SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) or 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
ACC CORP.
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(Exact name of registrant as specified in its charter)
Delaware 16-1175232
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(State of incorporation (I.R.S. employer
or organization) identification no.)
400 West Avenue
Rochester, New York 14611
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(Address of principal (zip code)
executive offices)
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
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None None
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
Preferred Stock Purchase Rights
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(Title of Class)
Exhibit Index Appears on Sequentially Numbered Page 6
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ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
On October 3, 1997, the Board of Directors of ACC Corp. (the
"Company") declared a dividend of one preferred share purchase right (a
"Right") for each outstanding share of Class A Common Stock, par value
$.015 per share, of the Company (the "Common Stock"). The dividend is
payable on October 15, 1997 (the "Record Date"), or as soon as reasonably
practicable thereafter, to the shareholders of record on October 15, 1997.
Each Right entitles the registered holder to purchase from the Company one
one-thousandth of a share (a "Unit") of Series A Preferred Stock, par value
$1.00 per share (the "Preferred Stock"), of the Company at a price of $150
per one one-thousandth of a share of Preferred Stock (the "Purchase
Price"), subject to adjustment. The description and terms of the Rights
are set forth in a Rights Agreement dated as of October 3, 1997, as the
same may be amended from time to time (the "Rights Agreement"), between the
Company and First Union National Bank, as Rights Agent (the "Rights
Agent").
Initially, the Rights will attach to all certificates representing
shares of outstanding Company Common Stock, and no separate Rights
Certificates will be distributed. The Rights will separate from the
Company Common Stock and the "Distribution Date" will occur upon the
earlier of (i) 10 days following a public announcement (the date of such
announcement being the "Stock Acquisition Date") that a person or group of
affiliated or associated persons (other than the Company, any subsidiary of
the Company or any employee benefit plan of the Company or such subsidiary)
(an "Acquiring Person") has acquired, obtained the right to acquire, or
otherwise obtained beneficial ownership of 15% or more of the then
outstanding shares of Company Common Stock, and (ii) 10 business days (or
such later date as may be determined by action of the Board of Directors
prior to such time as any person becomes an Acquiring Person) following the
commencement of a tender offer or exchange offer that would result in a
person or group beneficially owning 15% or more of the then outstanding
shares of Company Common Stock. Until the Distribution Date, (i) the
Rights will be evidenced by Company Common Stock certificates and will be
transferred with and only with such Company Common Stock certificates,
(ii) new Company Common Stock certificates issued after the Record Date
(also including shares distributed from Treasury) will contain a notation
incorporating the Rights Agreement by reference and (iii) the surrender for
transfer of any certificates representing outstanding Company Common Stock
will also constitute the transfer of the Rights associated with the Company
Common Stock represented by such certificates.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on the tenth anniversary of the Rights
Agreement unless earlier redeemed by the Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of Company Common Stock as
of the close of business on the Distribution Date and, thereafter, the
separate Rights Certificates alone will represent the Rights.
In the event that (i) the Company is the surviving corporation in a
merger with an Acquiring Person and shares of Company Common Stock shall
remain outstanding, (ii) a
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person becomes an Acquiring Person, (iii) an Acquiring Person engages in
one or more "self-dealing" transactions as set forth in the Rights
Agreement, or (iv) during such time as there is an Acquiring Person, an
event occurs which results in such Acquiring Person's ownership interest
being increased by more than 1% (E.G., by means of a recapitalization)
(each such event being a "SECTION 11(A)(II) EVENT"), THEN, in each such
case, each holder of a Right will thereafter have the right to receive,
upon exercise, Units of Preferred Stock (or, in certain circumstances,
Company Common Stock, cash, property or other securities of the Company)
having a value equal to two times the exercise price of the Right. The
exercise price is the Purchase Price multiplied by the number of Units of
Preferred Stock issuable upon exercise of a Right prior to the events
described in this paragraph. Notwithstanding any of the foregoing,
following the occurrence of any of the events set forth in this paragraph,
all Rights that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by any Acquiring Person will be
null and void.
In the event that, at any time following the Stock Acquisition Date,
(i) the Company is acquired in a merger or other business combination
transaction and the Company is not the surviving corporation (other than a
merger described in the preceding paragraph), (ii) any Person consolidates
or merges with the Company and all or part of the Company Common Stock is
converted or exchanged for securities, cash or property of any other Person
or (iii) 50% or more of the Company's assets or earning power is sold or
transferred, each holder of a Right (except Rights which previously have
been voided as described above) shall thereafter have the right to receive,
upon exercise, common stock of the ultimate parent of the Acquiring Person
having a value equal to two times the exercise price of the Right.
The Purchase Price payable, and the number of Units of Preferred Stock
issuable, upon exercise of the Rights are subject to adjustment from time
to time to prevent dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Preferred Stock,
(ii) if holders of the Preferred Stock are granted certain rights or
warrants to subscribe for Preferred Stock or convertible securities at less
than the current market price of the Preferred Stock, or (iii) upon the
distribution to the holders of the Preferred Stock of evidences of
indebtedness, cash or assets (excluding regular quarterly cash dividends)
or of subscription rights or warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. The Company is not required to issue fractional Units. In lieu
thereof, an adjustment in cash may be made based on the market price of the
Preferred Stock prior to the date of exercise.
At any time until ten business days following the Stock Acquisition
Date, a majority of the Company's Board of Directors may redeem the Rights
in whole, but not in part, at a price of $.01 per Right (subject to
adjustment in certain events) (the "Redemption Price"), payable, at the
election of such majority of the Company's Board of Directors, in cash or
shares of Company Common Stock. Immediately upon the action of a majority
of the Company's Board of Directors ordering the redemption of the Rights,
the Rights will terminate and the only right of the holders of Rights will
be to receive the Redemption Price.
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The Board of Directors, at its option, may exchange each Right for
(i) one Unit of Preferred Stock or (ii) such number of Units of Preferred
Stock as will equal (x) the difference between the aggregate market price
of the number of Units of Preferred Stock to be received upon a
Section 11(a)(ii) Event the purchase price set forth in the Rights
Agreement, divided by (y) the market price per Unit of Preferred Stock upon
a Section 11(a)(ii) Event.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends. While the distribution of the
Rights will not be taxable to stockholders or to the Company, stockholders
may, depending upon the circumstances, recognize taxable income in the
event that the Rights become exercisable for Units of Preferred Stock (or
other consideration).
Any of the provisions of the Rights Agreement may be amended without
the approval of the holders of Company Common Stock at any time prior to
the Distribution Date. After the Distribution Date, the provisions of the
Rights Agreement may be amended in order to cure any ambiguity, defect or
inconsistency, to make changes which do not adversely affect the interests
of holders of Rights (excluding the interests of any Acquiring Person), or
to shorten or lengthen any time period under the Rights Agreement;
provided, however, that no amendment to adjust the time period governing
redemption shall be made at such time as the Rights are not redeemable.
The Units of Preferred Stock that may be acquired upon exercise of the
Rights will be nonredeemable and subordinate to any other shares of
preferred stock that may be issued by the Company.
Each Unit of Preferred Stock will receive ratably any dividend
declared on the Company Common Stock.
In the event of liquidation, the holder of Preferred Stock will
receive a preferred liquidation payment equal to the greater of $1.00 per
Unit or the per share amount paid in respect of a share of the Company
Common Stock.
Each Unit of Preferred Stock will have one vote, voting together with
the Company Common Stock.
In the event of any merger, consolidation or other transaction in
which shares of Company Common Stock are exchanged, each Unit of Preferred
Stock will be entitled to receive the per share amount paid in respect of
each share of Company Common Stock.
The rights of holders of the Preferred Stock to dividends, liquidation
and voting, and in the event of mergers and consolidations, are protected
by customary antidilution provisions.
Because of the nature of the Preferred Stock's dividend, liquidation
and voting rights, the economic value of one Unit of Preferred Stock that
may be acquired upon the exercise of
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each Right is expected to approximate the economic value of one share of
Company Common Stock.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the
Company without conditioning the offer on (i) the Rights being redeemed or
(ii) a substantial number of Rights being acquired.
Attached hereto as Exhibit 1 and incorporated herein by reference are
a copy of the Rights Agreement, dated as of October 3, 1997, between the
Company and First Union National Bank, as Rights Agent, specifying the
terms of the Rights, and the exhibits thereto, as follows: Exhibit A --
Form of Rights Certificate; Exhibit B -- Summary of Rights to Purchase
Preferred Stock; and Exhibit C -- Certificate of Designation. The
foregoing description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement and the
exhibits thereto.
ITEM 2. EXHIBITS.
1. Form of Rights Agreement, dated as of October 3, 1997, between ACC
Corp. and First Union National Bank, as Rights Agent, which includes
as Exhibit A -- Form of Rights Certificate; Exhibit B -- Summary of
Rights to Purchase Preferred Stock; and Exhibit C -- Certificate of
Designation.
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this registration statement to
be signed on its behalf by the undersigned, thereunto duly authorized.
Dated: October 3, 1997
ACC CORP.
By: /s/ Michael R. Daley
--------------------------
Michael R. Daley
Chief Financial Officer
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EXHIBIT INDEX
Exhibit Sequentially
Number Exhibit Numbered Page
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1. Form of Rights Agreement, dated as Filed herewith
of October 3, 1997, between ACC
Corp. and First Union National
Bank, as Rights Agent, which
includes as Exhibit A -- Form of
Rights Certificate; Exhibit B --
Summary of Rights to Purchase
Preferred Stock; and Exhibit C --
Certificate of Designation.
Page 6
ACC CORP.
and
FIRST UNION NATIONAL BANK
Rights Agent
Rights Agreement
Dated as of October 3, 1997
<PAGE>
TABLE OF CONTENTS
PAGE
SECTION 1. CERTAIN DEFINITIONS 1
SECTION 2. APPOINTMENT OF RIGHTS AGENT 6
SECTION 3. ISSUE OF RIGHTS CERTIFICATES 6
SECTION 4. FORM OF RIGHTS CERTIFICATES 8
SECTION 5. COUNTERSIGNATURE AND REGISTRATION 8
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND
EXCHANGE OF RIGHTS CERTIFICATES;
MUTILATED, DESTROYED, LOST OR STOLEN
RIGHTS CERTIFICATE 9
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE;
EXPIRATION DATE OF RIGHTS 10
SECTION 8. CANCELLATION AND DESTRUCTION OF
RIGHTS CERTIFICATES 12
SECTION 9. RESERVATION AND AVAILABILITY
OF CAPITAL STOCK 12
SECTION 10. PREFERRED STOCK RECORD DATE 14
SECTION 11. ADJUSTMENT OF PURCHASE PRICE,
NUMBER AND KIND OF SHARES OR
NUMBER OF RIGHTS 14
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE
PRICE OR NUMBER OF SHARES 23
SECTION 13. CONSOLIDATION, MERGER OR SALE
OR TRANSFER OF ASSETS OR EARNING POWER 24
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES 27
SECTION 15. RIGHTS OF ACTION 28
SECTION 16. AGREEMENT OF RIGHTS HOLDERS 28
SECTION 17. RIGHTS CERTIFICATE HOLDER NOT
DEEMED A STOCKHOLDER 29
SECTION 18. CONCERNING THE RIGHTS AGENT 29
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE
OF NAME OF RIGHTS AGENT 30
SECTION 20. DUTIES OF RIGHTS AGENT 30
SECTION 21. CHANGE OF RIGHTS AGENT 33
SECTION 22. ISSUANCE OF NEW RIGHTS CERTIFICATES 34
SECTION 23. REDEMPTION AND TERMINATION 35
SECTION 24. NOTICE OF CERTAIN EVENTS 35
SECTION 25. NOTICES 36
SECTION 26. SUPPLEMENTS AND AMENDMENTS 37
SECTION 27. SUCCESSORS 38
SECTION 28. DETERMINATIONS AND ACTIONS BY THE BOARD
OF DIRECTORS, ETC 38
SECTION 29. BENEFITS OF THIS AGREEMENT 38
SECTION 30. SEVERABILITY 38
SECTION 31. GOVERNING LAW 39
SECTION 32. COUNTERPARTS 39
SECTION 33. DESCRIPTIVE HEADINGS 39
SECTION 34. EXCHANGE 39
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RIGHTS AGREEMENT, dated as of October 3, 1997 (this "AGREEMENT"),
between ACC Corp., a Delaware corporation (the "COMPANY"), and First Union
National Bank, a North Carolina banking corporation (the "RIGHTS AGENT").
WHEREAS, effective October 3, 1997 (the "RIGHTS DIVIDEND
DECLARATION
DATE"), the Board of Directors of the Company authorized and declared a
distribution of one Right (each, a "RIGHT") for each share of Class A
Common Stock, par value $.015 per share, of the Company (the "COMPANY
COMMON STOCK") outstanding at the Close of Business (as defined below) on
October 15, 1997 (the "RECORD DATE"), and has authorized the issuance of
one Right (as such number may hereinafter be adjusted pursuant hereto) for
each share of Company Common Stock issued between the Record Date (whether
originally issued or delivered from the Company's treasury) and, except as
otherwise provided in Section 22, the Distribution Date, each Right
initially representing the right to purchase upon the terms and subject to
the conditions hereinafter set forth one Unit (as defined below) of Series
A Preferred Stock (as defined below);
WHEREAS, the Company desires to set forth certain terms and
conditions governing the Rights; and
WHEREAS, the Company desires to appoint the Rights Agent to act
as rights agent hereunder, in accordance with the terms and conditions
hereof;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this Agreement,
the following terms have the meanings indicated:
(a) "ACQUIRING PERSON" shall mean any Person who or which, alone
or together with all Affiliates and Associates of such Person, shall
be the Beneficial Owner of 15% or more of the shares of Company Common
Stock then outstanding, but shall not include (x) the Company, any
Subsidiary of the Company, any employee benefit plan maintained by the
Company or any of its Subsidiaries or any trustee or fiduciary with
respect to such plan acting in such capacity or (y) any such Person
who has become and is such a Beneficial Owner solely because (A) of a
change in the aggregate number of shares of the Company Common Stock
since the last date on which such Person acquired Beneficial Ownership
of any shares of the Company Common Stock or (B) it acquired such
Beneficial Ownership in the good faith belief that such acquisition
would not (1) cause such Beneficial Ownership to exceed 15% of the
shares of the Company Common Stock then outstanding and such Person
relied in good faith in computing the percentage of its Beneficial
Ownership on publicly filed reports or documents of the Company which
are inaccurate or out-of-date or (2) otherwise cause a Distribution
Date or the adjustment provided for in Section 11(a)(ii) to occur.
Notwithstanding clause (B) of the prior sentence, if any Person that
is not an Acquiring Person due to such clause (B) does not reduce its
percentage of Beneficial Ownership of the Company Common Stock to 15%
or less
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by the Close of Business on the fifth Business Day after notice from
the Company (the date of notice being the first day) that such
person's Beneficial Ownership of the Company Common Stock so exceeds
15%, such Person shall at the end of such five Business Day period,
become an Acquiring Person (and such clause (B) shall no longer apply
to such Person). For purposes of this definition, the determination
whether any Person acted in "good faith" shall be conclusively
determined by the Board of Directors of the Company, acting by a vote
of those directors of the Company whose approval would be required to
redeem the rights under Section 23.
(b) "ADJUSTMENT SHARES" has the meaning set forth in
Section 11(a)(ii).
(c) "ADJUSTMENT SPREAD" has the meaning set forth in
Section 34(a).
(d) "AFFILIATE" and "ASSOCIATE" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the Exchange Act
Regulations as in effect on the date of this Agreement.
(e) A Person shall be deemed the "BENEFICIAL OWNER" of, and shall
be deemed to "BENEFICIALLY OWN", and shall be deemed to have
"BENEFICIAL OWNERSHIP" of, any securities:
(i) of which such Person or any of such Person's Affiliates
or Associates is considered to be a "beneficial owner" under
Rule 13d-3 of the Exchange Act Regulations as in effect on the
date of this Agreement; PROVIDED, HOWEVER, that a Person shall
not be deemed the "Beneficial Owner" of, or to "beneficially
own", or to have "Beneficial Ownership" of, any securities under
this subparagraph (i) as a result of an agreement, arrangement or
understanding to vote such securities if such agreement,
arrangement or understanding (A) arises solely from a revocable
proxy given in response to a proxy or consent solicitation made
pursuant to, and in accordance with, the applicable provisions of
the Exchange Act and the Exchange Act Regulations, and (B) is not
reportable by such Person on Schedule 13D under the Exchange Act
(or any comparable or successor report);
(ii) which are beneficially owned, directly or indirectly,
by any other Person (or any Affiliate or Associate of such other
Person) with which such Person (or any of such Person's
Affiliates or Associates) has any agreement, arrangement or
understanding (whether or not in writing), for the purpose of
acquiring, holding, voting (except pursuant to a revocable proxy
as described in the proviso to subparagraph (i) of this
paragraph (c)) or disposing of such securities; or
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(iii) which such Person or any of such Person's Affiliates
or Associates, directly or indirectly, has the right to acquire
(whether such right is exercisable immediately or only after the
passage of time or upon the satisfaction of conditions) pursuant
to any agreement, arrangement or understanding (whether or not in
writing) or upon the exercise of conversion rights, exchange
rights, rights, warrants or options, or otherwise;
PROVIDED, HOWEVER, that under this paragraph (e) a Person shall not be
deemed the "Beneficial Owner" of, or to "beneficially own, or to have
"Beneficial Ownership" of, (A) securities tendered pursuant to a
tender or exchange offer made in accordance with Exchange Act
Regulations by such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for purchase or
exchange, (B) securities that may be issued upon exercise of Rights at
any time prior to the occurrence of a Triggering Event or
(C) securities that may be issued upon exercise of Rights from and
after the occurrence of a Triggering Event, which Rights were acquired
by such Person or any of such Person's Affiliates or Associates prior
to the Distribution Date or pursuant to Section 3(c) or Section 22 or
pursuant to Section 11(i) in connection with an adjustment made with
respect to any such Rights.
(f) "BUSINESS DAY" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in The City of New York
are authorized or obligated by law or executive order to close.
(g) "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.
(h) "COMMON STOCK" of any Person other than the Company shall
mean the capital stock of such Person with the greatest voting power,
or, if such Person shall have no capital stock, the equity securities
or other equity interest having power to control or direct the
management of such Person.
(i) "COMPANY" has the meaning set forth in the preamble to this
Agreement.
(j) "COMPANY COMMON STOCK" has the meaning set forth in the
recitals to this Agreement.
(k) "CURRENT VALUE" has the meaning set forth in
Section 11(a)(iii).
(l) "DEPOSITARY AGENT" has the meaning set forth in Section 7(c).
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(m) "DISTRIBUTION DATE" has the meaning set forth in
Section 3(a).
(n) "EQUIVALENT PREFERRED STOCK" has the meaning set forth in
Section 11(b).
(o) "EXCHANGE ACT" shall mean the Securities Exchange Act of
1934, as amended.
(p) "EXCHANGE ACT REGULATIONS" shall mean the General Rules and
Regulations under the Exchange Act.
(q) "EXPIRATION DATE" has the meaning set forth in Section 7(a).
(r) "FINAL EXPIRATION DATE" has the meaning set forth in
Section 7(a).
(s) "PERSON" shall mean any individual, partnership, limited
liability company, firm, corporation, association, trust,
unincorporated organization or other entity, as well as any syndicate
or group deemed to be a person under Section 14(d)(2) of the Exchange
Act.
(t) "PREFERRED STOCK" shall mean the Series A Preferred Stock,
par value $1.00 per share, of the Company having the voting powers,
designation, preferences and relative, participating, optional or
other special rights and qualifications, limitations and restrictions
described in the Certificate of Designations set forth as Exhibit C
hereto.
(u) "PREFERRED STOCK EQUIVALENTS" has the meaning specified in
Section 11(a)(iii).
(v) "PRINCIPAL PARTY" has the meaning set forth in Section 13(b).
(w) "PURCHASE PRICE" has the meaning set forth in Section 7(b).
(x) "RECORD DATE" has the meaning set forth in the recitals to
this Agreement.
(y) "REDEMPTION PRICE" has the meaning set forth in
Section 23(a).
(z) "REGISTERED COMMON STOCK" has the meaning set forth in
Section 13(b)(ii).
(aa) "REGISTRATION DATE" has the meaning set forth in
Section 9(c).
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(bb) "REGISTRATION STATEMENT" has the meaning set forth in
Section 9(c).
(cc) "RIGHT" has the meaning set forth in the recitals to this
Agreement.
(dd) "RIGHTS AGENT" has the meaning set forth in the preamble to
this Agreement.
(ee) "RIGHTS CERTIFICATE" has the meaning set forth in
Section 3(a).
(ff) "RIGHTS DIVIDEND DECLARATION DATE" has the meaning set forth
in the recitals to this Agreement.
(gg) "SECTION 11(A)(II) EVENT" shall mean any event described in
Section 11(a)(ii)(A), (B) or (C).
(hh) "SECTION 11(A)(III) TRIGGER DATE" has the meaning set forth
in Section 11(a)(iii).
(ii) "SECTION 13 EVENT" shall mean any event described in
clause (x), (y) or (z) of Section 13(a).
(jj) "SECTION 34(A) EXCHANGE RATIO" has the meaning set forth in
Section 34(a).
(kk) "SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.
(ll) "SPREAD" has the meaning set forth in Section 11(a)(iii).
(mm) "STOCK ACQUISITION DATE" shall mean the first date of public
announcement (including, without limitation, the filing of any report
pursuant to Section 13(d) of the Exchange Act) by the Company or an
Acquiring Person that an Acquiring Person has become such.
(nn) "SUBSIDIARY" shall mean, with reference to any Person, any
other Person of which an amount of voting securities or equity
interests sufficient to elect at least a majority of the directors or
equivalent governing body of such other Person is beneficially owned,
directly or indirectly, by such Person, or otherwise controlled by
such first-mentioned Person.
(oo) "SUMMARY OF RIGHTS" has the meaning set forth in
Section 3(b).
(pp) "TRADING DAY" has the meaning set forth in Section 11(d)(i).
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(qq) "TRIGGERING EVENT" shall mean any Section 11(a)(ii) Event or
any Section 13 Event.
(rr) "UNIT" has the meaning set forth in Section 7(b).
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders
of the Rights in accordance with the terms and conditions hereof, and the
Rights Agent hereby accepts such appointment. With the consent of the
Rights Agent, the Company may from time to time appoint such Co-Rights
Agents as it may deem necessary or desirable.
SECTION 3. ISSUE OF RIGHTS CERTIFICATES.
(a) Until the earlier of (i) the Close of Business on the tenth
day after the Stock Acquisition Date and (ii) the Close of Business on the
tenth Business Day (or such later date as may be determined by action of
the Company's Board of Directors prior to such time as any Person becomes
an Acquiring Person, and of which the Company will give the Rights Agent
prompt written notice) after the date that a tender or exchange offer by
any Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan maintained by the Company or any of its Subsidiaries
or any trustee or fiduciary with respect to such plan acting in such
capacity) is first published or sent or given within the meaning of
Rule 14d-4(a) of the Exchange Act Regulations or any successor rule, if
upon consummation thereof such Person would be the Beneficial Owner of 15%
or more of the shares of Company Common Stock then outstanding (the earlier
of (i) and (ii) above being the "DISTRIBUTION DATE"), (x) the Rights will
be evidenced (subject to the provisions of paragraph (b) of this Section 3)
by the certificates for shares of Company Common Stock registered in the
names of the holders of shares of Company Common Stock as of and subsequent
to the Record Date (which certificates for shares of Company Common Stock
shall be deemed also to be certificates for Rights) and not by separate
certificates, and (y) the Rights will be transferable only in connection
with the transfer of the underlying shares of Company Common Stock
(including a transfer to the Company). As soon as practicable after the
Company has notified the Rights Agent of the occurrence of the Distribution
Date, the Rights Agent will send by first-class, insured, postage prepaid
mail, to each record holder of shares of Company Common Stock as of the
Close of Business on the Distribution Date, at the address of such holder
shown on the records of the Company, one or more rights certificates, in
substantially the form of Exhibit A hereto (the "RIGHTS CERTIFICATES"),
evidencing one Right for each share of Company Common Stock so held,
subject to adjustment as provided herein. In the event that an adjustment
in the number of Rights per share of Company Common Stock has been made
pursuant to Section 11(p), at the time of distribution of the Rights
Certificates, the Company shall make the necessary and appropriate rounding
adjustments (in accordance with Section 14(a)) and shall give prompt
written notice of such rounding adjustments to the Rights Agent which
adjustments shall be binding on the Rights Agent and on the holders of the
rights, so that Rights Certificates representing only
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whole numbers of Rights are distributed and cash is paid in lieu of any
fractional Rights. As of and after the Distribution Date, the Rights will
be evidenced solely by such Rights Certificates.
(b) As promptly as practicable following the Record Date, the
Company will send a copy of a Summary of Rights to Purchase Preferred
Stock, in a form which may be appended to certificates that represent
shares of Company Common Stock, in substantially the form attached hereto
as Exhibit B (the "SUMMARY OF RIGHTS"), by first-class, postage prepaid
mail, to each record holder of shares of Company Common Stock as of the
Close of Business on the Record Date, at the address of such holder shown
on the records of the Company.
(c) Rights shall, without any further action, be issued in
respect of all shares of Company Common Stock which are issued (including
any shares of Company Common Stock held in treasury) after the Record Date
but prior to the earlier of the Distribution Date and the Expiration Date.
Certificates representing such shares of Company Common Stock issued after
the Record Date shall bear the following legend:
"This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Rights Agreement, dated as of October 3,
1997 (the "Rights Agreement"), between ACC Corp. (the "Company") and First
Union National Bank (the "Rights Agent"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the
principal office of the Rights Agent. 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. One or
more certificates evidencing such Rights have been delivered to and
registered in the name of First Union National Bank, as Rights Agent under
the Rights Agreement. The Company will mail to the holder of this
certificate a copy of the Rights Agreement, as in effect on the date of
mailing, without charge promptly after receipt of a written request
therefor. Under certain circumstances set forth in the Rights Agreement,
Rights issued to, or held by, any Person who is, was or becomes an
Acquiring Person or any Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement), whether currently held by or on behalf of
such Person or by any subsequent holder, may become null and void."
With respect to certificates representing shares of Company
Common Stock (whether or not such certificates include the foregoing legend
or have appended to them the Summary of Rights), until the earlier of the
Distribution Date and the Expiration Date, the Rights associated with the
shares of Company Common Stock represented by such certificates shall be
evidenced by such certificates alone and registered holders of the shares
of Company Common Stock shall also be the registered holders of the
associated Rights, and the transfer of any of such certificates shall also
constitute the transfer of the Rights associated with the shares of Company
Common Stock represented by such certificates.
<PAGE>
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SECTION 4. FORM OF RIGHTS CERTIFICATES.
(a) Rights Certificates (and the forms of election to purchase,
assignment and certificate to be printed on the reverse thereof) shall each
be substantially in the form set forth in Exhibit A hereto and may have
such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law or any rule or regulation
thereunder or with any rule or regulation of any stock exchange on which
the Rights may from time to time be listed or to conform to usage. Subject
to the provisions of Section 11 and Section 22, the Rights Certificates,
whenever distributed, shall be dated as of the Record Date and on their
face shall entitle the holders thereof to purchase such number of Units of
Preferred Stock as shall be set forth therein at the price set forth
therein, but the amount and type of securities, cash or other assets that
may be acquired upon the exercise of each Right and the Purchase Price
thereof shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant hereto that
represents Rights beneficially owned by: (i) an Acquiring Person or any
Associate or Affiliate of an Acquiring Person, (ii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) which becomes a
transferee after the Acquiring Person becomes such, or (iii) a transferee
of an Acquiring Person (or of any such Associate or Affiliate) which
becomes a transferee prior to or concurrently with the Acquiring Person
becoming such and which receives such Rights pursuant to either (A) a
transfer (whether or not for consideration) from the Acquiring Person (or
any such Associate or Affiliate) to holders of equity interests in such
Acquiring Person (or such Associate or Affiliate) or to any Person with
whom such Acquiring Person (or such Associate or Affiliate) has any
continuing agreement, arrangement or understanding regarding the
transferred Rights, shares of Company Common Stock or the Company or (B) a
transfer which a majority of the Company's Board of Directors has
determined to be part of a plan, arrangement or understanding which has as
a primary purpose or effect the avoidance of Section 7(e), shall, upon the
written direction of a majority of the Company's Board of Directors,
contain (to the extent feasible) the following legend:
"The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person (as such terms are defined in
the Rights Agreement). Accordingly, this Rights Certificate and the Rights
represented hereby may become null and void in the circumstances specified
in Section 7(e) of such Agreement."
SECTION 5. COUNTERSIGNATURE AND REGISTRATION.
(a) Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board, one of its Presidents or one of its
Vice Presidents, under its corporate seal reproduced thereon attested by
its Secretary or one of its Assistant Secretaries.
<PAGE>
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The signature of any one or more of these officers on the Rights
Certificates may be manual or facsimile. Rights Certificates bearing the
manual or facsimile signatures of the individuals who were at any time the
proper officers of the Company shall bind the Company, notwithstanding that
such individuals or any of them have ceased to hold such offices prior to
the countersignature of such Rights Certificates or did not hold such
offices at the date of such Rights Certificates. No Rights Certificate
shall be entitled to any benefit under this Agreement or be valid for any
purpose unless there appears on such Rights Certificate a countersignature
duly executed by the Rights Agent by manual signature of an authorized
signatory, and such countersignature upon any Rights Certificate shall be
conclusive evidence, and the only evidence, that such Rights Certificate
has been duly countersigned as required hereunder.
(b) Following the Distribution Date, the Rights Agent will keep
or cause to be kept, at its principal office, books for registration and
transfer of the Rights Certificates issued hereunder. Such books shall
show the name and address of each holder of the Rights Certificates, the
number of Rights evidenced on its face by each Rights Certificate and the
date of each Rights Certificate.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS CERTIFICATES.
(a) Subject to the provisions of Sections 4(b), 7(e) and 14, at
any time after the Close of Business on the Distribution Date, and at or
prior to the Close of Business on the Expiration Date, any Rights
Certificate or Certificates may be transferred, split up, combined or
exchanged for another Rights Certificate or Certificates, entitling the
registered holder to purchase a like number of Units of Preferred Stock
(or, following a Triggering Event, other securities, cash or other assets,
as the case may be) as the Rights Certificate or Certificates surrendered
then entitled such holder to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Rights Certificate or
Certificates shall make such request in writing delivered to the Rights
Agent, and shall surrender the Rights Certificate or Certificates to be
transferred, split up, combined or exchanged at the office of the Rights
Agent designated for such purpose. Neither the Rights Agent nor the
Company shall be obligated to take any action whatsoever with respect to
the transfer of any such surrendered Rights Certificate until the
registered holder shall have completed and executed the certificate set
forth in the form of assignment on the reverse side of such Rights
Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) of the Rights
represented by such Rights Certificate or Affiliates or Associates thereof
as the Company shall reasonably request; whereupon the Rights Agent shall,
subject to the provisions of Sections 4(b), 7(e) and 14, countersign and
deliver to the Person entitled thereto a Rights Certificate or Rights
Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer, split up, combination or
exchange of Rights Certificates.
<PAGE>
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(b) If a Rights Certificate shall be mutilated, destroyed, lost
or stolen, upon request by the registered holder of the Rights represented
thereby and upon payment to the Company and the Rights Agent of all
reasonable expenses incident thereto. The Company shall issue, in exchange
for and upon cancellation of the mutilated Rights Certificate, or in
substitution for the lost, stolen or destroyed Rights Certificate, a new
Rights Certificate, in substantially the form of the prior Rights
Certificate, of like tenor and representing the equivalent number of
Rights, but, in the case of loss, theft or destruction, only upon receipt
of evidence satisfactory to the Company and the Rights Agent of such loss,
theft or destruction of such Rights Certificate and, if requested by the
Company or the Rights Agent, indemnity also satisfactory to it.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS.
(a) Prior to the earlier of (i) the Close of Business on the
tenth anniversary hereof (the "FINAL EXPIRATION DATE") and (ii) the time at
which the Rights are redeemed as provided in Section 23 (the earlier of (i)
and (ii) being the "EXPIRATION DATE"), the registered holder of any Rights
Certificate may, subject to the provisions of Sections 7(e) and 9(c),
exercise the Rights evidenced thereby in whole or in part at any time after
the Distribution Date upon surrender of the Rights Certificate, with the
form of election to purchase and the certificate on the reverse side
thereof duly executed, to the Rights Agent at the office of the Rights
Agent designated for such purpose, together with payment of the aggregate
Purchase Price (as hereinafter defined) for the number of Units of
Preferred Stock (or, following a Triggering Event, other securities, cash
or other assets, as the case may be) for which such surrendered Rights are
then exercisable.
(b) The purchase price for each one one-thousandth of a share
(each such one one-thousandth of a share being a "UNIT") of Preferred Stock
upon exercise of Rights shall be $150, subject to adjustment from time to
time as provided in Sections 11 and 13(a) (such purchase price, as so
adjusted, being the "PURCHASE PRICE"), and shall be payable in accordance
with paragraph (c) below.
(c) As promptly as practicable following the occurrence of the
Distribution Date, the Company shall deposit with a corporation in good
standing organized under the laws of the United States or any State of the
United States, which is authorized under such laws to exercise corporate
trust or stock transfer powers and is subject to supervision or examination
by federal or state authority (such institution being the "DEPOSITARY
AGENT"), certificates representing the shares of Preferred Stock that may
be acquired upon exercise of the Rights and shall cause such Depositary
Agent to enter into an agreement pursuant to
<PAGE>
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which the Depositary Agent shall issue receipts representing interests in
the shares of Preferred Stock so deposited. Upon receipt of a Rights
Certificate representing exercisable Rights, with the form of election to
purchase and the certificate duly executed, accompanied by payment, with
respect to each Right so exercised, of the Purchase Price for the Units of
Preferred Stock (or, following a Triggering Event, other securities, cash
or other assets, as the case may be) to be purchased thereby as set forth
below and an amount equal to any applicable transfer tax or evidence
satisfactory to the Company of payment of such tax, the Rights Agent shall,
subject to Section 20(k), thereupon promptly (i) requisition from the
Depositary Agent depositary receipts representing such number of Units of
Preferred Stock as are to be purchased and the Company hereby directs the
Depositary Agent to comply with such request, (ii) when appropriate,
requisition from the Company the amount of cash, if any, to be paid in lieu
of fractional shares in accordance with Section 14, (iii) after receipt of
such depositary receipts, cause the same to be delivered to or upon the
order of the registered holder of such Rights Certificate, registered in
such name or names as may be designated by such holder, and (iv) when
appropriate after receipt thereof, deliver such cash, if any, to or upon
the order of the registered holder of such Rights Certificate. In the
event that the Company is obligated to issue Company Common Stock, other
securities of the Company, pay cash and/or distribute other property
pursuant to Section 11(a), the Company will make all arrangements necessary
so that such Company Common Stock, other securities, cash and/or other
property are available for distribution by the Rights Agent, if and when
appropriate. The payment of the Purchase Price (as such amount may be
reduced pursuant to Section 11(a)(iii)) may be made in cash or by certified
or bank check payable to the order of the Company, or by wire transfer of
immediately available funds to the account of the Company (provided that
notice of such wire transfer shall be given by the holder of the related
Right to the Rights Agent).
(d) In case the registered holder of any Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing the Rights remaining unexercised shall be issued by
the Rights Agent and delivered to, or upon the order of, the registered
holder of such Rights Certificate, registered in such name or names as may
be designated by such holder, subject to the provisions of Section 14.
(e) Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of any Section 11(a)(ii) Event or
Section 13 Event, any Rights beneficially owned by (i) an Acquiring Person
or an Associate or Affiliate of an Acquiring Person, (ii) a transferee of
an Acquiring Person (or of any such Associate or Affiliate) which becomes a
transferee after the Acquiring Person becomes such, or (iii) a transferee
of an Acquiring Person (or of any such Associate or Affiliate) which
becomes a transferee prior to or concurrently with the Acquiring Person
becoming such and which receives such Rights pursuant to either (A) a
transfer (whether or not for consideration) from the Acquiring Person (or
any such Associate or Affiliate) to holders of equity interests in such
Acquiring Person (or such Associate or Affiliate) or to any Person with
whom such Acquiring Person (or such Associate or Affiliate) has any
continuing agreement, arrangement or understanding
<PAGE>
- 12 -
regarding the transferred Rights, shares of Company Common Stock or the
Company or (B) a transfer which a majority of the Company's Board of
Directors has determined to be part of a plan, arrangement or understanding
which has as a primary purpose or effect the avoidance of this
Section 7(e), shall be null and void without any further action, and no
holder of such Rights shall have any rights whatsoever with respect to such
Rights, whether under any provision of this Agreement or otherwise. The
Company shall use all reasonable efforts to ensure that the provisions of
this Section 7(e) and Section 4(b) are complied with, but shall have no
liability to any holder of Rights or any other Person as a result of its
failure to make any determination under this Section 7(e) or Section 4(b)
with respect to an Acquiring Person or its Affiliates, Associates or
transferees.
(f) Notwithstanding anything in this Agreement or any Rights
Certificate 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 by such registered holder
unless such registered holder shall have (i) completed and executed the
certificate following the form of election to purchase set forth on the
reverse side of the Rights Certificate surrendered for such exercise and
(ii) provided such additional evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) of the Rights represented by such Rights
Certificate or Affiliates or Associates thereof as the Company shall
reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES.
All Rights Certificates surrendered for the purpose of exercise, transfer,
split up, combination or exchange shall, if surrendered to the Company or
any of its agents, be delivered to the Rights Agent for cancellation or in
cancelled form, or, if surrendered to the Rights Agent, shall be cancelled
by it, and no Rights Certificates shall be issued in lieu thereof except as
expressly permitted by this Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any Rights Certificates acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver
all cancelled Rights Certificates to the Company, or shall, at the written
request of the Company, destroy such cancelled Rights Certificates, and in
such case shall deliver a certificate of destruction thereof to the
Company.
SECTION 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK.
(a) The Company shall at all times prior to the Expiration Date
cause to be reserved and kept available, out of its authorized and unissued
shares of Preferred Stock, the number of shares of Preferred Stock that, as
provided in this Agreement, will be sufficient to permit the exercise in
full of all outstanding Rights. Upon the occurrence of any events
resulting in an increase in the aggregate number of shares of Preferred
Stock (or other equity securities of the Company) issuable upon exercise of
all outstanding Rights above the number then reserved, the Company shall
make appropriate increases in the number of shares so reserved.
<PAGE>
- 13 -
(b) If the shares of Preferred Stock to be issued and delivered
upon the exercise of the Rights may be listed on any national securities
exchange, the Company shall during the period from the Distribution Date
through the Expiration Date use its best efforts to cause all securities
reserved for such issuance to be listed on such exchange upon official
notice of issuance upon such exercise.
(c) The Company shall use its best efforts (i) as soon as
practicable following the occurrence of a Section 11(a)(ii) Event and a
determination by the Company in accordance with Section 11(a)(iii) of the
consideration to be delivered by the Company upon exercise of the Rights
or, if so required by law, as soon as practicable following the
Distribution Date (such date being the "REGISTRATION DATE"), to file a
registration statement on an appropriate form under the Securities Act with
respect to the securities that may be acquired upon exercise of the Rights
(the "REGISTRATION STATEMENT"), (ii) to cause the Registration Statement to
become effective as soon as practicable after such filing, (iii) to cause
the Registration Statement to continue to be effective (and to include a
prospectus complying with the requirements of the Securities Act) until the
earlier of (A) the date as of which the Rights are no longer exercisable
for the securities covered by the Registration Statement and (B) the
Expiration Date and (iv) to take as soon as practicable following the
Registration Date such action as may be required to ensure that any
acquisition of securities upon exercise of the Rights complies with any
applicable state securities or "blue sky" laws.
(d) The Company shall take such action as may be necessary to
ensure that all shares of Preferred Stock (and, following the occurrence of
a Triggering Event, any other securities that may be delivered upon
exercise of Rights) shall be, at the time of delivery of the certificates
or depositary receipts for such securities, duly and validly authorized and
issued and fully paid and non-assessable.
(e) The Company shall pay any documentary, stamp or transfer tax
imposed in connection with the issuance or delivery of the Rights
Certificates or upon the exercise of Rights; PROVIDED, HOWEVER, the Company
shall not be required to pay any such tax imposed in connection with the
issuance or delivery of Units of Preferred Stock, or any certificates or
depositary receipts for such Units of Preferred Stock (or, following the
occurrence of a Triggering Event, any other securities, cash or assets, as
the case may be) to any person other than the registered holder of the
Rights Certificates evidencing the Rights surrendered for exercise. The
Company shall not be required to issue or deliver any certificates or
depositary receipts for Units of Preferred Stock (or, following the
occurrence of a Triggering Event, any other securities, cash or assets, as
the case may be) to, or in a name other than that of, the registered holder
of the Rights Certificate upon the exercise of any Rights represented
thereby until any such tax shall have been paid (any such tax being payable
by the holder of such Rights Certificate at the time of surrender) or until
it has been established to the Company's satisfaction that no such tax is
due.
<PAGE>
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SECTION 10. PREFERRED STOCK RECORD DATE. Each Person in whose
name any certificate for Units of Preferred Stock (or, following the
occurrence of a Triggering Event, other securities) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the
holder of record of the Units of Preferred Stock (or, following the
occurrence of a Triggering Event, other securities) represented thereby on,
and such certificate shall be dated, the date upon which the Rights
Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and any applicable transfer taxes) was made; PROVIDED,
HOWEVER, that if the date of such surrender and payment is a date upon
which the Preferred Stock (or, following the occurrence of a Triggering
Event, other securities) transfer books of the Company are closed, such
Person shall be deemed to have become the record holder of such securities
on, and such certificate shall be dated, the next succeeding Business Day
on which the Preferred Stock (or, following the occurrence of a Triggering
Event, other securities) transfer books of the Company are open; and
further PROVIDED, HOWEVER, that if delivery of Units of Preferred Stock is
delayed pursuant to Section 9(c), such Persons shall be deemed to have
become the record holders of such Units of Preferred Stock only when such
Units first become deliverable. Prior to the exercise of the Rights
evidenced thereby, the holder of a Rights Certificate shall not be entitled
to any rights of a stockholder of the Company with respect to securities
for which the Rights shall be exercisable, including, without limitation,
the right to vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to receive any
notice of any proceedings of the Company, except as provided herein.
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF
SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of
securities covered by each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred Stock
payable in shares of Preferred Stock, (B) subdivide the outstanding
Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller
number of shares or (D) issue any shares of its capital stock in a
reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), except as otherwise
provided in this Section 11(a), the Purchase Price in effect at the time of
the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of
shares of Preferred Stock or capital stock, as the case may be, issuable on
such date upon exercise of the Rights, shall be proportionately adjusted so
that the holder of any Right exercised after such time shall be entitled to
receive, upon Payment of the Purchase Price then in effect, the aggregate
number and kind of shares of Preferred Stock or capital stock, as the case
may be, which, if such Right had been exercised immediately prior to such
date, such holder would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs which would require an adjustment
under both this
<PAGE>
- 15 -
Section 11(a)(i) and Section 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:
(A) any Acquiring Person or any Associate or Affiliate of
any Acquiring Person, at any time after the date of this
Agreement, directly or indirectly, shall (1) merge into the
Company or otherwise combine with the Company and the Company
shall be the continuing or surviving corporation of such merger
or combination and Company Common Stock shall remain outstanding
and unchanged, (2) in one transaction or a series of
transactions, transfer any assets to the Company or to any of its
Subsidiaries in exchange (in whole or in part) for shares of
Company Common Stock, for other equity securities of the Company
or any such Subsidiary, or for securities exercisable for or
convertible into shares of equity securities of the Company or
any of its Subsidiaries (whether Company Common Stock or
otherwise) or otherwise obtain from the Company or any of its
Subsidiaries, with or without consideration, any additional
shares of such equity securities or securities exercisable for or
convertible into such equity securities (other than pursuant to a
pro rata distribution to all holders of Company Common Stock),
(3) sell, purchase, lease, exchange, mortgage, pledge, transfer
or otherwise acquire or dispose of, in one transaction or a
series of transactions, to, from or with the Company or any of
its Subsidiaries or any employee benefit plan maintained by the
Company or any of its Subsidiaries or any trustee or fiduciary
with respect to such plan acting in such capacity, assets
(including securities) on terms and conditions less favorable to
the Company or such Subsidiary or plan than those that could have
been obtained in arm's-length negotiations with an unaffiliated
third party, other than pursuant to a transaction set forth in
Section 13(a), (4) sell, purchase, lease, exchange, mortgage,
pledge, transfer or otherwise acquire or dispose of, in one
transaction or a series of transactions, to, from or with the
Company or any of the Company's Subsidiaries or any employee
benefit plan maintained by the Company or any of its Subsidiaries
or any trustee or fiduciary with respect to such plan acting in
such capacity (other than transactions, if any, consistent with
those engaged in, as of the date hereof, by the Company and such
Acquiring Person or such Associate or Affiliate), assets
(including securities) having an aggregate fair market value of
more than $5,000,000, other than pursuant to a transaction set
forth in Section 13(a), (5) sell, purchase, lease, exchange,
mortgage, pledge, transfer or otherwise acquire or dispose of, in
one transaction or a series of transactions, to, from or with the
Company or any of its Subsidiaries or any employee benefit plan
maintained by the Company or any of its Subsidiaries or any
trustee or fiduciary with respect to such plan acting in such
capacity, any
<PAGE>
- 16 -
material trademark or material service mark, other than pursuant
to a transaction set forth in Section 13(a), (6) receive, or any
designee, agent or representative of such Acquiring Person or any
Affiliate or Associate of such Acquiring Person shall receive,
any compensation from the Company or any of its Subsidiaries
other than compensation for full-time employment as a regular
employee at rates in accordance with the Company's (or its
Subsidiaries') past practices, or (7) receive the benefit,
directly or indirectly (except proportionately as a holder of
Company Common Stock or as required by law or governmental
regulation), of any loans, advances, guarantees, pledges or other
financial assistance or any tax credits or other tax advantage
provided by the Company or any of its Subsidiaries or any
employee benefit plan maintained by the Company or any of its
Subsidiaries or any trustee or fiduciary with respect to such
plan acting in such capacity; or
(B) any Person shall become an Acquiring Person, unless the
event causing such Person to become an Acquiring Person is a
transaction set forth in Section 13(a); or
(C) during such time as there is an Acquiring Person, there
shall be any reclassification of securities (including any
reverse stock split), or recapitalization of the Company, or any
merger or consolidation of the Company with any of its
Subsidiaries or any other transaction or series of transactions
involving the Company or any of its Subsidiaries, other than a
transaction or transactions to which the provisions of
Section 13(a) apply (whether or not with or into or otherwise
involving an Acquiring Person), which has the effect, directly or
indirectly, of increasing by more than 1% the proportionate share
of the outstanding shares of any class of equity securities of
the Company or any of its Subsidiaries that is directly or
indirectly beneficially owned by any Acquiring Person or any
Associate or Affiliate of any Acquiring Person;
THEN, immediately upon the date of the occurrence of an event
described in Section 11(a)(ii)(A), (B) or (C) (a "SECTION 11(A)(II)
EVENT"), proper provision shall be made so that each holder of a Right
(except as provided below and in Section 7(e)) shall thereafter have
the right to receive, upon exercise thereof at the then current
Purchase Price in accordance with the terms of this Agreement, in lieu
of the number of Units of Preferred Stock for which a Right was
exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event, such number of Units of Preferred Stock as
shall equal the result obtained by (x) multiplying the then current
Purchase Price by the then number of Units of Preferred Stock for
which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event (such product thereafter
being, for all purposes of this Agreement other than Section 13, the
"PURCHASE PRICE"), and (y) dividing that product by 50% of the then
current market
<PAGE>
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price (determined pursuant to Section 11(d)) per Unit of Preferred
Stock on the date of such first occurrence (such Units of Preferred
Stock being the "ADJUSTMENT SHARES").
(iii) In the event that the number of shares of Preferred Stock
which are authorized by the Company's Certificate of Incorporation but
not outstanding or reserved for issuance for purposes other than upon
exercise of the Rights is not sufficient to permit the exercise in
full of the Rights in accordance with the foregoing subparagraph (ii)
of this Section 11(a), the Company, by the vote of a majority of the
Company's Board of Directors, shall: (A) determine the excess of
(1) the value of the Adjustment Shares issuable upon the exercise of a
Right (the "CURRENT VALUE") over (2) the Purchase Price (such excess
being the "SPREAD"), and (B) with respect to each Right, make adequate
provision to substitute for such Adjustment Shares, upon payment of
the applicable Purchase Price, (1) cash, (2) a reduction in the
Purchase Price, (3) Company Common Stock or other equity securities of
the Company (including, without limitation, shares, or units of
shares, of preferred stock (such other shares being "PREFERRED STOCK
EQUIVALENTS")), (4) debt securities of the Company, (5) other assets
or (6) any combination of the foregoing, having an aggregate value
equal to the Current Value, where such aggregate value has been
determined by a majority of the Company's Board of Directors, after
receiving advice from a nationally recognized investment banking firm;
PROVIDED, HOWEVER, that if the Company shall not have made adequate
provision to deliver value pursuant to clause (B) above within thirty
days following the later of (x) the first occurrence of a
Section 11(a)(ii) Event and (y) the date on which the Company's right
of redemption pursuant to Section 23(a) expires (the later of (x) and
(y) being referred to herein as the "SECTION 11(A)(III) TRIGGER
DATE"), then the Company shall be obligated to deliver, upon the
surrender for exercise of a Right and without requiring payment of the
Purchase Price, Units of Preferred Stock (to the extent available) and
then, if necessary, cash, which Units of Preferred Stock and/or cash
shall have an aggregate value equal to the Spread. To the extent that
the Company determines that some action need be taken pursuant to the
first sentence of this Section 11(a)(iii), the Company shall provide,
subject to Section 7(e), that such action shall apply uniformly to all
outstanding Rights. For purposes of this Section 11(a)(iii), the
value of a Unit of Preferred Stock shall be the current market price
(as determined pursuant to Section 11(d)) per Unit of Preferred Stock
on the Section 11(a)(iii) Trigger Date and the value of any preferred
stock equivalent shall be deemed to have the same value as the
Preferred Stock on such date.
(b) In case the Company shall fix a record date for the issuance
of rights, options or warrants to all holders of Preferred Stock entitling
them to subscribe for or purchase (for a period expiring within forty-five
calendar days after such record date) shares of Preferred Stock (or shares
having substantially the same rights, privileges and preferences as shares
of Preferred Stock ("EQUIVALENT PREFERRED STOCK")) or securities
convertible into
<PAGE>
- 18 -
Preferred Stock or Equivalent Preferred Stock at a price per share of
Preferred Stock or per share of Equivalent Preferred Stock (or having a
conversion price per share, if a security convertible into Preferred Stock
or Equivalent Preferred Stock) less than the current market price (as
determined pursuant to Section 11(d)) per share of Preferred Stock on such
record date, the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be
the sum of the number of shares of Preferred Stock outstanding on such
record date plus the number of shares of Preferred Stock which the
aggregate offering price of the total number of shares of Preferred Stock
and/or Equivalent Preferred Stock so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be offered)
would purchase at such current market price, and the denominator of which
shall be the number of shares of Preferred Stock outstanding on such record
date plus the number of additional shares of Preferred Stock and/or
Equivalent Preferred Stock to be offered for subscription or purchase (or
into which the convertible securities so to be offered are initially
convertible). In case such subscription price may be paid by delivery of
consideration part or all of which may be in a form other than cash, the
value of such consideration shall be as determined in good faith by a
majority of the Company's Board of Directors, whose determination shall be
described in a statement filed with the Rights Agent and shall be binding
on the Rights Agent and the holders of the Rights. Shares of Preferred
Stock owned by or held for the account of the Company or any Subsidiary
shall not be deemed outstanding for the purpose of any such computation.
Such adjustment shall be made successively whenever such a record date is
fixed, and in the event that such rights or warrants are not so issued, the
Purchase Price shall be adjusted to be the Purchase Price which would then
be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of shares of Preferred Stock (including any
such distribution made in connection with a consolidation or merger in
which the Company is the continuing corporation) of evidences of
indebtedness, cash (other than a regular quarterly cash dividend out of the
earnings or retained earnings of the Company), assets (other than a
dividend payable in 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 such record date by a
fraction, the numerator of which shall be the current market price (as
determined pursuant to Section 11(d)) per share of Preferred Stock on such
record date less the fair market value (as determined in good faith by a
majority of the Company's Board of Directors, whose determination shall be
described in a statement filed with the Rights Agent and shall be binding
on the Rights Agent and the holder of the Rights) of the cash, assets or
evidences of indebtedness so to be distributed or of such subscription
rights or warrants distributable in respect of a share of Preferred Stock
and the denominator of which shall be such current market price (as
determined pursuant to Section 11(d)) per share of Preferred Stock. Such
adjustments shall be made successively whenever such a record date is
fixed, and in the event that such distribution is not so made,
<PAGE>
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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, the
"current market price" per share of Company Common Stock or Common Stock on
any date shall be deemed to be the average of the daily closing prices per
share of such shares for the ten consecutive Trading Days immediately prior
to such date; PROVIDED, HOWEVER, if prior to the expiration of such
requisite ten Trading Day period the issuer announces either (A) a dividend
or distribution on such shares payable in such shares or securities
convertible into such shares (other than the Rights) or (B) any
subdivision, combination or reclassification of such shares, then,
following the ex-dividend date for such dividend or the record date for
such subdivision, as the case may be, the "current market price" shall be
properly adjusted to take into account such event. The closing price for
each day shall be, if the shares are listed and admitted to trading on a
national securities exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the
principal national securities exchange on which such shares are listed or
admitted to trading or, if such shares are not listed or admitted to
trading on any national securities exchange, the last quoted price or, if
not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the NASDAQ National Market System
or such other system then in use, or, if on any such date such shares 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 shares selected by a majority of the Company's Board of Directors. If
on any such date no market maker is making a market in such shares, the
fair value of such shares on such date as determined in good faith by a
majority of the Company's Board of Directors shall be used. If such shares
are not publicly held or not so listed or traded, "current market price"
per share shall mean the fair value per share as determined in good faith
by a majority of the Company's Board of Directors, whose determination
shall be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes. The term "TRADING DAY" shall mean, if such
shares are listed or admitted to trading on any national securities
exchange, a day on which the principal national securities exchange on
which such shares are listed or admitted to trading is open for the
transaction of business or, if such shares are not so listed or admitted, a
Business Day.
(ii) For the purpose of any computation hereunder, the "current
market price" per share of Preferred Stock shall be determined in the
same manner as set forth above for Company Common Stock in clause (i)
of this Section 11(d) (other than the fourth sentence thereof). If
the current market price per share of Preferred Stock cannot be
determined in the manner provided above or if the Preferred Stock is
not publicly held or listed or traded in a manner described in
clause (i) of this Section 11(d), the "current market price" per share
of Preferred Stock shall be conclusively deemed to be an amount equal
to 1,000 (as such amount may be appropriately adjusted for such events
as stock splits, stock dividends and recapitalizations with respect to
Company Common Stock occurring after the date of
<PAGE>
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this Agreement) multiplied by the current market price per share of
Company Common Stock. If neither Company Common Stock nor Preferred
Stock is publicly held or so listed or traded, "current market price"
per share of the Preferred Stock shall mean the fair value per share
as determined in good faith by a majority of the Company's Board of
Directors, whose determination shall be described in a statement filed
with the Rights Agent and shall be binding on the Rights Agent and the
holders of the Rights. For all purposes of this Agreement, the
"current market price" of a Unit of Preferred Stock shall be equal to
the "current market price" of one share of Preferred Stock divided by
1000.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment
would require an increase or decrease of at least 1% in the Purchase Price;
PROVIDED, HOWEVER, that any adjustments which by reason of this
Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest cent or to the nearest
one-hundredth of a share of Company Common Stock or Common Stock or other
share or hundred-thousandth of a share of Preferred Stock, as the case may
be. Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the
earlier of (i) three years from the date of the transaction which mandates
such adjustment and (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a) (ii) or 13(a), the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock other than
Preferred Stock, thereafter the number of such other shares so receivable
upon exercise of any Right and the Purchase Price thereof shall be subject
to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Preferred
Stock contained in Sections 11(a), (b), (c), (d), (e), (g), (h), (i), (j),
(k), (1) and (m), and the provisions of Sections 7, 9, 10, 13 and 14 with
respect to the Preferred Stock shall apply on like terms to any such other
shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the
right to purchase, at the adjusted Purchase Price, the number of Units of
Preferred Stock (or other securities or amount of cash or combination
thereof) that may be acquired 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 of Preferred Stock (calculated to the nearest one
hundred-thousandth of a Unit) obtained by (i) multiplying (x) the number of
Units of
<PAGE>
- 21 -
Preferred Stock covered by a Right immediately prior to this adjustment by
(y) the Purchase Price in effect immediately prior to such adjustment of
the Purchase Price and (ii) dividing the product so obtained by the
Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any adjustment
of the Purchase Price to adjust the number of Rights, in lieu of any
adjustment in the number of Units of Preferred Stock that may be acquired
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 of Preferred Stock for which a Right was exercisable immediately
prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest hundred-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase
Price by the Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement of its
election to adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the tune, the amount of the adjustment to be
made. This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Rights Certificates have been
issued, shall be at least ten days later than the date of such public
announcement. If Rights Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to
holders of record of Rights Certificates on such record date Rights
Certificates evidencing, subject to Section 14, the additional Rights to
which such holders shall be entitled as a result of such adjustment, or, at
the option of the Company, shall cause to be distributed to such holders of
record in substitution and replacement for the Rights Certificates held by
such holders prior to the date of adjustment, and upon surrender thereof,
if required by the Company, new Rights Certificates evidencing all the
Rights to which such holders shall be entitled after such adjustment.
Rights Certificates to be so distributed shall be issued, executed and
countersigned in the manner provided for herein (and may bear, at the
option of the Company, the adjusted Purchase Price) and shall be registered
in the names of the holders of record of Rights Certificates on the record
date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of Units of Preferred Stock issuable upon the exercise
of the Rights, the Rights Certificates theretofore and thereafter issued
may continue to express the Purchase Price per Unit and the number of Units
of Preferred Stock which were expressed in the Initial Rights Certificates
issued hereunder without prejudice to any such adjustment or change.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value of the number of Units
of Preferred Stock issuable upon exercise of the Rights, the Company shall
take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue
<PAGE>
- 22 -
such fully paid and non-assessable number of Units of Preferred Stock at
such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for
a specified event, the Company may elect to defer until the occurrence of
such event the issuance to the holder of any Right exercised after such
record date of that number of Units of Preferred Stock and shares of other
capital stock or securities of the Company, if any, issuable upon such
exercise over and above the number of Units of Preferred Stock and shares
of other capital stock or securities of the Company, if any, issuable upon
such exercise on the basis of the Purchase Price in effect prior to such
adjustment; PROVIDED, HOWEVER, that the Company shall deliver to such
holder a due bill or other appropriate instrument evidencing such holder's
right to receive such additional shares (fractional or otherwise) or
securities upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Purchase
Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that in their good faith judgment a
majority of the Company's Board of Directors shall determine to be
advisable in order that any (i) consolidation or subdivision of the
Preferred Stock, (ii) issuance wholly for cash of any shares of Preferred
Stock at less than the current market price, (iii) issuance wholly for cash
of shares of Preferred Stock or securities which by their terms are
convertible into or exchangeable for shares of Preferred Stock, (iv) stock
dividends or (v) issuance of rights, options or warrants referred to in
this Section 11, hereafter made by the Company to holders of its Preferred
Stock, shall not be taxable to such holders or shall reduce the taxes
payable by such holders.
(n) The Company shall not, at any time after the Distribution
Date, (i) consolidate with any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o)), (ii) merge
with or into any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o)), or (iii) sell or transfer
(or permit any Subsidiary to sell or transfer), in one transaction, or a
series of 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 in one or more transactions each of which complies
with Section 11(o)), if (x) at the time of or immediately after such
consolidation, merger or sale there are any rights, warrants or other
instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately
after such consolidation, merger or sale, the Person which constitutes, or
would constitute, the "Principal Party" for purposes of Section 13(a) shall
have distributed or otherwise transferred to its stockholders or other
persons holding an equity interest in such Person Rights previously, owned
by such Person or any of its Affiliates and Associates;
<PAGE>
- 23 -
PROVIDED, HOWEVER, this Section 11(n) shall not affect the ability of any
Subsidiary of the Company to consolidate with, merge with or into, or sell
or transfer assets or earning power to, any other Subsidiary of the
Company.
(o) After the Distribution Date, the Company shall not, except
as permitted by Section 23 or Section 26, take (or permit any Subsidiary to
take) any action if at the time such action is taken it is reasonably
foreseeable that such action will diminish substantially or otherwise
eliminate the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding,
in the event that the Company shall at any time after the Rights Dividend
Declaration Date and prior to the Distribution Date (i) declare a dividend
on the outstanding shares of Company Common Stock payable in shares of
Company Common Stock, (ii) subdivide the outstanding shares of Company
Common Stock, (iii) combine the outstanding shares of Company Common Stock
into a smaller number of shares, or (iv) issue any shares of its capital
stock in a reclassification of Company Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), the number of Rights
associated with each share of Company Common Stock then outstanding, or
issued or delivered thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter associated
with each share of Company Common Stock following any such event shall
equal the result obtained by multiplying the number of Rights associated
with each share of Company Common Stock immediately prior to such event by
a fraction the numerator of which shall be the total number of shares of
Company Common Stock outstanding immediately prior to the occurrence of the
event and the denominator of which shall be the total number of shares of
Company Common Stock outstanding immediately following the occurrence of
such event.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF
SHARES. Whenever an adjustment is made as provided in Section 11 or
Section 13, the Company shall (a) promptly prepare a certificate setting
forth such adjustment and a brief statement of the facts accounting for
such adjustment, (b) promptly file with the Rights Agent, and with each
transfer agent for the Preferred Stock and the Company Common Stock, a copy
of such certificate, and (c) mail a brief summary thereof to each holder of
a Rights Certificate (or, if prior to the Distribution Date, to each holder
of a certificate representing shares of Company Common Stock) in accordance
with Section 25. The Rights Agent shall be fully protected in relying on
any such certificate and on any adjustment therein contained and shall not
be deemed to have knowledge of any such adjustment unless and until it
shall have received such certificate.
<PAGE>
- 24 -
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS
OR EARNING POWER.
(a) In the event that, following the Stock Acquisition Date,
directly or indirectly, either (x) the Company shall consolidate with, or
merge with and into, any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o)), and the
Company shall not be the continuing or surviving corporation of such
consolidation or merger, (y) any Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o)) shall
consolidate with, or merge with or into, the Company, and the Company shall
be the continuing or surviving corporation of such consolidation or merger
and, in connection with such consolidation or merger, all or part of the
outstanding shares of Company Common Stock shall be converted into or
exchanged for stock or other securities of any other Person or cash or any
other property, or (z) the Company shall sell or otherwise transfer (or one
or more of its Subsidiaries shall sell or otherwise transfer) to any Person
or Persons (other than the Company or any of its Subsidiaries in one or
more transactions each of which complies with Section 11(o)), in one or
more 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 (any such event described in clause (x), (y) or (z) being a
"SECTION 13 EVENT"), then, and in each such case, proper provision shall be
made so that: (i) each holder of a Right, except as provided in
Section 7(e), shall thereafter have the right to receive, upon the exercise
thereof at the then current Purchase Price, such number of validly
authorized and issued, fully paid and nonassessable shares of Common Stock
of the Principal Party, which shares shall not be subject to any liens,
encumbrances, rights of first refusal, transfer restrictions 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 of Preferred Stock
for which a Right is exercisable immediately prior to the first occurrence
of a Section 13 Event (or, if a Section 11(a)(ii) Event has occurred prior
to the first occurrence of a Section 13 Event, multiplying the number of
such Units for which a Right would be exercisable hereunder but for the
occurrence of such Section 11(a)(ii) Event by the Purchase Price which
would be in effect hereunder but for such first occurrence) and
(2) dividing that product (which, following the first occurrence of a
Section 13 Event, shall be the "Purchase Price" for all purposes of this
Agreement) by 50% of the current market price (determined pursuant to
Section 11(d)) per share of the Common Stock of such Principal Party on the
date of consummation of such Section 13 Event; (ii) such Principal Party
shall thereafter be liable for, and shall assume, by virtue of such
Section 13 Event, all the obligations and duties of the Company pursuant to
this Agreement; (iii) the term "Company" shall, for all purposes of this
Agreement, thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11 shall apply only to
such Principal Party following the first occurrence of a Section 13 Event;
(iv) such Principal Party shall take such steps (including, but not limited
to, the reservation of a sufficient number of shares of its Common Stock)
in connection with the consummation of any such transaction as may be
necessary to ensure that the provisions of this Agreement shall thereafter
be applicable to its shares of Common Stock thereafter
<PAGE>
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deliverable upon the exercise of the Rights; and (v) the provisions of
Section 11(a)(ii) shall be of no further effect following the first
occurrence of any Section 13 Event.
(b) "PRINCIPAL PARTY" shall mean:
(i) in the case of any transaction described in clause (x) or (y)
of the first sentence of Section 13(a), (A) the Person that is the
issuer of any securities into which shares of Company Common Stock are
converted in such merger or consolidation, or, if there is more than
one such issuer, the issuer of Common Stock that has the highest
aggregate current market price (determined pursuant to Section 11(d))
and (B) if no securities are so issued, the Person that is the other
party to such merger or consolidation, or, if there is more than one
such Person, the Person the Common Stock of which has the highest
aggregate current market price (determined pursuant to Section 11(d));
and
(ii) in the case of any transaction described in clause (z) of
the first sentence of Section 13(a), the Person that is the party
receiving the largest 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 transferred pursuant
to such transaction or transactions or if the Person receiving the
largest portion of the assets or earning power cannot be determined,
whichever Person the Common Stock of which has the highest aggregate
current market price (determined pursuant to Section 11(d)); PROVIDED,
HOWEVER, that in any such case, (1) if the Common Stock of such Person
is not at such time and has not been continuously over the preceding
twelve-month period registered under Section 12 of the Exchange Act
("REGISTERED COMMON STOCK"), or such Person is not a corporation, and
such Person is a direct or indirect Subsidiary of another Person that
has Registered Common Stock outstanding, "Principal Party" shall refer
to such other Person; (2) if the Common Stock of such Person is not
Registered Common Stock or such Person is not a corporation, and such
Person is a direct or indirect Subsidiary of another Person but is not
a direct or indirect Subsidiary of another Person which has Registered
Common Stock outstanding, "Principal Party" shall refer to the
ultimate parent entity of such firstmentioned Person; (3) if the
Common Stock of such Person is not Registered Common Stock or such
Person is not a corporation, and such Person is directly or indirectly
controlled by more than one Person, and one or more of such other
Persons has Registered Common Stock outstanding, "Principal Party"
shall refer to whichever of such other Persons is the issuer of the
Registered Common Stock having the highest aggregate current market
price (determined pursuant to Section 11(d)); and (4) if the Common
Stock of such Person is not Registered Common Stock or such Person is
not a corporation, and such Person is directly or indirectly
controlled by more than one Person, and none of such other Persons
have Registered Common Stock outstanding, "Principal Party" shall
refer to whichever ultimate parent entity is the
<PAGE>
- 26 -
corporation having the greatest stockholders' equity or, if no such
ultimate parent entity is a corporation, shall refer to whichever
ultimate parent entity is the entity having the greatest net assets.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless the Principal Party shall have a sufficient
number of authorized shares of its Common Stock which have not been issued
or reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13, and unless prior thereto the Company and
such Principal Party shall have executed and delivered to the Rights Agent
a supplemental agreement providing for the terms set forth in paragraphs
(a) and (b) of this Section 13 and further providing that the Principal
Party will:
(i) (A) file on an appropriate form, as soon as practicable
following the execution of such agreement, a registration statement
under the Securities Act with
respect to the Common Stock that may be acquired upon exercise of the
Rights, (B) cause such registration statement to remain effective (and
to include a prospectus complying with the requirements of the
Securities Act) until the Expiration Date, and (C) as soon as
practicable following the execution of such agreement take such action
as may be required to ensure that any acquisition of such Common Stock
upon the exercise of the Rights complies with any applicable state
securities or "blue sky" laws; and
(ii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form
10 under the Exchange Act.
(d) 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 Certificate of Incorporation or By-laws or
other instrument governing its corporate affairs, which provision would
have the effect of (i) causing such Principal Party to issue, in connection
with, or as a consequence of, the consummation of a transaction referred to
in this Section 13, shares of Common Stock of such Principal Party at less
than the then current market price per share (determined pursuant to
Section 11(d)) or securities exercisable for, or convertible into, Common
Stock of such 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 the Common Stock of such Principal Party
pursuant to the provisions of this Section 13, then, in such event, the
Company 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.
<PAGE>
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(e) The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. In the
event that a Section 13 Event shall occur at any time after the occurrence
of a Section 11(a)(ii) Event, the Rights which have not theretofore been
exercised shall thereafter become exercisable in the manner described in
Section 13(a).
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of
Rights or to distribute Rights Certificates which evidence fractional
Rights. In lieu of such fractional Rights, there shall be paid to the
Persons to which such fractional Rights would otherwise be issuable, an
amount in cash equal to such fraction of the market value of a whole Right.
For purposes of this Section 14(a), the market value of a whole Right shall
be the closing price of the Rights for the Trading Day immediately prior to
the date on which such fractional Rights would have been otherwise
issuable. The closing price of the Rights for any day shall be, if the
Rights are listed or admitted to trading on a national securities exchange,
as reported in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange
on which the Rights are listed or admitted to trading or, if the Rights are
not listed or admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by the NASDAQ
National Market System or such other system then in use or, if on any such
date the Rights are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker
making a market in the Rights selected by a majority of the Company's Board
of Directors. If on any such date no such market maker is making a market
in the Rights, the fair value of the Rights on such date as,determined in
good faith by a majority of the Company's Board of Directors shall be used
and such determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than fractions which are integral
multiples of one one-thousandth of a share of Preferred Stock) upon
exercise of the Rights or to distribute certificates which evidence such
fractional shares of Preferred Stock (other than fractions which are
integral multiples of one one-thousandth of a share of Preferred Stock).
In lieu of such fractional shares of Preferred Stock that are not integral
multiples of one one-thousandth of a share, the Company may pay to the
registered holders of Rights Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction
of the then current market price of a share of Preferred Stock on the day
of exercise, determined in accordance with Section 11(d).
<PAGE>
- 28 -
(c) The holder of a Right by the acceptance of such Right
expressly waives his right to receive any fractional Rights or any
fractional shares upon exercise of a Right, except as permitted by this
Section 14.
SECTION 15. RIGHTS OF ACTION. All rights of action in respect of
this Agreement, other than rights of action vested in the Rights Agent
pursuant to Section 18, are vested in the respective registered holders of
the Rights Certificates (and, prior to the Distribution Date, the
registered holders of certificates representing shares of Company Common
Stock); and any registered holder of a Rights Certificate (or, prior to the
Distribution Date, of a certificate representing shares of Company Common
Stock), without the consent of the Rights Agent or of the holder of any
other Rights Certificate (or, prior to the Distribution Date, of a
certificate representing shares of Company Common Stock), may, in such
registered holder's own behalf and for such registered holder's 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, such registered holder's right to exercise the Rights
evidenced by such Rights Certificate in the manner provided in such Rights
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy
at law for any breach of this Agreement and shall be entitled to specific
performance of the obligations hereunder and injunctive relief against
actual or threatened violations of the obligations hereunder of any Person
subject to this Agreement.
SECTION 16. AGREEMENT OF RIGHTS HOLDERS. Every holder of a Right
by accepting the same consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Company Common
Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the office of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of
transfer and with the appropriate forms and certificates duly
executed;
(c) subject to Section 6(a) and Section 7(f), the Company and the
Rights Agent may deem and treat the person in whose name a Rights
Certificate (or, prior to the Distribution Date, the associated
Company Common Stock certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Rights Certificates or the
associated Company Common Stock certificate made by anyone other than
the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company
<PAGE>
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nor the Rights Agent, subject to the last sentence of Section 7(e),
shall be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or any other Person as a result of its inability
to perform any of its obligations under this Agreement by reason of
any preliminary or permanent injunction or other order, decree or
ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, or
any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise
restraining performance of such obligation; PROVIDED, HOWEVER, the
Company must use its best efforts to have any such order, decree or
ruling lifted or otherwise overturned as promptly as practicable.
SECTION 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER.
No holder, as such, of any Rights Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the number of
shares of Preferred Stock or any other securities of the Company which may
at any time be issuable on the exercise of the Rights represented thereby,
nor shall anything contained herein or in any Rights Certificate be
construed to confer upon the holder of any Rights Certificate, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action,
or, except as provided in Section 24, to receive notice of meetings or
other actions affecting stockholders, or to receive dividends or
subscription rights, or otherwise.
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 connection with the execution and
administration of this Agreement and the exercise and performance of its
duties hereunder. The Company shall indemnify the Rights Agent, its
directors, officers, employees and agents for, and hold each of them
harmless against, any loss, liability, or expense, incurred without gross
negligence, bad faith or willful misconduct on the part of the Rights Agent
or such other indemnified party, for anything done, suffered or omitted by
the Rights Agent or such other indemnified party in connection with the
acceptance and administration of this Agreement or the existence or
performance of its duties hereunder, including the costs and expenses of
defending against any claim of liability hereunder (including reasonable
counsel fees and expenses).
(b) The Rights Agent shall be protected fully and shall incur no
liability for or in respect of any action taken, suffered or omitted by it
in connection with its
<PAGE>
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administration of this Agreement or the existence or performance of its
duties hereunder, in reliance upon any Rights Certificate or certificate
for Preferred Stock or for other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement or other paper or
document believed by it to be genuine and to have been signed, executed
and, where necessary, verified or acknowledged by the proper Person or
Persons.
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS
AGENT.
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust or shareholder services business of the
Rights Agent or any successor Rights Agent, shall be the successor to the
Rights Agent under this Agreement without the execution or filing of any
document or any further act on the part of any of the parties hereto;
PROVIDED that such corporation would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21. In case at the
time such successor Rights Agent shall succeed to the agency created by
this Agreement, any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt
the countersignature of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent
may countersign such Rights Certificates either in the name of the
predecessor or in the name of the successor Rights Agent; and in all such
cases such Rights Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates
shall not have been countersigned, the Rights Agent may countersign such
Rights Certificates either in its prior name or in its changed name; and in
all such cases such Rights Certificates shall have the full force provided
in the Rights Certificates and in this Agreement.
SECTION 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes
the duties and obligations imposed by this Agreement upon the following
terms and conditions, by all of which the Company and the holders of Rights
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the written advice or opinion of
such counsel shall be full and complete authorization and protection
to the Rights Agent as to any action
<PAGE>
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taken, suffered or omitted by it in good faith and in accordance with
such written advice or opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that
any fact or matter (including, without limitation, the identity of any
Acquiring Person and the determination of "current market price") be
proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in
respect thereof be specified herein) may be deemed to be conclusively
proved and established by a certificate signed by the Chairman of the
Board, any President, any Vice President, 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 to the Rights Agent for any action taken or suffered in
good faith by it under the provisions of this Agreement in reliance
upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or
in the Rights Certificates or be required to verify the same (except
as to its countersignature on such Rights Certificates), but all such
statements and recitals are and shall be deemed to have been made by
the Company only.
(e) The Rights Agent shall not have any responsibility for the
validity of any provision of this Agreement or the execution and
delivery hereof (except the due execution and delivery hereof by the
Rights Agent) or for the validity or execution of any Rights
Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or failure
by the Company to satisfy conditions contained in this Agreement or in
any Rights Certificate; nor shall it be responsible for any change in
the exercisability of the Rights or any adjustment in the terms of the
Rights provided for under this Agreement or for the manner, method or
amount of any such adjustment or the ascertaining of the existence of
facts, that would require any such adjustment (except with respect to
the exercise of Rights evidenced by Rights Certificates after receipt
by the Rights Agent of the certificate describing any such adjustment
contemplated by Section 12); 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 any other
securities to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any shares of Preferred Stock or any
other securities will, when so issued, be validly authorized and
issued, fully paid and non-assessable.
<PAGE>
- 32 -
(f) The Company shall perform, execute, acknowledge and deliver
or cause to be performed, executed, acknowledged and delivered all
such further acts, instruments and assurances as may reasonably be
required by the Rights Agent for the performance by the Rights Agent
of its duties under this 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, any President, any Vice President, the
Secretary, any Assistant Secretary, the Treasurer or any Assistant
Treasurer of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable
for any action taken, suffered or omitted to be taken by it in good
faith under the provisions of this Agreement in reliance upon
instructions of any such officer. At any time, the Rights Agent may
apply to the Company for written instructions from the Company with
respect to any matter arising in connection with the Rights Agent's
duties and obligations arising under this Agreement. Such application
by the Rights Agent for written instructions from the Company may, at
the option of the Rights Agent, set forth in writing any action
proposed to be taken or omitted by the Rights Agent with respect to
its duties or obligations under this Agreement and the date on and/or
after which such action shall be taken and the Rights Agent shall not
be liable for any action taken, suffered or omitted by the Rights
Agent in accordance with a proposal included in any such application
on or after the date specified in such application (which date shall
not be less than five Business Days after the date any such officer of
the Company actually receives such application, unless any such
officer shall have consented in writing to an earlier date) unless,
prior to taking any such action (or the effective date in the case of
an omission), the Rights Agent shall have received written
instructions in response to such application specifying the action to
be taken or omitted.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested,
or contract with or lend money to the Company or otherwise act as
fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other Person.
(i) The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights Agent
shall not be answerable or accountable for any act, default, neglect
or misconduct of any such attorneys or agents or for any loss to the
Company resulting from any such act, default, neglect or misconduct,
provided reasonable care was exercised in the selection and continued
employment thereof.
<PAGE>
- 33 -
(j) The Rights Agent undertakes only the express duties and
obligations imposed on it by this Agreement and no implied duties or
obligations shall be read into this Agreement against the Rights
Agent.
(k) Anything in this Agreement to the contrary notwithstanding,
in no event shall the Rights Agent be liable for special, indirect or
consequential loss or damage of any kind whatsoever (including but not
limited to lost profits).
(l) No provision of this Agreement shall require the Rights Agent
to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties or in the exercise
of its rights hereunder if the Rights Agent shall have reasonable
grounds for believing that repayment of such funds or adequate
indemnification against such risk or liability is not reasonably
assured to it.
(m) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the
form of assignment or form of election to purchase, as the case may
be, has either not been completed, not signed or indicates an
affirmative response to clause 1 and/or 2 thereof, the Rights Agent
shall not take any further action with respect to such requested
exercise or transfer without first consulting with the Company. If
such certificate has been completed and signed and shows a negative
response to clauses 1 and 2 of such certificate, unless previously
instructed otherwise in writing by the Company (which instructions may
impose on the Rights Agent additional ministerial responsibilities,
but no discretionary responsibilities), the Rights Agent shall assume
without further inquiry that the Rights Certificate is not owned by a
person described in Section 4(b) or Section 7(e) and shall not be
charged with any knowledge to the contrary.
SECTION 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under
this Agreement upon thirty days' prior notice in writing mailed to the
Company, and to each transfer agent of the Preferred Stock and the Company
Common Stock, by registered or certified mail, and to the holders of the
Rights Certificates (or certificates for the Company Common Stock prior to
the Distribution Date) by first-class mail. The Company may remove the
Rights Agent or any successor Rights Agent upon thirty days' prior notice
in writing, mailed to the Rights Agent or successor Rights Agent, as the
case may be, and to each transfer agent of the Preferred Stock and the
Company Common Stock, by registered or certified mail, and to the holders
of the Rights Certificates (or certificates for the Company Common Stock
prior to the Distribution Date) by first-class mail. If the Rights Agent
shall resign or be removed or shall otherwise become incapable of acting,
the Company shall appoint a successor to the Rights Agent. If the Company
shall fail to make such appointment within a period of thirty days after
giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights
Agent or by the holder of a Rights Certificate or, prior to the
Distribution Date, the holder of a certificate for the
<PAGE>
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Company Common Stock (who shall, with such notice, submit such holder's
Rights Certificate or certificate for Company Common Stock, as the case may
be, for inspection by the Company), then any registered holder of any
Rights Certificate or, prior to the Distribution Date, the holder of a
certificate for the Company Common Stock may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a
court, shall be (a) a corporation organized and doing business under the
laws of the United States or any state of the United States in good
standing, shall be authorized to do business as a banking institution in
the State of New York, shall be authorized under such laws to exercise
corporate trust or stock transfer powers, shall be subject to supervision
or examination by federal or state authorities and shall have at the time
of its appointment as Rights Agent a combined capital and surplus of at
least $100,000,000 or (b) an Affiliate of a corporation described in clause
(a). 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 Preferred Stock and the Company Common
Stock, and mail a notice thereof in writing to the registered holders of
the Rights Certificates (or certificates for the Company Common Stock prior
to the Distribution Date). 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.
SECTION 22. ISSUANCE OF NEW RIGHTS CERTIFICATES. Notwithstanding
any of the provisions of this Agreement or the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights
in such form as may be approved by a majority of the Company's Board of
Directors to reflect any adjustment or change made in accordance with the
provisions of this Agreement in the Purchase Price or the number or kind or
class of shares or other securities or property that may be acquired upon
exercise of the Rights. In addition, in connection with the issuance or
sale of shares of Company Common Stock following the Distribution Date and
prior to the Expiration Date, the Company (a) shall, with respect to shares
of Company Common Stock so issued or sold pursuant to the exercise of stock
options or under any employee plan or arrangement, or upon the exercise,
conversion or exchange of securities hereinafter issued by the Company, and
(b) may, in any other case, if deemed necessary or appropriate by a
majority of the Company's Board of Directors, issue Rights Certificates
representing the appropriate number of Rights in connection with such
issuance or sale; PROVIDED, HOWEVER, that (i) no such Rights Certificate
shall be issued if, and to the extent that, the Company shall be advised by
counsel that such issuance would create a significant risk of material
adverse tax consequences to the Company or the person to whom such Rights
Certificate would be issued
<PAGE>
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and (ii) no such Rights Certificate shall be issued if, and to the extent
that, appropriate adjustment shall otherwise have been made in lieu of the
issuance thereof.
SECTION 23. REDEMPTION AND TERMINATION.
(a) Subject to Section 28, the Company may, at its option, by
action of a majority of the Company's Board of Directors, at any time prior
to the earlier of (i) the Close of Business on the tenth Business Day
following the Stock Acquisition Date or (ii) the Final Expiration Date,
redeem all but not less than all of the then outstanding Rights at a
redemption price of $.01 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being the
"REDEMPTION PRICE"), and the Company may, at its option, by action of a
majority of the Company's Board of Directors, pay the Redemption Price
either in shares of Company Common Stock (based on the current market
price, determined in accordance with Section 11(d), of the shares of
Company Common Stock at the time of redemption) or cash. Subject to the
foregoing, the redemption of the Rights may be made effective at such time,
on such basis and with such conditions as the Board of Directors in its
sole discretion may establish.
(b) Immediately upon the action of a majority of the Company's
Board of Directors ordering the redemption of the Rights, evidence of which
shall be filed with the Rights Agent, and without any further action and
without any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right so held. Promptly after the action of a
majority of the Company's Board of Directors ordering the redemption of the
Rights, the Company shall give notice of such redemption to the Rights
Agent and the holders of the then outstanding Rights by mailing such notice
to all such holders at each holder's last address as it appears upon the
registry books of the Rights Agent or, prior to the Distribution Date, on
the registry books of the transfer agent for Company Common Stock. Any
notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption
Price will be made.
SECTION 24. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to
the holders of Preferred Stock or to make any other distribution to the
holders of Preferred Stock (other than a regular quarterly cash dividend
out of earnings or retained earnings of the Company), (ii) to offer to the
holders of Preferred Stock rights or warrants to subscribe for or to
purchase any additional shares of Preferred Stock or shares of stock of any
class or any other securities, rights or options, (iii) to effect any
reclassification of the Preferred Stock (other than a reclassification
involving only the subdivision of outstanding shares of Preferred Stock),
<PAGE>
- 36 -
(iv) to effect any consolidation or merger into or with any other Person
(other than a Subsidiary of the Company in a transaction which complies
with Section 11(o)), 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 (other than the Company and/or any of its Subsidiaries in one or
more transactions each of which complies with Section 11(o)) or (v) to
effect the liquidation, dissolution or winding up of the Company, then, in
each such case, the Company shall give to each holder of a Rights
Certificate (or, prior to the Distribution Date, to each holder of
certificates for Company Common Stock), to the extent feasible and in
accordance with Section 25, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend,
distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution or winding up is to take place and the date of participation
therein by the holders of the shares of Preferred Stock, if any such date
is to be fixed, and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least 20 days prior to the record
date for determining holders of the shares of Preferred Stock for purposes
of such action, and in the case of any such other action, at least 20 days
prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the shares of Preferred Stock,
whichever shall be the earlier; PROVIDED, HOWEVER, no such notice shall be
required pursuant to this Section 24 if any Subsidiary of the Company
effects a consolidation or merger with or into, or effects a sale or other
transfer of assets or earning power to, any other Subsidiary of the
Company.
(b) In case any of the events set forth in Section 11(a)(ii)
shall occur, then, in any such case, the Company shall as soon as
practicable thereafter give to each holder of a Rights Certificate, to the
extent feasible and in accordance with Section 25, a notice of the
occurrence of such event, which shall specify the event and the
consequences of the event to holders of Rights under Section 11(a)(ii).
SECTION 25. NOTICES. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
and mailed or sent or delivered (including by facsimile transmission), if
to the Company, at its address at:
ACC Corp.
400 West Avenue
Rochester, NY 14611
Attention: David K. Laniak
Chairman of the Board and Chief Executive Officer
Telecopy No.: (716) 987-3000
<PAGE>
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and if to the Rights Agent, at its address at:
First Union National Bank
Shareholder Services Group
230 South Tryon Street, 11th Floor
Charlotte, NC 28288-1153
Notices or demands authorized or required by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any Rights
Certificate (or, if prior to the Distribution Date, to the holder of
certificates representing shares of Company Common Stock) shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the
registry books of the Rights Agent or, prior to the Distribution Date, on
the registry books of the transfer agent for the Company Common Stock.
SECTION 26. SUPPLEMENTS AND AMENDMENTS. Prior to the
Distribution Date, the Company and the Rights Agent shall, if the Company
so directs, supplement or amend any provision of this Agreement without the
approval of any holders of certificates representing shares of Company
Common Stock. From and after the Distribution Date, the Company and the
Rights Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Rights Certificates in
order (i) to cure any ambiguity, (ii) to correct or supplement any
provision contained herein which may be defective or inconsistent with any
other provisions herein, (iii) to shorten or lengthen any time period
hereunder or (iv) to change or supplement the provisions hereunder in any
manner which the Company may deem necessary or desirable and which shall
not adversely affect the interests of the holders of Rights Certificates
(other than an Acquiring Person or an Affiliate or Associate of an
Acquiring Person); PROVIDED, HOWEVER, no supplement or amendment that
changes the rights or duties of the Rights Agent shall be effective without
the consent of the Company and the Rights Agent as evidenced by a writing
signed by both, and that this Agreement may not be supplemented or amended
to lengthen or shorten, pursuant to clause (iii) of this sentence,
(A) subject to Section 30, a time period relating to when the Rights may be
redeemed at such time as the Rights are not then redeemable or (B) any
other time period unless such lengthening or shortening is for the purpose
of protecting, enhancing or clarifying the rights of, and/or the benefits
to, the holders of Rights. Upon the delivery of a certificate from an
appropriate officer of the Company or, so long as any Person is an
Acquiring Person hereunder, from the majority of the Company's Board of
Directors, which states that the proposed supplement or amendment is in
compliance with the terms of this Section 26, the Rights Agent shall
execute such supplement or amendment. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident with the
interests of the holders of Company Common Stock.
<PAGE>
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SECTION 27. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
SECTION 28. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS,
ETC. For all purposes of this Agreement, any calculation of the number of
shares of Company Common Stock outstanding at any particular tune,
including for purposes of determining the particular percentage of such
outstanding shares of Company Common Stock of which any Person is the
Beneficial Owner, shall be made in accordance with the last sentence of
Rule 13d-3(d)(1)(i) of the Exchange Act Regulations as in effect on the
date hereof. Except as otherwise specifically provided herein, the Board
of Directors of the Company 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 to the
Company, or as may be necessary or advisable in the administration of this
Agreement, including, without Imitation, the right and power (i) to
interpret the provisions of this Agreement and (ii) to make all
determinations deemed necessary or advisable for the administration of this
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 in good
faith shall (x) be final, conclusive and binding on the Company, the Rights
Agent, the holders of the Rights and all other parties, and (y) not subject
the Board of Directors of the Company or any member thereof to any
liability to the holders of the Rights.
SECTION 29. BENEFITS OF THIS AGREEMENT. Nothing in this
Agreement shall be construed to give to any Person other than the Company,
the Rights Agent and the registered holders of the Rights Certificates
(and, prior to the Distribution Date, registered holders of shares of
Company Common Stock) any legal or equitable right, remedy or claim under
this Agreement. This Agreement shall be for the sole and exclusive benefit
of the Company, the Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, registered holders of
shares of Company Common Stock).
SECTION 30. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired
or invalidated; PROVIDED, HOWEVER, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant or
restriction is held by such court or authority to be invalid, void or
unenforceable and a majority of the Company's Board of Directors
determines in its good faith judgment that severing the invalid language
from this Agreement would adversely affect the purpose or effect of this
Agreement and the Rights shall not then be redeemable, the right of
redemption set forth in Section 23 shall be reinstated and shall not expire
until the Close of Business on the tenth Business Day following the date of
such determination by a majority of the Company's Board of Directors.
<PAGE>
- 39 -
SECTION 31. GOVERNING LAW. This Agreement, each Right and each
Rights Certificate issued hereunder shall be governed by, and construed in
accordance with, the laws of the State of Delaware; PROVIDED, HOWEVER, that
Sections 18, 19, 20 and 21 shall be governed by, and construed in
accordance with, the laws of the State of North Carolina.
SECTION 32. COUNTERPARTS. This Agreement may be executed
(including by facsimile) in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which when executed shall
be deemed to be an original, but all of which taken together shall
constitute one and the same instrument.
SECTION 33. DESCRIPTIVE HEADINGS. The headings contained in this
Agreement are for descriptive purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
SECTION 34. EXCHANGE.
(a) The Company may, at its option, at any time after any person
becomes an Acquiring Person, upon resolution adopted by a majority of the
Company's Board of Directors, exchange all or part of the then outstanding
and exercisable Rights (which shall not include Rights that have become
void pursuant to Section 7(e)) for Units of Preferred Stock at an exchange
ratio specified in the following sentence, as appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring
after the date hereof. Subject to such adjustment, each Right may be
exchanged for that number of Units of Preferred Stock obtained by dividing
the Adjustment Spread (as defined below) by the then current market price
(determined pursuant to Section 11(d)) per Unit of Preferred Stock on the
earlier of (i) the date on which any Person becomes an Acquiring Person and
(ii) the date on which a tender or exchange offer by any Person (other than
the Company, any Subsidiary of the Company, any employee benefit plan
maintained by the Company or any of its Subsidiaries or any trustee or
fiduciary with respect to such plan acting in such capacity) is first
published or sent or given within the meaning of Rule 14d-4(a) of the
Exchange Act Regulations or any successor rule, if upon consummation
thereof such Person would be the Beneficial Owner of 15% or more of the
shares of Company Common Stock then outstanding (such exchange ratio being
the "SECTION 34(A) EXCHANGE RATIO"). The "ADJUSTMENT SPREAD" shall equal
(x) the aggregate market price on the date of such event of the number of
Adjustment Shares determined pursuant to Section 11(a)(ii), minus (y) the
Purchase Price. Notwithstanding the foregoing, the Company may not effect
such exchange at any time after any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan maintained by the
Company or any of its Subsidiaries, or any trustee or fiduciary with
respect to such plan acting in such capacity), together with all Affiliates
and Associates of such Person, becomes the Beneficial Owner of 50% or more
of the shares of the Company Common Stock then outstanding.
<PAGE>
- 40 -
(b) Immediately upon the action of a majority of the Company's
Board of Directors ordering the exchange of any Rights pursuant to
Section 34(a) and without any further action and without any notice, the
right to exercise such Rights shall terminate and the only right thereafter
of a holder of such Rights shall be to receive that number of Units of
Preferred Stock equal to the number of such Rights held by such holder
multiplied by the Section 34(a) Exchange Ratio, as the case may be. The
Company shall promptly give public notice of any such exchange; PROVIDED,
HOWEVER, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company promptly shall mail a
notice of any such exchange to all of the holders of such Rights at their
last addresses as they appear upon the registry books of the Rights Agent.
Any notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such notice of
exchange shall state the method by which the exchange of Units of Preferred
Stock for Rights will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other
than Rights which have become void pursuant to Section 7(e)) held by each
holder of Rights.
(c) In the event that the number of shares of Preferred Stock
which are authorized by the Company's Certificate of Incorporation but not
outstanding or reserved for issuance for purposes other than upon exercise
of the Rights are not sufficient to permit any exchange of Rights as
contemplated in accordance with this Section 34, the Company shall take all
such action as may be necessary to authorize additional shares of Preferred
Stock for issuance upon exchange of the Rights or make adequate provision
to substitute (1) cash, (2) Company Common Stock or other equity securities
of the Company, (3) debt securities of the Company, (4) other assets or (5)
any combination of the foregoing, having an aggregate value equal to the
Adjustment Spread, where such aggregate value has been determined by a
majority of the Company's Board of Directors.
(d) The Company shall not be required to issue fractions of
Units of Preferred Stock or to distribute certificates which evidence
fractional Units. In lieu of fractional Units, the Company may pay to the
registered holders of Rights Certificates at the time such Rights are
exchanged as herein provided an amount in cash equal to the same fraction
of the current market price (determined pursuant to Section 11(d)) of one
Unit of Preferred Stock.
<PAGE>
- 41 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed on their behalf as of the date first above written.
ACC CORP.
By /s/ David K. Laniak
------------------------------
Name: David K. Laniak
Title: Chairman of the Board and
Chief Executive Officer
FIRST UNION NATIONAL BANK
By /s/ Frances S. Beam
____________________________
Name: Frances S. Beam
Title: Vice President
<PAGE>
EXHIBIT A
[Form of Rights Certificate]
Certificate No. _____ _____ Rights
NOT EXERCISABLE AFTER THE EXPIRATION DATE (AS DEFINED IN THE RIGHTS
AGREEMENT REFERRED TO BELOW). THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES (SPECIFIED IN THE RIGHTS AGREEMENT), RIGHTS
BENEFICIALLY OWNED BY ACQUIRING PERSONS (AS DEFINED IN THE RIGHTS
AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND
VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN
THE RIGHTS AGREEMENT REFERRED TO BELOW). ACCORDINGLY, THIS RIGHTS
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN
THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT.](1)
RIGHTS CERTIFICATE
ACC CORP.
This certifies that _______________, or registered assigns, is
the registered holder of the number of Rights set forth above, each of
which entitles the registered holder thereof, subject to the terms and
conditions of the Rights Agreement dated as of October __, 1997 (the
"RIGHTS AGREEMENT"; terms defined therein are used herein with the same
meaning unless otherwise defined herein) between ACC Corp., a Delaware
corporation (the "COMPANY"), and First Union National Bank, a North
Carolina banking corporation, as Rights Agent (which term shall include any
successor Rights Agent under the Rights Agreement), to purchase from the
Company at any time after the Distribution Date and prior to the Expiration
Date at the office of the Rights Agent, one one-thousandth of a fully paid
and non-assessable share of Series A Preferred Stock, par value $1.00 per
share (the "PREFERRED STOCK"), of the Company at the Purchase Price
initially of $_____ per one one-thousandth share (each such one one-
thousandth of a share being a "Unit") of Preferred Stock , upon
presentation and surrender of this Rights Certificate with the Election to
Purchase and related certificate duly executed.
The number of Rights evidenced by this Rights Certificate (and
the number of Units which may be purchased upon exercise thereof) set forth
above, and the Purchase Price per
- ------------------------
(1) The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
<PAGE>
-2-
Unit set forth above shall be subject to adjustment in certain events as
provided in the Rights Agreement.
Upon the occurrence of a Section 11(a)(ii) Event or Section 13
Event, if the Rights evidenced by this Rights Certificate are beneficially
owned by an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person or, under certain circumstances described in the Rights
Agreement, a transferee of any such Acquiring Person, Associate or
Affiliate, such Rights shall become null and void and no holder hereof
shall have any right with respect to such Rights from and after the
occurrence of such Section 11(a)(ii) Event.
In certain circumstances described in the Rights Agreement, the
Rights evidenced hereby may entitle the registered holder thereof to
purchase capital stock of an entity other than the Company or receive
common stock, cash or other assets, all as provided in the Rights
Agreement.
This Rights Certificate is subject to all of the terms and
conditions of the Rights Agreement, which terms and conditions are hereby
incorporated herein by reference and made a part hereof and to which Rights
Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates.
Copies of the Rights Agreement are on file at the principal office of the
Company and are available from the Company upon written request.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office of the Rights Agent designated
for such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing an aggregate number of
Rights equal to the aggregate number of Rights evidenced by the Rights
Certificate or Rights Certificates surrendered. If this Rights Certificate
shall be exercised in part, the registered holder shall be entitled to
receive, upon surrender hereof, another Rights Certificate or Rights
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company under certain
circumstances at its option at a redemption price of $.01 per Right,
payable at the Company's option in cash or in common stock of the Company,
subject to adjustment in certain events as provided in the Rights
Agreement.
No fractional shares of Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions
which are integral multiples of one one-thousandth of a share of Preferred
Stock), but in lieu thereof a cash payment will be made, as provided in the
Rights Agreement.
<PAGE>
-3-
No holder of this Rights Certificate, as such, shall be entitled
to vote or receive dividends or be deemed for any purpose the holder of
Preferred Stock or of any other securities which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such,
any of the rights of a shareholder of the Company or any right to vote for
the election of directors or upon any matter submitted to shareholders at
any meeting thereof, or to give or withhold consent to any corporate
action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Rights evidenced
by this Rights Certificate shall have been exercised as provided in the
Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officer of the
Company and its corporate seal. Dated as of__________, 199__.
ACC CORP.
By:_________________________
Name: David K. Laniak
Title: Chairman of the Board and
Chief Executive Officer
Countersigned:
FIRST UNION NATIONAL BANK, as
Rights Agent
By:_________________________
Name:
Title:
<PAGE>
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if
such holder desires to transfer the
Rights Certificate.)
FOR VALUE RECEIVED _________________________________________________
hereby sells, assigns and transfers unto ___________________________
____________________________________________________________________
(Please print name and address of transferee)
____________________________________________________________________
this Rights Certificate, together with all, right, title and interest
therein, and does hereby
irrevocably constitute and appoint _______________ Attorney, to transfer
the within Rights Certificate on the books of the within-named Company,
with full power of substitution.
Dated: _______________, 19__.
_____________________________
Signature
Signature Guaranteed:
<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Acquiring Person
(as such terms are defined pursuant to the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this
Rights Certificate from any Person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated: _______________, 19__ ___________________________
Signature
Signature Guaranteed:
______________________________
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate
in every particular, without alteration or enlargement or any change
whatsoever.
Signatures must be guaranteed by an approved eligible financial
institution acceptable to the Rights Agent in its sole discretion or by a
participant in the Securities Transfer Agents Medallion Program, the Stock
Exchange Medallion Program or the New York Stock Exchange Medallion
Program.
In the event the certification set forth above is not completed,
the Company will deem the beneficial owner of the Rights evidenced by this
Rights Certificate to be an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement) and, in the case of an
Assignment, will affix a legend to that effect on any Rights Certificates
issued in exchange for this Rights Certificate.
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder
desires to exercise Rights represented
by the Rights Certificate.)
To: ACC Corp.
The undersigned hereby irrevocably elects to exercise __________
Rights represented by this Rights Certificate to purchase the Units of
Preferred Stock issuable upon the exercise of the Rights (or such other
securities of the Company or of any other person or other property which may
be issuable upon the exercise of the Rights) and requests that certificates
for such Units be issued in the name of and delivered to:
______________________________________
(Please print name and address)
_______________________________________
Please insert social security
or other identifying number: __________
If such number of Rights shall not be all the Rights evidenced by
this Rights Certificate, a new Rights Certificate for the balance of such
Rights shall be registered in the name of and delivered to:
_______________________________________
(Please print name and address)
_______________________________________
Please insert social security
or other identifying number: __________
Dated: _______________, 19__
_____________________________
Signature
<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are
[ ] are not beneficially owned by an Acquiring Person or an Affiliate or an
Associate thereof (as defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned [ ] did [ ] did not acquire the Rights
evidenced by this Rights Certificate from any person who is, was or
subsequently became an Acquiring Person or an Affiliate or Associate
thereof.
Dated: _______________, 19__ ______________________________
Signature
Signature Guaranteed:
______________________________
NOTICE
The signature in the foregoing Election to Purchase and
Certificate must conform to the name as written upon the face of this
Rights Certificate in every particular, without alteration or enlargement
or any change whatsoever.
Signatures must be guaranteed by an approved eligible financial
institution acceptable to the Rights Agent in its sole discretion or by a
participant in the Securities Transfer Agents Medallion Program, the Stock
Exchange Medallion Program or the New York Stock Exchange Medallion
Program.
In the event the certification set forth above is not completed,
the Company will deem the beneficial owner of the Rights evidenced by this
Rights Certificate to be an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement) and, in the case of an
Assignment, will affix a legend to that effect on any Rights Certificates
issued in exchange for this Rights Certificate.
<PAGE>
EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On October ___, 1997 the Board of Directors of ACC Corp. (the
"COMPANY") declared a distribution of one Right for each outstanding share
of Class A Common Stock, par value $.015 per share (the "COMPANY COMMON
STOCK"), to stockholders of record at the close of business on
_______________ (the "RECORD DATE")(*) and for each share of Company Common
Stock issued (including shares distributed from Treasury) by the Company
thereafter and prior to the Distribution Date. Each Right entitles the
registered holder, subject to the terms of the Rights Agreement (as defined
below), to purchase from the Company one one-thousandth of a share (a
"UNIT") of Series A Preferred Stock, par value $1.00 per share (the
"PREFERRED STOCK"), at a Purchase Price of $_____ per Unit,(**) subject to
adjustment. The Purchase Price is payable in cash or by certified or bank
check payable to the order of the Company or by wire transfer to the
account of the Company (provided a notice of such wire transfer is given by
the holder of the related Right to the Rights Agent). The description and
terms of the Rights are set forth in a Rights Agreement between the Company
and First Union National Bank as Rights Agent (the "RIGHTS AGREEMENT").
Copies of the Rights Agreement and the Certificate of Designation
for the Preferred Stock have been filed with the Securities and Exchange
Commission as exhibits to [a Registration Statement on Form 8-A] [Current
Report on Form 8-K] dated _______________ __, 1997 (the ["FORM 8-A"]
["FORM 8-K"]).*** Copies of the Rights Agreement and the Certificate of
Designation are available free of charge from the Company. This summary
description of the Rights and the Preferred Stock does not purport to be
complete and is qualified in its entirety by reference to all the
provisions of the Rights Agreement and the Certificate of Designation,
including the definitions therein of certain terms, which Rights Agreement
and Certificate of Designation are incorporated herein by reference.
__________________________
* See note to Whereas Clause of Rights Agreement.
** See Rights Agreement <section> 7(b).
*** When this Summary is sent to the Company's stockholders (as part
of the Company's Letter to Stockholders) the reference should be to
whichever Form contains a copy of the EXECUTED Rights Agreement and
Certificate of Designation.
<PAGE>
-2-
THE RIGHTS AGREEMENT
Initially, the Rights will attach to all certificates
representing shares of outstanding Company Common Stock, and no separate
Rights Certificates will be distributed. The Rights will separate from the
Company Common Stock and the "DISTRIBUTION DATE" will occur upon the
earlier of (i) 10 days following a public announcement (the date
of such announcement being the "STOCK ACQUISITION DATE") that a person or
group of affiliated or associated persons (other than the Company, any
subsidiary of the Company or any employee benefit plan of the Company or
such subsidiary) (an "ACQUIRING PERSON") has acquired, obtained the right
to acquire, or otherwise obtained beneficial ownership of 15% or more of
the then outstanding shares of Company Common Stock, and (ii) 10 business
days (or such later date as may be determined by action of the Board of
Directors prior to such time as any person becomes an Acquiring Person)
following the commencement of a tender offer or exchange offer that would
result in a person or group beneficially owning 15% or more of the then
outstanding shares of Company Common Stock. Until the Distribution Date,
(i) the Rights will be evidenced by Company Common Stock certificates and
will be transferred with and only with such Company Common Stock
certificates, (ii) new Company Common Stock certificates issued after the
Record Date (also including shares distributed from Treasury) will contain
a notation incorporating the Rights Agreement by reference and (iii) the
surrender for transfer of any certificates representing outstanding Company
Common Stock will also constitute the transfer of the Rights associated
with the Company Common Stock represented by such certificates.
The Rights are not exercisable until the Distribution Date and
will expire at the close of business on the tenth anniversary of the Rights
Agreement unless earlier redeemed by the Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of Company Common Stock as
of the close of business on the Distribution Date and, thereafter, the
separate Rights Certificates alone will represent the Rights.
In the event that (i) the Company is the surviving corporation in
a merger with an Acquiring Person and shares of Company Common Stock shall
remain outstanding, (ii) a person becomes an Acquiring Person, (iii) an
Acquiring Person engages in one or more "self-dealing" transactions as set
forth in the Rights Agreement, or (iv) during such time as there is an
Acquiring Person, an event occurs which results in such Acquiring Person's
ownership interest being increased by more than 1% (E.G., by means of a
recapitalization) (each such event being a "SECTION 11(A)(II) EVENT"),
THEN, in each such case, each holder of a Right will thereafter have the
right to receive, upon exercise, Units of Preferred Stock (or, in certain
circumstances,
<PAGE>
-3-
Company Common Stock, cash, property or other securities of the Company)
having a value equal to two times the exercise price of the Right. The
exercise price is the Purchase Price multiplied by the number of Units of
Preferred Stock issuable upon exercise of a Right prior to the events
described in this paragraph. Notwithstanding any of the foregoing,
following the occurrence of any of the events set forth in this paragraph,
all Rights that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by any Acquiring Person will be
null and void.
In the event that, at any time following the Stock Acquisition
Date, (i) the Company is acquired in a merger or other business combination
transaction and the Company is not the surviving corporation (other than a
merger described in the preceding paragraph), (ii) any Person consolidates
or merges with the Company and all or part of the Company Common Stock is
converted or exchanged for securities, cash or property of any other Person
or (iii) 50% or more of the Company's assets or earning power is sold or
transferred, each holder of a Right (except Rights which previously have
been voided as described above) shall thereafter have the right to receive,
upon exercise, common stock of the ultimate parent of the Acquiring Person
having a value equal to two times the exercise price of the Right.
The Purchase Price payable, and the number of Units of Preferred
Stock issuable, upon exercise of the Rights are subject to adjustment from
time to time to prevent dilution (i) in the event of a stock dividend on,
or a subdivision, combination or reclassification of, the Preferred Stock,
(ii) if holders of the Preferred Stock are granted certain rights or
warrants to subscribe for Preferred Stock or convertible securities at less
than the current market price of the Preferred Stock, or (iii) upon the
distribution to the holders of the Preferred Stock of evidences of
indebtedness, cash or assets (excluding regular quarterly cash dividends)
or of subscription rights or warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will
be required until cumulative adjustments amount to at least 1% of the
Purchase Price. The Company is not required to issue fractional Units. In
lieu thereof, an adjustment in cash may be made based on the market price
of the Preferred Stock prior to the date of exercise.
At any time until ten business days following the Stock
Acquisition Date, a majority of the Company's Board of Directors may redeem
the Rights in whole, but not in part, at a price of $.01 per Right (subject
to adjustment in certain events) (the "REDEMPTION PRICE"),(*)
payable, at the election of such majority of the Company's Board of
Directors, in cash or shares of Company Common Stock.
Immediately upon the action of a majority of the Company's Board of
Directors ordering the redemption of the Rights, the Rights will terminate
and the only right of the holders of Rights will be to receive the
Redemption Price.
___________________________
* See Rights Agreement Section 23(a)
<PAGE>
-4-
The Board of Directors, at its option, may exchange each Right
for (i) one Unit of Preferred Stock or (ii) such number of Units of
Preferred Stock as will equal (x) the difference between the aggregate
market price of the number of Units of Preferred Stock to be received upon
a Section 11(a)(ii) Event the purchase price set forth in the Rights
Agreement, divided by (y) the market price per Unit of Preferred Stock upon
a Section 11(a)(ii) Event.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends. While the
distribution of the Rights will not be taxable to stockholders or to the
Company, stockholders may, depending upon the circumstances, recognize
taxable income in the event that the Rights become exercisable for Units of
Preferred Stock (or other consideration).
Any of the provisions of the Rights Agreement may be amended
without the approval of the holders of Company Common Stock at any time
prior to the Distribution Date. After the Distribution Date, the
provisions of the Rights Agreement may be amended in order to cure any
ambiguity, defect or inconsistency, to make changes which do not adversely
affect the interests of holders of Rights (excluding the interests of any
Acquiring Person), or to shorten or lengthen any time period under the
Rights Agreement; PROVIDED, HOWEVER, that no amendment to adjust the time
period governing redemption shall be made at such time as the Rights are
not redeemable.
DESCRIPTION OF PREFERRED STOCK
The Units of Preferred Stock that may be acquired upon exercise
of the Rights will be nonredeemable and subordinate to any other shares of
preferred stock that may be issued by the Company.
Each Unit of Preferred Stock will receive ratably any dividend
declared on the Company Common Stock.
In the event of liquidation, the holder of Preferred Stock will
receive a preferred liquidation payment equal to the greater of $1.00 per
Unit or the per share amount paid in respect of a share of the Company
Common Stock.
Each Unit of Preferred Stock will have one vote, voting together
with the Company Common Stock.
<PAGE>
-5-
In the event of any merger, consolidation or other transaction in
which shares of Company Common Stock are exchanged, each Unit of Preferred
Stock will be entitled to receive the per share amount paid in respect of
each share of Company Common Stock.
The rights of holders of the Preferred Stock to dividends,
liquidation and voting, and in the event of mergers and consolidations, are
protected by customary antidilution provisions.
Because of the nature of the Preferred Stock's dividend,
liquidation and voting rights, the economic value of one Unit of Preferred
Stock that may be acquired upon the exercise of each Right is expected to
approximate the economic value of one share of Company Common Stock.
<PAGE>
EXHIBIT C
CERTIFICATE OF DESIGNATION
OF THE VOTING POWERS, DESIGNATION,
PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL OR OTHER SPECIAL RIGHTS AND QUALIFICATIONS,
LIMITATIONS AND RESTRICTIONS OF THE
SERIES A PREFERRED STOCK
______________________________
Pursuant to Sections 151 and 157 of the
General Corporation Law
of the State of Delaware
______________________________
I, David K. Laniak, Chairman of the Board and Chief Executive
Officer of ACC Corp., a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"), DO
HEREBY CERTIFY:
That, pursuant to authority conferred upon the Board of Directors
of the Corporation by its Certificate of Incorporation (the "CERTIFICATE"),
and, pursuant to the provisions of Sections 151 and 157 of the General
Corporation Law of the State of Delaware, said Board of Directors, at a
duly called meeting held on _______________, 1997, at which a quorum was
present and acted throughout, adopted the following resolutions, which
resolutions remain in full force and effect on the date hereof creating a
series of 100,000 shares of Preferred Stock having a par value of $1.00 per
share, designated as Series A Preferred Stock (the "SERIES A PREFERRED
STOCK") out of the class of 2,000,000 shares of preferred stock of the par
value of $1.00 per share (the "PREFERRED STOCK"):
RESOLVED, that pursuant to the authority vested in the Board of
Directors in accordance with the provisions of the Certificate, the Board
of Directors does hereby create, authorize and provide for the issuance of
the Series A Preferred Stock having the voting powers, designation,
relative, participating, optional and other special rights, preferences,
and qualifications, limitations and restrictions thereof that are set forth
as follows:
Section 1. DESIGNATION AND AMOUNT. The shares of such series
shall be designated as "Series A Preferred Stock" and the number of shares
constituting such series shall be 100,000.
Section 2. DIVIDENDS AND DISTRIBUTIONS. (A) Each holder of one
one-thousandth of a share (a "UNIT") of Series A Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors out
for that purpose, dividends payable in cash, in an amount per Unit (rounded
to the nearest cent) equal to the per share amount of cash dividends
declared on shares of the Common Stock.
<PAGE>
-2-
In the event that the Corporation shall at any time after October __, 1997
(the "RIGHTS DECLARATION DATE") (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 of Series A Preferred Stock 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) The Corporation shall declare a dividend or distribution on
Units of Series A Preferred Stock 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).
Section 3. VOTING RIGHTS. The holders of Units of Series A
Preferred Stock shall have the following voting rights:
(A) Each Unit of Series A Preferred Stock shall entitle the
holder thereof to one vote on all matters submitted to a vote of the
stockholders of the Corporation. In the event the Corporation shall at any
time after the Rights Declaration Date (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 of
Series A Preferred Stock were entitled immediately prior to such event
shall be adjusted by multiplying such number by a fraction the numerator of
which 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 of Series A Preferred Stock and the holders of shares of Common
Stock shall vote together as one class on all matters submitted to a vote
of stockholders of the Corporation.
(C) Except as set forth herein, holders of Units of Series A
Preferred Stock shall have no special voting rights and their consents
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.
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Section 4. REACQUIRED SHARES. Any Units of Series A Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such Units shall, upon their cancellation, become authorized
but unissued Units of Preferred Stock and may be reissued
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as part of a new series of Preferred Stock to be created by resolution or
resolutions of the Board of Directors, subject to the conditions and
restrictions on issuance set forth herein.
Section 5. LIQUIDATION, DISSOLUTION OR WINDING UP. (A) Upon any
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, no distribution shall be made (i) to the holders of shares of
junior stock unless the holders of Units of Series A Preferred Stock shall
have received, subject to adjustment as hereinafter provided in
paragraph (B), the greater of either (a) $1.00 per Unit or (b) the amount
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 of
Series A Preferred Stock and all other shares of such parity stock in
proportion to the total amounts to which the holders of Units of Series A
Preferred Stock 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
Rights Declaration Date (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 of Series A Preferred Stock were entitled
immediately prior to such event pursuant to clause (i)(b) of paragraph (A)
of this Section 5 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 6. CONSOLIDATION, MERGER, ETC. In case the Corporation
shall enter into any consolidation, merger, combination or other
transaction in which the shares of common stock are exchanged for or
converted into other stock or securities, cash and/or any other property,
then in any such case Units of Series A Preferred Stock 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 Rights Declaration Date (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
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 of Series A Preferred Stock 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.
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Section 7. REDEMPTION. The Units of Series A Preferred Stock
shall not be redeemable.
Section 8. RANKING. The Units of Series A Preferred Stock shall
rank junior to all other series of the 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 9. AMENDMENT. The Certificate, including, without
limitation, this resolution, shall not hereafter be amended, either
directly or indirectly, or through merger or consolidation with another
corporations in any manner that would alter or change the powers,
preferences or special rights of the Series A Preferred Stock so as to
affect them adversely without the affirmative vote of the holders of a
majority or more of the outstanding Units of Series A Preferred Stock,
voting separately as a class.
Section 10. FRACTIONAL SHARES. The Series A Preferred Stock may
be issued in Units or other fractions of a share, which Units or fractions
shall entitle the holder, in proportion to such holder's fractional shares,
to exercise voting rights, receive dividends, participate in distributions
and to have the benefit of all other rights of holders of Series A
Preferred Stock.
Section 11. CERTAIN DEFINITIONS. As used herein with respect to
the Series A Preferred Stock, the following terms shall have the following
meanings:
(A) The term "COMMON STOCK" shall mean the class of stock
designated as the Class A common stock, par value $.015 per share, of the
Corporation at the date hereof or any other class of stock resulting from
successive changes or reclassification of such common stock.
(B) The term "JUNIOR STOCK", as used in Section 5 hereof, shall
mean the Common Stock and any other class or series of capital stock of the
Corporation over which the Series A Preferred Stock has preference or
priority in the distribution of assets on any liquidation, dissolution or
winding up of the Corporation.
(C) The term "PARITY STOCK", as used in Section 5 hereof, shall
mean any class or series of capital stock ranking PARI PASSU with the
Series A Preferred Stock in the distribution of assets on any liquidation,
dissolution or winding up of the Corporation.
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IN WITNESS WHEREOF, ACC Corp. has caused this Certificate to be
signed this _____ day of __________, 19__
ACC CORP.
By:___________________________
Name: David K. Laniak
Title: Chairman of the Board and
Chief Executive Officer
