1
EXHIBIT 4.2
ALAMOSA PCS HOLDINGS, INC.
AND
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
RIGHTS AGENT
RIGHTS AGREEMENT
DATED AS OF January 27, 2000
2
TABLE OF CONTENTS
SECTION PAGE
Section 1. Certain Definitions.............................................................................1
Section 2. Appointment of Rights Agent.....................................................................6
Section 3. Issuance of Rights Certificates.................................................................7
(a) Distribution Date; Rights Certificates..........................................................7
(b) Common Stock Certificates; Summary of Rights....................................................7
(c) Legend..........................................................................................8
Section 4. Form of Rights Certificates.....................................................................8
(a) Form; Date......................................................................................8
(b) Acquiring Person Legend.........................................................................9
Section 5. Countersignature and Registration..............................................................10
(a) Signatures.....................................................................................10
(b) Registration and Transfer......................................................................10
Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates.......................................10
(a) Procedure......................................................................................10
(b) Issuance of New Rights Certificates............................................................11
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights..................................11
(a) Exercise.......................................................................................11
(b) Purchase Price.................................................................................12
(c) Rights Agent Actions...........................................................................12
(d) Partial Exercise...............................................................................12
(e) Termination of Acquiring Person's Rights.......................................................13
(f) Surrender of Rights Certificates; Identity of Beneficial Owner.................................13
Section 8. Cancellation and Destruction of Rights Certificates............................................13
Section 9. Reservation and Availability of Capital Stock..................................................14
(a) Reservation of Capital Stock...................................................................14
(b) Listing........................................................................................14
(c) Registration under the Act.....................................................................14
(d) Covenant Regarding Capital Stock...............................................................15
(e) Taxes and Charges..............................................................................15
Section 10. Preferred Stock Record Date....................................................................15
(i)
3
Section 11. Adjustment of Purchase Price; Number and Kind of Shares or Number of
Rights ........................................................................................16
(a) Certain Adjustments............................................................................16
(b) Purchase Price Adjustment -- Capital Stock.....................................................19
(c) Purchase Price Adjustment -- Cash, Assets, etc.................................................20
(d) Current Market Price...........................................................................20
(e) Purchase Price Adjustment Threshold............................................................22
(f) Equivalent Adjustments.........................................................................22
(g) Post-Adjustment Rights Issuances...............................................................22
(h) Preferred Stock Anti-Dilution..................................................................22
(i) Adjustment of Number of Rights.................................................................23
(j) Rights Certificates............................................................................23
(k) Adjustment Below Par Value.....................................................................23
(l) Adjustment Effective as of Future Date; Exercise...............................................24
(m) Tax Adjustments................................................................................24
(n) Restriction on Certain Transactions............................................................24
(o) Restriction Against Diminishing Benefits of the Rights.........................................25
(p) Common Stock Adjustments.......................................................................25
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.....................................25
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power...........................25
(a) Flip-over Event................................................................................25
(b) Principal Party................................................................................27
(c) Supplemental Agreement.........................................................................27
(d) Exceptions.....................................................................................28
Section 14. Fractional Rights and Fractional Shares........................................................28
(a) Fractional Rights..............................................................................28
(b) Fractional Shares of Preferred Stock...........................................................29
(c) Fractional Shares of Common Stock..............................................................29
(d) Waiver of Fractional Rights and Shares.........................................................29
Section 15. Rights of Action...............................................................................30
Section 16. Agreement of Rights Holders....................................................................30
Section 17. Rights Certificate Holder Not Deemed a Stockholder.............................................31
Section 18. Concerning the Rights Agent....................................................................31
(a) Compensation...................................................................................31
(b) Reliance.......................................................................................31
(ii)
4
Section 19. Merger or Consolidation or Change of Name of Rights Agent......................................32
(a) Successor......................................................................................32
(b) Prior Countersignatures........................................................................32
Section 20. Duties of Rights Agent.........................................................................32
(a) Legal Counsel..................................................................................32
(b) Certification by the Company...................................................................32
(c) Liability for Negligence, etc..................................................................33
(d) Statements of Fact or Recitals.................................................................33
(e) Agreement; Adjustments.........................................................................33
(f) Further Assurances.............................................................................33
(g) Instructions...................................................................................33
(h) Dealing in Rights..............................................................................33
(i) Agents; Reasonable Care........................................................................34
(j) Expenses; Repayment Assurances.................................................................34
(k) Exercise of Rights; Consultation with Company..................................................34
Section 21. Change of Rights Agent.........................................................................34
Section 22. Issuance of New Rights Certificates............................................................35
Section 23. Redemption and Termination.....................................................................36
(a) Redemption.....................................................................................36
(b) Effect of Redemption; Procedure................................................................36
Section 24. Exchange.......................................................................................36
(a) Right to Exchange..............................................................................36
(b) Effect of Exchange; Procedure..................................................................37
(c) Common Stock Equivalents.......................................................................37
(d) Insufficient Common Stock......................................................................37
(e) Fractional Shares..............................................................................37
Section 25. Notice of Certain Events.......................................................................38
(a) Preferred Stock Transactions, etc. ...........................................................38
(b) Other Transactions.............................................................................38
Section 26. Notices........................................................................................39
Section 27. Supplements and Amendments.....................................................................39
Section 28. Successors.....................................................................................40
Section 29. Determinations and Actions by the Board of Directors, etc......................................40
(iii)
5
Section 30. Benefits of this Agreement.....................................................................40
Section 31. Severability...................................................................................41
Section 32. Governing Law..................................................................................41
Section 33. Counterparts...................................................................................41
Section 34. Descriptive Headings...........................................................................41
Exhibit 1 Certificate of Designation, Preferences and Rights of
Series A Preferred Stock.......................................................................43
Exhibit 2 Form of Rights Certificate.....................................................................51
Exhibit 3 Letter to Stockholders.........................................................................58
(iv)
6
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of January 27, 2000 between Alamosa PCS
Holdings, Inc., a Delaware corporation (the "Company"), and ChaseMellon
Shareholder Services, L.L.C., a New Jersey limited liability company (the
"Rights Agent").
RECITAL
On January 27, 2000 (the "Rights Dividend Declaration Date"), the Board of
Directors of the Company authorized and declared a dividend distribution of one
Right for each share of Common Stock (as hereinafter defined) of the Company
outstanding at the close of business on January 27, 2000 (the "Record Date"),
and has authorized the issuance of one Right (as such number may hereafter be
adjusted as provided herein) for each share of Common Stock of the Company
issued between the Record Date (whether originally issued or delivered from the
Company's treasury) and the Distribution Date, each Right initially representing
the right to purchase one one-thousandth of a share of Series A Preferred Stock
of the Company having the rights, powers and preferences set forth in the form
of Certificate of Designation, Preferences and Rights attached hereto as Exhibit
1, upon the terms and subject to the conditions hereinafter set forth (the
"Rights");
AGREEMENT
In consideration of the premises and the mutual agreements herein set
forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which, together
with all Affiliates and Associates of such Person, shall be the Beneficial Owner
(as such term is hereinafter defined) of 20% or more of the shares of Common
Stock then outstanding, but shall not include (i) the Company, (ii) any
Subsidiary of the Company, (iii) any employee benefit plan of the Company or of
any Subsidiary of the Company, or any Person or entity organized, appointed or
established by the Company for or pursuant to the terms of any such plan, (iv)
Alamosa PCS LLC, or (v) any Person who becomes an Acquiring Person solely as a
result of a reduction in the number of shares of Common Stock outstanding due to
the repurchase of shares of Common Stock by the Company, unless and until such
Person shall purchase or otherwise become (as a result of actions taken by such
Person or its Affiliates or Associates) the Beneficial Owner of additional
shares of Common Stock constituting 1% or more of the then outstanding shares of
Common Stock. Notwithstanding the foregoing, if the Board of Directors of the
Company determines in good faith that a Person who would otherwise be an
Acquiring Person, as defined pursuant to the foregoing provisions of this
paragraph, has become such inadvertently (including, without limitation, because
(i) such Person was unaware that it beneficially owned a percentage of Common
Stock that would otherwise cause such Person to be an Acquiring Person, or (ii)
such Person was aware of the extent of its Beneficial Ownership of
7
Common Stock but had no actual knowledge of the consequences of such Beneficial
Ownership under this Agreement) and without any present intention of changing or
influencing control of the Company, and such Person divests as promptly as
practicable a sufficient number of shares of Common Stock so that such Person
would no longer be an Acquiring Person as defined pursuant to the foregoing
provisions of this paragraph, then such Person shall not be deemed to be or to
have become an Acquiring Person for any purposes of this Agreement.
(b) "Act" shall mean the Securities Act of 1933, as amended and in
effect from time to time.
(c) "Adjustment Shares" shall have the meaning set forth in Section
11(a)(ii) (Adjustment of Purchase Price; Number and Kind of Shares or Number of
Rights -- Certain Adjustments)
(d) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act.
(e) "Agreement" shall mean this Rights Agreement as originally
executed or as it may from time to time be supplemented or amended pursuant to
the applicable provisions hereof.
(f) A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether such right
is exercisable immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding (whether or not in writing) or upon the
exercise of conversion rights, exchange rights, rights, warrants or options, or
otherwise; provided, however, that a Person shall not, for purposes of this
paragraph (i), be deemed the "Beneficial Owner" of or to "beneficially own," (A)
securities tendered pursuant to a tender or exchange offer made by such Person
or any of such Person's Affiliates or Associates until such tendered securities
are accepted for purchase or exchange, or (B) securities issuable upon exercise
of Rights at any time prior to the occurrence of a Triggering Event, or (C)
securities issuable upon exercise of Rights from and after the occurrence of a
Triggering Event, which Rights were acquired by such Person or any of such
Person's Affiliates or Associates prior to the Distribution Date or pursuant to
Section 3(a) (Issuance of Rights Certificates -- Distribution Date; Rights
Certificates) or Section 22 (Issuance of New Rights Certificates) (the "Original
Rights") or pursuant to Section 11(i) (Adjustment of Purchase Price; Number and
Kind of Shares or Number of Rights -- Adjustment of Number of Rights) in
connection with an adjustment made with respect to any Original Rights;
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of or has
"beneficial ownership" of (as determined pursuant to Rule 13d-3 of the General
Rules and Regulations under the Exchange Act), including pursuant to any
agreement, arrangement or understanding; provided, however, that a
2
8
Person shall not be deemed the "Beneficial Owner" of, or to "beneficially own,"
any security under this subparagraph (ii) as a result of an agreement,
arrangement or understanding to vote such security if such agreement,
arrangement or understanding: (A) arises solely from a revocable proxy given in
response to a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the General Rules and Regulations
under the Exchange Act, and (B) is not also then reportable by such Person on a
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) with which such Person
(or any of such Person's Affiliates or Associates) has any agreement,
arrangement or understanding (whether or not in writing), for the purpose of
acquiring, holding, voting (except pursuant to a revocable proxy as described in
the proviso to subparagraph (ii) of this paragraph (f)) or disposing of any
voting securities of the Company;
provided, however, that nothing in this paragraph (f) shall cause a Person
engaged in business as an underwriter of securities to be the "Beneficial Owner"
of or to "beneficially own," any securities acquired through such Person's
participation in good faith in a firm commitment underwriting until the
expiration of forty (40) calendar days after the date of such acquisition;
provided, further, that if any of Rosewood Telecommunications, L.L.C., South
Plains Advanced Communications & Electronics, Inc., West Texas PCS, LLC, Xxxxxx
Telecommunications, Inc., Tregan International Corp., Plateau
Telecommunications, Incorporated, XIT Telecommunication & Technology, Inc., LEC
Development, Inc., Xxx-Xxx Telecommunications, Inc., Longmont PCS, L.L.C. and
Yellow Rock PCS, LP is a party to an agreement that governs the voting of shares
of Common Stock, which agreement (x) has been approved by the Board prior to the
time it was entered into by such parties, (y) does not govern the voting of
Common Stock with respect to matters other than the election of Board members
and (z) does not govern the voting of Common Stock held by Persons other than
those entities named above in this proviso, then for purposes of this Agreement,
such voting agreement shall not cause any such Person (or any of such Person's
Affiliates or Associates) or all of such Persons acting together to be the
"Beneficial Owner" of, or to "beneficially own," any securities owned by any
other entity named above in this proviso that are subject to such voting
agreement.
(g) "Board" means the Board of Directors of the Company.
(h) "Business Day" shall mean any day other than a Saturday, Sunday or
a day on which banking institutions in the State of Texas or New York are
authorized or obligated by law or executive order to close.
(i) "Close of Business" on any given date shall mean 5:00 P.M.,
Dallas, Texas time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Dallas, Texas time, on the next succeeding
Business Day.
3
9
(j) "Common Stock" shall mean the common stock, par value $0.01 per
share, of the Company, or if such Common Stock shall have been converted into or
exchanged for other securities, such securities, except that "Common Stock" when
used with reference to any Person other than the Company shall mean the capital
stock of such Person with the greatest voting power, or the equity securities or
other equity interest having power to control or direct the management, of such
Person.
(k) "Common Stock Equivalents" shall have the meaning set forth in
Section 11(a)(iii) (Adjustment of Purchase Price; Number and Kind of Shares or
Number of Rights -- Certain Adjustments).
(l) "Company" shall mean the Person named as the "Company" in the
first paragraph of this Agreement until a successor corporation shall have
become such, or until a Principal Party shall assume, and thereafter be liable
for, all obligations and duties of the Company hereunder, pursuant to the
applicable provisions of this Agreement, and thereafter "Company" shall mean
such successor corporation or Principal Party.
(m) "Current Market Price" shall have the meaning set forth in Section
11(d)(i) (Adjustment of Purchase Price; Number and Kind of Shares or Number of
Rights -- Current Market Price).
(n) "Current Value" shall have the meaning set forth in Section
11(a)(iii) (Adjustment of Purchase Price; Number and Kind of Shares or Number of
Rights -- Certain Adjustments).
(o) "Distribution Date" shall have the meaning set forth in Section
3(a) (Issuance of Rights Certificates -- Distribution Date; Rights
Certificates).
(p) "Equivalent Preferred Stock" shall have the meaning set forth in
Section 11(b) (Adjustment of Purchase Price; Number and Kind of Shares or Number
of Rights -- Purchase Price Adjustment -- Capital Stock).
(q) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended and in effect on the date of this Agreement.
(r) "Exchange Number" shall mean one-half of the number of shares of
Common Stock, one-thousandths of a share of Preferred Stock, or shares or other
units of other property for which a Right is exercisable immediately prior to
the time of the action of the Board to exchange the Rights.
(s) "Expiration Date" shall have the meaning set forth in Section 7(a)
(Exercise of Rights; Purchase Price; Expiration Date of Rights -- Exercise).
4
10
(t) "Final Expiration Date" shall mean the Close of Business on
January 27, 2010.
(u) "Flip-in Event" shall mean any event described in Section
11(a)(ii) (A) or (B) (Adjustment of Purchase Price; Number and Kind of Shares or
Number of Rights -- Certain Adjustments).
(v) "Flip-in Trigger Date" shall have the meaning set forth in Section
11(a)(iii) (Adjustment of Purchase Price; Number and Kind of Shares or Number of
Rights -- Certain Adjustments).
(w) "Flip-over Event" shall mean any event described in clauses (x),
(y) or (z) of Section 13(a) (Consolidation, Merger or Sale or Transfer of Assets
or Earning Power -- Flip-over Event).
(x) "Original Rights" shall have the meaning set forth in Section
1(f)(i) (Certain Definitions).
(y) "Person" shall mean any individual, firm, corporation, limited
liability company, trust or partnership or other entity.
(z) "Preferred Stock" shall mean shares of Preferred Stock, Series A,
par value $0.01, of the Company, and, to the extent that there is not a
sufficient number of shares of Series A Preferred Stock authorized to permit the
full exercise of the Rights, any other series of Preferred Stock, par value
$0.01, of the Company designated for such purpose containing terms substantially
similar to the terms of the Series A Preferred Stock.
(aa) "Principal Party" shall have the meaning set forth in Section
13(b) (Consolidation, Merger or Sale or Transfer of Assets or Earning Power --
Principal Party).
(bb) "Purchase Price" shall have the meaning set forth in Section 4(a)
(Form of Rights Certificates -- Form; Date).
(cc) "Record Date" shall have the meaning set forth in the Recitals at
the beginning of the Agreement.
(dd) "Redemption Date" shall have the meaning set forth in Section
23(a) (Redemption and Termination -- Redemption).
(ee) "Redemption Price" shall have the meaning set forth in Section
23(a) (Redemption and Termination -- Redemption).
(ff) "Rights" shall have the meaning set forth in the Recitals at the
beginning of the Agreement.
5
11
(gg) "Rights Agent" shall mean the Person named as the "Rights Agent"
in the first paragraph of this Agreement until a successor Rights Agent shall
have become such pursuant to the applicable provisions hereof and thereafter
"Rights Agent" shall mean such successor Rights Agent. If at any time there is
more than one Person appointed by the Company as Rights Agent pursuant to the
applicable provisions of this Agreement, "Rights Agent" shall mean and include
each such Person.
(hh) "Rights Certificates" shall have the meaning set forth in Section
3(a) (Issuance of Rights Certificates -- Distribution Date; Rights
Certificates).
(ii) "Rights Dividend Declaration Date" shall have the meaning set
forth in the Recital at the beginning of the Agreement.
(jj) "Spread" shall have the meaning set forth in Section 11(a)(iii)
(Adjustment of Purchase Price; Number and Kind of Shares or Number of Rights --
Certain Adjustments).
(kk) "Stock Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed or amended pursuant to Section 13(d) under the
Exchange Act) by the Company or an Acquiring Person that an Acquiring Person has
become such.
(ll) "Subsidiary" shall mean, with reference to any Person, any
corporation or other entity of which a majority of the voting power of equity
securities or majority of the equity interest is beneficially owned, directly or
indirectly, by such Person, or otherwise controlled by such Person.
(mm) "Substitution Period" shall have the meaning set forth in Section
11(a)(iii) (Adjustment of Purchase Price; Number and Kind of Shares or Number of
Rights -- Certain Adjustments).
(nn) "Trading Day" shall have the meaning set forth in Section
11(d)(i) (Adjustment of Purchase Price; Number and Kind of Shares or Number of
Rights -- Current Market Price).
(oo) "Triggering Event" shall mean any Flip-in Event or any Flip-over
Event.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company 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.
6
12
Section 3. Issuance of Rights Certificates.
(a) Distribution Date; Rights Certificates. Until the earlier of (i)
the Close of Business on the tenth Business Day after the Stock Acquisition Date
(or, if the tenth Business Day after the Stock Acquisition Date occurs before
the Record Date, the Close of Business on the Record Date), or (ii) the Close of
Business on the tenth Business Day (or such later date as the Board shall
determine prior to such time as any Person becomes an Acquiring Person) after
the date that a tender or exchange offer by any Person (other than the Company,
any Subsidiary of the Company, any employee benefit plan of the Company or of
any Subsidiary of the Company, or any Person or entity organized, appointed or
established by the Company for or pursuant to the terms of any such plan) is
first published or sent or given within the meaning of Rule 14d-2(a) of the
General Rules and Regulations under the Exchange Act, if upon consummation
thereof such Person would be the Beneficial Owner of 20% or more of the shares
of Common Stock then outstanding (the earlier of (i) and (ii) being herein
referred to as the "Distribution Date"), (x) the Rights will be evidenced
(subject to the provisions of paragraph (b) of this Section 3) by the
certificates for the Common Stock registered in the names of the holders of the
Common Stock (which certificates for Common Stock shall be deemed also to be
certificates for Rights) and not by separate certificates, and (y) the Rights
will be transferable only in connection with the transfer of the underlying
shares of Common Stock (including a transfer to the Company, except pursuant to
the provision of Section 23 (Redemption and Termination)). As soon as
practicable after 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, at the address of
such holder shown on the records of the Company, one or more rights
certificates, in substantially the form of Exhibit 2 hereto (the "Rights
Certificates"), evidencing one Right for each share of Common Stock so held,
subject to adjustment as provided herein. In the event that an adjustment in the
number of Rights per share of Common Stock has been made pursuant to Section
11(p) (Adjustment of Purchase Price; Number and Kind of Shares or Number of
Rights -- Common Stock Adjustments) at the time of distribution of the Rights
Certificates, the Company shall make the necessary and appropriate rounding
adjustments (in accordance with Section 14(a) (Fractional Rights and Fractional
Shares -- Fractional Rights)) so that Rights Certificates representing only
whole numbers of Rights are distributed and cash is paid in lieu of any
fractional Rights. As of and after the Distribution Date, the Rights will be
evidenced solely by such Rights Certificates.
(b) Common Stock Certificates; Summary of Rights. With respect to
certificates for the Common Stock outstanding as of the Record Date, until the
Distribution Date, the Rights associated with the Common Stock represented by
such certificates will be evidenced by such certificates alone and the
registered holders of such Common Stock shall also be the registered holders of
the associated Rights. Until the earlier of the Distribution Date or the
Expiration Date, the transfer of any certificates representing shares of Common
Stock in respect of which Rights have been issued shall also constitute the
transfer of the Rights associated with such shares of Common Stock. On the
Record Date, or as soon as practicable thereafter, the Company will send a copy
of a Summary of Rights to Purchase Preferred Stock, in substantially the form of
Exhibit 3 hereto (the "Summary of Rights"), by first-class, postage-prepaid
mail, to each record holder of shares of
7
13
Common Stock as of the close of business of the Record Date, at the address of
such holder shown on the records of the Company.
(c) Legend. Rights shall be issued in respect of all certificates for
shares of Common Stock which are issued (whether originally issued or from the
Company's treasury) after the Record Date but prior to the earliest of the (i)
Distribution Date, (ii) the Expiration Date, or (iii) the Redemption Date, or,
in certain circumstances provided in Section 22 (Issuance of New Rights
Certificates) after the Distribution Date. Certificates representing such shares
of Common Stock shall also be deemed to be certificates for Rights, and shall
bear the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Rights Agreement, by and between
the Corporation and ChaseMellon Shareholder Services, L.L.C., as
Rights Agent, as it may be amended from time to time (the "Rights
Agreement"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal 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. The
Corporation will mail to the holder of this certificate a copy of the
Rights Agreement, as in effect on the date of mailing, without charge
promptly after receipt of a written request therefor. 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 (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 become null and void.
With respect to such certificates containing the foregoing legend, until the
earliest of (i) the Distribution Date, (ii) the Expiration Date, and (iii) the
Redemption Date, (x) the Rights associated with the Common Stock represented by
such certificates shall be evidenced by such certificates alone, (y) the
registered holders of such Common Stock shall also be the registered holders of
the associated Rights, and (z) the transfer of any of such certificates shall
also constitute the transfer of the Rights associated with such shares of Common
Stock. In the event that the Company purchases, or acquires any shares of Common
Stock after the Record Date but prior to the Distribution Date, any rights
associated with such shares of Common Stock shall be deemed canceled and retired
so that the Company shall not be entitled to exercise any Rights associated with
shares of Common Stock which are no longer outstanding.
Section 4. Form of Rights Certificates.
(a) Form; Date. The Rights Certificates (and the forms of election to
purchase and of assignment to be printed on the reverse thereof) shall each be
substantially in the form set forth in Exhibit 2 hereto and may have such marks
of identification or designation and such legends,
8
14
summaries or endorsements printed thereon as the Company may deem appropriate,
which do not affect the duties or responsibilities of the Rights Agent, and as
are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange on which
the Rights may from time to time be listed or any securities association on
whose interdealer quotation system the Rights may be from time to time
authorized for quotation, or to conform to usage. Subject to the provisions of
Section 11 (Adjustment of Purchase Price; Number and Kind of Shares or Number of
Rights) and Section 22 (Issuance of New Rights Certificates), the Rights
Certificates, whenever distributed, shall be dated as of the Record Date and on
their face shall entitle the holders thereof to purchase such number of one
one-thousandths of a share of Preferred Stock as shall be set forth therein at
the price set forth therein (such exercise price per one one-thousandth of a
share is referred to herein as the "Purchase Price"), but the amount and type of
securities purchasable upon the exercise of each Right and the Purchase Price
thereof shall be subject to adjustment as provided herein.
(b) Acquiring Person Legend. Any Rights Certificate issued pursuant to
Section 3(a) (Issuance of Rights Certificates -- Distribution Date; Rights
Certificates) or Section 22 (Issuance of New Rights Certificates) that
represents Rights beneficially owned by (i) an Acquiring Person or any Associate
or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or to
any Person with whom such Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer
which is part of an agreement, arrangement or understanding which has as a
primary purpose or effect avoidance of Section 7(e) (Exercise of Rights;
Purchase Price; Expiration Date of Rights -- Termination of Acquiring Person's
Rights) of this Agreement and, provided that the Company shall have notified the
Rights Agent that this Section 4(b) applies, and any Rights Certificate issued
pursuant to Section 6 (Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates), Section
11 (Adjustment of Purchase Price; Number and Kind of Shares or Number of Rights)
or Section 22 (Issuance of New Rights Certificates) upon transfer, exchange,
replacement or adjustment of any other Rights Certificate referred to in this
sentence, shall contain (to the extent feasible) the following legend:
The Rights represented by this Rights Certificate are or were beneficially
owned by a Person who was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (as such terms are defined in the Rights
Agreement, by and between Alamosa PCS Holdings, Inc. and ChaseMellon
Shareholder Services, L.L.C., as Rights Agent, as it may be amended from
time to time). Accordingly, this Rights Certificate and the Rights
represented hereby may become null and void in the circumstances specified
in Section 7(e) (Exercise of Rights; Purchase Price; Expiration Date of
Rights -- Termination of Acquiring Person's Rights) of such Agreement.
9
15
Section 5. Countersignature and Registration.
(a) Signatures. The Rights Certificates shall be executed on behalf of
the Company by its Chairman of the Board, 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 to by the
Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Rights Certificates shall be countersigned by the
Rights Agent, either manually or by facsimile signature, and shall not be valid
for any purpose unless so countersigned. In case any officer of the Company who
shall have signed any of the Rights Certificates shall cease to be such officer
of the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Rights Certificates, nevertheless, may be
countersigned by the Rights Agent and issued and delivered by the Company with
the same force and effect as though the person who signed such Rights
Certificates had not ceased to be such officer of the Company; and any Rights
Certificates may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Rights Certificate, shall be a proper
officer of the Company to sign such Rights Certificate, although at the date of
the execution of this Rights Agreement any such Person was not such an officer.
(b) Registration and Transfer. Following the Distribution Date and
receipt by the Rights Agent of written notice and a list of record holders of
Rights referred to in Section 3(a) hereof, the Rights Agent will keep or cause
to be kept, at its office designated pursuant to Section 26 hereof for surrender
of Rights Certificates upon exercise or transfer, books for registration and
transfer of the Rights Certificates issued hereunder. Such books shall show the
names and addresses of the respective holders of the Rights Certificates, the
number of Rights evidenced on its face by each of the Rights Certificates and
the date of each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Procedure. Subject to the provisions of Section 4(b) (Form of
Rights Certificates -- Acquiring Person Legend), Section 7(e) (Exercise of
Rights; Purchase Price; Expiration Date of Rights -- Termination of Acquiring
Person's Rights) and Section 14 (Fractional Rights and Fractional Shares), at
any time after the Close of Business on the Distribution Date, and at or prior
to the Close of Business on the Expiration Date, any Rights Certificate or
Certificates may be transferred, split up, combined or exchanged for another
Rights Certificate or Certificates, entitling the registered holder to purchase
a like number of one one-thousandths of a share of Preferred Stock (or,
following a Triggering Event, Common Stock, other securities, cash or other
assets, as the case may be) as the Rights Certificate or Certificates
surrendered then entitle such holder (or former holder in the case of a
transfer) to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Rights Certificate or Certificates shall make such
request in writing delivered to the Rights Agent, and shall surrender the Rights
Certificate or Certificates to be transferred, split up, combined or exchanged
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 Rights
Certificate until
10
16
the registered holder shall have completed and signed the certificate contained
in the form of assignment on the reverse side of such Rights Certificate and
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 or the Rights Agent shall request. Thereupon, the Rights Agent shall,
subject to Section 4(b), Section 7(e) and Section 14, countersign and deliver to
the Person entitled thereto a Rights Certificate or Rights Certificates, as the
case may be, as so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Rights
Certificates. The Rights Agent shall not be required to process any transaction
unless and until it receives written evidence that all taxes and governmental
charges have been paid in full.
(b) Issuance of New Rights Certificates. Upon receipt by the Company
and the Rights Agent of evidence reasonably satisfactory to them of the loss,
theft, destruction or mutilation of a Rights Certificate, and, in case of loss,
theft or destruction, of indemnity or security satisfactory to them, and
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 Rights Certificate if mutilated, the Company will execute and deliver a new
Rights Certificate of like tenor to the Rights Agent for countersignature and
delivery to the registered owner in lieu of the Rights Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) Exercise. Subject to Section 7(e) (Exercise of Rights; Purchase
Price; Expiration Date of Rights -- Termination of Acquiring Person's Rights),
the registered holder of any Rights Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein, including, without
limitation, the restrictions on exercisability set forth in Section 9(c)
(Reservation and Availability of Capital Stock -- Registration under the Act),
Section 11(a)(iii) (Adjustment of Purchase Price; Number and Kind of Shares or
Number of Rights -- Certain Adjustments), Section 23(a) (Redemption and
Termination -- Redemption), and Section 24(b) (Exchange -- Effect of Exchange;
Procedure)) in whole or in part at any time after the Distribution Date upon
surrender of the Rights 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 of the aggregate Purchase Price with respect to
the total number of one one-thousandths of a share of Preferred Stock (or other
securities, cash or other assets, as the case may be) as to which such
surrendered Rights are then exercisable and an amount equal to any applicable
tax or governmental charge, at or prior to the earliest of (i) the Final
Expiration Date, (ii) the Redemption Date, or (iii) the expiration of the Rights
pursuant to Section 13(d) (Consolidation, Merger or Sale or Transfer of Assets
or Earning Power -- Exceptions) (the earliest of (i), (ii) and (iii) being
herein referred to as the "Expiration Date"). The payment of the Purchase Price
and the applicable tax or governmental charge, if any (as such amount may be
reduced pursuant to Section 11(a)(iii) (Adjustment of Purchase Price; Number and
Kind of Shares or Number of Rights -- Certain Adjustments)), may be made (x) in
cash, (y) by certified check, cashier's check or money order payable to the
order of the Company, or (z) by delivery of a certificate or certificates (with
appropriate stock powers executed in blank attached thereto)
11
17
evidencing a number of shares of Common Stock equal to the then Purchase Price
divided by the closing price (as determined pursuant to Section 11(d)
(Adjustment of Purchase Price; Number and Kind of Shares or Number of Rights --
Current Market Price)) per share of Common Stock on the Trading Day immediately
preceding the date of such exercise. In the event that the Company is obligated
to issue other securities (including Common Stock) of the Company, pay cash
and/or distribute other property pursuant to Section 11(a) the Company will make
all arrangements necessary so that such other securities, cash and/or other
property are available for distribution by the Rights Agent, if and when
necessary to comply with this Agreement. The Company reserves the right to
require prior to the occurrence of a Triggering Event that upon any exercise of
Rights, a number of Rights be exercised so that only whole shares of Preferred
Stock would be issued.
(b) Purchase Price. The Purchase Price for each one one-thousandth of
a share of Preferred Stock pursuant to the exercise of a Right shall initially
be $84, and shall be subject to adjustment from time to time as provided in
Section 11 (Adjustment of Purchase Price; Number and Kind of Shares or Number of
Rights) and Section 13(a) (Consolidation, Merger or Sale or Transfer of Assets
or Earning Power -- Flip-over Event) and shall be payable in accordance with
paragraph (a) of this Section 7.
(c) Rights Agent Actions. Upon receipt of a Rights Certificate
representing exercisable Rights and the compliance by the holder of such Rights
Certificate with paragraph (a) of this Section 7, the Rights Agent shall,
subject to Section 20(k) (Duties of Rights Agent -- Exercise of Rights;
Consultation with Company), thereupon promptly (i) (A) requisition from any
transfer agent of the shares of Preferred Stock (or make available, if the
Rights Agent is the transfer agent for such shares) 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 total
number of shares of Preferred Stock issuable upon exercise of the Rights
hereunder with a depositary agent, requisition from the depositary agent
depositary receipts representing such number of one one-thousandths of a share
of Preferred Stock as are 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 fractional shares in
accordance with Section 14 (Fractional Rights and Fractional Shares), (iii)
after receipt thereof, deliver such certificates or depositary receipts to or
upon the order of the registered holder of such Rights Certificate, registered
in such name or names as may be designated by such holder, and (iv) after
receipt thereof, deliver such cash, if any, to or upon the order of the
registered holder of such Rights Certificate.
(d) Partial Exercise. In case the registered holder of any Rights
Certificate shall exercise less than all the Rights evidenced thereby, a new
Rights Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and delivered to, or upon the
order of the registered holder of such Rights Certificate, registered in such
name or names as may be designated by such holder, subject to the provisions of
Section 6 (Transfer, Split
12
18
Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost
or Stolen Rights Certificates) and Section 14 (Fractional Rights and Fractional
Shares).
(e) Termination of Acquiring Person's Rights. Notwithstanding anything
in this Agreement to the contrary, from and after the first occurrence of a
Flip-in Event, any Rights beneficially owned by (i) an Acquiring Person, or an
Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee after
such Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or to
any Person with whom the Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer
which is part of an agreement, arrangement or understanding which has as a
primary purpose or effect the avoidance of this Section 7(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 any provision of
this Agreement or otherwise. The Company shall notify the Rights Agent when this
Section 7(e) applies and shall use all reasonable efforts to ensure that the
provisions of this Section 7(e) and Section 4(b) (Form of Rights Certificates --
Acquiring Person Legend) are complied with, but neither the Company nor the
Rights Agent shall have any liability to any holder of Rights Certificates or
other Person as a result of the Company's failure to make any determinations
with respect to an Acquiring Person or any of its respective Affiliates,
Associates or transferees hereunder.
(f) Surrender of Rights Certificates; Identity of Beneficial Owner.
Notwithstanding anything in this Agreement to the contrary, neither the Rights
Agent nor the Company shall be obligated to undertake any action with respect to
a registered holder upon the occurrence of any purported exercise as set forth
in this Section 7 unless such registered holder shall have (i) properly
completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Rights Certificate surrendered for
such exercise, and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company or the Rights Agent shall reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates. All Rights
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
canceled Rights Certificates to the Company, or shall, at the written request of
the Company, destroy such canceled Rights Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
13
19
Section 9. Reservation and Availability of Capital Stock.
(a) Reservation of Capital Stock. The Company will use its best
efforts to reserve and keep available out of its authorized and unissued shares
of Preferred Stock (and, following the occurrence of a Triggering Event, out of
its authorized and unissued shares of Common Stock and/or other securities or
out of its authorized and issued shares of Common Stock held in its treasury),
the number of shares of Preferred Stock (and, following the occurrence of a
Triggering Event, Common Stock and/or other securities) that, as provided in
this Agreement, including the rights of the Company under Section 11(a)(iii)
(Adjustment of Purchase Price; Number and Kind of Shares or Number of Rights --
Certain Adjustments) to otherwise fulfill its obligations, will be sufficient to
permit the exercise in full of all outstanding Rights.
(b) Listing. So long as the shares of Preferred Stock (and, following
the occurrence of a Triggering Event, Common Stock and/or other securities)
issuable and deliverable upon the exercise of the Rights may be listed on any
stock exchange or authorized for quotation on any interdealer quotation system
of any securities association, the Company shall use its best efforts to cause,
from and after such time as the Rights become exercisable, all shares reserved
for such issuance to be listed on such exchange or quoted on such system upon
official notice of issuance upon such exercise.
(c) Registration under the Act. The Company will use its best efforts
to (i) file, as soon as practicable following the earliest date after the first
occurrence of a Flip-in Event on which the consideration to be delivered by the
Company upon exercise of the Rights has been determined in accordance with
Section 11(a)(iii) (Adjustment of Purchase Price; Number and Kind of Shares or
Number of Rights -- Certain Adjustments), or as soon as is required by law
following the Distribution Date, as the case may be, a registration statement on
an appropriate form under the Act with respect to the securities purchasable
upon exercise of the Rights, (ii) cause such registration statement to become
effective as soon as practicable after such filing, and (iii) cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the 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 will also take such action as may be appropriate
under, or 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 ninety (90) calendar
days after the date set forth in clause (i) of the first sentence of this
Section 9(c), 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 at such time as the suspension is no longer in effect. The Company
shall notify the Rights Agent in writing whenever it makes a public announcement
pursuant to this Section 9(c), and provide the Rights Agent with a copy of the
public announcement. In addition, if the Company shall determine that a
registration statement is required following the Distribution Date, the Company
may temporarily suspend the exercisability of the Rights until such time as a
registration statement has been declared effective. Notwithstanding any
provision of this Agreement to the contrary, the Rights shall not be exercisable
in any jurisdiction if the requisite
14
20
qualification in such jurisdiction shall not have been obtained, the exercise
thereof shall not be permitted under applicable law or a registration statement
shall not have been declared effective.
(d) Covenant Regarding Capital Stock. The Company will take all such
action as may be necessary to ensure that all one one-thousandths of a share of
Preferred Stock (and, following the occurrence of a Triggering Event, Common
Stock and/or other securities) delivered upon exercise of Rights shall, at the
time of delivery of the certificates for such shares (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully paid and
nonassessable.
(e) Taxes and Charges. The Company will pay when due and payable any
and all federal and state taxes and governmental charges which may be payable in
respect of the issuance or delivery of the Rights Certificates and of any
certificates for a number of one one-thousandths of a share of Preferred Stock
(or Common Stock and/or other securities, as the case may be) upon the exercise
of Rights. The Company shall not, however, be required to pay any transfer tax
which may be payable in respect of any transfer or delivery of Rights
Certificates to a Person other than, or the issuance or delivery of a number of
one one-thousandths of a share of Preferred Stock (or Common Stock and/or other
securities, as the case may be) in respect of a name other than, that of the
registered holder of the Rights Certificates evidencing Rights surrendered for
exercise or to issue or deliver any certificates for a number of one
one-thousandths of a share of Preferred Stock (or Common Stock and/or other
securities, as the case may be) in a name other than that of the registered
holder upon the exercise of any Rights until such tax shall have been paid (any
such tax being payable by the holder of such Rights Certificate at the time of
surrender) or until it has been established to the Company's satisfaction that
no such tax is due.
Section 10. Preferred Stock Record Date. Each Person in whose name any
certificate for a number of one one-thousandths of a share of Preferred Stock
(or Common Stock and/or other securities, as the case may be) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder of
record of such fractional shares of Preferred Stock (or Common Stock and/or
other securities, as the case may be) represented thereby on, and such
certificate shall be dated as of, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and all applicable taxes and other governmental charges) was made; provided,
however, that if the date of such surrender and payment is a date upon which the
Preferred Stock (or Common Stock and/or other securities, as the case may be)
transfer books of the Company are closed, such Person shall be deemed to have
become the record holder of such shares (fractional or otherwise) on, and such
certificate shall be dated, the next succeeding Business Day on which the
Preferred Stock (or Common Stock and/or other securities, as the case may be)
transfer books of the Company are open. Prior to the exercise of the Rights
evidenced thereby, the holder of a Rights 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, without limitation, 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.
15
21
Section 11. Adjustment of Purchase Price; Number and Kind of Shares or
Number of Rights. The Purchase Price, the number and kind of shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a) Certain Adjustments.
(i) In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Preferred Stock payable in
shares of Preferred Stock, (B) subdivide or split the outstanding Preferred
Stock, (C) combine the outstanding Preferred Stock into a smaller number of
shares, or (D) issue any shares of its capital stock in a reclassification
of the Preferred Stock (including any such reclassification in connection
with a consolidation or merger in which the Company is the continuing or
surviving corporation), except as otherwise provided in this Section 11(a)
and Section 7(e) (Exercise of Rights; Purchase Price; Expiration Date of
Rights -- Termination of Acquiring Person's Rights), the Purchase Price in
effect at the time of the record date for such dividend or of the effective
date of such subdivision, split, combination or reclassification, and the
number and kind of shares of Preferred Stock or capital stock, as the case
may be, issuable on such date, shall be proportionately adjusted so that
the holder of any Right exercised after such time shall be entitled to
receive, upon payment of the aggregate adjusted Purchase Price then in
effect necessary to exercise a Right in full, the aggregate number and kind
of shares of Preferred Stock or capital stock, as the case may be, which,
if such Right had been exercised immediately prior to such date and at a
time when the Preferred Stock (or other capital stock, as the case may be)
transfer books of the Company were open, such holder would have owned upon
such exercise and been entitled to receive by virtue of such dividend,
subdivision, split, combination or reclassification. If an event occurs
which would require an adjustment under both this Section 11(a)(i) and
Section 11(a)(ii) the adjustment provided for in this Section 11(a)(i)
shall be in addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii).
(ii) In the event:
(A) (1) any Acquiring Person or any Associate or Affiliate
of any Acquiring Person, at any time after the date of this Agreement,
directly or indirectly, shall merge into the Company or otherwise
combine with the Company and the Company shall be the continuing or
surviving corporation of such merger or combination and the Common
Stock of the Company shall remain outstanding and unchanged, or (2)
subject to Section 23 (Redemption and Termination), any Person (other
than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company, or any Person
or entity organized, appointed or established by the Company for or
pursuant to the terms of any such plan), alone or together with its
Affiliates and Associates, shall, at any time after the Rights
Dividend Declaration Date, become an Acquiring Person, unless the
event causing such Person to become an Acquiring Person is a Flip-over
Event, or is an acquisition of shares of Common Stock pursuant to a
tender offer or an
16
22
exchange offer for all outstanding shares of Common Stock at a price
and on terms determined by the Board, prior to the public announcement
of such tender offer or exchange offer, after receiving advice from
one or more investment banking firms selected by the Board, to be (a)
at a price which is fair to the stockholders of the Company (taking
into account all factors which the Board deems relevant including,
without limitation, prices which could reasonably be achieved if the
Company or its assets were sold on an orderly basis designed to
realize maximum value) and (b) otherwise in the best interests of the
Company and its stockholders, other than such Acquiring Person, its
Affiliates and its Associates; or
(B) during such time as there is an Acquiring Person, there
shall be any reclassification of securities (including any reverse
stock split), or recapitalization of the Company, or any merger or
consolidation of the Company with any of its Subsidiaries or any other
transaction or series of transactions involving the Company or any of
its Subsidiaries, other than a transaction or transactions to which
the provisions of Section 13(a) (Consolidation, Merger or Sale or
Transfer of Assets or Earning Power -- Flip-over Event) apply (whether
or not with or into or otherwise involving an Acquiring Person) which
has the effect, directly or indirectly, of increasing by more than 1%
the proportionate share of the outstanding shares of any class of
equity securities of the Company or any of its subsidiaries which is
directly or indirectly beneficially owned by any Acquiring Person or
any Associate or Affiliate of any Acquiring Person,
then, promptly following the occurrence of any such Flip-in Event (whether
described in Section 11(a)(ii)(A) or (B)), proper provision shall be made
so that each holder of a Right (except as provided below and in Section
7(e) (Exercise of Rights; Purchase Price; Expiration Date of Rights --
Termination of Acquiring Person's Rights)) shall thereafter have the right
to receive, upon exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, in lieu of the number of one
one-thousandths of a share of Preferred Stock, such number of shares of
Common Stock of the Company as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the then number of one
one-thousandths of a share of Preferred Stock for which a Right was
exercisable immediately prior to the first occurrence of a Flip-in Event,
and (y) dividing that product (which, following such first occurrence,
shall thereafter be referred to as the "Purchase Price" for each Right and
for all purposes of this Agreement) by 50% of the Current Market Price per
share of Common Stock on the date of such first occurrence (such number of
shares being referred to as the "Adjustment Shares").
(iii) In the event that the number of shares of Common Stock that
are authorized by the Company's Certificate of Incorporation but not
outstanding or reserved for issuance for purposes other than upon exercise
of the Rights is not sufficient to permit the exercise in full of the
Rights in accordance with the foregoing subparagraph (ii) of this Section
11(a), the Company shall: (A) determine the excess of (1) the value of the
Adjustment Shares issuable upon the exercise of a Right (the "Current
Value") over (2) the
17
23
Purchase Price (such excess, the "Spread"), and (B) with respect to each
Right, subject to Section 7(e)(Exercise of Rights; Purchase Price;
Expiration Date of Rights -- Termination of Acquiring Person's Rights),
make adequate provision to substitute for the Adjustment Shares, upon
payment of the applicable Purchase Price, (1) cash, (2) a reduction in the
Purchase Price, (3) Common Stock or other equity securities of the Company
(including, without limitation, shares, or units of shares, of preferred
stock which the Board has deemed to have essentially the same value or
economic rights as shares of Common Stock (such shares of preferred stock
being referred to as "Common Stock Equivalents")), (4) debt securities of
the Company, (5) other assets, or (6) any combination of the foregoing,
having an aggregate value equal to the Current Value (less the amount of
any reduction in the Purchase Price), where such aggregate value has been
determined by the Board based upon the advice of a nationally recognized
investment banking firm selected by the Board; provided, however, that if
the Company shall not have made adequate provision to deliver value
pursuant to clause (B) above within thirty (30) calendar days following the
first occurrence of a Flip-in Event (the date of such Flip-in Event being
referred to herein as the "Flip-in Trigger Date"), then the Company shall
be obligated to deliver, upon the surrender for exercise of a Right and
without requiring payment of the Purchase Price, shares of Common Stock (to
the extent available) and then, if necessary, cash, which shares and/or
cash have an aggregate value equal to the Spread. If the Board shall
determine in good faith that it is likely that sufficient additional shares
of Common Stock or other equity securities could be authorized for issuance
upon exercise in full of the Rights, the thirty (30) calendar day period
set forth above may be extended to the extent necessary, but not more than
ninety (90) calendar days after the Flip-in Trigger Date, in order that the
Company may seek stockholder approval for the authorization of such
additional shares (such period, the "Substitution Period"). To the extent
that the Company determines that some action need be taken pursuant to the
first and/or second sentences of this Section 11(a)(iii), the Company (x)
shall provide, subject to Section 7(e), that such action shall apply
uniformly to all outstanding Rights, and (y) may suspend the exercisability
of the Rights until the expiration of the Substitution Period in order to
seek any authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such first sentence
and to determine the value thereof. In the event of any such suspension,
the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no longer in effect.
For purposes of this Section 11(a)(iii), the value of the Common Stock
shall be the Current Market Price per share of the Common Stock on the
Flip-in Trigger Date and the value of any Common Stock Equivalent shall be
deemed to have the same value as the Common Stock on such date.
(iv) If the rules of the national securities exchange, registered
as such pursuant to Section 6 of the Exchange Act, or of the national
securities association, registered as such pursuant to Section 15A of the
Exchange Act, on which the Common Stock is principally traded or quoted
would prohibit such exchange or association from listing or continuing to
list, or from authorizing for or continuing quotation and/or transaction
reporting through an inter-dealer quotation system, the Common Stock or
other equity
18
24
securities of the Company if the Rights were to be exercised for shares of
Common Stock in accordance with subparagraph (ii) of this Section 11(a)
because such issuance would nullify, restrict or disparately reduce the per
share voting rights of holders of Common Stock, the Company shall: (A)
determine the Spread, and (B) with respect to each Right, make adequate
provision to substitute for the Adjustment Shares, upon payment of the
applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price,
(3) equity securities of the Company, including, without limitation, Common
Stock Equivalents, other than securities which would have the effect of
nullifying, restricting or disparately reducing the per share voting rights
of holders of Common Stock, (4) debt securities of the Company, (5) other
assets, or (6) any combination of the foregoing, having an aggregate value
equal to the Current Value, where such aggregate value has been determined
by the Board based upon the advice of a recognized investment banking firm
selected by the Board; provided, however, if the Company shall not have
made adequate provision to deliver value pursuant to clause (B) above
within thirty (30) calendar days following the Flip-in Trigger Date, then
the Company shall be obligated to deliver, upon the surrender for exercise
of a Right and without requiring payment of the Purchase Price, cash having
an aggregate value equal to the Spread. To the extent that the Company
determines that some action need be taken pursuant to the first sentence of
this Section 11(a)(iv), the Company (x) shall provide, subject to Section
7(e) (Exercise of Rights; Purchase Price; Expiration Date of Rights --
Termination of Acquiring Person's Rights), that such action shall apply
uniformly to all outstanding Rights and (y) may suspend the exercisability
of the Rights, but not longer than ninety (90) calendar days after the
Flip-in Trigger Date, in order to decide the appropriate form of
distribution to be made pursuant to such first sentence and to determine
the value thereof. In the event of any such suspension, the Company shall
issue a public announcement stating that the exercisability of the Rights
has been temporarily suspended, as well as a public announcement at such
time as the suspension is no longer in effect. For purposes of this Section
11(a)(iv), the value of the Common Stock shall be the Current Market Price
per share of the Common Stock on the Flip-in Trigger Date and the value of
any Common Stock Equivalent shall be deemed to have the same value as the
Common Stock on such date.
(b) Purchase Price Adjustment -- Capital Stock. In case the Company
shall fix a record date for the issuance of rights, options or warrants to all
holders of Preferred Stock entitling them to subscribe for or purchase (for a
period expiring within forty-five (45) calendar days after such record date)
Preferred Stock (or shares having the same rights, privileges and preferences as
the shares of Preferred Stock ("Equivalent Preferred Stock")) or securities
convertible into Preferred Stock or Equivalent Preferred Stock at a price per
share of Preferred Stock or per share of Equivalent Preferred Stock (or having a
conversion price per share, if a security convertible into Preferred Stock or
Equivalent Preferred Stock) less than the Current Market Price per share of
Preferred Stock on such record date, the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the number of shares of Preferred Stock outstanding on such record
date, plus the number of shares of Preferred Stock which the aggregate offering
price of the total number of shares of Preferred Stock and/or Equivalent
Preferred Stock so to be offered (and/or the aggregate initial conversion price
of the convertible securities so to be offered) would purchase at
19
25
such Current Market Price, and the denominator of which shall be the number of
shares of Preferred Stock outstanding on such record date, plus the number of
additional shares of Preferred Stock and/or Equivalent Preferred Stock to be
offered for subscription or purchase (or into which the convertible securities
so to be offered are initially convertible). In case such subscription price may
be paid by delivery of consideration part or all of which may 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 binding on the Rights Agent and the holders of the
Rights. 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 in the event that such rights 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) Purchase Price Adjustment -- Cash, Assets, etc. In case the
Company shall fix a record date for a distribution to all holders of Preferred
Stock (including any such distribution made in connection with a consolidation
or merger in which the Company is the continuing corporation) of evidences of
indebtedness, cash (other than a regular quarterly cash dividend out of the
earnings or retained earnings of the Company), assets (other than a dividend
payable in Preferred Stock, but including any dividend payable in stock other
than Preferred Stock) or subscription rights or warrants (excluding those
referred to in Section 11(b) (Adjustment of Purchase Price; Number and Kind of
Shares or Number of Rights Purchase Price Adjustment -- Capital Stock)), 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 on such record date, less the fair market value (as
determined in good faith by the Board, whose determination shall be described in
a statement filed with the Rights Agent) of the portion of the cash, assets or
evidences of indebtedness so to be distributed or of such subscription rights or
warrants applicable to a share of Preferred Stock and the denominator of which
shall be such Current Market Price per share of Preferred Stock. Such
adjustments shall be made successively whenever such a record date is fixed, and
in the event that such distribution is not so made, the Purchase Price shall be
adjusted to be the Purchase Price which would have been in effect if such record
date had not been fixed.
(d) Current Market Price.
(i) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) (Adjustment of Purchase Price;
Number and Kind of Shares or Number of Rights -- Certain Adjustments) the
Current Market Price per share of Common Stock on any date shall be deemed to be
the average of the daily closing prices per share of such Common Stock for the
thirty (30) consecutive Trading Days immediately prior to and not including such
date, and for purposes of computations made pursuant to Section 11(a)(iii) the
Current Market Price per share of Common Stock on any date shall be deemed to be
the average of the daily closing prices per share of such Common Stock for the
ten (10) consecutive Trading Days immediately following and not including such
date; provided, however, that in the event that the Current Market Price per
share of the Common Stock is determined during a period following the
20
26
announcement by the issuer of such Common Stock of (A) a dividend or
distribution on such Common Stock payable in shares of such Common Stock or
securities convertible into shares of such Common Stock (other than the Rights),
or (B) any subdivision, combination or reclassification of such Common Stock and
the ex-dividend date for such dividend or distribution, or the record date for
such subdivision, combination or reclassification shall not have occurred prior
to the commencement of the requisite thirty (30) Trading Day or ten (10) Trading
Day period, as set forth above, 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 Trading Day shall be the last sale price, regular way,
or, in case no such sale takes place on such Trading Day, the average of the
closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the shares
of Common Stock are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the shares of Common Stock are listed or admitted to trading or, if the
shares of Common Stock are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as reported by
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 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 Common Stock selected by the Board. If on any such date no market maker is
making a market in the Common Stock, the fair value of such shares on such date
as determined in good faith by the Board shall be used. The term "Trading Day"
shall mean a day on which the principal national securities exchange on which
the shares of Common Stock are listed or admitted to trading is open for the
transaction of business or, if the shares of Common Stock are not listed or
admitted to trading on any national securities exchange, a Business Day. If the
Common Stock is not publicly held or not so listed or traded, Current Market
Price per share shall mean the fair value per share 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.
(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 Common Stock in clause (i) of this Section 11(d)
(other than the last sentence thereof). If the Current Market Price per share of
Preferred Stock cannot be determined in the manner provided above or if the
Preferred Stock is not publicly held or listed or traded in a manner described
in clause (i) of this Section 11(d), the Current Market Price per share of
Preferred Stock shall be conclusively deemed to be an amount equal to 1,000 (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
the Common Stock. If neither the Common Stock nor the Preferred Stock is
publicly held or so listed or traded, Current Market Price per share of the
Preferred Stock shall mean the fair value per share 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. For all purposes of
this Agreement, the Current
21
27
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 1,000.
(e) Purchase Price Adjustment Threshold. Anything herein to the
contrary notwithstanding, no adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or decrease of at least one
percent (1%) in the Purchase Price; provided however, that any adjustments which
by reason of this Section 11(e) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 11 (Adjustment of Purchase Price; Number and Kind of Shares
or Number of Rights) shall be made to the nearest cent or to the nearest
thousandth of a share of Common Stock or other share or one-millionth of a share
of Preferred Stock, as the case may be. Notwithstanding the first sentence of
this Section 11(e), any adjustment required by this Section 11 shall be made no
later than the earlier of (i) three (3) years from the date of the transaction
which mandates such adjustment, or (ii) the Expiration Date.
(f) Equivalent Adjustments. If as a result of an adjustment made
pursuant to Section 11(a)(ii) (Adjustment of Purchase Price; Number and Kind of
Shares or Number of Rights -- Certain Adjustments) or Section 13(a)
(Consolidation Merger or Sale or Transfer of Assets or Earning Power --
Flip-over Event) the holder of any Right thereafter exercised shall become
entitled to receive 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 Sections 11(a), (b),
(c), (e), (g), (h), (i), (j), (k) and (m), and the provisions of Sections 7, 9,
10, 13 and 14 with respect to the Preferred Stock shall apply on like terms to
any such other shares.
(g) Post-Adjustment Rights Issuances. All Rights originally issued by
the Company subsequent to any adjustment made to the Purchase Price hereunder
shall evidence the right to purchase, at the adjusted Purchase Price, the number
of one one-thousandths of a share of Preferred Stock purchasable from time to
time hereunder upon exercise of the Rights, all subject to further adjustment as
provided herein.
(h) Preferred Stock Anti-Dilution. Unless the Company shall have
exercised its election as provided in Section 11(i) (Adjustment of Purchase
Price; Number and Kind of Shares or Number of Rights -- Adjustment of Number of
Rights), upon each adjustment of the Purchase Price as a result of the
calculations made in Section 11(b) (Adjustment of Purchase Price; Number and
Kind of Shares or Number of Rights -- Purchase Price Adjustment -- Capital
Stock) and Section 11(c) (Adjustment of Purchase Price; Number and Kind of
Shares or Number of Rights -- Purchase Price Adjustment -- Cash, Assets, etc.),
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-millionth) obtained by (i) multiplying (x) the number of one
one-thousandths of a share covered by a Right immediately prior to this
adjustment, by (y) the Purchase Price in effect immediately prior to such
22
28
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) Adjustment of Number of Rights. 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 purchasable upon the exercise of a Right. Each of the Rights
outstanding after the adjustment in the number of Rights shall be exercisable
for the number of one one-thousandths of a share of Preferred Stock for which a
Right was exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that number
of Rights (calculated to the nearest one-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, and provide a copy of such public announcement to
the Rights Agent, 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 Rights Certificates have been issued, shall be at least ten (10) calendar
days later than the date of the public announcement. If Rights Certificates have
been issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Rights Certificates on such record date
Rights Certificates evidencing, subject to Section 14 (Fractional Rights and
Fractional Shares) the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and replacement for the
Rights Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Rights 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 Rights Certificates on the record date
specified in the public announcement.
(j) Rights Certificates. 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 Rights Certificates
theretofore and thereafter issued may continue to express the Purchase Price per
one one-thousandth of a share and the number of one one-thousandths of a share
which were expressed in the initial Rights Certificates issued hereunder.
(k) Adjustment Below Par Value. Before taking any action that would
cause an adjustment reducing the Purchase Price below the then par or stated
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 is or 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.
23
29
(l) Adjustment Effective as of Future Date; Exercise. In any case in
which this Section 11 (Adjustment of Purchase Price; Number and Kind of Shares
or Number of Rights) 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 and other capital stock or securities of the Company,
if any, issuable upon such exercise over and above the number of one
one-thousandths of a share of Preferred Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise on the basis of
the Purchase Price in effect prior to such adjustment; provided, however, that
the Company shall deliver to such holder a due xxxx or other appropriate
instrument evidencing such holder's right to receive such additional shares
(fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment. The Company shall notify the Rights Agent in writing
of any adjustment in the Purchase Price and/or its election of deferment.
(m) Tax Adjustments. Anything in this Section 11 (Adjustment of
Purchase Price; Number and Kind of Shares or Number of Rights) to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that in its good faith judgment the Board shall
determine to be advisable in order that any (i) consolidation or subdivision of
the Preferred Stock, (ii) issuance wholly for cash of any shares of Preferred
Stock at less than the Current Market Price, (iii) issuance wholly for cash of
shares of Preferred Stock or securities which by their terms are convertible
into or exchangeable for shares of Preferred Stock, (iv) stock dividends or (v)
issuance of rights, options or warrants referred to in this Section 11,
hereafter made by the Company to holders of its Preferred Stock shall not be
taxable to such stockholders.
(n) Restriction on Certain Transactions. The Company shall not, at any
time after the earlier of the Stock Acquisition Date or the Distribution Date,
(i) consolidate with any other Person (other than a Subsidiary of the Company in
a transaction which complies with Section 11(o) (Adjustment of Purchase Price;
Number and Kind of Shares or Number of Rights -- Restriction Against Diminishing
Benefits of the Rights)), (ii) merge with or into any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)),
(iii) enter into a statutory share exchange or similar transaction with any
other Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o)), or (iv) sell or transfer (or permit any Subsidiary
to sell or transfer), in one transaction, or a series of related transactions,
assets, cash flow or earning power aggregating more than 50% of the assets, cash
flow or earning power of the Company and its Subsidiaries (taken as a whole) to
any other Person or Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which complies with Section
11(o)), if (x) at the time of or immediately after such consolidation, merger,
statutory share exchange or similar transaction, or sale there are any rights,
warrants or other instruments or securities outstanding or agreements in effect
which would substantially diminish or otherwise eliminate the benefits intended
to be afforded by the Rights or (y) prior to, simultaneously with or immediately
after such consolidation, merger, statutory share exchange or similar
transaction, or sale, the stockholders of the Person who constitutes, or would
constitute, the "Principal Party" for purposes of Section 13(a) (Consolidation,
Merger or Sale or Transfer of Assets or Earning Power
24
30
-- Flip-over Event) shall have received a distribution of Rights previously
owned by such Person or any of its Affiliates and Associates.
(o) Restriction Against Diminishing Benefits of the Rights. The
Company covenants and agrees that, after the earlier of the Stock Acquisition
Date or the Distribution Date, it will not, except as permitted by Section 23
(Redemption and Termination) or Section 27 (Supplements and Amendments) take (or
permit any Subsidiary to take) any action if at the time such action is taken it
is reasonably foreseeable that such action will diminish substantially or
otherwise eliminate the benefits intended to be afforded by the Rights.
(p) Common Stock Adjustments. Anything in this Agreement to the
contrary notwithstanding, in the event that the Company shall at any time after
the Rights Dividend Declaration Date and prior to the Distribution Date (i)
declare a dividend on the outstanding shares of Common Stock payable in shares
of Common Stock, (ii) subdivide or split the outstanding shares of Common Stock,
or (iii) combine the outstanding shares of 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 but prior to the Distribution
Date, shall be proportionately adjusted so that the number of Rights thereafter
associated with each share of Common Stock following any such event shall equal
the result obtained by multiplying the number of Rights associated with each
share of Common Stock immediately prior to such event by a fraction, the
numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to the occurrence of the event and the denominator
of which shall be the total number of shares of Common Stock outstanding
immediately following the occurrence of such event. The adjustments provided for
in this Section 11(p) shall be made successively whenever such a dividend is
declared or paid or such subdivision, combination or consolidation is effected.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 (Adjustment of Purchase
Price; Number and Kind of Shares or Number of Rights) and Section 13
(Consolidation, Merger or Sale or Transfer of Assets or Earning Power) the
Company shall (a) promptly prepare a certificate setting forth such adjustment
and a brief, reasonably detailed statement of the facts, computations and
methodology of 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 or cause the Rights Agent to
mail a brief summary thereof to each holder of a Rights Certificate (or, if
prior to the Distribution Date, to each holder of a certificate representing
shares of Common Stock) in accordance with Section 26 (Notices). The Rights
Agent shall be fully protected in relying on any such certificate and on any
adjustment therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power.
(a) Flip-over Event. In the event that, following the Stock
Acquisition Date, directly or indirectly, (x) the Company shall consolidate
with, or merge with and into, or enter into a statutory stock exchange or
similar transaction with, any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o)(Adjustment of
Purchase Price;
25
31
Number and Kind of Shares or Number of Rights -- Restriction Against Diminishing
Benefits of the Rights)), and the Company shall not be the continuing or
surviving corporation of such consolidation, merger or statutory share exchange
or similar transaction, (y) any Person (other than a Subsidiary of the Company
in a transaction which complies with Section 11(o)) shall consolidate with, or
merge with or into, or enter into a statutory stock exchange or similar
transaction with, the Company, and the Company shall be the continuing or
surviving corporation of such consolidation, merger or statutory share exchange
or similar transaction and, in connection with such consolidation, merger or
statutory share exchange or similar transaction, all or part of the outstanding
shares of Common Stock shall be changed into or exchanged for stock or other
securities of any other Person or cash or any other property, or (z) the Company
shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell
or otherwise transfer), in one transaction or a series of related transactions,
assets, cash flow or earning power aggregating more than 50% of the assets, cash
flow or earning power of the Company and its Subsidiaries (taken as a whole) to
any Person or Persons (other than the Company or any Subsidiary of the Company
in one or more transactions each of which complies with Section 11(o)), then,
and in each such case (except as may be contemplated by Section 13(d)
(Consolidation, Merger or Sale or Transfer of Assets or Earning Power --
Exceptions)), (i) proper provision shall be made so that: each holder of a
Right, except as provided in Section 7(e) (Exercise of Rights; Purchase Price;
Expiration Date of Rights -- Termination of Acquiring Person's Rights) shall
thereafter have the right to receive, upon the exercise thereof at the then
current Purchase Price in accordance with the terms of this Agreement, such
number of validly authorized and issued, fully paid, nonassessable and freely
tradeable shares of Common Stock of the Principal Party, not subject to any
liens, encumbrances, rights of first refusal or other adverse claims, as shall
be equal to the result obtained by (A) multiplying the then current Purchase
Price by the number of one one- thousandths of a share of Preferred Stock for
which a Right is exercisable immediately prior to the first occurrence of a
Flip-over Event (or, if a Flip-in Event has occurred prior to the first
occurrence of a Flip-over Event, multiplying the number of such one
one-thousandths of a share for which a Right was exercisable immediately prior
to the first occurrence of a Flip-in Event by the Purchase Price in effect
immediately prior to such first occurrence), and (B) dividing that product
(which, following the first occurrence of a Flip-over Event, shall be referred
to as the "Purchase Price" for each Right and for all purposes of this
Agreement) by 50% of the Current Market Price per share of the Common Stock of
such Principal Party on the date of consummation of such Flip-over Event; (ii)
such Principal Party shall thereafter be liable for, and shall assume, by virtue
of such Flip-over Event, 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 11 (Adjustment of Purchase Price; Number and Kind of Shares or Number of
Rights) shall apply only to such Principal Party following the first occurrence
of a Flip- over Event; (iv) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient number of shares
of its Common Stock) 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 its shares of Common
Stock thereafter deliverable upon the exercise of the Rights; and (v) the
provisions of Section 11(a)(ii) (Adjustment of Purchase Price; Number and Kind
of Shares or Number of Rights -- Certain Adjustments) hereof shall be of no
effect following the first occurrence of any Flip-over Event.
26
32
(b) Principal Party. "Principal Party" shall mean
(i) in the case of any transaction described in clause (x) or (y)
of the first sentence of Section 13(a) (Consolidation, Merger or Sale or
Transfer of Assets or Earning Power -- Flip-over Event), the Person that is
the issuer of any securities into which shares of Common Stock of the
Company are converted in such consolidation, merger or statutory share
exchange or similar transaction, and if no securities are so issued, the
Person that is the other party to such consolidation, merger or statutory
share exchange or similar transaction, and
(ii) in the case of any transaction described in clause (z) of
the first sentence of Section 13(a) (Consolidation, Merger or Sale or
Transfer of Assets or Earning Power -- Flip-over Event), the Person that is
the party receiving the greatest portion of the assets, cash flow or
earning power transferred pursuant to such transaction or transactions;
provided, however, that in any such case, (1) if the Common Stock of such Person
is not at such time and has not been continuously over the preceding twelve (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 (2) 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 total outstanding Common Stock having the greatest aggregate
market value.
(c) Supplemental Agreement. The Company shall not consummate a
Flip-over Event unless the Principal Party shall have a sufficient number of
authorized shares of its Common Stock which have not been issued or reserved for
issuance to permit the exercise in full of the Rights in accordance with this
Section 13 (Consolidation, Merger or Sale or Transfer of Assets or Earning
Power) 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 paragraphs (a) and (b) of this Section 13 and further
providing that, as soon as practicable after the date of such Flip-over Event,
the Principal Party will
(i) prepare and file a registration statement under the Act, with
respect to the Rights and the securities purchasable upon exercise of the
Rights on an appropriate form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as practicable after
such filing and (B) remain effective (with a prospectus at all times
meeting the requirements of the Act) until the Expiration Date and take all
such other action as may be necessary to enable the Principal Party to
issue the securities purchasable upon exercise of the Rights, including but
not limited to the registration or qualification of such securities under
all requisite securities laws or jurisdictions of the various states and
the listing of such securities on such exchange and trading markets as may
be necessary or appropriate; and
27
33
(ii) will deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which comply
in all respects with the requirements for registration on Form 10 under the
Exchange Act.
The provisions of this Section 13 (Consolidation, Merger or Sale or Transfer of
Assets or Earning Power) shall similarly apply to successive consolidations,
mergers or statutory share exchanges or similar transactions or sales or other
transfers. In the event that a Flip-over Event shall occur at any time after the
occurrence of a Flip-in Event, the Rights which have not theretofore been
exercised shall thereafter become exercisable in the manner described in Section
13(a) (Consolidation, Merger or Sale or Transfer of Assets or Earning Power --
Flip-over Event).
(d) Exceptions. Notwithstanding anything in this Agreement to the
contrary, Section 13 (Consolidation, Merger or Sale or Transfer of Assets or
Earning Power) shall not be applicable to a transaction described in
subparagraphs (x) and (y) of Section 13(a) (Consolidation, Merger or Sale or
Transfer of Assets or Earning Power -- Flip-over Event) if (i) such transaction
is consummated with a Person or Persons who acquired shares of Common Stock
pursuant to a tender offer or exchange offer for all outstanding shares of
Common Stock which complies with the provisions of Section 11(a)(ii)(A)
(Adjustment of Purchase Price; Number and Kind of Shares or Number of Rights --
Certain Adjustments) (or a wholly-owned subsidiary of any such Person or
Persons), (ii) the price per share of Common Stock offered in such transaction
is not less than the price per share of Common Stock paid to all holders of
shares of Common Stock whose shares were purchased pursuant to such tender or
exchange offer and (iii) the form of consideration being offered in such
transaction is the same as the form of consideration paid to all holders of
shares of Common Stock whose shares were purchased pursuant to such tender offer
or exchange offer. Upon consummation of any such transaction contemplated by
this Section 13(d), all Rights hereunder shall expire.
Section 14. Fractional Rights and Fractional Shares.
(a) Fractional Rights. The Company shall not be required to issue
fractions of Rights, except prior to the Distribution Date as provided in
Section 11(p) (Adjustment of Purchase Price; Number and Kind of Shares or Number
of Rights -- Common Stock Adjustments), or to distribute Rights Certificates
which evidence fractional Rights. In lieu of such fractional Rights, there shall
be paid to the registered holders of the Rights Certificates with regard to
which such fractional Rights would otherwise be issuable, an amount in cash
equal to the same fraction of the current market value of a whole Right. For
purposes of this Section 14(a), the current market value of a whole Right shall
be the closing price of the Rights for the Trading Day immediately prior to the
date on which such fractional Rights would have been otherwise issuable. The
closing price of the Rights for any Trading Day shall be the last sale price,
regular way, or, in case no such sale takes place on such Trading Day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities
28
34
exchange on which the Rights are listed or admitted to trading, or if the Rights
are not listed or admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market as reported by the National
Association of Securities Dealers, Inc. Automated Quotation System or such other
system then in use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by the Board.
If on any such date no such market maker is making a market in the Rights, the
fair value of the Rights on such date as determined in good faith by the Board
shall be used.
(b) Fractional Shares of Preferred Stock. The Company shall not be
required to issue fractions of shares of Preferred Stock (other than fractions
which are integral multiples of one one-thousandth of a share of Preferred Stock
which may at the option of the Company, be evidenced by depositary receipts)
upon exercise of the Rights or to distribute certificates which evidence
fractional shares of Preferred Stock (other than fractions which are integral
multiples of one one- thousandth of a share of Preferred Stock). Interests in
fractions of Preferred Stock in integral multiples of one one-thousandth of a
share of Preferred Stock may, at the election of the Company, be evidenced by
depositary receipts, pursuant to an appropriate agreement between the Company
and a depositary selected by it; provided, however, that such agreement shall
provide that the holders of such depositary receipts shall have all the rights,
privileges and preferences to which they are entitled as beneficial owners of
the Preferred Stock represented by such depositary receipts. In lieu of
fractional shares of Preferred Stock that are not integral multiples of one
one-thousandth of a share of Preferred Stock, the Company may pay to the
registered holders of Rights Certificates at the time such Rights are exercised
as herein provided an amount in cash equal to the same fraction of the current
market value of one one-thousandth of a share of Preferred Stock. For purposes
of this Section 14(b), the current market value 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 11(d)(ii) (Adjustment of
Purchase Price; Number and Kind of Shares or Number of Rights -- Current Market
Price) for the Trading Day immediately prior to the date of such exercise.
(c) Fractional Shares of Common Stock. Following the occurrence of a
Triggering Event, the Company shall not be required to issue fractions of shares
of Common Stock upon exercise of the Rights or to distribute certificates which
evidence fractional shares of Common Stock. In lieu of fractional shares of
Common Stock, the Company may pay to the registered holders of Rights
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of one (1) share
of Common Stock. For purposes of this Section 14(c), the current market value of
one share of Common Stock shall be the closing price of one share of Common
Stock (as determined pursuant to Section 11(d)(i) (Adjustment of Purchase Price;
Number and Kind of Shares or Number of Rights -- Current Market Price) for the
Trading Day immediately prior to the date of such exercise.
(d) Waiver of Fractional Rights and Shares. The holder of a Right by
the acceptance of the Right expressly waives his or her right to receive any
fractional Rights or any
29
35
fractional shares upon exercise of a Right, except as permitted by this Section
14 (Fractional Rights and Fractional Shares).
Section 15. Rights of Action. All rights of action in respect of this
Agreement are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Rights Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his or her own behalf and for
his or her 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 or her right to exercise the Rights evidenced by such Rights Certificate in
the manner provided in such Rights 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 shall be entitled to specific
performance of the obligations hereunder and injunctive relief against actual or
threatened violations of the obligations hereunder of any Person subject to this
Agreement.
Section 16. Agreement of Rights Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer and
with the appropriate forms and certificates fully executed;
(c) subject to Section 6(a) (Transfer, Split Up, Combination and
Exchange of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates -- Procedure) and Section 7(f) (Exercise of Rights; Purchase Price;
Expiration Date of Rights -- Surrender of Rights Certificates; Identity of
Beneficial Owner), the Company and the Rights Agent may deem and treat the
person in whose name a Rights Certificate (or, prior to the Distribution Date,
the associated Common Stock certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Rights Certificates or the associated Common Stock
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent, subject to
the last sentence of Section 7(e) (Exercise of Rights; Purchase Price;
Expiration Date of Rights -- Termination of Acquiring Person's Rights), shall be
required to 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
30
36
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,
judgment or ruling (whether interlocutory or final) issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative 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, however, the Company must use its best
efforts to have any such order, decree, judgment or ruling lifted or otherwise
overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a Stockholder. No holder,
as such, of any Rights Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the number of one one-thousandths of
a share of Preferred Stock or any other securities of the Company which may at
any time be issuable on the exercise of the Rights represented thereby, nor
shall anything contained herein or in any Rights Certificate be construed to
confer upon the holder of any Rights Certificate, as such, any of the rights of
a stockholder of the Company or 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, or to receive notice of meetings or
other actions affecting stockholders (except as provided in Section 25 (Notice
of Certain Events)), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such Rights Certificate shall
have been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) Compensation. 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 expenses and counsel fees and
other disbursements incurred in the preparation, delivery, amendment,
administration and execution of this Agreement and the exercise and performance
of its duties hereunder. The Company agrees to indemnify the Rights Agent for,
and to hold it harmless against, any loss, liability, damage, judgment, fine,
penalty, claim, demand, settlement, cost or expense, incurred without gross
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted to be done by the Rights Agent in connection with the
execution, acceptance and administration of this Agreement and the exercise and
performance hereunder of its duties, including without limitation the costs and
expenses of defending against or investigating any claim of liability in the
premises. The indemnity provided herein shall survive termination of this
Agreement and the termination and expiration of the Rights. The costs and
expenses incurred in enforcing this right of indemnification shall be paid by
the Company. Anything to the contrary notwithstanding, in no event shall the
Rights Agent be liable for special, punitive, indirect, consequential or
incidental loss or damage of any kind whatsoever (including but not limited to
lost profits), even if the Rights Agent has been advised of the possibility of
such loss or damage. Any liability of the Rights Agent under this Agreement will
be limited to the amount of fees paid by the Company to the Rights Agent
hereunder.
(b) Reliance. The Rights Agent shall be authorized and protected and
shall incur no liability for or in respect of any action taken, suffered or
omitted to be taken by it in connection with the acceptance and administration
of this Agreement in reliance upon any Rights Certificate or
31
37
certificate for Common Stock or for other securities of the Company, instrument
of assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement or other paper or document
believed by it to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or Persons, or otherwise upon the
advice of counsel as set forth in Section 20 (Duties of Rights Agent). The
Rights Agent shall be fully protected in relying on any such certificate and on
any adjustment therein contained. The Rights Agent shall not be deemed to have
any duty or notice unless and until the Company has provided the Rights Agent
with written notice.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Successor. Any Person into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any Person
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any Person succeeding to the
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 of the parties hereto;
provided, however, that such Person would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21 (Change of Rights
Agent).
(b) Prior Countersignatures. In case at any time the name of the
Rights Agent shall be changed and at such time any of the Rights Certificates
shall have been countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates shall not
have been countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in its changed name; and in all such
cases such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties
and obligations expressly imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(a) Legal Counsel. 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 and
the Rights Agent shall incur no liability for or in respect of any action taken,
suffered or omitted to be taken by it in good faith and in accordance with such
opinion.
(b) Certification by the Company. Whenever in the performance of its
duties under this Agreement the Rights Agent shall deem it necessary or
desirable that any fact or matter (including, without limitation, the identity
of any Acquiring Person and the determination of Current Market Price) be proved
or established by the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be herein
specifically
32
38
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by the President, any Vice President, the Secretary, any
Assistant Secretary, the Treasurer or any Assistant Treasurer of the Company and
delivered to the Rights Agent; and such certificate shall be full authorization
and protection to the Rights Agent and the Rights Agent shall incur no liability
for or in respect of any action taken, suffered or omitted in good faith by it
under the provisions of this Agreement in reliance upon such certificate.
(c) Liability for Negligence, etc. The Rights Agent shall be liable
hereunder only for its own negligence, bad faith or willful misconduct.
(d) Statements of Fact or Recitals. 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 Rights Certificates or be required to verify the
same (except as to its countersignature on such Rights Certificates), but all
such statements and recitals are and shall be deemed to have been made by the
Company only.
(e) Agreement; Adjustments. The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Rights Certificate (except its
countersignature); nor shall it be responsible for any breach by the Company of
any covenant or condition contained in this Agreement or in any Rights
Certificate; nor shall it be responsible for any adjustment required under the
provisions of Section 11 (Adjustment of Purchase Price; Number and Kind of
Shares or Number of Rights) or Section 13 (Consolidation, Merger or Sale or
Transfer of Assets or Earning Power) or responsible for the manner, method or
amount of any such adjustment or the ascertaining of the existence of facts that
would require any such adjustment (except with respect to the exercise of Rights
evidenced by Rights Certificates after actual notice of any such adjustment);
nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of Common Stock or
Preferred Stock to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any shares of Common Stock or Preferred Stock will,
when so issued, be validly authorized and issued, fully paid and nonassessable.
(f) Further Assurances. The Company will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) Instructions. The Rights Agent is hereby authorized and directed
to accept instructions with respect to the performance of its duties hereunder
from the President, any Vice President, the Secretary, any Assistant Secretary,
the Treasurer or any Assistant Treasurer of the Company and to apply to such
persons for advice or instructions in connection with its duties, and such
instructions shall be full authorization and protection to the Rights Agent and
the Rights Agent shall incur no liability for or in respect of any action taken,
suffered or omitted to be taken by it in
33
39
good faith in accordance with the written instructions of any such Person. The
Rights Agent may conclusively rely on the most recent written instructions given
by any such officer.
(h) Dealing in Rights. The Rights Agent and any stockholder,
affiliate, director, officer or employee of the Rights Agent may buy, sell or
deal in any of the Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or otherwise act as
fully and freely as though it were not Rights Agent under this Agreement.
Nothing herein shall preclude the Rights Agent from acting in any other capacity
for the Company or for any other Person.
(i) Agents; Reasonable Care. 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 any
other Person resulting from any such act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct, absent gross negligence, bad faith or
willful misconduct in the selection and continued employment thereof.
(j) Expenses; Repayment Assurances. 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) Exercise of Rights; Consultation with Company. If, with respect to
any Rights 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 case may be, has either not been completed or indicates an
affirmative response to clause 1 and/or 2 thereof, the Rights Agent shall not
take any further action with respect to such requested exercise of transfer
without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty (30) calendar days' notice in writing mailed to the Company, and to
each transfer agent of the Common Stock and Preferred Stock, by registered or
certified mail, and to the holders of the Rights Certificates by first- class
mail. The Company may remove the Rights Agent or any successor Rights Agent upon
thirty (30) calendar days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the
Common Stock and Preferred Stock, by registered or certified mail, and to the
holders of the Rights Certificates by first-class mail. If the Rights Agent
shall resign or be removed or shall otherwise become incapable of acting, the
Company shall appoint a successor to the Rights Agent. If the Company shall fail
to make such appointment within a period of thirty (30) calendar 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
34
40
a Rights Certificate (who shall, with such notice, submit his Rights Certificate
for inspection by the Company), then the registered holder of any Rights
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 Person organized and doing business
under the laws of the United States or of any State of the United States, in
good standing, which is subject to supervision or examination by federal or
state authority and 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 clause (a) of this sentence. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment, the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Stock and the Preferred Stock, and mail a
notice thereof in writing to the registered holders of the Rights Certificates.
Failure to give any notice provided for in this Section 21 (Change of Rights
Agent), 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. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any of the Rights
Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of a predecessor Rights Agent and
deliver such Rights Certificates so countersigned; and in case at that time any
of the Rights Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Rights Certificates either in the name of the
predecessor or in the name of the successor Rights Agent; and in all such cases
such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
Section 22. Issuance of New Rights Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Rights Certificates evidencing Rights in such form as
may be approved by the Board to reflect any adjustment or change in the Purchase
Price and the number or kind or class of shares or other securities or property
purchasable under the Rights Certificates made in accordance with the provisions
of this Agreement. In addition, in connection with the issuance or sale of
shares of Common Stock following the Distribution Date and prior to the
redemption or expiration of the Rights, the Company (a) shall, with respect to
shares of Common Stock so issued or sold pursuant to the exercise of stock
options or under any employee plan or arrangement, or upon the exercise,
conversion or exchange of securities hereafter issued by the Company, in either
case outstanding as of the Distribution Date, and (b) may, in any other case, if
deemed necessary or appropriate by the Board, issue Rights Certificates
representing the appropriate number of Rights in connection with such issuance
or sale; provided, however, that (i) no such Rights Certificate shall be issued
if, and to the extent that, the Company shall be 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 Rights Certificate would be issued,
and (ii) no such Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.
35
41
Section 23. Redemption and Termination.
(a) Redemption. The Company may, at its option, at any time prior to
the earlier of (i) the Close of Business on the Stock Acquisition Date, or (ii)
the Close of Business on the Final Expiration Date, redeem (the date of such
redemption being referred to herein as the "Redemption Date") 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 by the Company may be made effective at such time, on
such basis and with such conditions as the Board in its sole discretion, may
establish. The Company may, at its option, pay the Redemption Price in cash,
shares of Common Stock (based on the Current Market Price of the Common Stock at
the time of redemption) or any other form of consideration deemed appropriate by
Board.
(b) Effect of Redemption; Procedure. Immediately upon the action of
the Company ordering the redemption of the Rights and without any further action
and without any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right so held. Promptly after the Redemption Date, the
Company shall (i) give notice of such redemption to the Rights Agent, (ii) give
public notice of such redemption; provided, however, that the failure to give,
or any defect in, such notice shall not affect the validity of such redemption,
and (iii) mail notice of such redemption to the holders of the then outstanding
Rights at their last addresses as they appear upon the registry books of the
Rights Agent or, prior to the Distribution Date, on the registry books of the
Transfer Agent for the Common Stock. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made. Amounts payable shall be rounded
down to the nearest $0.01.
Section 24. Exchange.
(a) Right to Exchange. The Company may, at its option, at any time and
from time to time after the first occurrence of a Flip-in Event, exchange all or
part of the then outstanding and exercisable Rights (other than Rights which
have become null and void as provided in Section 7(e) (Exercise of Rights;
Purchase Price; Expiration Date of Rights -- Termination of Acquiring Person's
Rights)) for the Exchange Number of shares of Common Stock, shares or units of
Preferred Stock which the Board has determined to be a Common Stock Equivalent,
units of other property or any combination thereof as determined by the Board.
Notwithstanding the foregoing, the Company shall not be empowered to effect such
exchange at any time after any Person (other than the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or any such Subsidiary or
any entity holding shares of Common Stock for or pursuant to any such plan),
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the shares of Common Stock then outstanding.
The exchange of the Rights by the Company may be made effective at such time, on
such basis and with such conditions as the Board in its sole discretion may
establish.
36
42
(b) Effect of Exchange; Procedure. Immediately upon the action of the
Company ordering the exchange of any Rights pursuant to paragraph (a) of this
Section 24, evidence of which shall have been filed with the Rights Agent and
without any further action and without any notice, the right to exercise such
Rights will terminate and the only right thereafter of the holders of such
Rights shall be to receive that number of shares of Common Stock, Common Stock
Equivalents or units of other property equal to the number of such Rights held
by such holder multiplied by the Exchange Number. Promptly after the action of
the Company ordering the exchange of the Rights, the Company shall (i) file
evidence of such action with the Rights Agent and to the Rights Agent, (ii) give
public notice of such exchange; provided, however, that the failure to give, or
any defect in, such notice shall not affect the validity of such exchange, and
(iii) mail notice of such exchange to the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of exchange will state the
method by which the exchange 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 as provided in Section 7(e) (Exercise of Rights; Purchase
Price; Expiration Date of Rights -- Termination of Acquiring Person's Rights))
held by each holder of Rights.
(c) Common Stock Equivalents. In any exchange pursuant to this Section
24, the Company, at its option, may substitute Common Stock Equivalents for
Common Stock exchangeable for Rights, at the initial rate of one share of Common
Stock Equivalent for each share of Common Stock, as appropriately adjusted to
reflect adjustments in the voting rights of the Common Stock pursuant to the
Company's Certificate of Incorporation, so that the share of Common Stock
Equivalent delivered in lieu of each share of Common Stock shall have the same
voting rights as one share of Common Stock.
(d) Insufficient Common Stock. In the event that the number of shares
of Common Stock which are authorized by the Company's Certificate of
Incorporation but not outstanding or reserved for issuance for purposes other
than upon exercise of the Rights is not sufficient to permit any exchange of
Rights in accordance with this Section 24, the Company may, at its option, take
all such action as may be necessary to authorize additional shares of Common
Stock for issuance upon such exchange.
(e) Fractional Shares. Upon the action of the Company ordering the
exchange of any Rights pursuant to paragraph (a) of this Section 24, the Company
shall not be required to issue fractions of shares or to distribute certificates
which evidence fractional shares. In lieu of such fractional shares, the Company
may pay to the registered holders of the Rights Certificates with regard to
which such fractional shares would otherwise be issuable an amount in cash equal
to the same fraction of the current market value of one share of Common Stock.
For purposes of this Section 24, the current market value of one share of Common
Stock shall be the closing price of one share of Common Stock (as determined
pursuant to Section 11(d)(i) (Adjustment of Purchase Price; Number and Kind of
Shares or Number of Rights -- Current Market Price)) for the Trading Day
immediately prior to the date of exchange pursuant to this Section 24, and the
value of any Common
37
43
Stock Equivalent shall be deemed to have the same current market value as the
Common Stock on such date.
Section 25. Notice of Certain Events.
(a) Preferred Stock Transactions, etc. In case the Company shall
propose, at any time after the Distribution Date, (i) to pay any dividend
payable in stock of any class to the holders of Preferred Stock or to make any
other distribution to the holders of Preferred Stock (other than a regular
quarterly cash dividend out of earnings or retained earnings of the Company);
(ii) to offer to the holders of Preferred Stock rights or warrants to subscribe
for or to purchase any additional shares of Preferred Stock or shares of stock
of any class or any other securities, rights or options; (iii) to effect any
reclassification of its Preferred Stock (other than a reclassification involving
only the subdivision of outstanding shares of Preferred Stock); (iv) to effect
any consolidation with, merger into or with, or statutory share exchange or
similar transaction with, any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o) (Adjustment of
Purchase Price; Number and Kind of Shares or Number of Rights -- Restriction
against Diminishing Benefits of the Rights)), or to effect any sale or other
transfer (or to permit one or more of its Subsidiaries to effect any sale or
other transfer), in one transaction or a series of related transactions, of more
than 50% of the assets, cash flow or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(o)); (v) to effect the liquidation, dissolution or
winding up of the Company, or (vi) to declare or pay any dividend on the shares
of Common Stock payable in Common Stock or to effect a subdivision, combination
or consolidation of the shares of Common Stock (by reclassification or otherwise
than by payment of dividends in Common Stock), then, in each such case, the
Company shall give to the Rights Agent and to each holder of a Rights
Certificate, to the extent feasible and in accordance with Section 26 (Notices),
a notice of such proposed action, which shall specify the record date for the
purposes of such stock dividend, distribution of rights or warrants, or the date
on which such reclassification, consolidation, merger, statutory share exchange
or similar transaction, sale, transfer, liquidation, dissolution, or winding up
is to take place and the date of participation therein by the holders of the
shares 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 clause (i) or (ii) above
at least twenty (20) calendar days prior to the record date for determining
holders of the shares of Preferred Stock for purposes of such action, and in the
case of any such other action, at least twenty (20) calendar days prior to the
date of the taking of such proposed action or the date of participation therein
by the holders of the shares of Preferred Stock, whichever shall be the earlier.
(b) Other Transactions. In case any of the events set forth in Section
11(a)(ii) (Adjustment of Purchase Price; Number and Kind of Shares or Number of
Rights -- Certain Adjustments) shall occur, then, in any such case, (i) the
Company shall as soon as practicable thereafter give to each holder of a Rights
Certificate, to the extent feasible and in accordance with Section 26 (Notices),
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 11(a)(ii), and (ii)
all references in the
38
44
preceding paragraph to Preferred Stock shall be deemed thereafter to refer to
Common Stock and/or, if appropriate, other securities.
Section 26. Notices. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Rights Certificate to
or on the Company shall be sufficiently given or made if sent by telecopier
(with receipt confirmed) or by first-class mail, postage prepaid, addressed
(until another address is filed in writing with the Rights Agent) as follows:
Alamosa PCS Holdings, Inc.
0000 Xxxxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Chief Executive Officer
Telecopier: (000) 000-0000
Subject to the provisions of Section 21 (Change of Rights Agent), any notice or
demand authorized by this Agreement to be given or made by the Company or by the
holder of any Rights Certificate to or on the Rights Agent shall be sufficiently
given or made if sent by telecopier (with receipt confirmed) or by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Company) as follows:
ChaseMellon Shareholder Services, L.L.C.
0000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxxx X. Xxxxx
Telecopier: (000) 000-0000
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Common Stock) shall be sufficiently given or made if sent by first-
class mail, postage prepaid, addressed to such holder at the address of such
holder as shown on the registry books of the Company.
Section 27. Supplements and Amendments. For so long as the Rights are
redeemable, and subject to the penultimate sentence of this Section 27, the
Company may, and the Rights Agent shall, if the Company so directs, supplement
or amend any provision of this Agreement without the approval of any holders of
certificates representing shares of Common Stock or, on and after the
Distribution Date, any holders of Rights Certificates. At any time when the
Rights are no longer redeemable and subject to the penultimate sentence of this
Section 27, the Company and the Rights Agent shall, if the Company so directs,
supplement or amend this Agreement without the approval of any holders of Rights
Certificates; provided, however, that no such supplement or amendment may (i)
adversely affect the interests of the holders of Rights Certificates, or, prior
to the Distribution
39
45
Date, the holders of the Common Stock (other than an Acquiring Person or an
Affiliate or Associate of any such Person), (ii) cause this Agreement again to
become amendable other than in accordance with this sentence, or (iii) cause the
Rights again to become redeemable. Anything to the contrary notwithstanding, the
Rights Agent cannot be required to change or increase its duties and obligations
hereunder unless expressly consented to in writing by the Rights Agent. Upon the
delivery of a certificate from an appropriate officer of the Company which
states that the proposed supplement or amendment is in compliance with the terms
of this Section 27, the Rights Agent shall execute such supplement or amendment.
Notwithstanding anything contained in this Agreement to the contrary, no
supplement or amendment shall be made which changes the Redemption Price, the
Final Expiration Date, the Purchase Price, or the number of one one-thousandths
of a share of Preferred Stock for which a right is exercisable; provided,
however, that at any time prior to (i) a Stock Acquisition Date or (ii) the date
that a tender or exchange offer by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or any
Subsidiary of the Company, or any Person or entity organized, appointed or
established by the Company for or pursuant to the terms of any such plan) is
first published or sent or given within the meaning of Rule 14d-2(a) of the
General Rules and Regulations under the Exchange Act, if upon consummation
thereof, such Person would be the Beneficial Owner of 20% or more of the shares
of Common Stock then outstanding, the Board may amend this Agreement to increase
the Purchase Price or extend the Final Expiration Date. Prior to the
Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Stock.
Section 28. Successors. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Rights Agent shall bind and inure to
the benefit of their respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board of Directors, 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 the particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial Owner, shall be made in accordance with
the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations
under the Exchange Act. The Board shall have the exclusive power and authority
to administer this Agreement and to exercise all 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, without limitation, the right
and power to (i) interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem 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 30. 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 Rights Certificates (and, prior to the Distribution
Date, registered holders of the Common Stock) any legal
40
46
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 Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock).
Section 31. Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board determines
in its good faith judgment that severing the invalid language from this
Agreement would adversely affect the purpose or effect of this Agreement, the
right of redemption set forth in Section 23 (Redemption and Termination) shall
be reinstated and shall not expire until the Close of Business on the tenth
Business Day following the date of such determination by the Board.
Section 32. Governing Law. This Agreement, each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts made
and to be performed entirely within such State.
Section 33. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
* * * * *
41
47
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
ALAMOSA PCS HOLDINGS, INC.
By:/s/ XXXXX X. XXXXXXXX
------------------------------------------
Xxxxx X. Xxxxxxxx, Chairman of the
Board and Chief Executive Officer
CHASEMELLON SHAREHOLDER
SERVICES, L.L.C.
By:/s/ XXXXXXX XXXXXXX
------------------------------------------
Xxxxxxx Xxxxxxx, Assistant
Vice President
42
48
EXHIBIT 1
CERTIFICATE OF
DESIGNATION, PREFERENCES AND RIGHTS OF
SERIES A PREFERRED STOCK
OF
ALAMOSA PCS HOLDINGS, INC.
Pursuant to Section 151 of the General Corporation Law of the State of
Delaware
We, Xxxxx X. Xxxxxxxx, Chairman of the Board and Chief Executive Officer,
and Xxx X. Xxxxx, Secretary, of Alamosa PCS Holdings, Inc. (the "Corporation"),
a corporation organized and existing under the General Corporation Law of the
State of Delaware (the "GENERAL CORPORATION LAW"), in accordance with the
provisions of Section 103 of the GENERAL CORPORATION LAW, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors (the
"Board") by the Amended and Restated Certificate of Incorporation of the
Corporation, the said Board on January 5, 2000, adopted the following
resolutions creating a series of one hundred thousand shares of Preferred Stock,
par value $0.01 per share, designated as Series A Preferred Stock:
RESOLVED, that, pursuant to the authority vested in the Board in accordance
with the provisions of its Amended and Restated Certificate of Incorporation,
the Board does hereby create, authorize and provide for the issuance upon the
exercise of the Corporation's Preferred Stock Purchase Rights, of a series of
Preferred Stock of the Corporation, and does hereby fix and state that the
designations, amounts, powers, preferences and relative and other special rights
and the qualifications, limitations or restrictions thereof are as follows:
Series A Preferred Stock
Section 1. Designation and Amount. The shares of such series shall be
designated as Series A Preferred Stock and the number of shares constituting
such series shall be 300,000, which number may be increased or decreased (but
not below the number of shares thereof then outstanding) from time to time by
action of the Board of Directors.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock ranking prior and superior to the shares
of Series A Preferred Stock with respect to dividends, 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 that purpose,
43
49
quarterly dividends payable in cash on the 1st day of January, April, July and
October, in each year commencing April 1, 2000 (each such date being referred to
herein as a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or fraction
of a share of Series A Preferred Stock, in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $0.01 or (b) subject to the provision
for adjustment hereinafter set forth, one thousand (1,000) times the aggregate
per share amount of all cash dividends, and one thousand (1,000) times the
aggregate per share amount (payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in shares of the common stock of the
Corporation, par value $0.01 per share ("the Common Stock"), or 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. In the event the Corporation shall at any time after
January 27, 2000 (the "Rights Declaration Date") (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock, or (iii) combine the outstanding Common Stock into a smaller
number of shares, then in each such case the amount to which holders of shares
of Series A Preferred Stock were entitled immediately prior to such event under
clause (b) 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 paragraph (A) above immediately after it
declares a dividend or distribution on the Common Stock (other than a dividend
payable in shares of Common Stock); provided that, in the event 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, a dividend of $0.01 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 issue of such shares of Series A Preferred Stock, unless
the date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series A Preferred Stock entitled
to receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series A 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
44
50
to receive payment of a dividend or distribution declared thereon, which record
date shall be no more than thirty (30) days prior to the date fixed for the
payment thereof.
Section 3. Voting Rights. The holders of shares of Series A Preferred Stock
shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Preferred Stock shall entitle the holder thereof to one
thousand (1,000) votes on all matters submitted to a vote of the stockholders of
the Corporation. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the 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 such number by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) 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 one class on all matters submitted to a vote of
stockholders of the Corporation. Except as otherwise provided herein or by law,
the holders of the shares of Series A Preferred Stock shall not be entitled to
vote as a separate class on any matters submitted to a vote of the stockholders.
(C) (i) If at any time dividends on any Series A Preferred Stock
shall be in arrears in an amount equal to six (6) quarterly dividends thereon,
the holders of the Series A Preferred Stock, voting as a separate series from
all other series of Preferred Stock and classes of capital stock, shall be
entitled to elect two members of the Board of Directors in addition to any
directors elected by any other series, class or classes of securities, and the
authorized number of directors will automatically be increased by two. Promptly
thereafter, the Board of Directors of this Corporation shall, as soon as may be
practicable, call a special meeting of holders of Series A Preferred Stock for
the purpose of electing such members of the Board of Directors. Said special
meeting shall in any event be held within 45 days of the occurrence of such
arrearage.
(ii) During any period when the holders of Series A Preferred
Stock, voting as a separate series, shall be entitled and shall have exercised
their right to elect two directors, then and during such time as such right
continues (a) the then authorized number of directors shall be increased by two,
and the holders of Series A Preferred Stock, voting as a separate series, shall
be entitled to elect the additional directors so provided for, and (b) each such
additional director shall not be a member of any existing class of the Board of
Directors, but shall serve until the next annual meeting of stockholders for the
election of directors, or until his successor shall be elected and shall
qualify, or until his right to hold such office terminates pursuant to the
provisions of this Section 3(C).
45
51
(iii) A director elected pursuant to the terms hereof may be
removed with or without cause by the holders of Series A Preferred Stock
entitled to vote in an election of such Director.
(iv) If during any interval between annual meetings of
stockholders for the election of directors and while the holders of Series A
Preferred Stock shall be entitled to elect two directors, there is no such
director in office by reason of resignation, death or removal, then, promptly
thereafter, the Board of Directors shall call a special meeting of the holders
of Series A Preferred Stock for the purpose of filling such vacancy and such
vacancy shall be filled at such special meeting. Such special meeting shall in
any event be held within 90 days of the occurrence of such vacancy, unless an
annual meeting of stockholders is scheduled during such 90-day period.
(v) At such time as the arrearage is fully cured, and all
dividends accumulated and unpaid on any shares of Series A Preferred Stock
outstanding are paid, and, in addition thereto, at least one regular dividend
has been paid subsequent to curing such arrearage, the term of office of any
directors elected pursuant to this Section 3(C), or his successor, shall
automatically terminate, and the authorized number of directors shall
automatically decrease by two, the rights of the holders of the shares of the
Series A Preferred Stock to vote as provided in this Section 3(C) shall cease,
subject to renewal from time to time upon the same terms and conditions, and the
holders of shares of the Series A Preferred Stock shall have only the limited
voting rights elsewhere herein set forth.
(D) Except as set forth herein, holders of Series A Preferred Stock
shall have no special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of Common Stock as
set forth herein) for taking any corporate action.
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 shares of Series A Preferred Stock outstanding shall have
been paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any other distributions on,
or redeem or purchase or otherwise acquire for consideration 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 junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Stock, except
dividends paid ratably on the Series A Preferred Stock and all such junior 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;
46
52
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock,
provided that the Corporation may at any time redeem, purchase or otherwise
acquire shares of any such parity stock in exchange for shares of any stock of
the Corporation ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares
of Series A Preferred Stock, or any shares of stock ranking on a parity 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 such shares 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 consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
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 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, subject to
the conditions and restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation (voluntary or otherwise), dissolution or
winding up of the Corporation, no distribution shall be made to the holders of
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock unless, prior
thereto, the holders of shares of Series A Preferred Stock shall have received
$250.00 per share, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment (the
"Series A Liquidation Preference"), plus the Series A Pro Rata Liquidation
Preference, as defined below. The "Series A Pro Rata Liquidation Preference"
means the ratable and proportionate share of the assets to be distributed to the
holders of Series A Preferred Stock after subtracting (i) the amount of the
Series A Liquidation Preference to be distributed to the holders of shares of
Series A Preferred Stock as provided in the previous sentence and (ii) the
amount of the Common Adjustment to be distributed to the holders of shares of
Common Stock, as provided in the next sentence, in the ratio of the Adjustment
Number (as defined below) to one (1) with respect to all outstanding shares of
Preferred Stock and Common Stock, on a per share basis, respectively. Following
the payment of the full amount of the Series A Liquidation Preference and the
Series A Pro Rata Liquidation Preference, the holders of shares of
47
53
Common Stock shall receive an amount per share (the "Common Adjustment") equal
to the quotient obtained by dividing (i) the Series A Liquidation Preference by
(ii) one thousand (1,000) (as appropriately adjusted as set forth in paragraph
(C) of this Section to reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such number in clause (ii)
immediately above being referred to as the "Adjustment Number"). Following the
payment of the full amount of the Series A Liquidation Preference, the Series A
Pro Rata Liquidation Preference and the Common Adjustment in respect of all
outstanding shares of Series A Preferred Stock and Common Stock, respectively,
holders of shares of Common Stock shall receive their ratable and proportionate
share of the remaining assets to be distributed.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation Preference and
the liquidation preferences of all other series of preferred stock, if any,
which rank on a parity with the Series A Preferred Stock, then such remaining
assets shall be distributed ratably to the holders of such parity shares in
proportion to their respective liquidation preferences. In the event, however,
that there are not sufficient assets available to permit payment in full of the
Common Adjustment, then such remaining assets shall be distributed ratably to
the holders of Common Stock.
(C) In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the Adjustment Number in effect immediately prior to such event shall be
adjusted by multiplying such Adjustment Number by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case 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,
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 or
changed in an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to one thousand (1,000) times the aggregate amount
of stock, securities, cash and/or any other property (payable in kind), as the
case may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (ii) combine the
outstanding Common Stock into a smaller number of shares, 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.
48
54
Section 8. Redemption. The outstanding shares of Series A Preferred Stock
may be redeemed at the option of the Board of Directors as a whole, but not in
part, at any time, or from to time to time, at a cash price per share equal to
one hundred five percent (105%) of (i) the product of the Adjustment Number
times the Average Market Value (as such term is hereinafter defined) of the
Common Stock, plus (ii) all dividends which on the redemption date have accrued
on the shares to be redeemed and have not been paid, or declared and a sum
sufficient for the payment thereof set apart, without interest. The "Average
Market Value" is the average of the closing sale prices of the Common Stock
during the thirty (30) day period immediately preceding the date before the
redemption date on the Composite Tape for New York Stock Exchange Listed Stocks,
or, if such stock is not quoted on the Composite Tape, on the New York Stock
Exchange, or, if such stock is not listed on such Exchange, on the principal
United States securities exchange registered under the Securities Exchange Act
of 1934, as amended, on which such stock is listed, or, if such stock is not
listed on any such exchange, the average of the closing sale prices with respect
to a share of Common Stock during such thirty (30) day period, as quoted on the
National Association of Securities Dealers, Inc. Automated Quotations System or
any system then in use, or if no such quotations are available, the fair market
value of the Common Stock as determined by the Board of Directors in good faith.
Section 9. Ranking. The Series A Preferred Stock shall rank junior to all
other series of the Corporation's Preferred Stock as to the payment of dividends
and the distribution of assets, unless the terms of any such series shall
provide otherwise.
Section 10. Amendment. Except as otherwise provided in the Restated
Articles of Incorporation, as amended, or by law, the Restated Articles of
Incorporation of the Corporation, as amended, shall not be further amended in
any manner which would materially alter or change the powers, preferences or
special rights of the Series A Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of a majority or more of the
outstanding shares of Series A Preferred Stock, voting separately as a class.
Section 11. Fractional Shares. At the Corporation's sole discretion, 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.
* * * * *
49
55
IN WITNESS WHEREOF, we have executed and subscribed this Certificate and do
affirm the foregoing as true as of January 27, 2000.
/s/ XXXXX X. XXXXXXXX
--------------------------------------------------
Xxxxx X. Xxxxxxxx, Chairman of the Board and
Chief Executive Officer
Attest:
/s/ XXXXXXX X. XXXXX
--------------------------------
Xxxxxxx X. Xxxxx, Secretary
50
