SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES PURSUANT TO
SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
SPRINT CORPORATION
(Exact name of registrant as specified in its charter)
Kansas 48-0457967
(State of Incorporation) (I.R.S. Employer Identification No.)
2330 Shawnee Mission Parkway
Westwood, Kansas 66205
(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Titles of each class Name of each exchange on which
to be so registered each class is to be registered
Preferred Stock Purchase Rights New York Stock Exchange, Inc.
Pacific Exchange, Inc.
The Chicago Stock Exchange
If this Form relates to the registration of a class of debt
securities and is effective upon filing pursuant to General
Instruction A.(c)(1), please check the following box. [ ]
If this Form relates to the registration of a class of debt
securities and is to become effective simultaneously with the
effectiveness of a concurrent registration statement under the
Securities Act of 1933 pursuant to General Instruction A.(c)(2),
please check the following box. [ ]
Securities to be registered pursuant to Section 12(g) of the Act:
None
(Title of class)
<PAGE>
Item 1. Description of Registrant's Securities to be
Registered.
On June 9, 1997, the Board of Directors of Sprint
Corporation ("Sprint") declared a dividend distribution of one
Right for each outstanding share of Common Stock (which term
includes Class A Common Stock) to stockholders of record at the
close of business on June 24, 1997. The dividend distribution is
payable on the same date. Each Right entitles the registered
holder to purchase from Sprint at any time following the
Distribution Date (as defined below) and prior to the occurrence
of a Triggering Event (as defined below) a unit consisting of one
one-thousandth of a share (a "Unit") of Preferred Stock - Sixth
Series, Junior Participating, without par value (the "Preferred
Stock"), at a purchase price of $225 per Unit (the "Purchase
Price"). A total of 1,500,000 shares (1,500,000,000 Units) of
Preferred Stock have been authorized and reserved for issuance
upon exercise of the Rights. The Purchase Price is subject to
adjustment as described below. The description and terms of the
Rights are set forth in a Rights Agreement (the "Rights
Agreement") between Sprint and UMB Bank, n.a., as Rights Agent.
Initially, the Rights will be attached to all
certificates representing outstanding Common Stock, and no
separate Rights Certificates will be distributed. The Rights
will separate from the Common Stock on the Distribution Date,
which will occur upon the earlier of (i) 10 business days
following (A) 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 Common Stock, except pursuant to a Qualifying Offer (as
defined below), or (B) the public disclosure of facts by Sprint
or an Acquiring Person indicating that the Acquiring Person has
become such (the date of the public announcement or public
disclosure is referred to as the "Stock Acquisition Date"), and
(ii) 10 business days (or such later date as the Board shall
determine prior to such time as there is an Acquiring Person)
following the commencement of, or announcement of an intention to
make, a tender or exchange offer, the consummation of which would
result in a person or group of affiliated or associated persons
beneficially owning 15% or more of the outstanding Common Stock.
Special exceptions to the definitions of "Acquiring
Person", "Distribution Date" and "Stock Acquisition Date" were
created, and certain other provisions are included in the Rights
Agreement, with respect to acquisitions of Common Stock by France
Telecom ("FT") and Deutsche Telekom AG ("DT") and their
affiliates and associates (and in certain cases any strategic
investor or passive financial institution deemed to be part of a
group with respect to an investment in a qualified subsidiary)
pursuant to a Standstill Agreement among FT, DT and Sprint dated
as of July 31, 1995 (the "Standstill Agreement"). The Standstill
Agreement was entered into in connection with an Investment
Agreement dated as of that same date pursuant to which FT and DT
acquired approximately 20% of Sprint's outstanding Common Stock.
In general, actions of FT, DT and their affiliates and associates
which would otherwise cause a Distribution Date or Stock
Acquisition Date to occur will not do so unless such actions also
violate the Standstill Agreement.
Until the Distribution Date (or earlier redemption,
exchange or expiration of the Rights), (i) the Rights will be
evidenced by the Common Stock certificates and will be
transferred with and only with such Common Stock certificates,
(ii) Common Stock certificates will contain a notation incorpo
rating 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 certificates. Pursuant to
the Rights Agreement, Sprint 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 will be issued.
The Rights are not exercisable until the Distribution
Date and will expire at the close of business on June 25, 2007
("Final Expiration Date"), unless the Final Expiration Date is
extended or unless Sprint redeems or exchanges the Rights prior
to the Final Expiration Date, in each case 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 in certain circumstances, only
shares of Common Stock issued prior to the Distribution Date will
be issued with Rights.
In the event that a person or group becomes the
beneficial owner of 15% or more of the outstanding Common Stock,
except pursuant to a Qualifying Offer, each holder of a Right
will thereafter have the right to receive upon exercise Common
Stock (or, in certain circumstances, cash, property or other
securities of Sprint) having a value equal to two times the then
current Purchase Price of the Right. A "Qualifying Offer" is an
offer for all outstanding shares of Common Stock which a majority
of the independent directors (i.e., directors who are not also
officers of Sprint and who are not representatives, nominees,
affiliates or associates of an Acquiring Person) determine, after
receiving advice from one or more investment banking firms, to be
fair to the stockholders and otherwise in the best interests of
Sprint and its stockholders. However, the Rights will not be
exercisable following the occurrence of the event specified in
the first sentence of this paragraph until such time as the
Rights are no longer redeemable by Sprint as set forth below.
Notwithstanding the foregoing, following the occurrence of any
such event, all Rights that are, or (under certain circumstances
specified in the Rights Agreement) were, beneficially owned by
any Acquiring Person (or certain related parties) will be null
and void.
For example, at a Purchase Price of $225 per Right,
each Right not owned by an Acquiring Person (or by certain
related parties) would entitle its holder, following an event
specified in the first sentence of the immediately preceding
paragraph, to purchase $450 worth of Common Stock (or other
consideration, as noted above) for $225. Assuming that the
Common Stock has a per share value of $50 at such time, the
holder of each valid Right would be entitled to purchase nine
shares of Common Stock for $225.
In the event that, at any time following the Stock
Acquisition Date, (i) Sprint is acquired in a merger or other
business combination transaction in which Sprint is not the
surviving corporation (other than a merger which follows a
Qualifying Offer and satisfies certain other requirements), or
(ii) 50% or more of Sprint's assets or earning power is sold or
transferred, each holder of a Right (except Rights which
previously have 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 then
current Purchase Price of the Right. The events set forth in
this paragraph and in the second preceding paragraph which allow
Rights to be exercised are referred to as "Triggering Events."
At any time after any person or group becomes an
Acquiring Person and prior to the acquisition by such person or
group of 50% or more of the outstanding Common Stock, the Board
of Directors of Sprint may, at its option, exchange the Rights
(other than Rights owned by such person or group, which will have
become void), in whole or in part, at an exchange ratio of one
share of Common Stock, or one one-thousandth of a share of
Preferred Stock (or one share or a fraction of a share of a class
or series of Sprint's preferred stock having equivalent rights,
preferences and privileges), per Right (subject to adjustment for
any stock split, stock dividend or similar transaction occurring
after June 9, 1997).
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, or (ii) upon the distribution to holders of the
Preferred Stock of certain rights, options, warrants, evidences
of indebtedness or assets. 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; 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.
The number of outstanding Rights attached to each share
of Common Stock is also subject to adjustment in the event of a
stock split of the Common Stock or a stock dividend on the Common
Stock payable in shares of Common Stock or subdivisions or
combinations of the shares of Common Stock, if such split,
dividend, subdivision or combination occurs prior to the
Distribution Date.
At any time until the close of business on the tenth
business day following the Stock Acquisition Date, Sprint may
order that all Rights be redeemed at a price of $.01 per Right
(payable in cash, Common Stock or other consideration deemed
appropriate by the Board of Directors), subject to adjustment for
any stock split, stock dividend or similar transaction occurring
after June 9, 1997 (the "Redemption Price"). Immediately upon
the effectiveness of the action of the Board of Directors
ordering redemption of the Rights, the right to exercise the
Rights will terminate and the holders of the Rights will only be
entitled to receive the Redemption Price for each Right so held.
Until a Right is exercised, the holder will have no
rights as a stockholder of Sprint in his capacity as a holder of
Rights, including no right to vote or to receive dividends. The
holders of Rights will be able to vote and receive dividends on
the Common Stock that they hold. While the current distribution
of the Rights will not be taxable to stockholders or to Sprint,
stockholders might, depending upon the circumstances, realize
taxable income in the event that the Rights become severable from
the Common Stock and will likely realize taxable income in the
event such Rights become exercisable for common stock of the
acquiring company as set forth above.
For so long as the Rights are redeemable, Sprint may
amend the Rights in any manner, except that it may not change the
Redemption Price. After the Rights are no longer redeemable,
Sprint may amend the Rights in any manner that does not adversely
affect the interests of holders of the Rights.
Shares of Preferred Stock that are issued upon exercise
of the Rights will not be redeemable. Each share of Preferred
Stock will be entitled to a minimum preferential quarterly
dividend payment of the greater of (a) $100.00 per share or
(b) 1,000 times the aggregate per share amount of all dividends
(other than a dividend payable in Common Stock) declared per
share of Common Stock. In the event of liquidation, the holders
of shares of Preferred Stock will be entitled to the greater of
(a) a minimum preferential liquidation payment of $1,000.00 per
share, plus accrued dividends, or (b) 1,000 times the aggregate
amount to be distributed per share of Common Stock. Each share
of Preferred Stock will have 1,000 votes, voting together with,
and on the same matters as, the Common Stock (excluding the
special voting rights of the Class A Common Stock). Finally, in
the event of any merger, consolidation or other transaction in
which shares of Common Stock are exchanged for or changed into
other stock, securities, cash and/or other property, each share
of Preferred Stock will be entitled to receive 1,000 times the
amount received per share of Common Stock. These rights are
protected by customary antidilution provisions.
Because of the nature of the Preferred Stock's
dividend, liquidation and voting rights, the value of a Unit of
Preferred Stock should approximate the value of one share of
Common Stock.
As of June 9, 1997, there were 1,500 million shares of
Common Stock (including 500 million shares of Class A Common
Stock) authorized and approximately 430.5 million shares issued
and outstanding. Additional shares have been reserved for
issuance pursuant to employee benefit plans and Sprint's
automatic dividend reinvestment plan, and upon the conversion of
convertible preferred stock. Each share of Common Stock
outstanding at the close of business June 24, 1997 will receive
one Right. As long as the Rights are attached to shares of
Common Stock, Sprint will issue one Right for each share which
becomes outstanding between June 24, 1997 and the Distribution
Date so that all such shares will have attached Rights.
This summary description of the Rights does not purport
to be complete and is qualified in its entirety by reference to
the Rights Agreement and the exhibits thereto, filed herewith as
Exhibit 1, which is incorporated herein by reference.
Item 2. Exhibits.
The following exhibit is filed as a part of this
Registration Statement:
1. Rights Agreement dated as of June 9, 1997, between
Sprint Corporation and UMB Bank, n.a., as Rights
Agent, which includes as Exhibit A, the
Certificate of Designation, Preferences and Rights
of Preferred Stock - Sixth Series, as Exhibit B,
the Form of Rights Certificate, and as Exhibit C,
the Summary of Rights to Purchase Preferred Stock.
2. Standstill Agreement dated as of July 31, 1995, by
and among Sprint Corporation, France Telecom and
Deutsche Telekom AG (filed as Exhibit (10)(c)
to Sprint Corporation Quarterly Report on Form
10-Q for the quarter ended June 30, 1995 and
incorporated herein by reference).
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this
registration statement to be signed on its behalf by the
undersigned, thereto duly authorized.
SPRINT CORPORATION
Date: June 12, 1997 By: /s/ Michael T. Hyde
Michael T. Hyde,
Assistant Secretary
Exhibit 1
_____________________________________________________
SPRINT CORPORATION
and
UMB BANK, N.A.
Rights Agent
_____________________________
Rights Agreement
Dated as of June 9, 1997
_____________________________________________________
<PAGE>
TABLE OF CONTENTS
Section Page
1. Certain Definitions 1
2. Appointment of Rights Agent 7
3. Issue of Rights Certificates 7
4. Form of Rights Certificates 9
5. Countersignature and Registration 10
6. Transfer, Split Up, Combination and Exchange
of Rights Certificates; Mutilated, Destroyed, Lost
or Stolen Rights Certificates 10
7. Exercise of Rights; Purchase Price; Expiration
Date of Rights 11
8. Cancellation and Destruction of Rights Certificates 13
9. Reservation and Availability of Capital Stock 14
10. Preferred Stock Record Date 15
11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights 15
12. Certificate of Adjusted Purchase Price or Number
of Shares 23
13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power 24
14. Fractional Rights and Fractional Shares 27
15. Rights of Action 29
16. Agreement of Rights Holders 29
17. Rights Certificate Holder Not Deemed a Stockholder 30
18. Concerning the Rights Agent 30
19. Merger or Consolidation or Change of Name of
Rights Agent 30
<PAGE>
Section Page
20. Duties of Rights Agent 31
21. Change of Rights Agent 33
22. Issuance of New Rights Certificates 34
23. Redemption and Termination 34
24. Exchange 35
25. Notice of Certain Events 36
26. Notices 37
27. Supplements and Amendments 38
28. Successors 38
29. Determinations and Actions by the Board of
Directors, etc. 38
30. Benefits of this Agreement 39
31. Severability 39
32. Governing Law 39
33. Counterparts 39
34. Descriptive Headings 39
EXHIBIT A Form of Certificate of Designation,
Preferences and Rights of Preferred Stock -
Sixth Series
EXHIBIT B Form of Rights Certificate
EXHIBIT C Form of Summary of Rights
<PAGE>
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of June 9, 1997 (the
"Agreement"), between Sprint Corporation, a Kansas corporation
(the "Company"), and UMB Bank, n.a., a national banking
association (the "Rights Agent").
W I T N E S S E T H
WHEREAS, on June 9, 1997 (the "Rights Dividend
Declaration Date"), the Board of Directors of the Company
authorized and declared a dividend distribution of one Right (as
hereinafter defined) for each share of Common Stock (as
hereinafter defined) of the Company outstanding at the close of
business on June 24, 1997 (the "Record Date"), and has authorized
the issuance of one such right (as such number may hereinafter be
adjusted pursuant to the provisions of Section 11(p) hereof) for
each share of Common Stock of the Company issued between the
Record Date (whether originally issued or delivered from the
Company's treasury) and the Distribution Date (as hereinafter
defined), and in certain circumstances, after the Distribution
Date, each such right initially representing the right to
purchase one one-thousandth of a share of Preferred Stock - Sixth
Series, Junior Participating, of the Company (subject to
adjustment as hereinafter provided), having the rights, powers
and preferences set forth in the form of Certificate of
Designation, Preferences and Rights of Preferred Stock - Sixth
Series filed with the Secretary of State of Kansas on June 9,
1997, in substantially the form attached hereto as Exhibit A,
upon the terms and subject to the conditions hereinafter set
forth (the "Rights");
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
shares of Common Stock then outstanding other than as a result of
a Qualifying Offer, but shall not include (i) the Company, (ii)
any Subsidiary of the Company, (iii) any employee benefit plan of
the Company or of any Subsidiary of the Company, or (iv) any
Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan.
Notwithstanding the preceding sentence:
(x) none of (A) France Telecom ("FT"),
Deutsche Telekom AG ("DT") or any Affiliate or
Associate thereof or (B) any Strategic Investor or
Passive Financial Institution (each as defined in the
Standstill Agreement among the Company, FT and DT dated
as of July 31, 1995 (the "Standstill Agreement")) which
is deemed to be part of a "group" (within the meaning
of the Exchange Act) with FT, DT or any of their
Affiliates or Associates with respect to the Company
solely by virtue of its investment in a Qualified
Subsidiary (as defined in the Standstill Agreement)
(collectively, "FT/DT Parties") shall be deemed to be
an Acquiring Person unless the FT/DT Parties
individually or in the aggregate become the Beneficial
Owner of more than the sum of (i) the Permitted
Standstill Limit, and (ii) 0.5% of the Voting Power
represented by all Voting Securities then outstanding
(the maximum number of Voting Securities permitted
pursuant to this clause (x) to be Beneficially Owned by
the FT/DT Parties individually or in the aggregate
without any such Persons being Acquiring Persons is
referred to herein as "FT/DT Permitted Level"); and
(y) no Person (other than any of the FT/DT
Parties, individually or collectively) shall become an
Acquiring Person solely as a result of a reduction in
the number of shares of Common Stock outstanding due to
the repurchase of shares of Common Stock by the
Company, unless and until such Person shall purchase or
otherwise become the Beneficial Owner of additional
shares of Common Stock constituting 0.5% or more of the
shares of Common Stock then outstanding other than
pursuant to a Qualifying Offer.
The phrase "then outstanding," when used with reference to a
Person's beneficial ownership of securities of the Company, shall
mean the number of such securities then issued and outstanding
together with the number of such securities not then actually
issued and outstanding which such Person would be deemed to
beneficially own hereunder. The term "Permitted Standstill
Limit" shall mean the maximum number of Voting Securities
permitted to be Beneficially Owned by FT, DT and their Affiliates
and Associates, individually or in the aggregate, under Sections
2.1(a)(i), 2.1(a)(ii) and 2.3 of the Standstill Agreement (but
not Sections 2.1(a)(iii) or 2.2 thereof or Section 2.3 thereof to
the extent based upon an applicable Percentage Limitation as
determined by Section 2.1(a)(iii) or 2.2 thereof); provided that
if the Standstill Agreement is terminated or the provisions of
Section 2.1(a)(ii) have expired, the term "Permitted Standstill
Limit" shall mean the maximum number of Voting Securities that
would have been permitted to be Beneficially Owned by FT, DT and
their Affiliates and Associates under Sections 2.1(a)(i),
2.1(a)(ii) and 2.3 of the Standstill Agreement (but not Sections
2.1(a)(iii) or 2.2 thereof or Section 2.3 thereof to the extent
based upon an applicable Percentage Limitation as determined by
Section 2.1(a)(iii) or 2.2 thereof) had the Standstill Agreement
not been so terminated or Section 2.1(a)(ii) not so expired.
(b) "Act" shall mean the Securities Act of 1933.
(c) "Adjustment Shares" shall have the meaning set
forth in Section 11(a)(ii) hereof.
(d) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act as such Rule
is in effect on the date of this Agreement; provided, however,
that when used to indicate a relationship with the FT/DT Parties,
the terms "Affiliate" and "Associate" shall have the respective
meanings set forth in the Standstill Agreement.
(e) A Person shall be deemed the "Beneficial Owner"
of, and shall be deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the
right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (whether or not
in writing) or upon the exercise of conversion rights,
exchange rights, rights, warrants or options, or otherwise;
provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own,"
(A) securities tendered pursuant to a tender or exchange
offer made by such Person or any of such Person's Affiliates
or Associates until such tendered securities are accepted
for purchase or exchange, or (B) securities issuable upon
exercise of Rights at any time prior to the occurrence of a
Triggering Event, 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 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 as such Rule is in
effect on the date of this Agreement), including pursuant to
any agreement, arrangement or understanding, whether or not
in writing; provided, however, that a Person shall not be
deemed the "Beneficial Owner" of, or to "beneficially own,"
any security under this subparagraph (ii) as a result of an
agreement, arrangement or understanding to vote such
security if such agreement, arrangement or understanding:
(A) arises solely from a revocable proxy given in response
to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable provisions of the
General Rules and Regulations under the Exchange Act, and
(B) is not also then reportable by such Person on Schedule
13D under the Exchange Act (or any comparable or successor
report); or
(iii) which are beneficially owned, directly
or indirectly, by any other Person (or any Affiliate or
Associate thereof) with which such Person (or any of such
Person's Affiliates or Associates) has any agreement,
arrangement or understanding (whether or not in writing),
for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy as described in the proviso to
subparagraph (ii) of this paragraph (e)) or disposing of any
voting securities of the Company; provided, however, that
nothing in this paragraph (e) shall cause a person engaged
in business as an underwriter of securities to be the
"Beneficial Owner" of, or to "beneficially own," any
securities acquired through such person's participation in
good faith in a firm commitment underwriting under the Act
until the expiration of forty days after the date of such
acquisition. Notwithstanding anything in this definition of
Beneficial Owner to the contrary, a Person who, prior to the
Distribution Date, is a member of the Board of Directors or
an officer of the Company or who is an Affiliate or
Associate of a member of the Board of Directors or officer
of the Company (each, an "Excluded Person") shall not be
deemed to "beneficially own" shares of Common Stock held by
another Excluded Person solely by reason of any agreement,
arrangement or understanding, written or otherwise, entered
into in opposition to any transaction or in support of a
Qualifying Offer.
(f) "Board of Directors shall mean the Board of
Directors of the Company as constituted from time to time.
(g) "Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in the
State of New York or the State of Kansas are authorized or
obligated by law or executive order to close.
(h) "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.
(i) "Common Stock" shall mean the common stock, par
value $2.50 per share, of the Company, and the Class A Common
Stock, par value $2.50 per share, of the Company, taken together,
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.
(j) "Common Stock Equivalents" shall have the meaning
set forth in Section 11(a)(iii) hereof.
(k) "Current Market Price" shall have the meaning set
forth in Section 11(d)(i) hereof.
(l) "Current Value" shall have the meaning set forth
in Section 11(a)(iii) hereof.
(m) "Distribution Date" shall have the meaning set
forth in Section 3(a) hereof.
(n) "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended and in effect on the date of this
Agreement.
(o) "Exchange Ratio" shall have the meaning set forth
in Section 24(a) hereof.
(p) "Expiration Date" shall have the meaning set forth
in Section 7(a) hereof.
(q) "Final Expiration Date" shall have the meaning set
forth in Section 7(a) hereof.
(r) "NASDAQ" shall have the meaning set forth in
Section 11(d)(i) hereof.
(s) "Person" shall mean any individual, firm,
corporation, partnership or other entity, and shall include any
successor (by merger or otherwise) of such entity.
(t) "Preferred Stock" shall mean shares of Preferred
Stock - Sixth Series, Junior Participating, without par value, of
the Company, and, to the extent that there are not a sufficient
number of shares of Preferred Stock - Sixth Series, Junior
Participating, authorized to permit the full exercise of the
Rights, any other series of Preferred Stock, without par value,
of the Company designated for such purpose containing terms
substantially similar to the terms of the Preferred Stock - Sixth
Series, Junior Participating, of the Company.
(u) "Principal Party" shall have the meaning set forth
in Section 13(b) hereof.
(v) "Purchase Price" shall have the meaning set forth
in Section 4(a) hereof.
(w) "Qualifying Offer" shall mean an acquisition of
shares of Common Stock pursuant to a tender offer or an exchange
offer for all outstanding shares of Common Stock at a price and
on terms determined by at least a majority of the members of the
Board of Directors who are not officers of the Company and who
are not representatives, nominees, Affiliates or Associates of an
Acquiring Person, after receiving advice from one or more
investment banking firms, to be (a) fair to stockholders (taking
into account all factors which such members of the Board deem
relevant including, without limitation, prices which could
reasonably be achieved if the Company or its assets were sold on
an orderly basis designed to realize maximum value) and (b)
otherwise in the best interests of the Company and its
stockholders.
(x) "Record Date" shall have the meaning set forth in
the WHEREAS clause at the beginning of this Agreement.
(y) "Redemption Date" shall have the meaning set forth
in Section 7 hereof.
(z) "Redemption Price" shall have the meaning set
forth in Section 23(a) hereof.
(aa) "Rights" shall have the meaning set forth in the
WHEREAS clause at the beginning of this Agreement.
(bb) "Rights Certificate" shall have the meaning set
forth in Section 3(a) hereof.
(cc) "Rights Dividend Declaration Date" shall have the
meaning set forth in the WHEREAS clause at the beginning of this
Agreement.
(dd) "Section 11(a)(ii) Event" shall have the meaning
set forth in Section 11(a)(ii) hereof.
(ee) "Section 11(a)(ii) Trigger Date" shall have the
meaning set forth in Section 11(a)(iii) hereof.
(ff) "Section 13 Event" shall mean any event described
in clauses (x), (y) or (z) of Section 13(a) hereof.
(gg) "Spread" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(hh) "Stock Acquisition Date" shall mean the earlier of
the date of (i) the first public announcement (which, for
purposes of this definition, shall include, without limitation, a
report filed under the Exchange Act) by the Company or an
Acquiring Person that an Acquiring Person has become such or (ii)
the first public disclosure of facts by the Company or an
Acquiring Person indicating that an Acquiring Person has become
an Acquiring Person; provided, however, that a Stock Acquisition
Date shall not be deemed to have occurred if any Person
(including the FT/DT Parties, individually or in the aggregate)
shall have inadvertently become an Acquiring Person and within
ten Business Days after the date upon which the Company shall
first become aware of the occurrence of such an event, the Board
of Directors in its sole discretion (1) approves the beneficial
ownership interest then held by such Person, or (2) provides such
Person a thirty day period to divest a sufficient number of
Voting Securities so as to decrease the beneficial ownership of
such Person to less than 15% of the shares of Common Stock then
outstanding (or in the case of the FT/DT Parties (individually or
in the aggregate), to not more than the FT/DT Permitted Level)
and such Person or the FT/DT Parties have so divested at the end
of any such thirty day period.
(ii) "Subsidiary" shall mean, with reference to any
Person, any other Person of which an amount of voting securities
sufficient to elect at least a majority of the directors or
Persons having similar authority of such other Person is
beneficially owned, directly or indirectly, by such Person, or
otherwise controlled by such Person.
(jj) "Substitution Period" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(kk) "Summary of Rights" shall have the meaning set
forth in Section 3(b) hereof.
(ll) "Trading Day" shall have the meaning set forth in
Section 11(d)(i) hereof.
(mm) "Triggering Event" shall mean any Section
11(a)(ii) Event or any Section 13 Event.
(nn) "Vote" shall mean, with respect to any entity, the
ability to cast a vote at a stockholders', members' or comparable
meeting of such entity with respect to the election of directors,
managers or other members of such entity's governing body, or the
ability to cast a general partnership or comparable vote,
provided, that with respect to the Company, for so long as the
Class A Stock (as defined in the Standstill Agreement) is
outstanding, the term "Vote" shall mean the ability to exercise
general voting power (other than with respect to the election of
directors) at a meeting of the stockholders of the Company.
(oo) "Voting Power" shall mean, with respect to any
entity as at any date, the aggregate number of Votes outstanding
as at such date in respect of such entity.
(pp) "Voting Securities" shall mean the Common Stock
and any other securities of the Company the holders of which are
ordinarily, in the absence of contingencies, entitled to Vote,
even though the right to such Vote has been suspended by the
happening of such a contingency.
Section 2. Appointment of Rights Agent. The
Company hereby appoints the Rights Agent to act as agent for the
Company and the holders of the Rights (who, in accordance with
Section 3 hereof, shall prior to the Distribution Date also be
the holders of the Common Stock) in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such
Co-Rights Agents as it may deem necessary or desirable.
Section 3. Issue of Rights Certificates.
(a) Until the earlier of (i) the close of business on
the tenth Business Day after the Stock Acquisition Date (or, if
the tenth Business Day after the Stock Acquisition Date occurs
before the Record Date, the close of business on the Record
Date), and (ii) the close of business on the tenth Business Day
(or such later date as the Board shall determine prior to such
time as any Person becomes an Acquiring Person) after the date of
the commencement by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company, or any Person or
entity organized, appointed or established by the Company for or
pursuant to the terms of any such plan) of, or the first public
announcement of the intention of such Person to commence, a
tender offer or exchange offer, the consummation of which would
result in any Person becoming the Beneficial Owner of 15% or more
of the shares of Common Stock then outstanding (or in the case of
the FT/DT Parties (individually or in the aggregate), shares in
excess of the FT/DT Permitted Level) (the earlier of (i) and (ii)
being herein referred to as the "Distribution Date"), (x) the
Rights will be evidenced (subject to the provisions of paragraph
(b) of this Section 3) by the certificates for the Common Stock
registered in the names of the holders of the Common Stock (which
certificates for Common Stock shall be deemed also to be
certificates for Rights) and not by separate certificates, and
(y) the Rights will be transferable only in connection with the
transfer of the underlying shares of Common Stock (including a
transfer to the Company). As soon as practicable after the
Distribution Date, the Company shall prepare and execute and the
Rights Agent will countersign and send by first-class, insured,
postage prepaid mail, to each record holder of 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 attached
hereto as Exhibit B (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.
(b) On the Record Date, or as soon as practicable
thereafter, the Company will send a copy of a Summary of Rights,
in substantially the form attached hereto as Exhibit C (the
"Summary of Rights"), by first-class, postage prepaid mail, to
each record holder of the Common Stock as of the close of
business on the Record Date (other than any Acquiring Person or
any Associate or Affiliate of any Acquiring Person), at the
address of such holder shown on the records of the Company. With
respect to certificates for the Common Stock outstanding as of
the Record Date, until the Distribution Date, the Rights will be
evidenced by such certificates for the Common Stock and the
registered holders of the Common Stock shall also be the
registered holders of the associated Rights. Until the earlier
of the Distribution Date or the Expiration Date, the transfer of
any certificates representing shares of Common Stock in respect
of which Rights have been issued shall also constitute the
transfer of the Rights associated with such shares of Common
Stock.
(c) Rights shall be issued in respect of all shares of
Common Stock which are issued (whether originally issued or
transferred from the Company's treasury to any other Person)
after the Record Date but prior to the earlier of the Distribu
tion Date or the Expiration Date, or, in certain circumstances
provided in Section 22 hereof, after the Distribution Date.
Certificates representing such shares of Common Stock shall also
be deemed to be certificates for Rights, and shall bear the
following legend:
This certificate also evidences and enti
tles the holder hereof to certain Rights as
set forth in the Rights Agreement (the
"Rights Agreement"), between Sprint
Corporation (the "Company") and UMB Bank,
n.a. (the "Rights Agent"), the terms of which
are hereby incorporated herein by reference
and a copy of which is on file at the
principal offices of the Rights Agent. Under
certain circumstances, as set forth in the
Rights Agreement, such Rights will be evi
denced 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. In the event that the Company
purchases or otherwise acquires any shares of Common Stock after
the Record Date but prior to the Distribution Date, any Rights
associated with such shares of Common Stock shall be deemed
canceled and retired so that the Company shall not be entitled to
exercise any Rights associated with the shares of Common Stock
which are no longer outstanding. Notwithstanding this paragraph
(c), the omission of a legend shall not affect the enforceability
of any part of this Rights Agreement or the rights of any holder
of the Rights.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election
to purchase and of assignment to be printed on the reverse
thereof) shall each be substantially in the form set forth in
Exhibit B hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed
thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which the Rights may from time to time
be listed, or to conform to usage. Subject to the provisions of
Section 11 and Section 22 hereof, the Rights Certificates shall
entitle the holders thereof to purchase such number of one
one-thousandths of a share of Preferred Stock as shall be set
forth therein at the price set forth therein (such exercise price
per one one-thousandth 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) or Section 22 hereof that represents Rights beneficially
owned by: (i) an Acquiring Person or any Associate or Affiliate
of an Acquiring Person, (ii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee
after the Acquiring Person becomes such, or (iii) a transferee of
an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer which the Board of Directors
of the Company has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect avoidance
of Section 7(e) hereof, and any Rights Certificate issued
pursuant to Section 6 or Section 11 hereof upon 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 Certifi
cate are or were beneficially owned by a
Person who was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring
Person (as such terms are defined in the
Rights Agreement). Accordingly, this Rights
Certificate and the Rights represented hereby
may become, or may already have become, null
and void in the circumstances specified in
Section 7(e) of such Agreement.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on
behalf of the Company by its Chairman of the Board, any Vice
Chairman, its President or any Vice President, either manually or
by facsimile signature, and shall have affixed thereto the
Company's seal or a facsimile thereof which shall be attested by
the Secretary or an Assistant Secretary of the Company, either
manually or by facsimile signature. The Rights Certificates
shall be countersigned by the Rights Agent, either manually or by
facsimile signature, and shall not be valid for any purpose
unless so countersigned. In case any officer of the Company who
shall have signed any of the Rights Certificates shall cease to
be such officer of the Company before countersignature by the
Rights Agent and issuance and delivery by the Company, such
Rights Certificates, nevertheless, may be countersigned by the
Rights Agent and issued and delivered by the Company with the
same force and effect as though the person who signed such Rights
Certificates had not ceased to be such officer of the Company;
and any Rights Certificates may be signed on behalf of the
Company by any person who, at the actual date of the execution of
such Rights Certificate, shall be a proper officer of the Company
to sign such Rights Certificate, although at the date of the
execution of this Rights Agreement any such person was not such
an officer.
(b) Following the Distribution Date, the Rights Agent
will keep or cause to be kept, at its principal office or offices
designated as the appropriate place for surrender of Rights
Certificates upon exercise or transfer, books for registration
and transfer of the Rights Certificates issued hereunder. Such
books shall show the names and addresses of the respective
holders of the Rights Certificates, the number of Rights
evidenced on its face by each of the Rights Certificates and the
date of each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and
Exchange of Rights Certificates; Mutilated,
Destroyed, Lost or Stolen Rights
Certificates.
(a) Subject to the provisions of Section 4(b), Section
7(e) and Section 14 hereof, at any time after the close of
business on the Distribution Date, and at or prior to the close
of business on the Expiration Date, any Rights Certificate or
Certificates may be transferred, split up, combined or exchanged
for another Rights Certificate or Certificates, entitling the
registered holder to purchase a like number of one
one-thousandths of a share of Preferred Stock (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 entitled 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 principal office or offices of the
Rights Agent designated for such purpose. Neither the Rights
Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such surrendered
Rights Certificate until the registered holder shall have
completed and signed the certificate contained in the form of
assignment on the reverse side of such Rights Certificate and
shall have provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or Affiliates
or Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to Section 4(b),
Section 7(e) and Section 14 hereof, countersign and deliver to
the Person entitled thereto a Rights Certificate or Rights
Certificates, as the case may be, as so requested. The Company
may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Rights
Certificates.
(b) Subject to the provision of Section 4(b), Section
7(e) and Section 14 hereof, upon receipt by the Company and the
Rights Agent of evidence reasonably satisfactory to them of the
loss, theft, destruction or mutilation of a Rights Certificate,
and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and reimbursement to
the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Rights Certificate if mutilated, the Company
will execute and deliver a new Rights Certificate of like tenor
to the Rights Agent for countersignature and delivery to the
registered owner in lieu of the Rights Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights.
(a) Subject to Section 7(e) hereof, the registered
holder of any Rights Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein including,
without limitation, the restrictions on exercisability set forth
in Section 9(c), Section 11(a)(iii), Section 23(a) and Section
24(b) hereof) in whole or in part at any time after the
Distribution Date upon surrender of the Rights Certificate, with
the form of election to purchase and the certificate on the
reverse side thereof duly executed, to the Rights Agent at the
principal office or offices of the Rights Agent designated for
such purpose, together with payment of the aggregate Purchase
Price with respect to the total number of one one-thousandths of
a share of Preferred Stock (or other securities, cash or other
assets, as the case may be) as to which such surrendered Rights
are then exercisable, at or prior to the earlier of (i) the close
of business on June 25, 2007 (the "Final Expiration Date"); (ii)
the time at which the Rights are redeemed as provided in Section
23 hereof (the "Redemption Date"); (iii) the time at which such
Rights are exchanged as provided in Section 24 hereof; or
(iv) the consummation of a transaction contemplated by Section
13(d) hereof (the earliest of (i), (ii), (iii) and (iv)
being herein referred to as the "Expiration Date").
(b) The Purchase Price for each one one-thousandth of
a share of Preferred Stock pursuant to the exercise of a Right
shall initially be $225, and shall be subject to adjustment from
time to time as provided in Sections 11 and 13(a) hereof and
shall be payable in lawful money of the United Stated of America
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-thousandth of a share of Preferred Stock (or other shares,
securities, cash or other assets, as the case may be) to be
purchased as set forth below and an amount equal to any
applicable transfer tax required to be paid by the holder of such
Rights Certificate in accordance with Section 9 hereof, the
Rights Agent shall, subject to Section 20(k) hereof, thereupon
promptly (i) (A) requisition from any transfer agent of the
shares of Preferred Stock (or make available, if the Rights Agent
is the transfer agent for such shares) certificates for the total
number of one one-thousandths of a share of Preferred Stock to be
purchased and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests, or (B) if the
Company shall have elected to deposit the total number of shares
of Preferred Stock issuable upon exercise of the Rights hereunder
with a depositary agent, requisition from the depositary agent
depositary receipts representing such number of one
one-thousandths of a share of Preferred Stock as are to be
purchased (in which case certificates for the shares of Preferred
Stock represented by such receipts shall be deposited by the
transfer agent with the depositary agent) and the Company will
direct the depositary agent to comply with such request, (ii)
requisition from the Company the amount of cash, if any, to be
paid in lieu of fractional shares in accordance with Section 14
hereof, (iii) promptly after receipt of such certificates or
depositary receipts, cause the same to be delivered to or upon
the order of the registered holder of such Rights Certificate,
registered in such name or names as may be designated by such
holder, and (iv) after receipt thereof, promptly deliver such
cash, if any, to or upon the order of the registered holder of
such Rights Certificate. The payment of the Purchase Price (as
such amount may be reduced pursuant to Section 11(a)(iii) hereof)
shall be made in cash or by certified bank check or bank draft
payable to the order of the Company. In the event that the
Company is obligated to issue other securities (including Common
Stock) of the Company, pay cash and/or distribute other property
pursuant to Section 11(a) hereof, the Company will make all
arrangements necessary so that such other securities, cash and/or
other property are available for distribution by the Rights
Agent, if and when appropriate. The Company reserves the right
to require, prior to the occurrence of a Triggering Event, that
upon any exercise of Rights, a number of Rights be exercised so
that only whole shares of Preferred Stock would be issued.
(d) In case the registered holder of any Rights
Certificate shall exercise less than all the Rights evidenced
thereby, a new Rights Certificate evidencing Rights equivalent to
the Rights remaining unexercised shall be issued by the Rights
Agent and delivered to, or upon the order of, the registered
holder of 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 of Directors
of the Company has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect the
avoidance of this Section 7(e), shall become null and void
without any further action and no holder of such Rights shall
have any rights whatsoever with respect to such Rights, whether
under any provision of this Agreement or otherwise. The Company
shall use all reasonable efforts to ensure that the provisions of
this Section 7(e) and Section 4(b) hereof are complied with, but
neither the Company nor the Rights Agent shall have any liability
to any holder of Rights Certificates or other Person as a result
of the Company's failure to make any determinations with respect
to an Acquiring Person or its Affiliates, Associates or
transferees hereunder. The Company may require (or cause the
Rights Agent or any transfer agent of the Company to require) any
Person who submits a Rights Certificate (or a certificate
representing shares of Common Stock that evidences, or but for
the provisions of this Section 7(e) would evidence, Rights) for
transfer on the registry books or to exercise the Rights
represented thereby to establish to the satisfaction of the
Company in its sole discretion that such Rights have not become
null and void pursuant to the provisions of this Section 7(e).
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a registered
holder upon the occurrence of any purported exercise as set forth
in this Section 7 unless such registered holder shall have (i)
completed and signed the certificate contained in the form of
election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such exercise, and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as
the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights
Certificates. All Rights Certificates surrendered for the
purpose of exercise, transfer, split up, combination or exchange
shall, if surrendered to the Company or any of its agents, be
delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered to the Rights Agent, shall be canceled
by it, and no Rights Certificates shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this
Agreement. The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel
and retire, any other Rights Certificate purchased or acquired by
the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all canceled Rights Certificates to the
Company, or shall, at the written request of the Company, destroy
such canceled Rights Certificates, and in such case shall deliver
a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital
Stock.
(a) The Company covenants and agrees that it will
cause to be reserved and kept available out of its authorized and
unissued shares of Preferred Stock (and, following the occurrence
of a Triggering Event, out of its authorized and unissued shares
of Common Stock and/or other securities or out of its authorized
and issued shares held in its treasury), the number of shares of
Preferred Stock (and, following the occurrence of a Triggering
Event, Common Stock and/or other securities) that, as provided in
this Agreement, including Section 11(a)(iii) hereof, will be
sufficient to permit the exercise in full of all outstanding
Rights.
(b) So long as the shares of Preferred Stock (and,
following the occurrence of a Triggering Event, Common Stock
and/or other securities) issuable and deliverable upon the
exercise of the Rights may be listed on any national securities
exchange, the Company shall use its best efforts to cause, from
and after such time as the Rights become exercisable (but only to
the extent that it is reasonably likely that the Rights will be
exercised), all shares reserved for such issuance to be listed on
such exchange upon official notice of issuance upon such
exercise.
(c) The Company shall use its best efforts to (i)
file, as soon as practicable following the earliest date after
the first occurrence of a Section 11(a)(ii) Event on which the
consideration to be delivered by the Company upon exercise of the
Rights has been determined in accordance with Section 11(a)(iii)
hereof, a registration statement under the Act, with respect to
the securities purchasable upon exercise of the Rights on an
appropriate form, (ii) cause such registration statement to
become effective as soon as practicable after such filing, and
(iii) cause such registration statement to remain effective (with
a prospectus at all times meeting the requirements of the Act)
until the earlier of (A) the date as of which the Rights are no
longer exercisable for such securities, and (B) the Expiration
Date. The Company will also take such action as may be
appropriate under, or to ensure compliance with, the securities
or "blue sky" laws of the various states in connection with the
exercisability of the Rights. The Company may temporarily
suspend, for a period of time not to exceed ninety (90) days
after the date set forth in clause (i) of the first sentence of
this Section 9(c), the exercisability of the Rights in order to
prepare and file such registration statement and permit it to
become effective. Upon any such suspension, the Company shall
make a public announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in
effect. In addition, if the Company shall determine that a
registration statement is required following the Distribution
Date, the Company may temporarily suspend the exercisability of
the Rights until such time as a registration statement has been
declared effective. Notwithstanding any provision of this Agree
ment to the contrary, the Rights shall not be exercisable in any
jurisdiction if the requisite qualification in such jurisdiction
shall not have been obtained, the exercise thereof shall not be
permitted under applicable law or a registration statement (if
required) shall not have been declared effective.
(d) The Company covenants and agrees that it will take
all such action as may be necessary to ensure that all Preferred
Stock (and, following the occurrence of a Triggering Event,
Common Stock and/or other securities) delivered upon exercise or
exchange of the Rights shall, at the time of delivery of the
certificates for such shares (subject to payment of the Purchase
Price), be duly and validly authorized and issued and fully paid
and nonassessable, including, without limitation, effecting such
changes to the accounts of the Company as may be necessary to
accomplish the foregoing purposes.
(e) The Company further covenants and agrees that it
will pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of the
issuance or delivery of the Rights Certificates and of any
certificates for Preferred Stock (or Common Stock and/or other
securities, as the case may be) upon the exercise of Rights. The
Company shall not, however, be required to pay any transfer tax
which may be payable in respect of any transfer or delivery of
Rights Certificates to a Person other than, or the issuance or
delivery of certificates or depositary receipts for a number of
one one-thousandths of a share of Preferred Stock (or Common
Stock and/or other securities, as the case may be) in respect of
a name other than that of, the registered holder of the Rights
Certificates evidencing Rights surrendered for exercise or to
issue or deliver any certificates or depositary receipts for a
number of one one-thousandths of a share of Preferred Stock (or
Common Stock and/or other securities, as the case may be) in a
name other than that of the registered holder upon the exercise
of any Rights until such tax shall have been paid (any such tax
being payable by the holder of such Rights Certificate at the
time of surrender) or until it has been established to the
Company's satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each
person in whose name any certificate for a number of one
one-thousandths of a share of Preferred Stock (or Common Stock
and/or other securities, as the case may be) is issued upon the
exercise of Rights shall for all purposes be deemed to have
become the holder of record of such fractional shares of
Preferred Stock (or Common Stock and/or other securities, as the
case may be) represented thereby on, and such certificate shall
be dated, the date upon which the Rights Certificate evidencing
such Rights was duly surrendered and payment of the Purchase
Price (and all applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment is a date
upon which the Preferred Stock (or Common Stock and/or other
securities, as the case may be) transfer books of the Company are
closed, such Person shall be deemed to have become the record
holder of such shares (fractional or otherwise) on, and such
certificate shall be dated, the next succeeding Business Day on
which the Preferred Stock (or Common Stock and/or other
securities, as the case may be) transfer books of the Company are
open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Rights Certificate shall not be entitled to any
rights of a stockholder of the Company with respect to shares for
which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not
be entitled to receive any notice of any proceedings of the
Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and
Kind of Shares or Number of Rights. The Purchase Price, the
number and kind of shares covered by each Right and the number of
Rights outstanding are subject to adjustment from time to time as
provided in this Section 11.
(a) (i) In the event the Company shall at any
time after the 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,
he would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs which would require an
adjustment under both this Section 11(a)(i) and Section 11(a)(ii)
hereof, the adjustment provided for in this Section 11(a)(i)
shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 24 hereof, in the event any
Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or of any Subsidiary of
the Company, or any Person or entity organized, appointed or
established by the Company for or pursuant to the terms of any
such plan), alone or together with its Affiliates and Associates,
shall, at any time after the Rights Dividend Declaration Date,
become an Acquiring Person, unless such person becomes an
Acquiring Person pursuant to a transaction set forth in Section
13(a) hereof (such an event being referred to herein as "a
Section 11(a)(ii) Event") then, promptly following the occurrence
of such Section 11(a)(ii) Event, proper provision shall be made
so that each holder of 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-thousandths of a share of Preferred Stock, such number
of shares of 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-thousandths of a share of
Preferred Stock for which a Right was exercisable immediately
prior to the first occurrence of a Section 11(a)(ii) Event, and
(y) dividing that product (which, following such first occur
rence, 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 Common Stock on the date of such first
occurrence (such number of shares, the "Adjustment Shares").
(iii) Subject to such limitations existing as of
the date hereof as are necessary to prevent a default under any
agreement to which the Company is a party, in the event that the
number of shares of Common Stock which are authorized by the
Company's articles of incorporation but not outstanding or
reserved for issuance for purposes other than upon exercise of
the Rights are 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 excess of
(1) the value of the Adjustment Shares issuable upon the exercise
of a Right determined as set forth below (the "Current Value")
over (2) the Purchase Price (such excess, the "Spread"), and (B)
with respect to each Right (subject to Section 7(e) hereof), make
adequate provision to substitute for the Adjustment Shares, 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 days following the date on
which the Company's right of redemption pursuant to Section 23(a)
expires (such date being referred to herein as the "Section
11(a)(ii) Trigger Date"), then the Company shall be obligated to
deliver, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price (other than an amount
equal to the par value of the shares of Common Stock to be
issued), shares of Common Stock (to the extent available) and
then, if necessary, cash, which shares and/or cash have an aggre
gate value equal to the Spread. If the Board determines in good
faith that it is likely that sufficient additional shares of
Common Stock could be authorized for issuance upon exercise in
full of the Rights, the thirty day period set forth above may be
extended to the extent necessary, but not more than ninety days
after the Section 11(a)(ii) Trigger Date, in order that the
Company may seek shareholder approval for the authorization of
such additional shares (such thirty day period, as it may be
extended, is herein called the "Substitution Period"). To the
extent that action is to be taken pursuant to the first and/or
second sentences of this Section 11(a) (iii), the Company (1)
shall provide, subject to Section 7(e) hereof, that such action
shall apply uniformly to all outstanding Rights, and (2) may
suspend the exercisability of the Rights until the expiration of
the Substitution Period in order to seek such shareholder
approval for such authorization of additional shares and/or to
decide the appropriate form of distribution to be made pursuant
to such first sentence and to determine the value thereof. In
the event of any such suspension, the Company shall make a public
announcement stating that the exercisability of the Rights has
been temporarily suspended, as well as a public announcement at
such time as the suspension is no longer in effect. For purposes
of this Section 11(a)(iii), the Current Value of each Adjustment
Share shall be the Current Market Price per share of the Common
Stock on the Section 11(a)(ii) Trigger Date and the per share or
per unit value of any Common Stock Equivalent shall be deemed to
equal the Current Market Price per share of the Common Stock on
such date.
(iv) Notwithstanding anything in Section 11(a)(ii) to
the contrary, there shall not be deemed to have occurred a
Section 11(a)(ii) Event if a Person shall have inadvertently
become the Beneficial Owner of 15% or more of the shares of
Common Stock then outstanding (or in the case of the FT/DT
Parties (individually or in the aggregate), shares in excess of
the FT/DT Permitted Level) and within ten Business Days after the
date upon which the Company shall first become aware of the
occurrence of such an event, the Board of Directors in its sole
discretion (1) approves the beneficial ownership interest then
held by such Person or the FT/DT Parties (individually and in the
aggregate), or (2) provides such Person or the FT/DT Parties a
thirty day period to divest a sufficient number of Voting
Securities so as to decrease the beneficial ownership of such
Person to less than 15% of the shares of Common Stock then
outstanding (or in the case of the FT/DT Parties (individually or
in the aggregate), to not more than the FT/DT Permitted Level)
and such Person or the FT/DT Parties have so divested at the end
of any such thirty day period.
(b) In case the Company shall fix a record date for
the issuance of rights, options or warrants to all holders of
Preferred Stock entitling them to subscribe for or purchase (for
a period expiring within forty-five (45) calendar days after such
record date) 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 and equivalent preferred stock outstanding on such record
date, plus the number of shares of Preferred Stock and equivalent
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 and
equivalent 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
of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent and shall be
binding on the Rights Agent and the holders of the Rights.
Shares of Preferred Stock and preferred stock equivalents owned
by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date
is fixed, and in the event that such rights, options or warrants
are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date
had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Preferred Stock (including any
such distribution made in connection with a consolidation or
merger in which the Company is the continuing corporation) of
evidences of indebtedness, cash (other than a regular quarterly
cash dividend out of the earnings or retained earnings of the
Company), assets (other than a dividend payable in Preferred
Stock, but including any dividend payable in stock other than Pre
ferred Stock) or subscription rights or warrants (excluding those
referred to in Section 11(b) hereof), the Purchase Price to be in
effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record
date by a fraction, the numerator of which shall be the Current
Market Price (as determined pursuant to Section 11(d) hereof) per
share of Preferred Stock on such record date, less the fair
market value (as determined in good faith by the Board of Direc
tors of the Company, whose determination shall be described in a
statement filed with the Rights Agent) of the portion of the
cash, assets or evidences of indebtedness so to be distributed or
of such subscription rights or warrants applicable to a share of
Preferred Stock and the denominator of which shall be such
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 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 consecutive Trading Days imme
diately 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 or ex-
distribution date for such dividend or distribution, or the
record date for such subdivision, combination or reclassification
shall not have occurred prior to the commencement of the
requisite thirty Trading Day or ten Trading Day period, as set
forth above, then, and in each such case, the Current Market
Price shall be properly adjusted to reflect the current market
price per share equivalent of Common Stock. The closing price
for each day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading
on the New York Stock Exchange or, if the shares of 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 prin
cipal 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, Inc. 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 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 deter
mined 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 1,000 (as such number may be
appropriately adjusted for such events as stock splits, stock
dividends and recapitalizations with respect to the Common Stock
occurring after the date of this Agreement) multiplied by the
Current Market Price per share of the Common Stock. If neither
the Common Stock nor the 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. For all purposes of this Agreement, the Current
Market Price of one one-thousandth of a share of Preferred Stock
shall be equal to the Current Market Price of one share of
Preferred Stock divided by 1,000.
(e) Anything herein to the contrary notwithstanding,
no adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least one
percent (1%) in the Purchase Price; provided, however, that any
adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest cent or to the
nearest ten-thousandth of a share of 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 Expira
tion 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-thousandths of a share of Preferred
Stock purchasable from time to time hereunder upon exercise of
the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i), upon each adjustment of
the Purchase Price as a result of the calculations made in
Sections 11(b) and (c), each Right outstanding immediately prior
to the making of such adjustment shall thereafter evidence the
right to purchase, at the adjusted Purchase Price, that number of
one one-thousandths of a share of Preferred Stock (calculated to
the nearest one-millionth) obtained by (i) multiplying (x) the
number of one one-thousandths of a share covered by a Right
immediately prior to this adjustment, by (y) the Purchase Price
in effect immediately prior to such adjustment of the Purchase
Price, and (ii) dividing the product so obtained by the Purchase
Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights,
in lieu of any adjustment in the number of one one-thousandths of
a share of Preferred Stock purchasable upon the exercise of a
Right. Each of the Rights outstanding after the adjustment in
the number of Rights shall be exercisable for the number of one
one-thousandths of a share of Preferred Stock for which a Right
was exercisable immediately prior to such adjustment. Each Right
held of record prior to such adjustment of the number of Rights
shall become that number of Rights (calculated to the nearest
one-millionth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement of
its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the
date on which the Purchase Price is adjusted or any day
thereafter, but, if the Rights Certificates have been issued,
shall be at least ten days later than the date of the public
announcement. If Rights Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Rights Certificates on such
record date Rights Certificates evidencing, subject to Section 14
hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the
Company, shall cause to be distributed to such holders of record
in substitution and replacement for the Rights Certificates held
by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Rights
Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Rights Certificates so
to be distributed shall be issued, executed and countersigned in
the manner provided for herein (and may bear, at the option of
the Company, the adjusted Purchase Price) and shall be registered
in the names of the holders of record of Rights Certificates on
the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of one one-thousandths of a share of
Preferred Stock issuable upon the exercise of the Rights, the
Rights Certificates theretofore and thereafter issued may
continue to express the Purchase Price per one one-thousandths of
a share and the number of one one-thousandths 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-thousandths of a share of
Preferred Stock or the par value, if any, of any shares of any
other capital stock, issuable upon exercise of the Rights, the
Company shall take any corporate action which may, in the opinion
of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable such
number of one one-thousandths of a share of Preferred Stock (or
such other shares) at such adjusted Purchase Price. If, upon any
exercise of the Rights, a holder is to receive a combination of
Common Stock and Common Stock Equivalents, a portion of the
consideration paid upon such exercise, equal to at least the then
par value of a share of Common Stock, shall be allocated as the
payment for each share of Common Stock so received.
(l) In any case in which this Section 11 shall require
that an adjustment in the Purchase Price be made effective as of
a record date for a specified event, the Company may elect to
defer until the occurrence of such event the issuance to the
holder of any Right exercised after such record date the number
of one one-thousandths of a share of Preferred Stock and other
capital stock or securities of the Company, if any, issuable upon
such exercise over and above the number of one one-thousandths of
a share of Preferred Stock and other capital stock or securities
of the Company, if any, issuable upon such exercise on the basis
of the Purchase Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such holder
a due bill or other appropriate instrument evidencing such
holder's right to receive such additional shares (fractional or
otherwise) or securities upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to the
extent that in its good faith judgment the Board of Directors of
the Company shall determine to be advisable in order that any
(i) consolidation or subdivision of the Preferred Stock, (ii)
issuance wholly for cash of any shares of 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 and so long as the
Rights have not been redeemed pursuant to Section 23 hereof or
exchanged pursuant to Section 24 hereof, (i) consolidate with any
other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), (ii) merge
with or into any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o)
hereof), or (iii) sell or transfer (or permit any Subsidiary to
sell or transfer), in one transaction, or a series of related
transactions, assets or earning power aggregating more than 50%
of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons
(other than the Company and/or any of its Subsidiaries in one or
more transactions each of which complies with Section 11(o)
hereof), if (x) at the time of or immediately after such
consolidation, merger or sale there are any rights, warrants or
other instruments or securities outstanding or agreements in
effect which would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights or (y) prior
to, simultaneously with or immediately after such consolidation,
merger or sale, the shareholders of the Person who constitutes,
or would constitute, the "Principal Party" for purposes of
Section 13(a) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates and
Associates.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section
23, Section 24 or Section 27 hereof, take (or permit any
Subsidiary to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will diminish
substantially or otherwise eliminate the benefits intended to be
afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time
after the 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 of which shall be
the total number of shares of Common Stock outstanding imme
diately 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
Section 11 and Section 13 hereof, the Company shall (a) promptly
prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment, (b)
promptly file with the Rights Agent, and with each transfer agent
for the Preferred Stock and the Common Stock, a copy of such
certificate, and (c) 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 therein contained.
Section 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning Power.
(a) In the event that, following the Stock Acquisition
Date (which for purposes of this Section 13(a) only shall also
include the date of the first public announcement (including,
without limitation, a report filed pursuant to Section 13(d)
under the Exchange Act) that any Person (other than the Company,
any Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company, or any Person or
entity organized, appointed or established by the Company for or
pursuant to the terms of any such plan), together with any of
such Person's Affiliates and Associates, has become the
Beneficial Owner of 15% or more of the shares of Common Stock
then outstanding (or in the case of the FT/DT Parties
(individually or in the aggregate), shares in excess of the FT/DT
Permitted Level) pursuant to a Qualifying Offer), directly or
indirectly, (x) the Company shall consolidate with, or merge with
and into, any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o)
hereof), and the Company shall not be the continuing or surviving
corporation of such consolidation or merger, (y) any Person
(other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof) shall consolidate with, or
merge with or into, the Company, and the Company shall be the
continuing or surviving corporation of such consolidation or
merger and, in connection with such consolidation or merger, all
or part of the outstanding shares of Common Stock shall be
changed into or exchanged for stock or other securities of any
other Person or cash or any other property, or (z) the Company
shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one
transaction or a series of related transactions, assets or
earning power aggregating more than 50% of the assets or earning
power of the Company and its Subsidiaries (taken as a whole) to
any Person or Persons (other than the Company or any Subsidiary
of the Company in one or more transactions each of which complies
with Section 11(o) hereof), then, upon the first occurrence of
such event (except as may be contemplated by Section 13(d)
hereof), 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-thousandths of a share of Preferred Stock
for which a Right is exercisable immediately prior to the first
occurrence of a Section 13 Event (or, if a Section 11(a)(ii)
Event has occurred prior to the first occurrence of a Section 13
Event, multiplying the number of such one one-thousandths of a
share for which a Right was exercisable immediately prior to the
first occurrence of a Section 11(a)(ii) Event by the Purchase
Price in effect immediately prior to such first occurrence), and
dividing that product (which, following the first occurrence of a
Section 13 Event, shall be referred to as the "Purchase Price"
for each Right and for all purposes of this Agreement) by (2) 50%
of the Current Market Price (determined pursuant to Section
11(d)(i) hereof) per share of the Common Stock of such Principal
Party on the date of consummation of such Section 13 Event,
provided that the Purchase Price and the number of shares of
Common Stock of such Principal Party issuable upon exercise of
each Right shall be further adjusted as provided in Section 11(f)
of this Agreement to reflect any events occurring in respect of
such Principal Party after the date of such Section 13 Event;
(ii) such Principal Party shall thereafter be liable for, and
shall assume, by virtue of such Section 13 Event, all the
obligations and duties of the Company pursuant to this Agreement;
(iii) the term "Company" shall thereafter be deemed to refer to
such Principal Party, it being specifically intended that the
provisions of Section 11 hereof shall apply only to such
Principal Party following the first occurrence of a Section 13
Event; (iv) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient
number of shares of its Common Stock) in connection with the
consummation of any such transaction as may be necessary to
assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to its shares of
Common Stock thereafter deliverable upon the exercise of the
Rights; and (v) the provisions of Section 11(a)(ii) hereof shall
be of no effect following the first occurrence of any Section 13
Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in
clause (x) or (y) of the first sentence of Section 13(a):
(A) the Person that is the issuer of any securities into
which shares of Common Stock of the Company are converted in
such merger or consolidation, or if there is more than one
such issuer, the issuer of the shares of Common Stock which
has the greatest aggregate market value of shares
outstanding, or (B) if no securities are so issued, (1) the
Person that is the other party to the merger, if such Person
survives said merger, or, if there is more than one such
Person, the Person the shares of Common Stock of which has
the greatest aggregate market value of shares outstanding or
(2) if the Person that is the other party to the merger does
not survive the merger, the Person that does survive the
merger (including the Company if it survives) or (3) the
Person resulting from the consolidation; and
(ii) in the case of any transaction described in
clause (z) of the first sentence of Section 13(a), the
Person that is the party receiving the greatest portion of
the assets or earning power transferred pursuant to such
transaction or transactions or, if each Person that is a
party to such transaction or transactions receives the same
portion of the assets or earning power so transferred or if
the Person receiving the greatest portion of the assets or
earning power cannot be determined, whichever of such
Persons as is the issuer of the shares of Common Stock
having the greatest aggregate market value of shares
outstanding;
provided, however, that in any such case, (1) if the Common Stock
of such Person is not at such time and has not been continuously
over the preceding twelve (12) month period registered under
Section 12 of the Exchange Act, and such Person is a direct or
indirect Subsidiary of another Person the Common Stock of which
is and has been so registered, "Principal Party" shall refer to
such other Person; (2) in case such Person is a Subsidiary,
directly or indirectly, of more than one Person, the Common
Stocks of two or more of which are and have been so registered,
"Principal Party" shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest aggregate market
value of shares outstanding; and (3) in case such Person is
owned, directly or indirectly, by a joint venture formed by two
or more Persons that are not owned, directly or indirectly, by
the same Person, the rules set forth in (1) and (2) above shall
apply to each of the chains of ownership having an interest in
such joint venture as if such party were a "Subsidiary" of both
or all of such joint venturers and the Principal Parties in each
such chain shall bear the obligations set forth in this Section
13 in the same ratio as their direct or indirect interests in
such Person bear to the total of such interests.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless the Principal
Party covenants and agrees that it will cause to be reserved and
kept available out of its authorized and unissued shares of
Common Stock or out of its authorized and issued shares held in
its treasury, the number of shares of its Common Stock that will
be sufficient to permit the exercise in full of all outstanding
Rights under this Section 13 and unless prior thereto the Company
and such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement confirming that the
requirements set forth in paragraphs (a) and (b) of this Section
13 shall be promptly performed in accordance with their terms and
further providing that, as soon as practicable after executing
such agreement pursuant to this Section 13, the Principal Party
will
(i) prepare and file a registration statement
under the Act, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate
form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective (with
a prospectus at all times meeting the requirements of the
Act) until the Expiration Date and similarly comply with
applicable state securities laws;
(ii) use its best efforts, if the shares of Common
Stock of the Principal Party shall be listed or admitted to
trading on a national securities exchange or NASDAQ to list
or admit to trading (or continue the listing of) the Rights
and the securities purchasable upon exercise of the Rights
on such securities exchange or NASDAQ and, if the shares of
Common Stock of the Principal Party shall not be listed or
admitted to trading on a national securities exchange or
NASDAQ, to cause the Rights and the securities purchasable
upon exercise of the Rights to be reported by such other
system then in use;
(iii) will deliver to holders of the Rights
historical financial statements for the Principal Party and
each of its Affiliates which comply in all respects with the
requirements for registration on Form 10 under the Exchange
Act; and
(iv) obtain waivers of any rights of first refusal
or preemptive rights in respect of the shares of Common
Stock of the Principal Party subject to purchase upon
exercise of outstanding Rights.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.
In the event that a Section 13 Event shall occur at any time
after the occurrence of a Section 11(a)(ii) Event, the Rights
which have not theretofore been exercised shall thereafter become
exercisable in the manner described in Section 13(a). If, for
any reason, the Rights cannot be exercised for Common Stock of
the Company or such Principal Party, then a holder of Rights will
have the right to exchange his Rights for cash from the Company
or such Principal Party in an amount equal to the number of
shares of such Common Stock he would otherwise be entitled to
purchase times 50% of the then Current Market Price, as
determined pursuant to Section 11(d)(i) hereof, of such stock of
such Principal Party or the Company. If, for any reason,
including, without limitation, if such Principal Party is an
individual, private partnership or private company, the foregoing
formulation cannot be applied to determine the cash amount into
which the Rights are exchangeable, then the Board of Directors of
the Company, based upon the advice from one or more investment
banking firms, shall determine such amount reasonably and with
good faith to the holders of Rights. Any such determination
shall be binding and final.
(d) Notwithstanding anything in this Agreement to the
contrary, Section 13 shall not be applicable to a transaction
described in subparagraphs (x) and (y) of Section 13(a) if (i)
such transaction is consummated with a Person or Persons who
acquired shares of Common Stock pursuant to a Qualifying Offer
(or a wholly owned Subsidiary of any such Person or Persons),
(ii) the price per share of Common Stock offered in such transac
tion is not less than the price per share of Common Stock paid to
all holders of shares of Common Stock whose shares were purchased
pursuant to such Qualifying Offer and (iii) the form of
consideration being offered to the remaining holders of shares of
Common Stock pursuant to such transaction is the same as the form
of consideration paid pursuant to such Qualifying Offer. Upon
consummation of any such transaction contemplated by this Section
13(d), all Rights hereunder shall expire.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue
fractions of Rights, except prior to the Distribution Date as
provided in Section 11(p) hereof, or to distribute Rights
Certificates which evidence fractional Rights. In lieu of such
fractional Rights, there shall be paid to the registered holders
of the Rights Certificates with regard to which such fractional
Rights would otherwise be issuable, an amount in cash equal to
the same fraction of the current market value of a whole Right.
For purposes of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The
closing price of the Rights for any day shall be the last sale
price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the
Rights are not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Rights
are listed or admitted to trading, or if the Rights are not
listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average
of the high bid and low asked prices in the over-the-counter
market, as reported by NASDAQ or such other system then in use
or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the
Rights selected by the Board of Directors of the Company. If on
any such date no such market maker is making a market in the
Rights the fair value of the Rights on such date as determined in
good faith by the Board of Directors of the Company shall be
used.
(b) The Company shall not be required to issue
fractions of shares of Preferred Stock (other than, except as
provided in Section 7(c), fractions which are integral multiples
of one one-thousandth of a share of Preferred Stock) upon
exercise of the Rights or to distribute certificates which
evidence fractional shares of Preferred Stock (other than
fractions which are integral multiples of one one-thousandth of a
share of Preferred Stock). Fractions of shares of Preferred
Stock in integral multiples of one one-thousandth of a share of
Preferred Stock may, at the election of the Company, be evidenced
by depositary receipts, pursuant to an appropriate agreement
between the Company and a depositary selected by it, provided
that such agreement shall provide that the holders of such
depositary receipts shall have all the rights, privileges and
preferences to which they are entitled as beneficial owners of
the shares of Preferred Stock represented by such depositary
receipts. In lieu of fractional shares of Preferred Stock that
are not integral multiples of one one-thousandth of a share of
Preferred Stock, the Company may pay to the registered holders of
Rights Certificates at the time such Rights are exercised as
herein provided an amount in cash equal to the same fraction of
the current market value of one one-thousandth of a share of
Preferred Stock. For purposes of this Section 14(b), the current
market value of one one-thousandth of a share of Preferred Stock
shall be one one-thousandth of the closing price of a share of
Preferred Stock (as determined pursuant to Section 11(d)(ii)
hereof) for the Trading Day immediately prior to the date of such
exercise.
(c) Following the occurrence of a Triggering Event,
the Company shall not be required to issue fractions of shares of
Common Stock upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Common Stock.
In lieu of fractional shares of Common Stock, the Company may pay
to the registered holders of Rights Certificates at the time such
Rights are exercised as herein provided an amount in cash equal
to the same fraction of the current market value of one (1) share
of Common Stock. For purposes of this Section 14(c), the current
market value of one share of Common Stock shall be the closing
price of one share of Common Stock (as determined pursuant to
Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise.
(d) The holder of a Right by the acceptance of the
Rights expressly waives his right to receive any fractional
Rights or any fractional shares upon exercise of a Right, except
as permitted by this Section 14.
Section 15. Rights of Action. All rights of action
in respect of this Agreement are vested in the respective
registered holders of the Rights Certificates (and, prior to the
Distribution Date, the registered holders of the Common Stock);
and any registered holder of any Rights Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent
of the Rights Agent or of the holder of any other Rights Certif
icate (or, prior to the Distribution Date, of the Common Stock),
may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the
Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Rights Certificate in the
manner provided in such Rights Certificate and in this Agreement.
Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the
holders of Rights would not have an adequate remedy at law for
any breach of this Agreement and shall be entitled to specific
performance of the obligations hereunder and injunctive relief
against actual or threatened violations of the obligations
hereunder of any Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every
holder of a Right by accepting the same consents and agrees with
the Company and the Rights Agent and with every other holder of a
Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common
Stock;
(b) after the Distribution Date, the Rights
Certificates are transferable only on the registry books of the
Rights Agent if surrendered at the principal office or offices of
the Rights Agent designated for such purposes, duly endorsed or
accompanied by a proper instrument of transfer and with the
appropriate forms and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof,
the Company and the Rights Agent may deem and treat the person in
whose name a Rights Certificate (or, prior to the Distribution
Date, the associated Common Stock certificate) is registered as
the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Common Stock certificate
made by anyone other than the Company or the Rights Agent) for
all purposes whatsoever, and neither the Company nor the Rights
Agent, subject to the penultimate sentence of Section 7(e)
hereof, shall be required to be affected by any notice to the
contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any
liability to any holder of a Right or other Person as a result of
its inability to perform any of its obligations under this
Agreement by reason of any preliminary or permanent injunction or
other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of
such obligation; provided, however, the Company must use all
reasonable efforts to have any such order, decree or ruling
lifted or otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Rights Certificate shall
be entitled to vote, receive dividends or be deemed for any
purpose the holder of the number of one one-thousandths of a
share of Preferred Stock or any other securities of the Company
which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in
any Rights Certificate be construed to confer upon the holder of
any Rights Certificate, as such, any of the rights of a
stockholder of the Company or any right to vote for the election
of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate
action, or to receive notice of meetings or other actions
affecting stockholders (except as provided in Section 25 hereof),
or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by such Rights Certificate
shall have been exercised in accordance with the provisions
hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and disbursements and other
disbursements incurred in the administration and execution of
this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, or
expense, incurred without negligence, bad faith or willful
misconduct on the part of the Rights Agent, for anything done or
omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the
premises (including reasonable counsel fees and expenses).
(b) The Rights Agent shall be protected and shall
incur no liability for or in respect of any action taken,
suffered or omitted by it in connection with its administration
of this Agreement in reliance upon any Rights Certificate or
certificate for Common Stock or for other securities of the
Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it
to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of
Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the
corporate trust business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under
this Agreement without the execution or filing of any paper or
any further act on the part of any of the parties hereto;
provided, however, that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of
Section 21 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any
of the Rights Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the
countersignature of a predecessor Rights Agent and deliver such
Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned,
any successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor or in the name
of the successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent
shall be changed and at such time any of the Rights Certificates
shall have been countersigned but not delivered, the Rights Agent
may adopt the countersignature under its prior name and deliver
Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned,
the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such cases
such Rights Certificates shall have the full force provided in
the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights
Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of
which the Company and the holders of Rights Certificates, by
their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel
(who may be legal counsel for the Company), and the opinion of
such counsel shall be full and complete authorization and
protection to the Rights Agent as to any action taken or omitted
by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under
this Agreement the Rights Agent shall deem it necessary or
desirable that any fact or matter (including, without limitation,
the identity of any Acquiring Person and the determination of
"Current Market Price") be proved or established by the Company
prior to taking or omitting any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved
and established by a certificate signed by the Chairman of the
Board, any Vice Chairman, the President, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization to the
Rights Agent for any action taken or omitted in good faith by it
under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder only
for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained in
this Agreement, the Summary of Rights or in the Rights
Certificates or be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such
statements and recitals are and shall be deemed to have been made
by the Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement or
the execution and delivery hereof (except the due execution
hereof by the Rights Agent) or in respect of the validity or
execution of any Rights Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement
or in any Rights Certificate; nor shall it be responsible for any
adjustment required under the provisions of Section 11 or Section
13 hereof or responsible for the manner, method or amount of any
such adjustment or the ascertaining of the existence of facts
that would require any such adjustment (except with respect to
the exercise of Rights evidenced by Rights Certificates after
actual notice of any such adjustment); nor shall it by any act
hereunder be deemed to make any representation or warranty as to
the authorization or reservation of any shares of Common Stock or
Preferred Stock to be issued pursuant to this Agreement or any
Rights Certificate or as to whether any shares of Common Stock or
Preferred Stock will, when so issued, be validly authorized and
issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed
to accept instructions with respect to the performance of its
duties hereunder from the Chairman of the Board, any Vice
Chairman, the President, any Vice President, the Secretary, any
Assistant Secretary, the Treasurer or any Assistant Treasurer of
the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be
liable for any action taken or omitted to be taken by it in good
faith in accordance with instructions of any such officer.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal in
any of the Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the Company
may be interested, or contract with or lend money to the Company
or otherwise act as fully and freely as though it were not Rights
Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or
for any other legal entity.
(i) The Rights Agent may execute and exercise any of
the rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or agents,
and the Rights Agent shall not be answerable or accountable for
any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct; provided, however,
reasonable care was exercised in the selection and continued
employment thereof.
(j) No provision of this Agreement shall require the
Rights Agent to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its duties
hereunder or in the exercise of its rights if there shall be
reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Right Certificate
surrendered to the Rights Agent for exercise or transfer, the
certificate attached to the form of assignment or form of
election to purchase, as the case may be, has either not been
completed or indicates an affirmative response to clause 1 and/or
2 thereof, the Rights Agent shall not take any further action
with respect to such requested exercise or transfer without first
consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent
or any successor Rights Agent may resign and be discharged from
its duties under this Agreement upon thirty days' notice in
writing mailed to the Company, and shall provide notice thereof
to each transfer agent of the Common Stock and Preferred Stock,
by registered or certified mail, and to the holders of the Rights
Certificates in accordance with Section 26 hereof, or, if prior
to the Distribution Date, to the holders of Rights through any
filing made by the Company pursuant to the Exchange Act. The
Company may remove the Rights Agent or any successor Rights Agent
upon thirty days' notice in writing mailed to the Rights Agent or
successor Rights Agent, as the case may be, and shall provide
notice thereof to each transfer agent of the Common Stock and
Preferred Stock, by registered or certified mail, and to the
holders of the Rights Certificates in accordance with Section 26
hereof, or, if prior to the Distribution Date, to the holders of
Rights through any filing made by the Company pursuant to the
Exchange Act. If the Rights Agent shall resign or be removed or
shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall
fail to make such appointment within a period of thirty days
after giving notice of such removal or after it has been notified
in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Rights
Certificate (who shall, with such notice, submit his Rights
Certificate for inspection by the Company), then any registered
holder of any Rights Certificate or the resigning or removed
Rights Agent may apply to any court of competent jurisdiction for
the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court, shall
be a corporation organized and doing business under the laws of
the United States or of the State of Kansas, the State of
Missouri or the State of New York (or of any other state of the
United States so long as such corporation is authorized to do
business as a banking institution in the State of Kansas, the
State of Missouri or the State of New York), in good standing,
having a principal office in the State of Kansas, the State of
Missouri or the State of New York, which is authorized under such
laws to exercise corporate trust powers and is subject to
supervision or examination by federal or state authority and
which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $100,000,000. After
appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or
deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company
shall file notice thereof in writing with the predecessor Rights
Agent and each transfer agent of the Common Stock and the
Preferred Stock, and mail a notice thereof in writing to the
registered holders of the Rights Certificates in accordance with
Section 26 hereof, or, if prior to the Distribution Date, give
notice to the holders of Rights through any filing made by the
Company pursuant to the Exchange Act. Failure to give any notice
provided for in this Section 21, however, or any defect therein,
shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new
Rights Certificates evidencing Rights in such form as may be
approved by its Board of Directors to reflect any adjustment or
change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the
Rights Certificates made in accordance with the provisions of
this Agreement. In addition, in connection with the issuance or
sale of shares of Common Stock following the Distribution Date
and prior to the redemption or expiration of the Rights, the
Company (a) shall, with respect to shares of Common Stock so
issued or sold pursuant to the exercise of stock options or under
any employee plan or arrangement, granted or awarded as of the
Distribution Date, or upon the exercise, conversion or exchange
of securities hereinafter issued by the Company, and (b) may, in
any other case, if deemed necessary or appropriate by the Board
of Directors of the Company, issue Rights Certificates
representing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i) no such Rights
Certificate shall be issued and this sentence shall be null and
void ab initio if, and to the extent that, the Company shall be
advised by counsel that such issuance would create a significant
risk of material adverse tax consequences to the Company or the
Person to whom such Rights Certificate would be issued, and (ii)
no such Rights Certificate shall be issued if, and to the extent
that, appropriate adjustment shall otherwise have been made in
lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) The Board of Directors of the Company may, at its
option, at any time prior to the earlier of (i) the close of
business on the tenth Business Day following the Stock
Acquisition Date (or, if the Stock Acquisition Date shall have
occurred prior to the Record Date, the close of business on the
tenth Business Day following the Record Date), or (ii) the time
at which the Rights expire pursuant to this Agreement, redeem all
but not less than all the then outstanding Rights at a redemption
price of $.01 per Right, 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 of the Common
Stock at the time of redemption) or any other form of
consideration deemed appropriate by the Board of Directors. The
redemption of the Rights may be made effective at such time, on
such basis and with such conditions as the Board of Directors in
its sole discretion may establish.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the redemption of the Rights
pursuant to Section 23(a) (or at such later time as the Board of
Directors may establish for the effectiveness of such
redemption), notice of which shall have been provided to the
Rights Agent, and without any further action and without any
notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be to
receive the Redemption Price for each Right so held. Promptly
after the action of the Board of Directors ordering the redemp
tion of the Rights becoming effective, the Company shall mail a
notice of such redemption to the Rights Agent and the holders of
the then outstanding Rights in accordance with Section 26 hereof
(provided that the failure to give, or any defect in, such notice
shall not affect the validity of such redemption). Any notice
which is mailed in the manner provided in Section 26 hereof shall
be deemed given, whether or not the holder receives the notice.
Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its
option, at any time after any Person becomes an Acquiring Person,
exchange all or part of the then outstanding and exercisable
Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 7(e) hereof) for shares of
Common Stock at an exchange ratio of one share of Common Stock
per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date
hereof (such exchange ratio being hereinafter referred to as the
"Exchange Ratio"). Notwithstanding the foregoing, the Board of
Directors shall not be empowered to effect such exchange at any
time after any Person (other than (i) the Company, (ii) any
Subsidiary of the Company, (iii) any employee benefit plan of the
Company or any Subsidiary of the Company, or any person or entity
organized, appointed or established by the Company for or
pursuant to the terms of any such plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial
Owner of 50% or more of the shares of Common Stock then
outstanding.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the exchange of any Rights
pursuant to Section 24(a) and without any further action and
without any notice, the right to exercise such Rights shall
terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of shares of Common Stock
equal to the number of such Rights held by such holder multiplied
by the Exchange Ratio. The Company shall promptly make a public
announcement of any such exchange; provided, however, that the
failure to make, or any defect in, such public announcement shall
not affect the validity of such exchange. Promptly after the
action of the Board of Directors ordering the exchange of the
Rights becoming effective, the Company shall mail a notice of
such exchange to the Rights Agent and all of the holders of the
then outstanding Rights in accordance with Section 26 hereof
(provided that the failure to give, or any defect in, such notice
shall not affect the validity of such exchange). Any notice
which is mailed in the manner provided in Section 26 hereof shall
be deemed given, whether or not the holder receives the notice.
Each such notice of exchange will state the method by which the
exchange of the shares of Common Stock for Rights will be
effected and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange shall be
effected pro rata based on the number of Rights (other than
Rights which have become void pursuant to the provisions of
Section 7(e) hereof) held by each holder of Rights.
(c) In the event that there shall not be authorized
and unissued shares of Common Stock and/or authorized and issued
shares of Common Stock held in its treasury sufficient to permit
any exchange of Rights as contemplated in accordance with this
Section 24, the Company shall take all such action as may be
necessary to authorize additional shares of Common Stock for
issuance upon exchange of the Rights. In the event the Company
shall, after good faith effort, be unable to take all such action
as may be necessary to authorize such additional shares of Common
Stock, the Company shall substitute, for each share of Common
Stock that would otherwise be issuable upon exchange of a Right,
a number of shares of Preferred Stock or fraction thereof
(subject to Section 14(b) hereof) such that the Current Market
Price per share of Preferred Stock multiplied by such number or
fraction is equal to the Current Market Price per share of Common
Stock as of the date of issuance of such shares of Preferred
Stock or fraction thereof.
(d) The Company shall not be required to issue
fractions of shares of Common Stock or to distribute certificates
which evidence fractional shares of Common Stock. In lieu of
such fractional shares of Common Stock, the Company shall pay to
the registered holders of the Right Certificates with regard to
which such fractional shares of Common Stock would otherwise be
issuable an amount in cash equal to the same fraction of the
Current Market Price per share of Common Stock as of the Trading
Day immediately prior to the record date of exchange pursuant to
this Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose, at any time
after the Distribution Date, (i) to pay any dividend payable in
stock of any class to the holders of Preferred Stock or to make
any other distribution to the holders of Preferred Stock (other
than a regular quarterly cash dividend out of earnings or
retained earnings of the Company), or (ii) to offer to the
holders of Preferred Stock rights or warrants to subscribe for or
to purchase any additional shares of Preferred Stock or shares of
stock of any class or any other securities, rights or options, or
(iii) to effect any reclassification of its Preferred Stock
(other than a reclassification involving only the subdivision of
outstanding shares of Preferred Stock), or (iv) to effect any
consolidation or merger into or with any other Person (other than
a Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof), or to effect any sale or other transfer
(or to permit one or more of its Subsidiaries to effect any sale
or other transfer), in one transaction or a series of related
transactions, of more than 50% of the assets or earning power of
the Company and its Subsidiaries (taken as a whole) to any other
Person or Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which complies
with Section 11(o) hereof), or (v) to effect the liquidation,
dissolution or winding up of the Company, then, in each such
case, the Company shall give to each holder of a Rights
Certificate, to the extent feasible and in accordance with
Section 26 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend,
distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the shares of
Preferred Stock, if any such date is to be fixed, and such notice
shall be so given in the case of any action covered by clause (i)
or (ii) above at least twenty days prior to the record date for
determining holders of the shares of Preferred Stock for purposes
of such action, and in the case of any such other action, at
least twenty days prior to the date of the taking of such
proposed action or the date of participation therein by the
holders of the shares of Preferred Stock, whichever shall be the
earlier.
(b) In case a Section 11(a)(ii) Event shall occur,
then, in any such case, (i) the Company shall as soon as
practicable thereafter give to each holder of a Rights
Certificate, to the extent feasible and in accordance with
Section 26 hereof, a notice of the occurrence of such event,
which shall specify the event and the consequences of the event
to holders of Rights under 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 with the Rights Agent) as follows:
Sprint Corporation
2330 Shawnee Mission Parkway
Westwood, Kansas 66205
Attention: General Counsel
Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company
or by the holder of any Rights Certificate to or on the Rights
Agent shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed
in writing with the Company) as follows:
UMB Bank, n.a.
Post Office Box 410064
Kansas City, Missouri 64141-0064
Attention: Corporate Trust Department
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any
Rights Certificate (or, if prior to the Distribution Date, to the
holder of certificates representing shares of Common Stock) shall
be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such
holder as shown on the registry books of the Rights Agent (or, if
prior to the Distribution Date, on the registry books of the
Transfer Agent for the Common Stock of the Company).
Section 27. Supplements and Amendments. Except as
provided in the penultimate sentence of this Section 27, for so
long as the Rights are then redeemable, the Company may in its
sole and absolute discretion, and the Rights Agent shall if the
Company so directs, supplement or amend any provision of this
Agreement without the approval of any holders of the Rights. At
any time when the Rights are no longer redeemable, except as
provided in the penultimate sentence of this Section 27, the
Company may, and the Rights Agent shall if the Company so
directs, supplement or amend this Agreement without the approval
of any holders of Rights Certificates in order to (i) cure any
ambiguity, (ii) correct or supplement any provision contained
herein which may be defective or inconsistent with any other
provisions herein, (iii) shorten or lengthen any time period
hereunder, or (iv) change or supplement the provisions hereunder
in any manner which the Company may deem necessary or desirable;
provided that no such supplement or amendment adversely affects
the interests of the holders of Rights as such (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring Per
son) and no such amendment may cause the Rights again to become
redeemable or cause the Agreement again to become amendable other
than in accordance with this sentence. Notwithstanding anything
contained in this Agreement to the contrary, no supplement or
amendment shall be made which changes the Redemption Price. Upon
the delivery of a certificate from an appropriate officer of the
Company which states that the proposed supplement or amendment is
in compliance with the terms of this Section 27, the Rights Agent
shall execute such supplement or amendment; provided, however,
that the Rights Agent may, but shall not be obligated to, enter
into any such supplement or amendment which adversely affects the
Rights Agent's own rights, duties or immunities under this
Agreement.
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 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 as such Rule
is in effect on the date of this Agreement. The Board of
Directors of the Company, except as otherwise specifically
provided for herein, shall have the exclusive power and authority
to administer this Agreement and to exercise all rights and
powers specifically granted to the Board or to the Company, or as
may be necessary or advisable in the administration of this
Agreement, including, without limitation the right and power to
(i) interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the admin
istration of this Agreement (including a determination to redeem
or not redeem the Rights or to amend the Agreement). All such
actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with
respect to the foregoing) which are done or made by the Board in
good faith, shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights Certificates
(and, prior to the Distribution Date, registered holders of the
Common Stock) and all other parties, and (y) not subject the
Board to any liability to the holders of the Rights.
Section 30. Benefits of this Agreement. Nothing in
this Agreement shall be construed to give to any Person other
than the Company, the Rights Agent and the registered holders of
the Rights Certificates (and, prior to the Distribution Date,
registered holders of the Common Stock) any legal or equitable
right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Rights Certifi
cates (and, prior to the Distribution Date, registered holders of
the Common Stock).
Section 31. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court of
competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants
and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant
or restriction is held by such court or authority to be invalid,
void or unenforceable and the Board of Directors of the Company
determines in its good faith judgment that severing the invalid
language from this Agreement would adversely affect the purpose
or effect of this Agreement, the right of redemption set forth in
Section 23 hereof shall be reinstated and shall not expire until
the close of business on the tenth Business Day following the
date of such determination by the Board of Directors. Without
limiting the foregoing, if any provision requiring that a
determination be made by less than the entire Board (or at a time
or with the concurrence of a group of directors consisting of
less than the entire Board) is held by a court of competent
jurisdiction or other authority to be invalid, void or
unenforceable, such determination shall then be made by the Board
in accordance with applicable law and the Company's Articles of
Incorporation and Bylaws.
Section 32. Governing Law. This Agreement, each
Right and each Rights Certificate issued hereunder shall be
deemed to be a contract made under the laws of the State of
Kansas and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts
made and to be performed entirely within such State.
Section 33. Counterparts. This Agreement may be
executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and
the same instrument.
Section 34. Descriptive Headings. Descriptive
headings of the several Sections of this Agreement are inserted
for convenience only and shall not control or affect the meaning
or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate
seals to be hereunto affixed and attested, all as of the day and
year first above written.
SPRINT CORPORATION
By /s/ Gene M. Betts
Attest: Name: Gene M. Betts
Title: Senior Vice President
By /s/ Michael T. Hyde
Name: Michael T. Hyde
Title: Assistant Secretary
UMB BANK, N.A.
By /s/ Nancy L. Hoffman
Attest: Name: Nancy L. Hoffman
Title: Vice President
By /s/ R. William Bloemker
Name: R. William Bloemker
Title: Assistant Secretary
<PAGE>
EXHIBIT A
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF PREFERRED STOCK - SIXTH SERIES
OF
SPRINT CORPORATION
STATE OF KANSAS )
) ss.
COUNTY OF JOHNSON )
We, Gene M. Betts, Senior Vice President, and Michael
T. Hyde, Assistant Secretary, of Sprint Corporation, a
corporation organized and existing under the laws of the State of
Kansas and whose registered office is 2330 Shawnee Mission
Parkway, Westwood, Johnson County, Kansas, do hereby certify that
pursuant to authority expressly vested in the Board of Directors
of the Corporation by the provisions of the Articles of
Incorporation, as amended, and in accordance with the provisions
of K.S.A. 17-6401, as amended, the Board of Directors of said
Corporation, at the regular meeting of the Board of Directors
held on the 9th day of June, 1997, adopted the following
resolution creating a series of Serial Preferred Stock designated
as Preferred Stock - Sixth Series, Junior Participating:
RESOLVED, that pursuant to the authority vested in
the Board of Directors of this Corporation by the
provisions of its Articles of Incorporation, as amended
(the "Articles of Incorporation"), a series of
Preferred Stock, without par value, 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 and restrictions thereof
are as follows:
PREFERRED STOCK-SIXTH SERIES
(1) Designation and Amount. The shares
of such series shall be designated as
"Preferred Stock - Sixth Series, Junior
Participating" (hereafter "Sixth Series") and
the number of shares constituting such series
shall be one million five hundred thousand
(1,500,000).
(2) Dividends. Subject to the prior and
superior rights of the holders of any shares
of any other series of Preferred Stock of the
Corporation ("Preferred Stock"), or any
similar stock ranking prior and superior to
the shares of the Sixth Series with respect
to dividends, the holders of shares of the
Sixth Series, in preference to the holders of
Common Stock, par value $2.50 per share, of
the Corporation ("Common Stock"), Class A
Common Stock, par value $2.50 per share, of
the Corporation ("Class A Common Stock") and
any other junior stock, shall be entitled to
receive, when, as and if declared by the
Board of Directors out of funds legally
available for the purpose, quarterly
dividends payable in cash, on January 1,
April 1, July 1 and October 1 in each year
(each such date being referred to herein as a
"Quarterly Dividend Payment Date") in an
amount (rounded to the nearest cent) equal to
the greater of (a) $100.00 or (b) subject to
the provision for adjustment hereinafter set
forth, 1,000 times the aggregate per share
amount of all cash dividends, and 1,000 times
the aggregate per share amount (payable in
cash, based upon the fair market value at the
time the non-cash dividend or other distrib
ution is declared as determined in good faith
by the Board of Directors) of all non-cash
dividends or other distributions other than a
dividend payable in shares of Common Stock or
Class A Common Stock, as the case may be, or
a subdivision of the outstanding shares of
Common Stock or Class A Common Stock, as the
case may be (by reclassification or
otherwise), declared (but not withdrawn) on
the Common Stock or Class A Common Stock, as
the case may be, since the immediately
preceding Quarterly Dividend Payment Date,
or, with respect to the first Quarterly
Dividend Payment Date, since the first
issuance of any share or fraction of a share
of the Sixth Series. In the event this
Corporation shall at any time after June 9,
1997 (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 the Sixth Series 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.
(3) Voting Rights. Except as
prescribed by law and in addition to the
rights provided for in ARTICLE SIXTH of the
Articles of Incorporation of the Corporation,
as amended, and subject to the provision for
adjustment hereinafter set forth, the holders
of the shares of the Sixth Series shall be
entitled to 1,000 votes for each share held
and shall be entitled to exercise such voting
rights with the holders of Common Stock,
without distinction as to class, at any
annual or special meeting of stockholders for
the election of directors and on any other
matter submitted to a vote of the
stockholders of the Corporation at such
meeting. 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 the Sixth Series
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. Except as
otherwise provided herein, in the Articles of
Incorporation of the Corporation, in any
other Certificate of Designation establishing
a series of Preferred Stock or any similar
stock or otherwise required by law, the
holders of the shares of the Sixth Series
and the holders of Common Stock shall vote
together as one class on all matters
submitted to a vote of stockholders of the
Corporation.
(4) Certain Restrictions.
(A) Whenever quarterly dividends
or other dividends or distributions
payable on the shares of the Sixth
Series as provided in Section (2) are in
arrears, thereafter and until all
accrued and unpaid dividends and
distributions, whether or not declared,
on shares of the Sixth Series
outstanding shall have been paid in
full, the Corporation shall not:
(i) declare or pay dividends
(except a dividend payable in
Common Stock and/or any other class
of stock ranking junior to the
shares of the Sixth Series) 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 shares of the Sixth
Series;
(ii) declare or pay
dividends on or make any other
distribution on any shares of stock
ranking on a parity (either as to
dividends or upon liquidation,
dissolution or winding up) with the
shares of the Sixth Series, except
dividends paid ratably on the
shares of the Sixth Series and all
such parity stock on which
dividends are payable or in arrears
in proportion to the total amounts
to which the holders of all such
shares are then entitled;
(iii) redeem or purchase
or otherwise acquire for
consideration any shares of stock
ranking on a parity (either as to
dividends or upon liquidation,
dissolution or winding up) with the
shares of the Sixth Series,
provided that the Corporation may
at any time redeem, purchase or
otherwise acquire shares of 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 shares of the Sixth
Series; or
(iv) purchase or otherwise
acquire for consideration any
shares of the Sixth Series, or any
shares of stock ranking on a parity
with the shares of the Sixth
Series, except in accordance with a
purchase offer made in writing or
by publication (as determined by
the Board of Directors) to all
holders of such shares upon such
terms as the Board of Directors,
after consideration of the
respective annual dividend rates
and other relative rights and
preferences of the respective
series and classes, shall determine
in good faith will result in fair
and equitable treatment among the
respective series or classes.
(B) The Corporation shall not
permit any subsidiary of the Corporation
to purchase or otherwise acquire for
consideration any shares of stock of the
Corporation unless the Corporation
could, under paragraph (A) of this
Section (4), purchase or otherwise
acquire such shares at such time and in
such manner.
(5) Reacquired Shares. Any shares of
the Sixth Series purchased or otherwise
acquired by the Corporation in any manner
whatsoever shall be retired and canceled
promptly after the acquisition thereof. All
such shares shall upon their cancellation
become authorized but unissued shares of
Preferred Stock and may be reissued as part
of a new series of Preferred Stock to be
created by resolution or resolutions of the
Board of Directors, subject to the conditions
and restrictions on issuance set forth
herein, in the Articles of Incorporation, in
any other Certificate of Designation
establishing a series of Preferred Stock or
any similar stock or as otherwise required by
law.
(6) Liquidation, Dissolution or Winding
Up. In the event of any voluntary or
involuntary liquidation, dissolution or
winding up of the Corporation, the holders of
the shares of the Sixth Series shall be
entitled to receive the greater of (a)
$1,000.00 per share, plus accrued dividends
to the date of distribution, whether or not
earned or declared, or (b) an amount per
share, subject to the provision for
adjustment hereinafter set forth, equal to
1,000 times the aggregate amount to be
distributed per share to holders of Common
Stock. 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 to which holders of
shares of the Sixth Series were entitled
immediately prior to such event pursuant to
clause (b) of the preceding sentence shall be
adjusted by multiplying such amount by a
fraction the numerator of which is the number
of shares of Common Stock outstanding
immediately after such event and the
denominator of which is the number of shares
of Common Stock that were outstanding
immediately prior to such event.
(7) Consolidation, Merger, etc. In
case the Corporation shall enter into any
consolidation, merger, combination or other
transaction in which the shares of Common
Stock are exchanged for or changed into other
stock or securities, cash and/or any other
property, then in any such case the shares of
the Sixth Series shall at the same time be
similarly exchanged or changed in an amount
per share (subject to the provision for
adjustment hereinafter set forth) equal to
1,000 times the aggregate amount of stock,
securities, cash and/or any other property
(payable in kind), as the case may be, into
which or for which each share of Common Stock
is changed or exchanged. In the event the
Corporation shall 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 the Sixth Series shall be adjusted
by multiplying such amount by a fraction the
numerator of which is the number of shares of
Common Stock outstanding immediately after
such event and the denominator of which is
the number of shares of Common Stock that
were outstanding immediately prior to such
event.
(8) Ranking. The shares of the Sixth
Series shall rank junior to all other series
of the Corporation's Preferred Stock as to
the payment of dividends and the distribution
of assets, unless the terms of any such
series shall provide otherwise. Nothing
herein shall preclude the Board of Directors
of the Corporation from creating any series
of Preferred Stock or any similar stock
ranking on a parity with or prior to the
shares of the Sixth Series as to the payment
of dividends or distribution of assets.
(9) Fractional Shares. Shares of the
Sixth Series may be issued in fractions of a
share which shall entitle the holder, in
proportion to such holder's fractional
shares, to exercise voting rights, receive
dividends, participate in distributions and
to have the benefit of all other rights of
holders of shares of the Sixth Series.
IN WITNESS WHEREOF, we have hereunto set our hands and
affixed the seal of said Corporation this 9th day of June, 1997.
______________________________________
Gene M. Betts, Senior Vice President
(CORPORATE SEAL)
______________________________________
Michael T. Hyde, Assistant Secretary
STATE OF KANSAS )
) ss.
COUNTY OF JOHNSON )
BE IT REMEMBERED, that before me, a notary public in and
fore the aforesaid county and state, personally appeared Gene M.
Betts, Senior Vice President, and Michael T. Hyde, Assistant
Secretary, of Sprint Corporation, a corporation, who are known to
me to be the same persons who executed the foregoing instrument,
and duly acknowledged the execution of the same this 9th day of
June, 1997.
______________________________
Notary Public
My commission expires:
__________________________
<PAGE>
EXHIBIT B
[Form of Rights Certificate]
Certificate No. R- ________ Rights
NOT EXERCISABLE AFTER JUNE 25, 2007 OR EARLIER IF REDEEMED BY THE
COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF
THE COMPANY, AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS
DEFINED IN THE RIGHTS AGREEMENT) 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, OR MAY ALREADY HAVE
BECOME, NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION
7(e) OF SUCH AGREEMENT.]*
_______________________________
* The portion of the legend in brackets shall be inserted only
if applicable and shall replace the preceding sentence.
Rights Certificate
SPRINT CORPORATION
This certifies that , or registered
assigns, is the registered owner of the number of Rights set
forth above, each of which entitles the owner thereof, subject
to the terms, provisions and conditions of the Rights Agreement,
dated as of June 9, 1997 (the "Rights Agreement"), between
Sprint Corporation, a Kansas corporation (the "Company"),
and UMB Bank, n.a., a banking corporation (the "Rights Agent"),
to purchase from the Company at any time prior to 5:00 P.M. (New
York City time) on June 25, 2007 (the "Final Expiration Date") at
the office or offices of the Rights Agent designated for such
purpose, or its successors as Rights Agent, one one-thousandth of
a fully paid, non-assessable share of Preferred Stock - Sixth
Series, Junior Participating, without par value (the "Preferred
Stock") of the Company, at a purchase price of $225 per one
one-thousandth of a share (the "Purchase Price"), upon
presentation and surrender of this Rights Certificate with the
Form of Election to Purchase and related Certificate duly
executed. The Purchase Price may be paid in cash or by certified
bank check or bank draft payable to the order of the Company.
The number of Rights evidenced by this Rights Certificate (and
the number of shares which may be purchased upon exercise
thereof) set forth above, and the Purchase Price per share set
forth above, are the number and Purchase Price as of June 9,
1997, 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 an
Acquiring Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of an Acquiring Person or of any
such Associate or Affiliate, or (iii) under certain circumstances
specified in the Rights Agreement, a transferee of a person who,
after such transfer, became an Acquiring Person or an Affiliate
or Associate of an Acquiring Person, such Rights shall become
null and void and no holder hereof shall have any right with
respect to such Rights from and after the occurrence of such
Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price
and the number and kind of shares of Preferred Stock or other
securities which may be purchased upon the exercise of the Rights
evidenced by this Rights Certificate are subject to modification
and adjustment upon the happening of certain events, including
Triggering Events (as such term is defined in the Rights Agree
ment).
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 principal office or offices
of the Rights Agent designated for such purpose, may be exchanged
for another Rights Certificate or Rights Certificates of like
tenor and date evidencing Rights entitling the holder to purchase
a like aggregate number of one one-thousandths of a share of
Preferred Stock as the Rights evidenced by the Rights Certificate
or Rights Certificates surrendered shall have entitled such
holder to purchase. If this Rights Certificate shall be
exercised in part, the holder shall be entitled to receive upon
surrender hereof another Rights Certificate or Rights
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Certificate may be redeemed by the
Company at its option at a redemption price of $.01 per Right at
any time prior to the earlier of the close of business on (i) the
tenth business day following the Stock Acquisition Date, and (ii)
the Final Expiration Date. In addition, subject to the
provisions of the Rights Agreement, each Right evidenced by this
Certificate may be exchanged by the Company at its option for one
share of Common Stock of the Company (subject to adjustment for
any stock split, stock dividend or similar transaction) following
the Stock Acquisition Date and prior to the time an Acquiring
person owns 50% or more of the shares of Common Stock then
outstanding.
No fractional shares of Preferred Stock will be issued
upon the exercise of any Right or Rights evidenced hereby (other
than fractions which are integral multiples of one one-thousandth
of a share of Preferred Stock, which may, at the election of the
Company, be evidenced by depositary receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Rights Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any
purpose the holder of shares of Preferred Stock or of any other
securities of the Company which may at any time be issuable on
the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder
hereof, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to
receive dividends or subscription rights, or otherwise, until the
Right or Rights evidenced by this Rights Certificate shall have
been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or
obligatory for any purpose until it shall have been countersigned
by the Rights Agent.
WITNESS the facsimile signature of the proper officers
of the Company and its corporate seal.
Dated as of ____________ __, ____
ATTEST: SPRINT CORPORATION
By:____________________________
Secretary Name:
Title:
Countersigned:
UMB BANK, N.A.
By: ___________________________
Authorized Signature
<PAGE>
[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
an Acquiring Person (as such terms are defined pursuant to the
Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] 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:
<PAGE>
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.
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise Rights represented by the Rights Certificate.)
To: SPRINT CORPORATION:
The undersigned hereby irrevocably elects to exercise
_______ Rights represented by this Rights Certificate to purchase
the shares of Preferred Stock issuable upon the exercise of the
Rights (or such other securities of the Company or of any other
person which may be issuable upon the exercise of the Rights) and
requests that certificates for such shares be issued in the name
of and delivered to:
Please insert social security
or taxpayer identification number ____________________________
______________________________________________________________
(Please print name and address)
______________________________________________________________
If such number of Rights shall not be all the Rights
evidenced by this Rights Certificate, a new Rights Certificate
for the balance of such Rights shall be registered in the name
of and delivered to:
Please insert social security
or taxpayer identification number ____________________________
______________________________________________________________
(Please print name and address)
______________________________________________________________
Dated: __________, ____
________________________________
Signature
Signature Guaranteed:
<PAGE>
Certificate
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate
[ ] are [ ] are not being exercised by or on behalf of a
Person who is or was an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (as such terms are defined
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.
<PAGE>
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On June 9, 1997, the Board of Directors of Sprint
Corporation ("Sprint") declared a dividend distribution of one
Right for each outstanding share of Common Stock (which term
includes Class A Common Stock) to stockholders of record at the
close of business on June 24, 1997. The dividend distribution is
payable on the same date. Each Right entitles the registered
holder to purchase from Sprint at any time following the
Distribution Date (as defined below) and prior to the occurrence
of a Triggering Event (as defined below) a unit consisting of one
one-thousandth of a share (a "Unit") of Preferred Stock - Sixth
Series, Junior Participating, without par value (the "Preferred
Stock"), at a purchase price of $225 per Unit (the "Purchase
Price"). The Purchase Price is subject to adjustment as
described below. The description and terms of the Rights are set
forth in a Rights Agreement (the "Rights Agreement") between
Sprint and UMB Bank, n.a., as Rights Agent.
Initially, the Rights will be attached to all
certificates representing outstanding Common Stock, and no
separate Rights Certificates will be distributed. The Rights
will separate from the Common Stock on the Distribution Date,
which will occur upon the earlier of (i) 10 business days
following (A) 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 Common Stock, except pursuant to a Qualifying Offer (as
defined below), or (B) the public disclosure of facts by Sprint
or an Acquiring Person indicating that the Acquiring Person has
become such (the date of the public announcement or public
disclosure is referred to as the "Stock Acquisition Date"), and
(ii) 10 business days (or such later date as the Board shall
determine prior to such time as there is an Acquiring Person)
following the commencement of, or announcement of an intention to
make, a tender or exchange offer, the consummation of which would
result in a person or group of affiliated or associated persons
beneficially owning 15% or more of the outstanding Common Stock.
Special exceptions to the definitions of "Acquiring
Person", "Distribution Date" and "Stock Acquisition Date" were
created, and certain other provisions are included in the Rights
Agreement, with respect to acquisitions of Common Stock by France
Telecom ("FT") and Deutsche Telekom AG ("DT") and their
affiliates and associates (and in certain cases any strategic
investor or passive financial institution deemed to be part of a
group with respect to an investment in a qualified subsidiary)
pursuant to a Standstill Agreement among FT, DT and Sprint dated
as of July 31, 1995 (the "Standstill Agreement"). The Standstill
Agreement was entered into in connection with an Investment
Agreement dated as of that same date pursuant to which FT and DT
acquired approximately 20% of Sprint's outstanding Common Stock.
In general, actions of FT, DT and their affiliates and associates
which would otherwise cause a Distribution Date or Stock
Acquisition Date to occur will not do so unless such actions also
violate the Standstill Agreement.
Until the Distribution Date (or earlier redemption,
exchange or expiration of the Rights), (i) the Rights will be
evidenced by the Common Stock certificates and will be
transferred with and only with such Common Stock certificates,
(ii) Common Stock certificates will contain a notation incorpo
rating 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 certificates. Pursuant to
the Rights Agreement, Sprint 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 will be issued.
The Rights are not exercisable until the Distribution
Date and will expire at the close of business on June 25, 2007
("Final Expiration Date"), unless the Final Expiration Date is
extended or unless Sprint redeems or exchanges the Rights prior
to the Final Expiration Date, in each case 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 in certain circumstances, only
shares of Common Stock issued prior to the Distribution Date will
be issued with Rights.
In the event that a person or group becomes the
beneficial owner of 15% or more of the outstanding Common Stock,
except pursuant to a Qualifying Offer, each holder of a Right
will thereafter have the right to receive upon exercise Common
Stock (or, in certain circumstances, cash, property or other
securities of Sprint) having a value equal to two times the then
current Purchase Price of the Right. A "Qualifying Offer" is an
offer for all outstanding shares of Common Stock which a majority
of the independent directors (i.e., directors who are not also
officers of Sprint and who are not representatives, nominees,
affiliates or associates of an Acquiring Person) determine, after
receiving advice from one or more investment banking firms, to be
fair to the stockholders and otherwise in the best interests of
Sprint and its stockholders. However, the Rights will not be
exercisable following the occurrence of the event specified in
the first sentence of this paragraph until such time as the
Rights are no longer redeemable by Sprint as set forth below.
Notwithstanding the foregoing, following the occurrence of any
such event, all Rights that are, or (under certain circumstances
specified in the Rights Agreement) were, beneficially owned by
any Acquiring Person (or certain related parties) will be null
and void.
For example, at a Purchase Price of $250 per Right,
each Right not owned by an Acquiring Person (or by certain
related parties) would entitle its holder, following an event
specified in the first sentence of the immediately preceding
paragraph, to purchase $500 worth of Common Stock (or other
consideration, as noted above) for $250. Assuming that the
Common Stock has a per share value of $50 at such time, the
holder of each valid Right would be entitled to purchase ten
shares of Common Stock for $250.
In the event that, at any time following the Stock
Acquisition Date, (i) Sprint is acquired in a merger or other
business combination transaction in which Sprint is not the
surviving corporation (other than a merger which follows a
Qualifying Offer and satisfies certain other requirements), or
(ii) 50% or more of Sprint's assets or earning power is sold or
transferred, each holder of a Right (except Rights which
previously have 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 then
current Purchase Price of the Right. The events set forth in
this paragraph and in the second preceding paragraph which allow
Rights to be exercised are referred to as "Triggering Events."
At any time after any person or group becomes an
Acquiring Person and prior to the acquisition by such person or
group of 50% or more of the outstanding Common Stock, the Board
of Directors of Sprint may, at its option, exchange the Rights
(other than Rights owned by such person or group, which will have
become void), in whole or in part, at an exchange ratio of one
share of Common Stock, or one one-thousandth of a share of
Preferred Stock (or one share or a fraction of a share of a class
or series of Sprint's preferred stock having equivalent rights,
preferences and privileges), per Right (subject to adjustment for
any stock split, stock dividend or similar transaction occurring
after June 9, 1997).
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, or (ii) upon the distribution to holders of the
Preferred Stock of certain rights, options, warrants, evidences
of indebtedness or assets. 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; 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.
The number of outstanding Rights attached to each share
of Common Stock is also subject to adjustment in the event of a
stock split of the Common Stock or a stock dividend on the Common
Stock payable in shares of Common Stock or subdivisions or
combinations of the shares of Common Stock, if such split,
dividend, subdivision or combination occurs prior to the
Distribution Date.
At any time until the close of business on the tenth
business day following the Stock Acquisition Date, Sprint may
order that all Rights be redeemed at a price of $.01 per Right
(payable in cash, Common Stock or other consideration deemed
appropriate by the Board of Directors), subject to adjustment for
any stock split, stock dividend or similar transaction occurring
after June 9, 1997 (the "Redemption Price"). Immediately upon
the effectiveness of the action of the Board of Directors
ordering redemption of the Rights, the right to exercise the
Rights will terminate and the holders of the Rights will only be
entitled to receive the Redemption Price for each Right so held.
Until a Right is exercised, the holder will have no
rights as a stockholder of Sprint in his capacity as a holder of
Rights, including no right to vote or to receive dividends. The
holders of Rights will be able to vote and receive dividends on
the Common Stock that they hold. While the current distribution
of the Rights will not be taxable to stockholders or to Sprint,
stockholders might, depending upon the circumstances, realize
taxable income in the event that the Rights become severable from
the Common Stock and will likely realize taxable income in the
event such Rights become exercisable for common stock of the
acquiring company as set forth above.
For so long as the Rights are redeemable, Sprint may
amend the Rights in any manner, except that it may not change the
Redemption Price. After the Rights are no longer redeemable,
Sprint may amend the Rights in any manner that does not adversely
affect the interests of holders of the Rights.
Shares of Preferred Stock that are issued upon exercise
of the Rights will not be redeemable. Each share of Preferred
Stock will be entitled to a minimum preferential quarterly
dividend payment of the greater of (a) $100.00 per share or
(b) 1,000 times the aggregate per share amount of all dividends
(other than a dividend payable in Common Stock) declared per
share of Common Stock. In the event of liquidation, the holders
of shares of Preferred Stock will be entitled to the greater of
(a) a minimum preferential liquidation payment of $1,000.00 per
share, plus accrued dividends, or (b) 1,000 times the aggregate
amount to be distributed per share of Common Stock. Each share
of Preferred Stock will have 1,000 votes, voting together with,
and on the same matters as, the Common Stock (excluding the
special voting rights of the Class A Common Stock). Finally, in
the event of any merger, consolidation or other transaction in
which shares of Common Stock are exchanged for or changed into
other stock, securities, cash and/or other property, each share
of Preferred Stock will be entitled to receive 1,000 times the
amount received per share of Common Stock. These rights are
protected by customary antidilution provisions.
Because of the nature of the Preferred Stock's
dividend, liquidation and voting rights, the value of a Unit of
Preferred Stock should approximate the value of one share of
Common Stock.
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 dated June ______, 1997. 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.
