EXHIBIT 1
RIGHTS AGREEMENT
dated as of
November 18, 2002
between
AT&T COMCAST CORPORATION
and
EQUISERVE TRUST COMPANY, N.A.,
as Rights Agent
TABLE OF CONTENTS
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PAGE
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SECTION 1. Definitions.......................................................1
SECTION 2. Issuance of Rights and Right Certificates.........................6
SECTION 3. Form of Right Certificates........................................8
SECTION 4. Registration; Transfer and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates.........8
SECTION 5. Exercise of Rights................................................9
SECTION 6. Cancellation and Destruction of Right Certificates...............11
SECTION 7. Reservation and Availability of Capital Stock....................12
SECTION 8. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights...............................................13
SECTION 9. Certificate of Adjusted Purchase Price or Number of Shares.......22
SECTION 10. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power..................................................22
SECTION 11. Fractional Rights and Fractional Shares.........................24
SECTION 12. Rights of Action................................................26
SECTION 13. Agreement of Right Holders......................................26
SECTION 14. Right Certificate Holder Not Deemed a Stockholder...............27
SECTION 15. Appointment of the Rights Agent.................................27
SECTION 16. Merger or Consolidation or Change of Name of Rights
Agent.........................................................28
SECTION 17. Duties of the Rights Agent......................................28
SECTION 18. Change of Rights Agent..........................................31
SECTION 19. Redemption......................................................32
SECTION 20. Exchange........................................................32
SECTION 21. Notice of Proposed Actions......................................33
SECTION 22. Notices.........................................................34
SECTION 23. Supplements and Amendments......................................35
SECTION 24. Successors......................................................35
SECTION 25. Determinations and Actions by the Board, etc....................35
SECTION 26. Benefits of this Agreement......................................36
SECTION 27. Severability....................................................36
SECTION 28. Governing Law...................................................36
SECTION 29. Counterparts....................................................36
SECTION 30. Descriptive Headings............................................36
SECTION 31. Force Majeure...................................................37
Exhibit A - Form of Certificate of Designation of Preferred Stock
Exhibit B - Form of Right Certificate
RIGHTS AGREEMENT
AGREEMENT dated as of November 18, 2002 between AT&T Comcast Corporation,
a Pennsylvania corporation (the "Company"), and EquiServe Trust Company, N.A.,
as Rights Agent (the "Rights Agent").
W I T N E S S E T H
WHEREAS, on November 18, 2002, the Board of Directors of the Company
authorized and declared a dividend of one preferred stock purchase right (a
"Right") for each share of Common Stock (as defined below) outstanding at 3:40
p.m., New York City time, on November 18, 2002 (the "Record Date") and
authorized the issuance, upon the terms and subject to the conditions herein,
of one Right (subject to adjustment) in respect of each share of Common Stock
issued after the Record Date, each Right representing the right to purchase,
upon the terms and subject to the conditions herein, one one-thousandth
(subject to adjustment) of a share of Preferred Stock (as defined below);
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions. (a) The following terms, as used herein, have the
following meanings:
"Acquiring Person" means any Person who, together with all Affiliates and
Associates of such Person, is the Beneficial Owner after the Effective Time (as
defined in the Agreement and Plan of Merger dated as of December 19, 2001, as
amended, among the Company, Comcast Corporation, AT&T Corp. and the other
parties signatory thereto) of the Specified Percentage; provided that
"Acquiring Person" shall not include:
(i) an Exempt Person;
(ii) any Person that the Board determines in good faith became the
Beneficial Owner of the Specified Percentage inadvertently (including,
without limitation, because such Person was unaware that it Beneficially
Owned the Specified Percentage or because 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, unless such Person fails to divest itself, as soon as
practicable (as determined in good faith by the Board), of Beneficial
Ownership of a sufficient number of shares of Common Stock so that such
Person would own less than the Specified Percentage; or
(iii) any Person that, as the result of an acquisition of shares of
Common Stock by the Company that, by reducing the number of shares of
Common Stock outstanding, increases the percentage of voting power
represented by all of the shares of Common Stock Beneficially Owned by
such Person to the Specified Percentage; provided, however, that if such
Person shall thereafter become the Beneficial Owner of any additional
shares of Common Stock (other than pursuant to a dividend or distribution
paid or made by the Company on the outstanding Common Stock or pursuant to
a split or subdivision of the outstanding Common Stock), then such Person
shall be deemed to be an "Acquiring Person" unless upon becoming the
Beneficial Owner of such additional shares of Common Stock such Person
does not Beneficially Own the Specified Percentage.
"Affiliate" has the meaning ascribed to such term in Rule 12b-2 under the
Exchange Act as in effect on the date hereof.
"Associate" has the meaning ascribed to such term in Rule 12b-2 of the
Exchange Act as in effect on the date hereof.
A Person shall be deemed the "Beneficial Owner" of, and shall be deemed to
have "Beneficial Ownership" of and to "Beneficially Own", any securities:
(i) which such Person or any of its Affiliates or Associates,
directly or indirectly, beneficially owns (as determined pursuant to Rule
13d-3 under the Exchange Act as in effect on the date hereof);
(ii) which such Person or any of its Affiliates or Associates,
directly or indirectly, has
(A) the right to acquire (whether such right is exercisable
immediately or only upon the occurrence of certain events or the
passage of time or both) 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 such securities); provided that a Person shall not
be deemed the "Beneficial Owner" of or to "Beneficially Own", (1)
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
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or exchange, (2) securities that 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 (3) 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 8(i) or 8(p); or
(B) the right to vote (whether such right is exercisable
immediately or only upon the occurrence of certain events or the
passage of time or both) pursuant to any agreement, arrangement or
understanding; provided that a Person shall not be deemed the
"Beneficial Owner" of or to "Beneficially Own" any security under
this clause (B) as a result of an agreement, arrangement or
understanding to vote such security if such agreement, arrangement or
understanding (1) arises solely from a revocable proxy or consent
given in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and
regulations under the Exchange Act and (2) is not also then
reportable by such Person 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 (or any Affiliate or Associate thereof) and with respect to
which the Person or any of its 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 such securities) for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy or consent as described in
clause (ii)(B) immediately above) or disposing of any such securities;
provided, however, that no Person who is an officer, director or employee of an
Exempt Person shall be deemed, solely by reason of such position, to be the
"Beneficial Owner" of, to have "Beneficial Ownership" of or to "Beneficially
Own" any securities that are "Beneficially Owned", including, without
limitation, in a fiduciary capacity, by an Exempt Person or by any other such
officer, director or employee of an Exempt Person.
"Board" means the Board of Directors of the Company.
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"Business Day" means any day other than a Saturday, 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.
"Class A Common Stock" means the Class A common stock, par value $0.01 per
share, of the Company.
"Class A Special Common Stock" means the Class A Special common stock, par
value $0.01 per share, of the Company.
"Class B Common Stock" means the Class B common stock, par value $0.01 per
share, of the Company.
"close of business" on any given date means 5:00 p.m., New York City time,
on such date; provided that if such date is not a Business Day "close of
business" means 5:00 p.m., New York City time, on the next succeeding Business
Day.
"Common Stock" means each of the Class A Common Stock, the Class A Special
Common Stock and the Class B Common Stock, except that, when used with
reference to any Person other than the Company, "Common Stock" means the equity
securities or other equity interest having power to control or direct the
management of such Person.
"Distribution Date" means the earlier of (i) the close of business on the
tenth day after the Stock Acquisition Date and (ii) the close of business on
the tenth Business Day (or such later day as may be designated prior to the
occurrence of a Section 8(a)(ii) Event by action of the Board) after the date
of the commencement of a tender or exchange offer by any Person if, upon
consummation thereof, such Person would be an Acquiring Person.
"Exempt Person" means (i) the Company or any Subsidiary of the Company
(including, without limitation, in any fiduciary capacity), (ii) 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 other benefits for employees of
the Company or of any Subsidiary of the Company, (iii) any holder of Class B
Common Stock or any of such holder's Affiliates or Associates or (iv) any
Person who would not be an Acquiring Person except as a result of the direct or
indirect attribution of ownership of shares of Class B Common Stock to such
Person or such Person's Affiliates or Associates pursuant to the terms hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
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"Expiration Date" means the earlier of (i) the Final Expiration Date and
(ii) the time at which all Rights are redeemed as provided in Section 19 or
exchanged as provided in Section 20.
"Final Expiration Date" means the close of business on November 18, 2012.
"Person" means an individual, entity or organization.
"Preferred Stock" means the Series A Participating Cumulative Preferred
Stock, par value $0.01 per share, of the Company, having the terms set forth in
the form of certificate of designation attached hereto as Exhibit A.
"Purchase Price" means the price (subject to adjustment as provided
herein) at which a holder of a Right may purchase one one-thousandth of a share
of Preferred Stock (subject to adjustment as provided herein) upon exercise of
a Right, which price shall initially be $125.
"Securities Act" means the Securities Act of 1933, as amended.
"Specified Percentage" means shares of Common Stock representing 10% or
more of the voting power represented by all of the outstanding shares of Common
Stock.
"Stock Acquisition Date" means the date of the first public announcement
(including the filing of a report on Schedule 13D under the Exchange Act (or
any comparable or successor report)) by the Company or an Acquiring Person
indicating that an Acquiring Person has become such.
"Subsidiary" of any Person means any other Person of which securities or
other ownership interests having ordinary voting power, in the absence of
contingencies, to elect a majority of the board of directors or other Persons
performing similar functions are at the time directly or indirectly owned by
such first Person.
"Trading Day" means a day on which the principal national securities
exchange or interdealer quotation system on which the shares of Class A Common
Stock and Class A Special Common Stock are listed or admitted to trading is
open for the transaction of business or, if the shares of Class A Common Stock
and Class A Special Common Stock are not listed or admitted to trading on any
national securities exchange or interdealer quotation system, a Business Day.
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(b) Each of the following terms is defined in the Section set forth
opposite such term:
Term Section
---- -------
Adjustment Shares 8
Company Preamble
equivalent preferred stock 8
Exchange Ratio 20
Principal Party 10
Record Date Recitals
Redemption Price 19
Right Recitals
Rights Agent Preamble
Right Certificate 3
Section 8(a)(ii) Event 8
Section 10 Event 10
Substitution Period 8
SECTION 2. Issuance of Rights and Right Certificates.
(a) Certificates for the Common Stock issued after the Record Date but
prior to the earlier of the Distribution Date and the Expiration Date shall
have printed or 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 the 2002 Rights Agreement between AT&T Comcast
Corporation (the "Corporation") and the Rights Agent thereunder (the
"Rights Agreement"; capitalized terms used but not defined in this
paragraph have the meanings ascribed to them in the Rights Agreement), the
terms of which are hereby incorporated herein by reference and a copy of
which is on file at the principal offices of the Corporation. 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. Under certain circumstances set forth in the Rights
Agreement, Rights issued to, or held by, any Person who is, was or becomes
an Acquiring Person or any Affiliate or Associate thereof, whether
currently held by or on behalf of such Person or by any subsequent holder,
may become null and void.
(b) Prior to the Distribution Date, (i) the Rights will be evidenced by
the certificates for the Common Stock and not by separate Right Certificates
(as hereinafter defined) and the registered holders of the Common Stock shall
be deemed to be the registered holders of the associated Rights, and (ii) the
Rights
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will be transferable only in connection with the transfer of the underlying
shares of Common Stock.
(c) From and after the Distribution Date, the Rights will be evidenced
solely by separate Right Certificates and will be transferable only in
connection with the transfer of the Right Certificates pursuant to Section 4.
As soon as practicable after the Company has notified the Rights Agent of the
occurrence of the Distribution Date, the Rights Agent will send, by
first-class, insured, postage prepaid mail, to each record holder of the Common
Stock as of the close of business on the Distribution Date (other than any
Acquiring Person or any Affiliate or Associate thereof), at the address of such
holder shown on the records of the Company, one or more Right Certificates
evidencing one Right (subject to adjustment as provided herein) for each share
of Common Stock so held. If an adjustment in the number of Rights per share of
Common Stock has been made pursuant to Section 8, the Company shall, at the
time of distribution of the Right Certificates, make the necessary and
appropriate rounding adjustments (in accordance with Section 11(a)) so that
Right Certificates representing only whole numbers of Rights are distributed
and cash is paid in lieu of any fractional Rights.
(d) Rights shall be issued in respect of all shares of Common Stock
outstanding as of the Record Date or issued (on original issuance or out of
treasury) after the Record Date but prior to the earlier of the Distribution
Date and the Expiration Date. In addition, in connection with the issuance or
sale of shares of Common Stock following the Distribution Date and prior to the
Expiration Date, the Company (i) shall, with respect to shares of Common Stock
so issued or sold (A) pursuant to the exercise of stock options or under any
employee plan or arrangement or (B) upon the exercise, conversion or exchange
of other securities issued by the Company prior to the Distribution Date, and
(ii) may, in any other case, if deemed appropriate by the Board, issue Right
Certificates representing the appropriate number of Rights in connection with
such issuance or sale; provided that no such Right Certificate shall be issued
if, and to the extent that, (i) the Company is advised by counsel that such
issuance would create a significant risk of material adverse tax consequences
to the Company or the Person to whom such Right Certificate would be issued or
(ii) appropriate adjustment shall otherwise have been made in lieu of the
issuance thereof.
(e) Notwithstanding anything to the contrary contained herein, shares of
Common Stock and Rights (and any securities issuable upon their exercise) may
be issued and transferred by book-entry and not represented by physical
certificates. Where shares of Common Stock and Rights (and any securities
issuable upon their exercise) are held in uncertificated form, the Company and
the Rights Agent shall cooperate in all respects to give effect to the intent
of the provisions contained herein.
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SECTION 3. Form of Right Certificates. (a) The certificates evidencing the
Rights (and the forms of assignment, election to purchase and certificates to
be printed on the reverse thereof) (the "Right Certificates") shall be
substantially in the form of 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, rule or regulation 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 to conform to usage. The Right Certificates, whenever
distributed, shall be dated as of the Record Date.
(b) The Right Certificates shall be executed on behalf of the Company by
its Chief Executive Officer, its President or any Vice President, either
manually or by facsimile signature, and shall have affixed thereto the
Company's seal or a facsimile thereof which shall be attested by the Secretary
or an Assistant 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 so countersigned. In case
any officer of the Company whose manual or facsimile signature is affixed to
the Right Certificates ceases to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates may, nevertheless, be countersigned by the Rights Agent
and issued and delivered with the same force and effect as though the Person
who signed such Right Certificates had not ceased to be such officer of the
Company. 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, is a
proper officer of the Company to sign such Right Certificate, although at the
date of the execution of this Rights Agreement any such Person was not such an
officer.
(c) 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 form as may be approved by its Board to
reflect any adjustment or change in the Purchase Price and the number or kind
or class of shares of stock issuable upon exercise of the Rights made in
accordance with the provisions of this Agreement.
SECTION 4. Registration; Transfer and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates. (a) Following the
Distribution Date, the Rights Agent shall keep or cause to be kept, at its
principal office or offices designated as the place for surrender of Right
Certificates upon exercise, transfer or exchange, books for registration and
transfer of the Right
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Certificates. Such books shall show with respect to each Right Certificate the
name and address of the registered holder thereof, the number of Rights
indicated on the certificate and the certificate number.
(b) At any time after the Distribution Date and prior to the Expiration
Date, any Right Certificate or Certificates may, upon the terms and subject to
the conditions set forth in this Agreement, be transferred or exchanged for
another Right Certificate or Certificates evidencing a like number of Rights as
the Right Certificate or Certificates surrendered. Any registered holder
desiring to transfer or exchange any Right Certificate or Certificates shall
surrender such Right Certificate or Certificates (with, in the case of a
transfer, the form of assignment and certificate on the reverse side thereof
duly executed) to the Rights Agent at the principal office or offices of the
Rights Agent designated for such purpose. Neither the Rights Agent nor the
Company shall be obligated to take any action whatsoever with respect to the
transfer of any such surrendered Right Certificate or Certificates until the
registered holder of the Rights has complied with the requirements of Section
5(f). Upon satisfaction of the foregoing requirements, the Rights Agent shall,
subject to Sections 5(e), 5(f), 7(e), 11 and 20, countersign and deliver to the
Person entitled thereto a Right Certificate or Certificates as so requested.
The Company may require payment of a sum sufficient to cover any transfer tax
or other governmental charge that may be imposed in connection with any
transfer or exchange of any Right Certificate or Certificates.
(c) 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 issue and
deliver a new Right Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
SECTION 5. Exercise of Rights. (a) The registered holder of any Right
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein, including Sections 5(e), 5(f), 7(c), and 8(a)) in whole or in
part at any time after the Distribution Date and prior to the Expiration Date
upon surrender of the Right Certificate, with the form of election to purchase
and the certificate on the reverse side thereof duly executed, to the Rights
Agent at the principal office or offices of the Rights Agent designated for
such purpose, together with payment (in lawful money of the United States of
America by certified check or bank draft payable in immediately available or
next day funds to the order of the Company) of the aggregate Purchase Price
with respect to the
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Rights then to be exercised and an amount equal to any applicable transfer tax
or other governmental charge.
(b) Upon satisfaction of the requirements of Section 5(a) and subject to
Section 17(k), the Rights Agent shall thereupon promptly (i) (A) requisition
from any transfer agent of the Preferred Stock (or make available, if the
Rights Agent is the transfer agent therefor) certificates for the total number
of one one-thousandths of a share of Preferred Stock to be purchased (and the
Company hereby irrevocably authorizes its transfer agent to comply with all
such requests) or (B) if the Company shall have elected to deposit the shares
of Preferred Stock issuable upon exercise of the Rights with a depositary
agent, requisition from the depositary agent depositary receipts representing
interests in such number of one one-thousandths of a share of Preferred Stock
to be purchased (in which case certificates for the shares of Preferred Stock
represented by such receipts shall be deposited by the transfer agent with the
depositary agent and the Company will direct the depositary agent to comply
with such request), (ii) requisition from the Company the amount of cash, if
any, to be paid in lieu of issuance of fractional shares in accordance with
Section 11 and (iii) after receipt of such certificates or depositary receipts
and cash, if any, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate (with such certificates or receipts
registered in such name or names as may be designated by such holder). If the
Company is obligated to deliver Common Stock or other securities or assets
pursuant to this Agreement, the Company will make all arrangements necessary so
that such securities and assets are available for delivery by the Rights Agent,
if and when appropriate.
(c) Each Person (other than the Company) 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 such 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 transfer taxes or other governmental charges) was made;
provided that if the date of such surrender and payment is a date upon which
the transfer books of the Company relating to the Preferred Stock 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 applicable 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 stockholder of the Company with respect to shares
for which the Rights shall be exercisable, including the right to vote, to
receive dividends or other distributions or to exercise any preemptive rights,
and shall not be entitled to receive any notice of any proceedings of the
Company except as provided herein.
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(d) In case the registered holder of any Right Certificate shall exercise
less than all the Rights evidenced thereby, a new Right Certificate evidencing
the number of Rights remaining unexercised shall be issued by the Rights Agent
and 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, subject to the provisions of Section 11.
(e) Notwithstanding anything in this Agreement to the contrary, from and
after the first occurrence of a Section 8(a)(ii) Event, any Rights Beneficially
Owned by (i) an Acquiring Person or an Associate or Affiliate of an Acquiring
Person or (ii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate of an Acquiring Person) who (A) becomes a transferee after a Section
8(a)(ii) Event or (B) becomes a transferee prior to or concurrently with a
Section 8(a)(ii) Event and receives such Rights pursuant to either (1) a
transfer (whether or not for consideration) from the Acquiring Person (or any
such Associate or Affiliate) to holders of equity interests in such Acquiring
Person (or in any such Associate or Affiliate) or to any Person with whom the
Acquiring Person (or any such Associate or Affiliate) has any continuing
agreement, arrangement or understanding regarding the transferred Rights or (2)
a transfer which the Board has determined in good faith is part of a plan,
arrangement or understanding which has as a primary purpose or effect the
avoidance of this Section 5(e), shall become null and void without any further
action, and no holder of such Rights shall have any rights whatsoever with
respect to such Rights, whether under this Agreement or otherwise. The Company
shall use all reasonable efforts to insure that the provisions of this Section
5(e) 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 and
Associates or any transferee of any of them hereunder.
(f) 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 any purported transfer pursuant to Section 4 or exercise
pursuant to this Section 5 unless the registered holder of the applicable
Rights (i) shall have completed and signed the certificate contained in the
form of assignment or election to purchase, as the case may be, set forth on
the reverse side of the Right Certificate surrendered for such transfer or
exercise, as the case may be, (ii) shall not have indicated an affirmative
response to clause 1 or 2 thereof and (iii) shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner)
or Affiliates or Associates thereof as the Company shall reasonably request.
SECTION 6. Cancellation and Destruction of Right Certificates. All Right
Certificates surrendered for exercise, transfer or exchange shall, if
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surrendered to the Company or to any of its agents, be delivered to the Rights
Agent 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 this Agreement. The Company shall deliver to
the Rights Agent for cancellation, and the Rights Agent shall cancel, 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 7. Reservation and Availability of Capital Stock. (a) The Company
covenants and agrees that it will cause to be reserved and kept available a
number of authorized but not outstanding shares of Preferred Stock sufficient
to permit the exercise in full of all outstanding Rights as provided in this
Agreement.
(b) So long as the Preferred Stock issuable upon the exercise of Rights
may be listed on any national securities exchange or interdealer quotation
system, the Company shall use its best efforts to cause, from and after such
time as the Rights become exercisable, all securities reserved for such
issuance to be listed on any such exchange upon official notice of issuance
upon such exercise.
(c) The Company shall use its best efforts (i) to file, as soon as
practicable following the earliest date after the occurrence of a Section
8(a)(ii) Event and determination of the consideration to be delivered by the
Company upon exercise of the Rights in accordance with Section 8(a)(iii), or as
soon as is required by law following the Distribution Date, as the case may be,
a registration statement under the Securities Act with respect to the
securities issuable upon exercise of the Rights, (ii) to cause such
registration statement to become effective as soon as practicable after such
filing and (iii) to cause such registration statement to remain effective (with
a prospectus at all times meeting the requirements of the Securities Act) until
the earlier of (A) the date as of which the Rights are no longer exercisable
for such securities and (B) the Expiration Date. The Company shall also take
such action as may be appropriate to ensure compliance with the securities or
blue sky laws of the various states in connection with the exercisability of
the Rights. The Company may temporarily suspend, for a period of time not to
exceed 90 days after the date set forth in Section 7(c)(i), the exercisability
of the Rights in order to prepare and file such registration statement 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 when the
suspension is no longer in effect. Notwithstanding anything contained in this
Agreement to the contrary, the Rights shall not be exercisable for securities
in any
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jurisdiction if the requisite qualification in such jurisdiction has not been
obtained, such exercise is not permitted under applicable law or a registration
statement in respect of such securities has not been declared effective.
(d) The Company shall take all such action as may be necessary to ensure
that all one one-thousandths of a share of Preferred Stock issuable upon
exercise of Rights shall, at the time of delivery of the certificates for such
securities (subject to payment of the Purchase Price), be duly authorized,
validly issued, fully paid and nonassessable.
(e) The Company shall pay when due and payable any and all federal and
state transfer taxes and other governmental charges which may be payable in
respect of the issuance or delivery of the Right Certificates and of any
certificates for Preferred Stock upon the exercise of Rights. The Company shall
not, however, be required to pay any transfer tax or other governmental charge
which may be payable in respect of any transfer involved in the issuance or
delivery of any Right Certificates or any certificates for Preferred Stock to a
Person other than the registered holder of the applicable Right Certificate.
Prior to any such issuance or delivery of any Right Certificates or any
certificates for Preferred Stock, any such transfer tax or other governmental
charge shall have been paid by the holder of such Right Certificate or it shall
have been established to the Company's satisfaction that no such tax or other
governmental charge is due.
SECTION 8. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. (a) (i) If the Company at any time after the date of this
Agreement (A) pays a dividend on the Preferred Stock in shares of Preferred
Stock, (B) subdivides the outstanding Preferred Stock into a greater number of
shares, (C) combines the outstanding Preferred Stock into a smaller number of
shares or (D) issues any shares of its capital stock in a reclassification of
the Preferred Stock (including any such reclassification in connection with a
consolidation or merger involving the Company), the Purchase Price in effect
immediately prior to the record date for such dividend or the effective date of
such subdivision, combination or reclassification, and the number and kind of
shares of Preferred Stock or other capital stock issuable on such date, shall
be proportionately adjusted so that each holder of a Right shall (except as
otherwise provided herein, including Section 5(e)) thereafter be entitled to
receive, upon exercise of such Right at the Purchase Price in effect
immediately prior to such date, the aggregate number and kind of shares of
Preferred Stock or other capital stock, as the case may be, which such holder
would have been entitled to receive upon such exercise and by virtue of such
dividend, subdivision, combination or reclassification as if such Right had
been exercised immediately prior to the record date for such dividend or the
effective date of such subdivision, combination or reclassification. If an
event occurs which requires an adjustment
13
under both this Section 8(a)(i) and Section 8(a)(ii), the adjustment provided
for in this Section 8(a)(i) shall be made prior to, and in addition to, any
adjustment required pursuant to Section 8(a)(ii).
(ii) If any Person, alone or together with its Affiliates and
Associates, becomes, at any time after the date of this Agreement, an
Acquiring Person (a "Section 8(a)(ii) Event"), then each holder of a Right
shall (except as otherwise provided herein, including Section 5(e))
thereafter be entitled to receive, upon exercise thereof at the Purchase
Price in effect immediately prior to the first occurrence of a Section
8(a)(ii) Event, in lieu of Preferred Stock, such number of duly
authorized, validly issued, fully paid and nonassessable shares of Class A
Common Stock (such shares being referred to herein as the "Adjustment
Shares") equal to the result obtained by dividing
(x) the product obtained by multiplying the Purchase Price in
effect immediately prior to the first occurrence of a Section
8(a)(ii) Event by the number of one one-thousandths of a share of
Preferred Stock for which a Right was exercisable immediately prior
to such first occurrence (such product thereafter referred to as the
"Purchase Price" for each Right) by
(y) 50% of the current market price per share of Class A Common
Stock (determined pursuant to Section 8(d)(i)) on the date of such
first occurrence;
provided, however, that the Purchase Price (as so adjusted pursuant to the
foregoing clause (ii)(x)) and the number of Adjustment Shares so
receivable upon exercise of a Right shall be subject to further adjustment
as appropriate in accordance with Section 8(f). From and after the
occurrence of a Section 10 Event, any Rights that have not theretofore
been exercised pursuant to this Section 8(a)(ii) shall thereafter be
exercisable only in accordance with Section 10 and not pursuant to this
Section 8(a)(ii).
(iii) If the number of shares of Class A Common Stock which are
authorized by the Company's articles of incorporation but not outstanding
or reserved for issuance other than upon exercise of the Rights is not
sufficient to permit the exercise in full of the Rights in accordance with
Section 8(a)(ii), the Company shall, with respect to each Right, make
adequate provision to substitute for the Adjustment Shares, upon payment
of the Purchase Price then in effect, (A) (to the extent available) Class
A Common Stock, then (B) (to the extent available) such number of one
14
one-thousandths of a share of Preferred Stock as are then equivalent in
value to the value of the Adjustment Shares and then, (C) other equity or
debt securities of the Company, cash or other assets, a reduction in the
Purchase Price or any combination of the foregoing, having an aggregate
value (as determined in good faith by the Board based upon the advice of a
nationally recognized investment banking firm) equal to the value of the
Adjustment Shares; provided that (1) the Company may, and (2) if the
Company shall not have made adequate provision as required above to
deliver value within 30 days following the first occurrence of a Section
8(a)(ii) Event (the "Substitution Period"), then the Company shall be
obligated to, deliver upon the surrender for exercise of a Right and
without requiring payment of the Purchase Price, (x) (to the extent
available) Class A Common Stock, then (y) (to the extent available)
one-thousandths of a share of Preferred Stock and then, (z) other equity
or debt securities of the Company, cash or other assets or any combination
of the foregoing, having an aggregate value (as determined in good faith
by the Board based upon the advice of a nationally recognized investment
banking firm) equal to the excess of the value of the Adjustment Shares
over the Purchase Price. To the extent that the Company determines that
some action is to be taken pursuant to the preceding sentence, the Company
(A) shall provide, subject to Section 5(e), that such action shall apply
uniformly to all outstanding Rights and (B) may suspend the exercisability
of the Rights until the expiration of the Substitution Period in order to
decide the appropriate form and value of any consideration to be delivered
as referred to in such sentence. If any such suspension occurs, 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 8(a)(iii), the value of the Class A Common Stock
shall be the current market price per share of Class A Common Stock (as
determined pursuant to Section 8(d)(i)) on the date of the first
occurrence of a Section 8(a)(ii) Event; any common stock equivalent shall
be deemed to have the same value as the Class A Common Stock on such date;
and the value of other securities or assets shall be determined pursuant
to Section 8(d)(iii).
(b) If the Company fixes a record date for the issuance of rights, options
or warrants to all holders of Preferred Stock entitling them to subscribe for
or purchase (for a period expiring within 45 calendar days after such record
date) Preferred Stock (or securities having the same rights, privileges and
preferences as the shares of Preferred Stock ("equivalent preferred stock")) or
securities convertible into or exercisable for Preferred Stock (or equivalent
preferred stock) at a price per share of Preferred Stock (or equivalent
preferred stock) (in each case, taking account of any conversion or exercise
price) less than the current
15
market price per share of Preferred Stock (as determined pursuant to Section
8(d)(ii)), then 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 date by a fraction, the numerator of which
shall be the sum of (i) the number of shares of Preferred Stock outstanding on
such record date plus (ii) the number of shares of Preferred Stock which the
aggregate price (taking account of any conversion or exercise price) of the
total number of shares of Preferred Stock (and/or equivalent preferred stock)
so to be offered would purchase at such current market price and the
denominator of which shall be the sum of (i) number of shares of Preferred
Stock outstanding on such record date plus (ii) the number of additional shares
of Preferred Stock (and/or equivalent preferred stock) so to be offered. If
such subscription price may be paid by delivery of consideration part or all of
which will be in a form other than cash, the value of such consideration shall
be as determined in good faith by the Board, whose determination shall be
described in a statement filed with the Rights Agent and shall be conclusive
for all purposes. Shares of Preferred Stock 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 if 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) If the Company fixes a record date for the making of a distribution to
all holders of Preferred Stock (including any such distribution in connection
with a consolidation or merger involving the Company) of evidences of
indebtedness, equity securities other than Preferred Stock, assets (other than
a regular periodic cash dividend out of the earnings or retained earnings of
the Company) or rights, options or warrants (excluding those referred to in
Section 8(b)), 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 current
market price per share of Preferred Stock (as determined pursuant to Section
8(d)(ii)) on such record date, less the value (as determined pursuant to
Section 8(d)(iii)) of such evidences of indebtedness, equity securities,
assets, rights, options or warrants so to be distributed with respect to one
share of Preferred Stock and the denominator of which shall be such current
market price per share of Preferred Stock. Such adjustment shall be made
successively whenever such a record date is fixed, and if such distribution is
not so made, 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.
(d) (i) For purposes of computations hereunder other than computations
made pursuant to Sections 8(a)(iii) or 11, the "current market price" per share
of Class A Common Stock on any date shall be the average of the daily closing
16
prices per share of Class A Common Stock at the close of the regular session of
trading for the 30 Trading Days immediately prior to such date; for purposes of
computations made pursuant to Section 8(a)(iii), the "current market price" per
share of Class A Common Stock on any date shall be deemed to be the average of
the daily closing prices per share of Class A Common Stock at the close of the
regular session of trading for the 10 Trading Days immediately following such
date; and for purposes of computations made pursuant to Section 11, the
"current market price" per share of Class A Common Stock for any Trading Day
shall be the closing price per share of Class A Common Stock at the close of
the regular session of trading for such Trading Day; provided that if the
current market price per share of the Class A Common Stock is determined during
a period that is in whole or in part following the announcement by the issuer
of the Class A Common Stock of (A) a dividend or distribution on Class A Common
Stock payable in shares of Class A Common Stock or securities exercisable for
or convertible into shares of Class A Common Stock (other than the Rights), or
(B) any subdivision, combination or reclassification of Class A Common Stock,
and prior to 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 market price" shall be properly adjusted to take
into account ex-dividend trading. The closing price for each day shall be the
last sale price, regular way, at the close of the regular session of trading
or, if 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 at the close of the regular session
of trading with respect to securities listed or admitted to trading on the New
York Stock Exchange or, if the shares of Class A Common Stock are not listed or
admitted to trading on the New York Stock Exchange, on the principal national
securities exchange or interdealer quotation system on which the shares of
Class A Common Stock are listed or admitted to trading or, if the shares of
Class A Common Stock are not listed or admitted to trading on any national
securities exchange or interdealer quotation system, 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 the National Association of Securities
Dealers, Inc. Automated Quotation System or such other system then in use or,
if on any such date the shares of Class A Common Stock 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 Class A Common Stock
selected by the Board (in each case prices which are not identified as having
been reported late to such system). If on any such date, no market maker is
making a market in the Class A Common Stock or the Class A Common Stock is not
publicly held or not so listed or traded, the "current market value" of such
shares on such date shall be as determined in good faith by the Board (or, if
at the time of such determination there is an Acquiring Person, by a nationally
recognized investment banking firm selected by the Board) which determination
shall be
17
described in a statement filed with the Rights Agent and shall be conclusive
for all purposes.
(ii) For the purpose of any computation hereunder, the "current
market price" per share of Preferred Stock shall be determined in the same
manner as set forth above for the Class A Common Stock in Section 8(d)(i)
(other than the last sentence thereof). If the current market price per
share of Preferred Stock cannot be determined in such manner, the "current
market price" per share of Preferred Stock shall be conclusively deemed to
be an amount equal to 1000 (as such number may be appropriately adjusted
for such events as stock splits, stock dividends and recapitalizations
with respect to the Common Stock occurring after the date of this
Agreement) multiplied by the current market price per share of Class A
Common Stock (as determined pursuant to Section 8(d)(i)). For all purposes
of this Agreement, the "current market price" of one one-thousandth of a
share of Preferred Stock shall be equal to the "current market price" of
one share of Preferred Stock divided by 1000.
(iii) For the purpose of any computation hereunder, the value of any
securities or assets other than Class A Common Stock or Preferred Stock
shall be the fair value as determined in good faith by the Board, or, if
at the time of such determination there is an Acquiring Person, by a
nationally recognized investment banking firm selected by the Board, which
determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes.
(e) Notwithstanding any provision of this Agreement to the contrary, 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
that any adjustments which by reason of this Section 8(e) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 8 shall be made to the nearest
cent or to the nearest ten-thousandth of a share of Class A Common Stock or
other share or one-ten- millionth of a share of Preferred Stock, as the case
may be.
(f) If at any time, as a result of an adjustment made pursuant to Section
8(a)(ii) or Section 10(a), the holder of any Right is entitled to receive upon
exercise of such Right any shares of capital stock other than Preferred Stock,
thereafter the number of such other shares so receivable upon exercise of any
Right and the Purchase Price thereof 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 Section 8, and the
provisions of
18
Sections 5, 7, 10 and 11 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 hereunder shall evidence the right to purchase, at the Purchase
Price then in effect, the then applicable number of one one-thousandths of a
share of Preferred Stock and other capital stock issuable from time to time
hereunder upon exercise of the Rights, all subject to further adjustment as
provided herein.
(h) Unless the Company has exercised its election as provided in Section
8(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 8(b) and 8(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-thousandths of
a share of Preferred Stock (calculated to the nearest one-ten-millionth)
obtained by (i) multiplying (x) the number of one one-thousandths of a share of
Preferred Stock for which a Right was exercisable immediately prior to this
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 to adjust the number of Rights, in lieu of any adjustment in the
number of one one-thousandths of a share of Preferred Stock issuable upon the
exercise of a Right. Each of the Rights outstanding after such adjustment of
the number of Rights shall be exercisable for the number of one one-thousandths
of a share of Preferred Stock for which such 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 ten-thousandth) 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 8(i), the Company
shall, as promptly as practicable, cause to be distributed to holders of record
of Right Certificates on such record date Right Certificates evidencing,
subject to Section 11, 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
19
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 may bear, at the option of the Company,
the adjusted Purchase Price) 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-thousandths 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 per one one-thousandth of a
share and the number of shares 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 par value, if any, of the number of one
one-thousandths of a share of Preferred 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 such number of one one-thousandths of a
share of Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 8 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
issuance to the holder of any Right exercised after such record date the number
of one one-thousandths of a share of Preferred Stock or other capital stock, if
any, issuable upon such exercise over and above the number of one
one-thousandths of a share of Preferred Stock or other capital stock, if any,
issuable upon such exercise on the basis of the Purchase Price in effect prior
to such adjustment; provided that the Company shall deliver to such holder a
due xxxx or other appropriate instrument evidencing such holder's right to
receive such additional shares upon the occurrence of the event requiring such
adjustment.
(m) Notwithstanding anything in this Section 8 to the contrary, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 8, as and to
the extent that it, in its sole discretion, determines to be advisable so that
any consolidation or subdivision of the Preferred Stock, issuance wholly for
cash of any Preferred Stock at less than the current market price, issuance
wholly for cash of any Preferred Stock or securities which by their terms are
convertible into or
20
exercisable for Preferred Stock, stock dividends or issuance of rights, options
or warrants referred to in this Section 8 hereafter made by the Company to the
holders of its Preferred Stock, shall not be taxable to such stockholders.
(n) The Company shall not at any time after the Distribution Date (i)
consolidate, merge or otherwise combine with, or (ii) sell or otherwise
transfer (or permit any of its Subsidiaries to sell or otherwise transfer),
directly or indirectly in one transaction or a series of related transactions,
assets or earning power aggregating more than 50% of the assets or earning
power of the Company and its Subsidiaries, taken as a whole, to, any other
Person or Persons if (x) at the time of or immediately after such
consolidation, merger, combination, sale or transfer there are any rights,
warrants or other instruments or securities outstanding or any agreements or
arrangements in effect which would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights or (y) prior to,
simultaneously with or immediately after such consolidation, merger,
combination, sale or transfer, the stockholders of a Person who constitutes, or
would constitute, the "Principal Party" for the purposes of Section 10 shall
have received a distribution of Rights previously owned by such Person or any
of its Affiliates and Associates.
(o) The Company agrees that after the Distribution Date, it will not,
except as permitted by Sections 19, 20 or 23, 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 substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights.
(p) Notwithstanding anything in this Agreement to the contrary, if at any
time after the date hereof and prior to the Distribution Date the Company (i)
pays a dividend on the outstanding shares of Common Stock in shares of Common
Stock, (ii) subdivides the outstanding Common Stock into a larger number of
shares or (iii) combines the outstanding Common Stock into a smaller number of
shares, the number of Rights associated with each share of Common Stock then
outstanding, or issued or delivered thereafter as contemplated by Section 2,
shall be proportionately adjusted so that the number of Rights thereafter
associated with each share of Common Stock following any such event equals the
product 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.
21
SECTION 9. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 8 or 10, the Company
shall (a) promptly prepare a certificate setting forth such adjustment and a
brief statement of the facts accounting for such adjustment, (b) promptly file
with the Rights Agent and with each transfer agent for the Preferred Stock and
the Common Stock a copy of such certificate and (c) mail a brief summary
thereof to each holder of a Right Certificate (or, if prior to the Distribution
Date, to each holder of a certificate representing shares of Common Stock) in
the manner set forth in Section 22. The Rights Agent shall be fully protected
in relying on any such certificate and on any adjustment therein contained.
SECTION 10. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power. (a) If, following the occurrence of a Section 8(a)(ii) Event, directly
or indirectly,
(x) the Company consolidates with, merges into or otherwise combines
with, any Acquiring Person or any Affiliate or Associate of an Acquiring
Person, and the Company is not the continuing or surviving corporation of
such consolidation, merger or combination;
(y) any Acquiring Person or any Affiliate or Associate of an
Acquiring Person merges into, or otherwise combines with, the Company, and
the Company is the continuing or surviving corporation of such merger or
combination and, in connection with such merger or combination, all or
part of the outstanding shares of Common Stock is changed into or
exchanged for other stock or securities of the Company or of any Acquiring
Person or any Affiliate or Associate of an Acquiring Person, cash or any
other property; or
(z) the Company and/or one or more of its Subsidiaries sells or
otherwise transfers, in one transaction or a series of related
transactions, to any Acquiring Person or any Affiliate or Associate of an
Acquiring Person, assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its Subsidiaries, taken as a
whole,
(each of the above, a "Section 10 Event") then, and in each such case, proper
provision shall promptly be made so that
(i) each holder of a Right shall thereafter be entitled to receive,
upon exercise thereof at the Purchase Price in effect immediately prior to
the first occurrence of a Section 8(a)(ii) Event, such number of duly
authorized, validly issued, fully paid and nonassessable shares of freely
tradeable Common Stock of the Principal Party (as hereinafter defined),
22
not subject to any rights of call or first refusal, liens, encumbrances or
other claims, as shall be equal to the result obtained by dividing
(A) the product obtained by multiplying the Purchase Price in
effect immediately prior to the first occurrence of a Section
8(a)(ii) Event by the number of one one-thousandths of a share of
Preferred Stock for which a Right was exercisable immediately prior
to such first occurrence (such product being thereafter referred to
as the "Purchase Price" for each Right) by
(B) 50% of the current market price (determined in the manner
set forth for the Class A Common Stock in Section 8(d)(i)) per share
of the Common Stock of such Principal Party on the date of
consummation of such consolidation, merger, combination, sale or
transfer;
provided, however, that the Purchase Price (as so adjusted pursuant to the
foregoing clause (i)(A)) 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 8(f) 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;
(ii) the Principal Party shall thereafter be liable for, and shall
assume, by virtue of such consolidation, merger, combination, sale or
transfer, all the obligations and duties of the Company pursuant to this
Agreement;
(iii) the term "Company" shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the provisions of
Section 8 shall apply only to such Principal Party following the first
occurrence of a Section 10 Event; and
(iv) such Principal Party shall take such steps (including the
authorization and reservation of a sufficient number of shares of its
Common Stock to permit exercise of all outstanding Rights in accordance
with this Section 10(a)) in connection with the 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.
23
(b) "Principal Party" means
(i) in the case of any transaction described in Sections 10(a)(x) or
10(a)(y), the Person that is the issuer of any securities into which
shares of Common Stock of the Company are converted in such merger,
consolidation or combination, and if no securities are so issued, the
Person that survives or results from such merger, consolidation or
combination; or
(ii) in the case of any transaction described in Section 10(a)(z),
the Person that is receiving the greatest portion of the assets or earning
power transferred pursuant to such transaction or transactions;
provided that in any such case, (A) if the Common Stock of such Person is
not at such time and has not been continuously over the preceding 12-month
period registered under Section 12 of the Exchange Act, and such Person is
a direct or indirect Subsidiary of another Person the Common Stock of
which is and has been so registered, "Principal Party" shall refer to such
other Person; and (B) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Stocks of two or more of
which are and have been so registered, "Principal Party" shall refer to
whichever of such Persons is the issuer of the Common Stock having the
greatest aggregate market value.
(c) The Company shall not consummate any such consolidation, merger,
combination, sale or transfer unless the Principal Party has a sufficient
number of authorized shares of its Common Stock which are not outstanding or
otherwise reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 10 and unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in Sections 10(a) and
10(b) and providing that, as soon as practicable after the date of any
consolidation, merger, combination, sale or transfer mentioned in Section
10(a), the Principal Party shall (i) prepare and file a registration statement
under the Securities Act with respect to the securities issuable upon exercise
of the Rights, and shall use its best efforts to cause such registration
statement (A) to become effective as soon as practicable after such filing and
(B) to remain effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the Expiration Date, and (ii) 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 under the Exchange Act.
SECTION 11. Fractional Rights and Fractional Shares. (a) The Company is
not required to issue fractions of Rights, except prior to the Distribution
Date as
24
provided in Section 8(p), or to distribute Right Certificates which evidence
fractional Rights. In lieu of any such fractional Rights, the Company shall pay
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 price of a whole Right. For purposes of
this Section 11(a), the current market price of a whole Right shall be the
closing price of a Right at the close of the regular session of trading for the
Trading Day immediately prior to the date on which such fractional Rights would
otherwise have been issuable. The closing price of a Right for any day shall be
determined in the manner set forth for the Class A Common Stock in Section
8(d)(i).
(b) The Company is not required to issue fractions of shares of Preferred
Stock (other than fractions which are multiples of one one-thousandth 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 multiples of one one-thousandth of a share of Preferred
Stock). In lieu of any such fractional shares 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 price of one one-thousandth of a share of
Preferred Stock. For purposes of this Section 11(b), the current market price
of one one-thousandth of a share of Preferred Stock shall be one one-thousandth
of the closing price of a share of Preferred Stock (as determined pursuant to
Section 8(d)(ii)) for the Trading Day immediately prior to the date of such
exercise.
(c) Following the occurrence of any Section 8(a)(ii) Event or Section 10
Event or upon any exchange pursuant to Section 20, the Company shall not be
required to issue fractions of shares of Class A Common Stock upon exercise of
the Rights or to distribute certificates which evidence fractional shares of
Class A Common Stock. In lieu of fractional shares of Class A Common Stock, the
Company shall pay to the registered holders of Right Certificates at the time
such Rights are exercised or exchanged as herein provided an amount in cash
equal to the same fraction of the current market price of a share of Class A
Common Stock. For purposes of this Section 11(c), the current market price of a
share of Class A Common Stock shall be the closing price of a share of Class A
Common Stock (as determined pursuant to Section 8(d)(i)) for the Trading Day
immediately prior to the date of such exercise or exchange.
(d) Each holder of a Right, by his acceptance of the Right, expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right except as permitted by this Section 11.
25
SECTION 12. Rights of Action. All rights of action in respect of this
Agreement are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of
certificates representing Common Stock); and any such holder, without the
consent of any other such holder or the Rights Agent, may, in his own behalf
and for his own benefit, 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 in the manner provided in such Right Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of the obligations
of, any Person subject to this Agreement.
SECTION 13. Agreement of Right Holders. Each holder of a Right, by his
acceptance of the Right, 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 evidenced by
and transferable only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights will be evidenced by
Right Certificates and transferable only on the registry books of the
Rights Agent pursuant to Section 4;
(c) subject to Sections 4 and 5, the Company and the Rights Agent may
deem and treat the Person in whose name a Right Certificate (or, prior to
the Distribution Date, a certificate representing shares of Common Stock)
is registered as the absolute owner of such certificate and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing
on the Right Certificate or the certificate representing shares of Common
Stock made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent, subject
to the last sentence of Section 5(e), shall be affected by any notice to
the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any
holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary
or permanent injunction or other order, decree or ruling issued by a court
of competent jurisdiction or by a governmental, regulatory or
administrative
26
agency or commission, or any statute, rule, regulation or executive order
promulgated or enacted by any governmental authority prohibiting or
otherwise restraining performance of such obligation; provided that the
Company must use its best efforts to have any such order, decree or ruling
lifted or otherwise overturned as soon as possible.
SECTION 14. Right Certificate Holder Not Deemed a Stockholder. 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 shares of capital stock 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 stockholder of the Company (including any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
to give or withhold consent to any corporate action, to receive notice of
meetings or other actions affecting stockholders (except as provided in Section
21), or to receive dividends or subscription rights) until the Right or Rights
evidenced by such Right Certificate shall have been exercised in accordance
with the provisions hereof.
SECTION 15. Appointment of the Rights Agent. (a) The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders of
the Rights 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, upon ten
(10) days' prior written notice to the Rights Agent. The Rights Agent shall
have no duty to supervise, and in no event be liable for, the acts or omissions
of any such co-Rights Agent. If the Company appoints one or more co-rights
agents, the respective duties of the Rights Agent and any co-rights agents
shall be as the Company shall determine.
(b) The Company shall 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 out-of-pocket expenses, counsel fees and
disbursements and other out-of-pocket disbursements incurred in the execution
or administration of this Agreement and the exercise and performance of its
duties hereunder. The Company also shall indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
gross negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with the
administration of this Agreement or the exercise or performance of its duties
hereunder, including the costs and expenses of defending against any claim of
liability.
27
SECTION 16. Merger or Consolidation or Change of Name of Rights Agent. (a)
Any corporation into or with which the Rights Agent or any successor Rights
Agent may be merged, consolidated or combined, any corporation resulting from
any merger, consolidation or combination to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust or stock transfer business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any party hereto; provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 18. If
at the time such successor Rights Agent succeeds to the agency created by this
Agreement any of the Right Certificates have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of a
predecessor Rights Agent and deliver such Right Certificates so countersigned;
and if at that time any of the Right Certificates have not 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) If at any time the name of the Rights Agent shall be changed and at
such time any of the Right Certificates have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and if at that time any of the
Right Certificates have not been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or 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 17. Duties of the 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 deems it necessary that any fact or matter (including,
without limitation, the identity of any "Acquiring Person" and
28
the determination of "current market price") be proved or established by
the Company prior to taking, suffering or omitting to take 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 Chief Executive Officer,
the President or any Vice President or 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, suffered or
omitted in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be
deemed to have been made by the Company only.
(e) The Rights Agent shall not be responsible (i) 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), (ii) for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right
Certificate, (iii) for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 5(e)) or (iv) any
adjustment in the terms of the Rights (including the manner, method or
amount thereof) provided herein or the ascertaining of the existence of
facts that would require any such adjustment (except with respect to the
exercise of Rights evidenced by Right Certificates after actual notice of
any such adjustment). The Rights Agent shall not 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 duly authorized, validly 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 acts, instruments and assurances as
29
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
the Chief Executive Officer, the President, any Vice 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, suffered or omitted to be taken by it in good faith in
accordance with instructions of any such officer.
(h) The Rights Agent and any stockholder, 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 the 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 Person.
(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 or to any
holders of Rights resulting from any such act, default, neglect or
misconduct; provided that reasonable care was exercised in the selection
and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of its
rights if there shall be reasonable grounds for believing that repayment
of such funds or adequate indemnification against such risk or liability
is not reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the
form of assignment or form of election to purchase, as the cases may be,
has either not been completed or indicates an affirmative response to
clause 1 or 2 thereof, the Rights Agent shall not take any further action
with respect to such requested exercise or transfer without first
consulting with the Company.
30
(l) 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 the administration of this Agreement or the exercise or
performance of its duties hereunder in reliance upon any Right Certificate
or certificate for Common Stock or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, instruction, direction, consent, certificate,
statement or other paper or document reasonably believed by it to be
genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons.
SECTION 18. 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 to the Company and to each transfer agent of
the Common Stock and Preferred Stock by registered or certified mail, and,
after the Distribution Date, to the holders of the Right Certificates by
first-class mail. In the event the transfer agency relationship in effect
between the Company and the Rights Agent terminates, the Rights Agent will be
deemed to resign automatically on the effective date of such termination and
any required notice will be sent by the Company. The Company may remove the
Rights Agent or any successor Rights Agent upon 30 days' notice to the Rights
Agent or successor Rights Agent, as the case may be, and to each transfer agent
of the Common Stock and Preferred Stock by registered or certified mail, and,
after the Distribution Date, to the holders of the Right Certificates by first
class mail. If the Rights Agent resigns or is removed or otherwise becomes
incapable of acting, the Company shall appoint a successor to the Rights Agent.
If the Company fails 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) a corporation
organized, in good standing and doing business under the laws of the United
States or of any state of the United States, having a principal office in the
State of New York, authorized under such laws to exercise stock transfer or
corporate trust 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 $50,000,000 or (b) an Affiliate of a
corporation described in Section 18(a). 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
31
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 with the predecessor Rights Agent and each transfer agent of the
Common Stock and the Preferred Stock, and, after the Distribution Date, mail a
notice thereof to the registered holders of the Right Certificates. Failure to
give any notice provided for in this Section 18, 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 19. Redemption. (a) At any time prior to the occurrence of a
Section 8(a)(ii) Event, the Board may, at its option, redeem all but not less
than all of the then outstanding Rights at a redemption price of $0.001 per
Right, as such amount may be appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such
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 in its sole discretion may establish. The
Redemption Price shall be payable, at the option of the Company, in cash,
shares of Common Stock, or such other form of consideration as the Board shall
determine.
(b) Immediately upon the action of the Board electing to redeem the Rights
(or at such later time as the Board 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 thereafter the only right of the holders
of Rights shall be to receive the Redemption Price for each Right so held. The
Company shall promptly thereafter give notice of such redemption to the Rights
Agent and the holders of the Rights in the manner set forth in Section 22;
provided that the failure to give, or any defect in, such notice shall not
affect the validity of such redemption. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state the method by
which the payment of the Redemption Price will be made.
SECTION 20. Exchange. (a) At any time after the occurrence of a Section
8(a)(ii) Event, the Board may, at its option, exchange all or part of the then
outstanding and exercisable Rights (which shall not include Rights that have
become void pursuant to Section 5(e)) for shares of Class A Common Stock at an
exchange ratio of one share of Class A Common Stock per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such exchange ratio being hereinafter referred
to as the "Exchange Ratio"). The exchange of the Rights by the Board may be
made
32
effective at such time, on such basis and with such conditions as the Board in
its sole discretion may establish. Notwithstanding the foregoing, (i) the Board
shall not be empowered to effect such exchange at any time after an Acquiring
Person, together with all Affiliates and Associates of such Acquiring Person,
becomes the Beneficial Owner of 50% or more of the outstanding shares of Common
Stock and (ii) from and after the occurrence of a Section 10 Event, any Rights
that theretofore have not been exchanged pursuant to this Section 20(a) shall
thereafter be exercisable only in accordance with Section 10 and may not be
exchanged pursuant to this Section 20(a).
(b) Immediately upon the effectiveness of the action of the Board electing
to exchange any Rights pursuant to Section 20(a) and without any further action
and without any notice, the right to exercise such Rights will terminate and
thereafter the only right of a holder of such Rights shall be to receive that
number of shares of Class A Common Stock equal to the number of such Rights
held by such holder multiplied by the Exchange Ratio. The Company shall
promptly thereafter give notice of such exchange to the Rights Agent and the
holders of the Rights to be exchanged in the manner set forth in Section 22;
provided that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. 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 Rights for shares of Class A Common Stock 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 Section 5(e))
held by each holder of Rights.
(c) The Company may at its option substitute, and, if there shall not be
sufficient shares of Class A Common Stock authorized but not outstanding to
permit the exchange of Rights for Class A Common Stock in accordance with
Section 20(a), shall substitute to the extent of such insufficiency, for each
share of Class A Common Stock that would otherwise be issuable upon exchange of
a Right, a number of one one-thousandths of a share of Preferred Stock such
that the current market price (determined pursuant to Section 8(d)) of such
number of one one-thousandths of a share of Preferred Stock is equal to the
current market price (determined pursuant to Section 8(d)(i)) of one share of
Class A Common Stock as of the date of such exchange.
SECTION 21. Notice of Proposed Actions. (a) If the Company proposes, at
any time after the Distribution Date, (i) to pay any dividend in stock of any
class or to make any other distribution (other than a regular quarterly cash
dividend out of earnings or retained earnings of the Company) to the holders of
Preferred Stock, (ii) to offer to the holders of its Preferred Stock rights or
warrants
33
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 or combination of outstanding
shares of Preferred Stock), (iv) to effect, or permit any of its Subsidiaries
to effect, any consolidation, merger or combination with any other Person, or
to effect any sale or other transfer, in one transaction or a series of related
transactions, of assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its Subsidiaries, taken as a whole,
or (v) to effect the liquidation, dissolution or winding up of the Company,
then, in each such case, the Company shall give to each holder of a Right, a
notice of such proposed action specifying the record date for the purposes of
any such dividend, distribution or offering of rights or warrants, or the date
on which any such reclassification, consolidation, merger, combination, sale,
transfer, liquidation, dissolution or winding up is to take place and the date
of participation therein by the holders of 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 Sections 21(a)(i) or 21(a)(ii) above at least 20 days prior to the
record date for determining holders of the Preferred Stock entitled to
participate in such dividend, distribution or offering, and in the case of any
such other action, at least 20 days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of
Preferred Stock, whichever shall be earlier. The failure to give notice
required by this Section or any defect therein shall not affect the legality or
validity of the action taken by the Company or the vote upon any such action.
(b) If a Section 8(a)(ii) Event or Section 10 Event occurs, then, in any
such case, (i) the Company shall as soon as practicable thereafter give to each
holder of a Right, in accordance with Section 22, a notice of the occurrence of
such event, which shall specify the event and the consequences of the event to
holders of Rights under Section 8(a)(ii) or 10, as the case may be, and (ii)
all references in Section 21(a) to Preferred Stock shall be deemed thereafter
to refer to Class A Common Stock or other capital stock, as the case may be.
SECTION 22. Notices. Except as set forth below, all notices, requests and
other communications to any party hereunder and to the holder of any Right
shall be in writing unless otherwise expressly specified herein. Notices or
demands authorized by this Agreement to be given or made by the Rights Agent or
by the holder of any Right to or on the Company is sufficiently given or made
if sent by registered or certified mail (postage prepaid) to the address of the
Company indicated on the signature page hereof or such other address as the
Company specifies in writing to the Rights Agent. Subject to Section 18, any
notice or demand authorized by this Agreement to be given or made by the
Company or by the holder of any Right to or on the Rights Agent is sufficiently
given or made if
34
sent by registered or certified mail (postage prepaid) to the address of the
Rights Agent indicated on the signature page hereof or such other address as
the Rights Agent specifies in writing to the Company.
Except as otherwise expressly set forth in this Agreement, 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 any certificate
representing shares of Common Stock is sufficiently given or made if sent by
first-class mail (postage prepaid) to each record holder of such Certificate at
the address of such holder shown on the registry books of the Company.
Notwithstanding anything in this Agreement to the contrary, prior to the
Distribution Date a public filing by the Company with the Securities and
Exchange Commission shall constitute sufficient notice to the holders of
securities of the Company, including the Rights, for purposes of this Agreement
and no other notice need be given to such holders.
SECTION 23. Supplements and Amendments. At any time prior to the
occurrence of a Section 8(a)(ii) Event, the Company may, 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 Rights. At any
time after the occurrence of a Section 8(a)(ii) Event, 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; provided, however,
that no such supplement or amendment may (a) 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), (b) cause this Agreement again to become
amendable other than in accordance with this sentence or (c) cause the Rights
again to become redeemable. Upon the delivery of a certificate from the Chief
Executive Officer, the President, any Vice President or the Secretary of the
Company stating that the proposed supplement or amendment is in compliance with
the terms of this Agreement, the Rights Agent shall execute such supplement or
amendment.
SECTION 24. 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 25. Determinations and Actions by the Board, etc. 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
whether any Person is the Beneficial Owner of the Specified Percentage, shall
be made in accordance with the last sentence of Rule 13d-3(d)(1)(i) under the
Exchange Act as in effect on the date of this Agreement. The Board shall have
the exclusive power and authority to administer this Agreement and to exercise
all
35
rights and powers specifically granted to the Board or to the Company, or as
may be necessary or advisable in the administration of this Agreement,
including 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 a determination to redeem or
exchange or not to redeem or exchange the Rights or to amend the Agreement).
All such actions, calculations, interpretations and determinations (including,
for purposes of clause (y) below, all omissions with respect to the foregoing)
which are done or made by the Board in good faith shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights and all other parties, and (y) not subject the Board to any liability to
the holders of the Rights.
SECTION 26. 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 certificates representing the shares of 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 certificates representing the shares of Common
Stock).
SECTION 27. 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 28. Governing Law. This Agreement, each Right and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the Commonwealth of Pennsylvania and for all purposes shall be governed
by and construed in accordance with the laws of the Commonwealth of
Pennsylvania applicable to contracts to be made and performed entirely within
such State.
SECTION 29. 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 one and the
same instrument.
SECTION 30. Descriptive Headings. The captions herein are included for
convenience of reference only, do not constitute a part of this Agreement and
shall be ignored in the construction and interpretation hereof.
36
SECTION 31. Force Majeure. Notwithstanding anything to the contrary
contained herein, the Rights Agent shall not be liable for any delays or
failures in performance resulting from acts beyond its reasonable control
including, without limitation, acts of God, terrorist acts, shortage of supply,
breakdowns or malfunctions, interruptions or malfunction of computer
facilities, or loss of data due to power failures or mechanical difficulties
with information storage or retrieval systems, labor difficulties, war or civil
unrest.
37
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
AT&T COMCAST CORPORATION
By:
------------------------------
Name:
Title:
AT&T Comcast Corporation
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attn: General Counsel
EQUISERVE TRUST COMPANY, N.A.
By:
------------------------------
Name:
Title:
EquiServe Trust Company, N.A.
c/o EquiServe, Inc.
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Reorganization Department
EXHIBIT A
FORM OF
CERTIFICATE OF DESIGNATION
OF
SERIES A PARTICIPATING CUMULATIVE
PREFERRED STOCK
OF
AT&T COMCAST CORPORATION
Pursuant to Section 1522 of the
Business Corporation Law of the
Commonwealth of Pennsylvania
I, Xxxxxxxx X. Xxxxx, Executive Vice President, of AT&T Comcast
Corporation, a corporation organized and existing under the Business
Corporation Law of the Commonwealth of Pennsylvania ("Pennsylvania Law"), in
accordance with the provisions thereof, HEREBY CERTIFY that pursuant to the
authority conferred upon the Board of Directors by the articles of
incorporation of the Corporation, the Board of Directors on November 18, 2002,
adopted the following resolution creating a series of Preferred Stock in the
amount and having the designation, voting powers, preferences and relative,
participating, optional and other special rights and qualifications,
limitations and restrictions thereof as follows:
SECTION 1. Designation and Number of Shares. The shares of such series
shall be designated as "Series A Participating Cumulative Preferred Stock" (the
"Series A Preferred Stock"), and the number of shares constituting such series
shall be 2,500,000. Such number of shares of the Series A Preferred Stock may
be increased or decreased by resolution of the Board of Directors; provided
that no decrease shall reduce the number of shares of Series A Preferred Stock
to a number less than the number of shares then outstanding plus the number of
shares issuable upon exercise or conversion of outstanding rights, options or
other securities issued by the Corporation.
SECTION 2. Dividends and Distributions. (a) The holders of shares of
Series A 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 on March 31, June 30, September 30 and December 31
of 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 any share or fraction of a share of Series A Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to the greater of (i)
$10.00 and (ii) subject to the provision for adjustment hereinafter set forth,
1000 times the aggregate per share amount of all cash dividends or other
distributions and 1000 times the aggregate per share amount of all non-cash
dividends or other distributions (other than (A) a dividend payable in shares
of Common Stock, par value $0.01 per share, of the Corporation (the "Common
Stock") or (B) a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise)) declared on 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 Preferred Stock. If the Corporation, at any
time after November 18, 2002 (the "Rights Declaration Date"), pays any dividend
on Common Stock payable in shares of Common Stock or effects a subdivision or
combination of the outstanding shares of Common Stock (by reclassification or
otherwise) into a greater or lesser number of shares of Common Stock, then in
each such case the amount to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under Section 2(a)(ii) of
the preceding sentence shall be adjusted by multiplying such amount 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) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in Section 2(a) above immediately
after it declares a dividend or distribution on the Common Stock (other
than as described in Sections 2(a)(ii)(A) and 2(a)(ii)(B) above); provided
that if no dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment Date and
the next subsequent Quarterly Dividend Payment Date (or, with respect to
the first Quarterly Dividend Payment Date, the period between the first
issuance of any share or fraction of a share of Series A Preferred Stock
and such first Quarterly Dividend Payment Date), a dividend of $10.00 per
share on the Series A Preferred Stock shall nevertheless be payable on
such subsequent Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment
Date next preceding the date of issuance of such shares of Series A
Preferred Stock, unless the date of issuance of such shares is
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on or before the record date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin to accrue and be
cumulative from the date of issue of such shares, or unless the date of
issue is a date after the record date for the determination of holders of
shares of Series A Preferred Stock entitled to receive a quarterly
dividend and on or before such Quarterly Dividend Payment Date, in which
case 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 shares of Series A 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 Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall not be more than 60
days prior to the date fixed for the payment thereof.
SECTION 3. Voting Rights. In addition to any other voting rights required
by law, the holders of shares of Series A Preferred Stock shall have the
following voting rights:
(a) Each share of Series A Preferred Stock shall entitle the holder
thereof to a number of votes equal to 1000 (as adjusted as described
below, the "Adjustable Factor") times the number of votes a share of Class
A Common Stock is entitled to cast on all matters submitted to a vote of
stockholders of the Corporation. For purposes of calculating the number of
votes a share of Class A Common Stock is entitled to cast on all matters
submitted to a vote of stockholders of the Corporation, as set forth in
the Corporation's articles of incorporation, votes represented by shares
of Series A Preferred Stock shall be included in the "Total Number of
Other Votes" (as defined in the Corporation's articles of incorporation).
If the Corporation shall at any time after the Rights Declaration Date pay
any dividend on Common Stock payable in shares of Common Stock or effect a
subdivision or combination of the outstanding shares of Common Stock (by
reclassification or otherwise) into a greater or lesser number of shares
of Common Stock, then in each such case the number of votes per share to
which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying the
Adjustable Factor 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.
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(b) Except as otherwise provided herein or by law, the holders of
shares of Series A Preferred Stock and the holders of shares of Common
Stock shall vote together as a single class on all matters submitted to a
vote of stockholders of the Corporation.
(c) (i) If at any time dividends on any Series A Preferred Stock
shall be in arrears in an amount equal to six quarterly dividends thereon,
the occurrence of such contingency shall xxxx the beginning of a period
(herein called a "default period") which shall extend until such time when
all accrued and unpaid dividends for all previous quarterly dividend
periods and for the current quarterly dividend period on all shares of
Series A Preferred Stock then outstanding shall have been declared and
paid or set apart for payment. During each default period, all holders of
Preferred Stock and any other series of Preferred Stock then entitled as a
class to elect directors, voting together as a single class, irrespective
of series, shall have the right to elect two additional Directors to the
Board of Directors.
(ii) During any default period, such voting right of the holders
of Series A Preferred Stock may be exercised initially at a special
meeting called pursuant to Section 3(c)(iii) hereof or at any annual
meeting of stockholders, and thereafter at annual meetings of
stockholders; provided that neither such voting right nor the right
of the holders of any other series of Preferred Stock, if any, to
increase, in certain cases, the authorized number of Directors shall
be exercised unless the holders of 10% in number of shares of
Preferred Stock outstanding shall be present in person or by proxy.
The absence of a quorum of holders of Common Stock shall not affect
the exercise by holders of Preferred Stock of such voting right. If
at any meeting at which holders of Preferred Stock shall initially
exercise such voting right the number of additional Directors which
may be so elected does not amount to the required number, the holders
of the Preferred Stock shall have the right to make such increase in
the number of Directors as shall be necessary to permit the election
by them of the required number. After the holders of the Preferred
Stock shall have initially exercised their right to elect two
additional Directors in any default period and during the continuance
of such period, the number of Directors shall not be increased or
decreased except by vote of the holders of Preferred Stock as herein
provided or pursuant to the rights of any equity securities ranking
senior to or pari passu with the Series A Preferred Stock.
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(iii) Unless the holders of Preferred Stock shall have
previously exercised their right to elect Directors during an
existing default period, the Board of Directors may order, or any
stockholder or stockholders owning in the aggregate not less than 10%
of the total number of shares of Preferred Stock outstanding,
irrespective of series, may request, the calling of a special meeting
of holders of Preferred Stock, which meeting shall thereupon be
called by the Chief Executive Officer, the President, a Vice
President or the Secretary of the Corporation. Notice of such meeting
and of any annual meeting at which holders of Preferred Stock are
entitled to vote pursuant to this Section 3(c)(iii) shall be given to
each holder of record of Preferred Stock by mailing a copy of such
notice to him at the address of such holder shown on the registry
books of the Corporation. Such meeting shall be called for a time not
earlier than 20 days and not later than 60 days after such order or
request or in default of the calling of such meeting within 60 days
after such order or request, such meeting may be called on similar
notice by any stockholder or stockholders owning in the aggregate not
less than 10% of the total number of shares of Preferred Stock
outstanding, irrespective of series. Notwithstanding the provisions
of this Section 3(c)(iii), no such special meeting shall be called
during the period within 60 days immediately preceding the date fixed
for the next annual meeting of stockholders.
(iv) In any default period, the holders of Common Stock, and
other classes of stock of the Corporation if applicable, shall
continue to be entitled to elect the whole number of Directors until
the holders of Preferred Stock shall have exercised their right to
elect two Directors voting as a class, after the exercise of which
right (x) the Directors so elected by the holders of Preferred Stock
shall continue in office until their successors shall have been
elected by such holders or until the expiration of the default
period, and (y) any vacancy in the Board of Directors may (except as
provided in Section 3(c)(ii) hereof) be filled by vote of a majority
of the remaining Directors theretofore elected by the holders of the
class of stock which elected the Director whose office shall have
become vacant. References in this Section 3(c) to Directors elected
by the holders of a particular class of stock shall include Directors
elected by such Directors to fill vacancies as provided in clause (y)
of the foregoing sentence.
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(v) Immediately upon the expiration of a default period, (x) the
right of the holders of Preferred Stock as a class to elect Directors
shall cease, (y) the term of any Directors elected by the holders of
Preferred Stock as a class shall terminate, and (z) the number of
Directors shall be such number as may be provided for in the articles
of incorporation or by-laws irrespective of any increase made
pursuant to the provisions of Section 3(c)(ii) (such number being
subject, however, to change thereafter in any manner provided by law
or in the articles of incorporation or by-laws). Any vacancies in the
Board of Directors effected by the provisions of clauses (y) and (z)
in the preceding sentence may be filled by a majority of the
remaining Directors.
(d) The articles of incorporation of the Corporation shall not be
amended in any manner (whether by merger or otherwise) so as to adversely
affect the powers, preferences or special rights of the Series A Preferred
Stock without the affirmative vote of the holders of a majority of the
outstanding shares of Series A Preferred Stock, voting separately as a
class.
(e) Except as otherwise provided herein, holders of Series A
Preferred Stock shall have no special voting rights, and their consent
shall not be required for taking any corporate action.
SECTION 4. Certain Restrictions. (a) Whenever quarterly dividends or other
dividends or distributions payable on the Series A Preferred Stock as provided
in Section 2 are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not declared, on outstanding shares of
Series A Preferred Stock shall have been paid in full, the Corporation shall
not:
(i) declare or pay dividends on, or make any other distributions on,
any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends on, or make any other distributions on,
any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock,
except dividends paid ratably on the Series A Preferred Stock and all such
other parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such shares
are then entitled;
A-6
(iii) redeem, purchase or otherwise acquire for value any shares of
stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock; provided that
the Corporation may at any time redeem, purchase or otherwise acquire
shares of any such junior stock in exchange for shares of stock of the
Corporation ranking junior (as to dividends and upon dissolution,
liquidation or winding up) to the Series A Preferred Stock; or
(iv) redeem, purchase or otherwise acquire for value any shares of
Series A Preferred Stock, or any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up)
with the Series A Preferred Stock, except in accordance with a purchase
offer made in writing or by publication (as determined by the Board of
Directors) to all holders of Series A Preferred Stock and all such other
parity stock upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other relative
rights and preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable treatment among
the respective series or classes.
(b) The Corporation shall not permit any subsidiary of the Corporation to
purchase or otherwise acquire for value any shares of stock of the Corporation
unless the Corporation could, under paragraph 4(a), purchase or otherwise
acquire such shares at such time and in such manner.
SECTION 5. Reacquired Shares. Any shares of Series A Preferred Stock
redeemed, purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock without designation as to series and may be
reissued as part of a new series of Preferred Stock to be created by resolution
or resolutions of the Board of Directors as permitted by the articles of
incorporation or as otherwise permitted under Pennsylvania Law.
SECTION 6. Liquidation, Dissolution and Winding Up. Upon any liquidation,
dissolution or winding up of the Corporation, no distribution shall be made (a)
to the holders of shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A Preferred Stock
unless, prior thereto, the holders of shares of Series A Preferred Stock shall
have received $10.00 per share, plus an amount equal to accrued and unpaid
dividends
A-7
and distributions thereon, whether or not declared, to the date of such
payment; provided that the holders of shares of Series A Preferred Stock shall
be entitled to receive an aggregate amount per share, subject to the provision
for adjustment hereinafter set forth, equal to 1000 times the aggregate amount
to be distributed per share to holders of Common Stock, or (b) to the holders
of stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred Stock, except
distributions made ratably on the Series A Preferred Stock and all such other
parity stock in proportion to the total amounts to which the holders of all
such shares are entitled upon such liquidation, dissolution or winding up. If
the Corporation shall at any time after the Rights Declaration Date pay any
dividend on Common Stock payable in shares of Common Stock or effect a
subdivision or combination of the outstanding shares of Common Stock (by
reclassification or otherwise) into a greater or lesser number of shares of
Common Stock, then in each such case the aggregate amount to which holders of
shares of Series A Preferred Stock were entitled immediately prior to such
event under the proviso in clause (a) of the preceding sentence shall be
adjusted by multiplying such amount 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.
SECTION 7. Consolidation, Merger, Etc. If the Corporation shall enter into
any consolidation, merger, combination or other transaction in which the shares
of Common Stock are exchanged for or changed into other stock or securities,
cash or any other property, then in any such case the shares of Series A
Preferred Stock shall at the same time be similarly exchanged for or changed
into an amount per share, subject to the provision for adjustment hereinafter
set forth, equal to 1000 times the aggregate amount of stock, securities, cash
or any other property, as the case may be, into which or for which each share
of Common Stock is changed or exchanged. If the Corporation shall at any time
after the Rights Declaration Date pay any dividend on Common Stock payable in
shares of Common Stock or effect a subdivision or combination of the
outstanding shares of Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series A Preferred Stock shall be adjusted by multiplying
such amount 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.
SECTION 8. No Redemption. The Series A Preferred Stock shall not be
redeemable.
A-8
SECTION 9. Rank. The Series A Preferred Stock shall rank junior (as to
dividends and upon liquidation, dissolution and winding up) to all other series
of the Corporation's preferred stock except any series that specifically
provides that such series shall rank junior to or on a parity with the Series A
Preferred Stock.
SECTION 10. Fractional Shares. Series A Preferred Stock may be issued in
fractions of a share which 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 Preferred Stock.
A-9
IN WITNESS WHEREOF, we have executed and subscribed this Certificate this
18th day of November 2002.
AT&T COMCAST CORPORATION
By:
-------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Executive Vice President
Attest:
------------------------------------
Xxxxxx X. Block, Senior Vice
President, Assistant Secretary
and Assistant Treasurer
A-10
EXHIBIT B
[FORM OF RIGHT CERTIFICATE]
No. R- [Number of] Rights
NOT EXERCISABLE AFTER THE EARLIER OF NOVEMBER 18, 2012 AND THE DATE ON WHICH
THE RIGHTS EVIDENCED HEREBY ARE REDEEMED OR EXCHANGED BY THE COMPANY AS SET
FORTH IN THE RIGHTS AGREEMENT. AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS
ISSUED TO, OR HELD BY, ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON OR
AN AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT), WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY
SUBSEQUENT HOLDER, MAY BE NULL AND VOID.
RIGHT CERTIFICATE
AT&T COMCAST CORPORATION
This Right Certificate certifies that ______________________, or
registered assigns, is the registered holder of the number of Rights set forth
above, each of which entitles the holder (upon the terms and subject to the
conditions set forth in the Rights Agreement dated as of November 18, 2002 (the
"Rights Agreement") between AT&T Comcast Corporation, a Pennsylvania
corporation (the "Company"), and EquiServe Trust Company, N.A. (the "Rights
Agent")) to purchase from the Company, at any time after the Distribution Date
and prior to the Expiration Date, ___ one-thousandth[s] of a fully paid,
nonassessable share of Series A Participating Cumulative Preferred Stock (the
"Preferred Stock") of the Company at a purchase price of $___ per one
one-thousandth of a share (the "Purchase Price"), payable in lawful money of
the United States of America, upon surrender of this Right Certificate, with
the form of election to purchase and related certificate duly executed, and
payment of the Purchase Price at an office of the Rights Agent designated for
such purpose.
Terms used herein and not otherwise defined herein shall have the meanings
given to them in the Rights Agreement.
B-1
The number of Rights evidenced by this Right Certificate (and the number
and kind of shares issuable upon exercise of each Right) and the Purchase Price
set forth above are as of ___________, 20__, and may have been or in the future
be adjusted as a result of the occurrence of certain events, as more fully
provided in the Rights Agreement.
Upon the first occurrence of a Section 8(a)(ii) Event, if the Rights
evidenced by this Right Certificate are beneficially owned by (a) an Acquiring
Person or an Associate or Affiliate of such Acquiring Person, (b) a transferee
of an Acquiring Person (or of any such Associate or Affiliate) who (i) becomes
a transferee after a Section 8(a)(ii) Event, (ii) becomes a transferee prior to
or concurrently with a Section 8(a)(ii) Event and receives such Rights pursuant
to either (A) a transfer (whether or not for consideration) from the Acquiring
Person (or any such Associate or Affiliate) to holders of equity interests in
such Acquiring Person (or in any Associate or Affiliate) or to any Person with
whom the Acquiring Person (or any such Associate or Affiliate) has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which is part of a plan, arrangement or understanding
which has as a primary purpose or effect the avoidance of these transfer
restrictions, such Rights shall become null and void without any further
action, and no holder hereof shall have any rights whatsoever with respect to
such Rights.
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, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
At any time after the Distribution Date and prior to the Expiration Date,
any Right Certificate or Certificates may, upon the terms and subject to the
conditions set forth in the Rights Agreement, be transferred or exchanged for
another Right Certificate or Certificates evidencing a like number of Rights as
the Right Certificate or Certificates surrendered. Any registered holder
desiring to transfer or exchange any Right Certificate or Certificates shall
surrender such Right Certificate or Certificates (with, in the case of a
transfer, the form of assignment and certificate on the reverse side thereof
duly executed) to the Rights Agent at the principal office or offices of the
Rights Agent designated for such purpose.
Subject to the provisions of the Rights Agreement, the Board of Directors
of the Company may, at its option,
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(a) at any time prior to the occurrence of a Section 8(a)(ii) Event
redeem all but not less than all of the then outstanding Rights at a
redemption price of $0.001 per Right as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after November 18, 2002; or
(b) at any time after the occurrence of a Section 8(a)(ii) Event
exchange all or part of the then outstanding Rights (which shall not
include Rights that have become void pursuant to Section 5(e)) for shares
of Class A Common Stock at an exchange ratio of one share of Class A
Common Stock per Right appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after November 18, 2002.
If the Rights shall be exchanged in part, the holder of this Right
Certificate shall be entitled to receive upon surrender hereof another
Right Certificate or Certificates for the number of whole Rights not
exchanged.
The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions which are multiples of one
one-thousandths of a share of Preferred Stock) upon the exercise of the Rights
or to distribute certificates which evidence fractional shares of Preferred
Stock (other than fractions which are multiples of one one-thousandth of a
share of Preferred Stock). In lieu of any such fractional shares of Preferred
Stock, the Company shall pay to the registered holders of Right Certificates at
the time such Rights are exercised an amount in cash equal to the same fraction
of the current market price of one one-thousandth of a share of Preferred
Stock. If this Right Certificate shall be exercised in part, the holder shall
be entitled to receive upon surrender hereof another Right Certificate or
Certificates for the number of whole Rights not exercised.
No holder of this Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the shares of capital
stock 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 stockholder of the
Company (including any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, to receive notice of meetings or other actions
affecting stockholders (except as provided in the Rights Agreement), or to
receive dividends or subscription rights) 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.
B-3
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal by its authorized officers.
Dated as of ___________________, 20__
AT&T COMCAST CORPORATION
By:
---------------------------------
Title:
[SEAL]
Attest:
--------------------------------
Secretary
Countersigned:
EQUISERVE TRUST COMPANY, N.A.,
as Rights Agent
By:
-----------------------------
Authorized Signatory
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Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed if the registered holder desires
to transfer the Right Certificate.)
FOR VALUE RECEIVED______________________________________________________________
hereby sells, assigns and transfers unto________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ______________________,
Attorney, to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution.
Dated: _____________________, 20__
______________________________
Signature
Signature Guaranteed:
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CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate ___are ___are not being
assigned by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, it
___did ___did not acquire the Rights evidenced by this Right Certificate from
any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: __________, 20 __ ____________________________________
Signature
------------------
The signatures to the foregoing Assignment and Certificate must correspond
to the name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change whatsoever.
------------------
B-6
FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder desires to
exercise Rights represented by the Right Certificate.)
To: AT&T Comcast Corporation
The undersigned hereby irrevocably elects to exercise ____________ Rights
represented by this Right Certificate to purchase shares of Preferred Stock
issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person which may be issuable upon the exercise of the
Rights) and requests that certificates for such securities be issued in the
name of and delivered to:
Please insert social security or other identifying number_______________________
________________________________________________________________________________
(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 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: ________________, 20__
Signature
Signature Guaranteed:
B-7
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate ___are ___are not being
exercised by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, it
___did ___did not acquire the Rights evidenced by this Right Certificate from
any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: ____________, 20 __ ____________________________________
Signature
------------------
The signature to the foregoing Election to Purchase and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
------------------
B-8
