EXHIBIT 4.2
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DC HOLDCO, INC.
and
THE BANK OF NEW YORK
as Rights Agent
____________________________
Rights Agreement
Dated as of November 8, 1995
____________________________
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TABLE OF CONTENTS
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Section l. Certain Definitions. . . . . . . . . . . . . . . . . . . . . 2
Section 2. Appointment of Rights Agent. . . . . . . . . . . . . . . . . 10
Section 3. Issuance of Right Certificates . . . . . . . . . . . . . . . 10
Section 4. Form of Right Certificates . . . . . . . . . . . . . . . . . 14
Section 5. Countersignature and Registration. . . . . . . . . . . . . . 16
Section 6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or
Stolen Right Certificates. . . . . . . . . . . . . . . . . . 17
Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights. . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 8. Cancellation and Destruction of Right Certificates . . . . . 22
Section 9. Reservation and Availability of Shares of Series R
Preferred Stock. . . . . . . . . . . . . . . . . . . . . . . 23
Section 10. Series R Preferred Stock Record Date . . . . . . . . . . . . 26
Section 11. Adjustments to Number and Kind of Shares, Number of
Rights or Purchase Price.. . . . . . . . . . . . . . . . . . 26
Section 12. Certification of Adjustments . . . . . . . . . . . . . . . . 52
Section 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power . . . . . . . . . . . . . . . . . . . . . . 53
Section 14. Fractional Rights and Fractional Shares. . . . . . . . . . . 61
Section 15. Rights of Action . . . . . . . . . . . . . . . . . . . . . . 63
Section 16. Agreement of Right Holders . . . . . . . . . . . . . . . . . 64
Section 17. Right Certificate Holder Not Deemed a Shareholder . . . . . 66
Section 18. Concerning the Rights Agent. . . . . . . . . . . . . . . . . 66
Section 19. Merger or Consolidation or Change of Name of Rights
Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 20. Duties of Rights Agent . . . . . . . . . . . . . . . . . . . 69
Section 21. Change of Rights Agent . . . . . . . . . . . . . . . . . . . 73
Section 22. Issuance of New Right Certificates . . . . . . . . . . . . . 75
Section 23. Redemption . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 24. Notice of Proposed Actions . . . . . . . . . . . . . . . . . 77
Section 25. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Section 26. Supplements and Amendments . . . . . . . . . . . . . . . . . 80
Section 27. Successors . . . . . . . . . . . . . . . . . . . . . . . . . 82
Section 28. Benefits of this Rights Agreement. . . . . . . . . . . . . . 82
Section 29. Delaware Contract. . . . . . . . . . . . . . . . . . . . . . 83
Section 30. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 83
Section 31. Descriptive Headings . . . . . . . . . . . . . . . . . . . . 83
Section 32. Determination and Actions by the Board of Directors,
Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Section 33. Severability . . . . . . . . . . . . . . . . . . . . . . . . 84
Exhibit A -- Form of Certificate of Designation
Exhibit B -- Form of Right Certificate
Exhibit C -- Summary of Rights
RIGHTS AGREEMENT
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Agreement ("Rights Agreement"), dated as of November 8, 1995,
between DC Holdco, Inc., a Delaware corporation (the
"Corporation"), and The Bank of New York (the "Rights Agent").
W I T N E S S E T H :
WHEREAS, on November 8, 1995 the Board of Directors of the
Corporation (i) authorized the issuance and declared a dividend of
one right (a "Right") for each share of the Common Stock, $.01 par
value per share ("Common Stock"), of the Corporation outstanding as
of the close of business on November 8, 1995 (the "Record Date"),
each Right representing the right to purchase, on the terms and
conditions contained herein, one one-hundredth of a share (subject
to adjustment) of Preferred Stock, $.01 par value per share
("Series R Preferred Stock"), of the Corporation having the rights
and preferences set forth in the form of Certificate of Designation
attached hereto as Exhibit A, and (ii) further authorized the
issuance of one Right (subject to adjustment) with respect to each
share of Common Stock that shall become outstanding (whether
originally issued or delivered from the Corporation's treasury)
between the Record Date and the Distribution Date (as defined
herein);
NOW, THEREFORE, in consideration of the premises and the
mutual agreements set forth herein, the parties agree as follows:
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Section l. Certain Definitions. For purposes of this Rights
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Agreement, the following terms shall 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 25% or more
of the outstanding Common Stock, provided that an
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Acquiring Person shall not include an Exempt Person.
Notwithstanding the foregoing, no Person shall become an
"Acquiring Person" as a result of an acquisition of
shares of Common Stock by the Corporation which, by
reducing the number of such shares outstanding, increases
the proportionate number of shares beneficially owned by
such person to 25% or more of the outstanding Common
Stock, provided that if a Person (other than an Exempt
Person) becomes the Beneficial Owner of 25% or more of
the outstanding Common Stock by reason of share
acquisitions by the Corporation and, after such share
acquisitions by the Corporation, becomes the Beneficial
Owner of any additional shares of Common Stock, such
Person shall be deemed to be an "Acquiring Person." The
word "outstanding," when used with reference to a
Person's Beneficial Ownership of shares of Common Stock
of the Corporation, shall mean the number of such shares
then issued and outstanding together with the number of
such shares not then issued
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and outstanding which such Person would be deemed to own
beneficially hereunder.
(b) "Adjustment Shares" shall have the meaning set
forth in Section 11(a)(ii) hereof.
(c) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2
of the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as
in effect on the date of this Rights Agreement.
(d) A Person shall be deemed the "Beneficial Owner"
of, and shall be deemed to "beneficially own," any shares
of Common Stock:
(i) which such Person or any of such
Person's Affiliates or Associates beneficially
owns, directly or indirectly;
(ii) which such Person or any of such
Person's Affiliates or Associates has (A) the
right to acquire (whether such right is
exercisable immediately or only after the
passage of time) pursuant to any agreement,
arrangement or understanding, whether or not
in writing, or upon the exercise of conversion
rights, exchange rights, rights, warrants or
options, or otherwise, provided that a Person
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shall not be deemed the "Beneficial Owner" of,
or to "beneficially own," (1) 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 (2) securities which such
Person has a right to acquire on the exercise
of Rights at any time prior to the occurrence
of a Section 11(a) (ii) Event or a Section 13
Event or (3) securities issuable upon exercise
of Rights from and after the occurrence of a
Section 11(a) (ii) Event or a Section 13 Event
if such Rights were acquired by such Person or
any of such Person's Affiliates or Associates
prior to the Distribution Date or pursuant to
Section 3(a) or Section 22 hereof ("original
Rights") or pursuant to Section 11(i) with
respect to an adjustment to original Rights;
or (B) the right to vote pursuant to any
agreement, arrangement or understanding
(whether or not in writing), provided that
a Person shall not be deemed the "Beneficial
Owner" of, or to "beneficially own", any
securities if the agreement, arrangement or
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understanding to vote such security (1) arises
solely from a revocable proxy or consent given
in response to a public proxy or consent
solicitation made pursuant to, and in
accordance with, the applicable rules and
regulations of the Exchange Act and (2) is not
also then reportable by such Person on
Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) which are beneficially owned,
directly or indirectly, by any other Person
with which such Person or any of such Person's
Affiliates or Associates has any agreement,
arrangement or understanding, whether or not
in writing, for the purpose of acquiring,
holding, voting (except as described in clause
(B) of subparagraph (ii) of this paragraph
(d)) or disposing of any securities of the
Corporation.
Notwithstanding anything in this paragraph (d) to the contrary, a
Person engaged in the business of underwriting securities shall not
be deemed the "Beneficial Owner" of, or to "beneficially own," any
securities acquired in good faith in a firm commitment underwriting
until the expiration of forty days after the date of such
acquisition.
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(e) "Board of Directors" shall mean the Board of
Directors of the Corporation or any duly authorized
committee thereof.
(f) "Business Day" shall mean any day other than a
Saturday, Sunday, or a day of which banking institutions
in the City of New York are authorized or obligated by
law or executive order to close.
(g) "close of business" on any given date shall
mean 5:00 P.M., New York City time, on such date,
provided 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.
(h) "Common Stock" when used with reference to the
Corporation shall mean the Common Stock (currently $.01
par value per share) of the Corporation. "Common Stock"
when used with reference to any Person other than the
Corporation which shall be organized in corporate form
shall mean the capital stock or other equity security
with the greatest per share voting power of such Person.
"Common Stock" when used with reference to any Person
other than the Corporation which shall not be organized
in corporate form shall mean units of beneficial interest
which shall represent the right to participate in
profits, losses, deductions and credits of such Person
and which shall be entitled to exercise the
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greatest voting power per unit of such Person.
(i) "Common Stock equivalents" shall have the
meaning set forth in Section 11(a)(iii) hereof.
(j) "Current Market Price" shall have the meaning
set forth in Section 11(d) hereof.
(k) "Current Value" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(l) "Distribution Date" shall have the meaning set
forth in Section 3(a) hereof.
(m) "equivalent Series R Preferred Stock" shall
have the meaning set forth in Section 11(b) hereof.
(n) "Exchange Act" shall have the meaning set forth
in Section 1(c) hereof.
(o) "Exempt Person" shall mean the Corporation, any
Subsidiary or parent of the Corporation, any employee benefit
plan or employee stock plan of the Corporation or of any
Subsidiary of the Corporation, or any person or entity
organized, appointed, established or holding Common Stock
for or pursuant to the terms of any such plan.
(p) "Expiration Date" shall have the meaning set
forth in Section 7(a) hereof.
(q) "Final Expiration Date" shall have the meaning
set forth in Section 7(a) hereof.
(r) "invalidation time" shall have the meaning set
forth in Section 11(a)(ii) hereof.
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(s) NASDAQ shall have the meaning set forth in
Section 11 (d)(i) hereof.
(t) "NYSE" shall mean the New York Stock Exchange.
(u) "Permitted Transaction" shall mean a purchase
or series of related purchases of shares of Common Stock
of the Corporation that the Board of Directors, taking
into account the long-term value of the Corporation and
all other factors that the Board of Directors considers
relevant, determines to be fair to and otherwise in the
best interests of the holders of shares of Common Stock.
(v) "Person" shall mean any individual, firm,
corporation, partnership or other entity.
(w) "Principal Party" shall have the meaning set
forth in Section 13(b) hereof.
(x) "Purchase Price" shall have the meaning set
forth in Section 4(a) hereof.
(y) "Redemption Price" shall have the meaning set
forth in Section 23(a) hereof.
(z) "Right Certificate" shall have the meaning set
forth in Section 3(a) hereof.
(aa) "Section 11(a) (ii) Event" shall mean any event
described in Section 11(a)(ii) (A), (B) or (C) hereof.
(bb) "Section ll(a) (ii) Trigger Date" shall have the
meaning set forth in Section 11(a) (iii) hereof.
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(cc) "Section 13 Event" shall mean any event described in
clause (i), (ii) or (iii) of Section 13(a)
(dd)"Securities Act" shall mean the Securities Act of 1933,
as amended.
(ee) "Stock Acquisition Date" shall mean the first date of
public announcement by the Corporation or an Acquiring
Person that an Acquiring Person has become such or such
earlier date as a majority of the Board of Directors
shall become aware of the existence of an acquiring
person.
(ff) "Substitution Period" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(gg) "Subsidiary" of a Person shall mean any corporation
or other entity of which securities or other ownership
interests having ordinary voting power sufficient to elect a
majority of the board of directors or other persons performing
similar functions are beneficially owned, directly or
indirectly, by such Person and any corporation or other entity
that is otherwise controlled by such Person.
(hh) "Summary of Rights" shall have the meaning set forth in
Section 3(b) hereof.
(ii) "Trading Day" shall have the meaning set forth in Section
11(d) hereof.
(jj) "Triggering Event" shall mean any Section 11(a) (ii)
Event or Section 13 Event.
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Any determination required by the definitions contained or referred
to in this Section l shall be made by the Board of Directors in
good faith, and any such determination shall be binding on the
Rights Agent and the holders of the Rights.
Section 2. Appointment of Rights Agent. The Corporation hereby
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appoints the Rights Agent to act as agent for the Corporation in
accordance with the terms and conditions hereof, and the Rights
Agent hereby accepts such appointment. The Corporation may from
time to time appoint one or more Rights Agents as it may deem
necessary or desirable.
Section 3. Issuance of Right Certificates.
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(a) Until the close of business on the day (the "Distribution
Date") which is the earlier of (i) the tenth day after the Stock
Acquisition Date or (ii) such date as the Board of Directors may
fix following the commencement by any Person (other than an Exempt
Person) of, or the first public announcement of the intent of any
Person (other than an Exempt Person) to commence, a tender or
exchange offer upon the successful consummation of which such
Person, together with its Affiliates and Associates, would be the
Beneficial Owner of 25% or more of the outstanding Common Stock
(irrespective of whether any shares are actually purchased pursuant
to any such offer), provided that such date fixed by the Board of
Directors shall not be later than the nineteenth Business Day after
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the date of such commencement or public announcement (the date
specified in clauses (i) and (ii) being subject to extension by the
Board of Directors pursuant to Section 26 hereof), (x) the Rights
will be evidenced (subject to the provisions of Section 3(c)
hereof) by the certificates for the Common Stock registered in the
names of the holders of the Common Stock and not by separate Right
Certificates, and (y) each Right will be transferable only in
connection with the transfer of a share (subject to adjustment as
hereinafter provided) of Common Stock, provided that if the
Distribution Date would be prior to the Record Date, the Record
Date shall be the Distribution Date, and provided, further, that if
a tender or exchange offer referred to in clause (ii) above is
cancelled or withdrawn prior to the Distribution Date, such offer
shall be deemed, for purposes of this Rights Agreement, never to
have been made. As soon as practicable after the Distribution
Date, the Rights Agent will mail, by first-class, postage prepaid
mail, to each record holder of the Common Stock as of the close of
business on the Distribution Date, as shown by the records of the
Corporation, at the address of such holder shown on such records,
a Right Certificate in substantially the form of Exhibit B hereto
("Right Certificate") evidencing one Right for each share of Common
Stock so held, subject to adjustment as provided herein. In the
event that an adjustment in the number of Rights per share of
Common Stock has been made pursuant to Section 11(p) hereof, at the
time of distribution of the Right Certificates, the Corporation
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shall make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a) hereof) so that Right 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 Right
Certificates.
(b) On the Record Date or as soon as practicable thereafter,
the Corporation will send a copy of a Summary of Rights to Purchase
Series R Preferred Stock, substantially in the form attached hereto
as Exhibit C ("Summary of Rights"), by first-class, postage prepaid
mail, to each record holder of Common Stock as of the close of
business on the Record Date, at the address of such holder shown
on the records of the Corporation.
(c) With respect to certificates for Common Stock outstanding
as of the Record Date, until the Distribution Date (or, if earlier,
the Expiration Date), the Rights will be evidenced by such
certificates for Common Stock registered in the names of the
holders thereof together with a copy of the Summary of Rights.
Until the Distribution Date (or, if earlier, the Expiration Date),
the surrender for transfer of any certificate for Common Stock
outstanding on the Record Date, with or without a copy of the
Summary of Rights, shall also constitute the surrender for transfer
of the Rights associated with the Common Stock represented thereby.
(d) Rights shall be issued in respect of all shares of Common
Stock that become outstanding after the Record Date but prior to
13
the earlier of the Distribution Date or the Expiration Date and, in
certain circumstances provided for in Section 22 hereof, may be
issued in respect of shares of Common Stock that become outstanding
after the Distribution Date. Certificates issued for Common Stock
(including, without limitation, certificates issued upon original
issuance, disposition from the Corporation's treasury or transfer
or exchange of Common Stock) after the Record Date but prior to the
earlier of the Distribution Date, the Expiration Date or the Final
Expiration Date (or, in certain circumstances as provided in
Section 22 hereof, after the Distribution Date) shall have
impressed on, printed on, written on or otherwise affixed to them
the following legend:
This certificate also evidences and entitles the
holder hereof to certain Rights as set forth in a Rights
Agreement between DC Holdco, Inc. and The Bank of New
York, as Rights Agent, dated as of November 8, 1995 (the
"Rights Agreement"), the terms of which are incorporated
herein by reference and a copy of which is on file at the
principal executive office of DC Holdco, Inc. Under
certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this
certificate. DC Holdco, Inc. will mail to the holder of
this certificate a copy of the Rights Agreement without
charge within five days after receipt by it of a written
request therefor. Under certain circumstances as provided
in the Rights Agreement, Rights issued to or beneficially
owned by Acquiring Persons or their Associates or
Affiliates (as such terms are defined in the Rights
Agreement) or any subsequent holder of such Rights may
become null and void as provided in Section 11(a) (ii) of
the Rights Agreement.
With respect to such certificates containing the foregoing legend,
the Rights associated with the Common Stock represented by such
14
certificates shall, until the Distribution Date, be evidenced by
such certificates alone, and the surrender for transfer of any such
certificate shall also constitute the surrender for transfer of the
Rights associated with the Common Stock represented thereby.
Section 4. Form of Right Certificates.
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(a) The Right Certificates (and the forms of election to
purchase shares and of assignment to be printed on the reverse
thereof), when, as and if issued, shall be substantially in the
form set forth in Exhibit B attached hereto and may have such marks
of identification or designation and such legends, summaries or
endorsements printed thereon as the Corporation may deem
appropriate and as are not inconsistent with the provisions of this
Rights Agreement, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule
or regulation of any stock exchange on which the Rights may from
time to time be listed, or to conform to usage. Subject to the
provisions of Sections 11 and 22 hereof, the Right Certificates,
whenever issued, shall be dated as of the Record Date, and on their
face Right Certificates shall entitle the holders thereof to
purchase one one-hundredth (1/100) of one share of Series R
Preferred Stock, or other securities or property as provided
herein, as the same may from time to time be adjusted as provided
herein, at the price per one one-hundredth of a share set forth
therein, as the same may from time to time be adjusted as provided
15
herein (the "Purchase Price").
(b) Notwithstanding any other provision of this Rights
Agreement, any Right Certificate that represents Rights that are
beneficially owned by (i) an Acquiring Person or any Affiliate or
Associate thereof, (ii) a transferee of an Acquiring Person (or any
such Affiliate or Associate) who becomes a transferee after the
Acquiring Person became such or (iii) a transferee of an Acquiring
Person (or any such Affiliate or Associate) who becomes a
transferee prior to or concurrently with the Acquiring Person's
becoming such pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person (or any such Affiliate or
Associate) to holders of its equity securities or to any Person
with whom it has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer
(whether or not for consideration) which the Board of Directors has
determined is part of a plan, arrangement or understanding which
has the purpose or effect of avoiding the provisions of Section
11(a) (ii) hereof, and subsequent transferees of such Persons (or
of any transferee of such Rights), and any Right Certificates
issued pursuant to Section 6 hereof upon transfer, exchange,
replacement or adjustment of any other Right Certificate referred
to in this sentence, shall have impressed on, printed on, written
on or otherwise affixed to it (if the Corporation or the Rights
Agent has knowledge that such Person is an Acquiring Person or an
Associate or Affiliate thereof or transferee of such Persons or a
16
nominee of any of the foregoing) the following legend:
The beneficial owner of the Rights represented by this
Right Certificate is an Acquiring Person or an Affiliate
or Associate (as defined in the Rights Agreement) of an
Acquiring Person or a subsequent holder of such Right
Certificates beneficially owned by such Persons.
Accordingly, under certain circumstances as provided in
the Rights Agreement, this Right Certificate and the
Rights represented hereby may become null and void as
provided in Section 11(a) (ii) of the Rights Agreement.
Section 5. Countersignature and Registration.
---------------------------------
(a) The Right Certificates shall be executed on behalf of the
Corporation by its Chairman or Vice-Chairman of the Board, its
President or any Executive Vice President, Senior Vice President or
Vice President, either manually or by facsimile signature, and have
affixed thereto the Corporation's seal or a facsimile thereof which
shall be attested by the Secretary or an Assistant Secretary of the
Corporation, either manually or by facsimile signature. The Right
Certificates shall be manually countersigned by the Rights Agent
and shall not be valid for any purpose unless so countersigned. In
case any officer of the Corporation who shall have signed any of
the Right Certificates shall cease to be such officer of the
Corporation before countersignature by the Rights Agent and
issuance and delivery by the Corporation, such Right Certificates,
nevertheless, may be countersigned by the Rights Agent, issued and
delivered with the same force and effect as though the person who
signed such Right Certificates had not ceased to be such officer of
the Corporation; and any Right Certificate may be signed on behalf
17
of the Corporation by any person who, at the actual date of the
execution of such Right Certificate, shall be a proper officer of
the Corporation to sign such Right Certificate, although was not
such an officer at the date of the execution of this Rights
Agreement.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its principal office, books for
registration and transfer of the Right Certificates Issued
hereunder. Such books shall show the names and addresses of the
respective holders of the Right Certificates, the number of Rights
evidenced on its face by each of the Right Certificates, the date
of each of the Right Certificates, and the certificate numbers for
each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
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Right Certificates; Mutilated, Destroyed, Lost or Stolen Right
--------------------------------------------------------------
Certificates.
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(a) Subject to the provisions 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, any Right Certificate or
Certificates may be (i) transferred or (ii) split up, combined or
exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of one
one-hundredths of a share of Series R Preferred Stock as the Right
Certificate or Right Certificates surrendered then entitled such
holder to purchase. Any registered holder desiring to transfer any
18
Right Certificate shall surrender the Right Certificate at the
shareholder services office of the Rights Agent with the form of
assignment on the reverse side thereof duly endorsed (or enclose
with such Right Certificate a written instrument of transfer in
form satisfactory to the Corporation and the Rights Agent), duly
executed by the registered holder thereof or his attorney duly
authorized in writing, and with such signature duly guaranteed. Any
registered holder desiring to split up, combine or exchange any
Right Certificate shall make such request in writing delivered to
the Rights Agent, and shall surrender the Right Certificate or
Right Certificates to be split up, combined or exchanged at the
shareholder services office of the Rights Agent. Thereupon the
Rights Agent, subject to the provisions hereof, shall countersign
(by manual signature) and deliver to the person entitled thereto a
Right Certificate or Right Certificates, as the case may be, as so
requested. The Corporation may require payment of a sum sufficient
to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of
Right Certificates.
(b) Upon receipt by the Corporation and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Right Certificate, and, in case of
loss, theft or destruction, of indemnity or security reasonably
satisfactory to them, and, if requested by the Corporation,
reimbursement to the Corporation of all reasonable expenses
19
incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate if mutilated, the Corporation
will execute and deliver a new Right Certificate of like tenor to
the Rights Agent for delivery to the registered owner in lieu of
the Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration
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Date of Rights.
--------------
(a) Except as otherwise provided herein, the Rights shall
become exercisable at the close of business on the Distribution
Date, and may be exercised to purchase Series R Preferred Stock,
except as otherwise provided herein, in whole or in part at any
time after the Distribution Date upon surrender of the Right
Certificate, with the form of election to purchase on the reverse
side thereof duly executed (with such signature duly guaranteed),
to the Rights Agent at its principal office, together with payment
of the aggregate Purchase Price, subject to adjustment as
hereinafter provided, with respect to the number of one one-
hundredths of a share of Series R Preferred Stock (except as
otherwise provided herein) as to which such surrendered Rights are
then being exercised, at or prior to the close of business on the
date (the "Expiration Date") which is the earlier of (i) June 30,
1999 (the "Final Expiration Date"), or (ii) the time at which the
Rights are redeemed as provided in Section 23 hereof.
(b) The Purchase Price shall initially be $350.00 for each
one one-hundredth (1/100) of a share of Series R Preferred Stock
20
issued pursuant to the exercise of a Right. The Purchase Price and
the number of one one-hundredths of a share of Series R Preferred
Stock or other securities to be acquired upon exercise of a Right
shall be subject to adjustment from time to time as provided in
Sections 11 and 13 hereof. The Purchase Price shall be payable in
lawful money of the United States of America, in accordance with
Section 7(c) hereof.
(c) Except as provided in Section 7(d) hereof, upon receipt
of a Right Certificate representing exercisable Rights with the
form of election to purchase duly executed, accompanied by payment
of the aggregate Purchase Price for the number of one one-
hundredths of a share to be purchased and an amount equal to any
applicable transfer tax, by cash, certified or official bank check
or money order payable to the order of the Corporation or the
Rights Agent, the Rights Agent shall, subject to Section 20(j)
hereof, thereupon promptly (i) requisition from any transfer agent
of the Series R Preferred Stock certificates for the number of
shares of Series R Preferred Stock so elected to be purchased
(and/or requisition from the depository agent depository receipts
representing such number of fractional shares of Series R Preferred
Stock as are to be purchased, in which case certificates for the
fractional shares of Series R Preferred Stock so represented shall
be deposited with the depository agent) and the Corporation will
comply and hereby authorizes and directs such transfer agent (and
any such depository agent) to comply with all such requests, (ii)
21
requisition from the Corporation the amount of cash to be paid in
lieu of issuance of fractional shares in accordance with Section
14(b) hereof, and (iii) promptly after receipt of such Series R
Preferred Stock certificates cause the same to be delivered to or
upon the order of the registered holder of such Right Certificate,
registered in such name or names as may be designated by such
holder, and, when appropriate, after receipt promptly deliver such
depository receipts and cash to or upon the order of the registered
holder of such Right Certificate, provided that in the case of a
purchase of securities, other than Series R Preferred Stock,
pursuant to Section 13 hereof, the Rights Agent shall promptly take
the appropriate actions corresponding to the foregoing clauses (i)
through (iii). In the event that the Corporation is obligated to
issue other securities of the Corporation, pay cash and/or
distribute other property pursuant to Section 11(a) hereof, the
Corporation 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.
(d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new
Right Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent to the
registered holder of such Right Certificate or to his duly
authorized assigns, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
22
contrary, neither the Rights Agent nor the Corporation 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 Right
Certificate surrendered for such exercise and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the
Corporation shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates.
--------------------------------------------------
All Right Certificates surrendered for the purpose of
exercise, transfer, split up, combination or exchange shall, if
surrendered to the Corporation or to any of its agents, be
delivered to the Rights Agent for cancellation or in cancelled form
or, if surrendered to the Rights Agent, shall be cancelled by it,
and no Right Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Rights
Agreement. The Corporation shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel
and retire, any Right Certificate purchased or acquired by the
Corporation otherwise than upon the exercise thereof. The Rights
Agent shall deliver all cancelled Right Certificates to the
Corporation or shall, at the written request of the Corporation,
23
destroy such cancelled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Corporation.
Section 9. Reservation and Availability of Shares of Series R
--------------------------------------------------
Preferred Stock.
---------------
(a) The Corporation covenants and agrees that at all times it
will cause to be reserved and kept available, out of and to the
extent of its authorized and unissued shares of Series R Preferred
Stock not reserved for another purpose (and, following the
occurrence of a Triggering Event, shares of Common Stock and other
securities) or shares of Series R Preferred Stock (and, following
the occurrence of a Triggering Event, shares of Common Stock and
other securities) held in its treasury, the number of shares of
Series R Preferred Stock (and, following the occurrence of a
Triggering Event, shares of Common Stock and 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, provided that the Corporation shall not be
required to reserve and keep available shares of Common Stock or
other securities sufficient to permit the exercise in full of all
outstanding Rights pursuant to the adjustments set forth in Section
11(a) (ii), Section 11(a) (iii) or Section 13 hereof unless the
Rights become exercisable pursuant to such adjustments, and then
only to the extent the Rights become exercisable pursuant to such
adjustments.
(b) So long as the shares of Series R Preferred Stock (and,
24
following the occurrence of a Triggering Event, shares of Common
Stock and other securities) issuable and deliverable upon the
exercise of Rights may be listed on any national securities
exchange, the Corporation shall use its best efforts to cause, from
and after such time as the Rights become exercisable, all shares
reserved for such issuance to be listed on such exchange upon
official notice of issuance upon such exercise.
(c) Upon the Rights becoming exercisable, the Corporation
shall use its best efforts to, if then necessary to permit the
offer and issuance of shares of Series R Preferred Stock (and,
following the occurrence of a Triggering Event, shares of Common
Stock and other securities) upon the exercise of Rights, register
and qualify such shares of Series R Preferred Stock (and, following
the occurrence of a Triggering Event, shares of Common Stock and
other securities) under the Securities Act and any applicable state
securities or "blue sky" laws (to the extent exemptions therefrom
are not available), cause such registration statement and
qualifications to become effective as soon as possible after such
filing and keep such registration and qualifications effective
until the earlier of the date as of which the Rights are no longer
exercisable for such securities and the Expiration Date of the
Rights. The Corporation may temporarily suspend, for a period of
time not to exceed ninety days, the Exercisability of the Rights in
order to prepare and file a registration statement under the
Securities Act and permit it to become effective. Upon any such
25
suspension, the Corporation shall issue a public announcement
stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the
suspension is no longer in effect. Notwithstanding any provision of
this Agreement to the contrary, the Rights shall not be exercisable
in any jurisdiction unless the requisite qualification in such
jurisdiction shall have been obtained and until a registration
statement under the Securities Act (if required) shall have been
declared effective.
(d) The Corporation covenants and agrees that it will take
all such action as may be necessary to insure that all shares of
Series R Preferred Stock (and following the occurrence of a
Triggering Event, shares of Common Stock and other securities)
delivered upon exercise of Rights shall, to the extent applicable,
at the time of delivery of the certificates for such shares
(subject to payment of the aggregate Purchase Price in respect
thereof), be duly and validly authorized and issued and fully paid
and nonassessable shares in accordance with applicable law.
(e) The Corporation further covenants and agrees that it will
pay when due and payable any and all federal and state transfer
taxes and charges which may be payable in respect of the Issuance
or delivery of the Right Certificates or of any shares of Series R
Preferred Stock (or other securities, as the case may be) upon the
exercise of Rights. The Corporation shall not, however, be required
to pay any transfer tax which may be payable in respect of any
26
transfer or delivery of Right Certificates to a Person other than,
or the issuance or delivery of certificates for Series R Preferred
Stock (or other securities, as the case may be) upon exercise of
Rights in a name other than that of, the registered holder of the
Right Certificate, and the Corporation shall not be required to
issue or deliver a Right Certificate or certificate for Series R
Preferred Stock (or other securities, as the case may be) to a
person other than such registered holder until any such tax shall
have been paid (any such tax being payable by the holder of such
Right Certificate at the time of surrender) or until it has been
established to the Corporation's satisfaction that no such tax is
due.
Section 10. Series R Preferred Stock Record Date.
------------------------------------
Each Person in whose name any certificate for shares of Series
R Preferred Stock (or other securities, as the case may be) is
issued upon the exercise of Rights shall for all purposes be deemed
to have become the holder of record of the Series R Preferred Stock
(or other securities, as the case may be) represented thereby on,
and such certificate shall be dated, the date upon which the Right
Certificate evidencing such rights was duly surrendered and payment
of the Purchase Price (and any applicable transfer taxes) was made.
Section 11. Adjustments to Number and Kind of Shares, Number
------------------------------------------------
of Rights or Purchase Price.
---------------------------
The number and kind of shares subject to purchase upon the
27
exercise of each Right, the number of Rights outstanding and the
Purchase Price are subject to adjustment from time to time as
provided in this Section 11.
(a) (i) In the event that the Corporation shall at any time
after the Record Date (A) declare or pay any dividend on Series R
Preferred Stock payable in shares of Series R Preferred Stock, (B)
subdivide or split the outstanding shares of Series R Preferred
Stock into a greater number of shares, (C) combine or consolidate
the outstanding shares of Series R Preferred Stock into a smaller
number of shares or effect a reverse split of the outstanding
shares of Series R Preferred Stock or (D) issue any shares of its
capital stock in a reclassification of the Series R Preferred Stock
(including any such reclassification in connection with a
consolidation or merger in which the Corporation is the continuing
or surviving corporation), except as otherwise provided in this
Section 11(a), the Purchase Price in effect immediately prior to
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 Series R Preferred Stock or capital
stock, as the case may be, issuable upon exercise of a Right 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 an amount equal to (x) the Purchase Price in effect
immediately prior to the record date or effective date of such
dividend, subdivision, combination or reclassification multiplied
28
by (y) the number of one one-hundredths of a share of Series R
Preferred Stock, or shares of capital stock, as the case may be, as
to which a Right was exercisable immediately prior to such date,
the aggregate number and kind of shares of Series R Preferred Stock
or capital stock, as the case may be, which, if such Right had been
exercised immediately prior to such date, the holder thereof would
have owned upon such exercise and been entitled to receive, or
would be deemed to have owned, by virtue of such dividend,
subdivision, combination or reclassification. If an event occurs
which would require an adjustment under both this Section 11(a)(i)
and Section 11(a)(ii) hereof, the adjustment provided for in this
Section 11(a)(i) shall be in addition to, and shall be made prior
to, any adjustment required pursuant to Section 11(a)(ii).
(ii) In the event, at any time after the date of this
Agreement
(A) any Acquiring Person or any Associate or
Affiliate of any Acquiring Person, directly or
indirectly, other than pursuant to any transaction set
forth in Section 13(a) hereof, (1) shall merge with and
into the Corporation or any of its Subsidiaries or
otherwise combine with the Corporation or any of its
Subsidiaries and the Corporation or such Subsidiary shall
be the continuing or surviving corporation of such merger
or combination and the Common Stock of the Corporation
shall remain outstanding and no shares
29
thereof shall be changed into or exchanged for stock or other
securities of the Corporation or of any other Person or cash
or any other property, or (2) shall, in one or more
transactions, other than in connection with the exercise
of a Right or Rights and other than in connection with
the exercise or conversion of securities exercisable for
or convertible into securities of the Corporation or of
any Subsidiary of the Corporation (which securities were
outstanding prior to the time the Acquiring Person became
such), transfer any assets or property to the Corporation
or any of its Subsidiaries in exchange (in whole or in
part) for any shares of any class of capital stock of the
Corporation or any of its Subsidiaries or any securities
exercisable for or convertible into shares of any class
of capital stock of the Corporation or any of its
Subsidiaries, or otherwise obtain from the Corporation or
any of its Subsidiaries, with or without consideration,
any additional shares of any class of capital stock of
the Corporation or any of its Subsidiaries or any
securities exercisable for or convertible into shares of
any class of capital stock of the Corporation or any of
its Subsidiaries (other than as part of a pro rata offer
or distribution by the Corporation or such Subsidiary to
all holders of such shares), or (3) shall sell, purchase,
lease, exchange,
30
mortgage, pledge, transfer or otherwise acquire (other than
as a pro rata dividend) or dispose, in one transaction or a
series of transactions, to, from or with, as the case may be,
the Corporation or any of its Subsidiaries, assets (including
securities) on terms and conditions less favorable to the
Corporation or such Subsidiary than the Corporation or such
Subsidiary would be able to obtain in arm s length negotiation
with an unaffiliated third party, or (4) shall receive any
compensation from the Corporation or any of its
Subsidiaries for services other than compensation for
employment as a regular or part time employee, or fees
for serving as a director, at rates in accordance with
the Corporation s (or its Subsidiaries ) past practices,
or (5) shall receive the benefit, directly or indirectly
(except proportionately as a shareholder), or any loans,
advances, guarantees, pledges or other financial
assistance or any tax credits or tax advantage provided
by the Corporation or any of its Subsidiaries, or (6)
shall sell, purchase, lease, exchange, mortgage, pledge,
transfer or otherwise acquire (other than as a pro rata
dividend ) or dispose, in one transaction or a series of
transactions, to from or with, as the case may be, the
Corporation or any of its Subsidiaries (other than in
connection with the lines of business, if any, engaged
31
in between the Corporation and the Acquiring Person or
Associate or Affiliate thereof prior to the time and the
Acquiring Person became such) assets having an aggregate
fair market value or more than $250,000,000; or
(B) any Person, alone or together with its
Affiliates and Associates, shall become an Acquiring
Person, other than pursuant to a Permitted Transaction
or;
(C) during such time as there is an Acquiring
Person, there shall be any reclassification of securities
(including any reverse stock split), or any
recapitalization of the Corporation or any merger or
consolidation of the Corporation with any of its
Subsidiaries or any other transaction or series of
transactions involving the Corporation or any of its
Subsidiaries (whether or not with or into or otherwise
involving an Acquiring Person or any Affiliate or
Associate of such Acquiring Person) which has the effect,
directly or indirectly, of increasing by more than 1% the
proportionate share of the outstanding shares of any
class of equity securities of the Corporation or any of
its Subsidiaries, or securities exercisable for or
convertible into equity securities of the Corporation or
any of its Subsidiaries, which is directly or indirectly
beneficially owned by any
32
Acquiring Person or any Affiliate or Associate of any
Acquiring Person;
then, subject to the last sentence of Section 23(a) hereof, and
except as otherwise provided in this Section 11, each holder of a
Right shall thereafter have the right to receive, upon exercise of
a Right in accordance with the terms of this Rights Agreement and
payment of the aggregate Purchase Price with respect to the total
number of one one-hundredths of a share of Series R Preferred Stock
for which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event, in lieu of Series R
Preferred Stock, such number of shares of Common Stock of the
Corporation as shall equal the result obtained by (x) multiplying
the then current Purchase Price by the number of one one-hundredths
of a share of Series R Preferred Stock for which a Right was
exercisable immediately prior to the first occurrence of a Section
11(a) (ii) Event, and (y) dividing that product by 50% of the
Current Market Price per share of Common Stock on the date of such
first occurrence (such number of shares is herein called the
"Adjustment Shares"), provided that the number of Adjustment Shares
shall be further appropriately adjusted to reflect any events of
the type described in Sections 11(a)(i),(b) or (c) hereof occurring
in respect of the Common Stock after the date of such first
occurrence; and provided, further, that if the transaction that
would otherwise give rise to the foregoing adjustment is also
subject to the provisions of Section 13 hereof, then only the
33
provisions of Section l3 hereof shall apply and no adjustment shall
be made pursuant to this Section 11(a)(ii).
Notwithstanding anything in this Rights Agreement to the
contrary, from and after the time (the "invalidation time") when
(A) any Person first becomes an Acquiring Person, other than
through a Permitted Transaction or (B) there occurs any event
described in Section 11(a)(ii) (A) or (C) in respect of any
Acquiring Person who became such through a Permitted Transaction,
any Rights that are beneficially owned by (x) such Acquiring Person
(or any Associate or Affiliate of such Acquiring Person), (y) a
transferee of such Acquiring Person (or any such Associate or
Affiliate) who becomes a transferee after the invalidation time or
(z) a transferee of such Acquiring Person (or any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with
the invalidation time pursuant to either (I) a transfer from the
Acquiring Person to holders of its equity securities or to any
Person with whom it has any continuing agreement, arrangement or
understanding regarding the transferred rights or (II) a transfer
which the Board of Directors has determined is part of a plan,
arrangement or understanding which has the purpose or effect of
avoiding the provisions of this paragraph, and subsequent
transferees of such Persons, shall be void without any further
action and any holder of such Rights shall thereafter have no
rights whatsoever with respect to such Rights under any provision
of this Rights Agreement. The Corporation shall use all reasonable
34
effort to ensure that the provisions of this Section 11(a)(ii) and
of Section 4(b) hereof are complied with, but shall have no
liability to any holder of Right Certificates or other Person as a
result of its failure to make any determinations with respect to an
Acquiring Person or its Affiliates, Associates or transferees
hereunder. No Right Certificate shall be issued pursuant to Section
3 hereof that represents Rights beneficially owned by an Acquiring
Person whose Rights would be void pursuant to the provisions of
this paragraph or any Associate or Affiliate thereof; no Right
Certificate shall be issued at any time upon the transfer of any
Rights to an Acquiring Person whose Rights would be void pursuant
to the provisions of this paragraph or any Associate or Affiliate
thereof or to any nominee of such Acquiring Person whose Rights
would be void pursuant to the provisions of this paragraph shall be
cancelled.
(iii) In the event that the number of shares of Common
Stock which are authorized by the Corporation s Restated
Certificate of Incorporation but not outstanding or reserved for
issuance for purposes other than upon exercise of the Rights is not
sufficient to permit the exercise in full of the Rights in
accordance with Section 11(a)(ii) and the Rights shall become so
exercisable, the Corporation shall, to the extent permitted by
applicable law and any material agreements in effect on the date
hereof to which the Corporation is a party, (A) determine the value
of the Adjustment Shares issuable upon the exercise of a Right,
35
upon exercise of such Right, issue shares of Common Stock to the
extent available for the exercise in full of such Right and, to the
extent shares of Common Stock are not so available, make adequate
provision to substitute for the Adjustment Shares not received upon
exercise of such Right (1) cash, (2) other equity securities of the
Corporation (including, without limitation, shares, or units of
shares, of preferred stock which, by virtue of having dividend,
voting and liquidation rights substantially comparable to those of
the Common Stock, are deemed in good faith by the Board of
Directors to have substantially the same value as shares of Common
Stock (such shares or units of shares of preferred stock are herein
called "Common Stock equivalents")), (3) debt securities of the
Corporation, (4) other assets, (5) a reduction of the Purchase
Price or (6) any combination of the foregoing, having a value
which, when added to the value of the shares of Common Stock
actually issued upon exercise of such Right, shall have an
aggregate value equal to the Current Value, where such aggregate
value has been determined in good faith by the Board of Directors
based upon the advice of a nationally recognized independent
investment banking firm selected in good faith by the Board of
Directors, provided that if the Corporation shall not have made
adequate provision to deliver value pursuant to clause (B) above
within thirty days following the date (the "Section 11(a) (ii)
Trigger Date") which is the later of (x) the first occurrence of a
Section 11(a) (ii) Event and (y) the date on which the
36
Corporation's right of redemption pursuant to Section 23(a)
expires, then the Corporation shall be obligated to deliver, upon
the surrender for exercise of a Right and without requiring payment
of the Purchase Price, shares of Common Stock (to the extent
available) and then, if necessary, cash, which shares and cash have
an aggregate value equal to the excess of (x) the Current Value
over (y) the Purchase Price times the number of one one-hundredths
of a share of Series R Preferred Stock for which a Right was
exercisable immediately prior to the first occurrence of a Section
11(a) (ii) Event. If the Board of Directors shall determine in good
faith that it is likely that sufficient additional shares of Common
Stock could be authorized for issuance upon exercise in full of the
Rights, 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 Corporation may
seek shareholder approval for the authorization of such additional
shares (such thirty day period, as it may be extended, is herein
called the "Substitution Period"). To the extent that the
Corporation determines that some action must be taken pursuant to
the first or second sentence of this Section 11(a) (iii), the
Corporation (x) shall provide, subject to Section 11(a) (ii) hereof
and the last sentence of this Section 11(a) (iii), that such action
shall apply uniformly to all outstanding Rights and (y) may suspend
the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of
37
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 Corporation shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as
well as a public announcement at such time as the suspension is no
longer in effect. For purposes of this Section 11(a)(iii), the
value of the Common Stock shall be the Current Market Price per
share of the Common Stock on the Section 11(a)(ii) Trigger Date and
the per share or per unit value of any "Common Stock equivalent"
shall be deemed to equal the Current Market Price per share of the
Common Stock on such date. The Board of Directors may, but shall
not be required to, establish procedures to allocate the right to
receive Common Stock upon the exercise of the Rights among holders
of Rights pursuant to this Section 11(a)(iii).
(b) In case the Corporation shall fix a record date for the
issuance of rights, options or warrants to all holders of Series R
Preferred Stock entitling them to subscribe for or purchase (for a
period expiring within forty-five calendar days after such record
date) Series R Preferred Stock, shares having the same rights,
privileges and preferences as the Series R Preferred Stock
("equivalent Series R Preferred Stock") or securities convertible
into Series R Preferred Stock or equivalent Series R Preferred
Stock at a price per share of Series R Preferred Stock or
equivalent Series R Preferred Stock (or having a conversion price
38
per share, if a security convertible into Series R Preferred Stock
or equivalent Series R Preferred Stock) less than the Current
Market Price per share of Series R 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 Series R Preferred Stock
outstanding on such record date, plus the number of shares of
Series R Preferred Stock which the aggregate offering price of the
total number of shares of Series R Preferred Stock and equivalent
Series R Preferred Stock (and the aggregate initial conversion
price of the convertible securities so to be offered, including the
price required to be paid to purchase such convertible security)
would purchase at such Current Market Price, and the denominator of
which shall be the number of shares of Series R Preferred Stock
outstanding on such record date, plus the number of additional
shares of Series R Preferred Stock or equivalent Series R 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 non-cash consideration shall be as
determined in good faith by the Board of Directors, whose
determination shall be described in a statement filed with the
Rights Agent. Shares of Series R Preferred Stock owned by or held
39
for the account of the Corporation shall not be deemed outstanding
for the purpose of any such computation. Such adjustment shall be
made successively whenever such a record date is fixed, and in the
event that such rights or warrants are not so issued, the Purchase
Price shall be adjusted to be the Purchase Price which would then
be in effect if such record date had not been fixed.
(c) In case the Corporation shall fix a record date for a
distribution to all holders of Series R Preferred Stock (including
any such distribution made in connection with a consolidation or
merger in which the Corporation 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
Corporation), assets (other than a dividend payable in Series R
Preferred Stock, but including any dividend payable in stock other
than Series R 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 per share of Series R Preferred Stock on such
record date, less the fair market value (as determined in good
faith by the Board of Directors of the Corporation, 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
40
warrants applicable to a share of Series R Preferred Stock and the
denominator of which shall be such Current Market Price per share
of Series R 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
(including computations pursuant to Section 14 hereof), other than
computations made pursuant to Section 11(a) (iii) hereof, the
"Current Market Price" per share of Common Stock on any date shall
be deemed to be the average of the daily closing prices per share
of such stock for the thirty consecutive Trading Days (as such term
is hereinafter defined) immediately prior to such date, and for
purpose of computations made pursuant to Section 11(a) (iii)
hereof, the "Current Market Price" per share of Common Stock on any
date shall be deemed to be the average of the daily closing prices
per share of such stock for the ten consecutive Trading Days
immediately following such date provided that in the event that the
Current Market Price per share of Common Stock is determined during
a period following the announcement by the issuer of such stock of
(x) any dividend or distribution on such stock (other than a
regular quarterly cash dividend) or (y) any subdivision,
combination or reclassification of the stock, and prior to the
expiration of the requisite thirty Trading Day or ten Trading Day
41
period, as set forth above, the ex-dividend date for such dividend
or distribution, or the effective date of such subdivision,
combination or reclassification occurs, then, and in each such
case, the Current Market Price shall be properly adjusted to take
into account ex-dividend trading. The closing price for each day
shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to
securities listed or admitted to trading on the NYSE or, if the
shares of Common Stock are not listed or admitted to trading on the
NYSE, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal
national securities exchange on which the shares of Common Stock
are listed or admitted to trading or, if the shares of Common Stock
are not listed or admitted to trading on any national securities
exchange, the last quoted sale price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-
counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotations System ("NASDAQ") or
such other system then in use, or, if on any such date the shares
of Common Stock are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a
professional market maker making a market in such stock selected by
the Board of Directors. If on any such date no market maker is
42
making a market in the Common Stock, the fair value of such shares
on such date as determined in good faith by the Board of Directors
shall be used. The term "Trading Day" shall mean a day on which the
principal national securities exchange in which the shares of
Common Stock are listed or admitted to trading is open for the
transaction of business or, if the shares of Common Stock are not
listed or admitted to trading on any national securities exchange,
a Business Day. If the Common Stock is not publicly held or not so
listed or traded, "Current Market Price" per share shall mean the
fair value per share as determined in good faith by the Board of
Directors, 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 Series R Preferred Stock shall
be determined in the same manner as set fourth above for the Common
Stock in clause (i) of this Section 11(d) (other than the last
sentence thereof). If the current market price per share of Series
R Preferred Stock cannot be determined in the manner provided above
or if the Series R 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 Series R Preferred
Stock shall be conclusively deemed to be an amount equal to one
hundred (as such number may be appropriately adjusted for such
events as stock splits, stock dividends and recapitalization with
43
respect to the Common Stock occurring after the date of this
Agreement) multiplied by the current market price per share of the
Common Stock. If neither the Common Stock nor the Series R
Preferred Stock is publicly held or so listed or traded, "Current
Market Price" per share of the Series R Preferred Stock shall mean
the fair value per share as determined in good faith by the Board
of Directors, 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 Rights Agreement, the "Current
Market Price" of one one-hundredth of a share of Series R Preferred
Stock shall be equal to the "Current Market Price" of one share of
Series R Preferred Stock divided by one hundred.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least one
percent in the Purchase Price, provided that any adjustments which
by reason of this Section 11(e) are not required to be made shall
be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to
the nearest cent or to the nearest one ten-thousandth of a share,
as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall be
made no later than the earlier of (i) three years from the date of
the transaction which mandates such adjustment or (ii) one month
prior to the Expiration Date.
44
(f) If as a result of an adjustment made pursuant to Section
11(a)(i) or (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 Series R 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 applicable provisions with respect to the shares
of Series R Preferred Stock contained in Sections 7, 9, 10, 11, 13
and 14 hereof, and such provisions shall apply on like terms to any
such other shares.
(g) All Rights originally issued by the Corporation
subsequent to any adjustment made to the Purchase Price hereunder
shall evidence the right to purchase, at the adjusted Purchase
Price, the number of one one-hundredths of a share of Series R
Preferred Stock purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as
provided herein.
(h) Unless the Corporation shall have exercised its election
as provided in Section 11(i) hereof, upon each adjustment of the
Purchase Price as a result of the calculations made in Sections
11(b) and (c) hereof, each Right outstanding immediately prior to
the making of such adjustment shall thereafter evidence the right
to purchase, at the adjusted Purchase Price, that number of one
one-hundredths of a share of Series R Preferred Stock (calculated
45
to the nearest ten-thousandth) obtained by (i) multiplying (x) the
number of one one-hundredths 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 Corporation may elect, on or after the date of any
adjustment of the Purchase Price, to adjust the number of Rights,
in addition to the adjustment provided in Section 11(p) hereof.
Each of the Rights outstanding after the adjustment in the number
of Rights shall be exercisable for a number of one one-hundredths
of a share of Series R Preferred Stock equal to the number of one
one-hundredths of a share of Series R Preferred Stock for which a
Right was exercisable immediately prior to such adjustment
multiplied by a fraction, the numerator of which shall be the total
number of Rights outstanding immediately prior to such adjustment
and the denominator of which shall be the total number of Rights
outstanding immediately following such adjustment. The Corporation
shall make a public announcement of its election to adjust the
number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be made.
This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Right Certificates have
been issued, shall be at least ten days later than the date of the
public announcement. If Right Certificates have been issued, upon
46
each adjustment of the number of Rights pursuant to this Section
11(i), the Corporation shall, as promptly as practicable, cause to
be distributed to holders of record of Right 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
Corporation, shall cause to be distributed to such holders of
record in substitution and replacement for the Right Certificates
held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Corporation, new Right
Certificates evidencing all the Rights to which such holders shall
be entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and countersigned in the
manner provided for herein (and may bear, at the option of the
Corporation, the adjusted Purchase Price) and shall be registered
in the names of the holders of record of Right Certificates on the
record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of one one-hundredths of a share of Series R
Preferred Stock issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to
express the Purchase Price and the number of one one-hundredths of
a share which were expressed in the initial Right Certificates
issued hereunder.
(k) Before taking any action that would cause an adjustment
47
reducing the Purchase Price below one one-hundredth of the then par
value of a share of Series R Preferred Stock issuable upon exercise
of the Rights, the Corporation shall take any corporate action,
including using its best efforts to obtain any required shareholder
approvals, which may, in the opinion of its counsel, be necessary
in order that the Corporation may validly and legally issue fully
paid and nonassessable shares of Series R Preferred Stock.
(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 Corporation may elect to
defer until the occurrence of such event the issuance to the holder
of any Right exercised after much record date the shares of Series
R Preferred Stock and cash, other capital stock or securities of
the Corporation, if any, issuable upon such exercise over and above
the shares of Series R Preferred Stock and cash, other capital
stock or securities of the Corporation, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such
adjustment, provided that the Corporation shall deliver to such
holder a due xxxx or other appropriate instrument evidencing such
holder's right to receive such additional shares of Series R
Preferred Stock and cash, other capital stock or securities upon
the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Corporation shall be entitled to make such
reductions in the Purchase Price, in addition to those adjustments
48
expressly required by this Section 11, as and to the extent that in
their good faith judgment the Board of Directors shall determine to
be advisable in order that any (i) consolidation or subdivision of
the Series R Preferred Stock, (ii) issuance for cash of any shares
of Series R Preferred Stock at less than the current market price,
(iii) issuance for cash of shares of Series R Preferred Stock or
securities which by their terms are convertible into or
exchangeable for shares of Series R Preferred Stock, (iv) stock
dividends or (v) issuance of rights, options or warrants referred
to in this Section 11, hereafter made by the Corporation shall not
be taxable to holders of its Series R Preferred Stock.
(n) The Corporation covenants and agrees that it shall not,
at any time after the earlier of the Distribution Date or the Stock
Acquisition Date, (i) consolidate with any other Person, (ii) merge
with or into any other Person 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 Corporation and its
Subsidiaries (taken as a whole) to, any other Person or Persons if
(x) at the time of or immediately after such consolidation, merger,
sale or other transaction there are any rights, warrants or other
instruments or securities outstanding or agreements in effect which
would substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights, (y) prior to, simultaneously
with or immediately after such consolidation, merger, sale or other
49
transaction, the shareholders of the Person who constitutes, or
would constitute, the "Principal Party" for purposes of Section
13(a) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates and
Associates or (z) the form or nature of organization of the
Principal Party would preclude or limit the exercisability of the
Rights.
(o) The Corporation covenants and agrees that, after the
earlier of the Distribution Date or the Stock Acquisition Date, it
will not, except as permitted by Sections 23 or 26 hereof, take (or
permit any Subsidiary to take) any action if at the time such
action is taken it is reasonably foreseeable that such action will
diminish substantially or eliminate the benefits intended to be
afforded by the Rights.
(p) Anything in this Rights Agreement to the contrary
notwithstanding, in the event that the Corporation shall at any
time after the Record Date and prior to the Distribution Date (i)
declare a dividend on the outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding
shares of Common Stock or (iii) combine the outstanding shares of
Common Stock into a smaller number of shares, the number of Rights
associated with each share of Common Stock then outstanding, or
issued or delivered thereafter, shall be proportionately adjusted
so that the number of Rights thereafter associated with each share
of Common Stock following any such event shall equal the result
50
obtained by multiplying the number of Rights associated with each
share of Common Stock immediately prior to such event by a fraction
the numerator of which shall be the total number of shares of
Common Stock outstanding immediately prior to the occurrence of the
event and the denominator of which shall be the total number of
shares of Common Stock outstanding immediately following the
occurrence of such event.
Section 12. Certification of Adjustments. Whenever an
----------------------------
adjustment is made as provided in Sections 11 and 13 hereof, the
Corporation shall (a) promptly prepare a certificate setting forth
such adjustment and a brief statement of the facts giving rise to
such adjustment, (b) promptly file with the Rights Agent and with
each transfer agent for the Common Stock a copy of such certificate
and (c) mail a brief summary thereof to each record holder of a
Right (or, if prior to the Distribution Date, to each holder of
Common Stock) in accordance with Section 25 hereof. Notwithstanding
the foregoing sentence, the failure of the Corporation to give such
notice shall not affect the validity of or the force or effect of
or the requirement for such adjustment. The Rights Agent shall be
fully protected in relying on any certificate prepared by the
Corporation pursuant to Sections 11 and 13 hereof and on any
adjustment therein contained.
51
Section 13. Consolidation, Merger or Sale or Transfer of
--------------------------------------------
Assets or Earning Power.
-----------------------
(a) In the event that, at any time on or after the Stock
Acquisition Date, directly or indirectly, (i) the Corporation shall
consolidate with any other Person or Persons or shall merge with
and into any other Person or Persons (other than a Subsidiary of
the Corporation in a transaction that complies with Section 11(o)
hereof) and the Corporation shall not be the surviving or
continuing corporation of such merger, or (ii) any Person or
Persons other than Subsidiary of the Corporation in a transaction
that complies with Section 11(o) hereof) shall merge with and into
the Corporation, and the Corporation shall be the continuing or
surviving corporation of such merger and, in connection with such
merger, all or part of the outstanding shares of Common Stock shall
be changed into or exchanged for stock or other securities of any
other Person or of the Corporation or cash or any other property,
or (iii) the Corporation or one or more of its Subsidiaries shall
sell or otherwise transfer to any other Person (other than a
Subsidiary of the Corporation in a transaction that complies with
Section 11(o) hereof) or any Affiliate or Associate of such Person,
in one or more transactions, or the Corporation or one or more of
its Subsidiaries shall sell or otherwise transfer to any Person
(other than a Subsidiary of the Corporation in a transaction that
complies with Section 11(o) hereof) in one or a series of related
transactions, assets or earning power aggregating more than 50% of
52
the assets or earning power of the Corporation and its Subsidiaries
(taken as a whole), then, on the first occurrence of any such
event, except as may be contemplated by Section 13(d), proper
provision shall be made so that (A) each holder of record of a
Right, other than as provided in Section 11(a) (ii) hereof, shall
thereafter have the right to receive, upon the exercise thereof and
payment of the aggregate Purchase Price with respect to the total
number of one one-hundredths of a share for which a Right was
exercisable immediately prior to the first occurrence of a Section
13 Event (or, if earlier, the first occurrence of a Section 11(a)
(ii) Event) in accordance with the terms of this Rights Agreement,
such number of shares of validly issued, fully paid and non-
assessable and freely tradeable Common Stock of the Principal Party
(as defined herein) 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-hundredths of a share of Series R
Preferred Stock for which a Right was exercisable immediately prior
to the first occurrence of a Section 13 Event (or, if earlier, the
first occurrence of a Section 11(a) (ii) Event), and (2) dividing
that product by 50% of the Current Market Price (determined as
provided in Section 11(d) hereof with respect to the Common Stock)
per share of the Common Stock of such Principal Party on the date
of consummation of such Section 13 Event, provided that the
Purchase Price and the number of shares of Common Stock of such
53
Principal Party issuable upon exercise of each Right shall be
further adjusted as provided in this Rights Agreement to reflect
any events occurring after the date of the first occurrence of a
Section 13 Event, (B) 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 Corporation pursuant to this
Rights Agreement, (C) the term "Corporation" for all purposes of
this Rights Agreement shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the provisions
of Section 11 hereof shall apply only to such Principal Party
following the first occurrence of a Section 13 Event, and (D) such
Principal Party shall take such steps (including, but not limited
to, the reservation of a sufficient number of shares of its Common
Stock in accordance with Section 9 hereof) in connection with the
consummation of any such transaction as may be necessary to assure
that the provisions hereof shall thereafter be applicable, as
nearly as reasonably may be, in relation to its shares of Common
Stock thereafter deliverable upon the exercise of the Rights,
provided that, upon the subsequent occurrence of any merger,
consolidation, sale of all or substantially all of the assets,
recapitalization, reclassification of shares, reorganization or
other extraordinary transaction in respect of such Principal Party,
each holder of a Right shall thereupon be entitled to receive, upon
exercise of a Right and payment of the Purchase Price, such cash,
shares, rights, warrants and other property which such holder would
54
have been entitled to receive had he, at the time of such
transaction, owned the shares of Common Stock of the Principal
Party purchasable upon the exercise of a Right, and such Principal
Party shall take such steps (including, but not limited to,
reservation of shares of stock) as may be necessary to permit the
subsequent exercise of the Rights in accordance with the terms
hereof for such cash, shares, rights, warrants and other property
and (E) the provisions of Section 11(a)(ii) hereof shall be of no
effect following the occurrence of any Section 13 Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in
(i) or (ii) of the first sentence of Section 13(a)
hereof: (A) the Person that is the issuer of the
securities into which shares of Common Stock of the
Corporation are converted in such merger or
consolidation, or, if there is bore than one such issuer,
the issuer the Common Stock of which has the greatest
aggregate market value of shares outstanding or (B) if no
securities are so issued, (x) the Person that is the
other party to the merger, such Person survives said
merger, or, if there is more than one such Person, the
Person the Common Stock of which has the greatest
aggregate market value of shares outstanding or (y) if
the Person that is the other party to the merger does not
survive the merger, the Person that does survive the
55
merger (including the Corporation if it survives) or (z)
the Person resulting from the consolidation; and
(ii) in the case of any transaction described in
(iii) of the first sentence in Section 13(a)
hereof, the Person that is the party receiving the
greatest portion of the assets or earning power
transferred pursuant to such transaction or
transactions, or, if each Person that is a party
to such transaction or transactions receives the
same portion of the assets or earning power so
transferred or if the Person receiving the
greatest portion of the assets or earning power
cannot be determined, whichever of such Persons as
is the issuer of Common Stock having the greatest
aggregate market value of shares outstanding;
provided that in any such case described in the foregoing clause
--------
(b)(i) or (b)(ii), if the Common Stock of such Person is not at
such time or has not been continuously over the preceding 12-month
period registered under Section 12 of the Exchange Act, and (1) if
such Person is a direct or indirect Subsidiary of another Person
the Common Stock of which is and has been so registered, the term
"Principal Party" shall refer to such other Person, or (2) if such
Person is a Subsidiary, directly or indirectly, of more than one
Person, the Common Stocks of all of which are and have been so
registered, the term "Principal Party" shall refer to whichever of
56
such Persons is the issuer of the Common Stock having the greatest
aggregate market value of shares outstanding, or (3) if such Person
is owned, directly or indirectly, by a joint venture formed by two
or more Persons that are not owned, directly or indirectly, by the
same Person, the rules set forth in clauses (1) and (2) above shall
apply to each of the owners having an interest in the venture as if
the Person owned by the joint venture was a Subsidiary of both or
all of such joint venturers, and the Principal Party in each such
case shall bear the obligations set forth in this Section 13 in the
same ratio as its interest in such Person bears to the total of
such interests.
(c) The Corporation shall not consummate any consolidation,
merger, sale or transfer referred to in Section 13(a) hereof unless
prior thereto the Corporation and the Principal Party involved
therein shall have executed and delivered to the Rights Agent an
agreement confirming that the requirements of Sections 13(a) and
(b) hereof shall promptly be performed in accordance with their
terms and that such consolidation, merger, sale or transfer of
assets shall not result in a default by the Principal Party under
this Rights Agreement as the same shall have been assumed by the
Principal Party pursuant to Sections 13(a) and (b) hereof and
providing that, as soon as practicable after executing such
agreement pursuant to this Section 13, the Principal Party will:
(i) prepare and file a registration statement
under the Securities Act, if necessary, with respect to
57
the Rights and the securities purchasable upon exercise
of the Rights on an appropriate form, use its best
efforts to cause such registration statement to become
effective as soon as practicable after such filing and
use its best efforts to cause such registration statement
to remain effective (with a prospectus at all times
meeting the requirements of the Securities Act) until the
Expiration Date, and similarly comply with applicable
state securities laws;
(ii) use its best efforts, if the Common Stock of
the Principal Party shall become listed on a national
securities exchange, to list (or continue the listing of)
the Rights and the securities purchasable upon exercise
of the Rights on such securities exchange and, if the
Common Stock of the Principal Party shall not be listed
on a national securities exchange, to cause the Rights
and the securities purchasable upon exercise of the
Rights to be reported by NASDAQ or such other system then
in use;
(iii) deliver to holders of the Rights historical
financial statements for the Principal Party which comply
in all respects with the requirements for registration on
Form 10 (or any successor form) under the Exchange Act;
and
(iv) obtain waivers of any rights of first refusal
58
or preemptive rights in respect of the shares of Common
Stock of the Principal Party subject to purchase upon
exercise of outstanding Rights.
In the event that any of the transactions described in Section
13(a) hereof shall occur at any time after the occurrence of a
transaction described in Section 11(a) (ii) hereof, the Rights
which have not theretofore been exercised shall thereafter be
exercisable in the manner described in Section 13(a) hereof.
(d) Furthermore, in case the Principal Party which is to be
a party to a transaction referred to in this Section 13 has
provision in any of its authorized securities or in its Certificate
of Incorporation or By-laws or other instrument governing its
corporate affairs, which provision would have the effect of (i)
causing such Principal Party to issue, in connection with, or as a
consequence of, the consummation of a transaction referred to in
this Section 13, shares of Common Stock of such Principal Party at
less than the then Current Market Price per share (determined
pursuant to Section 11(d) hereof) or securities exercisable for, or
convertible into, Common Stock of such Principal Party at less than
such then Current Market Price (other than to holders of Rights
pursuant to this Section 13) or (ii) providing for any special
payment, tax or similar provisions in connection with the issuance
of the Common Stock of such Principal Party pursuant to the
provisions of Section 13, then, in such event, the Corporation
hereby agrees with each holder of Rights that it shall not
59
consummate any such transaction unless prior thereto the
Corporation and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing
that the provision in question of such Principal Party shall have
been cancelled, waived or amended, or that the authorized
securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the
consummation of the proposed transaction.
Section 14. Fractional Rights and Fractional Shares.
---------------------------------------
(a) The Corporation shall not be required to issue fractions
of Rights or to distribute Right Certificates which evidence
fractional Rights. If the Corporation shall not issue fractions of
Rights, in lieu of such fractional Rights, there shall be paid to
the holders of record of the Right Certificates with regard to
which such fractional Rights would otherwise be issuable an amount
in cash equal to the same fraction of the then current market value
of a whole Right. For the purposes of this Section 14(a), the then
current market value of a Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on which
fractional Rights would have been issuable, determined in the same
manner as the closing price of a share of Common Stock shall be
determined pursuant to Section 11(d) hereof.
(b) The Corporation shall not be required to issue fractions
of shares of Series R Preferred Stock or other securities of the
60
Corporation upon exercise of the Rights (other than fractions of
shares of Series R Preferred Stock which are integral multiples of
one one-hundredth of a share) or to distribute certificates which
evidence fractional shares (other than fractions of shares of
Series R Preferred Stock which are integral multiples of one one-
hundredth of a share); provided that in lieu of issuing fractions
of shares of Series R Preferred Stock, the Corporation may, at its
election, deliver depositary receipts evidencing fractions of
shares pursuant to an appropriate agreement between the Corporation
and a depositary selected by it, but only if such agreement shall
provide that the holders of such depositary receipts shall have all
of the rights, privileges and preferences to which they would be
entitled as beneficial owners of the Series R Preferred Stock. With
respect to fractional shares that are not integral multiples of one
one-hundredth of a share, if the Corporation does not issue such
fractional shares or deliver depositary receipts in lieu thereof,
there shall be paid to the holders of record of Right Certificates
at the time such Right Certificates are exercised as herein
provided an amount in cash equal to the same fraction of the then
current market value of a share of Series R Preferred Stock or
other securities of the Corporation. For purposes of this Section
14(b), the then current market value of a share of Series R
Preferred Stock or other securities of the Corporation shall be the
closing price thereof for the Trading Day immediately prior to the
date of such exercise, as determined pursuant to Section 11(d) (ii)
61
hereof or in the same manner as the closing price of a share of
Series R Preferred Stock shall be determined pursuant to Section
11(d) (ii) hereof, as the case may be.
(c) Following the occurrence of a Triggering Event, the
Corporation 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 Corporation may pay
to the registered holders of Right Certificates at the time such
Rights are exercised as herein provided an amount in cash equal to
the same fraction of the current market value of one share of
Common Stock. For purposes of this Section 14(c), the current
market value of one share of Common Stock shall be the closing
price of one share of Common Stock (as determined pursuant to
Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise.
(d) The holder of a Right by the acceptance of a Right
expressly waives his right to receive any fractional Right or any
fractional shares of Series R Preferred Stock or other securities
of the Corporation upon exercise of a Right, except as provided by
this Section 14.
Section 15. Rights of Action. All rights of action in respect
of this Rights Agreement are vested in the respective holders of
record of the Right Certificates (and, prior to the Distribution
62
Date, the holders of record of the Common Stock); and any holder of
record of any Right Certificate (or, prior to the Distribution
Date, of the Common Stock), without the consent of the Rights Agent
or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and
for his own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Corporation or any other
Person to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Right Certificate in the
manner provided in such Right Certificate and in this Rights
Agreement. Without limiting the foregoing or any remedies available
to the holders of Rights, it is specifically acknowledged that the
holders of Rights would not have an adequate remedy at law for any
breach of this Rights Agreement and, accordingly, that they will be
entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of, the
obligations of any Person subject to this Rights Agreement.
Section 16. Agreement of Right Holders. Every holder of a
Right by accepting the same consents and agrees with the
Corporation and the Rights Agent and with every other holder of a
Right that:
(a) prior to the Distribution Date, the Rights will not be
evidenced by a Right Certificate and will be transferable only in
connection with the transfer of Common Stock;
63
(b) after the Distribution Date, the Right Certificates will
be transferable only on the registry books of the Rights Agent if
surrendered at the designated office of the Rights Agent, duly
endorsed or accompanied by a proper instrument of transfer;
(c) the Corporation and the Rights Agent may deem and treat
the person in whose name the Right Certificate (or, prior to the
Distribution Date, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or
writing on the Right Certificate or the associated Common Stock
certificate made by anyone other than the Corporation or the Rights
Agent or the transfer agent of the Common Stock) for all purposes
whatsoever, and neither the Corporation nor the Rights Agent shall
be affected by any notice to the contrary; and
(d) notwithstanding anything in this Rights Agreement to the
contrary, neither the Corporation 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
Rights 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 that the Corporation must
64
use its best efforts to have any such order, decree or ruling
lifted or otherwise overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a Shareholder.
-------------------------------------------------
No holder of a Right Certificate, as such, shall be entitled
to vote, receive dividends in respect of or be deemed for any
purpose to be the holder of Series R Preferred Stock or any other
securities of the Corporation which may at any time be issuable
upon the exercise of the Rights, nor shall anything contained
herein or in any Right Certificate be construed to confer upon the
holder of any Right Certificate, as such, any of the rights of a
shareholder of the Corporation or any right to vote for the
election of directors or upon any matter submitted to shareholders
at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions
affecting shareholders, or to receive dividends or subscription
rights in respect of any such stock or securities, or otherwise,
until the Right or Rights evidenced by such Right Certificate shall
have been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
---------------------------
(a) The Corporation agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder
and from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements
65
incurred in the administration and execution of this Rights
Agreement and the exercise and performance of its duties hereunder.
The Corporation 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 to be done by
the Rights Agent in connection with the acceptance and
administration of this Rights Agreement, including the cost and
expenses of defending against any claim of liability in the
premises.
(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 Rights
Agreement in reliance upon any Right Certificate, certificate for
Series R Preferred Stock or other securities of the Corporation,
instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document believed by it to
be genuine and to be signed, executed and, where necessary,
guaranteed, verified or acknowledged, by the proper Person or
Persons.
Section 19. Merger or Consolidation or Change of Name of
--------------------------------------------
Rights Agent.
------------
(a) Any corporation into which the Rights Agent or any
66
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 or stock transfer business of the Rights Agent or
any successor Rights Agent, shall be the successor to the Rights
Agent under this Rights Agreement without the execution or filing
of any paper or any further act on the part of any of the parties
hereto, provided that such 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 Rights Agreement, any
of the Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such
Right Certificates so countersigned, and in case at that time any
of the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates
either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent, and in all such cases such Right
Certificates shall have the full force provided in the Right
Certificates and in this Rights Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have
been countersigned but not delivered, the Rights Agent may adopt
67
the countersignature under its prior name and deliver such Right
Certificates so countersigned; and in case at that time any of the
Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior
name or in its changed name; and in all such cases such Right
Certificates shall have the full force provided in the Right
Certificates and in this Rights Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
----------------------
undertakes the duties and obligations imposed by this Rights
Agreement upon the following terms and conditions, by all of which
the Corporation and the holders of Right Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Corporation), and the opinion of such
counsel shall be full and complete authorization and protection to
the Rights Agent as to any action taken or omitted to be taken by
it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Rights Agreement the Rights Agent shall deem it necessary or
desirable that any fact or matter be proved or established by the
Corporation prior to taking or suffering any action hereunder, such
fact or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved
and established by a certificate signed by the Chairman of the
68
Board, the President, any Vice Chairman, any Senior Executive Vice
President, any Executive Vice President, any Senior Vice President
or the Secretary or any Assistant Secretary of the Corporation and
delivered to the Rights Agent, and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered
in good faith by it under the provisions of this Rights 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 Rights
Agreement or in the Right Certificates (except its countersignature
thereof) or be required to verify the same, but all such statements
and recitals are and shall be deemed to have been made by the
Corporation only.
(e) The Rights Agent shall not (i) be responsible for (A) the
validity of this Rights Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or the
validity or execution of any Right Certificate (except its
countersignature thereof), (B) any breach by the Corporation of any
covenant or condition contained in this Rights Agreement or in any
Right Certificate, (C) any adjustment required under the provisions
of Section 11 or 13 hereof or (D) 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
69
exercise of Rights evidenced by Right Certificates after actual
notice of any such adjustment) or (ii) by any act hereunder be
deemed to make any representation or warranty as to the
authorization or reservation of any shares of Series R Preferred
Stock to be issued pursuant to this Rights Agreement or any Right
Certificate or as to whether any shares of Series R Preferred Stock
will, when issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Corporation agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights Agent
of the provisions of this Rights Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from the Chairman of the Board, the President, any Vice
Chairman, any Senior Executive Vice President, any Executive Vice
President, any Senior Vice President or the Secretary or any
Assistant Secretary of the Corporation, and to apply to such
officers for advice or instructions in connection with its duties,
and it shall not be liable for any action taken or suffered to be
taken by it in good faith in accordance with instructions of any
such officer.
(h) The Rights Agent and any shareholder, director, officer
70
or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Corporation or become pecuniarily
interested in any transaction in which the Corporation may be
interested, or contract with or lend money to the Corporation or
otherwise act as fully and freely as though it were not the Rights
Agent under this Rights Agreement. Nothing herein shall preclude
the Rights Agent from acting in any other capacity for the
Corporation or for any other 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 Corporation resulting from any such act,
default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
(j) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate
contained in the form of assignment or the form of election to
purchase set forth on the reverse thereof, as the case may be, has
either not been completed or indicates an affirmative response to
clause l or 2 thereof, the Rights Agent shall not take any further
action with respect to such requested exercise of transfer without
first consulting with the Corporation.
71
Section 21. Change of Rights Agent. The Rights Agent or any
----------------------
successor Rights Agent may resign and be discharged from its duties
under this Rights Agreement upon thirty days' notice in writing
mailed to the Corporation and to each transfer agent of the Common
Stock by registered or certified mail, and to the holders of the
Right Certificates by first-class mail. The Corporation may remove
the Rights Agent or any successor Rights Agent (with or without
cause) upon thirty days' notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Stock by registered or certified mail,
and to the holders of the Right Certificates by first-class mail.
If the Rights Agent shall resign or be removed or shall otherwise
become incapable of acting, the Corporation shall appoint a
successor to the Rights Agent. Notwithstanding the foregoing
provisions of this Section 21, in no event shall the resignation or
removal of a Rights Agent be effective until a successor Rights
Agent shall have been appointed and have accepted such appointment.
If the Corporation shall fail to make such appointment within a
period of thirty days after such removal or after it has been
notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right
Certificate (who shall, with such notice, submit his Right
Certificate for inspection by the Corporation), then the incumbent
Rights Agent or the holder of record of any Right Certificate may
apply to any court of competent jurisdiction for the appointment of
72
a new Rights Agent. Any successor Rights Agent, whether appointed
by the Corporation or by such a court, shall be (a) a corporation
organized and doing business under the laws of the United States or
any State thereof, in good standing, which is authorized under such
laws to exercise corporate trust or stock transfer powers and is
subject to supervision or examination by federal or state authority
and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50,000,000 or (b) an
Affiliate controlled by a corporation described in clause (a) of
this sentence. After appointment, the successor Rights Agent shall
be vested with the same powers, rights, duties and responsibilities
as if it had been originally named as Rights Agent without further
act or deed, but the predecessor Rights Agent shall deliver and
transfer to the successor Rights Agent any property at the time
held by it hereunder, and execute and deliver any further
assurance, conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment the
Corporation shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common
Stock, and mail a notice thereof in writing to the registered
holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein,
shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be.
73
Section 22. Issuance of New Right Certificates.
----------------------------------
Notwithstanding any of the provisions of this Rights Agreement or
of the Rights to the contrary, the Corporation may, at its option,
issue new Right Certificates evidencing Rights in such form as may
be approved by the Board of Directors to reflect any adjustment or
change in the Purchase Price and the number or kind or class of
shares of stock or other securities or property purchasable under
the Right Certificates made in accordance with the provisions of
this Rights Agreement. In addition, in connection with the Issuance
or sale of shares of Common Stock following the Distribution Date
and prior to the redemption or expiration of the Rights, the
Corporation may, with respect to shares of Common Stock so issued
or sold pursuant to the exercise of stock options or under any
employee plan or arrangement, or upon the exercise, conversion or
exchange of securities hereafter issued by the Corporation, or in
any other case, if deemed necessary or appropriate by the Board of
Directors, issue Right Certificates representing the appropriate
number of Rights in connection with such issuance or sale, provided
that (i) no such Right Certificate shall be issued if, and to the
extent that, the Corporation shall be advised by counsel that such
issuance would create a significant risk of material adverse tax
consequences to the Corporation 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.
74
Section 23. Redemption.
----------
(a) The Board of Directors may, at its option, at any time
prior to the earlier of (i) the close of business on the tenth day
following the Stock Acquisition Date, subject to extension by the
Board of Directors as provided in Section 26 hereof, or (ii) the
close of business on the Final Expiration Date, cause the
Corporation to redeem all but not less than all of the then
outstanding Rights at a redemption price of $0.01 per Right, as
such amount may be appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the
date hereof (such redemption price being hereinafter referred to as
the "Redemption Price"). Notwithstanding anything contained in this
Rights Agreement to the contrary, the Rights shall not be
exercisable after the first occurrence of any Section 11(a) (ii)
Event until such time as the Board of Directors' right of
redemption hereunder has expired.
(b) Immediately upon the action of the Board of Directors
ordering the redemption of the Rights, and without any further
action and without any notice, the right to exercise the Rights
will terminate and the only right thereafter of the holders of
Rights shall be to receive the Redemption Price, without any
interest thereon. Within ten days after the action of the Board of
Directors ordering the redemption of the Rights, the Corporation
shall give notice of such redemption to the holders of the then
outstanding Rights by mailing such notice to all such holders at
75
their last addresses as they appear upon the registry books of the
Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agent of the Common Stock. Any notice which
is mailed in the manner provided herein 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 and the time for such payment. The
failure to give notice required by this Section 23(b) or any defect
therein shall not affect the legality or validity of the action
taken by the Corporation.
Section 24. Notice of Proposed Actions.
--------------------------
(a) In case the Corporation, after the earlier of the
Distribution Date or the Stock Acquisition Date, shall propose (i)
to effect any of the transactions referred to in Section 11(a) (i)
hereof or to pay any dividend to the holders of record of its
Series R Preferred Stock payable in stock of any class or to make
any other distribution to the holders of record of its Series R
Preferred Stock (other than a regular quarterly cash dividend), or
(ii) to offer to the holders of record of its Series R Preferred
Stock options, warrants, or other rights to subscribe for or to
purchase shares of Series R Preferred Stock (including any security
convertible into or exchangeable for Series R Preferred Stock) or
shares of stock of any class or any other securities, options,
warrants, convertible or exchangeable securities or other rights,
76
or (iii) to effect any reclassification of its Series R Preferred
Stock or any recapitalization or reorganization of the Corporation,
or (iv) to effect the liquidation, dissolution or winding up of the
Corporation, then, in each such case, the Corporation shall give to
each holder of record of a Right Certificate, in accordance with
Section 25 hereof, notice of such proposed action, which shall
specify the record date for the purposes of such transaction
referred to in Section ll(a)(i), or such dividend or distribution,
or the date on which such reclassification, recapitalization,
reorganization, liquidation, dissolution or winding up is to take
place and the record date for determining participation therein by
the holders of record of Series R 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 ten days
prior to the record date for determining holders of record of
Series R Preferred Stock for purposes of such action, and in the
case of any such other action, at least ten days prior to the date
of the taking of such proposed action or the date of participation
therein by the holders of record of Series R Preferred Stock,
whichever shall be the earlier. The failure to give notice required
by this Section 24 or any defect therein shall not affect the
legality or validity of the action taken by the Corporation or the
vote upon any such action.
(b) In case any of the transactions referred to in Section
11(a)(ii) (A) or (C) or Section 13 of this Rights Agreement are
77
proposed after the earlier of the Distribution Date or the Stock
Acquisition Date, then, in any such case, (i) the Corporation shall
give to each holder of Rights, in accordance with Section 25
hereof, notice of the proposal of such transaction at least ten
days prior to consummating such transaction, which notice shall
specify the proposed event and the consequences of the event to
holders of Rights under Section 11(a) (ii) (A) or (C) or Section 13
hereof, as the case may be, and, upon consummating such
transaction, shall similarly give notice thereof to each holder of
Rights and (ii) all references in the preceding paragraph (a) to
Series R Preferred Stock shall be deemed thereafter to refer to
Common Stock or other securities, as appropriate.
Section 25. Notices. Notices or demands authorized by this
-------
Rights Agreement to be given or made by the Rights Agent or by the
holder of record of any Right Certificate or Right to or on behalf
of the Corporation 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:
DC Holdco, Inc.
000 Xxxxx Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx
Senior Vice President -
Assistant General Counsel
Subject to the provisions of Section 21 hereof, any notice or
78
demand authorized by this Rights Agreement to be given or made by
the Corporation or by the holder of record of any Right Certificate
or Right to or on the Rights Agent shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Corporation) as
follows:
The Bank of New York
Stock Transfer Administration
00xx Xxxxx Xxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx
Attention: Xxxxxxxx Xxxxxxx
Assistant Treasurer
Notices or demands authorized by this Rights Agreement to be given
or made by the Corporation or the Rights Agent to the holder of
record of any Right Certificate or Right shall be sufficiently
given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as it
appears upon the registry books of the Rights Agent or, prior to
the Distribution Date, on the registry books of the Transfer Agent.
Section 26. Supplements and Amendments. For as long as the
--------------------------
Rights are then redeemable and except as provided in the
penultimate sentence of this Section 26, the Corporation may in its
sole and absolute discretion, and the Rights Agent shall if the
Corporation so directs, supplement or amend any provision of this
Agreement without the approval of any holders of the Rights or the
Common Stock. At any time when the Rights are not then redeemable
79
and except as provided in the penultimate sentence of this Section
26, the Corporation may, and the Rights Agent shall if the
Corporation so directs, supplement or amend this Agreement without
the approval of any holders of Rights Certificates in order (a) to
cure any ambiguity, (b) to correct or supplement any provision
contained herein which may be defective or inconsistent with any
other provisions herein, (c) to shorten or lengthen any time period
hereunder or (d) to change or supplement the provisions hereunder
in any manner which the Corporation may deem necessary or
desirable; provided, that no such supplement or amendment shall
--------
adversely affect the interests of the holders of Right
Certificates as such (other than any Acquiring Person who became
such other than pursuant to a Permitted Transaction or an Affiliate
or Associate of such an Acquiring Person); provided, further, that
-----------------
this Rights Agreement may not be supplemented or amended to
lengthen, pursuant to clause (c) of this sentence, (i) a time
period relating to when the Rights may be redeemed or this
Agreement amended at the sole and absolute discretion of the
Corporation at such time as the Rights are not then redeemable or
(ii) any other time period unless such lengthening is for the
purpose of protecting, enhancing or clarifying the rights of, or
the benefits to, the holders of Rights as such (other than any
Acquiring Person who became such other than pursuant to a Permitted
Transaction or an Affiliate or Associate of such an Acquiring
Person). Upon the delivery of a certificate from an appropriate
80
officer of the Corporation which states that the proposed
supplement or amendment is in compliance with the terms of this
Section 26, the Rights Agent shall execute such supplement or
amendment. Notwithstanding anything contained in this Rights
Agreement to the contrary, no supplement or amendment shall be made
which changes the Redemption Price, the Final Expiration Date or,
except as contemplated herein, the number of one one-hundredths of
a share of Series R Preferred Stock for which a Right is
exercisable. Prior to the Distribution Date, the interests of the
holders of Rights shall be deemed coincident with the interests of
the holders of Common Stock.
Section 27. Successors. All of the covenants and provisions of
----------
this Rights Agreement by or for the benefit of the Corporation or
the Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
Section 28. Benefits of this Rights Agreement. Nothing in this
---------------------------------
Rights Agreement shall be construed to give to any person or
corporation other than the Corporation, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common Stock) any legal or equitable right,
remedy or claim under this Rights Agreement, and this Rights
Agreement shall be for the sole and exclusive benefit of the
Corporation, the Rights Agent and the holders of record of the
81
Right Certificates (and, prior to the Distribution Date, the Common
Stock).
Section 29. Delaware Contract. This Rights Agreement and each
-----------------
Right Certificate issued hereunder shall be deemed to be a contract
made under the laws of the State of Delaware and for all purposes
shall be governed by and construed in accordance with the laws of
such state applicable to contracts to be made and performed
entirely within such state.
Section 30. Counterparts. This Rights Agreement may be
------------
executed in any number of counterparts, 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 31. Descriptive Headings. Descriptive headings of the
--------------------
several sections of this Rights Agreement are inserted for
convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
Section 32. Determination and Actions by the Board of
-----------------------------------------
Directors, Etc.
--------------
For all purposes of this Agreement, any calculation of the
number of shares of Common Stock outstanding at any particular
82
time, including for purposes of determining the particular
percentage of such outstanding shares of Common Stock of which any
Person is the Beneficial Owner, shall be made in accordance with
the provisions of Rule l3d-3(d)(1)(i) of the General Rules and
Regulations under the Exchange Act. The Board of Directors of the
Corporation shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers
specifically granted to the Board of Directors or the Corporation
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
purpose of clause (ii) below, all omissions with respect to the
foregoing) which are done or made by the Board in good faith, shall
(i) be final, conclusive and binding on the Corporation, the Rights
Agent, the holders of the Right Certificates and all other parties,
and (ii) not subject the Board of Directors to any liability to the
holders of the Right Certificates.
Section 33. Severability. If any term, provision,
------------
covenant or restriction of this Rights Agreement is held by a court
of competent jurisdiction or other authority to be invalid,
illegal, or unenforceable, the remainder of the terms, provisions,
83
covenants and restrictions of this Rights Agreement shall remain in
full force and effect and shall in no way be affected, impaired or
invalidated.
IN WITNESS WHEREOF, the parties hereto have caused this
Rights Agreement to be duly executed, all as of the day and year
first above written.
Attest: DC HOLDCO, INC.
By: /s/ Xxxxxx X. Xxxx By: /s/ Xxxxx X. Xxxxxxxx
---------------------- ----------------------------
Name: Xxxxxx X. Xxxx Name: Xxxxx X. Xxxxxxxx
Title: Corporate Secretary Title: Senior Vice President
Assistant General Counsel
Attest: THE BANK OF NEW YORK
By: /s/ Xxxxx X. Brennnan By: /s/ Xxxxxxx Xxxxxxxxx
--------------------- ---------------------
Name: Xxxxx X. Xxxxxxx Name: Xxxxxxx Xxxxxxxxx
Title: Vice President Title: Vice President
EXHIBIT A
CERTIFICATE OF THE VOTING POWERS, DESIGNATION, PREFERENCES
AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL
RIGHTS, AND THE QUALIFICATIONS, LIMITATIONS OR
RESTRICTIONS THEREOF, WHICH HAVE NOT BEEN SET
FORTH IN THE RESTATED CERTIFICATE OF
INCORPORATION OR IN ANY AMENDMENT
THERETO, OF THE SERIES R
PREFERRED STOCK
($.01 Par Value Per Share)
OF
DC HOLDCO, INC.
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
The undersigned hereby certifies that the following resolution was adopted
by the Board of Directors of DC Holdco, Inc., a Delaware corporation (the
"Corporation"), on November 8, 1995:
RESOLVED, that pursuant to authority conferred on the Board of Directors of
the Corporation by its Restated Certificate of Incorporation, a Series R
Preferred Stock of the Corporation is created and the designation and amount
thereof and the voting powers, preferences and relative, participating, optional
or other special rights of the shares of such series, and the qualifications,
limitations or restrictions thereof, are as follows:
Section 1. Designation and Amount. The shares of such series shall be
----------------------
designated "Series R Preferred Stock" ("Series R
2
Preferred Stock") and the number of shares constituting such series shall be
8,000,000. Shares of Series R Preferred Stock shall have a par value of $.01
per share.
Section 2. Dividends and Distributions.
---------------------------
(A) Subject to the provisions for adjustment hereinafter set forth, the
holders of shares of Series R Preferred Stock shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available for the purpose, (i) cash dividends in an amount per share (rounded to
the nearest cent) equal to 100 times the aggregate per share amount of all cash
dividends declared or paid on the Common Stock, $.01 par value per share, of the
Corporation ("Common Stock") and (ii) a preferential cash dividend (a
"Preferential Dividend"), if any, on the fifteenth day of January, April, July
and October of each year (each a "Quarterly Dividend Payment Date"), commencing
on the first Quarterly Dividend Payment Date after the first issuance of a share
or fraction of a share of Series R Preferred Stock, in an amount equal to $1.00
per share of Series R Preferred Stock less the per share amount of all cash
dividends declared on the Series R Preferred Stock pursuant to clause (i) of
this sentence since the immediately preceding Quarterly Dividend Payment Date
or, with respect to the first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series R Preferred Stock. In
the event the Corporation shall, at any time
3
after the issuance of any share or fraction of a share of series R Preferred
Stock, make any distribution on the shares of Common Stock, whether by way of a
dividend or a reclassification of stock, a recapitalization, reorganization or
partial liquidation of the Corporation or otherwise, which is payable in cash or
any debt security, debt instrument, real or personal property or any other
property (other than cash dividends subject to clause (i) of the immediately
preceding sentence and other than a distribution of shares of Common Stock or
other capital stock of the Corporation and other than a distribution of rights
or warrants to acquire any such share, including any debt security convertible
into or exchangeable for any such share, at a price less than the Current Market
Price of such share), then and in each such event the Corporation shall
simultaneously pay on each then outstanding share of Series R Preferred Stock of
the Corporation a distribution, in like kind, of 100 times (subject to the
provisions for adjustment hereinafter set forth) such distribution paid on a
share of Common Stock. The dividends and distributions on the Series R Preferred
Stock to which holders thereof are entitled pursuant to clause (i) of the first
sentence of this paragraph and the second sentence of this paragraph are
hereinafter referred to as "Participating Dividends," and the multiple of cash
and non-cash dividends on the Common Stock applicable to the determination of
the Participating Dividends, which shall be 100 initially but shall be adjusted
from time to time as hereinafter provided, is hereinafter referred to as the
4
"Dividend Multiple." In the event the Corporation shall at any time after
November 8, 1995 declare or pay any dividend or make any distribution on Common
Stock payable in shares of Common Stock, or effect a subdivision or split or a
combination, consolidation or reverse split of the outstanding shares of Common
Stock into a greater or lesser number of shares of Common Stock, then in each
such event the Dividend Multiple thereafter applicable to the determination of
the amount of Participating Dividends which holders of shares of Series R
Preferred Stock shall be entitled to receive shall be the Dividend Multiple
applicable immediately prior to such event multiplied by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) The Corporation shall declare each Participating Dividend at the same
time it declares any cash or non-cash dividend or distribution on the Common
Stock in respect of which a Participating Dividend is required to be paid. No
cash or non-cash dividend or distribution on the Common Stock in respect of
which a Participating Dividend is required shall be paid or set aside for
payment on the Common Stock unless a Participating Dividend in respect of such
dividend or distribution on the Common Stock shall be simultaneously paid or set
aside for payment on the Series R Preferred Stock.
5
(C) Preferential Dividends shall begin to accumulate on outstanding shares
of Series R Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issuance of any shares of Series R Preferred Stock.
Accumulated but unpaid Preferential Dividends shall cumulate but shall not bear
interest. Preferential Dividends paid on the shares of Series R Preferred Stock
in an amount less than the total amount of such dividends at the time
accumulated and payable on such shares shall be allocated pro rata on a share-
by-share basis among all such shares at the time outstanding.
Section 3. Voting Rights. The holders of shares of Series R Preferred
-------------
Stock shall have the following voting rights:
(A) Each share of Series R Preferred Stock shall entitle the holder thereof
to one hundred votes on all matters submitted to a vote of the stockholders of
the Corporation. The number of votes which a holder of Series R Preferred Stock
is entitled to cast, as the same may be adjusted from time to time as
hereinafter provided, is hereinafter referred to as the "Vote Multiple". In the
event the Corporation shall at any time after November 8, 1995 declare or pay
any dividend on Common Stock payable in shares of Common Stock, or effect a
subdivision or split or a combination, consolidation or reverse split of the
outstanding shares of Common Stock into a greater or lesser number of shares of
Common Stock, then in each such case the Vote Multiple thereafter applicable to
the determination of the number
6
of votes per share to which holders of shares of Series R Preferred Stock shall
be entitled after such event shall be the Vote Multiple immediately prior to
such event multiplied by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the holders of shares of
Series R Preferred Stock and the holders of shares of Common Stock shall vote
together as one class on all matters submitted to a vote of stockholders of the
Corporation.
(C) If at the time of any annual meeting of stockholders for the election
of directors a default in preference dividends on the Series R Preferred Stock
shall exist, the number of directors constituting the Board of Directors of the
Corporation shall be increased by two, and the holders of the Series R Preferred
Stock, together with the holders of any other series of Preferred Stock of the
Corporation who shall have been granted voting rights to elect directors upon a
default in the payment of dividends by the Corporation (collectively with the
holders of the Series R Preferred Stock, the "Preferred Stockholders"), shall
have the right at such meeting, voting together as a single class without regard
to series, to the exclusion of the holders of Common Stock, to elect two
directors of the Corporation to fill such newly created directorships. Such
right shall continue until there are no dividends in arrears upon
7
the Series R Preferred Stock. Each director elected by the Preferred
Stockholders (herein called a "Preferred Director") shall continue to serve as
such director for the full term for which he shall have been elected,
notwithstanding that prior to the end of such term a default in preference
dividends shall cease to exist. Any Preferred Director may be removed by, and
shall not be removed without cause except by, the vote of the Preferred
Stockholders, voting together as a single class without regard to series, at a
meeting of the stockholders, or of the Preferred Stockholders, called for the
purpose. So long as a default in any preference dividends on the Series R
Preferred Stock shall exist (i) any vacancy in the office of a Preferred
Director may be filled (except as provided in the following clause (ii)) by an
instrument in writing signed by the remaining Preferred Director and filed with
the Corporation and (ii) in case of the removal of any Preferred Director, the
vacancy may be filed by the vote of the Preferred Stockholders, voting together
as a single class without regard to series, at the same meeting at which such
removal shall be voted. Each director appointed as aforesaid by the remaining
Preferred Director shall be deemed, for all purposes hereof, to be a Preferred
Director. Whenever the term of office of the Preferred Directors shall end and a
default in preference dividends shall no longer exist, the number of directors
constituting the Board of Directors shall be reduced by two. For the purposes
hereof, a "default in preference dividends" on the Series R Preferred Stock
shall be deemed to have occurred
8
whenever the amount of accrued dividends upon the Series R Preferred Stock shall
be equivalent to six full quarter-yearly dividends or more and, having so
occurred, such default shall be deemed to exist thereafter until, but only
until, all accrued dividends on all shares of Series R Preferred Stock then
outstanding shall have been paid to the end of the last preceding quarterly
dividend period.
(D) Except as otherwise required by law or set forth herein, holders of
Series R Preferred Stock shall have no special voting rights and their consent
shall not be required (except to the extent they are entitled to vote with
holders of Common Stock as set forth herein) for the taking of any corporate
action.
Section 4. Certain Restrictions.
--------------------
(A) Whenever Preferential Dividends or Participating Dividends are in
arrears or the Corporation shall be in default in payment thereof, thereafter
and until all accumulated and unpaid Preferential Dividends and Participating
Dividends, whether or not declared, on shares of Series R Preferred Stock
outstanding shall have been paid or set aside for payment in full, and in
addition to any and all other rights which any holder of shares of Series R
Preferred Stock may have in such circumstances, the Corporation shall not
(i) declare or pay dividends on, make any other distributions on or
redeem or purchase or otherwise acquire for consideration any shares of
stock ranking
9
junior (either as to dividends or upon liquidation, dissolution or winding
up) to the Series R Preferred Stock;
(ii) declare or pay dividends or make any other distributions on any
shares of stock ranking on a parity as to dividends with the Series R
Preferred Stock, unless dividends are paid ratably on the Series R
Preferred Stock 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) except as permitted by subparagraph (iv) of this paragraph (A),
redeem or purchase or otherwise acquire for consideration shares of any
stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series R Preferred Stock, provided that
the Corporation may at any time redeem, purchase or otherwise acquire
shares of any such parity stock in exchange for shares of any stock of the
Corporation ranking junior (both as to dividends and upon liquidation,
dissolution or winding up) to the Series R Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares of Series
R Preferred Stock, or any shares of stock ranking on a parity with the
Series R Preferred Stock (either as to dividends or
10
upon liquidation, dissolution or winding up), 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.
(C) The Corporation shall not issue any shares of Series R Preferred
Stock except upon exercise of Rights issued pursuant to that certain Rights
Agreement dated as of November 8, 1995 between the Corporation and The Bank of
New York (the "Rights Agreement"), a copy of which is on file at the principal
executive office of the Corporation and shall be made available to holders of
record of Common Stock or Series R Preferred Stock without charge upon written
request there for addressed to the Secretary of the Corporation. Notwithstanding
the foregoing sentence, nothing contained in the provisions hereof shall
11
prohibit or restrict the Corporation from issuing for any purpose any series of
Preferred Stock with rights and privileges similar to, different from, or
greater than those of the Series R Preferred Stock.
Section 5. Reacquired Shares. Any shares of Series R Preferred Stock
-----------------
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. The
Corporation shall cause all such shares upon their retirement and cancellation
to become authorized but unissued shares of Preferred Stock, without designation
as to series, and such shares may be reissued as part of a new series of
Preferred Stock to be created by resolution or resolutions of the Board of
Directors.
Section 6. Liquidation, Dissolution or Winding Up. Upon any voluntary
--------------------------------------
or involuntary liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (i) to the holders of shares of stock ranking junior
to the Series R Preferred Stock (upon liquidation, dissolution or winding up)
unless the holders of shares of Series R Preferred Stock shall have received,
subject to adjustment as hereinafter provided, the greater of either (A) $100.00
per share plus an amount equal to accumulated and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment, or
(B) the
12
amount equal to 100 times the aggregate amount to be distributed per share to
holders of Common Stock, or (ii) to the holders of stock ranking on a parity
upon liquidation, dissolution or winding up with the Series R Preferred Stock,
unless simultaneously therewith distributions are made ratably on the Series R
Preferred Stock and all other shares of such parity stock in proportion to the
total amounts to which the holders of shares of Series R Preferred Stock are
entitled under clause (i) (A) of this sentence and to which the holders of such
parity shares are entitled, in each case upon such liquidation, dissolution or
winding up. The amount to which holders of Series R Preferred Stock shall be
entitled upon liquidation, dissolution or winding up of the Corporation pursuant
to clause (i) (B) of the foregoing sentence is hereinafter referred to as the
"Participating Liquidation Amount," and the multiple of the amount to be
distributed to holders of shares of Common Stock upon the liquidation,
dissolution or winding up of the Corporation applicable pursuant to said clause
to the determination of the Participating Liquidation Amount, which shall be 100
initially but shall be adjusted from time to time as hereinafter provided, is
hereinafter referred to as the "Liquidation Multiple." In the event the
Corporation shall at any time after November 8, 1995 declare or pay any dividend
on Common Stock payable in shares of Common Stock, or effect a subdivision or
split or a combination, consolidation or reverse split of the outstanding shares
of Common Stock into a greater or
13
lesser number of shares of Common Stock, then in each such case the Liquidation
Multiple thereafter applicable to the determination of the Participating
Liquidation Amount to which holders of Series R Preferred Stock shall be
entitled after such event shall be the Liquidation Multiple applicable
immediately prior to such event multiplied by a fraction the numerator of which
is the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 7. Certain Reclassification and Other Events.
-----------------------------------------
(A) In the event that holders of shares of Common Stock receive after
November 8, 1995 in respect of their shares of Common Stock any share of capital
stock of the Corporation (other than any share of Common Stock of the
Corporation), whether by way of reclassification, recapitalization,
reorganization, dividend or other distribution or otherwise ("Transaction"),
then in each such event the dividend rights, rights upon the liquidation,
dissolution or winding up of the Corporation and voting rights of the shares of
Series R Preferred Stock shall be adjusted so that after such event the holders
of Series R Preferred Stock shall be entitled, in respect of each share of
Series R Preferred Stock held, in addition to such rights in respect thereof to
which such holder was entitled immediately prior to such adjustment, to (i) such
additional
14
dividends as equal the Dividend Multiple in effect immediately prior
to such Transaction multiplied by the additional dividends which the holder of a
share of Common Stock shall be entitled to receive by virtue of the receipt in
the Transaction of such capital stock, (ii) such additional distributions upon
liquidation, dissolution or winding up of the Corporation as equal the
Liquidation Multiple in effect immediately prior to such Transaction multiplied
by the additional amount which the holder of a share of Common Stock shall be
entitled to receive upon liquidation, dissolution or winding up of the
Corporation by virtue of the receipt in the Transaction of such capital stock,
as the case may be, all as provided by the terms of such capital stock and (iii)
such additional voting rights as equal the Vote Multiple in effect immediately
prior to such Transaction multiplied by the additional voting rights which the
holder of a share of Common Stock shall be entitled to receive by virtue of the
receipt in the Transaction of such capital stock.
(B) In the event that holders of shares of Common Stock receive after
November 8, 1995 in respect of their shares of Common Stock any right or warrant
to purchase Common Stock (including as such a right, for all purposes of this
paragraph, any security convertible into or exchangeable for Common Stock) at a
purchase price per share less than the Current Market Price (as hereinafter
defined) of a share of Common Stock on the date of issuance of such right or
warrant, then in each such event the dividend rights, rights upon the
liquidation, dissolution or
15
winding up of the Corporation and voting rights of the shares of Series R
Preferred Stock shall each be adjusted so that after such event the Dividend
Multiple and the Liquidation Multiple and the Vote Multiple shall each be the
product of the Dividend Multiple, the Liquidation Multiple and the Vote
Multiple, as the case may be, in effect immediately prior to such event
multiplied by a fraction the numerator of which shall be the number of shares of
Common Stock outstanding immediately before such issuance of rights or warrants
plus the maximum number of shares of Common Stock which could be acquired upon
exercise in full of all such rights or warrants and the denominator of which
shall be the number of shares of Common Stock outstanding immediately before
such issuance of rights or warrants plus the number of shares of Common Stock
which could be purchased, at the Current Market Price of the Common Stock at the
time of such issuance, by the maximum aggregate consideration payable upon
exercise in full of all such rights or warrants.
(C) In the event that holders of shares of Common Stock receive after
November 8, 1995 in respect of their shares of Common Stock any right or warrant
to purchase capital stock of the Corporation (other than shares of Common
Stock), including as such a right, for all purposes of this paragraph, any
security convertible into or exchangeable for capital stock of the Corporation
(other than Common Stock), at a purchase price per share less than the Current
Market Price of such shares of capital stock on the date of issuance of such
right or warrant,
16
then in each such event the dividend rights, rights upon liquidation,
dissolution or winding up of the Corporation and the voting rights of the shares
of Series R Preferred Stock shall each be adjusted so that after such event each
holder of a share of Series R Preferred Stock shall be entitled, in addition
to such rights in respect thereof to which such holder was entitled immediately
prior to such event, to receive (i) such additional dividends as equal the
Dividend Multiple in effect immediately prior to such event multiplied, first,
by the additional dividends to which the holder of a share of Common Stock shall
be entitled upon exercise of such right or warrant by virtue of the capital
stock which could be acquired upon such exercise and multiplied again by the
Discount Fraction (as hereinafter defined), (ii) such additional distributions
upon liquidation, dissolution or winding up of the Corporation as equal the
Liquidation Multiple in effect immediately prior to such event multiplied,
first, by the additional amount which the holder of a share of Common Stock
shall be entitled to receive upon liquidation, dissolution or winding up of the
Corporation upon exercise of such right or warrant by virtue of the capital
stock which could be acquired upon such exercise and multiplied again by the
Discount Fraction and (iii) such additional voting rights as equal the Vote
Multiple in effect immediately prior to such event multiplied, first, by the
additional voting rights to which the holder of a share of Common Stock shall be
entitled upon exercise of such right or warrant by virtue of the capital stock
17
which could be acquired upon such exercise and multipled again by the Discount
Fraction. For purposes of this paragraph, the "Discount Fraction" shall be a
fraction the numerator of which shall be the difference between the Current
Market Price (as hereinafter defined) of a share of the capital stock subject to
a right or warrant distributed to holders of shares of Common Stock as
contemplated by this paragraph immediately after the distribution thereof and
the purchase price per share for such share of capital stock pursuant to such
right or warrant and the denominator of which shall be the Current Market Price
of a share of such capital stock immediately after the distribution of such
right or warrant.
(D) For purposes of this Section 7, the "Current Market Price" of a
share of capital stock of the Corporation (including a share of Common Stock) on
any date shall be deemed to be the average of the daily closing prices per share
thereof over the 30 consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date, provided that in the event that such
Current Market Price of any such share of capital stock is determined during a
period which includes any date that is within 30 Trading Days after the ex-
dividend date for (i) a dividend or distribution on stock payable in shares of
such stock or securities convertible into shares of such stock or (ii) any
subdivision, split, combination, consolidation, reverse stock split or
reclassification of such stock, then in each such event, the Current Market
Price shall be appropriately adjusted by the
18
Board of Directors to reflect the Current Market Price of such stock to take
into account ex-dividend trading. The closing price for any day shall be the
last sale price, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the shares 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 are listed or admitted to trading or, if the shares 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 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 shares selected by the Board of
Directors. The term "Trading Day" shall mean a day on which the principal
national securities exchange on which the shares are listed or admitted to
trading is open for the transaction of business or, if the shares are not listed
or admitted to trading on any national securities
19
exchange, on which the New York Stock Exchange or such other national securities
exchange as may be selected by the Board of Directors is open. If the shares are
not publicly held or not so listed or traded on any day within the period of 30
Trading Days applicable to the determination of Current Market Price thereof as
aforesaid, "Current Market Price" shall mean the fair market value thereof per
share as determined in good faith by the Board of Directors. in either case
referred to in the foregoing sentence, the determination of Current Market Price
shall be described in a statement filed with the Secretary of the Corporation.
Section 8. Consolidation, Merger, etc. In the event that the
--------------------------
Corporation shall enter into any consolidation, merger, combination or other
transaction in which shares of Common Stock are exchanged for or changed into
other stock or securities, cash and/or any other property, then in any such
event each outstanding share of Series R Preferred Stock shall at the same time
be similarly exchanged for or changed into the aggregate amount of stock,
securities, cash and other property (payable in like kind), as the case may be,
for which or into which each share of Common Stock is changed or exchanged
multiplied by the higher of the Dividend Multiple, the Liquidation Multiple or
the Vote Multiple in effect immediately prior to such event.
20
Section 9. Effective Time of Adjustments.
-----------------------------
(A) Adjustments to the Series R Preferred Stock required by the
provisions hereof shall be effective as of the time at which the event requiring
such adjustments occurs.
(B) The Corporation shall give prompt written notice to each holder of
a share of Series R Preferred Stock of the effect on any such shares of any
adjustment to the dividend rights or rights upon liquidation, dissolution or
winding up of the Corporation required by the provisions hereof. Notwithstanding
the foregoing sentence, the failure of the Corporation to give such notice shall
not affect the validity of or the force or effect of or the requirement for such
adjustment.
Section 10. No Redemption. The shares of Series R Preferred Stock
-------------
shall not be redeemable at the option of the Corporation or any holder thereof.
Notwithstanding the foregoing sentence of this Section, the Corporation may
acquire shares of Series R Preferred Stock in any other manner permitted by law,
the provisions of this Certificate of Designation and the Restated Certificate
of Incorporation.
Section 11. Banking. Unless otherwise provided in the Restated
-------
Certificate of Incorporation or a Certificate of Designation relating to a
subsequent series of Preferred Stock of the Corporation, the Series R Preferred
Stock shall rank junior to all other series of the Corporation's Preferred Stock
as to
21
the payment of dividends and the distribution of assets on liquidation,
dissolution or winding up and senior to the Common Stock.
Section 12. Amendment. After the Distribution Date (as defined in the
---------
Rights Agreement), the provisions hereof and of the Restated Certificate of
incorporation shall not be amended in any manner which would materially affect
the rights, privileges or powers of the Series R Preferred Stock without, in
addition to any other vote of stockholders required by law, the affirmative vote
of the holders of 80% or more of the outstanding shares of Series R Preferred
Stock, voting together as a single class.
IN WITNESS WHEREOF, DC Holdco, Inc. has caused this Certificate to be
signed and attested on November 8, 1995.
By:_____________________________
Name: Xxxxx X. Xxxxxxxx
Title: Senior Vice President
Assistant General Counsel
ATTEST:
By__________________________
Name: Xxxxxx X. Xxxx
Title: Corporate Secretary
EXHIBIT B
(Form of Right Certificate)
Certificate No. _______ Rights
NOT EXERCISABLE AFTER JUNE 30, 1999 OR EARLIER IF REDEEMED. THE RIGHTS
ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE CORPORATION, AT $0.01
PER RIGHT (SUBJECT TO ADJUSTMENT) ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. IF THE RIGHTS REPRESENTED BY THIS CERTIFICATE ARE ISSUED TO
A PERSON WHO IS AN ACQUIRING PERSON OR AN ASSOCIATE OR AFFILIATE OF AN
ACQUIRING PERSON OR A TRANSFEREE OF THE RIGHTS PREVIOUSLY OWNED BY
SUCH PERSONS, THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY
MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION
11(a) (ii) OF THE RIGHTS AGREEMENT.
Right Certificate
DC HOLDCO, INC.
This certifies that , or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement dated as of November 8, 1995 ("Rights Agreement") between DC Holdco,
Inc., a Delaware corporation (the "Corporation"), and The Bank of New York (the
"Rights Agent"), to purchase from the Corporation at any time after the
Distribution Date (as that term is defined in the Rights Agreement) and prior to
5:00 P.M. (New York City time) on June 30, 1999 at the principal office of the
Rights Agent, or its successors as Rights Agent, in New York, New York, one one-
hundredth (1/100) of a fully paid and nonassessable
2
share of Series R Preferred Stock, $.01 par value per share, ("Series R
Preferred Stock") of the Corporation at a purchase price of $350.00 per one one-
hundredth of a share; as the same may from time to time be adjusted in
accordance with the Rights Agreement (the "Purchase Price"), upon presentation
and surrender of this Right Certificate with the Form of Election to Purchase
duly executed.
As provided in the Rights Agreement, the Purchase Price and the number
of one one-hundredth of a share of Series R Preferred Stock which may be
purchased upon the exercise of the Rights evidenced by this Right Certificate
are subject to modification and adjustment upon the happening of certain events
and, upon the happening of certain events, securities other than shares of
Series R Preferred Stock, or other property, may be acquired upon exercise of
the Rights evidenced by this Right Certificate, as provided by the Rights
Agreement.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
incorporated herein by reference and in and a part hereof, and reference to the
Rights Agreement is made for a full description of the rights, limitations of
rights, obligations, duties and immunities of the Rights Agent, the Corporation
and the holders of record of Right Certificates. Copies of the Rights Agreement
are on file at the principal executive office of the Corporation.
3
This Right Certificate, with or without other Right Certificates, upon
surrender at the shareholder services office of the Rights Agent designated for
that purpose, may be exchanged for another Right Certificate or Right
Certificates of like tenor and date evidencing Rights entitling the holder of
record to purchase the same aggregate number of shares of Series R Preferred
Stock as the Rights evidenced by the Right Certificate or Right Certificates
surrendered entitled that holder to purchase. If the Right Certificate is
exercised in part, the holder shall be entitled to receive, upon surrender
hereof, another Right Certificate or Right Certificates for the number of whole
not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this of Directors at its option at a redemption price of
Certificate may be redeemed by the Corporation by action of the Board $0.01 per
Right at any time prior to the earlier of the close of business on (i) the tenth
day following the Stock Acquisition Date (as that time period may be extended
pursuant to the Rights Agreement) and (ii) the Final Expiration date.
No fractional shares of Series R Preferred Stock or other securities
of the Corporation are required to be issued upon the exercise of any Right or
Rights evidenced hereby (other than fractions of shares of Series R Preferred
Stock which are integral multiples of one one-hundredth of a share), and in lieu
thereof, as provided in the Rights Agreement, a cash payment may
4
be made. As provided in the Rights Agreement, fractions of shares of Series R
Preferred Stock may, at the election of the Corporation, be evidenced by
depositary receipts.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Series R Preferred
Stock or of any other securities of the Corporation which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a shareholder of the Corporation or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action or to
receive notice of meetings or other actions affecting shareholders or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by this Right Certificate shall have been exercised as provided in the
Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
5
WITNESS the facsimile signature of the proper officers of the
Corporation and its corporate seal. Dated as of ___________ __, 19__.
ATTEST: DC HOLDCO, INC.
_____________________ By: _____________________
Secretary Title:
Countersigned:
THE BANK OF NEW YORK,
as Rights Agent
By: _____________________
Authorized signature
(Form of Reverse Side of Right Certificate)
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if that holder desires to transfer the
Rights represented by the Right Certificate)
FOR VALUE RECEIVED ______________________ hereby sells, assigns and
transfers unto ________________________
___________________________________________________
(Please print name and address of transferee)
___________________________________________________
__________ Rights evidenced by this Right Certificate, together with all right,
title and interest therein, and does hereby irrevocably constitute and appoint
Attorney to transfer this Right Certificate on the books of DC Holdco, Inc. with
full power of substitution.
Dated:_____________ __, 19__
___________________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are 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
those 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 Right Certificate from any
Person who is or was an Acquiring Person or an Affiliate or Associate of an
Acquiring Person or any transferee of such Persons.
Dated: , 19
___________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment must correspond to the name as written
upon the face of this Right Certificate in every particular, without alteration,
enlargement or any other change.
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed by the registered holder if that holder desires to exercise the
Rights represented by the Right Certificate)
To: DC Holdco, Inc.
The undersigned hereby irrevocably elects to exercise _______________
Rights represented by this Right Certificate to purchase the shares of Series R
Preferred Stock issuable upon the exercise of those Rights and requests that
certificates for those share(s) be issued in the name:
Please insert social security
or other identifying number
_____________________________________________________
(Please print name and address)
_____________________________________________________
If the number of Rights exercised does not constitute all of the Rights
evidenced by this Right Certificate, a new Right Certificate for the balance of
Rights remaining shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
____________________________________________________
(Please print name and address)
____________________________________________________
Dated: ____________ __, 19__
_______________________
Signature
Signature must conform in all respects to
name of holder as specified on the face of this Right Certificate)
Signature Guaranteed:
Certificate
-----------
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of an Acquiring Person (as those terms are defined
pursuant to 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 Right Certificate from
any Person who is or was an Acquiring Person or an Affiliate or Associate of an
Acquiring Person or any transferee of such Persons.
Dated: , 19 _______________________
Signature
Signature Guaranteed:
EXHIBIT C
DC HOLDCO, INC.
SUMMARY OF RIGHTS TO PURCHASE
SERIES R PREFERRED STOCK
On November 8, 1995, the Board of Directors of DC Holdco., Inc. (the
"Corporation") declared a dividend of one Right for each outstanding share of
Common Stock of the Corporation (the "Common Stock"). The dividend is payable on
November 8, 1995 to holders of record of Common Stock at the close of business
on that date. Each Right entitles the registered holder to purchase from the
Corporation one one-hundredth (1/100) of a share of Series R Preferred Stock at
an initial Purchase Price of $350.00, subject to adjustment. The terms and
conditions of the Rights are contained in a Rights Agreement between the
Corporation and The Bank of New York, as Rights Agent.
As discussed below, initially the Rights will not be exercisable,
-----------------------------------------------------------------
certificates for the Rights will not be issued, and the Rights will
-------------------------------------------------------------------
automatically trade with the Common Stock.
-----------------------------------------
Until the close of business on the Distribution Date, which will occur
on the earlier of (i) the tenth day following a public announcement that a
person or group of affiliated or associated persons ("Acquiring Person") has
acquired, or obtained the right to acquire, beneficial ownership of 25% or more
of the outstanding Common Stock (the "Stock Acquisition Date") or (ii) a date
fixed by the Board of Directors which is not later than the nineteenth business
day after the commencement by any person or group of, or the first public
announcement of the intent of any person or group to commence, a tender or
exchange offer which would result in that person or group owning 25% or more of
the outstanding Common Stock, the Rights will be represented by and transferred
only with the Common Stock. With respect to certificates for Common Stock
outstanding as of November 8, 1995, until the Distribution Date, the Rights will
be evidenced by such certificates and this Summary. Until the Distribution Date,
new certificates issued for Common Stock after November 8, 1995 will contain a
legend incorporating the Rights Agreement by reference. The surrender for
transfer of any of the Corporation's Common Stock certificates, with or without
this Summary, will also constitute the transfer of the Rights associated with
the Common Stock represented by those certificates. As soon as practicable
following the Distribution Date, separate Right Certificates will be mailed to
holders of record of Common Stock at the close of business on the Distribution
Date, and thereafter the Right Certificates alone will evidence the Rights.
2
The Rights are not exercisable until the Distribution Date. The Rights
will expire at the close of business on June 30, 1999, unless redeemed earlier
as described below.
The Series R Preferred Stock will be nonredeemable and, unless
otherwise provided in connection with the creation of a subsequent series of
preferred stock, subordinate to all other series of the Corporation's preferred
stock. The Series R Preferred Stock may not be issued except upon exercise of
the Rights. Each share of Series R Preferred Stock will be entitled to receive,
when, as and if declared, a quarterly dividend in an amount equal to the greater
of $1.00 per share or 100 times the quarterly cash dividend declared on the
Corporation's Common Stock. In addition, the Series R Preferred Stock is
entitled to 100 times any non-cash dividends (other than dividends payable in
equity securities) declared on the Common Stock, in like kind. In the event of
liquidation, the holders of Series R Preferred Stock will be entitled to receive
a liquidation payment in an amount equal to the greater of $100.00 per share or
100 times the liquidation payment made per share of Common Stock. Each share of
Series R Preferred Stock will have 100 votes, subject to adjustment, voting
together with the Common Stock and not as a separate class unless otherwise
required by law or the Corporation's Restated Certificate of Incorporation. In
the event of any merger, consolidation or other transaction in which common
shares are exchanged, each share of Series R Preferred Stock will be entitled to
receive 100 times the amount received per share of Common Stock. The rights of
the Series R Preferred Stock as to dividends, voting rights and liquidation are
protected by antidilution provisions.
The Purchase Price payable and the number of shares of Series R
Preferred Stock or other securities or property issuable upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution (i) in
the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Series R Preferred Stock, (ii) upon the grant to
holders of the Series R Preferred Stock of certain rights or warrants to
subscribe for Series R Preferred Stock or convertible securities at less than
the current market price of the Series R Preferred Stock or (iii) upon the
distribution to holders of the Series R Preferred Stock of evidences of
indebtedness or assets (excluding regular cash dividends and dividends payable
in Series R Preferred Stock) or of subscription rights or warrants.
If (i) any person becomes the beneficial owner of 25% or more of the
then outstanding shares of Common Stock, other than pursuant to a purchase or
series of related purchases of shares of Common Stock that the Board of
Directors, taking into account the long-term value of the Corporation and all
other factors that the Board of Directors considers relevant, determines to be
fair to and otherwise in the best interests of
3
the holders of Common Stock (a "Permitted Transaction"), or (ii) any Acquiring
Person or any of its affiliates or associates engages in one or more "self-
dealing" transactions as described in the Rights Agreement, then each holder of
a Right, other than the Acquiring Person, will have the right to receive, upon
payment of the Purchase Price, in lieu of Series R Preferred Stock, a number of
shares of Common Stock having a market value equal to twice the Purchase Price.
To the extent that insufficient shares of Common Stock are available for the
exercise in full of the Rights, holders of Rights will receive upon exercise
shares of Common Stock to the extent available and then cash, property or other
securities of the Corporation (which may be accompanied by a reduction in the
Purchase Price), in proportions determined by the Corporation, so that the
aggregate net value received is equal to twice the Purchase Price. Rights are
not exercisable following the acquisition of shares of Common Stock by an
Acquiring Person as described in this paragraph until the expiration of the
period during which the Rights may be redeemed as described below.
Notwithstanding the foregoing, after the occurrence of an event described in the
first sentence of this paragraph, Rights that are (or, under certain
circumstances, Rights that were) beneficially owned by an Acquiring Person will
be null and void.
Unless the Rights are redeemed earlier, if, after the Stock
Acquisition Date, the Corporation is acquired in a merger or other business
combination (in which the Corporation is not the surviving corporation or in
which any shares of Common Stock are converted or exchanged) or more than 50% of
the assets or earning power of the Corporation and its subsidiaries (taken as a
whole) are sold or transferred in one or a series of related transactions, the
Rights Agreement provides that proper provision shall be made so that each
holder of record of a Right will from and after that time have the right to
receive, upon payment of the Purchase Price, that number of shares of common
stock of the acquiring company which has a market value at the time of such
transaction equal to twice the Purchase Price.
Fractions of shares of Series R Preferred Stock may, at the election
of the Corporation, be evidenced by depositary receipts. The Corporation may
also issue cash in lieu of fractional shares of Series R Preferred Stock which
are not integral multiples of one one-hundredth of a share.
At any time until ten days following the Stock Acquisition Date
(subject to extension by the Board of Directors), the Board of Directors may
cause the Corporation to redeem the Rights in whole, but not in part, at a price
of $.01 per Right, subject to adjustment to reflect any stock split, stock
dividend or similar transaction. Immediately upon the action of the Board of
Directors authorizing redemption of the Rights, the right to exercise the Rights
will terminate, and the
4
holders of Rights will only be entitled to receive the redemption price without
any interest thereon.
As long as the Rights are redeemable, the Corporation may, except with
respect to the redemption price, the number of one one-hundredths of a share of
Series R Preferred Stock for which a Right is exercisable, or the date of
expiration of the Rights, amend the Rights in any manner, including an amendment
to extend the time period in which the Rights may be redeemed. At any time when
the Rights are not redeemable, the Corporation may amend the Rights in any
manner that does not adversely affect the interests of holders of the Rights as
such.
Until a Right is exercised, the holder, as such, will have no rights
as a stockholder of the Corporation, including without limitation the right to
vote or to receive dividends.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A. A
copy of the Rights Agreement is available free of charge from the Corporation,
000 Xxxxx Xxxxx Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000, Attention: Vice
President - Corporate and Stockholder Affairs. This summary description of the
Rights does not purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, which is incorporated in this summary
description by reference.
