===========================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------------
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
TCA Cable TV, Inc.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Texas 75-1798185
- ---------------------------------------- --------------------
(State of incorporation or organization) (I.R.S. Employer
Identification No.)
3015 SSE Loop 323
Tyler, Texas 75713
- ---------------------------------------- ----------------
(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
None
If this form relates to the registration of a class of securities pursuant to
Section 12(b) of the Exchange Act and is effective pursuant to General
Instruction A.(c), check the following box. \ \
If this form relates to the registration of a class of securities pursuant to
Section 12(g) of the Exchange Act and is effective pursuant to General
Instruction A.(d), check the following box. \xx\
Securities Act registration statement file number to which the form relates:
Not applicable
Securities to be registered pursuant to Section 12(g) of the Act:
Preferred Share Purchase Rights
===========================================================================
<PAGE>
Item 1. Description of Registrant's Securities to be Registered
On January 15, 1998, the Board of Directors of TCA Cable TV, Inc.
(the "Company") declared a dividend of one preferred share purchase right (a
"Right") for each outstanding share of common stock, par value $.10 per
share, of the Company (the "Common Stock"). The dividend is payable on
January 28, 1998 (the "Record Date") to the stockholders of record on that
date. Each Right entitles the registered holder to purchase from the Company
one one-thousandth of a share of Series A Junior Participating Preferred
Stock, par value $1.00 per share (the "Preferred Stock"), of the Company at a
price of $170.00 per one one-thousandth of a share of Preferred Stock (the
"Purchase Price"), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement dated as of January 15, 1998, as
the same may be amended from time to time (the "Rights Agreement"), between
the Company and Chase Mellon Shareholders Services, L.L.C., as Rights Agent
(the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") have acquired beneficial ownership of 15% or more of the
outstanding shares of Common Stock or (ii) 10 business days (or such later
date as may be determined by action of the Board of Directors prior to such
time as any person or group of affiliated persons becomes an Acquiring
Person) following the commencement of, or announcement of an intention to
make, a tender offer or exchange offer the consummation of which would result
in the beneficial ownership by a person or group of 15% or more of the out-
standing shares of Common Stock (the earlier of such dates being called the
"Distribution Date"), the Rights will be evidenced, with respect to any of
the Common Stock certificates outstanding as of the Record Date, by such
Common Stock certificate together with a summary of the Rights.
The Rights Agreement provides that, until the Distribution Date (or
earlier redemption or expiration of the Rights), the Rights will be
transferred with and only with the Common 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 issuances of
Common Stock will contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption or expiration
of the Rights), the surrender for transfer of any certificates for shares of
Common Stock outstanding as of the Record Date, even without such notation or
a copy of this Summary of Rights, will also constitute the transfer of the
Rights associated with the shares of Common Stock represented by such
certificate. As soon as practicable following the Distribution Date,
separate certificates evidencing the Rights ("Right Certificates") will be
mailed to holders of record of the Common Stock as of the close of business
on the Distribution Date and such separate Right Certificates alone will
evidence the Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on January 15, 2008 (the "Final Expiration Date"), unless
the Final Expiration Date is extended or unless the Rights are earlier
redeemed or exchanged by the Company, in each case as described below.
The 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
<PAGE>
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 or
purchase Preferred Stock at a price, or securities convertible into Preferred
Stock with a conversion price, less than the then-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 or dividends payable in Preferred Stock) or of subscription rights
or warrants (other than those referred to above).
The number of outstanding Rights are also subject to adjustment in
the event of a stock split of the Common Stock or a stock dividend on the
Common Stock payable in shares of Common Stock or subdivisions,
consolidations or combinations of the Common Stock occurring, in any such
case, prior to the Distribution Date.
Shares of Preferred Stock purchasable upon exercise of the Rights
will not be redeemable. Each share of Preferred Stock will be entitled,
when, as and if declared, to a minimum preferential quarterly dividend
payment of $1 per share but will be entitled to an aggregate dividend of 1000
times the dividend declared per share of Common Stock. In the event of
liquidation, the holders of the Preferred Stock will be entitled to a minimum
preferential liquidation payment of $100 per share (plus any accrued but
unpaid dividends) but will be entitled to an aggregate payment of 1000 times
the payment made per share of Common Stock. Each share of Preferred Stock
will have 1000 votes, voting together with the Common Stock. Finally, in the
event of any merger, consolidation or other transaction in which shares of
Common Stock are converted or exchanged, each share of Preferred Stock will
be entitled to receive 1000 times the amount received per share of Common
Stock. These rights are protected by customary antidilution provisions.
Because of the nature of the Preferred Stock's dividend,
liquidation and voting rights, the value of the one one-thousandth interest
in a share of Preferred Stock purchasable upon exercise of each Right should
approximate the value of one share of Common Stock.
In the event that any person or group of affiliated or associated
persons becomes an Acquiring Person, each holder of a Right, other than
Rights beneficially owned by the Acquiring Person (which will thereupon
become void), will thereafter have the right to receive upon exercise of a
Right at the then current exercise price of the Right, that number of shares
of Common Stock having a market value of two times the exercise price of the
Right.
In the event that, after a person or group has become an Acquiring
Person, the Company is acquired in a merger or other business combination
transaction or 50% or more of its consolidated assets or earning power are
sold, proper provision will be made so that each holder of a Right (other
than Rights beneficially owned by an Acquiring Person which will have become
void) will thereafter have the right to receive, upon the exercise thereof at
the then current exercise price of the Right, that number of shares of common
stock of the person with whom the Company has engaged in the foregoing
transaction (or its parent), which number of shares at the time of such
transaction will have a market value of two times the exercise price of the
Right.
<PAGE>
At any time after any person or group becomes an Acquiring Person
and prior to the acquisition by such person or group of 50% or more of the
outstanding shares of Common Stock or the occurrence of an event described in
the prior paragraph, the Board of Directors of the Company may exchange the
Rights (other than Rights owned by such person or group which will have
become void), in whole or in part, at an exchange ratio of one share of
Common Stock, or one one-thousandth of a share of Preferred Stock (or of a
share of a class or series of the Company's preferred stock having equivalent
rights, preferences and privileges), per Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will
be required until cumulative adjustments require an adjustment of at least 1%
in such Purchase Price. No fractional shares of Preferred Stock will be
issued (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) and in lieu thereof, an
adjustment in cash will be made based on the market price of the Preferred
Stock on the last trading day prior to the date of exercise.
At any time prior to the time an Acquiring Person becomes such, the
Board of Directors of the Company may redeem the Rights in whole, but not in
part, at a price of $.01 per Right (the "Redemption Price"). The redemption
of the Rights may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
Immediately upon any redemption of the Rights, the right to exercise the
Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
For so long as the Rights are then redeemable, the Company may,
except with respect to the redemption price, amend the Rights in any manner.
After the Rights are no longer redeemable, the Company may, except with
respect to the redemption price, amend the Rights in any manner that does not
adversely affect the interests of holders of the Rights.
Until a Right is exercised, the holder thereof, as such, will have
no rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends.
Item 2. Exhibits.
1. Rights Agreement, dated as of January 15, 1998, between the Company
and ChaseMellon Shareholder Services, L.L.C. which includes the
Certificate of Designations for the Series A Junior Participating
Preferred Stock as Exhibit A, the form of Right Certificate as
Exhibit B and the Summary of Rights to Purchase Preferred Shares as
Exhibit C.
2. Press Release dated January 16, 1998.
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this registration
statement to be signed on its behalf by the undersigned, thereto duly
authorized.
TCA CABLE TV, INC.
DATED: January 22, 1998 By: /s/ Fred R. Nichols
Name: Fred R. Nichols
Title: Chairman and Chief
Executive Officer
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
1 Rights Agreement, dated as of January 15, 1998, between
the Company and ChaseMellon Shareholder Services, L.L.C.
which includes the Certificate of Designations for the
Series A Junior Participating Preferred Stock as Exhibit
A, the form of Right Certificate as Exhibit B and the
Summary of Rights to Purchase Preferred Shares as Exhibit
C.
2 Press Release dated January 16, 1998.
- --------------------------------------------------------------------------
TCA CABLE TV, INC.
and
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.,
as Rights Agent
Rights Agreement
Dated as of January 15, 1998
- --------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
Section 1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . 4
Section 2. Appointment of Rights Agent . . . . . . . . . . . . . . . . 10
Section 3. Issue of Right Certificates . . . . . . . . . . . . . . . . 10
Section 4. Form of Right Certificates . . . . . . . . . . . . . . . . 13
Section 5. Countersignature and Registration . . . . . . . . . . . . . 13
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen
Right Certificates . . . . . . . . . . . . . . . . . . . 14
Section 7. Exercise of Rights, Purchase Price; Expiration Date of
Rights . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 8. Cancellation and Destruction of Right Certificates . . . . 18
Section 9. Availability of Shares of Preferred Stock . . . . . . . . . 18
Section 10. Preferred Stock Record Date . . . . . . . . . . . . . . . . 20
Section 11. Adjustment of Purchase Price, Number of Shares and
Number of Rights . . . . . . . . . . . . . . . . . . . . 21
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earnings Power . . . . . . . . . . . . . . . . . . . . . 37
Section 14. Fractional Rights and Fractional Shares . . . . . . . . . . 43
Section 15. Rights of Action . . . . . . . . . . . . . . . . . . . . . 45
Section 16. Agreement of Right Holders . . . . . . . . . . . . . . . . 46
Section 17. Right Certificate Holder Not Deemed a Stockholder . . . . . 47
Section 18. Concerning the Rights Agent . . . . . . . . . . . . . . . . 47
Section 19. Merger or Consolidation or Change of Name of Rights
Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 20. Duties of Rights Agent . . . . . . . . . . . . . . . . . . 49
Section 21. Change of Rights Agent . . . . . . . . . . . . . . . . . . 53
Section 22. Issuance of New Right Certificates . . . . . . . . . . . . 54
Section 23. Redemption . . . . . . . . . . . . . . . . . . . . . . . . 55
<PAGE>
Section 24. Exchange . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 25. Notice of Certain Events . . . . . . . . . . . . . . . . . 58
Section 26. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 27. Supplements and Amendments . . . . . . . . . . . . . . . . 60
Section 28. Successors . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 29. Benefits of this Agreement . . . . . . . . . . . . . . . . 61
Section 30. Severability . . . . . . . . . . . . . . . . . . . . . . . 61
Section 31. Governing Law . . . . . . . . . . . . . . . . . . . . . . . 61
Section 32. Counterparts . . . . . . . . . . . . . . . . . . . . . . . 62
Section 33. Descriptive Headings . . . . . . . . . . . . . . . . . . . 62
<PAGE>
RIGHTS AGREEMENT
Agreement, dated as of January 15, 1998, between TCA Cable
TV, Inc., a Texas corporation (the "Company"), and ChaseMellon Shareholder
Services, L.L.C., a New Jersey limited liability company (the "Rights
Agent").
The Board of Directors of the Company has authorized and
declared a dividend of one preferred share purchase right (a "Right") for
each share of Common Stock (as hereinafter defined) of the Company
outstanding as of the close of business (as defined below) on January 28,
1998 (the "Record Date"). Each Right represents the right to purchase one
one-thousandth (subject to adjustment) of a share of Preferred Stock (as
hereinafter defined), upon the terms and subject to the conditions herein set
forth, and the Board of Directors of the Company has further authorized and
directed the issuance of one Right (subject to adjustment as provided herein)
with respect to each share of Common Stock that shall become outstanding
between the Record Date and the earliest of the Distribution Date, the
Redemption Date and the Final Expiration Date (as such terms are hereinafter
defined); provided, however, that Rights may be issued with respect to shares
of Common Stock that shall become outstanding after the Distribution Date and
prior to the Redemption Date and the Final Expiration Date in accordance with
Section 22.
Accordingly, 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 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 an
<PAGE>
Exempt Person (as such term is hereinafter defined); provided,
however, that if the Board of Directors of the Company determines in
good faith that a Person who would otherwise be an "Acquiring Person"
has become such inadvertently (including, without limitation, because
(i) such Person was unaware that it beneficially owned a percentage
of Common Stock that would otherwise cause such Person to be an
"Acquiring Person" or (ii) such Person was aware of the extent of its
Beneficial Ownership of Common Stock but had no actual knowledge of
the consequences of such Beneficial Ownership under this Rights
Agreement) and without any intention of changing or influencing
control of the Company, and such Person, as promptly as practicable
divested or divests himself or itself of Beneficial Ownership of a
sufficient number of shares of Common Stock so that such Person would
no longer be an Acquiring Person, then such Person shall not be
deemed to be or to have become an "Acquiring Person" for any purposes
of this Agreement. Notwithstanding the foregoing: (i) if a Person
would be deemed an Acquiring Person upon the adoption of this
Agreement, such Person will not be deemed an Acquiring Person for any
purposes of this Agreement unless and until such Person acquires
Beneficial Ownership of any additional shares of Common Stock after
the adoption of this Agreement, and (ii) no Person shall become an
"Acquiring Person" as the result of an acquisition of shares of
Common Stock by the Company which, by reducing the number of shares
outstanding, increases the proportionate number of shares
beneficially owned by such Person to 15% or more of the shares of
Common Stock then outstanding, provided, however, that if a Person
shall thereafter become the Beneficial Owner of 15% or more of the
shares of Common Stock then outstanding by reason of such share
acquisitions by the Company and thereafter become the Beneficial
<PAGE>
Owner of any additional shares of Common Stock, then such Person
shall be deemed to be an "Acquiring Person" unless upon becoming the
Beneficial Owner of such additional shares of Common Stock such
Person does not beneficially own 15% or more of the shares of Common
Stock then outstanding. The phrase "then outstanding", when used
with reference to a Person's Beneficial Ownership of securities of
the Company, shall mean the number of such securities then issued and
outstanding together with the number of such securities not then
actually issued and outstanding which such Person would be deemed to
own beneficially hereunder.
(b) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), as in effect on the date of
this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of,
shall be deemed to have "Beneficial Ownership" of and shall be deemed
to "beneficially own" any securities:
(i) which such Person or any of such Person's
Affiliates or Associates is deemed to beneficially own,
directly or indirectly within the meaning of Rule 13d-3 of
the General Rules and Regulations under the Exchange Act as
in effect on the date of this Agreement;
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire
(whether such right is exercisable immediately or only after
the passage of time) pursuant to any agreement, arrangement
or understanding (other than customary agreements with and
between underwriters and selling group members with respect
<PAGE>
to a bona fide public offering of securities), or upon the
exercise of conversion rights, exchange rights, rights,
warrants or options, or otherwise; provided, however, that a
Person shall not be deemed the Beneficial Owner of, or to
beneficially own, (x) securities tendered pursuant to a
tender or exchange offer made by or on behalf of such Person
or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase, (y)
securities which such Person has a right to acquire on the
exercise of Rights at any time prior to the time a Person
becomes an Acquiring Person or (z) securities issuable upon
exercise of Rights from and after the time a Person becomes
an Acquiring Person if such 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 ("original Rights") or pursuant to
Section 11(i) or Section 11(n) with respect to an adjustment
to original Rights; or (B) the right to vote pursuant to any
agreement, arrangement or understanding; provided, however,
that a Person shall not be deemed the Beneficial Owner of,
or to beneficially own, any security by reason of such
agreement, arrangement or understanding if the agreement,
arrangement or understanding to vote such security (1)
arises solely from a revocable proxy or consent given to
such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the
applicable rules and regulations promulgated under the
Exchange Act and (2) is not also then reportable on Schedule
<PAGE>
13D under the Exchange Act (or any comparable or successor
report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or
any of such Person's Affiliates or Associates has any
agreement, arrangement or understanding (other than
customary agreements with and between underwriters and
selling group members with respect to a bona fide public
offering of securities) for the purpose of acquiring,
holding, voting (except to the extent contemplated by the
proviso to Section 1(c)(ii)(B)) or disposing of any
securities of the Company.
(d) "Business Day" shall mean any day other than a
Saturday, a Sunday, or a day on which banking or trust institutions
in the State of New York, or the State in which the principal
office of the Rights Agent is located, are authorized or obligated by
law or executive order to close.
(e) "close of business" on any given date shall mean
5:00 P.M., New York City time, on such date; provided, however, that
if such date is not a Business Day it shall mean 5:00 P.M., New York
City time, on the next succeeding Business Day.
(f) "Common Stock" when used with reference to the
Company shall mean the common stock, presently par value $.10 per
share, of the Company. "Common Stock" when used with reference to
any Person other than the Company shall mean the capital stock (or,
in the case of an unincorporated entity, the equivalent equity inter-
est) with the greatest voting power of such other Person or, if such
other Person is a subsidiary of another Person, the Person or Persons
which ultimately control such first-mentioned Person.
<PAGE>
(g) "Distribution Date" shall have the meaning set forth
in Section 3 hereof.
(h) "Exempt Person" shall mean the Company, any
Subsidiary (as such term is hereinafter defined) of the Company, any
employee benefit plan of the Company or of any Subsidiary of the
Company, or any entity or trustee holding Common Stock for or
pursuant to the terms of any such plan or for the purpose of funding
any such plan or funding other employee benefits for employees of the
Company or of any Subsidiary of the Company.
(i) "Final Expiration Date" shall have the meaning set
forth in Section 7 hereof.
(j) "NASDAQ Stock Market" shall mean the stock market
operated by the National Association of Securities Dealers, Inc.
(k) "Person" shall mean any individual, firm,
corporation or other entity, and shall include any successor (by
merger or otherwise) of such entity.
(l) "Preferred Stock" shall mean the Series A Junior
Participating Preferred Stock, par value $1.00 per share, of the
Company having the rights and preferences set forth in the Form of
Certificate of Designations attached to this Agreement as Exhibit A.
(m) "Redemption Date" shall have the meaning set forth in
Section 7 hereof.
(n) "Securities Act" shall mean the Securities Act of
1933, as amended.
(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)
of the Exchange Act) by the Company or an Acquiring Person that an
Acquiring Person has become such or such earlier date as a majority
<PAGE>
of the Board of Directors shall become aware of the existence of an
Acquiring Person.
(p) "Subsidiary" of any Person shall mean any
corporation or other entity of which securities or other ownership
interests having ordinary voting power sufficient to elect a majority
of the board of directors or other persons performing similar
functions are beneficially owned, directly or indirectly, by such
Person, and any corporation or other entity that is otherwise
controlled by such Person.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders of
the Rights (who, in accordance with Section 3 hereof, shall prior to the
Distribution Date also be the holders of Common Stock) in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such co-Rights Agents
as it may deem necessary or desirable.
Section 3. Issue of Right Certificates. (a) Until the
earlier of (i) the tenth day after the Stock Acquisition Date or (ii) the
tenth business day (or such later date as may be determined by action of the
Board of Directors prior to such time as any Person becomes an Acquiring
Person) after the date of the commencement by any Person (other than an
Exempt Person) of, or of the first public announcement of the intention of
such Person (other than an Exempt Person) to commence, a tender or exchange
offer the consummation of which would result in any Person becoming the
Beneficial Owner of shares of Common Stock aggregating 15% or more of the
Common Stock then outstanding (including any such date which is after the
date of this Agreement and prior to the issuance of the Rights; the earlier
of such dates being herein referred to as the "Distribution Date"), (x) the
Rights will be evidenced (subject to the provisions of Section 3(b) hereof)
<PAGE>
by the certificates for Common Stock registered in the names of the holders
thereof and not by separate Right Certificates, and (y) the Rights will be
transferable only in connection with the transfer of Common Stock. As soon
as practicable after the Distribution Date, the Company will prepare and
execute, the Rights Agent will countersign, and the Company will send or
cause to be sent (and the Rights Agent will, if requested, send) by first-
class, insured, postage-prepaid mail, to each record holder of Common Stock
as of the close of business on the Distribution Date (other than any
Acquiring Person or any Associate or Affiliate of an Acquiring Person), at
the address of such holder shown on the records of the Company, a Right
Certificate, in substantially the form of Exhibit B hereto (a "Right
Certificate"), evidencing one Right (subject to adjustment as provided
herein) for each share of Common Stock so held, with respect to the holders
of Common Stock. As of the Distribution Date, the Rights will be evidenced
solely by such Right Certificates.
(b) On the Record Date, or as soon as practicable
thereafter, the Company will send a copy of a Summary of Rights to Purchase
Shares of Preferred Stock, in substantially the form of Exhibit C hereto (the
"Summary of Rights"), by first-class, postage-prepaid mail, to each record
holder of Common Stock as of the close of business on the Record Date (other
than any Acquiring Person or any Associate or Affiliate of any Acquiring
Person), at the address of such holder shown on the records of the Company.
With respect to all certificates for Common Stock outstanding as of the
Record Date and until the Distribution Date, the Rights will be evidenced by
such certificates registered in the names of the holders thereof together
with the Summary of Rights. Until the Distribution Date (or the earlier of
the Redemption Date or the Final Expiration Date), the surrender for transfer
of any certificate for Common Stock outstanding on the Record Date, with or
<PAGE>
without a copy of the Summary of Rights, shall also constitute the transfer
of the Rights associated with the Common Stock represented thereby.
(c) Certificates issued for Common Stock (including,
without limitation, upon transfer of outstanding Common Stock, disposition of
Common Stock out of treasury stock or issuance or reissuance of Common Stock
out of authorized but unissued shares) after the Record Date but prior to the
earliest of the Distribution Date, the Redemption Date or the Final Expira-
tion Date shall have impressed on, printed on, written on or otherwise
affixed to them the following legend:
This certificate also evidences and
entitles the holder hereof to certain
rights as set forth in a Rights Agreement
between TCA Cable TV, Inc. and ChaseMellon
Shareholder Services, L.L.C., dated as of
January 15, 1998, as the same may be
amended from time to time (the "Rights
Agreement"), the terms of which are hereby
incorporated herein by reference and a copy
of which is on file at the principal
executive offices of TCA Cable TV, Inc.
Under certain circumstances, as set forth
in the Rights Agreement, such Rights will
be evidenced by separate certificates and
will no longer be evidenced by this
certificate. TCA Cable TV, Inc. will mail
to the holder of this certificate a copy of
the Rights Agreement without charge after
receipt of a written request therefor.
Under certain circumstances, as set forth
in the Rights Agreement, Rights owned by or
transferred to any Person who becomes an
Acquiring Person (as defined in the Rights
Agreement) and certain transferees thereof
will become null and void and will no
longer be transferable.
With respect to such certificates containing the foregoing legend, until the
Distribution Date the Rights associated with the Common Stock represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate, except as otherwise provided
herein, shall also constitute the transfer of the Rights associated with the
Common Stock represented thereby. In the event that the Company purchases or
<PAGE>
otherwise acquires any Common Stock after the Record Date but prior to the
Distribution Date, any Rights associated with such Common Stock shall be
deemed cancelled and retired so that the Company shall not be entitled to
exercise any Rights associated with the Common Stock which are no longer
outstanding.
Notwithstanding this paragraph (c), the omission of a legend
shall not affect the enforceability of any part of this Agreement or the
rights of any holder of the Rights.
Section 4. Form of Right Certificates. The Right
Certificates (and the forms of election to purchase shares and of assignment
to be printed on the reverse thereof) shall be substantially in the form set
forth in Exhibit B hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as
the Company may deem appropriate and as are not inconsistent with the
provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with
any rule or regulation of NASDAQ or of any other automated quotation system
or stock exchange on which the Rights may from time to time be listed, or to
conform to usage. Subject to the provisions of Sections 11, 13 and 22
hereof, the Right Certificates shall entitle the holders thereof to purchase
such number of one one-thousandths of a share of Preferred Stock as shall be
set forth therein at the price per one one-thousandth of a share of Preferred
Stock set forth therein (the "Purchase Price"), but the number of such one
one-thousandths of a share of Preferred Stock and the Purchase Price shall be
subject to adjustment as provided herein.
Section 5. Countersignature and Registration. (a) The
Right Certificates shall be executed on behalf of the
Company by the Chairman of the Board of Directors, the President, any of the
Vice Presidents, the Treasurer or the Controller of the Company, either
<PAGE>
manually or by facsimile signature, shall have affixed thereto the Company's
seal or a facsimile thereof, and shall be attested by the Secretary or an
Assistant Secretary of the Company, either manually or by facsimile
signature. The Right Certificates shall be manually countersigned by the
Rights Agent and shall not be valid for any purpose unless countersigned. In
case any officer of the Company who shall have signed any of the Right
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the
Company, such Right Certificates, nevertheless, may be countersigned by the
Rights Agent and issued and delivered by the Company with the same force and
effect as though the Person who signed such Right Certificates had not ceased
to be such officer of the Company; and any Right Certificate may be signed on
behalf of the Company by any Person who, at the actual date of the execution
of such Right Certificate, shall be a proper officer of the Company to sign
such Right Certificate, although at the date of the execution of this
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 an office or agency designated for such purpose,
books for registration and transfer of the Right Certificates issued
hereunder. Such books shall show the names and addresses of the respective
holders of the Right Certificates, the number of Rights evidenced on its face
by each of the Right Certificates and the date of each of the Right
Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions of Sections 7(e), 11(a)(ii) and 14 hereof, at
any time after the close of business on the Distribution Date, and prior to
the close of business on the earlier of the Redemption Date or the Final
Expiration Date, any Right Certificate or Right Certificates may be trans-
<PAGE>
ferred, split up, combined or exchanged for another Right Certificate or
Right Certificates, entitling the registered holder to purchase a like number
of one one-thousandths of a share of Preferred Stock as the Right Certificate
or Right Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any
Right Certificate or Right Certificates shall make such request in writing
delivered to the Rights Agent, and shall surrender the Right Certificate or
Right Certificates to be transferred, split up, combined or exchanged at the
office or agency of the Rights Agent designated for such purpose. Thereupon
the Rights Agent shall countersign and deliver to the Person entitled thereto
a Right Certificate or Right Certificates, as the case may be, as so
requested. The Company may require payment of a sum sufficient to cover any
tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Right Certificates.
(b) Subject to the provisions of Section 11(a)(ii)
hereof, at any time after the Distribution Date and prior to the close of
business on the earlier of the Redemption Date or the Final Expiration Date,
upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation
of the Right Certificate if mutilated, the Company will make and deliver a
new Right Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Right Certificate so lost, stolen, destroyed
or mutilated.
Section 7. Exercise of Rights, Purchase Price; Expiration
Date of Rights. (a) Except as otherwise provided herein, the Rights shall
<PAGE>
become exercisable on the Distribution Date, and thereafter the registered
holder of any Right Certificate may, subject to Section 11(a)(ii) hereof and
except as otherwise provided herein, exercise the Rights evidenced thereby in
whole or in part upon surrender of the Right Certificate, with the form of
election to purchase on the reverse side thereof duly executed, to the Rights
Agent at the office or agency of the Rights Agent designated for such
purpose, together with payment of the Purchase Price for each one
one-thousandth of a share of Preferred Stock as to which the Rights are
exercised, at any time which is both after the Distribution Date and prior to
the earliest of (i) the close of business on January 15, 2008 (the "Final
Expiration Date"), (ii) the time at which the Rights are redeemed as provided
in Section 23 hereof (the "Redemption Date") or (iii) the time at which such
Rights are exchanged as provided in Section 24 hereof.
(b) The Purchase Price shall be initially $170.00 for
each one one-thousandth of a share of Preferred Stock purchasable upon the
exercise of a Right. The Purchase Price and the number of one one-
thousandths of a share of Preferred Stock or other securities or property to
be acquired upon exercise of a Right shall be subject to adjustment from time
to time as provided in Sections 11 and 13 hereof and shall be payable in
lawful money of the United States of America in accordance with paragraph (c)
of this Section 7.
(c) Except as otherwise provided herein, upon receipt of
a Right Certificate representing exercisable Rights, with the form of
election to purchase duly executed, accompanied by payment of the aggregate
Purchase Price for the shares of Preferred Stock to be purchased and an
amount equal to any applicable transfer tax required to be paid by the holder
of such Right Certificate in accordance with Section 9 hereof, in cash or by
certified check, cashier's check or money order payable to the order of the
Company, the Rights Agent shall thereupon promptly (i) (A) requisition from
<PAGE>
any transfer agent of the Preferred Stock certificates for the number of
shares of Preferred Stock to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, or (B)
requisition from the depositary agent depositary receipts representing
interests in such number of one one-thousandths of a share of Preferred Stock
as are to be purchased (in which case certificates for the Preferred Stock
represented by such receipts shall be deposited by the transfer agent with
the depositary agent) and the Company hereby directs the depositary agent to
comply with such request, (ii) when appropriate, requisition from the Company
the amount of cash to be paid in lieu of issuance of fractional shares in
accordance with Section 14 hereof, (iii) promptly after receipt of such
certificates or depositary receipts, cause the same to be delivered to or
upon the order of the registered holder of such Right Certificate, registered
in such name or names as may be designated by such holder and (iv) when
appropriate, after receipt, promptly deliver such cash to or upon the order
of the registered holder of such Right Certificate.
(d) Except as otherwise provided herein, in case the
registered holder of any Right Certificate shall exercise less than all the
Rights evidenced thereby, a new Right Certificate evidencing Rights
equivalent to the exercisable Rights remaining unexercised shall be issued by
the Rights Agent to the registered holder of such Right Certificate or to his
duly authorized assigns, subject to the provisions of Section 14 hereof.
(e) 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 of Rights upon the
occurrence of any purported transfer or exercise of Rights pursuant to
Section 6 hereof or this Section 7 unless such registered holder shall have
(i) completed and signed the certificate contained in the form of assignment
or election to purchase set forth on the reverse side of the Rights
<PAGE>
Certificate surrendered for such transfer or exercise and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Right
Certificates. All Right Certificates surrendered for the purpose of
exercise, transfer, split up, combination or exchange shall, if surrendered
to the Company or to any of its agents, be delivered to the Rights Agent for
cancellation or in cancelled form, or, if surrendered to the Rights Agent,
shall be cancelled by it, and no Right Certificates shall be issued in lieu
thereof except as expressly permitted by any of the provisions of this
Agreement. The Company shall deliver to the Rights Agent for cancellation
and retirement, and the Rights Agent shall so cancel and retire, any other
Right Certificate purchased or acquired by the Company otherwise than upon
the exercise thereof. The Rights Agent shall deliver all cancelled Right
Certificates to the Company, or shall, at the written request of the Company,
destroy such cancelled Right Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
Section 9. Availability of Shares of Preferred 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 or any shares of Preferred Stock held in its treasury, the number of
shares of Preferred Stock that 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 time that a Person becomes an Acquiring Person, shares of
Common Stock and other securities) issuable upon the exercise of Rights may
be listed or admitted to trading on the NASDAQ Stock Market or listed on any
other national securities exchange or quotation system, the Company shall use
its best efforts to cause, from and after such time as the Rights become
<PAGE>
exercisable, all shares reserved for such issuance to be listed or admitted
to trading on the NASDAQ Stock Market or listed on any other exchange or
national quotation system upon official notice of issuance upon such
exercise.
(c) From and after such time as the Rights become
exercisable, the Company shall use its best efforts, if then necessary to
permit the issuance of shares of Preferred Stock (and following the time that
a Person first becomes an Acquiring Person, shares of Common Stock and other
securities) upon the exercise of Rights, to register and qualify such shares
of Preferred Stock (and, following the time that a Person first becomes an
Acquiring Person, shares of Common Stock and other securities) under the
Securities Act and any applicable state securities or "Blue Sky" laws (to the
extent exemptions therefrom are not available), cause such registration
statement and qualifications to become effective as soon as possible after
such filing and keep such registration and qualifications effective until the
earlier of the date as of which the Rights are no longer exercisable for such
securities and the Final Expiration Date. The Company may temporarily
suspend, for a period of time not to exceed 90 days, the exercisability of
the Rights in order to prepare and file a registration statement under the
Securities Act 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 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 unless the requisite
qualification in such jurisdiction shall have been obtained and until a
registration statement under the Securities Act (if required) shall have been
declared effective.
<PAGE>
(d) The Company covenants and agrees that it will take
all such action as may be necessary to ensure that all shares of Preferred
Stock (and, following the time that a Person becomes an Acquiring Person,
shares of Common Stock and other securities) delivered upon exercise of
Rights shall, at the time of delivery of the certificates therefor (subject
to payment of the Purchase Price), be duly and validly authorized and issued
and fully paid and nonassessable shares.
(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 Right Certificates or of any shares of Preferred Stock (or shares of
Common Stock or other securities) upon the exercise of Rights. The Company
shall not, however, be required to pay any transfer tax which may be payable
in respect of any transfer or delivery of Right Certificates to a Person
other than, or the issuance or delivery of certificates or depositary
receipts for the Preferred Stock (or shares of Common Stock or other
securities) in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or to issue or deliver
any certificates or depositary receipts for Preferred Stock (or shares of
Common Stock or other securities) upon the exercise of any Rights until any
such tax shall have been paid (any such tax being payable by that holder of
such Right Certificate at the time of surrender) or until it has been
established to the Company's reasonable satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each Person in
whose name any certificate for Preferred Stock is issued upon the exercise of
Rights shall for all purposes be deemed to have become the holder of record
of the shares of Preferred Stock represented thereby on, and such certificate
shall be dated the date upon which the Right Certificate evidencing such
Rights was duly surrendered and payment of the Purchase Price (and any
<PAGE>
applicable transfer taxes) was made; provided, however, that if the date of
such surrender and payment is a date upon which the Preferred Stock transfer
books of the Company are closed, such Person shall be deemed to have become
the record holder of such shares on, and such certificate shall be dated, the
next succeeding Business Day on which the Preferred Stock transfer books of
the Company are open. Prior to the exercise of the Rights evidenced thereby,
the holder of a Right Certificate shall not be entitled to any rights of a
holder of Preferred Stock for which the Rights shall be exercisable,
including, without limitation, the right to vote or to receive dividends or
other distributions, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares
and Number of Rights. The Purchase Price, the number of shares of Preferred
Stock or other securities or property purchasable upon exercise of 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
Preferred Stock 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), 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
<PAGE>
number and kind of shares of capital stock issuable on such
date, shall be proportionately adjusted so that the holder
of any Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of capital
stock which, if such Right had been exercised immediately
prior to such date and at a time when the Preferred Stock
transfer books of the Company were open, the holder would
have owned upon such exercise and been entitled to receive
by virtue of such dividend, subdivision, combination or
reclassification; provided, however, that in no event shall
the consideration to be paid upon the exercise of one Right
be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one
Right.
(ii) Subject to Section 24 of this Agreement
and except as otherwise provided in this Section 11(a)(ii),
in the event any Person becomes an Acquiring Person, each
holder of a Right shall thereafter have the right to
receive, upon exercise thereof at a price equal to the then
current Purchase Price multiplied by the number of one
one-thousandths of a share of Preferred Stock for which a
Right is then exercisable, in accordance with the terms of
this Agreement and in lieu of shares of Preferred Stock,
such number of shares of Common Stock (or at the option of
the Company, such number of one one-thousandths of shares of
Preferred Stock) as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the number of
one one-thousandths of a share of Preferred Stock for which
a Right is then exercisable and dividing that product by (y)
<PAGE>
50% of the then current per share market price of the
Company's Common Stock (determined pursuant to Section 11(d)
hereof) on the date of the occurrence of such event;
provided, however, that the Purchase Price and the number of
shares of Common Stock so receivable upon exercise of a
Right shall thereafter be subject to further adjustment as
appropriate in accordance with Section 11(f) hereof.
Notwithstanding anything in this Agreement to the contrary,
however, from and after the time (the "invalidation time")
when any Person first becomes an Acquiring Person, any
Rights that are beneficially owned by (x) any Acquiring
Person (or any Affiliate or Associate of any Acquiring
Person), (y) a transferee of any Acquiring Person (or any
such Affiliate or Associate) who becomes a transferee after
the invalidation time or (z) a transferee of any Acquiring
Person (or any such Affiliate or Associate) who became a
transferee prior to or concurrently with the invalidation
time pursuant to either (I) a transfer from the Acquiring
Person to holders of its equity securities or to any Person
with whom it has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (II) a
transfer which the Board of Directors has determined is part
of a plan, arrangement or understanding which has the
purpose or effect of avoiding the provisions of this
paragraph, and subsequent transferees of such Persons, shall
be void without any further action and any holder of such
Rights shall thereafter have no rights whatsoever with
respect to such Rights under any provision of this
Agreement. The Company shall use all reasonable efforts to
<PAGE>
ensure that the provisions of this Section 11(a)(ii) are
complied with, but shall have no liability to any holder of
Right Certificates or other Person as a result of its
failure to make any determinations with respect to an
Acquiring Person or its Affiliates, Associates or
transferees hereunder. From and after the invalidation
time, no Right Certificate shall be issued pursuant to
Section 3 or Section 6 hereof that represents Rights that
are or have become void pursuant to the provisions of this
paragraph, and any Right Certificate delivered to the Rights
Agent that represents Rights that are or have become void
pursuant to the provisions of this paragraph shall be
cancelled. From and after the occurrence of an event
specified in Section 13(a) hereof, any Rights that
theretofore have not been exercised pursuant to this Section
11(a)(ii) shall thereafter be exercisable only in accordance
with Section 13 and not pursuant to this Section 11(a)(ii).
(iii) The Company may at its option substitute for
a share of Common Stock issuable upon the exercise of Rights
in accordance with the foregoing subparagraph (ii) such
number or fractions of shares of Preferred Stock having an
aggregate current market value equal to the current per
share market price of a share of Common Stock. In the event
that there shall not be sufficient shares of Common Stock
issued but not outstanding or authorized but unissued to
permit the exercise in full of the Rights in accordance with
the foregoing subparagraph (ii), the Board of Directors
shall, to the extent permitted by applicable law and any
material agreements then in effect to which the Company is a
<PAGE>
party (A) determine the excess of (1) the value of the
shares of Common Stock issuable upon the exercise of a Right
in accordance with the foregoing subparagraph (ii) (the
"Current Value") over (2) the then current Purchase Price
multiplied by the number of one one-thousandths of shares of
Preferred Stock for which a Right was exercisable
immediately prior to the time that the Acquiring Person
became such (such excess, the "Spread"), and (B) with
respect to each Right (other than Rights which have become
void pursuant to Section 11(a)(ii)), make adequate provision
to substitute for the shares of Common Stock issuable in
accordance with subparagraph (ii) upon exercise of the Right
and payment of the applicable Purchase Price, (1) cash, (2)
a reduction in the Purchase Price, (3) shares of Preferred
Stock or other equity securities of the Company (including,
without limitation, shares or fractions of shares of
preferred stock which, by virtue of having dividend, voting
and liquidation rights substantially comparable to those of
the shares of Common Stock, are deemed in good faith by the
Board of Directors to have substantially the same value as
the shares of Common Stock (such shares of Preferred Stock
and shares or fractions of shares of preferred stock are
hereinafter referred to as "Common Stock equivalents"), (4)
debt securities of the Company, (5) other assets, or (6) any
combination of the foregoing, having a value which, when
added to the value of the shares of Common Stock actually
issued upon exercise of such Right, shall have an aggregate
value equal to the Current Value (less the amount of any
reduction in the Purchase Price), where such aggregate value
<PAGE>
has been determined by the Board of Directors upon the
advice of a nationally recognized investment banking firm
selected in good faith by the Board of Directors; provided,
however, if the Company shall not make adequate provision to
deliver value pursuant to clause (B) above within thirty
(30) days following the date that the Acquiring Person
became such (the "Section 11(a)(ii) Trigger Date"), then the
Company shall be obligated to deliver, to the extent
permitted by applicable law and any material agreements then
in effect to which the Company is a party, 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, such number
or fractions of shares of Preferred Stock (to the extent
available) and then, if necessary, cash, which shares and/or
cash have an aggregate value equal to the Spread. If, upon
the date any Person becomes an Acquiring Person, the Board
of Directors shall determine in good faith that it is likely
that sufficient additional shares of Common Stock could be
authorized for issuance upon exercise in full of the Rights,
then, if the Board of Directors so elects, the thirty (30)
day period set forth above may be extended to the extent
necessary, but not more than ninety (90) days after the
Section 11(a)(ii) Trigger Date, in order that the Company
may seek stockholder approval for the authorization of such
additional shares (such thirty (30) day period, as it may be
extended, is herein called the "Substitution Period"). To
the extent that the Company determines that some action need
be taken pursuant to the second and/or third sentence of
<PAGE>
this Section 11(a)(iii), the Company (x) shall provide,
subject to Section 11(a)(ii) hereof and the last sentence of
this Section 11(a)(iii) 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 pursuant to such second 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 the shares
of Common Stock shall be the current per share market price
(as determined pursuant to Section 11(d)(i)) on the Section
11(a)(ii) Trigger Date and the per share or fractional value
of any "Common Stock equivalent" shall be deemed to equal
the current per share market price of the Common Stock. The
Board of Directors of the Company may, but shall not be
required to, establish procedures to allocate the right to
receive shares of Common Stock upon the exercise of the
Rights among holders of Rights pursuant to this Section
11(a)(iii).
(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 (for a period expiring within 45 calendar days
after such record date) to subscribe for or purchase Preferred Stock
(or shares having the same rights, privileges and preferences as the
<PAGE>
Preferred Stock ("equivalent preferred shares")) or securities con-
vertible into Preferred Stock or equivalent preferred shares at a
price per share of Preferred Stock or equivalent preferred shares (or
having a conversion price per share, if a security convertible into
shares of Preferred Stock or equivalent preferred shares) less than
the then current per share market price of the Preferred Stock
(determined pursuant to Section 11(d) hereof) on such record date,
the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall
be the number of shares of Preferred Stock and equivalent preferred
shares outstanding on such record date plus the number of shares of
Preferred Stock and equivalent preferred shares which the aggregate
offering price of the total number of shares of Preferred Stock
and/or equivalent preferred shares so to be offered (and/or the
aggregate initial conversion price of the convertible securities so
to be offered) would purchase at such current market price, and the
denominator of which shall be the number of shares of Preferred Stock
and equivalent preferred shares outstanding on such record date plus
the number of additional shares of Preferred Stock and/or equivalent
preferred shares to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially
convertible); provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right. In case such subscription price
may be paid in a consideration part or all of which shall be in a
form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the Company,
<PAGE>
whose determination shall be described in a statement filed with the
Rights Agent. Shares of Preferred Stock and equivalent preferred
shares owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date is
fixed; and in the event that such rights, options or warrants are not
so issued, the Purchase Price shall be adjusted to be the Purchase
Price which would then be in effect if such record date had not been
fixed.
(c) In case the Company shall fix a record date for the
making of a distribution to all holders of the Preferred Stock
(including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation) of evidences of indebtedness or assets (other
than a regular quarterly cash dividend or a dividend payable in
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 then current per share
market price of the Preferred Stock (determined pursuant to Section
11(d) hereof) on such record date, less the fair market value (as
determined in good faith by the Board of Directors of the Company
whose determination shall be described in a statement filed with the
Rights Agent) of the portion of the assets or evidences of
indebtedness so to be distributed or of such subscription rights or
warrants applicable to one share of Preferred Stock, and the
denominator of which shall be such current per share market price
(determined pursuant to Section 11(d) hereof) of the Preferred Stock;
<PAGE>
provided, however, that in no event shall the consideration to be
paid upon the exercise of one Right be less than the aggregate par
value of the shares of capital stock of the Company to be issued upon
exercise of one Right. Such adjustments shall be made successively
whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be
adjusted to be the Purchase Price which would then be in effect if
such record date had not been fixed.
(d) (i) Except as otherwise provided herein, for the
purpose of any computation hereunder, the "current per share market
price" of any security (a "Security" for the purpose of this Section
11(d)(i)) on any date shall be deemed to be the average of the daily
closing prices per share of such Security for the 30 consecutive
Trading Days (as such term is hereinafter defined) immediately prior
to such date; provided, however, that in the event that the current
per share market price of the Security is determined during a period
following the announcement by the issuer of such Security of (A) a
dividend or distribution on such Security payable in shares of such
Security or securities convertible into such shares, or (B) any
subdivision, combination or reclassification of such Security, and
prior to the expiration of 30 Trading Days after the ex-dividend date
for such dividend or distribution, or the record date for such
subdivision, combination or reclassification, then, and in each such
case, the current per share market price shall be appropriately
adjusted to reflect the current market price per share equivalent of
such Security. The closing price for each day shall be the last sale
price, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in
either case as reported by the principal consolidated transaction
<PAGE>
reporting system with respect to securities listed or admitted to
trading on the NASDAQ Stock Market or, if the Security is not listed
or admitted to trading on the NASDAQ Stock Market, as reported in the
principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on
which the Security is listed or admitted to trading or, if the
Security is not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter
market or such other system then in use, or, if on any such date the
Security is not quoted by any organization in the over-the-counter
market, the average of the closing bid and asked prices as furnished
by a professional market maker making a market in the Security
selected by the Board of Directors of the Company. The term "Trading
Day" shall mean a day on which the principal national securities
exchange on which the Security is listed or admitted to trading is
open for the transaction of business or, if the Security is not
listed or admitted to trading on any national securities exchange, a
Business Day.
(ii) For the purpose of any computation hereunder, if the
Preferred Stock is publicly traded, the "current per share market
price" of the Preferred Stock shall be determined in accordance with
the method set forth in Section 11(d)(i). If the Preferred Stock is
not publicly traded but the Common Stock is publicly traded, the
"current per share market price" of the Preferred Stock shall be
conclusively deemed to be the current per share market price of the
Common Stock as determined pursuant to Section 11(d)(i) multiplied by
one thousand (appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date
<PAGE>
hereof). If neither the Common Stock nor the Preferred Stock is
publicly traded, "current per share market price" shall mean the fair
value per share as determined in good faith by the Board of Directors
of the Company, whose determination shall be described in a statement
filed with the Rights Agent.
(e) No adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or decrease of at
least 1% in the Purchase Price; provided, however, that any
adjustments which by reason of this Section 11(e) are not required to
be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall
be made to the nearest cent or to the nearest one ten-thousandth of a
share of Preferred Stock or share of Common Stock or other share or
security as the case may be. Notwithstanding the first sentence of
this Section 11(e), any adjustment required by this Section 11 shall
be made no later than the earlier of (i) three years from the date of
the transaction which requires such adjustment or (ii) the date of
the expiration of the right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to
Section 11(a) hereof, the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock of the
Company other than the Preferred Stock, thereafter the Purchase Price
and the number of such other shares so receivable upon exercise of a
Right shall be subject to adjustment from time to time in a manner
and on terms as nearly equivalent as practicable to the provisions
with respect to the Preferred Stock contained in Sections 11(a),
11(b), 11(c), 11(e), 11(h), 11(i) and 11(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.
<PAGE>
(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 ten-thousandth of a
share of Preferred Stock) obtained by (i) multiplying (x) the number
of one one-thousandths of a share covered by a Right immediately pri-
or to such adjustment by (y) the Purchase Price in effect immediately
prior to such adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately after
such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in
substitution for any adjustment in the number of one one-thousandths
of a share of Preferred Stock purchasable upon the exercise of a
Right. Each of the Rights outstanding after such adjustment of the
number of Rights shall be exercisable for the number of one
one-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)
<PAGE>
obtained by dividing the Purchase Price in effect immediately prior
to adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Company
shall make a public announcement of its election to adjust the number
of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This
record date may be the date on which the Purchase Price is adjusted
or any day thereafter, but, if the Right Certificates have been
issued, shall be at least 10 days later than the date of the public
announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i),
the Company may, as promptly as practicable, cause to be distributed
to holders of record of Right Certificates on such record date Right
Certificates evidencing, subject to Section 14 hereof, the additional
Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement
for the Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company,
new Right Certificates evidencing all the Rights to which such
holders shall be entitled after such adjustment. Right Certificates
so to be distributed shall be issued, executed and countersigned in
the manner provided for herein and shall be registered in the names
of the holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of one one-thousandths of a share of
Preferred Stock issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to
<PAGE>
express the Purchase Price and the number of one one-thousandths of a
share of Preferred Stock which were expressed in the initial Right
Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then par value, if
any, of the Preferred Stock or other shares of capital stock issuable
upon exercise of the Rights, the Company shall take any corporate
action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue fully paid and
nonassessable shares of Preferred Stock or other such shares at such
adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that
an adjustment in the Purchase Price be made effective as of a record
date for a specified event, the Company may elect to defer until the
occurrence of such event the issuing to the holder of any Right
exercised after such record date of the Preferred Stock and other
capital stock or securities of the Company, if any, issuable upon
such exercise over and above the 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 upon the occurrence
of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those adjustments
expressly required by this Section 11, as and to the extent that it
in its sole discretion shall determine to be advisable in order that
<PAGE>
any consolidation or subdivision of the Preferred Stock, issuance
wholly for cash of any shares of Preferred Stock at less than the
current market price, issuance wholly for cash or Preferred Stock or
securities which by their terms are convertible into or exchangeable
for Preferred Stock, dividends on Preferred Stock payable in shares
of Preferred Stock or issuance of rights, options or warrants
referred to hereinabove in Section 11(b), hereafter made by the
Company to holders of its Preferred Stock shall not be taxable to
such stockholders.
(n) Anything in this Agreement to the contrary
notwithstanding, in the event that at any time after the date of this
Agreement and prior to the Distribution Date, the Company shall (i)
declare or pay any dividend on the Common Stock payable in Common
Stock or (ii) effect a subdivision, combination or consolidation of
the Common Stock (by reclassification or otherwise than by payment of
a dividend payable in Common Stock) into a greater or lesser number
of Common Stock, then in any such case, the number of Rights
associated with each share of Common Stock then outstanding, or
issued or delivered thereafter, 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.
<PAGE>
(o) The Company agrees that, after the earlier of the
Distribution Date or the Stock Acquisition Date, it will not, except
as permitted by Sections 23, 24 or 27 hereof, take (or permit any
Subsidiary to take) any action if at the time such action is taken it
is reasonably foreseeable that such action will diminish
substantially or eliminate the benefits intended to be afforded by
the Rights.
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares. Whenever an adjustment is made as provided in Section 11
or 13 hereof, the Company shall promptly (a) prepare a certificate setting
forth such adjustment, and a brief statement of the facts accounting for such
adjustment, (b) file with the Rights Agent and with each transfer agent for
the Common Stock or the Preferred Stock a copy of such certificate and (c)
mail a brief summary thereof to each holder of a Right Certificate in
accordance with Section 25 hereof (if so required under Section 25 hereof).
The Rights Agent shall be fully protected in relying on any such certificate
and on any adjustment therein contained and shall not be deemed to have
knowledge of any such adjustment unless and until it shall have received such
certificate.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earnings Power. (a) In the event, directly or indirectly, at any
time after any Person has become an Acquiring Person, (i) the Company shall
merge with and into any other Person, (ii) any Person shall consolidate with
the Company, or any Person shall merge with and into the Company and the
Company shall be the continuing or surviving corporation of such merger and,
in connection with such merger, all or part of the Common Stock shall be
changed into or exchanged for stock or other securities of any other Person
(or of the Company) or cash or any other property, or (iii) the Company shall
sell or otherwise transfer (or one or more of its Subsidiaries shall sell or
<PAGE>
otherwise transfer), in one or more transactions, assets or earning power
aggregating 50% or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person (other than the Company
or one or more of its wholly-owned Subsidiaries), then upon the first
occurrence of such event, proper provision shall be made so that: (A) each
holder of record of a Right (other than Rights which have become void
pursuant to Section 11(a)(ii)) shall thereafter have the right to receive,
upon the exercise thereof at a price equal to the then current Purchase Price
multiplied by the number of one one-thousandths of a share of Preferred Stock
for which a Right was exercisable (whether or not such Right was then
exercisable) immediately prior to the time that any Person first became an
Acquiring Person (each as subsequently adjusted thereafter pursuant to
Sections 11(a)(i), 11(b), 11(c), 11(h), 11(i) and 11(m)), in accordance with
the terms of this Agreement and in lieu of Preferred Stock, such number of
validly issued, fully paid and non-assessable and freely tradeable shares of
Common Stock of the Principal Party (as defined herein) 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 was exercisable immediately prior to the time that
any Person first became an Acquiring Person (as subsequently adjusted
thereafter pursuant to Sections 11(a)(i), 11(b), 11(c), 11(h), 11(i) and
11(m)) and (2) dividing that product by 50% of the then current per share
market price of the Common Stock of such Principal Party (determined pursuant
to Section 11(d)(i) hereof) on the date of consummation of such
consolidation, merger, sale or transfer; provided that the Purchase Price and
the number of shares of Common Stock of such Principal Party issuable upon
exercise of each Right shall be further adjusted as provided in Section 11(f)
of this Agreement to reflect any events occurring in respect of such
<PAGE>
Principal Party after the date of the such consolidation, merger, sale or
transfer; (B) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such consolidation, merger, sale or transfer, all the
obligations and duties of the Company pursuant to this Agreement; (C) the
term "Company" shall thereafter be deemed to refer to such Principal Party;
and (D) such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of its shares of Common
Stock in accordance with Section 9 hereof) in connection with such
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 the shares of its Common Stock thereafter deliverable upon
the exercise of the Rights; provided that, upon the subsequent occurrence of
any consolidation, merger, sale or transfer of assets or other extraordinary
transaction in respect of such Principal Party, each holder of a Right shall
thereupon be entitled to receive, upon exercise of a Right and payment of the
Purchase Price as provided in this Section 13(a), such cash, shares, rights,
warrants and other property which such holder would have been entitled to
receive had such holder, at the time of such transaction, owned the Common
Stock of the Principal Party receivable upon the exercise of a Right pursuant
to this Section 13(a), and such Principal Party shall take such steps
(including, but not limited to, reservation of shares of stock) as may be
necessary to permit the subsequent exercise of the Rights in accordance with
the terms hereof for such cash, shares, rights, warrants and other property.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in
(i) or (ii) of the first sentence of Section 13(a) hereof: (A) the
Person that is the issuer of the securities into which the shares of
Common Stock are converted in such merger or consolidation, or, if
there is more than one such issuer, the issuer the shares of Common
<PAGE>
Stock of which have the greatest aggregate market value of shares
outstanding, or (B) if no securities are so issued, (x) the Person
that is the other party to the merger, if such Person survives said
merger, or, if there is more than one such Person, the Person the
shares of Common Stock of which have the greatest aggregate market
value of shares outstanding or (y) if the Person that is the other
party to the merger does not survive the merger, the Person that does
survive the merger (including the Company if it survives) or (z) the
Person resulting from the consolidation; and
(ii) in the case of any transaction described in
(iii) of the first sentence in Section 13(a) hereof, the Person that
is the party receiving the greatest portion of the assets or earning
power transferred pursuant to such transaction or transactions, or,
if each Person that is a party to such transaction or transactions
receives the same portion of the assets or earning power so
transferred or if the Person receiving the greatest portion of the
assets or earning power cannot be determined, whichever of such
Persons as is the issuer of Common Stock having the greatest
aggregate market value of shares outstanding;
provided, however, that in any such case described in the foregoing clause
(b)(i) or (b)(ii), if the Common Stock of such Person is not at such time or
has not been continuously over the preceding 12-month period registered under
Section 12 of the Exchange Act, then (1) if such Person is a direct or
indirect Subsidiary of another Person the Common Stock of which is and has
been so registered, the term "Principal Party" shall refer to such other
Person, or (2) if such Person is a Subsidiary, directly or indirectly, of
more than one Person, the Common Stock of all of which is and has been so
registered, the term "Principal Party" shall refer to whichever of such
Persons is the issuer of Common Stock having the greatest aggregate market
<PAGE>
value of shares outstanding, or (3) if such Person is owned, directly or
indirectly, by a joint venture formed by two or more Persons that are not
owned, directly or indirectly, by the same Person, the rules set forth in
clauses (1) and (2) above shall apply to each of the owners having an
interest in the venture as if the Person owned by the joint venture was a
Subsidiary of both or all of such joint venturers, and the Principal Party in
each such case shall bear the obligations set forth in this Section 13 in the
same ratio as its interest in such Person bears to the total of such
interests.
(c) The Company shall not consummate any consolidation,
merger, sale or transfer referred to in Section 13(a) hereof unless prior
thereto the Company and the Principal Party involved therein shall have
executed and delivered to the Rights Agent an agreement confirming that the
requirements of Sections 13(a) and (b) hereof shall promptly be performed in
accordance with their terms and that such consolidation, merger, sale or
transfer of assets shall not result in a default by the Principal Party under
this Agreement as the same shall have been assumed by the Principal Party
pursuant to Sections 13(a) and (b) hereof and providing that, as soon as
practicable after executing such agreement pursuant to this Section 13, the
Principal Party will:
(i) prepare and file a registration statement
under the Securities Act, if necessary, with respect to the Rights
and the securities purchasable upon exercise of the Rights on an
appropriate form, use its best efforts to cause such registration
statement to become effective as soon as practicable after such
filing and use its best efforts to cause such registration statement
to remain effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the Final Expiration Date,
and similarly comply with applicable state securities laws;
<PAGE>
(ii) use its best efforts, if the Common Stock
of the Principal Party shall be listed or admitted to trading on the
NASDAQ Stock Market or on another national securities exchange, to
list or admit to trading (or continue the listing of) the Rights and
the securities purchasable upon exercise of the Rights on the NASDAQ
Stock Market or such securities exchange, or, if the Common Stock of
the Principal Party shall not be listed or admitted to trading on the
NASDAQ Stock Market or a national securities exchange, to cause the
Rights and the securities receivable upon exercise of the Rights to
be reported by such other system then in use;
(iii) deliver to holders of the Rights historical
financial statements for the Principal Party which comply in all
respects with the requirements for registration on Form 10 (or any
successor form) under the Exchange Act; and
(iv) obtain waivers of any rights of first
refusal or preemptive rights in respect of the Common Stock of the
Principal Party subject to purchase upon exercise of outstanding
Rights.
(d) In case the Principal Party has provision in any of
its authorized securities or in its certificate of incorporation or by-laws
or other instrument governing its corporate affairs, which provision would
have the effect of (i) causing such Principal Party to issue (other than to
holders of Rights pursuant to this Section 13), in connection with, or as a
consequence of, the consummation of a transaction referred to in this Section
13, shares of Common Stock of such Principal Party at less than the then
current market price per share thereof (determined pursuant to Section 11(d)
hereof) or securities exercisable for, or convertible into, Common Stock of
such Principal Party at less than such then current market price, or (ii)
providing for any special payment, tax or similar provision in connection
<PAGE>
with the issuance of the Common Stock of such Principal Party pursuant to the
provisions of Section 13, then, in such event, the Company hereby agrees with
each holder of Rights that it shall not consummate any such transaction
unless prior thereto the Company and such Principal Party shall have executed
and delivered to the Rights Agent a supplemental agreement providing that the
provision in question of such Principal Party shall have been cancelled,
waived or amended, or that the authorized securities shall be redeemed, so
that the applicable provision will have no effect in connection with, or as a
consequence of, the consummation of the proposed transaction.
(e) The Company covenants and agrees that it shall not,
at any time after a Person first becomes an Acquiring Person, enter into any
transaction of the type contemplated by (i) - (iii) of Section 13(a) hereof
if (x) at the time of or immediately after such consolidation, merger, sale,
transfer or other transaction 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, (y) prior to, simultaneously with or immediately
after such consolidation, merger, sale, transfer of other transaction, 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 or Associates or (z) the form or nature of organization of the
Principal Party would preclude or limit the exercisability of the Rights.
Section 14. Fractional Rights and Fractional Shares. (a)
The Company shall not be required to issue fractions of Rights or to
distribute Right Certificates which evidence fractional Rights. In lieu of
such fractional Rights, there shall be paid to the registered holders of the
Right Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the
<PAGE>
current market value of a whole Right. For the purposes of this Section
14(a), the current market value of a whole Right shall be the closing price
of the Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price 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 secu-rities listed or admitted
to trading on the NASDAQ Stock Market, or, if the Rights are not listed or
admitted to trading on the NASDAQ Stock Market, 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 trad-
ing 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 any system then in use or, if on any such date
the Rights are not quoted by any organization in the over-the-counter market,
the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by the Board
of Directors of the Company. If on any such date no such market maker is
making a market in the Rights, the fair value of the Rights on such date as
determined in good faith by the Board of Directors of the Company shall be
used.
(b) The Company shall not be required to issue fractions
of Preferred Stock (other than fractions which are integral multiples of one
one-thousandth of a share of Preferred Stock) upon exercise of the Rights or
to distribute certificates which evidence fractional shares of Preferred
Stock (other than fractions which are integral multiples of one
one-thousandth of a share of Preferred Stock). Interests in fractions of
<PAGE>
Preferred Stock in integral multiples of one one-thousandth of a share of
Preferred Stock may, at the election of the Company, be evidenced by de-
positary receipts, pursuant to an appropriate agreement between the Company
and a depositary selected by it; provided, that such agreement shall provide
that the holders of such depositary receipts shall have all the rights,
privileges and preferences to which they are entitled as beneficial owners of
the Preferred Stock represented by such depositary receipts. In lieu of
fractional shares of Preferred Stock that are not integral multiples of one
one-thousandth of a share of Preferred Stock, the Company shall pay to the
registered holders of Right Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of
the current market value of one share of Preferred Stock. For the purposes
of this Section 14(b), the current market value of a share of Preferred Stock
shall be the closing price of a share of Preferred Stock (as determined
pursuant to Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise.
(c) The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Rights or any fractional
shares upon exercise of a Right (except as provided above).
Section 15. Rights of Action. All rights of action in
respect of this Agreement, excepting the rights of action given to the Rights
Agent under Section 18 hereof, are vested in the respective registered
holders of the Right Certificates (and, prior to the Distribution Date, the
registered holders of the Common Stock); and any registered holder of any
Right 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 Right
Certificate (or, prior to the Distribution Date, of the Common Stock), on his
own behalf and for his own benefit, may enforce, and may institute and
maintain any suit, action or proceeding against the Company to enforce, or
<PAGE>
otherwise act in respect of, his right to exercise the Rights evidenced by
such Right Certificate (or, prior to the Distribution Date, such Common
Stock) in the manner provided in such Right Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of, the obligations
of any Person subject to this Agreement.
Section 16. Agreement of Right Holders. Every holder of a
Right, by accepting the same, consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common
Stock;
(b) after the Distribution Date, the Right Certificates
are transferable only on the registry books of the Rights Agent if
surrendered at the office or agency of the Rights Agent designated
for such purpose, duly endorsed or accompanied by a proper instrument
of transfer; and
(c) the Company and the Rights Agent may deem and treat
the Person in whose name the Right Certificate (or, prior to the
Distribution Date, the Common Stock certificate) is registered as the
absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Right
Certificate or the Common Stock certificate made by anyone other than
the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent shall be affected by any
notice to the contrary.
<PAGE>
Section 17. Right Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Right Certificate shall be entitled
to vote, receive dividends or be deemed for any purpose the holder of the
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 Right Certificate be construed to confer
upon the holder of any Right Certificate, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors
or upon any matter submitted to stockholders at any meeting thereof, or to
give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided in this
Agreement), or to receive dividends or subscription rights, or otherwise,
until the Rights evidenced by such Right Certificate shall have been
exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. (a) The Company
agrees to pay to the Rights Agent reasonable compensation for all services
rendered by it hereunder and, from time to time, on demand of the Rights
Agent, its reasonable expenses and counsel fees and other disbursements
incurred in the administration and execution of this Agreement and the
exercise and performance of its duties hereunder. The Company also agrees to
indemnify the Rights Agent for, and to hold it harmless against, any loss,
liability or expense, incurred without gross negligence, bad faith or willful
misconduct on the part of the Rights Agent, for anything done or omitted by
the Rights Agent in connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against any claim of
liability arising therefrom, directly or indirectly.
(b) The Rights Agent shall be protected and shall incur
no liability for, or in respect of any action taken, suffered or omitted by
it in connection with, its administration of this Agreement in reliance upon
<PAGE>
any Right Certificate or certificate for the Preferred Stock, 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 ac-
knowledged, by the proper Person or Persons, or otherwise upon the advice of
counsel as set forth in Section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent. (a) Any corporation or entity into which the Rights Agent or
any successor Rights Agent may be merged or with which it may be
consolidated, or any corporation or entity resulting from any merger or
consolidation to which the Rights Agent or any successor Rights Agent shall
be a party, or any corporation or entity succeeding to the stock transfer or
corporate trust powers of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto; provided, that such corporation or entity would be eligible
for appointment as a successor Rights Agent under the provisions of Section
21 hereof. In case at the time such successor Rights Agent shall succeed to
the agency created by this Agreement, any of the Right Certificates shall
have been countersigned but not delivered, any such successor Rights Agent
may adopt the countersignature of the predecessor Rights Agent and deliver
such Right Certificates so countersigned; and in case at that time any of the
Right Certificates shall not have been countersigned, any successor Rights
Agent may countersign such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and in
all such cases such Right Certificates shall have the full force provided in
the Right Certificates and in this Agreement.
<PAGE>
(b) In case at any time the name of the Rights Agent shall
be changed and at such time any of the Right Certificates shall have been
countersigned but not delivered the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall
not have been countersigned, the Rights Agent may countersign such Right
Certificates either in its prior name or in its changed name and in all such
cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the holders
of Right Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who
may be legal counsel for the Company), and the opinion of such
counsel shall be full and complete authorization and protection to
the Rights Agent as to any action taken or omitted by it in good
faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that
any fact or matter be proved or established by the Company prior to
taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a
certificate signed by any one of the Chairman of the Board of
Directors, 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
<PAGE>
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 to the
Company and any other Person only for its own gross negligence, bad
faith or wilful misconduct.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained in this
Agreement or in the Right Certificates (except its countersignature
thereof) or be required to verify the same, but all such statements
and recitals are and shall be deemed to have been made by the Company
only.
(e) The Rights Agent shall not be under any responsibility
in respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights Agent)
or in respect of the validity or execution of any Right Certificate
(except its countersignature thereof); nor shall it be responsible
for any breach by the Company of any covenant or condition contained
in this Agreement or in any Right Certificate; nor shall it be re-
sponsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 11(a)(ii)
hereof) or any adjustment in the terms of the Rights (including the
manner, method or amount thereof) provided for in Sections 3, 11, 13,
23 and 24, or the ascertaining of the existence of facts that would
require any such change or adjustment (except with respect to the
exercise of Rights evidenced by Right Certificates after receipt of a
certificate furnished pursuant to Section 12, describing such change
or 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 Preferred Stock or other securities to be issued
<PAGE>
pursuant to this Agreement or any Right Certificate or as to whether
any shares of Preferred Stock or other securities will, when issued,
be validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights Agent
of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from any person reasonably believed by the Rights Agent to
be one of the Chairman of the Board of Directors, the President, the
Chief Financial Officer or the Secretary of the Company, and to apply
to such officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or suffered
by it in good faith in accordance with instructions of any such
officer or for any delay in acting while waiting for those
instructions. 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 any such application on or after the date specified in such
application (which date shall not be less than five Business Days
after the date any officer of the Company actually receives such
application, unless any such officer shall have consented in writing
<PAGE>
to an earlier date) unless, prior to taking any such action (or the
effective date in the case of an omission), the Rights Agent shall
have received written instructions in response to such application
specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal in any
of the Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent
from acting in any other capacity for the Company or for any other
legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the
Rights Agent shall not be answerable or accountable for any act,
default, neglect or misconduct of any such attorneys or agents or for
any loss to the Company resulting from any such act, default, neglect
or misconduct, provided reasonable care was exercised in the
selection and continued employment thereof.
(j) If, with respect to any Rights Certificate
surrendered to the Rights Agent for exercise or transfer, the
certificate contained in the form of assignment or the form of
election to purchase set forth on the reverse thereof, as the case
may be, has not been completed to certify the holder is not an
Acquiring Person (or an Affiliate or Associate thereof), a Rights
Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the
<PAGE>
Company. Without limiting the foregoing, unless either (i) the
Rights Agent has been notified by the Company of the identity of an
Acquiring Person or, (ii) the certificate contained in the form of
assignment or the form of election to purchase set forth on the
reverse side of the Rights Certificate indicates that the assignee or
the purchaser of such Rights Certificate is an Acquiring Person, the
Rights Agent shall not be responsible for a Rights Certificate's
assignment to or purchase by an Acquiring Person.
Section 21. Change of Rights Agent. The Rights Agent or
any successor Rights Agent may resign and be discharged from its duties under
this Agreement upon 30 days' notice in writing mailed to the Company and to
each transfer agent of the Common Stock or Preferred Stock by registered or
certified mail, and, following the Distribution Date, to the holders of the
Right Certificates by first-class mail. The Company may remove the Rights
Agent or any successor Rights Agent upon 30 days' notice in writing, mailed
to the Rights Agent or successor Rights Agent, as the case may be, and to
each transfer agent of the Common Stock or Preferred Stock by registered or
certified mail, and, following the Distribution Date, to the holders of the
Right Certificates by first-class mail. If the Rights Agent shall resign or
be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make
such appointment within a period of 30 days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of
a Right Certificate (who shall, with such notice, submit his Right
Certificate for inspection by the Company), then the registered holder of any
Right Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (a) a corporation
<PAGE>
organized and doing business under the laws of the United States or any State
thereof, in good standing, which is authorized under such laws to exercise
corporate trust or stock transfer powers and is subject to supervision or
examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least $100
million or (b) an affiliate of such a corporation. 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 or
Preferred Stock, and, following the Distribution Date, mail a notice thereof
in writing to the registered holders of the Right Certificates. Failure to
give any notice provided for in this Section 21, however, or any defect
therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent,
as the case may be.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights to
the contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such forms 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 Common Stock
following the Distribution Date and prior to the earlier of the Redemption
<PAGE>
Date and the Final Expiration Date, the Company may with respect to shares of
Common Stock so issued or sold pursuant to (i) the exercise of stock options,
(ii) under any employee plan or arrangement, (iii) upon the exercise,
conversion or exchange of securities notes or debentures issued by the
Company or (iv) a contractual obligation of the Company in each case existing
prior to the Distribution Date, issue Rights Certificates representing the
appropriate number of Rights in connection with such issuance or sale.
Section 23. Redemption. (a) The Board of Directors of the
Company may, at any time prior to such time as any Person first becomes an
Acquiring Person, redeem all but not less than all the then outstanding
Rights at a redemption price of $.01 per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring
after the date hereof (the redemption price being hereinafter referred to as
the "Redemption Price"). The redemption of the Rights may be made effective
at such time, on such basis and with such conditions as the Board of
Directors in its sole discretion may establish.
(b) Immediately upon the action of the Board of
Directors ordering the redemption of the Rights pursuant to paragraph (a) of
this Section 23 (or at such later time as the Board of Directors may
establish for the effectiveness of such redemption), and without any further
action and without any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of Rights shall be to
receive the Redemption Price. The Company shall promptly give public notice
of any such redemption; provided, however, that the failure to give, or any
defect in, any such notice shall not affect the validity of such redemption.
Within 10 days after such action of the Board of Directors ordering the
redemption of the Rights (or such later time as the Board of Directors may
establish for the effectiveness of such redemption), the Company shall mail a
notice of redemption to all the holders of the then outstanding Rights at
<PAGE>
their last addresses as they appear upon the registry books of the Rights
Agent or, prior to the Distribution Date, on the registry books of the
transfer agent for the Common 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 shall state the method
by which the payment of the Redemption Price will be made.
Section 24. Exchange. (a) The Board of Directors
of the Company may, at its option, at any time after any Person first becomes
an Acquiring Person, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 11(a)(ii) hereof) for shares of Common
Stock at an exchange ratio of one share of Common Stock per Right (such
exchange ratio being hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors shall not be empowered
to effect such exchange at any time after (1) any Person (other than an
Exempt Person), together with all Affiliates and Associates of such Person,
becomes the Beneficial Owner of shares of Common Stock aggregating 50% or
more of the shares of Common Stock then outstanding or (2) the occurrence of
an event specified in Section 13(a) hereof.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the exchange of any Rights pursuant to
paragraph (a) of this Section 24 and without any further action and without
any notice, the right to exercise such Rights shall terminate and the only
right thereafter of a holder of such Rights shall be to receive that number
of shares of Common Stock equal to the number of such Rights held by such
holder multiplied by the Exchange Ratio. The Company shall promptly give
public notice of any such exchange; provided, however, that the failure to
give, or any defect in, such notice shall not affect the validity of such
exchange. The Company shall promptly mail a notice of any such exchange to
<PAGE>
all of the holders of the Rights so exchanged at their last addresses as they
appear upon the registry books of the Rights Agent. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice. Each such notice of exchange will state the
method by which the exchange of the shares of Common Stock for Rights will be
effected and, in the event of any partial exchange, the number of Rights
which will be exchanged. Any partial exchange shall be effected pro rata
based on the number of Rights (other than Rights which have become void
pursuant to the provisions of Section 11(a)(ii) hereof) held by each holder
of Rights.
(c) In the event that there shall not be sufficient shares
of Common Stock issued but not outstanding or authorized but unissued to
permit any exchange of Rights as contemplated in accordance with this Section
24, the Company may, in its discretion, take such action as may be necessary
to authorize additional shares of Common Stock for issuance upon exchange of
the Rights. In the event that the Company shall determine not to take such
action or shall, after good faith effort, be unable to take such action as
may be necessary to authorize such additional shares of Common Stock, the
Company shall substitute, to the extent of such insufficiency, for each share
of Common Stock that would otherwise be issuable upon exchange of a Right, a
number of shares of Preferred Stock or fractions thereof (or equivalent
preferred shares as such term is defined in Section 11(b)) having an
aggregate current per share market price (determined pursuant to Section
11(d) hereof) equal to the current per share market price of one share of
Common Stock (determined pursuant to Section 11(d) hereof) as of the date of
issuance of such shares of Preferred Stock or fractions thereof (or
equivalent preferred shares).
(d) The Company shall not, in connection with any
exchange pursuant to this Section 24, be required to issue fractions of
<PAGE>
shares of Common Stock or to distribute certificates which evidence
fractional shares of Common Stock. In lieu of such fractional shares of
Common Stock, the Company shall pay to the registered holders of the Right
Certificates with regard to which such fractional shares of Common Stock
would otherwise be issuable an amount in cash equal to the same fraction of
the current market value of a whole share of Common Stock. For the purposes
of this paragraph (d), the current market value of a whole share of Common
Stock shall be the closing price of a share of Common Stock (as determined
pursuant to the second sentence of Section 11(d)(i) hereof) for the Trading
Day immediately prior to the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events. (a) In case the
Company shall at any time after the earlier of the Distribution Date or the
Stock Acquisition Date propose (i) to pay any dividend payable in stock of
any class to the holders of its Preferred Stock or to make any other
distribution to the holders of its Preferred Stock (other than a regular
quarterly cash dividend), (ii) to offer to the holders of its 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, (iii) to effect any reclassification of its Preferred
Stock (other than a reclassification involving only the subdivision of
outstanding Preferred Stock), (iv) to effect the liquidation, dissolution or
winding up of the Company, or (v) to declare or pay any dividend on the
Common Stock payable in Common Stock or to effect a subdivision, combination
or consolidation of the Common Stock (by reclassification or otherwise than
by payment of dividends in Common Stock), then, in each such case, the
Company shall give to each holder of a Right Certificate, in accordance with
Section 26 hereof, a notice of such proposed action, which shall specify the
record date for the purposes of such stock dividend, or distribution of
rights or warrants, or the date on which such liquidation, dissolution or
<PAGE>
winding up is to take place and the date of participation therein by the
holders of the Common Stock and/or 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 10 days prior to the record date for
determining holders of the Preferred Stock for purposes of such action, and
in the case of any such other action, at least 10 days prior to the date of
the taking of such proposed action or the date of participation therein by
the holders of the Common Stock and/or Preferred Stock, whichever shall be
the earlier.
(b) In case any event described in Section 11(a)(ii) or
Section 13 shall occur then the Company shall as soon as practicable
thereafter give to each holder of a Right Certificate (or if occurring prior
to the Distribution Date, the holders of the Common Stock) in accordance with
Section 26 hereof, a notice of the occurrence of such event, which notice
shall describe such event and the consequences of such event to holders of
Rights under Section 11(a)(ii) and Section 13 hereof.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
Right Certificate to or on the Company shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Rights Agent) as follows:
TCA Cable TV, Inc.
3015 SSE Loop 323
P.O. Box 130489
Tyler, Texas 75713-0489
Attention: Corporate Secretary
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Company or by the
holder of any Right Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
<PAGE>
addressed (until another address is filed in writing with the Company) as
follows:
ChaseMellon Shareholder Services, L.L.C.
450 W. 33rd St.
New York, NY 10001
Attention: Vice President
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the
registry books of the Company.
Section 27. Supplements and Amendments. Except as provided
in the penultimate sentence of this Section 27, for so long as the Rights are
then redeemable, the Company may in its sole and absolute discretion, and the
Rights Agent shall if the Company so directs, supplement or amend any
provision of this Agreement in any respect without the approval of any
holders of the Rights. At any time when the Rights are no longer redeemable,
except as provided in the penultimate sentence of this Section 27, the
Company may, and the Rights Agent shall, if the Company so directs,
supplement or amend this Agreement without the approval of any holders of
Rights Certificates in order to (i) cure any ambiguity, (ii) correct or
supplement any provision contained herein which may be defective or incon-
sistent with any other provisions herein, (iii) shorten or lengthen any time
period hereunder, or (iv) change or supplement the provisions hereunder in
any manner which the Company may deem necessary or desirable; provided that
no such supplement or amendment shall adversely affect the interests of the
holders of Rights as such (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person), and no such amendment may cause the rights
again to become redeemable or cause the Agreement again to become amendable
other than in accordance with this sentence. Notwithstanding anything
<PAGE>
contained in this Agreement to the contrary, no supplement or amendment
shall be made which changes the Redemption Price. Upon the delivery of a
certificate from an appropriate officer of the Company which states that the
proposed supplement or amendment is in compliance with the terms of this
Section 27, the Rights Agent shall execute such supplement or amendment.
Section 28. Successors. All the covenants and provisions
of this Agreement by or for the benefit of the Company or the Rights Agent
shall bind and inure to the benefit of their respective successors and
assigns hereunder.
Section 29. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the Company,
the Rights Agent and the registered holders of the Right Certificates (and,
prior to the Distribution Date, the Common 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 Right Certificates (and, prior to the Distribution
Date, the Common Stock).
Section 30. Severability. If any term, provision, covenant
or restriction of this Agreement or applicable to this Agreement is held by a
court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated.
Section 31. Governing Law. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Texas and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts
to be made and performed entirely within such State.
<PAGE>
Section 32. Counterparts. This Agreement may be executed
in any number of counterparts and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
Section 33. Descriptive Headings. Descriptive headings of
the several Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and attested, all as of the day and year first
above written.
Attest: TCA CABLE TV, INC.
By By /s/ Fred R. Nichols
----------------------------- -----------------------
Name: Name: Fred R. Nichols
Title: Title: Chairman and Chief
Executive Officer
Attest: CHASEMELLON SHAREHOLDER SERVICES,
L.L.C.
By By /s/ John Davis
----------------------------- --------------------------
Name: Name: John Davis
Title: Title: Relationship Manager
<PAGE>
Exhibit A
STATEMENT OF RESOLUTION
ESTABLISHING AND DESIGNATING A SERIES OF SHARES
OF
TCA CABLE TV, INC.
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
___________________
Pursuant to the provisions of Article 2.13 of the Texas
Business Corporation Act, as amended and pursuant to Article IV of its
Articles of Incorporation, as amended through the date hereof, the
undersigned, TCA Cable TV, Inc., a Texas corporation (the "Company"), hereby
submits the following statement for purposes of establishing and designating
a series of shares and fixing and determining the preferences, limitations
and relative rights thereof:
I. The name of the Company is TCA Cable TV, Inc.
II. The following resolution establishing and
designating a series of shares and fixing and determining the preferences,
limitations and relative rights thereof was duly adopted by the Board of
Directors of the Company on January 15, 1998, which action constitutes all
necessary action on the part of the Company for the adoption thereof:
RESOLVED, that pursuant to the authority granted to and
vested in the Board of Directors of the Company (hereinafter called the
"Board of Directors" or the "Board") in accordance with the provisions of the
Company's Articles of Incorporation, as amended to date (hereinafter called
the "Articles of Incorporation"), the Board of Directors hereby creates a
series of Preferred Stock, par value $1.00 per share (the "Preferred Stock"),
of the Company and hereby states the designation and number of shares, and
fixes the relative rights, powers and preferences thereof, and the
limitations thereof, as follows:
Section (i) Designation and Amount. The shares of such
series shall be designated as "Series A Junior Participating Preferred Stock"
(the "Series A Preferred Stock") and the number of shares constituting the
Series A Preferred Stock shall be 60,000. Such number of shares may be in-
creased or decreased by resolution of the Board of Directors; provided, that
no decrease shall reduce the number of shares of Series A Preferred Stock to
a number less than the number of shares then outstanding plus the number of
shares reserved for issuance upon the exercise of outstanding options, rights
or warrants or upon the conversion of any outstanding securities issued by
the Company convertible into Series A Preferred Stock.
Section 1. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares
of any series of Preferred Stock of the Company (the "Preferred Stock") (or
any similar stock) ranking prior and superior to the Series A Preferred Stock
with respect to dividends, the holders of shares of Series A Preferred Stock,
in preference to the holders of Common Stock, par value $.10 per share of the
<PAGE>
Company (the "Common Stock") and of any other stock of the Company ranking
junior to the Series A Preferred Stock, shall be entitled to receive, when,
as and if declared by the Board of Directors out of funds legally available
for the purpose, quarterly dividends payable in cash on the last day of
January, April, July, and October in each year (each such date being referred
to herein as a "Dividend Payment Date"), commencing on the first Dividend
Payment Date after the first issuance of a share or fraction of a share of
Series A Preferred Stock, in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $1 or (b) subject to the provision for
adjustment hereinafter set forth, 1000 times the aggregate per share amount
of all cash dividends, and 1000 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, declared on the Common Stock
since the immediately preceding Dividend Payment Date or, with respect to the
first Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series A Preferred Stock. In the event the Company
shall at any time after January 15, 1998, declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of
Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the amount to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under clause (b) of the
preceding sentence shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such event.
(B) The Company shall declare a dividend or distribution
on the Series A Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided that, in
the event no dividend or distribution shall have been declared on the Common
Stock during the period between any Dividend Payment Date and the next
subsequent Dividend Payment Date, a dividend of $1 per share on the Series A
Preferred Stock shall nevertheless be payable, when, as and if declared, on
such subsequent Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative,
whether or not earned or declared, on outstanding shares of Series A
Preferred Stock from the Dividend Payment Date next preceding the date of
issue of such shares, unless the date of issue of such shares is prior to the
record date for the first Dividend Payment Date, in which case dividends on
such shares shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Dividend Payment Date or is a date after the
record date for the determination of holders of shares of Series A Preferred
Stock entitled to receive a quarterly dividend and before such Dividend
Payment Date, in either of which events such dividends shall begin to accrue
and be cumulative from such Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series A
Preferred Stock in an amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The
Board of Directors may fix a record date for the determination of holders of
shares of Series A Preferred Stock entitled to receive payment of a dividend
<PAGE>
or distribution declared thereon, which record date shall be not more than 50
days prior to the date fixed for the payment thereof.
Section 2. Voting Rights. The holders of shares of Series
A Preferred Stock shall have the following voting rights;
(A) Subject to the provision for adjustment hereinafter
set forth and except as otherwise provided in the Articles of
Incorporation or required by law, each share of Series A Preferred
Stock shall entitle the holder thereof to 1000 votes on all matters
upon which the holders of the Common Stock of the Company are
entitled to vote. In the event the Company shall at any time after
January 15, 1998, declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number of shares
of Common Stock, then in each such case the number of votes per share
to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the number of shares
of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in the Articles
of Incorporation or in any other Certificate of Designations creating
a series of Preferred Stock or any similar stock, and except as
otherwise required by law, the holders of shares of Series A
Preferred Stock and the holders of shares of Common Stock and any
other capital stock of the Company having general voting rights shall
vote together as one class on all matters submitted to a vote of
stockholders of the Company.
(C) Except as set forth herein, or as otherwise provided
by law, holders of Series A Preferred Stock shall have no special
voting rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Common Stock as set
forth herein) for taking any corporate action.
Section 3. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not earned or declared, on
shares of Series A Preferred Stock outstanding shall have been paid
in full, the Company shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (as to
dividends) to the Series A Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity
(as to dividends) with the Series A Preferred Stock, except
dividends paid ratably on the Series A Preferred Stock and
<PAGE>
all such parity stock on which dividends are payable or in
arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as
to dividends or upon liquidation, dissolution or winding up)
to the Series A Preferred Stock, provided that the Company
may at any time redeem, purchase or otherwise acquire shares
of any such junior stock in exchange for shares of any stock
of the Company ranking junior (as to dividends and upon
dissolution, liquidation or winding up) to the Series A
Preferred Stock or rights, warrants or options to acquire
such junior stock;
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock, or any
shares of stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such
shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and
other relative rights and preferences of the respective
series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective
series or classes.
(B) The Company shall not permit any subsidiary of the
Company to purchase or otherwise acquire for consideration any shares
of stock of the Company unless the Company could, under paragraph (A)
of this Section 4, purchase or otherwise acquire such shares at such
time and in such manner.
Section 4. Reacquired Shares. Any shares of Series A
Preferred Stock purchased or otherwise acquired by the Company in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof.
Section 5. Liquidation, Dissolution or Winding Up. Upon
any liquidation, dissolution or winding up of the Company, no distribution
shall be made (A) to the holders of the Common Stock or of shares of any
other stock of the Company ranking junior, upon liquidation, dissolution or
winding up, to the Series A Preferred Stock unless, prior thereto, the
holders of shares of Series A Preferred Stock shall have received $100 per
share, plus an amount equal to accrued and unpaid dividends and distributions
thereon, whether or not earned or declared, to the date of such payment,
provided that the holders of shares of Series A Preferred Stock shall be
entitled to receive an aggregate amount per share, subject to the provision
for adjustment hereinafter set forth, equal to 1000 times the aggregate
amount to be distributed per share to holders of shares of Common Stock, or
(B) to the holders of shares of stock ranking on a parity upon liquidation,
dissolution or winding up with the Series A Preferred Stock, except
distributions made ratably on the Series A Preferred Stock and all such
parity stock in proportion to the total amounts to which the holders of all
such shares are entitled upon such liquidation, dissolution or winding up.
<PAGE>
In the event the Company shall at any time after January 15, 1998 declare or
pay any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or lesser number of shares
of Common Stock, then in each such case the aggregate amount to which holders
of shares of Series A Preferred Stock were entitled immediately prior to such
event under the proviso in clause (A) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
Section 6. Consolidation, Merger, etc. In case the Company
shall enter into any consolidation, merger, combination or other transaction
in which the shares of Common Stock are converted into, exchanged for or
changed into other stock or securities, cash and/or any other property, then
in any such case each share of Series A Preferred Stock shall at the same
time be similarly converted into, exchanged for or changed into an amount per
share (subject to the provision for adjustment hereinafter set forth) equal
to 1000 times the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into which or for which
each share of Common Stock is converted, exchanged or converted. In the
event the Company shall at any time after January 15, 1998 declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number of shares of
Common Stock, then in each such case the amount set forth in the preceding
sentence with respect to the conversion, exchange or change of shares of
Series A Preferred Stock shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such event.
Section 7. No Redemption. The shares of Series A Preferred
Stock shall not be redeemable from any holder.
Section 8. Rank. The Series A Preferred Stock shall rank,
with respect to the payment of dividends and the distribution of assets upon
liquidation, dissolution or winding up of the Company, junior to all other
series of Preferred Stock and senior to the Common Stock.
Section 9. Amendment. If any proposed amendment to the
Articles of Incorporation (including this Certificate of Designations) would
alter, change or repeal any of the preferences, powers or special rights
given to the Series A Preferred Stock so as to affect the Series A Preferred
Stock adversely, then the holders of the Series A Preferred Stock shall be
entitled to vote separately as a class upon such amendment, and the
affirmative vote of two-thirds of the outstanding shares of the Series A
Preferred Stock, voting separately as a class, shall be necessary for the
adoption thereof, in addition to such other vote as may be required by the
Business Corporation Act of the State of Texas.
<PAGE>
IN WITNESS WHEREOF, this Statement of Resolution is executed
on behalf of the Company by its Chairman of the Board of Directors and
attested by its Secretary this ____ day of January, 1998.
________________________________________
Chairman of the Board of Directors
Attest:
______________________
Secretary
<PAGE>
Exhibit B
Form of Right Certificate
Certificate No. R- ____ ___ Rights
NOT EXERCISABLE AFTER January __, 2008 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE
SUBJECT TO REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE
ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS OWNED BY
OR TRANSFERRED TO ANY PERSON WHO BECOMES AN ACQUIRING PERSON (AS
DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES THEREOF WILL
BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.
Right Certificate
TCA CABLE TV, INC.
This certifies that ___________ or registered assigns, is
the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions
of the Rights Agreement, dated as of January 15, 1998, as the same may be
amended from time to time (the "Rights Agreement"), between TCA Cable TV
Inc., a Delaware corporation (the "Company"), and ChaseMellon Shareholder
Services, L.L.C. (the "Rights Agent"), to purchase from the Company at any
time after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 P.M., New York City time, on January 15, 2008 at
the office or agency of the Rights Agent designated for such purpose, or of
its successor as Rights Agent, one one-thousandth of a fully paid
non-assessable share of Series A Junior Participating Preferred Stock, par
value $1.00 per share (the "Preferred Stock"), of the Company, at a purchase
price of $170.00 per one one-thousandth of a share of Preferred Stock (the
"Purchase Price"), upon presentation and surrender of this Right Certificate
with the Form of Election to Purchase duly executed. The number of Rights
evidenced by this Rights Certificate (and the number of one one-thousandths
of a share of Preferred Stock which may be purchased upon exercise hereof)
set forth above, and the Purchase Price set forth above, are the number and
Purchase Price as of January 15, 1998, based on the Preferred Stock as
constituted at such date. As provided in the Rights Agreement, the Purchase
Price, the number of one one-thousandths of a share of Preferred Stock (or
other securities or property) which may be purchased upon the exercise of the
Rights and the number of Rights evidenced by this Right Certificate are
subject to modification and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions
and conditions are hereby incorporated herein by reference and made a part
hereof and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of the
Right Certificates. Copies of the Rights Agreement are on file at the
principal executive offices of the Company and the above-mentioned office or
agency of the Rights Agent. The Company will mail to the holder of this
<PAGE>
Right Certificate a copy of the Rights Agreement without charge after receipt
of a written request therefor.
This Right Certificate, with or without other Right
Certificates, upon surrender at the office or agency of the Rights Agent
designated for such purpose, may be exchanged for another Right Certificate
or Right Certificates of like tenor and date evidencing Rights entitling the
holder to purchase a like aggregate number of shares of Preferred Stock as
the Rights evidenced by the Right Certificate or Right Certificates
surrendered shall have entitled such holder to purchase. If this Right
Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Certificate (i) may be redeemed by the Company at a
redemption price of $.01 per Right or (ii) may be exchanged in whole or in
part for shares of Preferred Stock or shares of the Company's Common Stock,
par value $.10 per share.
No fractional shares of Preferred Stock will be issued upon
the exercise of any Right or Rights evidenced hereby (other than fractions
which are integral multiples of one one-thousandth of a share of Preferred
Stock, which may, at the election of the Company, be evidenced by depositary
receipts), but in lieu thereof a cash payment will be made, as provided in
the Rights Agreement.
No holder of this Right Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder
of the Preferred Stock or of any other securities of the Company which may at
any time be issuable on the exercise hereof, nor shall anything contained in
the Rights Agreement or herein be construed to confer upon the holder hereof,
as such, any of the rights of a stockholder of the Company or any right to
vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement) or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by this Right certificate shall have been exercised as provided in
the Rights Agreement.
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of
the Company and its corporate seal. Dated as of _____________.
ATTEST: TCA CABLE TV, INC.
By CHASEMELLON SHAREHOLDER By____________________________
SERVICES, L.L.C.
<PAGE>
Countersigned:
_____________________________,
as Rights Agent
By___________________________
Authorized Signature
<PAGE>
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate)
FOR VALUE RECEIVED _________________________ hereby sells, assigns
and transfer unto ___________________________
__________________________________________________________________________
(Please print name and address of transferee)
__________________________________________________________________________
Rights represented by this Right Certificate, together with all right, title
and interest therein, and does hereby irrevocably constitute and appoint
___________________ Attorney, to transfer said Rights on the books of the
within-named Company, with full power of substitution.
Dated: _________________
______________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a
registered national securities exchange, a member of the National Association
of Securities Dealers, Inc., or a commercial bank or trust company having an
office or correspondent in the United States.
- --------------------------------------------------------------------------
(To be completed)
The undersigned hereby certifies that the Rights evidenced
by this Right Certificate are not beneficially owned by, were not acquired by
the undersigned from, and are not being assigned to, an Acquiring Person or
an Affiliate or Associate thereof (as defined in the Rights Agreement).
______________________________
Signature
<PAGE>
Form of Reverse Side of Right Certificate - continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate)
To TCA CABLE TV, INC.:
The undersigned hereby irrevocably elects to exercise
__________________ Rights represented by this Right Certificate to purchase
the shares of Preferred Stock (or other securities or property) issuable upon
the exercise of such Rights and requests that certificates for such shares of
Preferred Stock (or such other securities) be issued in the name of:
__________________________________________________________________________
(Please print name and address)
__________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivery to:
Please insert social security
or other identifying number
_________________________________________________________________________
(Please print name and address)
_________________________________________________________________________
Dated: ____________________
_____________________________
Signature
(Signature must conform to holder specified on Right Certificate)
Signature Guaranteed:
Signature must be guaranteed by a member of firm of a
registered national securities exchange, a member of the National Association
of Securities Dealers, Inc., or a commercial bank or trust company having an
office or correspondent in the United States.
<PAGE>
Form of Reverse Side of Right Certificate -- continued
_________________________________________________________________
(To be completed)
The undersigned certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by, and were not acquired by the
undersigned from, an Acquiring Person or an Affiliate or Associate thereof
(as defined in the Rights Agreement)
_____________________________
Signature
_________________________________________________________________________
NOTICE
The signature in the Form of Assignment or Form of Election
to Purchase, as the case may be, must conform to the name as written upon the
face of this Right Certificate in every particular, without alteration or
enlargement or any change whatsoever.
In the event the certification set forth above in the Form
of Assignment or the Form of Election to Purchase, as the case may be, is not
completed, such Assignment or Election to Purchase will not be honored.
<PAGE>
Exhibit C
UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT,
RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO BECOMES AN ACQUIRING
PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES
THEREOF WILL BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.
SUMMARY OF RIGHTS TO PURCHASE
Shares of Preferred Stock
On January 15, 1998, the Board of Directors of TCA Cable TV,
Inc. (the "Company") declared a dividend of one preferred share purchase
right (a "Right") for each outstanding share of common stock, par value $.10
per share, of the Company (the "Common Stock"). The dividend is payable on
January 28, 1998 (the "Record Date") to the stockholders of record on that
date. Each Right entitles the registered holder to purchase from the Company
one one-thousandth of a share of Series A Junior Participating Preferred
Stock, par value $1.00 per share (the "Preferred Stock"), of the Company at a
price of $170.00 per one one-thousandth of a share of Preferred Stock (the
"Purchase Price"), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement dated as of January 15, 1998, as
the same may be amended from time to time (the "Rights Agreement"), between
the Company and ChaseMellon Shareholder Services, L.L.C., as Rights Agent
(the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") have acquired beneficial ownership of 15% or more of the
outstanding shares of Common Stock or (ii) 10 business days (or such later
date as may be determined by action of the Board of Directors prior to such
time as any person or group of affiliated persons becomes an Acquiring
Person) following the commencement of, or announcement of an intention to
make, a tender offer or exchange offer the consummation of which would result
in the beneficial ownership by a person or group of 15% or more of the out-
standing shares of Common Stock (the earlier of such dates being called the
"Distribution Date"), the Rights will be evidenced, with respect to any of
the Common Stock certificates outstanding as of the Record Date, by such
Common Stock certificate together with a copy of this Summary of Rights.
The Rights Agreement provides that, until the Distribution
Date (or earlier redemption or expiration of the Rights), the Rights will be
transferred with and only with the Common 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 issuances of
Common Stock will contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption or expiration
of the Rights), the surrender for transfer of any certificates for shares of
Common Stock outstanding as of the Record Date, even without such notation or
a copy of this Summary of Rights, will also constitute the transfer of the
Rights associated with the shares of Common Stock represented by such
certificate. As soon as practicable following the Distribution Date,
separate certificates evidencing the Rights ("Right Certificates") will be
mailed to holders of record of the Common Stock as of the close of business
on the Distribution Date and such separate Right Certificates alone will
evidence the Rights.
<PAGE>
The Rights are not exercisable until the Distribution Date.
The Rights will expire on January 15, 2008 (the "Final Expiration Date"),
unless the Final Expiration Date is extended or unless the Rights are earlier
redeemed or exchanged by the Company, in each case as described below.
The 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 or
purchase Preferred Stock at a price, or securities convertible into Preferred
Stock with a conversion price, less than the then-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 or dividends payable in Preferred Stock) or of subscription rights
or warrants (other than those referred to above).
The number of outstanding Rights are also subject to
adjustment in the event of a stock split of the Common Stock or a stock divi-
dend on the Common Stock payable in shares of Common Stock or subdivisions,
consolidations or combinations of the Common Stock occurring, in any such
case, prior to the Distribution Date.
Shares of Preferred Stock purchasable upon exercise of the
Rights will not be redeemable. Each share of Preferred Stock will be
entitled, when, as and if declared, to a minimum preferential quarterly
dividend payment of $1 per share but will be entitled to an aggregate
dividend of 1000 times the dividend declared per share of Common Stock. In
the event of liquidation, the holders of the Preferred Stock will be entitled
to a minimum preferential liquidation payment of $100 per share (plus any
accrued but unpaid dividends) but will be entitled to an aggregate payment of
1000 times the payment made per share of Common Stock. Each share of
Preferred Stock will have 1000 votes, voting together with the Common Stock.
Finally, in the event of any merger, consolidation or other transaction in
which shares of Common Stock are converted or exchanged, each share of
Preferred Stock will be entitled to receive 1000 times the amount received
per share of Common Stock. These rights are protected by customary
antidilution provisions.
Because of the nature of the Preferred Stock's dividend,
liquidation and voting rights, the value of the one one-thousandth interest
in a share of Preferred Stock purchasable upon exercise of each Right should
approximate the value of one share of Common Stock.
In the event that any person or group of affiliated or
associated persons becomes an Acquiring Person, each holder of a Right, other
than Rights beneficially owned by the Acquiring Person (which will thereupon
become void), will thereafter have the right to receive upon exercise of a
Right at the then current exercise price of the Right, that number of shares
of Common Stock having a market value of two times the exercise price of the
Right.
In the event that, after a person or group has become an
Acquiring Person, the Company is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are sold, proper provision will be made so that each holder of a Right
<PAGE>
(other than Rights beneficially owned by an Acquiring Person which will have
become void) will thereafter have the right to receive, upon the exercise
thereof at the then current exercise price of the Right, that number of
shares of common stock of the person with whom the Company has engaged in the
foregoing transaction (or its parent), which number of shares at the time of
such transaction will have a market value of two times the exercise price of
the Right.
At any time after any person or group becomes an Acquiring
Person and prior to the acquisition by such person or group of 50% or more of
the outstanding shares of Common Stock or the occurrence of an event
described in the prior paragraph, the Board of Directors of the Company may
exchange the Rights (other than Rights owned by such person or group which
will have become void), in whole or in part, at an exchange ratio of one
share of Common Stock, or one one-thousandth of a share of Preferred Stock
(or of a share of a class or series of the Company's preferred stock having
equivalent rights, preferences and privileges), per Right (subject to
adjustment).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an adjustment of at
least 1% in such Purchase Price. No fractional shares of Preferred Stock
will be issued (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) and in lieu thereof, an
adjustment in cash will be made based on the market price of the Preferred
Stock on the last trading day prior to the date of exercise.
At any time prior to the time an Acquiring Person becomes
such, the Board of Directors of the Company may redeem the Rights in whole,
but not in part, at a price of $.01 per Right (the "Redemption Price"). The
redemption of the Rights may be made effective at such time, on such basis
and with such conditions as the Board of Directors in its sole discretion may
establish. Immediately upon any redemption of the Rights, the right to
exercise the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.
For so long as the Rights are then redeemable, the Company
may, except with respect to the redemption price, amend the Rights in any
manner. After the Rights are no longer redeemable, the Company may, except
with respect to the redemption price, amend the Rights in any manner that
does not adversely affect the interests of holders of the Rights.
Until a Right is exercised, the holder thereof, as such,
will have no rights as a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Registration Statement
on Form 8-A. A copy of the Rights Agreement is available free of charge from
the Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights
Agreement, as the same may be amended from time to time, which is hereby
incorporated herein by reference.
[TCA Cable TV, Inc. Logo]
NEWS RELEASE
For Immediate Release: January 16, 1998
Contact: Robert A. Roseman
TCA CABLE TV, INC. ADOPTS
SHAREHOLDER RIGHTS PLAN
[Tyler, Texas] -- TCA Cable TV, Inc. ("TCA") announced today that its
Board of Directors has adopted a Shareholder Rights Plan. In the face of the
rapidly evolving cable television industry, the adoption of the Rights Plan
provides protection against coercive or unfair takeover tactics, and should
encourage anyone seeking to acquire the Company to negotiate with the Board
first. The Rights Plan is similar to plans adopted by many public companies
and should provide a sound and reasonable means of safeguarding the interests
of all shareholders should an effort be made to acquire the Company at a
price not reflective of its fair value.
In connection with the adoption of the Rights Plan, the Board declared a
dividend of one preferred share purchase right for each outstanding share of
Company Common Stock. Each Right, which is not presently exercisable,
entitles the holder to purchase one one-thousandth of a share of Series A
Junior Participating Preferred Stock at an exercise price of $170. In the
event that any person acquires 15 percent or more of the outstanding shares
of Common Stock, each holder of a Right (other than the acquiring person or
group) will be entitled to receive, upon payment of the exercise price, that
number of Common Stock having a market value equal to two times the exercise
price. In order to retain flexibility and the ability to maximize
shareholder value in the event of unknown future transactions, the Board
retains the power to redeem the Rights for a set amount.
The distribution of the Rights will be made on January 28, 1998, payable
to shareholder of record at the close of business on that date. The Rights
<PAGE>
will expire on January 15, 2008, and the distribution of Rights is not
taxable to the Company's shareholders. In conjunction with the distribution,
details of the Rights are contained in a letter which is being mailed to all
shareholders of the Company. For further information, contact Bob Roseman at
TCA at (903) 595-3701.
