SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------------------
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) or (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
BELLSOUTH CORPORATION
(Exact name of registrant as specified in its charter)
GEORGIA 58-1533433
(State of incorporation) (I.R.S. Employer Identification
Number)
1155 Peachtree Street, N.E., Atlanta, Georgia 30309-3610
(Address of principal executive offices) (Zip code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
Preferred Stock Purchase Rights New York, Boston, Chicago,
Pacific and Philadelphia Stock
Exchanges
Securities to be registered pursuant to Section 12(g) of the Act:
None
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(Title of Class)
<PAGE>
Item 1. Description of Registrant's Securities to be Registered.
On November 22, 1999, the Board of Directors of BellSouth
Corporation (the "Company") declared a dividend distribution of one Preferred
Stock Purchase Right for each outstanding share of Common Stock, par value $1.00
per share ("Common Stock"), of the Company, payable to shareholders of record on
December 11, 1999, and issuable as of that date. Except in the circumstances
described below, each Right, when it becomes exercisable, entitles the
registered holder to purchase from the Company one one-thousandth of a share of
Series B First Preferred Stock, $1.00 par value, of the Company (each one
one-thousandth of a share, a "Unit") at a price of $200 per share (the "Purchase
Price"). The rights of a holder of a Unit are substantially equivalent to the
rights of a holder of a share of Common Stock. The description and terms of the
Rights are set forth in a Rights Agreement (the "Rights Agreement") between the
Company and ChaseMellon Shareholder Services, L.L.C. (the "Rights Agent").
As discussed below, initially the Rights will not be
exercisable, certificates will not be sent to shareholders and the Rights will
automatically trade with the Common Stock.
The Rights will be evidenced by the certificates representing
shares of Common Stock, and Rights relating to shares of Common Stock not
represented by certificates will be represented by notation on the records of
the Company, until the close of business on the earlier to occur of (i) a public
announcement or filing indicating that a person or group of affiliated or
associated persons has become an "Acquiring Person", which is defined generally
as a person who has acquired, or obtained the right to acquire, beneficial
ownership of voting securities of the Company representing 10% or more of the
total voting power represented by all of the voting securities of the Company,
or (ii) the tenth day (or a later date determined by the Board of Directors)
following the commencement of, or first public announcement of an intention to
commence, a tender or exchange offer the consummation of which would result in a
person becoming an Acquiring Person (the earlier of these dates is called the
"Distribution Date").
As soon as practicable following the Distribution Date,
separate certificates evidencing the Rights ("Right Certificates") will be
mailed to holders of record of shares of the Common Stock as of the close of
business on the Distribution Date, and those separate certificates alone will
evidence the Rights from and after the Distribution Date.
Each of the following persons will not be deemed to be an
Acquiring Person, even if they have acquired, or obtained the right to acquire,
beneficial ownership of voting securities of the Company representing 10% or
more of the total voting power of all of the voting securities of the Company:
(i) the Company, any subsidiary of the Company, any employee benefit plan or
employee stock plan of the Company or any subsidiary of the Company; (ii) any
underwriter acting under an agreement with the Company; (iii) any person who
becomes the beneficial owner of voting securities of the Company representing
10% or more of the total voting power of all of the voting securities of the
Company, with the prior approval of the Board of Directors of the Company (so
long as the person's beneficial ownership level does not exceed the level
approved by the Board of Directors); (iv) any person who becomes an Acquiring
Person solely by virtue of a reduction in the number of outstanding voting
securities, unless the person becomes the beneficial owner of additional voting
securities without the prior approval of the Board of Directors; and (v) any
person who becomes the beneficial owner of voting securities representing 10% or
more of the voting power of all of the voting securities of the Company
inadvertently (or in the good faith belief that the acquisition of voting
securities would not cause the person to become an Acquiring Person or because
the person was unaware of the Rights Agreement) and within five business days
after discovering that it would be an Acquiring Person (but for this exception)
the person notifies the Company's Board of Directors and within ten business
days (or any longer period allowed by the Board of Directors) divests a
sufficient number of shares so that the Person would not be an Acquiring Person
(regardless of this exception).
The Rights are not exercisable until the Distribution Date. The Rights will
expire at the close of business on December 11, 2009, unless earlier redeemed or
exchanged by the Company as described below.
The Purchase Price, and the number of Units 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 Units,
(ii) upon the grant to holders of Units of certain rights or warrants to
subscribe for Units or convertible securities at less than the current market
price of the Units or (iii) upon the distribution to holders of the Units of
evidences of indebtedness or assets (including dividends payable in Units) or of
subscription rights or warrants (other than those referred to above). The
Purchase Price is also subject to adjustment from time to time in the event of a
Common Stock dividend on, or a subdivision or combination of, the shares of
Common Stock.
In the event any person becomes an Acquiring Person, then each
requested holder of a Right, other than the Acquiring Person, will thereafter
have the right to receive, upon payment of the Purchase Price, that number of
Units having a value (determined based on the market value of the Common Stock)
at the time the person becomes an Acquiring Person equal to twice the Purchase
Price. Any Rights that are or were at any time, on or after the Distribution
Date, beneficially owned by an Acquiring Person shall become null and void.
After such an event, to the extent that insufficient Units are available for the
exercise in full of the Rights, holders of Rights will receive upon exercise a
number of Units to the extent available and then shares of Common Stock and
other securities of the Company, assets or cash, in proportions determined by
the Board of Directors of the Company, so that the aggregate value received is
equal to twice the Purchase Price.
The Rights Agreement provides that, on or after a public
announcement or filing indicating that person has become an Acquiring Person, if
the Company is acquired in a merger or other business combination (in which any
shares of Common Stock are changed into or exchanged for other securities or
assets) or more than 30% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) are sold or transferred in one or a series of
related transactions, proper provision will be made so that each registered
holder of record of a Right will have the right to receive, upon payment of the
Purchase Price, that number of shares of common stock of the acquiring company
having a value at the time of that transaction equal to two times the Purchase
Price.
No fractional Units will be required to be issued upon
exercise of the Rights and, in lieu thereof, a payment in cash equal to the
fraction of the value of a Unit may be made.
At any time after a person becomes an Acquiring Person, the
Board of Directors of the Company may exchange all or part of the outstanding
Rights (other than those held by an Acquiring Person) for Units at an exchange
rate of two Units (or, to the extent determined by the Board of Directors,
shares of Common Stock in lieu thereof) for each Right. The Company will
promptly give public notice of any exchange (although failure to give notice
will not affect the validity of the exchange).
At any time until the close of business on the day a public
announcement or filing is made indicating that person has become an Acquiring
Person, or thereafter under certain circumstances, the Company may redeem the
Rights in whole, but not in part, at a redemption price of $0.01 per Right.
Within ten days after the Board of Directors orders redemption of the Rights,
the Company will notify holders of the Rights of the redemption by mail or
through the issuance of a press release.
Immediately upon the action of the Board of Directors of the
Company authorizing exchange or redemption of the Rights (and prior to the
giving of notice of the exchange or redemption, as applicable, to the holders of
Rights), the right to exercise the Rights will terminate, and the only right of
the holders of Rights will be to receive (as applicable) the Units (or shares of
Common Stock) issuable in connection with the exchange or the redemption price
without any interest thereon.
Until the close of business on the day a public announcement
or filing is made indicating that a person has become an Acquiring Person, or
thereafter under certain circumstances, the Company may amend the Rights
Agreement in any manner. The Company may also amend the Rights Agreement after
the close of business on the day a public announcement or filing is made
indicating that person has become an Acquiring Person, to cure any ambiguities,
to correct defective or inconsistent provisions or in any manner that does not
adversely affect the interests of holders of the Rights.
Until a Right is exercised, the holder, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends.
The issuance of the Rights is not taxable to the Company or to
shareholders under presently existing federal income tax law, and will not
change the way in which shareholders can presently trade the shares of Common
Stock. If the Rights should become exercisable, shareholders, depending on then
existing circumstance, may recognize taxable income.
The Rights have anti-takeover effects. The Rights will cause
substantial dilution to a person that attempts to acquire the Company without
obtaining the approval of the Board of Directors, the redemption of the Rights
or an amendment to the Rights Agreement permitting the acquisition. However, the
Rights generally should not interfere with any merger or other business
combination approved by the Board of Directors.
The Form of Rights Agreement between the Company and
ChaseMellon Shareholder Services, L.L.C., specifying the terms of the Rights,
including Exhibit A thereto (the Form of Articles of Amendment to the Amended
and Restricted Articles of Incorporation of the Company authorizing the issuance
of the Units); Exhibit B thereto (the Form of Rights Certificate); and Exhibit C
thereto (a Summary of the Terms of the Rights to Purchase Units of Series B
Preferred Stock), is attached hereto as Exhibit 1 and incorporated herein by
reference. The foregoing description of the Rights is qualified in its entirety
by reference to the Rights Agreement.
Item 2. Exhibits.
1. Form of Rights Agreement (the "Rights Agreement") dated as of
November 22, 1999 between BellSouth Corporation and ChaseMellon Shareholder
Services, L.L.C. which includes, as Exhibit B thereto, the Form of Rights
Certificate.
<PAGE>
SIGNATURE
Pursuant to the requirement 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, thereunto duly authorized.
BELLSOUTH CORPORATION
By: /s/ W. Patrick Shannon
W. Patrick Shannon
Vice President and Controller
Date: November 22, 1999
BELLSOUTH CORPORATION
and
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
as Rights Agent
RIGHTS AGREEMENT
Dated November 22, 1999
<PAGE>
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Table of Contents
Section Page
Section 1. Certain Definitions......................................2
Section 2. Appointment of Rights Agent..............................6
Section 3. Issuance of Right Certificates...........................6
Section 4. Form of Right Certificates; Notice of Rights Agent as to
Acquiring Person .......................................8
Section 5. Countersignature and Registration........................9
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen
Right Certificates......................................10
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights...............................12
Section 8. Cancellation and Destruction of
Right Certificates .............15
Section 9. Reservation and Availability of
Shares of Preferred Stock .............15
Section 10. Preferred Stock Record Date.............................18
Section 11. Adjustments to Number and Kind of
Securities or Other Property,
Number of Rights or Purchase Price......................18
Section 12. Certification of Adjustments............................30
Section 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning Power .............31
Section 14. Fractional Rights and Fractional Shares.................36
Section 15. Rights of Action........................................37
Section 16. Agreement of Right Holders..............................38
Section 17. Right Certificate Holder Not Deemed a
Shareholder .............38
Section 18. Concerning the Rights Agent.............................39
Section 19. Merger or Consolidation or Change of Name
of Rights Agent .............40
Section 20. Duties of Rights Agent..................................41
Section 21. Change of Rights Agent..................................44
Section 22. Issuance of New Right Certificates......................45
Section 23. Redemption..............................................46
Section 24. Exchange................................................48
Section 25. Notice of Proposed Actions..............................49
Section 26. Notices.................................................50
Section 27. Supplements and Amendments..............................51
Section 28. Successors..............................................52
Section 29. Benefits of this Rights Agreement.......................52
Section 30. Georgia Contract........................................53
Section 31. Counterparts............................................53
Section 32. Descriptive Headings....................................53
Section 33. Severability............................................53
Section 34. Determination and Actions by the
Board of Directors, etc .............54
Exhibit A - Articles of Amendment
Exhibit B - Form of Right Certificate
Exhibit C - Form of Summary of Rights
<PAGE>
- 1 -
RIGHTS AGREEMENT
RIGHTS AGREEMENT (this "Rights Agreement"), dated November 22,
1999, between BELLSOUTH CORPORATION, a Georgia corporation (the "Company"), and
CHASEMELLON SHAREHOLDER SERVICES, L.L.C., a New Jersey limited liability company
(the "Rights Agent").
W I T N E S S E T H:
WHEREAS, on November 22, 1999, the Board of Directors of the
Company (i) authorized and declared a dividend of one right (a "Right") for each
share of the common stock, par value $1.00 per share, of the Company outstanding
as of the Close of Business (as defined herein) on December 11, 1999 (the
"Record Date"), and authorized the issuance of the Rights as of the Record Date,
each Right representing the right to purchase one one-thousandth of a share of
Series B First Preferred Stock, par value $1.00 per share, of the Company having
the voting powers, designation, preferences and relative rights described in the
Articles of Amendment set forth as Exhibit A (each one one-thousandth of a
share, a "Unit", and such shares of preferred stock, "Preferred Stock"), and
(ii) further authorized the issuance of one Right with respect to each share of
Common Stock of the Company that shall become outstanding between the Record
Date and the Distribution Date (as defined herein) (or thereafter in accordance
with Section 22), all upon the terms and subject to the conditions hereafter set
forth.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
<PAGE>
Section 1. Certain Definitions. For purposes of this Rights Agreement, the
following terms shall have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of Voting Securities representing 10% or more of the Voting
Power or who was such a Beneficial Owner at any time after the date of this
Rights Agreement, whether or not the Person continues to be the Beneficial Owner
of Voting Securities representing 10% or more of the Voting Power.
Notwithstanding the foregoing, (i) the term "Acquiring Person" shall not include
(x) the Company, any Subsidiary of the Company, any employee benefit plan or
employee stock plan of the Company or any Subsidiary of the Company, or any
Person organized, appointed, established or holding Voting Securities for or
pursuant to the terms of any such plan or (y) any underwriter acting in this
capacity by agreement with the Company or (z) any Person who shall become the
Beneficial Owner of Voting Securities representing 10% or more of the Voting
Power with the approval of the Board of Directors of the Company (so long as
such Person's Beneficial Ownership of Voting Securities does not exceed the
Beneficial Ownership level approved by the Board of Directors of the Company);
and (ii) no Person shall become an "Acquiring Person" (x) solely by virtue of a
reduction in the number of outstanding Voting Securities, unless the Person
thereafter becomes the Beneficial Owner of any additional Voting Securities
without previously receiving the approval of the Board of Directors of the
Company or (y) if the Person becomes an Acquiring Person (but for the operation
of this clause (y)) inadvertently (or in the good faith belief that the
acquisition of Voting Securities would not cause such Person to become an
Acquiring Person or because this Person was unaware of this Rights Agreement)
and (i) within five Business Days after the Person discovers that it would be an
Acquiring Person (but for the operation of this clause (y)) the Person notifies
the Board of Directors of the Company that it would be an Acquiring Person but
for the operation of this clause (y) and (ii) within ten Business Days after
notification to the Board of Directors of the Company (or such greater period as
the Board of Directors of the Company may set by a duly adopted resolution prior
to the tenth Business Day), the Person divests a sufficient number of Voting
Securities so that the Person is no longer an Acquiring Person (disregarding any
effect of this clause (y)).
(b) "Adjustment Units" shall have the meaning set forth in
Section 11(a)(ii).
(c) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act as in effect on the date of this Rights
Agreement.
(d) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own," any securities: (i)
which the Person or any of the Person's Affiliates or
Associates beneficially owns, directly or indirectly; (ii)
which the Person or any of the Person's Affiliates or
Associates has (A) the right or obligation to acquire
(whether such right or obligation is exercisable or
effective immediately or only after the passage of
time) pursuant to any agreement, arrangement or
understanding (whether or not in writing), or upon
the exercise of conversion rights, exchange rights,
rights (other than the Rights), warrants or options,
or otherwise; provided, however, that a Person shall
not be deemed the "Beneficial Owner" of, or to
"beneficially own," securities tendered pursuant to a
tender or exchange offer made by the Person or any of
the Person's Affiliates or Associates until the
tendered securities are accepted for purchase or
exchange; or (B) the right to vote pursuant to any
agreement, arrangement or understanding (whether or
not in writing); provided, however, that a Person
shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," any securities under this clause
(B) if the agreement, arrangement or understanding to
vote the securities (1) arises solely from a
revocable proxy or consent given in response to a
public proxy or consent solicitation made pursuant
to, and in accordance with, the applicable rules and
regulations of the Exchange Act and (2) is not also
then reportable by such Person on Schedule 13D under
the Exchange Act (or any comparable or successor
report); or
(iii) which are beneficially owned, directly or indirectly,
by any other Person (or any Affiliate or Associate
thereof) with which the Person or any of the Person's
Affiliates or Associates has any agreement,
arrangement or understanding (whether or not in
writing) for the purpose of acquiring, holding,
voting (except as described in clause (B) of
subparagraph (ii) of this paragraph (d)) or disposing
of any securities of the Company.
(e) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
(f) "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.
(g) "Common Stock", when used with reference to the Company,
shall mean the common stock (presently $1.00 par value per share) of the
Company. "Common Stock", when used with reference to any Person other than the
Company, shall mean the capital stock with the greatest voting power or the
equity securities or other equity interests having the power to control or
direct the management of such Person or, if such Person is a Subsidiary of or is
controlled by another Person, the Person which ultimately controls such
first-mentioned Person.
(h) "Company" shall have the meaning set forth in the preamble.
(i) "Current Market Price" shall have the meaning set forth in Section
11(d).
(j) "Current Value" shall have the meaning set forth in Section
11(a)(iii).
(k) "Distribution Date" shall have the meaning set forth in Section 3(a).
(l) "Equivalent Preferred Securities" shall have the meaning set forth
in Section 11(b).
(m) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(n) "Expiration Date" shall have the meaning set forth in Section 7(a).
(o) "Final Expiration Date" shall have the meaning set forth in Section
7(a).
(p) "NYSE" shall mean the New York Stock Exchange.
(q) "Person" shall mean any individual, firm, corporation, partnership,
limited liability company or other entity.
(r) "Preferred Stock" shall have the meaning set forth in the recitals.
(s) "Principal Party" shall have the meaning set forth in Section 13(b).
(t) "Purchase Price" shall have the meaning set forth in Section 7(b).
(u) "Record Date" shall have the meaning set forth in the preamble.
(v) "Redemption Price" shall have the meaning set forth in Section 23(a).
(w) "Right" shall have the meaning set forth in the preamble.
(x) "Rights Agent" shall have the meaning set forth in the preamble.
(y) "Right Certificate" shall have the meaning set forth in Section 3(a).
(z) "Section 11(a)(ii) Event" shall have the meaning set forth in Section
11(a)(ii).
(aa) "Section 13 Event" shall have the meaning set forth in Section 13(a).
(bb) "Securities Act" shall mean the Securities Act of 1933, as amended.
(cc) "Stock Acquisition Date" shall mean the first date of a
public announcement or filing by the Company or an Acquiring
Person indicating that an Acquiring Person has become such.
(dd) "Subsidiary" of a Person shall mean any corporation or
other entity of which securities or other ownership interests
having ordinary voting power sufficient to elect or appoint 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.
(ee) "Substitution Period" shall have the meaning set forth in Section
11(a)(iii).
(ff) "Summary of Rights" shall have the meaning set forth in Section 3(b).
(gg) "Trading Day" shall have the meaning set forth in Section 11(d).
(hh) "Triggering Event" shall mean any Section 11(a)(ii) Event or Section
13 Event.
(ii) "Unit" shall have the meaning set forth in the Recitals.
(jj) "Unit Equivalents" shall have the meaning set forth in Section
11(a)(iii).
(kk) "Voting Power" shall mean the voting power of all Voting Securities
of the Company then outstanding.
(ll) "Voting Securities" means any securities of the Company
the holders of which are generally entitled to vote
for the election of directors of the Company.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company in accordance with the
terms and conditions of this Rights Agreement, and the Rights Agent hereby
accepts this appointment. The Company may from time to time appoint such
co-Rights Agents as it may deem necessary or desirable. In the event the Company
appoints one or more co-Rights Agents, the respective duties of the Rights
Agents and any co-Rights Agents shall be as the Company shall determine. No
Rights Agent shall have a duty to supervise, and in no event shall be liable
for, the acts or omissions of any such co-Rights Agent.
Section 3. Issuance of Right Certificates.
(a) Until the Close of Business on the earlier to occur of (i)
the Stock Acquisition Date or (ii) the tenth day after the date of the
commencement by any Person of, or the first public announcement of the intent of
any Person to commence, a tender or exchange offer, upon the successful
consummation of which such Person, together with its Affiliates and Associates,
would be an Acquiring Person (irrespective of whether any shares are actually
purchased pursuant to such offer), or in the case of clause (ii) such later date
specified by the Board of Directors of the Company which date shall not be later
than the date specified in clause (i) (the earliest of such dates being referred
to herein as the "Distribution Date"), (x) the Rights will be evidenced by (i)
the certificates for the shares of Common Stock registered in the names of the
holders of the shares of Common Stock (which certificates for shares of Common
Stock shall be deemed also to be certificates for Rights) or, with respect to
shares of Common Stock not represented by certificates, the Rights related
thereto will be evidenced by the notation on the records of the Company
representing these shares, and, in each case, not by separate certificates, (y)
the registered holders of shares of Common Stock shall also be the registered
holders of the associated Rights, and (z) the Rights (and the right to receive
certificates therefor) will be transferable only in connection with the transfer
of the underlying shares of Common Stock (including a transfer to the Company).
As soon as practicable after the Distribution Date, the Rights Agent will, if
requested to do so by Company and provided with all necessary information, send,
by first-class, postage prepaid mail, to each record holder of shares of Common
Stock as of the Close of Business on the Distribution Date, at the address of
the holder shown on the records of the Company, a certificate in substantially
the form of Exhibit B ("Right Certificate") evidencing the Rights underlying the
shares of Common Stock so held. As of and after the Distribution Date, the
Rights will be evidenced solely by the Right Certificates. The Company shall
promptly notify the Rights Agent in writing upon the occurrence of the
Distribution Date and, if notification is given orally, the Company shall
confirm the same in writing on or prior to the Business Day next following.
Until this notice is received by the Rights Agent, the Rights Agent may presume
conclusively for all purposes that the Distribution Date has not occurred.
(b) Upon request of any holder of record of a Right, the
Company will send a copy of this Agreement, by postage prepaid mail, to the
holder.
(c) Until the Distribution Date (or, if earlier, the Expiration
Date or Final Expiration Date), the surrender for transfer of any certificate
for shares of Common Stock shall also constitute the surrender for transfer of
the Rights associated with the shares of Common Stock represented thereby and
the transfer of shares of Common Stock on the records of the Company shall also
constitute the transfer of the Rights associated with the shares.
(d) Certificates issued for shares of Common Stock (including,
without limitation, certificates issued upon transfer or exchange of shares of
Common Stock) after the Record Date, but prior to the earlier of the
Distribution Date, the Expiration Date or the Final Expiration Date, shall have
impressed on, printed on, written on or otherwise affixed to them the following
legend:
This certificate also evidences and entitles the holder to
certain Rights as set forth in a Rights Agreement between
BellSouth Corporation and ChaseMellon Shareholder Services,
L.L.C., as Rights Agent, dated November 22, 1999, as from time
to time amended, extended or renewed (the "Rights Agreement"),
the terms of which are incorporated herein by reference and a
copy of which is on file at the principal executive office of
BellSouth Corporation. 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. BellSouth Corporation will mail to the
holder of record of this certificate a copy of the Rights
Agreement, without charge, within ten Business Days after
receipt of a written request therefor. Under certain
circumstances, as provided in the Rights Agreement, Rights
issued to or beneficially owned by Acquiring Persons or their
Associates or Affiliates (as defined in the Rights Agreement)
or any purported subsequent holder of such Rights will become
null and void.
Section 4. Form of Right Certificates; Notice to
Rights Agent as to Acquiring Person.
(a) The Right Certificates (and the forms of election to
purchase shares and of assignment to be printed on the reverse thereof), when,
as and if issued, shall be substantially in the form set forth in Exhibit B and
may have such marks of identification or designation and such legends, summaries
or endorsements printed thereon as the Company may deem appropriate (which do
not affect the duties or responsibilities of the Rights Agent) and as are not
inconsistent with the provisions of this Rights Agreement, or as may be required
to comply with any law or with any rule or regulation made pursuant thereto or
with any rule or regulation of any stock exchange 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 , the Right Certificates evidencing the Rights, whenever
issued, on their face shall entitle the holders thereof to purchase a Unit, at
the Purchase Price, but the number and type of shares or other property holders
thereof shall be entitled to purchase and the Purchase Price shall be subject to
adjustment as provided in this Rights Agreement.
(b) Notwithstanding any other provision of this Rights
Agreement, any Right Certificate that represents Rights that may be or may have
been at any time on or after the Distribution Date beneficially owned by an
Acquiring Person or any Affiliate or Associate thereof (or any purported
transferee of such Rights) may have impressed on, printed on, written on or
otherwise affixed to it the following legend:
The beneficial owner of the Rights represented by this Right
Certificate may be an Acquiring Person or an Affiliate or
Associate (as defined in the Rights Agreement) of an Acquiring
Person or a subsequent holder of a Right Certificate
beneficially owned by such Persons. Accordingly, under certain
circumstances as provided in the Rights Agreement, this Right
Certificate and the Rights represented hereby will be null and
void. The provisions of this Rights Agreement shall be
operative whether or not the foregoing legend is imprinted on
any such Right Certificate. The Company shall give notice to
the Rights Agent promptly after it becomes aware of the
existence of any Acquiring Person.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be signed on behalf of the
Company by the Chairman of the Board of Directors, the Chief Executive Officer,
the President or any Vice President of the Company, either manually or by
facsimile signature, and shall have affixed thereto the Company's seal or a
facsimile thereof which shall be attested by the Secretary, Assistant Secretary,
the Treasurer or any Assistant Treasurer of the Company, either manually or by
facsimile signature. The Right Certificates shall be countersigned by the Rights
Agent, manually, or where permitted, in facsimile, and shall not be valid for
any purpose unless so countersigned. In case any officer of the Company who
shall have signed any of the Right Certificates shall cease to be such officer
of the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, the Right Certificates nevertheless may be
countersigned by the Rights Agent, issued and delivered with the same force and
effect as though the person who signed the 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 the
Right Certificate, although at the date of the execution of this Rights
Agreement any such person was not such an officer.
(b) Following the Distribution Date and receipt by the Rights
Agent of notice to that effect and all other relevant information referred to in
Section 3(a), the Rights Agent will keep or cause to be kept books for
registration and transfer of the Right Certificates issued hereunder. The books
shall show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the Right
Certificates, the date of each of the Right Certificates, and the certificate
numbers for each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right
Certificates.
(a) Subject to the provisions of Sections 4(b), 7(e) and
14(b), at any time after the Close of Business on the Distribution Date and at
or prior to the Close of Business on the earlier of the Expiration Date or the
Final Expiration Date, any Right Certificate or Certificates may be (a)
transferred or (b) split up, combined or exchanged for another Right Certificate
or Right Certificates, entitling the registered holder to purchase a like number
of Units (and/or other securities or property, as the case may be) as the Right
Certificate or Right Certificates surrendered then entitled such holder to
purchase. Any registered holder desiring to transfer any Right Certificate shall
surrender the Right Certificate at the office of the Rights Agent designated for
this purpose with the form of assignment on the reverse side thereof duly
endorsed (or enclose with such Right Certificate a written instrument of
transfer in a form satisfactory to the Company and the Rights Agent, duly
executed by the registered holder thereof or the registered holder's attorney
duly authorized in writing), and with all signatures duly guaranteed. Any
registered holder desiring to split up, combine or exchange any Right
Certificate shall make such request in writing delivered to the Rights Agent,
and shall surrender the Right Certificate or Right Certificates to be split up,
combined or exchanged at the office of the Rights Agent designated for such
purpose. Thereupon the Rights Agent shall countersign (by manual or, where
permitted, facsimile signature) 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. The Rights Agent shall have
no duty or obligation to take any action under any Section of this Rights
Agreement which requires the payment by a holder of Rights of applicable taxes
and governmental charges unless and until the Rights Agent is reasonably
satisfied that all such taxes and/or charges have been paid.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them, and, if requested by
the Company, reimbursement to the Company of all reasonable expenses incidental
thereto, and upon surrender to the Rights Agent and cancellation of the Right
Certificate if mutilated, the Company will execute and deliver to the Rights
Agent a new Right Certificate of like tenor for delivery to the registered owner
in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights.
(a) Subject to Section 7(e) or as otherwise provided in this
Rights Agreement, the registered holder of any Right Certificate may exercise
the Rights evidenced thereby in whole at any time or in part from time to time
after the Distribution Date upon surrender of the Right Certificate, with the
form of election to purchase on the reverse side thereof duly executed (with
such signature duly guaranteed), to the Rights Agent at the office of the Rights
Agent designated for such purposes together with payment of the Purchase Price
(defined below), or portion thereof, as applicable, with respect to each Unit or
Units (and/or other securities or property in lieu thereof) as to which the
Rights are exercised, subject to adjustment as hereinafter provided, at or prior
to the Close of Business on the earlier of (i) December 11, 2009 (this date, the
"Final Expiration Date"), (ii) the date on which the Rights are redeemed as
provided in Section 23 (this date, the "Expiration Date") or (iii) the date on
which the Rights are exchanged as provided in Section 24.
(b) The purchase price shall initially be $200 for each Unit
issuable pursuant to the exercise of a Right. The purchase price and the number
of Units (and/or other securities or property, as the case may be) to be
acquired upon exercise of a Right shall be subject to adjustment from time to
time as provided in Sections 11 and 13. (The purchase price, after giving effect
to any adjustments, shall be referred to as the "Purchase Price.") The Purchase
Price shall be payable in lawful money of the United States of America, in
accordance with Section 7(c).
(c) Except as provided in Sections 7(d) and 7(e), upon receipt
of a Right Certificate with the form of election to purchase duly executed,
accompanied by payment of the Purchase Price, or the applicable portion thereof,
for the Units (and/or other securities or property, as the case may be) to be
purchased and an amount equal to any applicable tax or governmental charge, by
cash, certified check or official bank check payable to the order of the Company
or the Rights Agent, the Rights Agent shall thereupon promptly (i) (A)
requisition from any transfer agent for the shares of Preferred Stock
certificates for the number of Units so elected to be purchased, and the Company
will comply and hereby authorizes and directs the transfer agent to comply with
all such requests or (B) if the Company, in its sole discretion, shall have
elected to deposit the shares of Preferred Stock underlying the Units issuable
upon exercise of the Rights hereunder into a depositary, requisition from the
depositary agent depositary receipts representing the number of Units as are to
be purchased (in which case certificates for the shares of Preferred Stock
underlying the Units represented by the receipts shall be deposited by the
transfer agent with the depositary agent) and the Company will direct the
depositary agent to comply with such request, (ii) requisition from the Company
the amount of cash to be paid in lieu of issuance of fractional shares in
accordance with Section 14(b) and (iii) promptly after receipt of the Units
certificates or depositary receipts, as the case may be, cause the same to be
delivered to or upon the order of the registered holder of the Right
Certificate, registered in such name or names as may be designated by such
holder, and, when appropriate, after receipt promptly deliver the cash to or
upon the order of the registered holder of the Right Certificate; provided,
however, that in the case of a purchase of securities pursuant to Section 13,
the Rights Agent shall promptly take the appropriate actions corresponding to
the foregoing clauses (i) through (iii). In the event that the Company is
obligated to issue other securities of the Company, pay cash and/or distribute
other property pursuant to Section 11(a), the Rights Agent shall promptly take
the appropriate actions corresponding to the foregoing clauses (i) through
(iii), as applicable, and the Company shall otherwise make all arrangements
necessary so that those other securities, cash and/or other property are
available for distribution by the Rights Agent, if and when necessary to comply
with this Rights Agreement. In addition, in the case of an exercise of the
Rights by a holder pursuant to Section 11(a)(ii), the Rights Agent shall return
the Right Certificate to the registered holder thereof after imprinting,
stamping or otherwise indicating thereon that the Rights represented by the
Right Certificate no longer include the rights provided by Section 11(a)(ii)
and, if less than all the Rights represented by such Right Certificate were so
exercised, the Rights Agent shall indicate on the Right Certificate the number
of Rights represented thereby which continue to include the rights provided by
Section 11(a)(ii). In case the holder of any Rights Certificate shall exercise
(except pursuant to Section 11(a)(ii)) less than all the Rights evidenced
thereby, a new Rights Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent and delivered to the
registered holder of the Rights Certificate or the holder's duly authorized
assigns, subject to the provisions of Section 14(b).
(d) Notwithstanding anything in this Rights Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported exercise as set forth in this Section 7 unless the registered
holder shall have (i) properly completed and signed the certificate contained in
the form of election to purchase set forth on the reverse side of the Right
Certificate surrendered for exercise and (ii) provided such additional evidence
of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company or the Rights Agent shall
reasonably request.
(e) Notwithstanding anything in this Rights Agreement to the
contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any
Rights beneficially owned by (i) an Acquiring Person or an Affiliate or
Associate thereof, (ii) a transferee of an Acquiring Person (or of any Affiliate
or Associate thereof) who becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or of any Affiliate
or Associate thereof) who becomes a transferee prior to or concurrently with the
Acquiring Person becoming such and receives those Rights pursuant to either (A)
a transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in the Acquiring Person or to any Person with whom
the Acquiring Person has a continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board of Directors
of the Company has determined is part of an agreement, arrangement or
understanding which has as a primary purpose or effect the avoidance of this
Section 7(e), shall become null and void without any further action and no
holder of those Rights shall have any rights whatsoever with respect to those
Rights, whether under any provision of this Rights Agreement or otherwise. The
Company shall notify the Rights Agent when this Section 7(e) applies and shall
use best efforts to insure that the provisions of this Section 7(e) and Section
4(b) are complied with, but neither the Company nor the Rights Agent shall have
any liability to any holder of Right Certificates or other Person as a result of
the Company's failure to make any determinations with respect to an Acquiring
Person or its Affiliates, Associates or transferees hereunder.
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 Rights Agreement. The Company shall deliver to
the Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any 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 the cancelled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Shares of
Preferred Stock.
(a) The Company covenants and agrees that at all times it will
cause to be reserved and kept available, out of and to the extent of its
authorized and unissued shares of Preferred Stock not reserved for another
purpose or shares of Preferred Stock not reserved for another purpose held in
its treasury, the number of Units that, as provided in this Rights Agreement,
will be sufficient to permit the exercise in full of all outstanding Rights;
provided, however, that the Company shall not be required to reserve and keep
available Units sufficient to permit the exercise in full of all outstanding
Rights pursuant to the adjustments set forth in Sections 11(a)(ii), 11(a)(iii)
or 13 unless, and only to the extent that, the Rights become exercisable
pursuant to such adjustments.
(b) The Company shall (i) use its best efforts to cause, from
and after the Distribution Date, the Rights and all Units (and/or following the
occurrence of a Triggering Event, other securities, as the case may be) issued
or reserved for issuance upon exercise thereof to be listed by the NYSE or any
other national securities exchanges, and (ii) if then necessary to permit the
offer and issuance of such Units and/or other securities, as the case may be,
register and qualify such Units (and/or other securities, as the case may be)
under the Securities Act and any applicable state securities or "blue sky" laws
(to the extent exemptions therefrom are not available), cause the related
registration statement and qualifications to become effective as soon as
possible after filing and keep such registration statement and qualifications
effective (with a prospectus at all times meeting the requirements of the
Securities Act) until the earlier of the expiration of the 60-day period
referred to in Section 11(a)(ii), the Expiration Date or 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. The Company shall notify the Rights Agent whenever it makes a
public announcement pursuant to this Section 9(b) and give the Rights Agent a
copy of such announcement. Notwithstanding any provision of this Rights
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.
(c) The Company covenants and agrees that it will take all
such action as may be necessary to insure that all Units (and/or other
securities) delivered upon exercise of Rights shall, at the time of delivery of
the certificates for such Units (and/or other securities) subject to payment of
the Purchase Price (or the applicable portion thereof) in respect thereof, be
duly and validly authorized and issued and fully paid and nonassessable Units
(and/or other securities, as the case may be) in accordance with applicable law.
(d) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state taxes and governmental
charges which may be payable in respect of the issuance or delivery of the Right
Certificates or of any Units (and/or other securities or property, as the case
may be) upon the exercise of Rights. The Company shall not, however, be required
to pay any transfer tax which may be payable in respect of any transfer or
delivery of Right Certificates to a Person other than, or the issuance or
delivery of certificates for Units (and/or other securities or property, as the
case may be) upon exercise of Rights in a name other than that of, the
registered holder of the Right Certificate, and the Company shall not be
required to issue or deliver a Right Certificate or certificate for Units
(and/or other securities or property, as the case may be) to a Person other than
the registered holder until any such tax shall have been paid (any such tax
being payable by the holder of such Right Certificate at the time of surrender)
or until it has been established to the Company's satisfaction that no such tax
is due.
Section 10. Preferred Stock Record Date. Each Person in whose
name any certificate for Units (and/or other securities, as the case may be) is
issued upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of the Units (and/or other securities, as the case
may be) represented thereby on, and the certificate shall be dated, the date
upon which the Right Certificate evidencing these Rights was duly surrendered
and payment of the Purchase Price, or the applicable portion thereof (and any
applicable taxes and governmental charges), was made; provided, however, that if
the date of such presentation and payment is a date upon which the transfer
books for the Units (and/or other securities, as the case may be) are closed,
such Person shall be deemed to have become the record holder of such shares
(and/or other securities) on, and such certificate shall be dated, the next
succeeding Business Day on which the transfer books for the Units (and/or other
securities) are open.
Section 11. Adjustments to Number and Kind of Securities or
Other Property, Number of Rights or Purchase Price. The number and kind of
securities or other property subject to purchase upon the exercise of each
Right, the number of Rights outstanding and the Purchase Price 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 Rights Agreement (A) declare or pay any dividend on the shares of
Preferred Stock payable in shares of Preferred Stock, (B) subdivide or split the
outstanding shares of Preferred Stock into a greater number of shares, (C)
combine or consolidate the outstanding shares of Preferred Stock into a smaller
number of shares or effect a reverse split of the outstanding shares of
Preferred Stock or (D) issue any shares of its capital stock in a
reclassification of the shares of Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), except as otherwise
provided in this Section 11(a) and Section 7(e), the Purchase Price in effect at
the time of the record date for the dividend or of the effective date of the
subdivision, split, combination or reclassification, and the number of Units and
the number and kind of other securities, as the case may be, issuable on such
date, shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive, upon payment of the
Purchase Price then in effect, the aggregate number of Units and/or the number
and kind of other securities as the case may be, which, if the Right had been
exercised immediately prior to such date, the holder thereof would have owned
upon such exercise and been entitled to receive by virtue of the dividend,
subdivision, split, combination or reclassification. If an event occurs which
would require an adjustment under both Sections 11(a)(i) and 11(a)(ii), the
adjustment provided for in this Section 11(a)(i) shall be in addition to, and
shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) In the event any Person at any time after the Record Date
becomes an Acquiring Person (this event being referred to as a "Section
11(a)(ii) Event"), then, subject to Sections 23(a) and 24, and except as
otherwise provided in Section 7(e), each holder of a Right shall, for a period
of sixty days (or such longer period as may be established by the Board of
Directors of the Company) after the later of the occurrence of any such event
and the effective date of an appropriate registration statement under the
Securities Act pursuant to Section 9, have a right to receive for each Right,
upon exercise thereof in accordance with the terms of this Rights Agreement and
payment of the Purchase Price (or the applicable portion thereof), such number
of Units as shall equal the result obtained by (x) multiplying the then current
Purchase Price by the then number of Units for which a Right was exercisable
immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y)
dividing that product by 50% of the Current Market Price per Unit on the date of
such first occurrence (such number of Units is called the "Adjustment Units");
provided, however, that the Purchase Price and the number of Adjustment Units
shall be further adjusted as appropriate to reflect any stock split, stock
dividend or similar transaction, or as provided in this Agreement to reflect any
other events, occurring after the date of such first occurrence; and provided,
further, that if the transaction that would otherwise give rise to the foregoing
adjustment is also subject to the provisions of Section 13, then only the
provisions of Section 13 shall apply and no adjustment shall be made pursuant to
this Section 11(a)(ii).
(iii) In the event that the number of shares of Preferred
Stock which are authorized by the Company's articles of incorporation but not
outstanding and which are not reserved for issuance for purposes other than upon
exercise of the Rights is not sufficient to permit the exercise in full of the
Rights for Units in accordance with Section 11(a)(ii) and the Rights shall
become so exercisable, to the extent permitted by applicable law each Right
shall thereafter represent the right to receive, upon exercise thereof at the
Purchase Price, (x) a number Units (up to the maximum number of Units which may
be permissibly issued), and (y) a number of shares of Common Stock so that, when
added together, the numbers in clauses (x) and (y) equal the number of
Adjustment Units. In the event the number of shares of Preferred Stock and
Common Stock which are authorized by the Company's articles of incorporation but
not outstanding or reserved for issuance for purposes other than upon exercise
of the Rights is insufficient to permit the exercise in full of the Rights in
accordance with the prior sentence and the Rights shall become so exercisable,
to the extent permitted by applicable law, the Company shall: (A) determine the
value of the Adjustment Units issuable upon the exercise of a Right (the
"Current Value") and (B) with respect to each Right, upon exercise of such
Right, issue Units and shares of Common Stock to the extent available for the
exercise in full of such Right and, to the extent Units and shares of Common
Stock are not so available, make adequate provision to substitute for the
Adjustment Units not received upon exercise of such Right: (1) other equity
securities of the Company (including, without limitation, shares, or units of
shares, of preferred stock which, by virtue of having dividend, voting and
liquidation rights substantially comparable to the Units, are deemed in good
faith by the Board of Directors of the Company to have substantially the same
value as one Unit (such shares or units of shares of preferred stock are herein
called "Unit Equivalents")); (2) debt securities of the Company; (3) other
assets; (4) cash; or (5) any combination of the foregoing determined by the
Board of Directors of the Company, having a value which, when added to the value
of the number of Units and the shares of Common Stock actually issued upon
exercise of such Right, shall have an aggregate value equal to the Current
Value, where such aggregate value has been determined by the Board of Directors
of the Company based upon the advice of a nationally recognized independent
investment banking firm; provided, however, if the Company shall not have made
adequate provision to deliver Units, shares of Common Stock and Unit Equivalents
pursuant to Section 11(a)(ii), the prior sentence of this paragraph and clause
(B) above within 30 days following the Stock Acquisition Date, then, to the
extent permitted by applicable law, the Company shall be obligated to deliver,
upon the surrender for exercise of a Right and without requiring payment of the
Purchase Price, Units, shares of Common Stock (to the extent available) or Unit
Equivalents and then, if necessary, cash, debt securities, or other assets (in
that order) which shares, units, cash, debt securities and/or assets have an
aggregate value equal to the excess of the Current Value over the Purchase
Price. If the Board of Directors of the Company shall determine in good faith
that it is likely that sufficient additional shares of Preferred Stock, shares
of Common Stock or Unit Equivalents could be authorized for issuance upon
exercise in full of the Rights, the 30 day period set forth above may be
extended to the extent necessary, but not more than 120 days after the Stock
Acquisition Date, in order that the Company may seek shareholder approval for
the authorization of such additional shares or Unit Equivalents (such 30 day
period, as it may be extended, is called the "Substitution Period"). To the
extent that the Company determines that some action need be taken pursuant to
the foregoing provisions of this Section 11(a)(iii), the Company (x) shall
provide, subject to Section 7(e), that this action shall apply uniformly to all
outstanding and exercisable Rights, and (y) may suspend the exercisability of
the Rights until the expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the appropriate form of
distribution to be made pursuant to the foregoing provisions of this Section
11(a)(iii) and, if necessary, 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 (with a prompt written notice thereof to the Rights
Agreement) at such time as the suspension is no longer in effect. For purposes
of this Section 11(a)(iii), the value of each Unit, each share of Common Stock
and the per share or unit value of any Unit Equivalent shall be deemed to equal
the Current Market Price thereof as of the Stock Acquisition Date.
(b) In case the Company shall fix a record date for the
issuance of rights (other than the Rights), options or warrants to all holders
of shares of Preferred Stock entitling them to subscribe for or purchase (for a
period expiring within 45 calendar days after this record date) shares of
Preferred Stock, securities having the same rights, privileges and preferences
as the Preferred Stock ("Equivalent Preferred Securities") or securities
convertible into Preferred Stock or Equivalent Preferred Securities at a price
per share of Preferred Stock or per unit of Equivalent Preferred Securities (or
having a conversion price per share or unit, if a security convertible into
Preferred Stock or Equivalent Preferred Securities) less than the Current Market
Price per share of Preferred Stock on the record date, the Purchase Price to be
in effect after the record date shall be determined by multiplying the Purchase
Price in effect immediately prior to the record date by a fraction, the
numerator of which shall be the number of shares of Preferred Stock outstanding
on such record date, plus the number of shares of Preferred Stock which the
aggregate offering price of the total number of shares of Preferred Stock and/or
units of Equivalent Preferred Securities (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would purchase
at that Current Market Price, and the denominator of which shall be the number
of shares of Preferred Stock outstanding on such record date, plus the number of
additional shares of Preferred Stock and/or units of Equivalent Preferred
Securities to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible). In case the
subscription price may be paid by delivery of consideration part or all of which
may be in a form other than cash, the value of the non-cash consideration shall
be as determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent.
Shares of Preferred Stock and units of Equivalent Preferred Securities owned by
or held for the account of the Company shall not be deemed outstanding for the
purpose of any such computation. This 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 the record date had not been
fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of shares of Preferred Stock (including any such
distribution made in connection with a consolidation, merger or share exchange
in which the Company is the continuing corporation) of evidences of
indebtedness, cash (other than a regular quarterly cash dividend), assets (other
than a dividend payable in shares of Preferred Stock, but including any dividend
payable in stock other than Preferred Stock) or subscription rights or warrants
(excluding those referred to in Section 11(b)), the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to the record date by a fraction, the
numerator of which shall be the Current Market Price per share of Preferred
Stock on the record date, less the fair market value (as determined in good
faith by the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent) of the portion of the
cash, assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to a share of Preferred Stock and the
denominator of which shall be such Current Market Price per share of Preferred
Stock; provided, however, that in no event shall the consideration to be paid
upon exercise of one Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon the exercise of one Right. These
adjustments shall be made successively whenever such a record date is fixed; and
in the event that the distribution is not so made, the Purchase Price shall be
adjusted to be the Purchase Price which would have been in effect if such record
date had not been fixed.
(d) (i) For the purpose of any computation hereunder, other
than computations made pursuant to Section 11(a)(iii), and subject to Section
11d(ii), the "Current Market Price" per share of stock or unit of other
securities on any date shall be deemed to be the average of the daily closing
prices per share of such stock or unit of other securities 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 Market Price
per share of any stock or unit of other securities is determined during a period
following the announcement by the issuer of that stock or other security of (i)
any dividend or distribution on such stock or other securities (other than a
regular quarterly cash dividend and other than the Rights), or (ii) any
subdivision, split, combination or reclassification of that stock or other
securities, and prior to the expiration of the requisite 30 Trading Day period,
the ex-dividend date for the dividend or distribution, or the record date for
the subdivision, combination or reclassification occurs, then, and in each such
case, the Current Market Price shall be properly adjusted to take into account
ex-dividend trading. The closing price for each day shall be the last sale
price, regular way, or, in case no such sale takes place on that 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 shares of stock or units of securities listed or admitted to trading on the
NYSE or, if the shares of stock or units of any other securities are not listed
or admitted to trading on the NYSE, as reported in the principal consolidated
transaction reporting system with respect to shares of stock or units of other
securities listed on the principal national securities exchange on which the
shares of stock or units of other securities are listed or admitted to trading
or, if the shares of stock or units of other security are not listed or admitted
to trading on any national securities exchange, the last quoted sale price or,
if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities
Dealers, Inc., Automated Quotations System or any other system then in use, or,
if on any such date the shares of such stock or units of such other security are
not quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in such stock
or other securities 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 shares of such stock or units of other securities are
listed or admitted to trading is open for the transaction of business or, if the
shares of such stock or other units of such security are not listed or admitted
to trading on any national securities exchange, a Business Day. Subject to
Section 11(d)(ii) with respect to Units, if such stock or units of other
securities is not publicly held or not so listed, traded or quoted, "Current
Market Price" per share or other unit of such securities shall mean the fair
value per share of stock or other unit of such securities as determined in good
faith by the Board of Directors of the Company whose determination shall be
described in a statement filed with the Rights Agent and shall be conclusive for
all purposes.
(ii) For the purpose of any computation hereunder, the
"Current Market Price" per Unit shall be determined in the same manner as set
forth above in paragraph (i) of this Section 11(d) (other than the last sentence
thereof). If the Current Market Price per Unit cannot be determined in the
manner provided above because the Units are not publicly held, listed or traded
or quoted in a manner described in paragraph (i) of this Section 11(d), the
"Current Market Price" per Unit shall be conclusively deemed to be an amount
equal to the Current Market Price per share of the Common Stock. If the shares
of Common Stock and the Units are not listed or traded or quoted as described in
Section 11(d)(i), "Current Market Price" per share thereof shall mean the fair
value per share of Common Stock as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all purposes.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least one percent 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 ten-thousandth of a Unit or share of
Common Stock or any other 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 mandates such adjustment, or (ii) the Final Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a), the holder of any Right thereafter exercised shall
become entitled to receive any securities other than Units, thereafter the
number of the other securities so receivable upon exercise of any Right and the
Purchase Price thereof shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the shares of Preferred Stock and/or Units contained in Sections
11(a), (b), (c), (d), (e), (g), (h), (i), (j), (k) and (m), and the provisions
of Sections 7, 9, 10, 13 and 14 with respect to the shares of Preferred Stock
and/or Units shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of Units (and/or other
securities) 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
Units (calculated to the nearest one-thousandth) equal to the quotient obtained
by (i) multiplying (x) the number of Units covered by a Right immediately prior
to this adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price, and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price or any adjustment to the number of shares of
Preferred Stock for which a Right may be exercised, to adjust the number of
Rights, in lieu of any adjustment in the number of Units purchasable upon the
exercise of a Right. Each of the Rights outstanding after the adjustment in the
number of Rights shall be exercisable for the number of Units 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 ten-thousandth) equal to the quotient 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 (with prompt
written notice thereof to the Rights Agent) 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 date thereafter, but, if the
Right Certificates have been issued, shall be at least 10 days later than the
date of the public announcement. If Right Certificates have been issued, upon
each adjustment of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to the
registered holders of Right Certificates on the record date Right Certificates
evidencing, subject to Section 14, the additional Rights to which the holders
shall be entitled as a result of such adjustment, or, at the option of the
Company, shall cause to be distributed to such registered holders in
substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be distributed
shall be issued, executed and countersigned in the manner provided for herein
(and may bear, at the option of the Company, the adjusted Purchase Price) and
shall be registered in the names of the registered holders 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 Units issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to express the
Purchase Price per share and the number of shares 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 attributable to the Units,
shares of Common Stock or other securities issuable upon exercise of the Rights,
the Company shall take any corporate action, including using its best efforts to
obtain any required shareholder approvals, which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally issue
fully paid and nonassessable Units, shares of Common Stock or other securities
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 (with prompt written notice
thereof to the Rights Agent) until the occurrence of such event the issuance to
the holder of any Right exercised after such record date the Units and/or other
securities of the Company, if any, issuable upon such exercise over and above
the shares of Preferred Stock and/or other 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 the additional Units and/or other securities upon the occurrence of
the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that in their good faith judgment the Board of
Directors of the Company shall determine to be advisable in order that any (i)
consolidation or subdivision of the Preferred Stock, (ii) issuance for cash of
any shares of Preferred Stock at less than the Current Market Price, (iii)
issuance for cash of shares of Preferred Stock or securities which by their
terms are convertible into or exchangeable for shares of Preferred Stock, (iv)
stock dividends or (v) issuance of rights, options or warrants referred to in
this Section 11, hereafter made by the Company to holders of its Preferred Stock
shall not be taxable to such shareholders.
(n) The Company covenants and agrees that it shall not, at any
time after the Distribution Date, (i) consolidate with any other Person (other
than a Subsidiary of the Company), (ii) merge with or into any other Person
(other than a Subsidiary of the Company), (iii) effect a share exchange with any
other Person (other than a Subsidiary of the Company) or (iv) sell or transfer
(or permit any Subsidiary to sell or transfer), in one transaction or a series
of related transactions, assets or earning power aggregating more than 50% of
the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to, any other Person or Persons (other than the Company and/or any of its
Subsidiaries), if (x) at the time of or immediately after such consolidation,
merger, share exchange, sale or transfer there are any rights, warrants or other
instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately after
such consolidation, merger, share exchange, sale or transfer, the shareholders
of the Person who constitutes, or would constitute, the "Principal Party" for
purposes of Section 13(a) shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates and Associates. The
Company shall not consummate any such consolidation, share exchange, merger,
sale or transfer unless prior thereto the Company and such other Person shall
have executed and delivered to the Rights Agent a supplemental agreement
evidencing compliance with this Section 11(n).
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23, Section 24 or
Section 27, 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.
(p) Anything in this Rights Agreement to the contrary
notwithstanding, in the event that at any time after the date of this Rights
Agreement and prior to the Distribution Date, the Company shall (i) declare or
pay any dividend on the shares of Common Stock payable in shares of Common Stock
or (ii) effect a subdivision or split the outstanding shares of Common Stock
into a greater number of shares of Common Stock or (iii) combine or consolidate
the outstanding shares of Common Stock into a small number of shares or effect a
reverse split of the outstanding shares of Common Stock, then in any such case,
each share of Common Stock outstanding following payment of such dividend such
subdivision, split, combination, consolidation or issuance shall continue to
have one Right (as adjusted as otherwise provided herein) associated therewith
and the Purchase Price following any such event shall be proportionately
adjusted to equal the result obtained by multiplying the Purchase Price
immediately prior to such event by a fraction the numerator of which shall be
the total number of shares of Common Stock 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. The
adjustment provided for in the preceding sentence shall be made successively
whenever such a dividend is declared or paid or such a subdivision, combination
or consolidation is effected.
Section 12. Certification of Adjustments. Whenever an
adjustment is made as provided in Sections 11 or 13, the Company shall (a)
promptly prepare a certificate setting forth the adjustment and a brief,
reasonably detailed statement of the facts, computations and methodology giving
rise to such adjustment, (b) promptly file with the Rights Agent and with each
transfer agent for the shares of Common Stock and Preferred Stock a copy of the
certificate and, (c) other than in connection with an adjustment pursuant to
Section 11(p), mail a brief summary thereof to each registered holder of a Right
Certificate (or, if prior to the Distribution Date, to each holder of record of
shares of Common Stock) in accordance with Section 26. Notwithstanding the
foregoing sentence, the failure of the Company to give such notice shall not
affect the validity of, the force or effect of, or the requirement for, the
adjustment. The Rights Agent shall be fully protected in relying on any
certificate prepared by the Company pursuant to Sections 11 or 13 and shall have
no duty with respect to any adjustment therein contained. Any adjustment to be
made pursuant to Sections 11 or 13 shall be effective as of the date of the
event giving rise to the adjustment.
Section 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power.
(a) In the event that, at any time on or after the Stock
Acquisition Date, directly or indirectly, (x) the Company shall consolidate
with, merge with and into, any other Person or Persons and the Company shall not
be the surviving or continuing corporation of the consolidation or merger, or
engage in any share exchange pursuant to which its shares are acquired, (y) any
Person or Persons shall consolidate with, or merge with and into, the Company,
or engage in any share exchange with the Company, and the Company shall be the
continuing, surviving or acquiring corporation of the consolidation, merger or
share exchange and, in connection with the consolidation, merger or share
exchange, all or part of the outstanding shares of Common Stock shall be changed
into or exchanged for stock or other securities of any other Person or of the
Company or cash or any other property, or (z) the Company or one or more of its
Subsidiaries shall sell or otherwise transfer to any other Person or any
Affiliate or Associate of such Person, in one or a series of related
transactions, assets or earning power aggregating more than 30% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole), then, on
the first occurrence of any such event on or after the Stock Acquisition Date
(each such event a "Section 13 Event"), proper provision shall be made so that
(i) each registered holder of a Right shall, for a period of 60 days after the
later of the occurrence of such event and the effectiveness of an appropriate
registration statement under the Securities Act pursuant to Section 13(c), have
the right to receive, upon the exercise thereof and payment of the Purchase
Price in accordance with the terms of this Rights Agreement, in lieu of Units,
such number of shares of validly issued, fully paid and nonassessable 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 Units for which a Right was exercisable
immediately prior to the first occurrence of a Section 13 Event (or, if a
Section 11(a)(ii) Event has occurred prior to the first occurrence of a Section
13 Event, multiplying the Purchase Price in effect immediately prior to the
first occurrence of a Section 11(a)(ii) Event by the number of Units for which a
Right was exercisable immediately prior to such first occurrence of a Section
11(a)(ii) Event) and (2) dividing that product by 50% of the Current Market
Price (determined as provided in Section 11(d)) per share of the Common Stock of
the Principal Party on the date of consummation of the Section 13 Event (or the
Current Market Price of other securities or property of the Principal Party as
of such date); provided that the Purchase Price and the number of shares of
Common Stock of the Principal Party issuable upon exercise of each Right shall
be further adjusted as appropriate to reflect any stock split, stock dividend or
similar transaction, or as provided in this Rights Agreement to reflect any
other events, occurring after the date of the first occurrence of a Section 13
Event; (ii) the Principal Party shall thereafter be liable for, and shall
assume, by virtue of such Section 13 Event, all the obligations and duties of
the Company pursuant to this Rights Agreement; (iii) the term "Company" for all
purposes of this Rights Agreement shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the provisions of Section
11 shall only apply to the Principal Party following the first occurrence of a
Section 13 Event; and (iv) the Principal Party shall take such steps (including,
but not limited to, the reservation of a sufficient number of shares of its
authorized Common Stock, or if there are an insufficient number of authorized
shares of Common Stock, securities with rights substantially similar to those
shares of Common Stock, which have not been issued or reserved for any other
purpose in order to permit the exercise in full of the Rights in accordance with
this Section 13) in connection with the consummation of any such transaction as
may be necessary to assure that the provisions of this Rights Agreement shall
thereafter be applicable, as nearly as reasonably may be, in relation to its
shares of Common Stock thereafter deliverable upon the exercise of the Rights;
provided, however, that, upon the subsequent occurrence of any merger,
consolidation, share exchange, sale of all or substantially all assets,
recapitalization, reclassification of shares, reorganization or other
extraordinary transaction in respect of the Principal Party, each holder of a
Right shall thereupon be entitled to receive, upon exercise of a Right and
payment of the Purchase Price, the cash, shares, rights, warrants and other
property which the holder would have been entitled to receive had the holder, at
the time of that transaction, owned the shares of Common Stock of the Principal
Party purchasable upon the exercise of a Right, and the 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 for such cash, shares, rights, warrants and other
property.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in (x) or (y) of the first
sentence of Section 13(a) : (A) the Person that is the issuer of the
securities into which shares of Common Stock of the Company are converted
in such merger, consolidation or share exchange or, if there is more than
one such issuer, the issuer the shares of Common Stock of which has the
greatest market value or (B) if no securities are so issued, (x) the Person
that is the other party to the merger, consolidation or share exchange and
that survives said merger, consolidation or share exchange or, if there is
more than one such Person, the Person the shares of Common Stock of which
has the greatest market value or (y) if the Person that is the other party
to the merger, consolidation or share exchange does not survive the merger,
consolidation or share exchange, the Person that does survive the merger,
consolidation or share exchange (including the Company if it survives); and
(ii) in the case of any transaction described in (z) of the first sentence in
Section 13(a), the Person that is the party receiving the greatest portion
of the assets or earning power transferred pursuant to such transaction or
transactions or, if 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 those Persons as is the
issuer of shares of Common Stock having the greatest market value of shares
outstanding;
provided, however, that in any such case described in the foregoing (b)(i) or
(b)(ii), (1) if the shares of Common Stock of that Person is not at such time
and has not been continuously over the preceding 12-month period registered
under Section 12 of the Exchange Act, and that Person is a direct or indirect
Subsidiary of another Person the shares of Common Stock of which is and has been
so registered, the term "Principal Party" shall refer to that other Person, (2)
if that Person is a Subsidiary, directly or indirectly, of more than one Person,
the shares of Common Stock of all of which are and have been so registered, the
term "Principal Party" shall refer to whichever of those Persons is the issuer
of the shares of Common Stock having the greatest market value of shares
outstanding and (3) in case that Person is owned, directly or indirectly, by a
joint venture formed by two or more Persons that are not owned, directly or
indirectly, by the same Person, the rules set forth in (1) and (2) above shall
apply to each of the chains of the ownership having an interest in such joint
venture as if the party were a "Subsidiary" of both or all of such joint
venturers and the Principal Parties in each such chain shall bear the
obligations set forth in this Section 13 in the same ratio as their direct or
indirect interests in such Person bear to the total of those interests.
(c) The Company shall not consummate any consolidation,
merger, share exchange, sale or transfer referred to in Section 13(a) 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) shall promptly be performed in accordance
with their terms and that such consolidation, merger, share exchange, sale or
transfer of assets shall not result in a default by the Principal Party under
this Rights Agreement as the same shall have been assumed by the Principal Party
pursuant to Sections 13(a) and (b) and further 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 the
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) for at least 60 days after the
registration first becomes effective, and similarly
comply with applicable state securities laws;
(ii) use its best efforts, if the shares of Common Stock
of the Principal Party shall become listed on a
national securities exchange, to list (or continue
the listing of) the Rights and the securities
purchasable upon exercise of the Rights on such
securities exchange and, if the shares of Common
Stock of the Principal Party shall not be listed on a
national securities exchange, to cause the Rights and
the securities purchasable upon exercise of the
Rights to be listed by the NYSE or another national
securities exchange;
(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 shares of Common
Stock of the Principal Party subject to purchase upon
exercise of outstanding Rights.
In the event that any of the transactions described in Section 13(a) shall occur
at any time after the occurrence of a transaction described in Section
11(a)(ii), the Rights shall thereafter continue to be exercisable in the manner
described in Section 13(a). The provisions of this Section 13 shall similarly
apply to all successive Section 13 Events.
(d) Furthermore, in case the Principal Party which is to be a
party to a transaction referred to in this Section 13 has a provision in any of
its authorized securities or in its charter or bylaws or other instrument
governing its corporate affairs, which provision would have the effect of (i)
causing the Principal Party to issue, in connection with, or as a consequence
of, the consummation of a transaction referred to in this Section 13, shares of
Common Stock of the Principal Party at less than the then Current Market Price
or par value per share or other securities of the Principal Party at less than
such then Current Market Price (other than to holders of Rights pursuant to this
Section 13) or (ii) providing for any special payment, tax or similar provisions
in connection with the issuance of shares of Common Stock of the Principal Party
pursuant to the provisions of this 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.
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.
Units may, at the election of the Company, be evidenced by depositary receipts,
pursuant to an appropriate agreement between the Company and a depositary
selected by it, provided that the agreement shall provide that the holders of
the depositary receipts shall have all the rights, privileges and preferences to
which they are entitled as beneficial owners of the Units represented by the
depositary receipts. In lieu of such fractional Rights, there may be paid to the
holders of record of the Right Certificates with regard to which the fractional
Rights would otherwise be issuable an amount in cash equal to the same fraction
of the then Current Market Value of a whole Right.
(b) The Company shall not be required to issue fractions of
Units or other securities upon exercise of the Rights or to distribute
certificates which evidence fractional Units or other securities. In lieu of
issuing fractions of Units or other securities, there may be paid to the
registered holders of Right Certificates at the time the Right Certificates are
exercised as herein provided an amount in cash equal to the same fraction of the
then Current Market Value of a Unit or other securities, as the case may be.
(c) The holder of a Right by the acceptance of a Right
expressly waives his right to receive any fractional Right or fractional Unit or
other fractional securities (other than the fractional shares of Preferred Stock
represented by Units) upon exercise of a Right.
Section 15. Rights of Action. All rights of action in respect
of this Agreement, except those rights of action vested in the Rights Agent
pursuant to Sections 18 and 20, are vested in the respective registered holders
of the Right Certificates (and, prior to the Distribution Date, the holders of
record of the Common Stock); and any registered holder of any Right Certificate
(or, prior to the Distribution Date, the shares of Common Stock), without the
consent of the Rights Agent or of the holder of any other Right Certificate (or,
prior to the Distribution Date, any shares of Common Stock), may, in its own
behalf and for its own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company or any other Person to enforce,
or otherwise act in respect of, its right to exercise the Rights evidenced by
the Right Certificate in the manner provided in the 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,
accordingly, that they will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened violations
of, the obligations of any Person subject to this Agreement.
Section 16. Agreement of Right Holders. Every holder
of a Right by accepting the same consents
and agrees with the Company and the Rights
Agent and with every other holder of a
Right that:
(a) prior to the Distribution Date, the Rights will not be
evidenced by a Right Certificate and will be transferable only in connection
with the transfer of Common Stock;
(b) after the Distribution Date, the Right Certificates will
be transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purposes, duly endorsed or
accompanied by a proper instrument of transfer;
(c) subject to Sections 6 and 7(e), the Company and the Rights
Agent may deem and treat the Person in whose name the Right Certificate (or,
prior to the Distribution Date, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Right Certificate
or the associated Common Stock certificate made by anyone other than the Company
or the Rights Agent or the transfer agent of the shares of Common Stock) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company, its directors, officers, employees and agents nor
the Rights Agent shall have any liability to any holder of a Right or other
Person as a result of its inability to perform any of its obligations under this
Agreement by reason of any preliminary or permanent injunction or other order,
decree, judgment or ruling (whether interlocutary or final) issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation.
Section 17. Right Certificate Holder Not Deemed a Shareholder.
No holder of a Right, as such, shall be entitled to vote, receive dividends in
respect of or be deemed for any purpose to be the holder of shares of Common
Stock, Preferred Stock, Units or any other securities of the Company which may
at any time be issuable upon the exercise of the Rights, nor shall anything
contained herein or in any Right Certificate be construed to confer upon the
holder of any Right Certificate, as such, any of the rights of a shareholder of
the Company or any right to vote for the election of directors or upon any
matter submitted to shareholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting shareholders, or to receive dividends or subscription rights
in respect of any such stock or securities, or otherwise, until the Right or
Rights evidenced by such Right Certificate shall have been exercised in
accordance with the provisions.
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 preparation, delivery, amendment,
administration and execution of this Rights Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify the
Rights Agent for, and to hold it harmless against, any loss, liability, damage,
judgment, fine, penalty, claim, demand, settlement, cost or expense incurred
without gross negligence, bad faith or willful misconduct on the part of the
Rights Agent (which gross negligence, bad faith or willful misconduct must be
finally determined by a court of competent jurisdiction) for any action taken,
suffered or omitted by the Rights Agent in connection with the acceptance and
administration of this Rights Agreement, including without limitation the cost
and expenses of defending against any claim of liability in the premises.
(b) The Rights Agent shall be authorized and protected and
shall incur no liability for or in respect of any action taken, suffered or
omitted by it in connection with its acceptance and administration of this
Rights Agreement in reliance upon any Right Certificate, certificate for shares
of Common or Preferred Stock, Units or 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 reasonably believed by it to be genuine and to be signed, executed and,
where necessary, guaranteed, verified or acknowledged, by the proper person or
persons.
The indemnity provided herein shall survive the termination of
this Agreement and the termination and the expiration of the Rights. The costs
and expenses incurred in enforcing this right of indemnification shall be paid
by the Company. Anything to the contrary notwithstanding, in no event shall the
Rights Agent be liable for special, punitive, indirect, consequential or
incidental loss or damage of any kind whatsoever (including but not limited to
lost profits) (other than by reason of bad faith or willful misconduct), even if
the Rights Agent has been advised of the likelihood of such loss or damage. Any
liability of the Rights Agent under this Rights Agreement (other than by reason
of bad faith or willful misconduct) will be limited to the amount of fees paid
by the Company to the Rights Agent.
Section 19. Merger or Consolidation or Change of Name
of Rights Agent.
(a) Any Person into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any Person
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any Person succeeding to the
shareholder services business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Rights Agreement without
the execution or filing of any paper or any further act on the part of any of
the parties hereto, provided that such Person would be eligible for appointment
as a successor Rights Agent under the provisions of Section 21. In case at the
time such successor Rights Agent shall succeed to the agency created by this
Rights Agreement, any of the Right Certificates shall have been countersigned
but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Rights Agreement.
(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 such Right Certificates so countersigned; and
in case at that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right Certificates either
in its prior name or in its changed name; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in
this Rights Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes to perform only the duties and obligations expressly imposed by this
Rights Agreement upon the following terms and conditions, by all of which the
Company and the holders of Right Certificates, by their acceptance thereof,
shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the advice or opinion of such counsel
shall be full and complete authorization and protection to the Rights Agent and
the Rights Agent shall incur no liability for or in respect of, any action
taken, suffered or omitted to be taken by it in good faith and in accordance
with such advice or opinion.
(b) Whenever in the performance of its duties under this
Rights Agreement the Rights Agent shall deem it necessary or desirable that any
fact or matter (including, without limitation, the identity of any Acquiring
Person and the determination of Current Market Price) be proved or established
by the Company prior to taking, suffering or omitting to take any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chairman of the Board of Directors,
the Chief Executive Officer, the President, or any Vice President of the Company
and by the Treasurer, any Assistant Treasurer, the Secretary or any Assistant
Secretary of the Company and delivered to the Rights Agent; and such certificate
shall be full authorization and protection to the Rights Agent (and the Rights
Agent shall incur no liability for or in respect of) any action taken, suffered
or omitted in good faith by it under the provisions of this Rights Agreement in
reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason
of any of the statements of fact or recitals contained in
this Rights Agreement or in the Right Certificates (except its countersignature
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 liability or
responsibility in respect of the validity of this Rights Agreement or the
execution and delivery (except the due execution by the Rights Agent) or in
respect of the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Rights Agreement or in
any Right Certificate; nor shall it be responsible for any adjustment required
under the provisions of Sections 11 or 13 or responsible for the manner, method
or amount of any such adjustment or the ascertaining of the existence of facts
that would require any such adjustment (except with respect to the exercise of
Rights evidenced by Right Certificates after actual notice of any such
adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Preferred Stock or Common Stock to be issued pursuant to this Rights
Agreement or any Right Certificate or as to whether any shares of Preferred
Stock (or other securities, as the case may be) will, when issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Rights Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
the Chairman of the Board of Directors, the Chief Executive Officer, the
President or any Vice President, the Treasurer, Assistant Treasurer, the
Secretary or any Assistant Secretary of the Company, and to apply to such
officers for advice or instructions in connection with its duties, and such
instructions shall be full authorization and protection to the Rights Agent and
the Rights Agent shall incur no liability for or in respect of any action taken,
suffered or omitted to be taken by it in good faith in accordance with
instructions of any such officer. The Rights Agent shall be fully authorized and
protected in relying upon the most recent instructions received by any such
officer.
(h) The Rights Agent and any shareholder, affiliate, 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
the Rights Agent under this Rights Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or for any other
Person.
(i) 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 either not been completed or indicates an
affirmative response to clause 1 and/or 2 of such certificate, the Rights Agent
shall not take any further action with respect to such requested exercise of
transfer without first consulting with the Company.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder or in the exercise of its
rights if it believes that repayment of such funds or adequate indemnification
against such risk or liability is not reasonably assured to it.
(k) 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 for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company or any other Person resulting from any
such act, default, neglect or misconduct (absent gross negligence, bad faith or
willful misconduct) in the selection and continued employment thereof.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Rights Agreement upon 30 days' notice in writing mailed to the Company and to
each transfer agent of the shares of Common Stock by registered or certified
mail, and to the registered holders of the Right Certificates by mail. The
Company may remove the Rights Agent or any successor Rights Agent (with or
without cause) upon 30 days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the
shares of Common Stock by registered or certified mail, and to the registered
holders of the Right Certificates by 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. Notwithstanding the foregoing
provisions of this Section 21, in no event shall the resignation or removal of a
Rights Agent be effective until a successor Rights Agent shall have been
appointed and have accepted such appointment. If the Company shall fail to make
such appointment within a period of 30 days after 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 registered holder of a Right Certificate
(who shall, with such notice, submit such holder's Right Certificate for
inspection by the Company), then the incumbent Rights Agent or 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 Person organized and
doing business under the laws of the United States or any State thereof, in good
standing, which is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50,000,000 or (b) an Affiliate
controlled by a Person described in clause (a) of this sentence. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the time held
by it hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Stock, and mail a
notice thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as
the case may be.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Rights Agreement or of the Rights
to the contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the purchase price per share and the number
or kind or class of shares of stock or other securities or property purchasable
under the Right Certificates made in accordance with the provisions of this
Rights Agreement. In addition, in connection with the issuance or sale of shares
of Common Stock following the Distribution Date and prior to the earlier of the
Redemption Date and the Final Expiration Date, the Company (a) shall, with
respect to shares of Common Stock so issued or sold pursuant to the exercise of
stock options or under any employee plan or arrangement, or upon the exercise,
conversion or exchange of securities hereinafter issued by the Company, and (b)
may, in any other case, if deemed necessary or appropriate by the Board of
Directors of the Company, issue Right Certificates representing the appropriate
number of Rights in connection with such issuance or sale; provided, however,
that (i) no such Right Certificate shall be issued if, and to the extent that,
the Company shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Company or the
Person to whom such Right Certificate would be issued, and (ii) no such Right
Certificate shall be issued, if, and to the extent that, appropriate adjustment
shall otherwise have been made in lieu of the issuance thereof.
Section 23. Redemption.
(a) (i) The Board of Directors of the Company may, at its
option, at any time prior to the earlier of (x) the Close of Business on the
Stock Acquisition Date or (y) the Close of Business on the Final Expiration
Date, redeem all but not less than all of the then outstanding Rights at a
redemption price of $0.01 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date (such redemption price being hereinafter referred to as
the "Redemption Price").
(ii) In addition, the Board of Directors of the Company may
redeem all but not less than all of the then outstanding Rights at the
Redemption Price following the occurrence of a Stock Acquisition Date but prior
to any Section 13 Event either (x) in connection with any event specified in
clauses (x),(y) or (z) of Section 13(a) in which all holders of shares of Common
Stock and Units are treated alike and not involving (other than as a holder of
shares of Common Stock or Units being treated like all other such holders) an
Acquiring Person or an Affiliate or Associate of an Acquiring Person or any
other Person in which such Acquiring Person, Affiliate or such Associate has any
interest, or any other Person acting directly or indirectly on behalf of or in
association with any such Acquiring Person, Affiliate or Associate, or (y)
following the occurrence of a Stock Acquisition Date if and for as long as
neither the Acquiring Person nor any Affiliate or Associate thereof is
thereafter the Beneficial Owner of Voting Securities representing 10% or more of
the Voting Power, and at the time of redemption there is no other person who is
an Acquiring Person.
(b) In the case of a redemption permitted under Section 23(a),
immediately upon the action of the Board of Directors of the Company ordering
the redemption of the Rights, evidence of which shall have been filed with the
Rights Agent and without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter of the holders
of Rights shall be to receive the Redemption Price. Within 10 days after the
action of the Board of Directors of the Company ordering any such redemption of
the Rights, the Company shall give notice of such redemption to the Rights Agent
and the holders of the then outstanding Rights by mailing such notice to the
Rights Agent and to all such holders at their last addresses as they appear upon
the registry books of the Rights Agent or, prior to the Distribution Date, on
the registry books of the Transfer Agent for the Common Stock. Any notice which
is mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice. Each such notice of redemption will state the
method by which the payment of the Redemption Price will be made.
In the case of a redemption permitted under Section 23(a), the
Company may, at its option, discharge all of its obligations with respect to the
Rights by (i) issuing a press release announcing the manner of redemption of the
Rights (with prompt notice thereof to the Rights Agent) and (ii) mailing payment
of the Redemption Price to the registered holders of the Rights at their last
addresses as they appear on the registry books of the Rights Agent or, prior to
the Distribution Date, on the registry books of the Transfer Agent of the Common
Stock, and upon such action, all outstanding Rights Certificates shall be null
and void without any further action by the Company.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its option,
at any time after the time that any Person becomes an Acquiring Person, exchange
all or part of the then outstanding and exercisable Rights (which shall not
include Rights that have become null and void pursuant to the provisions of
Section 7(e)) for Units at an exchange ratio equal to two Units (or, to the
extent determined by the Board of Directors of the Company, shares of Common
Stock in lieu thereof) per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction involving either the shares of
Common Stock or the shares of Preferred Stock occurring after the date of this
Agreement (such exchange ratio being hereinafter referred to as the "Exchange
Ratio").
(b) Immediately upon the action of the Board of Directors of
the Company ordering the exchange of any Rights pursuant to Section 24(a) and
without any further action and without any notice, the right to exercise such
Rights shall terminate and the only right thereafter of the holders of such
Rights shall be to receive that number of Units (or shares of Common Stock, as
applicable) 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 (with prompt notice thereof to the Rights Agent); provided, however,
that the failure to give, or any defect in, such notice shall not affect the
validity of such exchange. The Company shall promptly mail a notice of any such
exchange to all of the holders of Rights at their last addresses as they appear
upon the registry books of the Rights Agent. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder receives
the notice. Each notice of exchange will state the method by which the exchange
of Units (or shares of Common Stock, as applicable) 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 null and void pursuant to the
provisions of Section 7(e), held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company,
at its option, may, and to the extent there are an insufficient number of
authorized shares of Preferred Stock not reserved for any other purpose to
exchange all of the outstanding Rights shall, substitute shares of Common Stock
or Unit Equivalents for some or all of the Units exchangeable for Rights, at the
initial rate of a share of Common Stock or Unit Equivalent for each Unit.
(d) The Board of Directors of the Company shall not authorize
any exchange transaction referred to in Section 24(a) unless at the time such
exchange is authorized there shall be sufficient shares of Preferred Stock (or
shares of Common Stock, as applicable) issued but not outstanding, or authorized
but unissued, to permit the exchange of Rights as contemplated in accordance
with this Section 24.
Section 25. Notice of Proposed Actions.
(a) In case the Company shall propose (i) to pay any dividend
to the holders of record of its shares of Preferred Stock payable in stock of
any class or to make any other distribution to the holders of record of its
shares of Preferred Stock (other than a regular periodic cash dividend), (ii) to
offer to the holders of record of its shares of Preferred Stock options,
warrants, or other rights to subscribe for or to purchase shares of Preferred
Stock (including any security convertible into or exchangeable for shares of
Preferred Stock) or shares of stock of any class or any other securities,
options, warrants, convertible or exchangeable securities or other rights, (iii)
to effect any reclassification of its shares of Preferred Stock or any
recapitalization or reorganization of the Company, (iv) to effect any
consolidation or merger with or into, or any share exchange with, or to effect
any sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one or more transactions, of more than
50% of the assets or earning power of the Company and its Subsidiaries (taken as
a whole) to, any other Person or Persons, or (v) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the Company
shall give to the Rights Agent and to each registered holder of a Right
Certificate, in accordance with Section 26, notice of such proposed action,
which shall specify the record date for the purposes of such dividend or
distribution, or the date on which such reclassification, recapitalization,
reorganization, consolidation, merger, share exchange, sale or transfer of
assets, liquidation, dissolution, or winding up is to take place and the record
date for determining participation therein by the holders of record of shares of
Preferred Stock, if any such date is to be fixed, and such notice shall be so
given in the case of any action covered by clause (i) or (ii) above at least 10
days prior to the record date for determining holders of record of the shares of
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 record of the shares of
Preferred Stock, whichever shall be the earlier. The failure to give notice
required by this Section 25 or any defect therein shall not affect the legality
or validity of the action taken by the Company or the vote upon any such action.
(b) In case a Section 11(a)(ii) Event or Section 13 Event is
proposed, then, in any such case, the Company shall give to the Rights Agent and
to each registered holder of Rights, in accordance with Section 26, notice of
the occurrence of such event or proposal of such transaction as promptly as
practicable which notice shall specify the proposed event and the consequences
of the event to holders of Rights under Section 11(a)(ii) or Section 13, as the
case may be, and, upon consummating such transaction, shall similarly give
notice thereof to each holder of Rights.
Section 26. Notices. Notices or demands authorized by this
Rights Agreement to be given or made by the Rights Agent or by the registered
holder of any Right Certificate or Right to or on behalf of 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:
BellSouth Corporation
1155 Peachtree Street, N.E.
Atlanta, Georgia 30309
Attention: Treasurer
Subject to the provisions of Section 21, any notice or demand authorized by this
Rights Agreement to be given or made by the Company or by the registered holder
of any Right Certificate or Right to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
ChaseMellon Shareholder Services, L.L.C.
85 Challenger Road
Ridgefield Park, NJ 07660-2108
Attention: Relationship Manager
Notices or demands authorized by this Rights Agreement to be given or made by
the Company or the Rights Agent to the registered holder of any Right
Certificate or Right shall be sufficiently given or made if sent by mail,
postage prepaid, addressed to such holder at the address of such holder as it
appears upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the Transfer Agent.
Section 27. Supplements and Amendments. Subject to extension
by the Board of Directors by amendments, prior to the Close of Business on the
Stock Acquisition Date, 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 (including without limitation amendments that
increase or decrease the Purchase Price or Redemption Price or accelerate or
extend the Final Expiration Date), without the approval of any holders of the
Rights or shares of Common Stock. From and after the Close of Business on the
Stock Acquisition Date, 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 Right Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, or (iii) to change or supplement
the provisions hereunder in any manner which the Company may deem necessary or
desirable which shall not adversely affect the interests of the holders of Right
Certificates (other than any interest an Acquiring Person or an Affiliate or
Associate of an Acquiring Person has other than as a holder of Rights). In
addition, 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 following the occurrence of a Stock Acquisition Date but prior to a
Section 13 Event either (x) in connection with any event specified in clauses
(x), (y) and (z) of Section 13(a) in which all holders of Common Stock and Units
are treated alike and not involving (other than as a holder of shares of Common
Stock or Units being treated like all other such holders) an Acquiring Person or
an Affiliate or Associate of an Acquiring Person or any other Person in which
such Acquiring Person, Affiliate or such Associate has any interest, or any
other Person acting directly or indirectly on behalf of or in association with
any such Acquiring Person, Affiliate or Associate, or (y) following the
occurrence of a Stock Acquisition Date if and for as long as the Acquiring
Person is not thereafter the Beneficial Owner of Voting Securities representing
10% or more of the Voting Power, and at the time of such amendment or supplement
there is no other Person who is an Acquiring Person. Upon the delivery of a
certificate from an appropriate officer of the Company which states that the
proposed supplement or amendment is in compliance with the terms of this Section
27, the Rights Agent shall execute such supplement or amendment. Prior to the
Stock Acquisition Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of shares of Common Stock.
Notwithstanding anything contained herein to the contrary, the Rights Agent may,
but shall not obligated to, enter into any supplement or amendment that affects
the Rights Agent's own rights, duties, obligations or immunities under this
Rights Agreement.
Section 28. Successors. All of the covenants and provisions of this Rights
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. Benefits of this Rights Agreement. Nothing in this
Rights 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 shares of Common Stock) any legal or
equitable right, remedy or claim under this Rights Agreement but this Rights
Agreement shall be for the sole and exclusive benefit of the Company, the Rights
Agent and the registered holders of the Right Certificates (and, prior to the
Distribution Date, the shares of Common Stock).
Section 30. Georgia Contract. This Rights Agreement and each
Right Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Georgia and for all purposes shall be governed by and
construed in accordance with the laws of such state applicable to contracts to
be made and performed entirely within such state; provided, however, that for
the sole purpose of determining the rights, duties and obligations of the Rights
Agent under this Rights Agreement, the provisions of this Rights Agreement shall
be governed by and construed in accordance with the laws of the State of New
York applicable to contracts to be made or performed entirely within such State.
Section 31. Counterparts. This Rights Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 32. Descriptive Headings. Descriptive headings of the several
sections of this Rights Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions.
Section 33. Severability. If any term, provision, covenant or
restriction of this Rights Agreement is held by a court of competent
jurisdiction or other authority to be invalid, illegal, or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Rights
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
Section 34. Determination and Actions by the Board of
Directors, etc. For all purposes of this Agreement, any calculation of the
number of shares of Common Stock or Voting Securities outstanding at any
particular time, including for purposes of determining the particular percentage
of such outstanding shares of Common Stock or any other securities of which any
Person is the Beneficial Owner, shall be made in accordance with the last
sentence of Rule 13d-3(1)(i) of the General Rules and Regulations under the
Exchange Act as in effect on the date of this Agreement. The Board of Directors
of the Company (and any duly authorized committee thereof) shall have the
exclusive power and authority to administer this Agreement and to exercise all
rights and powers specifically granted to the Board of Directors of the Company,
or the Company, or as may be necessary or advisable in the administration of
this Agreement, including, without limitation, the right and power to (i)
interpret the provisions of this Agreement, and (ii) make all determinations
deemed necessary or advisable for the administration of this Agreement
(including a determination to redeem or not redeem the Rights or to amend the
Agreement). All such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with respect to the
foregoing) which are done or made by the Board of Directors of the Company (or
any duly authorized committee thereof) in good faith, shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights Certificates and all other parties, and (y) not subject the Board of
Directors of the Company to any liability to the holders of the Rights
Certificates. The Rights Agent is entitled always to assume the Board of
Directors (or any committee) acted in good faith and shall be fully protected
and incur no liability in reliance thereon.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Rights Agreement to be
duly executed, all as of the day and year first above written.
Attest: BELLSOUTH CORPORATION
By:/s/ Carl E. Swearingen By:/s/ R.M. Dykes
Name:Carl E. Swearingen Name R.M. Dykes
Title Senior Vice President- Title: Executive Vice President
Corporate Compliance and and Chief Financial Officer
Corporate Secretary
Attest: CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By: /s/ Marie Sandauer By: /s/ Barry A. Shapiro
Name: Marie Sandauer Name Barry A. Shapiro
Title: Vice President Title: Vice President
<PAGE>
EXHIBIT A
ARTICLES OF AMENDMENT
TO
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
BELLSOUTH CORPORATION
Pursuant to Sections 14-2-602(d) and 14-2-602(e) of the
Georgia Business Corporation Code, BellSouth Corporation (the "Corporation")
delivers these Articles of Amendment to the Amended and Restated Articles of
Incorporation of the Corporation to the Secretary of State of Georgia for
filing.
1.
The name of the Corporation is BellSouth Corporation.
2.
Article 5A of the Amended and Restated Articles of
Incorporation of the Corporation is hereby amended by deleting "30,000,000"
contained in the first paragraph thereof and substituting therefor "100." A copy
of the text of the remaining amendments to the Articles of Incorporation of the
Corporation is attached hereto as Exhibit A and incorporated by reference herein
as the text of a new Article 5B.
3.
The amendments herein provided were duly adopted by the Board
of Directors of the Corporation on November 22, 1999. Shareholder approval of
these amendments was not required.
4.
These Articles of Amendment shall become effective as of 5:00 p.m. on
December 11, 1999.
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused these Articles
of Amendment to be executed and its corporate seal to be affixed and has caused
its seal and the execution hereof to be attested, all by its duly authorized
officers, this _________ day of December, 1999.
BELLSOUTH CORPORATION
By:
Name:
Title:
<PAGE>
5B. SERIES B FIRST PREFERRED STOCK
Designation and Amount. There shall be a series of the First Preferred
Stock designated as "Series B First Preferred Stock". The number of shares
constituting such series shall be 30,000,000 and such series shall have the
preferences, limitations and relative rights set forth below.
Section 1. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of any
shares of any other series of First Preferred Stock or any other shares of
preferred stock of the Corporation ranking prior and superior to the shares of
Series B First Preferred Stock with respect to dividends, each holder of one
one-thousandth (1/1000) of a share of Series B First Preferred Stock (a "Unit")
shall be entitled to receive, when, as and if declared by the Board of Directors
out of funds legally available for that purpose, (i) quarterly dividends payable
in cash on the first day of January, April, July, and October in each year (each
such date being a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a Unit, in an amount
per Unit (rounded to the nearest cent) equal to the greater of (a) $.01 or (b)
subject to the provision for adjustment hereinafter set forth, the aggregate per
share amount of all cash dividends declared on shares of the common stock of the
Company (the "Common Stock"), since the immediately preceding quarterly Dividend
Payment Date, or, with respect to the first Quarterly Dividend Payment Date,
since the first issuance of a Unit, and (ii) subject to the provision for
adjustment hereinafter set forth, quarterly distributions (payable in kind) on
each Quarterly Dividend Payment Date in an amount per Unit equal to the
aggregate per share amount of all non-cash dividends or other distributions
(other than a dividend payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock, by reclassification or otherwise) declared
on shares of Common Stock since the immediately preceding Quarterly Dividend
Payment Date, or, with respect to the first Quarterly Dividend Payment Date,
since the first issuance of a Unit. In the event that the Corporation shall at
any time on or after the first issuance of a Unit (the "First Issuance Time")
(i) declare any dividend on outstanding shares of Common Stock payable in shares
of Common Stock, (ii) subdivide outstanding shares of Common Stock, or (iii)
combine outstanding shares of Common Stock into a smaller number of shares, then
in each such case, the amount to which the holder of a Unit was entitled
immediately prior to such event pursuant to the preceding sentence shall be
adjusted by multiplying such amount by a fraction, the numerator of which shall
be the number of shares of Common Stock that are outstanding immediately after
such event, and the denominator of which shall be the number of shares of Common
Stock that were outstanding immediately prior to such event.
(B) On or after the First Issuance Time, the Corporation shall declare
a dividend or distribution on Units as provided in paragraph (A) above
immediately after it declares a dividend or distribution on the shares of Common
Stock (other than a dividend payable in shares of Common Stock); provided,
however, that, in the event no dividend or distribution shall have been declared
on the shares of Common Stock during the period between any Quarterly Dividend
Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend
of $.01 per Unit shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.
(C) Dividends shall begin to accrue and shall be cumulative on each
outstanding Unit from the Quarterly Dividend Payment Date next preceding the
date of issuance of such Unit, unless the date of issuance of such Unit is prior
to the record date for the first Quarterly Dividend Payment Date, in which case,
dividends on such Unit shall begin to accrue from the date of issuance of such
Unit, or unless the date of issuance is a Quarterly Dividend Payment Date or is
a date after the record date for the determination of holders of Units entitled
to receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on Units in an amount less than the aggregate
amount of all such dividends at the time accrued and payable on such Units shall
be allocated pro rata on a unit-by-unit basis among all Units at the time
outstanding. The Board of Directors may fix a record date for the determination
of holders of Units entitled to receive payment of a dividend or distribution
declared thereon, which record date shall, be no more than 30 days prior to the
date fixed for the payment thereof.
Section 3. Voting Rights. The holders of Units shall have the following
voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each
Unit shall entitle the holder thereof to one vote on all matters submitted to a
vote of the shareholders of the Corporation. In the event the Corporation shall
at any time after the First Issuance Time (i) declare any dividend on
outstanding shares of Common Stock payable in shares of Common Stock, (ii)
subdivide outstanding shares of Common Stock, or (iii) combine the outstanding
shares of Common Stock into a smaller number of shares, then in each such case
the number of votes per Unit to which holders of Units were entitled immediately
prior to such event shall be adjusted by multiplying such number by a fraction,
the numerator of which shall be the number of shares of Common Stock outstanding
immediately after such event and the denominator of which shall be the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the holders of Units
and the holders of shares of Common Stock shall vote together as one class on
all matters submitted to a vote of shareholders of the Corporation.
(C) (i) If at any time dividends on any Units shall be in arrears in an
amount equal to six quarterly dividends thereon, then during the period (a
"default period") from the occurrence of such event until such time as all
accrued and unpaid dividends for all previous quarterly dividend period and for
the current quarterly dividend period on all Units then outstanding shall have
been declared and paid or set apart for payment, all holders of Units, voting
separately as a class, shall have the right to elect two (2) Directors, who
shall serve in addition to the Directors elected by the holders of shares of
Common Stock.
(ii) During any default period, such voting rights of the
holders of Units may be exercised initially at a special meeting, called
pursuant to subparagraph (iii) of this Section 3(C) or at any annual meeting of
shareholders, and thereafter at annual meetings of shareholders, provided that
neither such voting rights nor any right of the holders of Units to increase, in
certain cases, the authorized number of Directors may be exercised at any
meeting unless one-third (1/3) of the outstanding Units shall be present at such
meeting in person or by proxy. The absence of a quorum of the holders of shares
of Common Stock shall not affect the exercise by the holders of Units of such
rights. At any meeting at which the holders of Units shall exercise such voting
right initially during an existing default period, they shall have the right,
voting separately as a class, to elect two (2) Directors, who shall serve in
addition to the Directors elected by the holders of shares of Common Stock. If
the number which may otherwise be elected at any special meeting does not amount
to the required number, the holders of Units shall have the right to make such
increase in the number of Directors as shall be necessary to permit the election
by them of the required number. After the holders of Units shall have exercised
their right to elect Directors during any default period, the number of
Directors shall not be increased or decreased except as approved by a vote of
the holders of Units as herein provided or pursuant to the rights of any equity
securities ranking senior to the Units.
(iii) Unless the holders of Units shall, during an existing
default period, have previously exercised their right to elect Directors, the
Board of Directors may order, or any shareholder or shareholders owning in the
aggregate not less than 25% of the total number of Units outstanding may request
in writing, the calling of a special meeting of the holders of Units, which
meeting shall thereupon be called by the Secretary of the Corporation. Notice of
such meeting and of any annual meeting at which holders of Units are entitled to
vote pursuant to this paragraph (C)(iii) shall be given to each holder of record
of Units by mailing a copy of such notice to him at his last address as the same
appears on the books of the Corporation. Such meeting shall be called for a time
not earlier than 10 days and not later than 60 days after such order or request
or, if the Corporation is in default of the calling of such meeting within 60
days after such order or request, such meeting may be called on similar notice
by any shareholder or shareholders owning in the aggregate not less than 25% of
the total number of outstanding Units.
(iv) During any default period, the holders of shares of
Common Stock and Units, voting together, and other classes or series of shares
of the Corporation, if applicable, shall continue to be entitled to elect all
the Directors until the holders of Units shall have exercised their right to
elect two Directors voting as a separate class, after the exercise of which
right (x) the Directors so elected by the holders of Units shall continue in
office until their successors shall have been elected by such holders or until
the expiration of the default period, whichever is earlier, and (y) any vacancy
in the Board of Directors may (except as provided in paragraph (C)(ii) of this
Section 3) be filled by vote of a majority of the remaining Directors
theretofore elected by the holders of the class or series of capital stock which
elected the Director whose office shall have become vacant. References in this
paragraph (C) to Directors elected by the holders of a particular class or
series of capital stock shall include Directors elected by such Directors to
fill vacancies as provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x)
the right of the holders of Units as a separate class to elect Directors shall
cease, (y) the term of any Directors elected by the holders of Units as a
separate class shall terminate, and (z) the number of Directors shall be such
number as may be provided for in the Articles of Incorporation or By-Laws of the
Corporation irrespective of any increase made pursuant to the provisions of
paragraph (C)(ii) of this Section 3 (such number being subject, however, to
change thereafter in any manner provided by law or in the Articles of
Incorporation or By-Laws of the Corporation). Any vacancies in the Board of
Directors existing after giving effect to the provisions of clauses (y) and (z)
in the preceding sentence may be filled by a majority of the remaining
Directors.
(vi) The provisions of this paragraph (C) shall govern the
election of Directors by holders of Units during any default period
notwithstanding any other provisions of these Articles to the contrary.
(D) Except as expressly set forth herein, holders of Units 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 shares of Common Stock as set
forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Until all accrued and unpaid dividends and distributions, whether
or not declared, on outstanding Units shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends on, make any other distributions
on, or redeem or purchase or otherwise acquire for consideration any shares of
junior stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of parity stock, except dividends paid ratably on
Units and shares of all such parity stock on which dividends are payable or in
arrears in proportion to the total amounts to which the holders of such Units
and all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any parity stock, provided, however, that the
Corporation may at any time redeem, purchase or otherwise acquire shares of any
such parity stock in exchange for shares of any junior stock;
(iv) purchase or otherwise acquire for consideration any
Units, 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
Units.
(B) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of the Corporation
unless the Corporation could, under paragraph (A) of this Section 4, purchase or
otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any Units purchased or otherwise acquired by
the Corporation in any manner whatsoever shall become treasury shares.
Section 6. Liquidation, Dissolution or Winding Up.
(A) Upon any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, no distributions shall, be made (i) to the
holders of shares of junior stock unless the holders of Units shall have
received, subject to adjustment as hereinafter provided in paragraph (B), the
greater of either (a) $.01 per Unit plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment, or (b) an amount per Unit equal to the aggregate per share amount
to be distributed to holders of shares of Common Stock or (ii) to the holders of
shares of parity stock, unless simultaneously therewith distributions are made
ratably on Units and all other shares of such parity stock in proportion to the
total amounts to which the holders of Units are entitled under clause (i)(a) of
this sentence and to which the holders of shares of such parity stock are
entitled, in each case, upon such liquidation, dissolution or winding up.
(B) In the event the Corporation shall at any time after the First
Issuance Time (i) declare any dividend on outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide outstanding shares of Common
Stock, or (iii) combine outstanding shares of Common Stock into a smaller number
of shares, then in each such case, the aggregate amount to which holders of
Units were entitled immediately prior to such event pursuant to clause (i)(b) of
paragraph (A) of this Section 6 shall be adjusted by multiplying such amount by
a fraction, the numerator of which shall be the number of shares of Common Stock
that are outstanding immediately after such event, and the denominator of which
shall be the number of shares of Common Stock that were outstanding immediately
prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination, share exchange or other
transaction in which the shares of Common Stock are exchanged for or converted
into other stock or securities, cash and/or any other property, then in any such
case, Units shall at the same time be similarly exchanged for or converted into
an amount per Unit (subject to the provision for adjustment hereinafter set
forth) equal to the aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, into which or for which each
share of Common Stock is converted or exchanged. In the event the Corporation
shall at any time after the First Issuance Time (i) declare any dividend on
outstanding shares of Common Stock payable in shares of Common Stock, (ii)
subdivide outstanding shares of Common Stock, or (iii) combine outstanding
shares of Common Stock into a smaller number of shares, then in each such case,
the amount set forth in the immediately preceding sentence with respect to the
exchange or conversion of Units shall be adjusted by multiplying such amount by
a fraction, the numerator of which shall be the number of shares of Common Stock
that are outstanding immediately after such event, and the denominator of which
shall be the number of shares of Common Stock that were outstanding immediately
prior to such event.
Section 8. Redemption. The Units shall not be redeemable.
Section 9. Ranking. The Units shall rank junior to all other series of
the First Preferred Stock and to any other class of preferred stock that
hereafter may be issued by the Corporation as to the payment of dividends and
the distribution of assets, unless the terms of any such series or class shall
provide otherwise.
Section 10. Amendment. After the First Issuance Time, the Articles
shall not be amended, either directly or indirectly, or through merger,
consolidation, combination, share exchange or other transaction with another
corporation, in any manner that would alter or change the powers, preferences or
special rights of the Units so as to affect the Units adversely without the
affirmative vote of the holders of at least a majority of the outstanding Units,
voting separately as a class.
Section 11. Fractional Shares. The Series B First Preferred Stock may
be issued in Units or fractions of a Unit, which fractions shall entitle the
holder, in proportion to such holder's fractional Units, to exercise voting
rights, receive dividends, participate in distributions, and to have the benefit
of all other rights of holders of Units.
Section 12. Certain Definitions. As used herein with respect to the Series
B First Preferred Stock and Units, the following terms shall have the following
meanings:
(A) The term "junior stock" (i) as used in Section 4, shall mean the
Common Stock and any other class or series of capital stock of the Corporation
hereafter authorized or issued over which the Units have preference or priority
as to the payment of dividends, and (ii) as used in Section 6, shall mean the
Common Stock and any other class or series of capital stock of the Corporation
over which the Units have preference or priority in the distribution of assets
on any liquidation, dissolution or winding up of the Corporation.
(B) The term "parity stock" (i) as used in Section 4, shall mean any
class or series of stock of the Corporation hereafter authorized or issued
ranking pari passu with the Units as to dividends, and (ii) as used in Section
6, shall mean any class or series of stock of the Corporation ranking pari passu
with the Units in the distribution of assets on any liquidation, dissolution or
winding up of the Corporation.
<PAGE>
EXHIBIT B
[Form of Right Certificate]
Certificate No. W- _______ Rights
NOT EXERCISABLE AFTER DECEMBER 11, 2009 OR EARLIER IF REDEEMED
OR AS OTHERWISE PROVIDED IN THE RIGHTS AGREEMENT. THE RIGHTS
ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT
$0.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. AS PROVIDED IN THE RIGHTS AGREEMENT, IN THE EVENT
THAT THE RIGHTS REPRESENTED BY THIS CERTIFICATE BECOME
BENEFICIALLY OWNED BY A PERSON WHO IS AN ACQUIRING PERSON OR
AN ASSOCIATE OR AFFILIATE OF AN ACQUIRING PERSON OR A
SUBSEQUENT HOLDER OF THE RIGHTS PREVIOUSLY OWNED BY SUCH
PERSONS, THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED
HEREBY WILL BECOME NULL AND VOID.
Right Certificate
BellSouth Corporation
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 November 22, 1999 ("Rights Agreement") between BellSouth
Corporation, a Georgia corporation ("Company"), and ChaseMellon Shareholder
Services, L.L.C. ("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 time on December 11, 2009, at the office of the
Rights Agent designated for such purpose or at the designated offices of any
successor Rights Agent, one one-thousandth of a fully paid and nonassessable
share of Series B First Preferred Stock, par value $1.00 per share, of the
Company (a "Unit") at a purchase price of $200, as the same may from time to
time be adjusted in accordance with the Rights Agreement ("Purchase Price"),
upon presentation and surrender or this Right Certificate with the Form of
Election to Purchase duly executed.
As provided in the Rights Agreement, the Purchase Price and the number
of Units which may be purchased upon the exercise of the Rights evidenced by
this Right Certificate are subject to modification and adjustment upon the
happening of certain events and, upon the happening of certain events,
securities other than Units, or other property, may be acquired upon exercise of
the Rights evidenced by this Right Certificate, as provided by the Rights
Agreement.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
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 of the Rights Agent,
the Company and the registered holders of the Right Certificates. Copies of the
Rights Agreement are on file at the principal executive office of the Company
and will be mailed to shareholders upon request.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office of the Rights Agent, may be exchanged for another Right
Certificate or Right Certificates of like tenor and date evidencing Rights
entitling the registered holder to purchase a like aggregate number of Units as
the Rights evidenced by the Right Certificate or Right Certificates surrendered
shall have entitled the holder to purchase. If this Right Certificate shall be
exercised in part, the holder shall be entitled to receive, upon surrender
hereof, the Right Certificate indicating the remaining Rights represented
thereby or another Right Certificate or Right Certificates for the number of
Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be (x) redeemed by the Company at its option at a
redemption price of $0.01 per Right at any time prior to the earlier of the
Close of Business on (i) the Stock Acquisition Date, and (ii) the Final
Expiration Date, or under certain other conditions as specified in the Rights
Agreement, and (y) exchanged, after any Person becomes an Acquiring Person (as
such terms are defined in the Rights Agreement), at the option of the Board of
Directors of the Company, for two Units (or, the extent determined by the Board
of Directors, shares of Common Stock of the Company) as set forth in the Rights
Agreement.
No fractional Units or other securities (other than fractions of a
share of Preferred Stock represented by Units) shall be required to be issued
upon the exercise of any Right or Rights evidenced hereby, and in lieu thereof,
as provided in the Rights Agreement, a holder otherwise entitled to fractions of
Units or other securities (other than fractions of a share of Preferred Stock
represented by Units) may receive an amount in cash equal to the same fraction
of the then current value of a Unit or such other securities.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Units, shares of
Preferred Stock, shares of Common Stock or of any other securities of the
Company which may at any time be issuable upon the exercise hereof, nor shall
anything contained in the Rights Agreement or herein be construed to confer upon
the holder hereof, as such, any of the rights of a shareholder of the Company or
any right to vote for the election of directors, or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action or to receive notice of meetings or other actions affecting
shareholders 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.
<PAGE>
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal, dated as of ____________ __ , ____.
ATTEST: BELLSOUTH CORPORATION
By: __________________________ By: ______________________
Title: Title:
Countersigned:
ChaseMellon Shareholder Services, L.L.C.,
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
transfers unto
- ------------------------------------------------------------------
(Please print name and address of transferee)
- ------------------------------------------------------------------
______________ Rights evidenced by this Right Certificate, together with all
right, title and interest therein, and does hereby irrevocably constitute and
appoint ________ Attorney to transfer the within Right Certificate on the books
of the within-named Company, with full power of substitution.
Dated: ___________ __, ____
--------------------------
Signature
Signature Guaranteed:
<PAGE>
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are not
being sold, assigned and transferred by or on behalf of a Person who is or was
an Acquiring Person or an Affiliate or Associate of any such Acquiring Person
(as such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate from
any Person who is or was an Acquiring Person or an Affiliate or Associate of an
Acquiring Person or any transferee of such Persons.
Dated: ______________, ____
Signature
Signature Guaranteed:
<PAGE>
NOTICE
The signature to the foregoing Assignment must correspond to the name
as written upon the face of this Right Certificate in every particular, without
alteration or enlargement or any change whatsoever.
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if registered holder desires to Exercise the Right
Certificate.)
To: BellSouth Corporation
The undersigned hereby irrevocably elects to exercise
____________________ Rights represented by this Right Certificate to
purchase the number of one one-thousandths of a share of Preferred Stock
issuable upon the exercise of such Rights and requests that certificates
representing such share(s) be issued in the name:
Please insert social security
or other identifying number
- -------------------------------------------------------
(Please print name and address)
- -------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the remaining such Rights shall be
registered in the name of and delivered to:
Please insert social security
or other identifying number
- -------------------------------------------------------
(Please print name and address)
- -------------------------------------------------------
Dated: ________________ , ____
--------------------------------
Signature
(Signature must conform in all respects to name of holder as specified on the
face of this Right Certificate)
Signature Guaranteed:
<PAGE>
- 23 -
EXHIBIT C
BELLSOUTH CORPORATION
SUMMARY OF THE TERMS OF THE RIGHTS TO PURCHASE
UNITS OF
SERIES B FIRST PREFERRED STOCK
On November 22, 1999, the Board of Directors of BellSouth Corporation
(the "Company") declared a dividend distribution of one Preferred Stock purchase
right for each outstanding share of Common Stock, par value $1.00 per share
("Common Stock"), of the Company, payable to shareholders of record on December
11, 1999, and issuable as of that date. Except in the circumstances described
below, each Right, when it becomes exercisable, entitles the registered holder
to purchase from the Company one one-thousandth of a share of Series B First
Preferred Stock, $1.00 par value, of the Company (each one one-thousandth of a
share, a "Unit") at a price of $200 per share (the "Purchase Price"). The rights
of a holder of a Unit are substantially equivalent to the rights of a holder of
a share of Common Stock. The description and terms of the Rights are set forth
in a Rights Agreement (the "Rights Agreement") between the Company and
ChaseMellon Shareholder Services, L.L.C. (the "Rights Agent").
As discussed below, initially the Rights will not be exercisable,
certificates will not be sent to shareholders and the Rights will automatically
trade with the Common Stock.
The Rights will be evidenced by the representing shares of Common Stock
certificates, and Rights relating to shares of Common Stock not represented by
certificates will be represented by notation on the records of the Company,
until the close of business on the earlier to occur of (i) a public announcement
or filing that a person or group of affiliated or associated persons has become
an "Acquiring Person", which is defined as a person who has acquired, or
obtained the right to acquire, beneficial ownership of voting securities of the
Company representing 10% or more of the total voting power represented by all of
the voting securities of the Company, or (ii) the tenth day (or a later date
determined by the Board of Directors) following the commencement of, or first
public announcement of an intention to commence, a tender or exchange offer the
consummation of which would result in a person becoming an Acquiring Person (the
earlier of these dates is called the "Distribution Date").
As soon as practicable following a Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of shares of the Common Stock as of the close of business on
the Distribution Date, and those separate certificates alone will evidence the
Rights from and after the Distribution Date.
Each of the following persons will not be deemed to be an Acquiring
Person, even if they have acquired, or obtained the right to acquire, beneficial
ownership of voting securities of the Company representing 10% or more of the
total voting power of all of the voting securities of the Company: (i) the
Company, any subsidiary of the Company, any employee benefit plan or employee
stock plan of the Company or any subsidiary of the Company; (ii) any underwriter
acting under an agreement with the Company; (iii) any person who becomes the
beneficial owner of voting securities of the Company representing 10% or more of
the total voting power of all of the voting securities of the Company, with the
prior approval of the Board of Directors of the Company (so long as the person's
beneficial ownership level does not exceed the level approved by the Board of
Directors) Acquiring Person solely by virtue of a reduction in the number of
voting securities, unless and until the person becomes the beneficial owner of
any additional voting securities; (iv) any person who becomes an Acquiring
Person solely by virtue of a reduction in the number of outstanding voting
securities, unless the person becomes the beneficial owner of additional voting
securities, without the prior approval of the Board of Directors; and (v) any
person who becomes the beneficial owner of voting securities representing 10% or
more of the total voting power of all of the voting securities inadvertently (or
in the good faith belief that the acquisition of voting securities would not
cause the person to become an Acquiring Person or because the person was unaware
of the Rights Agreement) and within five business days after discovering that it
would be an Acquiring Person (but for this exception) the person notifies the
Company's Board of Directors and within ten business days (or any longer period
allowed by the Board of Directors) divests a sufficient number of voting
securities so that the Person would not be an Acquiring Person (regardless of
this exception).
The Rights are not exercisable until the Distribution Date. The Rights
will expire at the close of business on December 11, 2009, unless earlier
redeemed by the Company as described below.
The Purchase Price, and the number of Units 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 Units, (ii) upon the grant
to holders of Units of certain rights or warrants to subscribe for Units or
convertible securities at less than the current market price of the Units or
(iii) upon the distribution to holders of the Units or evidences of indebtedness
or assets (excluding dividends payable in Units) or of subscription rights or
warrants (other than those referred to above). The Purchase Price is also
subject to adjustment from time to time in the event of a Common Stock dividend
on, or a subdivision or combination of, the shares of Common Stock.
<PAGE>
In the event any Person becomes an Acquiring Person, then each holder
of record of a Right, other than the Acquiring Person, will thereafter have the
right to receive, upon payment of the Purchase Price, that number of Units
having a value (determined based on the market value of the Common Stock) at the
time the person becomes an Acquiring Person equal to twice the Purchase Price.
Any Rights that are or were at any time, on or after the Distribution Date,
beneficially owned by an Acquiring Person will become null and void. After such
an event, to the extent that insufficient Units are available for the exercise
in full of the Rights, holders of Rights will receive upon exercise a number of
Units to the extent available and then shares of Common Stock and other
securities of the Company, assets, or cash, in proportions determined by the
Company, so that the aggregate value received is equal to twice the Purchase
Price.
The Rights Agreement provides that on or after a public announcement or
filing indicating that a person has become an Acquiring Person, if the Company
is acquired in a merger or other business combination (in which any shares of
Common Stock are changed into or exchanged for other securities or assets) or
more than 30% of the assets or earning power of the Company and its subsidiaries
(taken as a whole) are sold or transferred in one or a series of related
transactions, proper provision will be made so that each registered holder of a
Right will have the right to receive, upon payment of the Purchase Price, that
number of shares of common stock of the acquiring company having a value at the
time of that transaction equal to two times the Purchase Price.
No fractional Units will be required to be issued upon exercise of the
Rights and, in lieu thereof, a payment in cash equal to the fraction of the then
current value of a Unit may be made.
At any time after a person becomes an Acquiring Person, the Board of
Directors of the Company may exchange all of part of the outstanding Rights
(other than those held by an Acquiring Person) for Units at an exchange rate of
two Units (or, to the extent determined by the Board of Directors, shares of
Common Stock) for each Right. The Company will promptly give public notice of
any exchange (although failure to give notice will not effect the validity of
the exchange).
At any time until close of business on the day a public announcement or
the filing is made indicating that a person has become an Acquiring Person (and
prior to the giving of notice of the exchange or redemption, as applicable to
the holders of the Rights), or thereafter under certain circumstances, the
Company may redeem the Rights in whole, but not in part, at a price of $0.01 per
Right.
Immediately upon the action of the Board of Directors of the Company
authorizing exchange or 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 (if applicable) the Units (or shares of Common Stock) issuable in
connection with the exchange or the Redemption Price without any interest
thereon.
Until the close of business on the day a public announcement or a
filing is made indicating that a person has become an Acquiring Person, or
thereafter under certain circumstances, the Company may amend the Rights in any
manner. The Company may also amend the Rights Agreement after the close of
business on the day a public announcement or filing is made indicating that a
person has become an Acquiring Person, to cure ambiguities, to correct defective
or inconsistent provisions or in any manner that does not adversely affect the
interests of holders of the Rights.
Until a Right is exercised, the holder, as such, will have no rights as
a shareholder of the Company, including, without limitation, the right to vote
or to receive dividends.
The issuance of the Rights is not taxable to the Company or to
shareholders under presently existing federal income tax law, and will not
change the way in which shareholders can presently trade the Company's shares of
Common Stock. If the Rights should become exercisable, shareholders, depending
on then existing circumstances, may recognize taxable income.
The Rights have anti-takeover effects. The Rights will cause
substantial dilution to a person that attempts to acquire without obtaining the
approval of the Board of Directors, the redemption of the Rights or an amendment
to the Rights Agreement permitting the acquisition. However, the Rights
generally should not interfere with any merger or other business combination
approved by the Board of Directors.
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 either the Rights
Agent or the Company. This summary description of the Rights does not purport to
be complete and is qualified in its entirety by reference to the Rights
Agreement, which is incorporated in this summary description by reference.
