EXHIBIT (E)(14)(III)
AMENDMENT NO. 2
TO
SHAREHOLDER RIGHTS AGREEMENT
This AMENDMENT NO. 2 TO THE SHAREHOLDER RIGHTS AGREEMENT (this
"AMENDMENT") between Cypress Communications, Inc., a Delaware corporation (the
"COMPANY"), and State Street Bank and Trust Company, a Massachusetts chartered
trust company (the "RIGHTS AGENT"), dated as of February 9, 2000, as amended on
March 13, 2001 (the "RIGHTS AGREEMENT"), is made as of January 9, 2002 by and
between the Company and the Rights Agent. All capitalized terms used in this
Amendment and not defined herein shall have the meaning given such terms in the
Rights Agreement.
WHEREAS, Section 27 of the Rights Agreement provides generally that for
so long as the Rights are then redeemable, the Company may, in its sole and
absolute discretion, and the Rights Agent shall, if the Company so directs,
supplement or amend any provision of the Rights Agreement in any respect without
the approval of any holders of the Rights;
WHEREAS, pursuant to Section 23 of the Rights Agreement, the Rights
generally are redeemable at any time prior to the earlier of (i) the time at
which any Person becomes an Acquiring Person or (ii) the Final Expiration Date;
WHEREAS, the Final Expiration Date has not yet occurred nor, to the
knowledge of the Company, has any Person become an Acquiring Person; and
WHEREAS, the Company and the Rights Agent desire to amend the Rights
Agreement in certain respects set forth herein.
NOW THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Amendment.
(a) Section 1 of the Rights Agreement is hereby amended
by adding the following at the end of such section:
"(kk) "APPROVED ACQUISITION" means any acquisition of
Common Stock that (i) causes a Person to become the Beneficial Owner of
(A) 15% or more of the shares of Common Stock then outstanding, or (B)
if already a Beneficial Owner of 15% or more of the shares of Common
Stock then outstanding, an additional 2% or more of the shares of
Common Stock then outstanding, and (ii) is approved in advance by a
majority of the Directors."
(b) Section 1(a) of the Rights Agreement is hereby
amended and restated in its entirety as follows:
"(a) "ACQUIRING PERSON" shall mean any Person
(as such term is hereinafter defined) who or which, together
with all Affiliates (as such term is hereinafter defined) and
Associates (as such term is hereinafter defined) of such
Person, shall be the Beneficial Owner (as such term is
hereinafter defined) of 15% or more of the shares of Common
Stock of the Company then outstanding, but shall not include
(i) the Company, (ii) any Subsidiary (as such term is
hereinafter defined) of the Company, (iii) any employee
benefit plan or compensation arrangement of the Company or any
Subsidiary of the Company or (iv) any Person holding shares of
Common Stock of the Company organized, appointed or
established by the Company or any Subsidiary of the Company
for or pursuant to the terms of any such employee benefit plan
or compensation arrangement (the Persons described in clauses
(i) through (iv) above are referred to herein as "Exempt
Persons"); provided, however, that the term "Acquiring Person"
shall not include any Grandfathered Person, unless such
Grandfathered Person at any time after the Grandfathered Time
becomes the Beneficial Owner of more than the Grandfathered
Percentage applicable to such Grandfathered Person.
Notwithstanding the foregoing, no Person shall become an
"Acquiring Person" who, alone or together with its Affiliates
or Associates becomes the Beneficial Owner of 15% or more of
the shares of Common Stock then outstanding as a result of an
Approved Acquisition; provided, however, that in the event
that a Person does not become an Acquiring Person as the
result of an Approved Acquisition, such Person nonetheless
shall become an Acquiring Person if such Person thereafter
becomes the Beneficial Owner of an additional 2% or more of
the Common Stock then outstanding, unless the acquisition of
such Common Stock is an Approved Acquisition.
Notwithstanding the foregoing, no Person shall become an
"Acquiring Person" as the result of an acquisition by the
Company of Common Stock of the Company which, by reducing the
number of shares outstanding, increases the proportionate
number of shares Beneficially Owned by such Person to 15% (or
in the case of a Grandfathered Person, the Grandfathered
Percentage applicable to such Grandfathered Person) or more of
the shares of Common Stock of the Company then outstanding;
provided, however, that if a Person shall become the
Beneficial Owner of 15% (or in the case of a Grandfathered
Person, the Grandfathered Percentage applicable to such
Grandfathered Person) or more of the shares of Common Stock of
the Company then outstanding by reason of share purchases by
the Company and shall, after such share purchases by the
Company, become the Beneficial Owner of any additional shares
(other than pursuant to a stock split, stock dividend or
similar transaction) of Common Stock of the Company and
immediately thereafter be the Beneficial Owner of 15% (or in
the case of a Grandfathered Person, the Grandfathered
Percentage applicable to such Grandfathered Person) or more of
the shares of Common Stock of the Company then outstanding,
then such Person shall be deemed to be an "Acquiring Person."
In addition, notwithstanding the foregoing, a Person shall not be an
"Acquiring Person" if the Board of Directors of the Company determines
that a Person who would otherwise be an "Acquiring Person," has become
such without intending to become an "Acquiring Person," and such Person
divests as promptly as practicable (or within such period of time as
the Board of Directors of the Company determines is reasonable) a
sufficient number of shares of Common Stock of the Company so that such
Person would no longer be an "Acquiring Person," as defined pursuant to
the foregoing provisions of this Section 1(a)."
2. Effectiveness. This Amendment shall become effective
immediately. Except as expressly amended herein, the terms and conditions of the
Agreement shall continue in full force and effect.
3. Defined terms. Capitalized terms not otherwise defined herein
shall have the meaning given to them in the Agreement.
4. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
[The Remainder of This Page Has Been Intentionally Left Blank]
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
as of the date first above written.
CYPRESS COMMUNICATIONS, INC.
By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
Title: Secretary, VP, General Counsel
EQUISERVE TRUST COMPANY, N.A.
AS SUCCESSOR RIGHTS AGENT TO
STATE STREET BANK AND
TRUST COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
