As filed with the Securities and Exchange Commission on June 24, 1998
Registration No. 333-
=====================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------
Young & Rubicam Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 13-1493710
(State or Other (I.R.S. Employer
Jurisdiction of Identification
Incorporation or Number)
Organization)
285 Madison Avenue
New York, New York 10017
(Address of Registrant's Principal Executive Offices)
YOUNG & RUBICAM INC. 1997 INCENTIVE COMPENSATION PLAN
YOUNG & RUBICAM HOLDINGS INC. MANAGEMENT STOCK OPTION PLAN
(Full Titles of the Plans)
-----------------
Stephanie W. Abramson, Esq.
Executive Vice President, General Counsel
Young & Rubicam Inc.
285 Madison Avenue
New York, New York 10017
(212) 210-3000
(Name, Address, and Telephone Number, Including Area Code,
of Agent for Service)
-----------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
===========================================================================================================================
Title of each class of securities Amount to be Proposed Proposed Amount of
to be registered registered (1) maximum maximum registration fee
offering aggregate offering
price per price
share
- ---------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $.01 per share 12,008,070 shares $1.92 (2) $23,055,495 (2) $6,802 (2)
- ---------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $.01 per share 6,331,185 shares $7.67 (2) $48,560,189 (2) $14,326 (2)
- ---------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $.01 per share 9,997,500 shares $12.33 (2) $123,269,175 (2) $36,365 (2)
- ---------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $.01 per share 118,710 shares $14.33 (2) $1,701,115 (2) $502 (2)
- ---------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $.01 per share 412,500 shares $15.00 (2) $6,187,500 (2) $1,826 (2)
- ---------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $.01 per share 73,375 shares $25.00 (2) $1,834,375 (2) $542 (2)
- ---------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $.01 per share 8,585,435 shares $29.72 (3) $255,159,129 (3) $75,272 (3)
- ---------------------------------------------------------------------------------------------------------------------------
Preferred Share Purchase Rights (4)
- ---------------------------------------------------------------------------------------------------------------------------
Total 37,526,775 shares -- $459,766,978 $135,635
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
(1) Together with an indeterminate number of shares that may
be necessary to adjust the number of shares reserved for
issuance pursuant to the Young & Rubicam Inc. 1997 Incentive
Compensation Plan (the "1997 ICP") and the Young & Rubicam
Holdings Inc. Management Stock Option Plan (the "Management
Stock Option Plan" and, together with the 1997 ICP, the
"Plans") as the result of a stock split, stock dividend or
similar adjustment of the outstanding Common Stock of Young &
Rubicam Inc. (the "Registrant").
(2) Estimated solely for the purposes of calculating the
registration fee pursuant to Rule 457(h) under the Securities
Act of 1933, as amended (the "Securities Act"), with respect
to shares of Common Stock issuable pursuant to stock options
granted under the Plans and based on the exercise price of
such stock options. Upon cancellation, expiration, forfeiture
or other termination of such stock options without a delivery
of shares of Common Stock, new stock options or other stock
awards may be granted at varying exercise prices under the
1997 ICP with respect to the shares of Common Stock
underlying such terminated stock options.
(3) Estimated solely for the purposes of calculating the
registration fee pursuant to Rule 457(h) under the Securities
Act, with respect to shares of Common Stock issuable pursuant
to stock options or other stock awards not yet granted under
the 1997 ICP and based on the average of the high and low
prices on June 18, 1998 of a share of Common Stock of the
Registrant as reported on the New York Stock Exchange.
(4) Rights initially trade together with the Common Stock. The
value attributable to the Rights, if any, is reflected in the
market price of the Common Stock.
<PAGE>
Part II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The reports listed below have been filed with or furnished
to the Securities and Exchange Commission (the "Commission") by
the Registrant and are incorporated herein by reference to the
extent not superseded by reports or other information
subsequently filed or furnished.
(a) The Registrant's Prospectus dated May 11, 1998 filed
pursuant to Rule 424(b) of the Securities Act with respect to the
Registration Statement on Form S-1 (No. 333-46929) filed by the
Registrant under the Securities Act with the Commission on
February 26, 1998, as amended by Amendment No. 1, Amendment No. 2
and Amendment No. 3 thereto filed by the Registrant under the
Securities Act with the Commission on April 8, 1998, April 20,
1998, and May 5, 1998, respectively, and the Registration
Statement on Form S-1 (No. 333-52395) filed by the Registrant
under the Securities Act with the Commission on May 12, 1998
(together, the "Registration Statements on Form S-1").
(b) All of the Registrant's reports filed with the
Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
after the date of this Registration Statement and prior to filing
a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities
then remaining unsold shall be deemed to be incorporated by
reference in this Registration Statement and to be part hereof
from the date of filing of such reports.
(c) The description of the Common Stock of the Registrant
is contained under the caption "Description of Capital Stock" in
the Prospectus dated May 11, 1998 filed pursuant to Rule 424(b)
of the Securities Act with respect to the Registration Statements
on Form S-1 and incorporated by reference to the Registration
Statement on Form 8-A filed by the Registrant under the Exchange
Act with the Commission on May 5, 1998.
Any statement contained herein or in a document
incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this
Registration Statement to the extent that a statement contained
in any subsequently filed document which also is or is deemed to
be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a
part of this Registration Statement.
Item 4. Description of Securities.
Not applicable.
II-1
<PAGE>
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Article X of the Registrant's Amended and Restated
Certificate of Incorporation, which has been filed as Exhibit 4.4
hereto, provides substantially as follows:
Section 1. Elimination of Certain Liability of Directors. A
director of the Registrant shall not be personally liable to the
Registrant or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any
breach of the director's duty of loyalty to the Registrant or its
stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the General Corporation Law of
the State of Delaware, or (iv) for any transaction from which the
director derived an improper personal benefit.
Section 2. Indemnification and Insurance.
(a) Right to indemnification. Each person who was or is
made a party or is threatened to be made a party to or is
involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative (hereinafter a
"proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was a
director or officer of the Registrant or is or was serving at the
request of the Registrant as a director, officer, trustee,
partner, member, employee or agent of another corporation or of a
partnership, limited liability company, joint venture, trust or
other enterprise, including service with respect to employee
benefit plans, whether the basis of such proceeding is alleged
action in an official capacity as a director, officer, trustee,
partner, member, employee or agent or in any other capacity while
serving as a director, officer, trustee, partner, member,
employee or agent, shall be indemnified and held harmless by the
Registrant to the fullest extent authorized by the General
Corporation Law of the State of Delaware, as the same exists or
may hereafter be amended (but, in the case of any such amendment,
to the fullest extent permitted by law, only to the extent that
such amendment permits the Registrant to provide broader
indemnification rights than said law permitted the Registrant to
provide prior to such amendment), against all expense, liability
and loss (including, without limitation, attorneys' fees,
judgments, fines, amounts paid or to be paid in settlement, and
excise taxes or penalties arising under the Employee Retirement
Income Security Act of 1974) reasonably incurred or suffered by
such person in connection therewith and such indemnification
shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of his
or her heirs, executors and administrators; provided, however,
that, except as provided in paragraph (b) hereof, the Registrant
shall indemnify any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by such
person only if such proceeding (or part thereof) was authorized
by the
II-2
<PAGE>
Board of Directors of the Registrant. The right to
indemnification conferred in this Section shall be a contract
right and shall include the right to be paid by the Registrant
the expenses incurred in defending any such proceeding in advance
of its final disposition; provided, however, that, if the General
Corporation Law of the State of Delaware requires, the payment of
such expenses incurred by a director or officer in his or her
capacity as a director or officer (and not in any other capacity
in which service was or is rendered by such person while a
director or officer, including, without limitation, service to an
employee benefit plan) in advance of the final disposition of a
proceeding, shall be made only upon delivery to the Registrant of
an undertaking, by or on behalf of such director or officer, to
repay all amounts so advanced if it shall ultimately be
determined that such director or officer is not entitled to be
indemnified under this Section or otherwise but no bond or other
security shall be required. The Registrant may, by action of the
Board of Directors, provide indemnification to employees and
agents of the Registrant with the same scope and effect as the
foregoing indemnification of directors and officers.
(b) Right of Claimant to Bring Suit. If a claim under
paragraph (a) of this Section is not paid in full by the
Registrant within thirty days after a written claim has been
received by the Registrant, the claimant may at any time
thereafter bring suit against the Registrant to recover the
unpaid amount of the claim and, if successful in whole or in
part, the claimant shall be entitled to be paid also the expense
of prosecuting such claim. It shall be a defense to any such
action (other than an action brought to enforce a claim for
expenses incurred in defending any proceeding in advance of its
final disposition where the required undertaking, if any is
required, has been tendered to the Registrant) that the claimant
has not met the standards of conduct which make it permissible
under the General Corporation Law of the State of Delaware for
the Registrant to indemnify the claimant for the amount claimed,
but the burden of proving such defense shall be on the
Registrant. Neither the failure of the Registrant (including its
Board of Directors, independent legal counsel, or its
stockholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant
is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in the General
Corporation Law of the State of Delaware, nor an actual
determination by the Registrant (including its Board of
Directors, independent legal counsel, or its stockholders) that
the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that the
claimant has not met the applicable standard of conduct.
(c) Non-Exclusivity of Rights. The right to indemnification
and the payment of expenses incurred in defending a proceeding in
advance of its final disposition conferred in this Section shall
not be exclusive of any other right which any person may have or
hereafter acquire under any statute, provision of the Certificate
of Incorporation, By-law, agreement, vote of stockholders or
disinterested directors or otherwise.
(d) Insurance. The Registrant may maintain insurance, at
its expense, to protect itself and any director, officer,
trustee, partner, member, employee or agent of the Registrant or
another
II-3
<PAGE>
corporation, partnership, limited liability company, joint
venture, trust or other enterprise against any such expense,
liability or loss, whether or not the Registrant would have the
power to indemnify such person against such expense, liability or
loss under the General Corporation Law of the State of Delaware.
Section 145 of the General Corporation Law of the State of
Delaware provides as follows:
(a) A corporation shall have power to indemnify any person
who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation) by reason
of the fact that the person is or was a director, officer,
employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust
or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred by the person in connection with such
action, suit or proceeding if the person acted in good faith and
in a manner the person reasonably believed to be in or not
opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable
cause to believe the person's conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the
person did not act in good faith and in a manner which the person
reasonably believed to be in or not opposed to the best interests
of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that the person's
conduct was unlawful.
(b) A corporation shall have power to indemnify any person
who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the
right of the corporation to procure a judgment in its favor by
reason of the fact that the person is or was a director, officer,
employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust
or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by the person in connection with
the defense or settlement of such action or suit if the person
acted in good faith and in a manner the person reasonably
believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the corporation unless
and only to the extent that the Court of Chancery or the court in
which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly
and reasonably entitled to indemnity for such expenses which the
Court of Chancery or such other court shall deem proper.
II-4
<PAGE>
(c) To the extent that a present or former director or
officer of a corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred
to in subsections (a) and (b) of this section, or in defense of
any claim, issue or matter therein, such person shall be
indemnified against expenses (including attorneys' fees) actually
and reasonably incurred by such person in connection therewith.
(d) Any indemnification under subsections (a) and (b) of
this section (unless ordered by a court) shall be made by the
corporation only as authorized in the specific case upon a
determination that indemnification of the present or former
director, officer, employee or agent is proper in the
circumstances because the person has met the applicable standard
of conduct set forth in subsections (a) and (b) of this section.
Such determination shall be made, with respect to a person who is
a director or officer at the time of such determination, (1) by a
majority vote of the directors who are not parties to such
action, suit or proceeding, even though less than a quorum, or
(2) by a committee of such directors designated by majority vote
of such directors, even though less than a quorum, or (3) if
there are no such directors, or if such directors so direct, by
independent legal counsel in a written opinion, or (4) by the
stockholders.
(e) Expenses (including attorneys' fees) incurred by an
officer or director in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be
paid by the corporation in advance of the final disposition of
such action, suit or proceeding upon receipt of an undertaking by
or on behalf of such director or officer to repay such amount if
it shall ultimately be determined that such person is not
entitled to be indemnified by the corporation as authorized in
this section. Such expenses (including attorneys' fees) incurred
by former directors and officers or other employees and agents
may be so paid upon such terms and conditions, if any, as the
corporation deems appropriate.
(f) The indemnification and advancement of expenses
provided by, or granted pursuant to, the other subsections of
this section shall not be deemed exclusive of any other rights to
which those seeking indemnification or advancement of expenses
may be entitled under any bylaw, agreement, vote of stockholders
or disinterested directors or otherwise, both as to action in
such person's official capacity and as to action in another
capacity while holding such office.
(g) A corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director,
officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted
against such person and incurred by such person in any such
capacity, or arising out of such person's status as such, whether
or not the corporation would have the power to indemnify such
person against such liability under this section.
II-5
<PAGE>
(h) For purposes of this section, references to "the
corporation" shall include, in addition to the resulting
corporation, any constituent corporation (including any
constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have
had power and authority to indemnify its directors, officers, and
employees or agents, so that any person who is or was a director,
officer, employee or agent of such constituent corporation, or is
or was serving at the request of such constituent corporation as
a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall
stand in the same position under this section with respect to the
resulting or surviving corporation as such person would have
respect to such constituent corporation if its separate existence
had continued.
(i) For purposes of this section, references to "other
enterprises" shall include employee benefit plans; references to
"fines" shall include any excise taxes assessed on a person with
respect to any employee benefit plan; and references to
"servicing at the request of the corporation" shall include any
service as a director, officer, employee or agent of the
corporation which imposes duties on, or involves services by,
such director, officer, employee, or agent with respect to an
employee benefit plan, its participants or beneficiaries; and a
person who acted in good faith and in a manner such person
reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have
acted in a manner "not opposed to the best interests of the
corporation" as referred to in this section.
(j) The indemnification and advancement of expense proved
by, or granted pursuant to, this section shall, unless otherwise
provided when authorized or ratified, continue as to a person who
has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the heirs, executors and administrators
of such a person.
(k) The Court of Chancery is hereby vested with exclusive
jurisdiction to hear and determine all actions for advancement of
expenses or indemnification brought under this section or under
any bylaw, agreement, vote of stockholders or disinterested
directors, or otherwise. The Court of Chancery may summarily
determine a corporation's obligation to advance expenses
(including attorneys' fees).
Section 5 of the Management Voting Trust Agreement, dated
as of December 12, 1996, provides substantially as follows:
The Registrant hereby agrees to assume liability for and
does hereby indemnify, protect, save and hold harmless the Voting
Trustees (as defined therein) and their successors, assigns,
agents and servants to the full extent lawful from and against
any and all liabilities, obligations, losses, damages, penalties,
taxes, claims, actions, suits, costs, expenses or disbursements
(including legal fees and expenses) of any kind and nature
whatsoever ("Losses") that may be imposed, incurred by or
asserted against the Voting Trustees or any of them individually
in any way relating to or arising under the Management Voting
Trust Agreement or the enforcement of
II-6
<PAGE>
any of the terms thereof or in any way relating to or arising out
of the administration of the trusts created thereby or the action
or inaction of the Management Voting Trust (as defined therein)
thereunder, unless the Registrant shall sustain the burden of
proving by clear and convincing evidence that such Losses were
proximately caused by an act or omission on the part of such
Voting Trustee or Voting Trustees that was not taken in good
faith or that was not reasonably believed to be in or not opposed
to the best interests of the Registrant and the Management
Investors (as defined therein) as a group. The Registrant shall
advance to any Voting Trustee all reasonable expenses in
connection with litigation arising under the Management Voting
Trust Agreement or the enforcement of any of the terms thereof or
in any way relating to or arising out of the administration of
the trusts created thereby or the action or inaction of the
Management Voting Trust thereunder, including, but not limited
to, expenses in connection with litigation in which such Voting
Trustee purports to seek to enforce any portion of the Management
Voting Trust Agreement. A Voting Trustee shall be required to
execute an undertaking agreeing to repay the Registrant the
amount so advanced in the event it is ultimately determined that
such Voting Trustee is not entitled to indemnification with
respect to such Losses, but the Voting Trustee shall not be
required to give a bond or any security for the advancement of
such expenses. To the extent insurance is available on
commercially reasonable terms, the Registrant will procure and
maintain (for the benefit of the Registrant and the Voting
Trustees) insurance covering the Voting Trustees at least to the
extent their conduct would give rise to indemnification under the
Management Voting Trust Agreement. The provisions contained in
this indemnification section shall survive the termination of the
Management Voting Trust Agreement.
The Young & Rubicam Holdings Inc. Restricted Stock Plan
(the "Restricted Stock Plan") and the Management Stock Option
Plan each provide that no member of the Compensation Committee of
the Registrant's Board of Directors or of the Registrant's Board
of Directors shall be liable for any action or determination made
in good faith with respect to such plan or any grant under such
plan. The Restricted Stock Plan and the Management Stock Plan
each provide that to the fullest extent permitted by law, the
Registrant shall indemnify and save harmless each person made or
threatened to be made a party to any civil or criminal action or
proceeding by reason of the fact that such person, or such
person's testator or intestate, is or was a member of the
Compensation Committee of the Registrant's Board of Directors.
The 1997 ICP provides that no member of the Compensation
Committee or any officer or employee of the Registrant or an
affiliate acting at the direction or on behalf of the
Compensation Committee shall be personally liable for any action
or determination taken or made in good faith with respect to the
1997 ICP, and shall, to the extent permitted by law, be fully
indemnified and protected by the Registrant with respect to any
such action or determination.
The Registrant also carries liability insurance covering
officers and directors.
II-7
<PAGE>
Item 7. Exemption From Registration Claimed.
Not applicable.
Item 8. Exhibits.
The following exhibits are filed with or incorporated by
reference into this Registration Statement (numbering corresponds
to Exhibit Table in Item 601 of Regulation S-K):
4.1 Young & Rubicam Inc. 1997 Incentive Compensation
Plan (filed as Exhibit 10.6 to Registrant's
Registration Statement on Form S-1 (No. 333-46929) and
incorporated herein by reference)
4.2 Amendment to Young & Rubicam Inc. 1997 Incentive
Compensation Plan (filed as Exhibit 10.28 to
Registrant's Registration Statement on Form S-1 (No.
333- 46929) and incorporated herein by reference)
4.3 Young & Rubicam Holdings Inc. Management Stock Option
Plan (filed as Exhibit 10.5 to Registrant's
Registration Statement on Form S-1 (No. 333-46929) and
incorporated herein by reference)
4.4 Amended and Restated Certificate of Incorporation of
Registrant
4.5 Amended and Restated Bylaws of Registrant
4.6 Specimen Certificate of Common Stock of Registrant
(filed as Exhibit 4.1 to Registrant's Registration
Statement on Form S-1 (No. 333-46929) and incorporated
herein by reference)
4.7 Management Voting Trust Agreement, dated as of
December 12, 1996 (filed as Exhibit 9.1 to
Registrant's Registration Statement on Form S-1 (No.
333-46929) and incorporated herein by reference)
4.8 Amended Stockholders' Agreement, dated as of May 8,
1998
4.9 Rights Agreement, dated as of May 1, 1998
5.1 Opinion of Cleary, Gottlieb, Steen & Hamilton
regarding the validity of securities being registered
23.1 Consent of Price Waterhouse LLP
23.2 Consent of Cleary, Gottlieb, Steen & Hamilton
(included in Exhibit 5.1)
II-8
<PAGE>
24.1 Powers of Attorney (included on signature pages)
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
Registration Statement: (i) to include any prospectus required by
Section 10(a)(3) of the Securities Act; (ii) to reflect in the
prospectus any facts or events arising after the effective date
of the Registration Statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in
the Registration Statement; (iii) to include any material
information with respect to the plan of distribution not
previously disclosed in the Registration Statement or any
material change to such information in the Registration
Statement; provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the information required to be
included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or 15(d) of
the Exchange Act that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act,
each filing of the Registrant's annual report pursuant to Section
13(a) or 15(d) of the Exchange Act (and, where applicable, each
filing of the employee benefit plan's annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by
reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers
and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid
by a director, officer or controlling person of the Registrant in
the successful defense of any action, suit or proceeding) is
asserted by
II-9
<PAGE>
such director, officer or controlling person in connection with
the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will
be governed by the final adjudication of such issue.
II-10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, the Registrant has duly caused this Registration Statement
to be signed on its behalf, thereunto duly authorized, in the
City of New York, State of New York, on June 24, 1998.
YOUNG & RUBICAM INC.
By: /s/ Stephanie W. Abramson
-------------------------------------
Stephanie W. Abramson, Executive Vice
President and General Counsel
POWER OF ATTORNEY
-----------------
We, the undersigned officers and directors of Young &
Rubicam Inc., hereby severally and individually constitute and
appoint Michael J. Dolan, Stephanie W. Abramson and Alan D.
Sheldon and each of them, the true and lawful attorneys-in-fact
and agents of each of us to execute in the name, place and stead
of each of us (individually and in any capacity stated below) any
and all amendments (including post-effective amendments) to this
Registration Statement, and to file the same, with all exhibits
thereto, and other documents or instruments necessary or
advisable in connection therewith, with the Securities and
Exchange Commission, each of said attorneys-in-fact and agents to
have the power to act with or without the others and to have full
power and authority to do and perform in the name and on behalf
of each of the undersigned every act whatsoever necessary or
advisable to be done in and about the premises, as fully to all
intents and purposes as any of the undersigned might or could do
in person, and we hereby ratify and confirm our signatures as
they may be signed by our said attorneys-in-fact and agents or
each of them to any and all such amendments and instruments.
This Power of Attorney may be executed in multiple
counterparts, each of which shall be deemed an original, but
which taken together shall constitute one instrument.
Pursuant to the requirements of the Securities Act of
1933, this Registration Statement has been signed by the
following persons in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Peter A. Georgescu Chairman of the Board and Chief June 24, 1998
- -------------------------- Executive Officer (principal
Peter A. Georgescu executive officer)
II-11
<PAGE>
Signature Title Date
--------- ----- ----
/s/ Michael J. Dolan Vice Chairman, Chief Financial June 24, 1998
- -------------------------- Officer and Director (principal
Michael J. Dolan financial officer)
/s/ Kevin Lavan Senior Vice President, Finance June 24, 1998
- -------------------------- (principal accounting officer)
Kevin Lavan
/s/ Edward H. Vick Chief Operating Officer and June 24, 1998
- -------------------------- Director
Edward H. Vick
/s/ Thomas D. Bell, Jr. Executive Vice President and June 24, 1998
- -------------------------- Director
Thomas D. Bell, Jr.
June 24, 1998
/s/ F. Warren Hellman Director
- --------------------------
F. Warren Hellman
/s/ Richard S. Bodman Director June 24, 1998
- --------------------------
Richard S. Bodman
/s/ Philip U. Hammarskjold Director
- -------------------------- June 24, 1998
Philip U. Hammarskjold
/s/ Alan D. Schwartz Director
- -------------------------- June 24, 1998
Alan D. Schwartz
/s/ John F. McGillicuddy Director
- -------------------------- June 24, 1998
John F. McGillicuddy
II-12
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Exhibit Sequentially Numbered
No. Description Method of Filing Page Location
- ------- ----------- ---------------- ---------------------
4.1 Young & Rubicam Inc. 1997 Incentive Filed as Exhibit 10.6 to --
Compensation Plan Registrant's Registration
Statement on Form S-1 (No. 333-
46929) and incorporated herein
by reference
4.2 Amendment to Young & Rubicam Inc. Filed as Exhibit 10.28 to --
1997 Incentive Compensation Plan Registrant's Registration
Statement on Form S-1 (No. 333-
46929) and incorporated herein
by reference
4.3 Young & Rubicam Holdings Inc. Filed as Exhibit 10.5 to --
Management Stock Option Plan Registrant's Registration
Statement on Form S-1 (No. 333-
46929) and incorporated herein
by reference
4.4 Amended and Restated Certificate of Filed herewith
Incorporation of Registrant
4.5 Amended and Restated Bylaws of Filed herewith
Registrant
4.6 Specimen Certificate of Common Stock Filed as Exhibit 4.1 to --
of Registrant Registrant's Registration
Statement on Form S-1 (No. 333-
46929) and incorporated herein
by reference
4.7 Management Voting Trust Agreement, Filed as Exhibit 9.1 to --
dated as of December 12, 1996 Registrant's Registration
Statement on Form S-1 (No. 333-
46929) and incorporated herein
by reference
4.8 Amended Stockholders' Agreement, Filed herewith
dated as of May 8, 1998
4.9 Rights Agreement, dated as of May 1, Filed herewith
1998
5.1 Opinion of Cleary, Gottlieb, Steen & Filed herewith
Hamilton regarding the validity of
securities being registered
<PAGE>
23.1 Consent of Price Waterhouse LLP Filed herewith
23.2 Consent of Cleary, Gottlieb, Steen & Filed herewith
Hamilton (included in Exhibit 5.1)
24.1 Powers of Attorney (included on Filed herewith
signature pages)
</TABLE>
Exhibit 4.4
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION OF
YOUNG & RUBICAM INC.
The name of the corporation is Young & Rubicam Inc.
(the "Corporation"). The date of filing of the Corporation's
original certificate of incorporation with the Secretary of State
is October 17, 1996, which certificate of incorporation was
amended and restated by the filing of an amended and restated
certificate of incorporation with the Secretary of State on
December 13, 1996, further amended by the filing of a certificate
of amendment with the Secretary of State on April 9, 1998, which
certificate of amendment was nullified and voided by the filing
of a certificate of correction with the Secretary of State on May
11, 1998, and further amended by the filing of a certificate of
amendment with the Secretary of State on May 11, 1998. This
Amended and Restated Certificate of Incorporation was duly
adopted in accordance with the provisions of Sections 242 and 245
of the General Corporation Law of the State of Delaware.
The Amended and Restated Certificate of Incorporation
of the Corporation is hereby amended and restated to read as
follows:
ARTICLE I - NAME
The name of the corporation (which is hereinafter
referred to as the "Corporation") is:
Young & Rubicam Inc.
ARTICLE II - AGENT
The registered office of the Corporation is located at
1209 Orange Street, in the City of Wilmington, in the County of
New Castle, in the State of Delaware. The name of its registered
agent at that address is The Corporation Trust Company.
ARTICLE III - PURPOSE
The purposes for which the Corporation is formed are
to engage in any lawful act or activity for which corporations
may be organized and incorporated under the General Corporation
Law of the State of Delaware.
ARTICLE IV - STOCK
Section 1. Authorized Stock. The aggregate number of
shares which the Corporation shall have authority to issue is
260,00,000. 10,000,000 of said shares shall be of the par value
of $0.01 per share, and shall be designated Preference Stock, and
250,000,000 of said shares shall be of the par value of $0.01 per
share, and shall be designated Common Stock.
Section 2. Preference Stock. Subject to the limitations
and in the manner provided by law, shares of the Preference Stock
may be issued from time to time in series and, except as
otherwise provided in Section 3 of this Article IV with respect
to the initial series of the
<PAGE>
Preference Stock (the "Money Market Preferred Stock"), the Board
of Directors of the Corporation is hereby authorized to establish
and designate series of the Preference Stock in addition to the
Money Market Preferred Stock, to fix the number of shares
constituting each series, and to fix the designations and the
relative rights, preferences and limitations of the shares of
each series and the variations in the relative rights,
preferences and limitations as between series, and to increase
and to decrease the number of shares constituting each series.
Subject to the limitations and in the manner provided by law, the
authority of the Board of Directors of the Corporation with
respect to each series shall include but shall not be limited to
the authority to determine the following:
(a) The designation of such series.
(b) The number of shares initially constituting such
series.
(c) The increase, and the decrease to a number not
less than the number of the outstanding shares of such
series, of the number of shares constituting such series
theretofore fixed.
(d) The rate or rates and the times at which dividends
on the shares of such series shall be paid and whether or
not such dividends shall be cumulative and, if such
dividends shall be cumulative, the date or dates from and
after which they shall accumulate; provided, however, that,
if the stated dividends are not paid in full, the shares of
all series of the Preference Stock ranking pari passu with
the Money Market Preferred Stock (including the shares of
the Money Market Preferred Stock) shall share ratably in
the payment of dividends, including accumulations, if any,
in accordance with the sums which would be payable on such
shares if all dividends were declared and paid in full.
(e) Whether or not the shares of such series shall be
redeemable and, if such shares shall be redeemable, the
terms and conditions of such redemption, including but not
limited to the date or dates upon or after which such
shares shall be redeemable and the amount per share which
shall be payable upon such redemption, which amount may
vary under different conditions and at different redemption
dates.
(f) The amount payable on the shares of such series in
the event of the voluntary or involuntary liquidation,
dissolution or winding up of the Corporation; provided,
however, that the holders of such shares shall be entitled
to be paid, or to have set apart for payment, not less than
$.01 per share before the holders of shares of the Common
Stock or the holders of any other class or series of stock
ranking junior to the Preference Stock as to rights on
liquidation shall be entitled to be paid any amount or to
have any amount set apart for payment; provided, further,
that, if the amounts payable on liquidation are not paid in
full, the shares of all series of the Preference Stock
ranking pari passu with the Money Market Preferred Stock
(including the shares of Money Market Preferred Stock)
shall share ratably in any distribution of assets other
than by way of dividends in accordance with the sums which
would be payable in such distribution if all sums payable
were discharged in full. A liquidation, dissolution or
winding up of the Corporation, as such terms are used in
this paragraph (f), shall not be deemed to be
2
<PAGE>
occasioned by or to include any consolidation or merger of
the Corporation with or into any other corporation or other
entity or corporations or other entities or a sale, lease
or conveyance of all or a part of its assets.
(g) Whether or not the shares of such series shall
have voting rights, in addition to the voting rights
provided by law and, if such shares shall have such voting
rights, the terms and conditions thereof, including but not
limited to the right of the holders of such shares to vote
as a separate class either alone or with the holders of
shares of one or more other series of Preference Stock and
the right to have more than one vote per share.
(h) Whether or not a sinking fund shall be provided
for the redemption of the shares of such series and, if
such a sinking fund shall be provided, the terms and
conditions thereof.
(i) Whether or not a purchase fund shall be provided
for the shares of such series, and, if such a purchase fund
shall be provided, the terms and conditions thereof.
(j) Whether or not the shares of such series shall
have conversion privileges, and, if such shares shall have
conversion privileges, the terms and conditions of
conversion, including but not limited to any provision for
the adjustment of the conversion rate or the conversion
price.
(k) Any other relative rights, preferences and
limitations.
Section 3. Money Market Preferred Stock. The initial
series of the Preference Stock is hereby established, consisting
initially of 50,000 shares and designated Money Market Preferred
Stock. Subject to the limitations provided by law and to the
provisions of Sections 1, 2 and 4 of this Article IV, the
relative rights, preferences and limitations of the shares of the
Money Market Preferred Stock are as follows:
(a) Dividends. The holders of Money Market Preferred
Stock shall not be entitled to any dividends, except as set
forth below. The holders of the Money Market Preferred
Stock shall be entitled to receive, when and as declared by
the Board of Directors of the Corporation, cash dividends
at the Applicable Rate per share per annum, and no more,
payable for each quarterly dividend period ending on
December 31, March 31, June 30, and September 30 (each, a
"Dividend Period") (to be paid on January 15, April 15,
July 15 and October 15, respectively (the "Dividend Payment
Dates"), commencing with the Dividend Period ending March
31, 1997). Dividends shall accrue and be cumulative with
respect to shares issued in the merger (the "Merger") with
Young & Rubicam Inc. (a New York corporation) (the
"Predecessor") in exchange for shares of substantially
identical shares of the Predecessor from December 12, 1996
(the "Initial Issue Date") and with respect to shares
issued subsequent to the Merger, from the first day of the
quarterly dividend period next succeeding the quarterly
dividend period in which such shares are issued. Dividends
on the Money Market Preferred Stock shall be paid in full
for all prior dividend periods, and shall be paid or
declared and set apart for
3
<PAGE>
payment in full for the current dividend period, before the
payment of any dividends, other than dividends payable in
shares of the Common Stock, on the Common Stock or any
other class of stock ranking junior to the Money Market
Preferred Stock as to dividends. Accumulations of dividends
on the Money Market Preferred Stock shall bear interest at
the Applicable Rate per annum.
"Applicable Rate" means the rate per annum quoted by
Bank of America National Trust and Savings Association, a
national banking association ("B of A") at approximately
11:00 a.m. London time (or as soon thereafter as
practicable) for the offering by B of A to leading banks in
the London interbank market of dollar deposits having a
term of three months, as in effect on the first business
day of the applicable Dividend Period (or, in the case of
the Dividend Periods ending December 31, 1996 and March 31,
1997, such rate as in effect on the Initial Issue Date),
plus 250 basis points.
(b) Redemption. (1) The Corporation, at the option of
its Board of Directors, may on or at any time and from time
to time subsequent to December 12, 2001 redeem all or less
than all of the shares of the Money Market Preferred Stock
then outstanding at a redemption price per share of $115
(together with the amount of all dividends accrued and
unpaid thereon to the date fixed for redemption); provided
however, that no share of Money Market Preferred Stock
shall be redeemed on or prior to the fifth anniversary of
the date such share of Money Market Preferred Stock was
issued.
(2) Notice of redemption shall be given by the
Corporation by causing a notice thereof to be mailed to
each holder of record of the Money Market Preferred Stock
(as of the date of mailing) of the shares to be redeemed or
as of a record date fixed for the determination of the
holders entitled to such notice, addressed to such holder
at his address appearing on the books of the Corporation or
given by him to the Corporation for the purpose of notice,
or, if no such address appears or is given, at the place
where the principal office of the Corporation is located,
not less than 30 or more than 90 days before the date fixed
for redemption. Such notice of redemption shall set forth
the date fixed for redemption, the redemption price, the
shares, and the total number thereof, to be redeemed and
the place (in the Borough of Manhattan, The City of New
York), at which the stockholders may obtain payment of the
redemption price upon the surrender of the certificates
representing their shares. No defect in any such notice or
in the mailing thereof shall affect the validity of the
proceeding for the redemption of the shares so to be
redeemed.
(3) On or after the date fixed for redemption and
stated in such notice, each holder of shares called for
redemption shall, upon surrender of certificates
representing such shares to the Corporation at the place
designated in such notice, be entitled to receive payment
of the redemption price thereof. In case less than all of
the shares represented by any such surrendered certificates
are redeemed, a new certificate shall be issued
representing the unredeemed shares.
(4) If, on or prior to the date fixed for
redemption of any shares, the Corporation shall deposit
with any bank or trust company organized under the laws
of the
4
<PAGE>
United States or of the State of New York having an office
in the Borough of Manhattan, The City of New York, and
having capital, surplus and undivided profits aggregating
at least $5,000,000, as a trust fund, a sum sufficient to
redeem, on the date fixed for redemption thereof, the
shares called for redemption, with irrevocable instructions
and authority to the bank or trust company to give the
notice of redemption thereof, if such notice shall not
previously have been given by the Corporation, or to
complete the giving of such notice if theretofore
commenced, and to pay, on and after the date fixed for
redemption (or, at the election of the Corporation, prior
thereto) the redemption price of such shares to the
respective holders upon the surrender of their certificates
representing such shares, then, (i) from and after the date
of such deposit (although prior to the date fixed for
redemption), such shares shall be deemed to be redeemed and
dividends thereon shall cease to accrue after the date
fixed for redemption, and (ii) from and after the date of
such deposit, such shares shall be deemed to be no longer
outstanding, and the holders thereof shall cease to be
stockholders with respect to such shares, and shall have no
rights with respect thereto except the right to receive
from the bank or trust company (or from the Corporation)
payment of the redemption price of such shares, without
interest, upon the surrender of the certificates
representing such shares. Any moneys so deposited by the
Corporation and unclaimed at the end of six years from the
date fixed for redemption shall, upon the request of the
Corporation, be repaid to it, in which event, the persons
entitled thereto shall look only to the Corporation for
payment thereof and may apply for and receive said moneys,
without interest, from the Corporation; provided, however,
that, if the Corporation shall, as required or permitted by
law, pay to any state authority under applicable escheat or
unclaimed property laws any unclaimed moneys so repaid to
the Corporation, said persons shall thereafter look only to
such state authorities for payment thereof.
(5) Shares of the Money Market Preferred Stock so
redeemed may be reissued as shares of such series or as
shares of such other series of the Preference Stock as
shall be determined by the Board of Directors of the
Corporation.
(c) Conversion. Shares of Money Market Preferred Stock
shall not be convertible into any other shares of capital
stock of the Corporation.
(d) Liquidation. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the
Corporation, the holders of shares of the Money Market
Preferred Stock shall be entitled to receive from the
assets of the Corporation the sum of $115 per share
together with the amount of all dividends accrued and
unpaid thereon to the date that payment is made available
to such holders, before the payment or declaration and
setting apart for payment of any amount for, or the
distribution of any assets of the Corporation to, the
holders of shares of the Common Stock or the holders of
shares of any other class or series of stock ranking junior
to the Money Market Preferred Stock in connection with such
liquidation, dissolution or winding up.
(e) Voting. The holders of shares of the Money Market
Preferred Stock shall have the right to vote, together with
the holders of all the outstanding shares of Common Stock
and not as a class, except as otherwise provided herein or
as required by the
5
<PAGE>
Delaware General Corporation Law, on all matters on which
holders of Common Stock shall have the right to vote. The
holders of shares of Money Market Preferred Stock shall
have the right to cast one-tenth of one vote for each share
of Money Market Preferred Stock held by them.
Section 4. Except as otherwise provided by law, in
Section 3(e) of this Article IV or by the resolution or
resolutions providing for the issue of any series of Preference
Stock, the holders of outstanding shares of Common Stock shall
have the exclusive right to vote for the election of directors
and for all other purposes, each holder of record of shares of
Common Stock being entitled to one vote for each share of Common
Stock standing in such holder's name on the books of the
Corporation.
ARTICLE V - ELECTION OF DIRECTORS
Unless and except to the extent that the By-Laws of
the Corporation shall so require, the election of directors of
the Corporation need not be by written ballot.
ARTICLE VI - AMENDMENT OF BY-LAWS
In furtherance and not in limitation of the powers
conferred by law, the Board of Directors of the Corporation (the
"Board") is expressly authorized and empowered to adopt, amend
and repeal the By-Laws of the Corporation by a majority vote at
any regular or special meeting of the Board or by written
consent, subject to the power of the stockholders of the
Corporation to amend or repeal any By-Laws made by the Board.
Notwithstanding any other provision of this Amended and Restated
Certificate of Incorporation or the By-Laws (and notwithstanding
that a lesser percentage may be specified by law), the provisions
of Article II, Sections 1, 2 and 5, Article III, Section 1, and
Article VII of the By-Laws may not be amended or repealed, nor
may any By-Law provision inconsistent therewith be adopted, by
the stockholders of the Corporation unless such action is
approved by the affirmative vote of the holders of not less than
eighty percent (80%) of the voting power of all of the
outstanding shares of capital stock of the Corporation entitled
to vote generally in the election of directors, considered for
purposes of this Article VI as a single class.
ARTICLE VII - AMENDMENT OF CHARTER
The Corporation reserves the right at any time from
time to time to amend, alter, change or repeal any provision
contained in this Amended and Restated Certificate of
Incorporation, and any other provisions authorized by the laws of
the State of Delaware at the time in force may be added or
inserted, in the manner now or hereafter prescribed by law; and
all rights, preferences and privileges of whatsoever nature
conferred upon stockholders, directors or any other persons
whomsoever by and pursuant to this Amended and Restated
Certificate of Incorporation in its present form or as hereafter
amended are granted subject to the right reserved in this
Article. Notwithstanding any other provisions of this Amended and
Restated Certificate of Incorporation or the By-Laws of the
Corporation (and notwithstanding that a lesser percentage may be
specified by law), the provisions of this Article VII, Article
VI, Article VIII, Article IX, Section 1 of Article X, Article XI,
Article XII, Article XIII and Article XIV hereof may not be
6
<PAGE>
amended or repealed, nor may any Certificate of Incorporation
provision inconsistent therewith be adopted, by the stockholders
of the Corporation unless such action is approved by the
affirmative vote of the holders of not less than eighty percent
(80%) of the voting power of all of the outstanding shares of
capital stock of the Corporation entitled to vote generally in
the election of directors, considered for purposes of this
Article VII as a single class.
ARTICLE VIII - BOARD OF DIRECTORS
Section 1. Number. The business and affairs of the
Corporation shall be managed by or under the direction of a Board
of Directors consisting of not fewer than five (5) nor more than
fifteen (15) directors (exclusive of directors referred to in the
following paragraph), the exact number to be determined from time
to time by resolution adopted by affirmative vote of a majority
of such directors then in office. Upon the filing of this Amended
and Restated Certificate of Incorporation with the Secretary of
State of the State of Delaware, the directors shall be divided
into three classes, designated Class I, Class II and Class III.
Each class shall consist, as nearly as may be possible, of
one-third of the total number of directors determined by the
Board pursuant to this Section 1. Class I directors shall serve
for an initial term ending at the annual meeting of stockholders
held in 1999, Class II directors for an initial term ending at
the annual meeting of stockholders held in 2000 and Class III
directors for an initial term ending at the annual meeting of
stockholders held in 2001. At each annual meeting of stockholders
beginning in 1999, successors to the directors in the class whose
term expires at that annual meeting shall be elected for a
three-year term. If the number of directors is changed, any
increase or decrease shall be apportioned among the classes so as
to maintain the number of directors in each class as nearly equal
as possible, and any additional director of any class elected to
fill a vacancy resulting from an increase in such class shall
hold office for the remaining term of that class, but in no case
will a decrease in the number of directors shorten the term of
any incumbent director. A director shall hold office until the
annual meeting for the year in which his or her term expires and
until his or her successor shall be elected and shall qualify,
subject, however, to prior death, resignation, retirement,
disqualification or removal from office.
Notwithstanding the foregoing, whenever the holders of
any one or more classes or series of Preference Stock issued by
the Corporation shall have the right, voting separately by class
or series, to elect directors at an annual or special meeting of
stockholders, the number of such directors and the election, term
of office, filling of vacancies and other features of such
directorships shall be governed by the provisions of Article IV
of this Amended and Restated Certificate of Incorporation and any
resolution or resolutions adopted by the Board pursuant thereto,
and such directors shall not be divided into classes unless
expressly so provided therein.
Section 2. Removal. Subject to the rights of the
holders of any one or more classes or series of Preference Stock
issued by the Corporation, any director, or the entire Board, may
be removed from office at any time, but only for cause and only
by the affirmative vote of the holders of not less than eighty
percent (80%) of the voting power of all of the outstanding
shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for purposes
of this sentence as a single class. Any vacancy in the Board that
results from an increase in the number of directors may be filled
by a majority of the directors then in office, provided that a
quorum is present, and any other vacancy may be filled only by a
majority
7
<PAGE>
of the directors then in office, even if less than a quorum, or
by a sole remaining director. Any director elected to fill a
vacancy not resulting from an increase in the number of directors
shall hold office for the remaining term of his or her
predecessor.
ARTICLE IX - STOCKHOLDER ACTION
No action required to be taken or which may be taken
at any annual or special meeting of stockholders of the
Corporation may be taken by stockholders of the Corporation
except at such a meeting of stockholders.
ARTICLE X - LIABILITY OF DIRECTORS & OFFICERS, ETC.
Section 1. Elimination of Certain Liability of
Directors. A director of the Corporation shall not be personally
liable to the Corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to
the Corporation or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the General
Corporation Law of the State of Delaware, or (iv) for any
transaction from which the director derived an improper personal
benefit.
Section 2. Indemnification and Insurance.
(a) Right to indemnification. Each person who was or
is made a party or is threatened to be made a party to or is
involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative (hereinafter a
"proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was a
director or officer of the Corporation or is or was serving at
the request of the Corporation as a director, officer, trustee,
partner, member, employee or agent of another corporation or of a
partnership, limited liability company, joint venture, trust or
other enterprise, including service with respect to employee
benefit plans, whether the basis of such proceeding is alleged
action in an official capacity as a director, officer, trustee,
partner, member, employee or agent or in any other capacity while
serving as a director, officer, trustee, partner, member,
employee or agent, shall be indemnified and held harmless by the
Corporation to the fullest extent authorized by the General
Corporation Law of the State of Delaware, as the same exists or
may hereafter be amended (but, in the case of any such amendment,
to the fullest extent permitted by law, only to the extent that
such amendment permits the Corporation to provide broader
indemnification rights than said law permitted the Corporation to
provide prior to such amendment), against all expense, liability
and loss (including, without limitation, attorneys' fees,
judgments, fines, amounts paid or to be paid in settlement, and
excise taxes or penalties arising under the Employee Retirement
Income Security Act of 1974) reasonably incurred or suffered by
such person in connection therewith and such indemnification
shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of his
or her heirs, executors and administrators; provided, however,
that, except as provided in paragraph (b) hereof, the Corporation
shall indemnify any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by such
person only if such proceeding (or part thereof) was authorized
by the Board. The right to indemnification conferred in this
Section shall be a contract right and shall include the right to
be
8
<PAGE>
paid by the Corporation the expenses incurred in defending any
such proceeding in advance of its final disposition; provided,
however, that, if the General Corporation Law of the State of
Delaware requires, the payment of such expenses incurred by a
director or officer in his or her capacity as a director or
officer (and not in any other capacity in which service was or is
rendered by such person while a director or officer, including,
without limitation, service to an employee benefit plan) in
advance of the final disposition of a proceeding shall be made
only upon delivery to the Corporation of an undertaking, by or on
behalf of such director or officer, to repay all amounts so
advanced if it shall ultimately be determined that such director
or officer is not entitled to be indemnified under this Section
or otherwise, but no bond or other security shall be required.
The Corporation may, by action of the Board, provide
indemnification to employees and agents of the Corporation with
the same scope and effect as the foregoing indemnification of
directors and officers.
(b) Right of Claimant to Bring Suit. If a claim under
paragraph (a) of this Section is not paid in full by the
Corporation within thirty days after a written claim has been
received by the Corporation, the claimant may at any time
thereafter bring suit against the Corporation to recover the
unpaid amount of the claim and, if successful in whole or in
part, the claimant shall be entitled to be paid also the expense
of prosecuting such claim. It shall be a defense to any such
action (other than an action brought to enforce a claim for
expenses incurred in defending any proceeding in advance of its
final disposition where the required undertaking, if any is
required, has been tendered to the Corporation) that the claimant
has not met the standards of conduct which make it permissible
under the General Corporation Law of the State of Delaware for
the Corporation to indemnify the claimant for the amount claimed,
but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation (including
its Board, independent legal counsel, or its stockholders) to
have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the
circumstances because he or she has met the applicable standard
of conduct set forth in the General Corporation Law of the State
of Delaware, nor an actual determination by the Corporation
(including its Board, independent legal counsel, or its
stockholders) that the claimant has not met such applicable
standard of conduct, shall be a defense to the action or create a
presumption that the claimant has not met the applicable standard
of conduct.
(c) Non-Exclusivity of Rights. The right to
indemnification and the payment of expenses incurred in defending
a proceeding in advance of its final disposition conferred in
this Section shall not be exclusive of any other right which any
person may have or hereafter acquire under any statute, provision
of the Certificate of Incorporation, By-Law, agreement, vote of
stockholders or disinterested directors or otherwise.
(d) Insurance. The Corporation may maintain insurance,
at its expense, to protect itself and any director, officer,
trustee, partner, member, employee or agent of the Corporation or
another corporation, partnership, limited liability company,
joint venture, trust or other enterprise against any such
expense, liability or loss, whether or not the Corporation would
have the power to indemnify such person against such expense,
liability or loss under the General Corporation Law of the State
of Delaware.
9
<PAGE>
ARTICLE XI - ISSUANCE OF STOCK AND RIGHTS
The Board shall have authority to authorize the
issuance, from time to time without any vote or other action by
the stockholders, of any or all shares of stock of the
Corporation of any class at any time authorized, any securities
convertible into or exchangeable for any such shares so
authorized, and any warrant, option or right to purchase,
subscribe for or otherwise acquire, shares of stock of the
Corporation for any such consideration and on such terms as the
Board from time to time in its discretion lawfully may determine,
which terms and conditions may include, without limitation,
restrictions or conditions that preclude or limit the exercise,
transfer or receipt thereof or that invalidate or void any such
securities, warrants, options or rights; provided, however, that
the consideration for the issuance of shares of stock of the
Corporation having par value shall not be less than such par
value. Stock so issued, for which the consideration has been paid
to the Corporation, shall be fully paid stock, and the holders of
such stock shall not be liable to any further call or assessments
thereon. Nothing in this Article XI shall be interpreted to limit
the authority of the Board under the Delaware General Corporation
Law or under any other provision of this Amended and Restated
Certificate of Incorporation, to authorize the issuance of
shares, warrants, options or rights or other securities or to
take any other action.
ARTICLE XII - CONSIDERATION OF OTHER CONSTITUENCIES
In addition to any other considerations which the
Board may lawfully take into account in determining whether to
take or to refrain from taking corporate action on any matter,
including proposing any matter to the stockholders of the
Corporation, the Board may, but shall not be obligated to, take
into account the interests of clients or other customers,
creditors, current and retired employees and other constituencies
of the Corporation and its subsidiaries and the effect upon
communities in which the Corporation and its subsidiaries do
business.
ARTICLE XIII - SHAREHOLDER PROPOSAL AND NOMINATION PROCEDURES
The By-Laws of the Corporation may establish
procedures regulating the submission by stockholders of
nominations and proposals for consideration at meetings of
stockholders of the Corporation.
ARTICLE XIV - BUSINESS COMBINATIONS WITH INTERESTED STOCKHOLDERS
The Corporation shall be governed in all manner and
respects by the provisions of Section 203 of the Delaware General
Corporation Law ("Section 203"); provided, however, that in no
case shall Hellman & Friedman Capital Partners III, L.P., a
California limited partnership, H&F Orchard Partners III, L.P., a
California limited partnership, H&F International Partners III,
L.P., a California limited partnership, or any successor to all
or substantially all of their assets, or any affiliate thereof
(collectively, "H&F Investors"), or any person who is a
Transferee (as defined below) of the H&F Investors, regardless of
the total percentage of the Corporation's Common Stock or other
voting stock owned by the H&F Investors or such person, be deemed
an "interested stockholder" for any purpose under Section 203
whatsoever. As used in this Article XIV, the terms "interested
stockholder", "owned", "person" and "voting stock" shall have the
10
<PAGE>
meanings ascribed to such terms in Section 203(c) of the Delaware
General Corporation Law, and the term "Transferee" shall mean any
person to which any H&F Investor sells, distributes or otherwise
transfers Common Stock, or other voting stock of the Corporation,
provided that (i) the transfer to such Transferee either is not
restricted under, or occurs in compliance with, the transfer
restrictions set forth in Articles II and III of the Amended and
Restated Stockholders' Agreement dated as of May 8, 1998 by and
among the H&F Investors, the Management Investors and the
Management Voting Trust (as such terms are defined therein), such
additional signatories as may be deemed added from time to time
pursuant thereto, and the Company (the "Stockholders'
Agreement"), and (ii) such Transferee becomes a party to the
Stockholders' Agreement if required thereby.
IN WITNESS WHEREOF, Young & Rubicam Inc. has caused
this Amended and Restated Certificate of Incorporation to be
signed by Stephanie W. Abramson, its Executive Vice President and
General Counsel, and attested by Mark T. McEnroe, its Assistant
Secretary, this 14th day of May, 1998.
By: /s/ Stephanie W. Abramson
Name: Stephanie W. Abramson
Title: Executive Vice President
and General Counsel
ATTEST:
By: /s/ Mark T. McEnroe
Name: Mark T. McEnroe
Title: Assistant Secretary
11
Exhibit 4.5
AMENDED AND RESTATED BY-LAWS
of
YOUNG & RUBICAM INC.
============
ARTICLE I
OFFICES
SECTION 1. REGISTERED OFFICE -- The registered office
of Young & Rubicam Inc. (the "Corporation") is located at 1209
Orange Street, in the City of Wilmington, in the County of New
Castle, in the State of Delaware. The name of its registered
agent at that address is The Corporation Trust Company.
SECTION 2. OTHER OFFICES -- The Corporation may have
other offices, either within or without the State of Delaware, at
such place or places as the Board of Directors may from time to
time select or the business of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 1. ANNUAL MEETINGS -- Annual meetings of
stockholders for the election of directors, and for such other
business as may be stated in the notice of the meeting, shall be
held at such place, either within or without the State of
Delaware, and at such time and date as the Board of Directors, by
resolution, shall determine and as set forth in the notice of the
meeting. If the Board of Directors fails so to determine the
time, date and place of meeting, the annual meeting of
stockholders shall be held at the principal office of the
Corporation in the State of New York on the first Tuesday in
June. If the date of the annual meeting shall fall upon a legal
holiday, the meeting shall be held on the next succeeding
business day. At each annual meeting, the stockholders entitled
to vote shall elect directors by a plurality vote, in accordance
with Article VIII of the Certificate of Incorporation, and the
stockholders may transact such other corporate business as shall
be stated in the notice of the meeting.
SECTION 2. SPECIAL MEETINGS -- Except as provided in
the Certificate of Incorporation, special meetings of the
stockholders may be called only on the order of the Chairman of
the Board or the Board of Directors and shall be held at such
date, time and place as may be specified by such order. The
business permitted to be conducted at any special meeting of the
stockholders is limited to the purpose or purposes specified by
such order.
SECTION 3. VOTING -- Each stockholder entitled to vote
in accordance with the terms of the Certificate of Incorporation
of the Corporation and these By-Laws may vote in person or by
proxy executed in writing by the stockholder or by his or her
duly authorized attorney-in-fact. If a quorum is present, the
affirmative vote of a majority of the votes cast at a
<PAGE>
meeting of the stockholders by the holders of shares entitled to
vote thereon shall be the act of the stockholders, unless the
vote of a greater or lesser number of shares of stock is required
by law, the Certificate of Incorporation of the Corporation or
these Bylaws.
A complete list of the stockholders entitled to vote
at the meeting, arranged in alphabetical order, with the address
of each, and the number of shares held by each, shall be open to
the examination of any stockholder, for any purpose germane to
the meeting, during ordinary business hours, for a period of at
least ten days prior to the meeting, either at a place within the
city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or, if not so specified,
at the place where the meeting is to be held. The list shall also
be produced and kept at the time and place of the meeting during
the whole time thereof, and may be inspected by any stockholder
who is entitled to be present.
SECTION 4. QUORUM-- Except as otherwise required by
law, by the Certificate of Incorporation of the Corporation or by
these By-Laws, the presence, in person or by proxy, of
stockholders holding shares of capital stock constituting a
majority of the shares of capital stock of the Corporation issued
and outstanding and entitled to vote thereat, shall constitute a
quorum at all meetings of the stockholders. In case a quorum
shall not be present at any meeting, a majority in interest of
the stockholders present in person or by proxy and entitled to
vote thereat, shall have the power to adjourn the meeting from
time to time, without notice other than announcement at the
meeting, until the requisite amount of stock entitled to vote
shall be present. At any such adjourned meeting at which the
requisite amount of stock entitled to vote shall be represented,
any business may be transacted that might have been transacted at
the meeting as originally noticed; but, unless the Board of
Directors fixes a new record date, only those stockholders
entitled to vote at the meeting as originally noticed shall be
entitled to vote at any adjournment or adjournments thereof.
SECTION 5. NOTICE OF MEETINGS -- Written notice of all
meetings of the stockholders shall be mailed or delivered to each
stockholder not less than ten nor more than sixty days before the
meeting. The notice or an accompanying document shall identify
the business to be transacted at the meeting as determined by the
Board of Directors and, if directors are to be elected, the
nominees therefor proposed by the Board of Directors.
Other business may be transacted at the annual meeting
(but not at any special meeting), only if the Secretary of the
Corporation has received from the sponsoring stockholder (a) not
less than ninety nor more than one hundred twenty days before the
first Tuesday in June (or, if the Board of Directors has
designated another date for the annual meeting pursuant to
Section 1 of this Article II, not less than ninety nor more than
one hundred twenty days before such other date or, if such other
date has not been publicly disclosed or announced at least one
hundred five days in advance, then not less than fifteen days
after such initial public disclosure or announcement) a written
notice setting forth (i) as to each matter the stockholder
proposes to bring before the annual meeting, a brief description
of the proposal desired to be brought before the annual meeting
and the reasons for conducting such business at the annual
meeting, (ii) the name and address, as they appear on the
Corporation's books, of the stockholder proposing such business,
(iii) the class and number of shares which are owned beneficially
and of record by the
2
<PAGE>
stockholder on the date of such stockholder's notice and (iv) any
material interest of the stockholder in such proposal, and (b)
not more than ten days after receipt by the sponsoring
stockholder of a written request from the Secretary, such
additional information as the Secretary may reasonably require.
Notwithstanding anything in these By-Laws to the contrary, no
business shall be brought before or conducted at an annual
meeting except in accordance with the provisions of this Section
5 of Article II. The officer of the Corporation or other person
presiding over the annual meeting shall, if the facts so warrant,
determine and declare to the meeting that business was not
properly brought before the meeting in accordance with the
provisions of this Section 5 of Article II and, if he or she
should so determine, such officer shall so declare to the meeting
and any business so determined to be not properly brought before
the meeting shall not be transacted.
Candidates for election to the Board of Directors of
the Corporation (other than nominees proposed by the Board of
Directors) may be nominated at the annual meeting (but not at any
special meeting), only if the Secretary of the Corporation has
received from the nominating stockholder (a) not less than ninety
nor more than one hundred twenty days before the first Tuesday in
June (or, if the Board of Directors has designated another date
for the annual meeting pursuant to Section 1 of this Article II,
not less than ninety nor more than one hundred twenty days before
such other date or, if such other date has not been publicly
disclosed or announced at least one hundred five days in advance,
then not less than fifteen days after such initial public
disclosure or announcement) a written notice setting forth (i)
with respect to each person whom such stockholder proposes to
nominate for election or re-election as a director, all
information relating to such person that would be required to be
disclosed in solicitations of proxies for election of directors,
or would otherwise be required, in each case pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as
amended, if such Regulation 14A were applicable (including such
person's written consent to being named in the proxy statement as
a nominee and to serving as a director if elected) or any
successor regulation or statute, (ii) the name and address, as
they appear on the Corporation's books, of the stockholder
proposing such business and (iii) the class and number of shares
which are owned beneficially and of record by the stockholder on
the date of such stockholder's notice, and (b) not more than ten
days after receipt by the nominating stockholder of a written
request from the Secretary, such additional information as the
Secretary may reasonably require. Notwithstanding anything in
these By-Laws to the contrary, no person shall be eligible for
election as a director except in accordance with the provisions
of this Section 5 of Article II. The officer of the Corporation
or other person presiding over the annual meeting shall, if the
facts so warrant, determine and declare to the meeting that a
nomination was not made in accordance with the provisions of this
Section 5 of Article II and, if he or she should so determine,
such officer shall so declare to the meeting and any such
defective nomination shall be disregarded.
ARTICLE III
DIRECTORS
SECTION 1. NUMBER -- Subject to the provisions of the
Certificate of Incorporation, the number of directors of the
Corporation shall initially be fixed at nine and
3
<PAGE>
thereafter shall be determined from time to time by resolution
adopted by affirmative vote of a majority of such directors then
in office.
SECTION 2. COMMITTEES-- The Board of Directors may, by
resolution or resolutions passed by a majority of the entire
Board of Directors, designate one or more committees, each
committee to consist of one or more directors of the Corporation.
SECTION 3. MEETINGS -- The Board of Directors may hold
an annual meeting for the purpose of organization and the
transaction of business, if a quorum be present, immediately
after the annual meeting of the stockholders; or the time and
place of such meeting may be fixed by consent of all the
directors.
Regular meetings of the Board of Directors or any
committee may be held without notice at such places and times as
shall be determined from time to time by resolution of the Board
of Directors or such committee, respectively.
Special meetings of the Board of Directors may be
called by the Chairman of the Board or the President, and shall
be called by the Secretary on the written request of any two
directors, on at least one day's notice to each director (except
that notice to any director may be waived in writing by such
director) and shall be held at such place or places as may be
determined by the Board of Directors, or as shall be stated in
the call of the meeting.
Special meetings of a committee of the Board of
Directors may be called by the chairman of the committee, and
shall be called by the secretary of the committee on the written
request of any two members, on at least one day's notice to each
member (except that notice to any member may be waived in writing
by such member) and shall be held at such place or places as may
be determined by the committee, or as shall be stated in the call
of the meeting.
Unless otherwise restricted by the Certificate of
Incorporation of the Corporation or these By-Laws, members of the
Board of Directors, or any committee designated by the Board of
Directors, may participate in any meeting of the Board of
Directors or any committee thereof by means of a conference
telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other, and
such participation in a meeting shall constitute presence in
person at the meeting.
SECTION 4. QUORUM-- A majority of the entire Board of
Directors or a majority of an entire committee shall constitute a
quorum of the Board of Directors or such committee for the
transaction of business. If at any meeting of the Board of
Directors or a committee there shall be less than a quorum
present, a majority of those present may adjourn the meeting from
time to time until a quorum is obtained, and no further notice
thereof need be given other than by announcement at the meeting
which shall be so adjourned. The vote of the majority of the
directors present at a meeting at which a quorum is present shall
be the act of the Board of Directors unless the Certificate of
Incorporation of the Corporation or these By-Laws shall require
the vote of a greater number.
4
<PAGE>
SECTION 5. COMPENSATION -- The directors shall receive
such compensation for their services as may be prescribed by the
Board of Directors. Expenses for attendance at meetings of the
Board of Directors and committees of the Board of Directors shall
be reimbursed for all members of the Board of Directors. Nothing
herein contained shall be construed to preclude any director from
serving the Corporation in any other capacity as an officer,
agent or otherwise, and receiving compensation therefor.
SECTION 6. ACTION WITHOUT MEETING -- Any action
required or permitted to be taken at any meeting of the Board of
Directors or of any committee thereof may be taken without a
meeting if a written consent thereto is signed by all members of
the Board of Directors or of such committee, as the case may be,
and such written consent is filed with the minutes of proceedings
of the Board of Directors or such committee.
ARTICLE IV
OFFICERS
SECTION 1. ELECTION; QUALIFICATIONS -- As soon as
practicable after each annual meeting of shareholders, the Board
of Directors shall elect or appoint a Chairman of the Board, one
or more Vice Chairmen, a President, one or more Executive Vice
Presidents, one or more Senior Vice Presidents, one or more Vice
Presidents, a Secretary, a Treasurer, and such other officers,
including assistant officers, as the Board of Directors may from
time to time deem advisable. No officer need be a director of the
Corporation. Any two or more offices may be held by the same
person, except the offices of President and Secretary.
SECTION 2. TERM OF OFFICE; VACANCIES -- All officers
shall be elected or appointed to hold office until the meeting of
the Board of Directors following the next annual meeting of
stockholders. Each officer shall hold office for such term, and
until his or her successor has been elected or appointed and
qualified unless he or she shall earlier resign, die, or be
removed. Any vacancy occurring in any office, whether because of
death, resignation or removal, with or without cause, or any
other reason, shall be filled by the Board of Directors.
SECTION 3. REMOVAL; RESIGNATION. Any officer may be
removed by the Board of Directors with or without cause. Any
officer may resign his or her office at any time, such
resignation to be made in writing and to take effect immediately
or on any future date stated in such writing, without acceptance
by the Corporation.
SECTION 4. POWERS AND DUTIES OF OFFICERS. Officers of
the Corporation shall, unless otherwise provided by the Board of
Directors, each have such powers and duties as generally pertain
to their respective offices as well as such powers and duties as
may be set forth in these By-Laws or may from time to time be
specifically conferred or imposed by the Board of Directors. The
Board of Directors shall designate either the Chairman of the
Board or the President as the chief executive officer of the
Corporation.
SECTION 5. SHARES OF OTHER CORPORATIONS. Whenever the
Corporation is the holder of shares of any other corporation, any
right or power of the
5
<PAGE>
Corporation as such shareholder (including the attendance, acting
and voting at shareholders' meetings and execution of waivers,
consents, proxies or other instruments) may be exercised on
behalf of the Corporation by the Chairman, any Vice Chairman, the
President, any Executive Vice President, any Senior Vice
President, the Secretary or such other person as the Board of
Directors may authorize from time to time.
SECTION 6. DELEGATION. In the event of the absence of
any officer of the Corporation or for any other reason that the
Board of Directors may deem sufficient, the Board of Directors
may at any time and from time to time delegate all or any part of
the powers or duties of any officer to any other officer or
officers or to any director or directors.
ARTICLE V
TRANSFER RESTRICTIONS
Any direct or indirect sale, transfer, assignment,
pledge, hypothecation or other encumbrance or disposition (a
"Transfer") of legal or beneficial ownership of any stock
heretofore or hereafter issued and sold by the Corporation
pursuant to Regulation S under the Securities Act of 1933, as
amended (the "Securities Act"), may be made only (i) pursuant to
an effective registration statement under the Securities Act or
(ii) pursuant to a transaction that is exempt from, or not
subject to, the registration requirements of the Securities Act.
Neither the Corporation nor any employee or agent of the
Corporation shall record any Transfer prohibited by the preceding
sentence, and the purported transferee of such a prohibited
Transfer (the "Purported Transferee") shall not be recognized as
a securityholder of the Corporation for any purpose whatsoever in
respect of the security or securities that are the subject of the
prohibited Transfer. The Purported Transferee shall not be
entitled, with respect to such securities, to any rights of a
securityholder of the Corporation, including without limitation,
in the case of securities that are Common Stock, the right to
vote such Common Stock or to receive dividends or distributions
in respect thereof, if any. All certificates representing
securities subject to the transfer restrictions set forth in this
Article V shall bear a legend to the effect that the securities
represented by such certificates are subject to such
restrictions, unless and until the Company determines in its sole
discretion that such legend may be removed consistent with
applicable law.
ARTICLE VI
MISCELLANEOUS
SECTION 1. CERTIFICATES OF STOCK -- A certificate of
stock shall be issued to each stockholder certifying the number
of shares owned by such stockholder in the Corporation.
Certificates of stock of the Corporation shall be in such form as
the Board of Directors may from time to time determine.
SECTION 2. LOST CERTIFICATES -- A new certificate of
stock may be issued in the place of any certificate theretofore
issued by the Corporation, alleged to have been lost or
destroyed, and the Board of Directors may, in its discretion,
require the owner of the lost or destroyed certificate, or such
owner's legal representatives, to give the Corporation a bond, in
6
<PAGE>
such sum as they may direct, not exceeding double the value of
the stock, to indemnify the Corporation against any claim that
may be made against it on account of the alleged loss of any such
certificate, or the issuance of any such new certificate.
SECTION 3. TRANSFER OF SHARES -- The shares of stock
of the Corporation shall be transferable only upon its books by
the holders thereof in person or by their duly authorized
attorneys or legal representatives, and upon such transfer the
old certificates shall be surrendered to the Corporation by the
delivery thereof to the person in charge of the stock and
transfer books and ledgers, or to such other person as the Board
of Directors may designate, by whom they shall be canceled, and
new certificates shall thereupon be issued. A record shall be
made of each transfer and whenever a transfer shall be made for
collateral security, and not absolutely, it shall be so expressed
in the entry of the transfer.
SECTION 4. STOCKHOLDERS RECORD DATE -- In order that
the Corporation may determine the stockholders entitled to notice
of or to vote at any meeting of stockholders or any adjournment
thereof, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise
any rights in respect of any change, conversion or exchange of
stock or for the purpose of any other lawful action, the Board of
Directors may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date
is adopted by the Board of Directors and which record date: (1)
in the case of determination of stockholders entitled to vote at
any meeting of stockholders or adjournment thereof, shall, unless
otherwise required by law, not be more than sixty nor less than
ten days before the date of such meeting; and (2) in the case of
any other action, shall not be more than sixty days prior to such
other action. If no record date is fixed: (1) the record date for
determining stockholders entitled to notice of or to vote at a
meeting of stockholders shall be at the close of business on the
day next preceding the day on which notice is given, or, if
notice is waived, at the close of business on the day next
preceding the day on which the meeting is held; and (2) the
record date for determining stockholders for any other purpose
shall be at the close of business on the day on which the Board
of Directors adopts the resolution relating thereto. A
determination of stockholders of record entitled to notice of or
to vote at a meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the Board of
Directors may fix a new record date for the adjourned meeting.
SECTION 5. DIVIDENDS -- Subject to the provisions of
the Certificate of Incorporation of the Corporation, the Board of
Directors may, out of funds legally available therefor at any
regular or special meeting, declare dividends upon stock of the
Corporation as and when they deem appropriate. Before declaring
any dividend there may be set apart out of any funds of the
Corporation available for dividends, such sum or sums as the
Board of Directors from time to time in their discretion deem
proper for working capital or as a reserve fund to meet
contingencies or for equalizing dividends or for such other
purposes as the Board of Directors shall deem conducive to the
interests of the Corporation.
SECTION 6. SEAL -- The corporate seal of the
Corporation shall be in such form as shall be determined by
resolution of the Board of Directors. Said seal may be used by
causing
7
<PAGE>
it or a facsimile thereof to be impressed or affixed or
reproduced or otherwise imprinted upon the subject document or
paper.
SECTION 7. FISCAL YEAR -- The fiscal year of the
Corporation shall be the calendar year unless otherwise
determined by resolution of the Board of Directors.
SECTION 8. CHECKS -- All checks, drafts or other
orders for the payment of money, notes or other evidences of
indebtedness issued in the name of the Corporation shall be
signed by such officer or officers, or agent or agents, of the
Corporation, and in such manner as shall be determined from time
to time by resolution of the Board of Directors.
SECTION 9. NOTICE AND WAIVER OF NOTICE -- Whenever any
notice is required to be given under these By-Laws, personal
notice is not required (except in the case of notices pursuant to
Article III, Section 3), and any notice so required shall be
deemed to be sufficient if given by depositing the same in the
United States mail, postage prepaid, addressed to the person
entitled thereto at his or her address as it appears on the
records of the Corporation, and such notice shall be deemed to
have been given on the day of such mailing. Stockholders not
entitled to vote shall not be entitled to receive notice of any
meetings except as otherwise provided by law. Whenever any notice
is required to be given under the provisions of any law, or under
the provisions of the Certificate of Incorporation of the
Corporation or of these By-Laws, a waiver thereof, in writing and
signed by the person or persons entitled to said notice, whether
before or after the time stated thereon, shall be deemed
equivalent to such required notice.
ARTICLE VII
AMENDMENTS
In furtherance and not in limitation of the powers
conferred by law, the Board of Directors of the Corporation is
expressly authorized and empowered to adopt, amend and repeal the
By-Laws of the Corporation by a majority vote at any regular or
special meeting of the Board of Directors or by written consent,
subject to the power of the stockholders of the Corporation to
amend or repeal any By-Laws made by the Board of Directors.
Notwithstanding any other provisions of the Certificate of
Incorporation or the By-Laws (and notwithstanding that a lesser
percentage may be specified by law), the provisions of Article
II, Sections 1, 2 and 5, Article III, Section 1, and this Article
VII of the By-Laws may not be amended or repealed, nor may any
By-Law provision inconsistent herewith or therewith be adopted,
by the stockholders of the Corporation unless such action is
approved by the affirmative vote of the holders of not less than
eighty percent (80%) of the voting power of all of the
outstanding shares of capital stock of the Corporation entitled
to vote generally in the election of directors, considered for
purposes of this Article VII as a single class.
8
Exhibit 4.8
- -----------------------------------------------------------------
STOCKHOLDERS' AGREEMENT
Dated as of May 8, 1998
- -----------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions................................ 2
ARTICLE II
GENERAL PROVISIONS RELATING TO TRANSFER OF
SHARES AND VOTING TRUST CERTIFICATES
SECTION 2.01. General Restrictions....................... 6
SECTION 2.02. Condition to Restricted Transfers;
Non-Conforming Transfers................. 6
ARTICLE III
TRANSFERS OF SHARES BY THE H&F INVESTORS
SECTION 3.01. Restrictions on Transfers.................. 7
ARTICLE IV
TRANSFERS OF SHARES AND VOTING TRUST CERTIFICATES
BY THE MANAGEMENT INVESTORS AND THE MANAGEMENT VOTING TRUST
SECTION 4.01. Right of First Refusal of the Company
and the H&F Investors.................... 8
SECTION 4.02. Transfer of Payments by the Management
Voting Trust to the Management
Investors ............................... 10
ARTICLE V
GOVERNANCE AND MANAGEMENT OF CORPORATION
.
SECTION 5.01. Board of Directors......................... 10
SECTION 5.02. Delaware Statute........................... 11
ARTICLE VI
MISCELLANEOUS
SECTION 6.01. Termination................................ 11
<PAGE>
SECTION 6.02. Legend..................................... 12
SECTION 6.03. Binding Effect; Successors................. 12
SECTION 6.04. Amendment and Waiver....................... 12
SECTION 6.05. Governing Law.............................. 12
SECTION 6.06. Specific Performance....................... 12
SECTION 6.07. Unenforceability........................... 13
SECTION 6.08. Headings................................... 13
SECTION 6.09. Copies on File............................. 13
SECTION 6.10. Notices.................................... 13
SECTION 6.11. Waiver and Consent......................... 14
SECTION 6.12. Recapitalizations, Exchanges, Etc.
Affecting the Company's Stock............ 14
SECTION 6.13. Counterparts............................... 14
ii
<PAGE>
STOCKHOLDERS' AGREEMENT (the "Agreement") dated as of
May 8, 1998, by and among the H&F Investors, the Management
Investors and the Management Voting Trust (as such terms are
defined herein) (with each of the foregoing parties, together
with such additional signatories as may be deemed added from time
to time pursuant to Section 2.02 hereof, being referred to herein
as the "Stockholders") and Young & Rubicam Inc., a Delaware
corporation (the "Company").
WHEREAS, the Stockholders, together with certain other
stockholders, collectively own all of the outstanding shares of
common stock, par value $.01 per share, of the Company (the
"Common Stock"), and, together with such other stockholders, are
parties to a Stockholders' Agreement (the "Prior Agreement")
dated as of December 12, 1996 providing for, among other things,
the rights of the parties thereto to hold and dispose of the
Common Stock, the voting of the Common Stock, the governance and
management of the Company and certain other matters;
WHEREAS, in connection with an initial public offering
by the Company, and a secondary offering by the H&F Investors and
certain other stockholders (collectively the "Offerings"), the
parties to the Prior Agreement wish to amend and restate the
Prior Agreement, to eliminate certain stockholders as parties
thereto, to eliminate a number of provisions set forth therein,
and to restate other provisions as set forth herein;
WHEREAS, by a letter agreement of even date herewith,
the parties to the Prior Agreement are, among other things, (1)
acknowledging that it does not restrict the sale of Common Stock
in the Offerings or prohibit the parties thereto from entering
into agreements to effect such Offerings and (2) acknowledging
the termination of such Prior Agreement, effective as of the
closing of the Offerings;
WHEREAS, effective upon the closing of the Offerings,
this Agreement shall become effective and shall supersede the
Prior Agreement in all respects;
WHEREAS, by a letter agreement of even date herewith,
the parties to the HFCP Voting Trust Agreement (as defined
herein) are acknowledging its termination effective as of the
closing of the Offerings;
WHEREAS, concurrently with the execution and delivery
of the Prior Agreement, (a) each of the Initial Management
Investors (as defined therein), the Company, certain predecessors
of the Company and certain voting trustees entered into a voting
trust agreement, dated as of December 12, 1996 (the "Management
Voting Trust Agreement"), pursuant to which each of the Initial
Management Investors assigned and transferred all of the Common
Stock held by such Initial Management Investor to a voting trust
created by the Management Voting Trust Agreement (the "Management
Voting Trust") and agreed to deposit into the Management Voting
Trust any shares of Common Stock which such Initial Management
Investor thereafter acquired (including pursuant to the exercise
of any options or any distribution from the Restricted Stock
Trust), (b) the Management Voting Trust delivered or caused to be
delivered to each Initial Management Investor voting trust
certificates representing the Common Stock so deposited by
<PAGE>
such Initial Management Investor and agreed to deliver voting
trust certificates with respect to all shares of Common Stock and
other securities subsequently deposited into the Management
Voting Trust (all such voting trust certificates, the "Voting
Trust Certificates");
WHEREAS, pursuant to the irrevocable unanimous written
consent of the voting trustees, effective twenty-four months
after the closing of the Offerings, the Management Voting Trust
will terminate, unless terminated earlier in accordance with its
terms;
WHEREAS, pursuant to the Management Voting Trust
Agreement, the Management Voting Trust has authority to take
certain actions on behalf of the Initial Management Investors
under the Prior Agreement and has authority to take certain
actions hereunder on behalf of the Management Investors,
including entering into this Agreement;
NOW, THEREFORE, in consideration of the premises and
the mutual representations, warranties, covenants and agreements
hereinafter set forth, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. For all purposes of this
Agreement, the following terms shall have the meanings set forth
below:
"Affiliate" has the meaning set forth in Rule 12b-2
under the Exchange Act.
"Agreement" has the meaning set forth in the
introductory paragraph hereof.
"Beneficial Ownership" and "beneficially own" and
similar terms have the meaning ascribed thereto in Rule 13d-3
under the Exchange Act.
"Board" means the Board of Directors of the Company.
"Company" has the meaning set forth in the introductory
paragraph hereof.
"Common Stock" has the meaning set forth in the first
recital paragraph hereof.
"Contribution Agreement" means the Contribution
Agreement, dated October 30, 1996, among the H&F Investors, the
Company and certain other parties.
"Derivative Security," with respect to a Person, means
all options, warrants or other rights to acquire, or obligations
to issue, shares of capital stock of, equity interests in, or
partnership interests in, such Person, or similar securities or
contractual obligations the value of which is derived from the
value of an equity interest in such Person, or securities
convertible into
2
<PAGE>
or exchangeable for capital stock of, equity interests in,
partnership interests in, or similar securities or contractual
obligations of, such Person.
"Executive Options" means the options to acquire
Common Stock issued as such under the Company's Stock Option
Plan.
"Exchange Act" means the Securities Exchange Act of
1934, as amended, and the regulations promulgated thereunder.
"H&F Designees" has the meaning set forth in Section
5.01(a) hereof.
"H&F Investors" means, collectively, HFCP, H&F Orchard
Partners III, L.P., a California limited partnership, H&F
International Partners III, L.P., a California limited
partnership, together with any transferee of Shares from any of
the foregoing in a Restricted Transfer permitted under Articles
II and III who is required thereunder to become a party hereto.
"HFCP" means Hellman & Friedman Capital Partners III,
L.P., a California limited partnership.
"HFCP Options" means the options to purchase Common
Stock issued to the H&F Investors in connection with the
Contribution Agreement.
"HFCP Voting Trust Agreement" means the voting trust
agreement dated as of December 12, 1996 by and among the Company,
certain predecessors of the Company, Peter Georgescu and the H&F
Investors.
"Initial Management Investors" means each of the
Persons listed on Schedule 3 to the Prior Agreement.
"Management Investors" means the Initial Management
Investors, together with any individuals who became or become
holders of Shares after December 12, 1996 (other than
the HFCP Investors, their Affiliates and permitted transferees)
who became or were or are required to become parties to the Prior
Agreement or this Agreement and the Management Voting Trust
Agreement in accordance with the terms hereof and thereof, but
excludes (i) any Person who was a party to the Management Voting
Trust Agreement, but has ceased to be a party in accordance with
the terms thereof and (ii) any Person that is not an employee of
the Company or its subsidiaries.
"Management Voting Trust" has the meaning set forth in
the sixth recital paragraph hereof.
"Management Voting Trust Agreement" has the meaning
set forth in the sixth recital paragraph hereof.
3
<PAGE>
"Money Market Preferred Stock" means the money market
preferred stock, without par value, of the Company.
"Non-Conforming Transfer" has the meaning set forth in
Section 2.02(b) hereof.
"Non-Conforming Transferee" has the meaning set forth
in Section 2.02(b) hereof.
"Non-Restricted Transfer" has the meaning set forth in
Section 2.01.
"Notice of Proposed Transfer" has the meaning set forth
in Section 3.01(a) hereof.
"Options" means Executive Options and Roll-Over
Options.
"Outstanding Shares" as of a given time means the sum
of (a) the number of shares of Common Stock then issued and
outstanding (including all shares of Common Stock held in the
Restricted Stock Trust) and (b) the number of shares of Common
Stock issuable upon exercise of (1) the HFCP Options and the
Roll-Over Options and (2) all other options, warrants and rights
to acquire, and the conversion of any securities convertible
into, shares of Common Stock, to the extent such rights to
acquire shares of Common Stock are then exercisable. When
calculating the percentage of the Outstanding Shares owned by a
specified Person, such Person shall be deemed to own all shares
of Common Stock beneficially owned by such Person (A) assuming
the exercise of all of such Person's options, warrants and rights
to acquire, and the conversion by such Person of any securities
convertible into, shares of Common Stock only to the extent such
rights to acquire shares of Common Stock are then exercisable by
such Person and (B) in the case of any Management Investor,
assuming such Management Investor beneficially owns all shares of
Common Stock allocated to him or her under the Restricted Stock
Trust, whether or not then vested. For purposes of calculating
the percentage owned by the Management Voting Trust, the
Management Voting Trust shall be deemed to own all shares of
Common Stock (including all shares of Common Stock required to be
deposited thereunder upon exercise of vested options) then
subject to the Management Voting Trust.
"Person" means any individual or corporation, company,
incorporated or unincorporated association or organization,
limited liability company, partnership, estate, trust, joint
venture or other entity of any kind, including any pension,
profit sharing or other benefit plan or trust, and any
governmental authority.
"Restricted Stock" means the Common Stock issued by
the Company pursuant to the Restricted Stock Plan to the
Restricted Stock Trust on December 12, 1996.
"Restricted Stock Plan" means the Restricted Stock
Plan in the form attached to the Contribution Agreement as
Exhibit 6.
"Restricted Stock Trust" has the meaning set forth in
the Contribution Agreement.
4
<PAGE>
"Restricted Stock Trust Agreement" means the
Restricted Stock Trust Agreement in the form attached to the
Contribution Agreement as Exhibit 7.
"Restricted Transfer" has the meaning set forth in
Section 2.01 hereof.
"Roll-Over Options" means the options to acquire
Common Stock issued as Roll-Over Options under the Stock Option
Plan.
"Shares" shall mean (a) all shares of Common Stock
issued and outstanding as of, and from and after, December 12,
1996 through the date hereof (including without limitation, all
shares of Restricted Stock), together with any other shares of
Common Stock or other capital stock of the Company entitling the
record owner thereof to vote in elections of directors generally
which are issued by the Company during the life of this Agreement
to any Person who is, by the terms of this Agreement or
otherwise, required to subject such shares to this Agreement, and
(b) any economic interest in such shares, whether or not
constituting Beneficial Ownership of such shares (including,
without limitation, the HFCP Options, Roll-Over Options,
Executive Options, interests in the Restricted Stock Trust, and
any other options, warrants or rights to acquire such shares).
"Stock Option Plan" means the Stock Option Plan in the
form attached to the Contribution Agreement as Exhibit 8, setting
forth the terms and conditions upon which Roll-Over Options and
Executive Options may be granted to key employees of the Company.
"Stockholders" has the meaning set forth in the
introductory paragraph hereof.
"Termination Percentage" has the meaning set forth in
Section 3.01.
"Transfer" has the meaning set forth in Section 2.01
hereof.
"Ultimate General Partner" means H&F Investors III,
Inc., a California corporation, as managing general partner of
Hellman & Friedman Associates III, L.P., a California limited
partnership, as managing general partner of H&F Investors III, a
California general partnership, as general partner of each of the
H&F Investors which is a partnership.
"Voting Trust Certificates" has the meaning set forth
in the sixth recital paragraph hereof.
"Voting Trustees" has the meaning set forth in the
Management Voting Trust Agreement.
5
<PAGE>
ARTICLE II
GENERAL PROVISIONS RELATING TO
TRANSFER OF SHARES AND VOTING TRUST CERTIFICATES
SECTION 2.01. General Restrictions. Each Stockholder
agrees with each other Stockholder and the Company that, during
the time periods when the restrictions on transfer specified in
Articles III and IV hereof apply to such Stockholder, such
Stockholder shall not directly or indirectly sell, transfer,
assign, pledge, hypothecate or otherwise encumber or dispose of
any Shares (or any related Voting Trust Certificates) (each, a
"Transfer") except in compliance with the restrictions in
Articles III and IV; provided, however, that no Shares or any
related Voting Trust Certificates shall, in any event, be
Transferred if such Transfer would violate any United States
federal or state or foreign securities laws. A Transfer that is
not subject to Article III or Article IV, in the sense that it
does not require compliance with the procedures set forth
therein, is referred to herein as a "Non-Restricted Transfer". A
Transfer that is permitted after the procedures set forth in
Article III or Article IV have been complied with is referred to
as a "Restricted Transfer".
SECTION 2.02. Condition to Restricted Transfers;
Non-Conforming Transfers. (a) During the time periods when
restrictions on transfer apply to a Stockholder, no Restricted
Transfer of Shares or any related Voting Trust Certificates by
such Stockholder, other than Transfers to the Company, shall be
effective unless, as a condition to any such Restricted Transfer,
each transferee that is not a party hereto shall, prior to such
Transfer, agree in writing to be bound by all of the provisions
of this Agreement applicable to the transferor and no such
transferee shall be permitted to make any Transfer other than in
accordance with the terms of this Agreement. Each such transferee
shall thereafter be deemed to be a Stockholder hereunder and
shall have the benefit of, and be subject to, all of the
obligations and limitations with respect to such transferred
Shares and related Voting Trust Certificates, as the case may be
(including, without limitation, the restrictions on Transfers) to
the same extent as the original transferor under this Agreement.
The foregoing provisions of this Section 2.02(a) shall not apply
to a Transfer which is a Non-Restricted Transfer.
(b) Any purported Transfer of Shares or related Voting
Trust Certificates (1) other than a Non-Restricted Transfer or a
Restricted Transfer which complies with this Agreement or (2) in
a Restricted Transfer to a transferee who is not or does not
become a Stockholder pursuant to Section 2.02(a) (each, a "Non-
Conforming Transferee," and each such transfer, a "Non-Conforming
Transfer") shall be null and void. The Company and the Management
Voting Trust shall not register, recognize or give effect to any
such Non-Conforming Transfer, and the Company and the Management
Voting Trust, as the case may be, shall continue to recognize on
their respective books and records the transferor of such Shares
or related Voting Trust Certificates as the holder thereof.
6
<PAGE>
ARTICLE III
TRANSFERS OF SHARES BY THE H&F INVESTORS
SECTION 3.01. Restrictions on Transfers. (a) (1) Prior
to the termination of the Management Voting Trust, if (A) Shares
subject to the Management Voting Trust represent at least 20% of
the Outstanding Shares and (B) the H&F Investors propose to
Transfer Shares to a Person who, as a result thereof, would
(together with its Affiliates) own Shares representing a
percentage of the Outstanding Shares which is greater than the
percentage of the Outstanding Shares subject to the Management
Voting Trust, or
(2) After termination of the Management Voting Trust,
and (A) prior to the first anniversary of such termination, if
the H&F Investors propose to Transfer Shares to a Person who, as
a result thereof, would (together with its Affiliates) own Shares
representing a percentage of the Outstanding Shares that is
greater than the percentage equal to the greater of (i) 20% and
(ii) the percentage of the Outstanding Shares subject to the
Management Voting Trust upon termination thereof (the
"Termination Percentage") less five percent (5%), and (B) from
and after the first anniversary of such termination until
December 12, 2002, if the H&F Investors propose to Transfer
Shares to a Person who, as a result thereof, would (together with
its Affiliates) own Shares representing a percentage of the
Outstanding Shares which is greater than the greater of (i) 20%
and (ii) a percentage which is the Termination Percentage less
10%,
then, in any such case set forth in (1) or (2) above,
such Transfer can be made only if:
(I) the H&F Investors give written notice to the
Company of the proposed Transfer (specifying the proposed
transferee and the terms of the proposed Transfer) (such
notice, the "Notice of Proposed Transfer"); and
(II) the Company fails to arrange for and complete
the sale of all of the Shares subject to the proposed
Transfer to one or more third parties (including pursuant
to a secondary public offering) at a price to the H&F
Investors at least equal to the price specified in the
Notice of Proposed Transfer within 180 days following the
date of the Notice of Proposed Transfer (it being
understood that the H&F Investors shall be permitted to
withdraw a Notice of Proposed Transfer, at any time during
such period, in which case the Company shall not arrange
for the sale of, or sell, such Shares); and
(III) the Management Voting Trust (if it has not
theretofore terminated) or the Company (after termination
of the Management Voting Trust) thereafter consents in
writing to such Transfer, which consent shall not be
unreasonably withheld (and shall either be given or
withheld no later than 10 days after the earlier of: such
time as the Company concludes that it does not intend to
arrange for a sale under subsection (II) of this Section
3.01(a) or, the expiration of such 180-day period).
7
<PAGE>
(b) A Transfer of Shares by the H&F Investors prior to
December 12, 2002, to any Person who, as a result thereof, would
(together with its Affiliates) own Shares representing a
percentage of the Outstanding Shares that is a smaller percentage
of the Outstanding Shares than the applicable percentage set
forth in subsections (a)(1) or (a)(2), shall be a Non-Restricted
Transfer. The restrictions on Transfer set forth in subsections
(a)(1) and (a)(2) hereof shall terminate immediately on December
12, 2002, whether or not a Notice of Proposed Transfer has
theretofore being given. Transfers of Shares by the H&F Investors
after such date shall not be restricted under Articles II or III,
or otherwise, under this Agreement.
ARTICLE IV
TRANSFERS OF SHARES AND VOTING TRUST CERTIFICATES
BY THE MANAGEMENT INVESTORS AND
THE MANAGEMENT VOTING TRUST
SECTION 4.01. Right of First Refusal of the Company
and the H&F Investors. Prior to termination of the Management
Voting Trust, in the event that a Management Investor or the
Management Voting Trust shall propose to Transfer any Shares (and
any related Voting Trust Certificates) owned or held by them to
any Person who, as a result thereof, together with any related
Transfers by Management Investors or the Management Voting Trust,
would (together with its Affiliates) own more than 20% of the
Outstanding Shares, the Company and the H&F Investors shall each
have a right of first refusal with respect to such a proposed
Transfer, which rights shall be exercised in accordance with the
provisions of subsections (a) through (e) of this Section 4.01.
(a) With respect to any such proposed Transfer, the
Management Investor or the Management Voting Trust shall first
offer to the Company (by written notice to the Company, with a
copy to the H&F Investors) the option to purchase the Shares
(together with any related Voting Trust Certificates) proposed to
be transferred at the same price and upon the same terms and
conditions as are specified in a bona fide written offer from the
proposed transferee.
(b) The offer by such Management Investor or the
Management Voting Trust to the Company shall include a copy of
the written offer from such proposed transferee setting forth all
the details pertaining to any such proposed Transfer to a third
party, including the price, form of consideration and any other
terms and conditions, and the identity of the Person to whom such
Management Investor or the Management Voting Trust is proposing
to Transfer such Shares (and any related Voting Trust
Certificates), including the identity of any Person controlling
such proposed transferee, as well as such evidence of the arm's
length nature of the proposed Transfer, the proposed transferee's
ability to complete the transaction and such other information as
is reasonably requested by the Company or the H&F Investors. If
the Company exercises its right to purchase all or a portion of
the Shares (and any related Voting Trust Certificates) proposed
to be transferred, it shall give notice thereof to the Management
Investor or the Management Voting Trust and the H&F Investors
within 30 days after receipt of such offer. The consideration for
Shares held by a Management Investor or the Management Voting
Trust shall be paid by the
8
<PAGE>
Company to the Management Voting Trust and then delivered by the
Management Voting Trust to the Management Investor (as
applicable) against delivery of his or her Voting Trust
Certificates, which Voting Trust Certificates shall be canceled.
The closing of any purchase hereunder shall take place at the
offices of the Company (or at any other place as may be
designated by the Company) on a date specified by the Company,
which date shall be within 10 days after the Company's notice of
such election to such Management Investor and specified in such
notice (or, if the Company has elected to purchase less than all
of such Shares, within 10 days after the expiration of the 15-day
period for election by the H&F Investors, specified in Section
4.01(d) hereof). If the terms of the proposed Transfer include
the Transfer of the Shares (and any related Voting Trust
Certificates) for consideration other than cash, the Company will
have the right to exercise its rights hereunder either (A) by
purchasing the Shares (and any related Voting Trust Certificates)
for a substantially equivalent form of consideration of equal
value in the reasonable opinion of the Board, or (B) by
purchasing such Shares (and any related Voting Trust
Certificates) for cash in an amount equal to the fair market
value of such proposed consideration in the reasonable opinion of
the Board.
(c) If the Company does not elect to exercise its
right to purchase the Shares (and any related Voting Trust
Certificates) proposed to be transferred within the 30-day period
provided therefor, or elects to purchase less than all of such
Shares, the H&F Investors shall have the option to purchase all
(but not less than all) of the Shares proposed to be transferred
(and any related Voting Trust Certificates) which the Company has
elected not to purchase, at the same price and upon the same
terms and conditions as the offer made by the Management Investor
or the Management Voting Trust to the Company.
(d) If the H&F Investors exercise their right to
purchase the Shares (and any related Voting Trust Certificates)
proposed to be transferred, they shall give notice thereof within
15 days after the expiration of the 30-day period referred to in
Section 4.01(b) above. The consideration for Shares held by a
Management Investor or the Management Voting Trust shall be paid
by the H&F Investors to the Management Voting Trust and then
delivered by the Management Voting Trust to the Management
Investor (as applicable) against delivery of his or her Voting
Trust Certificates, which Voting Trust Certificates shall be
canceled. The closing of any purchase hereunder shall take place
at the offices of the Company (or at any other place as may be
designated by the H&F Investors) on a date determined by the H&F
Investors within ten (10) days after the H&F Investors' notice of
such election and specified in such notice; provided that, if the
Company has elected to purchase Shares pursuant to subsection (b)
hereof, the closing under this subsection (d) shall be at the
same time and place as the Company's closing as specified in the
Company's notice. If the terms of the proposed Transfer include
the Transfer of the Shares (and any related Voting Trust
Certificates) for consideration other than cash, the H&F
Investors shall have the right to exercise their rights hereunder
either (A) by purchasing the Shares (and any related Voting Trust
Certificates) for a substantially equivalent form of
consideration of equal value in the reasonable opinion of the H&F
Investors, or (B) by purchasing such Shares (and any related
Voting Trust Certificates) for cash in an amount equal to the
fair market value of such proposed consideration in the
reasonable opinion of the H&F Inves tors; provided, however,
that, if the Company has elected to purchase Shares pursuant to
subsection (b) of this Section 4.01, the H&F Investors shall use
the same form of consideration
9
<PAGE>
(if possible) or, if the Company is using cash (or the H&F
Investors cannot use the alternative form of consideration), pay
the amount of cash determined by the Board to be the fair market
value of the alternative compensation pursuant to the last
sentence of subsection (b) of this Section 4.01.
(e) If the Company and the H&F Investors,
collectively, elect to purchase less than all of the Shares (and
any related Voting Trust Certificates) proposed to be Transferred
by the Management Investor or the Management Voting Trust within
the exercise periods provided therefor, then such elections shall
not be effective and the Management Investor or the Management
Voting Trust may sell all (but not less than all) of such Shares
(and any related Voting Trust Certificates) to the Person
specified in the notice delivered to the Company and the H&F
Investors in accordance with Section 4.01(a); provided that such
sale is made within 90 days after the expiration of the H&F
Investors' 15-day exercise period, at a price and upon terms and
conditions not more favorable to such transferee than those that
were specified in such notice.
SECTION 4.02. Transfer of Payments by the Management
Voting Trust to the Management Investors. All payments made by
the Company or the H&F Investors in respect of any Shares and
Voting Trust Certificates purchased by the Company or the HFCP
Investors pursuant to this Article IV shall be made by the
Company or the H&F Investors, as the case may be, to the
Management Voting Trust, and the Management Voting Trust shall,
upon receipt of such payment, promptly make an identical payment
to the Management Investor holding the Voting Trust Certificates
representing such Shares upon surrender by such Management
Investor of such Voting Trust Certificates to the Management
Voting Trust and such Voting Trust Certificates shall be canceled
upon such surrender.
ARTICLE V
GOVERNANCE AND MANAGEMENT OF CORPORATION
SECTION 5.01. Board of Directors. (a) The Company
shall be managed by its duly elected officers subject to the
overall direction and supervision of the Board. The Company will
take all actions reasonably within its power, including those
actions of the Company specified in Section 5.01(b), to provide
that the Board will include (1) so long as the H&F Investors own
at least 10% of the Outstanding Shares, two individuals
designated by the H&F Investors and (2) so long as the H&F
Investors own at least 5% of the Outstanding Shares, one
individual designated by the H&F Investors (the "H&F Designees").
(b) For so long as the H&F Investors own at least 10%
of the Outstanding Shares, the Company agrees to nominate two H&F
Designees, and for so long as the H&F Investors own at least 5%
of the Outstanding Shares, the Company agrees to nominate one H&F
Designee, in each case for election to the Board. The Company
agrees to recommend to its stockholders that the H&F Designees be
elected to the Board and to cooperate and use all reasonable
efforts to effectuate the election of the H&F Designees to the
Board. For so long as the Management
10
<PAGE>
Voting Trust is in existence, the Management Voting Trust agrees
to take all such steps (including voting all Shares and all
shares of Money Market Preferred Stock as to which it has voting
power to elect and re-elect individuals as directors, to remove
directors and to fill vacancies) as requested by the H&F
Investors and permitted to be taken by the Management Voting
Trust so as to attempt to assure that the Board includes the H&F
Designee(s) at all times, to the extent required under this
Section 5.01. The H&F Investors shall be free to replace the
members of the Board designated by them, and the Company shall
cooperate and use all reasonable efforts to effectuate any such
replacement requested by the H&F Investors. For so long as the
Management Voting Trust is in existence, the Management Voting
Trust agrees to take all such steps (including voting all Shares
and all shares of Money Market Preferred Stock as to which it has
voting power to elect and re-elect individuals as directors, to
remove directors and to fill vacancies) as requested by the H&F
Investors and permitted to be taken by the Management Voting
Trust to attempt to effectuate any such replacement requested by
the H&F Investors.
SECTION 5.02. Delaware Statute. The Company will not
take any action to amend, eliminate or adopt any provision
inconsistent with, Article XIV of its Amended and Restated
Certificate of Incorporation, a copy of which is included in
Exhibit A, or to rescind, amend, supersede or adopt any
resolution inconsistent with, the Board resolution included in
Exhibit A.
ARTICLE VI
MISCELLANEOUS
SECTION 6.01. Termination. The term of this Agreement
varies provision by provision as follows:
(a) The restrictions on Transfer set forth in
Article III shall terminate on December 12, 2002.
(b) The restrictions on Transfer set forth in
Article IV shall terminate on the date of termination of
the Management Voting Trust.
(c) The restrictions on Transfer set forth in
Article II shall terminate at the time that related
restrictions in Articles III and IV, respectively,
terminate.
(d) The provisions of Article V shall apply so
long as the H&F Investors own at least 5% of the
Outstanding Shares.
(e) The provisions of Article I and Article VI
shall apply until the later of (1) the termination of
Articles II, III and IV pursuant to Sections 6.01(a)
through (c) and (2) the termination of Article V pursuant
to Section 6.01(d).
11
<PAGE>
SECTION 6.02. Legend. All certificates representing
Common Stock held by Stockholders shall bear a legend stamped,
typed or otherwise legibly placed on the face or reverse side
thereof substantially in the form set forth below:
NOTICE IS HEREBY GIVEN THAT the securities represented
by this certificate have not been registered under the
Securities Act of 1933, as amended, or the securities
laws of any state of the United States or any non-U.S.
jurisdiction. The securities cannot be offered, sold,
transferred or otherwise disposed of except (1)
pursuant to an effective registration statement or
amendment thereto under such Act and any other
applicable laws or (2) pursuant to an exemption from,
or in a transaction not subject to, the registration
requirements of such Act and such other applicable
laws. The sale, transfer or other disposition of the
securities represented by this certificate and certain
other rights and obligations of the holder of this
certificate are also subject to a Stockholders'
Agreement dated as of May 8, 1998 by and among the
Company and the other parties thereto (copies of which
are available for review at the principal office of
the Company by contacting the Secretary of the
Company).
SECTION 6.03. Binding Effect; Successors. This
Agreement shall be binding upon and inure to the benefit of and
shall be enforceable by the parties hereto and their respective
legal representatives, heirs, legatees, successors and assigns.
The terms and provisions of this Agreement shall become effective
only upon the closing of the Offerings.
SECTION 6.04. Amendment and Waiver. This Agreement may
be amended, modified or supplemented or any term or condition
waived only by a written instrument executed by the parties
hereto; provided, however, that pursuant to the Management Voting
Trust Agreement, each Management Investor has delegated to the
Voting Trustees the authority to act on his or her behalf for
purposes of this Section 6.04.
SECTION 6.05. Governing Law. This Agreement shall be
governed by and construed in accordance with the internal laws of
the State of Delaware, without regard to principles of conflict
of laws, and each Stockholder agrees to submit to personal
jurisdiction and to waive any objection as to venue of the Court
of Chancery in the State of Delaware in connection with any
action arising out of or relating to this Agreement. Service of
process on any party hereto in any action arising out of or
relating to this Agreement shall be effective if served upon such
party by mail in accordance with Section 6.10.
SECTION 6.06. Specific Performance. Each party hereto
agrees that irreparable damages would occur in the event that any
of the provisions of this Agreement were not performed in
accordance with their specific terms, or were otherwise breached.
It is, accordingly, agreed that the parties hereto shall be
entitled to injunctive relief to prevent breaches of the
provisions of this Agreement, and to enforce specifically the
terms and provisions hereof, in addition to any other remedy to
which they may be entitled at law or in equity.
12
<PAGE>
SECTION 6.07. Unenforceability. If any provision of
this Agreement is held or deemed to be invalid or unenforceable
to any extent when applied to any Person or circumstance, the
remaining provisions of this Agreement and the enforcement of
such provisions to other Persons or circumstances shall not be
affected, and each provision of this Agreement shall be enforced
to the fullest extent allowed by law.
SECTION 6.08. Headings. The headings of Articles and
Sections contained in this Agreement are solely for convenience
of reference, are not part of the agreement of the parties, and
shall not affect the meaning or interpretation of this Agreement.
SECTION 6.09. Copies on File. Copies of this Agreement
and of every agreement amending or supplementing this Agreement
shall be available for review at the Company's principal office
by contacting the Secretary of the Company.
SECTION 6.10. Notices. (a) All notices, requests,
demands or other communications required by or otherwise with
respect to this Agreement shall be in writing and shall be deemed
to have been duly given to any party when delivered by hand, by
messenger, or by a nationally recognized overnight delivery
company, when delivered by telecopy and confirmed by return
telecopy, or when delivered by first-class mail, postage prepaid
and return receipt requested, in each case to the applicable
addresses set forth below:
If to the Company: Young & Rubicam Inc.
285 Madison Avenue
New York, New York 10017-6486
Attention: Stephanie W. Abramson, Esq.
Facsimile: (212) 210-5544
If to the
H&F Investors: H&F Investors III, Inc.
One Maritime Plaza
12th Floor
San Francisco, California 94111
Attention: Philip Hammarskjold
Facsimile: (415) 788-0176
If to the Management
Voting Trust: Management Voting Trust
c/o Young & Rubicam Inc.
285 Madison Avenue
New York, New York 10017-6436
Attention: Stephanie W. Abramson,
Voting Trustee Representative
Facsimile: (212) 210-5544
13
<PAGE>
(or, as to any party, to such other address as such party shall
from time to time designate by written notice to the other
parties). Notices sent by registered or certified mail in
accordance with this Section 6.10 shall be deemed delivered as of
the date posted in the United States mail.
(b) Whenever this Agreement contemplates delivery to,
or action (such as consent, approval or waiver) by (1) the H&F
Investors, delivery to, or action (evidenced in writing) by, the
Ultimate General Partner shall bind the H&F Investors or (2) the
Management Voting Trust, delivery to, or action (evidenced in
writing) by the Voting Trustee representative (set forth in
subsection (a) of this Section 6.10) shall bind the Management
Voting Trust. Whenever the consent, approval or waiver of the H&F
Investors or the Management Voting Trust is required under this
Agreement such Person agrees to act with reasonable promptness to
either grant or deny such request following receipt of written
notice of such request in accordance with Section 6.10 hereof.
SECTION 6.11. Waiver and Consent. Subject to Section
6.04 hereof, any two of the Company, the Ultimate General Partner
and the Management Voting Trust may by notice to the third such
party hereto (a) extend the time for the performance of any of
the obligations or other actions of such third party under this
Agreement; (b) waive compliance with any of the conditions or
covenants of such third party contained in this Agreement; and
(c) waive or modify performance of any of the obligations of such
third party under this Agreement. Except as provided in the
preceding sentence, no action taken pursuant to this Agreement,
including, without limitation, any investigation by or on behalf
of any party, shall be deemed to constitute a waiver by the party
taking such action of compliance with any representations,
warranties, covenants or agreements contained herein. The waiver
by any party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any
preceding or succeeding breach and no failure by any party to
exercise any right or privilege hereunder shall be deemed a
waiver of such party's rights or privileges hereunder or shall be
deemed a waiver of such party's rights to exercise the same at
any subsequent time or times hereunder.
SECTION 6.12. Recapitalizations, Exchanges, Etc.
Affecting the Company's Stock. The provisions of this Agreement
shall apply, to the full extent set forth herein with respect to
the Common Stock and Derivative Securities, to any and all shares
of capital stock, and to any and all Derivative Securities,
respectively, of the Company or any successor or assign of the
Company (whether by merger, consolidation, sale of assets, or
otherwise) which may be issued in respect of, in exchange for, or
in substitution of the Common Stock or such options, as the case
may be.
SECTION 6.13. Counterparts. This Agreement may be
executed in one or more counterparts, each of which shall be
deemed to be an original and all of which together shall be
deemed to constitute one and the same agreement.
14
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed
this Stockholders' Agreement as of the date first above written.
HELLMAN & FRIEDMAN CAPITAL
PARTNERS III, L.P.
By its General Partner,
H&F Investors III
By its Managing General Partner,
Hellman & Friedman Associates III, L.P.
By its Managing General Partner,
H&F Investors III, Inc.
By: /s/ Philip U. Hammarskjold
---------------------------
Name: Philip U. Hammarskjold
Title: Vice President
H&F ORCHARD PARTNERS III, L.P.
By its General Partner,
H&F Investors III
By its Managing General Partner,
Hellman & Friedman Associates III, L.P.
By its Managing General Partner,
H&F Investors III, Inc.
By: /s/ Philip U. Hammarskjold
---------------------------
Name: Philip U. Hammarskjold
Title: Vice President
H&F INTERNATIONAL PARTNERS III, L.P.
By its General Partner,
H&F Investors III
By its Managing General Partner,
Hellman & Friedman Associates III, L.P.
By its Managing General Partner,
H&F Investors III, Inc.
By: /s/ Philip U. Hammarskjold
---------------------------
Name: Philip U. Hammarskjold
Title: Vice President
<PAGE>
YOUNG & RUBICAM INC., a Delaware
corporation
By: /s/ Stephanie W. Abramson
--------------------------
Name: Stephanie W. Abramson
Title: Secretary and Assistant
Treasurer
THE MANAGEMENT VOTING TRUST
By: /s/ Stephanie W. Abramson
--------------------------
Name: Stephanie W. Abramson
Attorney-in-fact
<PAGE>
THE MANAGEMENT INVESTORS
By: /s/ Stephanie W. Abramson
--------------------------
Name: Stephanie W. Abramson
Attorney-in-fact
Exhibit 4.9
- -----------------------------------------------------------------
YOUNG & RUBICAM INC.
AND
THE BANK OF NEW YORK
-----------------------------
Rights Agent
Rights Agreement
Dated as of May 1, 1998
- -----------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Section Page
- ------- ----
1 Certain Definitions................................ 1
2 Appointment of Rights Agent........................ 7
3 Issue of Right Certificates........................ 7
4 Form of Right Certificates......................... 9
5 Countersignature and Registration.................. 9
6 Transfer, Split Up, Combination
and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or
Stolen Right Certificates.......................... 10
7 Exercise of Rights; Purchase Price;
Expiration Date of Rights ......................... 11
8 Cancellation of Right Certificates................. 13
9 Reservation and Availability of Capital Stock...... 13
10 Preferred Share Record Date........................ 15
11 Adjustment of Purchase Price, Number of Shares or
Number of Rights................................... 15
12 Certification of Adjusted
Purchase Price or Number of Shares ................ 23
13 Consolidation, Merger or Sale
or Transfer of Assets or Earning
Power............................................. 23
14 Fractional Rights and Fractional Shares............ 27
15 Rights of Action................................... 28
16 Agreement of Right Holders......................... 29
17 Right Certificate Holder
Not Deemed a Stockholder .......................... 30
i
<PAGE>
Section Page
- ------- ----
18 Concerning the Rights Agent........................ 30
19 Merger or Consolidation or
Change of Name of Rights Agent .................... 30
20 Duties of Rights Agent............................. 31
21 Change of Rights Agent............................. 34
22 Issuance of New Right Certificates................. 35
23 Redemption......................................... 35
24 Exchange........................................... 36
25 Notice of Certain Events........................... 37
26 Notices............................................ 38
27 Supplements and Amendments......................... 39
28 Successors......................................... 40
29 Benefits of this Agreement......................... 40
30 Severability....................................... 40
31 Determination and Actions by the
Board of Directors, etc. .......................... 40
32 Governing Law...................................... 41
33 Counterparts....................................... 41
34 Descriptive Headings............................... 41
Exhibit A Form of Certificate of Designations
Exhibit B Form of Right Certificate
ii
<PAGE>
RIGHTS AGREEMENT
----------------
This Rights Agreement, dated as of May 1, 1998,
between Young & Rubicam Inc., a Delaware corporation (the
"Company"), and The Bank of New York, a New York banking
corporation, as Rights Agent (the "Rights Agent").
W I T N E S S E T H:
WHEREAS, the board of directors of the Company (the "Board of
Directors") has authorized and declared a dividend of one right
(a "Right") for each share of Common Stock of the Company
outstanding immediately prior to the date and time of
consummation of the Company's initial public offering of shares
of Common Stock (the "Record Date"), and has further authorized
and directed the issuance of one Right (subject to adjustment)
with respect to each share of Common Stock that shall become
outstanding (whether originally issued or delivered from the
Company's treasury) between the Record Date and the earlier of
the Distribution Date and the Expiration Date, including any
shares of Common Stock issued in connection with the initial
public offering of the shares of Common Stock, each Right
initially representing the right to purchase one one-hundredth of
a Preferred Share upon the terms and subject to the conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and
the mutual agreements herein set forth, the parties hereby agree
as follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms shall have the meanings indicated:
(a) "Acquiring Person" shall mean (i) any Person
(other than the H&F Investors and other than any Permitted H&F
15% Transferee), who or which, together with all Affiliates and
Associates of such Person, shall be or become the Beneficial
Owner of fifteen percent (15%) or more of the then outstanding
shares of Common Stock (other than as a result of an Approved
Offer), (ii) the H&F Investors, if after the Record Date, the H&F
Investors, together with all of their Affiliates and Associates,
shall acquire Beneficial Ownership of any additional shares of
Common Stock, such that following the acquisition of such
additional shares of Common Stock, (A) the H&F Investors
beneficially own fifteen percent (15%) or more of the then
outstanding shares of Common Stock, and, (B) if the Management
Voting Trust is then in existence, following the acquisition of
such additional shares of Common Stock, the H&F Investors
beneficially own a greater percentage of the Diluted Shares
Outstanding than the percentage of the Diluted Shares Outstanding
subject to the Management Voting Trust at the time of the
acquisition of such additional shares of Common Stock (it being
understood that neither sales by, nor termination of, the
Management Voting Trust shall result in the H&F Investors
becoming an Acquiring Person pursuant to this clause (ii) absent
a subsequent acquisition of beneficial ownership of additional
shares of Common Stock by the H&F Investors or any of their
Affiliates or
<PAGE>
Associates) or (iii) any person who or which is a Permitted H&F
15% Transferee, if contemporaneously with or subsequent to the
Transfer from the H&F Investors that resulted in such Person
becoming a Permitted H&F 15% Transferee, such Permitted H&F 15%
Transferee, together with all of its Affiliates and Associates,
shall purchase or otherwise become the Beneficial Owner of any
additional shares of Common Stock; provided, however, that (w) a
Person shall not become an Acquiring Person if such Person,
together with all of its Affiliates and Associates, shall become
the Beneficial Owner of fifteen percent (15%) or more of the then
outstanding shares of Common Stock (in the case of clause (i)
above) 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 time as such
Person shall purchase or otherwise become (as a result of actions
taken by such Person or any of its Affiliates or Associates) the
Beneficial Owner of any additional shares of Common Stock; (x)
"Acquiring Person" shall not include any Company Entity; and (y)
"Acquiring Person" shall not include any Person who or which,
together with all Affiliates and Associates of such Person,
becomes the Beneficial Owner of fifteen percent (15%) or more of
the then outstanding shares of Common Stock (in the case of
clause (i) above) or any additional shares of Common Stock (in
the case of clauses (ii) and (iii) above) but who acquired
beneficial ownership of shares of Common Stock inadvertently, and
such Person promptly (and in any event within ten (10) Business
Days after being so requested by the Company) enters into an
irrevocable commitment satisfactory to the Board of Directors
promptly (and in any event within twenty (20) Business Days or
such shorter period as shall be determined by the Board of
Directors) to divest, and thereafter promptly divests as required
by such commitment, sufficient shares of Common Stock so that
such Person, together with all of its Affiliates and Associates,
ceases to be a Beneficial Owner of fifteen percent (15%) or more
of the then outstanding shares of Common Stock (in the case of
clause (i) above) or such additional shares of Common Stock (in
the case of clauses (ii) and (iii) above).
"Affiliate" shall have the meaning ascribed to such
term in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
as in effect on the date of this Agreement.
(b) "Approved Offer" shall mean a tender or exchange
offer for all outstanding shares of Common Stock which is at a
price and on terms approved, prior to the acceptance for payment
of shares under such tender or exchange offer, by the Board of
Directors.
(c) "Associate" shall include (x) any Person included in
the definition of "Associate" in Rule 12b-2 under the Exchange
Act, as in effect on the date of this Agreement, and (y) any
Affiliate of any such Person.
(e) A Person shall be deemed the "Beneficial Owner" of,
and to have "beneficial ownership" of, and to "beneficially own"
any securities:
2
<PAGE>
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns or may be deemed to
beneficially own, directly or indirectly (as determined pursuant
to Rule 13d-3 or 13d-5 under the Exchange Act as in effect on the
date of this Agreement);
(ii) which such Person or any of such Person's
Affiliates or Associates has, directly or indirectly, (A) the
right to acquire (whether such right is exercisable immediately
or only after the passage of time or the satisfaction of one or
more conditions or both) pursuant to any agreement (other than
customary agreements with and between underwriters and selling
group members with respect to a bona fide public offering of
securities), arrangement or understanding (whether in writing or
not), or upon the exercise of conversion rights, exchange rights,
rights (other than the Rights), warrants or options, or
otherwise; provided, however, that a Person shall not be deemed
to be the Beneficial Owner of, or to beneficially own, any
security solely because such security has been tendered pursuant
to a tender or exchange offer made by such Person or any of such
Person's Affiliates or Associates until such tendered security is
accepted for payment or exchange); or (B) the right to vote or
dispose of, or to direct the vote or disposition of, alone or in
concert with others, pursuant to any agreement, arrangement or
understanding (whether in writing or not); provided, however,
that a Person shall not be deemed pursuant to this clause (ii)(B)
to be the Beneficial Owner of, or to beneficially own, any
security if the agreement, arrangement or understanding to vote,
or direct the vote of, such security (1) arises solely from a
revocable proxy or consent given to such Person or any of such
Person's Affiliates or Associates in response to a public proxy
or consent solicitation made pursuant to, and in accordance with,
the applicable rules and regulations under the Exchange Act and
(2) is not also then reportable on Schedule 13D under the
Exchange Act (or any comparable or successor report), other than
solely by reason of the existence of such revocable proxy or
consent; or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any of
such Person's Affiliates or Associates has any agreement (other
than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering
of securities), arrangement or understanding (whether or not in
writing) for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy or consent as described in clause
(ii)(B) of this paragraph) or disposing of any securities of the
Company.
Except as otherwise provided in Section 2(k) hereof, if a Person
shall be deemed to be the Beneficial Owner of any securities
which are not outstanding, such securities shall be deemed to be
outstanding for purposes of determining the percentage of the
then outstanding shares of Common Stock beneficially owned by
such Person but all other securities (including securities of the
same class) not actually outstanding shall not be deemed
outstanding for such purposes.
3
<PAGE>
(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 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 $0.01 per share, of the Company (as it may be constituted
from time to time during the term of this Agreement), except that
"Common Stock" when used with reference to any Person other than
the Company (or, in the case of a transaction referred to in
Section 13 hereof, if the Company is the successor to the other
Person referred to in Section 13, or is the surviving
corporation, when thereafter used with reference to the Company)
shall mean the capital stock (or, in the case of a partnership or
other unincorporated entity, the equivalent equity interest) with
the greatest voting power of such Person, together with all
rights and benefits (however denominated or constituted) relating
to such capital stock (including, without limitation, any rights
or warrants to acquire additional shares of such capital stock or
other securities or assets, or to participate in any trust for
the benefit of holders of such shares, or to share in the
benefits of any agreements or other arrangements for the benefit
of such holders), whether or not such rights are yet exercisable,
and together with any other securities which are represented by
the certificates for such shares or are transferred in connection
with transfers of such shares.
(j) "Company Entity" shall mean any of the Company,
any wholly owned Subsidiary of the Company, any employee benefit
plan or employee stock plan of the Company or of any wholly owned
Subsidiary of the Company, any Person or entity holding shares of
Common Stock which was organized, appointed or established by the
Company or any such wholly owned Subsidiary for or pursuant to
the terms of any such plan, the Management Voting Trust, the
Young & Rubicam Restricted Stock Trust (the "Restricted Stock
Trust"), the trustees under the Management Voting Trust or the
Restricted Stock Trust, any Affiliate or Associate of the
Management Voting Trust or the Restricted Stock Trust or any
trustee under either such trust and any group that includes the
Management Voting Trust, the Restricted Stock Trust, any trustee
under either such trust or any Affiliate or Associate thereof.
(k) "Diluted Shares Outstanding" as of any given time
shall mean the sum of (a) the number of shares of Common Stock
then issued and outstanding (including all shares of Common Stock
held in the Restricted Stock Trust) and (b) the number of shares
of Common Stock issuable upon exercise of (1) the HFCP Options
and the Roll-Over Options and (2) all other options, warrants and
rights to acquire, and the conversion of any securities
convertible into, shares of Common Stock, to the extent such
rights to acquire shares of Common Stock are then exercisable.
For purposes of Section 1(a)(ii)(B), when calculating
4
<PAGE>
the percentage of the Diluted Shares Outstanding owned by the H&F
Investors or the Management Voting Trust, as the case may be, the
H&F Investors or the Management Voting Trust, as the case may be,
shall be deemed to own all shares of Common Stock beneficially
owned by them assuming the exercise of all of their options,
warrants and rights to acquire, and the conversion by them of any
securities convertible into, shares of Common Stock to the
extent, but only to the extent, such rights to acquire shares of
Common Stock are then exercisable by them. For purposes of
calculating the percentage of Diluted Shares Outstanding owned by
the Management Voting Trust, the Management Voting Trust shall be
deemed to own all shares of Common Stock (including all shares of
Common Stock required to be deposited thereunder upon exercise of
vested options) then subject to the Management Voting Trust.
(l) "H&F Investors" shall mean, collectively, Hellman
& Friedman Capital Partners III, L.P., a California limited
partnership, H&F Orchard Partners III, L.P., a California limited
partnership and H&F Partners III, L.P., a California limited
partnership.
(m) "HFCP Options" shall have the meaning given such
term in the Stockholders' Agreement.
(n) "Management Voting Trust" shall mean the trust
established pursuant to the management voting trust agreement
dated as of December 12, 1996 by and among the Company, the
Restricted Stock Trust, the Voting Trustees (as defined therein)
and each other party thereto.
(o) "Permitted H&F Transferee" shall mean any
transferee of Shares (as defined in the Stockholders' Agreement)
from an H&F Investor in a Transfer that either is not restricted
by, or occurs in compliance with, the transfer restrictions set
forth in Articles II and III of the Stockholders' Agreement,
which transferee becomes a party to the Stockholders' Agreement
if required thereby.
(p) "Permitted H&F 15% Transferee" shall mean any
Person who is a Permitted H&F Transferee who or which,
immediately after the transfer from the H&F Investors that
resulted in such Person becoming a Permitted H&F Transferee,
together with all Affiliates and Associates of such Person, is
the beneficial owner of 15% or more of the then outstanding
shares of Common Stock.
(q) "Person" shall mean any individual, firm, limited
liability company, corporation, partnership, trust, association
or other entity.
(r) "Preferred Shares" shall mean shares of Cumulative
Participating Junior Preferred Stock, no par value, of the
Company having the rights, preferences and limitations set forth
in the form of Certificate of Designations attached to this
Agreement as Exhibit A and, to the extent that there are not a
sufficient number of shares of Cumulative Participating Junior
Preferred Stock authorized to permit the full exercise of the
then outstanding Rights,
5
<PAGE>
any other series of preferred stock of the Company designated for
such purpose by the Board of Directors containing terms
substantially similar to the terms of the Cumulative
Participating Junior Preferred Stock.
(s) "Roll-Over Options" shall have the meaning set
forth in the Stockholders' Agreement.
(t) "Stock Acquisition Date" shall mean the time and
day of the first public announcement (which for purposes of this
definition, shall include, without limitation, the filing of a
report pursuant to the Exchange Act) by the Company or an
Acquiring Person indicating that an Acquiring Person has become
such.
(u) "Stockholders' Agreement" shall mean the amended
and restated stockholders' agreement dated as of May 8, 1998 by
and among the H&F Investors, the Management Investors and the
Management Voting Trust (as such terms are defined therein), such
additional signatories as may be deemed added from time to time
pursuant thereto, and the Company.
(v) "Stock Split" shall mean any and all dividends
declared on the outstanding shares of Common Stock payable in
shares of Common Stock, if the declaration of such dividends
occurs prior to the date on which the class of shares of Common
Stock is registered under the Exchange Act, regardless of when
such dividends are payable or paid.
(w) "Subsidiary" shall mean, with respect to any
Person, any corporation or other entity as to which such Person
beneficially owns, directly or indirectly, sufficient voting
securities or other ownership interests having ordinary voting
power sufficient, in the absence of contingencies, to elect at
least a majority of its directors (or individuals performing
similar functions).
(x) "Transfer" shall have the meaning set forth in the
Stockholders' Agreement.
(y) The terms set forth below are defined in the
Sections indicated below:
Term Section
---- -------
Act 7(c)
Board of Directors Recitals
Common Stock Equivalent 11(a)(iii)(B)
current market price 11(d)
Current Value 11(a)(iii)(A)
Distribution Date 3(a)
Equivalent Preferred Shares 11(b)
Exchange Act 1(b)
Exchange Ratio 24
6
<PAGE>
Expiration Date 7(a)
Final Expiration Date 7(a)
NASDAQ 11(d)(i)
NYSE 11(d)(i)
Principal Party 13(b)
Purchase Price 7(b)
Record Date Recitals
Redemption Date 7(a)
Redemption Price 23
Restricted Stock Trust 1(j)
Right Recitals
Right Certificates 3(a)
Rights Agent Recitals
Section 13 Event 13(a)
Security 11(d)(i)
Spread 11(a)(iii)(A)
Substitution Period 11(a)(iii)
Trading Day 11(d)(i)
Trigger Date 11(a)(iii)
Section 2. Appointment of Rights Agent. The Company
hereby appoints the Rights Agent to act as agent for the Company
in accordance with the terms and conditions hereof, and the
Rights Agent hereby accepts such appointment. The Company may
from time to time appoint such Co-Rights Agents as it may deem
necessary or desirable upon ten (10) days' prior written notice
to the Rights Agent. The Rights Agent shall have no duty to
supervise, and shall in no event be liable for, the acts or
omissions of any such Co-Rights Agent. In the event that the
Company appoints one or more Co-Rights Agents, the respective
duties of the Rights Agent and any Co-Rights Agents shall be as
the Company shall determine.
Section 3. Issue of Right Certificates. (a) Until the
close of business on the earlier of (i) the tenth (10th) Business
Day after the Stock Acquisition Date and (ii) the tenth (10th)
Business Day (or such later day as may be determined by action of
the Board of Directors prior to such time as any Person becomes
an Acquiring Person) after the date of the commencement by any
Person (other than any Company Entity) of, or the first public
announcement of the intent of any Person (other than any Company
Entity) to commence (which intention to commence remains in
effect for five (5) Business Days after such announcement), a
tender or exchange offer the consummation of which would result
in any Person becoming an Acquiring Person (the earlier of the
dates referred to in clauses (i) and (ii) above 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 shares of Common Stock
registered in the names of the holders of the shares of Common
Stock (which certificates for shares of Common Stock shall also
be deemed (other than for
7
<PAGE>
purposes of this Section 3 and any provision of this Agreement
referring to the issuance of Rights Certificates) to be Right
Certificates) and not by separate Right Certificates, and (y) the
Rights (and the right to receive Right Certificates) will be
transferable only simultaneously and together with the transfer
of the underlying shares of Common Stock. The Company shall give
the Rights Agent prompt written notice of the Distribution Date.
As soon as practicable after the Distribution Date, and receipt
by the Rights Agent of written notice of the Distribution Date
from the Company, subject to Section 7(e) hereof, the Company
will prepare and execute, the Rights Agent will countersign, and
the Company will send or cause to be sent (and the Rights Agent
will, if requested, send, at the expense of the Company) by
first-class, postage-prepaid mail, to each record holder of
shares of Common Stock as of the close of business on the
Distribution Date, as shown by the records of the Company, at the
address of such holder shown on such records, a right
certificate, substantially in the form of Exhibit B hereto (a
"Right Certificate"), evidencing one Right for each share of
Common Stock so held, subject to adjustment as herein provided.
As of and after the close of business on the Distribution Date,
the Rights will be evidenced solely by such Right Certificates
and may be transferred only by the transfer of the Rights
Certificates as permitted hereby, separately and apart from any
transfer of one or more shares of Common Stock.
(b) With respect to certificates for shares of Common
Stock outstanding as of the Record Date or issued prior to the
Distribution Date, until the Distribution Date the Rights will be
evidenced solely by such certificates registered in the names of
the holders thereof. Until the Distribution Date (or the earlier
of the Redemption Date or the Expiration Date), the surrender for
transfer of any certificate for shares of Common Stock
outstanding as of the Record Date shall also constitute the
transfer of the Rights associated with the shares of Common Stock
represented thereby.
The Company will mail to any record holder of a Right
(including, prior to the Distribution Date, a record holder of
shares of Common Stock) a copy of this Rights Agreement, without
charge, promptly after receipt of a written request therefor.
(c) Rights shall be issued in respect of all shares of
Common Stock that become outstanding after the Record Date and
prior to the earlier of the Distribution Date and the Expiration
Date, and all certificates for shares of Common Stock which
become outstanding after the Record Date, but prior to the
earlier of the Distribution Date and the Expiration Date shall
have impressed on, printed on, written on or otherwise affixed to
them substantially the following legend:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Rights Agreement
between Young & Rubicam Inc. and The Bank of New York,
dated as of May 1, 1998, as it may from time to time be
supplemented or amended pursuant to its terms (the "Rights
Agreement"), the terms of which are hereby incorporated by
reference and a copy of which is on file at the principal
8
<PAGE>
executive offices of Young & Rubicam Inc. Under certain
circumstances as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and will
no longer be evidenced by this certificate. Young & Rubicam
Inc. will mail to the registered holder of this certificate
a copy of the Rights Agreement without charge promptly
after receipt of a written request therefor. Under certain
circumstances provided for in the Rights Agreement, Rights
issued to or beneficially owned by any Person who is an
Acquiring Person or an Affiliate or Associate thereof (as
such terms are defined in the Rights Agreement) or any
subsequent holder of such Rights shall become null and
void.
In the event that the Company purchases or 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 cancelled 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.
Section 4. Form of Right Certificates. The Right
Certificates (and the forms of election to purchase shares and of
assignment to be printed on the reverse thereof) shall be
substantially in the form of 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 law or
with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange or quotation system on
which the Rights may from time to time be listed, or to conform
to usage. Subject to the provisions of Sections 11 and 22 hereof,
the Right Certificates, whenever distributed, shall be dated as
of the Record Date, shall show the date of countersignature and
on their face shall entitle the holders thereof to purchase such
number of one-hundredths of a Preferred Share as shall be set
forth therein at the Purchase Price, but the number and type of
securities purchasable upon the exercise of each Right and the
Purchase Price thereof shall be subject to adjustment as provided
herein.
Section 5. Countersignature and Registration. (a) The
Right Certificates shall be executed on behalf of the Company by
its Chairman of the Board, its Chief Executive Officer, its
President or any Senior Vice President or Vice President, or its
Treasurer, either manually or by facsimile signature. The Right
Certificates shall be manually countersigned by the Rights Agent
and shall not be valid for any purpose unless so countersigned.
In case any officer of the Company who shall have signed any of
the Right Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance
and delivery by the Company, such Right Certificates,
nevertheless, may be countersigned by the Rights Agent, and
issued and delivered with the same force and effect as though the
person who signed such Right Certificates had not ceased to be
such officer of the Company; and any Right Certificate may be
signed on behalf of the Company by any person who, at the actual
date of the execution of such Right
9
<PAGE>
Certificate, shall be a proper officer of the Company to sign
such Right 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 stock transfer
office or such other office designated by it for such purpose,
books for registration and transfer of the Right Certificates
issued hereunder. Such books shall show the name(s) and
address(es) of the holder(s) of each Right Certificate, the
number of Rights evidenced on its face by each Right Certificate,
the certificate number of each Right Certificate and the date of
each Right Certificate.
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates; Mutilated, Destroyed, Lost or
Stolen Right Certificates. (a) Subject to the provisions of
Sections 7(e), 7(f) and 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 Right Certificate or
Right Certificates may be transferred, split up, combined or
exchanged for another Right Certificate or other Right
Certificates entitling the registered holder to purchase a like
number of one one-hundredths of a Preferred Share (or other
securities, cash and/or assets, as the case may be) as the Right
Certificate or Right Certificates surrendered then entitled such
holder to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Right Certificate or Right
Certificates shall make such request in writing delivered to the
Rights Agent, and shall surrender the Right Certificate or Right
Certificates to be transferred, split up, combined or exchanged
at the principal stock transfer office of the Rights Agent or
such other office 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 Right Certificate unless and
until the registered holder shall have completed and signed the
certificate contained in the form of assignment on the reverse
side thereof and shall have provided such additional evidence of
the identity of the Beneficial Owner (or former Beneficial Owner)
or Associates and Affiliates of the foregoing as the Company
shall reasonably request. Thereupon the Rights Agent shall,
subject to Sections 7(e), 7(f) and 14 hereof, countersign and
deliver to the person entitled thereto a Right Certificate or
Right Certificates, as the case may be, as so requested. The
Company may require payment, by the holders of the Rights, of a
sum sufficient to cover any tax or governmental charge that may
be imposed in connection with any transfer, split up, combination
or exchange of Right Certificates.
(b) Subject to the provisions of Sections 7(e), 7(f)
and 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 Right Certificate, and, in case of
loss, theft or destruction, of an indemnity or security
reasonably satisfactory to the Company and the Rights Agent, 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 Right Certificate if
mutilated, the Company will make and deliver a new Right
Certificate of
10
<PAGE>
like tenor to the Rights Agent for countersignature and delivery
to the registered holder in lieu of the Right Certificate so
lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price,
Expiration Date of Rights. (a) Subject to Sections 7(e), 7(f),
9(e) and 11(a)(iii) hereof, the registered holder of any Right
Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein) in whole or in part at any time after
the Distribution Date upon surrender of the Right Certificate,
with the form of election to purchase and the certificate on the
reverse side thereof duly executed, to the Rights Agent at its
principal office or such other office designated by it for such
purpose, together with payment of the Purchase Price for each
one-hundredth of a Preferred Share (or other securities, cash
and/or assets, as the case may be) as to which the Rights are
exercised, at or prior to the earliest of (i) the close of
business on May 1, 2008 (the "Final Expiration Date"), (ii) the
date and time at which the Rights are redeemed as provided in
Section 23 hereof (the "Redemption Date"), (iii) the date and
time at which the Rights are exchanged as provided in Section 24
hereof, or (iv) the date and time at which the Rights expire
pursuant to Section 13(d) (such earliest date and time being
referred to herein as the "Expiration Date").
(b) The purchase price for each one one-hundredth of a
Preferred Share purchasable pursuant to the exercise of a Right
shall initially be $87.50, shall be subject to adjustment from
time to time as provided in Sections 11 and 13 hereof and shall
be payable in lawful money of the United States of America in
accordance with paragraph (c) below (the "Purchase Price").
(c) Except as otherwise provided herein, upon receipt
of a Right Certificate representing exercisable Rights, with the
form of election to purchase and the certificate duly executed,
accompanied by payment of the Purchase Price for the Preferred
Shares (or other securities, cash and/or assets, as the case may
be) to be purchased and an amount equal to any applicable
transfer tax (as determined by the Rights Agent) in cash, or by
certified check or bank draft payable to the order of the
Company, the Rights Agent shall, subject to Section 20(j) hereof,
thereupon promptly (i) (A) requisition from any transfer agent of
the Preferred Shares certificates (or make available, if the
Rights Agent is the transfer agent) for the number of Preferred
Shares to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests or
(B) if the Company has elected to deposit the Preferred Shares
issuable upon exercise of the Rights hereunder into a depositary,
requisition from the depositary agent depositary receipts
representing such number of one one-hundredths of a Preferred
Share as are to be purchased (in which case certificates for the
Preferred Shares represented by such receipts shall be deposited
by the transfer agent of the Preferred Shares with the depositary
agent) and the Company hereby directs the depositary agent to
comply with such request, (ii) when appropriate, requisition from
the Company the amount of cash to be paid in lieu of issuance of
fractional shares in accordance with Section 14 hereof, (iii)
after receipt of such certificates or depositary receipts, cause
the same to be delivered to or upon the order of the registered
holder of such
11
<PAGE>
Right Certificate, registered in such name or names as may be
designated by such holder and (iv) when appropriate, promptly
after receipt thereof, deliver any such cash to or upon the order
of the registered holder of such Right Certificate. In the event
that the Company is obligated to issue other securities of the
Company, pay cash and/or distribute other property pursuant to
Section 11 hereof, the Company will make all arrangements
necessary so that such other securities, cash and/or property are
available for distribution by the Rights Agent, if and when
appropriate. Notwithstanding the foregoing provisions of this
Section 7(c), the Company may suspend the issuance of Preferred
Shares or shares of Common Stock or other securities upon
exercise of a Right for a reasonable period, not in excess of
ninety (90) calendar days, during which the Company seeks to
register under the Securities Act of 1933, as amended (the
"Act"), and any applicable securities law of any other
jurisdiction, the Preferred Shares or shares of Common Stock or
such other securities to be issued pursuant to the Rights.
(d) In case the registered holder of any Right
Certificate shall exercise less than all the Rights evidenced
thereby, a new Right Certificate evidencing Rights equivalent to
the Rights remaining unexercised shall be issued by the Rights
Agent to the registered holder of such Right Certificate or to
his duly authorized assigns, subject to the provisions of
Sections 7(e), 7(f) and 14 hereof, or the Rights Agent shall
place an appropriate notation on the Right Certificate with
respect to those Rights exercised.
(e) Notwithstanding any other provision of this
Agreement to the contrary, from and after the Stock Acquisition
Date, any Rights beneficially owned by (i) an Acquiring Person or
any Affiliate or Associate thereof, (ii) a transferee of an
Acquiring Person (or of any Affiliate or Associate thereof) who
becomes a transferee concurrently with or after the Acquiring
Person becomes such, (iii) a transferee of an Acquiring Person
(or of any Affiliate or Associate thereof) who becomes a
transferee prior to the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether
or not for consideration) by the Acquiring Person to holders of
equity interests in such Acquiring Person (or any Affiliate or
Associate thereof) or to any Person with whom the Acquiring
Person (or any Affiliate or Associate thereof) has any continuing
agreement, arrangement or understanding (whether or not in
writing) regarding the transferred Rights or (B) a transfer which
the Board of Directors has determined is part of a plan,
arrangement or understanding (whether or not in writing) which
has as a purpose or effect the avoidance of this Section 7(e) or
of Section 11 or 13 with respect to the limitation of rights
beneficially owned by an Acquiring Person (or any Associate or
Affiliate thereof), or (iv) a subsequent transferee of any of the
foregoing, shall become null and void without any further action
and no existing or subsequent holder of such Rights shall have
any rights whatsoever with respect to such Rights, whether under
any provision of this Agreement or otherwise. No Right
Certificate shall be issued pursuant to Section 3 hereof that
represents Rights beneficially owned by an Acquiring Person whose
Rights would be void pursuant to the provisions of this Section
7(e) or any Associate or Affiliate thereof; no Right Certificate
shall be issued at any time upon the transfer of any Rights to an
Acquiring Person whose Rights would be void pursuant to
12
<PAGE>
the provisions of this Section 7(e) or any Associate or Affiliate
thereof or to any nominee of such Acquiring Person, Associate or
Affiliate; and any Right Certificate delivered to the Rights
Agent for transfer to an Acquiring Person whose Rights would be
void pursuant to the provisions of this Section 7(e) shall be
cancelled; provided, that if any Right Certificate that should
not have been issued, or should have been cancelled, pursuant to
this sentence is issued or is not cancelled, it shall
nevertheless be void as provided above in this Section 7(e). The
Company shall use all reasonable efforts to insure that the
provisions of this Section 7(e) hereof are complied with, but
shall have no liability to any holder of Right Certificates or
any other Person as a result of the failure to make any
determination with respect to an Acquiring Person or its
Affiliates or Associates or to transferees of the foregoing. The
Rights Agent shall use all reasonable efforts to comply with the
provisions hereof to the extent it has received instructions from
the Company concerning such matters.
(f) Notwithstanding any other provision of this
Agreement to the contrary, neither the Rights Agent nor the
Company shall be obligated to take any action whatsoever with
respect to a registered holder of any Right Certificate upon the
occurrence of any purported transfer or exercise as set forth in
this Section 7 unless and until the registered holder shall have
completed and signed the certificate contained in the form of
election to purchase shares set forth on the reverse side thereof
and shall have provided such additional evidence of the identity
of the Beneficial Owner and former Beneficial Owner (and
Associates and Affiliates of the foregoing) as the Company shall
reasonably request.
Section 8. Cancellation of Right Certificates. All
Right Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered
to the Company or to any of its agents, be delivered to the
Rights Agent for cancellation or in cancelled form, or, if
surrendered to the Rights Agent, shall be cancelled by it, and no
Right Certificate shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Rights
Agreement. The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel
and retire, any other Right Certificate purchased or acquired by
the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all cancelled Right Certificates to the
Company.
Section 9. Reservation and Availability of Capital
Stock. (a) The Company covenants and agrees that at all times
prior to the Stock Acquisition Date, it will cause to be reserved
and kept available out of its authorized and unissued Preferred
Shares or any authorized and issued Preferred Shares held in its
treasury, the number of Preferred Shares that will be sufficient
to permit the exercise in full of all outstanding Rights and,
after the Stock Acquisition Date, shall to the extent reasonably
practicable, so reserve and keep available a sufficient number of
its authorized and unissued shares of Common Stock and/or other
securities or out of its authorized and issued shares of Common
Stock and/or other securities held in its treasury which may be
required to permit the exercise in full of the Rights pursuant to
this Agreement.
13
<PAGE>
(b) The Company covenants and agrees that it will take
all such action as may be necessary to insure that all Preferred
Shares (and following the Stock Acquisition Date, shares of
Common Stock and/or other securities) delivered upon exercise of
Rights shall, at the time of delivery of the certificates for
such shares (subject to payment of the Purchase Price), be duly
and validly authorized and issued and fully paid and
nonassessable shares.
(c) The Company covenants and agrees that it will pay
when due and payable any and all U.S. federal and state transfer
taxes and charges which may be payable in respect of the issuance
or delivery of the Right Certificates or of any Preferred Shares
(or shares of 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 involved in the transfer or delivery
of Right Certificates to a person other than, or the issuance or
delivery of certificates or depositary receipts for Preferred
Shares (or shares of Common Stock and/or other securities, as the
case may be) in a name other than that of, the registered holder
of the Right Certificate evidencing Rights surrendered for
exercise or to issue or deliver any certificates or depositary
receipts for Preferred Shares (or shares of Common Stock and/or
other securities, as the case may be) upon the exercise of any
Rights until any such tax shall have been paid (any such tax
being payable by the holder of such Right Certificate at the time
of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
(d) So long as the Preferred Shares (or shares of
Common Stock and/or other securities, as the case may be)
issuable upon the exercise of the Rights may be listed on any
national securities exchange, the Company shall use its best
efforts to cause, from and after such time as the Rights become
exercisable, all shares reserved for such issuance to be listed
on such exchange upon official notice of issuance upon such
exercise.
(e) The Company shall use its best efforts to (i) file
as soon as practicable following the Stock Acquisition Date (or,
if required by law, at such earlier time following the
Distribution Date as so required) 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 and the rules and regulations thereunder)
until the earlier of (A) the date as of which the Rights are no
longer exercisable for such securities and (B) the expiration of
the Rights. The Company will also take such action as may be
appropriate to ensure compliance with the securities or "blue
sky" laws of the various states. The Company may temporarily
suspend, in accordance with applicable law, for a period of time
not to exceed ninety (90) calendar days after the date set forth
in clause (i) of the first sentence of this Section 9(e), the
exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. Upon
any such suspension, the Company shall issue a public
announcement, and shall promptly send written notice to the
14
<PAGE>
Rights Agent, stating that the exercisability of the Rights has
been temporarily suspended, as well as a public announcement at
such time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary,
the Rights shall not be exercisable in any jurisdiction if the
requisite qualification in such jurisdiction shall not have been
obtained, the exercise thereof shall not be permitted under
applicable law or a registration statement shall not have been
declared effective. The Rights Agent may assume that any Right
exercised is permitted to be exercised under applicable law and
shall have no liability for acting in reliance upon such
assumption.
Section 10. Preferred Share Record Date. Each Person
in whose name any certificate or depositary receipt for Preferred
Shares (or shares of 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 the
Preferred Shares (or shares of Common Stock and/or other
securities, as the case may be) represented thereby on, and such
certificate or depositary receipt shall be dated, the date upon
which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable
transfer taxes) was made; provided, however, that if the date of
such surrender and payment is a date upon which the transfer
books of the Company are closed, such Person shall be deemed to
have become the record holder of such shares on, and such
certificate or depositary receipt shall be dated, the next
succeeding Business Day on which the transfer books of the
Company are open. Prior to the exercise of the Rights evidenced
thereby, the holder of a Right 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 of
Shares or Number of Rights. The Purchase Price, the number and
kind of securities, or fractions thereof, 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 or pay a dividend on
the Preferred Shares payable in Preferred Shares, (B) subdivide
or split the outstanding Preferred Shares, (C) combine or
consolidate the outstanding Preferred Shares into a smaller
number of Preferred Shares or (D) issue any shares of its capital
stock in a reclassification of the Preferred Shares (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), the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of such
subdivision, split, combination, consolidation or
reclassification, and the number and kind of shares of Preferred
Shares or capital stock, as the case may be, issuable upon
exercise of a Right on such date, shall be proportionately
15
<PAGE>
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 Shares 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 transfer books of the Company were open, such
holder would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, split,
combination, consolidation or reclassification; provided,
however, that in no event shall the consideration to be paid upon
the exercise of one Right be less than the aggregate par value of
the shares of Preferred Shares or capital stock, as the case may
be, issuable upon exercise of one Right. If an event occurs which
would require an adjustment under both this Section 11(a)(i) and
Section 11(a)(ii), the adjustment provided for in this Section
11(a)(i) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii).
(ii) Immediately upon the Stock Acquisition Date,
proper provision shall be made so that each holder of a Right
(except as otherwise provided 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 and subject to Sections 9(e), 11(a)(iii) and 24,
in lieu of Preferred Shares, 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-hundredths of a Preferred Share for which a Right was or
would have been exercisable immediately prior to the Stock
Acquisition Date (whether or not such Right was then exercisable)
and (y) dividing that product by fifty percent (50%) of the
current market price per share of the Common Stock (determined
pursuant to Section 11(d) hereof) on the Stock Acquisition Date
(such number of shares being hereinafter referred to as the
"Adjustment Shares"); provided, however, if the transaction that
would otherwise give rise to the foregoing adjustment is also
subject to the provisions of Section 13 hereof, then only the
provisions of Section 13 hereof shall apply and no adjustment
shall be made pursuant to this Section 11(a)(ii).
(iii) In the event that the number of shares of Common
Stock which are authorized by the Company's certificate of
incorporation but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights is not sufficient
to permit the exercise in full of the Rights in accordance with
the foregoing clause (ii) of this Section 11(a), and the Rights
become so exercisable, the Company (acting by resolution of the
Board of Directors) shall:
(A) determine the excess of (1) the value of the
Adjustment Shares issuable upon the exercise of a Right
(the "Current Value") over (2) the then current Purchase
Price attributable to each Right (such excess being
referred to herein as the "Spread"), and
(B) with respect to each Right, make adequate
provision to substitute for the Adjustment Shares, upon
payment of the Purchase Price, (1)
16
<PAGE>
shares of Common Stock or other equity securities of the
Company (including, without limitation, shares, or units of
shares, of preferred stock which the Board of Directors has
deemed to have substantially the same value as shares of
Common Stock (such shares of preferred stock being referred
to herein as "Common Stock Equivalents")), (2) a reduction
in the Purchase Price, (3) cash, (4) debt securities of the
Company, (5) other assets, or (6) any combination of the
foregoing (provided, that in making any such provision,
Rights shall, to the fullest extent feasible in view of the
number of authorized shares of Common Stock not outstanding
or reserved for issuance for purposes other than upon
exercise of the rights, be exercisable for shares of Common
Stock), in each case having an aggregate value equal to the
Current Value, where such aggregate value has been
determined by the Board of Directors based upon the advice
of a nationally recognized investment banking firm selected
by the Board of Directors;
provided, however, that if the Company shall not have made
adequate provision to deliver value pursuant to clause (B) above
within thirty (30) calendar days following the Stock Acquisition
Date (the "Trigger Date"), then the Company shall be obligated to
deliver, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, shares of Common Stock
(to the extent available) and then, if necessary, cash,
securities and/or assets that have an aggregate value equal to
the Spread. Notwithstanding the immediately preceding sentence,
if the Board of Directors shall determine in good faith that it
is likely that sufficient additional shares of Common Stock could
be authorized for issuance upon exercise in full of the Rights,
the thirty (30) calendar day period set forth above may be
extended to the extent necessary, but not to more than ninety
(90) calendar days after the Trigger Date, in order that the
Company may seek stockholder approval for the authorization of
such additional shares (such period, as it may be extended, being
referred to herein as the "Substitution Period"). To the extent
that the Company determines that some action need be taken
pursuant to the foregoing provisions of this Section 11(a)(iii),
the Company (x) shall provide, subject to Section 7(e), that such
action shall apply uniformly to all outstanding Rights and (y)
may suspend the exercisability of the Rights until the expiration
of the Substitution Period in order to seek any authorization of
additional shares and/or to decide the appropriate form of
distribution to be made pursuant to the first sentence of this
Section 11(a)(iii) and to determine the value thereof. In the
event of any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has
been temporarily suspended, as well as a public announcement at
such time as the suspension is no longer in effect, in each case
with prompt notice to the Rights Agent. For purposes of this
Section 11(a)(iii), the terms of any Common Stock Equivalent
shall be determined so that the per share or per unit value of
such Common Stock Equivalent shall have the same value as the
"current market price" per share of Common Stock (as determined
pursuant to Section 11(d) hereof on the date of the first
occurrence of the Stock Acquisition Date).
17
<PAGE>
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of
Preferred Shares entitling them (for a period expiring within
forty-five (45) calendar days after such record date) to
subscribe for or purchase Preferred Shares (or shares having
substantially the same rights, privileges, and preferences as the
Preferred Shares ("Equivalent Preferred Shares")) or securities
convertible into Preferred Shares or Equivalent Preferred Shares
at a price per Preferred Share or Equivalent Preferred Share (or
having a conversion price per share, if a security convertible
into Preferred Shares or Equivalent Preferred Shares) less than
the current market price per Preferred Share (as determined
pursuant to Section 11(d) hereof) 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, of which the
numerator shall be the number of Preferred Shares and Equivalent
Preferred Shares outstanding on such record date plus the number
of Preferred Shares which the aggregate offering price of the
total number of Preferred Shares and/or Equivalent Preferred
Shares to be so offered (and/or the aggregate initial conversion
price of the convertible securities to be so offered) would
purchase at such current market price and of which the
denominator shall be the number of Preferred Shares and
Equivalent Preferred Shares outstanding on such record date plus
the number of additional Preferred Shares and/or Equivalent
Preferred Shares 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 in a consideration part or all of which shall be in a form
other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors, whose
determination shall be described in a statement filed with the
Rights Agent. Preferred Shares owned by or held for the account
of the Company or any of its Subsidiaries 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 again 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
the making of a distribution to all holders of Preferred Shares
(including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation) of evidences of indebtedness or assets
(other than a regular quarterly cash dividend at a rate per
Preferred Share not in excess of the greater of (x) two hundred
(200) times the rate of the last quarterly cash dividend per
share of Common Stock theretofore paid and (y) $5.00 per quarter,
or a dividend payable in Preferred Shares) or subscription rights
or warrants (excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the
numerator of which shall be the current market price per
Preferred Share (as determined pursuant to Section 11(d) hereof)
on such record date, less the fair market value (as determined in
good faith by the Board of Directors, whose determination shall
be described in a statement filed with the Rights Agent) of the
portion of the assets or evidences of indebtedness so to be
18
<PAGE>
distributed or of such subscription rights or warrants applicable
to one Preferred Share and of which the denominator shall be such
current market price per Preferred Share. 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 again be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder,
and subject to Section 11(d)(ii), the "current market price" for
any security (a "Security" for purposes of this Section 11(d)(i))
on any date shall be deemed to be the average of the daily
closing prices per share of such Security for the thirty (30)
consecutive Trading Days immediately prior to such date;
provided, however, that in the event that the current market
price per share of the Security is determined during a period
following the announcement by the issuer of such Security of a
dividend or distribution on such Security payable in such
Security or securities convertible into or exercisable or
exchangeable for such Security, or any subdivision, split,
combination, consolidation or reclassification of such Security,
and prior to the expiration of thirty (30) Trading Days after the
ex-dividend date for such dividend or distribution or the record
date for such subdivision, split, combination, consolidation or
reclassification, then, and in each such case, the current market
price shall be appropriately adjusted to reflect ex-dividend or
ex-distribution trading. The closing price for each day shall be
the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock
Exchange, Inc. ("NYSE") or, if the Security is not listed or
admitted to trading on the NYSE, as reported in the principal
consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange
on which the Security is listed or admitted to trading or, if the
Security is 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 or any
successor ("NASDAQ") or such other system then in use, or, if on
any such date the Security is 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
Security selected by the Board of Directors. If on such date no
such market maker is making a market in the Security, the fair
value of such shares on such date as determined in good faith by
the Board of Directors shall be used, such determination to be
described in a statement filed with the Rights Agent. The term
"Trading Day" shall mean a day on which the principal national
securities exchange on which the Security is listed or admitted
to trading is open for the transaction of business or, if the
Security is not listed or admitted to trading on any national
securities exchange but is quoted on NASDAQ, a day on which
NASDAQ is in operation or if the Security is neither listed nor
admitted to trading on any national securities exchange nor
quoted on NASDAQ, a Business Day.
19
<PAGE>
(ii) For the purpose of any computation hereunder, the
"current market price" of the Preferred Shares shall be
determined in accordance with the method set forth in Section
11(d)(i), except that if the Preferred Shares are not publicly
traded, the "current market price" of the Preferred Shares shall
be conclusively deemed to be the current per share market price
of the Common Stock as determined pursuant to Section 11(d)(i),
multiplied by one hundred (as such number may be appropriately
adjusted for stock splits, stock dividends, recapitalizations and
similar events after the date of this Agreement). If neither the
shares of Common Stock nor the Preferred Shares are publicly held
or so listed or traded, the "current per share market price"
shall mean the fair value per share as determined in good faith
by an independent investment banking firm selected in good faith
by the Board of Directors, whose determination shall be described
in a statement filed with the Rights Agent and shall be
conclusive for all purposes.
(e) Notwithstanding any other provision of this
Agreement to the contrary, 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 such 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 security or to the nearest one one-millionth of a
Preferred Share. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall
be made no later than the earlier of (i) three years from the
date of the transaction which mandates such adjustment and (ii)
the date of the expiration of the right to exercise any Rights.
(f) In the event that at any time, as a result of an
adjustment made pursuant to Section 11(a) or Section 13(a), the
holder of any Right thereafter exercised shall become entitled to
receive any securities other than Preferred Shares, thereafter
the number or amount of such other securities so receivable upon
exercise of any Right 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 securities 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 of this
Agreement with respect to the Preferred Shares shall apply on
like terms to any such other securities.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price hereunder
shall evidence the right to purchase, at the adjusted Purchase
Price, the number of one one-hundredths of a Preferred Share
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) of this Agreement, upon
each adjustment of the Purchase Price as a result of the
calculations made in Section 11(b) and (c) of this Agreement,
each Right outstanding
20
<PAGE>
immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of one one-hundredths of a Preferred
Share (calculated to the nearest one one-millionth of a Preferred
Share) obtained by (i) multiplying (x) the number of one
one-hundredths of a Preferred Share covered by a Right
immediately prior to such 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 substitution for any adjustment in the number of one
one-hundredths of a Preferred Share purchasable upon the exercise
of a Right. Each of the Rights outstanding after such adjustment
of the number of Rights shall be exercisable for the number of
one one-hundredths of a Preferred Share for which it was
exercisable immediately prior to such adjustment. Each Right held
of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest one
ten-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement of
its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the
date on which the Purchase Price is adjusted or any day
thereafter, but, if the Right Certificates have been issued,
shall be at least ten (10) calendar days later than the date of
the public announcement. If Right 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 Right
Certificates on such record date, Right 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 Right
Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to
which such holders shall be entitled after such adjustment. Right
Certificates so to be distributed shall be issued, executed and
countersigned in the manner provided for herein (and may bear, at
the option of the Company, the adjusted Purchase Price) and shall
be registered in the names of the holders of record of Right
Certificates on the record date specified in the public
announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of one one-hundredths of a Preferred
Share issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to
express the Purchase Price per share and the number of one
one-hundredths of a Preferred Share which were expressed in the
initial Right Certificates issued hereunder.
21
<PAGE>
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below one-hundredth of the
then par value, if any, of the Preferred Shares 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 Preferred Shares at such adjusted Purchase
Price.
(l) In any case in which this Section 11 shall require
that an adjustment in the Purchase Price be made effective as of
a record date for a specified event, the Company may elect to
defer until the occurrence of such event the issuing to the
holder of any Right exercised after such record date of the
Preferred Shares and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the
Preferred Shares 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 upon the occurrence of the event
requiring such adjustment.
(m) Notwithstanding any provision of this Section 11
to the contrary, 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 the Board of Directors shall, in its sole
discretion determine to be advisable in order that any (i)
consolidation or subdivision of the Preferred Shares, (ii)
issuance wholly for cash of any Preferred Shares at less than the
current market price, (iii) issuance wholly for cash of Preferred
Shares or securities which by their terms are convertible into or
exercisable or exchangeable for Preferred Shares, (iv) stock
dividends or (v) issuance of rights, options or warrants referred
to hereinabove in this Section 11, hereafter made by the Company
to holders of its Preferred Shares shall not be taxable to such
stockholders.
(n) The Company covenants and agrees that it shall
not, at any time after the Distribution Date, (i) consolidate
with any other Person (other than a wholly-owned Subsidiary of
the Company in a transaction which does not violate Section 11(o)
hereof), (ii) merge with or into any other Person (other than a
wholly-owned Subsidiary of the Company in a transaction which
does not violate 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 fifty percent (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 does not violate Section 11(o)
hereof), if (x) at the time of or immediately after such
consolidation, merger, sale or transfer there are any charter or
by-law provisions or any rights, warrants or other instruments or
securities outstanding or agreements in effect or other actions
taken, which would materially diminish or otherwise eliminate the
benefits intended to be afforded by the Rights or (y) prior to,
simultaneously with or immediately after such consolidation,
merger or sale, the stockholders of the Person
22
<PAGE>
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. The Company shall not consummate
any such consolidation, merger, sale or transfer unless prior
thereto the Company and such other Person shall have executed and
delivered to the Rights Agent a supplemental agreement evidencing
compliance with this Section 11(n).
(o) The Company covenants and agrees that, after a
Stock Acquisition Date it will not, except as permitted by
Section 24 or Section 27 hereof, take (or permit any
Subsidiary to take) any action the purpose of which is to, or if
at the time such action is taken it is reasonably foreseeable
that the effect of such action is to, materially diminish or
eliminate the benefits intended to be afforded by the Rights.
(p) Notwithstanding any other provision of this
Agreement to the contrary, in the event that the Company shall,
at any time after the date of this Agreement and prior to the
Distribution Date, (i) declare or pay any dividend on the
outstanding shares of Common Stock payable in shares of Common
Stock (other than the Stock Split), (ii) subdivide the
outstanding shares of Common Stock, (iii) combine or consolidate
the outstanding shares of Common Stock into a smaller number of
shares, or (iv) effect a reclassification of its outstanding
shares of Common Stock, the number of one one-hundredths of a
Preferred Share so purchasable after such event upon proper
exercise of each Right shall be determined by multiplying the
number of one one-hundredths of a Preferred Share so purchasable
immediately prior to such event by a fraction, the numerator of
which shall be the total number of shares of Common Stock
outstanding immediately prior to such event and the denominator
of which shall be the total number of shares of Common Stock
outstanding immediately following such event. The adjustments
provided for in this Section 11(p) shall be made successively
whenever such a dividend is declared or paid or such a
subdivision, combination or consolidation is effected. If an
event occurs which would require an adjustment under Section
11(a)(ii) and this Section 11(p), the adjustments provided for in
this Section 11(p) shall be in addition and prior to any
adjustment required pursuant to Section 11(a)(ii).
Section 12. Certification of Adjusted Purchase Price
or Number of Shares. Whenever an adjustment is made as provided
in Sections 11 or 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 Shares or the shares of Common Stock a copy of
such certificate. The Rights Agent shall be fully protected in
relying on such certificate and on any adjustment contained
therein and shall not be deemed to have knowledge of any such
adjustment unless and until it shall have received such
certificate.
Section 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power. (a) In the event (a "Section 13
Event") that, following the Stock Acquisition Date,
23
<PAGE>
directly or indirectly, (x) the Company shall consolidate with,
or merge with and into, any Person or Persons, (y) any Person or
Persons shall consolidate with, or merge with and into, the
Company, and the Company shall be the continuing or surviving
corporation of such consolidation or merger (other than, in the
case of any transaction described in (x) or (y), a merger or
consolidation which would result in all of the securities
generally entitled to vote in the election of directors ("voting
securities") of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by
being converted into securities of the surviving entity) all of
the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation and
holders of such securities not having changed as a result of such
merger or consolidation), or (z) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall sell
or otherwise transfer), in one or a series of related
transactions, assets or earning power aggregating more than fifty
percent (50%) of the assets or earning power of the Company and
its Subsidiaries (taken as a whole and calculated on the basis of
the Company's most recent regularly prepared financial
statements) to any Person or Persons (other than the Company or
any Subsidiary of the Company in one or more transactions each of
which does not violate Section 11(o) hereof), then, and in each
such case (except as provided in 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 and in lieu of the Preferred Shares, shares of Common
Stock and other securities or assets of the Company, such number
of validly authorized and issued, fully paid, non-assessable and
freely tradable shares of Common Stock of the Principal Party,
not subject to any liens, encumbrances, rights of first refusal,
preemptive rights or other adverse claims, as shall be equal to
the result obtained by (A) multiplying the then current Purchase
Price by the number of one one-hundredths of a Preferred Share
for which a Right was exercisable immediately prior to the first
occurrence of a Section 13 Event (without taking into account any
adjustment previously made pursuant to Section 11(a)(ii)) and (y)
dividing that product by fifty percent (50%) of the current
market price per share of the Common Stock of such Principal
Party (determined pursuant to Section 11(d) hereof) on the date
of consummation of such Section 13 Event; (ii) such Principal
Party shall thereafter be liable for, and shall assume, by virtue
of such Section 13 Event, all the obligations and duties of the
Company pursuant to this Agreement; (iii) the term "Company"
shall thereafter be deemed to refer to such Principal Party, it
being specifically intended that the provisions of Section 11
hereof shall apply only to such Principal Party following the
first occurrence of a Section 13 Event; and (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 accordance with Section 9 hereof (applying the provisions
thereof with respect to Preferred Shares of the Company to the
shares of Common Stock of such Principal Party)) in connection
with such consummation as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as
reasonably may be possible, in relation to the shares of its
Common Stock thereafter deliverable upon the exercise of the
Rights.
24
<PAGE>
(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 Common Stock of the Company is converted in such
merger or consolidation, or, if there is more than one such
issuer, the issuer of whose Common Stock has the greatest
aggregate market value or (B) if no securities are so
issued, the Person that is the other party to such merger
or consolidation, or, if there is more than one such
Person, the Person whose Common Stock has the greatest
aggregate market value (including, if applicable, the
Company if it is the surviving corporation); 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 the Person receiving the
greatest portion of the assets or earning power cannot be
determined, whichever of such Persons whose Common Stock
has the greatest aggregate market value;
provided, however, that in any of the cases described in Section
13(b)(i) or (b)(ii) above, (1) if the shares of Common Stock of
such Person are not at such time and have 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 shares of Common Stock
of which are and have 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
shares of Common Stock of two or more of which are and have been
so registered, "Principal Party" shall refer to whichever of such
Persons whose Common Stock has the greatest aggregate market
value; 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
ventures 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 shall have a sufficient number of its authorized shares of
Common Stock which have not been issued or reserved for issuance
to permit the exercise in full of the Rights in accordance with
this Section 13 and unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights
Agent a supplemental agreement providing for the terms set forth
in paragraphs (a) and (b) of this Section 13 and that all rights
of first refusal or preemptive rights in respect of the issuance
of shares of Common Stock of the Principal Party upon exercise of
the outstanding Rights have
25
<PAGE>
been waived and that such transaction shall not result in a
default by the Principal Party under this Agreement, and further
providing that, as soon as practicable after the date of any
consolidation, merger, sale or transfer mentioned in paragraph
(a) of this Section 13, the Principal Party at its own expense
shall:
(i) prepare and file a registration statement
under the Act with respect to the Rights and the securities
purchasable upon the exercise of the Rights on an appropriate
form, and use its best efforts to cause such registration
statement to become effective as soon as practicable after such
filing and to remain effective (with a prospectus at all times
meeting the requirements of the Act) until the Final Expiration
Date;
(ii) use its best efforts to qualify or register
the Rights and the securities purchasable upon exercise of the
Rights under the blue sky laws of such jurisdictions as may be
necessary or appropriate;
(iii) deliver to holders of the Rights historical
financial statements for the Principal Party which comply in all
respects with the requirements for registration on Form 10 under
the Exchange Act; and
(iv) use its best efforts to list (or continue
the listing of) the Rights and the securities purchasable upon
exercise of the Rights on a national securities exchange or to
meet the eligibility requirements for quotation on NASDAQ.
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 Stock Acquisition Date, the
Rights which have not theretofore been exercised pursuant to
Section 11(a)(ii) shall thereafter become exercisable in the
manner described in Section 13(a).
(d) Notwithstanding any other provision of 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 an
Approved Offer (or an Affiliate of any such Person or Persons) as
promptly as reasonably practical (and in any event within one
year) following consummation of such Approved Offer; (ii) the
price per share of Common Stock offered in such transaction is
not less than the price per share of Common Stock paid to all
holders of Common Stock whose shares were purchased pursuant to
such Approved Offer; and (iii) the form of consideration offered
in such transaction is the same as the form of consideration paid
pursuant to such Approved Offer. Upon consummation of any such
transaction contemplated by this Section 13(d), all Rights
hereunder shall expire.
(e) In case the Principal Party which is to be a party
to a transaction referred to in this Section 13 has provision in
any of its authorized securities or in its Certificate of
Incorporation or By-Laws or other instrument governing its
corporate affairs, which
26
<PAGE>
provision would have the effect of (i) causing such Principal
Party to issue, in connection with, or as a consequence of, the
consummation of a transaction referred to in this Section 13,
shares of Common Stock of such Principal Party at less than the
then current market price per share (determined pursuant to
Section 11(d) hereof) or securities exercisable or exchangeable
for, or convertible into, Common Stock of such Principal Party at
less than such then current market price (other than to holders
of Rights pursuant to this Section 13) or (ii) providing for any
special payment, tax or similar provisions in connection with the
issuance of the Common Stock of such Principal Party pursuant to
the provisions of Section 13, then, in such event, the Company
shall not consummate any such transaction unless prior thereto
the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing
that the provision in question of such Principal Party shall have
been cancelled, waived or amended, or that the authorized
securities shall be redeemed, so that the applicable provision
will have no effect in connection with, or as a consequence of,
the consummation of the proposed transaction.
(f) In no event shall the Rights Agent have any
liability in respect of any such Principal Party transaction,
including without limitation, the propriety thereof. The Rights
Agent may rely and be fully protected in relying upon a
certificate of the Company stating that the provisions of this
Section 13 have been fulfilled. Notwithstanding anything in this
Agreement to the contrary, the prior written consent of the
Rights Agent must be obtained in connection with any supplemental
agreement which alters the rights or duties of the Rights Agent.
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 hereof) or to distribute Right Certificates which
evidence fractional Rights. In lieu of such fractional Rights,
there shall be paid to the registered holders of the Right
Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same
fraction of the current market value of a whole Right. For the
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 NYSE or, if the Rights are not listed or admitted
to trading on the NYSE, as reported in the principal consolidated
transaction reporting system with respect to securities listed on
the principal national securities exchange on which the 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
27
<PAGE>
market maker making a market in the Rights, as selected by the
Board of Directors. If on any such date the Rights are not quoted
by any such organization and no professional market maker is
making such a market in the Rights, the fair value of the Rights
on such date as determined in good faith by the Board of
Directors shall be used.
(b) The Company shall not be required to issue
fractions of Preferred Shares (other than fractions which are
integral multiples of one one-hundredth of a Preferred Share)
upon exercise of the Rights or to distribute certificates which
evidence fractional Preferred Shares (other than fractions which
are integral multiples of one one-hundredth of a Preferred
Shared). Fractions of Preferred Shares in integral multiples of
one one-hundredth of a Preferred Share 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 Preferred Shares represented by such
depositary receipts. In lieu of fractional Preferred Shares that
are not integral multiples of one one-hundredth of a Preferred
Share, the Company shall pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the
current market value of one Preferred Share. For purposes of this
Section 14(b), the current market value of a Preferred Share
shall be the closing price of a Preferred Share (as determined
pursuant to the second sentence of Section 11(d)(i) hereof) for
the Trading Day immediately prior to the date of such exercise.
(c) Following the occurrence of the Stock Acquisition
Date or a Section 13 Event, the Company shall not be required to
issue fractions of shares of its Common Stock upon exercise of
the Rights or to distribute certificates which evidence
fractional shares of its Common Stock. In lieu of fractional
shares of its Common Stock, the Company may pay to the registered
holders of Right Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one share of its Common
Stock. For purposes of this Section 14(c), the current market
value of one share of Common Stock of the Company shall be the
closing price of one share of Common Stock of the Company (as
determined pursuant to 11(d)(i)) for the Trading Day immediately
prior to the date of such exercise.
(d) The holder of a Right by the acceptance thereof
expressly waives any right to receive any fractional Rights or
any fractional shares upon exercise of a Right (except as
provided above).
Section 15. Rights of Action. All rights of action in
respect of this Agreement, other than the rights of action vested
in the Rights Agent pursuant to Section 18, are vested in the
respective registered holders of the Right Certificates (and,
prior to the Distribution Date, the registered holders of the
shares of Common Stock); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the shares of
Common
28
<PAGE>
Stock), without the consent of the Rights Agent or of the holder
of any other Right Certificate (or, prior to the Distribution
Date, any holder of the shares of Common Stock), may, on his or
her own behalf and for his or her 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 or her
right to exercise the Rights evidenced by such Right Certificate
in the manner provided in such Right 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 will
be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of the
obligations of any Person subject to, this Agreement.
Section 16. Agreement of Right 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 simultaneously and together with the transfer
of shares of Common Stock;
(b) after the Distribution Date, the Right
Certificates are transferable only on the registry books of the
Rights Agent if surrendered at the principal office or such other
office of the Rights Agent designated for such purpose, duly
endorsed or accompanied by a proper instrument of transfer and
with the appropriate forms and certificates fully executed;
(c) subject to Section 6, Section 7(f) and Section
11(a) hereof, the Company and the Rights Agent may deem and treat
the person in whose name the Right Certificate (or, prior to the
Distribution Date, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or
writing on the Right 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 shall be required to be affected by any notice
to the contrary; and
(d) notwithstanding any other provision of 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, that the
Company must use its best efforts to have any such injunction,
order, decree or ruling lifted, dissolved or otherwise overturned
as soon as possible.
29
<PAGE>
Section 17. Right Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Right Certificate shall
be entitled to vote, receive dividends or be deemed for any
purpose the holder of Preferred Shares 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 Right Certificate be construed to confer upon
the holder of any Right 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 other
distributions or to exercise any preemptive or subscription
rights, or otherwise, until the Right or Rights evidenced by such
Right Certificate shall have been exercised in accordance with
the provisions hereof.
Section 18. Concerning the Rights Agent. The Company
agrees to pay to the Rights Agent such compensation as shall be
agreed in writing between the Company and the Rights Agent for
all services rendered by it hereunder and, from time to time, on
demand of the Rights Agent, its reasonable expenses and counsel
fees and other disbursements 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 and all
loss, liability, damage, claim or expense, incurred without gross
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.
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 Right 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, opinion, statement, or other paper or document
believed by it to be genuine and to be signed and executed by the
proper person or persons and, where necessary, to be verified or
acknowledged.
The provisions of this Section 18 shall survive the
expiration of the Rights and the termination of this Agreement.
Section 19. Merger or Consolidation or Change of Name
of Rights Agent. 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 all or
substantially all the corporate trust or stock transfer business
of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any
30
<PAGE>
further act on the part of any of the parties hereto, provided
that such corporation would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21 hereof.
In case at the time such successor Rights Agent shall succeed to
the agency created by this Agreement, any of the Right
Certificates shall have been countersigned but not delivered, any
such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Right Certificate so
countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Right Certificate either in the
name of the predecessor Rights Agent or in the name of the
successor Rights Agent; and in all such cases such Right
Certificate shall have the full force provided in the Right
Certificate and in this Agreement.
In case at any time the name of the Rights Agent shall
be changed and at such time any of the Right Certificates shall
have been countersigned but not delivered, the Rights Agent may
adopt the countersignature under its prior name and deliver Right
Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the
Rights Agent may countersign such Right Certificates either in
its prior name or in its changed name; and in all such cases such
Right Certificates shall have the full force provided in the
Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes only those duties and obligations imposed by this
Agreement upon the following terms and conditions, and no implied
duties or obligations shall be read into this Agreement against
the Rights Agent, by all of which the Company and the holders of
Right Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel of
its own selection (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 or any Affiliate or
Associate thereof and the determination of the current market
price per share of any Security) be proved or established by the
Company prior to taking or suffering any action hereunder, such
fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by the Chairman of
the Board, the Chief Executive Officer, the President, any Vice
President, the Treasurer or the 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
by it in good faith under the provisions of this Agreement in
reliance upon such certificate.
31
<PAGE>
(c) The Rights Agent shall be liable hereunder only for
its own gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained in
this Agreement or in the Right Certificates (except its
countersignature thereof), or be required to verify the same, but
all such statements and recitals are and shall be deemed to have
been made by the 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 Right 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 Right Certificate; nor shall it be responsible for any
change in the exercisability of the Rights (including Rights
becoming null and void pursuant to Section 7(e) hereof); nor
shall it be responsible for any adjustment required under the
provisions of Sections 11 or 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 Right Certificates after the Rights Agent's actual
receipt of a certificate described in Section 12 hereof); nor
shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation
of any Preferred Shares or shares of Common Stock or other
securities to be issued pursuant to this Agreement or any Right
Certificate or as to whether any Preferred Shares or shares of
Common Stock or other securities will, when issued, be validly
authorized and issued, fully paid and nonassessable; and nor
shall it be responsible for the legality of the terms hereof in
its capacity as an administrative agent.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed
to accept instructions with respect to the performance of its
duties hereunder from the Chairman of the Board, the Chief
Executive Officer, the President, any Vice President, the
Treasurer or the Secretary 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
suffered to be taken by it in good faith in accordance with
instructions of any such officer or for any delay in acting while
waiting for such instructions. Any application by the Rights
Agent for written instructions from the Company may, at the
option of the Rights Agent, set forth in writing any action
proposed to be taken or omitted by the Rights Agent under this
Rights Agreement and the date on and/or after which such action
shall be taken or such omission shall be effective. The Rights
Agent shall not be liable for any action taken by, or omission
of, the Rights
32
<PAGE>
Agent in accordance with a proposal included in any such
application on or after the date specified in such application
(which date shall not be less than five (5) Business Days after
the date any officer of the Company actually receives such
application, unless any such officer shall have consented in
writing to an earlier date) unless, prior to taking any such
action (or the effective date in the case of an omission), the
Rights Agent shall have received written instructions in response
to such application specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal in
any of the Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the Company
may be interested, or contract with or lend money to the Company
or otherwise act as fully and freely as though it were not Rights
Agent under this Agreement. Nothing herein shall
preclude the Rights Agent from acting in any other capacity for
the Company or for any other legal entity, except it may not act
for an Acquiring Person in an investment banking capacity, or
otherwise assist an Acquiring Person in ways hostile to the
Company, without the written consent of the Company.
(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, omission, default, neglect or misconduct of any such
attorneys or agents or for any loss to the Company resulting from
any such act, omission, default, neglect or misconduct, provided
reasonable care was exercised in the selection thereof.
(j) 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 any item
therein, the Rights Agent shall not take any further action with
respect to such requested exercise or transfer without first
consulting with the Company.
(k) 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.
(l) In addition to the foregoing, the Rights Agent
shall be protected and shall incur no liability for, or in
respect of, any action taken or omitted by it in connection with
its administration of this Agreement if such acts or omissions
are in reliance upon (i) the proper execution of the certificates
concerning beneficial ownership appended to the form of
assignment and the form of election to purchase attached hereto
unless the Rights Agent shall have actual knowledge that, as
executed, any such certificate is untrue, or (ii) the non-
33
<PAGE>
execution of any such certificate including, without limitation,
any refusal to honor any otherwise permissible assignment or
election by reason of such non-execution.
(m) The Company agrees to give the Rights Agent prompt
written notice of any event or ownership which would prohibit the
exercise or transfer of the Right Certificates.
Section 21. Change of Rights Agent. The Rights Agent
or any successor Rights Agent may resign and be discharged from
its duties under this Agreement upon thirty (30) days' notice in
writing mailed to the Company and to each transfer agent of the
Common Stock by registered or certified mail. The Company may
remove the Rights Agent or any successor Rights Agent upon thirty
(30) days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer
agent of the Common Stock and Preferred Shares by registered or
certified mail. If the Rights Agent shall resign or be removed or
shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall
fail to make such appointment within a period of sixty (60) 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 Right
Certificate (who shall, with such notice, submit his or her Right
Certificate for inspection by the Company), then the Rights Agent
or the registered holder of any Right Certificate may apply at
the expense of the Company 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, bank or trust company organized and doing
business under the laws of the United States or of the State of
New York (or 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 New York) in good standing, having an office in
the State of New York, which is authorized under such laws to
exercise corporate trust or stock transfer powers and is subject
to supervision or examination by federal or state authority and
which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50,000,000. 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 Preferred Shares,
and mail a notice thereof in writing to the registered holders of
the Right Certificates. Failure to give any notice provided for
in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of
the Rights Agent or the appointment of the successor Rights
Agent, as the case may be. Notwithstanding the foregoing
provision, in the event of resignation, removal or incapacity
34
<PAGE>
of the Rights Agent, the Company shall have the authority to act
as the Rights Agent until a successor Rights Agent shall have
assumed the duties of the Rights Agent hereunder.
Section 22. Issuance of New Right Certificate.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new
Right Certificates evidencing Rights in such form as may be
approved by the Board of Directors to reflect any adjustment or
change in the Purchase Price and the number or kind or class of
shares of stock or other securities or property purchasable under
the Right Certificates made in accordance with the provisions of
this Agreement.
In addition, in connection with the issuance or sale
of shares of Common Stock following the Distribution Date (other
than upon exercise or exchange of a Right) and
prior to the Expiration Date, the Company, subject to Section
7(e) hereof, (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, or upon the exercise,
conversion or exchange of securities, notes or debentures issued
by the Company, and (b) may, in any other case, if deemed
necessary or appropriate by the Board of Directors, issue Right
Certificates representing the appropriate number of Rights in
connection with such issuance or sale; provided, however, that
(i) the Company shall not be obligated to issue any Right
Certificate 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. (a) The Company may, by
resolution of the Board of Directors, at its option, at any time
prior to the earlier of (x) the Stock Acquisition Date and (y)
the close of business on the Final Expiration Date, redeem all
but not less than all of the then outstanding Rights at a
redemption price of $0.01 per Right, as such amount may be
appropriately adjusted to reflect any stock split, stock dividend
or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the "Redemption
Price"). The redemption of the Rights by the Board of Directors
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. 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 determined pursuant to Section
11(d)(i) hereof) or any other form of consideration deemed
appropriate by the Board of Directors.
(b) Immediately upon adoption of an effective
resolution of the Board of Directors ordering the redemption of
the Rights in compliance with Section 23(a) (or upon the
subsequent satisfaction of all conditions to such redemption
established by such resolution), evidence of which shall have
been filed with the Rights Agent, and without any further action
and without any notice, the right to exercise the Rights will
terminate and the
35
<PAGE>
only right thereafter of the holders of Rights shall be to
receive the Redemption Price. Within ten (10) Business Days after
the action of the Board of Directors ordering the redemption of
the Rights (or such subsequent satisfaction of all such
conditions), the Company shall give notice of such redemption to
the holders of the then outstanding Rights by mailing such notice
to all such holders at their last addresses as they appear upon
the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent
for the shares of Common Stock. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of redemption will
state the method by which the payment of the Redemption Price
will be made. Neither the Company nor any of its Affiliates or
Associates may redeem, acquire or purchase any Rights at any time
in any manner other than that specifically set forth in this
Section 23 or in Section 24 hereof, and other than in connection
with the repurchase of shares of Common Stock of the Company
prior to the Distribution Date.
(c) In the event that the Board of Directors adopts an
effective resolution ordering the redemption of the Rights in
compliance with Section 23(a), the Company may, at its option,
discharge all of its obligations with respect to the Rights by
(i) issuing a press release announcing the manner of redemption
of the Rights in accordance with this Agreement and (ii) mailing
payment of the Redemption Price to the registered holders of the
Rights at their last addresses as they appear on the registry
books of the Rights Agent or, prior to the Distribution Date, on
the registry books of the transfer agent of the Common Stock, and
upon such action, all outstanding Rights and Right Certificates
shall be null and void without any further action by the Company.
Section 24. Exchange. (a) The Board of Directors may,
at its option, at any time after the Stock Acquisition Date
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 (or Common Stock Equivalents) 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 any
Company Entity), together with all Affiliates and Associates of
such Person, becomes the Beneficial Owner of fifty percent (50%)
or more of the shares of Common Stock then outstanding.
(b) Immediately upon the action of the Board of
Directors ordering the exchange of Rights pursuant to and in
compliance with subsection (a) of this Section 24 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, which excludes Rights that have become void
pursuant to the provisions of Section 7(e) hereof, shall be to
receive that number of shares of Common Stock, or Common Stock
Equivalents, equal to the number of
36
<PAGE>
such Rights held by such holder multiplied by the Exchange Ratio.
The Company shall promptly file notice of such Board action with
the Rights Agent and give public notice of any such exchange;
provided, however, that the failure to give, or any defect in,
such notice shall not affect the validity of such exchange. The
Company shall promptly mail a notice of any such exchange to all
of the holders of such Rights at their last addresses as they
appear upon the registry books of the Rights Agent. Any notice
which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such
notice of exchange will state the method by which the exchange of
the 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)) held by
each holder of Rights.
(c) In the event that there shall not be sufficient
shares of Common Stock issued but not outstanding or authorized
but unissued 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.
(d) The Company shall not be required, pursuant to
this Section 24, 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 value of a whole share
of Common Stock. For the purposes of this paragraph (d), the
current market value of a whole share of Common Stock shall be
the closing price of a share of Common Stock (as determined
pursuant to the second sentence of Section 11(d)(i) hereof) for
the Trading Day immediately prior to the date of exchange
pursuant to this Section 24, and the value of any Common Stock
Equivalent shall be deemed to have the same current market value
as the Common Stock on such date.
Section 25. Notice of Certain Events. (a) In case the
Company shall propose (a) to pay any dividend payable in stock of
any class to the holders of its Preferred Shares (or, after the
Distribution Date, holders of the shares of Common Stock) or to
make any other distribution to the holders of its Preferred
Shares (or, after the Distribution Date, holders of the shares of
Common Stock), other than a regular quarterly cash dividend at a
rate per Preferred Share not in excess of the greater of (x) two
hundred (200) times the rate of the last quarterly cash dividend
per share of Common Stock theretofore paid and (y) $5.00 per
quarter or (b) to offer to the holders of its Preferred Shares
(or, after the Distribution Date, holders of the shares of Common
Stock) rights, options or warrants to subscribe for or to
purchase any additional Preferred Shares or shares of stock of
any class or any other securities, rights or options, or (c) to
effect any reclassification of its Preferred Shares (other than a
reclassification involving only the subdivision of outstanding
Preferred
37
<PAGE>
Shares), or (d) after the Distribution Date, to effect any
merger, consolidation or other combination with or into any
Person (other than a Subsidiary of the Company in a transaction
which does not violate 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 or
more transactions, of more than fifty percent (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 and/or
any of its Subsidiaries in one or more transactions each of which
does not violate Section 11(o) hereof), or (e) after the
Distribution Date, 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 Right, in accordance with Section
26 hereof, a notice of such proposed action to the extent
feasible and file a certificate with the Rights Agent to that
effect, which shall specify the record date for the purposes of
such stock dividend, distribution of rights or Rights, 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
shares of Common Stock and/or Preferred Shares, if any such date
is to be fixed, and such notice shall be so given in the case of
any action covered by clause (a) or (b) above at least ten (10)
days prior to the record date for determining holders of the
Preferred Shares for purposes of such action, and in the case of
any such other action, at least twenty (20) days prior to the
date of the taking of such proposed action or the date of
participation therein by the holders of shares of Common Stock
and/or Preferred Shares, whichever shall be earlier. The failure
to give notice required by this Section 24 or any defect therein
shall not affect the legality or validity of the action taken by
the Company or the vote upon any such action.
(b) Upon the Stock Acquisition Date (i) the Company
shall as soon as practicable thereafter give to the Rights Agent
and each holder of a Right Certificate, to the extent feasible
and in accordance with Section 26 hereof, a notice of the
occurrence of such event, which notice shall describe such event
and the consequences of such event to holders of Rights under
Sections 7(e) and 11(a) hereof and (ii) all references in Section
25(a) hereof to Preferred Shares shall be deemed thereafter to
refer also to shares of Common Stock or other securities issuable
in respect of the Rights.
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 Right 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:
Young & Rubicam Inc.
285 Madison Avenue
New York, New York 10017-6486
Attention: General Counsel
38
<PAGE>
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 Right 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:
The Bank of New York
101 Barclay Street, Floor 12W
New York, New York 10286
Attention: Stock Transfer Administration
Notices or demands authorized by this Agreement to be
given or made by the Company or the Rights Agent to the holder of
any Right Certificate (or, if prior to the Distribution Date, to
the holder of any certificate for shares of Common Stock) shall
be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such
holder as shown on the registry books of the Company.
Section 27. Supplements and Amendments. Prior to the
Stock Acquisition Date, the Company and the Rights Agent shall,
if the Company so directs, supplement or amend this Agreement
without the approval of any holders of Rights Certificates or
certificates representing shares of Common Stock. From and after
the Stock Acquisition Date, the Company and the Rights Agent
shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Right
Certificates or certificates representing shares of Common Stock
in order (i) to cure any ambiguity, (ii) to correct or supplement
any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) to shorten
or lengthen any time period hereunder or (iv) to change or
supplement the provisions hereunder in any manner which the
Company may deem necessary or desirable and which shall not
adversely affect the interests of the holders of Right
Certificates (other than an Acquiring Person or an Affiliate or
Associate thereof); provided, however, that this Agreement may
not be supplemented or amended to lengthen, pursuant to clause
(iii) of this sentence, (A) a time period relating to when the
Rights may be redeemed or to modify the ability (or inability) of
the Board of Directors to redeem the Rights, in either case at
such time as the Rights are not then redeemable or (B) any other
time period unless such lengthening is for the purpose of
protecting, enhancing or clarifying the rights of and/or the
benefits to the holders of Rights (other than an Acquiring Person
or an Affiliate or Associate of any such Person). Upon the
delivery of a certificate from an appropriate officer of the
Company which states that the proposed supplement or amendment is
in compliance with the terms of this Section 27, the Rights Agent
shall execute such supplement or amendment provided that such
supplement or amendment does not adversely affect the rights or
obligations of the Rights Agent under Section 18 or Section 20
hereof. Prior to the Distribution Date, the interests of the
holders of Rights shall be deemed coincident with the interests
of the holders of shares of Common Stock.
39
<PAGE>
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. 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 Right Certificates (and, prior to the Distribution Date, of
the shares of Common Stock of the Company) 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 Right Certificates
(and, prior to the Distribution Date, of the shares of Common
Stock of the Company).
Section 30. Severability. If any term, provision,
covenant or restriction of this Agreement or the Rights is held
by a court of competent jurisdiction or other authority to be
invalid, void or unenforceable, the remainder of this Agreement
and the Rights shall remain in full force and effect and shall in
no way be affected, impaired or invalidated; provided, however,
that notwithstanding any other provision of 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 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 (10th) Business Day following the date of
such determination by the Board of Directors.
Section 31. Determination and Actions by the Board of
Directors, etc. The Board of Directors shall have the exclusive
power and authority to administer this Agreement and to exercise
all rights and powers specifically granted to the Board of
Directors or to the Company, or as may be necessary or advisable
in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions
of this Agreement, and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement
(including, without limitation, a determination to redeem or not
to redeem the Rights pursuant to Section 23 hereof or to sup
plement or amend the Agreement and whether any proposed
supplement or amendment adversely affects the interests of the
holders of Right Certificates and comports with the requirements
of Section 27 hereof, or to approve any tender offer or exchange
offer for purposes of the definition of "Approved Offer," or to
determine whether any acquisition of beneficial ownership of
shares of Common Stock is inadvertent within the meaning of the
definition of "Acquiring Person," or to find or to announce
publicly that any Person has become an Acquiring Person). All
such actions, calculations, interpretations and determinations
(including for purpose of clause (y) below, all omissions with
respect to the foregoing) which are done or made by the Board of
Directors in good faith, shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the
Right
40
<PAGE>
Certificates and all other parties, and (y) not subject the Board
of Directors or any director to any liability to the holders of
the Right Certificates.
Section 32. Governing Law. This Agreement and each
Right Certificate issued hereunder shall be deemed to be a
contract made under the laws of the State of Delaware and for all
purposes shall be governed by and construed in accordance with
the laws of such State applicable to contracts to be made and
performed entirely within such State, provided, however, that the
rights and obligations of the Rights Agent shall be governed by
and construed in accordance with the laws of the State of New
York.
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.
41
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed, all as of the date and the year first above
written.
Young & Rubicam Inc.
By /s/ Stephanie W. Abramson
------------------------------
Name: Stephanie W. Abramson
Title: Executive Vice President,
General Counsel
The Bank of New York, as Rights Agent
By /s/ Richard T. Hanrahan
------------------------------
Name: Richard T. Hanrahan
Title: Asst. Vice President
42
<PAGE>
EXHIBIT A
---------
FORM
of
CERTIFICATE OF DESIGNATIONS
of
CUMULATIVE PARTICIPATING JUNIOR PREFERRED STOCK
of
YOUNG & RUBICAM INC.
(Pursuant to Section 151 of the
Delaware General Corporation Law)
--------------------
Young & Rubicam Inc., a corporation organized and
existing under the Delaware General Corporation Law (hereinafter
called the "Corporation"), hereby certifies that the following
resolution was duly adopted by the Board of Directors of the
Corporation as required by Section 151 of the Delaware General
Corporation Law on April 16, 1998:
RESOLVED, that pursuant to the authority vested in the
Board of Directors of this Corporation (hereinafter called the
"Board of Directors" or the "Board") in accordance with the
provisions of the Amended and Restated Certificate of
Incorporation of the Corporation, the Board of Directors hereby
creates a series of Preference Stock, par value of $0.01 per
share, of the Corporation and hereby states the designation and
number of shares, and fixes the relative rights, preferences, and
limitations thereof as follows:
Cumulative Participating Junior Preferred Stock
Section 1. Designation and Amount. The shares of such
series shall be designated as "Cumulative Participating Junior
Preferred Stock" (the "Junior Preferred Stock") and the number of
shares initially constituting the Junior Preferred Stock shall be
2,500,000. Such number of shares may be increased or decreased by
resolution of the Board
<PAGE>
of Directors; provided, that no such decrease shall reduce the
number of authorized shares of Junior Preferred Stock to a number
less than the number of shares of Junior Preferred Stock then
outstanding plus the number of shares of Junior Preferred Stock
then reserved for issuance upon the exercise of any outstanding
options, rights or warrants or upon the exercise of any
conversion or exchange privilege contained in any outstanding
securities issued by the Corporation. The Corporation's stated
capital with respect to each issued and outstanding share of
Junior Preferred Stock shall be $1.00.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares
of any series of Preference stock ranking senior to the Junior
Preferred stock with respect to dividends, including the
Corporation's Money Market Preferred Stock, the holders of shares
of Junior Preferred Stock, in preference to the holders of shares
of Common Stock, par value $0.01 per share (the "Common Stock"),
of the Corporation, and in preference to the holders of shares of
any other class of capital stock of the Corporation ranking
junior to the Junior Preferred Stock with respect to dividends,
shall be entitled to receive, when, as and if declared by the
Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the first days of
January, April, July and October in each year (each such date
being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the
first issuance of a share or fraction of a share of Junior
Preferred Stock, in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $1.00 and (b) subject to the
provision for adjustment hereinafter set forth, one hundred (100)
times the aggregate per share amount of all cash dividends, and
one hundred (100) times the aggregate per share amount (payable
in kind) of all non-cash dividends or other distributions, other
than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock
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
Junior Preferred Stock. In the event the Corporation shall at any
time declare or pay any dividend on the Common Stock payable in
shares of Common Stock (other than any and all dividends declared
on the outstanding Shares of Common Stock payable in Common
Stock, if the declaration of such dividends occurs prior to the
date on which the Common Stock is registered under the Exchange
Act, regardless of when such dividends are payable or are paid (a
"Stock Split")), or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise), then in each such case the amount
to which holders of shares of Junior Preferred Stock were
entitled immediately prior to such event under clause (b) of the
preceding sentence shall be adjusted by multiplying such amount
by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the
denominator of which is
A-2
<PAGE>
the number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) The Corporation shall declare, out of funds
legally available therefor, a dividend or distribution on the
Junior Preferred Stock as provided in paragraph (A) of this
Section immediately after it declares a dividend or distribution
on the Common Stock (other than a dividend payable in shares of
Common Stock); provided that, in the event no dividend or
distribution shall have been declared on the Common Stock during
the period between any Quarterly Dividend Payment Date and the
next subsequent Quarterly Dividend Payment Date, a dividend of
$1.00 per share on the Junior Preferred Stock shall nevertheless
be payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative
on outstanding shares of Junior Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of issue
of such shares, unless the date of issue of such shares of Junior
Preferred Stock is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such
shares shall begin to accrue from the date of issue of such
shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the
determination of holders of shares of Junior Preferred Stock
entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends
shall not bear interest. Dividends paid on the shares of Junior
Preferred Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Junior
Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be not
more than fifty (50) calendar days prior to the date fixed for
the payment thereof.
Section 3. Voting Rights. In addition to any other
voting rights required by applicable law, the holders of shares
of Junior Preferred Stock shall have the following voting rights:
(A) Each share of Junior Preferred Stock shall entitle
the holder thereof to one hundred (100) votes (subject to
adjustment as set forth below) on all matters submitted to a vote
of the stockholders of the Corporation (including, without
limitation, the election of directors). In the event the
Corporation shall at any time declare any dividend on the Common
Stock payable in shares of Common Stock (other than the Stock
Split), or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification or
otherwise), then in each such case the number of votes per share
to which holders of shares of Junior Preferred Stock were
entitled immediately prior to such event shall be adjusted by
multiplying such number by a fraction, the numerator of which is
the
A-3
<PAGE>
number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares
of Common Stock that were outstanding immediately prior to such
event.
(B) Except as otherwise provided herein, in the
Amended and Restated Certificate of Incorporation, in any other
Certificate of Designations creating a series of Preference Stock
or any similar stock or by law, the holders of shares of Junior
Preferred Stock, the holders of shares of Common Stock and the
holders of any other capital stock of the Corporation having
general voting rights shall vote together as one class on all
matters submitted to a vote of stockholders of the Corporation.
(C) (i) If at any time dividends on any Junior
Preferred Stock in an amount equal to the full accrued dividends
for six (6) or more quarterly dividend periods, whether or not
consecutive, shall not have been paid or declared and a sum
sufficient for the payment thereof irrevocably set aside in trust
for the holders of all of such shares, the Board of Directors of
the Corporation shall promptly take all necessary actions to
increase the authorized number of directors of the Corporation by
one (1) and the holders of the shares of the Junior Preferred
Stock then outstanding shall be entitled (by series, voting as a
single class) to elect one (1) person as a director to the Board
of Directors of the Corporation (such right to elect one (1)
director being hereinafter sometimes referred to as the "special
voting rights"), each outstanding share having such right being
entitled for such purpose to one vote; provided, however, that at
such time as the arrearage in payment of dividends which gave
rise to the exercise of the special voting rights has been cured
with regard to the Junior Preferred Stock by waiver or payment of
all accrued dividends, the right of the holders of such shares so
to vote as provided in this paragraph (C)(i) of this Section 3
shall cease (subject to renewal from time to time upon the same
terms and conditions) and the term of office of the person who is
at that time a director elected by such holders shall terminate
and the number of directors of the Corporation shall be
automatically reduced by one (1).
(ii) At any time after the special voting rights shall
have become vested in the holders of the shares of the Junior
Preferred Stock as provided in paragraph (C)(i) of this Section
3, the Secretary of the Corporation, as promptly as possible but
in any event within twenty (20) calendar days after receipt of
the written request of the holders of not less than ten percent
(10%) of the shares of the Junior Preferred Stock then
outstanding, addressed to the Corporation at its principal
office, shall call a special meeting of the holders of the shares
of the Junior Preferred Stock for the purpose of electing such
additional director, such meeting to be held at any place as
provided by the By-Laws of the Corporation for meetings of the
Corporation's stockholders, and upon not less than ten (10) nor
more than sixty (60) calendar days' notice. If such meeting shall
not be so called within sixty (60) calendar days after receipt of
the request by the Secretary of the Corporation, then the holders
of not less than ten percent (10%) of the shares of the Junior
Preferred Stock then outstanding may, by
A-4
<PAGE>
written notice to the Secretary of the Corporation, designate any
person to call such meeting, and the person so designated may
call such meeting, at any such place as provided above and upon
not less than ten (10) nor more than sixty (60) calendar days'
notice and for that purpose shall have access to the stockholder
record books of the Corporation. No such special meeting of the
holders of the shares of the Junior Preferred Stock and no
adjournment thereof shall be held on a date later than thirty
(30) calendar days before the annual meeting of stockholders of
the Corporation. At any meeting so called or at any annual
meeting held at any time when the special voting rights are in
effect, the holders of a majority of the shares of the Junior
Preferred Stock then outstanding, present in person or by proxy,
shall be sufficient to constitute a quorum for the election of
such additional director, and such additional director, together
with any and all other directors who are then members of the
Board of Directors, shall constitute the duly elected directors
of the Corporation.
(iii) With respect to a vacancy arising in the
directorship referred to in paragraph (C)(i) of this Section 3 at
any time when the special voting rights are in effect pursuant to
paragraph (C)(i) of this Section 3, upon the written request of
the holders of not less than ten percent (10%) of the shares of
the Junior Preferred Stock then outstanding, addressed to the
Corporation at its principal office, the Secretary of the
Corporation shall give notice of a special meeting of holders of
the shares of the Junior Preferred Stock of the election of a
director to fill such vacancy caused by the death, resignation or
other inability to serve as a director elected by such holders,
to be held not less than ten (10) nor more than twenty (20)
calendar days following receipt by the Secretary of the
Corporation of such written request. So long as special voting
rights are in effect pursuant to paragraph (c)(i) of this Section
3, any director who shall have been so elected by the holders of
the Junior Preferred Stock may be removed at any time, either
with or without cause, only by the affirmative vote of the
holders of the shares at the time entitled to cast a majority of
the votes entitled to be cast for the election of such director
at a special meeting of such holders called for that purpose, and
any vacancy thereby created may be filled by the vote of such
holders.
(D) Except as set forth herein, or as otherwise
provided by the Amended and Restated Certificate of Incorporation
or by law, holders of Junior Preferred Stock shall have no
special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of
Common Stock as set forth herein) for taking any corporate
action.
(E) Holders of Junior Preferred Stock shall be
entitled to such notice of each meeting of stockholders as is
furnished to the holders of Common Stock with respect to such
meeting.
Section 4. Certain Restrictions.
A-5
<PAGE>
(A) Subject to the provisions of the Amended and
Restated Certificate of Incorporation, whenever quarterly
dividends or other dividends or distributions payable on the
Junior Preferred Stock as provided in Section 2 are in arrears as
of any Quarterly Dividend Payment Date, thereafter and until all
accrued and unpaid dividends and distributions, whether or not
declared, on shares of Junior Preferred Stock outstanding shall
have been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either as
to dividends or upon liquidation, dissolution or winding up) to
the Junior Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up)
with the Junior Preferred Stock, except dividends paid ratably on
the Junior Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to the total
amounts to which the holders of all such shares are then
entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Junior Preferred Stock, provided that the Corporation may at any
time redeem, purchase or otherwise acquire shares of any such
junior stock in exchange for shares of any stock of the
Corporation ranking junior (both as to dividends and upon
dissolution, liquidation or winding up) to the Junior Preferred
Stock; or
(iv) purchase or otherwise acquire for consideration
any shares of Junior Preferred Stock, or any shares of stock
ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Junior Preferred Stock or
redeem any shares of such parity stock, except in accordance with
the terms of the Amended and Restated Certificate of
Incorporation and with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of Directors,
after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series
and classes, shall determine in good faith will result in fair
and equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of
the Corporation to purchase or otherwise acquire for
consideration any shares of stock of the Corporation unless the
Corporation could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares. Any shares of Junior
Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and
cancelled promptly after such purchase or acquisition. All such
shares shall upon
A-6
<PAGE>
their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of
Preference 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 Amended and
Restated Certificate of Incorporation, or in any other
Certificate of Designations creating a series of Preference Stock
or any similar stock or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. (A)
Upon any liquidation (voluntary or otherwise), dissolution or
winding up of the Corporation, no distribution shall be made to
the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Junior Preferred Stock unless, prior thereto, the holders of
shares of Junior Preferred Stock shall have received $1.00 per
share, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of
such payment (the "Junior Preferred Liquidation Preference").
Following the payment of the full amount of the Junior Preferred
Liquidation Preference, no additional distributions shall be made
to the holders of shares of Junior Preferred Stock unless, prior
thereto, the holders of shares of Common Stock shall have
received an amount per share (the "Common Adjustment") equal to
the quotient obtained by dividing (i) the Junior Preferred
Liquidation Preference by (ii) 100 (as appropriately adjusted as
set forth in subparagraph (C) below to reflect such events as
stock splits, stock dividends and recapitalizations with respect
to the Common Stock) (such number in clause (ii) immediately
above being referred to as the "Adjustment Number"). Following
the payment of the full amount of the Junior Preferred
Liquidation Preference and the Common Adjustment in respect of
all outstanding shares of Junior Preferred Stock and Common
Stock, respectively, holders of Junior Preferred Stock and
holders of shares of Common Stock shall receive their ratable and
proportionate share of the remaining assets to be distributed in
the ratio of the Adjustment Number to one (1) with respect to
such Junior Preferred Stock and Common Stock, on a per share
basis, respectively.
(B) In the event, however, that there are not
sufficient assets available to permit payment in full of the
Junior Preferred Liquidation Preference and the liquidation
preferences of all other series of preferred stock, if any, which
rank on a parity with the Junior Preferred Stock, then such
remaining assets shall be distributed ratably to the holders of
such parity shares in proportion to their respective liquidation
preferences. In the event, however, that there are not sufficient
assets available to permit payment in full of the Common
Adjustment, then such remaining assets shall be distributed
ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time (i)
declare any dividend on Common Stock payable in shares of Common
Stock (other than the Stock Split), (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common
Stock
A-7
<PAGE>
into a smaller number of shares, then in each such case the
Adjustment Number in effect immediately prior to such event shall
be adjusted by multiplying such Adjustment Number by a fraction
the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common
Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case
each share of Junior Preferred Stock shall at the same time be
similarly exchanged or changed into an amount per share, subject
to the provision for adjustment hereinafter set forth, equal to
one hundred (100) times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as
the case may be, into which or for which each share of Common
Stock is changed or exchanged. In the event the Corporation shall
at any time declare any dividend on the Common Stock payable in
shares of Common Stock (other than the Stock Split), or effect a
subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with
respect to the exchange or change of shares of Junior Preferred
Stock shall be adjusted by multiplying such amount by a fraction,
the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. Ranking. The Junior Preferred Stock shall
rank senior, as to dividends and upon liquidation, dissolution or
winding up, to the Common Stock, and junior, as to dividends and
upon liquidation, dissolution or winding up, to all other classes
and series of capital stock of the Corporation, including all
series of Preference Stock of the Corporation, unless the terms
of any such class or series shall expressly provide otherwise.
Section 9. No Redemption. The shares of Junior
Preferred Stock shall not be redeemable.
Section 10. Fractional Shares. The Junior Preferred
Stock may be issued in fractions of a share which shall entitle
the holder, in proportion to such holder's fractional shares, to
exercise voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights of
holders of shares of Junior Preferred Stock.
A-8
<PAGE>
IN WITNESS WHEREOF, this Certificate of Designations is
executed on behalf of the Corporation by its Executive Vice
President and General Counsel as of the 15th day of May, 1998.
-----------------------------
Executive Vice President and
General Counsel
A-9
<PAGE>
Exhibit B
---------
[Form of Right Certificate]
Certificate No. R- Rights
-----------
NOT EXERCISABLE AFTER MAY 1, 2008 OR EARLIER IF NOTICE
OF REDEMPTION IS GIVEN BY THE COMPANY OR IF EXCHANGED
BY THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION,
AT THE OPTION OF THE COMPANY, AT $0.01 PER RIGHT AND
TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR ANY
ASSOCIATES OR AFFILIATES THEREOF (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT
HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
Right Certificate
YOUNG & RUBICAM INC.
This certifies that , or registered assigns, is the
registered owner of the number of Rights set forth above, each of
which entitles the owner thereof, subject to the terms,
provisions and conditions of the Rights Agreement dated as of May
1, 1998 (the "Rights Agreement") between Young & Rubicam Inc., a
Delaware corporation (the "Company"), and The Bank of New York
(the "Rights Agent"), to purchase from the Company at any time
after the Distribution Date and prior to 5:00 P.M. (New York City
time) on the Expiration Date (as such terms are defined in the
Rights Agreement) at the principal stock transfer office or such
other office of the Rights Agent designated for such purpose, or
of its successors as Rights Agent, one one-hundredth of a
fully-paid, nonassessable share of Cumulative Participating
Junior Preferred Stock, no par value (the "Junior Preferred
Shares"), of the Company, at a purchase price of $87.50 per one
one-hundredth of a Junior Preferred Share (the "Purchase Price"),
upon presentation and surrender of this Right Certificate with
the Form of Election to Purchase Shares and related Certificate
duly executed. The number of Rights evidenced by this Right
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
May __, 1998.
<PAGE>
From and after the Stock Acquisition Date (as such term
is defined in the Rights Agreement), if the Rights evidenced by
any Right Certificate are beneficially owned by (i) an Acquiring
Person or any Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement), (ii) a transferee of an
Acquiring Person (or of any Affiliate or Associate thereof),
(iii) under certain circumstances specified in the Rights
Agreement, a transferee of a person who, after such transfer,
became an Acquiring Person or any Affiliate or Associate thereof
or (iv) a subsequent transferee of any of the foregoing, such
Rights shall become null and void and no holder hereof shall have
any rights whatsoever with respect to such Rights, whether under
any provision of the Rights Agreement or otherwise.
As provided in the Rights Agreement, the Purchase
Price and the number and kind of Junior Preferred Shares or other
securities which may be purchased upon the exercise of the Rights
evidenced by this Right Certificate are subject to modification
and adjustment upon the happening of certain events, and in
certain circumstances may be exercised to purchase securities of
issuers other than the Company.
This Right 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
Right Certificates, which limitations of rights include the
temporary suspension of the exercisability of such Rights under
the 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 available free of charge upon written
request from the Company at:
Young & Rubicam Inc.
285 Madison Avenue
New York, New York 10017-6486
Attention: General Counsel
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office of the
Rights Agent or such other office designated by it for such
purpose, may be exchanged for another Right Certificate or Right
Certificates of like tenor and date evidencing Rights entitling
the holder to purchase a like aggregate number of one
one-hundredths of a Junior Preferred Share as the Rights
evidenced by the Right Certificate or Right Certificates
surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be
entitled to receive, upon surrender hereof, another Right
Certificate or Right certificates for the number of whole Rights
not exercised.
B-2
<PAGE>
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Right Certificate (i) may be redeemed by
the Company at its option at a redemption price of $0.01 per
Right (payable in cash, shares of Common Stock or other
consideration), appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the
date hereof, at any time prior to the earlier of (x) the Stock
Acquisition Date and (y) the Final Expiration Date, or (ii)
exchanged, in whole or in part, for Common Stock or Common Stock
Equivalents.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Right Certificate (and the Rights
Agreement itself) may be amended by action of the Company's Board
of Directors without the approval of the holders of any of the
Rights.
No fractional Junior Preferred Shares will be issued
upon the exercise of any Right or Rights evidenced hereby (other
than fractions which are integral multiples of one one-hundredth,
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 Right Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any
purpose the holder of Junior Preferred Shares 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 Right Certificate shall have
been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or
obligatory for any purpose until it shall have been countersigned
by the Rights Agent.
B-3
<PAGE>
WITNESS the facsimile signature of the proper officers
of the Company.
Dated as of , 19
------------- --
YOUNG & RUBICAM INC.
By
---------------------------------
Name:
Title:
Countersigned:
The Bank of New York, as Rights Agent
By
-----------------------------
Authorized Signatory
Date of Countersignature:
B-4
<PAGE>
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
__________________
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate)
FOR VALUE RECEIVED ________________________ hereby
sells, assigns and transfers unto
_______________________________________________
_____________________________________________ (Please print name
and address of transferee) this Right Certificate, together with
all right, title and interest therein, and does hereby
irrevocably constitute and appoint __________________________
Attorney, to transfer the within Right Certificate on the books
of the within-named Company, with full power of substitution.
Dated: _________________, 19__
_____________________________
Signature
Signature Guaranteed:
B-5
<PAGE>
Certificate
-----------
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) this Right Certificate is |_| is not |_|
being sold, assigned or transferred by or on behalf of a Person
who is or was an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person (as such terms are defined in the
Rights Agreement);
(2) after due inquiry and to the best knowledge
of the undersigned, it did |_| did not |_| acquire the Rights
evidenced by this Right Certificate from any Person who is, was
or subsequently became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: , 19
---------------- -- ----------------------------
Signature
Signature Guaranteed:
NOTICE
------
The signature of the foregoing Assignment and
Certificate must correspond to the name as written upon the face
of this Right Certificate in every particular, without alteration
or enlargement or any change whatsoever.
B-6
<PAGE>
FORM OF ELECTION TO PURCHASE SHARES
(To be executed if holder desires
to exercise Rights represented by the Right Certificate)
To Young & Rubicam Inc.:
The undersigned hereby irrevocably elects to exercise
_________________ Rights represented by this Right Certificate to
purchase the Junior Preferred Shares issuable upon the exercise
of the Rights (or such other securities of the Company or of any
other person which may be issuable upon the exercise of the
Rights) and requests that certificates for such shares be issued
in the name of and delivered to:
Please insert Social Security or other identifying number: ________
____________________________________________________________________
(Please print name and address)
____________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by
this Right Certificate, a new Right Certificate for the balance
of such Rights shall be registered in the name of and delivered
to:
Please insert Social Security or other identifying number: _______
___________________________________________________________________
(Please print name and address)
___________________________________________________________________
B-7
<PAGE>
Dated: __________________, 19__
_______________________________
Signature
Signature Guaranteed:
B-8
<PAGE>
Certificate
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) the Rights evidenced by this Right
Certificate are |_| are not |_| being exercised by or on behalf
of a Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person (as such terms are defined
in the Rights Agreement);
(2) after due inquiry and to the best knowledge
of the undersigned, it did |_| did not |_| acquire the Rights
evidenced by this Right Certificate from any Person who is, was
or became an Acquiring Person or an Affiliate or Associate of an
Acquiring Person.
Dated: , 19
------------------- --
-----------------------------
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 Right Certificate in every particular, without
alteration or enlargement or any change whatsoever.
B-9
Exhibit 5.1
[Letterhead of Cleary, Gottlieb, Steen & Hamilton]
Writer's Direct Dial: (212) 225-2410
June 24, 1998
Young & Rubicam Inc.
285 Madison Avenue
New York, New York 10017-6486
Re: Young & Rubicam Inc.
Registration Statement on Form S-8
----------------------------------
Ladies and Gentlemen:
We have acted as special counsel to Young & Rubicam
Inc., a Delaware corporation (the "Company"), in connection with
the registration statement on Form S-8 (the "Registration
Statement") to be filed today with the Securities and Exchange
Commission (the "Commission") pursuant to the Securities Act of
1933, as amended (the "Act"), for the registration of 37,526,775
shares of Common Stock, par value $.01 per share (the "Shares"),
to be issued under the Young & Rubicam Holdings Inc. Management
Stock Option Plan and the Young & Rubicam Inc. 1997 Incentive
Compensation Plan (the "Plans"), and the related preferred share
purchase rights (the "Rights") to be issued pursuant to the
Rights Agreement between the Company and The Bank of New York, as
Rights Agent.
We have participated in the preparation of the
Registration Statement and have reviewed the originals or copies
certified or otherwise identified to our satisfaction of all such
corporate records of the Company and such other instruments and
other certificates of public officials, officers and
representatives of the Company and such other persons, and we
have made such investigations of law, as we have deemed
appropriate as a basis for the opinions expressed below.
<PAGE>
Young & Rubicam Inc., p. 2
In rendering the opinions expressed below, we have
assumed the authenticity of all documents submitted to us as
originals and the conformity to the originals of all documents
submitted to us as copies. In addition, we have assumed and have
not verified the accuracy as to factual matters of each document
we have reviewed.
Based on the foregoing, and subject to the further
assumptions and qualifications set forth below, it is our opinion
that:
1. The Shares have been duly authorized by all
necessary corporate action of the Company and, when issued in
accordance with the terms of the Plans, at prices in excess of
the par value thereof, will be validly issued, fully paid and
nonassessable.
2. Upon issuance of the Shares in accordance with the
terms of the Plans, at prices in excess of the par value thereof,
the Rights associated with the Shares will be validly issued.
The foregoing opinions are limited to the General
Corporation Law of the State of Delaware.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement. In giving such consent, we
do not thereby admit that we are "experts" within the meaning of
the Act or the rules and regulations of the Commission issued
thereunder with respect to any part of the Registration
Statement, including this exhibit.
Very truly yours,
CLEARY, GOTTLIEB, STEEN & HAMILTON
By /s/ A. Richard Susko
-------------------------------
A. Richard Susko, a Partner
Exhibit 23.1
[Letterhead of Price Waterhouse LLP]
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of our report dated February
19, 1998 appearing or incorporated by reference in Young &
Rubicam Inc.'s Registration Statements on Form S-1 (No. 333-46929
and No. 333-52395). We also consent to the incorporation by
reference of our report on the Financial Statement Schedules,
which also appear or are incorporated by reference in such
Registration Statements on Form S-1.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
New York, New York
June 24, 1998
