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
CT COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
North Carolina 56-1837282
(State of incorporation (IRS Employer
or organization) Identification No.)
68 Cabarrus Avenue, East
Concord, North Carolina 28025
(Address of principal executive offices) (Zip Code)
If this form relates to the registration of a class of
securities pursuant to Section 12(b) of the Exchange Act
and is effective pursuant to General Instruction A.(c),
check the following box. [ ]
If this form relates to the registration of a class of
securities pursuant to Section 12(g) of the Exchange Act
and is effective pursuant to General Instruction A.(d),
check the following box. [x]
Securities Act registration statement file number to
which this form relates: _____________ (if applicable).
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered: each class is to be registered:
None
Securities to be registered pursuant to Section 12 (g) of the Act:
Common Stock
(Title of Class)
Rights to Purchase Common Stock
(Title of Class)
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Item 1. Description of Registrant's Securities to be Registered.
This Registration Statement relates to the Common Stock
of CT Communications, Inc. (the "Company"). The Company is
authorized to issue 100,000,000 shares of Common Stock, of
which 9,365,337 shares are issued and outstanding. Each
share of Common Stock currently outstanding or subsequently
issued entitles the holder thereof, under certain
circumstances, to purchase one share of Common Stock at a
purchase price of $123 per share (a "Right"). In addition,
approximately 9,914,533 shares of Common Stock are
reserved for issuance in connection with the exercise of any
Rights and under the Company's various stock benefit
plans. The Common Stock has been approved by the National
Association of Securities Dealers, Inc. for designation on
the Nasdaq National Market. The Common Stock trades under
the symbol "CTCI."
The Company is also authorized to issue up to (i) 2,000
shares of 4-1/2 Preferred Stock, par value $100 per share
(the "4-1/2% Preferred Stock"), of which 623 shares are
currently outstanding, and (ii) 17,000 shares of 5%
Preferred Stock, par value $100 per share (the "5% Preferred
Stock"), of which 3,428 shares currently are outstanding. In
addition, The Concord Telephone Company, a wholly owned
subsidiary of the Company ("Concord Telephone"), is
authorized to issue up to 5,000 shares of Cumulative
Preferred Stock, 4.80% Series, par value $100 per share (the
"4.80% Preferred Stock"), of which 1,375 shares are currently
outstanding. The rights of the holders of the Common Stock
are subject to the rights and preferences of the 4-1/2%
Preferred Stock, the 5% Preferred Stock and the 4.80%
Preferred Stock (referred to hereinafter collectively as the
"Preferred Stock"). There is no established trading market
for the Preferred Stock.
The following summary description of the capital stock
of the Company is qualified in its entirety by reference to
the Company's Articles of Incorporation, as amended, and
Bylaws, each of which are incorporated by reference herein.
This description may be updated by reports subsequently
filed by the Company with the Securities and Exchange
Commission for such purpose.
HISTORY
At the Annual Meeting of Shareholders held on
January 28, 1999, the shareholders of the Company approved a
proposal to adopt a plan of recapitalization (the "Plan of
Recapitalization") which (i) provides for one class of
Common Stock, consisting of 100,000,000 authorized shares
and (ii) reclassifies, changes and converts each issued
share of Voting Common Stock of the Company (the "Voting
Common Stock") into 4.4 shares of Common Stock and each
issued share of Class B Nonvoting Common Stock of the
Company (the "Class B Nonvoting Common Stock") into 4.0
shares of Common Stock. On January 28, 1999, the Company
filed an amendment to its Articles of Incorporation with the
North Carolina Secretary of State to effectuate the Plan of
Recapitalization.
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COMMON STOCK
Voting and Other Rights. Holders of the Common Stock
are entitled to one vote per share on all matters to be
voted on by the shareholders and are not entitled to
cumulative voting. Except as otherwise required by law, the
holders of the Preferred Stock are not entitled to vote. The
North Carolina Business Corporation Act (the "NCBCA"),
however, provides that holders of otherwise nonvoting stock
may vote as a separate voting group on any amendment to the
Company's Articles of Incorporation that would
(1) change the aggregate number of authorized shares
of that class of stock;
(2) effect an exchange or reclassification of any
shares of that class of stock into shares of another class;
(3) effect an exchange (or create a right of exchange)
or reclassification of any shares of another class into
shares of that class of stock;
(4) change the designation, rights, preferences or
limitations of any shares of that class;
(5) change any shares of that class of stock into a
different number of shares of the same class;
(6) create a new class of shares having rights or
preferences with respect to distributions or to dissolution
that are prior, superior or substantially equal to the
shares of that class of stock;
(7) increase the rights, preferences, or number of
authorized shares of any class that, after giving effect to
the amendment, would have rights or preferences with respect
to distributions or to dissolution that are prior, superior
or substantially equal to the shares of that class of stock;
(8) limit or deny an existing preemptive right of any
shares of that class of stock;
(9) cancel or otherwise affect rights to distributions
or dividends that have accumulated but not yet been declared
on any shares of that class of stock; or
(10) change the Company into a nonprofit corporation or
a cooperative organization.
Except as provided above, the Common Stock is the only class
of securities of the Company entitled to vote.
All shareholders of the Company, including the holders
of the Common Stock, have dissenters' rights to appraisal
with respect to their shares as provided by statute in
connection with certain types of merger or share exchange
transactions. Dissenters' rights are also available with
respect to certain sales of all or substantially all of the
property of the
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Company and certain amendments to the Company's Articles of
Incorporation that materially and adversely affect certain
enumerated rights of a dissenter's shares.
In the event of liquidation, the holders of Common
Stock would be entitled to receive any assets legally
available for distribution to shareholders with respect to
shares held by them, subject to any prior rights of any
Preferred Stock then outstanding.
The Common Stock does not have any preemptive rights,
redemption privileges, sinking fund privileges or conversion
rights. All the outstanding shares of Common Stock are
validly issued, fully paid and nonassessable. First Union
National Bank, Charlotte, North Carolina acts as transfer
agent and registrar for the Common Stock. There are
currently approximately 1,550 holders of record of Common Stock.
Distributions. The Company may issue share dividends in
Common Stock to the holders of shares of Common Stock. In
addition, if certain requirements are met, share dividends
in shares of another class or series may be issued to
holders of Common Stock. The holders of shares of Common
Stock will be entitled to receive such other distributions
as the Board of Directors of the Company may declare,
subject to any restrictions contained in the Company's
Articles of Incorporation (of which there currently are none
other than those related to the Preferred Stock), unless
after giving effect to such distribution, (i) the Company
would not be able to pay its debts as they become due in the
ordinary course of business or (ii) the Company's total
assets would be less than the sum of the Company's total
liabilities plus the amount that would be needed, if the
Company were to be dissolved at the time of the
distribution, to satisfy claims of shareholders which have
preferential rights superior to the rights of holders of
Common Stock.
Indemnification of Officers and Directors. The Company
has adopted a bylaw, as permitted by the NCBCA, which
provides that, in addition to the indemnification of
directors and officers otherwise provided by the NCBCA, the
Company must, under certain circumstances, indemnify current
or former directors or officers against any and all
liability and litigation expense, including reasonable
attorneys' fees, arising out of their status or activities
as directors or officers, except for liability or litigation
expense incurred on account of activities that were at the
time known or believed by such director or officer to be
clearly in conflict with the best interests of the
corporation. Pursuant to such bylaw, the Company may also
maintain insurance on behalf of its directors and officers
against liability asserted against such persons in such
capacity whether or not such directors or officers have the
right to indemnification pursuant to the bylaw or otherwise.
In addition to the above-described indemnification
provisions, Sections 55-8-50 through 55-8-58 of the NCBCA
contain provisions prescribing the extent to which directors
and officers shall or may be indemnified. Section 55-8-51 of
the NCBCA permits a corporation, with certain exceptions, to
indemnify a present or former director against liability if
(i) he conducted himself in good faith, (ii) he reasonably
believed (x) that his conduct in his official capacity with
the corporation was in its best interests and (y) in all
other cases his conduct was at least not opposed to the
corporation's best interest, and (iii) in the case of any
criminal proceeding, he had no reasonable cause to believe
his conduct was unlawful. A corporation may not indemnify
him in connection with a proceeding by or in the
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right of the corporation in which he was adjudged liable to the
corporation or in connection with a proceeding charging
improper personal benefit to him. The above standard of
conduct is determined by the Board of Directors, or a
committee or special legal counsel or the shareholders as
prescribed in Section 55-8-55.
Sections 55-8-52 and 55-8-56 of the NCBCA require a
corporation to indemnify a director or officer in the
defense of any proceeding to which he was a party against
reasonable expenses when he is wholly successful in his
defense, unless the articles of incorporation provide
otherwise. Upon application, the court may order
indemnification of the director or officer if he is adjudged
fairly and reasonably so entitled under Section 55-8-54.
Limitation of Director Liability. The Articles of
Incorporation of the Company provide that, to the fullest
extent permitted by the NCBCA, a director of the Company
shall not be personally liable to the Company, its
shareholders or otherwise for monetary damages for breach of
his duty as a director. This provision precludes any claim
by the shareholders of the Company for monetary damages
based on a breach of duty of directors, with the following
exceptions under the NCBCA: (i) acts or omissions that such
director at the time of such breach knew or believed were
clearly in conflict with the best interests of the
corporation, (ii) certain unlawful distributions, including
unlawful redemptions of shares, (iii) any transaction from
which such director derived an improper personal benefit or
(iv) acts or omissions occurring prior to the effectiveness
of the provision on April 27, 1988.
4-1/2% PREFERRED STOCK
The 4-1/2% Preferred Stock shall be entitled to
receive, when and as declared from the surplus or net
profits arising from the business of the Company, cumulative
dividends at the rate of 4-1/2% per annum before any
dividends shall be paid to the holders of Common Stock.
Upon any distribution of capital assets, the 4-1/2%
Preferred Stock shall be entitled to receive the sum of
$100 a share, together with a sum equivalent to all unpaid
dividends (if any) accumulated thereon, before any
distribution shall be made to the holders of Common Stock.
The 4-1/2% Preferred Stock shall be subject to
redemption, either in whole or in part, at the option of the
Company upon any dividend payment date at $100 per share,
plus any unpaid accumulated dividends to the date of
redemption, upon the vote of not less than a majority in
interest of the outstanding shares of Common Stock.
The 4-1/2% Preferred Stock has no voting rights except
as provided by the NCBCA.
5% PREFERRED STOCK
The holders of the 5% Preferred Stock shall be
entitled to receive thereon from the surplus or net profits
arising from the business of the Company a fixed cumulative
dividend of 5% per annum when and as declared by the Board
of Directors. Should the surplus or net profits arising from
the business of the Company prior to any dividend
payment date be
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insufficient to pay the dividend on the 5% Preferred Stock, such
dividend shall be payable from future profits, and no dividend shall
at any time be paid on the Common Stock until the full amount of 5%
per annum up to such time shall have been paid or set apart.
In the event of dissolution or liquidation of the
Company, the holders of the 5% Preferred Stock shall be
entitled to receive the par value of their stock, together
with dividends accumulated thereon to the date of payment,
before holders of the Common Stock shall be entitled to
receive anything thereon. Thereafter, the 5% Preferred Stock
shall not be entitled to share in the assets of the Company.
The 5% Preferred Stock may be called or redeemed in
whole or in part on any semiannual dividend payment date, at
the option of the Board of Directors, at the price of $100
per share plus all unpaid dividends accrued on such share.
The 5% Preferred Stock has no voting rights except as
provided by the NCBCA.
4.80% PREFERRED STOCK
The holders of the 4.80% Preferred Stock shall be
entitled to receive cumulative dividends at the rate of
$4.80 per share per annum, but only when, as and if declared
by the Board of Directors of Concord Telephone. All
dividends accrued on the 4.80% Preferred Stock shall be
fully paid before any dividends on the Common Stock shall be
paid.
Upon the dissolution, liquidation or winding up of
Concord Telephone, the holders of the 4.80% Preferred Stock
then outstanding shall be entitled to receive out of the net
assets of Concord Telephone an amount equal to the
redemption price per share applicable on the date of a
voluntary dissolution, liquidation or winding up of Concord
Telephone and, in the case of an involuntary dissolution,
liquidation or winding up of Concord Telephone, the sum of
$100 per share, plus, in either case, an amount equal to the
dividends accrued and unpaid on each share before any
distribution of the assets of Concord Telephone shall be
made to the holders of the common stock of Concord
Telephone.
The 4.80% Preferred Stock shall be redeemable at the
option of the Board of Directors of Concord Telephone,
either as a whole or in part, for (i) $100 per share, if
redeemed thereafter; plus (ii) an amount equal to all
dividends accrued and unpaid thereon, whether or not earned
or declared, to the date fixed for redemption.
Concord Telephone shall not pay any dividends on, or
make any other distribution with respect to, any shares of
its Common Stock or other stock ranking junior (in priority
as to dividends or on dissolution) to the 4.80% Preferred
Stock (such common stock and other such stock being herein
called "junior stock"), other than in shares of junior
stock, or set apart or pay any of its property or assets to
the purchase, redemption or other retirement of any shares
of junior stock of Concord Telephone, or make any other
disposition of property or assets through the reduction
capital or otherwise in respect of, or permit any subsidiary
to purchase, any shares of junior stock of Concord Telephone
unless, after giving effect to such action, the conditions
set forth in the following paragraphs (i), (ii) and (iii)
shall be fulfilled:
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(i) The sum of
(A) the amount of cash and property (at book or
market value, whichever is greater) paid or then
payable as dividends (other than paid or payable in
junior stock of Concord Telephone) with respect to
junior stock of Concord Telephone or distributed in
respect of such shares of junior stock subsequent to
December 31, 1964, and
(B) the excess of (x) the amount of cash and
property (at book or market value, whichever is
greater, and without attributing any value to any
junior stock of Concord Telephone issued solely in
exchange for junior stock of Concord Telephone) applied
to or set apart for the purchase (including purchases
by subsidiaries) or retirement of shares of junior
stock of Concord Telephone subsequent to December 31,
1961, over (y) the net proceeds in cash or property of
sales of shares of Concord Telephone subsequent to
December 31, 1961
shall not exceed $130,000 plus (or minus if a deficit) the
consolidated net income of Concord Telephone and its
subsidiaries accrued subsequent to December 31, 1961, after
deducting from said consolidated net income of Concord
Telephone and its subsidiaries full cumulative dividends
accrued during such period on the 4.80% Preferred Stock or
any stock other than junior stock;
(ii) All dividends upon all outstanding shares of 4.80%
Preferred Stock for all past dividend periods and for the
then current dividend period shall have been paid or
declared and set apart for payment; and
(iii) Concord Telephone shall have met all
obligations accrued to the time of such action in respect of
sinking funds for all 4.80% Preferred Stock.
The 4.80% Preferred Stock has no voting rights except
(i) in connection with certain matters directly affecting
the rights of the holders thereof and (ii) the right to
elect two directors of Concord Telephone in the event of a
default in the payment of dividends by Concord Telephone in
the aggregate amount equal to three semi-annual dividends on
all shares of 4.80% Preferred Stock, subject to certain
conditions.
As a sinking fund for the benefit of the 4.80%
Preferred Stock, Concord Telephone will call for redemption,
and redeem at a redemption price of $100 per share plus
accrued and unpaid dividends thereon to the date fixed for
redemption, whether or not earned or declared, on December
15th in each year so long as any shares of 4.80% Preferred
Stock are outstanding, 125 shares of 4.80% Preferred Stock.
Concord Telephone shall, subject to certain exceptions, have
the right at its option to satisfy any obligation in respect
of redemption of 4.80% Preferred Stock on any such December
15th by retiring, not earlier than June 15th in such year,
and not later than November 15 in such years, shares of
4.80% Preferred Stock theretofore issued and outstanding and
repurchased by Concord Telephone.
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RIGHTS TO PURCHASE COMMON STOCK
On August 27, 1998, the Board of Directors of the
Company adopted a Rights Agreement (the "Rights Agreement")
and authorized and declared a dividend of one common share
purchase right (a "Right") for each outstanding share of (i)
Voting Common Stock and (ii) Class B Nonvoting Common Stock.
The dividend was paid on August 28, 1998 to the shareholders
of record on that date (the "Record Date") and is payable
with respect to shares issued thereafter until the
Distribution Date (as hereinafter defined) or the expiration
or earlier redemption or exchange of the Rights. As
described above, effective January 28, 1999, the issued and
outstanding shares of Voting Common Stock and Class B
Nonvoting Common Stock were converted into shares of Common
Stock pursuant to the Plan of Recapitalization. Pursuant to
Sections 11 and 27 of the Rights Agreement, the Rights to
purchase shares of Voting Common Stock and Class B Nonvoting
Common Stock were automatically converted into Rights to
purchase Common Stock.
Except as set forth below, each Right entitles the
registered holder to purchase from the Company, at any time
after the Distribution Date, one share of Common Stock at a
price per share of $123, subject to adjustment (the "Purchase
Price"). The description and terms of the Rights are as set
forth in the Rights Agreement, as amended and restated as of
January 28, 1999.
Initially, the Rights will be attached to all
certificates representing Common Stock then outstanding, and
no separate Right Certificates will be distributed. The
Rights will separate from the Common Stock upon the earlier
to occur of (i) 10 days after the public announcement of a
person's or group of affiliated or associated persons'
(other than L.D. Coltrane III, Chairman of the Board of the
Company, or Michael R. Coltrane, President and Chief
Executive Officer of the Company) having acquired beneficial
ownership of 15% or more of the outstanding Common Stock
(such person or group being hereinafter referred to as an
"Acquiring Person"), or (ii) 10 days (or such later date as
the Board may determine) following the commencement of, or
announcement of an intention to make, a tender offer or
exchange offer the consummation of which would result in a
person or group's becoming an Acquiring Person (the earlier
of such dates being called the "Distribution Date").
Until the Distribution Date, the Rights will be
transferred with, and only with, the Common Stock. Until
the Distribution Date (or earlier redemption or expiration
of the Rights), new Common Stock certificates issued after
the Record Date upon transfer or new issuance of Common
Stock 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 Stock
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 Stock 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 Common Stock as of the close of business on the
Distribution Date (and to each initial record holder of
certain Common Stock issued after the Distribution Date),
and such separate Right Certificates alone will evidence the
Rights.
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The Rights will expire on August 27, 2008 (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 Rights initially are not exercisable. In the event
that any person becomes an Acquiring Person (except pursuant
to a tender or exchange offer that is for all outstanding
Common Stock at a price and on terms which a majority of
certain members of the Board of Directors determines to be
adequate and in the best interests of the Company, its
shareholders and other relevant constituencies, other than
such Acquiring Person, its affiliates and associates (a
"Permitted Offer")), each holder of a Right will thereafter
have the right (the "Flip-In Right") to receive, upon
exercise and payment of the applicable Purchase Price,
Common Stock of the applicable class having a value equal to
two times the applicable Purchase Price. Notwithstanding the
foregoing, all Rights that are, or were, beneficially owned
by any Acquiring Person or any affiliate or associate
thereof will be null and void and not exercisable.
In the event that, at any time following the
Distribution Date, (i) the Company is acquired in a merger
or other business combination transaction in which the
holders of all of the outstanding Common Stock immediately
prior to the consummation of the transaction are not the
holders of all of the surviving corporation's voting power,
or (ii) more than 50% of the Company's assets or earning
power is sold or transferred, then each holder of a Right
(except Rights which have previously been voided as set
forth above) shall thereafter have the right (the "Flip-Over
Right") to receive, upon exercise and payment of the
applicable Purchase Price, common stock of the acquiring
company having a value equal to two times the applicable
Purchase Price. If a transaction would otherwise result in
a holder's having a Flip-In as well as a Flip-Over Right,
then only the Flip-Over Right will be exercisable; if a
transaction results in a holder's having a Flip-Over Right
subsequent to a transaction resulting in a holder's having a
Flip-In Right, a holder will have Flip-Over Rights only to
the extent such holder's Flip-In Rights have not been
exercised.
The Purchase Price payable, and the number of shares
of Common Stock or other securities or property issuable,
upon exercise of 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, Common Stock, (ii) upon the grant to
holders of Common Stock of certain rights or warrants to
subscribe for or purchase Common Stock at a price, or
securities convertible into Common Stock with a conversion
price, less than the then current market price of Common
Stock, or (iii) upon the distribution to holders of Common
Stock of evidences of indebtedness or assets (excluding
regular periodic cash dividends paid out of earnings or
retained earnings or dividends payable in Common Stock) or
of subscription rights or warrants (other than those
referred to above). However, no adjustment in the Purchase
Price will be required until cumulative adjustments require
an adjustment of at least 1%. No fractional shares of
Common Stock will be issued and, in lieu thereof, an
adjustment in cash will be made based on the market price of
Common Stock on the last trading day prior to the date of
exercise.
At any time prior to the earlier to occur of (i) the
Distribution Date or (ii) the Final Expiration Date, the
Board of Directors of the Company may redeem the Rights in
whole,
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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 in cash.
At any time after any person becomes an Acquiring
Person and prior to the acquisition by such person or group
of Common Stock representing 50% or more of the then
outstanding Common Stock, the Board of Directors of the
Company may exchange the Rights (other than Rights which
have become null and void), in whole or in part, at an
exchange ratio of one share of Common Stock per Right
(subject to adjustment).
All of the provisions of the Rights Agreement may be
amended prior to the Distribution Date by the Board of
Directors of the Company, without the consent of the holders
of the Rights, for any reason it deems appropriate. After
the Distribution Date, the provisions of the Rights
Agreement may be amended by the Board in order to cure any
ambiguity, defect or inconsistency, to make changes which do
not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person), or,
subject to certain limitations, to shorten or lengthen any
time period under the Rights Agreement. Without limiting the
foregoing, prior to the time any person becomes an Acquiring
Person, the Board of Directors is also authorized, as it
deems appropriate, to lower the thresholds required to
become an Acquiring Person to not less than the greater of
(i) any percentage greater than the largest percentage then
held by any shareholder other than L.D. Coltrane III or
Michael R. Coltrane, or (ii) 10%.
Until a Right is exercised, the holder thereof, as
such, will have no rights as a shareholder of the Company,
including, without limitation, the right to vote or to
receive dividends.
Although the distribution of the Rights will not be
taxable to shareholders of the Company, shareholders may,
depending upon the circumstances, recognize taxable income
should the Rights become exercisable or upon the occurrence
of certain events thereafter.
The Rights have certain anti-takeover effects. The
Rights will cause substantial dilution to a person or group
that attempts to acquire the Company on terms not approved
by the Company's Board of Directors. The Rights should not
interfere with any merger or other business combination
approved by the Board of Directors because the Rights may be
redeemed by the Company at the Redemption Price prior to the
date that is 10 days after the public announcement that a
person or group has become the beneficial owner of 15% or
more of the Common Stock.
The Rights Agreement, dated as of August 27, 1998, as
amended and restated as of January 28, 1999, between the
Company and First Union National Bank, N.A. as Rights Agent,
specifying the terms of the rights, which includes as
Exhibit A the form of Right Certificate, is attached hereto
as Exhibit 4.2 and is incorporated herein by reference. The
foregoing description of the Rights is qualified by
reference to such exhibits.
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EFFECTIVE LAW
The rights of the holders of Common Stock are
dependent, directly or indirectly, on applicable state and
federal statutes and regulations which are subject to change
from time to time. The Company has not undertaken to update
the foregoing description in each case where such a change
may affect the rights of shareholders.
Item 2. Exhibits.
3.1 Articles of Incorporation, as amended
3.2 Bylaws, as amended
4.1 Specimen of Common Stock Certificate
4.2 Amended and Restated Rights Agreement, dated as of
January 28, 1999 and effective as of August 27,
1998, between the Company and First Union National
Bank
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SIGNATURE
Pursuant to the requirements of Section 12 of the
Securities Exchange Act of 1934, the registrant has duly
caused this registration statement to be signed on its
behalf of the undersigned, thereto duly authorized.
CT COMMUNICATIONS, INC.
Date: January 28, 1999 By: /s/ BARRY R. RUBENS
Barry R. Rubens
Executive Vice President
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Exhibit Index
3.1 Articles of Incorporation, as amended
3.2 Bylaws, as amended
4.1 Specimen of Common Stock Certificate
4.2 Amended and Restated Rights Agreement, dated as of
January 28, 1999 and effective as of August 27, 1998,
between the Company and First Union National Bank
ARTICLES OF INCORPORATION
OF
CT COMMUNICATIONS, INC.
The undersigned person does hereby organize a business
corporation under the laws of the State of North Carolina, as
contained in Chapter 55 of the General Statutes of North
Carolina, entitled "North Carolina Business Corporation Act" and
the several amendments thereto, and to that end does hereby set
forth:
1. The name of the Corporation is "CT Communications, Inc.".
2. The aggregate number of shares which the Corporation
shall have authority to issue is Eight Hundred Nineteen Thousand
(819,000) shares of capital stock which shall be classified and
bear designations as follows:
(a) One Hundred Thousand (100,000) shares of common
stock designated as Voting Common Stock.
(b) Seven Hundred Thousand (700,000) shares of common
stock designated as Class B Nonvoting Common Stock. These
shares shall be in all respects the same as the Voting
Common Stock except that the share shall not be entitled to
vote.
(c) Two Thousand (2,000) shares of preferred stock
designated as Four and One-half Percent Preferred Stock.
(d) Seventeen Thousand (17,000) shares of preferred
stock designated as Five Percent Preferred Stock.
3. The holders of the Four and One-Half Percent Preferred
Stock shall be entitled to receive, when and as declared from the
surplus or net profits arising from the business of the
Corporation, cumulative dividends at the rate of four and
one-half percent (4-1/2%) per annum, and no more, payable either
quarterly, semiannually or annually as determined by the Board of
Directors, before any dividends shall be paid to the common
stock, which shall be entitled to receive any and all sums which
may be distributed as dividends in excess of the said dividends
on the Four and One-half Percent Preferred Stock.
Upon any distribution of capital assets, this Preferred
Stock shall be entitled to receive the sum of one hundred dollars
($100) a share, together with a sum equivalent to all unpaid
dividends (if any) accumulated thereon, before any distribution
shall be made to the common stock, which shall be entitled to
receive all the remainder of any capital assets so distributed.
This Preferred Stock shall be subject to redemption, either
in whole or in part, at the option of the Corporation upon any
dividend date at one hundred dollars ($100) per share, plus any
unpaid accumulated dividends to date of redemption, upon the vote
of not less than a majority in interest of the outstanding Voting
Common Stock. Notice of the intention of the Corporation to
redeem this Preferred Stock shall be mailed thirty days before
the date of redemption to each holder of record of Four and
One-half Percent Preferred Stock at his last known post office
address, and dividends on such shares of stock as shall have
been so called for redemption shall not accrue after the
redemption date given in said notice.
This Preferred Stock shall not have any voting rights.
4. The holders of the Five Percent Preferred Stock shall
be entitled to receive thereon from the surplus or net profits
arising from the business of the Corporation a fixed cumulative
dividend when and as declared by the Board of Directors of five
percent (5%) per annum, and no more, payable semiannually on the
first day of January and July of each year. Should the surplus
or net profits arising from the business of this Corporation
prior to any dividend date be insufficient to pay the dividend on
this Five Percent Preferred Stock, such dividend shall be
payable from future profits, and no dividend shall at any time be
paid on the common stock until the full amount of five percent
(5%) per annum up to such time shall have been paid or set apart.
In the event of dissolution or liquidation of this
Corporation, the holders of the Five Percent Preferred Stock
shall be entitled to receive the par value of their stock,
together with accumulated dividends thereon to the date of
payment, before holders of the common stock shall be entitled to
receive anything thereon. Thereafter the Five Percent Preferred
Stock shall not been titled to share in the assets of the
Corporation.
The Five Percent Preferred Stock may be called or redeemed
in whole or in part on any semi annual dividend payment date, at
the option of the Board of Directors, at the price of One Hundred
Dollars ($100) per share and all unpaid dividends accrued on such
share. Not less than thirty (30) days prior notice to the
holders of record of the Five Percent Preferred Stock shall be
given by mailing notice to the last known address of the holder
thereof or by giving such other notice as may be prescribed by
the bylaws or by resolution of the Board of Directors.
The Five Percent Preferred Stock shall not have any voting
rights.
5. The address of the initial registered office of the
Corporation is 68 Cabarrus Avenue, East, Concord, Cabarrus
County, North Carolina 28026-0227 and the name of the initial
registered agent at such address is Michael R. Coltrane.
6. The name and address of the sole incorporator is:
Name Address
Michael R. Coltrane 68 Cabarrus Avenue,East
Concord, NC 28026-0227
7. The number of directors constituting the initial board
of directors shall be seven (7) and the names and addresses of
the persons who are to serve as directors until the first annual
meeting of shareholders, or until their successors are elected
and qualified, are:
Name Address
Betty Gay C. Bivens 400 Avinger Lane
Cottage 424
Davidson, NC 28036
John R. Boger, Jr. P. 0. Box 810
Concord, NC 28026-0810
Lester D. Coltrane, III 151 Ingleside Drive
Concord, NC 28025
Michael R. Coltrane 68 Cabarrus Avenue, East
Concord, NC 28026-0227
Jerry H. McClellan 68 Cabarrus Avenue, East
Concord, NC 28026-0227
Mariam C. Schramm 400 Avinger Ln, Apt. 201
Davidson, NC 28036
Phil W. Widenhouse 215 Union St., South
Concord, NC 28025
8. The purposes for which the corporation is organized are:
(a) To transact, operate and carry on in all of its
branches a general telecommunication business in Cabarrus,
Rowan, and Stanly counties and elsewhere in North Carolina
with exchanges at Concord, Kannapolis, China Grove -
Landis, Mt. Pleasant, Harrisburg, Albemarle, Badin,
Oakboro, and New London and at such other places in North
Carolina or outside of North Carolina as seem to be
desirable, either directly or through subsidiaries and
affiliates; and
(b) To engage in any lawful act or activity for which
corporations may be organized under Chapter 55 of the
General Statutes of North Carolina, entitled "North Carolina
Business Corporation Act".
9. The shareholders shall not be entitled to cumulate
their votes for directors of the Corporation.
10. (a) In addition to any affirmative vote required by
law or these Articles of Incorporation, any "Business
Combination" (as defined below) involving the Corporation or any
subsidiary thereof and any "Interested Shareholder" (as defined
below) shall require the affirmative vote of the holders of at
least 80% of the voting power of the outstanding shares of
capital stock of the Corporation entitled to vote generally in
the election of directors (the "Voting Stock"), voting together as
a single class, unless the Business Combination is approved by a
majority of (i) the directors who are unaffiliated with the Interested
Shareholder and who were directors before the Interested Shareholder became
an Interested Shareholder ("Disinterested Directors"), and (ii)
any successor or successors to any of the Disinterested Directors
who are not affiliated with an Interested Shareholder and who
were recommended by a majority of the Disinterested Directors then
on the Board. The 80% affirmative vote set forth above shall be required,
notwithstanding the fact that no vote may be required, or that a
lesser percentage may be specified, by law or otherwise.
(i) For purposes of this Article 10, the term
"Business Combination" and "Business Combinations"
includes the following transactions: (A) a merger or
consolidation of the Corporation or any subsidiary
thereof with an Interested Shareholder or with any
other corporation or entity which is, or after such
merger or consolidation would be, an Affiliate (as
defined below) of an Interested Shareholder; (B) any
sale, lease, exchange or other disposition of the
Corporation or any subsidiary thereof of 20% or more of
the total assets of the Corporation (with the total
assets determined as of the most recently audited
financial statements of the Corporation) if an
Interested Shareholder (or an Affiliate thereof) is a
party to the transaction; (C) the issuance of stock or
other securities of the Corporation or any subsidiary
thereof to an Interested Shareholder (or an Affiliate
thereof) in exchange for cash or property (including
stock or other securities) having an aggregate fair
market value equal to or greater than 20% of the total
assets of the Corporation (with the total assets
determined as of the most recently audited financial
statements of the Corporation); (D) the adoption of any
plan or' proposal for the liquidation or dissolution
of the Corporation proposed by or on behalf of an
Interested Shareholder (or an Affiliate thereof);
or (E) any reclassification of securities (including
any reverse stock split), recapitalization, merger with
a subsidiary or other transaction which has the effect,
directly or indirectly, of increasing the proportionate
share of the outstanding stock (or securities
convertible into stock) of any class of the Corporation
or any subsidiary thereof owned by an Interested
Shareholder.
(ii) For purposes of this Article 10, the
term "Interested Shareholder" shall mean any person
(other than the Corporation or any subsidiary thereof)
who or which (A) is the beneficial owner, directly or
indirectly, of 20% or more of the voting power of the
outstanding Voting Stock; (B) is an Affiliate of the
Corporation and at any time within the two- year period
immediately prior to the date of any proposed Business
Combination, was the beneficial owner, directly or
indirectly, of 20% or more of the voting power of the
then Voting Stock; or (C) is an assignee or has
otherwise succeeded to any shares of Voting Stock in a
transaction not involving a public offering which were
at any time within the two-year period prior to the
date of any proposed Business Combination beneficially
owned by an Interested Shareholder.
(iii) For purposes of this Article 10, a person
shall be a "beneficial owner" of any Voting Stock: (A)
if such person or any of its Affiliates or Associates
(as herein defined) beneficially owns, directly or
indirectly; or (B) if such person or any of its
Affiliates or Associates has (1) the right to acquire
(whether such right is exercisable immediately or
only after the passage of time) pursuant to any
agreement, arrangement or understanding or upon the
exercise of conversion rights, exchange rights,
warrants, options or otherwise or (2) the right to vote
pursuant to any agreement, arrangement or
understanding; or (C) which are beneficially owned,
directly or indirectly, by any other person with which
such person or any of its Affiliates or Associates has
any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or disposing of
any shares of Voting Stock.
(iv) For purposes of this Article 10, the terms
"Affiliate" or "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.
(b) The majority of directors of the Corporation shall
have the power and duty, among other things, to determine
for purposes of this Article 10 on the basis of information
known to them after reasonable inquiry, (i) whether a
person is an Interested Shareholder, (ii) the number of
shares of Voting Stock beneficially owned by any person,
(iii) whether a person is an Affiliate or Associate of
another, and (iv) whether the assets which are the subject
of any Business Combination have, or the consideration to be
received for the issuance or transfer of securities by the
Corporation or any subsidiary in any Business Combination
has, an aggregate fair market value equal to or in excess of
20% of the total assets of the Corporation, with the total
assets determined as of the most recently audited financial
statements of the Corporation.
(c) Nothing contained in this Article 10 shall be
construed to relieve any Interested Shareholder from any
fiduciary obligation imposed by law.
(d) Notwithstanding any other provision of these
Articles of Incorporation or the Bylaws of the Corporation
(and notwithstanding that a lesser percentage may be
specified by law, these Articles of Incorporation or the
Bylaws of the Corporation), the affirmative vote of the
holders of 80% or more of the outstanding Voting Stock,
voting together as a single class, shall be required to
amend or repeal, or adopt any provision inconsistent with,
this Article 10.
11. As soon as permissible by North Carolina Statutes, the
Directors shall be divided into three classes, as nearly equal in
number as may be, the term of office of those of the first class
to expire at the first Annual Meeting of Shareholders after their
election, the term of office of those of the second class to
expire at the second Annual Meeting of Shareholders after their
election, and the term of office of those of the third class to
expire at the third Annual Meeting of Shareholders after their
election. At each annual election held thereafter, directors
shall be chosen for a term of three years to succeed those whose
terms expire.
12. In considering or acting on an offer or proposal that
relates to the sale of all or substantially all of the assets of
this Corporation, whether or not in the usual and regular course
of the business of this Corporation, or an offer or proposal that
relates to the sale of all or substantially all of the stock of
this Corporation or a sufficient amount of the voting stock to
effect the control of the Corporation, a director of this
Corporation shall consider, in determining what he or she
reasonably believes to be in the best interest of the Corporation
and its subsidiaries, considered as one enterprise, (1) the long-
term, as well as the short-term, interests of the Corporation and
its subsidiaries, (2) the interests of the shareholders of the
Corporation and its subsidiaries, long-term as well as
short-term, including the possibility that those interests may be
best served by the continued independence of the
Corporation and its subsidiaries, (3) the interests of the
employees, customers, creditors and suppliers of the Corporation
and its subsidiaries, and (4) community and societal
considerations including those of any community in which any
office or other facility of the Corporation and its subsidiaries
is located. A Director may also in his or her discretion
consider any other factors he or she believes to be in the best
interests of the Corporation and its subsidiaries. A person
who performs his or her duties in accordance with this Article
shall be deemed to have no liability by reason of being or having
been a Director of the Corporation.
13. To the fullest extent permitted by the North Carolina
Business Corporation Act, as the same exists or may hereafter be
amended, a director of the Corporation shall not be personally
liable to the Corporation, its shareholders or otherwise, for
monetary damages for breach of duty as a director. Any repeal
or modification of this Article shall be prospective only and
shall not adversely affect any limitation on the personal
liability of a director of the Corporation existing at the time
of such repeal or modification.
14. A director of the Corporation may be removed only for
cause by a vote of the shareholders of the Corporation if the
number of votes cast to remove such director exceeds the number
of votes cast not to remove him or her. If a director is
elected by a voting group of shareholders, only the shareholders
of that voting group may participate in the vote to remove such
director. A director may not be removed by the shareholders at a
meeting unless the notice of the meeting states that the purpose,
or one of the purposes, of the meeting is removal for cause of
the director. If any directors are so removed, new directors may
be elected at the same meeting.
15. The provisions of the North Carolina Shareholder
Protection Act entitled "Shareholder Protection Act" of the North
Carolina Business Corporation Act shall not be applicable to this
Corporation.
16. The provisions of the North Carolina Control Share
Acquisition Act entitled "Control Share Acquisitions" of the
North Carolina Business Corporation Act shall not be applicable
to this Corporation.
17. These Articles will become effective when filed.
IN WITNESS WHEREOF, the incorporator has executed these
Articles of Incorporation, this the 30th day of July, 1993.
/s/ MICHAEL R. COLTRANE
Michael R. Coltrane,
Incorporator
State of North Carolina
Department of the Secretary of State
ARTICLES OF AMENDMENT
BUSINESS CORPORATION
Pursuant to Section 55-10-06 of the General Statutes of North Carolina,
the undersigned corporation hereby submits the following Articles
of Amendment for the purpose of amending its Articles of
Incorporation:
1. The name of the corporation is: CT Communications, Inc.
2. The text of each amendment adopted is as follows (State below
or attach):
See Exhibit A attached hereto.
3. If an amendment provides for an exchange, reclassification, or
cancellation of issued shares, provisions for implementing the
amendment, if not contained in the amendment itself, are as
follows:
N/A
4. The date of adoption of each amendment was as follows: April 25, 1996
5. (Check either a, b, c, or d, whichever is applicable)
a. The amendment(s) was (were) duly adopted by the
incorporators prior to the issuance of shares.
b. The amendment(s) was (were) duly adopted by the
board of directors prior to the issuance of shares.
c. The amendment(s) was (were) duly adopted by the
board of directors without shareholder action as
shareholder action was not required because (set forth
a brief explanation of why shareholder action was not
required)
d. X The amendment(s) was (were) duly adopted by
shareholder action, and such shareholder approval was
obtained as required by Chapter 55 of the North
Carolina General Statutes.
ARTICLES OF AMENDMENT
Page 2
6. These articles will be effective upon filing, unless a
delayed time and date is specified:
This the 3rd day of May, 1996
CT Communications, Inc.
Name of Corporation
/s/ BARRY R. RUBENS
Signature
Barry R. Rubens
Type or Print Name and Title
EXHIBIT A
CT COMMUNICATIONS, INC.
AMENDMENT TO THE
ARTICLES OF INCORPORATION
Duly Adopted by the Shareholders of the Corporation
In Accordance with Chapter 55 of the North Carolina General
Statutes
on April 25, 1996
RESOLVED, that Article 2 of the Corporation's Articles of
Incorporation shall be amended in its entirety so that as
amended it shall read as follows:
2. The aggregate number of shares which the Corporation
shall have authority to issue is Eighteen Million Nineteen
Thousan (18,019,000) shares of capital stock, which shall be
classified and bear designations as follows:
(a) Three Million (3,000,000) shares of common stock
designated as Voting Common Stock.
(b) Fifteen Million (15,000,000) shares of common
stock designated as Class B Nonvoting Common
Stock. These shares shall be in all respects the
same as the Voting Common Stock except that the
share shall not beentitled to vote.
(c) Two Thousand (2,000) shares of preferred stock
designated as Four and One-Half Percent Preferred
Stock.
(d) Seventeen Thousand (17,000) shares of preferred
stock designated as Five Percent Preferred Stock.
State of North Carolina
Department of the Secretary of State
ARTICLES OF AMENDMENT
BUSINESS CORPORATION
Pursuant to Section 55-10-06 of the General Statutes of North Carolina,
the undersigned corporation hereby submits the following Articles
of Amendment for the purpose of amending its Articles of
Incorporation:
1. The name of the corporation is: CT Communications, Inc.
2. The text of each amendment adopted is as follows (State
below or attach):
See Exhibit A attached hereto and incorporated herein by
reference.
3. If an amendment provides for an exchange,
reclassification, or cancellation of issued shares,
provisions for implementing the amendment, if not
contained in the amendment itself, are as follows:
See Exhibit A attached hereto and incorporated herein by
reference.
4. The date of adoption of each amendment was as follows:
January 28, 1999
5. (Check either a, b, c, or d, whichever is applicable)
a. The amendment(s) was (were) duly adopted by
the incorporators prior to the issuance of shares.
b. The amendment(s) was (were) duly adopted by
the board of directors prior to the issuance of
shares.
c. The amendment(s) was (were) duly adopted by
the board of directors without shareholder action
as shareholder action was not required because (set
forth a brief explanation of why shareholder action
was not required)
d. X The amendment(s) was (were) duly adopted by
shareholder action, and such shareholder approval
was obtained as required by Chapter 55 of the North
Carolina General Statutes.
ARTICLES OF AMENDMENT
Page 2
6. These articles will be effective upon filing, unless a delayed
time and date is specified:
This the 28th day of January, 1999
CT Communications, Inc
Name of Corporation
/s/ BARRY R. RUBENS
Signature
Barry R. Rubens,Chief Financial Officer
Type or Print Name and Title
Exhibit A
Article 2 of the Company's Articles of Incorporation, is
hereby amended by deleting Article 2 in its entirety and
substituting the following therefor:
"The aggregate number of shares which the Corporation
shall have authority to issue is 100,019,000 shares of
capital stock, which shall be classified and bear
designations as follows:
(a) 100,000,000 shares of common stock designated as
Common Stock.
(b) 2,000 shares of preferred stock designated as Four
and One-half Percent Preferred Stock.
(c) 17,000 shares of preferred stock designated as
Five Percent Preferred Stock.
Each share of Voting Common Stock of the Corporation
outstanding when these Articles of Amendment become
effective, shall be reclassified, changed and converted into
4.4 fully paid and nonassessable shares of Common Stock,
with cash to be paid in lieu of any fractional shares. Each
share of Class B Nonvoting Common Stock of this Corporation
issued and outstanding when these Articles of Amendment
become effective, shall be reclassified, changed and
converted into 4.0 fully paid and nonassessable shares of
Common Stock. In addition, all outstanding options to
purchase shares of Voting Common Stock and Class B Nonvoting
Common Stock shall be converted automatically into options
to purchase shares of Common Stock in an amount and at an
exercise price appropriately adjusted to reflect the
foregoing conversion ratios."
BYLAWS
OF
CT COMMUNICATIONS, INC.
TABLE OF CONTENTS
ARTICLE I. OFFICE. . . . . . . . . . . . . . . . . . . . . . . .4
ARTICLE II. SHAREHOLDERS . . . . . . . . . . . . . . . . . . . .4
Section 1. Annual Meeting. . . . . . . . . . . . . . . . .4
Section 2. Substitute Annual Meeting. . . . . . . . . . . .4
Section 3. Special Meetings. . . . . . . . . . . . . . . .4
Section 4. Place of Meeting. . . . . . . . . . . . . . . . .4
Section 5. Notice of Meeting. . . . . . . . . . . . . . .4
Section 6. Closing of Transfer Books or Fixing of Record
Date. . . . . . . . . . . . . . . . . . . . . . .5
Section 7. Voting Lists. . . . . . . . . . . . . . . . . .5
Section 8. Quorum. . . . . . . . . . . . . . . . . . . . . .6
Section 9. Proxies. . . . . . . . . . . . . . . . . . . .6
Section 10. Voting of Shares. . . . . . . . . . . . . . . .6
Section 11. Voting for Directors. . . . . . . . . . . . . .6
Section 12. Informal Action by Shareholders . . . . . . . . .6
ARTICLE III. BOARD OF DIRECTORS. . . . . . . . . . . . . . . . .7
Section 1. General Powers. . . . . . . . . . . . . . . . .7
Section 2. Number, Tenure and Qualifications. . . . . . . .7
Section 3. Removal.. . . . . . . . . . . . . . . . . . . . .7
Section 4. Regular Meetings. . . . . . . . . . . . . . . .7
Section 5. Special Meetings. . . . . . . . . . . . . . . .7
Section 6. Notice. . . . . . . . . . . . . . . . . . . . .7
Section 7. Quorum. . . . . . . . . . . . . . . . . . . . .8
Section 8. Manner of Acting. . . . . . . . . . . . . . . . .8
Section 9. Vacancies. . . . . . . . . . . . . . . . . . . .8
Section 10. Presumption of Assent. . . . . . . . . . . . . .8
Section 11. Informal Action by Directors. . . . . . . . . .8
Section 12. Executive Committee.. . . . . . . . . . . . . . .9
ARTICLE IV. OFFICERS . . . . . . . . . . . . . . . . . . . . . .9
Section 1. Number. . . . . . . . . . . . . . . . . . . . .9
Section 2. Election of Officers. . . . . . . . . . . . . .9
Section 3. Removal. . . . . . . . . . . . . . . . . . . . .9
Section 4. Chief Executive Officer. . . . . . . . . . . . .9
Section 5. Chairman of the Board. . . . . . . . . . . . . 10
Section 6. President. . . . . . . . . . . . . . . . . . . 10
Section 7. Executive Vice President. . . . . . . . . . . 10
Section 8. Vice Presidents.. . . . . . . . . . . . . . . . 10
Section 9. Secretary. . . . . . . . . . . . . . . . . . 11
Section 10. Treasurer. . . . . . . . . . . . . . . . . . . 11
Section 11. Assistant Secretaries and Assistant Treasurers. 11
Section 12. Salaries. . . . . . . . . . . . . . . . . . . 11
ARTICLE V. CONTRACTS, LOANS, CHECKS AND DEPOSITS. . . . . . . 11
Section 1. Contracts. . . . . . . . . . . . . . . . . . . 11
Section 2. Loans.. . . . . . . . . . . . . . . . . . . . . 11
Section 3. Checks and Drafts. . . . . . . . . . . . . . . 11
Section 4. Deposits. . . . . . . . . . . . . . . . . . . 12
ARTICLE VI. CERTIFICATES FOR SHARES AND THEIR TRANSFER. . . . 12
Section 1. Certificate for Shares. . . . . . . . . . . . 12
Section 2. Transfer of Shares. . . . . . . . . . . . . . 12
ARTICLE VII. FISCAL YEAR. . . . . . . . . . . . . . . . . . . 12
ARTICLE VIII. DIVIDENDS . . . . . . . . . . . . . . . . . . . 12
ARTICLE IX. SEAL. . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE X. WAIVER OF NOTICE . . . . . . . . . . . . . . . . . 13
ARTICLE XI. AMENDMENTS. . . . . . . . . . . . . . . . . . . . 13
ARTICLE XII. INDEMNIFICATION . . . . . . . . . . . . . . . . . 13
Section 1. Extent. . . . . . . . . . . . . . . . . . . . 13
Section 2. Determination. . . . . . . . . . . . . . . . . 14
Section 3. Advanced Expenses. . . . . . . . . . . . . . . 14
Section 4. Indemnified Officer. . . . . . . . . . . . . . 14
Section 5. Reliance and Consideration. . . . . . . . . . 14
Section 6. Insurance. . . . . . . . . . . . . . . . . . 15
ARTICLE I. OFFICE
The principal office of the Corporation shall be located in
the City of Concord, State of North Carolina. The Corporation may
have such other offices, either within or without the State of
North Carolina, as the Board of Directors may designate or as the
business of the Corporation may require from time to time.
The registered office of the Corporation required by the
North Carolina Business Corporation Act to be maintained in the
State of North Carolina may be, but need not be, identical with
the principal office of the Corporation, and the address of the
registered office may be changed from time to time by the Board
of Directors.
ARTICLE II. SHAREHOLDERS
Section 1. Annual Meeting. The annual meeting of the
shareholders shall be held on the fourth Thursday in April of
each year at a time to be fixed by the Chief Executive Officer
for the purpose of electing Directors and for the transaction of
such other business as may come before the meeting. If the day
fixed for the annual meeting shall be a legal holiday in the
State of North Carolina, such meeting shall be held on the next
succeeding business day.
Section 2. Substitute Annual Meeting. If the annual
meeting shall not be held within the period designated by these
Bylaws, a substitute annual meeting may be called in accordance
with the provisions of Section 5 of this Article. A meeting so
called shall be designated and treated for all purposes as the
annual meeting.
Section 3. Special Meetings. Special meetings of the
share-holders, for any purpose or purposes, unless otherwise
prescribed by statute, may be called by the Chief Executive
Officer, or by the Secretary acting under his instructions, or
by the Board of Directors.
Section 4. Place of Meeting. The Board of Directors
may designate any place, either within or without the State of
North Carolina, as the place of meeting for any annual meeting or
for any special meeting called by the Board of Directors. A
waiver of notice signed by all shareholders entitled to vote at a
meeting may designate any place, either within or without the
State of North Carolina, as the place for holding such meeting.
If no designation is made, or if a special meeting be otherwise
called, the place of meeting shall be the principal office of the
Corporation in the State of North Carolina.
Section 5. Notice of Meeting. Written or printed
notice stating the place, day and hour of the meeting shall be
delivered not less than ten nor more than 60 days before the date
of the meeting, either personally or by mail, by or at the
direction of the Chief Executive Officer, or the Secretary, or
the officer or persons calling the meeting, to each shareholder
of record entitled to vote at such meeting. If mailed, such
notice shall be deemed to be delivered when deposited in the
United States mail, addressed to the shareholder at his address
as it appears on the stock transfer books of the Corporation,
with postage thereon prepaid. In the case of an annual or
substitute annual meeting, the notice of meeting need not
specifically state the business to be transacted thereat unless
it is a matter, other than election of Directors, on which the
vote of shareholders is expressly required by the provisions of
the North Carolina Business Corporation Act. In the case of a
special meeting, the notice of meeting shall state the purpose or
purposes for which the meeting is called.
When a meeting is adjourned for 120 days or more, notice of
the adjourned meeting shall be given as in the case of an
original meeting. When a meeting is adjourned for less than 120
days in any one adjournment, it is not necessary to give nay
notice of the adjourned meeting other than by announcement at the
meeting at which the adjournment is taken.
Section 6. Closing of Transfer Books or Fixing of Record
Date. For the purpose of determining shareholders entitled to
notice of or to vote at any meeting of shareholders or any
adjournment thereof, or shareholders entitled to receive payment
of any dividend, or in order to make a determination of
shareholders for any other proper purpose, the Board of Directors
of the Corporation may provide that the stock transfer books
shall be closed for a stated period but not to exceed, in any
case, 70 days. If the stock transfer books shall be closed for
the purpose of determining shareholders entitled to notice of or
to vote at a meeting of shareholders, such books shall be closed
for at least ten days immediately preceding such meeting. In
lieu of closing the stock transfer books the Board of Directors
may fix in advance a date in any case to be not more than seventy
days and, in case of a meeting of shareholders, not less than
ten days prior to the date on which the particular action,
requiring such determination of shareholders, is to be taken. If
the stock transfer books are not closed and no record date is
fixed for the determination of shareholders entitled to notice of
or to vote at a meeting of shareholders, or shareholders entitled
to receive payment of a dividend, the date on which notice of the
meeting is mailed or the date on which the resolution of the
Board of Directors declaring such dividend is adopted, as the
case may be, shall be the recorded date for such determination of
shareholders. When a determination of shareholders entitled to
vote at any meeting of shareholder has been made as provided in
this section, such determination shall apply to any adjournment
thereof except where the determination has been made through the
closing of the stock transfer books and the stated period of
closing has expired.
Section 7. Voting Lists. The officer or agent having
charge of the stock transfer books for shares of the Corporation
shall make, within two days after notice of the meeting is given
for which the list was prepared, a complete list of the
shareholders entitled to vote at such meeting, or any adjournment
thereof, arranged in alphabetical order, with the address of and
the number of shares held by each. Such list, for a period
beginning two business days after notice of the meeting is given
for which the list was prepared and continuing through the
meeting, shall be kept on file at the principal office of the
Corporation and shall be subject to inspection by any shareholder
at any time during usual business hours, and such list shall also
be produced and kept open at the time and place of the meeting
and shall be subject to the inspection of any shareholder during
the whole time of the meeting; provided, however, that it shall
not be necessary to prepare or produce such list in any case
where the record of shareholders readily shows in alphabetical
order or by alphabetical index, and by classes or series if
such there be, the names of the
shareholders entitled to vote, with their addresses and the
amounts of their holdings. The original stock transfer books
shall be prima facie evidence as to who are the shareholders
entitled to
examine such list or transfer books or to vote at any meeting of
shareholders.
Section 8. Quorum. A majority of the outstanding shares
of the Corporation entitled to vote, represented in person or by
proxy, shall constitute a quorum at a meeting of shareholders.
If less than a majority of the outstanding shares are represented
at a meeting, a majority of the shares so represented may adjourn
the meeting from time to time without further notice. At such
adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have
been transacted at the meeting as originally notified. The
shareholders present at a duly organized meeting may continue to
transact business until adjournment, notwithstanding the
withdrawal of enough shareholders to leave less than a quorum.
Section 9. Proxies. At all meetings of shareholders, a
shareholder may vote by proxy executed in writing by the
shareholder or by his duly authorized attorney in fact. Such
proxy shall be filed with the Secretary of the Corporation before
or at the time of the meeting. No proxy shall be valid after
eleven months from the date of its execution, unless otherwise
provided in the proxy.
Section 10. Voting of Shares. Each outstanding share of
the Corporation entitled to vote shall be entitled to one vote
upon each matter submitted to a vote at a meeting of
shareholders. The vote of a majority of the shares voted on any
matter at a meeting of shareholders at which a quorum is present
shall be the act of the shareholders on that matter unless the
vote of a greater number is required by law, by the Articles of
Incorporation of the Corporation or by a bylaw adopted by the
shareholders of the Corporation.
Voting on all matters shall be by voice vote or by a show of
hands unless the holders of more than ten percent of the shares
represented at the meeting shall, prior to the voting on any
matter, demand a ballot vote on that matter.
Section 11. Voting for Directors. Unless otherwise
provided in the Articles of Incorporation or in an agreement
valid under the Act, the directors of the Corporation shall be
elected by a plurality of the votes cast by the shares entitled
to vote in the election at a meeting at which a quorum is
present. The shareholders do not have a right to cumulate their
votes for
directors.
Section 12. Informal Action by Shareholders. Any action
which is required or permitted to be taken at a meeting of the
shareholders may be taken without a meeting if consent in
writing, setting forth the action so taken, shall be signed by
all the persons who would be entitled to vote upon such action at
a meeting, and filed with the Secretary of the Corporation in the
minute book of the Corporation, whether done before or after the
action so taken.
ARTICLE III. BOARD OF DIRECTORS
Section 1. General Powers. The business and affairs of
the Corporation shall be directed by its Board of Directors.
Section 2. Number, Tenure and Qualifications. The
number of Directors constituting the whole Board shall be not
more than nine nor less than six as determined by the Board.
The authorized number of Directors, within the limits above
specified, may be changed by the affirmative vote of a majority
of the whole Board given at a regular or special meeting of the
Board of Directors; provided, however, that if the number so
determined is to be increased, or decreased, notice of proposed
increase or decrease shall be included in the notice of the such
meeting, or all of the Directors at the time in office shall be
present at such meeting, or those not present at any time shall
waive or have waived notice thereof in writing; and provided,
further, that the number of Directors which shall constitute the
whole Board shall not be less than six nor shall it be reduced to
a number less than the number of Directors then in office unless
such reduction shall become effective only at and after the
next ensuing meeting of shareholders for the election of
Directors. Any directorships not filled by the shareholders
shall be treated as vacancies to be filled by and in the
discretion of the Board of Directors. Each Director shall hold
office until the next annual meeting of shareholders and until
his successor shall have been elected and qualified. Directors
need not be residents of the State of North Carolina. Each
Director must own directly at least five shares of the voting
common stock of the Corporation.
Section 3. Removal. Unless otherwise provided in the
Articles of Incorporation, any director may be removed at any
time only for cause by a vote of the shareholders if the number
of votes cast to remove such director exceeds the number of votes
cast not to remove him or her. If a director is elected by a
voting group of shareholders, only the shareholders of that
voting group may participate in the vote to remove such director.
A director may not be removed by the shareholders at a meeting
unless the notice of the meeting states that the purpose, or one
of the purposes, of the meeting is removal for cause of the
director. If any directors are so removed, new directors may be
elected at the same meeting.
Section 4. Regular Meetings. A regular meeting of the
Board of Directors shall be held without other notice at the same
date and place as the annual meeting of the shareholders. The
Board of Directors may provide, by resolution, the time, date and
place, either within or with out the State of North Carolina, for
the holding of additional regular meetings.
Section 5. Special Meetings. Special meetings of the
Board of Directors may be held at any date, time and place upon
the call of the Chief Executive Officer or the Secretary
acting under instructions from the Chief Executive Officer, or
upon the call of any two Directors.
Section 6. Notice. Notice of any special meeting shall
be given at least two days prior thereto by written notice
delivered personally or mailed to each Director at his business
address, by telegram or facsimile machine or telephone or other
usual means of communication; provided, however, that special
meetings may be held at any date, time and place without notice
by unanimous consent of the Directors. If mailed, such notice
shall be deemed to be delivered when deposited in the United
States mail so addressed, with postage thereon prepaid. If
notice is given by telegram, such notice shall be deemed to be
delivered when the telegram is delivered to the telegraph
company. If notice is transmitted by facsimile machine, such
notice shall be deemed to be delivered when sent. The attendance
of a Director at a meeting shall constitute a waiver of notice of
such meeting, except where a Director attends a meeting for the
express purpose of objecting to the transaction of any business
because the meeting is not lawfully called or convened. Notice
of an adjourned meeting need not be given if the time and place
are fixed at the meeting adjourning and if the period of
adjournment does not exceed ten days in any one adjournment.
Section 7. Quorum. A majority of the number of
Directors fixed as provided in Section 2 of this Article III
shall constitute a quorum for the transaction of business at any
meeting of the Board of Directors, but if less than such majority
is present at a meeting, a majority of the Directors present may
adjourn the meeting from time to time without further notice.
Section 8. Manner of Acting. The act of the majority of
the Directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors, except as otherwise
provided in this Section. The vote of a majority of the number
of Directors fixed as provided in Section 2 of this Article III
shall be required for the adoption of a resolution designating
the Directors to constitute the Executive Committee. The vote of
a majority of
the Directors then holding office shall be required for the
adoption, amendment or repeal of a bylaw which is a proper
subject for such action by the Board of Directors, or for the
adoption of
a resolution dissolving the Corporation without action by the
shareholders.
Section 9. Vacancies. Except as otherwise expressly
required by the provisions of the North Carolina Business
Corporation Act, any vacancy occurring in the Board of Directors
may be filled by the affirmative vote of a majority of the
remaining Directors though less than a quorum of the Board of
Directors. A Director elected to fill a vacancy shall be elected
for the unexpired term of his predecessor in office.
Section 10. Presumption of Assent. A Director of the
Corporation who is present at a meeting of the Board of Directors
at which action on any corporate matter is taken shall be deemed
to have assented to the action taken unless he objects at the
beginning of the meeting (or promptly upon his arrival) to
holding the meeting or transacting business thereat, or unless
his dissent or abstention from the action shall be entered in the
minutes of the meeting or unless he shall file his written
dissent or abstention to such action with the presiding officer
of the meeting before the adjournment thereof or with the Corporation
immediately after the adjournment of the meeting. Such right to
dissent or abstention shall not apply to a Director who voted in
favor of such action.
Section 11. Informal Action by Directors. Action taken
by a majority of the Directors without a meeting is nevertheless
action of the Board of Directors if written consent to the action
in question is signed by all the Directors and filed with the
minutes of the proceedings of the Board of Directors, whether
done before or after the action so taken.
Section 12. Executive Committee. The Board of Directors,
by
resolution adopted by a majority of the number of Directors fixed
as provided in Section 2 of this Article III, may designate two
or more Directors to constitute an Executive Committee. The
Executive Committee, between meetings of the Board of Directors
and subject to such limitations as may be required by law or
imposed by resolution of the Board of Directors, shall have and
may exercise all of the authority of the Board of Directors in
the management of the Corporation. The designation of the
Executive Committee and delegation thereto of authority shall not
operate to relieve the Board of Directors, or any member thereof,
of any responsibility or liability imposed upon it or him by law.
Meetings of the Executive Committee may be held at any time
on call of the Chief Executive Officer or of any two members of
the Committee. No notice of a meeting need be given if a
majority of the Executive Committee is present, but whenever
notice is given, a notice of one day given by mail, telephone,
telegraph or telecopy shall be sufficient. A majority of the
members shall constitute a quorum of all meetings. The Executive
Committee shall keep minutes of its proceedings and submit them
to the next succeeding meeting of the Board of Directors for
approval.
ARTICLE IV. OFFICERS
Section 1. Number. The officers of the Corporation
shall be the Chief Executive Officer, the President, one or more
Vice Presidents (one or two of whom may be designated Executive
Vice President), a Treasurer, one or more Assistant Treasurers,
a Secretary, and one or more Assistant Secretaries, and a
Chairman of the Board of Directors if and when such Chairman of
the Board shall be deemed necessary or desirable, and such other
officers and assistant officers as the Board of Directors shall
deem necessary or desirable. Any two or more offices may be held
by the same person, but no officer may act in more than one
capacity where action of two or more officers is required.
Section 2. Election of Officers. The officers of the
Corporation shall be elected annually by the Board of Directors
at the first meeting of the Board of Directors held after each
annual meeting of the shareholders or at such time or times as
the Board of Directors shall determine.
Section 3. Removal. Any officer or agent elected or
appointed by the Board of Directors may be removed by the Board
of Directors at any time with or without cause.
Section 4. Chief Executive Officer. If the Board of
Directors shall appoint a Chairman of the Board and shall designate the
Chairman of the Board as the Chief Executive Officer, the
Chairman of the Board shall serve as the Chief Executive Officer
of the Corporation. If a Chairman of the Board is not appointed
by the Board of Directors or if the Chairman of the Board is not
designated as the Chief Executive Officer, the President (or such
other person as shall be named by the Board of Directors) shall
be the Chief Executive Officer of the Corporation. The Chief
Executive Officer shall, subject to the direction and control of
the Board of Directors, supervise and control the business and
affairs of the Corporation. Such officer shall, when present,
preside at all meetings of the shareholders. The Chief Executive
Officer may sign, with the Secretary or any other proper officer
of the Corporation thereunto authorized by the Board of
Directors, certificates for shares of the Corporation, any deeds
mortgages, bonds, contracts or other instruments which the Board
of Directors has authorized to be executed, except in cases where
the signing and execution thereof shall be expressly delegated by
the Board of Directors or by these Bylaws to some other officer
or agent of the Corporation, or shall be required by law to be
otherwise signed or executed; and in general the Chief Executive
Officer shall perform all duties incident to the position of
Chief Executive Officer and such other duties as may be
prescribed by the Board of Directors from time to time. The
title of the Chairman of the Board or the President, as the case
may be, serving as the Chief Executive Officer may also refer to
such officer's position as Chief Executive Officer, but such
additional designation shall not be required.
Section 5. Chairman of the Board. The Chairman of the
Board, if and when elected, shall be chosen by and from among the
Directors, shall preside at all meetings of the Board of
Directors if present, and shall, in general, perform all duties
incident to the office of Chairman of the Board and such other
duties as, from time to time, may be assigned to him by the Board
of Directors.
Section 6. President. Unless a Chairman of the Board
has been appointed and also designated as the Chief Executive Officer, the
President (or such other person as shall be named by the Board of
Directors) shall be the Chief Executive Officer of the
Corporation and shall have all of the duties and authority of
that office. If the President is not the Chief Executive
Officer, the President, in the absence of the Chief Executive
Officer or in the event of such person's death or inability or
refusal to act, shall perform the duties and exercise the powers
of that office and, in addition, the President shall perform such
other duties and shall have such other authority as the Board of
Directors shall prescribe. Unless the Board of Directors shall
otherwise provide, the President shall also be the Chief
Operating Officer of the Corporation and, subject to the control
of the Board of Directors, shall have all the duties and
authority of that office.
Section 7. Executive Vice President. The Executive
Vice President, if and when elected, shall familiarize himself with
the affairs of the Corporation, and, in the absence or disability
of the President, shall possess all the powers of and perform all
the duties of that officer, and shall have such other powers and
duties as may be prescribed from time to time by the Board of
Directors.
Section 8. Vice Presidents. Each Vice President shall
have such powers and perform such duties as may be prescribed from
time to time by the Board of Directors. At the request of the
President (or, if and when elected, the Executive Vice
President), any Vice President may act temporarily in the place
of the President.
Section 9. Secretary. The Secretary shall: (a) keep
the minutes of the shareholders' and of the Board of Directors'
meetings in one or more books provided for that purpose; (b) see
that all notices are duly given in accordance with the provisions
of these Bylaws or as required by law; (c) be custodian of the
corporate records and of the seal of the Corporation and see that
the seal of the Corporation is affixed to all documents the
execution of which on behalf of the Corporation under its seal is
duly authorized; (d) keep a register of the post office address
of each shareholder which shall be furnished to the Secretary by
such shareholder; (e) sign with the Chief Executive Officer,
or president, or a Vice President, certificates for shares of the
Corporation, the issuance of which shall have been authorized by
resolution of the Board of Directors; (f) have general charge of
the stock transfer books of the Corporation; and (g) in general
perform all duties incident to the office of the Secretary and
such other duties as from time to time may be assigned to him by
the Chief Executive Officer, or by the President or by the Board
of Directors.
Section 10. Treasurer. The Treasurer shall: (a) have
charge and custody of and be responsible for all funds and securities of
the Corporation; receive and give receipts for moneys due and
payable to the Corporation from any source whatsoever, and
deposit all such moneys in the name of the Corporation in such
banks, trust companies or other depositaries as shall be selected
in accordance with the provisions of Article V of these Bylaws;
and (b) in general perform all of the duties incident to the
office of Treasurer and such other duties as from time to time
may be assigned to him by the Chief Executive Officer, or
President or by the Board of Directors.
Section 11. Assistant Secretaries and Assistant
Treasurers. The Assistant Secretaries and Assistant Treasurers,
in general, shall perform such duties as shall be assigned to
them by the Board of Directors or by senior officers.
Section 12. Salaries. The salaries of the officers shall
be fixed from time to time by the Board of Director and no
officer shall be prevented from receiving such salary by reason
of the fact that he is also a Director of the Corporation.
ARTICLE V. CONTRACTS, LOANS, CHECKS AND DEPOSITS
Section 1. Contracts. The Board of Directors may
authorize any officer or officers, agent or agents, to enter into
any con- tract or execute and deliver any instruments in the name
of and on behalf of the Corporation, and such authority may be
general or confined to specific instances.
Section 2. Loans. No loans shall be contracted on
behalf of the Corporation and no evidences of indebtedness shall
be issued in its name unless authorized by a resolution of the
Board of Directors. Such authority may be general or confined to
specific instances.
Section 3. Checks and Drafts. All checks, drafts or
other orders for the payment of money, notes or other evidences
of indebtedness issued in the name of the Corporation shall be
signed by such officer or officers, agent or agents of the
Corporation and in such manner as shall from time to time be
determined by resolution of the Board of Directors.
Section 4. Deposits. All funds of the Corporation not
otherwise employed shall be deposited from time to time to the
credit of the Corporation in such banks, trust companies or other
depositaries as the Board of Directors may select.
ARTICLE VI. CERTIFICATES FOR SHARES AND THEIR TRANSFER
Section 1. Certificate for Shares. Certificates
representing shares of the Corporation shall be in such form,
including non-certificated shares, as shall be determined by the
Board of Directors. Certificated shares shall be signed by, or
bear the facsimile signature of, the Chief Executive Officer, the
President or a Vice President and the Secretary or an Assistant
Secretary. All certificates for certificated shares shall be consecutively
numbered or otherwise identified. The name and address of the
person to whom the shares represented thereby are issued, with
the number of shares and date of issue, shall be entered on the stock
transfer books of the Corporation. All certificates for
certificated shares surrendered to the Corporation for transfer
shall be cancelled and no new certificate for certificated shares
shall be issued until the former certificate for certificated
shares for a like number of shares shall have been surrendered
and cancelled, except that in case of a lost, destroyed or mutilated
certificate, a new one may be issued therefor upon such terms and
indemnity to the Corporation as the Board of Directors may
prescribe.
Section 2. Transfer of Shares. Transfer of shares of
the Corporation shall be made only (a) on the stock transfer
books of the Corporation by the holder of record thereof or by
his legal representative, who shall furnish proper evidence of
authority to transfer, or by his attorney thereunto authorized by
power of attorney duly executed and filed with the Secretary of
the Corporation, and (b) on surrender for cancellation of the
certificate for such certificated shares. The person in whose
name shares stand on the books of the Corporation shall be deemed
by the Corporation to be the owner thereof for all purposes.
ARTICLE VII. FISCAL YEAR
The fiscal year of the Corporation shall be the calendar
year unless otherwise determined by the Board of Directors.
ARTICLE VIII. DIVIDENDS
The Board of Directors may from time to time declare, and
the Corporation may pay, dividends on its outstanding shares in
the manner and upon the terms and conditions provided by law and
its Articles of Incorporation.
ARTICLE IX. SEAL
The corporate seal shall be in the form as it now exists,
unless otherwise provided by the Board of Directors.
ARTICLE X. WAIVER OF NOTICE
Whenever any notice is required to be given to any
shareholder or Director of the Corporation under the provisions
of the North Carolina Business Corporation Act or under the
provisions of the Articles of Incorporation or Bylaws of the
Corporation, a waiver thereof in writing, signed by the person or
persons entitled to such notice, whether before or after the time
stated therein, shall be equivalent to the giving of such notice.
ARTICLE XI. AMENDMENTS
Except as hereinafter otherwise provided, these Bylaws may
be amended or repealed and new Bylaws may be adopted by the
affirmative vote of a majority of the Directors then holding
office at any regular or special meeting of the Board of
Directors.
The Board of Directors shall have no power to adopt a Bylaw:
1. requiring more than a majority of the voting shares for
a quorum at a meeting of shareholders or more than a
majority of the votes cast to constitute action by the
shareholders, except where higher percentages are
required by law;
2. providing for the management of the Corporation
otherwise than by the Board of Directors or its
Executive Committee;
3. increasing or decreasing the number of Directors; or
4. classifying and staggering the election of Directors.
The Board of Directors shall have no power to readopt, amend
or repeal a bylaw adopted, amended or repealed by the
shareholders if such bylaw does not so authorize the Board of
Directors.
ARTICLE XII. INDEMNIFICATION
Section 1. Extent. In addition to the indemnification
otherwise provided by law, the Corporation shall indemnify and
hold harmless its Directors and Indemnified Officers (as
hereinafter defined) against all liability and litigation
expense, including reasonable attorneys' fees, arising out of
their status as Directors or officers, or in their activities in
any of the foregoing capacities. The Corporation shall also and
to the same extent indemnify its Directors and Indemnified
Officers from activities in any capacity in which they are or
were serving at the Corporation's request, in another corporation,
partnership, joint venture, trust or other enterprise; provided,
however, that the Corporation shall not indemnify a Director or
Indemnified Officer against liability or litigation expense that he
may incur on account of his activities which at the time taken were
known or believed by him to be clearly in conflict with the best interests
of the Corporation. The Corporation shall also indemnify the
Director or Indemnified Officer for reasonable costs, expenses
and attorneys' fees in connection with the enforcement of rights
to indemnification granted herein, if it is determined in
accordance with Section 2 of this Article that the Director or
Indemnified Officer is entitled to indemnification hereunder.
Section 2. Determination. Any indemnification under
Section I shall be paid by the Corporation in any specific case
only after a determination that the Director or Indemnified
Officer did not act in a manner, at the time the activities were
taken, that was known or believed by him to be clearly in
conflict with the best interests of the Corporation. Such
determination shall be made (a) by the affirmative vote of a
majority (but not less than two) of all the Directors of the
Corporation who are not or were not parties to the action, suit
or proceeding out of which the liability or expense for which
indemnification is to be determined arose, or against whom the
claim out of which such liability or expense arose is not
asserted ("Disinterested Directors"), even though less than a
quorum, or (b) if a majority (but not less than two) of
Disinterested Directors so direct, by independent legal counsel
in a written opinion, or (c) if there are less than two
Disinterested Directors, by the affirmative vote of all of the
Directors, or (d) by the vote of a majority of all of the voting
shares other than those owned or controlled by Directors or
Indemnified Officers who were parties to such action, suit or
proceeding or against whom such claim is asserted, or by a
unanimous vote of all of the voting shares, or (e) by a court of
competent jurisdiction.
Section 3. Advanced Expenses. Expenses incurred by a
Director or Indemnified Officer in defending a civil or criminal
claim, action, suit or proceeding may, upon approval of a
majority (but not less than two) of the Disinterested Directors,
even though less than a quorum, or, if there are less than two
Disinterested Directors upon approval of the Board of Directors,
be paid by the Corporation in advance of the final disposition of
such claim, action, suit or proceeding upon receipt of an
undertaking by or on behalf of the Director or Indemnified
Officer to repay such amount unless it shall ultimately be
determined that he is entitled to be indemnified against such
expenses by the Corporation.
Section 4. Indemnified Officer. For purposes of this
Article, "Indemnified Officer" shall mean (a) each officer of
the Corporation who is also a Director of the Corporation or (b)
each other officer who is designated by the Board of Directors
from time to time as an Indemnified Officer; provided, however,
that if any person ceases to be an Indemnified Officer, then such
cessation shall have no effect with respect to actions arising
prior to such time of cessation.
Section 5. Reliance and Consideration. Any Director or
Indemnified Officer who at any time after the adoption of this
Article serves or has served in any of the aforesaid capacities
for or on behalf of the Corporation shall be deemed to be doing
or to have done so in reliance upon, and as consideration for,
the right of indemnification provided herein. Such right shall
inure to the benefit of the legal representatives of any such
person and shall not be exclusive of any other rights to which
such person may be entitled apart from the provisions of this
Article. No amendment, modification or repeal of this Article
XII shall adversely affect the right of any Director or
Indemnified Officer to indemnification hereunder with respect to
any activities occurring prior to the time of such amendment,
modification or repeal.
Section 6. Insurance. The Corporation may purchase and
maintain insurance on behalf of its Directors, officers,
employees and agents and those persons who were serving at the
request of the Corporation in any capacity in another
corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against him and
incurred by him in any such capacity, or arising out of his
status as such, whether or not the Corporation would have the
power to indemnify him against such liability under the
provisions of this Article or otherwise. Any full or partial
payment made by an insurance company under any insurance policy
covering any Director, officer, employee or agent made to or on
behalf of a person entitled to indemnification under this Article
shall relieve the Corporation of its liability for
indemnification provided for in this Article or otherwise to the
extent of such payment, and no insurer shall have a right of
subrogation against the Corporation with respect to such payment.
Last Amended: April 23, 1998
NUMBER SHARES
CTC ______
SEE REVERSE FOR CERTAIN DEFINITIONS
COMMON STOCK
ORGANIZED UNDER THE LAWS OF THE STATE OF NORTH CAROLINA
[CTC LOGO]
CT COMMUNICATIONS, INC.
Concord, North Carolina
CUSIP 126426 40 2
THIS CERTIFIES THAT ______________________________ IS THE
OWNER OF ______________________________ FULLY PAID AND
NONASSESSABLE SHARES OF COMMON STOCK OF CT Communications, Inc.
transferable on the books of the Company by the holder hereof in
person or by his duly authorized attorney upon surrender of this
certificate properly endorsed. This certificate and the shares
represented hereby are issued and shall be held subject to all
the provisions of the Articles of Incorporation, as now and
hereafter amended, and of the Bylaws of the Company, as now and
hereafter amended (copies thereof being on file with the
Secretary of the Company), and the holder hereof, by accepting
this certificate, expressly assents thereto.
This certificate is not valid unless countersigned and
registered by the Transfer Agent and Registrar.
Witness the seal of the Company and the signatures of its
duly authorized officers.
Dated __________
[CT COMMUNICATIONS, INC.
CORPORATE SEAL]
COUNTERSIGNED AND REGISTERED:
FIRST UNION NATIONAL BANK
(CHARLOTTE, NORTH CAROLINA)
TRANSFER AGENT
BY__________________AND REGISTRAR
AUTHORIZED SIGNATURE _________________________
SECRETARY
_________________________
PRESIDENT AND CHIEF
EXECUTIVE OFFICER
[Reverse Side of Printed Certificate]
CT COMMUNICATIONS, INC.
THE COMPANY WILL FURNISH IN WRITING AND WITHOUT CHARGE TO EACH
SHAREHOLDER WHO SO REQUESTS A STATEMENT OF THE DESIGNATIONS,
PREFERENCES, LIMITATIONS AND RELATIVE PARTICIPATING, OPTIONAL OR
OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OR SERIES THEREOF,
THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH
PREFERENCES AND/OR RIGHTS AND THE AUTHORITY OF THE BOARD OF
DIRECTORS TO DETERMINE VARIATIONS FOR FUTURE CLASSES OR SERIES.
THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO
CERTAIN RIGHTS AS SET FORTH IN A RIGHTS AGREEMENT, AS IT MAY FROM
TIME TO TIME BE SUPPLEMENTED OR AMENDED, BETWEEN THE COMPANY AND
FIRST UNION NATIONAL BANK (THE "RIGHTS AGREEMENT"), THE TERMS OF
WHICH ARE HEREBY INCORPORATED HEREIN BY REFERENCE AND A COPY OF
WHICH IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF THE
COMPANY. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS
AGREEMENT, SUCH RIGHTS MAY BE REDEEMED OR EXCHANGED, MAY EXPIRE,
OR MAY BE EVIDENCED BY SEPARATE CERTIFICATES AND NO LONGER BE
EVIDENCED BY THIS CERTIFICATE. THE COMPANY WILL MAIL TO THE
HOLDER OF THIS CERTIFICATE A COPY OF THE RIGHTS AGREEMENT WITHOUT
CHARGE WITHIN FIVE DAYS AFTER RECEIPT OF A WRITTEN REQUEST
THEREFOR. UNDER CERTAIN CIRCUMSTANCES, RIGHTS ISSUED TO OR HELD
BY ACQUIRING PERSONS OR THEIR AFFILIATES OR ASSOCIATES (AS
DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF
SUCH RIGHTS MAY BECOME NULL AND VOID.
The following abbreviations, when used in the inscription on
the face of this certificate, shall be construed as though they
were written out in full according to applicable laws or
regulations:
TEN COM - as tenants UNIF GIFT MIN ACT -_____Custodian______
in common (Cust) (Minor)
TEN ENT - as tenants by under Uniform Gifts
the entireties to Minors Act ______
JT TEN - as joint tenants (State)
with right of
survivorship and
not as tenants
in common
Additional abbreviations may also be used
though not in the above list.
For value received, ____________________ hereby sell, assign
and transfer unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
____________________________
/____________________________/
_________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS,
INCLUDING ZIP CODE, OF ASSIGNEE)
_________________________________________________________________
_________________________________________________________________
__________________________________________________________ shares
of the common stock represented by the within Certificate, and do
hereby irrevocably constitute and appoint
________________________________________________________ Attorney
to transfer the said stock on the books of the within named
Company with full power of substitution in the premises.
Dated ____________________
__________________________________________________
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND
WITH THE NAME AS WRITTEN UPON THE FACE OF THE
CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
SIGNATURE(S)
GUARANTEED: __________________________________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN
ELIGIBLE GUARANTOR INSTITUTION (BANKS,
STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND
CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED
SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT
TO S.E.C. RULE 17Ad-15.
KEEP THIS CERTIFICATE IN A SAFE PLACE. IF IT IS LOST, STOLEN,
MUTILATED OR DESTROYED, THE CORPORATION WILL REQUIRE A BOND OF
INDEMNITY AS A CONDITION TO THE ISSUANCE OF A REPLACEMENT
CERTIFICATE.
AMENDED AND RESTATED
RIGHTS AGREEMENT
Between
CT COMMUNICATIONS, INC.
and
FIRST UNION NATIONAL BANK,
Rights Agent
Adopted: August 27, 1998
Amended: January 28, 1999
TABLE OF CONTENTS
SECTION 1. Certain Definitions . . . . . . . . . .1
SECTION 2. Appointment of Rights Agent . . . . . .5
SECTION 3. Issue of Right Certificates . . . . . .6
SECTION 4. Form of Right Certificates. . . . . . .7
SECTION 5. Countersignature and Registration . . .8
SECTION 6. Transfer, Split Up, Combination and
Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen
Right Certificates. . . . . . . . . . .8
SECTION 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights . . . . . . .9
SECTION 8. Cancellation and Destruction of Right
Certificates . . . . . . . . . . . . 10
SECTION 9. Availability of Common Stock . . . . 10
SECTION 10. Record Holders of Common Stock Issued
upon Exercise of Rights. . . . . . . 10
SECTION 11. Adjustment of Purchase Price, Number
and Kind of Common Stock or Number of
Rights. . . . . . . . . . . . . . . . 11
SECTION 12. Certificate of Adjustment . . . . . . 17
SECTION 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning Power . 17
SECTION 14. Fractional Rights and Fractional
Shares . . . . . . . . . . . . . . . 19
SECTION 15. Rights of Action. . . . . . . . . . . 20
SECTION 16. Agreement of Right Holders. . . . . . 21
SECTION 17. Right Certificate Holder Not Deemed
a Shareholder . . . . . . . . . . . . 21
SECTION 18. Concerning the Rights Agent . . . . . 22
SECTION 19. Merger or Consolidation or Change of
Name of Rights Agent. . . . . . . . . 22
SECTION 20. Duties of Rights Agent. . . . . . . . 23
SECTION 21. Change of Rights Agent. . . . . . . . 25
SECTION 22. Issuance of New Right Certificates. . 26
SECTION 23. Redemption. . . . . . . . . . . . . . 26
SECTION 24. Exchange. . . . . . . . . . . . . . . 27
SECTION 25. Notice of Certain Events. . . . . . . 28
SECTION 26. Notices . . . . . . . . . . . . . . . 28
SECTION 27. Supplements and Amendments. . . . . . 29
SECTION 28. Successors. . . . . . . . . . . . . . 30
SECTION 29. Determinations and Actions by the
Board of Directors. . . . . . . . . . 30
SECTION 30. Benefits of this Rights Agreement . . 30
SECTION 31. Severability. . . . . . . . . . . . . 30
SECTION 32. Governing Law . . . . . . . . . . . . 31
SECTION 33. Counterparts. . . . . . . . . . . . . 31
SECTION 34. Descriptive Headings . . . . . . . . 31
Exhibit A Form of Right Certificate . . . . . . . . . . . . .A-1
Exhibit B Form of Election to Purchase. . . . . . . . . . . .B-1
Exhibit C Summary of Rights to Purchase Common
Shares. . . . . . . . . . . . . . . . . . . . . . .C-1
AMENDED AND RESTATED RIGHTS AGREEMENT
This Amended and Restated Rights Agreement (the "Rights
Agreement"), is dated as of January 28, 1999 and effective as of
August 27, 1998 between CT Communications, Inc., a North Carolina
corporation (the "Company"), and First Union National Bank (the
"Rights Agent").
W I T N E S S E T H
WHEREAS, on August 27, 1998, the Board of Directors of the
Company authorized and declared a dividend of one common share
purchase right for each share of (i) the Company's Voting Common
Stock (the "Company Voting Common Stock") and (ii) the Company's
Class B Nonvoting Common Stock (the "Company Nonvoting Common
Stock" outstanding at the close of business on August 28, 1998
(the "Record Date"), each such right representing the right to
purchase one share of Company Voting Common Stock, in the event
the dividend is distributed with respect to Company Voting Common
Stock, or Company Nonvoting Common Stock, in the event the
dividend is distributed with respect to Company Nonvoting Common
Stock, upon the terms and subject to the conditions herein set
forth; and
WHEREAS, at that time the Board of Directors of the Company
further authorized and directed the issuance of one common share
purchase right with respect to each share of Company Voting
Common Stock and Company Nonvoting Common Stock that became
outstanding between the Record Date and the Distribution Date (as
hereinafter defined);
WHEREAS, the Company and the Rights Agent entered into the
Rights Agreement effective as of August 27, 1998 pursuant to
which the rights and procedures with respect to each common share
purchase right were set forth; and
WHEREAS, on January 28, 1999, the shareholders of the
Company approved a reclassification of common stock of the
Company pursuant to which (i) each outstanding share of Company
Voting Common Stock was converted into 4.4 shares of common stock
of the Company (the "Company Common Stock") and (ii) each
outstanding share of Company Nonvoting Common Stock was converted
into 4.0 shares of Company Common Stock (the "Reclassification");
and
WHEREAS, the Company and the Rights Agent wish to amend and
restate the Rights Agreement to reflect the Reclassification.
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 Rights Agreement, the following terms have
the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall
become, at any time after the date of this Rights Agreement
(whether or not such status continues for any period), the
Beneficial Owner of Company Common Stock representing 15% or more
of the Company Common Stock then outstanding (individually, a
"15% Beneficial Owner") other than as a result of a Permitted
Offer. Notwithstanding the foregoing, (A) the term "Acquiring
Person" shall not include (i) the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or any
Subsidiary of the Company, or any entity holding Company Common
Stock for or pursuant to the terms of any such plan, (ii) any
Person, who or which together with all Affiliates and Associates
of such Person becomes the Beneficial Owner of 15% or more of
such shares by the acquisition thereof directly from the Company
(provided, however, that if, after such acquisition, such Person,
or an Affiliate or Associate of such Person, becomes the
Beneficial Owner of any additional Company Common Stock in an
acquisition not made directly from the Company, then such Person
shall be deemed an Acquiring Person), or (iii) L.D. Coltrane III
or Michael R. Coltrane, and (B) no Person shall be deemed to be
an "Acquiring Person" either (X) as a result of the acquisition
of Company Common Stock by the Company which, by reducing the
number of Company Common Stock outstanding, increases the
proportional number of shares beneficially owned by such Person
together with all Affiliates and Associates of such Person;
except that if (i) a Person would become an Acquiring Person (but
for the operation of this subclause (X)) as a result of the
acquisition of Company Common Stock by the Company, and (ii)
after such share acquisition by the Company, such Person, or an
Affiliate or Associate of such Person, becomes the Beneficial
Owner of any additional Company Common Stock, then such Person
shall be deemed an Acquiring Person, or (Y) if (i) such Person,
or an Affiliate or Associate of such Person, inadvertently
becomes a 15% Beneficial Owner, (ii) within 8 days thereafter
such Person notifies the Board of Directors that such Person did
so inadvertently and (iii) within 2 days after such notification,
such Person is no longer a 15% Beneficial Owner.
(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 Exchange Act.
(c) A Person shall be deemed the "Beneficial Owner" of and
shall be deemed to have acquired "beneficial ownership" of, or to
"beneficially own," any securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or
indirectly, as determined pursuant to Rule 13d-3 of the
General Rules and Regulations under the Exchange Act as
of the date hereof;
(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 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,
however, 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
or Schedule 13E 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 Owner"
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 own beneficially hereunder.
(d) "Business Day" shall mean any day other than a
Saturday, a Sunday, or a day on which banking institutions in New
York, New York or the state in which the principal office of the
Rights Agent is located 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., Charlotte, North Carolina time, on such date; provided,
however, that if such date is not a Business Day it shall mean
5:00 p.m., Charlotte, North Carolina time, on the next succeeding
Business Day.
(f) "Common Stock" 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) "Company Common Stock" shall have the meaning set forth
in the recitals to this Rights Agreement and shall include any
other class or classes or series of common stock of the Company
resulting from any subdivision, combination, recapitalization or
reclassification of shares of such common stock.
(h) "Company Voting Common Stock" shall have the meaning
set forth in the recitals to this Rights Agreement.
(i) "Company Nonvoting Common Stock" shall have the meaning
set forth in the recitals to this Rights Agreement.
(j) "Company" shall have the meaning set forth in the
recitals to this Rights Agreement.
(k) "Distribution Date" shall have the meaning set forth in
Section 3(a) hereof.
(l) "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended, as in effect from time to time during the
term of this Rights Agreement.
(m) "Exchange Ratio" shall have the meaning set forth in
Section 24 hereof.
(n) "Final Expiration Date" shall have the meaning set
forth in Section 7(a) hereof.
(o) "Nasdaq" shall have the meaning set forth in Section
11(d) hereof.
(p) "Permitted Offer" shall mean a tender or exchange offer
which is for all outstanding Company Common Stock at a price and
on terms determined, prior to the purchase of shares under such
tender or exchange offer, by at least a majority of the members
of the Board of Directors who are not officers of the Company and
who are not (or would not be, if the offer were consummated)
Acquiring Persons or Affiliates, Associates, nominees or
representatives of an Acquiring Person, to be adequate and
otherwise in the best interests of the Company and its
shareholders (other than the Person or any Affiliate or Associate
thereof on whose basis the offer is being made). In determining
whether an offer is adequate or in the best interests of the
Company and its shareholders, the Board may take into account all
factors that it deems relevant including, without limitation, (1)
the consideration being offered in the proposal in relation to
the Board's estimate of (i) the current value of the Company in a
freely negotiated sale of either the Company by merger,
consolidation or otherwise, or all or substantially all of the
Company's assets, (ii) the current value of the Company if
orderly liquidated, and (iii) the future value of the Company
over a period of years as an independent entity discounted to
current value; (2) then existing political, economic and other
factors bearing on security prices generally or the current
market value of the Company's securities in particular; (3)
whether the proposal might violate federal, state or local laws;
(4) social, legal and economic effects on employees, suppliers,
customers and others having similar relationships with the
Company, and the communities in which the Company conducts its
businesses; (5) the financial condition and earnings prospects of
the person making the proposal, including the Person's ability to
service its debt and other existing or likely financial
obligations and the value of the consideration offered by such
Person; and (6) the competence, experience and integrity of the
Person making the acquisition proposal.
(q) "Person" shall mean any individual, firm, partnership,
corporation, limited liability company, trust, association, joint
venture or other entity, and shall include any successor (by
merger or otherwise) of such entity.
(r) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
(s) "Purchase Price" shall have the meaning set forth in
Section 7(a) hereof.
(t) "Reclassification Date" shall mean the date of
effectiveness of the Reclassification which shall be the date in
which the Company's Articles of Amendment are filed with the
North Carolina Secretary of State.
(u) "Record Date" shall have the meaning set forth in the
recitals to this Rights Agreement.
(v) "Redemption Date" shall have the meaning set forth in
Section 7(a) hereof.
(w) "Redemption Price" shall have the meaning set forth in
Section 23 hereof.
(x) "Rights" shall mean the rights to purchase Company
Common Stock authorized by the Board of Directors of the Company.
(y) "Rights Agent" shall have the meaning set forth in the
recitals to this Rights Agreement.
(z) "Rights Agreement" shall have the meaning set forth in
the recitals to this Rights Agreement.
(aa) "Right Certificates" shall have the meaning set forth
in Section 3(a) hereof.
(bb) "Securities Act" shall mean the Securities Act of 1933,
as amended, as in effect from time to time during the term of
this Rights Agreement.
(cc) "Shares Acquisition Date" shall mean the first date of
a public announcement (which, for purposes of this definition,
shall include, without limitation, a report filed pursuant to
Section 13(d) under the Exchange Act) by the Company or an
Acquiring Person that an Acquiring Person has become such;
provided, that, if such Person is determined not to have become
an Acquiring Person pursuant to Section 1(a) hereof, then no
Shares Acquisition Date shall be deemed to have occurred.
(dd) "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.
(ee) "Summary of Rights" shall have the meaning set forth in
Section 3(b) hereof.
(ff) "Trading Day" shall have the meaning set forth in
Section 11(d) hereof.
(gg) "Voting Securities" shall have the meaning set forth in
Section 13(a) hereof.
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 Company Common Stock) in accordance with
the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company may from time to time
appoint such co-Rights Agents as it may deem necessary or
desirable.
SECTION 3. ISSUE OF RIGHT CERTIFICATES
(a) Until the earlier of (i) the Close of Business on the
tenth business day after the Shares Acquisition Date or (ii) the
Close of Business on the tenth business day (or such later date
as may be determined by action of the Board of Directors of the
Company prior to such time as any Person becomes an Acquiring
Person) after the date that a tender or exchange offer by any
Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or of any Subsidiary of
the Company or any entity holding Company Common Stock for or
pursuant to the terms of any such plan) is first published or
sent or given within the meaning of Rule 14d-2 of the General
Rules and Regulations under the Exchange Act, if upon
consummation thereof, such Person would be a 15% Beneficial Owner
(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
the Company Common Stock, registered in the names of the holders
thereof (which certificates shall also be deemed to be
certificates for Rights) and not by separate certificates, and
(y) the Rights (and the right to receive separate certificates
("Right Certificates")) will be transferable only in connection
with the transfer of the underlying Company Common Stock
(including a transfer to the Company) as more fully set out
below. 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 Company Common
Stock as of the close of business on the Distribution Date, at
the address of such holder shown on the records of the Company, a
Right Certificate (the "Right Certificate"), which shall be in
substantially the form of Exhibit A hereto evidencing one Right
for each share so held. As of and after the Distribution Date,
the Rights will be evidenced solely by such Right Certificates.
(b) As promptly as practicable following the
Reclassification Date, the Company will send a copy of a Summary
of Rights to Purchase Common Shares, in substantially the form of
Exhibit C hereto (the "Summary of Rights"), by first-class,
postage- prepaid mail, to each record holder of Company Common
Stock as of the close of business on the Reclassification Date,
at the address of such holder shown on the records of the
Company. Until the Distribution Date (or the earlier of the
Redemption Date or the Final Expiration Date), the surrender for
transfer of any certificate for Company Common Stock outstanding,
with or without a copy of the Summary of Rights attached thereto,
shall also constitute the transfer of the Rights associated with
the Company Common Stock.
(c) Certificates for Company Common Stock which become
outstanding (including, without limitation, reacquired shares
which are subsequently disposed of by the Company) 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 a Rights Agreement,
as it may from time to time be supplemented or amended,
between CT Communications, Inc. and First Union National
Bank, (the "Rights Agreement"), the terms of which are
hereby incorporated herein by reference and a copy of which
is on file at the principal executive offices of CT
Communications, Inc. Under certain circumstances, as set
forth in the Rights Agreement, such rights may be redeemed
or exchanged, may expire, or may be evidenced by separate
certificates and no longer be evidenced by this certificate.
CT Communications, Inc. will mail to the holder of this
certificate a copy of the Rights Agreement without charge
within five days after receipt of a written request
therefor. Under certain circumstances, rights issued to or
held by Acquiring Persons or their Affiliates or Associates
(as defined in the Rights Agreement) and any subsequent
holder of such rights may become null and void."
With respect to such certificates containing the foregoing
legend, until the Distribution Date, the Rights associated with
the Company Common Stock 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 therewith. In the event that
the Company purchases or acquires any Company Common Stock prior
to the Distribution Date, any Rights associated with such Company
Common Stock shall be deemed canceled and retired.
SECTION 4. FORM OF RIGHT CERTIFICATES
(a) The Right Certificates (and the forms of election to
purchase and of assignment to be printed on the reverse thereof)
shall be substantially the same as provided for in Section 3(a)
hereof 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 Rights 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 Company Common Stock as shall be set
forth therein at the price per share set forth therein, but the
number of such Company Common Stock and the price per share shall
be subject to adjustment as provided herein.
(b) Any Right Certificate issued pursuant to Section 3(a)
or Section 22 hereof that represents Rights which are null and
void pursuant to Section 11(a)(iv) of this Rights Agreement and
any Right Certificate issued pursuant to Section 6, Section 11 or
Section 22 hereof upon transfer, exchange, replacement or
adjustment of any other Right Certificate referred to in this
sentence, shall contain (to the extent feasible) the following
legend:
"The Rights represented by this Right Certificate are or
were beneficially owned by a Person who was or became an
Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights
Agreement). Accordingly, this Right Certificate and the
Rights represented hereby are null and void."
Notwithstanding the above provision, failure to place such
legend on any Right Certificate representing Rights that are
otherwise null and void pursuant to the terms of this Rights
Agreement shall not affect the null and void status of such
Rights.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION
The Right Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its Chief Executive
Officer, its President, any of its Vice Presidents, or its
Treasurer, 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 manually countersigned by the Rights Agent
and shall not be valid for any purpose unless countersigned. In
case any officer of the Company who shall have signed any of the
Right Certificates shall cease to be such officer of the Company
before countersignature by the Rights Agent and issuance and
delivery by the Company, such Right Certificates, nevertheless,
may be countersigned by the Rights Agent and issued and delivered
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. Following the
Distribution Date, the Rights Agent will keep or cause to be
kept, at its principal office or offices designated as the
appropriate place for surrender of such Right Certificate or
transfer, 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 and the date of each of the Right
Certificates.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF
RIGHT CERTIFICATES; MUTILATED, DESTROYED, LOST
OR STOLEN RIGHT CERTIFICATES
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, respectively, entitling the
registered holder to purchase a like number of Company Common
Stock 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 or offices of
the Rights Agent designated for such purpose. 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. 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 make and deliver a new
Right Certificate of like tenor to the Rights Agent for delivery
to the registered holder in lieu of the Right Certificate so
lost, stolen, destroyed or mutilated.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION
DATE OF RIGHTS
(a) Subject to Section 11(a)(iv) hereof, the registered
holder of any Right Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein) in whole or in part
at any time after the Distribution Date upon surrender of the
Right Certificate, with the form of election to purchase on the
reverse side thereof duly executed, to the Rights Agent at the
principal office or offices of the Rights Agent designated for
such purpose, together with payment of the price per share
(rounded to the nearest cent) provided for in paragraph (b) below
(the "Purchase Price") for shares of Company Common Stock as to
which the Rights are exercised, at or prior to the earliest of
(i) the Close of Business on August 27, 2008 (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 share of Company Common
Stock pursuant to the exercise of a Right shall initially be $123
subject to adjustment from time to time as provided in Sections
11 and 13 hereof, and shall be payable in lawful money of the
United States of America in accordance with paragraph (c) below.
(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 of Company
Common Stock 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 by
certified check, cashier's check or money order payable to the
order of the Company, the Rights Agent shall thereupon promptly
(i) requisition from any transfer agent of the Company Common
Stock certificates for the number of Company Common Stock to be
purchased (or depository receipts when appropriate) and the
Company hereby irrevocably authorizes its transfer agents to
comply with all such requests, (ii) when appropriate, requisition
from the Company the amount of cash to be paid in lieu of
issuance of fractional shares in accordance with Section 14
hereof, (iii) after receipt of such certificates, 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 (iv) when appropriate, after
receipt, deliver such cash to or upon the order of the registered
holder of such Right Certificate.
(d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new
Right Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent to the
registered holder of such Right Certificate or to his duly
authorized assigns, subject to the provisions of Section 14
hereof.
(e) So long as the Company Common Stock issuable upon the
exercise of Rights may be listed on any national securities
exchange, the Company shall use its best efforts to cause all
shares reserved for such issuance to be listed on such exchange
upon official notice of issuance upon such exercise.
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 canceled form, or, if
surrendered to the Rights Agent, shall be canceled by it, and no
Right Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Rights
Agreement. The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel
and retire, any other Right Certificate purchased or acquired by
the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all canceled Right Certificates to the
Company, or shall, at the written request of the Company, destroy
such canceled Right Certificates, and in such case shall deliver
a certificate of destruction thereof to the Company.
SECTION 9. AVAILABILITY OF COMMON STOCK
(a) The Company covenants and agrees that it will cause to
be reserved and kept available out of its authorized and unissued
Company Common Stock or any Company Common Stock held in its
treasury, the number of Company Common Stock that will be
sufficient to permit the exercise in full of all outstanding
Rights in accordance with this Rights Agreement.
(b) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all Company Common
Stock delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such shares (subject to payment
of the Purchase Price), be duly and validly authorized and issued
and fully paid and nonassessable Company Common Stock.
(c) The Company 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 Company Common Stock
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
depository receipts for the Company Common Stock 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 for Company Common Stock 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. RECORD HOLDERS OF COMMON STOCK ISSUED UPON
EXERCISE OF RIGHTS
Each person in whose name any certificate for Company Common
Stock is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of the
Company Common Stock 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 Company's transfer books for the Company
Common Stock 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 such
transfer books 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 Company Common Stock for
which the Rights evidenced thereby shall be exercisable,
including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF
COMMON STOCK OR NUMBER OF RIGHTS
The Purchase Price, the number of Company Common Stock or
other securities covered by each Right, and the number of Rights
outstanding are subject to adjustment from time to time as
provided in this Section 11.
(a)
(i) In the event the Company shall at any time
after the Reclassification Date (A) declare a dividend
on Company Common Stock payable in Company Common
Stock, (B) subdivide the outstanding Company Common
Stock into a greater number of such shares, (C) combine
the outstanding Company Common Stock into a smaller
number of such shares, or (D) issue any shares of its
capital stock in a reclassification of Company Common
Stock (including any such reclassification in
connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) or
any other similar transaction for the purpose of
reclassifying the Company Common Stock, except as
otherwise provided in this Section 11(a), the Purchase
Price in effect for Rights at the time of the
Reclassification 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, upon payment of
the Purchase Price then in effect, 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
Company Common Stock transfer books of the Company were
open, he would have owned upon such exercise and been
entitled to receive by virtue of such dividend,
subdivision, combination or reclassification; provided,
however, that in no event shall the consideration to be
paid upon the exercise of one such Right be less than
the per share par value, if any, of Company Common
Stock. If an event occurs which would require an
adjustment under both Section 11(a)(i) and Section
11(a)(iv), 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)(iv).
(ii) Subject to Section 24 of this Rights
Agreement, in the event any Person becomes an Acquiring
Person, then proper provision shall be made so that
each holder of a Right (except as provided below and in
Section 7(e) hereof) shall thereafter have the right to
receive, upon exercise thereof at the then current
Purchase Price in accordance with the terms of this
Agreement, such number of shares of Company Common
Stock as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the then
number of shares of Company Common Stock for which a
Right was exercisable by such holder immediately prior
to the Shares Acquisition Date, and dividing that
product (such product shall be referred to as the
"Purchase Price" for each Right and for all purposes of
this Agreement) by (y) 50% of the current market price
(determined pursuant to Section 11(d) hereof) per share
of Company Common Stock on the Shares Acquisition Date.
Notwithstanding the above, if the transaction that
would otherwise give rise to the foregoing adjustment
is also subject to the provisions of Section 13 hereof,
then only the provisions of Section 13 hereof shall
apply and no adjustment shall be made pursuant to this
Section 11(a)(ii).
(iii) In the event that there shall not be
sufficient Company Common Stock (A) issued but not
outstanding or (B) authorized but unissued to permit
the exercise in full of the Rights in accordance with
the foregoing subparagraph (ii), the Company shall, to
the extent permitted by applicable law, take all such
action as may be necessary to authorize additional
Company Common Stock for issuance upon exercise of the
Rights, including the calling of a meeting of
shareholders; provided, however, if the Company is
unable to cause the authorization of additional Company
Common Stock then the Company, to the extent necessary
and permitted by applicable law and any agreements or
instruments in effect on the date hereof to which it is
a party, shall, at its option (A) pay cash equal to
twice the Purchase Price (as adjusted pursuant to this
Section 11) in lieu of issuing any such Company Common
Stock and requiring payment therefor, or (B) issue
equity securities having a value equal to the market
price of Company Common Stock which otherwise would
have been issuable pursuant to the foregoing
subparagraph (ii), which value shall be determined by
the Board of Directors of the Company, whose
determination shall be described in a statement filed
with the Rights Agent, or (C) distribute a combination
of Company Common Stock, cash and/or other equity
securities having a value equal to the market price of
the shares of Company Common Stock which otherwise
would have been issuable pursuant to the foregoing
subparagraph (ii), determined in accordance with the
preceding clause (B), upon exercise of the related
Rights.
(iv) From and after the occurrence of the event
described above, 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 Rights 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 or from an
Acquiring Person whose Rights would be void pursuant to
the preceding sentence or any Associate or Affiliate
thereof or to or from any nominee of such Acquiring
Person, Associate or Affiliate; and any Right
Certificate delivered to the Rights Agent for transfer
to or from an Acquiring Person (or any Associate,
Affiliate or nominee of such Acquiring Person) whose
Rights would be void pursuant to the preceding sentence
shall be canceled.
(b) In case the Company shall fix a record date for the
issuance of rights (other than the Rights), options or warrants
to all holders of Company Common Stock entitling them (for a
period expiring within 45 calendar days after such record date)
to subscribe for or purchase Company Common Stock, or securities
convertible into Company Common Stock at a price per share (or
having a conversion price per share, if a security convertible
into Company Common Stock) less than the then current per share
market price (as defined in Section 11(d)) of such Company Common
Stock on such record date, the Purchase Price to be in effect
after such record date with respect to Company Common Stock shall
be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the
numerator of which shall be the number of shares of such Company
Common Stock outstanding on such record date plus the number of
shares of such Company Common Stock which the aggregate offering
price of the total number of 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 shares of such
Company Common Stock outstanding on such record date plus the
number of additional shares of such Company Common Stock 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 per share 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. Company
Common Stock owned by or held for the account of the Company
shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever
such a record date is fixed; and in the event that such rights,
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 Company Common Stock
(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, a dividend payable
in Company Common Stock or other distribution referred to in
Section 11(a) hereof) 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 with
respect to Company Common Stock 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 Company Common Stock
on such record date, less the fair market value (as determined in
good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the
Rights Agent and shall be binding on the Rights Agent) of the
portion of such assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable
to one share of such Company Common Stock and the denominator of
which shall be such current per share market price of Company
Common Stock; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less
than the per share 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) For the purpose of any computation hereunder, the
"current per share market price" of a share of Company Common
Stock on any date shall be deemed to be the average of the daily
closing prices per share of a share of Company Common Stock for
the 30 consecutive Trading Days immediately prior to such date;
provided, however, that in the event that the current per share
market price of a share of Company Common Stock is determined
during a period following the announcement by the Company of (A)
a dividend or distribution on the Company Common Stock, payable
in Company Common Stock or securities convertible into Company
Common Stock, or (B) any subdivision, combination or
reclassification of the Company Common Stock, 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 of a share of Company Common Stock. The closing price for
each day shall be the last sale price, regular way, or, in case
no such sale takes place on such day, the average of the closing
bid and asked prices, regular way, in either case as reported in
the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New
York Stock Exchange or, if the Company Common Stock 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 Company Common Stock is
listed or admitted to trading or, if Company Common Stock 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 Company Common
Stock 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 Company Common Stock, selected by
the Board of Directors of the Company. If on any such date no
market-maker is making a market in Company Common Stock, the fair
value of Company Common Stock on such date as determined in good
faith by the Board of Directors of the Company shall be used,
whose determination shall be described in a statement filed with
the Rights Agent. The term "Trading Day" shall mean a day on
which the principal national securities exchange on which Company
Common Stock is listed or admitted to trading is open for the
transaction of business or, if Company Common Stock is not listed
or admitted to trading on any national securities exchange, a
Business Day. If Company Common Stock is not 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) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 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 ten-thousandth of a
share as the case may be.
(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 Company Common Stock, 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 Company Common Stock contained in
Section 11(a) through (c), inclusive, and the provisions of
Sections 7, 9, 10, 13 and 14 with respect to the Company Common
Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent
to any adjustment made hereunder to the Purchase Price applicable
thereto shall evidence the right to purchase, at the adjusted
Purchase Price, the number of shares of Company Common Stock or
other capital stock purchasable from time to time hereunder upon
exercise of such 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 related Right outstanding immediately prior to the
making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, the number of shares of
Company Common Stock (calculated to the nearest one
ten-thousandth of a share) obtained by (i) multiplying (x) the
number of shares covered by such Right immediately prior to this
adjustment by (y) the Purchase Price in effect immediately prior
to such Purchase Price adjustment and (ii) dividing the product
so obtained by the Purchase Price in effect immediately after
such Purchase Price adjustment.
(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 shares of
Company Common Stock purchasable upon the exercise of a Right.
Each of such Rights outstanding after such adjustment of the
number of such Rights shall be exercisable for the number of
shares of Company Common Stock for which such Right was
exercisable immediately prior to such adjustment. Each such Right
held of record prior to such adjustment of the number of Rights
shall become that number of such Rights (calculated to the
nearest one ten-thousandth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of such Purchase
Price by the Purchase Price in effect immediately after such
adjustment. 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 such Rights pursuant to this Section 11(i), the Company shall,
as promptly as practicable, cause to be distributed to holders of
record of such Right Certificates on such record date 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 such 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 shares of Company Common Stock
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 shares of a kind of Company
Common Stock which were expressed in such Right Certificates
theretofore issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of
the Company Common Stock issuable upon exercise of the Rights,
the Company shall take any corporate action which may, in the
opinion of its counsel, be necessary in order that the Company
may validly and legally issue fully paid and nonassessable
Company Common Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that
an adjustment in the Purchase Price be made effective as of a
record date for a specified event, the Company may elect to defer
until the occurrence of such event the issuing to the holder of
any related Right exercised after such record date of the Company
Common Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the
Company Common Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise on the basis of the
Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due bill
or other appropriate instrument evidencing such holder's right to
receive such additional shares 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 (i) any consolidation or subdivision of any of the
Company Common Stock, (ii) issuance wholly for cash of any
Company Common Stock at less than the current market price, (iii)
issuance wholly for cash of Company Common Stock or securities
which by their terms are convertible into or exchangeable for
Company Common Stock, (iv) dividends on Company Common Stock
payable in Company Common Stock or (v) issuance of rights,
options or warrants referred to hereinabove in Section 11(b),
hereafter made by the Company to holders of Company Common Stock,
shall not be taxable to such shareholders.
(n) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Sections
23 or 27 hereof, take (or permit any Subsidiary to take) any
action the purpose of which is to, or if at the time such action
is taken it is reasonably foreseeable that the effect of such
action is to, materially diminish or otherwise eliminate the
benefits intended to be afforded by the Rights.
SECTION 12. CERTIFICATE OF ADJUSTMENT
Whenever an adjustment is made as provided in Sections 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 Company Common Stock a copy
of such certificate and, (c) include a brief summary thereof in
the next quarterly or current report filed pursuant to the
Exchange Act by the Company, and, following the Distribution
Date, mail such summary to each holder of a Right Certificate in
accordance with Section 25 hereof. The Rights Agent shall be
fully protected in relying on any such certificate and on any
adjustment therein and shall not be deemed to have knowledge of
any such adjustment unless and until it shall have received such
a certificate.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF
ASSETS OR EARNING POWER
(a) In the event that, on or following the Distribution
Date, directly or indirectly, (x) the Company shall consolidate
with, or merge with and into any other Person, (y) the Company
shall consolidate with, or merge with, any other Person, and the
Company shall be the continuing or surviving corporation of such
consolidation or merger (other than, in a case of any transaction
described in (x) or (y), a merger or consolidation which would
result in all of the securities generally entitled to vote in the
election of directors ("voting securities") of the Company
outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into
securities of the surviving entity) all of the voting securities
of the Company or such surviving entity outstanding immediately
after such merger or consolidation and the holders of such
securities not having changed as a result of such merger or
consolidation), or (z) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer), in one or a series of related transactions,
assets or earning power aggregating more than 50% 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 any
Subsidiary of the Company in one or more transactions each of
which does not violate Section 11(n) hereof), then, and in each
such case (except as provided in Section 13(d) hereof), proper
provision shall be made so that (i) each holder of a Right,
except as provided in Section 11(a) hereof, shall thereafter have
the right to receive, upon the exercise thereof at a price equal
to the then current Purchase Price (without giving effect to any
adjustment to such Purchase Price pursuant to Section 11(a)(iv))
multiplied by the number of shares of Company Common Stock for
which such Right is then exercisable, in accordance with the
terms of this Rights Agreement, such number of freely tradable
shares of Common Stock of the Principal Party, not subject to any
liens, encumbrances, rights of first refusal or other adverse
claims, as shall equal the result obtained by (A) multiplying the
then current Purchase Price (without giving effect to any
adjustment to such Purchase Price pursuant to Section 11(a)(iv))
by the number of shares of Company Common Stock for which such
Right is then exercisable and dividing that product by (B) 50% of
the then current per share market price of the Common Stock of
such Principal Party (determined pursuant to Section 11(d)
hereof) on the date of consummation of such consolidation,
merger, sale or transfer; (ii) such Principal Party 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 Rights Agreement; (iii)
the term "Company" shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the
provisions of Section 11 hereof shall apply only to such
Principal Party following the first occurrence of an event
described in this Section 13; and (iv) such Principal Party shall
take such steps (including, but not limited to, the reservation
of a sufficient number of its Common Stock 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 Stock thereafter deliverable upon the exercise of the
Rights.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in
clause (x) or (y) of the first sentence of Section
13(a), the Person that is the issuer of any securities
into which Company Common Stock is converted in such
merger or consolidation, and if no securities are so
issued, the Person that is the other party to such
merger or consolidation (including, if applicable, the
Company if it is the surviving corporation); and
(ii) in the case of any transaction described in
clause (z) of the first sentence of Section 13(a), the
Person that is the party receiving the greatest portion
of the assets or earnings power transferred pursuant to
such transaction or transactions; provided, however,
that in any of the foregoing cases, (1) if the Common
Stock of such Person is not at such time and have not
been continuously over the preceding twelve (12) month
period registered under Section 12 of the Exchange Act,
and such Person is a direct or indirect Subsidiary of
another Person the Common Stock of which is and has
been so registered, "Principal Party" shall refer to
such other Person; (2) in case such Person is a
Subsidiary, directly or indirectly, of more than one
Person, the Common Stock of two or more of which are
and have been so registered, "Principal Party" shall
refer to whichever of such Persons is the issuer of the
Common Stock having the greatest aggregate market
value; and (3) in case such Person is owned, directly
or indirectly, by a joint venture formed by two or more
Persons that are not owned, directly or indirectly, by
the same Person, the rules set forth in (1) and (2)
above shall apply to each of the chains of ownership
having an interest in such joint ventures as if such
party were a "Subsidiary" of both or all of such joint
ventures and the Principal Parties in each such chain
shall bear the obligations set forth in this Section 13
in the same ratio as their direct or indirect interests
in such Person bear to the total of such interests.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless the Principal
Party shall have a sufficient number of its authorized Common
Stock which has not been issued or reserved for issuance to
permit the exercise in full of the Rights in accordance with this
Section 13 and unless prior thereto the Company and such
Principal Party shall have executed delivered to the Rights Agent
a supplemental agreement providing for the terms set forth in
paragraphs (a) and (b) of this Section 13 and further providing
that, as soon as practicable after the date of any consolidation,
merger, sale or transfer mentioned in paragraph (a) of this
Section 13, the Principal Party at its own expense shall:
(i) prepare and file a registration statement
under the Securities Act of 1933, as amended, with
respect to the Rights and the securities purchasable
upon exercise of the Rights on an appropriate form, and
will use its best efforts to cause such registration
statement to (A) become effective as soon as
practicable after such filing and (B) remain effective
(with a prospectus at all times meeting the
requirements of such Act) until the Final Expiration
Date;
(ii) use its best efforts to qualify or register
the Rights and the securities purchasable upon exercise
of the Rights under the blue sky laws of such
jurisdictions as may be necessary or appropriate; and
(iii) deliver to holders of the Rights
historical financial statements for the Principal Party
which comply in all respects with the requirements for
registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.
In the event that the events described in this Section 13 shall
occur at any time after the occurrence of the events described in
Section 11(a)(iv), the Rights which have not theretofore been
exercised shall thereafter become exercisable in the manner
described in Section 13(a).
(d) Notwithstanding anything in this Agreement to the
contrary, Section 13 shall not be applicable to a transaction
described in subparagraphs (x) and (y) of Section 13(a) if (i)
such transaction is consummated with a Person or Persons who
acquired Company Common Stock pursuant to a Permitted Offer (or a
wholly owned subsidiary of any such Person or Persons), (ii) the
price per share of the Company Common Stock offered in such
transaction is not less than the price per share of Company
Common Stock whose shares were purchased pursuant to such tender
offer or exchange offer and (iii) the form of consideration being
offered to the remaining holders of shares of Company Common
Stock pursuant to such transaction is the same as the form of
consideration paid pursuant to such tender offer or exchange
offer. Upon consummation of any such transaction contemplated by
this Section 13(d), all Rights hereunder shall expire.
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES
(a) The Company shall not be required to issue fractions of
Rights 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 such Rights for the Trading Day immediately
prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price for any day shall be the
last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock
Exchange or, if the Rights are not listed or admitted to trading
on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange
on which the Rights are listed or admitted to trading or, if such
Rights are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the
over-the-counter market, as reported by Nasdaq or such other
system then in use or, if on any such date the Rights are not
quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker
making a market in such Rights selected by the Board of Directors
of the Company. If on any such date no such market maker is
making a market in the Rights, the fair value of such Rights on
such date 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, shall be used.
(b) The Company shall not be required to issue fractions of
shares of Company Common Stock upon (i) exercise of the Rights or
exchange of the Rights for Company Common Stock pursuant to
Section 24 of this Rights Agreement, or to distribute
certificates which evidence fractional shares of such securities.
Fractions of shares of Company Common Stock may, at the election
of the Company, be evidenced by depository 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 the rights,
privileges and preferences to which they are entitled as
beneficial owners of the Company Common Stock represented by such
depositary receipts. In lieu of fractional shares of Company
Common Stock or depositary receipts, the Company may pay to the
registered holders of Right Certificates at the time such Rights
are exercised as herein provided an amount in cash equal to the
same fraction of the current market value of one share of Company
Common Stock. For the purposes of this Section 14(b), the current
market value of a share of Company Common Stock shall be the
closing price of a share of Company Common Stock (as determined
pursuant to the second sentence of Section 11(d) hereof) for the
Trading Day immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of such Right
expressly waives his 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 Rights 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 Company Common Stock); and any
registered holder of any Right Certificate (or, prior to the
Distribution Date, of Company Common Stock), without the consent
of the Rights Agent or of the holder of any other Right
Certificate (or, prior to the Distribution Date, of Company
Common Stock), may, in his own behalf and for his own benefit,
enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in
respect of, his right to exercise the Rights evidenced by such
Right Certificate in the manner provided in such Right
Certificate and in this Rights 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 Rights
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 Rights Agreement.
SECTION 16. AGREEMENT OF RIGHT HOLDERS
Every holder of a Right, by accepting the same, consents and
agrees with the Company and the Rights Agent and with every other
holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Company
Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the principal office 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 certificates for Company Common
Stock) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated
certificates for Company Common Stock 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; and
(d) notwithstanding anything in this Rights Agreement to
the contrary, neither the Company nor the Rights Agent shall have
any liability to any holder of a Right or a beneficial interest
in a Right or other Person as a result of its inability to
perform any of its obligations under this Rights Agreement by
reason of any preliminary or permanent injunction or other order,
decree or ruling issued by a court of competent jurisdiction or
by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order
promulgated or enacted by any governmental authority, prohibiting
or otherwise restraining performance of such obligation;
provided, however, the Company must use its best efforts to have
any such order, decree or ruling lifted or otherwise overturned
as soon as possible.
SECTION 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A
SHAREHOLDER
No holder, as such, of any Right Certificate shall be
entitled to vote, receive dividends or be deemed for any purpose
the holder of Company Common Stock or any other securities of the
Company which may at any time be issuable on the exercise of the
Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the
holder of any Right Certificate, 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 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
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 Rights Agreement and the
exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent, its directors,
officers, employees and agents for, and to hold each of them
harmless against, any loss, liability, or expense, incurred
without gross negligence, bad faith or willful misconduct on the
part of the Rights Agent or such other indemnified party for
anything done or omitted by the Rights Agent or such other
indemnified party in connection with the acceptance and
administration of this Rights Agreement or the exercise or
performance of its duties hereunder, including the costs and
expenses of defending against any claim of liability in the
premises. The indemnity provided for herein shall survive the
expiration of the Rights and the termination of this Rights
Agreement. The Rights Agent shall be fully 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 Rights Agreement or the exercise or performance of its
duties hereunder in reliance upon any Right Certificate or
certificate for Company Common Stock or for other securities of
the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and,
where necessary, verified or acknowledged, by the proper Person
or Persons, or otherwise upon the advice of counsel as set forth
in Section 20 hereof.
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF
RIGHTS AGENT
Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated,
or any corporation resulting from any merger or consolidation to
which the Rights Agent or any successor Rights Agent shall be a
party, or any corporation succeeding to the stock transfer or all
or substantially all of the corporate trust business of the
Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Rights 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 Rights 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 Rights Agreement.
In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right
Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the
Rights Agent may countersign such Right Certificates either in
its prior name or in its changed name; and in all such cases such
Right Certificates shall have the full force provided in the
Right Certificates and in this Rights Agreement.
SECTION 20. DUTIES OF RIGHTS AGENT
The Rights Agent undertakes the duties and obligations
imposed by this Rights 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 or its own in-house
counsel), and the written advice or 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 written advice or opinion.
(b) Whenever in the performance of its duties under this
Rights 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 Rights Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder to the
Company and any other Person only for its own gross negligence,
bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason
of any of the statements of fact or recitals contained in this
Rights Agreement or in the Right Certificates (except its
countersignature on such Right Certificates) 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 any provision of this Rights
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 Rights 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)(iv)
hereof) or any adjustment in the terms of the Rights (including
the manner, method or amount thereof) provided for herein, 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 Company Common Stock to be
issued pursuant to this Rights Agreement or any Right Certificate
or as to whether any Company Common Stock 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 Rights 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
Secretary or the Treasurer of the Company, and to apply to such
officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or
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.
Any application by the Rights Agent for written
instructions from the Company may, at the option of the Rights
Agent, set forth in writing any action consistent with the terms
of this Rights Agreement proposed to be taken by the Rights Agent
under this Agreement and the date on or after which such action
shall be taken. The Rights Agent shall not be liable for any
action consistent with the terms of this Rights Agreement taken
by the Rights Agent in accordance with a proposal included in any
such application on or after the date specified in such
application (which date shall not be less than five Business Days
after the date any officer of the Company actually receives such
application, unless any such officer shall have consented in
writing to an earlier date) unless, prior to taking any such
action, the Rights Agent shall have received written instructions
in response to such application specifying the action to be
taken.
(h) The Rights Agent and any shareholder, 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 Rights Agreement; provided that neither the
Rights Agent nor any Affiliate of the Rights Agent may act in
such manner on behalf of or in concert with an Acquiring Person,
or its agents or Affiliates. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or
for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or agents,
and the Rights Agent shall not be answerable or accountable for
any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
(j) The Rights Agent undertakes only the express duties and
obligations imposed on it by this Agreement and no implied duties
or obligations shall be read into this Agreement against the
Rights Agent.
(k) Anything in this Agreement to the contrary
notwithstanding, in no event shall the Rights Agent be liable for
special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits).
(l) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder or in the exercise of its rights if there shall be
reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not
reasonably assured to it.
SECTION 21. CHANGE OF RIGHTS AGENT
The Rights Agent or any successor Rights Agent may resign
and be discharged from its duties under this Rights Agreement
upon 30 days' notice in writing mailed to the Company and to each
transfer agent of Company Common Stock by registered or certified
mail, and to the holders of the Right Certificates by first-class
mail. The Company may remove the Rights Agent or any successor
Rights Agent 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 Company Common Stock by registered or
certified mail, and 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
Certificate 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) a corporation organized and doing
business under the laws of the United States or of any 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 and which has at the time of its appointment as Rights
Agent a combined capital and surplus of at least $25 million, or
(b) an affiliate of a corporation described in clause (a) of this
sentence. After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and responsibilities
as if it had been originally named as Rights Agent 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 Company
Common Stock and mail a notice thereof in writing to the
registered holders of the Right Certificates. Failure to give any
notice provided for in this Section 21, however, or any defect
therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES
Notwithstanding any of the provisions of this Rights
Agreement or of the Rights to the contrary, the Company may, at
its option, issue new Right Certificates evidencing Rights in
such form as may be approved by 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 Rights Agreement. In addition, in
connection with the issuance or sale of Company Common Stock
following the Distribution Date and prior to the earlier of the
Redemption Date and the Final Expiration Date, the Company (a)
shall with respect to Company Common Stock so issued or sold
pursuant to the exercise of stock options or under any employee
plan or arrangement, or upon the exercise, conversion or exchange
of securities, notes or debentures issued by the Company, and (b)
may, in any other case, if deemed necessary or appropriate by the
Board of Directors of the Company, issue Right Certificates
representing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i) the Company
shall not be obligated to issue any such Right Certificates if,
and to the extent that, the Company shall be advised by counsel
that such issuance would create a significant risk of material
adverse tax consequences to the Company or the Person to whom
such Right Certificate would be issued, and (ii) no Right
Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of
the issuance thereof.
SECTION 23. REDEMPTION
(a) The Board of Directors of the Company may, at its
option, at any time prior to the earlier to occur of (i) the
Distribution Date or (ii) the Final Expiration Date, redeem all
but not less than all of the then outstanding Rights at an
initial redemption price of $.01 per Right ("Redemption Price").
The Redemption Price shall be appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring
after the date hereof. 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 (b) 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 Company Common Stock.
Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each
such notice of redemption will state the method by which the
payment of the Redemption Price will be made. Neither the Company
nor any of its Affiliates or Associates may redeem, acquire or
purchase 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
Company Common Stock 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)(iv) hereof) for
Company Common Stock at an exchange ratio of one share of Company
Common Stock per Right of the same kind, 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 entity holding Company Common Stock for or pursuant to the
terms of any such plan or any trust agreement entered into by the
Company to secure benefits payable under any employee benefit
plan of the Company or any Subsidiary of the Company), together
with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of Company Common Stock representing 50% or more
of the kind of Company Common Stock then outstanding.
(b) Immediately upon the action of the Board of Directors
of the Company ordering the exchange of any Rights pursuant to
subsection (a) of this Section 24 and without any further action
and without any notice, the right to exercise such Rights shall
terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of the kind of shares of
Company Common Stock equal to the number of 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 shall
promptly mail a notice of any such exchange to all of the holders
of such Rights at their last addresses as they appear upon the
registry books of the Rights Agent. Any notice which is mailed in
the manner herein provided shall be deemed given, whether or not
the holder receives the notice. Each such notice of exchange will
state the method by which the exchange of Company Common Stock
for Rights will be effected and, in the event of any partial
exchange, the number and kind of Rights which will be exchanged.
Any partial exchange shall be effected pro rata based on the
number of Rights being exchanged (other than Rights which have
become void pursuant to the provisions of Section 11(a)(iv)
hereof) held by each holder of such Rights.
(c) In the event that there shall not be sufficient Company
Common Stock (i) issued but not outstanding or (ii) authorized
but unissued, to permit any exchange of Rights as contemplated in
accordance with this Section 24, the Company shall take all such
action as may be necessary to authorize additional Company Common
Stock for issuance upon exchange of the Rights.
SECTION 25. NOTICE OF CERTAIN EVENTS
(a) In case the Company, following the Distribution Date,
shall propose (i) to pay any dividend payable in stock of any
class or series to holders of Company Common Stock or to make any
other distribution to holders of Company Common Stock (other than
a regular quarterly cash dividend), (ii) to offer to holders of
Company Common Stock rights or warrants to subscribe for or to
purchase any additional Company Common Stock or any other
securities, rights or options, (iii) to effect any
reclassification of Company Common Stock (other than a
reclassification involving only the subdivision of outstanding
Company Common Stock), (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 (other than the Company
and/or any of its Subsidiaries in one or more transactions each
of which does not violate Section 11(n) hereof), or (v) to effect
the liquidation, dissolution or winding up of the Company, then,
in each such case, the Company shall give to each holder of a
Right Certificate, in accordance with Section 26 hereof, a notice
of such proposed action to the extent feasible, 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 holders of Company Common Stock
if any such date is to be fixed, and such notice shall be so
given in the case of any action covered by clause (i) or (ii)
above at least 10 days prior to the record date for determining
holders of Company Common Stock 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 holders of Company Common Stock,
whichever shall be the earlier. The failure to give notice
required by this Section 25 or any defect therein shall not
affect the legality or validity of the action taken by the
Company or the vote upon any such action.
(b) In case any of the events set forth in Section
11(a)(iv) 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)(iv) hereof.
SECTION 26. NOTICES
Notices or demands authorized by this Rights 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:
CT Communications, Inc.
68 Cabarrus Avenue, East
Concord, North Carolina 28025
Attention: President
Subject to the provisions of Section 21 hereof, any notice
or demand authorized by this Rights 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:
First Union National Bank
1525 West W.T. Harris Boulevard, 3C3
Charlotte, North Carolina 28288-1153
Attention: Shareholders Services
Notices or demands authorized by this Rights 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
Prior to the Distribution Date, the Company and the Rights
Agent shall, if the Company so directs, supplement or amend any
provision of this Rights Agreement without the approval of any
holders of certificates representing Company Common Stock. From
and after the Distribution Date, the Company and the Rights Agent
shall, if the Company so directs, supplement or amend this Rights
Agreement without the approval of any holders of Right
Certificates in order (i) to cure any ambiguity, (ii) to correct
or supplement any provision contained herein which may be
defective or inconsistent with any other provisions herein, (iii)
to shorten or lengthen any time period hereunder or (iv) to
change or supplement the provisions hereunder in any manner which
the Company may deem necessary or desirable and which shall not
adversely affect the interests of the holders of Right
Certificates (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person); provided, however, that this
Rights Agreement may not be supplemented or amended to lengthen,
pursuant to clause (iii) of this sentence, (A) a time period
relating to when the Rights may be redeemed at such time as the
Rights are not then redeemable, or (B) any other time period
unless such lengthening is for the purpose of protecting,
enhancing or clarifying the rights of, and/or the benefits to,
the holders of Rights. Without limiting the foregoing, the
Company may at any time prior to such time as any Person becomes
an Acquiring Person amend this Rights Agreement to lower the
thresholds set forth in Sections 1(a) and 3(a) hereof from 15% to
not less than the greater of (i) any percentage greater than the
largest percentage of the then outstanding Company Common Stock
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, any entity holding Company Common Stock for or pursuant
to the terms of any such plan, L.D. Coltrane III or Michael R.
Coltrane) together with all Affiliates or Associates of such
Person, or (ii) 10%. Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed
supplement or amendment is in compliance with the terms of this
Section 27, the Rights Agent shall execute such supplement or
amendment, provided that such supplement or amendment does not
adversely affect the rights or obligations of the Rights Agent
under this Rights Agreement. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident
with the interests of the holders of Company Common Stock.
SECTION 28. SUCCESSORS
All the covenants and provisions of this Rights Agreement by
or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and
assigns hereunder.
SECTION 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF
DIRECTORS
For all purposes of this Rights Agreement, any calculation
of the number of shares of Company Common Stock outstanding at
any particular time, including for purposes of determining the
particular percentage of such outstanding shares of Company
Common Stock of which any Person is the Beneficial Owner, shall
be made in accordance with the last sentence of Rule
13d-3(d)(1)(i) of the General Rules and Regulations under the
Exchange Act. The Board of Directors of the Company shall have
the exclusive power and authority to administer this Rights
Agreement and to exercise all rights and powers specifically
granted to the Board or to the Company, or as may be necessary or
advisable in the administration of this Rights Agreement,
including, without limitation, the right and power to (i)
interpret the provisions of this Rights Agreement, and (ii) make
all determinations deemed necessary or advisable for the
administration of this Rights Agreement (including a
determination to redeem or not redeem the Rights or to amend the
Rights Agreement or a determination that an adjustment to the
Redemption Price or Exchange Ratio is or is not appropriate). All
such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with
respect to the foregoing) which are done or made by the Board in
good faith, shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all
other parties, and (y) not subject the Board to any liability to
the holders of the Rights.
SECTION 30. BENEFITS OF THIS RIGHTS AGREEMENT
Nothing in this Rights Agreement shall be construed to give
to any person or corporation other than the Company, the Rights
Agent and the registered holders of the Right Certificates (and,
prior to the Distribution Date, the Company Common Stock) any
legal or equitable right, remedy or claim under this Rights
Agreement; but this Rights 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 Company Common Stock).
SECTION 31. SEVERABILITY
If any term, provision, covenant or restriction of this
Rights 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 Rights Agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated.
SECTION 32. GOVERNING LAW
THIS RIGHTS AGREEMENT AND EACH RIGHT CERTIFICATE ISSUED
HEREUNDER SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF
THE STATE OF NORTH CAROLINA AND FOR ALL PURPOSES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF SUCH
STATE APPLICABLE TO CONTRACTS TO BE MADE AND PERFORMED ENTIRELY
WITHIN SUCH STATE.
SECTION 33. COUNTERPARTS
This Rights Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
SECTION 34. DESCRIPTIVE HEADINGS
Descriptive headings of the several Sections of this Rights
Agreement are inserted for convenience only and shall not control
or affect the meaning or construction of any of the provisions
hereof.<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed on their behalf as of the date
first above written.
CT COMMUNICATIONS, INC.
By: /s/ MICHAEL R. COLTRANE
Name: Michael R. Coltrane
Title: President and CEO
FIRST UNION NATIONAL BANK, as
Rights Agent
By: /s/ KENNETH E. STAAB
Name: Kenneth E. Staab
Title: Vice President
EXHIBIT A
FORM OF RIGHT CERTIFICATE
Certificate No. R- ______ ______Rights
NOT EXERCISABLE AFTER AUGUST 27, 2008 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
CT COMMUNICATIONS, 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 Amended and Restated Rights
Agreement, dated as of January 28, 1999 and effective as of
August 27, 1998 (the " Rights Agreement"), between CT
Communications, Inc., a North Carolina corporation (the
"Company"), and First Union 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., Charlotte, North Carolina time, on August 27, 2008,
at the principal office of the Rights Agent, or at the office of
its successor as Rights Agent, one fully paid non-assessable
share of CT Communications, Inc. Common Stock (the "Stock"), at a
purchase price of $123 per 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 shares of
Stock 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 January 28, 1999 (the "Reclassification
Date") based on the shares of Stock of the Company as constituted
at such date. As provided in the Rights Agreement, the Purchase
Price and the number of shares of Stock which may be purchased
upon the exercise of the Rights evidenced by this Right
Certificate are subject to modification and adjustment upon the
happening of certain events.
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
Certificates of like tenor and date evidencing Rights entitling
the holder to purchase a like aggregate number of shares of Stock
as the Rights evidenced by the Right Certificate or 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 Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Right Certificate (i) may be redeemed by
the Company at its option at a redemption price of $.01 per Right
or (ii) may be exchanged in whole or in part for shares of Stock.
No fractional shares of Stock will be issued upon the exercise of
any Right or Rights evidenced hereby, 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 shares of Stock or of any other securities of the Company
which may at any time be issuable on the exercise hereof, nor
shall anything contained in the Rights Agreement or herein be
construed to confer upon the holder hereof, as such, any of the
rights of a 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: CT COMMUNICATIONS, INC.
__________________ By:
Name:
Title:
Countersigned:
FIRST UNION NATIONAL BANK
By:
Name:
Title:
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.
- - - - - - - - - - - - - - - - - - - - - - - - -
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are
[ ] are not beneficially owned by an Acquiring Person or an
Affiliate or an Associate thereof (as defined in the Rights
Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned [ ] did [ ] did not acquire the
Rights evidenced by this Right Certificate from any person who
is, was or subsequently became an Acquiring Person or an
Affiliate or Associate thereof.
Dated:
Signature
Signature Guaranteed:
______________________________________________________________
NOTICE
The signature in the foregoing Assignment and Certificate
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 is not
completed, the Company 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, in the case of an
Assignment, will affix a legend to that effect on any Right
Certificates issued in exchange for this Right Certificate.
EXHIBIT B
FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder
desires to exercise Rights represented
by the Right Certificate.)
To: CT Communications, Inc.
The undersigned hereby irrevocably elects to exercise
_____________ Rights represented by this Right Certificate to
purchase the Company Common Stock issuable upon the exercise of
the Rights (or such other securities of the Company or of any
other person or other property which may be issuable upon the
exercise of the Rights) and requests that certificates for such
Company Common Stock be issued in the name of and delivered to:
(Please print name and address)
Please insert social security
or other identifying number:
If such number of Rights shall not be all the Rights
evidenced by this Right Certificate, a new Right Certificate for
the balance of such Rights shall be registered in the name of and
delivered to:
(Please print name and address)
Please insert social security
or other identifying number:
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.
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are
[ ] are not beneficially owned by an Acquiring Person or an
Affiliate or an Associate thereof (as defined in the Rights
Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned [ ] did [ ] did not acquire the
Rights evidenced by this Right Certificate from any person who
is, was or subsequently became an Acquiring Person or an
Affiliate or Associate thereof.
Dated:
Signature
Signature Guaranteed:
_____________________________________________________________
NOTICE
The signature in the foregoing Election to Purchase and
Certificate 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 is not
completed, the Company 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, in the case of an
Assignment, will affix a legend to that effect on any Right
Certificates issued in exchange for this Right Certificate.
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE COMMON SHARES
On August 27, 1998, the Board of Directors of CT
Communications, Inc. (the "Company") adopted a Rights Agreement
(the "Rights Agreement") and authorized and declared a dividend
of one common share purchase right (a "Right") for each
outstanding share of Voting Common Stock and Class B Nonvoting
Common Stock of the Company outstanding at such time. On January
28, 1999, the shareholders of the Company approved a
reclassification of Common Stock of the Company pursuant to which
(i) each outstanding share of Company Voting Common Stock was
converted into 4.4 shares of common stock of the Company (the
"Company Common Stock") and (ii) each outstanding share of
Company Nonvoting Common Stock was converted into 4.0 shares of
Company Common Stock (the "Reclassification"). On January 28,
1999, the Company adopted an amendment and restatement of the
Rights Agreement which provided for the effectiveness of the
Rights to the Company Common Stock. Rights Certificates will be
mailed to the shareholders of record as of the close of business
on the date of effectiveness of the Reclassification (the
"Reclassification Date") and the Rights will also apply to
Company Common Stock issued thereafter until the Distribution
Date (as hereinafter defined) or the expiration or earlier
redemption or exchange of the Rights.
Except as set forth below, each Right entitles the
registered holder to purchase from the Company, at any time after
the Distribution Date, one share of Company Common Stock at a
price per share of $123 (the "Purchase Price"). The description
and terms of the Rights are as set forth in the Rights Agreement.
Initially, the Rights will be attached to all certificates
representing Company Common Stock then outstanding, and no
separate Right Certificates will be distributed. The Rights will
separate from the Company Common Stock upon the earlier to occur
of (i) 10 days after the public announcement of a person's or
group of affiliated or associated persons' (other than L.D.
Coltrane III, Chairman of the Board of the Company, or Michael R.
Coltrane, President and Chief Executive Officer of the Company)
having acquired beneficial ownership of 15% or more of the
outstanding Company Common Stock (such person or group being
hereinafter referred to as an "Acquiring Person"), or (ii) 10
days (or such later date as the Board may determine) following
the commencement of, or announcement of an intention to make, a
tender offer or exchange offer the consummation of which would
result in a person or group's becoming an Acquiring Person (the
earlier of such dates being called the "Distribution Date").
Until the Distribution Date, the Rights will be transferred
with, and only with, the Company Common Stock. Until the
Distribution Date (or earlier redemption or expiration of the
Rights), new Company Common Stock certificates issued after the
Record Date upon transfer or new issuance of Company Common Stock
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 Company Common Stock 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 Company Common Stock
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 Company Common Stock as of the close of business on the
Distribution Date (and to each initial record holder of certain
Company Common Stock issued after the Distribution Date), and
such separate Right Certificates alone will evidence the Rights.
The Rights will expire on August 27, 2008 (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 Rights initially are not exercisable. In the event that
any person becomes an Acquiring Person (except pursuant to a
tender or exchange offer that is for all outstanding Company
Common Stock at a price and on terms which a majority of certain
members of the Board of Directors determines to be adequate and
in the best interests of the Company, its shareholders and other
relevant constituencies, other than such Acquiring Person, its
affiliates and associates (a "Permitted Offer")), each holder of
a Right will thereafter have the right (the "Flip-In Right") to
receive, upon exercise and payment of the applicable Purchase
Price, Company Common Stock of the applicable class having a
value equal to two times the applicable Purchase Price.
Notwithstanding the foregoing, all Rights that are, or were,
beneficially owned by any Acquiring Person or any affiliate or
associate thereof will be null and void and not exercisable.
In the event that, at any time following the Distribution
Date, (i) the Company is acquired in a merger or other business
combination transaction in which the holders of all of the
outstanding Company Common Stock immediately prior to the
consummation of the transaction are not the holders of all of the
surviving corporation's voting power, or (ii) more than 50% of
the Company's assets or earning power is sold or transferred,
then each holder of a Right (except Rights which have previously
been voided as set forth above) shall thereafter have the right
(the "Flip-Over Right") to receive, upon exercise and payment of
the applicable Purchase Price, common stock of the acquiring
company having a value equal to two times the applicable Purchase
Price. If a transaction would otherwise result in a holder's
having a Flip-In as well as a Flip-Over Right, then only the
Flip-Over Right will be exercisable; if a transaction results in
a holder's having a Flip-Over Right subsequent to a transaction
resulting in a holder's having a Flip-In Right, a holder will
have Flip-Over Rights only to the extent such holder's Flip-In
Rights have not been exercised.
The Purchase Price payable, and the number of shares of
Company Common Stock or other securities or property issuable,
upon exercise of 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 Company
Common Stock, (ii) upon the grant to holders of Company Common
Stock of certain rights or warrants to subscribe for or purchase
Company Common Stock at a price, or securities convertible into
Company Common Stock with a conversion price, less than the then
current market price of Company Common Stock, or (iii) upon the
distribution to holders of Company Common Stock of evidences of
indebtedness or assets (excluding regular periodic cash dividends
paid out of earnings or retained earnings or dividends payable in
Company Common Stock) or of subscription rights or warrants
(other than those referred to above). However, no adjustment in
the Purchase Price will be required until cumulative adjustments
require an adjustment of at least 1%. No fractional shares of
Company Common Stock will be issued and, in lieu thereof, an
adjustment in cash will be made based on the market price of
Company Common Stock on the last trading day prior to the date of
exercise.
At any time prior to the earlier to occur of (i) the
Distribution Date and (ii) the Final Expiration Date, 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 in cash.
At any time after any person becomes an Acquiring Person and
prior to the acquisition by such person or group of Company
Common Stock representing 50% or more of the then outstanding
Company Common Stock, the Board of Directors of the Company may
exchange the Rights (other than Rights which have become null and
void), in whole or in part, at an exchange ratio of one share of
Company Common Stock per Right (subject to adjustment).
All of the provisions of the Rights Agreement may be amended
prior to the Distribution Date by the Board of Directors of the
Company, without the consent of the holders of the Rights, for
any reason it deems appropriate. After the Distribution Date,
the provisions of the Rights Agreement may be amended by the
Board in order to cure any ambiguity, defect or inconsistency, to
make changes which do not adversely affect the interests of
holders of Rights (excluding the interests of any Acquiring
Person), or, subject to certain limitations, to shorten or
lengthen any time period under the Rights Agreement. Without
limiting the foregoing, prior to the time any person becomes an
Acquiring Person, the Board of Directors is also authorized, as
it deems appropriate, to lower the thresholds required to become
an Acquiring Person to not less than the greater of (i) any
percentage greater than the largest percentage then held by any
shareholder other than L.D. Coltrane III or Michael R. Coltrane,
or (ii) 10%.
Until a Right is exercised, the holder thereof, as such,
will have no rights as a shareholder of the Company, including,
without limitation, the right to vote or to receive dividends.
Although the distribution of the Rights will not be taxable
to shareholders of the Company, shareholders may, depending upon
the circumstances, recognize taxable income should the Rights
become exercisable or upon the occurrence of certain events
thereafter.
The Rights have certain anti-takeover effects. The Rights
will cause substantial dilution to a person or group that
attempts to acquire the Company on terms not approved by the
Company's Board of Directors. The Rights should not interfere
with any merger or other business combination approved by the
Board of Directors because the Rights may be redeemed by the
Company at the Redemption Price prior to the date that is 10 days
after the public announcement that a person or group has become
the beneficial owner of 15% or more of a class of the Common
Stock.
A copy of the Rights Agreement, as amended and restated, has
been filed with the Securities and Exchange Commission on
January 28, 1999 as an Exhibit to the Company's Registration
Statement on Form 8-A with respect to the Rights filed with the
Securities and Exchange Commission (Commission File No. 0-19179 )
on such date. 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.
