RCN CORPORATION
and
HSBC BANK USA,
as Rights Agent
Rights Agreement
Dated as of December 5, 2001
TABLE OF CONTENTS
Page
Section 1. Certain Definitions............................................1
Section 2. Appointment of Rights Agent....................................8
Section 3. Issuance of Rights Certificates................................8
Section 4. Form of Rights Certificates...................................11
Section 5. Countersignature and Registration.............................12
Section 6. Transfer, Split-Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates..................................................13
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.14
Section 8. Cancellation and Destruction of Rights Certificates...........16
Section 9. Reservation and Availability of Capital Stock.................16
Section 10. Preferred Stock Record Date...................................18
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights..............................................19
Section 12. Certificate of Adjusted Purchase Price or Number of Shares....29
Section 13. Consolidation, Merger or Sale or Transfer of Assets Cash
Flow or Earning Power.........................................30
Section 14. Fractional Rights and Fractional Shares.......................33
Section 15. Rights of Action..............................................34
Section 16. Agreement of Rights Holders...................................34
Section 17. Rights Certificate Holder Not Deemed a Stockholder............35
Section 18. Concerning the Rights Agent...................................36
Section 19. Merger or Consolidation or Change of Name of Rights Agent.....37
Section 20. Duties of Rights Agent........................................37
Section 21. Change of Rights Agent. ......................................40
Section 22. Issuance of New Rights Certificates...........................41
Section 23. Redemption and Termination....................................42
Section 24. Exchange......................................................43
Section 25. Notice of Certain Events......................................44
Section 26. Notices. .....................................................46
Section 27. Supplements and Amendments....................................46
Section 28. Successors....................................................47
Section 29. Determinations and Actions by the Board of Directors, etc.....47
Section 30. Benefits of this Agreement....................................48
Section 31. Severability..................................................48
Section 32. Governing Law.................................................48
Section 33. Counterparts..................................................49
Section 34. Descriptive Headings..........................................49
EXHIBITS
Exhibit A -- Form of Certificate of Designation, Preferences and Rights of
Series C Junior Participating Preferred Stock
Exhibit B -- Form of Rights Certificates
Exhibit C -- Form of Summary of Rights to Purchase Series C Junior
Participating Preferred Stock
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of December 5, 2001 (the
"Agreement"), between RCN Corporation, a Delaware corporation (the
"Company"), and HSBC Bank USA, a banking corporation and trust company duly
organized and validly existing under the laws of the State of New York (the
"Rights Agent").
W I T N E S S E T H
WHEREAS, on December 4, 2001 (the "Rights Dividend
Declaration Date"), the Board of Directors of the Company (the "Board")
authorized and declared a dividend distribution of one right (a "Class A
Right") for each share of Class A common stock, par value $1.00 per share,
of the Company (the "Class A Common Stock" or "Voting Common Stock") and
one right (a "Class B Right" and, together with the Class A Rights, the
"Rights") for each share of Class B common stock, par value $1.00 per
share, of the Company (the "Class B Common Stock" or "Nonvoting Common
Stock" and, together with the Class A Common Stock, the "Common Stock")
outstanding at the close of business on December 17, 2001 (the "Record
Date"), and has authorized the issuance of one Class A Right (as such
number may hereinafter be adjusted pursuant to the provisions of Section
11(p) hereof) for each share of Class A Common Stock and one Class B Right
(as such number may hereinafter be adjusted pursuant to the provisions of
Section 11(p) hereof) for each share of Class B Common Stock issued between
the Record Date (whether originally issued or delivered from the Company's
treasury) and the Distribution Date (as hereinafter defined), each Right
initially representing the right to purchase one one- hundredth of a share
of Series C Junior Participating Preferred Stock of the Company (the
"Preferred Stock") having the rights, powers and preferences set forth in
the form of Certificate of Designation, Preferences and Rights attached
hereto as Exhibit A, upon the terms and subject to the conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or
which, together with all Affiliates and Associates of such Person, shall be
the Beneficial Owner of 15% or more of the Voting Capital Stock then
outstanding, but shall not include (i) the Company, (ii) any Subsidiary of
the Company, (iii) any employee benefit plan of the Company, or of any
Subsidiary of the Company, or any Person or entity organized, appointed or
established by the Company for or pursuant to the terms of any such plan,
(iv) any Exempt Person or (v) any Person who becomes the Beneficial Owner
of fifteen percent (15%) or more of the Voting Capital Stock then
outstanding as a result of a reduction in the number of shares of Capital
Stock outstanding due to the repurchase of shares of Capital Stock by the
Company unless and until such Person, after becoming aware that such Person
has become the Beneficial Owner of fifteen percent (15%) or more of the
then outstanding Voting Capital Stock, acquires beneficial ownership of
additional shares of Capital Stock representing one percent (1%) or more of
the Voting Capital Stock then outstanding.
(b) "Act" shall mean the Securities Act of 1933, as
amended.
(c) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act.
(d) A Person shall be deemed the "Beneficial Owner" of,
and shall be deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right to
acquire (whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement, arrangement
or understanding (whether or not in writing) or upon the exercise
of conversion rights, exchange rights, other rights, warrants or
options, or otherwise; provided, however, that a Person shall not
be deemed the "Beneficial Owner" of, or to "beneficially own," (A)
securities tendered pursuant to a tender or exchange offer made by
such Person or any of such Person's Affiliates or Associates until
such tendered securities are accepted for purchase or exchange,
(B) securities issuable upon exercise of Rights at any time prior
to the occurrence of a Triggering Event (as hereinafter defined),
or (C) securities issuable upon exercise of Rights from and after
the occurrence of a Triggering Event which Rights were acquired by
such Person or any of such Person's Affiliates or Associates prior
to the Distribution Date (as hereinafter defined) or pursuant to
Section 3(a) or Section 22 hereof (the "Original Rights") or
pursuant to Section 11(i) hereof in connection with an adjustment
made with respect to any Original Rights;
(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right to
vote or dispose of or has "beneficial ownership" of (as determined
pursuant to Rule 13d-3 of the General Rules and Regulations under
the Exchange Act), including pursuant to any agreement,
arrangement or understanding, whether or not in writing; provided,
however, that a Person shall not be deemed the "Beneficial Owner"
of, or to "beneficially own," any security under this subparagraph
(ii) as a result of an agreement, arrangement or understanding to
vote such security if such agreement, arrangement or
understanding: (A) arises solely from a revocable proxy given in
response to a public proxy or consent solicitation made pursuant
to, and in accordance with, the applicable provisions of the
General Rules and Regulations under the Exchange Act, and (B) is
not reportable by such Person on Schedule 13D under the Exchange
Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly
or indirectly, by any other Person (or any Affiliate or Associate
thereof) with which such Person (or any of such Person's
Affiliates or Associates) has any agreement, arrangement or
understanding (whether or not in writing), for the purpose of
acquiring, holding, voting (except pursuant to a revocable proxy
as described in the proviso to subparagraph (ii) of this paragraph
(d)) or disposing of any voting securities of the Company;
provided, however, that nothing in this paragraph (d) shall cause
a Person engaged in business as an underwriter of securities to be
the "Beneficial Owner" of, or to "beneficially own," any
securities acquired through such Person's participation in good
faith in a firm commitment underwriting until the expiration of
forty days after the date of such acquisition, and then only if
such securities continue to be owned by such Person at such
expiration of forty days and provided further, however, that any
stockholder of the Company, with Affiliates, Associates or other
Persons who may be deemed representatives of it serving as
Directors of the Company, shall not be deemed to beneficially own
securities held by other Persons as a result of (i) persons
affiliated or otherwise associated with such stockholder serving
as directors or taking any action in connection therewith, (ii)
discussing the status of its shares with the Company or other
stockholders of the Company similarly situated or (iii) voting or
acting in a manner similar to other stockholders similarly situated,
absent a specific finding by the Board of an express agreement among
such stockholders to act in concert with one another as stockholders
so as to cause, in the good faith judgment of the Board, each such
stockholder to be the Beneficial Owner of the shares held by the other
stockholders.
(e) "Board" shall have the meaning set forth in the
preamble of this Agreement.
(f) "Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in the State of New
York are authorized or obligated by law or executive order to close.
(g) "Capital Stock" shall mean, any and all shares,
interests, participations, rights in, or other equivalents (however
designated and whether voting and/or nonvoting) of the Company and any
rights (other than debt securities convertible into capital stock),
warrants or options to acquire such capital stock, whether now outstanding
or issued after the date of this Agreement.
(h) "Class A Common Stock" shall have the meaning set
forth in the preamble of this Agreement.
(i) "Class A Rights" shall have the meaning set forth
in the preamble of this Agreement.
(j) "Class B Common Stock" shall have the meaning set
forth in the preamble of this Agreement.
(k) "Class B Rights" shall have the meaning set forth
in the preamble of this Agreement.
(l) "Close of business" on any given date shall mean
5:00 P.M., New York City time, on such date; provided, however, that if such
date is not a Business Day, it shall mean 5:00 P.M., New York City time, on
the next succeeding Business Day.
(m) "Common Stock" shall mean the common stock, par
value $1.00 per share, of the Company at the date hereof or any other stock
resulting from successive changes or reclassifications of the common stock,
and includes both the Class A Common Stock and the Class B Common Stock,
except that "Common Stock" when used with reference to any Person other
than the Company shall mean the capital stock of such Person with the
greatest voting power, or the equity securities or other equity interest
having power to control or direct the management, of such Person
(n) "Common Stock Equivalents" shall have the meaning
set forth in Section 11(a)(iii) hereof.
(o) "Current Market Price" shall have the meaning
determined in accordance with Section 11(d)(i) hereof.
(p) "Current Value" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(q) "Distribution Date" shall have the meaning set forth
in Section 3(a) hereof.
(r) "Equivalent Preferred Stock" shall have the meaning
set forth in Section 11(b) hereof.
(s) "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
(t) "Exchange Ratio" shall have the meaning set forth in
Section 24(a) hereof.
(u) "Exempt Person" shall mean (i) any Person,
together with all Affiliates and Associates of such Person, that is the
Beneficial Owner of fifteen percent (15%) or more of the Voting Capital
Stock as of December 5, 2001, provided that such Person, together with such
Person's Affiliates and Associates, does not increase its beneficial
ownership of the Voting Capital Stock except to the extent such additional
securities (a) are acquired pursuant to the exercise of a pre- emptive
right or anti-dilution adjustment under the terms of any agreements such
Person has entered into with the Company (including, without limitation,
the Series B Certificate of Designation) that were in existence as of
December 5, 2001, (b) are acquired pursuant to any stock split, stock
dividend, recapitalization, reclassification or similar event initiated by
the Company, (c) are shares of Series B Preferred Stock issued as payment
in kind for dividends with respect to the Series B Preferred Stock (the
"Dividend PIK") or Common Stock issued upon the conversion of the Dividend
PIK pursuant to the Series B Certificate of Designation as it existed on
December 5, 2001, (d) represent an increase in such Person's beneficial
ownership of the Voting Capital Stock of one half of one percent (0.5%) or
less of the Voting Capital Stock then outstanding in the aggregate until
the Expiration Date, or (e) are acquired upon the exercise of any Rights,
and (ii) NSTAR Communications, Inc., a Massachusetts company ("NSTAR"), to
the extent, but only to the extent, it becomes the Beneficial Owner of
fifteen percent (15%) or more of the Voting Capital Stock then outstanding
solely as a result of an exchange of NSTAR's equity ownership in
RCN-BecoCom, LLC, a joint venture between the Company and NSTAR, for Voting
Capital Stock, pursuant to the Exchange Agreement between the Company
(f/k/a C-TEC Corporation) and NSTAR (f/k/a Becocom, Inc.), dated as of June
17, 1997.
(v) "Expiration Date" shall have the meaning set
forth in Section 7(a) hereof.
(w) "Final Expiration Date" shall have the meaning
set forth in Section 7(a) hereof.
(x) "Nonvoting Common Stock" shall have the meaning
set forth in the preamble of this Agreement.
(y) "Person" shall mean any individual, firm,
corporation, partnership or other entity.
(z) "Preferred Stock" shall mean shares of Series C
Junior Participating Preferred Stock, par value $1.00 per share, of the
Company, and, to the extent that there are not a sufficient number of
shares of Series C Junior Participating Preferred Stock authorized to
permit the full exercise of the Rights, any other series of preferred stock
of the Company designated for such purpose containing terms substantially
similar to the terms of the Series C Junior Participating Preferred Stock.
(aa) "Principal Party" shall have the meaning set
forth in Section 13(b) hereof.
(ab) "Purchase Price" shall have the meaning set
forth in Section 4(a) hereof.
(ac) "Record Date" shall have the meaning set forth
in the preamble of this Agreement.
(ad) "Rights" shall have the meaning set forth in
the preamble of this Agreement.
(ae) "Rights Agent" shall have the meaning set forth
in the preamble of this Agreement.
(af) "Rights Certificate" shall have the meaning set
forth in Section 3(a) hereof.
(ag) "Rights Dividend Declaration Date" shall have
the meaning set forth in the preamble of this Agreement.
(ah) "Section 11(a)(ii) Event" shall mean any event
described in Section 11(a)(ii) hereof.
(ai) "Section 13 Event" shall mean any event
described in clauses (x), (y) or (z) of Section 13(a) hereof.
(aj) "Series B Certificate of Designation" shall
mean the Certificate of Designations, Preferences and Rights of Series B 7%
Senior Convertible Preferred Stock of the Company.
(ak) "Series B Preferred Stock" shall mean the
shares of Series B 7% Convertible Participating Preferred Stock, no par
value per share, of the Company.
(al) "Spread" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(am) "Stock Acquisition Date" shall mean the first
date of public announcement (which, for purposes of this definition, shall
include, without limitation, a report filed or amended pursuant to Section
13(d) under the Exchange Act) by the Company or an Acquiring Person that an
Acquiring Person has become such.
(an) "Subsidiary" shall mean, with reference to any
Person, any corporation of which an amount of voting securities sufficient
to elect at least a majority of the directors of such corporation is
beneficially owned, directly or indirectly, by such Person, or otherwise
controlled by such Person.
(ao) "Substitution Period" shall have the meaning
set forth in Section 11(a)(iii) hereof.
(ap) "Summary of Rights" shall have the meaning set
forth in Section 3(b) hereof.
(aq) "Trading Day" shall have the meaning set forth
in Section 11(d)(i) hereof.
(ar) "Triggering Event" shall mean any Section
11(a)(ii) Event or any Section 13 Event.
(as) "Voting Capital Stock" shall mean the Capital
Stock of any class or kind ordinarily having the power to vote for the
election of directors or other members of the governing body of the
Company.
(at) "Voting Common Stock" shall have the meaning
set forth in the preamble of this Agreement.
Section 2. Appointment of Rights Agent. The Company
hereby appoints the Rights Agent to act as rights agent for the Company in
accordance with the terms and conditions hereof, and the Rights Agent
hereby accepts such appointment. The Company may from time to time appoint
such co-rights agents as it may deem necessary or desirable. The Rights
Agent shall have no duty to supervise, and in no event shall be liable for,
the acts or omissions of any such co- rights agent.
Section 3. Issuance of Rights Certificates.
(a) Until the earlier of (i) the close of business
on the tenth Business Day after the Stock Acquisition Date (or, if the
tenth Business Day after the Stock Acquisition Date occurs before the
Record Date, the close of business on the Record Date), or (ii) the close
of business on the tenth Business Day (or such later date as the Board
shall determine) after the date that a tender or exchange offer by any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company, or any
Person or entity organized, appointed or established by the Company for or
pursuant to the terms of any such plan) is first published or sent or given
within the meaning of Rule 14d-2(a) of the General Rules and Regulations
under the Exchange Act, if, upon consummation thereof, such Person would
become an Acquiring Person (the earlier of (i) and (ii) being herein
referred to as the "Distribution Date"), (x) the Class A Rights will be
evidenced (subject to the provisions of paragraph (b) of this Section 3) by
the certificates for the Class A Common Stock registered in the names of
the holders of the Class A Common Stock (which certificates for Class A
Common Stock shall be deemed also to be certificates for Class A Rights)
and the Class B Rights will be evidenced (subject to the provisions of
paragraph (b) of this Section 3) by the certificates for the Class B Common
Stock registered in the names of the holders of the Class B Common Stock
(which certificates for Class B Common Stock shall be deemed also to be
certificates for Class B Rights), and, in each such case, not by separate
certificates, and (y) the Rights will be transferable only in connection
with the transfer of the underlying shares of Common Stock (including a
transfer to the Company). As soon as practicable after the Distribution
Date, the Company will prepare and execute, the Rights Agent will
countersign and the Company will send or cause to be sent (and the Right
Agents will, if requested and provided with all necessary information,
send) by first-class, insured, postage-prepaid mail, to each record holder
of the Common Stock as of the close of business on the Distribution Date,
at the address of such holder shown on the records of the Company, one or
more rights certificates, in substantially the form of Exhibit B hereto
(the "Rights Certificates"), evidencing one Right for each share of Common
Stock so held, subject to adjustment as provided herein. In the event that
an adjustment in the number of Rights per share of Common Stock has been
made pursuant to Section 11(p) hereof, at the time of distribution of the
Rights Certificates, the Company shall make the necessary and appropriate
rounding adjustments (in accordance with Section 14(a) hereof) so that
Rights Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Rights. As of and
after the Distribution Date, the Rights will be evidenced solely by such
Rights Certificates. The Company shall promptly notify the Rights Agent in
writing upon the occurrence of the Distribution Date. Until such notice is
received by the Rights Agent, the Rights Agent may presume conclusively for
all purposes that the Distribution Date has not occurred. After the
Distribution Date, Rights Certificates shall also be issued with each
certificate for a share of Common Stock that is issued upon conversion of
Series B Preferred Stock. The obligations of the Company and the Rights
Agent with respect to the issuance of such Rights Certificates shall be the
same as for other Rights Certificates issued with respect to shares of
Common Stock issued and outstanding prior to the Distribution Date.
(b) The Company will make available, as promptly as
practicable following the Record Date, a copy of a Summary of Rights, in
substantially the form attached hereto as Exhibit C (the "Summary of
Rights") to any holder of Rights who may so request from time to time prior
to the Expiration Date. With respect to certificates for the Common Stock
outstanding as of the Record Date, or issued subsequent to the Record Date,
unless and until the Distribution Date shall occur, the Rights will be
evidenced by such certificates for the Common Stock and the registered
holders of the Common Stock shall also be the registered holders of the
associated Rights. Until the earlier of the Distribution Date or the
Expiration Date, the transfer of any certificates representing shares of
Common Stock in respect of which Rights have been issued shall also
constitute the transfer of the Rights associated with such shares of Common
Stock.
(c) Rights shall be issued in respect of all shares
of Common Stock which are issued (whether originally issued or from the
Company's treasury) after the Record Date but prior to the earlier of the
Distribution Date or the Expiration Date; provided, however, that Rights
shall be issued in respect of all shares of Common Stock which are issued
after the Record Date but prior to the Expiration Date upon the conversion
of any shares of Series B Preferred Stock. Certificates representing such
shares of Common Stock shall also be deemed to be certificates for Rights,
and shall bear the following legend if such certificates are issued after
the Record Date but prior to the earlier of the Distribution Date or the
Expiration Date:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in the Rights Agreement
between RCN Corporation (the "Company") and HSBC Bank USA (the
"Rights Agent"), dated as of December 5, 2001, as it may be
amended from time to time (the "Rights Agreement"), the terms of
which are hereby incorporated herein by reference and a copy of
which is on file at the office of the Rights Agent designated for
such purpose. Under certain circumstances, as set forth in the
Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this certificate.
The Rights Agent will mail to the holder of this certificate a
copy of the Rights Agreement, as in effect on the date of mailing,
without charge, promptly after receipt of a written request
therefor. Under certain circumstances set forth in the Rights
Agreement, Rights issued to, or held by, any Person who is, was or
becomes an Acquiring Person or any Affiliate or Associate thereof
(as such terms are defined in the Rights Agreement), whether
currently held by or on behalf of such Person or by any subsequent
holder, may become null and void.
With respect to such certificates containing the foregoing legend, until
the earlier of (i) the Distribution Date or (ii) the Expiration Date, the
Rights associated with the Common Stock represented by such certificates
shall be evidenced by such certificates alone and registered holders of
Common Stock shall also be the registered holders of the associated Rights,
and the transfer of any of such certificates shall also constitute the
transfer of the Rights associated with the Common Stock represented by such
certificates.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of
election to purchase and of assignment to be printed on the reverse
thereof) shall each be substantially in the form set forth in Exhibit B
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable law or with
any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which the Rights may from time to time be listed,
or to conform to usage (but which shall not, in any case, affect the rights
or duties of the Rights Agent). Subject to the provisions of Section 11 and
Section 22 hereof, the Rights Certificates, whenever distributed, shall be
dated as of the Record Date and on their face shall entitle the holders
thereof to purchase such number of one one-hundredths of a share of
Preferred Stock as shall be set forth therein at the price set forth
therein (such exercise price per one one-hundredth of a share, the
"Purchase Price"), but the amount and type of securities purchasable upon
the exercise of each Right and the Purchase Price thereof shall be subject
to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to
Section 3(a), Section 11(i) or Section 22 hereof that represents Rights
beneficially owned by: (i) an Acquiring Person or any Associate or
Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee prior to
or concurrently with the Acquiring Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether or not for consideration)
from the Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom such Acquiring Person has any continuing
agreement, arrangement or understanding regarding the transferred Rights or
(B) a transfer which the Board has determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect the
avoidance of Section 7(e) hereof, and any Rights Certificate issued
pursuant to Section 6 or Section 11 hereof upon transfer, exchange,
replacement or adjustment of any other Rights Certificate referred to in
this sentence, shall contain (to the extent feasible) the following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person (as such
terms are defined in the Rights Agreement). Accordingly, this Rights
Certificate and the Rights represented hereby may become null and
void in the circumstances specified in Section 7(e) of the Rights
Agreement.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on
behalf of the Company by its Chairman of the Board, its President or any
Vice President, either manually or by facsimile signature, and shall have
affixed thereto the Company's seal or a facsimile thereof which shall be
attested by the Secretary or an Assistant Secretary of the Company, either
manually or by facsimile signature. The Rights Certificates shall be
countersigned by the Rights Agent, either manually or by facsimile
signature and shall not be valid for any purpose unless so countersigned.
In case any officer of the Company who shall have signed any of the Rights
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the
Company, such Rights Certificates, nevertheless, may be countersigned by
the Rights Agent and issued and delivered by the Company with the same
force and effect as though the person who signed such Rights Certificates
had not ceased to be such officer of the Company; and any Rights
Certificates may be signed on behalf of the Company by any person who, at
the actual date of the execution of such Rights Certificate, shall be a
proper officer of the Company to sign such Rights Certificate, although at
the date of the execution of this Rights Agreement any such person was not
such an officer.
(b) Following the Distribution Date, receipt by the
Rights Agent of notice to that effect and all other relevant information
referred to in Section 3(a), the Rights Agent will keep, or cause to be
kept, at its office designated for such purpose, books for registration and
transfer of the Rights Certificates issued hereunder. Such books shall show
the names and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced on its face by each of the
Rights Certificates and the date of each of the Rights Certificates.
Section 6. Transfer, Split-Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost
or Stolen Rights Certificates.
(a) Subject to the provisions of Section 4(b),
Section 7(e) and Section 14 hereof, at any time after the close of business
on the Distribution Date, and at or prior to the close of business on the
Expiration Date, any Rights Certificate or Certificates (other than Rights
Certificates representing Rights that may have been exchanged pursuant to
Section 24 hereof) may be transferred, split up, combined or exchanged for
another Rights Certificate or Certificates, entitling the registered holder
to purchase a like number of one one-hundredths of a share of Preferred
Stock (or, following a Triggering Event, Common Stock, other securities,
cash or other assets, as the case may be) as the Rights Certificate or
Certificates surrendered then entitles such holder (or former holder in the
case of a transfer) to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Rights Certificate or
Certificates shall make such request in writing delivered to the Rights
Agent, and shall surrender the Rights Certificate or Certificates to be
transferred, split up, combined or exchanged at the office of the Rights
Agent designated for such purpose. The Rights Certificates are transferable
only on the registry books of the Rights Agent. Neither the Rights Agent
nor the Company shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Rights Certificate until
the registered holder shall have completed and signed the certificate
contained in the form of assignment on the reverse side of such Rights
Certificate, shall have provided such additional evidence of the identity
of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company or the Rights Agent shall reasonably
request and shall have paid a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer,
split up, combination or exchange of Rights Certificates. Thereupon the
Rights Agent shall, subject to Section 4(b), Section 7(e), Section 14 and
Section 24, countersign and deliver to the Person entitled thereto a Rights
Certificate or Rights Certificates, as the case may be, as so requested.
(b) Upon receipt by the Company and the Rights Agent
of evidence reasonably satisfactory to them of the loss, theft, destruction
or mutilation of a Rights Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them, and
reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Rights Certificate, if mutilated, the Company will
execute and deliver a new Rights Certificate of like tenor to the Rights
Agent for countersignature and delivery to the registered owner in lieu of
the Rights Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights.
(a) Subject to Section 7(e) hereof, at any time after the
Distribution Date the registered holder of any Rights Certificate may
exercise the Rights evidenced thereby (except as otherwise provided herein
including, without limitation, the restrictions on exercisability set forth
in Section 9(c), Section 11(a)(iii) and Section 23(a) hereof) in whole or
in part upon surrender of the Rights Certificate, with the form of election
to purchase and the certificate on the reverse side thereof duly executed,
to the Rights Agent at the office of the Rights Agent designated for such
purpose, together with payment of the aggregate Purchase Price with respect
to the total number of one one-hundredths of a share of Preferred Stock (or
other securities, cash or other assets, as the case may be) as to which
such surrendered Rights are then exercisable, and an amount equal to any
tax or charge required to be paid under Section 9(e), at or prior to the
earlier of (i) 5:00 P.M., New York City time, on December 5, 2011, or such
later date as may be established by the Board prior to the expiration of
the Rights (such date, as it may be extended by the Board, the "Final
Expiration Date"), or (ii) the time at which the Rights are redeemed or
exchanged as provided in Section 23 and Section 24 hereof (the earlier of
(i) and (ii) being herein referred to as the "Expiration Date").
(b) The Purchase Price for each one one-hundredth of a
share of Preferred Stock pursuant to the exercise of a Right initially
shall be $30, shall be subject to adjustment from time to time as provided
in Section 11 and Section 13(a) hereof and shall be payable in accordance
with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the
certificate duly executed, accompanied by payment, with respect to each
Right so exercised, of the Purchase Price per one one-hundredth of a share
of Preferred Stock (or other shares, securities, cash or other assets, as
the case may be) to be purchased as set forth below and an amount equal to
any applicable transfer tax or charge required to be paid under Section
9(e), the Rights Agent shall, subject to Section 20(k) hereof, thereupon
promptly (i) (A) requisition from any transfer agent of the shares of
Preferred Stock (or make available, if the Rights Agent is the transfer
agent for such shares) certificates for the total number of one
one-hundredths of a share of Preferred Stock to be purchased and the
Company hereby irrevocably authorizes its transfer agent to comply with all
such requests, or (B) if the Company shall have elected to deposit the
total number of shares of Preferred Stock issuable upon exercise of the
Rights hereunder with a depositary agent, requisition from the depositary
agent depositary receipts representing such number of one one-hundredths of
a share of Preferred Stock as are to be purchased (in which case
certificates for the shares of Preferred Stock represented by such receipts
shall be deposited by the transfer agent with the depositary agent) and the
Company will direct the depositary agent to comply with such request, (ii)
requisition from the Company the amount of cash, if any, to be paid in lieu
of fractional shares in accordance with Section 14 hereof, (iii) after
receipt of such certificates or depositary receipts, cause the same to be
delivered to or, upon the order of the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such
holder, and (iv) after receipt thereof, deliver such cash, if any, to or
upon the order of the registered holder of such Rights Certificate. The
payment of the Purchase Price (as such amount may be reduced pursuant to
Section 11(a)(iii) hereof) shall be made in cash or by certified bank check
or bank draft payable to the order of the Company. In the event that the
Company is obligated to issue other securities (including Common Stock) of
the Company, pay cash and/or distribute other property pursuant to Section
11(a) hereof, the Company will make all arrangements necessary so that such
other securities, cash and/or other property are available for distribution
by the Rights Agent, if and when appropriate. The Company reserves the
right to require prior to the occurrence of a Triggering Event that, upon
any exercise of Rights, a number of Rights be exercised so that only whole
shares of Preferred Stock would be issued.
(d) In case the registered holder of any Rights
Certificate shall exercise less than all the Rights evidenced thereby, a
new Rights Certificate evidencing the Rights remaining unexercised shall be
issued by the Rights Agent and delivered to, or upon the order of, the
registered holder of such Rights Certificate, registered in such name or
names as may be designated by such holder, subject to the provisions of
Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section 11(a)(ii) Event,
any Rights beneficially owned by (i) an Acquiring Person or an Associate or
Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee prior to
or concurrently with the Acquiring Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether or not for consideration)
from the Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom the Acquiring Person has any continuing
agreement, arrangement or understanding regarding the transferred Rights or
(B) a transfer which the Board has determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect the
avoidance of this Section 7(e), shall become null and void without any
further action and no holder of such Rights shall have any rights
whatsoever with respect to such Rights, whether under any provision of this
Agreement or otherwise. The Company shall use all reasonable efforts to
insure that the provisions of this Section 7(e) and Section 4(b) hereof are
complied with, but shall have no liability to any holder of Rights
Certificates or any other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or any of its
Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the
occurrence of any purported exercise as set forth in this Section 7 unless
such registered holder shall have (i) completed and signed the certificate
contained in the form of election to purchase set forth on the reverse side
of the Rights Certificate surrendered for such exercise, and (ii) provided
such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates of such Beneficial Owner as
the Company or the Rights Agent shall reasonably request.
Section 8. Cancellation and Destruction of Rights
Certificates.
All Rights Certificates surrendered for the purpose of
exercise, transfer, split-up, combination or exchange shall, if surrendered
to the Company or any of its agents, be delivered to the Rights Agent for
cancellation or in cancelled form, or, if surrendered to the Rights Agent,
shall be cancelled by it, and no Rights Certificates shall be issued in
lieu thereof except as expressly permitted by any of the provisions of this
Agreement. The Company shall deliver to the Rights Agent for cancellation
and retirement, and the Rights Agent shall so cancel and retire, any other
Rights Certificate purchased or acquired by the Company otherwise than upon
the exercise thereof. The Rights Agent shall deliver all cancelled Rights
Certificates to the Company, or shall, at the written request of the
Company, destroy such cancelled Rights Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) The Company covenants and agrees that it will cause
to be reserved and kept available out of its authorized and unissued shares
of Preferred Stock (and, following the occurrence of a Triggering Event,
out of its authorized and unissued shares of Common Stock and/or other
securities or out of its authorized and issued shares held in its
treasury), the number of shares of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other securities)
that, as provided in this Agreement including Section 11(a)(iii) hereof,
will be sufficient to permit the exercise in full of all outstanding
Rights.
(b) So long as the shares of Preferred Stock (and,
following the occurrence of a Triggering Event, Common Stock and/or other
securities) issuable and deliverable upon the exercise of the Rights may be
listed on any national securities exchange, the Company shall use its best
efforts to cause, from and after such time as the Rights become
exercisable, all shares reserved for such issuance to be listed on such
exchange upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file,
as soon as practicable following the earliest date after the first
occurrence of a Section 11(a)(ii) Event on which the consideration to be
delivered by the Company upon exercise of the Rights has been determined in
accordance with Section 11(a)(iii) hereof, a registration statement under
the Act, with respect to the securities purchasable upon exercise of the
Rights on an appropriate form, (ii) cause such registration statement to
become effective as soon as practicable after such filing, and (iii) cause
such registration statement to remain effective (with a prospectus at all
times meeting the requirements of the Act) until the earlier of (A) the
date as of which the Rights are no longer exercisable for such securities,
and (B) the date of the expiration of the Rights. The Company will also
take such action as may be appropriate under, or to ensure compliance with,
the securities or "blue sky" laws of the various states in connection with
the exercisability of the Rights. The Company may temporarily suspend, for
a period of time not to exceed ninety (90) days after the date set forth in
clause (i) of the first sentence of this Section 9(c), the exercisability
of the Rights in order to prepare and file such registration statement and
permit it to become effective. Upon any such suspension, the Company shall
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 has been rescinded. The Company shall notify the
Rights Agent whenever it makes a public announcement pursuant to this
Section 9(c) and give the Rights Agent a copy of such announcement. In
addition, if the Company shall determine that a registration statement is
required following the Distribution Date, the Company may temporarily
suspend the exercisability of the Rights until such time as a registration
statement has been declared effective. Notwithstanding any provision of
this Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction if the requisite qualification in such jurisdiction shall not
have been obtained, the exercise thereof shall not be permitted under
applicable law, or a registration statement shall not have been declared
effective.
(d) The Company covenants and agrees that it will take
all such action as may be necessary to ensure that all one one-hundredths
of a share of Preferred Stock (and, following the occurrence of a
Triggering Event, Common Stock and/or other securities) delivered upon
exercise of Rights shall, at the time of delivery of the certificates for
such shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that it will
pay when due and payable any and all federal and state transfer taxes and
charges which may be payable in respect of the issuance or delivery of the
Rights Certificates and of any certificates for a number of one
one-hundredths of a share of Preferred Stock (or Common Stock and/or other
securities, as the case may be) upon the exercise of Rights. The Company
shall not, however, be required to pay any transfer tax which may be
payable in respect of any transfer or delivery of Rights Certificates to a
Person other than, or the issuance or delivery of a number of one
one-hundredths of a share of Preferred Stock (or Common Stock and/or other
securities, as the case may be) in respect of a name other than that of the
registered holder of the Rights Certificates evidencing Rights surrendered
for exercise or to issue or deliver any certificates for a number of one
one-hundredths of a share of Preferred Stock (or Common Stock and/or other
securities, as the case may be) in a name other than that of the registered
holder upon the exercise of any Rights until such tax shall have been paid
(any such tax being payable by the holder of such Rights Certificates at
the time of surrender) or until it has been established to the Company's
and the Rights Agent's satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each person in
whose name any certificate for a number of one one-hundredths of a share of
Preferred Stock (or Common Stock and/or other securities, as the case may
be) is issued upon the exercise of Rights shall for all purposes be deemed
to have become the holder of record of such fractional shares of Preferred
Stock (or Common Stock and/or other securities, as the case may be)
represented thereby on, and such certificate shall be dated, the date upon
which the Rights Certificate evidencing such Rights was duly surrendered
and payment of the Purchase Price (and all applicable transfer taxes) was
made; provided, however, that if the date of such surrender and payment is
a date upon which the Preferred Stock (or Common Stock and/or other
securities, as the case may be) transfer books of the Company are closed,
such Person shall be deemed to have become the record holder of such shares
(fractional or otherwise) on, and such certificate shall be dated, the next
succeeding Business Day on which the Preferred Stock (or Common Stock
and/or other securities, as the case may be) transfer books of the Company
are open. Prior to the exercise of the Rights evidenced thereby, the holder
of a Rights Certificate shall not be entitled to any rights of a
stockholder of the Company with respect to shares for which the Rights
shall be exercisable, including, without limitation, the right to vote, to
receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings
of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind
of Shares or Number of Rights. The Purchase Price, the number and kind of
shares covered by each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 11.
(a)(i) In the event the Company shall at any
time after the date of this Agreement (A) declare a dividend on
the Preferred Stock payable in shares of Preferred Stock, (B)
subdivide the outstanding Preferred Stock, (C) combine the
outstanding Preferred Stock into a smaller number of shares, or
(D) issue any shares of its capital stock in a reclassification of
the Preferred Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is
the continuing or surviving corporation), except as otherwise
provided in this Section 11(a) and Section 7(e) hereof, the
Purchase Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision, combination
or reclassification, and the number and kind of shares of
Preferred Stock or capital stock, as the case may be, issuable on
such date, shall be proportionately adjusted so that the holder of
any Right exercised after such time shall be entitled to receive,
upon payment of the Purchase Price then in effect, the aggregate
number and kind of shares of Preferred Stock or capital stock, as
the case may be, which, if such Right had been exercised
immediately prior to such date and at a time when the Preferred
Stock transfer books of the Company were open, such holder would
have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination or
reclassification. If an event occurs which would require an
adjustment under both this Section 11(a)(i) and Section 11(a)(ii)
hereof, the adjustment provided for in this Section 11(a)(i) shall
be in addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii) hereof.
(ii) In the event any Person shall, at
any time after the Rights Dividend Declaration Date, become an
Acquiring Person, unless the event causing such Person to become an
Acquiring Person is a transaction set forth in Section 13(a)
hereof, then, promptly following the occurrence of such event,
proper provision shall be made so that (A) each holder of a Class
A Right (except as provided below and in Section 7(e) hereof)
shall thereafter have the right to receive, upon exercise thereof
at the then current Purchase Price in accordance with the terms of
this Agreement, in lieu of a number of one one-hundredths of a
share of Preferred Stock, such number of shares of Class A Common
Stock of the Company as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the then number of
one one-hundredths of a share of Preferred Stock for which a Right
was exercisable immediately prior to the first occurrence of a Section
11(a)(ii) Event, and (y) dividing that product (which, following such
first occurrence, shall thereafter be referred to as the "Purchase
Price" for each Right and for all purposes of this Agreement) by 50%
of the Current Market Price (determined pursuant to Section 11(d)
hereof) per share of Class A Common Stock on the date of such first
occurrence (such number of shares, the "Class A Adjustment
Shares") and (B) each holder of a Class B Right (except as
provided below and in Section 7(e) hereof) shall thereafter have
the right to receive, upon exercise thereof at the then current
Purchase Price in accordance with the terms of this Agreement, in
lieu of a number of one one-hundredths of a share of Preferred
Stock, such number of shares of Class B Common Stock of the
Company as shall equal the result obtained by (x) multiplying the
then current Purchase Price by the then number of one
one-hundredths of a share of Preferred Stock for which a Right was
exercisable immediately prior to the first occurrence of a Section
11(a)(ii) Event, and (y) dividing that product (which, following
such first occurrence, shall thereafter be referred to as the
"Purchase Price" for each Right and for all purposes of this
Agreement) by 50% of the Current Market Price (determined pursuant
to Section 11(d) hereof) per share of Class B Common Stock on the
date of such first occurrence (such number of shares, the "Class B
Adjustment Shares" and, together with the Class A Adjustment
Shares, the "Adjustment Shares"). The Company shall give the
Rights Agent written notice of the identity of any such Acquiring
Person, Associate or Affiliate, or the nominee of any of the
foregoing, and the Rights Agent may rely on such notice in
carrying out is duties under this Agreement and shall be deemed
not to have any knowledge of the identity of any such Acquiring
Person, Associate or Affiliate, or the nominee of any of the
foregoing, unless and until it shall have received such notice.
(iii) In the event that the number of
shares of Common Stock which is authorized by the Company's Amended
and Restated Certificate of Incorporation, as amended, but not
outstanding or reserved for issuance for purposes other than upon
exercise of the Rights, is not sufficient to permit the exercise
in full of the Rights in accordance with the foregoing
subparagraph (ii) of this Section 11(a), the Company shall (A)
determine the value of the Adjustment Shares issuable upon the
exercise of a Class A Right or Class B Right (the "Current
Value"), and (B) with respect to each Right (subject to Section
7(e) hereof), make adequate provision to substitute for the
Adjustment Shares, upon the exercise of a Right and payment of the
applicable Purchase Price, (1) cash, (2) a reduction in the
Purchase Price, (3) Common Stock or other equity securities of the
Company (including, without limitation, shares, or units of
shares, of preferred stock, such as the Preferred Stock, which the
Board has deemed to have essentially the same value or economic
rights as shares of Common Stock (such shares of preferred stock
being referred to as "Common Stock Equivalents")), (4) debt
securities of the Company, (5) other assets, or (6) any
combination of the foregoing, having an aggregate value equal to
the Current Value (less the amount of any reduction in the
Purchase Price), where such aggregate value has been determined by
the Board based upon the advice of a nationally recognized
investment banking firm selected by the Board; provided, however,
that if the Company shall not have made adequate provision to
deliver value pursuant to clause (B) above within thirty (30) days
following the later of (x) the first occurrence of a Section
11(a)(ii) Event and (y) the date on which the Company's right of
redemption pursuant to Section 23(a) expires (the later of (x) and
(y) being referred to herein as the "Section 11(a)(ii) Trigger
Date"), then the Company shall be obligated to deliver, upon the
surrender for exercise of a Right and without requiring payment of
the Purchase Price, shares of Class A Common Stock or Class B
Common Stock, as the case may be, (to the extent available) and
then, if necessary, cash, which shares and/or cash have an
aggregate value equal to the Spread. For purposes of the preceding
sentence, the term "Spread" shall mean the excess of (i) the
Current Value over (ii) the Purchase Price. If the Board
determines in good faith that it is likely that sufficient
additional shares of Common Stock could be authorized for issuance
upon exercise in full of the Rights, the thirty (30) day period
set forth above may be extended to the extent necessary, but not
more than ninety (90) days after the Section 11(a)(ii) Trigger
Date, in order that the Company may seek stockholder approval for
the authorization of such additional shares (such thirty (30) day
period, as it may be extended, is herein called the "Substitution
Period"). To the extent that the Company determines that action
should be taken pursuant to the first and/or third sentences of
this Section 11(a)(iii), the Company (1) shall provide, subject to
Section 7(e) hereof, that such action shall apply uniformly to all
outstanding Rights, and (2) may suspend the exercisability of the
Rights until the expiration of the Substitution Period in order to
seek such stockholder approval for such authorization of
additional shares and/or to decide the appropriate
form of distribution to be made pursuant to such first sentence
and to determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the
suspension is no longer in effect. The Company shall notify the
Rights Agent whenever it makes a public announcement pursuant to
this Section 11(a)(iii) and give the Rights Agent a copy of such
announcement. For purposes of this Section 11(a)(iii), the value
of each Adjustment Share shall be the Current Market Price per
share of the Class A Common Stock or Class B Common Stock, as the
case may be, 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 Class A
Common Stock or Class B Common Stock, as the case may be, on such
date.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Stock
entitling them to subscribe for or purchase (for a period expiring within
forty-five (45) calendar days after such record date) Preferred Stock (or
shares having the same rights, privileges and preferences as the shares of
Preferred Stock ("Equivalent Preferred Stock")) or securities convertible
into Preferred Stock or Equivalent Preferred Stock at a price per share of
Preferred Stock or per share of Equivalent Preferred Stock (or having a
conversion price per share, if a security convertible into Preferred Stock
or Equivalent Preferred Stock) less than the Current Market Price (as
determined pursuant to Section 11(d) hereof) per share of Preferred Stock
on such record date, the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the number of shares of Preferred Stock outstanding on such record
date, plus the number of shares of Preferred Stock which the aggregate
offering price of the total number of shares of Preferred Stock and/or
Equivalent Preferred Stock so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would
purchase at such Current Market Price, and the denominator of which shall
be the number of shares of Preferred Stock outstanding on such record date,
plus the number of additional shares of Preferred Stock and/or Equivalent
Preferred Stock to be offered for subscription or purchase (or into which
the convertible securities so to be offered are initially convertible). In
case such subscription price may be paid by delivery of consideration, part
or all of which may be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board, whose
determination shall be described in a statement filed with the Rights Agent
and shall be binding on the Rights Agent and the holders of the Rights.
Shares of Preferred Stock owned by or held for the account of the Company
shall not be deemed outstanding for the purpose of any such computation.
Such adjustment shall be made successively whenever such a record date is
fixed, and in the event that such rights or warrants are not so issued, the
Purchase Price shall be adjusted to be the Purchase Price which would then
be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation), cash (other than a regular
quarterly cash dividend out of the earnings or retained earnings of the
Company), assets (other than a dividend payable in Preferred Stock, but
including any dividend payable in stock other than Preferred Stock) or
evidences of indebtedness, or of subscription rights or warrants (excluding
those referred to in Section 11(b) hereof), the Purchase Price to be in
effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the Current Market Price (as
determined pursuant to Section 11(d) hereof) per share of Preferred Stock
on such record date, less the fair market value (as determined in good
faith by the Board, whose determination shall be described in a statement
filed with the Rights Agent) of the portion of the cash, assets or
evidences of indebtedness so to be distributed or of such subscription
rights or warrants applicable to a share of Preferred Stock, and the
denominator of which shall be such Current Market Price (as determined
pursuant to Section 11(d) hereof) per share of Preferred Stock. Such
adjustments shall be made successively whenever such a record date is
fixed, and in the event that such distribution is not so made, the Purchase
Price shall be adjusted to be the Purchase Price which would have been in
effect if such record date had not been fixed.
(d)(i) For the purpose of any computation hereunder,
other than computations made pursuant to Section 11(a)(iii)
hereof, the Current Market Price per share of Common Stock on any
date shall be deemed to be the average of the daily closing prices
per share of such Common Stock for the thirty (30) consecutive
Trading Days immediately prior to such date, and for purposes 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 Common Stock for the ten (10) consecutive Trading Days
immediately following such date; provided, however, that in the
event that the Current Market Price per share of the Common Stock
is determined during a period following the announcement by the
issuer of such Common Stock of (A) a dividend or distribution on such
Common Stock payable in shares of such Common Stock or securities
convertible into shares of such Common Stock (other than the Rights),
or (B) any subdivision, combination or reclassification of such Common
Stock, and the ex-dividend date for such dividend or distribution, or
the record date for such subdivision, combination or reclassification
shall not have occurred prior to the commencement of the requisite
thirty (30) Trading Day or ten (10) Trading Day period, as set
forth above, then, and in each such case, the Current Market Price
shall be properly adjusted to take into account ex-dividend
trading. The closing price for each day shall be the last sale
price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way,
in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the
shares of Common Stock are not listed or admitted to trading on
the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on
which the shares of Common Stock are listed or admitted to trading
or, if the shares of Common Stock are not listed or admitted to
trading on any national securities exchange, the last quoted 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 Automated Quotation 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 the
Common Stock selected by the Board. If on any such date no market
maker is making a market in the Common Stock, the fair value of
such shares on such date as determined in good faith by the Board
shall be used. The term "Trading Day" shall mean a day on which
the principal national securities exchange on which the shares of
Class A Common Stock or Class B Common Stock are listed or
admitted to trading is open for the transaction of business or, if
the shares of Common Stock are not listed or admitted to trading
on any national securities exchange, a Business Day. If the Common
Stock is not publicly held or not so listed or traded, Current
Market Price per share shall mean the fair value per share as
determined in good faith by the Board, whose determination shall
be described in a statement filed with the Rights Agent and shall
be conclusive for all purposes.
(ii) For the purpose of any computation
hereunder, the Current Market Price per share of Preferred Stock shall
be determined in the same manner as set forth above for the Common
Stock in clause (i) of this Section 11(d) (other than the last
sentence thereof). If the Current Market Price per share of
Preferred Stock cannot be determined in the manner provided above
or if the Preferred Stock is not publicly held or listed or traded
in a manner described in clause (i) of this Section 11(d), the
Current Market Price per share of Preferred Stock shall be
conclusively deemed to be an amount equal to 100 (as such number
may be appropriately adjusted for such events as stock splits,
stock dividends and recapitalizations with respect to the Class B
Common Stock occurring after the date of this Agreement)
multiplied by the Current Market Price per share of the Class B
Common Stock. If neither the Class B Common Stock nor the
Preferred Stock is publicly held or so listed or traded, Current
Market Price per share of the Preferred Stock shall mean the fair
value per share as determined in good faith by the Board, whose
determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment
would require an increase or decrease of at least one percent (1%) in the
Purchase Price; provided, however, that any adjustments which by reason of
this Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest cent or to the nearest
ten-thousandth of a share of Common Stock or other share or one-millionth
of a share of Preferred Stock, as the case may be. Notwithstanding the
first sentence of this Section 11(e), any adjustment required by this
Section 11 shall be made no later than the earlier of (i) three (3) years
from the date of the transaction which mandates such adjustment, or (ii)
the Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a)(ii) or Section 13(a) hereof, the holder of any Right
thereafter exercised shall become entitled to receive any shares of capital
stock other than Preferred Stock, thereafter the number of such other
shares so receivable upon exercise of any Right and the Purchase Price
thereof shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to
the Preferred Stock contained in Sections 11(a), (b), (c), (e), (g), (h),
(i), (j), (k) and (m), and the provisions of Sections 7, 9, 10, 13 and 14
hereof with respect to the Preferred Stock shall apply on like terms to any
such other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price hereunder shall
evidence the right to purchase, at the adjusted Purchase Price, the number
of one one- hundredths of a share of Preferred Stock purchasable from time
to time hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.
(h) Unless the Company shall have exercised its election
as provided in Section 11(i), upon each adjustment of the Purchase Price as
a result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price,
that number of one one-hundredths of a share of Preferred Stock (calculated
to the nearest one-millionth) 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 Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in lieu of
any adjustment in the number of one one-hundredths of a share of Preferred
Stock purchasable upon the exercise of a Right. Each of the Rights
outstanding after the adjustment in the number of Rights shall be
exercisable for the number of one one- hundredths of a share of Preferred
Stock for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the
nearest one-ten-thousandth) obtained by dividing the Purchase Price in
effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement (with prompt written
notice thereof to the Rights Agent) of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made. This record date may be the
date on which the Purchase Price is adjusted or any day thereafter, but, if
the Rights Certificates have been issued, shall be at least ten (10) days
later than the date of the public announcement. If Rights Certificates have
been issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Rights Certificates on such record date
Rights Certificates evidencing, subject to Section 14 hereof, the
additional Rights to which such holders shall be entitled as a result of
such adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement for
the Rights Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new
Rights Certificates evidencing all the Rights to which such holders shall
be entitled after such adjustment. Rights Certificates so to be distributed
shall be issued, executed and countersigned in the manner provided for
herein (and may bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the holders of record of
Rights Certificates on the record date specified in the public
announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of one one-hundredths of a share of Preferred
Stock issuable upon the exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express the Purchase
Price per one one-hundredth of a share and the number of one one-hundredth
of a share which were expressed in the initial Rights Certificates issued
hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then stated value, if any,
of the number of one one-hundredths of a share of Preferred Stock issuable
upon exercise of the Rights, the Company shall take any corporate action
which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue fully paid and nonassessable such
number of one one-hundredths of a share of Preferred Stock at such adjusted
Purchase Price.
(l) In any case in which this Section 11 shall require
that an adjustment in the Purchase Price be made effective as of a record
date for a specified event, the Company may elect to defer (with prompt
written notice thereof to the Rights Agent) until the occurrence of such
event the issuance to the holder of any Right exercised after such record
date the number of one one-hundredths of a share of Preferred Stock and
other capital stock or securities of the Company, if any, issuable upon
such exercise over and above the number of one one-hundredths of a share of
Preferred Stock and other capital stock or securities of the Company, if
any, issuable upon such exercise on the basis of the Purchase Price in
effect prior to such adjustment; provided, however, that the Company shall
deliver to such holder a due xxxx or other appropriate instrument
evidencing such holder's right to receive such additional shares
(fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in
the Purchase Price, in addition to those adjustments expressly required by
this Section 11, as and to the extent that in their good faith judgment the
Board shall determine to be advisable in order that any (i) consolidation
or subdivision of the Preferred Stock, (ii) issuance wholly for cash of any
shares of Preferred Stock at less than the Current Market Price, (iii)
issuance wholly for cash of shares of Preferred Stock or securities which
by their terms are convertible into or exchangeable for shares of Preferred
Stock, (iv) stock dividends or (v) issuance of rights, options or warrants
referred to in this Section 11, hereafter made by the Company to holders of
its Preferred Stock shall not be taxable to such stockholders.
(n) The Company covenants and agrees that it shall not,
at any time after the Distribution Date, (i) consolidate with any other
Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), (ii) merge with or into any other
Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), or (iii) sell or transfer (or permit
any Subsidiary to sell or transfer), in one transaction, or a series of
related transactions, assets, cash flow or earning power aggregating more
than 50% of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person or Persons (other than the Company
and/or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(o) hereof), if (x) at the time of or immediately
after such consolidation, merger or sale there are any rights, warrants or
other instruments or securities outstanding or agreements in effect which
would substantially diminish or otherwise eliminate the benefits intended
to be afforded by the Rights or (y) prior to, simultaneously with or
immediately after such consolidation, merger or sale, the stockholders of
the Person who constitutes, or would constitute, the "Principal Party" for
purposes of Section 13(a) hereof shall have received a distribution of
Rights previously owned by such Person or any of its Affiliates and
Associates.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23 or
Section 27 hereof, take (or permit any Subsidiary to take) any action if at
the time such action is taken it is reasonably foreseeable that such action
will diminish substantially or otherwise eliminate the benefits intended to
be afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after the
Rights Dividend Declaration Date and prior to the Distribution Date (i)
declare a dividend on the outstanding shares of Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding shares of Common
Stock, or (iii) combine the outstanding shares of Common Stock into a
smaller number of shares, the number of Rights associated with each share
of Common Stock then outstanding, or issued or delivered thereafter but
prior to the Distribution Date, shall be proportionately adjusted so that
the number of Rights thereafter associated with each share of Common Stock
following any such event shall equal the result obtained by multiplying the
number of Rights associated with each share of Common Stock immediately
prior to such event by a fraction the numerator 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. Certificate of Adjusted Purchase Price or
Number of Shares. Whenever an adjustment is made as provided in Section 11
and Section 13 hereof, the Company shall (a) promptly prepare a certificate
setting forth such adjustment and a brief statement of the facts,
computations and methodology accounting for such adjustment, (b) promptly
file with the Rights Agent, and with each transfer agent for the Preferred
Stock and the Common Stock, a copy of such certificate and (c) if a
Distribution Date has occurred, mail a brief summary thereof to each holder
of a Rights Certificate (or, if prior to the Distribution Date, to each
holder of a certificate representing shares of Common Stock) in accordance
with Section 26 hereof. The Rights Agent shall be fully protected in
relying on any such certificate and on any adjustment or statement therein
contained and shall have no duty or liability with respect to, and shall
not be deemed to have knowledge of, any adjustment unless and until it
shall have received such a certificate.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets Cash Flow or Earning Power.
(a) In the event that, following the Stock Acquisition
Date, directly or indirectly, (x) the Company shall consolidate with, or
merge with and into, any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o) hereof), and the
Company shall not be the continuing or surviving corporation of such
consolidation or merger, (y) any Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o) hereof) shall
consolidate with, or merge with or into, the Company, and the Company shall
be the continuing or surviving corporation of such consolidation or merger
and, in connection with such consolidation or merger, all or part of the
outstanding shares of Common Stock shall be changed into or exchanged for
stock or other securities of any other Person or cash or any other
property, or (z) the Company shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer), in one
transaction or a series of related transactions, assets, cash flow or
earning power aggregating more than 50% of the assets, cash flow or earning
power of the Company and its Subsidiaries (taken as a whole) to any Person
or Persons (other than the Company or any Subsidiary of the Company in one
or more transactions each of which complies with Section 11(o) hereof),
then, and in each such case, proper provision shall be made so that: (i)
each holder of a Right, except as provided in Section 7(e) hereof, shall
thereafter have the right to receive, upon the exercise thereof at the then
current Purchase Price in accordance with the terms of this Agreement, such
number of validly authorized and issued, fully paid, non-assessable and
freely tradeable shares of Common Stock of the Principal Party (as such
term is hereinafter defined), not subject to any liens, encumbrances,
rights of first refusal or other adverse claims, as shall be equal to the
result obtained by (1) multiplying the then current Purchase Price by the
number of one one-hundredths of a share of Preferred Stock for which a
Right is exercisable immediately prior to the first occurrence of a Section
13 Event (or, if a Section 11(a)(ii) Event has occurred prior to the first
occurrence of a Section 13 Event, multiplying the number of such one
one-hundredths of a share for which a Right was exercisable immediately
prior to the first occurrence of a Section 11(a)(ii) Event by the Purchase
Price in effect immediately prior to such first occurrence of a Section
11(a)(ii) Event), and (2) dividing that product (which, following the first
occurrence of a Section 13 Event, shall be referred to as the "Purchase
Price" for each Right and for all purposes of this Agreement) by 50% of the
Current Market Price (determined pursuant to Section 11(d)(i) hereof) per
share of the Common Stock of such Principal Party on the date of
consummation of such Section 13 Event; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such Section 13
Event, all the obligations and duties of the Company pursuant to this
Agreement; (iii) the term "Company" shall thereafter be deemed to refer to
such Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply only to such Principal Party following the
first occurrence of a Section 13 Event; (iv) such Principal Party shall
take such steps (including, but not limited to, the reservation of a
sufficient number of shares of its Common Stock) in connection with the
consummation of any such transaction as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably
may be, in relation to its shares of Common Stock thereafter deliverable
upon the exercise of the Rights; and (v) the provisions of Section
11(a)(ii) hereof shall be of no effect following the first occurrence of
any Section 13 Event.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in
clause (x) or (y) of the first sentence of Section 13(a) hereof,
the Person that is the issuer of any securities into which shares
of Common Stock of the Company are converted in such merger or
consolidation, and if no securities are so issued, the Person that
is the other party to such merger or consolidation; and
(ii) in the case of any transaction described in
clause (z) of the first sentence of Section 13(a) hereof, the
Person that is the party receiving the greatest portion of the
assets, cash flow or earning power transferred pursuant to such
transaction or transactions; provided, however, that in any such
case, (1) if the Common Stock of such Person is not at such time
and has not been continuously over the preceding twelve (12) month
period registered under Section 12 of the Exchange Act, and such
Person is a direct or indirect Subsidiary of another Person the
Common Stock of which is and has been so registered, "Principal
Party" shall refer to such other Person; and (2) in case such
Person is a Subsidiary, directly or indirectly, of more than one
Person, the Common Stock of two or more of which are and have been
so registered, "Principal Party" shall refer to whichever of such
Persons is the issuer of the Common Stock having the greatest
aggregate market value.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless the Principal Party shall
have a sufficient number of authorized shares of its Common Stock which
have not been issued or reserved for issuance to permit the exercise in
full of the Rights in accordance with this Section 13 and unless prior
thereto the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing for the
terms set forth in paragraphs (a) and (b) of this Section 13 and further
providing that, as soon as practicable after the date of any consolidation,
merger or sale of assets mentioned in paragraph (a) of this Section 13, the
Principal Party will:
(i) prepare and file a registration statement under
the Act, with respect to the Rights and the securities purchasable
upon exercise of the Rights on an appropriate form, and will use
its best efforts to cause such registration statement to (A)
become effective as soon as practicable after such filing and (B)
remain effective (with a prospectus at all times meeting the
requirements of the Act) until the Expiration Date;
(ii) take all such other action as may be necessary
to enable the Principal Party to issue the securities purchasable
upon exercise of the Rights, including but not limited to the
registration or qualification of such securities under all
requisite securities laws of jurisdictions of the various states
and the listing of such securities on such exchanges and trading
markets as may be necessary or appropriate; and
(iii) will deliver to holders of the Rights
historical financial statements for the Principal Party and each
of its Affiliates which comply in all respects with the
requirements for registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. In the event that a
Section 13 Event shall occur at any time after the occurrence of a Section
11(a)(ii) Event, the Rights which have not theretofore been exercised shall
thereafter become exercisable in the manner described in Section 13(a).
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions
of Rights, except prior to the Distribution Date as provided in Section
11(p) hereof, or to distribute Rights Certificates which evidence
fractional Rights. In lieu of such fractional Rights, the Company shall pay
to the registered holders of the Rights Certificates with regard to which
such fractional Rights would otherwise be issuable, an amount in cash equal
to the same fraction of the current market value of a whole Right. For
purposes of this Section 14(a), the current market value of a whole Right
shall be the closing price of the Rights for the Trading Day immediately
prior to the date on which such fractional Rights would have been otherwise
issuable. The closing price of the Rights for any day shall be the last
sale price, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system
with respect to securities listed or admitted to trading on the New York
Stock Exchange or, if the Rights are not listed or admitted to trading on
the New York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the
principal national securities exchange on which the Rights are listed or
admitted to trading, or if the Rights are not listed or admitted to trading
on any national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other system then in
use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished
by a professional market maker making a market in the Rights, selected by
the Board. If on any such date no such market maker is making a market in
the Rights, the fair value of the Rights on such date as determined in good
faith by the Board shall be used.
(b) The Company shall not be required to issue fractions
of shares of Preferred Stock (other than fractions which are integral
multiples of one one-hundredth of a share of Preferred Stock) upon exercise
of the Rights or to distribute certificates which evidence fractional
shares of Preferred Stock (other than fractions which are integral
multiples of one one-hundredth of a share of Preferred Stock). In lieu of
fractional shares of Preferred Stock that are not integral multiples of one
one-hundredth of a share of Preferred Stock, the Company may pay to the
registered holders of Rights Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction
of the current market value of one one-hundredth of a share of Preferred
Stock. For purposes of this Section 14(b), the current market value of one
one-hundredth of a share of Preferred Stock shall be one one-hundredth of
the closing price of a share of Preferred Stock (as determined pursuant to
Section 11(d)(ii) hereof) for the Trading Day immediately prior to the date
of such exercise.
(c) Following the occurrence of a Triggering Event, the
Company shall not be required to issue fractions of shares of Common Stock
upon exercise of the Rights or to distribute certificates which evidence
fractional shares of Common Stock. In lieu of fractional shares of Common
Stock, the Company may pay to the registered holders of Rights Certificates
at the time such Rights are exercised as herein provided an amount in cash
equal to the same fraction of the current market value of one (1) share of
Common Stock. For purposes of this Section 14(c), the current market value
of one share of Common Stock shall be the closing price per share of Common
Stock (as determined pursuant to Section 11(d)(i) hereof) on the Trading
Day immediately prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the Rights
expressly waives its right to receive any fractional Rights or any
fractional shares upon exercise of a Right, except as permitted by this
Section 14.
Section 15. Rights of Action. All rights of action in
respect of this Agreement, excepting the rights of action given to the
Rights Agent under Section 18 and Section 20, are vested in the respective
registered holders of the Rights Certificates (and, prior to the
Distribution Date, the registered holders of the Common Stock); and any
registered holder of any Rights Certificate (or, prior to the Distribution
Date, of the Common Stock), without the consent of the Rights Agent or of
the holder of any other Rights Certificate (or, prior to the Distribution
Date, of the Common Stock), may, in its own behalf and for its own benefit,
enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, its right
to exercise the Rights evidenced by such Rights Certificate in the manner
provided in such Rights Certificate and in this Agreement. Without limiting
the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have
an adequate remedy at law for any breach of this Agreement and shall be
entitled to specific performance of the obligations hereunder and
injunctive relief against actual or threatened violations of the
obligations hereunder of any Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of
a Right by accepting the same consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates
are transferable only on the registry books of the Rights Agent if
surrendered at the office of the Rights Agent designated for such purpose,
duly endorsed or accompanied by a proper instrument of transfer and with
the appropriate forms and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the
Company and the Rights Agent may deem and treat the person in whose name a
Rights Certificate (or, prior to the Distribution Date, the associated
Common Stock certificate) is registered as the absolute owner thereof and
of the Rights evidenced thereby (notwithstanding any notations of ownership
or writing on the Rights Certificates or the associated Common Stock
certificate made by anyone other than the Company or the Rights Agent) for
all purposes whatsoever, and neither the Company nor the Rights Agent,
subject to the last sentence of Section 7(e) hereof, shall be required to
be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability
to any holder of a Right or other Person as a result of its inability to
perform any of its obligations under this Agreement by reason of any
preliminary or permanent injunction or other order, decree or ruling issued
by a court of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligation;
provided, however, the Company must use its best efforts to have any such
order, decree or ruling lifted or otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Rights Certificate shall be
entitled to vote, receive dividends or be deemed for any purpose the holder
of the number of one one- hundredths of a share of Preferred Stock or any
other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained
herein or in any Rights Certificate be construed to confer upon the holder
of any Rights Certificate, as such, any of the rights of a stockholder of
the Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings
or other actions affecting stockholders (except as provided in Section 25
hereof), or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by such Rights Certificate shall have
been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder and to
reimburse the Rights Agent for all reasonable expenses, counsel fees,
disbursements, taxes and governmental charges and other charges of any kind
incurred by the Rights Agent in the preparation, delivery, amendment,
administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify
the Rights Agent for, and to hold it harmless against, any loss, judgment,
fine, penalty, claim, demand, settlement, damage, cost, liability or
expense, including, without limitation the reasonable fees and expenses of
counsel, incurred without negligence, bad faith or willful misconduct on
the part of the Rights Agent (which negligence, bad faith or willful
misconduct must be determined by a final, non-appealable order, judgment,
decree or ruling of a court of competent jurisdiction), for any action
taken, suffered or omitted by the Rights Agent pursuant to this Agreement
or in connection with the acceptance, administration, exercise and
performance of this Agreement, including the costs and expenses of
defending against any claim of liability in the premises. The indemnity
provided for herein shall survive the termination of this Agreement, the
exercise or expiration of the Rights, and the resignation or removal of the
Rights Agent.
(b) The Rights Agent shall be fully protected and
authorized and shall incur no liability for or in respect of any action
taken, suffered or omitted by it in connection with its acceptance and
administration of this Agreement and the exercise and performance of its
duties hereunder, in reliance upon any Rights Certificate or certificate
for Common Stock or for other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other paper or
document believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons, or
otherwise upon the advice of counsel as set forth in Section 20.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent.
(a) Any Person into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated,
or any Person resulting from any merger or consolidation to which the
Rights Agent or any successor Rights Agent shall be a party, or any Person
succeeding to the corporate trust, stock transfer or other stockholder
services business of the Rights Agent or any successor Rights Agent, shall
be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of
the parties hereto; but only if such Person would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent shall succeed to
the agency created by this Agreement, any of the Rights Certificates shall
have been countersigned but not delivered, any such successor Rights Agent
may adopt the countersignature of a predecessor Rights Agent and deliver
such Rights Certificates so countersigned; and in case at that time any of
the Rights Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Rights Certificates either in the name of
the predecessor or in the name of the successor Rights Agent; and in all
such cases such Rights Certificates shall have the full force provided in
the Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent
shall be changed and at such time any of the Rights Certificates shall have
been countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates
shall not have been countersigned, the Rights Agent may countersign such
Rights Certificates either in its prior name or in its changed name; and in
all such cases such Rights Certificates shall have the full force provided
in the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes to perform only the duties and obligations expressly imposed by
this Agreement, upon the following terms and conditions, by all of which
the Company and the holders of Rights Certificates, by their acceptance
thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who
may be legal counsel for the Company), and the advice or opinion of such
counsel shall be full and complete authorization and protection to the
Rights Agent and the Rights Agent shall incur no liability for or in
respect of any action taken or omitted by it in good faith and in
accordance with such advice or opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any
fact or matter (including, without limitation, the identity of any
Acquiring Person and the determination of Current Market Price) be proved
or established by the Company prior to taking, suffering or omitting any
action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by the Chairman of the
Board, the President, any Vice President, the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be full and
complete authorization and protection to the Rights Agent and the Rights
Agent shall incur no liability for in respect of any action taken, suffered
in good faith by it under the provisions of this Agreement in reliance upon
such certificate.
(c) The Rights Agent shall be liable hereunder to the
Company and other Person only for its own negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be liable for or by reason
of any of the statements of fact or recitals contained in this Agreement or
in the Rights Certificates or be required to verify the same (except as to
its countersignature on such Rights Certificates), but all such statements
and recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not have any liability for or
be under any responsibility in respect of the validity of this Agreement or
the execution and delivery hereof (except the due execution hereof by the
Rights Agent) or in respect of the validity or execution of any Rights
Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or condition
contained in this Agreement or in any Rights Certificate; nor shall it be
responsible for any change in the exercisability of the Rights or any
adjustment required under the provisions of Section 11, Section 13 or
Section 24 hereof or responsible for the manner, method or amount of any
such adjustment or the ascertaining of the existence of facts that would
require any such adjustment (except with respect to the exercise of Rights
evidenced by Rights Certificates after receipt of the certificate described
in Section 12, upon which the Rights Agent may rely); nor shall it by any
act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock or Preferred
Stock to be issued pursuant to this Agreement or any Rights Certificate or
as to whether any shares of Common Stock or Preferred Stock will, when so
issued, be validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged
and delivered all such further and other acts, instruments and assurances
as may reasonably be required by the Rights Agent for the carrying out or
performing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder
from the Chairman of the Board, the President, any Vice President, the
Secretary, any Assistant Secretary, the Treasurer or any Assistant
Treasurer of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and such instructions shall be
full authorization and protection to the Rights Agent and the Rights Agent
shall not be liable for or in respect of any action taken, suffered or
omitted by it in good faith in accordance with instructions of any such
officer or for any delay in acting while waiting for those instructions.
The Rights Agent shall be fully authorized and protected in relying upon
the most recent instructions received from any such officers. Any
application by the Rights Agent for written instructions from the Company
may, at the option of the Rights Agent, set forth in writing any action
proposed to be taken, suffered or omitted by the Rights Agent under this
Agreement and the date on and/or after which such action shall be taken or
suffered or such omission shall be effective. The Rights Agent shall not be
liable for any action taken or suffered by, or omission of, the Rights
Agent in accordance with a proposal included in any such application on or
after the date specified in such application (which date shall not be less
than five (5) Business Days after the date any officer of the Company
actually receives such application, unless any such officer shall have
consented in writing to an earlier date) unless, prior to taking any such
action (or the effective date in the case of an omission), the Rights Agent
shall have received written instructions in response to such application
specifying the action to be taken, suffered or omitted.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily interested
in any transaction in which the Company may be interested, or contract with
or lend money to the Company or otherwise act as fully and freely as though
it were not Rights Agent under this Agreement. Nothing herein shall
preclude the Rights Agent and any such stockholder, director, officer or
employee of the Rights Agent from acting in any other capacity for the
Company or for any other Person.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights Agent shall
not be answerable or accountable for any act, default, neglect or
misconduct of any such attorneys or agents or for any loss to the Company
resulting from any such act, default, neglect or misconduct; provided,
however, reasonable care was exercised in the selection and continued
employment thereof.
(j) No provision of this Agreement shall require the
Rights Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder or in
the exercise of any of its rights or powers if there shall be reasonable
grounds for believing that repayment of such funds or adequate
indemnification against such risk or liability is not reasonably assured to
it.
(k) If, with respect to any Rights Certificate
surrendered to the Rights Agent for exercise or transfer, the certificate
attached to the form of assignment or form of election to purchase, as the
case may be, has either not been completed or indicates an affirmative
response to clause 1 and/or 2 thereof, the Rights Agent shall not take any
further action with respect to such requested exercise or transfer without
first consulting with the Company.
(l) The Rights Agent shall act hereunder solely as agent
for the Company and its duties shall be determined solely by the provisions
hereof, and no implied duties, covenants or obligations of the Rights Agent
shall be read into this Agreement or any Rights Certificate or other
document or instrument executed in connection herewith. The Rights Agent
does not assume any obligations or relationship of agency or trust for or
with the holders of the Rights.
Section 21. Change of Rights Agent. The Rights Agent or
any successor Rights Agent may resign and be discharged from its duties
under this Agreement upon thirty (30) days' notice in writing mailed to the
Company, and to each transfer agent of the Common Stock and Preferred Stock
known to the Rights Agent, by registered or certified mail, and, if such
resignation occurs after the Distribution Date, to the registered holders
of the Rights Certificates by first-class mail. The Company may remove the
Rights Agent or any successor Rights Agent upon thirty (30) days' notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the case
may be, and to each transfer agent of the Common Stock and Preferred Stock,
by registered or certified mail, and, if such removal occurs after the
Distribution Date, to the holders of the Rights Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise
become incapable of acting, the Company shall appoint a successor to the
Rights Agent. If the Company shall fail to make such appointment within a
period of thirty (30) days after giving notice of such removal or after it
has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Rights
Certificate (who shall, with such notice, submit his Rights Certificate for
inspection by the Company), then any registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (a) a Person
organized and doing business under the laws of the United States or any
State thereof, in good standing, having an office in the State of New York
or the State of New Jersey, which is authorized under such laws to exercise
corporate trust, stock transfer or stockholder services powers 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 of a Person 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 under
this Agreement without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent any property
at the time held by it hereunder, and execute and deliver any further
assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company shall file
notice thereof in writing with the predecessor Rights Agent and each
transfer agent of the Common Stock and the Preferred Stock, and, if such
appointment occurs after the Distribution Date, mail a notice thereof in
writing to the registered holders of the Rights Certificates. Failure to
give any notice provided for in this Section 21, however, or any defect
therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights
Agent, as the case may be.
Section 22. Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights to
the contrary, the Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by the Board to reflect
any adjustment or change in the Purchase Price and the number or kind or
class of shares or other securities or property purchasable under the
Rights Certificates made in accordance with the provisions of this
Agreement. In addition, in connection with the issuance or sale of shares
of Common Stock following the Distribution Date and prior to the redemption
or expiration of the Rights, the Company (a) shall, with respect to shares
of Common Stock so issued or sold pursuant to the exercise of stock options
or under any employee plan or arrangement, granted or awarded as of the
Distribution Date, or upon the exercise, conversion or exchange of
securities hereinafter issued by the Company, and (b) may, in any other
case, if deemed necessary or appropriate by the Board, issue Rights
Certificates representing the appropriate number of Rights in connection
with such issuance or sale; provided, however, that (i) no such Rights
Certificate shall be issued if, and to the extent that, the Company shall
be advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the Person to whom such
Rights Certificate would be issued, and (ii) no such Rights Certificate
shall be issued if, and to the extent that, appropriate adjustment shall
otherwise have been made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) The Board may, at its option, at any time prior to
the earlier of (i) the close of business on the tenth Business Day
following the Stock Acquisition Date (or, if the Stock Acquisition Date
shall have occurred prior to the Record Date, the close of business on the
tenth Business Day following the Record Date), or (ii) the Final Expiration
Date, redeem all but not less than all of the then outstanding Rights at a
redemption price of $0.001 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price." Notwithstanding anything contained
in this Agreement to the contrary, the Rights shall not be exercisable
after the first occurrence of a Section 11(a)(ii) Event until such time as
the Company's right of redemption hereunder has expired. The Company may,
at its option, pay the Redemption Price in cash, shares of Common Stock
(based on the Current Market Price, as defined in Section 11(d)(i) hereof,
of the Common Stock at the time of redemption) or any other form of
consideration deemed appropriate by the Board.
(b) Immediately upon the action of the Board ordering the
redemption of the Rights, evidence of which shall have been filed with the
Rights Agent, and without any further action and without any notice, the
right to exercise the Rights will terminate and the only right thereafter
of the holders of Rights shall be to receive the Redemption Price for each
Right so held. Promptly after the action of the Board ordering the
redemption of the Rights, the Company shall give notice of such redemption
to the Rights Agent and the holders of the then outstanding Rights by
mailing such notice to all such holders at each holder's last address 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 for the
Common Stock. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each
such notice of redemption will state the method by which the payment of the
Redemption Price will be made.
Section 24. Exchange.
(a) The Board may, at its option, at any time after any
Person becomes an Acquiring Person, exchange all or part of the then
outstanding and exercisable (i) Class A Rights (which shall not include
Class A Rights that have become void pursuant to the provisions of Section
7(e) hereof) for Class A Common Stock at an exchange ratio of one share of
Class A Common Stock per Class A Right and (ii) Class B Rights (which shall
not include Class B Rights that have become void pursuant to the provisions
of Section 7(e) hereof) for Class B Common Stock at an exchange ratio of
one share of Class B Common Stock per Class B Right, appropriately adjusted
to reflect any stock split, stock dividend or similar transaction occurring
after the date hereof (such exchange ratio being hereinafter referred to as
the "Exchange Ratio"). Notwithstanding the foregoing, the Board shall not
be empowered to effect such exchange at any time after any Person (other
than the Company, any Subsidiary of the Company, any employee benefit plan
of the Company or any such Subsidiary, or any entity holding Common Stock
for or pursuant to the terms of any such plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of
50% or more of the Voting Capital Stock then outstanding.
(b) Immediately upon the action of the Board ordering the
exchange of any Class A Rights or Class B Rights pursuant to subsection (a)
of this Section 24 and without any further action and without any notice,
the right to exercise such (i) Class A Rights shall terminate and the only
right thereafter of a holder of such Class A Rights shall be to receive
that number of shares of Class A Common Stock equal to the number of such
Class A Rights held by such holder multiplied by the Exchange Ratio and
(ii) Class B Rights shall terminate and the only right thereafter of a
holder of Class B Rights shall be to receive that number of shares of Class
B Common Stock equal to the number of such Class B Rights held by such
holder multiplied by the Exchange Ratio. The Company shall promptly give
public notice of any such exchange; provided, however, that the failure to
give, or any defect in, such notice shall not affect the validity of such
exchange. The Company promptly shall mail a notice of any such exchange to
all of the holders of such Rights at their last addresses as they appear
upon the registry books of the Rights Agent. Any notice which is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange will state the method by
which the exchange of the Class A Common Stock for Class A Rights and Class
B Common Stock for Class B Rights will be effected and, in the event of any
partial exchange, the number of Class A Rights and Class B Rights which
will be exchanged. Any partial exchange shall be effected pro rata based on
the number of Class A Rights or Class B Rights (other than Class A Rights
or Class B Rights which have become void pursuant to the provisions of
Section 7(e) hereof) held by each holder of Class A Rights or Class B
Rights.
(c) In any exchange pursuant to this Section 24, the
Company, at its option, may substitute Preferred Stock (or Equivalent
Preferred Stock, as such term is defined in paragraph (b) of Section 11
hereof) for Class A Common Stock exchangeable for Class A Rights or Class B
Common Stock exchangeable for Class B Rights, at the initial rate of one
one-hundredth of a share of Preferred Stock (or Equivalent Preferred Stock)
for each share of Class A Common Stock or Class B Common Stock, as the case
may be, as appropriately adjusted to reflect stock splits, stock dividends
and other similar transactions after the date hereof.
(d) In the event that there shall not be sufficient
shares of Class A Common Stock or Class B Common Stock issued but not
outstanding or authorized but unissued to permit any exchange of Class A
Rights or Class B Rights, as the case may be, as contemplated in accordance
with this Section 24, the Company shall take all such action as may be
necessary to authorize additional shares of Class A Common Stock or Class B
Common Stock for issuance upon exchange of the Class A Rights or Class B
Rights, as the case may be.
(e) The Company shall not be required to issue fractions
of shares of Common Stock or to distribute certificates which evidence
fractional shares of Common Stock. In lieu of such fractional shares of
Common Stock, there shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional shares of Common Stock
would otherwise be issuable, an amount in cash equal to the same fraction
of the current market value of a whole share of Common Stock. For the
purposes of this subsection (e), the current market value of a whole share
of Common Stock shall be the closing price of a share of Common Stock (as
determined pursuant to the second sentence of Section 11(d)(i) hereof) for
the Trading Day immediately prior to the date of exchange pursuant to this
Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose, at any time after
the Distribution Date, (i) to pay any dividend payable in stock of any
class to the holders of Preferred Stock or to make any other distribution
to the holders of Preferred Stock (other than a regular quarterly cash
dividend out of earnings or retained earnings of the Company), or (ii) to
offer to the holders of Preferred Stock rights or warrants to subscribe for
or to purchase any additional shares of Preferred Stock or shares of stock
of any class or any other securities, rights or options, or (iii) to effect
any reclassification of its Preferred Stock (other than a reclassification
involving only the subdivision of outstanding shares of Preferred Stock),
or (iv) to effect any consolidation or merger into or with any other Person
(other than a Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof), or to effect any sale or other transfer (or to
permit one or more of its Subsidiaries to effect any sale or other
transfer), in one transaction or a series of related transactions, of more
than 50% of the assets, cash flow or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than
the Company and/or any of its Subsidiaries in one or more transactions each
of which complies with Section 11(o) hereof), or (v) to effect the
liquidation, dissolution or winding up of the Company, then, in each such
case, the Company shall give to the Rights Agent and to each holder of a
Rights Certificate, to the extent feasible and in accordance with Section
26 hereof, a notice of such proposed action, which shall specify the record
date for the purposes of such stock dividend, distribution of rights or
warrants, or the date on which such reclassification, consolidation,
merger, sale, transfer, liquidation, dissolution, or winding up is to take
place and the date of participation therein by the holders of the shares of
Preferred Stock, if any such date is to be fixed, and such notice shall be
so given in the case of any action covered by clause (i) or (ii) above at
least twenty (20) days prior to the record date for determining holders of
the shares of Preferred Stock for purposes of such action, and in the case
of any such other action, at least twenty (20) days prior to the date of
the taking of such proposed action or the date of participation therein by
the holders of the shares of Preferred Stock, whichever shall be the
earlier.
(b) In case any of the events set forth in Section
11(a)(ii) hereof shall occur, then, in any such case, (i) the Company shall
as soon as practicable thereafter give to the Rights Agent and to each
holder of a Rights Certificate, to the extent feasible and in accordance
with Section 26 hereof, a notice of the occurrence of such event, which
shall specify the event and the consequences of the event to holders of
Rights under Section 11(a)(ii) hereof, and (ii) all references in the
preceding paragraph to Preferred Stock shall be deemed thereafter to refer
to Common Stock and/or, if appropriate, other securities.
Section 26. Notices. Notices or demands authorized by
this Agreement to be given or made by the Rights Agent or by the holder of
any Rights Certificate to or on the Company shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing by the Rights Agent with the Company) as
follows:
RCN Corporation
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000-0000
Attention: General Counsel
Subject to the provisions of Section 21, any notice or demand authorized by
this Agreement to be given or made by the Company or by the holder of any
Rights Certificate to or on the Rights Agent shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing by the Rights Agent with the Company) as
follows:
HSBC Bank USA
Issuer Services
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxx Xxxxxxxx
Fax: (000) 000-0000
Tel.: (000) 000-0000
by courier:
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Notices or demands authorized by this Agreement to be
given or made by the Company or the Rights Agent to the holder of any
Rights Certificate (or, if prior to the Distribution Date, to the holder of
certificates representing shares of Common Stock) shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed to
such holder at the address of such holder as shown on the registry books of
the Company.
Section 27. Supplements and Amendments. Prior to the
Distribution Date, the Company and the Rights Agent shall, if the Company
so directs, supplement or amend any provision of this Agreement without the
approval of any holders of certificates representing shares of Common
Stock. From and after the Distribution Date, the Company and the Rights
Agent shall, if the Company so directs, supplement or amend this Agreement
without the approval of any holders of Rights Certificates in order (i) to
cure any ambiguity, (ii) to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provisions
herein, (iii) to shorten or lengthen any time period hereunder or (iv) to
change or supplement the provisions hereunder in any manner which the
Company may deem necessary or desirable and which shall not adversely
affect the interests of the holders of Rights Certificates (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring Person). Upon
the delivery of a certificate from an appropriate officer of the Company
which states that the proposed supplement or amendment is in compliance
with the terms of this Section 27, the Rights Agent shall execute such
supplement or amendment. 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. Notwithstanding anything herein to the contrary,
(a) this Agreement may not be amended (other than pursuant to clauses (i)
or (ii) of the preceding sentence) at a time when the Rights are not
redeemable and (b) the Rights Agent may, but shall not be obligated to,
enter into any supplement or amendment that affects the Rights Agent's own
rights, duties, obligations or immunities under this Agreement.
Section 28. Successors. All the covenants and provisions
of this Agreement by or for the benefit of the Company or the Rights Agent
shall bind and inure to the benefit of their respective successors and
assigns hereunder.
Section 29. Determinations and Actions by the Board of
Directors, etc. For all purposes of this Agreement, any calculation of the
number of shares of Common Stock or any other class of capital stock
outstanding at any particular time, including for purposes of determining
the particular percentage of such outstanding shares of Common Stock of
which any Person is the Beneficial Owner, shall be made in accordance with
the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and
Regulations under the Exchange Act. The Board shall have the exclusive
power and authority to administer this Agreement and to exercise all rights
and powers specifically granted to the Board or to the Company, or as may
be necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power to (i) interpret the
provisions of this Agreement, and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement (including
a determination to redeem or not redeem the Rights or to amend the
Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions
with respect to the foregoing) which are done or made by the Board in good
faith, shall (x) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights and all other parties, and (y) not
subject the Board, or any of the directors on the Board to any liability to
the holders of the Rights.
Section 30. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the Company,
the Rights Agent and the registered holders of the Rights Certificates
(and, prior to the Distribution Date, registered holders of the Common
Stock) any legal or equitable right, remedy or claim under this Agreement;
but this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, registered holders of
the Common Stock).
Section 31. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated; provided, however, that notwithstanding
anything in this Agreement to the contrary, if any such term, provision,
covenant or restriction is held by such court or authority to be invalid,
void or unenforceable and the Board determines in its good faith judgment
that severing the invalid language from this Agreement would adversely
affect the purpose or effect of this Agreement, the right of redemption set
forth in Section 23 hereof shall be reinstated and shall not expire until
the close of business on the tenth Business Day following the date of such
determination by the Board. Without limiting the foregoing, if any
provision requiring a specific group of directors of the Company to act is
held to by any court of competent jurisdiction or other authority to be
invalid, void or unenforceable, such determination shall then be made by
the Board in accordance with applicable law and the Company's Amended and
Restated Certificate of Incorporation, as amended, and By-laws.
Section 32. Governing Law. This Agreement, each Right and
each Rights Certificate issued hereunder shall be deemed to be a contract
made under the laws of the State of Delaware and for all purposes shall be
governed by and construed in accordance with the laws of such State
applicable to contracts made and to be performed entirely within such
State.
Section 33. Counterparts. This Agreement may be executed
in any number of counterparts and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of
the several sections of this Agreement are inserted for convenience only
and shall not control or affect the meaning or construction of any of the
provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, all as of the day and year first above
written.
Attest: RCN CORPORATION
By /s/ Xxxx X. Xxxxx By /s/ Xxxxxxx X. Xxxxxxxx
----------------------------------- --------------------------------
Name: Xxxx X. Xxxxx Name: Xxxxxxx X. Xxxxxxxx
Title: Executive Vice President and Title: Vice President and
General Counsel Chief Financial Officer
Attest: HSBC BANK USA,
as Rights Agent
By /s/ Xxxxxxx Xxxxxxxx By /s/ Xxxx Xxxxxxxx
------------------------------------ -------------------------------
Name: Xxxxxxx Xxxxxxxx Name: Xxxx Xxxxxxxx
Title: Vice President Title: Vice President
Exhibit A
FORM OF
CERTIFICATE OF DESIGNATION, PREFERENCES AND
RIGHTS OF SERIES C JUNIOR PARTICIPATING PREFERRED STOCK
of
RCN CORPORATION
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
We, the undersigned, Xxxx X. Xxxxx, Executive Vice
President, General Counsel and Corporate Secretary, and Xxxxxxx X.
Xxxxxxxx, Executive Vice President and Chief Financial Officer, of RCN
Corporation, a Delaware corporation (hereinafter called the "Corporation"),
pursuant to the provisions of Sections 103 and 151 of the General
Corporation Law of the State of Delaware, do hereby make this Certificate
of Designations and do hereby state and certify that pursuant to the
authority expressly vested in the Board of Directors of the Corporation by
the Amended and Restated Certificate of Incorporation, the Board of
Directors duly adopted the following resolutions:
RESOLVED, that, pursuant to Article FOURTH of the Amended
and Restated Certificate of Incorporation (which authorizes 25,000,000
shares of preferred stock, $1.00 par value ("Preferred Stock") of which
708,000 shares of Series A 7% Senior Convertible Preferred Stock and
2,681,931 shares Series B 7% Senior Convertible Preferred Stock have
already been designated), the Board of Directors hereby fixes the powers,
designations, preferences and relative, participating, optional and other
special rights, and the qualifications, limitations and restrictions, of a
series of Preferred Stock;
RESOLVED, that pursuant to the authority vested in the
Board of Directors of this Corporation in accordance with the provisions of
its Amended and Restated Certificate of Incorporation, a series of
Preferred Stock of the Corporation be and it hereby is created, and that
the designation and amount thereof and the voting powers, preferences and
relative, participating, optional and 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 as "Series C Junior Participating Preferred
Stock" and the number of shares constituting such series shall be
4,100,000.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the
holders of any shares of any series of Preferred Stock ranking prior and
superior to the shares of Series C Junior Participating Preferred Stock
with respect to dividends, the holders of shares of Series C Junior
Participating 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, quarterly dividends payable in cash on the 1st day of March, June,
September and December in each year (each such date being referred to
herein as a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series C Junior Participating Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to the greater of (a)
$0.10 or (b) subject to the provision for adjustment hereinafter set forth,
100 times the aggregate per share amount of all cash dividends, and 100
times the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions other than a dividend payable in shares of
Common Stock or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock of the
Corporation 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 C Junior
Participating Preferred Stock. In the event the Corporation shall at any
time after December 5, 2001 (the "Rights Declaration Date") (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide
the outstanding Common Stock, or (iii) combine the outstanding Common Stock
into a smaller number of shares, then in each such case the amount to which
holders of shares of Series C Junior Participating Preferred Stock were
entitled immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such
event.
(B) The Corporation shall declare a dividend or
distribution on the Series C Junior Participating Preferred Stock as
provided in Paragraph (A) above immediately after it declares a dividend or
distribution on the Common Stock (other than a dividend payable in shares
of Common Stock); provided that, in the event no dividend or distribution
shall have been declared on the Common Stock during the period between any
Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend
Payment Date, a dividend of $0.10 per share on the Series C Junior
Participating Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series C Junior Participating Preferred Stock from
the Quarterly Dividend Payment Date next preceding the date of issue of
such shares of Series C Junior Participating Preferred Stock, unless the
date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares
shall begin to accrue from the date of issue of such shares, or unless the
date of issue is a Quarterly Dividend Payment Date or is a date after the
record date for the determination of holders of shares of Series C Junior
Participating Preferred Stock entitled to receive a quarterly dividend and
before such Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such Quarterly
Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series C Junior Participating
Preferred Stock in an amount less than the total amount of such dividends
at the time accrued and payable on such shares shall be allocated pro rata
on a share-by-share basis among all such shares at the time outstanding.
The Board of Directors may fix a record date for the determination of
holders of shares of Series C Junior Participating Preferred Stock entitled
to receive payment of a dividend or distribution declared thereon, which
record date shall be no more than 30 days prior to the date fixed for the
payment thereof.
Section 3. Voting Rights. The holders of shares of Series
C Junior Participating Preferred Stock shall have the following voting
rights:
(A) Subject to the provision for adjustment hereinafter
set forth, each share of Series C Junior Participating Preferred Stock
shall entitle the holder thereof to 100 votes on all matters submitted to a
vote of the stockholders of the Corporation. In the event the Corporation
shall at any time after the Rights Declaration Date (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide
the outstanding Common Stock, or (iii) combine the outstanding Common Stock
into a smaller number of shares, then in each such case the number of votes
per share to which holders of shares of Series C Junior Participating
Preferred Stock were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the
holders of shares of Series C Junior Participating 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) (i) If at any time dividends on any Series C
Junior Participating Preferred Stock shall be in arrears in an
amount equal to six (6) quarterly dividends thereon, the
occurrence of such contingency shall xxxx the beginning of a
period (herein called a "default period") which shall extend until
such time when all accrued and unpaid dividends for all previous
quarterly dividend periods and for the current quarterly dividend
period on all shares of Series C Junior Participating Preferred
Stock then outstanding shall have been declared and paid or set
apart for payment. During each default period, all holders of
Preferred Stock (including holders of the Series C Junior
Participating Preferred Stock) with dividends in arrears in an
amount equal to six (6) quarterly dividends thereon, voting as a
class, irrespective of series, shall have the right to elect two
(2) directors.
(ii) During any default period, such voting
right of the holders of Series C Junior Participating Preferred
Stock may be exercised initially at a special meeting called
pursuant to subparagraph (iii) of this Section 3(C) or at any
annual meeting of stockholders, and thereafter at annual meetings
of stockholders, provided that neither such voting right nor the
right of the holders of any other series of Preferred Stock, if
any, to increase, in certain cases, the authorized number of
directors shall be exercised unless the holders of ten percent
(10%) in number of shares of Preferred Stock outstanding shall be
present in person or by proxy. The absence of a quorum of the
holders of Common Stock shall not affect the exercise by the
holders of Preferred Stock of such voting right. At any meeting at
which the holders of Preferred Stock shall exercise such voting
right initially during an existing default period, they shall have
the right, voting as a class, to elect directors to fill such
vacancies, if any, in the Board of Directors as may then exist up
to two (2) directors or, if such right is exercised at an annual
meeting, to elect two (2) directors. If the number which may be so
elected at any special meeting does not amount to the required
number, the holders of the Preferred Stock shall have the right to
make such increase in the number of directors as shall be
necessary to permit the election by them of the required number.
After the holders of the Preferred Stock shall have exercised their
right to elect directors in any default period and during the
continuance of such period, the number of directors shall not be
increased or decreased except by vote of the holders of Preferred
Stock as herein provided or pursuant to the rights of any equity
securities ranking senior to or pari passu with the Series C Junior
Participating Preferred Stock.
(iii) Unless the holders of Preferred Stock
shall, during an existing default period, have previously
exercised their right to elect directors, the Board of Directors
may order, or any stockholder or stockholders owning in the
aggregate not less than ten percent (10%) of the total number of
shares of Preferred Stock outstanding, irrespective of series, may
request, the calling of a special meeting of the holders of
Preferred Stock, which meeting shall thereupon be called by the
President, a Vice-President or the Secretary of the Corporation.
Notice of such meeting and of any annual meeting at which holders
of Preferred Stock are entitled to vote pursuant to this Paragraph
(C)(iii) shall be given to each holder of record of Preferred
Stock by mailing a copy of such notice to him at his last address
as the same appears on the books of the Corporation. Such meeting
shall be called for a time not earlier than 20 days and not later
than 60 days after such order or request or in default of the
calling of such meeting within 60 days after such order or
request, such meeting may be called on similar notice by any
stockholder or stockholders owning in the aggregate not less than
ten percent (10%) of the total number of shares of Preferred Stock
outstanding. Notwithstanding the provisions of this Paragraph
(C)(iii), no such special meeting shall be called during the
period within 60 days immediately preceding the date fixed for the
next annual meeting of the stockholders.
(iv) In any default period, the holders of
Common Stock, and other classes of stock of the Corporation if
applicable, shall continue to be entitled to elect the whole
number of directors until the holders of Preferred Stock shall
have exercised their right to elect two (2) directors voting as a
class, after the exercise of which right (x) the directors so
elected by the holders of Preferred Stock shall continue in office
until their successors shall have been elected by such holders or
until the expiration of the default period, and (y) any vacancy in
the Board of Directors may (except as provided in Paragraph
(C)(ii) of this Section 3) be filled by vote of a majority of the
remaining directors theretofore elected by the holders of the
class of stock which elected the director whose office shall have
become vacant. References in this Paragraph (C) to directors
elected by the holders of a particular class of stock shall include
directors elected by such directors to fill vacancies as provided in
clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default
period, (x) the right of the holders of Preferred Stock as a class
to elect directors shall cease, (y) the term of any directors
elected by the holders of Preferred Stock as a class shall
terminate, and (z) the number of directors shall be such number as
may be provided for in the certificate of incorporation or by-laws
irrespective of any increase made pursuant to the provisions of
Paragraph (C)(ii) of this Section 3 (such number being subject,
however, to change thereafter in any manner provided by law or in
the certificate of incorporation or by-laws). Any vacancies in the
Board of Directors effected by the provisions of clauses (y) and
(z) in the preceding sentence may be filled by a majority of the
remaining directors.
(D) Notwithstanding anything to the contrary contained in
paragraphs (A), (B) and (C) of this Section 3, except as otherwise provided
by law, shares of Series C Junior Participating Preferred Stock received by
Vulcan Ventures Incorporated, a Washington corporation (or any successor
thereto), and its Affiliates (each a "Vulcan Person") upon exercise of
Rights (as such term is defined in the Rights Agreement of the Corporation,
dated December 5, 2001) issued to any Vulcan Person in respect of shares of
Class B Common Stock of the Corporation shall not, for so long as such
shares of Series C Junior Participating Preferred Stock are held by any
Vulcan Person, have any right to vote on any matters to be voted on by the
stockholders of the Corporation, and such shares of Series C Junior
Participating Preferred Stock shall not be included in determining the
number of shares voting or entitled to vote on any such matters.
(E) Except as set forth herein, holders of Series C
Junior Participating Preferred Stock shall have no special voting rights
and their consent shall not be required (except to the extent they are
entitled to vote with holders of Common Stock as set forth herein) for
taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series C Junior Participating Preferred Stock
as provided in Section 2 are in arrears, thereafter and until all accrued
and unpaid dividends and distributions, whether or not declared, on shares
of Series C Junior Participating Preferred Stock outstanding shall have
been paid in full, the Corporation shall not
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series C Junior Participating Preferred Stock;
(ii) declare or pay dividends on or make any
other distributions on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series C Junior Participating Preferred
Stock, except dividends paid ratably on the Series C Junior
Participating 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) 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 C Junior Participating Preferred Stock, provided
that the Corporation may at any time redeem, purchase or otherwise
acquire shares of any such parity stock in exchange for shares of
any stock of the Corporation ranking junior (either as to
dividends or upon dissolution, liquidation or winding up) to the
Series C Junior Participating Preferred Stock; or
(iv) purchase or otherwise acquire for
consideration any shares of Series C Junior Participating
Preferred Stock, or any shares of stock ranking on a parity with
the Series C Junior Participating Preferred Stock, except in
accordance with a purchase offer made in writing or by publication
(as determined by the Board of Directors) to all holders of such
shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and
classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of
the Corporation to purchase or otherwise acquire for consideration any
shares of stock of the Corporation unless the Corporation could, under
Paragraph (A) of this Section 4, purchase or otherwise acquire such shares
at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series C
Junior Participating Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and cancelled
promptly after the acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued shares of Preferred Stock and
may be reissued as part of a new series of Preferred Stock to be created by
resolution or resolutions of the Board of Directors, subject to the
conditions and restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up. (A)
Upon any liquidation (voluntary or otherwise), dissolution or winding up of
the Corporation, no distribution shall be made to the holders of shares of
stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series C Junior Participating Preferred
Stock unless, prior thereto, the holders of shares of Series C Junior
Participating Preferred Stock shall have received an amount equal to $100
per share of Series C Participating Preferred Stock, plus an amount equal
to accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment (the "Series C Liquidation
Preference"). Following the payment of the full amount of the Series C
Liquidation Preference, no additional distributions shall be made to the
holders of shares of Series C Junior Participating Preferred Stock unless,
prior thereto, the holders of shares of Common Stock shall have received an
amount per share (the "Common Adjustment") equal to the quotient obtained
by dividing (i) the Series C Liquidation Preference by (ii) 100 (as
appropriately adjusted as set forth in subparagraph (C) below to reflect
such events as stock splits, stock dividends and recapitalizations with
respect to the Common Stock) (such number in clause (ii), the "Adjustment
Number"). Following the payment of the full amount of the Series C
Liquidation Preference and the Common Adjustment in respect of all
outstanding shares of Series C Junior Participating Preferred Stock and
Common Stock, respectively, holders of Series C Junior Participating
Preferred Stock and holders of shares of Common Stock shall receive their
ratable and proportionate share of the remaining assets to be distributed
in the ratio of the Adjustment Number to 1 with respect to such Preferred
Stock and Common Stock, on a per share basis, respectively.
(B) In the event, however, that there are not sufficient
assets available to permit payment in full of the Series C Liquidation
Preference and the liquidation preferences of all other series of preferred
stock, if any, which rank on a parity with the Series C Junior
Participating Preferred Stock, then such remaining assets shall be
distributed ratably to the holders of such parity shares in proportion to
their respective liquidation preferences. In the event, however, that there
are not sufficient assets available to permit payment in full of the Common
Adjustment, then such remaining assets shall be distributed ratably to the
holders of Common Stock.
(C) In the event the Corporation shall at any time after
the Rights Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common
Stock, or (iii) combine the outstanding Common Stock into a smaller number
of shares, then in each such case the Adjustment Number in effect
immediately prior to such event shall be adjusted by multiplying such
Adjustment Number by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger, combination or
other transaction in which the shares of Common Stock are exchanged for or
changed into other stock or securities, cash and/or any other property,
then in any such case the shares of Series C Junior Participating Preferred
Stock shall at the same time be similarly exchanged or changed in an amount
per share (subject to the provision for adjustment hereinafter set forth)
equal to 100 times the aggregate amount of stock, securities, cash and/or
any other property (payable in kind), as the case may be, into which or for
which each share of Common Stock is changed or exchanged. In the event the
Corporation shall at any time after the Rights Declaration Date (i) declare
any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the outstanding
Common Stock into a smaller number of shares, then in each such case the
amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series C Junior Participating Preferred Stock shall be
adjusted by multiplying such amount by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Series C Junior
Participating Preferred Stock shall not be redeemable.
Section 9. Ranking. The Series C Junior Participating
Preferred Stock shall rank junior to all other series of the Corporation's
Preferred Stock as to the payment of dividends and the distribution of
assets, unless the terms of any such series shall provide otherwise.
Section 10. Amendment. At any time when any shares of
Series C Junior Participating Preferred Stock are outstanding, the Amended
and Restated Certificate of Incorporation, as amended, of the Corporation
shall not be amended in any manner which would materially alter or change
the powers, preferences or special rights of the Series C Junior
Participating Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of a majority or more of the outstanding
shares of Series C Junior Participating Preferred Stock, voting separately
as a class.
Section 11. Fractional Shares. Series C Junior
Participating Preferred Stock may be issued in fractions of a share which
shall entitle the holder, in proportion to such holder's fractional shares,
to exercise voting rights, receive dividends, participate in distributions
and to have the benefit of all other rights of holders of Series C Junior
Participating Preferred Stock.
Section 12. Certain Definitions. As used herein with
respect to the Series C Junior Participating Preferred Stock, the following
terms shall have the following meanings:
(A) The term "Class A Common Stock" means the class of
common stock designated as the Class A Common Stock, par value $1.00 per
share, of the Corporation at the date hereof or any other class of stock
resulting from successive changes or reclassification of the common stock.
(B) The term "Class B Common Stock" means the class of
common stock designated as the Class B Common Stock, par value $1.00 per
share, of the Corporation at the date hereof or any other class of stock
resulting from successive changes or reclassification of the common stock.
(C) The term "Common Stock" means the common stock, par
value $1.00 per share, of the Corporation at the date hereof or any other
stock resulting from successive changes or reclassifications of the common
stock, and includes both the Class A Common Stock and the Class B Common
Stock.
IN WITNESS WHEREOF, we have executed and subscribed this
Certificate and do affirm the foregoing as true under the penalties of
perjury this 5th day of December, 2001.
------------------------------
Xxxx X. Xxxxx
Attest:
-----------------------------
Xxxxxxx X. Xxxxxxxx
Exhibit B
[Form of Rights Certificate]
Certificate No. R- ________ Rights
NOT EXERCISABLE AFTER DECEMBER 5, 2011, UNLESS EXTENDED PRIOR THERETO BY
THE BOARD OF DIRECTORS OF THE COMPANY, OR EARLIER IF REDEEMED BY THE
COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $0.001 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A
PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE
OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT).
ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY
BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH
AGREEMENT.]*
Class [A][B] Rights Certificate
RCN CORPORATION
--------
* The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
This certifies that ______________________, or registered
assigns, is the registered owner of the number of Class [A][B]* 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
December 5, 2001 (the "Rights Agreement"), between RCN Corporation, a
Delaware corporation (the "Company"), and HSBC Bank USA, a banking
corporation and trust company duly organized and validly existing under the
laws of the State of New York (the "Rights Agent"), to purchase from the
Company at any time prior to 5:00 P.M. (New York City time) on December 5,
2011 (unless such date is extended prior thereto by the Board of Directors)
at the office or offices of the Rights Agent designated for such purpose,
or its successors as Rights Agent, one one-hundredth of a fully paid,
non-assessable share of Series C Junior Participating Preferred Stock (the
"Preferred Stock") of the Company, at a purchase price of $30 per one
one-hundredth of a share (the "Purchase Price"), upon presentation and
surrender of this Rights Certificate with the Form of Election to Purchase
and related Certificate duly executed. The number of Rights evidenced by
this Rights Certificate (and the number of shares which may be purchased
upon exercise thereof) set forth above, and the Purchase Price per share
set forth above, are the number and Purchase Price as of December 17, 2001,
based on the Preferred Stock as constituted at such date. The Company
reserves the right to require prior to the occurrence of a Triggering Event
(as such term is defined in the Rights Agreement) that a number of Rights
be exercised so that only whole shares of Preferred Stock will be issued.
Upon the occurrence of a Section 11(a)(ii) Event (as such
term is defined in the Rights Agreement), if the Rights evidenced by this
Rights Certificate are beneficially owned by (i) an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are
defined in the Rights Agreement), (ii) a transferee of any such Acquiring
Person, Associate or Affiliate, or (iii) under certain circumstances
specified in the Rights Agreement, a transferee of a person who, after such
transfer, became an Acquiring Person, or an Affiliate or Associate of an
Acquiring Person, such Rights shall become null and void and no holder
hereof shall have any right with respect to such Rights from and after the
occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price
and the number and kind of shares of Preferred Stock or other securities,
which may be purchased upon the exercise of the Rights evidenced by this
Rights Certificate are subject to modification and adjustment upon the
happening of certain events, including Triggering Events.
--------
* Wherever the designation [A][B] is used, the form A should be inserted for
Class A Right and the form B should be inserted for Class B Rights
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions
and conditions are hereby incorporated herein by reference and made a part
hereof and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of
the Rights Certificates, which limitations of rights include the temporary
suspension of the exercisability of such Rights under the specific
circumstances set forth in the Rights Agreement. Copies of the Rights
Agreement are on file at the above-mentioned office of the Rights Agent and
are also available upon written request to the Rights Agent.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office of the Rights Agent designated
for such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights entitling the holder
to purchase a like aggregate number of one one-hundredths of a share of
Preferred Stock as the Rights evidenced by the Rights Certificate or Rights
Certificates surrendered shall have entitled such holder to purchase. If
this Rights Certificate shall be exercised in part, the holder shall be
entitled to receive upon surrender hereof another Class [A][B] Rights
Certificate or Rights Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Certificate may be redeemed by the Company at its
option at a redemption price of $0.001 per Right at any time prior to the
earlier of the close of business on (i) the tenth Business Day following
the Stock Acquisition Date (as such time period may be extended pursuant to
the Rights Agreement), and (ii) the Final Expiration Date. In addition,
under certain circumstances following the Stock Acquisition Date, the
Rights may be exchanged, in whole or in part, for shares of the Class
[A][B] Common Stock, or shares of preferred stock of the Company having
essentially the same value or economic rights as such shares. Immediately
upon the action of the Board of Directors of the Company authorizing any
such exchange, and without any further action or any notice, the Rights
(other than Rights which are not subject to such exchange) will terminate
and the Rights will only enable holders to receive the shares issuable upon
such exchange.
No fractional shares of Preferred Stock will be issued
upon the exercise of any Right or Rights evidenced hereby (other than
fractions which are integral multiples of one one-hundredth of a share of
Preferred Stock, which may, at the election of the Company, be evidenced by
depositary receipts), but in lieu thereof a cash payment will be made, as
provided in the Rights Agreement. The Company, at its election, may require
that a number of Rights be exercised so that only whole shares of Preferred
Stock would be issued.
No holder of this Rights Certificate shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of shares
of Preferred Stock or of any other securities of the Company which may at
any time be issuable on the exercise hereof, nor shall anything contained
in the Rights Agreement or herein be construed to confer upon the holder
hereof, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give consent to or withhold
consent from any corporate action, or, to receive notice of meetings or
other actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by this Rights Certificate shall have
been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory
for any purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of
the Company and its corporate seal.
Dated as of December 5, 2001
ATTEST: RCN CORPORATION
By
--------------------------------- -----------------------------------
Secretary Title:
Countersigned:
HSBC BANK USA,
as Rights Agent
By
-------------------------------
Authorized Signature
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if
such holder desires to transfer the Rights
Certificate.)
FOR VALUE RECEIVED ________________________________________________
hereby sells, assigns and transfers unto________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
________________________________________________________________________________
this Rights Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint ____________________
__________________ Attorney, to transfer the within Rights Certificate on
the books of the within named Company, with full power of substitution.
Dated: __________________,_______
_______________________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Acquiring Person
(as such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this
Rights Certificate from any Person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated: _______________, __
_______________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and Certificate
must correspond to the name as written upon the face of this Rights
Certificate in every particular, without alteration or enlargement or any
change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights
represented by the Rights Certificate.)
To: RCN CORPORATION:
The undersigned hereby irrevocably elects to exercise
__________ Class [A][B] Rights represented by this Rights Certificate to
purchase the shares of Preferred Stock issuable upon the exercise of the
Rights (or such other securities of the Company or of any other person
which may be issuable upon the exercise of the Rights) and requests that
certificates for such shares be issued in the name of and delivered to:
Please insert social security
or other identifying number
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
If such number of Rights shall not be all the Rights
evidenced by this Rights Certificate, a new Rights Certificate for the
balance of such Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
________________________________________________________________________________
Dated: _______________,__
________________________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ]
are [ ] are not being exercised by or on behalf of a Person who is or was
an Acquiring Person or an Affiliate or Associate of any such Acquiring
Person (as such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this
Rights Certificate from any Person who is, was or became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
Dated: ______________,_____
________________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of this
Rights Certificate in every particular, without alteration or enlargement
or any change whatsoever.
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On December 4, 2001, the Board of Directors of RCN
Corporation (the "Company") authorized and declared a dividend distribution
of one right (a "Class A Right") for each share of Class A common stock,
par value $1.00 per share, of the Company (the "Class A Common Stock" or
"Voting Common Stock") and one right (a "Class B Right" and, together with
the Class A Rights, the "Rights") for each share of Class B common stock,
par value $1.00 per share, of the Company (the "Class B Common Stock" or
"Nonvoting Common Stock" and, together with the Class A Common Stock, the
"Common Stock") to stockholders of record at the close of business on
December 17, 2001 (the "Record Date"). Each Right entitles the registered
holder to purchase from the Company a unit consisting of one one- hundredth
of a share (a "Unit") of Series C Junior Participating Preferred Stock, no
par value (the "Series C Preferred Stock") at a Purchase Price of $30 per
Unit, subject to adjustment. The description and terms of the Rights are
set forth in a Rights Agreement (the "Rights Agreement") between the
Company and HSBC Bank USA, a banking corporation and trust company duly
organized and validly existing under the laws of the State of New York, as
Rights Agent.
Initially, the Class A Rights will be attached to all
Class A Common Stock certificates representing shares then outstanding and
the Class B Rights will be attached to all Class B Common Stock
certificates representing shares then outstanding, and no separate Rights
Certificates will be distributed. Subject to certain exceptions specified
in the Rights Agreement, the Rights will separate from the Common Stock and
a Distribution Date will occur upon the earlier of (i) 10 business days
following a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired beneficial
ownership of 15% or more of the outstanding shares of Voting Capital Stock
(the "Stock Acquisition Date"), other than as a result of repurchases of
stock by the Company or certain inadvertent actions by institutional or
certain other stockholders or certain Exempt Persons or (ii) 10 business
days (or such later date as the Board shall determine) following the
commencement of a tender offer or exchange offer that would result in a
person or group becoming an Acquiring Person. An "Exempt Person" is (i) any
Person, and such Person's affiliates and associates, that is the Beneficial
Owner of 15% or more of the shares of Voting Capital Stock, as of December
5, 2001, provided that such Person, together with such Person's affiliates
and associates, does not increase its beneficial ownership of the Voting
Capital Stock except to the extent such additional securities (a) are
acquired pursuant to the exercise of a pre-emptive right or anti-dilution
adjustment under the terms of any agreements such Person has entered into
with the Company (including, without limitation, the Series B Certificate
of Designation) that were in existence as of December 5, 2001, (b) are
acquired pursuant to any stock split, stock dividend, recapitalization,
reclassification or similar event initiated by the Company, (c) are shares
of Series B Preferred Stock issued as payment in kind for dividends with
respect to the Series B Preferred Stock (the "Dividend PIK") or Common
Stock issued upon the conversion of the Dividend PIK pursuant to the Series
B Certificate of Designation as it existed on December 5, 2001, (d)
represent an increase in such Person's beneficial ownership of the Voting
Capital Stock of one half of one percent (0.5%) or less of the Voting
Capital Stock then outstanding in the aggregate until the Expiration Date,
or (e) are acquired upon the exercise of any Rights, and (ii) NSTAR
Communications, Inc., to the extent that it becomes the beneficial owner of
15% or more of the outstanding Voting Capital Stock as a result of an
exchange of NSTAR's equity ownership in RCN-BecoCom, LLC for Voting Capital
Stock.
Until the Distribution Date, (i) the Rights will be
evidenced by the Common Stock certificates and will be transferred with and
only with such Common Stock certificates, (ii) new Common Stock
certificates issued after the Record Date will contain a notation
incorporating the Rights Agreement by reference and (iii) the surrender for
transfer of any certificates for Common Stock outstanding will also
constitute the transfer of the Rights associated with the Common Stock
represented by such certificate. Pursuant to the Rights Agreement, the
Company reserves the right to require prior to the occurrence of a
Triggering Event (as defined below) that, upon any exercise of Rights, a
number of Rights be exercised so that only whole shares of Preferred Stock
will be issued.
The Rights are not exercisable until the Distribution
Date and will expire at 5:00 P.M. (New York City time) on December 5, 2011,
unless such date is extended or the Rights are earlier redeemed or
exchanged by the Company as described below.
As soon as practicable after the Distribution Date,
Rights Certificates will be mailed to holders of record of the Common Stock
as of the close of business on the Distribution Date and, thereafter, the
separate Rights Certificates alone will represent the Rights. Except as
otherwise determined by the Board of Directors or with respect to shares of
Common Stock which are issued after the Record Date but prior to the
Expiration Date upon the conversion of any shares of Series B Preferred
Stock, only shares of Common Stock issued prior to the Distribution Date
will be issued with Rights.
In the event that a Person becomes an Acquiring Person,
each holder of a Right will thereafter have the right to receive, upon
exercise, (i) Class A Common Stock (or, in certain circumstances, cash,
property or other securities of the Company) having a value equal to two
times the exercise price of the Class A Right or (ii) Class B Common Stock
(or, in certain circumstances, cash, property or other securities of the
Company) having a value equal to two times the exercise price of the Class
B Right . Notwithstanding any of the foregoing, following the occurrence of
the event set forth in this paragraph, all Rights that are, or (under
certain circumstances specified in the Rights Agreement) were, beneficially
owned by any Acquiring Person will be null and void. However, Rights are
not exercisable following the occurrence of the event set forth above until
such time as the Rights are no longer redeemable by the Company as set
forth below.
For example, at an exercise price of $30 per Right, each
Right not owned by an Acquiring Person (or by certain related parties)
following an event set forth in the preceding paragraph would entitle its
holder to purchase $60 worth of Common Stock (or other consideration, as
noted above) for $30. Assuming that the Common Stock had a per share value
of $3 at such time, the holder of each valid Right would be entitled to
purchase 20 shares of Common Stock for $30.
In the event that, at any time following the Stock
Acquisition Date, (i) the Company engages in a merger or other business
combination transaction in which the Company is not the surviving
corporation, (ii) the Company engages in a merger or other business
combination transaction in which the Company is the surviving corporation
and the Common Stock of the Company is changed or exchanged, or (iii) 50%
or more of the Company's assets, cash flow or earning power is sold or
transferred, each holder of a Right (except Rights which have previously
been voided as set forth above) shall thereafter have the right to receive,
upon exercise, common stock of the acquiring company having a value equal
to two times the exercise price of the Right. The events set forth in this
paragraph and in the second preceding paragraph are referred to as the
"Triggering Events."
At any time after a person becomes an Acquiring Person
and prior to the acquisition by such person or group of fifty percent (50%)
or more of the outstanding Voting Capital Stock, the Board may exchange the
Rights (other than Rights owned by such person or group which have become
void), in whole or in part, at an exchange ratio of one share of Common
Stock, or one one-hundredth of a share of Preferred Stock (or of a share of
a class or series of the Company's preferred stock having equivalent
rights, preferences and privileges), per Right (subject to adjustment).
The Purchase Price payable, and the number of Units of
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 Preferred Stock, (ii) if holders of the Preferred
Stock are granted certain rights or warrants to subscribe for Preferred
Stock or convertible securities at less than the current market price of
the Preferred Stock, or (iii) upon the distribution to holders of the
Preferred Stock of evidences of indebtedness or assets (excluding regular
quarterly cash dividends) or of subscription rights or warrants (other than
those referred to above).
With certain exceptions, no adjustment in the Purchase
Price will be required until cumulative adjustments amount to at least 1%
of the Purchase Price. No fractional Units will be issued and, in lieu
thereof, an adjustment in cash will be made based on the market price of
the Preferred Stock on the last trading date prior to the date of exercise.
At any time until ten business days following the Stock
Acquisition Date, the Company may redeem the Rights in whole, but not in
part, at a price of $0.001 per Right (payable in cash, Common Stock or
other consideration deemed appropriate by the Board of Directors).
Immediately upon the action of the Board of Directors ordering redemption
of the Rights, the Rights will terminate and the only right of the holders
of Rights will be to receive the $0.001 redemption price.
Until a Right is exercised, the holder thereof, as such,
will have no rights as a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends. While the
distribution of the Rights will not be taxable to stockholders or to the
Company, stockholders may, depending upon the circumstances, recognize
taxable income in the event that the Rights become exercisable for Common
Stock (or other consideration) of the Company or for common stock of the
acquiring company or in the event of the redemption of the Rights as set
forth above.
Any of the provisions of the Rights Agreement may be
amended by the Board of Directors of the Company prior to the Distribution
Date. After the Distribution Date, the provisions of the Rights Agreement
may be amended by the Board in order to cure any ambiguity, to make changes
which do not adversely affect the interests of holders of Rights, or to
shorten or lengthen any time period under the Rights Agreement. The
foregoing notwithstanding, no amendment may be made at such time as the
Rights are not redeemable.
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 and as an Exhibit to a Current Report on Form 8-K,
each dated December 5, 2001. A copy of the Rights Agreement is available
free of charge from the Rights Agent. 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 herein by
reference.
