ROSEVILLE COMMUNICATIONS COMPANY
and
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
Rights Agent
RIGHTS AGREEMENT
Dated as of March 12, 1998
TABLE OF CONTENTS
Page
.Begin Table C.1. Certain Definitions
1
2. Appointment of Rights Agent
5
3. Issuance of Right Certificates
5. Countersignature and Registration
6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates
9
7. Exercise of Rights; Purchase Price; Expiration Date of Rights
9
8. Cancellation and Destruction of Right Certificates
9. Reservation and Availability of Shares of Common Stock
10. Common Stock Record Date
11. Adjustments to Number and Kind of Shares, Number of Rights or Purchase
Price
12. Certification of Adjustments
13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power
14. Fractional Rights and Fractional Shares
15. Rights of Action
16. Agreement of Right Holders
17. Right Certificate Holder Not Deemed a Shareholder
18. Concerning the Rights Agent
19. Merger or Consolidation or Change of Name of Rights
Agent
20. Duties of Rights Agent
21. Change of Rights Agent
22. Issuance of New Right Certificates
23. Redemption
24. Exchange of Rights for Common Stock
25. Notice of Proposed Actions
26. Notices
27. Supplements and Amendments
28. Successors
29. Benefits of this Rights Agreement
30. California Contract
31. Counterparts
32. Descriptive Headings
33. Severability
.End Table C.
RIGHTS AGREEMENT
This Rights Agreement ("Rights Agreement"), is dated as of March 12,
1998, between Roseville Communications Company, a California corporation
(the "Company"), and ChaseMellon Shareholder Services, L.L.C., a New Jersey
limited liability company (the "Rights Agent").
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company on March 12, 1998 (i)
announced that it authorized the issuance and declared a dividend of one
right (a "Right") for each share of the common stock of the Company
("Common Stock") outstanding as of the Close of Business on March 13, 1998,
each Right representing the right to purchase one share of Common Stock of
the Company upon the terms and subject to the conditions hereinafter set
forth, and (ii) further authorized the issuance of one Right with respect
to each share of Common Stock of the Company that shall become outstanding
between March 13, 1998, and the Distribution Date.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
1. Certain Definitions.
For purposes of this Rights Agreement, the following terms shall
have the meanings indicated:
(a) "Acquiring Person" shall mean any Person, other than an
Exempt Person, who or which, together with all Affiliates and Associates of
such Person, without the prior approval of the Board of Directors, shall be
the Beneficial Owner of 20% or more of the outstanding Common Stock;
provided, however, that in no event shall a Person who or which, together
with all Affiliates and Associates of such Person, is the Beneficial Owner
of less than 20% of the Company's outstanding shares of Common Stock,
become an Acquiring Person solely as a result of a reduction of the number
of shares of outstanding Common Stock, including repurchases of outstanding
shares of Common Stock by the Company, which reduction increases the
percentage of outstanding shares of Common Stock Beneficially Owned by such
Person.
(b) "Adjustment Shares" shall have the meaning set forth in
Section 11(a)(ii)(C) hereof.
(c) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act, as in effect on February 25, 1998.
(d) 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 beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates
or Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding, or upon the exercise of conversion
rights, exchange rights, rights (other than the Rights), warrants or
options, or otherwise; provided, however, that a Person shall not be deemed
the "Beneficial Owner" of, or to "Beneficially Own", 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) the right to vote pursuant to any
agreement, arrangement or understanding (whether or not in writing);
provided, however, that a Person shall not be deemed the "Beneficial Owner"
of, or to "Beneficially Own", any securities if the agreement, arrangement
or understanding to vote such security (1) arises solely from a revocable
proxy or consent given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable rules
and regulations of the Exchange Act and (2) is not also then reportable by
such Person on Schedule 13D under the Exchange Act (or any comparable or
successor report); or
(iii) which are Beneficially Owned, directly or indirectly,
by any other Person 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 as described in clause (B) of subparagraph (ii) of this Section
l(d)], or disposing of any securities of the Company.
(e) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of California
or New York are authorized or obligated by law or executive order to close.
(f) "Close of Business" on any given date shall mean 5:00 P.M.,
San Francisco time, on such date; provided, however, that if such date is
not a Business Day it shall mean 5:00 P.M., San Francisco time, on the next
succeeding Business Day.
(g) "Common Stock" when used with reference to the Company shall
mean the common stock of the Company. "Common Stock" when used with
reference to any Person other than the Company which shall be organized in
corporate form shall mean the capital stock or other equity security with
the greatest per share voting power of such Person or, if such Person is a
Subsidiary of or is controlled by another Person, the Person which
ultimately controls such first-mentioned Person. "Common Stock" when used
with reference to any Person other than the Company which shall not be
organized in corporate form shall mean units of beneficial interest which
shall represent the right to participate in profits, losses, deductions and
credits of such Person and which shall be entitled to exercise the greatest
voting power per unit of such Person.
(h) "Common Stock Equivalents" shall have the meaning set forth
in Section 11(a)(iii) hereof;
(i) "Current Market Price" shall have the meaning set forth in
Section 11(d) hereof.
(j) "Current Value" shall have the meaning set forth in Section
11(a)(iii) hereof.
(k) "Distribution Date" shall have the meaning set forth in
Section 3(a) hereof.
(l) "Equivalent Common Stock" shall have the meaning set forth
in Section 11(b) hereof.
(m) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(n) "Exchange Ratio" shall have the meaning set forth in Section
24(a) hereof.
(o) "Exempt Person" shall mean the Company, any Subsidiary of
the Company, any employee benefit plan or employee stock plan of the
Company, or of any Subsidiary of the Company, or any Person, organized,
appointed, established or holding Common Stock for or pursuant to the terms
of any such plan.
(p) "Final Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(q) "Flip-in Event" shall mean any event described in Section
11(a)(ii)(A),(B) or (C) hereof.
(r) "Flip-In Exercise Payment" shall have the meaning set forth
in Section 11(a)(ii) hereof.
(s) "Flip-In Trigger Date" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(t) "Flip-Over Event" shall mean any event described in clause
(x),(y) or (z) of Section 13(a) hereof.
(u) "Flip-Over Exercise Payment" shall have the meaning set
forth in Section 13(a) hereof.
(v) "NASDAQ" shall have the meaning set forth in Section 9(b)
hereof.
(w) "Permitted Offer" shall have the meaning set forth in
Section 11(a)(ii)(B) hereof.
(x) "Person" shall mean any individual, firm, corporation,
partnership, limited liability company or other entity.
(y) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
(z) "Purchase Price" shall have the meaning set forth in Section
4(a) hereof.
(aa) "Redemption Date" shall have the meaning set forth in
Section 7(a) hereof.
(ab) "Redemption Price" shall have the meaning set forth in
Section 23(a) hereof.
(ac) "Right Certificate" shall have the meaning set forth in
Section 3(a) hereof.
(ad) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(ae) "Stock Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person that an Acquiring Person
has become such or such earlier date as a majority of the directors shall
become aware of the existence of an Acquiring Person.
(af) "Substitution Period" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(ag) "Subsidiary" of a Person shall mean any corporation or other
entity of which securities or other ownership interests having ordinary
voting power sufficient to elect a majority of the board of directors or
other persons performing similar functions are Beneficially Owned, directly
or indirectly, by such Person and any corporation or other entity that is
otherwise controlled by such Person.
(ah) "Summary of Rights" shall have the meaning set forth in
Section 3(b) hereof.
(ai) "Trading Day" shall have the meaning set forth in Section
11(d) hereof.
(aj) "Triggering Event" shall mean any event described in Section
11(a)(ii)(A),(B) or (C) or Section 13 hereof.
(ak) "Voting Power" shall mean the voting power of all securities
of the Company then outstanding and generally entitled to vote for the
election of directors of the Company.
Any determination required by the definitions contained in this
Section 1 shall be made by the Board of Directors of the Company in its
good faith judgment, which determination shall be binding on the Rights
Agent and the holders of the Rights.
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. With the consent of the
Rights Agent, the Company may from time to time appoint such co-Rights
Agents as it may deem necessary or desirable.
3. Issuance of Right Certificates.
(a) Until the earlier of (i) the Stock Acquisition Date or (ii)
the tenth day (or such later date as may be determined by action of the
Board of Directors prior to such time as any Person becomes an Acquiring
Person) after the date of the commencement by any Person (other than an
Exempt Person) of, or of the first public announcement of the intent of any
Person (other than an Exempt Person) to commence (which intention to
commence remains in effect for five business days after such announcement),
a tender or exchange offer upon the successful consummation of which such
Person, together with its Affiliates and Associates, would be the
Beneficial Owner, of 20% or more of the outstanding Common Stock
(irrespective of whether any shares are actually purchased pursuant to any
such offer) (including any such date which is after the date of this Rights
Agreement and prior to the issuance of the Rights; the earlier of such
dates being herein referred to as the "Distribution Date"), (x) the Rights
will be evidenced (subject to the provisions of Section 3(c) hereof) by the
certificates for the Common Stock registered in the names of the holders of
the Common Stock and not by separate Right Certificates, and (y) each Right
will be transferable only in connection with the transfer of a share
(subject to adjustment as hereinafter provided) of Common Stock. Upon the
occurrence of a Distribution Date, the Company shall promptly notify the
Rights Agent of the same and shall provide, or cause its transfer agent to
provide, to the Rights Agent a list of the record shareholders of the
Company. As soon as practicable after the Rights Agent receives such
notice and list, the Rights Agent will mail, by first-class, postage
prepaid mail, to each record holder of the Common Stock as of the Close of
Business on the Distribution Date, as shown by the records of the Company,
at the address of such holder shown on such records, a Right Certificate in
substantially the form of Exhibit A hereto ("Right Certificate") evidencing
one Right for each share of Common Stock so held. As of and after the
Distribution Date the Rights will be evidenced solely by such Right
Certificates.
(b) On March 13, 1998 or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights to Purchase Common Stock,
substantially in the form attached hereto as Exhibit B ("Summary of
Rights"), by first-class, postage prepaid mail, to each record holder of
Common Stock as of the Close of Business on March 13, 1998 at the address
of such holder shown on the records of the Company.
(c) With respect to certificates for Common Stock outstanding as
of March 13, 1998, until the Distribution Date (or, if earlier, the
"Redemption Date" or the "Final Expiration Date"), the Rights will be
evidenced by such certificates for Common Stock registered in the names of
the holders thereof together with a copy of the Summary of Rights. Until
the Distribution Date (or, if earlier, the Redemption Date or Final
Expiration Date), the surrender for transfer of any certificate for Common
Stock outstanding on March 13, 1998, with or without a copy of the Summary
of Rights attached thereto, shall also constitute the surrender for
transfer of the Rights associated with the Common Stock represented
thereby.
(d) Certificates issued for Common Stock (including, without
limitation, certificates issued upon transfer or exchange of Common Stock)
after March 6, 1998 but prior to the earlier of the Distribution Date, the
Redemption Date or the Final Expiration Date shall have impressed on,
printed on, written on or otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement, as it may from
time to time be supplemented or amended, between Roseville
Communications Company and ChaseMellon Shareholder Services,
L.L.C., as Rights Agent, dated as of March 12, 1998 (the "Rights
Agreement"), the terms of which are incorporated herein by
reference and a copy of which is on file at the principal
executive office of Roseville Communications Company. 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. Roseville
Communications Company will mail to the holder of this
certificate a copy of the Rights Agreement without charge within
five days after receipt by it of a written request therefor.
Under certain circumstances, as provided in the Rights Agreement,
Rights issued to or Beneficially Owned by Acquiring Persons or
their Associates or Affiliates (as defined in the Rights
Agreement) or any subsequent holder of such Rights may be limited
as provided in Section 11(a)(ii) and Section 24 of the Rights
Agreement.
With respect to such certificates containing the foregoing legend, the
Rights associated with the Common Stock represented by such certificates
shall, until the Distribution Date, be evidenced by such certificates
alone, and the surrender for transfer of any such certificate shall also
constitute the surrender for transfer of the Rights associated with the
Common Stock represented thereby.
4. Form of Right Certificates.
(a) The Right Certificates (and the forms of election to
purchase shares and of assignment to be printed on the reverse thereof),
when, as and if issued, shall be substantially in the form set forth in
Exhibit A hereto and may have such marks of identification or designation
and such legends, summaries or endorsements printed thereon as the Company
may deem appropriate and as are not inconsistent with the provisions of
this Rights Agreement, or as may be required to comply with any law or with
any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which the Rights may from time to time be listed,
or to conform to usage. Subject to the other provisions of this Rights
Agreement, the Right Certificates evidencing the Rights issued on March 13,
1998, whenever such certificates are issued, shall be dated as of March 13,
1998, and the Right Certificates evidencing Rights to holders of record of
Common Stock issued after March 13, 1998, shall be dated as of March 13,
1998, but shall also be dated to reflect the date of issuance of such Right
Certificate. On their face, Right Certificates shall entitle the holders
thereof to purchase, for each Right, one share of Common Stock, or other
securities or property as provided herein, as the same may from time to
time be adjusted as provided herein, at the price per share of $100.00, as
the same may from time to time be adjusted as provided herein (the
"Purchase Price").
(b) Notwithstanding any other provision of this Rights
Agreement, any Right Certificate that represents Rights that are or were at
any time on or after the earlier of the Stock Acquisition Date or the
Distribution Date Beneficially Owned by an Acquiring Person or any
Affiliate or Associate thereof (or any transferee of such Rights) shall
have impressed on, printed on, written on or otherwise affixed to it (if
the Company or the Rights Agent has knowledge that such Person is an
Acquiring Person or an Associate or Affiliate thereof or transferee of such
Persons or a nominee of any of the foregoing) the following legend:
The beneficial owner of the Rights represented by this Right
Certificate is an Acquiring Person or an Affiliate or Associate
(as defined in the Rights Agreement) of an Acquiring Person or a
subsequent holder of such Right Certificates beneficially owned
by such Persons. Accordingly, under certain circumstances as
provided in the Rights Agreement, this Right Certificate and the
Rights represented hereby may be limited as provided in Section
11(a)(ii) and Section 24 of the Rights Agreement.
5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the
Company by its Chairman, President or any Vice President, either manually
or by facsimile signature, and have affixed thereto the Company's seal or a
facsimile thereof which shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile signature. The
Right Certificates shall be manually countersigned by the Rights Agent and
shall not be valid for any purpose unless so countersigned. In case any
officer of the Company who shall have signed any of the Right Certificates
shall cease to be such officer of the Company before countersignature by
the Rights Agent and issuance and delivery by the Company, such Right
Certificates, nevertheless, may be countersigned by the Rights Agent,
issued and delivered with the same force and effect as though the Person
who signed such Right Certificates had not ceased to be such officer of the
Company; and any Right Certificate may be signed on behalf of the Company
by any person who, at the actual date of the execution of such Right
Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Rights Agreement
any such Person was not such an officer.
(b) Following the Distribution Date, and receipt by the Rights
Agent of the notice and list of record holders of Rights referred to in
Section 3(a), the Rights Agent will keep or cause to be kept, at one of its
offices designated pursuant to Section 26 hereof for such purposes, books
for registration and transfer of the Right Certificates issued hereunder.
Such books shall show the names and addresses of the respective holders of
the Right Certificates, the number of Rights evidenced on its face by each
of the Right Certificates, the date of each of the Right Certificates and
the certificate numbers for each of the Right Certificates.
6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates
Mutilated, Destroyed, Lost or Stolen Right Certificates;.
(a) Subject to the provisions of Section 14(b) hereof, at any
time after the Close of Business on the Distribution Date and at or prior
to the Close of Business on the earlier of the Redemption Date or the Final
Expiration Date, any Right Certificate may be (a) transferred or (b) split
up, combined or exchanged for another Right Certificate or Right
Certificates, entitling the registered holder to purchase a like number of
shares of Common Stock as the Right Certificate surrendered then entitled
such holder to purchase. Any registered holder desiring to transfer any
Right Certificate shall surrender the Right Certificate at the office of
the Rights Agent designated for such purposes with the form of assignment
on the reverse side thereof duly endorsed (or enclose with such Right
Certificate a written instrument of transfer in form satisfactory to the
Company and the Rights Agent), duly executed by the registered holder
thereof or such holder's attorney duly authorized in writing, and with such
signature duly guaranteed. Any registered holder desiring to split up,
combine or exchange any Right Certificate shall make such request in
writing delivered to the Rights Agent, and shall surrender the Right
Certificate to be split up, combined or exchanged at the office of the
Rights Agent designated for such purposes. Thereupon the Rights Agent
shall countersign (by manual signature) and deliver to the person entitled
thereto a Right Certificate or Right Certificates, as the case may be, as
so requested. The Company may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Right Certificates and the
Rights Agent, prior to the delivery of a Right Certificate or Rights
Certificates, may require evidence that any such tax or governmental charge
has been paid.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or
destruction, of indemnity or security satisfactory to them, and, if
requested by the Company, reimbursement to the Company of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate if mutilated, the Company will
execute and deliver a new Right Certificate of like tenor to the Rights
Agent for delivery to the registered owner in lieu of the Right Certificate
so lost, stolen, destroyed or mutilated.
7. Exercise of Rights; Purchase Price; Expiration Date of Rights
Purchase Price; Expiration Date of Rights;.
(a) The Rights shall become exercisable, and may be exercised to
purchase Common Stock, except as otherwise provided herein, in whole or in
part at any time after the Distribution Date upon surrender of the Right
Certificate, with the form of election to purchase on the reverse side
thereof duly executed (with such signature duly guaranteed), to the Rights
Agent at the office of the Rights Agent in San Francisco, California,
together with payment of the Purchase Price with respect to each Right
exercised, subject to adjustment as hereinafter provided, at or prior to
the Close of Business on the earlier of (i) March 11, 2008 (the "Final
Expiration Date"), (ii) the time at which the Rights are redeemed as
provided in Section 23 hereof (such date being herein referred to as the
"Redemption Date") or (iii) the time at which all such Rights are exchanged
as provided in Section 24 hereof.
(b) The Purchase Price and the number of shares of Common Stock
or other securities or consideration to be acquired upon exercise of a
Right shall be subject to adjustment from time to time as provided in
Sections 11 and 13 hereof. The Purchase Price shall be payable in lawful
money of the United States of America, in accordance with Section 7(c)
hereof.
(c) Except as provided in Section 7(d) hereof, upon receipt of a
Right Certificate with the form of election to purchase duly executed,
accompanied by payment of the Purchase Price or so much thereof as is
necessary for the shares to be purchased and an amount equal to any
applicable tax or government charge, by cash, certified check or official
bank check payable to the order of the Company or the Rights Agent, the
Rights Agent shall thereupon promptly (i) requisition from any transfer
agent of the Common Stock certificates for the number of shares of Common
Stock so elected to be purchased and the Company will comply and hereby
authorizes and directs such transfer agent to comply with all such
requests, (ii) requisition from the Company the amount of cash to be paid
in lieu of issuance of fractional shares in accordance with Section 14(b)
hereof and (iii) promptly after receipt of such Common Stock certificates
cause the same to be delivered to or upon the order of the registered
holder of such Right Certificate, registered in such name or names as may
be designated by such holder, and, after receipt promptly deliver such cash
to or upon the order of the registered holder of such Right Certificate.
In the event that the Company is obligated to issue other securities of the
Company, pay cash and/or distribute other property pursuant to Section
11(a) hereof, 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 Rights
Agreement.
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent to the registered holder of
such Right Certificate or to such holder's duly authorized assigns, subject
to the provisions of Section 6 and Section 14 hereof.
(e) Notwithstanding anything in this Rights 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 Right 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.
8. Cancellation and Destruction of Right Certificates.
All Right Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the
Company or to any of its agents, be delivered to the Rights Agent for
cancellation or in canceled form, or, if surrendered to the Rights Agent,
shall be canceled by it, and no Right Certificates shall be issued in lieu
thereof except as expressly permitted by any of the provisions of this
Rights Agreement. The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel and
retire, any Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver
all canceled Right Certificates to the Company, or shall, at the written
request of the Company, destroy such canceled Right Certificates, and in
such case shall deliver a certificate of destruction thereof to the
Company.
9. Reservation and Availability of Shares of Common Stock.
(a) The Company covenants and agrees that at all times it will
cause to be reserved and kept available, out of and to the extent of its
authorized and unissued shares of Common Stock not reserved for another
purpose (and, following the occurrence of a Triggering Event, other
securities) or held in its treasury, the number of shares of Common Stock
(and, following the occurrence of a Triggering Event, other securities)
that, as provided in this Rights Agreement, will be sufficient to permit
the exercise in full of all outstanding Rights, provided, however, that the
Company shall not be required to reserve and keep available shares of
Common Stock or other securities sufficient to permit the exercise in full
of all outstanding Rights pursuant to the adjustments set forth in Section
11(a)(ii), Section 11(a)(iii) or Section 13 hereof unless, and only to the
extent that, the Rights become exercisable pursuant to such adjustments.
(b) The Company shall (i) if trading of the Common Stock shall
be reported by the National Association of Securities Dealers, Inc.
Automated Quotations System ("NASDAQ") use its best efforts to cause, from
and after such time as the Rights become exercisable, the Rights and all
shares of Common Stock (and following the occurrence of a Triggering Event,
other securities) issued or reserved for issuance upon exercise thereof to
be reported by the NASDAQ or such other system then in use, and if the
Common Stock shall become listed an any national securities exchange, to
cause, from and after such time as the Rights become exercisable, the
Rights and all shares of Common Stock (and, following the occurrence of a
Triggering Event, other securities) issued or reserved for issuance upon
exercise thereof to be listed on such exchange upon official notice of
issuance upon such exercise and (ii) if then necessary, to permit the offer
and issuance of such shares of Common Stock (and, following the occurrence
of a Triggering Event, other securities), register and qualify such shares
of Common Stock (and, following the occurrence of a Triggering Event, other
securities) under the Securities Act and any applicable state securities or
"blue sky" laws (to the extent exemptions therefrom are not available),
cause such registration statement and qualifications to become effective as
soon as possible after such filing and keep such registration and
qualifications effective until the earlier of the Redemption Date or the
Final Expiration Date. The Company may temporarily suspend, for a period
of time not to exceed ninety (90) days, the exercisability of the Rights in
order to prepare and file a registration statement under the Securities Act
and permit it to become effective. Upon any such suspension, the Company
shall issue a public announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as a public announcement at
such time as the suspension is no longer in effect. The Company shall
promptly notify the Rights Agent whenever it makes a public announcement
pursuant to this Section 9(b), and give the Rights Agent a copy of the
announcement. Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction unless
the requisite qualification in such jurisdiction shall have been obtained
and until a registration statement under the Securities Act (if required)
shall have been declared effective.
(c) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all shares of Common Stock (and
following the occurrence of a Triggering Event, 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 in respect
thereof), be duly and validly authorized and issued and fully paid and
nonassessable shares in accordance with applicable law.
(d) The Company further covenants and agrees that it will pay
when due and payable any and all taxes and government charges which may be
payable in respect of the issuance or delivery of the Right Certificates or
of any shares of Common Stock (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 Right Certificates to a Person other than, or the issuance or
delivery of certificates for Common Stock (or other securities, as the case
may be) upon exercise of Rights in a name other than that of, the
registered holder of the Right Certificate, and the Company shall not be
required to issue or deliver a Right Certificate or certificate for Common
Stock (or other securities, as the case may be) to a person other than such
registered holder until any such tax shall have been paid (any such tax
being payable by the holder of such Right Certificate at the time of
surrender) or until it has been established to the Company's satisfaction
that no such tax is due.
10. Common Stock Record Date.
Each Person in whose name any certificate for shares of Common
Stock (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 the Common Stock (or other securities, as the case may be)
represented thereby on, and such certificate shall be dated, the date upon
which the Right Certificate evidencing such rights was duly surrendered and
payment of the Purchase Price (and any applicable taxes and government
charges) was made.
11. Adjustments to Number and Kind of Shares, Number of Rights or
Purchase Price.
The number and kind of shares subject to purchase upon the
exercise of each Right, the number of Rights outstanding and the Purchase
Price are subject to adjustment from time to time as provided in this
Section 11.
(a) (i) If the Company shall at any time after the date of this
Rights Agreement (A) declare or pay any dividend on Common Stock payable in
shares of Common Stock, (B) subdivide or split the outstanding shares of
Common Stock into a greater number of shares, (C) combine or consolidate
the outstanding shares of Common Stock into a smaller number of shares or
effect a reverse split of the outstanding shares of Common Stock, or (D)
issue any shares of its capital stock in a reclassification of the Common
Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a), the
Purchase Price in effect at the time of the record date for such dividend
or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of Common 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 Purchase Price
then in effect, the aggregate number and kind of shares of Common Stock or
capital stock, as the case may be, which, if such Right had been exercised
immediately prior to such date, the holder thereof would have owned upon
such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification. If an event occurs which
would require an adjustment under both this Section 11(a)(i) and Section
11(a)(ii) hereof, 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) Subject to Section 24, in the event
(A) any Acquiring Person or any Associate or Affiliate
of any Acquiring Person, at any time after the date of this Rights
Agreement, directly or indirectly, (1) shall consolidate with or merge with
and into the Company or any of its Subsidiaries or otherwise combine with
the Company or any of its Subsidiaries and the Company or such Subsidiary
shall be the continuing or surviving corporation of such consolidation,
merger or combination and the Common Stock of the Company shall remain
outstanding and no shares thereof shall be changed into or exchanged for
stock or other securities of the Company or of any other Person or cash or
any other property, or (2) shall, in one or more transactions, other than
in connection with the exercise of a Right or Rights and other than in
connection with the exercise or conversion of securities exercisable for or
convertible into securities of the Company or of any Subsidiary of the
Company, transfer any assets or property to the Company or any of its
Subsidiaries in exchange (in whole or in part) for any shares of any class
of capital stock of the Company or any of its Subsidiaries or any
securities exercisable for or convertible into shares of any class of
capital stock of the Company or any of its Subsidiaries, or otherwise
obtain from the Company or any of its Subsidiaries, with or without
consideration, any additional shares of any class of capital stock of the
Company or any of its Subsidiaries or any securities exercisable for or
convertible into shares of any class of capital stock of the Company or any
of its Subsidiaries (other than as part of a pro rata offer or distribution
by the Company or such Subsidiary to all holders of such shares), or (3)
shall sell, purchase, lease, exchange, mortgage, pledge, transfer or
otherwise acquire (other than as a pro rata dividend) or dispose, to, from
or with, as the case may be, in one transaction or a series of
transactions, the Company or any of its Subsidiaries, assets (including
securities) on terms and conditions less favorable to the Company or such
Subsidiary than the Company or such Subsidiary would be able to obtain in
arm's-length negotiation with an unaffiliated third party, or (4) shall
receive any compensation from the Company or any of its Subsidiaries for
services other than compensation for employment as a regular or part-time
employee, or fees for serving as a director, at rates in accordance with
the Company's (or its Subsidiary's) past practices, or (5) shall receive
the benefit, directly or indirectly (except proportionately as a
shareholder), of any loans, advances, guarantees, pledges or other
financial assistance or any tax credits or tax advantage provided by the
Company or any of its Subsidiaries, or (6) shall engage in any transaction
with the Company (or any of its Subsidiaries) involving the sale, license,
transfer or grant of any right in, or disclosure of, any patents,
copyrights, trade secrets, trademarks, knowhow or any other intellectual or
industrial property rights recognized under any country's intellectual
property laws which the Company (including its Subsidiaries) owns or has
the right to use on terms and conditions not approved by the Board of
Directors; or
(B) any Person, alone or together with its Affiliates
and Associates, shall become an Acquiring Person other than pursuant to (1)
any transaction set forth in Section 13(a) hereof, or (2) a tender or
exchange offer for all outstanding shares of Common Stock of the Company at
a price and on terms determined by the Company's Board of Directors to be
both adequate and otherwise in the best interests of the Company and its
shareholders other than the Acquiring Person or an Affiliate or Associate
thereof on whose behalf the offer is being made (a "Permitted Offer"); or
(C) during such time as there is an Acquiring Person,
there shall be any reclassification of securities (including any reverse
stock split), or any 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 (whether or not with or into or otherwise involving an
Acquiring Person or any Affiliate or Associate of such 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, or securities
exercisable for or convertible into equity securities of the Company or any
of its Subsidiaries, which is directly or indirectly beneficially owned by
any Acquiring Person or any Affiliate or Associate of any Acquiring Person;
then, except as otherwise provided in this Section 11,
each holder of a Right shall thereafter have a right to receive for each
Right, upon payment of an amount equal to the product of the then current
Purchase Price per share and the then number of shares of Common Stock for
which a Right was exercisable immediately prior to the first occurrence of
a Flip-In Event (the "Flip-In Exercise Payment") and exercise of a Right in
accordance with the terms of this Rights Agreement, such number of shares
of Common Stock as shall equal the result obtained by dividing the Flip-In
Exercise Payment by 50% of the Current Market Price per share of Common
Stock on the date of the first occurrence of a Flip-In Event (such number
of shares is herein called the "Adjustment Shares"); provided that the
Purchase Price per share and the number of Adjustment Shares shall be
further adjusted as provided in this Rights Agreement to reflect any events
occurring after the date of such first occurrence; and provided, further,
that if the transaction that would otherwise give rise to the foregoing
adjustment is also subject to the provisions of Section 13 hereof, then
only the provisions of Section 13 hereof shall apply and no adjustment
shall be made pursuant to this Section 11(a)(ii).
Notwithstanding the foregoing, the adjustment pursuant
to this Section 11(a)(ii) shall not occur with respect to any Rights that
are or were at any time on or after the earlier of the Stock Acquisition
Date or the Distribution Date beneficially owned by the Acquiring Person or
any Associate or Affiliate of the Acquiring Person which is or was involved
in or which caused or facilitated, directly or indirectly, the event or
transaction or transactions listed above in this Section 11(a)(ii) in
respect of which such adjustment occurs (or any subsequent transferee of
such Rights), and upon exercise of such Rights, the holders thereof shall
continue to receive upon exercise the number of shares of Common Stock
otherwise provided for herein without giving effect to such adjustment.
(iii) If the number of shares of Common Stock which are
authorized by the Company's Articles of Incorporation, as amended, 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 Section 11(a)(ii) and the Rights shall become
exercisable, to the extent permitted by applicable law and any agreements
in effect on the date hereof to which the Company is a party, the Company
shall: (A) determine the value of the Adjustment Shares issuable upon the
exercise of a Right (the "Current Value") and (B) with respect to each
Right, upon exercise of such Right, issue shares of Common Stock to the
extent available for the exercise in full of such Right and, to the extent
shares of Common Stock are not so available, make adequate provision to
substitute for the Adjustment Shares not received upon exercise of such
Right (1) cash, (2) other equity securities of the Company (including,
without limitation, shares, or units of shares, of preferred stock which,
by virtue of having dividend, voting and liquidation rights substantially
comparable to those of the Common Stock, are deemed in good faith by the
Board of Directors of the Company to have substantially the same value as
shares of Common Stock (such shares or units of shares of preferred stock
are herein called "Common Stock Equivalents"), (3) debt securities of the
Company, (4) other assets, or (5) any combination of the foregoing, having
a value which, when added to the value of the shares of Common Stock
actually issued upon exercise of such Right, shall have an aggregate value
equal to the Current Value, where such aggregate value has been determined
in good faith by the Board of Directors of the Company based upon the
advice of a nationally recognized independent investment banking firm
selected in good faith by the Board of Directors of the Company; provided,
however, if the Company shall not have made adequate provision to deliver
value pursuant to clause (B) above within thirty days following the later
of (x) the first occurrence of a Flip-In Event and (y) the date on which
the Company's right of redemption pursuant to Section 23(a) expires (the
later of (x) and (y) being referred to herein a 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 excess of the Current Value over the Purchase Price. If the Board of
Directors of the Company shall determine in good faith that it is likely
that sufficient additional shares of Common Stock could be authorized for
issuance upon exercise in full of the Rights, the thirty day period set
forth above may be extended to the extent necessary, but not more than
ninety days after the Flip-In Trigger Date, in order that the Company may
seek shareholder approval for the authorization of such additional shares
(such thirty day period, as it may be extended, is herein called the
"Substitution Period"). To the extent that the Company determines that
some action need be taken pursuant to the first and/or second sentence of
this Section 11(a)(iii), the Company (x) shall provide, subject to the last
sentence of Section 11(a)(ii) hereof, that such action shall apply
uniformly to all outstanding Rights, and (y) may suspend the exercise 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 exercise of the
Rights has been temporarily suspended, as well as a public announcement at
such time as the suspension is no longer in effect (and the Company shall
promptly notify the Rights Agent of the same, and give the Rights Agent a
copy of any announcement). 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 per share or per unit
value of any Common Stock Equivalent shall be deemed to equal the Current
Market Price per share of the Common Stock on such date. The Company's
Board of Directors may, but shall not be required to, establish procedures
to allocate the right to receive Common Stock upon the exercise of the
Rights among holders of Rights pursuant to this Section 11(a)(iii).
(b) In case the Company shall fix a record date for the issuance
of rights (other than the Rights), options or warrants to all holders of
Common Stock entitling them to subscribe for or purchase (for a period
expiring within forty-five calendar days after such record date) Common
Stock, shares having the same rights, privileges and preferences as the
Common Stock ("Equivalent Common Stock") or securities convertible into
Common Stock or Equivalent Common Stock at a price per share of Common
Stock or Equivalent Common Stock (or having a conversion price per share,
if a security convertible into Common Stock or Equivalent Common Stock)
less than the Current Market Price per share of Common 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 Common Stock outstanding on such record date, plus the number
of shares of Common Stock which the aggregate offering price of the total
number of shares of Common Stock and/or Equivalent Common Stock (and/or the
aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such Current Market Price, and the denominator
of which shall be the number of shares of Common Stock outstanding, on such
record date, plus the number of additional shares of Common Stock and/or
Equivalent Common 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 non-cash consideration shall be as determined in good faith
by the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent. Shares of Common
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) In case the Company shall fix a record date for a
distribution to all holders of Common 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,
assets (other than a dividend payable in Common Stock, but including any
dividend payable in stock other than Common Stock) or subscription rights
or warrants (excluding those referred to in Section 11(b) hereof), the
Purchase Price to be in effect after such record date shall be determined
by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the Current
Market Price per share of Common Stock on such record date, less the fair
market value (as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with
the Rights Agent and shall be binding upon the Rights Agent and the holders
of the Rights) 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 Common Stock and the denominator of which
shall be such Current Market Price per share of Common 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) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) hereof, 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 the Common Stock for the
thirty consecutive Trading Days immediately prior to and not including such
date, and for purpose of computations made pursuant to Section 11(a)(iii)
hereof, the Current Market Price per share of the Common Stock on any date
shall be deemed to be the average of the daily closing prices per share of
the Common Stock for the ten 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 announcement by the issuer of the Common Stock of (i)
any dividend or distribution on the Common Stock (other than a regular
quarterly cash dividend and other than the Rights), (ii) any subdivision,
combination or reclassification of the Common Stock, and prior to the
expiration of the requisite thirty Trading Day or ten Trading Day period,
as set forth above, the ex-dividend date for such dividend or distribution,
or the record date for such subdivision, combination or reclassification
occurs, then, and in each such case, the Current Market Price shall be
properly adjusted to take into account ex-dividend trading. The closing
price for each day shall be the last sale price, regular way, or, in case
no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed
or admitted to trading on the New York Stock Exchange or, if the 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
sale price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use, or, if on any such date the 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 of Directors of the Company. 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 of Directors of the Company, whose determination shall be described
in a statement filed with the Rights Agent and shall be conclusive for all
purposes.
(e) 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 in the
Purchase Price; provided, however, that any adjustments which by reason of
this Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest cent or to the nearest ten-
thousandth of a share, as the case may be.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of capital stock
other than Common 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
shares of Common Stock contained in this Section 11, and the provisions of
Sections 7, 9, 10, 13 and 14 hereof with respect to the Common Stock shall
apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the
right to purchase, at the adjusted Purchase Price, the number of shares of
Common Stock purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price,
that number of shares of Common Stock (calculated to the nearest one ten-
thousandth) obtained by (i) multiplying (x) the number of shares covered by
a Right immediately prior to this adjustment, by (y) the Purchase Price in
effect immediately prior to such adjustment of the Purchase Price, and (ii)
dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment
of the Purchase Price or any adjustment to the number of shares of Common
Stock for which a Right may be exercised, to adjust the number of Rights,
in lieu of any adjustment in the number of shares of Common 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 shares of Common 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, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to be
made (and the Company shall promptly notify the Rights Agent of the same,
and give the Rights Agent a copy of any announcement). This record date
may be the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Right Certificates have been issued, shall be at
least ten days later than the date of the public announcement. If Right
Certificates have been issued, upon each adjustment of the number of Rights
pursuant to this Section 11(i), the Company shall, as promptly as
practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the
date of adjustment, and upon surrender thereof, if required by the Company,
new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates to be so
distributed shall be issued, executed and countersigned in the manner
provided for herein (and may bear, at the option of the Company, the
adjusted Purchase Price) and shall be registered in the names of the
holders of record of Right Certificates on the record date specified in the
public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of shares of Common Stock issuable upon the exercise of
the Rights, the Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price per share and the number of shares
which were expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the par value, if any, of the shares of
Common Stock issuable upon exercise of the Rights, the Company shall take
any corporate action, including using its best efforts to obtain any
required shareholder approvals, which may, in the opinion of its counsel,
be necessary in order that the Company may validly and legally issue fully
paid and nonassessable shares of Common Stock at such adjusted Purchase
Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for
a specified event, the Company may elect to defer (and notify the Rights
Agent of the same) until the occurrence of such event the issuance to the
holder of any Right exercised after such record date the shares of Common
Stock and other capital stock or securities of the Company, if any,
issuable upon such exercise over and above the shares of Common 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 of Common Stock and other capital
stock or securities upon the occurrence of the event requiring such
adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Purchase
Price, in addition to those adjustments expressly required by this Section
11, as and to the extent that in their good faith judgment the Board of
Directors of the Company shall determine to be advisable in order that any
(i) consolidation or subdivision of the Common Stock, (ii) issuance for
cash of any shares of Common Stock at less than the Current Market Price,
(iii) issuance for cash of shares of Common Stock or securities which by
their terms are convertible into or exchangeable for shares of Common
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 Common Stock shall not be taxable to such shareholders.
(n) The Company covenants and agrees that it shall not, at any
time after the Distribution Date, (i) consolidate with any other Person
(other than a Subsidiary of the Company), (ii) merge with or into any other
Person (other than a Subsidiary of the Company), or (iii) sell or transfer
(or permit any Subsidiary to sell or transfer), in one transaction or a
series of related transactions, assets or earning power aggregating more
than 50% of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to, any other Person or Persons (other than the Company
and/or any of its Subsidiaries), if (x) at the time of or immediately after
such consolidation, merger 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 or sale, the shareholders of the Person
who constitutes, or would constitute, the "Principal Party" for purposes of
Section 13(a) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23, Section
24 or Section 27 hereof, take (or permit any Subsidiary to take) any action
if at the time such action is taken it is reasonably foreseeable that such
action will diminish substantially or eliminate the benefits intended to be
afforded by the Rights.
12. Certification of Adjustments.
Whenever an adjustment is made as provided in Sections 11 or 13
hereof, the Company shall (a) promptly prepare a certificate setting forth
such adjustment and a brief, reasonably detailed statement of the facts,
computations and methodology giving rise to such adjustment, (b) promptly
file with the Rights Agent and with each transfer agent for the Common
Stock a copy of such certificate and (c) mail a brief summary thereof to
each holder of a Right Certificate (or, if prior to the Distribution Date,
to each holder of a certificate representing shares of Common Stock) in
accordance with Section 25 hereof. Notwithstanding the foregoing sentence,
the failure of the Company to give such notice shall not affect the
validity of or the force or effect of or the requirement for such
adjustment. The Rights Agent shall be fully protected in relying on any
certificate prepared by the Company pursuant to Sections 11 and 13 and on
any adjustment therein contained and shall have no duties with respect to
and shall not be deemed to have knowledge of any such adjustment unless and
until it shall have received such certificate. Any adjustment to be made
pursuant to Sections 11 and 13 of this Rights Agreement shall be effective
as of the date of the event giving rise to such adjustment.
13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power.
(a) In the event that, at any time on or after the Distribution
Date, directly or indirectly, (x) the Company shall consolidate with, or
merge with and into, any other Person or Persons and the Company shall not
be the surviving or continuing corporation of such consolidation or merger,
or (y) any Person or Persons shall consolidate with, or merge with and
into, the Company, and the Company shall be the continuing or surviving
corporation of such consolidation or merger and, in connection with such
consolidation or merger, 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 of the Company or cash or any other property [other
than, in the case of the transactions described in subparagraphs (x) or
(y), a merger or consolidation which would result in all of the Voting
Power represented by the securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or
by being converted into securities of the surviving entity) all of the
Voting Power represented by the securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation and the
holders of such securities not having changed as a result of such
transactions], or (z) the Company or one or more of its Subsidiaries shall
sell, mortgage or otherwise transfer to any other Person or any Affiliate
or Associate of such Person, in one transaction, or a series of related
transactions, assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a
whole),
then, on the first occurrence of any such event, proper provision
shall be made so that (i) each holder of record of a Right shall thereafter
have the right to receive, upon payment of an amount equal to the product
of the then current Purchase Price per share and the then number of shares
of Common Stock for which a Right was exercisable immediately prior to the
first occurrence of a Flip-Over Event (or, if a Flip-In Event hereof has
occurred prior to the first occurrence of a Flip-Over Event, multiplying
the Purchase Price per share in effect immediately prior to the first
occurrence of a Flip-In Event by the number of shares of Common Stock for
which a Right was exercisable immediately prior to such first occurrence of
a Flip-In Event) (the "Flip-Over Exercise Payment") and the exercise of a
Right in accordance with the terms of this Rights Agreement, such number of
shares of validly issued, fully paid and nonassessable and freely tradeable
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 dividing the Flip-Over Exercise Payment by 50% of the
Current Market Price (determined as provided in Section 11(d) hereof with
respect to the Common Stock) per share of the Common Stock of such
Principal Party on the date of consummation of such Flip-Over Event (or the
fair market value on such date of other securities or property of the
Principal Party, as provided for herein); provided that the Purchase Price
per share and the number of shares of Common Stock of such Principal Party
issuable upon exercise of each Right shall be further adjusted as provided
in this Agreement to reflect any events occurring after the date of the
first occurrence of a 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
Rights Agreement; (iii) the term "Company" for all purposes of this Rights
Agreement shall thereafter be deemed to refer to such Principal Party, it
being specifically intended that the provisions of Section 11 hereof shall
only apply to such Principal Party following the first occurrence of a Flip-
Over Event; and (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 accordance with Section 9 hereof) 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; provided, however, that, upon the
subsequent occurrence of any merger, consolidation, sale of all or
substantially all assets, recapitalization, reclassification of shares,
reorganization or other extraordinary transaction in respect of such
Principal Party, each holder of a Right shall thereupon be entitled to
receive, upon exercise of a Right, such cash, shares, rights, warrants and
other property which such holder would have been entitled to receive had
he, at the time of such transaction, owned the shares of Common Stock of
the Principal Party purchasable upon the exercise of a Right, and such
Principal Party shall take such steps (including, but not limited to,
reservation of shares of stock) as may be necessary to permit the
subsequent exercise of the Rights in accordance with the terms hereof for
such cash, shares, rights, warrants and other property.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in (x) or (y)
of the first sentence of Section 13(a) hereof; (A) the Person that is the
issuer of the securities into which shares of Common Stock of the Company
are converted in such merger or consolidation, or, if there is more than
one such issuer, the issuer the Common Stock of which has the greatest
market value or (B) if no securities are so issued, (x) the Person that is
the other party to the merger or consolidation and that survives said
merger or consolidation, or, if there is more than one such Person, the
Person the Common Stock of which has the greatest market value or (y) if
the Person that is the other party to the merger or consolidation does not
survive the merger or consolidation, the Person that does survive the
merger or consolidation (including the Company if it survives); and
(ii) in the case of any transaction described in (z) of the
first sentence in Section 13(a) hereof, the Person that is the party
receiving the greatest portion of the assets or earning power transferred
pursuant to such transaction or transactions, or, if each Person that is a
party to such transaction or transactions receives the same portion of the
assets or earning power so transferred or if the Person receiving the
greatest portion of the assets or earning power cannot be determined,
whichever of such Persons as is the issuer of common stock having the
greatest market value of shares outstanding; provided, however, that in any
such case described in the foregoing (b)(i) or (b)(ii), if the Common Stock
of such Person is not at such time and has not been continuously over the
preceding 12-month period registered under Section 12 of the Exchange Act,
and such Person is a direct or indirect Subsidiary of another Person the
Common Stock of which is and has been so registered, the term "Principal
Party" shall refer to such other Person, or if such Person is a Subsidiary,
directly or indirectly, of more than one Person, the Common Stocks of all
of which are and have been so registered, the term Principal Party shall
refer to whichever of such Persons is the issuer of the Common Stock having
the greatest market value of shares outstanding.
(c) The Company shall not consummate any consolidation, merger,
sale or transfer referred to in Section 13(a) unless prior thereto the
Company and the Principal Party involved therein shall have executed and
delivered to the Rights Agent an agreement confirming that the requirements
of Sections 13(a) and (b) hereof shall promptly be performed in accordance
with their terms and that such consolidation, merger, sale or transfer of
assets shall not result in a default by the Principal Party under this
Rights Agreement as the same shall have been assumed by the Principal Party
pursuant to Sections 13(a) and (b) hereof and further providing that, as
soon as practicable after executing such agreement pursuant to this Section
13, the Principal Party at its own expense shall:
(i) prepare and file a registration statement under the
Securities Act, if necessary, with respect to the Rights and the
securities purchasable upon exercise of the Rights on an appropriate
form, use its best efforts to cause such registration statement to
become effective as soon as practicable after such filing and use its
best efforts to cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the
Securities Act) until the date of expiration of the Rights, and
similarly comply with applicable state securities laws;
(ii) use its best efforts, if the Common Stock of the
Principal Party shall become listed on a national securities exchange,
to list (or continue the listing of) the Rights and the securities
purchasable upon exercise of the Rights on such securities exchange
and, if the Common Stock of the Principal Party shall not be listed on
a national securities exchange, to cause the Rights and the securities
purchasable upon exercise of the Rights to be reported by NASDAQ or
such other system then in use;
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party which comply in all respects with
the requirements for registration on Form 10 (or any successor form)
under the Exchange Act; and
(iv) obtain waivers of any rights of first refusal or preemptive
rights in respect of the shares of Common Stock of the Principal Party
subject to purchase upon exercise of outstanding Rights.
In the event that any of the transactions described in Section 13(a) hereof
shall occur at any time after the occurrence of a transaction described in
Section 11(a)(ii) hereof, the Rights which have not theretofore been
exercised shall thereafter be exercisable in the manner described in
Section 13(a). The provisions of this Section 13 shall similarly apply to
all successive Flip-Over Events.
(d) Furthermore, in case the Principal Party which is to be a
party to a transaction referred to in this Section 13 has a provision in
any of its authorized securities or in its Articles of Incorporation or By-
laws or other instrument governing its corporate affairs, which provision
would have the effect of (i) causing such Principal Party to issue, in
connection with, or as a consequence of, the consummation of a transaction
referred to in this Section 13, shares of Common Stock of such Principal
Party at less than the then Current Market Price per share (determined
pursuant to Section 11(d) hereof) or securities exercisable for, or
convertible into, Common Stock of such Principal Party at less than such
then Current Market Price (other than to holders of Rights pursuant to this
Section 13) or (ii) providing for any special payment, tax or similar
provisions in connection with the issuance of the Common Stock of such
Principal Party pursuant to the provisions of Section 13; then, in such
event, the Company hereby agrees with each holder of Rights that it shall
not consummate any such transaction unless prior thereto the Company and
such Principal Party shall have executed and delivered to the Rights Agent
a supplemental agreement providing that the provision in question of such
Principal Party shall have been canceled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision
will have no effect in connection with, or as a consequence of, the
consummation of the proposed transaction.
(e) Notwithstanding anything in this Agreement to the contrary,
Section 13 shall not be applicable to a Flip-Over Event of the type
described in subparagraphs (x) or (y) of Section 13(a) if (i) such
transaction is consummated with a Person or Persons (or a wholly-owned
Subsidiary of any such Person) who acquired shares of Common Stock pursuant
to a Permitted Offer, (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 Common Stock whose shares were purchased pursuant to such
Permitted Offer, and (iii) the form of consideration being offered to the
remaining holders of Common Stock pursuant to such transaction is the same
as the form of consideration paid pursuant to such Permitted Offer. Upon
consummation of any such transaction contemplated by this subsection (e),
all Rights hereunder shall expire.
14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates which evidence fractional
Rights. In lieu of such fractional Rights, there shall be paid to the
holders of record of the Right Certificates with regard to which such
fractional Rights would otherwise be issuable, an amount in cash equal to
the same fraction of the then current market value of a whole Right. For
the purposes of this Section 14(a), the then current market value of a
Right shall be determined in the same manner as the Current Market Price of
a share of Common Stock shall be determined pursuant to Section 11(d)
hereof.
(b) 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. In lieu of issuing
fractions of shares of Common Stock, there shall be paid to the holders of
record of Right Certificates at the time such Right Certificates are
exercised as herein provided an amount in cash equal to the same fraction
of the then current market value of a share of Common Stock. For purposes
of this Section 14(b), the then current market value of a share of Common
Stock shall be the Current Market Price thereof as determined pursuant to
Section 11(d) hereof.
(c) The holder of a Right by the acceptance of a Right expressly
waives his right to receive any fractional Right or any fractional shares
upon exercise of a Right.
(d) Whenever a payment for fractional Rights or fractional
shares is to be made by the Rights Agent, the Company shall (i) promptly
prepare and deliver to the Rights Agent a certificate setting forth in
reasonable detail the facts related to such payment and the prices and/or
formula utilized in calculating such payments, and (ii) provide sufficient
monies to the Rights Agent in the form of fully collected funds to make
such payments. The Rights Agent shall be fully protected in relying upon
such a certificate and shall have no duty with respect to and shall not be
deemed to have knowledge of any payment for fractional Rights or fractional
shares under this Section 14 unless and until it shall have received such a
certificate and sufficient monies.
15. Rights of Action.
All rights of action in respect of this Rights Agreement, other
than any rights of action vested in the Rights Agent pursuant to this
Rights Agreement, are vested in the respective holders of record of the
Right Certificates (and, prior to the Distribution Date, the holders of
record of the Common Stock); and any holder of record of any Right
Certificate (or, prior to the Distribution Date, of the Common Stock),
without the consent of the Rights Agent or of the holder of any other Right
Certificate (or, prior to the Distribution Date, of the Common Stock), may,
in his own behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company or any other
Person to enforce, or otherwise act in respect of, his right to exercise
the Rights evidenced by such Right Certificate in the manner provided in
such Right Certificate and in this Rights 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, accordingly,
that they will be entitled to specific performance of the obligations
under, and injunctive relief against actual or threatened violations of,
the obligations of any Person subject to this Agreement. Holders of Rights
shall be entitled to recover the reasonable costs and expenses, including
attorneys' fees, incurred by them in any action to enforce the provisions
of this Rights Agreement.
16. Agreement of Right Holders.
Every holder of a Right by accepting the same consents and agrees
with the Company and the Rights Agent and with every other holder of a
Right that:
(a) prior to the Distribution Date, the Rights will not be
evidenced by a Right Certificate and will be transferable only in
connection with the transfer of Common Stock;
(b) after the Distribution Date, the Right Certificates will be
transferable only on the registry books of the Rights Agent if surrendered
at the office of the Rights Agent, duly endorsed or accompanied by a proper
instrument of transfer;
(c) the Company and the Rights Agent may deem and treat the
Person in whose name the Right Certificate (or, prior to the Distribution
Date, the 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 Right Certificate or the
associated Common Stock certificate made by anyone other than the Company
or the Rights Agent or the transfer agent of the Common Stock) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any
holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree, 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.
17. Right Certificate Holder Not Deemed a Shareholder.
No holder of a Right, as such, shall be entitled to vote, receive
dividends in respect of or be deemed for any purpose to be the holder of
Common Stock or any other securities of the Company which may at any time
be issuable upon the exercise of the Rights, nor shall anything contained
herein or in any Right Certificate be construed to confer upon the holder
of any Right Certificate, as such, any of the rights of a shareholder of
the Company or any right to vote in the election of directors or upon any
matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings
or other actions affecting shareholders (except as provided in Section 25
hereof), or to receive dividends or subscription rights in respect of any
such stock or securities, or otherwise, until the Right or Rights evidenced
by such Right Certificate shall have been exercised in accordance with the
provisions hereof.
18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to
time, on demand of the Rights Agent, its reasonable expenses and counsel
fees and other disbursements incurred in the preparation, delivery,
amendment, administration and execution of this Rights Agreement and the
exercise and performance of its duties hereunder. The Company also agrees
to indemnify the Rights Agent for, and to hold it harmless against, any
loss, liability, damage, judgment, fine, penalty, claim, settlement demand,
settlement, cost or expense incurred without gross negligence, bad faith or
willful misconduct on the part of the Rights Agent for any action taken,
suffered or omitted by the Rights Agent in connection with the acceptance
and administration of this Rights Agreement, including, without limitation,
the cost and expenses of defending against any claim of liability. The
indemnity provided herein shall survive the expiration of the Rights and
the termination of this Rights Agreement.
(b) The Rights Agent shall be authorized and protected and shall
incur no liability for or in respect of any action taken, suffered or
omitted by it in connection with the acceptance and administration of this
Rights Agreement in reliance upon any Right Certificate, certificate for
Common Stock or 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, guaranteed, verified or acknowledged, by the proper Person or
Persons. The Rights Agent shall be fully protected in relying upon any
certificate or notice provided to it hereunder by the Company, and the
Rights Agent shall not have any duty or notice hereunder until such
certificate or notice is delivered by the Company to the Rights Agent.
(c) Anything to the contrary notwithstanding, in no event shall
the Rights Agent be liable for special, 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
likelihood of such loss or damage.
19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any Person into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, of 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 Rights Agreement without the
execution or filing of any paper or any further act on the part of any of
the parties hereto, provided that such Person would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent shall succeed to
the agency created by this Rights Agreement, any of the Right Certificates
shall have been countersigned but not delivered, any such successor Rights
Agent may adopt the countersignature of the predecessor Rights Agent and
deliver such Right Certificates so countersigned; and, in case at that time
any of the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates either in
the name of the predecessor Rights Agent or in the name of the successor
Rights Agent; and in all such cases such Right Certificates shall have the
full force provided in the Right Certificates and in this Rights Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver such Right Certificates
so countersigned; and in case at that time any of the Right Certificates
shall not have been countersigned, the Rights Agent may countersign such
Right Certificates either in its prior name or in its changed name; and in
all such cases such Right Certificates shall have the full force provided
in the Right Certificates and in this Rights Agreement.
20. Duties of Rights Agent.
The Rights Agent undertakes the duties and obligations, and only
the duties and obligations expressly imposed by this Rights Agreement (and
no implied duties or obligations) upon the following terms and conditions,
all of which the Company and the holders of Right Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the advice or 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 advice or opinion.
(b) Whenever in the performance of its duties under this Rights
Agreement the Rights Agent shall deem it necessary or desirable that any
fact or matter (including, without limitation, the identity of any
acquiring Person) be proved or established by the Company prior to taking,
suffering or omitting any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a certificate signed by
the Chairman, President or any Vice President and by the Treasurer or any
Assistant Treasurer or the Secretary or any Assistant Secretary 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 Rights Agreement
in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Rights Agreement or
in the Right Certificates (except its countersignature thereof) or be
required to verify the same, but all such statements and recitals are and
shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any liability or
responsibility in respect of the validity of this Rights Agreement or the
execution and delivery hereof (except the due execution hereof by the
Rights Agent) or in respect of the validity or execution of any Right
Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or condition
contained in this Rights Agreement or in any Right Certificate; nor shall
it be responsible for any adjustment required under the provisions of
Sections 11, 13, 23 or 24 hereof 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 Right Certificates after receipt of a Certificate
furnished pursuant to Section 12 describing 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 to be
issued pursuant to this Rights Agreement or any Right Certificate or as to
whether any shares of Common Stock will, when issued, be validly authorized
and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged
and delivered all such further and other acts, instruments and assurances
as may reasonably be required by the Rights Agent for the carrying out or
performing by the Rights Agent of the provisions of this Rights Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
the Chairman, President or any Vice President or the Secretary or any
Assistant Secretary or the Treasurer or any Assistant Treasurer of the
Company, and to apply to such officers 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 or suffered to be
taken by it in good faith in accordance with instructions of any such
officer. Any application by the Rights Agent for written instructions from
the Company may, at the option of the Rights Agent, set forth in writing
any action proposed to be taken or omitted by the Rights Agent under this
Rights Agreement and the date on and/or after which such action shall be
taken or such omission shall be effective. Subject to Section 20(c)
hereof, the Rights Agent shall not be liable for any action taken or
suffered by, or omission of, the Rights Agent in accordance with a proposal
included in any such application on or after the date specified in such
application (which date shall not be less than five Business Days after the
date any officer of the Company actually receives such application, unless
any such officer shall have consented in writing to an earlier date)
unless, prior to taking any such action (or the effective date in the case
of an omission), the Rights Agent shall have received written instructions
in response to such application specifying the action to be taken or
omitted.
(h) The Rights Agent and any shareholder, 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 the Rights Agent under this Rights Agreement. Nothing herein
shall preclude the Rights Agent from acting in any other capacity for the
Company or for any other Person or legal entity.
(i) The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either by
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, absent gross negligence, bad faith or willful misconduct,
provided reasonable care was exercised in the selection and continued
employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of its rights if it believes that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate contained in the
form of assignment or the form of election to purchase set forth on the
reverse thereof, as the case may be, has 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.
21. Change of Rights Agent.
The Rights Agent or any successor Rights Agent may resign and be
discharged from its duties under this Rights Agreement upon 30 days notice
in writing mailed to the Company and to each transfer agent of the Common
Stock by registered or certified mail, and to the holders of the Right
Certificates by first class mail. The Company may remove the Rights Agent
or any successor Rights Agent (with or without cause) upon 30 days notice
in writing, mailed to the Rights Agent or successor Rights Agent, as the
case may be, and to each transfer agent of the Common Stock by registered
or certified mail, and to the holders of the Right Certificates by first-
class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor
to the Rights Agent. If the Company shall fail to make such appointment
within a period of 30 days after such removal or after it has been notified
in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who
shall, with such notice, submit his Right Certificate for inspection by the
Company), then the incumbent Rights Agent or the holder of record of any
Right Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (a) a Person
organized and doing business under the laws of the United States or any
State thereof, in good standing, which is authorized under such laws to do
business in such jurisdiction and is subject to supervision or examination
by federal or state authority and which has at the time of its appointment
as Rights Agent a combined capital and surplus of at least $50,000,000 or
(b) an Affiliate controlled by 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 mail a notice
thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.
22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Rights Agreement or
of the Rights to the contrary, the Company may, at its option, issue new
Right Certificates evidencing Rights in such form as may be approved by its
Board of Directors to reflect any adjustment or change in the purchase
price per share and the number or kind or class of shares of stock or other
securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Rights 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 hereinafter issued by the Company, and (b) may, in any other
case, if deemed necessary or appropriate by the Board of Directors of the
Company, issue Right Certificates representing the appropriate number of
Rights in connection with such issuance or sale; provided, however, that
(i) no such Right 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 Right Certificate would be issued, and (ii) no such
Right Certificate shall be issued, if, and to the extent that, appropriate
adjustment shall otherwise have been made in lieu of the issuance thereof.
23. Redemption.
(a) (i) The Board of Directors of the Company may, at its
option, at any time prior to the earlier of (x) the occurrence of a Stock
Acquisition Date or (y) the Close of Business on the Final Expiration Date,
redeem all but not less than all the then outstanding Rights at a
redemption price of $.01 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").
(ii) Notwithstanding anything contained in this Rights
Agreement to the contrary, the Board of Directors of the Company may redeem
all but not less than all of the then outstanding Rights at the Redemption
Price following the occurrence of a Stock Acquisition Date but prior to any
Flip-Over Event in connection with a Flip-Over Event in which all holders
of Common Stock are treated alike and not involving (other than as a holder
of Common Stock being treated like all other such holders) an Acquiring
Person or an Affiliate or Associate of an Acquiring Person or any other
Person in which such Acquiring Person, Affiliate or Associate has an
interest, or any other Person or Persons acting directly or indirectly on
behalf of or in association with any such Acquiring Person, Affiliate or
Associate.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights (the day of such action being
the Redemption Date), 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, without any interest thereon. Within 10 days after the Redemption
Date, the Company shall give notice of such redemption to the Rights Agent
and the holders of the then outstanding Rights by, in case of notice to
holders, mailing such notice to all such holders 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 of 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. The failure to give notice required by this
Section 23(b) or any defect therein shall not affect the legality or
validity of the action taken by the Company.
(c) In the case of a redemption permitted under Section 23(a),
the Company may, at its option and upon prior written notice to the Rights
Agent, discharge all of its obligations with respect to the Rights by (i)
issuing a press release announcing the manner of redemption of the Rights
and (ii) mailing payment of the Redemption Price to the registered holders
of the Rights at their last addresses as they appear on the registry books
of the Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agent of the Common Stock, and upon such action, all
outstanding Right Certificates shall be null and void without any further
action by the Company.
24. Exchange of Rights for Common Stock.
(a) The Board of Directors of the Company may, at its option, at
any time after the occurrence of a Flip-In Event, exchange all or part of
the then outstanding and exercisable Rights (which shall not include Rights
that do not receive adjustments upon the occurrence of a Flip-In Event) for
shares of Common Stock at an exchange ratio of one share of Common Stock
per Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof (such
exchange ratio being hereinafter referred to as the "Exchange Ratio").
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to subsection (a) of
this Section 24 and without any further action and without any notice, the
right to exercise such Rights shall terminate and the only right thereafter
of the holders of such Rights shall be to receive that number of shares of
Common Stock equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company shall promptly give public
notice and notify the Rights Agent of any such exchange; provided, however,
that the failure to give, or any defect in, such notice shall not affect
the validity of such exchange. The Company promptly shall mail a notice of
any such exchange to all of 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 of the shares of
Common Stock for Rights will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other
than Rights which do not receive adjustments upon the occurrence of a Flip-
In Event) held by each holder of Rights.
(c) In the event that there shall not be sufficient shares of
Common Stock issued but not outstanding or authorized but unissued to
permit any exchange of Rights as contemplated in accordance with this
Section 24, the Company shall take all such action as may be necessary to
authorize additional shares of Common Stock for issuance upon exchange of
the Rights.
(d) The Company shall not be required to issue fractions of
shares of Common Stock or to distribute certificates which evidence
fractional shares of Common Stock. In lieu of such fractional shares of
Common Stock, the Company shall pay to the registered holders of the Right
Certificates with regard to which such fractional shares of Common Stock
would otherwise be issuable an amount in cash equal to the same fraction of
the current market value of a whole share of Common Stock. For the
purposes of this subsection (d), the current market value of a whole share
of Common Stock shall be the Current Market Price of a share of Common
Stock (as defined in Section 11(d) hereof for the purposes of computations
made other than pursuant to Section 11(a)(iii)) for the Trading Day
immediately prior to the date of exchange pursuant to this Section 24.
25. Notice of Proposed Actions.
(a) In case the Company, after the Distribution Date, shall
propose (i) to effect any of the transactions referred to in Section
11(a)(i) or to pay any dividend to the holders of record of its Common
Stock payable in stock of any class or to make any other distribution to
the holders of record of its Common Stock (other than a regular periodic
cash dividend), or (ii) to offer to the holders of record of its Common
Stock or options, warrants, or other rights to subscribe for or to purchase
shares of Common Stock (including any security convertible into or
exchangeable for Common Stock) or shares of stock of any class or any other
securities, options, warrants, convertible or exchangeable securities or
other rights, or (iii) to effect any reclassification of its Common Stock
or any recapitalization or reorganization of the Company, or (iv) to effect
any consolidation or merger with or into, 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 or more transactions, of more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a
whole) to, any other Person or Persons, or (v) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the
Company shall give to the Rights Agent and to each holder of record of a
Right Certificate, in accordance with Section 26 hereof, notice of such
proposed action, which shall specify the record date for the purposes of
such transaction referred to in Section 11(a)(i), or such dividend or
distribution, or the date on which such reclassification, recapitalization,
reorganization, consolidation, merger, sale or transfer of assets,
liquidation, dissolution or winding up is to take place and the record date
for determining participation therein by the holders of record of Common
Stock, if any such date is to be fixed, and such notice shall be so given
in the case of any action covered by clause (i) or (ii) above at least 10
days prior to the record date for determining holders of record of the
Common Stock for purposes of such action, and in the case of any such other
action, at least 10 days prior to the date of the taking of such proposed
action or the date of participation therein by the holders of record of
Common Stock, whichever shall be the earlier.
(b) In case any of the transactions referred to in Section
11(a)(ii) or Section 13 of this Rights Agreement are proposed, then, in any
such case, the Company shall give to the Rights Agent and to each holder of
Rights, in accordance with Section 26 hereof, notice of the proposal of
such transaction at least 10 days prior to consummating such transaction,
which notice shall specify the proposed event and the consequences of the
event to holders of Rights under Section 11(a)(ii) or Section 13 hereof, as
the case may be, and, upon consummating such transaction, shall similarly
give notice thereof to each holder of Rights.
(c) The failure to give notice required by this Section 25 or
any defect therein shall not affect the legality or validity of the action
taken by the Company or the vote upon any such action.
26. Notices.
Notices or demands authorized by this Rights Agreement to be
given or made by the Rights Agent or by the holder of record of any Right
Certificate or Right to or on the Company shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent) as follows:
Roseville Communications Company
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Secretary
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Rights Agreement to be given or made by the Company or
by the holder of record of any Right Certificate or Right to or on the
Rights Agent shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing
with the Company) as follows:
ChaseMellon Shareholder Services, L.L.C.
00 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: General Counsel
Notices or demands authorized by this Rights Agreement to be given or made
by the Company or the Rights Agent to the holder of record of any Right
Certificate or Right 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 it appears upon the registry books of the Rights Agent or,
prior to the Distribution Date, on the registry books of the Transfer
Agent.
27. Supplements and Amendments.
Prior to the Distribution Date, the Company and the Rights Agent
shall, if the Company so directs, supplement or amend any provision of this
Rights Agreement without the approval of any holders of certificates
representing Common Shares, with the understanding that the Rights Agent
need not agree to any amendment or supplement that modifies or otherwise
affects its duties or obligations hereunder. From and after the
Distribution Date, the Company and the Rights Agent may from time to time
supplement or amend this Rights Agreement without approval of any holders
of Right Certificates in order (i) to cure any ambiguity, (ii) to correct
or supplement any provision contained herein which may be defective or
inconsistent with any other provision herein, (iii) shorten or lengthen any
time period hereunder, or (iv) to change or supplement the provisions
hereunder in any manner which the Company may deem necessary or desirable
and which shall not adversely affect the interests of the holders of Right
Certificates (other than an Acquiring Person or an Affiliate or Associate
of an Acquiring Person). 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,
and if requested by the Rights Agent an opinion of counsel the Rights Agent
shall execute such supplement or amendment unless the Rights Agent shall
have determined in good faith that such supplement or amendment would
adversely affect its interests under this Rights Agreement. 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.
28. Successors.
All of the covenants and provisions of this Rights 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.
29. Benefits of this Rights Agreement.
Nothing in this Rights Agreement shall be construed to give to
any person or corporation other than the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common Stock) any legal or equitable right, remedy
or claim under this Rights Agreement; but this Rights Agreement shall be
for the sole and exclusive benefit of the Company, the Rights Agent and the
holders of record of the Right Certificates (and, prior to the Distribution
Date, the Common Stock).
30. California Contract.
This Rights Agreement and each Right Certificate issued hereunder
shall be deemed to be a contract made under the laws of the State of
California and for all purposes shall be governed by and construed in
accordance with the laws of such state applicable to contracts to be made
solely by California residents and performed entirely within such state;
except that all provisions regarding the rights, duties and obligations of
the Rights Agent shall be governed by and construed in accordance with the
laws of the State of New York applicable to contracts made and to be
performed entirely within such state.
31. Counterparts.
This Rights 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.
32. Descriptive Headings.
Descriptive headings of the several sections of this Rights
Agreement are inserted for convenience only and shall not control or affect
the meaning or construction of any of the provisions hereof.
33. Severability.
If any term, provision, covenant or restriction of this Rights
Agreement is held by a court of competent jurisdiction or other authority
to be invalid, illegal or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Rights Agreement shall
remain in full force and effect and shall in no way be affected, impaired
or invalidated.
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed, all as of the day and year first above
written.
ATTEST: ROSEVILLE COMMUNICATIONS
COMPANY, a California
corporation
By /s/XXXXXXX X. XXXXXXXX
Xxxxxxx X. Xxxxxxxx
Executive Vice President By: /s/XXXXX X. XXXXX
and Chief Financial Xxxxx X. Xxxxx
Officer President and Chief
Executive Officer
ATTEST: CHASEMELLON SHAREHOLDER
SERVICES, L.L.C., a New Jersey
limited liability company
By
Name:
Title: By
Name:
Title:
EXHIBIT A
[Form of Right Certificate]
Certificate No. __ ____________ Rights
NOT EXERCISABLE AFTER MARCH 11, 2008 OR EARLIER IF REDEEMED OR
EXCHANGED. AT THE OPTION OF THE COMPANY, THE RIGHTS MAY BE
REDEEMED AT $.01 Of PER RIGHT OR EXCHANGED FOR COMMON STOCK ON
THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. IN THE EVENT THAT
THE RIGHTS REPRESENTED BY THIS CERTIFICATE ARE ISSUED TO A PERSON
WHO IS AN ACQUIRING PERSON OR AN ASSOCIATE OR AFFILIATE OF AN
ACQUIRING PERSON OR A TRANSFEREE OF THE RIGHTS PREVIOUSLY OWNED
BY SUCH PERSONS, THIS RIGHT CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BE SUBJECT TO CERTAIN LIMITATIONS IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 11(a)(ii) OF THE RIGHTS
AGREEMENT.
RIGHT CERTIFICATE
ROSEVILLE COMMUNICATIONS COMPANY
This certifies that ____________________________, or registered
assigns, is the registered owner of the number of Rights set forth above,
each of which entitles the owner thereof, subject to the terms, provisions
and conditions of the Rights Agreement dated as of March 12, 1998 ("Rights
Agreement") between Roseville Communications Company, a California
corporation ("Company"), and ChaseMellon Shareholder Services, L.L.C., a
New Jersey limited liability company ("Rights Agent"), to purchase from the
Company at any time after the Distribution Date (as such term is defined in
the Rights Agreement) and prior to 5:00 P.M. (San Francisco time) on
March 11, 2008 at the office of the Rights Agent, or its successors as
Rights Agent, designated for such purposes, one fully paid and
nonassessable share of Common Stock of the Company ("Common Stock") at a
purchase price of $100.00 per share, as the same may from time to time be
adjusted in accordance with the Rights Agreement ("Purchase Price"), upon
presentation and surrender of this Right Certificate with the Form of
Election to Purchase duly executed.
As provided in the Rights Agreement, the Purchase Price and the number
of shares of Common Stock which may be purchased upon the exercise of the
Rights evidenced by this Right Certificate are subject to modification and
adjustment upon the happening of certain events and, upon the happening of
certain events, securities other than shares of Common Stock, or other
property, may be acquired upon exercise of the Rights evidenced by this
Right Certificate, as provided in the Rights Agreement.
This Right Certificate is subject to all of the terms, covenants and
restrictions of the Rights Agreement, which terms, covenants and
restrictions are incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and
immunities of the Rights Agent, the Company and the holders of record of
the Right Certificates. Copies of the Rights Agreement are on file at the
principal executive office of the Company.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office of the Rights Agent, may be exchanged for another
Right Certificate or Right Certificates of like tenor and date evidencing
Rights entitling the holder of record to purchase a like aggregate number
of shares of Common Stock as the Rights evidenced by the Right Certificate
or Right Certificates surrendered shall have entitled such holder to
purchase. If this Right Certificate shall be exercised in part, the holder
shall be entitled to receive upon surrender hereof, another Right
Certificate or Right Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, at any time prior
to the earlier of (i) the occurrence of a Stock Acquisition Date (as such
term is defined in the Rights Agreement) or (ii) the Final Expiration Date,
the Rights evidenced by title Certificate may be redeemed by the Company at
its option at a redemption price of $.01 per Right or exchanged by the
Company at its option in whole or in part for shares of Common Stock.
No fractional shares of Common Stock shall be issued upon the exercise
or exchange of any Right or Rights evidenced hereby, and in lieu thereof as
provided in the Rights Agreement, fractions of shares of Common Stock shall
receive an amount in cash equal to the same fraction of the then Current
Market Price (as such term is defined in the Rights Agreement) of a share
of Common Stock.
No holder of this Right Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of Common
Stock or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such,
as any of the rights of a shareholder of the Company or any right to vote
in the election of directors; or upon any matter submitted to shareholders
at any meeting thereof, or to give or withhold consent to any corporate
action or to receive notice of meetings or other actions affecting
shareholders (other than certain actions specified in the Rights Agreement)
or to receive dividends or subscription rights, or otherwise, until the
Right or Rights evidenced by this Right Certificate shall have been
exercised or exchanged as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers
of the Company and its corporate seal. Dated as of March 12, 1998.
ATTEST: ROSEVILLE COMMUNICATIONS
COMPANY
Secretary By:
Title:
COUNTERSIGNED:
By
Authorized Signature
FORM OF REVERSE SIDE OF RIGHT CERTIFICATE
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer
the Right Certificate.)
FOR VALUE RECEIVED hereby sells, assigns and
transfers unto
(Please print name and address of transferee)
the Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ,
attorney, to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution.
Dated:
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an
office or correspondent in the United States.
__________________________________________
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
Signature
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Right Certificate.)
To: ROSEVILLE COMMUNICATIONS COMPANY
The undersigned hereby irrevocably elects to exercise Rights
represented by this Right Certificate to purchase the Common Shares
issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person that may be issuable upon the exercise of
the Rights) and requests that certificates for such shares (or other
securities) be issued in the name of and delivered to:
(Please print name and address)
(Please insert social security or other identifying number)
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
(Please print name and address)
(Please insert social security or other identifying number)
Dated: ,
Signature:
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate are not being
exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of an Acquiring Person (as such terms are defined
pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned,
it did not acquire the Rights evidenced by this Right Certificate from any
Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: ,
Signature:
Signature Guaranteed:
NOTICE
The signatures to the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Rights
Certificate in every particular, without alteration or enlargement or any
change whatsoever.
EXHIBIT B
ROSEVILLE COMMUNICATIONS COMPANY
OVERVIEW OF THE SHAREHOLDER RIGHTS PLAN
The following is a general overview of the principal aspects of the
Shareholder Rights Plan adopted by the Board of Directors of Roseville
Communications Company. A more detailed summary of the terms of the Plan
is attached.
PURPOSE OF THE PLAN. The Plan is designed to protect the interests of
Roseville Communications Company shareholders in the event of an
unsolicited takeover attempt. It is intended to encourage a potential
acquiror to work with Roseville Communications Company's Board of Directors
to determine if a business combination is in the best long-term interests
of the shareholders, and if so, to negotiate a fair price that adequately
reflects the Company's long-term potential value. It is not intended to
prevent a takeover, but rather to prevent abusive takeover tactics.
In today's unsettled stock markets, there exists a risk of acquisition
attempts at unfair and inadequate prices. In addition, open-market
accumulations of large blocks of stock and partial or two-tier offers that
do not treat shareholders equally can deprive shareholders of the full
value of their shares. Roseville Communications Company's Board believes
the Plan will provide the Board the ability to guard against these tactics.
DETERRENT EFFECT OF THE PLAN. If a potential acquiror attempts to
takeover Roseville Communications Company without the approval of the Board
of Directors, the Plan provides that, when certain events occur,
shareholders (other than the acquiror) will have the right to purchase
Roseville Communications Company stock at a 50 percent discount from market
value. Exercise of the Rights under these circumstances would dilute the
acquiror's interest and result in additional outstanding shares that then
also would have to be purchased by the acquiror to gain ownership of
Roseville Communications Company. In this way, the dilutive impact of the
Rights would make a non-negotiated takeover attempt more expensive, which
should deter hostile acquisition attempts.
It is important to note the Shareholder Rights Plan will not preclude
either a proxy contest or a tender or exchange offer for all shares of the
Company if that offer is determined by the Board of Directors to be both
adequate and otherwise in the best interests of the Company and its
shareholders. Accordingly, the Shareholder Rights Plan should not deter a
prospective offeror willing to negotiate in good faith with the Board of
Directors. The Board believes such a course is preferable to hostile
actions calculated to deprive the Board and shareholders of their ability
to determine the Company's destiny and, potentially, to favor some
shareholders at the expense of others.
REASON FOR THE BOARD'S ADOPTION OF THE PLAN. The Board did not adopt
the Shareholder Rights Plan in response to any specific effort to acquire
control of the Company. The Board adopted the Shareholder Rights Plan in
the belief it provides the best available means of protecting your right to
retain the full value of your equity investment in the Company.
DESCRIPTION OF THE RIGHTS DISTRIBUTED TO SHAREHOLDERS. The Plan
adopted by the Board provides that each Roseville Communications Company
shareholder of record on March 13, 1998 will receive one Right for each
share of Roseville Communications Company Common Stock owned on that date.
Initially, each Right will entitle the holder to purchase one share of
Roseville Communications Company Common Stock for $100. The Rights will
trade automatically with the Company's Common Stock and are not initially
exercisable. The Rights only become exercisable if and when the
circumstances addressed by the Shareholder Rights Plan arise.
Generally speaking, there are two different events that could result
in the Rights becoming exercisable. One event is any accumulation by a
potential acquiror of 20 percent or more of Roseville Communications
Company Common Stock. The other event would be an announcement by a
potential acquiror of a tender or exchange offer that would result in the
acquiror's ownership of 20 percent or more of Roseville Communications
Company Common Stock, in which case the Rights would become exercisable 10
days after the announcement, or such later date as the Board may decide.
Once exercisable, the Rights would trade separately from the Common Stock
and you would receive by mail a separate Right Certificate from Roseville
Communications Company.
EVENTS TRIGGERING THE 50 PERCENT DISCOUNT. The Rights change from the
right to buy one share for $100 to the right to buy $200 worth of stock for
the same $100 if a potential acquiror acquires 20 percent or more of
Roseville Communications Company Common Stock or if the acquiror merges
with Roseville Communications Company or engages in other types of business
combinations or "self-dealing" transactions with Roseville Communications
Company.
EFFECT OF A MERGER OF ROSEVILLE COMMUNICATIONS COMPANY INTO ANOTHER
COMPANY. If an acquiror has purchased 20 percent or more of Roseville
Communications Company Common Stock and Roseville Communications Company is
then merged into another company, the Rights would change into rights to
purchase $200 worth of Common Stock of the acquiring company for a price of
$100. For example, if the acquiring company's common stock is trading at
$50 a share and a shareholder exercises the Right for $100, he or she would
receive four shares of the acquiring company's stock.
NOT AN IMPEDIMENT TO FAIR DEALS. The Board adopted the Shareholder
Rights Plan to encourage fair negotiations between a potential acquiror and
the Board and to prevent abusive takeover tactics. The Rights will not
impede an acquisition plan which the Board determines to have a purchase
price representing fair value for Roseville Communications Company
shareholders and is otherwise in the best long-term interests of the
Company and the shareholders.
TRANSFERABILITY OF RIGHTS BEFORE THEY BECOME EXERCISABLE. If you sell
your shares of Roseville Communications Company Common Stock before the
Rights become exercisable, your Rights would be sold with your Common Stock
and would belong to the purchaser of your stock.
EFFECT OF RIGHTS ON STOCK VALUE. Your current holdings are not
affected by the Shareholder Rights Plan. The issuance of the Rights will
not weaken Roseville Communications Company's financial strength in any
way. Since the Rights become exercisable only if a potential acquiror
attempts any of the transactions mentioned above, the Rights do not have
any immediate dilutive effect nor do they affect reported earnings per
share.
CALCULATION OF EXERCISE PRICE. The Board of Directors determined that
$100 for each share of Roseville Communications Company Common Stock is a
fair estimation of the long-term value of Roseville Communications Company
Common Stock.
TAX EFFECTS. The initial distribution of the Rights should have no
federal income tax implications
ROSEVILLE COMMUNICATIONS COMPANY
SUMMARY OF TERMS OF SHAREHOLDER RIGHTS PLAN
1. NATURE OF RIGHT:
When exercisable, each Right initially will entitle the holder to
purchase one share of the Common Stock of Roseville Communications
Company (the "Company") for $100.
2. MEANS OF DISTRIBUTION:
The Rights will be distributed to holders of the Company's outstanding
Common Stock as a dividend of one Right for each share of Common
Stock. The Rights will also be attached to all future issuances of
Common Stock.
3. EXERCISABILITY:
Rights become exercisable for one share on the earlier of: (i) the
acquisition of, or the public announcement of the intent of any person
or group (an "Acquiring Person") to acquire, without the approval of
the Board of Directors (the "Board"), beneficial ownership of 20% or
more of the Company's outstanding Common Stock, or (ii) the tenth day
(unless extended by the Board) following the commencement of, or
announcement of an intention to commence, a tender offer which would
result in the offeror owning 20% or more of the outstanding Common
Stock of the Company (the earliest of such dates is referred to as the
"Initial Exercise Date"). Rights may be transferred separately from
the Common Stock once they are exercisable.
4. EXERCISE PRICE:
$100 per share, which is the amount that in the judgment of the Board
represents the long-term value of a share of Roseville Communications
Company Common Stock (the "Exercise Price").
5. TERM:
The Rights will expire ten years after the date of issuance, unless
earlier redeemed or exchanged by the Company as described below.
6. REDEMPTION OF RIGHTS:
The Board may redeem the Rights at a price of $.01 per Right at any
time until the date a person becomes an Acquiring Person (the "Stock
Acquisition Date"). After the Stock Acquisition Date, Rights are
redeemable prior to any business combination in which all holders of
Common Stock are treated alike and in which an Acquiring Person is not
involved (except as a holder of Common Stock treated like all other
holders).
7. RIGHTS IN EVENT OF
BUSINESS COMBINATION:
If after the Initial Exercise Date the Company or more than
50% of its assets is acquired in a merger or similar transaction, each
holder of a Right may purchase for $100 a number of shares of common
stock of the acquiring company having a current market value equal to
$200. Both the initial Exercise Price of $100 per share and the
number of shares purchasable through exercise of a Right are subject
to adjustment for stock splits, reverse stock splits, stock dividends,
etc.
8. RIGHTS IN EVENT OF SELF-
DEALING TRANSACTION OR
ACQUISITION OF SUBSTANTIAL
AMOUNT OF COMMON STOCK:
If an Acquiring Person engages in certain self-dealing
transactions with the Company, or a person becomes the
beneficial owner of 20% or more of the outstanding
Common Stock, each holder of a Right may purchase for $100 a number of
shares of Common Stock with a market value equal to $200. If
insufficient authorized shares of Common Stock are available for
issuance, the Company will deliver to the Rights holders cash or other
property so that the aggregate value received is equal to $200.
Self-dealing transactions are defined to include a merger of an
Acquiring Person into the Company in which the Common Stock remains
outstanding and unchanged, the issuance of securities of the Company
to an Acquiring Person, the transfer of assets to an Acquiring Person
on other than an arm's length basis, and similar transactions on terms
not approved by the Board.
9. PERMITTED OFFERS:
The provisions described in terms 7 and 8 will not apply to tender or
exchange offers for all outstanding shares of the Company's Common
Stock at a price and on terms determined by the Board to be both
adequate and otherwise in the best interests of the Company and its
shareholders other than the Acquiring Person.
10. EXCHANGE OPTION:
In the event (i) any person or group becomes an Acquiring Person or
(ii) any of the types of transactions, acquisitions, combinations or
other events described in item 8 above occurs, the Board may require
all or any portion of the outstanding Rights to be exchanged for
Common Stock on a pro rata basis at the rate of one share of Common
Stock per outstanding Right. However, the Rights held by any
Acquiring Person would not be included in the exchange.
11. VOTING POWER OF RIGHTS:
The Rights themselves do not entitle the holder to any voting rights.
12. AMENDMENT OF RIGHTS:
Until the Initial Exercise Date, the Company may amend the Rights in
any manner. After the Initial Exercise Date, the Company may amend
the Rights in any manner that does not adversely affect the interests
of the holders of the Rights.
