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SPRINT CORPORATION
and
UMB BANK, N.A.
Rights Agent
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Second Amended and Restated
Rights Agreement
Dated as of March 16, 2004
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Table of Contents
Section 1. CERTAIN DEFINITIONS 2
Section 2. APPOINTMENT OF RIGHTS AGENT 7
Section 3. ISSUE OF RIGHTS CERTIFICATES 7
Section 4. FORM OF RIGHTS CERTIFICATES 9
Section 5. COUNTERSIGNATURE AND REGISTRATION 10
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF
RIGHTS CERTIFICATES; MUTILATED, DESTROYED, LOST
OR STOLEN RIGHTS CERTIFICATES 10
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE
OF RIGHTS 11
Section 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES 13
Section 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK 13
Section 10. PREFERRED STOCK RECORD DATE 15
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND
OF SHARES OR NUMBER OF RIGHTS 15
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER
OF SHARES 23
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS
OR EARNING POWER 23
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES 27
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Section 15. RIGHTS OF ACTION 28
Section 16. AGREEMENT OF RIGHTS HOLDERS 28
Section 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER 29
Section 18. CONCERNING THE RIGHTS AGENT 29
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF
RIGHTS AGENT 30
Section 20. DUTIES OF RIGHTS AGENT 30
Section 21. CHANGE OF RIGHTS AGENT 32
Section 22. ISSUANCE OF NEW RIGHTS CERTIFICATES 33
Section 23. REDEMPTION AND TERMINATION 33
Section 24. EXCHANGE 34
Section 25. NOTICE OF CERTAIN EVENTS 36
Section 26. NOTICES 36
Section 27. SUPPLEMENTS AND AMENDMENTS 37
Section 28. SUCCESSORS 38
Section 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF
DIRECTORS, ETC 38
Section 30. BENEFITS OF THIS AGREEMENT 38
Section 31. SEVERABILITY 38
ii
Section 32. GOVERNING LAW 39
Section 33. COUNTERPARTS 39
Section 34. DESCRIPTIVE HEADINGS 39
Exhibit A - Terms of Preferred Stock
Exhibit B - Form of Rights Certificate
iii
SECOND AMENDED AND RESTATED
RIGHTS AGREEMENT
THIS SECOND AMENDED AND RESTATED RIGHTS AGREEMENT, is dated as of March 16,
2004 (the "Agreement"), between Sprint Corporation, a Kansas corporation (the
"Company" or "Sprint"), and UMB Bank, n.a., a national banking association (the
"Rights Agent"), and shall become effective upon the Conversion Date (as defined
hereinafter).
W I T N E S S E T H
WHEREAS, on June 9, 1997 the Board of Directors of the Company adopted a
shareholder rights plan governed by the terms of a rights agreement between the
Company and the Rights Agent, dated as of that same date (the "Original
Agreement"); and
WHEREAS, in connection with the recapitalization of the Company's common
stock into FON common stock and PCS common stock, the Board of Directors adopted
the Amended and Restated Rights Agreement, dated as of November 23, 1998 (the
"First Amended and Restated Agreement"), which amended and restated the Original
Agreement; and
WHEREAS, on April 20, 1999, the Board of Directors declared a 2-for-1 split
of the FON common stock in the form of a dividend paid in shares of FON common
stock which had the effect of adjusting the number of FON Group Rights (as
defined in the First Amended and Restated Agreement) attached to the shares of
FON common stock so that following that stock-split one-half of one whole FON
Group Right was attached to each share of FON common stock; and
WHEREAS, following such stock-split, the Company issued one- half of one
whole FON Group Right for each share of FON common stock issued after such
stock-split, which one-half of one whole FON Group Right was attached to each
such share of FON common stock; and
WHEREAS, on December 14, 1999, the Board of Directors declared a 2-for-1
split of the PCS common stock in the form of a dividend paid in shares of PCS
common stock which had the effect of adjusting the number of PCS Group Rights
(as defined in the First Amended and Restated Agreement) attached to the shares
of PCS common stock so that following that stock-split one-half of one whole PCS
Group Right was attached to each share of PCS common stock; and
WHEREAS, following such stock-split, the Company issued one- half of one
whole PCS Group Right for each share of PCS common stock issued after such
stock-split, which one-half of one whole PCS Group Right was attached to each
such share of PCS common stock; and
WHEREAS, on March 12, 2003, the Board of Directors of the Company approved
an amendment to Section 23 of the First Amended and Restated Agreement as set
forth in an amendment thereto dated March 28, 2003 (collectively, the "First
Amended and Restated Agreement, as amended"); and
WHEREAS, the Board of Directors has exercised its rights under Section
7.1(D) of Article SIXTH of the Company's Articles of Incorporation, as amended,
to convert (i) each
outstanding share of PCS Common Stock - Series 1, par value $1.00 per share
("Series 1 PCS Stock"), into .50 shares of FON Common Stock - Series 1, par
value $2.00 per share ("Series 1 FON Stock"), and (ii) each outstanding share of
PCS Common Stock - Series 2, par value $1.00 per share, into .50 shares of FON
Common Stock - Series 2, par value $2.00 per share ("Series 2 FON Stock"), which
conversion will in each case become effective on April 23, 2004 (the "Conversion
Date"); and
WHEREAS, all outstanding shares of the Class A Common Stock, initial par
value $2.50 per share, FON Common Stock - Series 3, par value $2.00 per share,
and PCS Common Stock - Series 3, par value $1.00 per share, were converted into
Series 1 FON Stock and Series 1 PCS Stock prior to the date hereof, no shares of
any such class are currently outstanding, nor will any such shares be
outstanding in the future.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree, effective as of the Conversion Date,
(i) that each FON Group Right shall be amended on the Conversion Date to be, and
shall thereupon be redesignated as, a Right (as hereinafter defined), and (ii)
that each one-half of one whole PCS Group Right, which is associated with a
share of the applicable series of PCS Common Stock that will be converted into
one-half of a share of the applicable series of Common Stock (as hereinafter
defined) on the Conversion Date, shall be converted into a fraction of one whole
Right equal to the product of the fraction of a share of Common Stock received,
times one-half, and (iii) otherwise as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which, together with
all Affiliates and Associates of such Person, shall be the Beneficial Owner of
the Voting Securities of the Company then outstanding representing 15% or more
of the Voting Power of the Company other than as a result of a Qualifying Offer,
but shall not include (i) the Company, (ii) any Subsidiary of the Company, (iii)
any employee benefit plan of the Company or of any Subsidiary of the Company, or
(iv) any Person or entity organized, appointed or established by the Company for
or pursuant to the terms of any such plan. Notwithstanding the preceding
sentence:
(x) in order to effectuate Section 6.23 of the Restructuring and
Merger Agreement:
(1) a holder of Series 2 FON Stock shall not be deemed to
Beneficially Own the shares of Series 1 FON Stock issuable upon
conversion thereof prior to the time of such conversion (including for
purposes of calculating the Voting Power of the shares held by such
holder); and
(2) the Beneficial Ownership by a Cable Parent or its Affiliates
of the shares of Common Stock of the Company acquired by such Cable
Parent or its Affiliates pursuant to the Restructuring and Merger
Agreement (including Article 4, Section 6.8 and Section 7.10 of the
Restructuring and Merger Agreement and including any other shares of
Common Stock of the Company acquired upon
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conversion on reclassification thereof, or upon payment of any
dividend or other distribution thereon), or acquired upon the
conversion of any such shares, shall not in and of itself constitute
Beneficial Ownership of shares sufficient so as to result in such
Cable Parent or its Affiliates being an Acquiring Person;
(y) no Person shall become an Acquiring Person solely as a result of a
reduction in the number of shares of Voting Securities outstanding due to
the repurchase of such securities by the Company, unless and until such
Person shall purchase or otherwise become the Beneficial Owner of
additional Voting Securities constituting 0.5% or more of the Voting Power
represented by such securities then outstanding other than pursuant to a
Qualifying Offer.
The phrase "then outstanding," when used with reference to a Person's beneficial
ownership of securities of the Company, shall mean the number of such securities
then issued and outstanding together with the number of such securities not then
actually issued and outstanding which such Person would be deemed to
beneficially own hereunder.
(b) "Act" shall mean the Securities Act of 1933, as amended.
(c) "Adjustment Shares" shall have the meaning set forth in Section
11(a)(ii) hereof.
(d) "Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations under the
Exchange Act as such Rule is in effect on the date of this Agreement.
(e) A Person shall be deemed the "Beneficial Owner" of, and shall be deemed
to "beneficially own," any securities:
(i) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether such
right is exercisable immediately, or only after the passage of time)
pursuant to any agreement, arrangement or understanding (whether or not in
writing) or upon the exercise of conversion rights, exchange rights,
rights, warrants or options, or otherwise; provided, however, that a Person
shall not be deemed the "Beneficial Owner" of, or to "beneficially own,"
(A) securities tendered pursuant to a tender or exchange offer made by such
Person or any of such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange, or (B) securities
issuable upon exercise of Rights at any time prior to the occurrence of a
Triggering Event;
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of or
has "beneficial ownership" of (as determined pursuant to Rule 13d-3 of the
General Rules and Regulations under the Exchange Act as such Rule is in
effect on the date of this Agreement), including 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 security under this subparagraph (ii) as a result
of an agreement, arrangement or understanding to vote such security if such
agreement, arrangement or understanding:
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(A) arises solely from a revocable proxy given in response to a public
proxy or consent solicitation made pursuant to, and in accordance with, the
applicable provisions of the General Rules and Regulations under the
Exchange Act, and (B) is not also then reportable by such Person on
Schedule 13D under the Exchange Act (or any comparable or successor
report); or
(iii) which are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) with which such Person
(or any of such Person's Affiliates or Associates) has any agreement,
arrangement or understanding (whether or not in writing), for the purpose
of acquiring, holding, voting (except pursuant to a revocable proxy as
described in the proviso to subparagraph (ii) of this paragraph (e)) or
disposing of any Voting Securities of the Company; provided, however, that
nothing in this paragraph (e) shall cause a person engaged in business as
an underwriter of securities to be the "Beneficial Owner" of, or to
"beneficially own," any securities acquired through such person's
participation in good faith in a firm commitment underwriting under the Act
until the expiration of forty days after the date of such acquisition.
Notwithstanding anything in this definition of Beneficial Owner to the
contrary, a Person who, prior to the Distribution Date, is a member of the
Board of Directors or an officer of the Company or who is an Affiliate or
Associate of a member of the Board of Directors or officer of the Company
(each, an "Excluded Person") shall not be deemed to "beneficially own"
shares of Common Stock held by another Excluded Person solely by reason of
any agreement, arrangement or understanding, written or otherwise, entered
into in opposition to any transaction or in support of a Qualifying Offer.
(f) "Board of Directors" shall mean the Board of Directors of the Company
as constituted from time to time.
(g) "Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in the State of New York or the State of
Kansas are authorized or obligated by law or executive order to close.
(h) "Cable Parent" shall mean any of the Cable Parents.
(i) "Cable Parents" shall mean Tele-Communications, Inc., a Delaware
corporation, Comcast Corporation, a Pennsylvania corporation, and Xxx
Communications, Inc., a Delaware corporation.
(j) "Close of Business" on any given date shall mean 5:00 P.M., New York
City time, on such date; provided, however, that if such date is not a Business
Day it shall mean 5:00 P.M., New York City time, on the next succeeding Business
Day.
(k) "Common Stock" (i) when used with reference to the Company shall mean
Series 1 FON Stock, and/or Series 2 FON Stock, in each case as the context
requires; and (ii) when used with reference to any Person other than the Company
shall mean the capital stock of such Person with the greatest voting power, or
the equity securities or other equity interest having power to control or direct
the management, of such Person.
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(l) "Common Stock Equivalents" shall have the meaning set forth in Section
11(a)(iii) hereof.
(m) "Current Market Price" shall have the meaning set forth in Section
11(d)(i) hereof.
(n) "Current Value" shall have the meaning set forth in Section 11(a)(iii)
hereof.
(o) "Distribution Date" shall have the meaning set forth in Section 3(a)
hereof.
(p) "Effective Date" shall be the same date as the Conversion Date.
(q) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended and in effect on the date of this Agreement.
(r) "Exchange Ratio" shall have the meaning set forth in Section 24(a)
hereof.
(s) "Expiration Date" shall have the meaning set forth in Section 7(a)
hereof.
(t) "Final Expiration Date" shall have the meaning set forth in Section
7(a) hereof.
(u) "FON Stock" shall mean the Series 1 FON Stock and the Series 2 FON
Stock.
(v) "NASDAQ" shall have the meaning set forth in Section 11(d)(i) hereof.
(w) "Person" shall mean any individual, firm, corporation, partnership,
limited liability company, or other entity, and shall include any successor (by
merger or otherwise) of such entity.
(x) "Preferred Stock" shall mean shares of Preferred Stock - Sixth Series,
Junior Participating, without par value, of the Company, and, to the extent that
there are not a sufficient number of shares of Preferred Stock - Sixth Series,
Junior Participating, without par value, authorized to permit the full exercise
of the Rights, any other series of Preferred Stock, without par value, of the
Company designated for such purpose containing terms substantially similar to
the terms of the Preferred Stock - Sixth Series, Junior Participating, without
par value, of the Company.
(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 7(b)
hereof, except as otherwise provided in Section 11(a)(ii) and Section 13(a)
hereof.
(aa) "Qualifying Offer" shall mean an acquisition of shares of Common Stock
pursuant to a tender offer or an exchange offer for all outstanding shares of
Common Stock at a price and on terms determined by at least a majority of the
members of the Board of Directors who are not officers of the Company and who
are not representatives, nominees, Affiliates or Associates of an Acquiring
Person, after receiving advice from one or more investment banking firms, to be
(a) fair to stockholders (taking into account all factors which such members of
the
5
Board deem relevant including, without limitation, prices which could reasonably
be achieved if the Company or its assets were sold on an orderly basis designed
to realize maximum value) and (b) otherwise in the best interests of the Company
and its stockholders.
(bb) "Redemption Date" shall have the meaning set forth in Section 7(a)
hereof.
(cc) "Redemption Price" shall have the meaning set forth in Section 23(a)
hereof.
(dd) "Restructuring and Merger Agreement" shall mean that certain
agreement, dated as of May 26, 1998, by and among the Company, the Cable
Parents, TCI Spectrum Holdings, Inc., a Colorado corporation, Comcast Telephony
Services, a Delaware general partnership, Cox Telephony Partnership, a Delaware
general partnership, Sprint Enterprises, L.P., a Delaware limited partnership,
TCI Philadelphia Holdings, Inc., a Delaware corporation, Com Telephony Services,
Inc., a Delaware corporation, Comcast Telephony Services, Inc., a Delaware
corporation, Cox Telephony Partners, Inc., a Delaware corporation, Xxx
Communications Wireless, Inc., a Delaware corporation, SWV One, Inc., a Delaware
corporation, SWV Two, Inc., a Delaware corporation, SWV Three, Inc., a Delaware
corporation, SWV Four, Inc., a Delaware corporation, SWV Five, Inc., a Delaware
corporation, and SWV Six, Inc., a Colorado corporation.
(ee) "Right" shall mean one right (as such number may hereinafter be
adjusted pursuant to the provisions of Section 11(p) hereof) for each two shares
of Common Stock outstanding immediately after the Conversion Date, and in
certain circumstances, after the Distribution Date, each such right initially
representing the right to purchase one one-thousandth of a share of Preferred
Stock - Sixth Series (subject to adjustment as hereinafter provided), upon the
terms and subject to the conditions herein set forth.
(ff) "Rights Certificate" shall have the meaning set forth in Section 3(a)
hereof.
(gg) "Section 11(a)(ii) Event" shall have the meaning set forth in Section
11(a)(ii) hereof.
(hh) "Section 11(a)(ii) Trigger Date" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(ii) "Section 13 Event" shall mean any event described in clauses (x), (y)
or (z) of Section 13(a) hereof.
(jj) "Spread" shall have the meaning set forth in Section 11(a)(iii)
hereof.
(kk) "Stock Acquisition Date" shall mean the earlier of the date of (i) the
first public announcement (which, for purposes of this definition, shall
include, without limitation, a report filed under the Exchange Act) by the
Company or an Acquiring Person that an Acquiring Person has become such or (ii)
the first public disclosure of facts by the Company or an Acquiring Person
indicating that an Acquiring Person has become an Acquiring Person; provided,
however, that a Stock Acquisition Date shall not be deemed to have occurred if
any Person shall have inadvertently become an Acquiring Person and within ten
Business Days after the date upon which the Company shall first become aware of
the occurrence of such an event, the Board of
6
Directors in its sole discretion (1) approves the beneficial ownership interest
then held by such Person, or (2) provides such Person a thirty day period to
divest a sufficient number of Voting Securities so as to decrease the beneficial
ownership of such Person to less than 15% of the Voting Power of the Voting
Securities then outstanding and such Person has so divested at the end of any
such thirty day period.
(ll) "Subsidiary" shall mean, with reference to any Person, any other
Person of which an amount of voting securities sufficient to elect at least a
majority of the directors or Persons having similar authority of such other
Person is beneficially owned, directly or indirectly, by such Person, or
otherwise controlled by such Person.
(mm) "Substitution Period" shall have the meaning set forth in Section
11(a)(iii) hereof.
(nn) "Trading Day" shall have the meaning set forth in Section 11(d)(i)
hereof.
(oo) "Triggering Event" shall mean any Section 11(a)(ii) Event or any
Section 13 Event.
(pp) "Vote" shall mean, with respect to any entity, the ability to cast a
vote at a stockholders', members' or comparable meeting of such entity with
respect to the election of directors, managers or other members of such entity's
governing body, or the ability to cast a general partnership or comparable vote.
(qq) "Voting Power" shall mean, with respect to any entity as at any date,
the aggregate number of Votes outstanding as at such date in respect of such
entity.
(rr) "Voting Securities" shall mean the Common Stock and any other
securities of the Company the holders of which are ordinarily, in the absence of
contingencies, entitled to Vote, even though the right to such Vote has been
suspended by the happening of such a contingency.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Common Stock) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Company may
from time to time appoint such Co-Rights Agents as it may deem necessary or
desirable.
Section 3. ISSUE OF RIGHTS CERTIFICATES.
(a) Until the earlier of (i) the close of business on the tenth Business
Day after the Stock Acquisition Date, and (ii) the close of business on the
tenth Business Day (or such later date as the Board shall determine prior to
such time as any Person becomes an Acquiring Person) after the date of the
commencement by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of the
Company, or any Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan) of, or the first public
announcement of the intention of such Person to commence, a tender offer or
exchange offer, the consummation of which would result in any Person becoming
the Beneficial Owner of Voting Securities then outstanding representing 15%
7
or more of the Voting Power of the Company (the earlier of (i) and (ii) being
herein referred to as the "Distribution Date"), (x) the Rights will be evidenced
(subject to the provisions of paragraph (b) of this Section 3) by the
certificates for applicable series of Common Stock, and not by separate
certificates, and (y) the Rights will be transferable only in connection with
the transfer of the underlying shares of Common Stock (including a transfer to
the Company). As soon as practicable after the Distribution Date, the Company
shall prepare and execute and the Rights Agent will countersign and send by
first-class, insured, postage prepaid mail, to each record holder of (i) Common
Stock as of the close of business on the Distribution Date, at the address of
such holder shown on the records of the Company, one or more rights
certificates, in substantially the form attached hereto as Exhibit B (the
"Rights Certificates"), evidencing one-half of one whole Right for each share of
Common Stock so held, subject in each case to adjustment as provided herein. In
the event that an adjustment in the number of Rights per share of Common Stock
has been made after the Conversion Date pursuant to Section 11(p) hereof, at the
time of distribution of the Rights Certificates, the Company shall make the
necessary and appropriate rounding adjustments (in accordance with Section 14(a)
hereof) so that Rights Certificates representing only whole numbers of Rights
are distributed and cash is paid in lieu of any fractional Rights. As of and
after the Distribution Date, the Rights will be evidenced solely by such Rights
Certificates.
(b) With respect to certificates for the Common Stock outstanding after the
Conversion Date, until the Distribution Date, the Rights will be evidenced by
such certificates for the Common Stock and the registered holders of the Common
Stock shall also be the registered holders of the associated Rights. Until the
earlier of the Distribution Date or the Expiration Date, the transfer of any
certificates representing shares of Common Stock in respect of which Rights have
been issued shall also constitute the transfer of the Rights associated with
such shares of Common Stock.
(c) Rights shall be issued in respect of all shares of Common Stock which
are issued (whether originally issued or transferred from the Company's treasury
to any other Person) after the Conversion Date but prior to the earlier of the
Distribution Date or the Expiration Date, or, in certain circumstances provided
in Section 22 hereof, after the Distribution Date. Certificates representing
such shares of Common Stock shall also be deemed to be certificates for Rights,
and shall bear the following legend, and all references to Rights Agreement or
Rights in such legend appearing on certificates for Common Stock issued prior to
or after the Conversion Date shall be deemed to refer to this Second Amended and
Restated Rights Agreement and the Rights issued pursuant to this Second Amended
and Restated Rights Agreement:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement (the "Rights Agreement"),
between Sprint Corporation (the "Company") and UMB Bank, n.a. (the "Rights
Agent"), the terms of which are hereby incorporated herein by reference and
a copy of which is on file at the principal offices of the Rights Agent.
Under certain circumstances, as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and will no longer be
evidenced by this certificate. The Rights Agent will mail to the holder of
this certificate a copy of the Rights Agreement, as in effect on the date
of mailing, without charge promptly after receipt of a written request
therefor. Under certain
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circumstances set forth in the Rights Agreement, Rights issued to, or held
by, any Person who is, was or becomes an Acquiring Person or any Affiliate
or Associate thereof (as such terms are defined in the Rights Agreement),
whether currently held by or on behalf of such Person or by any subsequent
holder, may become null and void.
With respect to such certificates containing the foregoing legend, until the
earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights
associated with the Common Stock represented by such certificates shall be
evidenced by such certificates alone and registered holders of Common Stock
shall also be the registered holders of the associated Rights, and the transfer
of any of such certificates shall also constitute the transfer of the Rights
associated with the Common Stock represented by such certificates. In the event
that the Company purchases or otherwise acquires any shares of Common Stock
prior to the Distribution Date, any Rights associated with such shares of Common
Stock shall be deemed canceled and retired so that the Company shall not be
entitled to exercise any Rights associated with the shares of Common Stock which
are no longer outstanding. Notwithstanding this paragraph (c), the omission of a
legend shall not affect the enforceability of any part of this Rights Agreement
or the rights of any holder of the Rights.
Section 4. FORM OF RIGHTS CERTIFICATES.
(a) The Rights Certificates (and the forms of election to purchase and of
assignment to be printed on the reverse thereof) shall each be substantially in
the form set forth in Exhibit B hereto, and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which such Rights may from time to
time be listed, or to conform to usage. Subject to the provisions of Section 11
and Section 22 hereof, the Rights Certificates shall entitle the holders thereof
to purchase such number of one one-thousandths of a share of Preferred Stock -
Sixth Series as shall be set forth therein at the Purchase Price set forth
therein, but the amount and type of securities purchasable upon the exercise of
each Right and the Purchase Price thereof, shall be subject to adjustment as
provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) or Section 22
hereof that represents Rights beneficially owned by: (i) an Acquiring Person or
any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding which has as a
primary purpose or effect avoidance of Section 7(e) hereof, and any Rights
Certificate issued pursuant to Section 6 or Section 11 hereof upon
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transfer, exchange, replacement or adjustment of any other Rights Certificate
referred to in this sentence, shall contain (to the extent feasible) the
following legend:
The Rights represented by this Rights Certificate are or were beneficially
owned by a Person who was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (as such terms are defined in the Rights
Agreement). Accordingly, this Rights Certificate and the Rights represented
hereby may become, or may already have become, null and void in the
circumstances specified in Section 7(e) of such Agreement.
Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Rights Certificates shall be executed on behalf of the Company by
its Chairman of the Board, any Vice Chairman, its President or any Vice
President, either manually or by facsimile signature, and shall have affixed
thereto the Company's seal or a facsimile thereof which shall be attested by the
Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Rights Certificates shall be countersigned by the
Rights Agent, either manually or by facsimile signature, and shall not be valid
for any purpose unless so countersigned. In case any officer of the Company who
shall have signed any of the Rights Certificates shall cease to be such officer
of the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Rights Certificates, nevertheless, may be
countersigned by the Rights Agent and issued and delivered by the Company with
the same force and effect as though the person who signed such Rights
Certificates had not ceased to be such officer of the Company; and any Rights
Certificates may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Rights Certificate, shall be a proper
officer of the Company to sign such Rights Certificate, although at the date of
the execution of this Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at its principal office or offices designated as the appropriate place
for surrender of Rights Certificates upon exercise or transfer, books for
registration and transfer of the Rights Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced on its face by each of the Rights
Certificates and the date of each of the Rights Certificates.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS CERTIFICATES.
(a) Subject to the provisions of Section 4(b), Section 7(e) and Section 14
hereof, at any time after the Close of Business on the Distribution Date, and at
or prior to the Close of Business on the Expiration Date, (i) any Rights
Certificate or Certificates may be transferred, split up, combined or exchanged
for another Rights Certificate or Certificates, entitling the registered holder
to purchase a like number of one one-thousandths of a share of Preferred Stock -
Sixth Series (or, following a Triggering Event, Common Stock of the applicable
series, other securities, cash or other assets, as the case may be) as the
Rights Certificate or Certificates surrendered then entitled such holder (or
former holder in the case of a transfer) to purchase.
10
Any registered holder desiring to transfer, split up, combine or exchange any
Rights Certificate or Certificates shall make such request in writing delivered
to the Rights Agent, and shall surrender the Rights Certificate or Certificates
to be transferred, split up, combined or exchanged at the principal office or
offices of the Rights Agent designated for such purpose. Neither the Rights
Agent nor the Company shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Rights Certificate until the
registered holder shall have completed and signed the certificate contained in
the form of assignment on the reverse side of such Rights Certificate and shall
have provided such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request. Thereupon the Rights Agent shall, subject to Section
4(b), Section 7(e) and Section 14 hereof, countersign and deliver to the Person
entitled thereto a Rights Certificate or Rights Certificates, as the case may
be, as so requested. The Company may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Rights Certificates.
(b) Subject to the provision of Section 4(b), Section7(e) and Section 14
hereof, upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Rights
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and reimbursement to the Company and
the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Rights Certificate if
mutilated, the Company will execute and deliver a new Rights Certificate of like
tenor to the Rights Agent for countersignature and delivery to the registered
owner in lieu of the Rights Certificate so lost, stolen, destroyed or mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS.
(a) Subject to Section 7(e) hereof, the registered holder of any Rights
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section 11(a)(iii), Section 23(a) and
Section 24(b) hereof) in whole or in part at any time after the Distribution
Date upon surrender of the Rights Certificate, with the form of election to
purchase and the certificate on the reverse side thereof duly executed, to the
Rights Agent at the principal office or offices of the Rights Agent designated
for such purpose, together with payment of the aggregate Purchase Price with
respect to the total number of one one-thousandths of a share of Preferred Stock
(or other securities, cash or other assets, as the case may be) as to which such
surrendered Rights are then exercisable, at or prior to the earlier of (i) the
close of business on June 25, 2007 (the "Final Expiration Date"); (ii) the time
at which the Rights are redeemed as provided in Section 23 hereof (the
"Redemption Date"); (iii) the time at which such Rights are exchanged as
provided in Section 24 hereof; or (iv) the consummation of a transaction
contemplated by Section 13(d) hereof (the earliest of (i), (ii), (iii) and (iv)
being herein referred to as the "Expiration Date").
(b) The purchase price for each one one-thousandth of a share of Preferred Stock
pursuant to the exercise of a Right shall be $275.00, and shall be subject to
adjustment from time
11
to time as provided in Sections 11 and 13(a) hereof and shall be payable in
lawful money of the United States of America in accordance with paragraph (c)
below (the "Purchase Price").
(c) Upon receipt of a Rights Certificate representing exercisable Rights,
with the form of election to purchase and the certificate duly executed,
accompanied by payment, with respect to each Right so exercised, of the Purchase
Price per one one- thousandth of a share of Preferred Stock (or other shares,
securities, cash or other assets, as the case may be) to be purchased as set
forth below and an amount equal to any applicable transfer tax required to be
paid by the holder of such Rights Certificate in accordance with Section 9
hereof, the Rights Agent shall, subject to Section 20(k) hereof, thereupon
promptly (i) (A) requisition from any transfer agent of the shares of Preferred
Stock (or make available, if the Rights Agent is the transfer agent for such
shares) certificates for the total number of one one-thousandths of a share of
Preferred Stock to be purchased and the Company hereby irrevocably authorizes
its transfer agent to comply with all such requests, or (B) if the Company shall
have elected to deposit the total number of shares of Preferred Stock issuable
upon exercise of the Rights hereunder with a depositary agent, requisition from
the depositary agent depositary receipts representing such number of one one-
thousandths of a share of Preferred Stock as are to be purchased (in which case
certificates for the shares of Preferred Stock represented by such receipts
shall be deposited by the transfer agent with the depositary agent) and the
Company will direct the depositary agent to comply with such request, (ii)
requisition from the Company the amount of cash, if any, to be paid in lieu of
fractional shares in accordance with Section 14 hereof, (iii) promptly after
receipt of such certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such
holder, and (iv) after receipt thereof, promptly deliver such cash, if any, to
or upon the order of the registered holder of such Rights Certificate. The
payment of the Purchase Price (as such amount may be reduced pursuant to Section
11(a)(iii) hereof) shall be made in cash or by certified bank check or bank
draft payable to the order of the Company. In the event that the Company is
obligated to issue other securities (including Common Stock) of the Company, pay
cash and/or distribute other property pursuant to Section 11(a) 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 appropriate. The Company reserves the right to require, prior to the
occurrence of a Triggering Event, that upon any exercise of Rights, a number of
Rights be exercised so that only whole shares of Preferred Stock would be
issued.
(d) In case the registered holder of any Rights Certificate shall exercise
less than all the Rights evidenced thereby, a new Rights Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent and delivered to, or upon the order of, the registered holder of
the Rights Certificate registered in such name or names as may be designated by
such holder, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from and
after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially
owned by (i) an Acquiring Person or an Associate or Affiliate of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person becomes such, or
(iii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with the Acquiring
Person becoming
12
such and receives such Rights pursuant to either (A) a transfer (whether or not
for consideration) from the Acquiring Person to holders of equity interests in
such Acquiring Person or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding which has as a
primary purpose or effect the avoidance of this Section 7(e), shall become null
and void without any further action and no holder of such Rights shall have any
rights whatsoever with respect to such Rights, whether under any provision of
this Agreement or otherwise. The Company shall use all reasonable efforts to
ensure that the provisions of this Section 7(e) and Section 4(b) hereof are
complied with, but neither the Company nor the Rights Agent shall have any
liability to any holder of Rights Certificates or other Person as a result of
the Company's failure to make any determinations with respect to an Acquiring
Person or its Affiliates, Associates or transferees hereunder. The Company may
require (or cause the Rights Agent or any transfer agent of the Company to
require) any Person who submits a Rights Certificate (or a certificate
representing shares of Common Stock that evidences, or but for the provisions of
this Section 7(e) would evidence, Rights) for transfer on the registry books or
to exercise the Rights represented thereby to establish to the satisfaction of
the Company in its sole discretion that such Rights have not become null and
void pursuant to the provisions of this Section 7(e).
(f) Notwithstanding anything in this Agreement to the contrary, neither the
Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder upon the occurrence of any purported exercise as
set forth in this Section 7 unless such registered holder shall have (i)
completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Rights Certificate surrendered for
such exercise, and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES. All Rights
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
canceled Rights Certificates to the Company, or shall, at the written request of
the Company, destroy such canceled Rights Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK.
(a) The Company covenants and agrees that it will cause to be reserved and
kept available out of its authorized and unissued shares of Preferred Stock
(and, following the occurrence of a Triggering Event, out of its authorized and
unissued shares of Common Stock and/or other securities or out of its authorized
and issued shares held in its treasury), the number of shares of Preferred Stock
(and, following the occurrence of a Triggering Event, the applicable
13
series of Common Stock and/or other securities) that, as provided in this
Agreement, including Section 11(a)(iii) hereof, will be sufficient to permit the
exercise in full of all outstanding Rights.
(b) So long as the shares of Preferred Stock (and, following the occurrence
of a Triggering Event, Common Stock and/or other securities) issuable and
deliverable upon the exercise of the Rights may be listed on any national
securities exchange, the Company shall use its best efforts to cause, from and
after such time as the Rights become exercisable (but only to the extent that it
is reasonably likely that the Rights will be exercised), all shares reserved for
such issuance to be listed on such exchange upon official notice of issuance
upon such exercise.
(c) The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the first occurrence of a Section
11(a)(ii) Event on which the consideration to be delivered by the Company upon
exercise of the Rights has been determined in accordance with Section 11(a)(iii)
hereof, a registration statement under the Act, with respect to the securities
purchasable upon exercise of the Rights on an appropriate form, (ii) cause such
registration statement to become effective as soon as practicable after such
filing, and (iii) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Act) until the earlier
of (A) the date as of which the Rights are no longer exercisable for such
securities, and (B) the Expiration Date. The Company will also take such action
as may be appropriate under, or to ensure compliance with, the securities or
"blue sky" laws of the various states in connection with the exercisability of
the Rights. The Company may temporarily suspend, for a period of time not to
exceed ninety (90) days after the date set forth in clause (i) of the first
sentence of this Section 9(c), the exercisability of the Rights in order to
prepare and file such registration statement and permit it to become effective.
Upon any such suspension, the Company shall make 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. In
addition, if the Company shall determine that a registration statement is
required following the Distribution Date, the Company may temporarily suspend
the exercisability of the Rights until such time as a registration statement has
been declared effective. Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction if the
requisite qualification in such jurisdiction shall not have been obtained, the
exercise thereof shall not be permitted under applicable law or a registration
statement (if required) shall not have been declared effective.
(d) The Company covenants and agrees that it will take all such action as
may be necessary to ensure that all Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other securities)
delivered upon exercise or exchange of the Rights shall, at the time of delivery
of the certificates for such shares (subject to payment of the Purchase Price),
be duly and validly authorized and issued and fully paid and nonassessable,
including, without limitation, effecting such changes to the accounts of the
Company as may be necessary to accomplish the foregoing purposes.
(e) The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Rights Certificates and of
any certificates for Preferred Stock (or Common Stock and/or other securities,
as the case may be) upon the exercise of Rights. The Company shall not, however,
be required to pay any transfer tax which may be payable in
14
respect of any transfer or delivery of Rights Certificates to a Person other
than, or the issuance or delivery of certificates or depositary receipts for a
number of one one-thousandths of a share of Preferred Stock (or Common Stock
and/or other securities, as the case may be) in respect of a name other than
that of, the registered holder of the Rights Certificates evidencing Rights
surrendered for exercise or to issue or deliver any certificates or depositary
receipts for a number of one one- thousandths of a share of Preferred Stock (or
Common Stock and/or other securities, as the case may be) in a name other than
that of the registered holder upon the exercise of any Rights until such tax
shall have been paid (any such tax being payable by the holder of such Rights
Certificate at the time of surrender) or until it has been established to the
Company's satisfaction that no such tax is due.
Section 10. PREFERRED STOCK RECORD DATE. Each person in whose name any
certificate for a number of one one-thousandths of a share of Preferred Stock
(or Common Stock and/or other securities, as the case may be) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder of
record of such fractional shares of Preferred Stock (or Common Stock and/or
other securities, as the case may be) represented thereby on, and such
certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and all applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Preferred Stock (or
Common Stock and/or other securities, as the case may be) transfer books of the
Company are closed, such Person shall be deemed to have become the record holder
of such shares (fractional or otherwise) on, and such certificate shall be
dated, the next succeeding Business Day on which the Preferred Stock (or Common
Stock and/or other securities, as the case may be) transfer books of the Company
are open. Prior to the exercise of the Rights evidenced thereby, the holder of a
Rights Certificate shall not be entitled to any rights of a stockholder of the
Company with respect to shares for which the Rights shall be exercisable,
including, without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES OR
NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the Conversion
Date (A) declare a dividend on the Preferred Stock payable in shares of
Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine
the outstanding Preferred Stock into a smaller number of shares, or (D)
issue any shares of its capital stock in a reclassification of the
Preferred Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a) and
Section 7(e) hereof, 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 the
Preferred Stock or capital stock, as the case may be, issuable on such
date, shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive, upon payment of the
Purchase Price then in effect,
15
the aggregate number and kind of shares of Preferred Stock or capital
stock, as the case may be, which, if such Right had been exercised
immediately prior to such date and at a time when such Preferred Stock
transfer books of the Company were open, he 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) hereof.
(ii) Subject to Section 24 hereof, in the event any Person (other than
the Company, any Subsidiary of the Company, any employee benefit plan of
the Company or of any Subsidiary of the Company, or any Person or entity
organized, appointed or established by the Company for or pursuant to the
terms of any such plan), alone or together with its Affiliates and
Associates, shall, at any time on or after the Conversion Date, be or
become an Acquiring Person, unless such person becomes an Acquiring Person
pursuant to a transaction set forth in Section 13(a) hereof (such an event
being referred to herein as "a Section 11(a)(ii) Event") then, promptly
following the occurrence of such Section 11(a)(ii) Event, proper provision
shall be made so that (except as provided below and in Section 7(e)
hereof), each holder of a Right shall thereafter have the right to receive,
upon exercise thereof at the then current Purchase Price in accordance with
the terms of this Agreement, in lieu of a number of one one-thousandths of
a share of Preferred Stock, such number of shares of the applicable series
of Common Stock as shall equal the result obtained by (x) multiplying the
then current Purchase Price by the then number of one one-thousandths of a
share of Preferred Stock for which a Right was exercisable (or, if the
Distribution Date shall not have occurred prior to the date of such Section
11(a)(ii) Event, the number of one one-thousandths of a share of Preferred
Stock for which a Right would have been exercisable if the Distribution
Date had occurred on the Business Day immediately preceding the date of
such Section 11(a)(ii) Event) immediately prior to the first occurrence of
a Section 11(a)(ii) Event, and (B) dividing that product (which, following
such first occurrence, shall thereafter be referred to as the "Purchase
Price" for each Right and for all purposes of this Agreement) by 50% of the
Current Market Price (determined pursuant to Section 11(d) hereof) per
share of the applicable series of Common Stock on the date of such first
occurrence (such number of shares, the "Adjustment Shares"); which shares
shall be distributed in the same series of Common Stock as the holder of
the Right was the record holder on the date of the first occurrence of a
Section 11(a)(ii) Event.
(iii) Subject to such limitations existing as of the date hereof as
are necessary to prevent a default under any agreement to which the Company
is a party, in the event that the number of shares of Common Stock which
are authorized but not outstanding or reserved for issuance for purposes
other than upon exercise of the Rights is less than the aggregate number of
Adjustment Shares issuable upon the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii) of this Section 11(a), the
Company shall (A) determine the excess of (1) the value of the Adjustment
Shares issuable upon the exercise of a Right determined as set forth below
(the "Current Value") over (2) the Purchase Price (such excess, the
"Spread"), and (B) with respect to each Right (subject to Section 7(e)
hereof), make adequate provision to substitute for the Adjustment Shares,
16
upon the exercise of a Right and payment of the Purchase Price, (1) cash,
(2) a reduction in the Purchase Price, (3) Common Stock or other equity
securities of the Company (including, without limitation, shares, or units
of shares, of preferred stock, such as the Preferred Stock, which the Board
has deemed to have essentially the same value or economic rights as a share
of the Common Stock (such shares of preferred stock being referred to as
"Common Stock Equivalents")), (4) debt securities of the Company, (5) other
assets, or (6) any combination of the foregoing, having an aggregate value
equal to the Current Value (less the amount of any reduction in the
Purchase Price), where such aggregate value has been determined by the
Board based upon the advice of a nationally recognized investment banking
firm selected by the Board; provided, however, that if the Company shall
not have made adequate provision to deliver value pursuant to clause (B)
above within thirty days following the date on which the Company's right of
redemption pursuant to Section 23(a) expires (such date being referred to
herein as the "Section 11(a)(ii) 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 (other than an amount equal
to the par value of the shares of Common Stock to be issued), shares of the
applicable series of Common Stock (to the extent available) and then, if
necessary, cash, which shares and/or cash have an aggregate value equal to
the Spread. If the Board determines 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 Section 11(a)(ii) 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 action is to be taken
pursuant to the first and/or second sentences of this Section 11(a)(iii),
the Company (1) shall provide, subject to Section 7(e) hereof, that such
action shall apply uniformly to all outstanding Rights, and (2) may suspend
the exercisability of the Rights until the expiration of the Substitution
Period in order to seek such shareholder approval for such 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 make a public
announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. For purposes of this Section 11(a)(iii),
the Current Value of each Adjustment Share of the applicable series shall
be the Current Market Price per share of the Common Stock of such series on
the Section 11(a)(ii) Trigger Date and the per share or per unit value of
any Common Stock Equivalent to such Common Stock shall be deemed to equal
the Current Market Price per share of such Common Stock on such date.
(iv) Notwithstanding anything in Section 11(a)(ii) to the contrary,
there shall not be deemed to have occurred a Section 11(a)(ii) Event if a
Person shall have inadvertently become the Beneficial Owner of Voting
Securities of the Company then outstanding representing 15% or more of the
Voting Power of the Company and within ten Business Days after the date
upon which the Company shall first become aware of the occurrence of such
an event, the Board of Directors in its sole discretion (1) approves the
beneficial ownership interest then held by such Person, or (2) provides
such Person a thirty day period to divest a sufficient number of Voting
Securities so as to decrease the
17
beneficial ownership of such Person to less than 15% of the Voting Power of
the Company and such Person has so divested at the end of any such thirty
day period.
(b) In case the Company shall fix a record date for the issuance of rights,
options or warrants to all holders of Preferred Stock entitling them to
subscribe for or purchase (for a period expiring within forty-five (45) calendar
days after such record date) such Preferred Stock (or shares having the same
rights, privileges and preferences as the shares of such Preferred Stock
("equivalent preferred stock")) or securities convertible into such Preferred
Stock or equivalent preferred stock at a price per share of such Preferred Stock
or per share of equivalent preferred stock (or having a conversion price per
share, if a security convertible into Preferred Stock or equivalent preferred
stock) less than the Current Market Price (as determined pursuant to Section
11(d) hereof) per share of such Preferred Stock on such record date, the
Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the number of shares of such
Preferred Stock and equivalent preferred stock outstanding on such record date,
plus the number of shares of such Preferred Stock and equivalent preferred stock
which the aggregate offering price of the total number of shares of such
Preferred Stock and/or equivalent preferred stock so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such Current Market Price, and the denominator of
which shall be the number of shares of such Preferred Stock and equivalent
preferred stock outstanding on such record date, plus the number of additional
shares of such Preferred Stock and/or equivalent preferred stock to be offered
for subscription or purchase (or into which the convertible securities so to be
offered are initially convertible). In case such subscription price may be paid
by delivery of consideration part or all of which may be in a form other than
cash, the value of such consideration shall be as determined in good faith by
the Board of Directors of the Company, whose determination shall be described in
a statement filed with the Rights Agent and shall be binding on the Rights Agent
and the holders of the Rights. Shares of Preferred Stock and preferred stock
equivalents owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall be
made successively whenever such a record date is fixed, and in the event that
such rights, options or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such record
date had not been fixed.
(c) In case the Company shall fix a record date for a distribution to all
holders of Preferred Stock (including any such distribution made in connection
with a consolidation or merger in which the Company is the continuing
corporation) of evidences of indebtedness, cash (other than a regular quarterly
cash dividend out of the earnings or retained earnings of the Company), assets
(other than a dividend payable in Preferred Stock, but including any dividend
payable in stock other than Preferred Stock) or subscription rights or warrants
(excluding those referred to in Section 11(b) 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 (as determined pursuant to
Section 11(d) hereof) per share of Preferred 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) of the portion of the cash, assets or evidences of indebtedness so
to be distributed or of such subscription rights or warrants applicable to a
share of Preferred Stock and the denominator of which shall be such
18
Current Market Price (as determined pursuant to Section 11(d) hereof) per share
of Preferred Stock. Such adjustments shall be made successively whenever such a
record date is fixed, and in the event that such distribution is not so made,
the Purchase Price shall be adjusted to be the Purchase Price which would have
been in effect if such record date had not been fixed.
(d) (i) 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 the applicable series of Common Stock on any date shall
be deemed to be the average of the daily closing prices per share of such
series of Common Stock for the thirty consecutive Trading Days immediately
prior to such date, and for purposes of computations made pursuant to
Section 11(a)(iii) hereof, the Current Market Price per share of the
applicable series of Common Stock on any date shall be deemed to be the
average of the daily closing prices per share of such series of Common
Stock for the ten consecutive Trading Days immediately following such date;
provided, however, that in the event that the Current Market Price per
share of the applicable series of Common Stock is determined during a
period following the announcement by the issuer of such series of Common
Stock of (A) a dividend or distribution on such series of Common Stock
payable in shares of such series of Common Stock or securities convertible
into shares of such series of Common Stock (other than the Rights), or (B)
any subdivision, combination or reclassification of such series of Common
Stock, and the ex- dividend or ex-distribution date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification shall not have occurred prior to the commencement of the
requisite thirty Trading Day or ten Trading Day period, as set forth above,
then, and in each such case, the Current Market Price shall be properly
adjusted to reflect the current market price per share equivalent of such
series of Common Stock. 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 the applicable series 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 such series of Common Stock are listed or admitted
to trading or, if the shares of such series of Common Stock are not listed
or admitted to trading on any national securities exchange, the last quoted
price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") or such other system then in use, or, if on any such date the
shares of such series 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 such series of Common
Stock selected by the Board. If on any such date no market maker is making
a market in the applicable series of Common Stock, the fair value of such
shares on such date as determined in good faith by the Board shall be used.
Subject to the second proviso in the first sentence of this Section
11(d)(i), the term "Trading Day" shall mean a day on which the principal
national securities exchange on which the shares of the applicable series
of Common Stock are listed or admitted to trading is open for the
transaction of business or, if the shares of such series of Common Stock
are not listed or
19
admitted to trading on any national securities exchange, a Business Day. If
the applicable series of Common Stock is not publicly held or not so listed
or traded, Current Market Price per share shall mean the fair value per
share as determined in good faith by the Board, whose determination shall
be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the Current Market
Price per share of the applicable series of Preferred Stock shall be
determined in the same manner as set forth above for the applicable series
of Common Stock in clause (i) of this Section 11(d) (other than the last
sentence thereof). If the Current Market Price per share of the applicable
series of Preferred Stock cannot be determined in the manner provided above
or if such series of Preferred Stock is not publicly held or listed or
traded in a manner described in clause (i) of this Section 11(d), the
Current Market Price per share of such series of Preferred Stock shall be
conclusively deemed to be an amount equal to 2,000 (as such number may be
appropriately adjusted for such events as stock splits, stock dividends and
recapitalizations with respect to the applicable series of Common Stock
occurring after the date of this Agreement) multiplied by the Current
Market Price per share of such series of Common Stock determined in
accordance with the second proviso to the first sentence of Section
11(d)(i). If neither the applicable series of Common Stock nor the
Preferred Stock is publicly held or so listed or traded, Current Market
Price per share of Preferred Stock shall mean the fair value per share as
determined in good faith by the Board, whose determination shall be
described in a statement filed with the Rights Agent and shall be
conclusive for all purposes. For all purposes of this Agreement, the
Current Market Price of one one-thousandth of a share of Preferred Stock
shall be equal to the Current Market Price of one share of such series of
Preferred Stock divided by 2,000.
(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 (1%) in the Purchase Price;
provided, however, that any adjustments which by reason of this Section 11(e)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest ten-thousandth of a share of the
applicable series of Common Stock or other share or one-millionth of a share of
Preferred Stock. Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the earlier
of (i) three (3) years from the date of the transaction which mandates such
adjustment, or (ii) the Expiration Date.
(f) 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 the applicable series
of Preferred Stock, thereafter the number of such other shares so receivable
upon exercise of any Right and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the applicable series of Preferred
Stock contained in Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and
(m), and the provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to
the applicable series of Preferred Stock shall apply on like terms to any such
other shares.
20
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-thousandths of a
share of Preferred Stock purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of one one- thousandths of
a share of the Preferred Stock (calculated to the nearest one-millionth)
obtained by (i) multiplying (x) the number of one one-thousandths of a share
covered by a Right immediately prior to this adjustment, by (y) the Purchase
Price in effect immediately prior to such adjustment of the Purchase Price, and
(ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in lieu of any adjustment in the
number of one one-thousandths of a share of Preferred Stock purchasable upon the
exercise of a Right. Each of the Rights outstanding after the adjustment in the
number of Rights shall be exercisable for the number of one one-thousandths of a
share of Preferred Stock for which a Right was exercisable immediately prior to
such adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the nearest
one-millionth) obtained by dividing the Purchase Price in effect immediately
prior to adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Company shall make a
public announcement of its election to adjust the number of Rights, indicating
the record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Rights Certificates have
been issued, shall be at least ten days later than the date of the public
announcement. If Rights Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of Rights
Certificates on such record date Rights Certificates evidencing, subject to
Section 14 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
Rights Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Rights Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein (and may bear, at the option
of the Company, the adjusted Purchase Price) and shall be registered in the
names of the holders of record of Rights Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or the
number of one one-thousandths of a share of Preferred Stock issuable upon the
exercise of the Rights, the Rights Certificates theretofore and thereafter
issued may continue to express the Purchase Price per one one-thousandths of a
share of Preferred Stock and the number of one one-thousandths of
21
a share of the Preferred Stock which were expressed in the initial Rights
Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then stated value, if any, of the number of one
one-thousandths of a share of Preferred Stock or the par value, if any, of any
shares of any other capital stock, issuable upon exercise of the Rights, the
Company shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally issue
fully paid and nonassessable such number of one one-thousandths of a share of
the Preferred Stock (or such other shares) at such adjusted Purchase Price. If,
upon any exercise of the Rights, a holder is to receive a combination of the
applicable series of Common Stock and the applicable series of Common Stock
Equivalents, a portion of the consideration paid upon such exercise, equal to at
least the then par value of a share of such series of Common Stock, shall be
allocated as the payment for each share of such series of Common Stock so
received.
(l) In any case in which this Section 11 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event the
issuance to the holder of any Right exercised after such record date the number
of one one- thousandths of a share of Preferred Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise over and above
the number of one one-thousandths of a share of Preferred Stock and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due xxxx or other
appropriate instrument evidencing such holder's right to receive such additional
shares (fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.
(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 its 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 Preferred Stock, (ii) issuance wholly for cash of any shares
of the Preferred Stock at less than the Current Market Price, (iii) issuance
wholly for cash of shares of the Preferred Stock or securities which by their
terms are convertible into or exchangeable for shares of the Preferred Stock,
(iv) stock dividends or (v) issuance of rights, options or warrants referred to
in this Section 11, hereafter made by the Company to holders of the Preferred
Stock shall not be taxable to such stockholders.
(n) The Company covenants and agrees that it shall not, at any time after
the Distribution Date and so long as all of the Rights have not been redeemed
pursuant to Section 23 hereof or exchanged pursuant to Section 24 hereof, (i)
consolidate with any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), (ii) merge with or into
any other Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), 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
22
Subsidiaries in one or more transactions each of which complies with Section
11(o) hereof), 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 otherwise eliminate the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time after the Conversion Date and prior to
the Distribution Date (i) declare a dividend on the outstanding shares of any
series of Common Stock payable in shares of such series of Common Stock, (ii)
subdivide the outstanding shares of any series of Common Stock, or (iii) combine
the outstanding shares of any series of Common Stock into a smaller number of
shares, the number of Rights associated with each share of such series of Common
Stock then outstanding, or issued or delivered thereafter but prior to the
Distribution Date, shall be proportionately adjusted so that the number of
Rights thereafter associated with each share of such series of Common Stock
following any such event shall equal the result obtained by multiplying the
number of Rights associated with each share of such series of Common Stock
immediately prior to such event by a fraction the numerator of which shall be
the total number of shares of such series of Common Stock outstanding
immediately prior to the occurrence of the event and the denominator of which
shall be the total number of shares of such series of Common Stock outstanding
immediately following the occurrence of such event.
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Section 11 and Section 13 hereof,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent, and with each transfer agent for the
Preferred Stock and the applicable series of Common Stock, a copy of such
certificate, and (c) mail a brief summary thereof to each holder of a Rights
Certificate evidencing the Rights (or, if prior to the Distribution Date, to
each holder of a certificate representing shares of such series of Common Stock)
in accordance with Section 26 hereof. The Rights Agent shall be fully protected
in relying on any such certificate and on any adjustment therein contained.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
POWER.
(a) In the event that, following the Stock Acquisition Date (which for
purposes of this Section 13(a) only shall also include the date of the first
public announcement (including, without limitation, a report filed pursuant to
Section 13(d) under the Exchange Act) that any
23
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company, or any Person
or entity organized, appointed or established by the Company for or pursuant to
the terms of any such plan), together with any of such Person's Affiliates and
Associates, has become the Beneficial Owner of Voting Securities of the Company
then outstanding representing 15% or more of the Voting Power of the Company
pursuant to a Qualifying Offer), directly or indirectly, (x) the Company shall
consolidate with, or merge with and into, any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)
hereof), and the Company shall not be the continuing or surviving corporation of
such consolidation or merger, (y) any Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o) hereof) shall
consolidate with, or merge with or 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 cash or any other property, or (z) the Company
shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell
or otherwise transfer), in one transaction or a series of related transactions,
assets 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 Person or Persons
(other than the Company or any Subsidiary of the Company in one or more
transactions each of which complies with Section 11(o) hereof), then, upon the
first occurrence of such event (except as may be contemplated by Section13(d)
hereof), proper provision shall be made so that except as provided in Section
7(e) hereof, (i) each holder of a Right shall thereafter have the right to
receive, upon the exercise thereof at the then current Purchase Price, in
accordance with the terms of this Agreement, such number of validly authorized
and issued, fully paid, non-assessable and freely tradable shares of Common
Stock of the Principal Party (as such term is hereinafter defined), not subject
to any liens, encumbrances, rights of first refusal or other adverse claims, as
shall be equal to the result obtained by (1) multiplying the then current
Purchase Price by the number of one one-thousandths of a share of Preferred
Stock for which a Right is exercisable immediately prior to the first occurrence
of a Section 13 Event (or, if a Section 11(a)(ii) Event has occurred prior to
the first occurrence of a Section 13 Event, multiplying the number of such one
one-thousandths of a share of Preferred Stock for which a Right was exercisable
immediately prior to the first occurrence of a Section 11(a)(ii) Event by the
Purchase Price in effect immediately prior to such first occurrence), and
dividing that product (which, following the first occurrence of a Section 13
Event, shall be referred to as the "Purchase Price" for each Right and for all
purposes of this Agreement) by (2) 50% of the Current Market Price (determined
pursuant to Section 11(d)(i) hereof) per share of the Common Stock of such
Principal Party on the date of consummation of such Section 13 Event, provided
that the Purchase Price 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 Section 11(f) of this Agreement to reflect any events occurring
in respect of such Principal Party after the date of such Section 13 Event; (ii)
such Principal Party shall thereafter be liable for, and shall assume, by virtue
of such Section 13 Event, all the obligations and duties of the Company pursuant
to this Agreement; (iii) the term "Company" shall thereafter be deemed to refer
to such Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply only to such Principal Party following the first
occurrence of a Section 13 Event; (iv) such Principal Party shall take such
steps (including, but not limited to, the reservation of a sufficient number of
shares of its Common Stock) in connection with the consummation of any such
24
transaction as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to its
shares of Common Stock thereafter deliverable upon the exercise of the Rights;
and (v) the provisions of Section 11(a)(ii) hereof shall be of no effect
following the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (x) or (y) of
the first sentence of Section 13(a): (A) the Person that is the issuer of
any 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 of the shares of Common Stock which has the
greatest aggregate market value of shares outstanding, or (B) if no
securities are so issued, (1) the Person that is the other party to the
merger, if such Person survives said merger, or, if there is more than one
such Person, the Person the shares of Common Stock of which has the
greatest aggregate market value of shares outstanding or (2) if the Person
that is the other party to the merger does not survive the merger, the
Person that does survive the merger (including the Company if it survives)
or (3) the Person resulting from the consolidation; and
(ii) in the case of any transaction described in clause (z) of the
first sentence of Section 13(a), 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 the shares of Common Stock having the
greatest aggregate market value of shares outstanding;
provided, however, that in any such case, (1) if the Common Stock of such Person
is not at such time and has not been continuously over the preceding twelve (12)
month period registered under Section 12 of the Exchange Act, and such Person is
a direct or indirect Subsidiary of another Person the Common Stock of which is
and has been so registered, "Principal Party" shall refer to such other Person;
(2) in case such Person is a Subsidiary, directly or indirectly, of more than
one Person, the Common Stocks of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest aggregate market value of shares
outstanding; and (3) in case such Person is owned, directly or indirectly, by a
joint venture formed by two or more Persons that are not owned, directly or
indirectly, by the same Person, the rules set forth in (1) and (2) above shall
apply to each of the chains of ownership having an interest in such joint
venture as if such party were a "Subsidiary" of both or all of such joint
venturers and the Principal Parties in each such chain shall bear the
obligations set forth in this Section 13 in the same ratio as their direct or
indirect interests in such Person bear to the total of such interests.
(c) The Company shall not consummate any such consolidation, merger, sale
or transfer unless the Principal Party covenants and agrees that it will cause
to be reserved and kept available out of its authorized and unissued shares of
Common Stock or out of its authorized and
25
issued shares held in its treasury, the number of shares of its Common Stock
that will be sufficient to permit the exercise in full of all outstanding Rights
under this Section 13 and unless prior thereto the Company and such Principal
Party shall have executed and delivered to the Rights Agent a supplemental
agreement confirming that the requirements set forth in paragraphs (a) and (b)
of this Section 13 shall be promptly performed in accordance with their terms
and further providing that, as soon as practicable after executing such
agreement pursuant to this Section 13, the Principal Party will
(i) prepare and file a registration statement under the Act, with
respect to the Rights and the securities purchasable upon exercise of the
Rights on an appropriate form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as practicable after
such filing and (B) remain effective (with a prospectus at all times
meeting the requirements of the Act) until the Expiration Date and
similarly comply with applicable state securities laws;
(ii) use its best efforts, if the shares of Common Stock of the
Principal Party shall be listed or admitted to trading on a national
securities exchange or NASDAQ to list or admit to trading (or continue the
listing of) the Rights and the securities purchasable upon exercise of the
Rights on such securities exchange or NASDAQ and, if the shares of Common
Stock of the Principal Party shall not be listed or admitted to trading on
a national securities exchange or NASDAQ, to cause the Rights and the
securities purchasable upon exercise of the Rights to be reported by such
other system then in use;
(iii) will deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which comply
in all respects with the requirements for registration on Form 10 under the
Exchange Act; 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.
The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. In the event that a Section 13 Event
shall occur at any time after the occurrence of a Section 11(a)(ii) Event, the
Rights which have not theretofore been exercised shall thereafter become
exercisable in the manner described in Section 13(a). If, for any reason, the
Rights cannot be exercised for Common Stock of the Company or such Principal
Party, then a holder of Rights will have the right to exchange his Rights for
cash from the Company or such Principal Party in an amount equal to the number
of shares of such Common Stock he would otherwise be entitled to purchase times
50% of the then Current Market Price, as determined pursuant to Section11(d)(i)
hereof, of such stock of such Principal Party or the Company. If, for any
reason, including, without limitation, if such Principal Party is an individual,
private partnership or private company, the foregoing formulation cannot be
applied to determine the cash amount into which the Rights are exchangeable,
then the Board of Directors of the Company, based upon the advice from one or
more investment banking firms, shall determine such amount reasonably and with
good faith to the holders of Rights. Any such determination shall be binding and
final.
26
(d) Notwithstanding anything in this Agreement to the contrary, Section 13
shall not be applicable to a transaction described in subparagraphs (x) and (y)
of Section 13(a) if (i) such transaction is consummated with a Person or Persons
who acquired shares of Common Stock pursuant to a Qualifying Offer (or a wholly
owned Subsidiary of any such Person or Persons), (ii) the price per share of the
applicable series of Common Stock offered in such transaction is not less than
the price per share of such series of Common Stock paid to all holders of shares
of such series of Common Stock whose shares were purchased pursuant to such
Qualifying Offer and (iii) the form of consideration being offered to the
remaining holders of shares of Common Stock pursuant to such transaction is the
same as the form of consideration paid pursuant to such Qualifying Offer. Upon
consummation of any such transaction contemplated by this Section13(d), all
Rights hereunder shall expire.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights, except
prior to the Distribution Date as provided in Section 11(p) hereof, or to
distribute Rights Certificates which evidence fractional Rights. In lieu of such
fractional Rights, there shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For purposes of this Section 14(a), the current market
value of a whole Right shall be the closing price of the Rights for the Trading
Day immediately prior to the date on which such fractional Rights would have
been otherwise issuable. The closing price of the Rights for any day shall be
the last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the Rights are not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national securities
exchange on which the Rights are listed or admitted to trading, or if the Rights
are not listed or admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by the Board of
Directors of the Company. If on any such date no such market maker is making a
market in the Rights the fair value of the Rights on such date as determined in
good faith by the Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than, except as provided in Section 7(c), fractions which
are integral multiples of one one- thousandth of a share of Preferred Stock)
upon exercise of the Rights or to distribute certificates which evidence
fractional shares of Preferred Stock (other than fractions which are integral
multiples of one one-thousandth of a share of Preferred Stock). Fractions of
shares of Preferred Stock in integral multiples of one one-thousandth of a share
of Preferred Stock may, at the election of the Company, be evidenced by
depositary receipts, pursuant to an appropriate agreement between the Company
and a depositary selected by it, provided that such agreement shall provide that
the holders of such depositary receipts shall have all the rights, privileges
and
27
preferences to which they are entitled as beneficial owners of the shares of
Preferred Stock represented by such depositary receipts. In lieu of fractional
shares of Preferred Stock that are not integral multiples of one one-thousandth
of a share of Preferred Stock, the Company may pay to the registered holders of
Rights Certificates at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current market value of one
one-thousandth of a share of Preferred Stock. For purposes of this Section
14(b), the current market value of one one-thousandth of a share of Preferred
Stock shall be one one-thousandth of the closing price of a share of Preferred
Stock (as determined pursuant to Section 11(d)(ii) hereof) for the Trading Day
immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event, the Company shall not
be required to issue fractions of shares of Common Stock upon exercise of the
Rights or to distribute certificates which evidence fractional shares of Common
Stock. In lieu of fractional shares of Common Stock, the Company may pay to the
registered holders of Rights Certificates at the time such Rights are exercised
as herein provided an amount in cash equal to the same fraction of the current
market value of one (1) share of the applicable series of Common Stock which
such holder would otherwise have been entitled to receive. For purposes of this
Section 14(c), the current market value of one share of the applicable series of
Common Stock shall be the closing price of one share of such series of Common
Stock (as determined pursuant to Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the Rights expressly waives
his right to receive any fractional Rights or any fractional shares upon
exercise of a Right, except as permitted by this Section 14.
Section 15. RIGHTS OF ACTION. All rights of action in respect of this
Agreement are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Rights Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Rights Certificate in the manner provided
in such Rights Certificate and in this Agreement. Without limiting the foregoing
or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and shall be entitled to specific performance
of the obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this Agreement.
Section 16. AGREEMENT OF RIGHTS HOLDERS. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable only in
connection with the transfer of Common Stock;
28
(b) after the Distribution Date, the Rights Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the principal
office or offices of the Rights Agent designated for such purposes, duly
endorsed or accompanied by a proper instrument of transfer and with the
appropriate forms and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the Company and the
Rights Agent may deem and treat the person in whose name a Rights Certificate
(or, prior to the Distribution Date, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Rights
Certificates or the associated Common Stock certificate made by anyone other
than the Company or the Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent, subject to the penultimate sentence of Section
7(e) hereof, shall be required to be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither the
Company nor the Rights Agent shall have any liability to any holder of a Right
or other Person as a result of its inability to perform any of its obligations
under this Agreement by reason of any preliminary or permanent injunction or
other order, decree or ruling issued by a court of competent jurisdiction or by
a governmental, regulatory or administrative 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 all reasonable efforts to
have any such order, decree or ruling lifted or otherwise overturned as soon as
possible.
Section 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No holder,
as such, of any Rights Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the number of one one-thousandths of
a share of Preferred Stock or any other securities of the Company which may at
any time be issuable on the exercise of the Rights represented thereby, nor
shall anything contained herein or in any Rights Certificate be construed to
confer upon the holder of any Rights Certificate, as such, any of the rights of
a stockholder of the Company or any right to vote for the election of directors
or upon any matter submitted to stockholders at any meeting thereof, or to give
or withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in Section 25 hereof),
or to receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Rights Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. CONCERNING THE RIGHTS AGENT.
(a) 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 disbursements and
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability, or expense, incurred without negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done or omitted
by the Rights Agent in connection with the acceptance and administration of this
Agreement, including the costs and
29
expenses of defending against any claim of liability in the premises (including
reasonable counsel fees and expenses).
(b) The Rights Agent shall be protected and shall incur no liability for or
in respect of any action taken, suffered or omitted by it in connection with its
administration of this Agreement in reliance upon any Rights Certificate or
certificate for Common Stock or for other securities of the Company, instrument
of assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or Persons.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
(a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto; provided, however, that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor or in
the name of the successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed and
at such time any of the Rights Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned, the Rights
Agent may countersign such Rights Certificates either in its prior name or in
its changed name; and in all such cases such Rights Certificates shall have the
full force provided in the Rights Certificates and in this Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the duties
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and
30
protection to the Rights Agent as to any action taken or omitted by it in good
faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and the
determination of "Current Market Price") be proved or established by the Company
prior to taking or 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 of the Board, any Vice Chairman, the President, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of
the Company and delivered to the Rights Agent; and such certificate shall be
full authorization to the Rights Agent for any action taken or omitted in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder only for its own negligence,
bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Rights
Certificates or be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Rights Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights Certificate; nor shall it
be responsible for any adjustment required under the provisions of Section 11 or
Section 13 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
Rights Certificates after actual notice of any such adjustment); nor shall it by
any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock or Preferred Stock to
be issued pursuant to this Agreement or any Rights Certificate or as to whether
any shares of Common Stock or Preferred Stock will, when so issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, any Vice Chairman, the President, any Vice President, the
Secretary, any Assistant Secretary, 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 it shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with instructions of any
such officer.
31
(h) The Rights Agent and any stockholder, director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other securities
of the Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting in any
other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or through
its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct; provided, however, that reasonable care was exercised in
the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) If, with respect to any Right Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the 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 or transfer without first consulting with the Company.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty days' notice in writing mailed to the Company, and shall provide
notice thereof to each transfer agent of the Common Stock and Preferred Stock,
by registered or certified mail, and to the holders of the Rights Certificates
in accordance with Section 26 hereof, or, if prior to the Distribution Date, to
the holders of Rights through any filing made by the Company pursuant to the
Exchange Act. The Company may remove the Rights Agent or any successor Rights
Agent upon thirty days' notice in writing mailed to the Rights Agent or
successor Rights Agent, as the case may be, and shall provide notice thereof to
each transfer agent of the Common Stock and Preferred Stock, by registered or
certified mail, and to the holders of the Rights Certificates in accordance with
Section 26 hereof, or, if prior to the Distribution Date, to the holders of
Rights through any filing made by the Company pursuant to the Exchange Act. If
the Rights Agent shall resign or be removed or shall otherwise become incapable
of acting, the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of thirty days after
giving notice of such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by
the holder of a Rights Certificate (who shall, with such notice, submit his
Rights Certificate for inspection by the Company), then any registered holder of
any Rights Certificate or the resigning or removed Rights Agent may apply to any
court of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be a corporation organized and doing business under the laws
32
of the United States or of the State of Kansas, the State of Missouri or the
State of New York (or of any other state of the United States so long as such
corporation is authorized to do business as a banking institution in the State
of Kansas, the State of Missouri or the State of New York), in good standing,
having a principal office in the State of Kansas, the State of Missouri or the
State of New York, which is authorized under such laws to exercise corporate
trust powers and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $100,000,000. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment, the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Stock and the Preferred Stock, and mail a
notice thereof in writing to the registered holders of the Rights Certificates
in accordance with Section 26 hereof, or, if prior to the Distribution Date,
give notice to the holders of Rights through any filing made by the Company
pursuant to the Exchange Act. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.
Section 22. ISSUANCE OF NEW RIGHTS CERTIFICATES. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Rights Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the Purchase Price and the number or kind or class of shares or other securities
or property purchasable under the Rights Certificates made in accordance with
the provisions of this Agreement. In addition, in connection with the issuance
or sale of shares of Common Stock following the Distribution Date and prior to
the redemption or expiration of the Rights, the Company (a) shall, with respect
to shares of Common Stock so issued or sold pursuant to the exercise of stock
options or under any employee plan or arrangement, granted or awarded as of the
Distribution Date, 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 Rights
Certificates representing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i) no such Rights Certificate
shall be issued and this sentence shall be null and void ab initio if, and to
the extent that, the Company shall be advised by counsel that such issuance
would create a significant risk of material adverse tax consequences to the
Company or the Person to whom such Rights Certificate would be issued, and (ii)
no such Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.
Section 23. REDEMPTION AND TERMINATION.
(a) The Board of Directors of the Company may, at its option, at any time
prior to the earlier of (i) the Close of Business on the tenth Business Day
following the Stock Acquisition Date (or, if the Stock Acquisition Date shall
have occurred on or prior to the Conversion Date), the Close of Business on the
tenth Business Day following the Conversion Date), or (ii) the time
33
at which the Rights expire pursuant to this Agreement, redeem all but not less
than all the then outstanding Rights at a redemption price of $.01 per Right
(such redemption price being hereinafter referred to as the "Redemption Price").
Notwithstanding anything contained in this Agreement to the contrary, the Rights
shall not be exercisable after the first occurrence of a Section 11(a)(ii) Event
until such time as the Company's right of redemption hereunder has expired. The
Company may, at its option, pay the Redemption Price in cash, shares of any
series of Common Stock (based on the Current Market Price of the applicable
series of Common Stock at the time of redemption) or any other form of
consideration deemed appropriate by the Board of Directors. The redemption of
the Rights may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
(b) Immediately upon the action of the Board of Directors of the Company
ordering the redemption of the Rights pursuant to Section 23(a) (or at such
later time as the Board of Directors may establish for the effectiveness of such
redemption), notice of which shall have been provided to the Rights Agent, and
without any further action and without any notice, the right to exercise the
Rights will terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price for each Right so held. Promptly after
the action of the Board of Directors ordering the redemption of the Rights
becoming effective, the Company shall mail a notice of such redemption to the
Rights Agent and the holders of the then outstanding Rights in accordance with
Section 26 hereof (provided that the failure to give, or any defect in, such
notice shall not affect the validity of such redemption). Any notice which is
mailed in the manner provided in Section 26 hereof 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.
(c) The Nominating and Corporate Governance Committee of the Company's
Board of Directors shall review this Agreement in order to consider whether the
maintenance of this Agreement continues to be in the best interests of the
Company and its stockholders. The Committee shall conduct such review
periodically when, as and in such manner as the Committee deems appropriate,
after giving due regard to all relevant circumstances; provided, however, that
the Committee shall take such action at least every three years. Following each
such review, the Committee will report its conclusions to the full Board of
Directors of the Company, including any recommendation in light thereof as to
whether this Agreement should be modified or the Rights should be redeemed. The
Committee shall be comprised only of directors of the Company who shall have
been determined by the Company's Board of Directors to be independent and
disinterested (who are neither an Acquiring Person nor a Person on whose behalf
a tender offer or exchange offer for Common Stock of the Company is being made
nor an Affiliate, Associate, nominee or representative of an Acquiring Person or
a Person on whose behalf a tender offer or exchange for Common Stock of the
Company is being made).
Section 24. EXCHANGE.
(a) The Board of Directors of the Company may, at its option, at any time
after any Person becomes an Acquiring Person, exchange all or part of the then
outstanding and exercisable Rights (which shall not include Rights that have
become void pursuant to the provisions of Section 7(e) hereof) for shares of
Common Stock at an exchange ratio of two shares of Common Stock per Right,
appropriately adjusted to reflect any stock split, stock
34
dividend or similar transaction occurring after the Conversion Date (such
exchange ratio being hereinafter referred to as the "Exchange Ratio"), provided
that the shares of Common Stock so exchanged shall be of the same series which
the holders of such Rights would have been entitled to receive upon the exercise
thereof. Notwithstanding the foregoing, the Board of Directors shall not be
empowered to effect such exchange at any time after any Person (other than (i)
the Company, (ii) any Subsidiary of the Company, or (iii) any employee benefit
plan of the Company or any Subsidiary of the Company, or any person or entity
organized, appointed or established by the Company for or pursuant to the terms
of any such plan), together with all Affiliates and Associates of such Person,
becomes the Beneficial Owner of Voting Securities of the Company then
outstanding representing 50% or more of the Voting Power of the Company.
(b) Immediately upon the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to Section 24(a) and without any
further action and without any notice, the right to exercise such Rights shall
terminate and the only right thereafter of a holder of such Rights shall be to
receive that number of shares of Common Stock equal to the number of such Rights
held by such holder multiplied by the Exchange Ratio, provided that the shares
of Common Stock so exchanged shall be of the same series which the holder of
such Rights would have been entitled to receive upon the exercise thereof. The
Company shall promptly make a public announcement of any such exchange;
provided, however, that the failure to make, or any defect in, such public
announcement shall not affect the validity of such exchange. Promptly after the
action of the Board of Directors ordering the exchange of the Rights becoming
effective, the Company shall mail a notice of such exchange to the Rights Agent
and all of the holders of the then outstanding Rights in accordance with Section
26 hereof (provided that the failure to give, or any defect in, such notice
shall not affect the validity of such exchange). Any notice which is mailed in
the manner provided in Section 26 hereof 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 based on the number of
Rights (other than Rights which have become void pursuant to the provisions of
Section 7(e) hereof) held by each holder of Rights.
(c) In the event that there shall not be authorized and unissued shares of
the applicable series of Common Stock and/or authorized and issued shares of the
applicable series of Common Stock held in its treasury sufficient 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 the applicable series of Common Stock for issuance upon exchange of
the Rights. In the event the Company shall, after good faith effort, be unable
to take all such action as may be necessary to authorize such additional shares
of the applicable series of Common Stock, the Company shall substitute, for each
share of such series of Common Stock that would otherwise be issuable upon
exchange of a Right, a number of shares of the Preferred Stock or fraction
thereof (subject to Section 14(b) hereof) such that the Current Market Price per
share of the Preferred Stock multiplied by such number or fraction is equal to
the Current Market Price per share of such series of Common Stock as of the date
of issuance of such shares of Preferred Stock or fraction thereof.
35
(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 Rights 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 Price per share
of the applicable series of Common Stock as of the Trading Day immediately prior
to the record date of exchange pursuant to this Section 24.
Section 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose, at any time after the Distribution
Date, (i) to pay any dividend payable in stock of any class to the holders of
Preferred Stock or to make any other distribution to the holders of Preferred
Stock (other than a regular quarterly cash dividend out of earnings or retained
earnings of the Company), or (ii) to offer to the holders of Preferred Stock
rights or warrants to subscribe for or to purchase any additional shares of
Preferred Stock or shares of stock of any class or any other securities, rights
or options, or (iii) to effect any reclassification of its Preferred Stock
(other than a reclassification involving only the subdivision of outstanding
shares of Preferred Stock), or (iv) to effect any consolidation or merger into
or with any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), or to effect any sale or
other transfer (or to permit one or more of its Subsidiaries to effect any sale
or other transfer), in one transaction or a series of related transactions, of
more than 50% of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person or Persons (other than the Company and/or
any of its Subsidiaries in one or more transactions each of which complies with
Section 11(o) hereof), or (v) to effect the liquidation, dissolution or winding
up of the Company, then, in each such case, the Company shall give to each
holder of a Rights Certificate, to the extent feasible and in accordance with
Section 26 hereof, a notice of such proposed action, which shall specify the
record date for the purposes of such stock dividend, distribution of rights or
warrants, or the date on which such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the shares of Preferred Stock,
if any such date is to be fixed, and such notice shall be so given in the case
of any action covered by clause (i) or (ii) above at least twenty days prior to
the record date for determining holders of the shares of Preferred Stock for
purposes of such action, and in the case of any such other action, at least
twenty days prior to the date of the taking of such proposed action or the date
of participation therein by the holders of the shares of Preferred Stock,
whichever shall be the earlier.
(b) In case a Section 11(a)(ii) Event shall occur, then, in any such case,
(i) the Company shall as soon as practicable thereafter give to each holder of a
Rights Certificate, to the extent feasible and in accordance with Section 26
hereof, a notice of the occurrence of such event, which shall specify the event
and the consequences of the event to holders of Rights under Section11(a)(ii)
hereof, and (ii) all references in the preceding paragraph to Preferred Stock
shall be deemed thereafter to refer to Common Stock and/or, if appropriate,
other securities.
Section 26. NOTICES. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Rights Certificate to
or on the Company
36
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:
Sprint Corporation
X.X. Xxx 0000
Xxxxxxx Xxxxxxx, Xxxxxx 00000-0000
Attention: General Counsel
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Rights
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:
UMB Bank, n.a.
X.X. Xxx 000000
Xxxxxx Xxxx, Xxxxxxxx 00000-0000
Attention: Corporate Trust Department
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Rights Agent (or, if prior to
the Distribution Date, on the registry books of the Transfer Agent for the
Common Stock of the Company).
Section 27. SUPPLEMENTS AND AMENDMENTS. Except as provided in the
penultimate sentence of this Section 27, for so long as the Rights are then
redeemable, the Company may in its sole and absolute discretion, and the Rights
Agent shall if the Company so directs, supplement or amend any provision of this
Agreement without the approval of any holders of the Rights. At any time when
the Rights are no longer redeemable, except as provided in the penultimate
sentence of this Section 27, the Company may, and the Rights Agent shall if the
Company so directs, supplement or amend this Agreement without the approval of
any holders of Rights Certificates in order to (i) cure any ambiguity, (ii)
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) shorten or lengthen any
time period hereunder, or (iv) change or supplement the provisions hereunder in
any manner which the Company may deem necessary or desirable; provided that no
such supplement or amendment adversely affects the interests of the holders of
Rights as such (other than an Acquiring Person or an Affiliate or Associate of
an Acquiring Person) and no such amendment may cause the Rights again to become
redeemable or cause the Agreement again to become amendable other than in
accordance with this sentence. Notwithstanding anything contained in this
Agreement to the contrary, no supplement or amendment shall be made which
changes the Redemption Price. Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section 27, the Rights Agent
shall execute such supplement or amendment; provided, however, that the Rights
Agent may, but shall not be obligated to, enter into any such supplement or
amendment which adversely affects the Rights Agent's own rights, duties or
immunities under this Agreement.
37
Section 28. SUCCESSORS. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Rights Agent shall bind and inure to
the benefit of their respective successors and assigns hereunder.
Section 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS, ETC. For
all purposes of this Agreement, any calculation of the number or amount of
Voting Securities outstanding at any particular time, including for purposes of
determining the particular percentage of the Voting Power represented by such
Voting Securities of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules
and Regulations under the Exchange Act as such Rule is in effect on the date of
this Agreement. The Board of Directors of the Company, except as otherwise
specifically provided for herein, shall have the exclusive power and authority
to administer this Agreement and to exercise all rights and powers specifically
granted to the Board or to the Company, or as may be necessary or advisable in
the administration of this Agreement, including, without limitation the right
and power to (i) interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the Rights or to
amend the Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions with
respect to the foregoing) which are done or made by the Board in good faith,
shall (x) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights Certificates (and, prior to the Distribution Date,
registered holders of the Common Stock) and all other parties, and (y) not
subject the Board to any liability to the holders of the Rights.
Section 30. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of the Common Stock) any legal or equitable right,
remedy or claim under this Agreement; but this Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Rights Certificates (and, prior to the Distribution Date,
registered holders of the Common Stock).
Section 31. SEVERABILITY. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that severing the
invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23 hereof
shall be reinstated and shall not expire until the close of business on the
tenth Business Day following the date of such determination by the Board of
Directors. Without limiting the foregoing, if any provision requiring that a
determination be made by less than the entire Board (or at a time or with the
concurrence of a group of directors consisting of less than the entire Board) is
held by a court of competent jurisdiction or other authority to be invalid, void
or unenforceable, such determination shall then be made by the Board in
accordance with
38
applicable law and the Company's Articles of Incorporation, as amended, and
Bylaws, as amended.
Section 32. GOVERNING LAW. This Agreement, each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Kansas and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts made
and to be performed entirely within such State.
Section 33. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
Section 34. DESCRIPTIVE HEADINGS. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
39
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
SPRINT CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice President, Corporate Governance
and Ethics, and Corporate Secretary
ATTEST:
By: /s/ Xxxxxxx X. Xxxx
Name: Xxxxxxx X. Xxxx
Title: Assistant Secretary
UMB BANK, N.A.
By: /s/ R. Xxxxxxx Xxxxxxxx
Name: R. Xxxxxxx Xxxxxxxx
Title: Vice President
ATTEST:
By: /s/ Xxxxx X. Keep
Name: Xxxxx X. Keep
Title: Assistant Secretary
40
EXHIBIT A
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF PREFERRED STOCK-SIXTH SERIES
OF
SPRINT CORPORATION
STATE OF KANSAS )
) ss.
COUNTY OF XXXXXXX )
We, Xxxxxxx X. Xxxxxxxxx, Vice President, and Xxxxxxx X. Xxxx, Assistant
Secretary, of Sprint Corporation, a corporation organized and existing under the
laws of the State of Kansas (the "Corporation"), do hereby certify that pursuant
to authority expressly vested in the Board of Directors of the Corporation by
the provisions of the Articles of Incorporation, as amended, and in accordance
with the provisions of K.S.A. Section 17-6401, as amended, the Board of
Directors of said Corporation, at a special meeting of the Board of Directors
held on the 28th day of February 2004, adopted the following resolution amending
and restating the series of Preferred Stock designated as Preferred Stock-Sixth
Series, Junior Participating:
RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation by the provisions of its Articles of
Incorporation, as amended and restated, the Certificate of Designation,
Preferences and Rights of Preferred Stock-Sixth Series, originally adopted
by the Board of Directors on June 9, 1997, as amended and restated, is
hereby further amended and restated to read in its entirety as follows:
PREFERRED STOCK-SIXTH SERIES
(1) DESIGNATION AND AMOUNT. The shares of such Series shall be
designated as "Preferred Stock-Sixth Series, Junior Participating"
(hereafter "Sixth Series") and the number of shares constituting such
series shall be increased from 1,500,000 to 2,125,000.
(2) DIVIDENDS.
(A) Subject to the prior and superior rights of the holders of
any shares of any other series of Preferred Stock of the Corporation
("Preferred Stock"), or any similar stock ranking prior and superior
to the shares of the Sixth Series with respect to dividends, the
holders of shares of the Sixth Series, in preference to the holders of
Common Stock and any shares of stock ranking junior (as to dividends)
to the shares of the Sixth Series (collectively with such Common
Stock, "Junior Stock"), shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally available for
the purpose, quarterly dividends payable in cash, on January 1, April
1, July 1 and October 1 in each year (each such date being referred to
herein as a "Quarterly Dividend Payment Date") in
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an amount (rounded to the nearest cent) equal to the greater of (a)
$100.00 or (b) subject to the provision for adjustment hereinafter set
forth, 2,000 times the aggregate per share amount of all cash
dividends, plus 2,000 times the aggregate per share amount (payable in
cash, based upon the fair market value at the time the non-cash
dividend or other distribution is declared as determined in good faith
by the Board of Directors) of all non- cash dividends or other
distributions, other than a dividend payable in shares of Common Stock
or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared (but not withdrawn) on the
Common Stock since the immediately preceding Quarterly Dividend
Payment Date, or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of
the Sixth Series.
(B) In the event the Corporation shall (i) declare any dividend
on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the
amount to which holders of shares of the Sixth Series were entitled
immediately before such event under clause (b) of paragraph (A) of
this Section 2 shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding
immediately before such event.
(C) The Corporation shall declare a dividend or distribution on
the Sixth Series as provided above in paragraph (A) of this Section
(2) immediately after it declares a dividend or distribution on the
Common Stock (other than a dividend payable in shares of Common
Stock); provided, however, that in the event no dividend or
distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, the minimum quarterly
dividend of $100.00 on the Sixth Series shall nevertheless be payable
on such subsequent Quarterly Dividend Payment Date.
(D) Dividends shall begin to accrue and be cumulative on
outstanding shares of Sixth Series from the Quarterly Dividend Payment
Date next preceding the date of issue of such shares of Sixth Series,
unless the date of issue of such shares of Sixth Series is before the
record date for the first Quarterly Dividend Payment Date, in which
case dividends on such shares shall begin to accrue from the date of
issue of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Sixth Series entitled to receive
a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which cases such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment
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Date. Accrued but unpaid dividends shall cumulate but shall not bear
interest. Dividends paid on the shares of Sixth Series in an amount
less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share
basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of
shares of the Sixth Series entitled to receive payment of a dividend
or distribution declared thereon, which record date shall not be more
than 10 days before the date fixed for the payment thereof.
(3) VOTING RIGHTS. Except as prescribed by law and in addition to the
rights provided for in ARTICLE SIXTH of the Articles of Incorporation of
the Corporation, as amended and restated, and subject to the provision for
adjustment hereinafter set forth, the holders of the shares of the Sixth
Series shall be entitled to 2,000 votes for each share held. In the event
the Corporation shall (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or
(iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the number of votes per share to which holders of
shares of the Sixth Series were entitled immediately before such event
shall be adjusted by multiplying such number by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately before such event. Except as
otherwise provided herein, in the Articles of Incorporation of the
Corporation, as amended and restated, in any other Certificate of
Designation establishing a series of Preferred Stock or any similar stock
or otherwise required by law, the holders of the shares of the Sixth Series
and the holders of Common Stock shall vote together as one class on all
matters submitted to a vote of stockholders of the Corporation.
(4) CERTAIN RESTRICTIONS.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the shares of the Sixth Series as provided in
Section (2) are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on shares
of the Sixth Series outstanding shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends (except a dividend payable in
Common Stock and/or any other Junior Stock) on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of Junior Stock;
(ii) declare or pay dividends on or make any other
distribution on any shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up)
with the shares of the Sixth Series, except dividends paid
ratably on the
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shares of the Sixth Series and all such parity stock on which
dividends are payable or in arrears in proportion to the total
amounts to which the holders of all such shares are then
entitled;
(iii) redeem or purchase or otherwise acquire for
consideration any shares ranking on a parity (either as to
dividends or upon dissolution, liquidation or winding up) with
the shares of the Sixth Series, provided that the Corporation may
at any time redeem, purchase or otherwise acquire shares of such
parity stock in exchange for shares of Junior Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of the Sixth Series, or any shares of stock ranking on a
parity (either as to dividends or upon dissolution, liquidation
or winding up) with the shares of the Sixth Series, except in
accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of Directors,
after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series
and classes, shall determine in good faith will result in fair
and equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of
the Corporation unless the Corporation could, under paragraph (A) of this
Section (4), purchase or otherwise acquire such shares at such time and in
such manner.
(5) REACQUIRED SHARES. Any shares of the Sixth Series purchased or
otherwise acquired by the Corporation in any manner whatsoever shall be retired
and canceled promptly after the acquisition thereof. All such shares shall upon
their cancellation become authorized but unissued shares of Preferred Stock and
may be reissued as part of a new series of Preferred Stock to be created by
resolution or resolutions of the Board of Directors, subject to the conditions
and restrictions on issuance set forth herein, in the Articles of Incorporation,
in any other Certificate of Designation establishing a series of Preferred Stock
or any similar stock or as otherwise required by law.
(6) LIQUIDATION, DISSOLUTION OR WINDING UP.
(A) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the holders of the shares of
the Sixth Series shall be entitled to receive, in preference to the holders
of stock ranking junior (as to the amount payable upon liquidation,
dissolution or winding up) to the Sixth Series, the greater of (a)
$1,000.00 per share, plus accrued and unpaid dividends to the date of
distribution,
A-4
whether or not earned or declared, or (b) an amount per share, subject to
the provision for adjustment hereinafter set forth, equal to 2,000 times
the aggregate amount to be distributed per share to holders of Common
Stock. In the event the Corporation shall (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock
into a smaller number of shares, then in each such case the amount to which
holders of shares of the Sixth Series were entitled immediately before such
event pursuant to clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately before such event.
(B) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the holders of stock ranking
on a parity (as to the amount payable upon liquidation, dissolution or
winding up) with the Sixth Series shall not receive any distributions
except for distributions made ratably on the Sixth Series and all other
such parity stock in proportion to the total amounts to which the holders
of all such shares are entitled upon such liquidation, dissolution or
winding up.
(7) CONSOLIDATION, MERGER, ETC. In case the Corporation shall enter into
any consolidation, merger, combination or other transaction in which the shares
of Common Stock are exchanged for or changed into other stock or securities,
cash and/or any other property, then in any such case the shares of the Sixth
Series shall at the same time be similarly exchanged or changed in an amount per
share (subject to the provision for adjustment hereinafter set forth) equal to
2,000 times the aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, into which or for which each
share of Common Stock is changed or exchanged. In the event the Corporation
shall (i) declare any dividend on Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the amount to which holders of shares of the Sixth Series were entitled
immediately before such event pursuant to the preceding sentence with respect to
the exchange or change of shares of the Sixth Series shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately before such event.
(8) RANKING. The shares of the Sixth Series shall rank junior to all other
series of the Corporation's Preferred Stock as to the payment of dividends and
the distribution of assets, unless the terms of any such series shall provide
otherwise. Nothing herein shall preclude the Board of Directors of the
Corporation from creating any additional series of Preferred Stock or any
similar
A-5
stock ranking on a parity with or prior to the shares of the Sixth Series as to
the payment of dividends or distribution of assets.
(9) FRACTIONAL SHARES. Shares of the Sixth Series may be issued in
fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of shares of the Sixth Series.
(10) DEFINITIONS. For purposes of these designations, unless the context
otherwise requires:
(A) "Common Stock" shall mean Series 1 FON Stock, and/or Series 2 FON
Stock, in each case as the context requires.
(B) "Series 1 FON Stock" shall mean the FON Common Stock - Series 1,
par value $2.00 per share, of the Corporation.
(C) "Series 2 FON Stock" shall mean the FON Common Stock - Series 2,
par value $2.00 per share, of the Corporation.
IN WITNESS WHEREOF, we have hereunto set our hands and affixed the seal of
said Corporation this ______ day of ___________, 2004.
__________________________________
Xxxxxxx X. Xxxxxxxxx
ATTEST: Vice President
_____________________________
Xxxxxxx X. Xxxx
Assistant Secretary
A-6
EXHIBIT B
[Form of Rights Certificate]
Certificate No. ___________ ________ Rights
NOT EXERCISABLE AFTER JUNE 25, 2007 OR EARLIER IF REDEEMED BY THE COMPANY. THE
RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.01 PER
RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS
DEFINED IN THE RIGHTS AGREEMENT) OR AN AFFILIATE (AS SUCH TERM IS DEFINED IN THE
RIGHTS AGREEMENT) OR ASSOCIATE (AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT)
OF AN ACQUIRING PERSON AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL
AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON. ACCORDINGLY, THIS RIGHTS
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME, OR MAY ALREADY HAVE
BECOME, NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH
AGREEMENT.]*
Rights Certificate
SPRINT CORPORATION
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 Second Amended and Restated Rights Agreement, dated as of __________, 2004
(the "Rights Agreement"), between Sprint Corporation, a Kansas corporation (the
"Company"), and UMB Bank, n.a., a banking corporation (the "Rights Agent"), to
purchase from the Company at any time before 5:00 P.M. (New York City time) on
June 25, 2007 (the "Final Expiration Date") at the office or offices of the
Rights Agent designated for such purpose, or its successors as Rights Agent, one
one-thousandth of a fully paid, non-assessable share of Preferred Stock - Sixth
Series, Junior Participating, without par value (the "Preferred Stock") of the
Company, at a purchase price of $______ per one one-thousandth of a share (the
"Purchase Price"), upon presentation and surrender of this Rights Certificate
with the Form of Election to Purchase and related Certificate duly executed. The
Purchase Price may be paid in cash or by certified bank check or bank draft
payable to the order of the Company. The number of Rights evidenced by this
Rights Certificate (and the number of shares which may be purchased upon
exercise thereof) set forth above, and the Purchase Price per share set forth
above, are the number and Purchase Price as of __________, 2004, based on the
Preferred Stock as constituted at such date. The Company reserves the right to
require before the occurrence of a Triggering Event (as
__________________________________
* The portion of the legend in brackets shall be inserted only if applicable
and shall replace the preceding sentence.
B-1
such term is defined in the Rights Agreement) that a number of Rights be
exercised so that only whole shares of Preferred Stock will be issued.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is defined
in the Rights Agreement), if the Rights evidenced by this Rights Certificate are
beneficially owned by (i) an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights Agreement), (ii) a
transferee of an Acquiring Person or of any such Associate or Affiliate, or
(iii) under certain circumstances specified in the Rights Agreement, a
transferee of a person who, after such transfer, became an Acquiring Person or
an Affiliate or Associate of an Acquiring Person, such Rights shall become null
and void and no holder hereof shall have any right with respect to such Rights
from and after the occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and the number and
kind of shares of Preferred Stock or other securities which may be purchased
upon the exercise of the Rights evidenced by this Rights Certificate are subject
to modification and adjustment upon the happening of certain events, including
Triggering Events (as such term is defined in the Rights Agreement).
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the principal executive offices of
the Company and the principal office of the Rights Agent and are also available
upon written request to the Company.
This Rights Certificate, with or without other Rights Certificates, upon
presentation and surrender at the principal office or offices of the Rights
Agent designated for such purpose, may be exchanged for another Rights
Certificate or Rights Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number of one one- thousandths
of a share of Preferred Stock as the Rights evidenced by the Rights Certificate
or Rights Certificates surrendered shall have entitled such holder to purchase.
If this Rights Certificate shall be exercised in part, the holder shall be
entitled to receive upon presentation and surrender hereof another Rights
Certificate or Rights Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate may be redeemed by the Company at its option at a redemption
price of $.01 per Right at any time before the earlier of the close of business
on (i) the tenth business day following the Stock Acquisition Date, and (ii) the
Final Expiration Date. In addition, subject to the provisions of the Rights
Agreement, each Right evidenced by this Certificate may be exchanged by the
Company at its option for two shares of the applicable series (which the holder
would have been entitled to receive upon the exercise thereof) of Common Stock
(as such term is defined in the Rights Agreement) of the Company (subject to
adjustment for any stock split, stock dividend or similar transaction) following
the Stock Acquisition Date and before the time an Acquiring Person owns 50% or
more of the shares of Common Stock then outstanding.
B-2
No fractional shares of Preferred Stock will be issued upon the exercise of
any Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-thousandth of a share of Preferred Stock, which may, at the
election of the Company, be evidenced by depositary receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of shares of Preferred
Stock or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights Agreement.
This Rights 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 ________________, ____
SPRINT CORPORATION
ATTEST: By: _______________________________
Name:
Title:
__________________________
Secretary
Countersigned:
UMB BANK, N.A.
By:_____________________________
Authorized Signature
B-3
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer any or all of the
Rights represented by this Rights Certificate.)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto _________________________________________________________________________
(Please print name, address and social security or other
identifying number of transferee)
________________ (_______) of the Rights represented by this Rights Certificate,
together with all right, title and interest in and to said Rights, and does
hereby irrevocably constitute and appoint _____________________________
Attorney, to transfer the Rights on the books of Sprint Corporation, with full
power of substitution.
Dated: ___________________, ____
__________________________________________
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned and
transferred 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 in the
Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it [ ]
did [ ] did not acquire the Rights evidenced by this Rights Certificate from any
Person who is, was or subsequently became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: __________________, ____
_________________________________
Signature
Signature Guaranteed:
B-4
NOTICE
The signature to the foregoing Assignment 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, and must
be guaranteed by a Medallion Signature Guarantee.
B-5
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if such holder desires to exercise any
or all of the Rights represented by this Rights Certificate.)
To: SPRINT CORPORATION:
The undersigned hereby irrevocably elects to exercise
______________________________ (________) Rights represented by this Rights
Certificate to purchase the shares of Preferred Stock issuable upon the exercise
of the Rights (or such other securities of the Company or of any other person
which may be issuable upon the exercise of the Rights) and requests that
certificates for such shares be issued in the name of and delivered to:
Please insert social security
or taxpayer identification number ______________________________
_____________________________________________________________________________
(Please print name and address)
_____________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or taxpayer identification number ______________________________
_____________________________________________________________________________
(Please print name and address)
_____________________________________________________________________________
Dated: _________________, ____
________________________________
Signature
Signature Guaranteed:
B-6
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of an Acquiring Person (as such terms are defined in
the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it [ ]
did [ ] did not acquire the Rights evidenced by this Rights 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 signature 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,
and must be guaranteed by a Medallion Signature Guarantee.
B-7
