SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) or (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
CENTURY TELEPHONE ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)
Louisiana 72-0651161
(State of incorporation) (I.R.S. Employer
or organization) Identification Number)
100 Century Park Drive
Monroe, Louisiana 71203
(Address of principal executive offices)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange
to be so registered on which each class is to be registered
___________________ ________________________________________
Preference Share Purchase Rights New York Stock Exchange
If this Form relates to the registration of a class of debt securities
and is effective upon filing pursuant to General Instruction A.(c)(1),
please check the following box. [ ]
If this Form relates to the registration of a class of debt securities
and is to become effective simultaneously with the effectiveness of a
concurrent registration statement under the Securities Act of 1933
pursuant to General Instruction A.(c)(2), please check the following
box. [ ]
Securities to be registered pursuant to Section 12(g) of the Act:
None
Item 1: Description of Securities to be Registered
On August 27, 1996, the Board of Directors of Century
Telephone Enterprises, Inc. (the "Company") declared a dividend
of one preference share purchase right (a "Right") for each
outstanding share of common stock, par value $1.00 per share
(the "Common Shares"), of the Company. The dividend is payable
on November 1, 1996 to stockholders of record on September 30,
1996 (the "Record Date"). Each Right entitles the registered
holder to purchase from the Company one one-hundredth of a share
of Series BB Participating Cumulative Preference Stock, par value
$25 per share (the "Preference Shares"), of the Company at a
price of $110 per one one-hundredth of a Preference Share (the
"Purchase Price"), subject to adjustment as described below. The
description and terms of the Rights are set forth in a Rights
Agreement dated as of August 27, 1996 (the "Rights Agreement")
between the Company and Society National Bank, as Rights Agent
(the "Rights Agent").
Initial Status of the Rights
----------------------------
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated
persons (an "Acquiring Person") have acquired beneficial
ownership of 15% or more of the outstanding Common Shares or (ii)
10 business days (or such later date as may be determined by
action of the Board of Directors prior to such time as any person
or group of affiliated persons becomes an Acquiring Person)
following the commencement of, or announcement of an intention to
make, a tender offer or exchange offer that, if consummated,
would result in the beneficial ownership by a person or group of
15% or more of the outstanding Common Shares (the earlier of such
dates being called the "Distribution Date"), the Rights will be
evidenced by the Common Share certificates outstanding as of the
Record Date, together with a copy of a Summary of Rights in the
form provided in an exhibit to the Rights Agreement.
The Rights Agreement provides that, until the Distribution
Date (or earlier redemption or expiration of the Rights), the
Rights will be transferred with and only with the Common Shares.
Until the Distribution Date (or earlier redemption or expiration
of the Rights), new Common Share certificates issued after the
Record Date upon any transfer or new issuance of Common Shares
will contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any
certificates for Common Shares outstanding as of the Record Date,
even without such notation or a copy of the Summary of Rights
being attached thereto, will also constitute the transfer of the
Rights associated with the Common Shares represented by such
certificate.
Distribution and Term of Rights
-------------------------------
As soon as practicable following the Distribution Date,
separate certificates evidencing the Rights will be mailed to
holders of record of the Common Shares as of the close of
business on the Distribution Date and such separate certificates
alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire on November 1, 2006 (the "Final Expiration
Date"), unless the Final Expiration Date is extended or unless
the Rights are earlier redeemed or exchanged by the Company, in
each case, as described below.
Triggering Events
-----------------
In the event that the Company is acquired in a merger or
other business combination transaction or 50% or more of its
consolidated assets or earning power are sold after a person or
group has become an Acquiring Person, proper provision will be
made so that each holder of a Right will thereafter have the
right to receive, upon the exercise thereof at the then current
exercise price of the Right, that number of shares of common
stock of the acquiring company which at the time of such
transaction will have a market value of two times the exercise
price of the Right. In the event that any person or group of
affiliated or associated persons becomes an Acquiring Person,
proper provision shall be made so that each holder of a Right,
other than Rights beneficially owned by the Acquiring Person
(which will thereafter be void), will thereafter have the right
to receive upon exercise that number of Common Shares having a
market value at the time of such occurrence of two times the
exercise price of the Right.
Anti-Dilution
-------------
The Purchase Price payable, and the number of Preference
Shares or other securities or property issuable, upon exercise of
the Rights are subject to adjustment from time to time to prevent
dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Preference
Shares, (ii) upon the grant to holders of the Preference Shares
of certain rights, options or warrants to subscribe for or
purchase Preference Shares at a price, or securities convertible
into Preference Shares with a conversion price, less than the
then-current market price of the Preference Shares or (iii) upon
the distribution to holders of the Preference Shares of evidences
of indebtedness or assets (excluding regular quarterly cash
dividends or dividends payable in Preference Shares) or of
subscription rights or warrants (other than those referred to
above).
The number of outstanding Rights and the number of one one-
hundredths of a Preference Share issuable upon exercise of each
Right are also subject to adjustment in the event of a stock
split of the Common Shares or a stock dividend on the Common
Shares payable in Common Shares or subdivisions, consolidations
or combinations of the Common Stock occurring, in any such case,
prior to the Distribution Date.
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an
adjustment of at least 1%. No fractional Preference Shares will
be issued (other than fractions which are integral multiples of
one one-hundredth of a Preference Share, which may, at the
election of the Company, be evidenced by depository receipts) and
in lieu thereof, an adjustment in cash will be made based on the
market price of the Preference Shares on the last trading day
prior to the date of exercise.
Exchange and Redemption
-----------------------
At any time after any person or group becomes an Acquiring
Person and prior to the acquisition by such person or group of
50% or more of the outstanding Common Shares, the Board of
Directors of the Company may exchange the Rights (other than
Rights owned by such person or group which have become void), in
whole or in part, at an exchange ratio of one Common Share, or
one one-hundredth of a Preference Share, per Right (subject to
adjustment).
At any time prior to the acquisition by a person or group of
affiliated or associated persons of beneficial ownership of 15%
or more of the outstanding Common Shares, the Board of Directors
of the Company may redeem the Rights in whole, but not in part,
at a price of $.01 per Right (the "Redemption Price"), subject to
adjustment. The redemption of the Rights may be made effective
at such time, on such basis and with such conditions as the Board
of Directors in its sole discretion may establish. Immediately
upon any redemption of the Rights, the right to exercise the
Rights will terminate and the only right of the holders of Rights
will be to receive the Redemption Price.
Rights, Preferences and Limitations of Purchase Rights
------------------------------------------------------
Preference Shares purchasable upon exercise of the Rights
will not be redeemable. Each Preference Share will entitle the
holder to receive a preferential quarterly dividend payment of
the greater of $10 or 100 times the aggregate dividend declared
per Common Share. In the event of liquidation, the holders of
the Preference Shares will be entitled to a minimum preferential
liquidation payment of $100 per share and, under certain
circumstances, may be entitled to receive additional
distributions. Each Preference Share will entitle the holder to
100 votes, voting together with the Common Shares. Finally, in
the event of any merger, consolidation or other transaction in
which Common Shares are exchanged, each Preference Share will
entitle the holder to receive 100 times the amount received per
Common Share. These rights are protected by customary
antidilution provisions. Because of the nature of the Preference
Shares' dividend, liquidation and voting rights, the value of
each one one-hundredth interest in a Preference Share purchasable
upon exercise of each Right should approximate the value of one
Common Share.
Amendments
----------
The terms of the Rights may be amended by the Board of
Directors of the Company without the consent of the holders of
the Rights, including an amendment to lower the 15% thresholds
described above to not less than the greater of (i) the sum of
.001% and the largest percentage of the outstanding Common Shares
then known to the Company to be beneficially owned by any person
or group of affiliated or associated persons and (ii) 10%, except
that from and after such time as any person or group of
affiliated or associated persons becomes an Acquiring Person, no
such amendment may adversely affect the interests of the holders
of the Rights.
Miscellaneous
-------------
Until a Right is exercised, the holder thereof, as such,
will have no rights as a stockholder of the Company, including,
without limitation, the right to vote or to receive dividends.
The Rights may have certain anti-takeover effects. The
Rights should not, however, interfere with any merger or other
business combination approved by the Board of Directors since the
Rights may be redeemed by the Company as described above.
While the dividend of the rights will not be taxable to
stockholders or to the Company, stockholders or the Company may,
depending upon the circumstances, recognize taxable income in the
event that the Rights become exercisable as described above.
The Rights Agreement and a form of press release announcing
the declaration of the Rights are attached hereto as exhibits and
are incorporated herein by reference. The foregoing description
of the Rights is qualified in its entirety by reference to such
exhibits.
Item 2. Exhibits
The exhibits to this registration statement are listed in
the exhibit list, which appears elsewhere herein and is
incorporated herein by reference.
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the Company has duly caused this
registration statement to be signed on its behalf by the
undersigned thereunto duly authorized.
CENTURY TELEPHONE ENTERPRISES, INC.
By: /s/ Harvey P. Perry
_______________________________
Harvey P. Perry
Senior Vice President,
General Counsel and Secretary
Dated: August 30, 1996
EXHIBIT LIST
Exhibit Description
1. Rights Agreement, dated as of August 27, 1996, between
Century Telephone Enterprises, Inc. and Society
National Bank, as Rights Agent.
2. Form of Articles of Amendment for the Series BB
Participating Cumulative Preference Stock, included as
Exhibit A to the Rights Agreement, which were executed
in such form on August 27, 1996 and filed on August
29, 1996 with the Secretary of State of the State of
Louisiana.
3. Forms of Rights Certificate, Assignment, and Election
to Purchase, included as Exhibit B to the Rights
Agreement.
4. Summary of Rights to Purchase Preference Shares,
included as Exhibit C to the Rights Agreement.
5. Form of press release dated August 27, 1996.
Exhibit to 8-A
Registration Statement
CENTURY TELEPHONE ENTERPRISES, INC.
and
SOCIETY NATIONAL BANK
Rights Agent
Rights Agreement
Dated as of August 27, 1996
TABLE OF CONTENTS
Page
Section 1. Certain Definitions................................ 1
Section 2. Appointment of Rights Agent........................ 3
Section 3. Issue of Right Certificates........................ 3
Section 4. Form of Right Certificates......................... 5
Section 5. Countersignature and Registration.................. 5
Section 6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost
or Stolen Right Certificates....................... 6
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights..................................... 6
Section 8. Cancellation and Destruction of Right Certificates 7
Section 9. Availability of Preference Shares.................. 8
Section 10. Preference Shares Record Date...................... 8
Section 11. Adjustment of Purchase Price, Number of Shares
or Number of Rights................................ 8
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares............................................ 15
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power.............................. 15
Section 14. Fractional Rights and Fractional Shares ............. 16
Section 15. Rights of Action .................................... 17
Section 16. Agreement of Right Holders........................... 17
Section 17. Right Certificate Holder Not Deemed a Stockholder.... 17
Section 18. Concerning the Rights Agent.......................... 18
Section 19. Merger or Consolidation or Change of Name of
Rights Agent......................................... 19
Section 20. Duties of Rights Agent............................... 19
Section 21. Change of Rights Agent............................... 21
Section 22. Issuance of New Right Certificates................... 21
Section 23. Redemption........................................... 22
Section 24. Exchange............................................. 22
Section 25. Notice of Certain Events............................. 23
Section 26. Notices.............................................. 24
Section 27. Supplements and Amendments........................... 24
Section 28. Successors........................................... 25
Section 29. Benefits of this Agreement........................... 25
Section 30. Severability......................................... 25
Section 31. Governing Law........................................ 25
Section 32. Counterparts......................................... 25
Section 33. Descriptive Headings................................. 25
Exhibits
Exhibit A -Form of Articles of Amendment......................A-1
Exhibit B -Form of Right Certificate..........................B-1
Exhibit C -Summary of Rights to Purchase Preference Shares....C-1
<PAGE 1>
RIGHTS AGREEMENT
Rights Agreement, dated as of August 27, 1996, between
Century Telephone Enterprises, Inc., a Louisiana corporation (the
"Company"), and Society National Bank, as Rights Agent hereunder
(the "Rights Agent").
W I T N E S S E T H:
WHEREAS, on August 27, 1996, the Board of Directors of the
Company has authorized and declared a dividend, payable as of
November 1, 1996, of one preference share purchase right (a
"Right") for each Common Share (as hereinafter defined) of the
Company outstanding on September 30, 1996 (the "Record Date"),
each Right representing the right to purchase one one-hundredth
of a Preference Share (as hereinafter defined), upon the terms
and subject to the conditions herein set forth, and has further
authorized and directed the issuance of one Right with respect
to each Common Share that shall become outstanding between the
Record Date and the earliest of the Distribution Date, the
Redemption Date or the Final Expiration Date (as such terms are
hereinafter defined).
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as
follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term
is hereinafter defined) who or which, together with all
Affiliates and Associates (as such terms are hereinafter
defined) of such Person, shall be the Beneficial Owner (as such
term is hereinafter defined) of 15% or more of the Common Shares
of the Company then outstanding, but shall not include the
Company, any Subsidiary (as such term is hereinafter defined) of
the Company, any employee benefit plan of the Company or any
Subsidiary of the Company, or any trust or other entity holding
Common Shares for or pursuant to the terms of any such plan.
Notwithstanding the foregoing, no Person shall become an
"Acquiring Person" as the result of an acquisition of Common
Shares by the Company which, by reducing the number of shares
outstanding, increases the proportionate number of shares
beneficially owned by such Person to 15% or more of the Common
Shares of the Company then outstanding; provided, however, that
if a Person shall become the Beneficial Owner of 15% or more of
the Common Shares of the Company then outstanding by reason of
share purchases by the Company and shall, after such share
purchases by the Company, become the Beneficial Owner of any
additional Common Shares of the Company, then such Person shall
be deemed to be an "Acquiring Person". Notwithstanding the
foregoing, if the Board of Directors of the Company determines
in good faith that a Person who would otherwise be an "Acquiring
Person", as defined pursuant to the foregoing provisions of this
paragraph (a), has become such inadvertently, and such Person
divests as promptly as practicable a sufficient number of Common
Shares so that such Person would no longer be an "Acquiring
Person," as defined pursuant to the foregoing provisions of this
paragraph (a), then such Person shall not be deemed to be an
"Acquiring Person" for any purposes of this Agreement.
<PAGE 2>
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General
Rules and Regulations under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), as in effect on the date of
this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of and
shall be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or
indirectly;
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire
(whether such right is exercisable immediately or only after
the passage of time) pursuant to any agreement, arrangement
or understanding (other than customary agreements with and
between underwriters and selling group members with respect
to a bona fide public offering of securities), or upon the
exercise of conversion rights, exchange rights, rights
(other than the above-defined Rights), warrants or options,
or otherwise; provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own,
securities tendered pursuant to a tender or exchange offer
made by or on behalf of such Person or any of such Person's
Affiliates or Associates until such tendered securities are
accepted for purchase or exchange; or (B) the right to vote
pursuant to any agreement, arrangement or understanding;
provided, further, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, any security if
the agreement, arrangement or understanding to vote such
security (1) arises solely from a revocable proxy or consent
given to such Person in response to a public proxy or
consent solicitation made pursuant to, and in accordance
with, the applicable rules and regulations promulgated under
the Exchange Act and (2) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or
successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or
any of such Person's Affiliates or Associates has any
agreement, arrangement or understanding (other than
customary agreements with and between underwriters and
selling group members with respect to a bona fide public
offering of securities) for the purpose of acquiring,
holding, voting (except to the extent contemplated by the
proviso to Section 1(c)(ii)(B)) or disposing of any
securities of the Company.
Notwithstanding anything in this definition of Beneficial
Ownership to the contrary, the phrase "then outstanding," when
used with reference to a Person's Beneficial Ownership of
securities of the Company, shall mean the number of such
securities then issued and outstanding together with the number
of such securities not then actually issued and outstanding
which such Person would be deemed to beneficially own hereunder.
<PAGE 3>
(d) "Business Day" shall mean any day other than a
Saturday, a Sunday, or a day on which banking institutions in
the State of the principal office of the Rights Agent are
authorized or obligated by law or executive order to close.
(e) "Close of business" on any given date shall mean 5:00
P.M., local time in the State of the principal office of the
Rights Agent, on such date; provided, however, that if such date
is not a Business Day it shall mean 5:00 P.M., local time in the
State of the principal office of the Rights Agent, on the next
succeeding Business Day.
(f) "Common Shares" when used with reference to the
Company shall mean the shares of common stock, par value $1.00
per share, of the Company. "Common Shares" when used with
reference to any Person other than the Company shall mean the
capital stock (or equity interest) with the greatest voting
power of such other Person or, if such other Person is a
Subsidiary of another Person, the Person or Persons which
ultimately control such first-mentioned Person.
(g) "Distribution Date" shall have the meaning set forth
in Section 3 hereof.
(h) "Final Expiration Date" shall have the meaning set
forth in Section 7 hereof.
(i) "Person" shall mean any individual, firm, corporation,
partnership, limited liability company or other entity, and shall
include any successor (by merger or otherwise) of such entity.
(j) "Preference Shares" shall mean shares of Series BB
Participating Cumulative Preference Stock, par value $25.00 per
share, of the Company, having the rights and preferences set
forth in the form of Articles of Amendment attached to this
Agreement as Exhibit A.
(k) "Redemption Date" shall have the meaning set forth in
Section 7 hereof.
(l) "Share Acquisition Date" shall mean the first date of
public announcement by the Company or an Acquiring Person that
an Acquiring Person has become such.
(m) "Subsidiary" of any Person shall mean any corporation
or other entity of which a majority of the voting power of the
voting equity securities or equity interest is owned, directly
or indirectly, by such Person.
Section 2. Appointment of Rights Agent. The Company
hereby appoints the Rights Agent to act as agent for the Company
and the holders of the Rights (who, in accordance with Section 3
hereof, shall prior to the Distribution Date also be the holders
of the Common Shares) 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, in which
event it shall notify the Rights Agent of the name and address of
any such Co-Rights Agent appointed by it.
Section 3. Issue of Right Certificates. (a) Until the
earlier of (i) the tenth day after the Share Acquisition Date or
(ii) the tenth Business Day (or such later date as may be
determined by action of the Board of Directors of the Company
<PAGE 4>
prior to such time as any Person becomes an Acquiring Person)
after the date of the commencement by any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan
of the Company or of any Subsidiary of the Company or any trust
or other entity holding Common Shares for or pursuant to the
terms of any such plan) of, or of the first public announcement
of the intention of any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company or any trust or
other entity holding Common Shares for or pursuant to the terms
of any such plan) to commence, a tender or exchange offer the
consummation of which would result in any Person becoming the
Beneficial Owner of Common Shares aggregating 15% or more of the
then outstanding Common Shares, irrespective of whether any
shares are actually purchased pursuant to any such offer
(including any such date which is after the date of this
Agreement and prior to the issuance of the Rights; the earlier
of such dates being herein referred to as the "Distribution
Date"), (x) the Rights will be evidenced (subject to the
provisions of Section 3(b) hereof) by the certificates for
Common Shares registered in the names of the holders thereof
(which certificates shall also be deemed to be Right
Certificates) and not by separate Right Certificates, and (y)
the right to receive Right Certificates will be transferable
only in connection with the transfer of Common Shares. As soon
as practicable after the Distribution Date, the Company will
prepare and execute, the Rights Agent will countersign, and the
Company will send or cause to be sent (and the Rights Agent
will, if requested, send) by first-class, postage-prepaid mail,
to each record holder of Common Shares as of the close of
business on the Distribution Date, at the address of such holder
shown on the records of the Company, a Right Certificate, in
substantially the form of Exhibit B hereto (a "Right
Certificate"), evidencing one Right for each Common Share so
held. As of and after the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.
(b) On or about November 1, 1996, or as promptly as
reasonably practicable thereafter, the Company will send a copy
of a Summary of Rights to Purchase Preference Shares, in
substantially the form of Exhibit C hereto (the "Summary of
Rights"), by postage-prepaid mail, to each record holder of
Common Shares as of the close of business on the Record Date, at
the address of such holder shown on the records of the Company.
With respect to certificates for Common Shares outstanding as of
the Record Date, until the Distribution Date, the Rights will be
evidenced by such certificates registered in the names of the
holders thereof together with a copy of the Summary of Rights.
Until the Distribution Date (or the earlier of the Redemption
Date or the Final Expiration Date), the surrender for transfer of
any certificate for Common Shares outstanding on the Record
Date, with or without a copy of the Summary of Rights attached
thereto, shall also constitute the transfer of the Rights
associated with the Common Shares represented thereby.
(c) Certificates for Common Shares which become
outstanding (including, without limitation, reacquired Common
Shares referred to in the last sentence of this paragraph (c))
after the Record Date but prior to the earliest of the
Distribution Date, the Redemption Date or the Final Expiration
Date shall have impressed on, printed on, written on or otherwise
affixed to them the following legend:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in the Rights
Agreement between Century Telephone Enterprises, Inc. (the
<PAGE 5>
"Company") and Society National Bank (the "Rights Agent"),
dated as of August 27, 1996 (as amended from time to time,
the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on
file at the principal offices of the Company. Under
certain circumstances, as set forth in the Rights Agreement,
such Rights will be evidenced by separate certificates and
will no longer be evidenced by this certificate. The
Company will mail to the holder of this certificate a copy
of the Rights Agreement, as in effect on the date of
mailing, without charge promptly after receipt of a written
request therefor. Under certain circumstances set forth in
the Rights Agreement, Rights issued to, or held by, any
Person who is, was or becomes an Acquiring Person or any
Affiliate or Associate thereof (as such terms are defined in
the Rights Agreement), whether currently held by or on
behalf of such Person or by any subsequent holder, may
become null and void.
With respect to such certificates containing the foregoing
legend, until the Distribution Date, the Rights associated with
the Common Shares represented by such certificates shall be
evidenced by such certificates alone, and the surrender for
transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares
represented thereby. In the event that the Company purchases or
acquires any Common Shares after the Record Date but prior to
the Distribution Date, any Rights associated with such Common
Shares shall be deemed cancelled and retired so that the Company
shall not be entitled to exercise any Rights associated with the
Common Shares which are no longer outstanding.
Section 4. Form of Right Certificates. The Right
Certificates (and the forms of election to purchase Preference
Shares and of assignment to be printed on the reverse thereof)
shall be substantially in the form set forth in Exhibit B hereto
and may have such marks of identification or designation and
such legends, summaries or endorsements printed thereon as the
Company may deem appropriate and as are not inconsistent with
the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation
made pursuant thereto or with any rule or regulation of any
stock exchange on which the Rights may from time to time be
listed, or to conform to usage. Subject to the provisions of
Section 22 hereof, the Right Certificates shall entitle the
holders thereof to purchase such number of one one-hundredths of
a Preference Share as shall be set forth therein at the price
per one one-hundredth of a Preference Share set forth therein
(the "Purchase Price"), but the number of such one one-
hundredths of a Preference Share or other securities purchasable
and the Purchase Price 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 of its Vice Presidents, either manually or by
facsimile signature, shall have affixed thereto the Company's
seal or a facsimile thereof, and shall be attested by the
Secretary or an Assistant Secretary of the Company, either
manually or by facsimile signature. The Right Certificates
shall be countersigned by the Rights Agent, either manually or
by facsimile signature, and shall not be valid for any purpose
unless so countersigned. In case any officer of the Company who
shall have signed any of the Right Certificates shall cease to
be such officer of the Company before countersignature by the
<PAGE 6>
Rights Agent and issuance and delivery by the Company, such Right
Certificates, nevertheless, may be countersigned by the Rights
Agent and issued and delivered by the Company with the same
force and effect as though the person who signed such 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 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 office, books for
registration and transfer of the Right Certificates issued
hereunder. Such books shall show the names and addresses of the
respective holders of the Right Certificates, the number of
Rights evidenced on its face by each of the Right Certificates,
the date of each of the Right Certificates and the certificate
number for each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates. (a) Subject to the provisions of Section 14
hereof, at any time after the close of business on the
Distribution Date, and at or prior to the close of business on
the earlier of the Redemption Date or the Final Expiration Date,
any Right Certificate or Right Certificates (other than Right
Certificates representing Rights that have become void pursuant
to Section 11(a)(ii) hereof or that have been exchanged pursuant
to Section 24 hereof) may be transferred, split up, combined or
exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of one
one-hundredths of a Preference Share 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 office of the Rights Agent. Thereupon the Rights Agent
shall 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 of a sum
sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or
exchange of Right Certificates.
(b) Upon receipt by the 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 indemnity or security reasonably
satisfactory to them, and, at the Company's request,
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 execute and deliver a new Right
Certificate of 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) 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 on the reverse side thereof
duly executed, to the Rights Agent at the principal office of the
<PAGE 7>
Rights Agent, together with payment of the Purchase Price for
each one one-hundredth of a Preference Share as to which the
Rights are exercised, at or prior to the earliest of (i) the
close of business on November 1, 2006 (the "Final Expiration
Date"), (ii) the time at which the Rights are redeemed as
provided in Section 23 hereof (the "Redemption Date"), or (iii)
the time at which such Rights are exchanged as provided in
Section 24 hereof.
(b) The Purchase Price for each one one-hundredth of a
Preference Share purchasable pursuant to the exercise of a Right
shall initially be $110, and shall be subject to adjustment from
time to time as provided in Section 11 or 13 hereof and shall be
payable in lawful money of the United States of America in
accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase duly
executed, accompanied by payment of the Purchase Price for the
shares to be purchased and an amount equal to any applicable
transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof, the Rights Agent
shall thereupon promptly (i) requisition from any transfer agent
of the Preference Shares certificates for the number of
Preference Shares to be purchased and the Company hereby
irrevocably authorizes its transfer agent to comply with all such
requests, (ii) as provided in Section 14(b), at the election of
the Company, cause depositary receipts in lieu of fractional
shares to be issued, (iii) 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, (iv)
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 Right Certificate, registered in such name or
names as may be designated by such holder, and (v) when
appropriate, after receipt, deliver such cash to or upon the
order of the registered holder of such Right Certificate. The
payment of the Purchase Price may be made (x) in cash or by
certified bank check or bank draft payable to the order of the
Company, or (y) by delivery of a certificate or certificates
(with appropriate stock powers executed in blank attached
thereto) evidencing a number of Common Shares of the Company
equal to the then Purchase Price divided by the current per share
market price (as determined pursuant to Section 11(d) hereof) per
Common Share on the date of such exercise. In the event that the
Company is obligated to issue other securities (including Common
Shares) of the Company pursuant to Section 11(a) hereof, the
Company will make all arrangements necessary so that such other
securities are available for distribution by the Rights Agent, if
and when appropriate.
(d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new
Right Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent to the
registered holder of such Right Certificate or to such holder's
duly authorized assigns, subject to the provisions of Section 14
hereof.
Section 8. Cancellation and Destruction of Right
Certificates. All Right Certificates surrendered for the purpose
of exercise, transfer, split up, combination or exchange shall,
if surrendered to the 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 Certificates shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this
<PAGE 8>
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, or shall, at the written request of the Company,
destroy such cancelled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. Availability of Preference Shares. (a) The
Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued Preference
Shares or any Preference Shares held in its treasury, the number
of Preference Shares that will be sufficient to permit the
exercise in full of all outstanding Rights in accordance with
Section 7. The Company covenants and agrees that it will take
all such action as may be necessary to ensure that all Preference
Shares delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such Preference Shares (subject
to payment of the Purchase Price), be duly and validly authorized
and issued and fully paid and nonassessable shares.
(b) The Company further covenants and agrees that it will
pay when due and payable any and all federal and state transfer
taxes and charges which may be payable in respect of the issuance
or delivery of the Right Certificates or of any Preference Shares
upon the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax which may be payable in respect
of any transfer or delivery of Right Certificates to a person
other than, or the issuance or delivery of certificates or
depositary receipts for the Preference Shares in a name other
than that of, the registered holder of the Right Certificate
evidencing Rights surrendered for exercise or to issue or to
deliver any certificates or depositary receipts for Preference
Shares 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 reasonable satisfaction that no such
tax is due.
Section 10. Preference Shares Record Date. Each person in
whose name any certificate for Preference Shares is issued upon
the exercise of Rights shall for all purposes be deemed to have
become the holder of record of the Preference Shares represented
thereby on, and such certificate shall be dated, the date upon
which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable
transfer taxes) was made; provided, however, that if the date of
such surrender and payment is a date upon which the Preference
Shares 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 shall be dated, the next succeeding
Business Day on which the Preference Shares 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 holder of Preference 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
Preference Shares or other shares covered by each Right and the
number of Rights outstanding are subject to adjustment from time
to time as provided in this Section 11.
<PAGE 9>
(a)(i)In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preference
Shares payable in Preference Shares, (B) subdivide the
outstanding Preference Shares, (C) combine the outstanding
Preference Shares into a smaller number of Preference Shares or
(D) issue any shares of its capital stock in a reclassification
of the Preference 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), the Purchase Price in effect at
the time of the record date for such dividend or of the effective
date of such subdivision, combination or reclassification, and
the number and kind of shares of capital stock issuable on such
date, shall be proportionately adjusted so that the holder of any
Right exercised after such time shall be entitled to receive the
aggregate number and kind of shares of capital stock which, if
such Right had been exercised immediately prior to such date and
at a time when the Preference Shares transfer books of the
Company were open, such holder would have owned upon such
exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification; 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 capital stock of the Company 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) below, 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) below.
(ii) Subject to Section 24 of this Agreement, in the
event any Person, alone or together with its Affiliates and
Associates, becomes an Acquiring Person, each holder of a Right
shall thereafter have a right to receive, upon exercise thereof
at a price equal to the then current Purchase Price multiplied by
the number of one one-hundredths of a Preference Share for which
the Right is then exercisable, in accordance with the terms of
this Agreement and in lieu of Preference Shares, such number of
Common Shares of the Company as shall equal the result obtained
by (x) multiplying the then current Purchase Price by the number
of one one-hundredths of a Preference Share for which a Right is
then exercisable and dividing that product by (y) 50% of the then
current per share market price of the Company's Common Shares
(determined pursuant to Section 11(d) hereof) on the date of the
occurrence of such event. In the event that any Person shall
become an Acquiring Person and the Rights shall then be
outstanding, the Company shall not take any action which would
eliminate or diminish the benefits intended to be afforded by the
Rights. From and after the time at which any Person, alone or
together with its Affiliates and Associates, becomes an Acquiring
Person, any Rights that are or were acquired or beneficially
owned by any Acquiring Person (or any Associate or Affiliate of
such Acquiring Person) shall be void and any holder of such
Rights shall thereafter have no right to exercise such Rights
under any provision of this Agreement. No Right Certificate
shall be issued pursuant to Section 3 that represents Rights
beneficially owned by an Acquiring Person whose Rights would be
void pursuant to the preceding sentence or any Associate or
Affiliate thereof; no Right Certificate shall be issued at any
time upon the transfer of any Rights to an Acquiring Person whose
Rights would be void pursuant to the preceding sentence 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
preceding sentence shall be cancelled.
<PAGE 10>
(iii) If the number of Common Shares that are authorized
by the Company's Articles of Incorporation but not outstanding or
reserved for issuance for purposes other than upon exercise of
the Rights are not sufficient to permit the exercise in full of
the Rights in accordance with Section 11(a)(ii) hereof, the
Company shall (A) determine an amount (the "Excess Amount") equal
to the excess of the value (the "Current Value") of the aggregate
number of Common Shares that would otherwise be issuable upon the
exercise of a Right in accordance with Section 11(a)(ii) hereof
over the Purchase Price and (B) with respect to each Right,
substitute for such Common Shares, upon payment of the applicable
Purchase Price, (1) cash, (2) a reduction in the Purchase Price,
(3) Common Shares (to the extent available) or other equity
securities of the Company, (4) debt securities of the Company,
(5) other assets or (6) any combination of the foregoing, having
an aggregate value equal to the Current Value (less the amount of
any reduction in the Purchase Price), where such aggregate value
has been determined by a majority of the Independent Directors
and the Board of Directors of the Company, based upon the advice
of a nationally recognized investment banking firm selected by
the Board of Directors of the Company; provided, however, that if
the Company shall not have made adequate provision to deliver
value pursuant to clause (B) above within 30 days following the
date upon which any Person, alone or together with its Affiliates
and Associates, becomes an Acquiring Person (the "Section
11(a)(ii) Trigger Date"), then the Company shall be obligated to
deliver, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, Common Shares (to the
extent available) and then, if necessary, cash, securities and/or
assets that have an aggregate value equal to the Excess Amount,
where such aggregate value has been determined by a majority of
the Independent Directors and the Board of Directors of the
Company based upon the advice of a nationally recognized
investment banking firm selected by the Board of Directors of the
Company; provided, further, however, that if the Independent
Directors shall determine in good faith that it is likely that
sufficient additional Common Shares could be authorized for
issuance upon exercise of the Rights in full, the 30-day period
referred to above (such period, as it may be extended, being
referred to hereinafter as the "Substitution Period") may, in the
sole discretion of the Independent Directors, be extended to the
extent necessary, but not more than 90 days following the Section
11(a)(ii) Trigger Date, in order for the Company to seek
shareholder approval for the authorization of such additional
shares. To the extent that action is to be taken pursuant to the
first sentence of this Section 11(a)(iii), the Company (1) shall
provide, subject to the exceptions specified in Section 11(a)(ii)
hereof, that such action shall to the maximum extent possible
apply uniformly to the holders of all outstanding Rights that
shall not have become null and void and (2) may suspend the
exercisability of the Rights until the expiration of the
Substitution Period in order to seek any corporate
authorizations, to decide the appropriate form of distribution to
be made pursuant to such first sentence, to determine the value
thereof, or to take any combination of such actions. 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. For purposes
of this Section 11(a)(iii), the value of the Common Shares shall
be the current per share market price per Common Share (as
determined pursuant to Section 11(d) hereof) on the Section
11(a)(ii) Trigger Date. For purposes of this paragraph,
"Independent Director" shall mean any member of the Board of
Directors of the Company, while such person is a member of the
Board, who is not an Acquiring Person, or an Affiliate or
<PAGE 11>
Associate of an Acquiring Person, or a representative or nominee
of an Acquiring Person or of any such Affiliate or Associate, and
was a member of the Board prior to the time that any Person
becomes an Acquiring Person, and any successor of an Independent
Director, while such successor is a member of the Board, who is
not an Acquiring Person or an Affiliate or Associate of an
Acquiring Person, or a representative or nominee of an Acquiring
Person or of any such Affiliate or Associate, and is recommended
or elected to succeed the Independent Director by a majority of
the Independent Directors.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of
Preference Shares entitling them (for a period expiring within 45
calendar days after such record date) to subscribe for or
purchase Preference Shares (or shares having the same rights,
privileges and preferences as the Preference Shares ("equivalent
preference shares")) or securities convertible into Preference
Shares or equivalent preference shares at a price per Preference
Share or equivalent preference share (or having a conversion
price per share, if a security convertible into Preference Shares
or equivalent preference shares) less than the then current per
share market price of the Preference Shares (as defined in
Section 11(d)) on such record date, the Purchase Price to be in
effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record
date by a fraction, the numerator of which shall be the number of
Preference Shares outstanding on such record date plus the number
of Preference Shares which the aggregate offering price of the
total number of Preference Shares and/or equivalent preference
shares so to be offered (and/or the aggregate initial conversion
price of the convertible securities so to be offered) would
purchase at such current market price and the denominator of
which shall be the number of Preference Shares outstanding on
such record date plus the number of additional Preference Shares
and/or equivalent preference shares to be offered for
subscription or purchase (or into which the convertible
securities so to be offered are initially convertible); 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 capital stock of the Company issuable upon exercise
of one Right. 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 of the Company, whose
determination shall be described in a statement filed with the
Rights Agent. Preference Shares owned by or held for the account
of the Company shall not be deemed outstanding for the purpose of
any such computation. Such adjustment shall be made successively
whenever such a record date is fixed, and in the event that such
rights, options or warrants are not so issued, the Purchase Price
shall be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the
making of a distribution to all holders of the Preference 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 or a dividend
payable in Preference 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 then current per share market
price of the Preference Shares on such record date, less the fair
market value (as determined in good faith by the Board of
<PAGE 12>
Directors of the Company, 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 distributed or of
such subscription rights or warrants applicable to one Preference
Share and the denominator of which shall be such current per
share market price of the Preference Shares; 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 capital stock of the Company to be issued upon exercise
of one Right. 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, the
"current per share market price" of any security (a "Security"
for the purpose of this Section 11(d)(i)) on any particular date
shall be deemed to be the average of the daily closing prices per
share of such Security for the 30 consecutive Trading Days (as
such term is hereinafter defined) immediately prior to such date;
provided, however, that in the event that the current per share
market price of the Security is determined during a period
following the announcement by the issuer of such Security of (A)
a dividend or distribution on such Security payable in shares of
such Security or securities convertible into such shares, or (B)
any subdivision, combination or reclassification of such Security
and prior to the expiration of 30 Trading Days after the
ex-dividend date for such dividend or distribution, or the record
date for such subdivision, combination or reclassification, then,
and in each such case, the current per share market price shall
be appropriately adjusted to reflect the current market price per
share equivalent of such Security. The closing price for each
day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid
and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock
Exchange or, if the Security is not listed or admitted to trading
on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange
on which the 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 Quotations System
("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 of the Company, or, if on any
such date no such market maker is making a market in the
Security, the fair value of the Security on such date as
determined in good faith by the Board of Directors of the
Company. 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, a Business Day.
(ii) For the purpose of any computation hereunder, the
"current per share market price" of the Preference Shares shall
be determined in accordance with the method set forth in Section
11(d)(i). If the Preference Shares are not publicly traded, the
"current per share market price" of a Preference Share shall be
conclusively deemed to be the current per share market price of a
Common Share as determined pursuant to Section 11(d)(i)
<PAGE 13>
(appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof),
multiplied by one hundred. If neither the Common Shares nor the
Preference Shares are publicly held or so listed or traded,
"current per share market price" shall mean the fair value per
share as determined in good faith by the Board of Directors of
the Company, whose determination shall be described in a
statement filed with the Rights Agent.
(e) No adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or decrease of
at least 1% in the Purchase Price; provided, however, that any
adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest cent or to the
nearest one one-millionth of a Preference Share or one
ten-thousandth of any other share or security as the case may be.
Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later
than the earlier of (i) three years from the date of the
transaction which requires such adjustment or (ii) the date of
the expiration of the right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to
Section 11(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of capital
stock of the Company other than Preference Shares, thereafter the
number of such other shares 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 Preference Shares contained in
Section 11(a) through (c), inclusive, and the provisions of
Sections 7, 9, 10 and 13 with respect to the Preference Shares
shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent
to any adjustment made to the Purchase Price hereunder shall
evidence the right to purchase, at the adjusted Purchase Price,
the number of one one-hundredths of a Preference 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), upon each adjustment of the Purchase
Price as a result of the calculations made in Sections 11(b) and
(c), each Right outstanding immediately prior to the making of
such adjustment shall thereafter evidence the right to purchase,
at the adjusted Purchase Price, that number of one one-hundredths
of a Preference Share (calculated to the nearest one
one-millionth of a Preference Share) obtained by (i) multiplying
(x) the number of one one-hundredths of a share covered by a
Right immediately prior to this adjustment by (y) the Purchase
Price in effect immediately prior to such adjustment of the
Purchase Price and (ii) dividing the product so obtained by the
Purchase Price in effect immediately after such adjustment of the
Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights,
in substitution for any adjustment in the number of one
one-hundredths of a Preference 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 Preference Share for which a
Right was exercisable immediately prior to such adjustment. Each
Right held of record prior to such adjustment of the number of
<PAGE 14>
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 10 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 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
Preference Share issuable upon the exercise of the Rights, the
Right Certificates theretofore and thereafter issued may continue
to express the Purchase Price and the number of one
one-hundredths of a Preference Share which were expressed in the
initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below one one-hundredth of the then
par value, if any, of the Preference 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 Preference 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 issuance to the holder of
any Right exercised after such record date of the Preference
Shares and other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the Preference
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) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to the
extent that it in its sole discretion shall determine to be
advisable in order that any consolidation or subdivision of the
Preference Shares, issuance wholly for cash of any Preference
<PAGE 15>
Shares at less than the current market price, issuance wholly for
cash of Preference Shares or securities which by their terms are
convertible into or exchangeable for Preference Shares, dividends
on Preference Shares payable in Preference Shares or issuance of
rights, options or warrants referred to hereinabove in Section
11(b), hereafter made by the Company to holders of its Preference
Shares, shall not be taxable to such shareholders.
(n) In the event that at any time after the date of this
Agreement and prior to the Distribution Date, the Company shall
(i) declare or pay any dividend on the Common Shares payable in
Common Shares or (ii) effect a subdivision, combination or
consolidation of the Common Shares (by reclassification or
otherwise than by payment of dividends in Common Shares) into a
greater or lesser number of Common Shares, then in any such case
(A) the number of one one-hundredths of a Preference Share
purchasable after such event upon proper exercise of each Right
shall be determined by multiplying the number of one
one-hundredths of a Preference Share so purchasable immediately
prior to such event by a fraction, the numerator of which is the
number of Common Shares outstanding immediately before such event
and the denominator of which is the number of Common Shares
outstanding immediately after such event, and (B) each Common
Share outstanding immediately after such event shall have issued
with respect to it that number of Rights which each Common Share
outstanding immediately prior to such event had issued with
respect to it. The adjustments provided for in this Section
11(n) shall be made successively whenever such a dividend is
declared or paid or such a subdivision, combination or
consolidation is effected.
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares. Whenever an adjustment is made as provided in
Section 11 or 13 hereof, the Company shall promptly (a) prepare a
certificate setting forth such adjustment, and a brief statement
of the facts accounting for such adjustment, (b) file with the
Rights Agent and with each transfer agent for the Common Shares
or the Preference Shares a copy of such certificate and (c)
subject to Section 25(c), mail a brief summary thereof to each
holder of a Right Certificate in accordance with Section 25
hereof. Notwithstanding the foregoing sentence, the failure of
the Company to give such notice shall not affect the validity of
or the force or effect of or the requirement of such adjustment.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power. In the event, directly or indirectly,
at any time after a Person has become an Acquiring Person, (a)
the Company shall consolidate with, or merge with and into, any
other Person, (b) any Person shall consolidate with the Company,
or merge with and into the Company and the Company shall be the
continuing or surviving corporation of such merger and, in
connection with such merger, all or part of the Common Shares
shall be changed into or exchanged for stock or other securities
of any other Person (or the Company) or cash or any other
property, or (c) the Company shall sell or otherwise transfer (or
one or more of its Subsidiaries shall sell or otherwise
transfer), in one or more transactions, assets or earning power
aggregating 50% or more of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any other
Person other than the Company or one or more of its wholly-owned
Subsidiaries, then, and in each such case, proper provision shall
be made so that (i) each holder of a Right (except as otherwise
provided herein) shall thereafter have the right to receive, upon
the exercise thereof at a price equal to the then current
Purchase Price multiplied by the number of one one-hundredths of
a Preference Share for which a Right is then exercisable, in
accordance with the terms of this Agreement and in lieu of
<PAGE 16>
Preference Shares, such number of Common Shares of such other
Person (including the Company as successor thereto or as the
surviving corporation) as shall equal the result obtained by (A)
multiplying the then current Purchase Price by the number of one
one-hundredths of a Preference Share for which a Right is then
exercisable and dividing that product by (B) 50% of the then
current per share market price of the Common Shares of such other
Person (determined pursuant to Section 11(d) hereof) on the date
of consummation of such consolidation, merger, sale or transfer;
(ii) the issuer of such Common Shares shall thereafter be liable
for, and shall assume, by virtue of such consolidation, merger,
sale or transfer, all the obligations and duties of the Company
pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such issuer; and (iv) such
issuer shall take such steps (including, but not limited to, the
reservation of a sufficient number of its Common Shares in
accordance with Section 9 hereof) 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, in relation to the Common Shares thereafter deliverable
upon the exercise of the Rights. The Company shall not
consummate any such consolidation, merger, sale or transfer
unless prior thereto the Company and such issuer shall have
executed and delivered to the Rights Agent a supplemental
agreement so providing. The Company shall not enter into any
transaction of the kind referred to in this Section 13 if at the
time of such transaction there are any rights, warrants,
instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such
transaction, would eliminate or substantially diminish the
benefits intended to be afforded by the Rights. The provisions
of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers.
Section 14. Fractional Rights and Fractional Shares. (a)
The Company shall not be required to issue fractions of Rights 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 (as determined pursuant to the second
sentence of Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date on which such fractional Rights
would have been otherwise issuable.
(b) The Company shall not be required to issue fractions of
Preference Shares (other than fractions which are integral
multiples of one one-hundredth of a Preference Share) upon
exercise of the Rights or to distribute certificates which
evidence fractional Preference Shares (other than fractions which
are integral multiples of one one-hundredth of a Preference
Share). Fractions of Preference Shares in integral multiples of
one one-hundredth of a Preference 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 Preference Shares represented by such
depositary receipts. In lieu of fractional Preference Shares
that are not integral multiples of one one-hundredth of a
Preference 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 Preference Share. For the
purposes of this Section 14(b), the current market value of a
Preference Share shall be the closing price of a Preference Share
<PAGE 17>
(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) The holder of a Right by the acceptance of the Right
expressly waives such holder's 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, excepting the rights of action given
to the Rights Agent under Section 18 hereof, are vested in the
respective registered holders of the Right Certificates (and,
prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common
Shares), without the consent of the Rights Agent or of the holder
of any other Right Certificate (or, prior to the Distribution
Date, of the Common Shares), may, in such holder's own behalf and
for such holder's own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, such holder's 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 not be
evidenced by a Rights Certificate and will be transferable only
in connection with the transfer of the Common Shares;
(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 of the Rights Agent, duly
endorsed or accompanied by a proper instrument of transfer; and
(c) 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 Shares certificate) is
registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or
writing on the Right Certificate or the associated Common Shares
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 affected by any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a
Stockholder. No holder of a Right, as such, shall be entitled to
vote, receive dividends or be deemed for any purpose the holder
of the Preference Shares or any other securities of the Company
which may at any time be issuable upon the exercise of the Rights
represented thereby, nor shall anything contained herein or in
<PAGE 18>
any Right Certificate be construed to confer upon the holder of
any Rights, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to
receive dividends or subscription rights, or otherwise, until the
Right or Rights evidenced by such Right Certificate shall have
been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. (a) The Company
agrees to pay to the Rights Agent reasonable compensation for all
services rendered by it hereunder and, from time to time, on
demand of the Rights Agent, its reasonable expenses and counsel
fees and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of
its duties hereunder. The Company also agrees to indemnify the
Rights Agent for, and to hold it harmless against, any loss,
liability, or expense, incurred without negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything
done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the
costs and expenses of defending against any claim of liability in
the premises. The Rights Agent shall promptly notify the Company
of any claim for which it may seek indemnity. The Company shall
defend any such claim for which the Rights Agent is entitled to
indemnification and the Rights Agent shall cooperate in the
defense. The Rights Agent may engage separate counsel to review
the progress of the defense to any claim and to advise the Rights
Agent as to its obligation to cooperate in such defense, and the
Company shall pay the reasonable fees and expenses of such
counsel.
(b) The Rights Agent shall be protected and shall incur no
liability for, or in respect of any action taken, suffered or
omitted by it in connection with, its administration of this
Agreement in reliance upon any Right Certificate or certificate
for the Preference Shares or Common Shares or for other
securities of the Company, instrument of assignment or transfer,
power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate (including certificates delivered
under Section 12), statement, or other paper or document believed
by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper person or
persons, or otherwise upon the advice of counsel as set forth in
Section 20 hereof.
(c) The Rights Agent has no duty to determine when an
adjustment under this Rights Agreement should be made, how it
should be made, or what it should be. The Rights Agent makes no
representation as to the validity or value of any securities or
assets issued upon exercise of the Rights. The Rights Agent
shall not be responsible for the Company's failure to comply with
this Agreement. Each Co-Rights Agent shall have the same
protection under this Section as the Rights Agent.
(d) As long as the Rights are listed on the New York Stock
Exchange, the Rights Agent shall maintain all facilities in the
area located south of Chambers Street in the Borough of
Manhattan, New York, New York, that are required by Section 6 of
the New York Stock Exchange Listed Company Manual.
<PAGE 19>
Section 19. Merger or Consolidation or Change of Name of
Rights Agent. (a) Any corporation into which the Rights Agent
or any successor Rights Agent may be merged or with which it may
be consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the
stock transfer or corporate trust business of the Rights Agent or
any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any
paper or any further act on the part of any of the parties
hereto; provided, 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 Certificates so countersigned; and in case at that time any
of the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates
either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall
be changed and at such time any of the Right Certificates shall
have been countersigned but not delivered, the Rights Agent may
adopt 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 the duties and obligations imposed by this Agreement
upon the following terms and conditions, 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 (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 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 any one of 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 suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
<PAGE 20>
(c) The Rights Agent shall be liable hereunder to the
Company and any other Person only for its own negligence, bad
faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason
of any of the statements of fact or recitals contained in this
Agreement or in the 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 the Rights becoming void
pursuant to Section 11(a)(ii) hereof) or any adjustment in the
terms of the Rights (including the manner, method or amount
thereof) provided for in Section 3, 11, 13, 23 or 24, or the
ascertaining of the existence of facts that would require any
such change or adjustment (except with respect to the exercise of
Rights evidenced by Right Certificates after actual notice that
such change or adjustment is required); nor shall it by any act
hereunder be deemed to make any representation or warranty as to
the authorization or reservation of any Preference Shares to be
issued pursuant to this Agreement or any Right Certificate or as
to whether any Preference Shares will, when issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from any one of 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 by it in good faith in accordance with instructions of
any such officer or for any delay in acting while waiting for
those instructions.
(h) The Rights Agent and any stockholder, director, officer
or employee of the Rights Agent may buy, sell or deal in any of
the Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the Company
may be interested, or contract with or lend money to the Company
or otherwise act as fully and freely as though it were not Rights
Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or
for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or agents,
and the Rights Agent shall not be answerable or accountable for
any act, default, neglect or misconduct of any such attorneys or
<PAGE 21>
agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
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 30 days' notice in writing
mailed to the Company and to each transfer agent of the Common
Shares or Preference Shares by registered or certified mail, and,
after the Distribution Date, to the holders of the Right
Certificates by first-class mail. The Company may remove the
Rights Agent or any successor Rights Agent (with or without
cause) upon 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 Shares or Preference Shares by
registered or certified mail, and, after the Distribution Date,
to the holders of the Right Certificates by first-class mail. If
the Rights Agent shall resign or be removed or shall otherwise
become incapable of acting, the Company shall appoint a successor
to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of
such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit his Right Certificates for inspection by
the Company), then the registered holder of any Right Certificate
may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent,
whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the
United States or of any other state of the United States, in good
standing, which is authorized under such laws to exercise
corporate trust or stock transfer powers and is subject to
supervision or examination by federal or state authority, or
which is a Subsidiary of such banking institution, and which has
at the time of its appointment as Rights Agent a combined capital
and surplus of at least $20 million. 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 Shares or Preference
Shares, and, after the Distribution Date, 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.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or 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 its Board of Directors to reflect any adjustment or
change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the
Right Certificates made in accordance with the provisions of this
Agreement.
<PAGE 22>
Section 23. Redemption. (a) The Board of Directors of the
Company may, at its option, at any time prior to such time as any
Person becomes an Acquiring Person, redeem all but not less than
all the then outstanding Rights at a redemption price of $.01 per
Right, as such amount may be appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring
after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price"). 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.
(b) Immediately upon the action of the Board of Directors
of the Company ordering the redemption of the Rights pursuant to
paragraph (a) of this Section 23, and without any further action
and without any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price. The Company shall
promptly give public notice of any such redemption; provided,
however, that the failure to give, or any defect in, any such
notice shall not affect the validity of such redemption. Within
10 days after such action of the Board of Directors ordering the
redemption of the Rights, the Company shall mail a notice of
redemption to all the holders of the then outstanding Rights 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 Common Shares. 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 for value 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
purchase of Common Shares prior to the Distribution Date.
Section 24. Exchange. (a) The Board of Directors of the
Company may, at its option, at any time after any Person becomes
an Acquiring Person, exchange all or part of the then outstanding
and exercisable Rights (which shall not include Rights that have
become void pursuant to the provisions of Section 11(a)(ii)
hereof) for Common Shares at an exchange ratio of one Common
Share 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 the Company, any Subsidiary
of the Company, any employee benefit plan of the Company or any
such Subsidiary, or any trust or other entity holding Common
Shares for or pursuant to the terms of any such plan), together
with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Common Shares then
outstanding.
(b) Immediately upon the action of the Board of Directors
of the Company ordering the exchange of any Rights pursuant to
paragraph (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 shall be to receive that number of Common Shares equal to
the number of such Rights held by such holder multiplied by the
Exchange Ratio. The Company shall promptly give public notice of
any such exchange; provided, however, that the failure to give,
or any defect in, such notice shall not affect the validity of
such exchange. The Company promptly shall mail a notice of any
<PAGE 23>
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 Common Shares 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 11(a)(ii) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient Common
Shares issued but not outstanding or authorized but unissued to
permit any exchange of Rights as contemplated in accordance with
this Section 24, the Company may take any such action as may be
necessary to authorize additional Common Shares for issuance upon
exchange of the Rights. In the event the Company shall, after
good faith effort, be unable to take all such action as may be
necessary to authorize such additional Common Shares in a timely
manner, the Company may substitute, for each Common Share that
would otherwise be issuable upon exchange of a Right, a number of
Preference Shares or fraction thereof such that the current per
share market price of one Preference Share multiplied by such
number or fraction is equal to the current per share market price
of one Common Share as of the date of issuance of such Preference
Shares or fraction thereof.
(d) The Company shall not be required to issue fractions of
Common Shares or to distribute certificates which evidence
fractional Common Shares. In lieu of such fractional Common
Shares, the Company shall pay to the registered holders of the
Right Certificates with regard to which such fractional Common
Shares would otherwise be issuable an amount in cash equal to the
same fraction of the current market value of a whole Common
Share. For the purposes of this paragraph (d), the current
market value of a whole Common Share shall be the closing price
of a Common Share (as determined pursuant to the second sentence
of Section 11(d)(i) hereof) for the Trading Day immediately prior
to the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events. (a) In case the
Company shall propose (i) to pay any dividend payable in stock of
any class to the holders of its Preference Shares or to make any
other distribution to the holders of its Preference Shares (other
than a regular quarterly cash dividend), (ii) to offer to the
holders of its Preference Shares rights or warrants to subscribe
for or to purchase any additional Preference Shares or shares of
stock of any class or any other securities, rights or options,
(iii) to effect any reclassification of its Preference Shares
(other than a reclassification involving only the subdivision of
outstanding Preference Shares), (iv) to effect any consolidation
or merger into or with, 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 50% or more
of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to, any other Person, or (v) to
effect the liquidation, dissolution or winding up of the Company,
then, in each such case, the Company shall give to each holder of
a Right Certificate, in accordance with Section 26 hereof, a
notice of such proposed action, which shall specify the record
date for the purposes of such stock dividend, or distribution of
rights or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution,
or winding up is to take place and the date of participation
therein by the holders of the Preference Shares, if any such date
is to be fixed, and such notice shall be so given in the case of
<PAGE 24>
any action covered by clause (i) or (ii) above at least 10 days
prior to the record date for determining holders of the
Preference Shares for purposes of such action, and in the case of
any such other action, at least 10 days prior to the date of the
taking of such proposed action or the date of participation
therein by the holders of the Preference Shares, whichever shall
be the earlier.
(b) In case the event set forth in Section 11(a)(ii) hereof
shall occur, then the Company shall as soon as practicable
thereafter give to each holder of a Right Certificate, 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 Section
11(a)(ii) hereof.
(c) Notwithstanding anything in this Agreement to the
contrary, prior to the Distribution Date a filing by the Company
with the Securities and Exchange Commission shall constitute
sufficient notice to the holders of securities of the Company,
including the Rights, for purposes of this Agreement and no other
notice need be given.
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:
Century Telephone Enterprises, Inc.
100 Century Park Drive
Monroe, Louisiana 71203
Attention: Corporate Secretary
Subject to the provisions of Section 21 hereof, 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:
Society National Bank
5050 Renaissance Tower
1201 Elm Street
Dallas, Texas 75270
Attention: Shareholder Services
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 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. (a) The Company
may from time to time supplement or amend this Agreement without
the approval of any holders of Rights in order to cure any
ambiguity, to correct or supplement any provision contained
herein which may be defective or inconsistent with any other
<PAGE 25>
provisions herein, or to make any other provisions with respect
to the Rights which the Company may deem necessary or desirable,
any such supplement or amendment to be evidenced by a writing
signed by the Company and the Rights Agent; provided, however,
that from and after such time as any Person becomes an Acquiring
Person, this Agreement shall not be amended in any manner which
would adversely affect the interests of the holders of Rights.
(b) Without limiting the foregoing, the Company may at any
time prior to such time as any Person becomes an Acquiring Person
amend this Agreement to lower the thresholds set forth in
Sections 1(a) and 3(a) to not less than the greater of (i) the
sum of .001% and the largest percentage of the outstanding Common
Shares then known by the Company to be beneficially owned by any
Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or any Subsidiary of the
Company, or any trust or other entity holding Common Shares for
or pursuant to the terms of any such plan) and (ii) 10%.
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, the Common
Shares) 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, the Common Shares).
Section 30. Severability. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants
and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
Section 31. 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 Louisiana and for all
purposes shall be governed by and construed in accordance with
the laws of such State applicable to contracts made and to be
performed entirely within such State.
Section 32. 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 33. 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.
<PAGE 26>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and attested, all as of the day and
year first above written.
ATTEST: CENTURY TELEPHONE ENTERPRISES, INC.
/s/ Sherry Bowen By:/s/ Glen F. Post, III
_____________________ ___________________________
Glen F. Post, III
Vice Chairman, President and
Chief Executive Officer
ATTEST: SOCIETY NATIONAL BANK
/s/ Cindy Bennett By:/s/ Mark Asbury
_____________________ ___________________________
Mark Asbury
Vice President
Exhibit A
to Rights Agreement
ARTICLES OF AMENDMENT
to the
ARTICLES OF INCORPORATION
of
CENTURY TELEPHONE ENTERPRISES, INC.
Century Telephone Enterprises, Inc., a Louisiana corporation
(the "Corporation"), by and through its undersigned President and
Secretary and by authority of its Board of Directors, does hereby
certify that at a regular meeting of the Board of Directors of
the Corporation held on August 27, 1996, the Board, pursuant to
Section 33A of the Business Corporation Law of Louisiana, duly
adopted resolutions approving an amendment to the Corporation's
Articles of Incorporation, as in effect prior to the date hereof,
by adding to the end of Article III thereof the following new
Section J:
J. Series BB Preference Stock. The Corporation's Series
BB Participating Cumulative Preference Stock shall consist of
1,000,000 shares of Preferred Stock having the preferences,
limitations and relative rights set forth below. Such number of
shares may be increased or decreased by resolution of the Board
of Directors; provided, however, that no decrease shall reduce
the number of shares of Series BB Participating Cumulative
Preference Stock to a number less than the number of shares then
outstanding plus the number of shares reserved for issuance upon
the exercise of outstanding options or rights or upon the
conversion of any outstanding securities issued by the
Corporation convertible into Series BB Participating Cumulative
Preference Stock.
(1) The holders of Series BB Participating Cumulative
Preference Stock shall have the following dividend rights.
(a) Subject to the rights of the holders of any
shares of any series of Preferred Stock (or any similar stock)
ranking prior and superior to the Series BB Participating
Cumulative Preference Stock with respect to dividends, the
holders of shares of Series BB Participating Cumulative
Preference Stock shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally available
for the purpose, quarterly dividends payable in cash on the
fifteenth day of March, June, September and December in each year
(each such date being referred to herein as a "Quarterly Dividend
Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a
share of Series BB Participating Cumulative Preference Stock, in
an amount per share (rounded to the nearest cent) equal to the
greater of (a) $10.00 or (b) subject to the provision for
adjustment hereinafter set forth, 100 times the aggregate per
share amount of all cash dividends, and 100 times the aggregate
per share amount (payable in kind) of all non-cash dividends or
other distributions other than a dividend payable in shares of
Common Stock or a subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared on the Common
Stock, par value $1.00 per share, of the Corporation (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 Series BB Participating Cumulative Preference
Stock. In the event the Corporation shall at any time after
August 27, 1996 (the "Right Declaration Date") (i) declare or pay
any dividend on Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in
each such case the amount to which holders of shares of Series BB
Participating Cumulative Preference Stock were entitled
immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
(b) The Corporation shall declare a dividend or
distribution on the Series BB Participating Cumulative Preference
Stock as provided in paragraph (a) above immediately after it
declares a dividend or distribution on the Common Stock (other
than a dividend payable in shares of Common Stock); provided
that, in the event no dividend or distribution shall have been
declared on the Common Stock during the period between any
Quarterly Dividend Payment Date and the next subsequent Quarterly
Dividend Payment Date, a dividend of $10.00 per share on the
Series BB Participating Cumulative Preference Stock shall
nevertheless be payable on such subsequent Quarterly Dividend
Payment Date.
(c) Dividends shall begin to accrue and be
cumulative on outstanding shares of Series BB Participating
Cumulative Preference Stock from the Quarterly Dividend Payment
Date next preceding the date of issue of such shares of Series BB
Participating Cumulative Preference Stock, unless the date of
issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends of such
shares shall begin to accrue from the date of issue of such
shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the
determination of holders of shares of Series BB Participating
Cumulative Preference Stock entitled to receive a quarterly
dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and
be cumulative from such Quarterly Dividend Payment Date. Accrued
but unpaid dividends shall not bear interest. Dividends paid on
the shares of Series BB Participating Cumulative Preference Stock
in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro
rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for
the determination of holders of shares of Series BB Participating
Cumulative Preference Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date
shall be no more than 45 days prior to the date fixed for the
payment thereof.
(2) In addition to any voting rights otherwise
required by law, the holders of shares of Series BB Participating
Cumulative Preference Stock shall have the following voting
rights:
(a) Subject to the provision for adjustment
hereinafter set forth, each share of Series BB Participating
Cumulative Preference Stock shall entitle the holder thereof to
100 votes on all matters submitted to a vote of the shareholders
of the Corporation. In the event the Corporation shall at any
time after the Rights Declaration Date (i) declare or pay any
dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in
each such case the number of votes per share to which holders of
shares of Series BB Participating Preference Stock were entitled
immediately prior to such event shall be adjusted by multiplying
such number by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
(b) Except as otherwise provided in the
Corporation's Articles of Incorporation or by law, the holders of
shares of Series BB Participating Cumulative Preference Stock and
the holders of shares of Common Stock shall vote together as one
class on all matters submitted to a vote of stockholders of the
Corporation.
(c) (i) If at any time dividends on any Series
BB Participating Cumulative Preference Stock shall be in arrears
in an amount equal to six quarterly dividends thereon, the
occurrence of such contingency shall mark the beginning of a
period (herein called a "default period") which shall extend
until such time when all accrued and unpaid dividends for all
previous quarterly dividend periods and for the current quarterly
dividend period on all shares of Series BB Participating
Cumulative Preference Stock then outstanding shall have been
declared and paid or set apart for payment. During each default
period, all holders of Preferred Stock (including holders of the
Series BB Participating Cumulative Preference Stock) with
dividends in arrears in an amount equal to six quarterly
dividends thereon, voting as a class, irrespective of series,
shall have the right to elect two Directors.
(ii) During any default period, such voting
right of the holders of Series BB Participating Cumulative
Preference Stock may be exercised initially at a special meeting
called pursuant to subparagraph (iii) of this Section 2(c) or at
any annual meeting of shareholders, and thereafter at annual
meetings of shareholders, provided that neither such voting right
nor the right of the holders of any other series of Preferred
Stock, if any, to increase, in certain cases, the authorized
number of Directors shall be exercised unless the holders of 10%
in number of shares of Preferred Stock outstanding shall be
present in person or by proxy. The absence of a quorum of the
holders of Common Stock shall not affect the exercise by the
holders of Preferred Stock of such voting right. At any meeting
at which the holders of Preferred Stock shall exercise such
voting right initially during an existing default period, they
shall have the right, voting as a class, to elect Directors to
fill such vacancies, if any, in the Board of Directors as may
then exist up to two Directors or, if such right is exercised at
an annual meeting, to elect two Directors. If the number which
may be so elected at any special meeting does not amount to the
required number, the holders of the Preferred Stock shall have
the right to make such increase in the number of Directors as
shall be necessary to permit the election by them of the required
number. After the holders of the Preferred Stock shall have
exercised their right to elect Directors in any default period
and during the continuance of such period, the number of
Directors shall not be increased or decreased except by vote of
the holders of Preferred Stock as herein provided or pursuant to
the rights of any equity securities ranking senior to or pari
passu with the Series BB Participating Cumulative Preference
Stock.
(iii) Unless the holders of Preferred Stock
shall, during an existing default period, have previously
exercised their right to elect Directors, the Board of Directors
may order, or any shareholder or shareholders owning in the
aggregate not less than 10% of the total number of shares of
Preferred Stock outstanding, irrespective of series, may request,
the calling of a special meeting of the holders of Preferred
Stock, which meeting shall thereupon be called by the Chairman of
the Board, the Chief Executive Officer, the President, a
Vice-President or the Secretary of the Corporation. Notice of
such meeting and of any annual meeting at which holders of
Preferred Stock are entitled to vote pursuant to this paragraph
(c)(iii) shall be given to each holder of record of Preferred
Stock by mailing a copy of such notice to the holder the last
address appearing on the books of the Corporation. Such meeting
shall be called for a time not earlier than 20 days and not later
than 60 days after such order or request or in default of the
calling of such meeting within 60 days after such order or
request, such meeting may be called on similar notice by any
shareholder or shareholders owning in the aggregate not less than
10% of the total number of shares of Preferred Stock outstanding.
Notwithstanding the provisions of this paragraph (c)(iii), no
such special meeting shall be called during the period within 60
days immediately preceding the date fixed for the next annual
meeting of the shareholders.
(iv) In any default period, the holders of
Common Stock, and other classes of stock of the Corporation, if
applicable, shall continue to be entitled to elect the whole
number of Directors until the holders of Preferred Stock shall
have exercised their right to elect two Directors voting as a
class, after the exercise of which right (x) the Directors so
elected by the holders of Preferred Stock shall continue in
office until their successors shall have been elected by such
holders or until the expiration of the default period, and (y)
any vacancy in the Board of Directors may (except as provided in
paragraph (c)(ii) of this Section 2) be filled by vote of a
majority of the remaining Directors theretofore elected by the
holders of the class of stock which elected the Director whose
office shall have become vacant. References in this paragraph
(c) to Directors elected by the holders of a particular class of
stock shall include Directors elected by such Directors to fill
vacancies as provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a
default period, (x) the right of the holders of Preferred Stock
as a class to elect Directors shall cease, (y) the term of any
Directors elected by the holders of Preferred Stock as a class
shall terminate, and (z) the number of Directors shall be such
number as may be provided for in the Corporation's Articles of
Incorporation or By-laws irrespective of any increase made
pursuant to the provisions of paragraph (c)(ii) of this Section 2
(such number being subject, however, to change thereafter in any
manner provided by law or in the Corporation's Articles of
Incorporation or By-laws). Any vacancies in the Board of
Directors effected by the provisions of clauses (y) and (z) in
the preceding sentence may be filled by a majority of the
remaining Directors.
(d) Except as set forth herein, holders of Series
BB Participating Cumulative Preference 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.
(3) Any shares of Series BB Participating Cumulative
Preference Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and
cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of
a new series of Preferred Stock to be created by resolution or
resolutions of the shareholders or the Board of Directors,
subject to the conditions and restrictions on issuance set forth
in the Corporation's Articles of Incorporation.
(4) The Corporation shall abide by the following
restrictions:
(a) Whenever quarterly dividends or other
dividends or distributions payable on the Series BB
Participating Cumulative Preference Stock as provided for in
Section 1 are in arrears or the Corporation shall be in
default in payment thereof, thereafter and until all accrued
and unpaid dividends and distributions, whether or not
declared, on shares of Series BB Participating Cumulative
Preference Stock outstanding shall have been paid or set
aside for payment in full, and in addition to any and all
other rights which any holder of shares of Series BB
Participating Cumulative Preference Stock may have in such
circumstances, the Corporation shall not:
1. 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 Series BB
Participating Cumulative Preference Stock;
2. 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 Series BB
Participating Cumulative Preference Stock, unless
dividends are paid ratably on the Series BB
Participating Cumulative Preference 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;
3. 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 Series BB
Participating Cumulative Preference 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 (either as to dividends or upon
liquidation, dissolution or winding up) to the Series
BB Participating Cumulative Preference Stock; or
4. redeem or purchase or otherwise acquire
for consideration any shares of Series BB Participating
Cumulative Preference Stock, or any shares of stock
ranking on a parity with the Series BB Participating
Cumulative Preference Stock (either as to dividends or
upon liquidation, dissolution or winding up), except in
accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors)
to all holders of such shares upon such terms as the
Board of Directors, after consideration of the
respective annual dividend rates and other relative
rights and preferences of the respective series and
classes, shall determine in good faith will result in
fair and equitable treatment among the respective
series or classes.
(b) The Corporation shall not permit any
subsidiary of the Corporation to purchase or otherwise
acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph
(a) of this Section 4, purchase or otherwise acquire such
shares at such time and in such manner.
(5) Upon any liquidation, dissolution or winding up of
the Corporation, the holders of Series BB Participating
Cumulative Preference Stock shall have the following rights.
(a) Upon any liquidation, dissolution or winding
up of the Corporation, whether voluntary or involuntary, no
distribution shall be made to the holders of shares of stock
ranking (either as to dividends or upon liquidation, dissolution
or winding up) junior to the Series BB Participating Cumulative
Preference Stock unless, prior thereto, the holders of shares of
Series BB Participating Cumulative Preference Stock shall have
received $100 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 "Series BB Liquidation
Preference"). Following the payment of the full amount of the
Series BB Liquidation Preference, no additional distributions
shall be made to the holders of shares of Series BB Participating
Cumulative Preference Stock unless, prior thereto, the holders of
shares of Common Stock shall have received an amount per share
(the "Common Adjustment") equal to the quotient obtained by
dividing (i) the Series BB Liquidation Preference by (ii) 100 (as
appropriately adjusted as set forth in subparagraph (c) below to
reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such number
in clause (ii), the "Adjustment Number"). Following the payment
of the full amount of the Series BB Liquidation Preference and
the Common Adjustment in respect of all outstanding shares of
Series BB Participating Cumulative Preference Stock and Common
Stock, respectively, holders of Series BB Participating
Cumulative Preference Stock and holders of shares of Common Stock
shall receive their ratable and proportionate share of the
remaining assets to be distributed in the ratio of the Adjustment
Number to 1 with respect to such Cumulative Preference Stock and
Common Stock, on a per share basis, respectively.
(b) In the event, however, that there are not
sufficient assets available to permit payment in full of the
Series BB Liquidation Preference and the liquidation preferences
of all other series of Cumulative Preference Stock, if any, which
rank on a parity with the Series BB Participating Cumulative
Preference Stock, then such remaining assets shall be distributed
ratably to the holders of such parity shares in proportion to
their respective liquidation preferences. In the event, however,
that there are not sufficient assets available to permit payment
in full of the Common Adjustment then such remaining assets shall
be distributed ratably to the holders of Common Stock.
(c) In the event the Corporation shall at any
time after the Rights Declaration Date (i) declare any dividend
on Common Stock payable in shares of Common Stock, (ii) subdivide
the outstanding Common Stock, or (iii) combine the outstanding
Common Stock into a smaller number of shares, then in each such
case the Adjustment Number in effect immediately prior to such
event shall be adjusted by multiplying such Adjustment Number by
a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
(6) 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 converted into
other stock or securities, cash and/or any other property, then
in any such case the shares of Series BB Participating Cumulative
Preference Stock shall at the same time be similarly exchanged or
converted in an amount per share (subject to the provision for
adjustment hereinafter set forth) equal to 100 times the
aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, into which or for
which each share of Common Stock is converted or exchanged. In
the event the Corporation shall at any time after the Rights
Declaration Date (i) declare or pay any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock, or (iii) combine the outstanding Common Stock into
a smaller number of shares, then in each such case the amount set
forth in the preceding sentence with respect to the exchange or
conversion of shares of Series BB Participating Cumulative
Preference 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.
(7) The shares of Series BB Participating Cumulative
Preference Stock shall not be redeemable.
(8) The Articles of Incorporation of the Corporation
shall not be further amended in any manner which would materially
alter or change the powers, preferences or special rights of the
Series BB Participating Cumulative Preference Stock so as to
affect them adversely without the affirmative vote of the holders
of at least two-thirds of the outstanding shares of Series BB
Participating Cumulative Preference Stock, voting separately as a
class.
(9) Series BB Participating Cumulative Preference
Stock may be issued in fractions of a share which shall entitle
the holder, in proportion to such holder's fractional shares, to
exercise voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights of
holders of Series BB Participating Cumulative Preference Stock.
* * * * * * * * * *
IN WITNESS WHEREOF, the undersigned duly authorized officers
of the Corporation have executed and delivered these Articles of
Amendment on this _____ day of August, 1996.
CENTURY TELEPHONE ENTERPRISES, INC.
By: _______________________________
Glen F. Post, III, President
By:________________________________
Harvey P. Perry, Secretary
ACKNOWLEDGMENT
STATE OF LOUISIANA
PARISH OF OAUCHITA
BEFORE ME, the undersigned authority, personally came
and appeared Glen F. Post, III and Harvey P. Perry, to me known
to be the President and Secretary of Century Telephone
Enterprises, Inc., respectively, and the persons who executed the
foregoing instrument in such capacities, and who, being duly
sworn, acknowledged in my presence and in the presence of the
undersigned witnesses, that they were authorized to and did
execute the foregoing instrument in such capacities for such
corporation, as its and their free act and deed.
IN WITNESS WHEREOF, the appearers, witnesses and I have
hereunto affixed our hands on this ______ day of August, 1996.
WITNESSES:
_____________________ _____________________________
Glen F. Post, III
President
_____________________ _____________________________
Harvey P. Perry
Secretary
__________________________
NOTARY PUBLIC
Exhibit B
to Rights Agreement
Form of Right Certificate
Certificate No. R- ________ Rights
NOT EXERCISABLE AFTER NOVEMBER 1, 2006 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT
TO REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE
ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
Right Certificate
CENTURY TELEPHONE ENTERPRISES, 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 August 27, 1996 (the "Rights Agreement"), between
Century Telephone Enterprises, Inc., a Louisiana corporation (the
"Company"), and Society National Bank (the "Rights Agent"), to
purchase from the Company at any time after the Distribution Date
(as such term is defined in the Rights Agreement) and prior to
5:00 P.M., local time in the State of the principal office of the
Rights Agent, on November 1, 2006 at the principal office of the
Rights Agent, or at the office of its successor as Rights Agent,
one one-hundredth of a fully paid non-assessable share of Series
BB Participating Cumulative Preference Stock, par value $25 per
share (the "Preference Shares"), of the Company, at a purchase
price of $110 per one one-hundredth of a Preference Share (the
"Purchase Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase duly executed.
The number of Rights evidenced by this Right Certificate (and the
number of one one-hundredths of a Preference Share which may be
purchased upon exercise hereof) set forth above, and the Purchase
Price set forth above, are the number and Purchase Price as of
August 27, 1996, based on the Preference Shares as constituted as
of such date. As provided in the Rights Agreement, the Purchase
Price and the number of one one-hundredths of a Preference Share
(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 occurrence of certain
events.
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. Copies of the Rights Agreement are on file
at the principal executive offices of the Company and the
above-mentioned offices of the Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office of the
Rights Agent, 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
Preference Shares 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.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Certificate (i) may be redeemed by the
Company at a redemption price of $.01 per Right or (ii) may be
exchanged in whole or in part for Preference Shares or shares of
the Company's Common Stock, par value $1.00 per share.
No fractional Preference 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 of a
Preference Share, 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 shall be entitled to
vote or receive dividends or be deemed for any purpose the holder
of the Preference 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 shareholder of the Company or any right to vote for
the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings
or other actions affecting shareholders (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.
WITNESS the facsimile signature of the proper officers of
the Company and its corporate seal. Dated as of
________________________.
ATTEST: CENTURY TELEPHONE ENTERPRISES, INC.
_____________________ By: _____________________________
Name:
Title:
Countersigned:
SOCIETY NATIONAL BANK
By: ___________________________
Authorized Signature
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: ______________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a
registered national securities exchange, a member of the National
Association of Securities Dealers, Inc., or a commercial bank or
trust company having an office or correspondent in the United
States.
The undersigned hereby certifies that the Rights evidenced
by this Right Certificate are not beneficially owned by an
Acquiring Person or an Affiliate or Associate thereof (as defined
in the Rights Agreement).
Signature
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights represented
by the Right Certificate.)
To: CENTURY TELEPHONE ENTERPRISES, INC.
The undersigned hereby irrevocably elects to exercise Rights
represented by this Right Certificate to purchase the Preference
Shares issuable upon the exercise of such Rights and requests
that certificates for such Preference Shares be issued in the
name of: ________________________________________________________
_________________________________________________________________
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
remaining of such Rights shall be registered in the name of and
delivered to: ___________________________________________________
Please insert social security or other identifying number
(Please print name and address)
Dated: _________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a
registered national securities exchange, a member of the National
Association of Securities Dealers, Inc., or a commercial bank or
trust company having an office or correspondent in the United
States.
The undersigned hereby certifies that the Rights evidenced
by this Right Certificate are not beneficially owned by an
Acquiring Person or an Affiliate or Associate thereof (as defined
in the Rights Agreement).
Signature
NOTICE
The signature in the Form of Assignment or Form of Election
to Purchase, as the case may be, must conform to the name as
written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change
whatsoever.
In the event the certification set forth above in the Form
of Assignment or the Form of Election to Purchase, as the case
may be, is not completed, the Company and the Rights Agent will
deem the beneficial owner of the Rights evidenced by this Right
Certificate to be an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
Exhibit C
to Rights Agreement
SUMMARY OF RIGHTS TO PURCHASE PREFERENCE SHARES
On August 27, 1996, the Board of Directors of Century
Telephone Enterprises, Inc. (the "Company") declared a dividend
of one preference share purchase right (a "Right") for each
outstanding share of common stock, par value $1.00 per share (the
"Common Shares"), of the Company. The dividend is payable on
November 1, 1996 to stockholders of record on September 30, 1996
(the "Record Date"). Each Right entitles the registered holder
to purchase from the Company one one-hundredth of a share of
Series BB Participating Cumulative Preference Stock, par value
$25 per share (the "Preference Shares"), of the Company at a
price of $110 per one one-hundredth of a Preference Share (the
"Purchase Price"), subject to adjustment. The description and
terms of the Rights are set forth in a Rights Agreement dated as
of August 27, 1996 (the "Rights Agreement") between the Company
and Society National Bank, as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated
persons (an "Acquiring Person") have acquired beneficial
ownership of 15% or more of the outstanding Common Shares or (ii)
10 business days (or such later date as may be determined by
action of the Board of Directors prior to such time as any person
or group of affiliated persons becomes an Acquiring Person)
following the commencement of, or announcement of an intention to
make, a tender offer or exchange offer the consummation of which
would result in the beneficial ownership by a person or group of
15% or more of the outstanding Common Shares (the earlier of such
dates being called the "Distribution Date"), the Rights will be
evidenced, with respect to any of the Common Share certificates
outstanding as of the Record Date, by such Common Share
certificate with a copy of this Summary of Rights attached
thereto.
The Rights Agreement provides that, until the Distribution
Date (or earlier redemption or expiration of the Rights), the
Rights will be transferred with and only with the Common Shares.
Until the Distribution Date (or earlier redemption or expiration
of the Rights), new Common Share certificates issued after the
Record Date upon transfer or new issuance of Common Shares will
contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any
certificates for Common Shares outstanding as of the Record Date,
even without such notation or a copy of this Summary of Rights
being attached thereto, will also constitute the transfer of the
Rights associated with the Common Shares represented by such
certificate. As soon as practicable following the Distribution
Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common
Shares as of the close of business on the Distribution Date and
such separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire on November 1, 2006 (the "Final Expiration
Date"), unless the Final Expiration Date is extended or unless
the Rights are earlier redeemed or exchanged by the Company, in
each case, as described below.
The Purchase Price payable, and the number of Preference
Shares or other securities or property issuable, upon exercise of
the Rights are subject to adjustment from time to time to prevent
dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Preference
Shares, (ii) upon the grant to holders of the Preference Shares
of certain rights or warrants to subscribe for or purchase
Preference Shares at a price, or securities convertible into
Preference Shares with a conversion price, less than the
then-current market price of the Preference Shares or (iii) upon
the distribution to holders of the Preference Shares of evidences
of indebtedness or assets (excluding regular periodic cash
dividends paid out of earnings or retained earnings or dividends
payable in Preference Shares) or of subscription rights or
warrants (other than those referred to above).
The number of outstanding Rights and the number of one
one-hundredths of a Preference Share issuable upon exercise of
each Right are also subject to adjustment in the event of a stock
split of the Common Shares or a stock dividend on the Common
Shares payable in Common Shares or subdivisions, consolidations
or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.
Preference Shares purchasable upon exercise of the Rights
will not be redeemable. Each Preference Share will be entitled
to a minimum preferential quarterly dividend payment of $10 per
share but will be entitled to an aggregate dividend of 100 times
the dividend declared per Common Share. In the event of
liquidation, the holders of the Preference Shares will be
entitled to a minimum preferential liquidation payment of $100
per share but will be entitled to an aggregate payment of 100
times the payment made per Common Share. Each Preference Share
will have 100 votes, voting together with the Common Shares.
Finally, in the event of any merger, consolidation or other
transaction in which Common Shares are exchanged, each Preference
Share will be entitled to receive 100 times the amount received
per Common Share. These rights are protected by customary
antidilution provisions.
Because of the nature of the Preference Shares' dividend,
liquidation and voting rights, the value of each one
one-hundredth interest in a Preference Share purchasable upon
exercise of each Right should approximate the value of one Common
Share.
In the event that the Company is acquired in a merger or
other business combination transaction or 50% or more of its
consolidated assets or earning power are sold after a person or
group has become an Acquiring Person, proper provision will be
made so that each holder of a Right will thereafter have the
right to receive, upon the exercise thereof at the then current
exercise price of the Right, that number of shares of common
stock of the acquiring company which at the time of such
transaction will have a market value of two times the exercise
price of the Right. In the event that any person or group of
affiliated or associated persons becomes an Acquiring Person,
proper provision shall be made so that each holder of a Right,
other than Rights beneficially owned by the Acquiring Person
(which will thereafter be void), will thereafter have the right
to receive upon exercise that number of Common Shares having a
market value at the time of such occurrence of two times the
exercise price of the Right.
At any time after any person or group becomes an Acquiring
Person and prior to the acquisition by such person or group of
50% or more of the outstanding Common Shares, the Board of
Directors of the Company may exchange the Rights (other than
Rights owned by such person or group which will have become
void), in whole or in part, at an exchange ratio of one Common
Share, or one one-hundredth of a Preference Share, per Right
(subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an
adjustment of at least 1% in such Purchase Price. No fractional
Preference Shares will be issued (other than fractions which are
integral multiples of one one-hundredth of a Preference Share,
which may, at the election of the Company, be evidenced by
depositary receipts) and in lieu thereof, an adjustment in cash
will be made based on the market price of the Preference Shares
on the last trading day prior to the date of exercise.
At any time prior to the acquisition by a person or group of
affiliated or associated persons of beneficial ownership of 15%
or more of the outstanding Common Shares, the Board of Directors
of the Company may redeem the Rights in whole, but not in part,
at a price of $.01 per Right (the "Redemption Price"). The
redemption of the Rights may be made effective at such time, on
such basis and with such conditions as the Board of Directors in
its sole discretion may establish. Immediately upon any
redemption of the Rights, the right to exercise the Rights will
terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
The terms of the Rights may be amended by the Board of
Directors of the Company without the consent of the holders of
the Rights, including an amendment to lower the 15% thresholds
described above to not less than the greater of (i) the sum of
.001% and the largest percentage of the outstanding Common Shares
then known to the Company to be beneficially owned by any person
or group of affiliated or associated persons and (ii) 10%, except
that from and after such time as any person or group of
affiliated or associated persons becomes an Acquiring Person, no
such amendment may adversely affect the interests of the holders
of the Rights.
Until a Right is exercised, the holder thereof, as such,
will have no rights as a stockholder of the Company, including,
without limitation, the right to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a
Registration Statement on Form 8-A dated ________________, 1996.
A copy of the Rights Agreement is available free of charge from
the Company. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, which is hereby incorporated
herein by reference.
Exhibit to 8-A
Registration Statement
August 27, 1996
CENTURY TELEPHONE ENTERPRISES, INC. DECLARES QUARTERLY DIVIDEND;
UPDATES SHAREHOLDER RIGHTS PLAN
MONROE, LOUISIANA . . . . Century Telephone Enterprises,
Inc., (NYSE Symbol: CTL), today announced that its Board of
Directors declared a quarterly dividend payment of $.09 per share
of Common Stock, payable September 20, 1996, to shareholders of
record on September 6, 1996.
The Board also adopted an updated shareholder rights plan to
replace the existing plan which expires in late November 1996.
The Board of Directors originally adopted a shareholder rights
plan in November 1986 to protect shareholder interests in the
event the Company was faced with a takeover initiative that would
deny shareholders the full value of their investment. Century
Telephone has no knowledge that anyone is considering a hostile
takeover of the Company.
The new Rights are similar in purpose and effect to the
existing Rights, and are intended to enable all shareholders to
realize the long-term value of their investment in Century
Telephone. The new Rights, which will be issued as a dividend on
November 1, 1996 to each common shareholder of record on
September 30, 1996, will be exercisable only if a person
acquires, or announces a tender offer which would result in
ownership of, 15% or more of the Company's common stock. The
Board of Directors will be authorized in certain circumstances to
lower this 15% threshold to not less than 10%. The initial
exercise price will be $110 per Right. The Rights will expire on
November 1, 2006, unless redeemed or exchanged at an earlier
date. A summary of the updated rights plan will be sent to
shareholders in November.
Century Telephone Enterprises, Inc., headquartered in
Monroe, Louisiana, is a diversified telecommunications company.
Century is the 16th largest U.S. local exchange telephone company
based on access lines, and the 15th largest U.S. cellular company
based on population equivalents owned.
