 11(a)(ii) or
Section 13 shall occur then the Company shall as soon as
practicable thereafter give to each holder of a Right Certificate
(or if occurring prior to the Distribution Date, the holders of the
Common Stock) in accordance with Section 26 hereof, a notice of the
occurrence of such event, which notice shall describe such event
and the consequences of such event to holders of Rights under
Section 11(a)(ii) and Section 13 hereof.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder
of any Right Certificate to or on the Company shall be sufficiently
given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the
Rights Agent) as follows:
▇▇▇▇▇▇▇▇ Communications, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Subject to the provisions of Section 21 hereof, any notice or
demand authorized by this Agreement to be given or made by the
Company or by the holder of any Right Certificate to or on the
Rights Agent shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:
KeyCorp Shareholder Services, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Notices or demands authorized by this Agreement to be given or made
by the Company or the Rights Agent to the holder of any Right
Certificate 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 27. Supplements and Amendments. Except as provided
in the penultimate sentence of this Section 27, for so long as the
Rights are then redeemable, the Company may in its sole and
absolute discretion, and the Rights Agent shall if the Company so
directs, supplement or amend any provision of this Agreement in any
respect without the approval of any holders of the Rights. At any
time when the Rights are no longer redeemable, except as provided
in the penultimate sentence of this Section 27, the Company may,
and the Rights Agent shall, if the Company so directs, supplement
or amend this Agreement without the approval of any holders of
Rights Certificates 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, (iii)
shorten or lengthen any time period hereunder, or (iv) change or
supplement the provisions hereunder in any manner which the Company
may deem necessary or desirable; provided that no such supplement
or amendment shall adversely affect the interests of the holders of
Rights as such (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person), and no such amendment may cause
the rights again to become redeemable or cause the Agreement again
to become amendable other than in accordance with this sentence.
Notwithstanding anything contained in this Agreement to the
contrary, no supplement or amendment shall be made which changes
the Redemption Price. Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed
supplement or amendment is in compliance with the terms of this
Section 27, the Rights Agent shall execute such supplement or
amendment.
Section 28. Successors. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights
Agent shall bind and inure to the benefit of their respective
successors and assigns hereunder.
Section 29. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the
Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common
Stock) any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive
benefit of the Company, the Rights Agent and the registered holders
of the Right Certificates (and, prior to the Distribution Date, the
Common Stock).
Section 30. Determinations and Actions by the Board of
Directors. The Board of Directors of the Company shall have the
exclusive power and authority to administer this Agreement and to
exercise the rights and powers specifically granted to the Board of
Directors of the Company or to the Company, or as may be necessary
or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the
provisions of this Agreement and (ii) make all determinations
deemed necessary or advisable for the administration of this
Agreement (including, without limitation, a determination to redeem
or not redeem the Rights or to amend this Agreement). All such
actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with
respect to the foregoing) that are done or made by the Board of
Directors of the Company in good faith, shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the
holders of the Rights, as such, and all other parties, and (y) not
subject the Board of Directors to any liability to the holders of
the Rights.
Section 31. Severability. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants
and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
Section 32. Governing Law. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made
under the laws of the State of Texas and for all purposes shall be
governed by and construed in accordance with the laws of such State
applicable to contracts to be made and performed entirely within
such State.
Section 33. 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 34. Descriptive Headings. Descriptive headings of
the several Sections of this Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of
any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and attested, all as of the day and
year first above written.
Attest: ▇▇▇▇▇▇▇▇ COMMUNICATIONS, INC.
By: By:
Name: Name:
Title: Title:
Attest: KEYCORP SHAREHOLDER SERVICES,
INC.
By: By:
Name: Name:
Title: Title:
Exhibit A
STATEMENT OF RESOLUTION
ESTABLISHING AND DESIGNATING
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
OF
▇▇▇▇▇▇▇▇ COMMUNICATIONS, INC.
To the Secretary of State
of the State of Texas:
Pursuant to the provisions of Article 2.13 of the Texas
Business Corporation Act, and pursuant to Article Five of its
Articles of Incorporation, the undersigned, ▇▇▇▇▇▇▇▇
Communications, Inc., a corporation organized and existing under
the Texas Business Corporation Act, as amended (the "Corporation"),
hereby submits the following statement for the purpose of
establishing and designating a series of shares and fixing and
determining the relative rights thereof:
I. The name of the corporation is ▇▇▇▇▇▇▇▇ Communications,
Inc.
II. The following resolution establishing and designating a
series of shares and fixing and determining the relative rights and
preferences thereof was duly adopted by the Board of Directors of
the Corporation on or about January 9, 1996;
RESOLVED, that pursuant to the authority vested in
the Board of Directors of this Corporation in accordance
with the provisions of its Articles of Incorporation, a
series of Preferred Stock, par value $.01 per share, of
the Corporation be and hereby is created, and that the
designation and number of shares thereof and the voting
and other powers, preferences and relative,
participating, optional or other rights of the shares of
such series and the qualifications, limitations and
restrictions thereof are as follows:
Series A Junior Participating Preferred Stock
1. Designation and Amount. There shall be a series of
Preferred Stock that shall be designated as "Series A Junior
Participating Preferred Stock," and the number of shares
constituting such series shall be 290,000.
2. Dividends and Distribution.
(A) Subject to the prior and superior rights of the
holders of any shares of any class or series of stock of the
Corporation ranking prior and superior to the shares of Series A
Junior Participating Preferred Stock with respect to dividends, the
holders of shares of Series A Junior Participating Preferred Stock,
in preference to the holders of shares of any class or series of
stock of the Corporation ranking junior to the Series A Junior
Participating Preferred Stock, shall be entitled to receive, when,
as and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on
the last day of March, June, September and December in each year
(each such date being referred to herein as a "Quarterly Dividend
Payment Date"), commencing on the first Quarterly Dividend Payment
Date after the first issuance of a share or fraction of a share of
Series A Junior Participating Preferred Stock, in an amount per
share (rounded to the nearest cent) equal to the greater of (a)
$1.00 or (b) the Adjustment Number (as defined below) times the
aggregate per share amount of all cash dividends, and the
Adjustment Number times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions other than
a dividend payable in shares of Common Stock or a subdivision of
the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock, par value $.01 per share,
of the Corporation (the "Common Stock") since the immediately
preceding Quarterly Dividend Payment Date, or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of
any share or fraction of a share of Series A Junior Participating
Preferred Stock. The "Adjustment Number" shall initially be 100.
In the event the Corporation shall at any time after January 9,
1996 (the "Rights Declaration Date") (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the
Adjustment Number in effect immediately prior to such event shall
be adjusted by multiplying such Adjustment Number by a fraction the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Junior Participating Preferred Stock
from the Quarterly Dividend Payment Date next preceding the date of
issue of such shares of Series A Junior Participating Preferred
Stock, unless the date of issue of such shares is prior to the
record date for the first Quarterly Dividend Payment Date, in which
case dividends on such shares shall begin to accrue from the date
of issue of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Junior Participating
Preferred Stock entitled to receive a quarterly dividend and before
such Quarterly Dividend Payment Date, in either of which events
such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends
shall not bear interest. Dividends paid on the shares of Series A
Junior Participating Preferred Stock in an amount less than the
total amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of
shares of Series A Junior Participating Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon,
which record date shall be no more than 30 days prior to the date
fixed for the payment thereof.
3. Voting Rights. The holders of shares of Series A Junior
Participating Preferred Stock shall have the following voting
rights:
(A) Each share of Series A Junior Participating
Preferred Stock shall entitle the holder thereof to a number of
votes equal to the Adjustment Number on all matters submitted to a
vote of the shareholders of the Corporation.
(B) Except as required by law, holders of Series A
Junior Participating Preferred Stock and holders of shares of
Common Stock shall vote together as one class on all matters
submitted to a vote of the shareholders of the Corporation.
(C) Except as required by law, holders of Series A
Junior Participating Preferred Stock shall have no special voting
rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Common Stock as
set forth herein) for taking any corporate action.
4. Liquidation, Dissolution or Winding Up. (A) Upon any
liquidation (voluntary or otherwise), dissolution or winding up of
the Corporation, no distribution shall be made to the holders of
shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Junior
Participating Preferred Stock unless, prior thereto, the holders of
shares of Series A Junior Participating Preferred Stock shall have
received $[100.00] per share, plus an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment (the "Series A Liquidation
Preference"). Following the payment of the full amount of the
Series A Liquidation Preference, no additional distributions shall
be made to the holders of shares of Series A Junior Participating
Preferred Stock unless, prior thereto, the holders of shares of
Common Stock shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i) the
Series A Liquidation Preference by (ii) the Adjustment Number.
Following the payment of the full amount of the Series A
Liquidation Preference and the Common Adjustment in respect of all
outstanding shares of (1) Series A Junior Participating Preferred
Stock and (2) Common Stock, respectively, (a) holders of Series A
Junior Participating Preferred Stock and (b) holders of shares of
Common Stock shall, subject to the prior rights of all other
classes and series of stock of the Corporation, if any, ranking
prior thereto, receive their ratable and proportionate share of the
remaining assets to be distributed in the ratio of the Adjustment
Number to 1 with respect to (x) the Series A Junior Participating
Preferred Stock and (y) the Common Stock, on a per share basis,
respectively.
(B) In the event, however, that there are not sufficient
assets available to permit payment in full of the Series A
Liquidation Preference and the liquidation preferences of all other
classes and series of stock of the Corporation, if any, that rank
on a parity with the Series A Junior Participating Preferred Stock,
then, such remaining assets shall be distributed ratably to the
holders of such parity shares in proportion to their respective
liquidation preferences. In the event, however, that there are not
sufficient assets available to permit payment in full of the Common
Adjustment, then such remaining assets shall be distributed ratably
to the holders of Common Stock.
(C) Neither the merger or consolidation of the
Corporation into or with another corporation nor the merger or
consolidation of any other corporation into or with the Corporation
shall be deemed to be a liquidation, dissolution or winding up of
the Corporation within the meaning of this Section 4.
5. No Redemption. Shares of Series A Junior Participating
Preferred Stock shall not be subject to redemption by the Company.
6. Ranking. The Series A Junior Participating Preferred
Stock shall rank junior to all other series of the Preferred Stock
as to the payment of dividends and the distribution of assets,
unless the terms of any such series shall provide otherwise, and
shall rank senior to the Common Stock as to such matters.
7. Fractional Shares. Series A Junior Participating
Preferred Stock may be issued in fractions of a share that shall
entitle the holder, in proportion to such holder's fractional
shares, to exercise voting rights, receive dividends, participate
in distributions and to have the benefit of all other rights of
holders of Series A Junior Participating Preferred Stock.
AND BE IT FURTHER RESOLVED, that the appropriate officers of
the Corporation, be, and they are hereby, authorized and directed
from time to time to execute such certificates, instruments or
other documents and do all such things as may be necessary or
advisable in their discretion in order to carry out the terms,
including the filing with the Secretary of State for the State of
Texas of a copy of the foregoing resolution executed by the
Chairman of the Board, the President or any Vice President and the
Secretary or Assistant Secretary and verified by one of the
officers so executing such document.
Dated: January __, 1996 ▇▇▇▇▇▇▇▇ COMMUNICATIONS, INC.
By:
Name:
Title:
Attest:
Name:
Title:
Exhibit B
Form of Right Certificate
Certificate No. R- ____ _______
Rights
NOT EXERCISABLE AFTER JANUARY 9, 2006 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO
REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE ON THE TERMS
SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT,
RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS OR
BECOMES AN ACQUIRING PERSON (AS DEFINED IN THE RIGHTS
AGREEMENT) AND CERTAIN TRANSFEREES THEREOF WILL BECOME
NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.
Right Certificate
▇▇▇▇▇▇▇▇ COMMUNICATIONS, 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 Agreement, dated as of
January 9, 1996, as the same may be amended from time to time (the
"Rights Agreement"), between ▇▇▇▇▇▇▇▇ Communications, Inc., a Texas
corporation (the "Company"), and KeyCorp Shareholder Services, Inc.
(the "Rights Agent"), to purchase from the Company at any time
after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 P.M., New York City time, on January
9, 2006 at the office or agency of the Rights Agent designated for
such purpose, or of its successor as Rights Agent, one one-hundredth of a
fully paid non-assessable share of Series A Junior Participating Preferred
Stock, par value $.01 per share (the "Preferred Stock"), of the Company, at
a purchase price of $80.00 per one one-hundredth of a share of Preferred
Stock (the "Purchase Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase duly executed. The
number of Rights evidenced by this Rights Certificate (and the number of one
one-hundredths of a share of Preferred Stock which may be purchased
upon exercise hereof) set forth above, and the Purchase Price set
forth above, are the number and Purchase Price as of January 9,
1996, based on the Preferred Stock as constituted at such date. As
provided in the Rights Agreement, the Purchase Price, the number of
one one-hundredths of a share of Preferred Stock (or other
securities or property) which may be purchased upon the exercise of
the Rights and the number of Rights evidenced by this Right
Certificate are subject to modification and adjustment upon the
happening of certain events.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Right
Certificates. Copies of the Rights Agreement are on file at the
principal executive offices of the Company and the above-mentioned
office or agency of the Rights Agent. The Company will mail to the
holder of this Right Certificate a copy of the Rights Agreement
without charge after receipt of a written request therefor.
This Right Certificate, with or without other Right
Certificates, upon surrender at the office or agency of the Rights
Agent designated for such purpose, may be exchanged for another
Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate
number of shares of Preferred Stock as the Rights evidenced by the
Right Certificate or Right Certificates surrendered shall have
entitled such holder to purchase. If this Right Certificate shall
be 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 exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at
a redemption price of $.01 per Right or (ii) may be exchanged in
whole or in part for shares of the Company's Common Stock, par
value $.01 share, or shares of Preferred Stock.
No fractional shares of Preferred Stock will be issued upon
the exercise of any Right or Rights evidenced hereby (other than
fractions which are integral multiples of one one-hundredth of a
share of Preferred Stock, which may, at the election of the
Company, be evidenced by depositary receipts), but in lieu thereof
a cash payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose
the holder of the Preferred Stock or of any other securities of the
Company which may at any time be issuable on the exercise hereof,
nor shall anything contained in the Rights Agreement or herein be
construed to confer upon the holder hereof, as such, any of the
rights of a shareholder of the Company or any right to vote for the
election of directors or upon any matter submitted to shareholders
at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions
affecting shareholders (except as provided in the Rights Agreement)
or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Right Certificate shall have
been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights
Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of ________________ __,
1996.
▇▇▇▇▇▇▇▇ COMMUNICATIONS, INC.
ATTEST: By:
Name:
Title:
Countersigned:
KEYCORP SHAREHOLDER SERVICES, INC.
as Rights Agent
By:
Authorized Signature
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate)
FOR VALUE RECEIVED __________________________ hereby sells,
assigns and transfers unto
(Please print name and address of transferee)
Rights represented by this Right Certificate, together with all
right, title and interest therein, and does hereby irrevocably
constitute and appoint Attorney, to transfer said Rights on the books of
the within-named Company, with full power of substitution.
Dated: ______________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association
of Securities Dealers, Inc., or a commercial bank or trust company
having an office or correspondent in the United States.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(To be completed)
The undersigned hereby certifies that the Rights evidenced by
this Right Certificate are not beneficially owned by, were not
acquired by the undersigned from, and are not being assigned to an
Acquiring Person or an Affiliate or Associate thereof (as defined
in the Rights Agreement).
_____________________________
Signature
Form of Reverse Side of Right Certificate - continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate)
To: ▇▇▇▇▇▇▇▇ COMMUNICATIONS, INC.
The undersigned hereby irrevocably elects to exercise
___________ Rights represented by this Right Certificate to
purchase the shares of Preferred Stock (or other securities or
property) issuable upon the exercise of such Rights and requests
that certificates for such shares of Preferred Stock (or such other
securities) be issued in the name of:
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by
this Right Certificate, a new Right Certificate for the balance
remaining of such Rights shall be registered in the name of and
delivered to:
Please insert social security
or other identifying number
(Please print name and address)
Dated: ________________
_____________________________
Signature
(Signature must conform to holder specified on Right Certificate)
Signature Guaranteed:
Form of Reverse Side of Right Certificate - continued
Signature must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association
of Securities Dealers, Inc., or a commercial bank or trust company
having an office or correspondent in the United States.
(To be completed)
The undersigned certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by, and were not
acquired by the undersigned from, an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights
Agreement).
_____________________________
Signature
NOTICE
The signature of the holder of the Right Certificate in the
Form of Assignment or Form of Election to Purchase, as the case may
be, must conform to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement
or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the certification set forth above in the Form of
Election to Purchase, as the case may be, is not completed, such
Assignment or Election to Purchase will not be honored.
Exhibit C
UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS
AGREEMENT, RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON
WHO IS OR BECOMES AN ACQUIRING PERSON (AS DEFINED IN THE
RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES THEREOF WILL
BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.
SUMMARY OF RIGHTS TO PURCHASE
SHARES OF PREFERRED STOCK OF
▇▇▇▇▇▇▇▇ COMMUNICATIONS, INC.
On January 9, 1996, the Board of Directors of ▇▇▇▇▇▇▇▇
Communications, Inc. (the "Company") declared a dividend of one
preferred share purchase right (a "Right") for each outstanding
share of common stock, par value $.01 per share, of the Company
(the "Common Stock"). The dividend is payable on January 22, 1996
(the "Record Date") to the shareholders of record on that date.
Each Right entitles the registered holder to purchase from the
Company one one-hundredth of a share of Series A Junior
Participating Preferred Stock, par value $.01 per share (the
"Preferred Stock") of the Company at a price of $80.00 per one one-hundredth
of a share of Preferred Stock (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set forth in a
Rights Agreement dated as of January 9, 1996, as the same may be amended
from time to time (the "Rights Agreement"), between the Company and KeyCorp
Shareholder Services, Inc., as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated
persons has acquired beneficial ownership of 20% or more of the
outstanding shares of Common Stock (thereby becoming an "Acquiring
Person") or (ii) 10 business days (or such later date as may be
determined by action of the Board of Directors prior to such time
as any person or group of affiliated persons becomes an Acquiring
Person) following the commencement of, or announcement of an
intention to make, a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by
a person or group of 20% or more of the outstanding shares of
Common Stock (the earlier of such dates being called the
"Distribution Date"), the Rights will be evidenced, with respect to
any of the Common Stock certificates outstanding as of the Record
Date, by such Common Stock certificate together with a copy of this
Summary of Rights.
The Rights Agreement provides that, until the Distribution
Date (or earlier redemption or expiration of the Rights), the
Rights will be transferred with and only with the Common Stock.
Until the Distribution Date (or earlier redemption or expiration of
the Rights), new Common Stock certificates issued after the Record
Date upon transfer or new issuances of Common Stock will contain a
notation incorporating the Rights Agreement by reference. Until
the Distribution Date (or earlier redemption or expiration of the
Rights), the surrender for transfer of any certificates for shares
of Common Stock outstanding as of the Record Date, even without
such notation or a copy of this Summary of Rights, will also
constitute the transfer of the Rights associated with the shares of
Common Stock represented by such certificate. As soon as
practicable following the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Stock as of the close of business
on the Distribution Date and such separate Right Certificates alone
will evidence the Rights. Rights will be issued with all shares of
Common Stock issued between the Record Date and the Distribution
Date.
The Rights are not exercisable until the Distribution Date.
The Rights will expire on January 9, 2006 (the "Final Expiration
Date"), unless the Final Expiration Date is extended or unless the
Rights are earlier redeemed or exchanged by the Company, in each
case as described below.
The Purchase Price payable, and the number of shares of
Preferred Stock or other securities or property issuable, upon
exercise of the Rights is subject to adjustment from time to time
to prevent dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Preferred
Stock, (ii) upon the grant to holders of the Preferred Stock of
certain rights or warrants to subscribe for or purchase Preferred
Stock at a price, or securities convertible into Preferred Stock
with a conversion price, less than the then-current market price of
the Preferred Stock or (iii) upon the distribution to holders of
the Preferred Stock of evidences of indebtedness or assets
(excluding regular periodic cash dividends or dividends payable in
Preferred Stock) or of subscription rights or warrants (other than
those referred to above).
The number of outstanding Rights is also subject to adjustment
in the event of a stock split of the Common Stock or a stock
dividend on the Common Stock payable in shares of Common Stock or
subdivisions, consolidations or combinations of the Common Stock
occurring, in any such case, prior to the Distribution Date.
Shares of Preferred Stock purchasable upon exercise of the
Rights will not be redeemable. Each share of Preferred Stock will
be entitled, when, as and if declared, to a minimum preferential
quarterly dividend payment of $1.00 per share but will be entitled
to an aggregate dividend of 100 times the dividend declared per
share of Common Stock. In the event of liquidation, the holders of
the Preferred Stock will be entitled to a minimum preferential
liquidation payment of $100.00 per share (plus any accrued but
unpaid dividends) but will be entitled to an aggregate payment of
100 times the payment made per share of Common Stock. Each share
of Preferred Stock will have 100 votes, voting together with the
Common Stock. In addition, the Preferred Stock will vote
separately as a class where required by law. These rights are
protected by customary antidilution provisions.
Because of the nature of the Preferred Stock's dividend,
liquidation and voting rights, the value of the one one-hundredth
interest in a share of Preferred Stock purchasable upon exercise of
each Right should approximate the value of one share of Common
Stock.
In the event that any person or group of affiliated or
associated persons becomes an Acquiring Person, each holder of a
Right, other than Rights beneficially owned by the Acquiring Person
(which will thereupon become void), will thereafter have the right
to receive upon exercise of a Right at the then-current exercise
price of the Right, that number of shares of Common Stock having a
market value of two times the exercise price of the Right.
In the event that, after a person or group has become an
Acquiring Person, the Company is acquired in a merger or other
business combination transaction or 50% or more of its consolidated
assets or earning power are sold, proper provisions will be made so
that each holder of a Right (other than Rights beneficially owned
by an Acquiring Person which will have become void) will thereafter
have the right to receive, upon the exercise thereof at the then-current
exercise price of the Right, that number of shares of common stock of the
person with whom the Company has engaged in the foregoing transaction
(or its parent) which at the time of such transaction will have a market
value of two times the exercise price of the Right.
At any time after any person or group becomes an Acquiring
Person and prior to the earlier of one of the events described in
the previous paragraph or the acquisition by such person or group
of 50% or more of the outstanding shares of Common Stock, the Board
of Directors of the Company may exchange the Rights (other than
Rights owned by such person or group which will have become void),
in whole or in part, for shares of Common Stock, or one one-hundredths of a
share of Preferred Stock (or shares of a class or series of the Company's
preferred stock having equivalent rights, preferences and privileges),
having a value per Right equal to the difference between the market value
of the shares of Common Stock receivable upon exercise of the Right and the
exercise price of the Right.
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an adjustment
of at least 1% in such Purchase Price. No fractional shares of
Preferred Stock will be issued (other than fractions which are
integral multiples of one one-hundredth of a share of Preferred
Stock, which may, at the election of the Company, be evidenced by
depositary receipts), and in lieu thereof an adjustment in cash
will be made based on the market price of the Preferred Stock on
the last trading day prior to the date of exercise.
At any time prior to the time an Acquiring Person has become
such, the Board of Directors of the Company may redeem the Rights
in whole, but not in part, at a price of $.01 per Right (the
"Redemption Price"). The redemption of the Rights may be made
effective at such time, on such basis and with such conditions as
the Board of Directors in its sole discretion may establish.
Immediately upon any redemption of the Rights, the right to
exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price.
For so long as the Rights are then redeemable, the Company
may, except with respect to the redemption price, amend the Rights
in any manner. After the Rights are no longer redeemable, the
Company may, except with respect to the redemption price, amend the
Rights in any manner that does not adversely affect the interests
of holders of the Rights.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a shareholder of the Company, including, without
limitation, the right to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Registration
Statement on Form 8-A dated January 11, 1996. A copy of the Rights
Agreement is available free of charge from the Company. This
summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights
Agreement, as the same may be amended from time to time, which is
hereby incorporated herein by reference.
