SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
January 30, 1997
DATE OF REPORT (Date of earliest event reported)
ALLTEL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-4996 34-0868285
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) No.)
One Allied Drive
Little Rock, Arkansas 72202
(Address of principal executive offices)
(Zip Code)
(501) 661-8000
(Registrant's telephone number, including area code)
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Item 5. Other Events.
On January 30, 1997 (the "Rights Dividend Declaration Date"), the
Board of Directors of ALLTEL Corporation (the "Company") declared a dividend
of one right ("Right") for each share of common stock, par value $1.00 per
share (the "Common Stock"), of the Company outstanding at the close of
business on February 9, 1997 (the "Record Date"). The Rights replace certain
rights granted by the Board of Directors on January 28, 1987, which expire at
the close of business on February 9, 1997. The description and terms of the
Rights are set forth in a Rights Agreement (the "Rights Agreement") between
the Company and First Union National Bank of North Carolina, as Rights Agent
(the "Rights Agent"), dated as of January 30, 1997. The following description
of the Rights does not purport to be complete and is qualified in its entirety
by reference to the Rights Agreement, a copy of which is attached hereto as
Exhibit 4.1 and is incorporated herein by reference.
One Right is granted for each share of Common Stock of the Company
outstanding on the Record Date and for each share of Common Stock of the
Company issued between the Record Date and the Distribution Date (as defined
herein). Each Right entitles the registered holder to purchase from the
Company in certain events one-one/thousandth (1/1000) of a share of Series K,
Cumulative Voting Preferred Stock, par value $25.00 per share, of the Company
(the "Preferred Stock") at a price of $100.00 per one-one/thousandth of a
share (the "Purchase Price"). The number of Rights per share of Common Stock,
the number of shares of Preferred Stock for which each Right is exercisable,
and the Purchase Price are subject to adjustment as described below.
Initially, the Rights will be evidenced by the certificates for the
Common Stock registered in the names of the holders of the Common Stock and
not by separate certificates. Upon the earlier of (i) the close of business
on the tenth business day after the first date of public announcement that any
person (other than the Company, any subsidiary of the Company, or any employee
benefit plan of the Company), together with all affiliates and associates (an
"Acquiring Person"), shall be the beneficial owner of fifteen percent (15%) or
more of the shares of Common Stock then outstanding or (ii) the close of
business on the 10th business day after the date that a tender or exchange
offer by any person is first published or sent, if upon consummation thereof,
such person would be the beneficial owner of fifteen percent (15%) or more of
the shares of Common Stock then outstanding (the earlier of such dates being
called the "Distribution Date"), the Rights Agent will transmit to each record
holder of the Common Stock as of the close of business on such Distribution
Date a rights certificate (the "Rights Certificate") evidencing one right for
each share of Common Stock so held, subject to adjustment as described herein.
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The Rights Agreement provides that, 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 legend 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, without such notation being
attached thereto, will constitute the transfer of the Rights associated with
the Common Stock represented by such certificate.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on January 31, 2007 (the "Final Expiration
Date"), unless earlier redeemed by the Company as described below.
In the event any person (other than the Company, any subsidiary of
the Company, or any employee benefit plan of the Company) alone or together
with its affiliates and associates, shall, at any time after the Rights
Dividend Declaration Date, become the beneficial owner of fifteen percent
(15%) of the shares of Common Stock then outstanding (the "Stock Acquisition
Date"), then, promptly following the occurrence of such event, each holder of
a Right shall thereafter have the right to receive, upon exercise of each
Right at the then-current Purchase Price, in lieu of a number of
one-one/thousandths (1/1000) of a share of Preferred Stock, such number of
shares of Common Stock of the Company having a value equal to two (2) times
the Purchase Price.
If a person becomes a beneficial owner of 15% of the shares of common
stock because of an acquisition pursuant to a tender offer or an exchange
offer for all outstanding shares of Common Stock at a price and on terms
determined by at least a majority of the Continuing Directors (as defined
herein) to be in the best interest of the Company and its stockholders (a
"Qualifying Offer"), then Rights holders shall not be entitled to exercise the
Rights. The term "Continuing Director" means (i) any member of the Board of
Directors of the Company who is not an Acquiring Person or an affiliate or
associate of such person, and who was a member of the Board prior to the date
of the Rights Agreement, or (ii) any person who subsequently becomes a member
of the Board and who is not an Acquiring Person or an affiliate or associate
of such person if the member's election to the Board is recommended or
approved by a majority of the Continuing Directors.
In the event that, following the Stock Acquisition Date, (i) the
Company engages in a merger or other business combination transaction in which
the Company is not the surviving corporation, (ii) the Company engages in a
merger or other business combination transaction with another person in which
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the Company is a surviving corporation, but in which its common stock is
changed or exchanged, or (iii) fifty percent (50%) or more of the Company's
assets or earning power is sold or transferred, the Rights Agreement provides
that a proper provision shall be made so that each holder of a Right will
thereafter have the right to receive, upon exercise of each Right thereof at
the then-current Purchase Price, common stock of the acquiring company having
a value equal to two (2) times the Purchase Price.
The rights set forth in (i) and (ii) of the preceding paragraph shall
not be applicable to a transaction described therein if (x) such transaction
is consummated with a person who acquired shares of Common Stock pursuant to a
Qualifying Offer, (y) the price per share of Common Stock offered in such
transaction is not less than the price per share of Common Stock paid to all
holders of shares of Common Stock whose shares were purchased pursuant to such
offer, and (z) the form of consideration being offered to the remaining
holders of shares of Common Stock pursuant to such transaction is the same as
that paid pursuant to such offer.
Under the terms of the Rights Agreement, any initial Rights
beneficially owned by an Acquiring Person, or an associate or affiliate of an
Acquiring Person, or certain transferees of an Acquiring Person, shall become
null and void without any further action on the part of the Company, and no
holder of such Rights shall have any rights whatsoever with respect to such
Rights.
The Purchase Price payable, and the number of shares of Preferred
Stock or other securities or property issuable, upon exercise of the Rights,
are subject to adjustment from time to time to prevent dilution (i) in the
event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Stock, (ii) upon the grant to holders of
the Preferred Stock of certain rights or warrants to subscribe for Preferred
Stock or convertible securities at less than the current market price of the
Preferred Stock, or (iii) upon the distribution to holders of the Preferred
Stock of evidences of indebtedness or assets (excluding regular periodic cash
dividends out of earnings or retained earnings, and dividends payable in
Preferred Stock) or of subscription rights or warrants (other than those
referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least one
percent (1%) in such Purchase Price. No fractional shares of Preferred Stock
(other than fractions which are integral multiples of one-one/thousandth
(1/1000) of a share, which may, at the election of the Company, be evidenced
by depositary receipts), or fractional shares of Common Stock will be issued,
and in lieu thereof, an adjustment in cash will be made based on the market
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price of the Preferred Stock or Common Stock on the last trading date prior to
the date of exercise.
If the Company, prior to the Distribution Date, (i) declares a
dividend on the outstanding shares of Common Stock payable in shares of Common
Stock (ii) subdivides the outstanding shares of Common Stock, or (iii)
combines the outstanding shares of Common Stock into a smaller number of
shares, then the number of Rights associated with each share of Common Stock
shall be proportionately adjusted in such a manner that the total number of
outstanding Rights is unchanged.
At any time after the date of the Rights Agreement until the close of
business on the tenth business day following the Stock Acquisition Date, the
Company may redeem all (but not less than all) of the Rights at a price of
$.01 per Right (the "Redemption Price"). The Company may, at its option, pay
the Redemption Price in cash, Common Stock, or any other form of consideration
deemed appropriate by the Board of Directors. Immediately upon the action of
the Board of Directors of the Company ordering redemption of the Rights, the
Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
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.
Prior to the Distribution Date, the Company may amend any provision
of the Rights Agreement without the approval of the holders of certificates
representing Common Stock. Following the Distribution Date, the Company may
amend the Rights Agreement without the approval of any holders of Rights
Certificates in order to (i) cure any ambiguity, (ii) correct or supplement
any defective or inconsistent provision, (iii) shorten or lengthen any time
period hereunder, or (iv) change any provisions in the Rights Agreement in any
manner which the Company deems necessary or desirable and which does not
adversely affect the interests of the holders of Rights Certificates (other
than an Acquiring Person or its affiliates and associates). However, the
Rights Agreement may not be amended to lengthen a time period relating to when
the Rights may be redeemed at such time as the Rights are not then redeemable,
or any other time period unless such lengthening is for the purpose of
protecting the rights of, and/or the benefits to, the holders of Rights.
Additionally, the Company may not make any amendment to the Rights Agreement
that changes the Redemption Price, the Final Expiration Date, the Purchase
Price or the number of one-one/thousandths (1/1000) of a share of Preferred
Stock for which a Right is exercisable; provided, however, that at any time
prior to the Distribution Date the Board of Directors of the Company may amend
the Rights Agreement to increase the Purchase Price or extend the Final
Expiration Date.
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As of December 31, 1996, there were 187,199,811 shares of Common
Stock outstanding, with an additional 19,213,213 shares of Common Stock
reserved for issuance under the Company's Employee Benefit Plans and upon the
conversion of outstanding convertible shares of preferred stock and
debentures. Each outstanding share of Common Stock on February 9, 1997 will
receive one Right. As long as the Rights are attached to the Common Stock,
the Company will issue one Right for each share of Common Stock issued between
the Record Date and the Distribution Date so that all such Shares will have
attached Rights, except as otherwise provided in the case of dividends on,
subdividing of, combination of or reclassification of the Common Stock as
described above. Five hundred thousand (500,000) shares of Series K Preferred
Stock will be reserved for issuance upon exercise of the Rights.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
without conditioning the offer on (i) the Rights being redeemed, (ii) a
substantial number of Rights being acquired or (iii) an offer being deemed a
Qualifying Offer under the Rights Agreement. However, the Rights should not
interfere with any merger or business combination in connection with a
Qualifying Offer or that is approved by the Company because the Rights are
redeemable under certain circumstances.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
4.1 Rights Agreement, dated as of January 30, 1997, between
ALLTEL Corporation and First Union National Bank of North
Carolina, which includes, as Exhibit A thereto, the Form
of Rights Certificate.
4.2 Certificate of Amended Designation, Preferences and Rights
of the Cumulative Voting Preferred Stock, Series K
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ALLTEL CORPORATION
(Registrant)
/s/ Francis X. Frantz
By: /s/ Francis X. Frantz
Francis X. Frantz
Senior Vice President -
External Affairs, General
Counsel and Secretary
Secretary and General
Counsel
Date: February 3, 1997
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EXHIBIT INDEX
Exhibits to Form 8-K
Number in
Exhibit Table Exhibit
4.1 Rights Agreement, dated as of January 30, 1997, between
ALLTEL Corporation and First Union National Bank of North
Carolina, which includes, as Exhibit A thereto, the Form
of Rights Certificate.
4.2 Certificate of Amended Designation, Preferences and Rights
of the Cumulative Voting Preferred Stock, Series K
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ALLTEL CORPORATION
and
FIRST UNION NATIONAL BANK OF NORTH CAROLINA,
Rights Agent
Rights Agreement
Dated as of January 30, 1997
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Table of Contents
Section Page
Section 1. Certain Definitions....................................... . .2
Section 2. Appointment of Rights Agent................................ 6
Section 3. Issue of Rights Certificates.............................. .. 6
Section 4. Form of Rights Certificates................................ . 8
Section 5. Countersignature and Registration.......................... . 9
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates ............................................ . 10
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights .................................................. 11
Section 8. Cancellation and Destruction of Rights Certificates......... 13
Section 9. Reservation and Availability of Capital Stock............... 14
Section 10. Preferred Stock Record Date................................. 15
Section 11. Adjustment of Purchase Price, Number and Kind of Shares
or Number of Rights......................................... 16
Section 12. Certificate of Adjusted Purchase Price or Number of Shares. 27
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power............................................... 28
Section 14. Fractional Rights and Fractional Shares..................... 31
Section 15. Rights of Action........................................... 32
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Section Page
Section 16. Agreement of Rights Holders................................. 33
Section 17. Rights Certificate Holder Not Deemed a Stockholder.......... 34
Section 18. Concerning the Rights Agent................................ 34
Section 19. Merger or Consolidation or Change of Name of Rights
Agent ................................................... 35
Section 20. Duties of Rights Agent...................................... 36
Section 21. Change of Rights Agent...................................... 39
Section 22. Issuance of New Rights Certificates......................... 40
Section 23. Redemption and Termination...................................41
Section 24. Notice of Certain Events.....................................42
Section 25. Notices 43
Section 26. Supplements and Amendments...................................43
Section 27. Successors...................................................44
Section 28. Determinations and Actions by the Board of Directors, etc....44
Section 29. Benefits of this Agreement...................................45
Section 30. Severability.................................................45
Section 31. Governing Law................................................46
Section 32. Counterparts.................................................46
Section 33. Descriptive Headings.........................................46
Exhibit A [Form of Rights Certificate].................................A-1
ii
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RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of January 30, 1997 (the
"Agreement"), between ALLTEL Corporation, a Delaware corporation (the
"Company"), and FIRST UNION NATIONAL BANK OF NORTH CAROLINA, a national
banking institution (the "Rights Agent").
W I T N E S S E T H
WHEREAS, on January 28, 1987, the Board of Directors of the
Company authorized and declared a dividend distribution of one right for each
share of Common Stock (as such term is hereinafter defined) of the Company
outstanding at the close of business on February 9, 1987 (the "1987 Record
Date"), and authorized the issuance of one right for each share of Common
Stock of the Company issued between the 1987 Record Date (whether originally
issued or delivered from the Company's treasury) and the earlier of the
Distribution Date or the Expiration Date (as such terms are defined in the
Rights Agreement, dated as of January 28, 1987 (the "1987 Agreement"), as
amended and restated as of April 26, 1989, and as amended as of April 16, 1990
(the "1989 Agreement")) between the Company and the Rights Agent, each right
initially representing the right to purchase one one-hundredth of a share of
Series K, Cumulative Voting Preferred Stock of the Company having the rights,
powers and preferences set forth in the Certificate of Incorporation of the
Company, upon the terms and subject to the conditions set forth in the 1987
Agreement (the "1987 Rights");
WHEREAS, effective as of April 26, 1989, the Board of
Directors of the Company in accordance with the terms and conditions of the
1987 Agreement, determined it desirable and in the best interests of the
Company and its stockholders for the Company to amend and restate the 1987
Agreement and on such date implemented such changes by executing an amended
and restated agreement;
WHEREAS, effective as of April 16, 1990, the Board of
Directors of the Company, in accordance with the terms and conditions of the
1989 Agreement determined it desirable and in the best interests of the
Company and its stockholders for the Company to amend certain provisions of
the 1989 Agreement and on such date implemented such changes by executing the
First Amendment to Amended and Restated Rights Agreement;
WHEREAS, on January 30, 1997, the Board of Directors of the
Company determined it desirable and in the best interests of the Company and
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its stockholders for the Company to extend the 1989 Agreement and to implement
such extension by executing this Agreement; and
WHEREAS, on January 30, 1997 (the "Rights Dividend
Declaration Date"), the Board of Directors of the Company authorized and
declared a dividend distribution of one Right for each share of Common Stock
of the Company outstanding upon the Expiration Date (as defined in the 1989
Agreement) (the "Record Date"), and authorized the issuance of one Right (as
such number may hereafter be adjusted pursuant to the provisions of Section
11(p) hereof) for each share of Common Stock of the Company issued between the
Record Date (whether originally issued or delivered from the Company's
treasury) and the Distribution Date (as hereinafter defined), each Right
initially representing the right to purchase one one-thousandth of a share of
Series K, Cumulative Voting Preferred Stock of the Company having the rights,
powers and preferences set forth in the Certificate of Incorporation of the
Company, upon the terms and subject to the conditions hereinafter set forth
(the "Rights").
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such
term is hereinafter defined) who or which, together with all Affiliates
and Associates (as such terms are hereinafter defined) of such Person,
shall be the Beneficial Owner (as such term is hereinafter defined) of 15%
or more of the shares of Common Stock then outstanding, but shall not
include the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company, or any Person or
entity organized, appointed or established by or for the Company for or
pursuant to the terms of any such plan, or any Person who becomes an
Acquiring Person solely as a result of a reduction in the number of shares
of Common Stock outstanding due to the repurchase of shares of Common
Stock by the Company, unless and until such Person shall purchase or
otherwise become the Beneficial Owner of additional shares of Common
Stock constituting 1% or more of the then outstanding shares of Common
Stock.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
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Regulations under the Securities Exchange Act of 1934, as amended and in
effect on the date of this Agreement (the "Exchange Act").
(c) A Person shall be deemed the "Beneficial Owner" of,
and shall be deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the
right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (whether or not
in writing) or upon the exercise of conversion rights,
exchange rights, rights, warrants or options, or otherwise;
provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or be deemed to "beneficially own,"
(A) securitiestendered pursuant to a tender or exchange
offer made by such Person or any of such Person's Affiliates
or Associates until such tendered securities are accepted
for purchase or exchange, or (B) securities issuable upon
exercise of Rights at any time prior to the occurrence of a
Triggering Event, or (C) securities issuable upon exercise
of Rights from and after the occurrence of a Triggering Event
which Rights were acquired by such Person or any of such
Person's Affiliates or Associates prior to the Distribution
Date or pursuant to Section 3(a) or Section 22 hereof (the
"Original Rights") or pursuant to Section 11(i) hereof in
connection with an adjustment made with respect to any
Original Rights;
(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the
right to vote or dispose of or has "beneficial ownership" of
(as determined pursuant to Rule 13d-3 of the General Rules
and Regulations under the Exchange Act), including pursuant
to any agreement, arrangement or understanding, whether or
not in writing; provided, however, that a Person shall not
be deemed the "Beneficial Owner" of, or to "beneficially
own," any security under this subparagraph (ii) as a result
of an agreement, arrangement or understanding to vote such
security if such agreement, arrangement or understanding:
(A) arises solely from a revocable proxy given in response
to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable provisions of the
General Rules and Regulations under the Exchange Act, and
(B) is not also then reportable by such Person on Schedule
13D under the Exchange Act (or any comparable or successor
report); or
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(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or
Associate thereof) with which such Person (or any of such
Person's Affiliates or Associates) has any agreement,
arrangement or understanding (whether or not in writing),
for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy as described in the proviso to
subparagraph (ii) of this paragraph (c)) or disposing of any
voting securities of the Company; provided, however, that
nothing in this paragraph (c) shall cause a Person engaged
in business as an underwriter of securities to be deemed the
"Beneficial Owner" of, or to be deemed to "beneficially own,"
any securities acquired through such Person's participation
in good faith in a firm commitment underwriting until the
expiration of forty (40) days after the date of such
acquisition.
(d) "Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in the State of
Arkansas 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., Little Rock, Arkansas time, on such date; provided, however,
that if such date is not a Business Day it shall mean 5:00 P.M., Little
Rock, Arkansas time, on the next succeeding Business Day.
(f) "Common Stock" shall mean the common stock, par
value $1.00 per share, of the Company, except that "Common Stock" when
used with reference to any Person other than the Company shall mean the
capital stock of such Person with the greatest voting power, or the
equity securities or other equity interest having power to control or
direct the management, of such Person.
(g) "Continuing Director" shall mean (i) any member of
the Board of Directors of the Company, while such Person is a member of
the Board, who is not an Acquiring Person or an Affiliate or Associate of
an Acquiring Person, or a representative of an Acquiring Person or of any
such Affiliate or Associate, and was a member of the Board prior to the
date of this Agreement, or (ii) any Person who subsequently becomes a
member of the Board, while such Person is a member of the Board, who is
not an Acquiring Person or an Affiliate or Associate of an Acquiring
Person or a representative
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of an Acquiring Person or of any such Affiliate or Associate, if such
Person's nomination for election or election to the Board is recommended
or approved by a majority of the Continuing Directors.
(h) "Distribution Date" shall mean the earlier of (i)
the close of business on the tenth Business Day after the Stock
Acquisition Date (as such term is hereinafter defined) or (ii) the close
of business on the tenth Business Day (or such later date as the Board of
Directors shall determine) after the date that a tender or exchange offer
by any Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of the Company,
or any Person or entity organized, appointed or established by or for the
Company, for or pursuant to the terms, of any such plan) is first
published or sent or given within the meaning of Rule 14d-2(a) of the
General Rules and Regulations under the Exchange Act, if upon consummation
thereof, such Person would be the Beneficial Owner of 15% or more of the
shares of Common Stock then outstanding.
(i) "Expiration Date" shall mean the earlier of (i) the
close of business on January 31, 2007 (the "Final Expiration Date"), or
(ii) the time at which the Rights are redeemed as provided in Section 23
hereof.
(j) "Person" shall mean any individual, firm,
corporation, partnership or other entity whether organized under the laws
of the United States of America or any state or territory thereof or under
the laws of any other country or political subdivision thereof.
(k) "Preferred Stock" shall mean shares of Series K,
Cumulative Voting Preferred Stock, par value $25 per share, of the
Company.
(l) "Qualifying Offer" shall mean an acquisition of
shares of Common Stock pursuant to a tender offer or an exchange offer for
all outstanding shares of Common Stock at a price and on terms determined
by at least a majority of the Continuing Directors to be in the best
interests of the Company and its stockholders.
(m) "Section 11(a)(ii) Event" shall mean the event
described in Section 11(a)(ii) hereof.
(n) "Section 13 Event" shall mean any event described in
clauses (x), (y) or (z) of Section 13(a) hereof.
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(o) "Stock Acquisition Date" shall mean the first date
of 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.
(p) "Subsidiary" shall mean, with reference to any
Person, any corporation of which an amount of voting securities sufficient
to elect at least a majority of the directors of such corporation is
beneficially owned, directly or indirectly, by such Person, or otherwise
controlled by such Person.
(q) "Triggering Event" shall mean the Section 11(a)(ii)
Event or any Section 13 Event.
Section 2. Appointment of Rights Agent. The Company
hereby appoints the Rights Agent to act as agent for the Company and the
holders of the Rights (who, in accordance with Section 3 hereof, shall prior
to the Distribution Date also be the holders of the Common Stock) in
accordance with the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment and hereby certifies that it complies with the
requirements of the New York Stock Exchange, Inc. governing transfer agents.
The Company may from time to time appoint such Co-Rights Agents as it may deem
necessary or desirable. Any actions which may be taken by the Rights Agent
pursuant to the terms of this Agreement may also be taken by any such
Co-Rights Agents.
Section 3. Issue of Rights Certificates.
(a) Until the Distribution Date (x) the Rights will be
evidenced (subject to the provisions of paragraph (b) of this Section 3)
by the certificates for the Common Stock registered in the names of the
holders of the Common Stock (which certificates for Common Stock shall be
deemed also to be certificates for Rights) and not by separate
certificates, and (y) the Rights will be transferable only in connection
with the transfer of the underlying shares of Common Stock (including a
transfer to the Company). As soon as practicable after the Distribution
Date, the Rights Agent will send by first-class, postage prepaid mail, to
each record holder of the Common Stock as of the close of business on the
Distribution Date, at the address of such holder shown on the records of
the Company, one or more right certificates, in substantially the form of
Exhibit A hereto (the "Rights Certificates"), evidencing one Right for
each share of Common Stock so held, subject to
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adjustment as provided herein. In the event that an adjustment in the
number of Rights per share of Common Stock has been made pursuant to
Section 11(p) hereof, at the time of distribution of the Rights
Certificates, the Company shall make the necessary and appropriate
rounding adjustments (in accordance with Section 14(a) hereof) so that
Rights Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Rights. As of
and after the Distribution Date, the Rights will be evidenced solely by
such Rights Certificates.
(b) Rights shall be issued in respect of all shares of
Common Stock which are issued after the Record Date but prior to the
earlier of the Distribution Date or the Expiration Date. Certificates
representing such shares of Common Stock shall also be deemed to be
certificates for Rights, and shall bear the following legend:
This certificate evidences and entitles the holder hereof to
certain Rights as set forth in the Rights Agreement between ALLTEL
Corporation (the "Company") and the Rights Agent (the "Rights
Agreement"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal offices of the
Company and available for inspection by the holder of this certificate.
Under certain circumstances, as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and will no longer be
evidenced by this certificate. The Company will mail to the holder of
this certificate a copy of the Rights Agreement, as in effect on the date
of mailing, without charge promptly within five days after receipt of a
written request therefor. Under certain circumstances set forth in the
Rights Agreement, Rights issued to, or held by, any Person who is, was or
becomes an Acquiring Person or any Affiliate or Associate thereof (as such
terms are defined in the Rights Agreement), whether currently held by or
on behalf of such Person or by any subsequent holder, may become null and
void.
With respect to such certificates containing the foregoing legend and
certificates containing the legend specified in the 1989 Agreement and with
respect to previously issued certificates that contain no comparable legend,
until the earlier of (i) the Distribution Date or (ii) the Expiration Date,
the Rights associated with the Common Stock represented by such certificates
shall be evidenced by such certificates alone and the registered holders of
Common Stock shall also be the registered holders of the associated Rights,
and the transfer of any of such certificates shall also constitute the
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transfer of the Rights associated with the Common Stock represented by such
certificates.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to
purchase and of assignment to be printed on the reverse thereof) shall
each be substantially in the form set forth in Exhibit A hereto and may
have such marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable law or
with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which the Rights may from time to
time be listed, or to conform to usage. Subject to the provisions of
Section 11 and Section 22 hereof, the Rights Certificates, whenever
distributed, shall be dated as of the Record Date and on their face shall
entitle the holders thereof to purchase such number of one one-thousandths
of a share of Preferred Stock as shall be set forth therein at the price
set forth therein (such exercise price per one one-thousandth of a share
being referred to herein as the "Purchase Price"), but the amount and
type of securities purchasable upon the exercise of each Right and the
Purchase Price thereof shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to
Section 3(a), Section 11(i) or Section 22 hereof that represents Rights
beneficially owned by: (i) an Acquiring Person or any Associate or
Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee
after the Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming
such and receives such Rights pursuant to either (A) a transfer (whether
or not for consideration) from the Acquiring Person to holders of equity
interests in such Acquiring Person or to any Person with whom such
Acquiring Person has any agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board of
Directors of the Company has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect avoidance of
Section 7(e) hereof, and any Rights Certificate issued pursuant to
Section 6 or Section 11 hereof upon transfer, exchange, replacement or
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adjustment of any other Rights Certificate referred to in this sentence,
shall contain (to the extent feasible) the following legend:
The Rights represented by this Rights Certificate are or were beneficially
owned by a Person who was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (as such terms are defined in the Rights
Agreement). Accordingly, this Rights Certificate and the Rights
represented hereby may become null and void in the circumstances
specified in Section 7(e) of such Agreement.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf
of the Company by its Chairman of the Board, its President or any Vice
President, either manually or by facsimile signature, and shall have
affixed thereto the Company's seal or a facsimile thereof which shall be
attested by the Secretary or an Assistant Secretary of the Company, either
manually or by facsimile signature. The Rights Certificates shall be
countersigned by the Rights Agent, either manually or by facsimile
signature, and shall not be valid for any purpose unless so countersigned.
In case any officer of the Company who shall have signed any of the
Rights Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the
Company, such Rights Certificates, nevertheless, may be countersigned by
the Rights Agent and issued and delivered by the Company with the same
force and effect as though the person who signed such Rights Certificates
had not ceased to be such officer of the Company; and any Rights
Certificates may be signed on behalf of the Company by any person who, at
the actual date of the execution of such Rights Certificate, shall be a
proper officer of the Company to sign such Rights Certificate, although at
the date of the execution of this Rights Agreement any such person was
not such an officer.
(b) Following the Distribution Date, the Rights Agent
will keep or cause to be kept, at its principal office or offices
designated as the appropriate place for surrender of Rights Certificates
upon exercise or transfer, books for registration and transfer of the
Rights Certificates issued hereunder. Such books shall show the names
and addresses of the respective holders of the Rights Certificates, the
number of Rights evidenced on its face by each of the Rights Certificates,
the certificate number of each of the Rights Certificates and the date of
each of the Rights Certificates.
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Section 6. Transfer, Split Up, Combination and Exchange
of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates.
(a) Subject to the provisions of Section 4(b),
Section 7(e) and Section 14 hereof, at any time after the close of
business on the Distribution Date, and at or prior to the close of
business on the Expiration Date, any Rights Certificate or Certificates
may be transferred, split up, combined or exchanged for another Rights
Certificate or Certificates, entitling the registered holder to purchase
a like number of one one-thousandths of a share of Preferred Stock (or,
following a Triggering Event, Common Stock, other securities, cash or
other assets, as the case may be) as the Rights Certificate or
Certificates surrendered then entitled such holder (or former holder in
the case of a transfer) to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Rights Certificate or
Certificates shall make such request in writing delivered to the Rights
Agent, and shall surrender the Rights Certificate or Certificates to be
transferred, split up, combined or exchanged at the principal office or
offices of the Rights Agent designated for such purpose. Neither the
Rights Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such surrendered Rights
Certificate until the registered holder shall have completed and signed
the certificate contained in the form of assignment on the reverse side
of such Rights Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial
Owner) or Affiliates or Associates thereof as the Company shall
reasonably request. Thereupon the Rights Agent shall, subject to Section
4(b), Section 7(e) and Section 14 hereof, countersign and deliver to the
Person entitled thereto a Rights Certificate or Rights Certificates, as
the case may be, as so requested. The Company may require payment of a
sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or
exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction
or mutilation of a Rights Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them,
and reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Rights Certificate if mutilated, the Company will
execute and deliver a new Rights Certificate of like tenor to the Rights
Agent for countersignature and
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delivery to the registered owner in lieu of the Rights Certificate so
lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights.
(a) Subject to Section 7(e) hereof, the registered holder
of any Rights Certificate may exercise the Rights evidenced thereby
(except as otherwise provided herein including, without limitation, the
restrictions on exercisability set forth in Section 9(c), Section
11(a)(iii) and Section 23(a) hereof) in whole or in part at any time
after the Distribution Date upon surrender of the Rights Certificate,
with the form of election to purchase and the certificate on the reverse
side thereof duly executed, to the Rights Agent at the principal office
or offices of the Rights Agent designated for such purpose, together with
payment of the aggregate Purchase Price with respect to the total number
of one one-thousandths of a share of Preferred Stock (or other securities,
cash or other assets, as the case may be) as to which such surrendered
Rights are then exercisable, at or prior to the Expiration Date.
(b) The Purchase Price for each one one-thousandth of a
share of Preferred Stock pursuant to the exercise of a Right shall
initially be $100, and shall be subject to adjustment from time to time
as provided in Sections 11 and 13(a) hereof and shall be payable in
accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the
certificate duly executed, accompanied by payment, with respect to each
Right so exercised, of the Purchase Price per one one-thousandth of a
share of Preferred Stock (or other securities, cash or other assets, as
the case may be) to be purchased as set forth below and an amount equal
to any applicable transfer tax, the Rights Agent shall, subject to
Section 20(k) hereof, thereupon promptly (i) (A) requisition from any
transfer agent of the shares of Preferred Stock (or make available, if
the Rights Agent is the transfer agent for such shares) certificates for
the total number of one one-thousandths of a share of Preferred Stock to
be purchased and the Compan hereby irrevocably authorizes its transfer
agent to comply with all such requests, or (B) if the Company shall have
elected to deposit the total number of shares of Preferred Stock issuable
upon exercise of the Rights hereunder with a depositary agent, requisition
from the depositary agent depositary receipts representing such number of
one one-thousandths of a share of Preferred Stock as are to be purchased
(in which case certificates for the
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shares of Preferred Stock represented by such receipts shall be deposited
by the transfer agent with the depositary agent) and the Company will
direct the depositary agent to comply with such request, (ii) requisition
from the Company the amount of cash, if any, to be paid in lieu of
fractional shares in accordance with Section 14 hereof, (iii) after
receipt of such certificates or depositary receipts, cause the same to be
delivered to, or upon the order of, the registered holder of such Rights
Certificate, registered in such name or names as may be designated by
such holder, and (iv) after receipt thereof, deliver such cash, if any,
to, or upon the order of, the registered holder of such Rights
Certificate. The payment of the Purchase Price (as such amount may be
reduced pursuant to Section 11(a)(iii) hereof) may be made (x) in cash or
by certified bank check or bank draft payable to the order of the Company,
or (y) by delivery of a certificate or certificates (with appropriate
stock powers executed in blank attached thereto) evidencing a number of
shares of Common Stock equal to the then Purchase Price divided by the
closing price (as determined pursuant to Section 11(d) hereof) per share
of Common Stock on the Trading Day immediately preceding the date of such
exercise. In the event that the Company is obligated to issue other
securities (including Common Stock) of the Company, pay cash and/or
distribute other property pursuant to Section 11(a) hereof, the Company
will make all arrangements necessary so that such other securities, cash
and/or other property are available for distribution by the Rights Agent,
if and when appropriate. The Company reserves the right to require prior
to the occurrence of a Triggering Event that, upon any exercise of Rights,
a number of Rights be exercised so that only whole shares of Preferred
Stock would be issued.
(d) In case the registered holder of any Rights
Certificate shall exercise less than all the Rights evidenced thereby, a
new Rights Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent and delivered
to, or upon the order of, the registered holder of such Rights
Certificate, registered in such name or names as may be designated by
such holder, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the occurrence of the Section 11(a)(ii) Event,
any Rights beneficially owned by (i) an Acquiring Person or an Associate
or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee
after the Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person
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(or of any such Associate or Affiliate) who becomes a transferee prior to
or concurrently with the Acquiring Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests
in such Acquiring Person or to any Person with whom the Acquiring Person
has any agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding which has as
a primary purpose or effect the avoidance of this Section 7(e), shall
become null and void without any further action, and no holder of such
Rights shall have any rights whatsoever with respect to such Rights,
whether under any provision of this Agreement or otherwise. The Company
shall use all reasonable efforts to ensure that the provisions of this
Section 7(e) and Section 4(b) hereof are complied with, but shall have no
liability to any holder of Rights Certificates or other Person as a result
of its failure to make any determinations with respect to an Acquiring
Person or any of its Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the
occurrence of any purported exercise as set forth in this Section 7
unless such registered holder shall have (i) completed and duly executed
the certificate and the form of election to purchase set forth on the
reverse side of the Rights Certificate surrendered for such exercise, and
(ii) provided such additional evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) or Affiliates or Associates thereof as
the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights
Certificates. All Rights Certificates surrendered for the purpose of
exercise, transfer, split up, combination or exchange shall, if
surrendered to the Company or any of its agents, be delivered to the
Rights Agent for cancellation or in canceled form, or, if surrendered to
the Rights Agent, shall be canceled by it, and no Rights Certificates
shall be issued in lieu thereof except as expressly permitted by any of
the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Rights Certificate purchased or acquired by
the Company otherwise than upon the exercise thereof. The Rights Agent
shall deliver all canceled Rights Certificates to the Company, or shall,
at the written request of the Company,
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destroy such canceled Rights Certificates, and in such case shall deliver
a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) The Company covenants and agrees that it will cause
to be reserved and kept available out of its authorized and unissued
shares of Preferred Stock (and, following the occurrence of a Triggering
Event, out of its authorized and unissued shares of Common Stock and/or
other securities or out of its authorized and issued shares held in its
treasury), the number of shares of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other securities)
that, as provided in this Agreement including Section 11(a)(iii) hereof,
will be sufficient to permit the exercise in full of all outstanding
Rights.
(b) So long as the shares of Preferred Stock (and,
following the occurrence of a Triggering Event, Common Stock and/or other
securities) issuable and deliverable upon the exercise of the Rights may
be listed on any national securities exchange, the Company shall use its
best efforts to cause, from and after such time as the Rights become
exercisable, all shares reserved for such issuance to be listed on such
exchange upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file,
as soon as practicable following the earliest date after the occurrence of
the Section 11(a)(ii) Event on which the consideration to be delivered by
the Company upon exercise of the Rights has been determined in accordance
with Section 11(a)(iii) hereof, or as soon as is required by law following
the Distribution Date, as the case may be, a registration statement under
the Securities Act of 1933 (the "Act"), with respect to the securities
purchasable upon exercise of the Rights on an appropriate form, (ii)
cause such registration statement to become effective as soon as
practicable after such filing, and (iii) cause such registration
statement to remain effective (with a prospectus at all times meeting the
requirements of the Act) until the earlier of (A) the date as of which the
Rights are no longer exercisable for such securities, and (B) the date of
the expiration of the Rights. The Company will also take such action as
may be appropriate under, or to ensure compliance with, the securities or
"blue sky" laws of the various states in connection with the
exercisability of the Rights. The Company may temporarily suspend, for a
period of time not to exceed ninety (90) days after the date set
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forth in clause (i) of the first sentence of this Section 9(c), the
exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. Upon any such
suspension, the Company shall issue a public announcement stating that
the exercisability of the Rights has been temporarily suspended, as well
as a public announcement and notice to the Rights Agent at such time as
the suspension is no longer in effect. Notwithstanding any provision of
this Agreement to the contrary, the Rights shall not be exercisable in
any jurisdiction if the requisite qualification in such jurisdiction
shall not have been obtained, the exercise thereof shall not be permitted
under applicable law or a registration statement shall not have been
declared effective.
(d) The Company covenants and agrees that it will take
all such action as may be necessary to ensure that all one one-thousandths
of a share of Preferred Stock (and, following the occurrence of a
Triggering Event, Common Stock and/or other securities) delivered upon
exercise of Rights shall, at the time of delivery of the certificates for
such shares (subject to payment of the Purchase Price), be duly and
validly authorized and issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that it will
pay when due and payable any and all federal and state transfer taxes and
charges which may be payable in respect of the issuance or delivery of the
Rights Certificates and of any certificates for a number of one
one-thousandths of a share of Preferred Stock (or Common Stock and/or
other securities, as the ease may be) upon the exercise of Rights.
The Company shall not, however, be required to pay any transfer tax which
may be payable in respect of any transfer or delivery of Rights
Certificates to a Person other than, or the issuance or delivery of a
number of one one-thousandths of a share of Preferred Stock (or Common
Stock and/or other securities, as the case may be) in respect of a name
other than that of, the registered holder of the Rights Certificates
evidencing Rights surrendered for exercise or to issue or deliver any
certificates for a number of one one-thousandths of a share of Preferred
Stock (or Common Stock and/or other securities, as the case may be) in a
name other than that of the registered holder upon the exercise of any
Rights until such tax shall have been paid (any such tax being payable by
the holder of such Rights Certificate at the time of surrender) or until
it has been established to the Company's satisfaction that no such tax is
due.
Section 10. Preferred Stock Record Date. Each person
in whose name any certificate for a number of one one-thousandths of a share
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of Preferred Stock (or Common Stock and/or other securities, as the case may
be) is issued upon the exercise of Rights shall for all purposes be deemed to
have become the holder of record of the whole or fractional shares of
Preferred Stock (or Common Stock and/or other securities, as the case may be)
represented thereby on, and such certificate shall be dated, the date upon
which the Rights Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (and all applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date
upon which the Preferred Stock (or Common Stock and/or other securities, as
the case may be) transfer books of the Company are closed, such Person shall
be deemed to have become the record holder of such whole or fractional shares
on, and such certificate shall be dated, the next succeeding Business Day on
which the Preferred Stock (or Common Stock and/or other securities, as the
case may be) transfer books of the Company are open. Prior to the exercise of
the Rights evidenced thereby, the holder of a Rights Certificate, as such,
shall not be entitled to any rights of a stockholder of the Company with
respect to shares for which the Rights shall be exercisable, including,
without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled
to receive any notice of any proceedings of the Company, except as provided
herein.
Section 11. Adjustment of Purchase Price, Number and Kind
of Shares or Number of Rights. The Purchase Price, the number and kind of
shares covered by each Right and the number of Rights outstanding are subject
to adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after
the date of this Agreement (A) declare a dividend on the Preferred Stock
payable in shares of Preferred Stock, (B) subdivide the outstanding
Preferred Stock, (C) combine the outstanding Preferred Stock into a
smaller number of shares, or (D) issue any shares of its capital stock in
a reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), except as
otherwise provided in this Section 11(a) and Section 7(e) hereof, the
Purchase Price in effect at the time of the record date for such dividend
or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of Preferred Stock or
capital stock, as the case may be, issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after
such time shall be entitled to receive, upon payment of the Purchase Price
then in effect, the aggregate number and kind of shares of Preferred
Stock or capital stock, as the case may be, which, if such Right had been
exercised immediately prior to such date and at a time when the Preferred
16
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Stock transfer books of the Company were open, the holder of such Right
would have owned upon such exercise and been entitled to receive by virtue
of such dividend, subdivision, combination or reclassification. If an
event occurs which would require an adjustment under both this Section
11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in
this Section 11(a)(i) shall be in addition to, and shall be made prior to,
any adjustment required pursuant to, Section 11(a)(ii) hereof.
(ii) In the event any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company, or any Person or entity
organized, appointed or established by or for the Company for, or pursuant
to the terms of, any such plan), alone or together with its Affiliates and
Associates, shall, at any time after the Rights Dividend Declaration Date,
become the Beneficial Owner of 15% or more of the shares of Common Stock
then outstanding, unless the event causing the 15% threshold to be crossed
is a transaction set forth in Section 13(a) hereof or is an acquisition of
shares of Common Stock pursuant to a Qualifying Offer, then, promptly
following the occurrence of such event, proper provision shall be made so
that each holder of a Right (except as provided below and in Section 7(e)
hereof) shall thereafter have the right to receive, upon exercise thereof
at the then current Purchase Price in accordance with the terms of this
Agreement, in lieu of a number of one one-thousandths of a share of
Preferred Stock, such number of shares of Common Stock of the Company as
shall equal the result obtained by (x) multiplying the then current
Purchase Price by the then number of one one-thousandths of a share of
Preferred Stock for which a Right was exercisable immediately prior
to the Section 11(a)(ii) Event, and (y) dividing that product (which,
following such occurrence, shall thereafter be referred to as the
"Purchase Price" for each Right for all purposes of this Agreement) by 50%
of the current market price (determined pursuant to Section 11(d) hereof)
per share of Common Stock on the date of such occurrence (such number of
shares being referred to herein as the "Adjustment Shares").
(iii) In the event that the number of shares of
Common Stock which are authorized by the Certificate of Incorporation but
not outstanding or reserved for issuance for purposes other than upon
exercise of the Rights are not sufficient to permit the exercise in full
of the Rights in accordance with the foregoing subparagraph (ii) of this
Section 11(a), the Company shall: (A) determine the excess of (1) the
value of the Adjustment Shares issuable upon the exercise of a Right
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(the "Current Value") over (2) the Purchase Price (such excess being
referred to herein as the "Spread"), and (B) with respect to each Right
(subject to Section 7(e) hereof), make adequate provision to substitute
for the Adjustment Shares, upon exercise of the Right and payment of the
applicable Purchase Price, (1) cash, (2) a reduction in the Purchase
Price, (3) Common Stock or other equity securities of the Company
(including, without limitation, shares, or units of shares, of preferred
stock which the Board of Directors of the Company has deemed to have the
same value as shares of Common Stock (such shares of preferred stock being
referred to herein as "common stock equivalents")), (4) debt securities of
the Company, (5) other assets, or (6) any combination of the foregoing,
having an aggregate value equal to the Current Value, where such aggregate
value has been determined by the Board of Directors of the Company
based upon the advice of a nationally recognized investment banking firm
selected by the Board of Directors of the Company; provided, however, if
the Company shall not have made adequate provision to deliver value
pursuant to clause (B) above within thirty (30) days following the later
of (x) the occurrence of the Section 11(a)(ii) Event and (y) the date
on which the Company's right of redemption pursuant to Section 23(a)
expires (the later of (x) and (y) being referred to herein as the "Section
11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver,
upon the surrender for exercise of a Right and without requiring payment
of the Purchase Price, shares of Common Stock (to the extent available)
and then, if necessary, cash, which in the aggregate are equal to the
Spread. If the Board of Directors of the Company shall determine in good
faith that it is likely that sufficient additional shares of Common Stock
could be authorized for issuance upon exercise in full of the Rights, the
thirty (30) day period set forth above may be extended to the extent
necessary, but not more than ninety (90) days following the Section 11(a)
(ii) Trigger Date, in order that the Company may seek stockholder approval
for the authorization of such additional shares (such period, as it may be
extended being referred to herein as the "Substitution Period"). To the
extent that the Company determines that some action need be taken pursuant
to the first and/or second sentences of this Section 11(a)(iii), the
Company (x) shall provide, subject to Section 7(e) hereof, that such
action shall apply uniformly to all outstanding Rights, and (y) may
suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of additional
shares and/or to decide the appropriate form of distribution to be made
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pursuant to such first sentence and to determine the value thereof. In
the event of any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time
as the suspension is no longer in effect. For purposes of this Section
11(a)(iii), the value of each Adjustment Share shall be the current market
price (as determined pursuant to Section 11(d) hereof) per share of the
Common Stock on the Section 11(a)(ii) Trigger Date and the per share or
per unit value of any "common stock equivalent" shall be deemed to be
equal to the current market price (as determined pursuant to Section 11(d)
hereof) of the Common Stock on such date.
(iv) If the rules of the national securities
exchange, registered as such pursuant to Section 6 of the Exchange Act, or
of the national securities association, registered as such pursuant to
Section 15A of the Exchange Act, on which the Common Stock is principally
traded would prohibit such exchange or association from listing or
continuing to list, or from authorizing for or continuing quotation and/or
transaction reporting through an inter-dealer quotation system, the Common
Stock or other equity securities of the Company if the Rights were to be
exercised for shares of Common Stock in accordance with subparagraph (ii)
of this Section 11(a) because such issuance would nullify, restrict or
disparately reduce the per share voting rights of holders of Common
Stock, the Company shall: (A) determine the Spread, and (B) with respect
to each Right, make adequate provision to substitute for the Adjustment
Shares, upon payment of the applicable Purchase Price, (1) cash,
(2) equity securities of the Company, including, without limitation,
"common stock equivalents," other than securities which would have the
effect of nullifying, restricting or disparately reducing the per share
voting rights of holders of Common Stock, (3) debt securities of the
Company, (4) other assets, or (5) any combination of the foregoing, having
an aggregate value equal to the Current Value, where such aggregate value
has been determined by the Board of Directors of the Company based upon
the advice of a nationally recognized investment banking firm selected by
the Board of Directors; provided, however, if the Company shall not have
made adequate provision to deliver value pursuant to clause (B) above
within thirty (30) days following the Section 11(a)(ii) Trigger Date, then
the Company shall be obligated to deliver, upon the surrender for exercise
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<PAGE>
of a Right and without requiring payment of the Purchase Price, cash
having an aggregate value equal to the Spread. To the extent that the
Company determines that some action need be taken pursuant to the first
sentence of this Section 11(a)(iv), the Company (x) shall provide, subject
to Section 7(e) hereof, that such action shall apply uniformly to all
outstanding Rights and (y) may suspend the exercisability of the Rights,
but not longer than ninety (90) days after the Section 11(a)(ii) Trigger
Date, in order to decide the appropriate form of distribution to be made
pursuant to such first sentence and to determine the value thereof. In
the event of any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement and notice to the
Rights Agent at such time as the suspension is no longer in effect. For
purposes of this Section 11(a)(iv), the value of the Common Stock shall be
the current market price (as determined pursuant to Section 11(d) hereof)
per share of the Common Stock on the Section 11(a)(ii) Trigger Date and
the value of any "common stock equivalent" shall be deemed to have the
same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Stock
entitling them to subscribe for or purchase (for a period expiring within
forty-five (45) calendar days after such record date) Preferred Stock (or
shares having the same rights, privileges and preferences as the shares of
Preferred Stock ("equivalent preferred stock")) or securities convertible
into Preferred Stock or equivalent preferred stock at a price per share of
Preferred Stock or per share of equivalent preferred stock (or having a
conversion price per share, if a security convertible into Preferred Stock
or equivalent preferred stock) less than the current market price (as
determined pursuant to Section 11(d) hereof) per share of Preferred Stock
on such record date, the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of
which shall be the number of shares of Preferred Stock outstanding on such
record date, plus the number of shares of Preferred Stock which the
aggregate offering price of the total number of shares of Preferred
Stock and/or equivalent preferred stock so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such current market price, and the denominator
of which shall be the number of shares of Preferred Stock outstanding on
such record date, plus the number of additional shares of Preferred Stock
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and/or equivalent preferred stock to be offered for subscription or
purchase (or into which the convertible securities so to be offered are
initially convertible). In case such subscription price may be paid by
delivery of consideration part or all of which may be in a form other than
cash, the value of such consideration shall be as determined in good faith
by the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent and shall be
conclusive for all purposes and binding on the Rights Agent and the
holders of the Rights. Shares of Preferred Stock owned by or held for
the account of the Company shall not be deemed outstanding for the purpose
of any such computation. Such adjustment shall be made successively
whenever such a record date is fixed, and in the event that such rights or
warrants are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date had not
been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which
the Company is the continuing corporation) of evidences of indebtedness,
cash (other than a regular quarterly cash dividend out of the earnings or
retained earnings of the Company), assets (other than a dividend payable
in Preferred Stock, but including any dividend payable in stock other than
Preferred Stock) or subscription rights or warrants (excluding those
referred to in Section 11(b) hereof), the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the current market price (as determined
pursuant to Section 11(d) hereof) per share of Preferred Stock on such
record date, less the fair market value (as determined in good faith by
the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent) of the portion
of the cash, assets or evidences of indebtedness so to be distributed or
of such subscription rights or warrants applicable to a share of Preferred
Stock and the denominator of which shall be such current market price
(as determined pursuant to Section 11(d) hereof) per share of Preferred
Stock. Such adjustments shall be made successively whenever such a record
date is fixed, and in the event that such distribution is not so made, the
Purchase Price shall be adjusted to be the Purchase Price which would have
been in effect if such record date had not been fixed.
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(d) (i) For the purpose of any computation hereunder,
other than computations made pursuant to Section 11(a)(iii) or (iv)
hereof, the "current market price" per share of Common Stock on any date
shall be deemed to be the average of the daily closing prices per share of
such Common Stock for the thirty (30) consecutive Trading Days (as such
term is hereinafter defined) immediately prior to such date, and for
purposes of computations made pursuant to Section 11(a)(iii) or (iv)
hereof, the "current market price" per share of Common Stock on any date
shall be deemed to be the average of the daily closing prices per share of
such Common Stock for the ten (10) consecutive Trading Days immediately
following such date; provided, however, that in the event that the current
market price per share of the Common Stock is determined during a period
following the announcement by the issuer of such Common Stock of (A) a
dividend or distribution on such Common Stock payable in shares of such
Common Stock or securities convertible into shares of such Common Stock
(other than the Rights), or (B) any subdivision, combination or
reclassification of such Common Stock, and the ex-dividend date for such
dividend or distribution, or the record date for such subdivision,
combination or reclassification shall not have occurred prior to the
commencement of the requisite thirty (30) Trading Day or ten (10) Trading
Day period, as set forth above, then, and in each such case, the "current
market price" shall be properly adjusted to take into account ex-dividend
trading. The closing price for each day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the average
of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the shares of Common Stock are not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the
shares of Common Stock are listed or admitted to trading or, if the shares
of Common Stock are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter
market, as reported by the National Association of Securities Dealers,
Inc. Automated Quotation System ("NASDAQ") or such other system then in
use, or, if on any such date the shares of Common Stock are not quoted by
any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Common
Stock selected by the Board of Directors of the Company. If on any such
date no market maker is making a market in the Common Stock, the fair
value of such shares on such date as determined in good faith by the Board
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<PAGE>
of Directors of the Company shall be used. The term "Trading Day" shall
mean a day on which the principal national securities exchange on which
the shares of Common Stock are listed or admitted to trading is open for
the transaction of business or, if the shares of Common Stock are not
listed or admitted to trading on any national securities exchange, a
Business Day. If the Common Stock is not publicly held or not so listed or
traded, "current market price" per share shall mean the fair value per
share as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with
the Rights Agent and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the
"current market price" per share of Preferred Stock shall be determined in
the same manner as set forth above for the Common Stock in clause (i) of
this Section 11(d) (other than the last sentence thereof). If the current
market price per share of Preferred Stock cannot be determined in the
manner provided above or if the Preferred Stock is not publicly held or
listed or traded in a manner described in clause (i) of this Section
11(d), the "current market price" per share of Preferred Stock shall be
conclusively deemed to be an amount equal to 1,000 (as such number may be
appropriately adjusted for such events as stock splits, stock dividends
and recapitalizations with respect to the Common Stock occurring after the
date of this Agreement) multiplied by the current market price per share
of the Common Stock. If neither the Common Stock nor the Preferred Stock
is publicly held or so listed or traded, "current market price" per share
of the Preferred Stock shall mean the fair value per share as determined
in good faith by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes. For all purposes of this Agreement, the
"current market price" of one one-thousandth of a share of Preferred Stock
shall be equal to the "current market price" of one share of Preferred
Stock divided by 1,000.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment
would require an increase or decrease of at least one percent (1%) in the
Purchase Price; provided, however, that any adjustments which by reason of
this Section 11(e) are not required to be made shall be carried forward
and taken into account in any subsequent adjustment. All calculations
under this Section 11 shall be made to the nearest cent or to the nearest
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ten-thousandth of a share of Common Stock or other share or one-millionth
of a share of Preferred Stock, as the case may be. Notwithstanding the
first sentence of this Section 11(e), any adjustment required by this
Section 11 shall be made no later than the earlier of (i) three (3) years
from the date of the transaction which mandates such adjustment, or
(ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a)(ii) or Section 13(a) hereof, the holder of any Right
thereafter exercised shall become entitled to receive any shares of
capital stock other than Preferred Stock, thereafter the number of such
other shares so receivable upon exercise of any Right and the Purchase
Price thereof shall be subject to adjustment from time to time in a manner
and on terms as nearly equivalent as practicable to the provisions with
respect to the Preferred Stock contained in Sections 11(a), (b), (c), (e),
(g), (h), (i), (j), (k) and (m), and the provisions of Sections 7, 9, 10,
13 and 14 hereof with respect to the Preferred Stock shall apply on like
terms to any such other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price hereunder shall
evidence the right to purchase, at the adjusted Purchase Price, the number
of one one-thousandths of a share of Preferred Stock purchasable from time
to time hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.
(h) Unless the Company shall have exercised its election
as provided in Section 11(i), upon each adjustment of the Purchase Price
as a result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price,
that number of one one-thousandths of a share of Preferred Stock
(calculated to the nearest one-millionth) obtained by (i) multiplying (x)
the number of one one-thousandths of a share covered by a Right
immediately prior to this adjustment, by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price, and (ii)
dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in lieu
of any adjustment in the number of one one-thousandths of a share of
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<PAGE>
Preferred Stock purchasable upon the exercise of a Right. Each of the
Rights outstanding after the adjustment in the number of Rights shall be
exercisable for the number of one one-thousandths of a share of Preferred
Stock for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the
nearest one-ten-thousandth) obtained by dividing the Purchase Price in
effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to
adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to be
made. This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Rights Certificates have been
issued, shall be at least ten (10) days later than the date of the public
announcement. If Rights Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to
holders of record of Rights Certificates on such record date Rights
Certificates evidencing, subject to Section 14 hereof, the additional
Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement for
the Rights Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new
Rights Certificates evidencing all the Rights to which such holders shall
be entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and countersigned in the manner
provided for herein (and may bear, at the option of the Company, the
adjusted Purchase Price) and shall be registered in the names of the
holders of record of Rights Certificates on the record date specified in
the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of one one-thousandths of a share of
Preferred Stock issuable upon the exercise of the Rights, the Rights
Certificates theretofore and thereafter issued may continue to express the
Purchase Price per one one-thousandths of a share and the number of one
one-thousandths of a share which were expressed in the initial Rights
Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then stated value, if
any, of the number of one one-thousandths of a share of Preferred Stock
issuable upon exercise of the Rights, the Company shall take any corporate
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<PAGE>
action which may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue fully paid and
nonassessable such number of one one-thousandths of a share of Preferred
Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require
that an adjustment in the Purchase Price be made effective as of a record
date for a specified event, the Company may elect to defer until the
occurrence of such event the issuance to the holder of any Right exercised
after such record date the number of one one-thousandths of a share of
Preferred Stock and other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the number of one one-
thousandths of a share of Preferred Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise on the
basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive such
additional shares (fractional or otherwise) or securities upon the
occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in
the Purchase Price, in addition to those adjustments expressly required by
this Section 11, as and to the extent that in their good faith judgment a
majority of the Continuing Directors shall determine to be advisable in
order that any (i) consolidation or subdivision of the Preferred Stock,
(ii) issuance wholly for cash of any shares of Preferred Stock at less
than the current market price, (iii) issuance wholly for cash of shares of
Preferred Stock or securities which by their terms are convertible into or
exchangeable for shares of Preferred Stock, (iv) stock dividends, or
(v) issuance of rights, options or warrants referred to in this Section
11, hereafter made by the Company to holders of its Preferred Stock shall
not be taxable to such stockholders.
(n) The Company covenants and agrees that it shall not,
at any time after the Distribution Date, (i) consolidate with any other
Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), (ii) merge with or into any other
Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), or (iii) sell or transfer (or permit
any Subsidiary to sell or transfer), in one transaction, or a series of
related transactions, assets, cash flow or earning power aggregating more
than 50% of the assets, cash flow or earning power of the Company and its
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Subsidiaries (taken as a whole) to any other Person or Persons (other than
the Company and/or any of its Subsidiaries in one or more transactions
each of which complies with Section 11(o) hereof), if (x) at the time of
or immediately after such consolidation, merger or sale there are any
rights, warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights or (y) prior
to, simultaneously with or immediately after such consolidation, merger or
sale, the stockholders of the Person who constitutes, or would constitute,
the "Principal Party" for purposes of Section 13(a) hereof shall have
received a distribution of Rights previously owned by such Person or any
of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23 or
Section 26 hereof, take (or permit any Subsidiary to take) any action if
at the time such action is taken it is reasonably foreseeable that such
action will diminish substantially or otherwise eliminate the benefits
intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after the
Rights Dividend Declaration Date and prior to the Distribution Date
(i) declare a dividend on the outstanding shares of Common Stock payable
in shares of Common Stock, (ii) subdivide the outstanding shares of Common
Stock, or (iii) combine the outstanding shares of Common Stock into a
smaller number of shares, the number of Rights associated with each share
of Common Stock then outstanding, or issued or delivered thereafter but
prior to the Distribution Date, shall be proportionately adjusted so that
the number of Rights thereafter associated with each share of Common Stock
following any such event shall equal the result obtained by multiplying
the number of Rights associated with each share of Common Stock
immediately prior to such event by a fraction the numerator of which shall
be the total number of shares of Common Stock outstanding immediately
prior to the occurrence of the event and the denominator of which shall
be the total number of shares of Common Stock outstanding immediately
following the occurrence of such event.
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares. Whenever an adjustment is made as provided in Section 11 and
Section 13 hereof, the Company shall (a) promptly prepare a certificate
setting forth such adjustment and a brief statement of the facts
accounting for such adjustment, (b) promptly file with the Rights Agent
and with each transfer agent for the Preferred Stock and the Common Stock
27
<PAGE>
a copy of such certificate, and (c) mail or cause the Rights Agent to
mail a brief summary thereof to each holder of a Rights Certificate (or,
if prior to the Distribution Date, to each holder of a certificate
representing shares of Common Stock) in accordance with Section 25 hereof.
The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power.
(a) In the event that, following the Stock Acquisition
Date, directly or indirectly, (x) the Company shall consolidate with, or
merge with and into, any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o) hereof), and
the Company shall not be the continuing or surviving corporation of such
consolidation or merger, (y) any Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o) hereof) shall
consolidate with, or merge with or into, the Company, and the Company
shall be the continuing or surviving corporation of such consolidation or
merger and, in connection with such consolidation or merger, all or part
of the outstanding shares of Common Stock shall be changed into or
exchanged for stock or other securities of any other Person or cash or any
other property, or (z) the Company shall sell or otherwise transfer (or
one or more of its Subsidiaries shall sell or otherwise transfer), in one
transaction or a series of related transactions, assets, cash flow or
earning power aggregating more than 50% of the assets, cash flow or
earning power of the Company and its Subsidiaries (taken as a whole) to
any Person or Persons (other than the Company or any Subsidiary of the
Company in one or more transactions each of which complies with Section
11(o) hereof), then, and in each such case (except as may be contemplated
by Section 13(d) hereof), proper provision shall be made so that: (i) each
holder of a Right, except as provided in Section 7(e) hereof, shall
thereafter have the right to receive, upon the exercise thereof at the
then current Purchase Price in accordance with the terms of this
Agreement, such number of validly authorized and issued, fully paid,
nonassessable and freely tradeable shares of Common Stock of the
Principal Party (as such term is hereinafter defined), not subject to any
liens, encumbrances, rights of first refusal or other adverse claims, as
shall be equal to the result obtained by (1) multiplying the then current
Purchase Price by the number of one one-thousandths of a share of
Preferred Stock for which a Right is exercisable immediately prior to the
first occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event
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has occurred prior to the first occurrence of a Section 13 Event,
multiplying the number of such one one-thousandths of a share for which a
Right was exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event by the Purchase Price in effect immediately prior
to such first occurrence), and (2) dividing that product (which,
following the first occurrence of a Section 13 Event, shall be referred
to as the "Purchase Price" for each Right and for all purposes of this
Agreement) by 50% of the current market price (determined pursuant to
Section 11(d)(i) hereof) per share of the Common Stock of such Principal
Party on the date of consummation of such Section 13 Event; (ii) such
Principal Party shall thereafter be liable for, and shall assume, by
virtue of such Section 13 Event, all the obligations and duties of the
Company pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11 hereof shall apply
only to such Principal Party following the first occurrence of a Section
13 Event; (iv) such Principal Party shall take such steps (including, but
not limited to, the reservation of a sufficient number of shares of its
Common Stock) in connection with the consummation of any such transaction
as may be necessary to assure that the provisions hereof shall thereafter
be applicable, as nearly as reasonably may be, in relation to its shares
of Common Stock thereafter deliverable upon the exercise of the Rights;
and (v) the provisions of Section 11(a)(ii) hereof shall be of no effect
following the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in
clause (x) or (y) of the first sentence of Section 13(a), the
Person that is the issuer of any securities into which shares
of Common Stock of the Company are converted in such merger
or consolidation, and if no securities are so issued, the
Person that is the other party to such merger or
consolidation; and
(ii) in the case of any transaction described in
clause (z) of the first sentence of Section 13(a), the Person
that is the party receiving the greatest portion of the
assets, cash flow or earning power transferred pursuant to
such transaction or transactions;
provided, however, that in any such case, (1) if the Common Stock of such
Person is not at such time and has not been continuously over the
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<PAGE>
preceding twelve (12) month period registered under Section 12 of the
Exchange Act, and such Person is a direct or indirect Subsidiary of
another Person the Common Stock of which is and has been so registered,
"Principal Party" shall refer to such other Person; and (2) in case such
Person is a Subsidiary, directly or indirectly, of more than one Person,
the Common Stocks of two or more of which are and have been so registered,
"Principal Party" shall refer to whichever of such Persons is the issuer
of the Common Stock having the greatest aggregate market value.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless the Principal Party shall
have a sufficient number of authorized shares of its Common Stock which
have not been issued or reserved for issuance to permit the exercise in
full of the Rights in accordance with this Section 13 and unless prior
thereto the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing for the
terms set forth in paragraphs (a) and (b) of this Section 13 and further
providing that, as soon as practicable after the date of any
consolidation, merger, sale or transfer of assets mentioned in paragraph
(a) of this Section 13, the Principal Party will
(i) prepare and file a registration statement
under the Act, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate
form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective (with
a prospectus at all times meeting the requirements of the
Act) until the Expiration Date; and
(ii) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates which comply in all respects with the requirements
for registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive mergers
or consolidations or sales or other transfers. In the event that a Section 13
Event shall occur at any time after the occurrence of a Section 11(a)(ii)
Event, the Rights which have not theretofore been exercised shall thereafter
become exercisable in the manner described in Section 13(a).
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(d) Notwithstanding anything in this Agreement to the
contrary, Section 13 shall not be applicable to a transaction described
in subparagraphs (x) and (y) of Section 13(a) if (i) such transaction is
consummated with a Person or Persons who acquired shares of Common Stock
pursuant to a Qualifying Offer (or a wholly owned subsidiary of any such
Person or Persons), (ii) the price per share of Common Stock offered in
such transaction is not less than the price per share of Common Stock
paid to all holders of shares of Common Stock whose shares were purchased
pursuant to such tender offer or exchange offer, and (iii) the form of
consideration being offered to the remaining holders of shares of Common
Stock pursuant to such transaction is the same as the form of
consideration paid pursuant to such 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, except prior to the Distribution Date as provided in Section
11(p) hereof, or to distribute Rights Certificates which evidence
fractional Rights. In lieu of such fractional Rights, there shall be
paid to the registered holders of the Rights Certificates with regard to
which such fractional Rights would otherwise be issuable, an amount in
cash equal to the same fraction of the current market value of a whole
Right. For purposes of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have
been otherwise issuable. The closing price of the Rights for any day
shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted
to trading on the New York Stock Exchange or, if the Rights are not listed
or admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which
the Rights are listed or admitted to trading, or if the Rights are not
listed or admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the high bid and
low asked prices in the over-the-counter market, as reported by NASDAQ or
such other system then in use or, if on any such date the Rights are not
quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the
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Rights selected by the Board of Directors of the Company. If on any such
date no such market maker is making a market in the Rights the fair value
of the Rights on such date as determined in good faith by the Board of
Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions
of shares of Preferred Stock (other than fractions which are integral
multiples of one one-thousandth of a share of Preferred Stock), which may,
at the option of the Company, be evidenced by depositary receipts upon
exercise of the Rights or to distribute certificates which evidence
fractional shares of Preferred Stock (other than fractions which are
integral multiples of one one-thousandth of a share of Preferred Stock).
In lieu of fractional shares of Preferred Stock that are not integral
multiples of one one-thousandth of a share of Preferred Stock, the Company
may pay to the registered holders of Rights Certificates at the time such
Rights are exercised as herein provided an amount in cash equal to the
same fraction of the current market value of one one-thousandth of a
share of Preferred Stock. For purposes of this Section 14(b), the current
market value of one one-thousandth of a share of Preferred Stock shall be
one one-thousandth of the closing price of a share of Preferred Stock (as
determined pursuant to Section 11(d)(ii) hereof) for the Trading Day
immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event, the
Company shall not be required to issue fractions of shares of Common Stock
upon exercise of the Rights or to distribute certificates which evidence
fractional shares of Common Stock. In lieu of fractional shares of
Common Stock, the Company may pay to the registered holders of Rights
Certificates at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current market value of
one (1) share of Common Stock. For purposes of this Section 14(c), the
current market value of one (1) share of Common Stock shall be the
closing price of one (1) share of Common Stock (as determined pursuant to
Section 11(d)(i) hereof) for the Trading Day immediately prior to the
date of such exercise.
(d) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or any
fractional shares upon exercise of a Right, except as permitted by this
Section 14.
Section 15. Rights of Action. All rights of action in
respect of this Agreement are vested in the respective registered holders of
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the Rights Certificates (and, prior to the Distribution Date, the registered
holders of the Common Stock); and any registered holder of any Rights
Certificate (or, prior to the Distribution Date, of the Common Stock), without
the consent of the Rights Agent or of the holder of any other Rights
Certificate (or, prior to the Distribution Date, of the Common Stock), may, in
such holder's own behalf and for such holder's own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, such holder's right to exercise the
Rights evidenced by such Rights Certificate in the manner provided in such
Rights Certificate and in this Agreement. Without limiting the foregoing or
any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at
law for any breach of this Agreement and shall be entitled to specific
performance of the obligations hereunder and injunctive relief against actual
or threatened violations of the obligations hereunder of any Person subject to
this Agreement.
Section 16. Agreement of Rights Holders. Every holder
of a Right by accepting the same consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates
are transferable only on the registry books of the Rights Agent if
surrendered at the principal office or offices of the Rights Agent
designated for such purposes, duly endorsed or accompanied by a proper
instrument of transfer and with the appropriate forms and certificates
fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the
Company and the Rights Agent may deem and treat the person in whose name
a Rights Certificate (or, prior to the Distribution Date, the associated
Common Stock certificate) is registered as the absolute owner thereof and
of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Rights Certificates or the associated Common
Stock certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor the
Rights Agent, subject to the last sentence of Section 7(e) hereof, shall
be required to be affected by any notice to the contrary; and
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(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any
liability to any holder of a Right or other Person as a result of its
inability to perform any of its obligations under this Agreement by
reason of any preliminary or permanent injunction or other order, decree
or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, or any
statute, rule, regulation or executive order promulgated or enacted by
any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company shall be
required to use its best efforts to have any such order, decree or ruling
lifted, overturned or otherwise removed as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Rights Certificate shall be entitled
to vote, receive dividends or be deemed for any purpose the holder of the
number of one one-thousandths of a share of Preferred Stock or any other
securities of the Company which may at any time be issuable on the exercise of
the Rights represented thereby, nor shall anything contained herein or in any
Rights Certificate be construed to confer upon the holder of any Rights
Certificate, as such, any of the rights of a stockholders of the Company or
any right to vote for the election of directors or upon any matter submitted
to stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 24 hereof), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by such Rights Certificate shall have been exercised in accordance
with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder and,
from time to time, on demand of the Rights Agent, its reasonable expenses
and counsel fees and disbursements and other disbursements incurred in
the administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify
the Rights Agent, its officers, employees, agents and directors 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, for anything done or omitted by the Rights
Agent or such other indemnified party in connection with the acceptance or
administration of this Agreement or the exercise or performance of its
duties hereunder, including the costs and expenses of defending against
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any claim of liability in the premises. The provisions of this Section
18(a) shall survive the termination of this Agreement.
(b) The Rights Agent shall be protected and shall incur
no liability for or in respect of any action taken, suffered or omitted
by it in connection with its administration of this Agreement or the
exercise or performance of its duties hereunder in reliance upon any
Rights Certificate or certificate for Common Stock or for other
securities of the Company, instrument of assignment or transfer, power
of attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be
genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated,
or any corporation resulting from any merger or consolidation to which the
Rights Agent or any successor Rights Agent shall be a party, or any
corporation succeeding to the corporate trust or stock transfer business
of the Rights Agent or any successor Rights Agent, shall be the successor
to the Rights Agent under this Agreement without the execution or filing
of any paper or any further act on the part of any of the parties hereto;
provided, however, that such corporation would be eligible for appointment
as a successor Rights Agent under the provisions of Section 21 hereof.
In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Rights Certificates shall
have been countersigned but not delivered, any such successor Rights Agent
may adopt the countersignature of a predecessor Rights Agent and deliver
such Rights Certificates so countersigned; and in case at that time any
of the Rights Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Rights Certificates either in
the name of the predecessor or in the name of the successor Rights Agent;
and in all such cases such Rights Certificates shall have the full force
provided in the Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent
shall be changed and at such time any of the Rights Certificates shall
have been countersigned but not delivered, the Rights Agent may adopt the
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countersignature under its prior name and deliver Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates
shall not have been countersigned, the Rights Agent may countersign such
Rights Certificates either in its prior name or in its changed name; and
in all such cases such Rights Certificates shall have the full force
provided in the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Rights Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel
(who may be legal counsel for the Company), and the 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 advice or opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any
fact or matter (including, without limitation, the identity of any
Acquiring Person and the determination of "current market price") be
proved or established by the Company prior to taking 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 person
believed in good faith by the Rights Agent to be one of the Chairman of
the Board, the President, any Vice President, the Treasurer or the
Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any
action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for
its own gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason
of any of the statements of fact or recitals contained in this Agreement
or in the Rights Certificates or be required to verify the same (except
as to its countersignature on such Rights Certificates), but all such
statements and recitals are and shall be deemed to have been made by the
Company only.
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(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement or the
execution and delivery hereof (except the due execution hereof by the
Rights Agent) or in respect of the validity or execution of any Rights
Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or condition
contained in this Agreement or in any Rights Certificate; nor shall it be
responsible for any adjustment required under any of the provisions
hereof or responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that would
require any such adjustment (except with respect to the exercise of Rights
evidenced by Rights Certificates after actual notice to the Rights Agent
of any such adjustment); nor shall it by any act hereunder be deemed to
make any representation or warranty as to the authorization or reservation
of any shares of Common Stock or Preferred Stock or other securities to
be issued pursuant to this Agreement or any Rights Certificate or as to
whether any Common Stock, Preferred Stock or other securities will, when
so issued, be validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged
and delivered all such further and other acts, instruments and assurances
as may reasonably be required by the Rights Agent for the carrying out or
performing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed
to accept instructions with respect to the performance of its duties
hereunder from any person believed in good faith by the Rights Agent to
be one of the Chairman of the Board, 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 to be taken by it in
good faith in accordance with instructions of any such officer or for any
delay in acting while awaiting instructions.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal in any of
the Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested, or
contract with or lend money to the Company or otherwise act as fully and
freely as though it were not Rights Agent under this Agreement. Nothing
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herein shall preclude the Rights Agent from acting in any other capacity
for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights Agent
shall not be answerable or accountable for any act, default, neglect or
misconduct of any such attorneys or agents or for any loss to the Company
resulting from any such act, default, neglect or misconduct; provided,
however, reasonable care was exercised in the selection and continued
employment thereof.
(j) No provision of this Agreement shall require the
Rights Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder or
in the exercise of its rights if there shall be reasonable grounds for
believing that repayment of such funds or adequate indemnification
against such risk or liability is not reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered
to the Rights Agent for exercise or transfer, the certificate attached to
the form of assignment or form of election to purchase, as the case may
be, has either not been completed or indicates an affirmative response to
clause 1 and/or 2 thereof, the Rights Agent shall not take any further
action with respect to such requested exercise of transfer without first
consulting with the Company.
(l) Any application by the Rights Agent for written
instructions from the Company may, at the option of the Rights Agent, set
forth in writing any action proposed to be taken or omitted by the Rights
Agent under this Agreement and the date on and/or after which such action
shall be taken or such omission shall be effective. The Rights Agent
shall not be liable for any action taken by, or omission of, the Rights
Agent in accordance with a proposal included in 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 any earlier date) unless prior to taking any such
action (or the effective date in the case of an omission), the Rights
Agent shall have received written instructions in response to such
application specifying the action to be taken.
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(m) In addition to the foregoing, the Rights Agent shall
be protected and shall incur no liability for, or in respect of, any
action taken or omitted by it in connection with its administration of
this Agreement if such acts or omissions are in reliance upon (i) the
proper execution of the certifications concerning beneficial ownership
appended to the form of assignment and the form of election to purchase
attached hereto unless the Rights Agent shall have actual knowledge that,
as executed, such certification is untrue, or (ii) the non-execution of
such certification including, without limitation, any refusal to honor
any otherwise permissible assignment or election by reason of such
non-execution.
(n) The Company agrees to give the Rights Agent prompt
written notice of any event or ownership which would prohibit the
exercise or transfer of the Right Certificates.
(o) 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.
Section 21. Change of Rights Agent. The Rights Agent
or any successor Rights Agent may resign and be discharged from its duties
under this Agreement upon thirty (30) days' notice in writing mailed to the
Company, and to each transfer agent of the Common Stock and Preferred Stock,
by registered or certified mail, and to the holders of the Rights Certificates
by first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon thirty (30) days' notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the Common Stock and Preferred Stock, by registered or certified
mail, and to the holders of the Rights Certificates by first-class mail. If
the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights
Agent. If the Company shall fail to make such appointment within a period of
thirty (30) days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Rights Certificate (who
shall, with such notice, submit his Rights Certificate for inspection by the
Company), then the Rights Agent or any registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a corporation organized
and doing business under the laws of the United States or of any state of the
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United States so long as such corporation is authorized to do business in the
State of Arkansas or the State of New York, in good standing, having a
principal office in the State of Arkansas or the State of New York, which is
authorized under such laws to exercise corporate trust or stock transfer
powers and is subject to supervision or examination by federal or state
authority and which either has or is an affiliate of a corporation which has
at the time of its appointment as Rights Agent a combined capital and surplus
of at least $50,000,000 and which shall also meet any requirements imposed by
the New York Stock Exchange on transfer agents, depositaries and registrars.
After appointment, the successor Rights Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally named
as Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the
effective date of any such appointment, the Company shall file notice thereof
in writing with the predecessor Rights Agent and each transfer agent of the
Common Stock and the Preferred Stock, and mail a notice thereof in writing to
the registered holders of the Rights Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights to
the contrary, the Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the Purchase Price and the number or kind
or class of shares or other securities or property purchasable under the
Rights Certificates made in accordance with the provisions of this Agreement.
In addition, in connection with the issuance or sale of shares of Common Stock
following the Distribution Date and prior to the redemption or expiration of
the Rights, the Company (a) shall, with respect to shares of Common Stock so
issued or sold pursuant to the exercise of stock options or under any employee
plan or arrangement, granted or awarded as of the Distribution Date, or upon
the exercise, conversion or exchange of securities hereinafter issued by the
Company, and (b) may, in any other case, if deemed necessary or appropriate by
the Board of Directors of the Company, issue Rights Certificates representing
the appropriate number of Rights in connection with such issuance or sale;
provided, however, that (i) no such Rights Certificate shall be issued if, and
to the extent that, the Company shall be advised by counsel that such issuance
would create a significant risk of material adverse tax consequences to the
Company or the Person to whom such Rights Certificate would be issued, and
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(ii) no such Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.
Section 23. Redemption and Termination.
(a) The Board of Directors of the Company may, at its
option, at any time prior to the earlier of (i) the close of business on
the tenth Business Day following the Stock Acquisition Date or (ii) the
Final Expiration Date, redeem all but not less than all the then
outstanding Rights at a redemption price of $.01 per Right, as such amount
may be appropriately adjusted to reflect any stock split, stock dividend
or similar transaction occurring after the date hereof (such redemption
price being hereinafter referred to as the "Redemption Price").
Notwithstanding anything contained in this Agreement to the contrary, the
Rights shall not be exercisable after the occurrence of the Section
11(a)(ii) Event until such time as the Company's right of redemption
hereunder has expired. The Company may, at its option, pay the Redemption
Price in cash, shares of Common Stock (based on the "current market
price," as defined in Section 11(d)(i) hereof, of the Common Stock at the
time of redemption) or any other form of consideration deemed appropriate
by the Board of Directors.
(b) Immediately upon the action of the Board of Directors
of the Company ordering the redemption of the Rights, evidence of which
shall have been filed with the Rights Agent and without any further action
and without any notice, the right to exercise the Rights will terminate
and the only right thereafter of the holders of Rights shall be to receive
the Redemption Price for each Right so held. Promptly after the action
of the Board of Directors ordering the redemption of the Rights, the
Company shall give notice of such redemption to the Rights Agent and the
holders of the then outstanding Rights by mailing such notice to all such
holders at each holder's last address as it appears upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the Common Stock. Any notice
which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption
Price will be made.
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Section 24. Notice of Certain Events.
(a) In case the Company shall propose, at any time after
the Distribution Date, (i) to pay any dividend payable in stock of any
class to the holders of Preferred Stock or to make any other distribution
to the holders of Preferred Stock (other than a regular quarterly cash
dividend out of earnings or retained earnings of the Company), or (ii)
to offer to the holders of Preferred Stock rights or warrants to subscribe
for or to purchase any additional shares of Preferred Stock or shares of
stock of any class or any other securities, rights or options, or (iii)
to effect any reclassification of its Preferred Stock (other than a
reclassification involving only the subdivision of outstanding shares of
Preferred Stock), or (iv) to effect any consolidation or merger into or
with any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), or to effect any
sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one transaction or a series of
related transactions, of more than 50% of the assets, cash flow or earning
power of the Company and its Subsidiaries (taken as a whole) to any other
Person or Persons (other than the Company and/or any of its Subsidiaries
in one or more transactions each of which complies with Section 11(o)
hereof), or (v) to effect the liquidation, dissolution or winding up of
the Company, then, in each such case, the Company shall give to each
holder of a Rights Certificate, to the extent feasible and in accordance
with Section 25 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend,
distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the shares of Preferred Stock, if any such date
is to be fixed, and such notice shall be so given in the case of any
action covered by clause (i) or (ii) above at least twenty (20) days
prior to the record date for determining holders of the shares of
Preferred Stock for purposes of such action, and in the case of any such
other action, at least twenty (20) days prior to the date of the taking
of such proposed action or the date of participation therein by the
holders of the shares of Preferred Stock whichever shall be the earlier.
(b) In case the Section 11(a)(ii) Event shall occur, then
(i) the Company shall as soon as practicable thereafter give to each
holder of a Rights Certificate, to the extent feasible and in accordance
with Section 25 hereof, a notice of the occurrence of such event, which
shall specify the event and the consequences of the event to holders of
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Rights under Section 11(a)(ii) hereof, and (ii) all references in the
preceding paragraph to Preferred Stock shall be deemed thereafter to refer
to Common Stock and/or, if appropriate, other securities.
Section 25. Notices. Notices or demands authorized by
this Agreement to be given or made by the Rights Agent or by the holder of any
Rights Certificate to or on the Company shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Rights Agent) as follows:
ALLTEL Corporation
One Allied Drive
Little Rock, Arkansas 72202
Attention: Chief Executive Officer
With a copy to: Chief Legal Officer
Subject to the provisions of Section 21, any notice or demand authorized by
this Agreement to be given or made by the Company or by the holder of any
Rights Certificate to or on the Rights Agent shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
First Union National Bank of North Carolina
230 South Tryon Street
Charlotte, NC 28288
Attention: Corporate Trust Department
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.
Section 26. Supplements and Amendments. Prior to the
Distribution Date and subject to the penultimate sentence of this Section 26,
the Company and the Rights Agent shall, if the Company so directs, supplement
or amend any provision of this Agreement without the approval of any holders
of certificates representing shares of Common Stock. From and after the
Distribution Date and subject to the penultimate sentence of this Section 26,
the Company and the Rights Agent shall, if the Company so directs, supplement
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or amend this Agreement without the approval of any holders of Rights
Certificates in order (i) to cure any ambiguity, (ii) to correct or supplement
any provision contained herein which may be defective or inconsistent with any
other provisions herein, (iii) to shorten or lengthen any time period hereunder
(including, without limitation, the period within which the Rights may be
redeemed in accordance with Section 23 hereof) or (iv) to change or supplement
the provisions hereunder in any manner which the Company may deem necessary or
desirable and which shall not adversely affect the interests of the holders of
Rights Certificates (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person); provided, this Agreement may not be
supplemented or amended to lengthen, pursuant to clause (iii) of this
sentence, (A) a time period relating to when the Rights may be redeemed 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.
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 26, the Rights Agent shall execute
such supplement or amendment. Notwithstanding anything contained in this
Agreement to the contrary, no supplement or amendment shall be made which
changes the Redemption Price, the Final Expiration Date, the Purchase Price or
the number of one one-thousandths of a share of Preferred Stock for which a
Right is exercisable; provided, however, that at any time prior to the
Distribution Date the Board of Directors of the Company may amend this
Agreement to increase the Purchase Price or extend the Final Expiration Date.
Prior to the Distribution Date, the interests of the holders of Rights shall
be deemed coincident with the interests of the holders of Common Stock.
Notwithstanding anything contained in this Agreement to the contrary, no
supplement or amendment that changes the rights and duties of the Rights Agent
under this Agreement shall be effective without the consent of the Rights
Agent.
Section 27. Successors. All the covenants and
provisions of this Agreement by or for the benefit of the Company or the
Rights Agent shall bind and inure to the benefit of their respective
successors and assigns hereunder.
Section 28. Determinations and Actions by the Board of
Directors, etc. For all purposes of this Agreement, any calculation of the
number of shares of Common Stock outstanding at any particular time, including
for purposes of determining the particular percentage of such outstanding
shares of Common Stock of which any Person is the Beneficial Owner, shall be
made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of the
General Rules and Regulations under the Exchange Act. The Board of Directors
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of the Company (with, where specifically provided for herein, the concurrence
of the Continuing Directors) shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board (with, where specifically provided for herein, the
concurrence of the Continuing Directors) or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the provisions of
this Agreement, and (ii) make all determinations deemed necessary or advisable
for the administration of this Agreement (including a determination to redeem
or not redeem the Rights or to amend the Agreement). All such actions,
calculations, interpretations and determinations (including, for purposes of
clause (y) below, all omissions with respect to the foregoing) which are done
or made by the Board (with, where specifically provided for herein, the
concurrence of the Continuing Directors) in good faith, shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights and all other parties, and (y) not subject the Board or the Continuing
Directors to any liability to the holders of the Rights.
Section 29. Benefits of this Agreement. Nothing in
this Agreement shall be construed to give to any Person other than the
Company, the Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, registered holders of the
Common Stock) any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of
the Company, the Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, registered holders of the
Common Stock).
Section 30. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated; provided, however, that notwithstanding
anything in this Agreement to the contrary, if any such term, provision,
covenant or restriction is held by such court or authority to be invalid, void
or unenforceable and the Board of Directors of the Company determines in its
good faith judgment that severing the invalid language from this Agreement
would adversely affect the purpose or effect of this Agreement, the right of
redemption set forth in Section 23 hereof shall be reinstated and shall not
expire until the close of business on the tenth Business Day following the
date of such determination by the Board of Directors. Without limiting the
foregoing, if any provision requiring a majority of the Board of Directors of
45
<PAGE>
the Company to be Continuing Directors to act is held by any court of
competent jurisdiction or other authority to be invalid, void or
unenforceable, such determination shall then be made by the Board of Directors
of the Company in accordance with applicable law and the Company's Articles of
Incorporation and By-Laws.
Section 31. Governing Law. This Agreement, each Right
and each Rights Certificate issued hereunder shall be deemed to be a contract
made under the laws of the State of Delaware and for all purposes shall be
governed by and construed in accordance with the laws of such State applicable
to contracts made and to be performed entirely within such State.
Section 32. Counterparts. This Agreement may be
executed in any number of counterparts and each of such counterparts shall for
all purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
Section 33. Descriptive Headings. Descriptive
headings of the several Sections of this Agreement are inserted for
convenience only and shall not control or affect the meaning or construction
of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
Attest: ALLTEL CORPORATION
By /s/ Francis X. Frantz By /s/ Joe Ford
Name: Francis X. Frantz Name: Joe Ford
Title: Secretary Title: Chairman & CEO
46
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Attest: FIRST UNION NATIONAL BANK
OF NORTH CAROLINA
By /S/ Myren O. Gray By /s/ Victor W. Latessa
Name: Myren O. Gray Name: Victor W. Latessa
Title: Vice President Title: Vice President
47
<PAGE>
Exhibit A
[Form of Rights Certificate]
Certificate No. R-
Rights
NOT EXERCISABLE AFTER JANUARY 30, 2007 OR EARLIER IF REDEEMED BY THE
COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY
AN ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT)
AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
[THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON
OR AN AFFILIATE OR ASSOCIATE (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) OF AN ACQUIRING PERSON. ACCORDINGLY, THIS RIGHTS
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID
IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.]1
Rights Certificate
ALLTEL CORPORATION
The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
A-1
<PAGE>
This certifies that , or registered assigns, is
the registered owner of the number of Rights set forth above, each of
which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated as of January 30, 1997 (the
"Rights Agreement"), between ALLTEL Corporation, a Delaware corporation
(the "Company"), and FIRST UNION NATIONAL BANK OF NORTH CAROLINA, a
federally chartered banking institution, the "Rights Agent"), to purchase
from the Company at any time prior to 5:00 P.M. (Little Rock, Arkansas
time) on January 30, 2007 at the office or offices of the Rights Agent
designated for such purpose, or its successors as Rights Agent, one
one-thousandth of a fully paid, nonassessable share of Series K,
Cumulative Voting Preferred Stock (the "Preferred Stock") of the Company,
at a purchase price of $ per one one-thousandth of a share (the "Purchase
Price"), upon presentation and surrender of this Rights Certificate with
the Form of Election to Purchase and related Certificate duly executed.
The Purchase Price shall be paid, at the election of the holder, in cash
or shares of Common Stock of the Company having an equivalent value.
The number of Rights evidenced by this Rights Certificate (and the number
of shares which may be purchased upon exercise thereof) set forth above,
and the Purchase Price per share set forth above, are the number and
Purchase Price as of January 30, 1997, based on the Preferred Stock as
constituted at such date.
Upon the occurrence of the Section 11(a)(ii) Event (as such
term is defined in the Rights Agreement), if the Rights evidenced by this
Rights Certificate are beneficially owned by (i) an Acquiring Person or
an Affiliate or Associate of such Acquiring Person (as such term is
defined in the Rights Agreement), (ii) a transferee of any such Acquiring
Person (or of any such Associate or Affiliate), or (iii) under certain
circumstances specified in the Rights Agreement, a transferee of a person
who, after such transfer, became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person, such Rights shall become null and void
and no holder hereof shall have any right with respect to such Rights
from and after the occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and
the number and kind of shares of Preferred Stock or other securities,
which may be purchased upon the exercise of the Rights evidenced by this
Rights Certificate are subject to modification and adjustment upon the
happening of certain events, including Triggering Events.
A-2
<PAGE>
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions
and conditions are hereby incorporated herein by reference and made a part
hereof and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of
the Rights Certificates, which limitations of rights include the
temporary suspension of the exercisability of such Rights under the
specific circumstances set forth in the Rights Agreement. Copies of the
Rights Agreement are on file at the above-mentioned office of the Rights
Agent and are also available upon written request to the Rights Agent.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the principal office or offices of the
Rights Agent designated for such purpose, may be exchanged for another
Rights Certificate or Rights Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate
number of one one-thousandths of a share of Preferred Stock as the Rights
evidenced by the Rights Certificate or Rights Certificates surrendered
shall have entitled such holder to purchase. If this Rights Certificate
shall be exercised in part, the holder shall be entitled to receive upon
surrender hereof another Rights Certificate or Rights Certificates for
the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its
option at a redemption price of $.01 per Right at any time prior to the
earlier of the close of business on (i) the tenth Business Day following
the Stock Acquisition Date (as such time period may be extended pursuant
to the Rights Agreement), and (ii) the Final Expiration Date.
The Company is not required to issue fractional shares of
Preferred Stock upon the exercise of any Right or Rights evidenced hereby
(other than fractions which are integral multiples of one one-thousandth
of a share of Preferred Stock, which may, at the election of the Company,
be evidenced by depositary receipts), but in lieu thereof a cash payment
may be made, as provided in the Rights Agreement.
No holder of this Rights Certificate shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of
shares of Preferred Stock or of any other securities of the Company which
may at any time be issuable on the exercise hereof, nor shall anything
contained in the Rights Agreement or herein be construed to confer upon
the holder hereof, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any
A-3
<PAGE>
matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or, to receive notice of
meetings or other actions affecting stockholders (except as provided in
the Rights Agreement), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by this Rights Certificate
shall have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Dated as of _________ __, ____
ATTEST: ALLTEL CORPORATION
By
Secretary Title:
Countersigned:
FIRST UNION NATIONAL BANK
OF NORTH CAROLINA
By
Authorized Signature
A-4
<PAGE>
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint ______________
Attorney, to transfer the within Rights Certificate on the books of the
within-named Company, with full power of substitution.
Date:
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an
A-5
<PAGE>
Acquiring Person or an Affiliate or Associate of any such Person (as such
terms are defined pursuant to the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this
Rights Certificate from any Person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate of any such Person.
Dated: ___________, ____
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and Certificate
must correspond to the name as written upon the face of this Rights
Certificate in every particular, without alteration or enlargement or any
change whatsoever.
A-6
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise Rights represented by the
Rights Certificate.)
To: ALLTEL CORPORATION:
The undersigned hereby irrevocably elects to exercise
Rights represented by this Rights Certificate to purchase the shares of
Preferred Stock issuable upon the exercise of the Rights (or such other
securities of the Company or of any other person which may be issuable
upon the exercise of the Rights) and requests that certificates for such
shares be issued in the name of and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
If such number of Rights shall not be all the Rights
evidenced by this Rights Certificate, a new Rights Certificate for the
balance of such Rights shall be registered in the name of and delivered
to:
Please insert social security
or other identifying number
(Please print name and address)
Dated: _______________, ____
Signature
A-7
<PAGE>
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are
[ ] are not being exercised by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Person (as such
terms are defined pursuant to the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this
Rights Certificate from any Person who is, was or became an Acquiring
Person or an Affiliate or Associate of any such Person.
Dated: ___________, ____ Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of this
Rights Certificate in every particular, without alteration or enlargement
or any change whatsoever.
A-8
<PAGE>
CERTIFICATE OF
AMENDED DESIGNATION,
PREFERENCES AND RIGHTS OF THE
CUMULATIVE VOTING PREFERRED STOCK, SERIES K
OF
ALLTEL CORPORATION
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
ALLTEL Corporation, a corporation organized and existing
under the General Corporation Law of the State of Delaware (the "DGCL"), in
accordance with the provisions of Section 103 and 151 thereof, HEREBY
CERTIFIES:
FIRST: On May 14, 1990, the Corporation filed with the
Secretary of State of the State of Delaware, a Restated Certificate of
Incorporation of the Corporation (the "Restated Certificate"), Article IV,
Section 2(b)(H) of which set forth the designation, preferences and rights of
a series of Par Preferred Stock (as such term is defined in the Restated
Certificate) entitled "Cumulative Voting Preferred Stock, Series K" (the
"Series K Par Preferred Stock").
SECOND: As of the date hereof, no shares of the Series K
Par Preferred Stock are issued and outstanding.
THIRD: The Board of Directors of the Corporation at a duly
convened meeting held on January 30, 1997, duly adopted the following
resolutions authorizing the amendment to the designation, preferences and
rights of the Series K Par Preferred Stock set forth in the Restated
Certificate pursuant to Section 151 of the DGCL, which resolutions have not
been modified or rescinded and are in full force and effect on the date hereof:
FURTHER RESOLVED, that pursuant to the
authority vested in the Board of Directors in accordance
with the provisions of the Corporation's Restated
Certificate of Incorporation, the Board of Directors hereby
amends the terms of the Preferred Stock as set forth in the
Certificate of Amended Designation, Preferences and Rights
of the Cumulative Voting Preferred Stock, Series K,
presented to this meeting and a copy of which shall be
<PAGE>
annexed to the minutes of this meeting, which Certificate of
Amended Designation, Preferences and Rights is hereby
approved and adopted; and it is
FURTHER RESOLVED, that the proper officers of the
Corporation be, and they hereby are, authorized and directed
to execute and file the Certificate of Amended Designation,
Preferences and Rights with the Secretary of State of the
State of Delaware; and it is
FOURTH: The amendment to the designation, preferences and
rights of the Series K Par Preferred Stock set forth below, among other
things, conforms certain provisions of the Restated Certificate to the terms
of the Rights Agreement, dated as of January 30, 1997, between the Corporation
and First Union National Bank of North Carolina (the "Rights Agreement"),
pursuant to which the Corporation declared a dividend of one right (a "Right")
for each share of common stock, par value $1.00 per share, of the Corporation
issued and outstanding on the expiration date of the Corporation's existing
Rights Agreement (the "Expiration Date"), each Right representing the right to
purchase one one-thousandth of a share of Series K Par Preferred Stock upon
the terms and conditions set forth in the Rights Agreement.
FIFTH: Pursuant to the resolutions adopted by the Board of
Directors of the Corporation authorizing the amendment to the designation,
preferences and rights of the Series K Par Preferred Stock and in accordance
with Section 151 of the DGCL, the following provisions of the Restated
Certificate are hereby amended to read in their entirety as follows:
(a) Article IV, Section 2(b)(H)(2):
"(2) Dividends. The holders of shares of
Series K Par Preferred Stock shall be entitled prior to the
payment of any dividends on shares ranking junior to the
Series K Par Preferred Stock to receive, commencing on the
first quarterly dividend payment date (as set forth in
Section 2(a)(B) of this ARTICLE IV) after the first issuance
of a share or fraction of a share of Series K Par Preferred
Stock, in an amount per share (rounded to the nearest cent)
equal to the greater of (a) $275 or (b) subject to the
provisions for adjustment hereinafter set forth, 1,000 times
the aggregate per share amount of all cash dividends, and
1,000 times the aggregate per share amount (payable in kind)
of all non-cash dividends or other distributions other than
a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock
2
<PAGE>
since the immediately preceding quarterly dividend payment
date, or, with respect to the first quarterly dividend
payment date, since the first issuance of any share or
fraction of a share of Series K Par Preferred Stock. In the
event the Corporation shall at any time after the Expiration
Date (the "Rights Declaration Date") (i) declare any
dividend on Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number
of shares, then in each such case the amount to which
holders of shares of Series K Par Preferred Stock were
entitled immediately prior to such event under clause (b) of
the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of
shares of Common Stock that were outstanding immediately
after such event and the denominator of which is the number
of shares of Common Stock that were outstanding immediately
prior to such event. Dividends shall be payable in
accordance with the provisions of Section 2(a)(B) of this
ARTICLE IV and shall be cumulative from the date of issuance
thereof."
(b) Article IV, Section 2(b)(H)(3)(a):
"(a) Upon any liquidation, dissolution or
winding up of the Corporation, no distribution shall be made
to the holders of shares of stock ranking junior (either as
to dividends or upon liquidation, dissolution or winding up)
to the Series K Par Preferred Stock unless, prior thereto,
the holders of shares of Series K Par Preferred Stock shall
have received an amount equal to 1,000 times the par value
per share, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared,
to the date of such payment (the "Series K Liquidation
Preference"). Following the payment of the full amount of
the Series K Liquidation Preference, no additional
distributions shall be made to the holders of shares of
Series K Par Preferred Stock unless, prior thereto, the
holders of shares of Common Stock shall have received an
amount per share (the "Common Adjustment") equal to the
quotient obtained by dividing (i) the Series K Liquidation
Preference by (ii) 1,000 (as appropriately adjusted as set
forth in subparagraph (c) below to reflect such events as
stock splits, stock dividends and recapitalizations with
respect to the Common Stock) (such number in clause (ii) is
hereinafter referred to as the "Adjustment Number").
Following the payment of the full amount of the Series K
Liquidation Preference and the Common Adjustment in respect
of all outstanding shares of Series K Par Preferred Stock
and Common Stock, respectively, holders of Series K Par
3
<PAGE>
Preferred Stock and holders of shares of Common Stock shall
receive their ratable and proportionate share of the
remaining assets to be distributed in the ratio of the
Adjustment Number to 1 with respect to such Series K Par
Preferred Stock and Common Stock, on a per share basis,
respectively."
(c) Article IV, Section 2(b)(H)(4):
"(4) Conversion on Merger, Consolidation,
etc. In case the Corporation shall enter into any merger,
consolidation, combination or other transaction in which the
shares of Common Stock are exchanged or changed into other
stock or securities, cash and/or any other property, then in
any such case each share of Series K Par Preferred Stock
shall at the same time be similarly exchanged or changed in
an amount per share (subject to the provision for the
adjustment hereinafter set forth) equal to 1,000 times the
aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, into which
or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time
after the Rights Declaration Date (i) declare any dividend
on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock or (iii) combine the
outstanding Common Stock into a smaller number of shares,
then in each such case the amount set forth in the preceding
sentence with respect to the exchange or change of shares of
Series K Par Preferred Stock shall be adjusted by
multiplying such amount by a fraction the numerator of which
is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding
immediately prior to such event."
4
<PAGE>
IN WITNESS WHEREOF, ALLTEL Corporation has caused this
Certificate to be executed by its duly authorized officers, this 30th day of
January 1997.
ALLTEL CORPORATION
By: /s/ Scott T. Ford
Name: Scott T. Ford
Title: Executive Vice Pres.
Attest:
/s/ Francis X. Frantz
Name: Francis X. Frantz
Title: Secretary
5
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