SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date of Report (Date of earliest event reported) May 18, 1995
Rentrak Corporation
(Exact Name of Registrant as Specified in its Charter)
Oregon D-15159 93-0780536
(State or Other (Commission File (I.R.S. Employer
Jurisdiction of Number) Identification No.)
Incorporation)
7227 N.E. 55th Avenue,
Portland, Oregon 97218
(Address of Principal (Zip Code)
Executive Offices)
(503) 284-7581
(Registrant's Telephone Number, Including Area Code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Index to Exhibits appears at page 7.<PAGE>
Item 5. Other Events.
Adoption of Shareholder Rights Plan.
On May 18, 1995, the Board of Directors of Rentrak
Corporation (the "Company") declared a dividend of one preferred
stock purchase right (the "Rights") for each share of common
stock, par value $.001 per share (the "Common Shares"), of the
Company outstanding at the close of business on June 5, 1995 (the
"Record Date"). Each Right will entitle the registered holder
thereof, after the Rights become exercisable and until May 18,
2005 (or the earlier redemption, exchange or termination of the
Rights), to purchase from the Company one one-hundredth (1/100th)
of a share of Series A Junior Participating Preferred Stock, par
value $.001 per share (the "Preferred Shares"), at a price of $40
per one one-hundredth (1/100th) of a Preferred Share, subject to
certain anti-dilution adjustments (the "Purchase Price"). The
Rights will be represented by the Common Share certificates and
will not be exercisable or transferable apart from the Common
Shares until the earlier to occur of (i) the tenth day after a
public announcement that a Person or group of affiliated or
associated Persons has become an Acquiring Person (a Person or
group of affiliated or associated Persons who has acquired, or
obtained the right to acquire, beneficial ownership of 15% or
more of the Common Shares), or (ii) the tenth day after a Person
or group commences, or announces an intention to commence, a
tender or exchange offer, the consummation of which would result
in the beneficial ownership by a Person or group of 15% or more
of the Common Shares (the earlier of (i) and (ii) being called
the "Distribution Date," whether or not either such date occurs
prior to the Record Date). Separate certificates representing
the Rights will be mailed to holders of record of the Common
Shares as of the close of business on the Distribution Date. The
Rights will first become exercisable on the Distribution Date,
unless earlier redeemed or exchanged, and may then begin trading
separately from the Common Shares. The Rights will at no time
have any voting rights.
Each Preferred Share purchasable upon exercise of the
Rights will be entitled to a minimum preferential quarterly
dividend payment of $1.00 per share but will be entitled to an
aggregate dividend of 100 times the dividend, if any, declared
per Common Share. In the event of liquidation, the holders of
the Preferred Shares will be entitled to a minimum preferential
liquidation payment of $100 per share but will be entitled to an
aggregate payment of 100 times the payment made per Common Share.
Each Preferred Share will have 100 votes and will vote together
with the Common Shares. Finally, in the event of any merger,
consolidation or other transaction in which Common Shares are
exchanged, each Preferred Share will be entitled to receive 100
times the amount received per Common Share. These Rights are
protected by customary anti-dilution provisions. Because of the
nature of the Preferred Share's dividend, liquidation and voting
rights, the value of one one-hundredth of a Preferred Share
purchasable upon exercise of each Right should approximate the
value of one Common Share.<PAGE>
In the event that a Person becomes an Acquiring Person
(except pursuant to certain cash offers for all outstanding
Common Shares approved by the Board of Directors of the Company)
or if the Company were the surviving corporation in a merger with
an Acquiring Person or any affiliate or associate of an Acquiring
Person and the Common Shares were not changed or exchanged, each
holder of a Right, other than Rights that are or were acquired or
beneficially owned by the Acquiring Person (which Rights will
thereafter be void), will thereafter have the right to receive
upon exercise that number of Common Shares having a market value
of two times the then current Purchase Price of one Right. With
certain exceptions, in the event that, following the time that a
Person has become an Acquiring Person, the Company were acquired
in a merger or other business combination transaction or more
than 50% of its assets or earning power were sold, proper
provision shall be made so that each holder of a Right shall
thereafter have the right to receive, upon the exercise thereof
at the then current Purchase Price of the Right, that number of
shares of common stock of the acquiring company which at the time
of such transaction would have a market value of two times the
then current Purchase Price of one Right.
At any time after a Person becomes an Acquiring Person
and prior to the acquisition by such Acquiring Person (except
pursuant to certain cash offers for all outstanding Common Shares
approved by the Board of Directors of the Company) of 50% or more
of the then outstanding Common Shares, the Board of Directors may
cause the Company to acquire the Rights (other than Rights owned
by an Acquiring Person which have become void), in whole or in
part, in exchange for that number of Common Shares having an
aggregate value equal to the Spread (the excess of the value of
the Common Shares issuable upon exercise of a Right after a
Person becomes an Acquiring Person over the Purchase Price) per
Right (subject to adjustment).
The Rights may be redeemed in whole, but not in part,
at a price of $.01 per Right (the "Redemption Price") by the
Board of Directors at any time prior to the first date that a
Person has become an Acquiring Person (except pursuant to certain
cash offers for all outstanding Common Shares approved by the
Board of Directors of the Company). The redemption of the Rights
by the Board of Directors may be made effective at such time, on
such basis and with such conditions as the Board of Directors in
its sole discretion may establish. The Company may, at its
option, pay the Redemption Price in cash, Common Shares (based on
the current per share market price at the time of the redemption)
or any other form of consideration deemed appropriate by the
Board of Directors. Immediately upon the action of the Board of
Directors of the Company electing to redeem the Rights, the
Company shall make an announcement thereof, and upon such
election, the right to exercise the Rights will terminate and the
only right of the holders of Rights will be to receive the
Redemption Price.
The Rights will expire on May 18, 2005 (the "Final
Expiration Date")(unless earlier redeemed, exchanged or<PAGE>
terminated). U.S. Stock Transfer Corporation is the Rights
Agent.
The Purchase Price payable, and the number of one one-
hundredths of a Preferred Share or other securities or property
issuable, upon exercise of the Rights are subject to adjustment
from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification
of, the Preferred Shares, (ii) upon the grant to holders of the
Preferred Shares of certain rights or warrants to subscribe for
or purchase Preferred Shares or convertible securities at less
than the current market price of the Preferred Shares or (iii)
upon the distribution to holders of the Preferred Shares of
evidences of indebtedness, cash, securities or assets (excluding
regular periodic cash dividends at a rate not in excess of 125%
of the rate of the last regular periodic cash dividend
theretofore paid or, in case regular periodic cash dividends have
not theretofore been paid, at a rate not in excess of 50% of the
average net income per share of the Company for the four quarters
ended immediately prior to the payment of such dividend, or
dividends payable in Preferred Shares (which dividends will be
subject to the adjustment described in clause (i) above)) or of
subscription rights or warrants (other than those referred to
above).
Until a Right is exercised, the holder thereof, as
such, will have no rights as a stockholder of the Company beyond
those as an existing stockholder, including, without limitation,
the right to vote or to receive dividends.
Any of the provisions of the Rights Agreement dated as
May 18, 1995 between the Company and the Rights Agent (the
"Rights Agreement") may be amended by the Board of Directors of
the Company prior to the Distribution Date. After the
Distribution Date, the Company and the Rights Agent may amend or
supplement the Rights Agreement without the approval of any
holders of Right Certificates to cure any ambiguity, to correct
or supplement any provision contained therein which may be
defective or inconsistent with any other provisions therein, to
shorten or lengthen any time period under the Rights Agreement
(so long as, under certain circumstances, a majority of
Continuing Directors (as defined below) approve such shortening
or lengthening) or so long as the interests of the holders of
Right Certificates (other than an Acquiring Person or an
affiliate or associate of an Acquiring Person) are not adversely
affected thereby, to make any other provisions in regard to
matters or questions arising thereunder which the Company and the
Rights Agent may deem necessary or desirable, including but not
limited to extending the Final Expiration Date. The Company may
at any time prior to such time as any Person becomes an Acquiring
Person amend the Rights Agreement to lower the thresholds
described above to not less than the greater of (i) any
percentage greater than the largest percentage of the outstanding
Common Shares then known by the Company to be beneficially owned
by any Person or group of affiliated or associated Persons and
(ii) 10%.<PAGE>
The term "Continuing Directors" means any member of the
Board of Directors of the Company who was a member of the Board
prior to the time that any Person becomes an Acquiring Person,
and any person who is subsequently elected to the Board if such
person is recommended or approved by a majority of the Continuing
Directors. Continuing Directors do not include an Acquiring
Person, or an affiliate or associate of an Acquiring Person, or
any representative of the foregoing.
One Right will be distributed to stockholders of the
Company for each Common Share owned of record by them on June 5,
1995. As long as the Rights are attached to the Common Shares,
the Company will issue one Right with each new Common Share so
that all such shares will have attached Rights. The Company has
agreed that, from and after the Distribution Date, the Company
will reserve 300,000 Preferred Shares initially for issuance upon
exercise of the Rights.
The Rights will cause substantial dilution to a person
or group that acquires 15% or more of the Company's stock on
terms not approved by the Company's Board of Directors. The
Rights should not interfere with any merger or other business
combination approved by the Board of Directors at any time prior
to the first date that a Person or group has become an Acquiring
Person.
The Rights Agreement specifying the terms of the
Rights, the text of the press release announcing the declaration
of the Rights, and the form of a letter to be sent to the holders
of the Company's Common Stock dated June 1, 1995, explaining the
Rights, are incorporated herein by reference as exhibits to this
Current Report. The foregoing description of the Rights is
qualified in its entirety by reference to such exhibits.
Amendment to Bylaws.
On May 25, 1995, the Board of Directors of the Company
adopted certain amendments to the 1991 Restated Bylaws of Rentrak
Corporation (the "Bylaws"), generally establishing a 60-day
notice requirement that shareholders must satisfy to bring
business before a meeting of shareholders or nominate persons for
election to the Board of Directors. The Bylaws, as amended and
restated, are incorporated herein by reference as an exhibit to
this Current Report and the foregoing description thereof is
qualified in its entirety by reference to such exhibit.
Earnings Release.
On May 30, 1995, the Company issued a press release, a
copy of which is attached hereto as an exhibit and incorporated
herein by reference.<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(c) Exhibits.
3. Bylaws of Rentrak Corporation.
4. Rights Agreement, dated as of May 18, 1995, between
Rentrak Corporation and U.S. Stock Transfer
Corporation, which includes the form of Certificate of
Designations of the Series A Junior Participating
Preferred Stock of Rentrak Corporation as Exhibit A,
the form of Right Certificate as Exhibit B and the
Summary of Rights to Purchase Preferred Shares as
Exhibit C.
20. Form of Letter to the holders of Rentrak Corporation
Common Stock, dated June 5, 1995.
99.1 Text of Press Release, dated May 19, 1995.
99.2 Text of Press Release, dated May 30, 1995.<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
Dated: June 2, 1995
RENTRAK CORPORATION
By: /S/ F. Kim Cox
Name: F. Kim Cox
Title: Executive Vice President
and Secretary<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit Page
3. Bylaws of Rentrak Corporation.
4. Rights Agreement, dated as of May 18, 1995, between
Rentrak Corporation and U.S. Stock Transfer
Corporation, which includes the form of Certificate
of Designations of the Series A Junior Participating
Preferred Stock of Rentrak Corporation as Exhibit A,
the form of Right Certificate as Exhibit B and the
Summary of Rights to Purchase Preferred Shares as
Exhibit C.
20. Form of Letter to the holders of Rentrak Corporation
Common Stock, dated June 5, 1995.
99.1 Text of Press Release, dated May 19, 1995.
99.2 Text of Press Release, dated May 30, 1995.<PAGE>
1995 RESTATED BYLAWS
OF
RENTRAK CORPORATION
ARTICLE 1
OFFICES
Section 1.1 Principal Office. The principal office of
the corporation in the State of Oregon shall be located at 7227
N.E. 55th Avenue, Portland, Oregon 97218, or such other place as
the Board of Directors may designate. The corporation may have
such other offices, within or without the State of Oregon, as the
Board of Directors may designate or as the business of the
corporation may require.
Section 1.2 Registered Office. The registered office of
the corporation required by the Oregon Business Corporation Act
to be maintained in the State of Oregon may, but need not, be
identical with the corporation's principal office in the State of
Oregon and the address of the registered office may be changed
from time to time by the Board of Directors.
ARTICLE 2
SHAREHOLDERS
Section 2.1 Annual Meetings. The annual meeting of the
shareholders shall be held in the month of August each year or
such other month as the Board of Directors may specify on the
date and at the time specified by the Board of Directors for the
purpose of electing directors and for transacting other business
which may properly come before the meeting. If the election of
directors shall not be held on the date designated for the annual
meeting of the shareholders, or at any adjournment thereof, the
Board of Directors shall cause the election to be held at a
special meeting of the shareholders as soon thereafter as may be
convenient.
Section 2.2 Special Meetings. Unless otherwise
prescribed by statute, special meetings of the shareholders may
be called for any purpose or purposes by the Chief Executive
Officer or the Board of Directors and shall be called by the
Chief Executive Officer at the request of the holders of not less
than 10 percent of all outstanding shares of the corporation
entitled to vote at the meeting. Only business within the
purpose or purposes discussed in the notice required by Section
2.4 of these Restated Bylaws may be conducted at a special
meeting of the shareholders.
Section 2.3 Place of Meeting. The Board of Directors may
designate any place, within or without the State of Oregon, as
the place for the annual meeting or any special meeting called by
the Board of Directors. A waiver of notice signed by all<PAGE>
shareholders entitled to vote at a meeting may designate any
place, within or without the State of Oregon, as the place for
holding such meetings. If no designation is made, the meeting
shall be held at the principal office of the corporation in the
State of Oregon.
Section 2.3.1. Subject of Meetings. To be properly
brought before an annual meeting of shareholders, business must
be either (i) specified in the notice of the meeting (or any
supplement or amendment thereto) given by or at the direction of
the Board of Directors, (ii) otherwise brought before the meeting
by or at the direction of the Board of Directors, or (iii)
otherwise brought before the meeting by a shareholder who is a
shareholder of record at the time of giving of the notice
provided for in this Article II, Section 2.3.1, who shall be
entitled to vote at such meeting and who complies fully with all
of the notice procedures and other requirements set forth in this
Article II, Section 2.3.1. In addition to any other applicable
requirements, for business to be properly brought before an
annual meeting of shareholders by a shareholder, the shareholder
must have given timely notice thereof in writing to the Secretary
of the corporation. To be timely, a shareholder's notice shall
be delivered to or mailed and received at the principal executive
offices of the corporation not less than sixty (60) calendar days
nor more than ninety (90) calendar days prior to the first
anniversary of the preceding year's annual meeting; provided,
however, that in the event that the date of the annual meeting is
changed by more than thirty (30) calendar days from such
anniversary date, notice by the shareholder to be timely must be
so received not later than the close of business on the tenth
(10th) calendar day following the earlier of the day on which
notice of the date of the meeting was mailed or public disclosure
was made. A shareholder's notice to the corporation's Secretary
of business proposed to be conducted at any annual or special
meeting of shareholders shall set forth as to each matter the
shareholder proposes to bring before such meeting (i) a brief
description of the business desired to be brought before the
meeting and the reasons for conducting such business at the
meeting, (ii) the name and record address of the shareholder
proposing such business and the name and address of the
beneficial owner, if any, on whose behalf the proposal is made,
(iii) the class, series and number of shares of the capital stock
of the corporation which are owned beneficially and of record by
such shareholder and by the beneficial owner, if any, on whose
behalf the proposal is made, and (iv) any material interest of
such shareholder and the beneficial owner, if any, on whose
behalf the proposal is made in such business. Notwithstanding
anything in the Bylaws to the contrary, no business shall be
conducted at a meeting of shareholders except in accordance with
the procedures set forth in this Article II, Section 2.3.1. The
officer of the corporation presiding at a meeting of shareholders
(the "Presiding Officer") shall determine whether the proposed
business is properly brought before the meeting in accordance
with the provisions of this Article II, Section 2.3.1. If the<PAGE>
Presiding Officer should determine that the proposed business is
not properly brought before the meeting, the Presiding Officer
shall state such determination to the meeting, whereupon any such
business not properly brought before the meeting shall not be
transacted or otherwise brought before the meeting.
Notwithstanding the foregoing provisions of this Article II,
Section 2.3.1, a shareholder shall also comply with all
applicable requirements of the Securities Exchange Act of 1934,
as amended, and the rules and regulations thereunder with respect
to the matters set forth herein.
Section 2.4 Notice of Meeting. Unless otherwise
prescribed by statute, written notice stating the place, day and
hour of the meeting and, in the case of a special meeting, the
purpose or purposes for which the meeting is called, shall be
delivered to each shareholder of record entitled to vote at such
meeting not less than ten (10) nor more than sixty (60) days
before the date of the meeting, either personally or by mail, by
or at the direction of the Chief Executive Officer, the
Secretary, or the officer or persons calling the meeting. If
mailed, such notice shall be deemed to be delivered when
deposited in the United States mail, addressed to the shareholder
at his or her address as it appears on the stock registrar of the
corporation with postage prepaid.
Section 2.5 Closing of Transfer Books or Fixing of Record
Date. For the purposes of determining which shareholders are
entitled to notice of, or to vote at, any meeting of shareholders
or any adjournment thereof, or which shareholders are entitled to
receive payment of any dividend, or in order to determine
shareholders for any other proper purpose, the Board of Directors
may provide that the stock transfer books shall be closed for a
stated period not to exceed seventy (70) days. If the stock
transfer books are closed for the purpose of determining
shareholders entitled to notice of, or to vote, at a meeting of
shareholders, such books shall be closed for at least ten (10)
days immediately preceding this meeting. In lieu of closing the
stock transfer books, the Board of Directors may fix in advance a
date as the record date for any such determination of
shareholders, such date to be not more than seventy (70) days
and, in the case of a meeting of shareholders, not fewer than ten
(10) days prior to the date on which the particular action
requiring such determination of shareholders is to be taken. If
the stock transfer books are not closed and no record date is
fixed for the determination of shareholders entitled to notice
of, or to vote, at a meeting of shareholders or shareholders
entitled to receive payment of a dividend, the date on which
notice of the meeting is mailed or the date on which the
resolution of the Board of Directors declaring such dividend is
adopted, as the case may be, shall be the record date for such
determination of shareholders. When a determination of
shareholders entitled to vote at any meeting of shareholders has
been made as provided in this section, the determination shall
apply to any adjournment of the meeting unless the Board of<PAGE>
Directors fixes a new record date, which it shall do if the
meeting is adjourned to a date more than 120 days after the date
fixed for the original meeting.
Section 2.6 Voting Record. The officer or agent having
charge of the stock transfer books for shares of the corporation
shall prepare an alphabetical list of the names of all
shareholders entitled to vote at each shareholders' meeting.
This list shall be arranged by voting group, and within each
voting group by class or series of shares, and shall show the
address of and the number of shares held by each shareholder.
This list shall be available for inspection by any shareholder
beginning two business days after notice of the meeting is given
for which the list was prepared and continuing through the
meeting at the corporation's principal office or at a place
identified in the notice, which shall be located in the city
where the meeting will be held. The corporation shall make this
list available at the meeting and any shareholder or the
shareholder's agent or attorney shall be entitled to inspect the
list at any time during the meeting or any adjournment.
Section 2.7 Quorum. A majority of the outstanding shares
of the corporation entitled to vote, represented in person or by
proxy, shall constitute a quorum at a meeting of the
shareholders. If less than a majority of the outstanding shares
are represented at a meeting, a majority of the shares so
represented may adjourn the meeting from time to time without
further notice. At such adjourned meeting at which a quorum
shall be present or represented, any business may be transacted
which might have been transacted at the meeting as originally
noticed. The shareholders present at a duly organized meeting
may continue to transact business until adjournment,
notwithstanding the withdrawal of enough shareholders to leave
less than a quorum.
Section 2.8 Proxies. At all meetings of shareholders, a
shareholder may vote in person or by proxy executed in writing by
the shareholder or by the shareholder's duly authorized attorney
in fact. Such proxy shall be filed with the secretary of the
corporation before or at the time of the meeting. No proxy shall
be valid after eleven months from the date of its execution
unless otherwise provided in the proxy.
Section 2.9 Voting of Shares. Each outstanding share
entitled to vote shall be entitled to one vote upon each matter
submitted to a vote at a meeting of shareholders.
Section 2.10 Voting of Shares by Certain Holders. Shares
standing in the name of another corporation may be voted by the
officer, agent or proxy as the bylaws of such corporation may
prescribe, or, in the absence of such provision, as the Board of
Directors of such corporation may determine.<PAGE>
Shares held by an administrator, executor, guardian or
conservator may be voted by such person, in person or by proxy,
without a transfer of the shares into such person's name. Shares
standing in the name of a trustee or custodian may be voted by
such person, in person or by proxy, but no trustee or custodian
shall be entitled to vote shares held by him or her without a
transfer of the shares into his or her name.
Shares standing in the name of a receiver may be voted by
the receiver, and shares held by or under the control of a
receiver may be voted by the receiver without transferring the
shares into the receiver's name if authority to so vote is
contained in an order of the court by which the receiver was
appointed.
A shareholder whose shares are pledged shall be entitled to
vote the shares until they have been transferred into the name of
the pledgee, and thereafter the pledgee shall be entitled to vote
the shares so transferred. Nothing in this Section 2.10 shall
prevent a pledgee from obtaining a proxy entitling the pledgee to
vote the pledged shares and from voting the pledged shares in
accordance with a valid proxy.
Neither shares of its own stock held by this corporation,
nor shares held by another corporation if a majority of the
shares entitled to vote for the election of directors of such
other corporation are held by this corporation, shall be voted at
any meeting or counted in determining the total number of
outstanding shares at any given time for purposes of any meeting.
The foregoing, however, shall not limit the power of the
corporation to vote any shares, including its own shares, held by
it in a fiduciary capacity.
Section 2.11 Action Without Meeting. Any action required
or permitted to be taken at a shareholders' meeting may be taken
without a meeting if the action is taken by all the shareholders
entitled to vote on the action. The action shall be evidenced by
one or more written consents describing the action taken, signed
by all the shareholders entitled to vote on the action and
delivered to the corporation for inclusion in the minutes or
filing with the corporate records.
ARTICLE 3
BOARD OF DIRECTORS
Section 3.1 General Powers. The business and affairs of
the corporation shall be managed by its Board of Directors.
Section 3.2 Number, Tenure and Qualifications. The
number of directors of the corporation shall be not less than
three or more than seven, with the number of directors to be
established by resolution of the Board of Directors.<PAGE>
As long as the number of directors is established to be six
or greater, the directors shall be divided into three classes
designated as Class I, Class II, and Class III. Initially,
Classes I and II shall consist of two directors each and Class
III shall consist of three directors. At the Annual Meeting of
Shareholders to be held in 1991, Class I directors shall be
elected to a one-year term, Class II directors to a two-year term
and Class III directors to a three-year term. At each succeeding
annual meeting of shareholders beginning in 1992, successors to
the class of directors whose term expires at that annual meeting
shall be elected for three-year terms. If the number of
directors changes, any increase or decrease shall be apportioned
among the classes to maintain the number of directors in each
class as nearly equal as possible but in no case will a decrease
in the number of director shorten the term of any incumbent
director. A director shall hold office until the annual meeting
of shareholders for the year in which his or her term expires or
until his or her successor is elected and qualified or until
death, resignation or removal.
Section 3.2.1. Nominations of Directors. Only persons
who are nominated in accordance with the following procedures
shall be eligible for election as directors. Nominations of
persons for election to the Board of Directors of the corporation
at any meeting of shareholders may be made by or at the direction
of the Board of Directors, by any committee of persons appointed
by the Board of Directors or at the meeting by any shareholder of
the corporation who is a shareholder of record at the time of
giving notice provided for in this Article III, Section 3.2.1,
who shall be entitled to vote for the election of directors at
the meeting and who complies fully with all of the notice
procedures and other requirements set forth in this Article III,
Section 3.2.1 and the procedures and requirements set forth in
the Oregon Business Act. Nominations by any shareholder shall be
made pursuant to timely notice in writing to the Secretary of the
corporation. To be timely, a shareholder's notice shall be
delivered to or mailed and received at the principal executive
offices of the corporation (a) in the case of annual meeting, not
less than sixty (60) calendar days nor more than ninety (90)
calendar days prior to the first anniversary of the preceding
year's annual meeting; provided, however, that in the event that
the date of the annual meeting is changed by more than thirty
(30) calendar days from such anniversary date, notice by the
shareholder to be timely must be so received not later than the
close of business on the tenth (10th) calendar day following the
earlier of the day on which notice of the date of the meeting was
mailed or public disclosure was made, and (b) in the case of a
special meeting at which directors are to be elected, not later
than the earlier of (i) the close of business on the tenth (10th)
calendar day following the earlier of the day on which notice of
the date of the meeting was mailed or public disclosure was made
or (ii) the close of business on the fifth (5th) calendar day
before the date of the meeting. Such shareholder's notice to the
Secretary or a written demand from shareholders pursuant to<PAGE>
Section 60.204 of the Oregon Revised Statutes shall set forth (i)
as to each person whom such shareholders propose to nominate for
election or reelection as a director, (a) the name, age, business
address and residence address of the person, (b) the principal
occupation or employment of the person, (c) the class and number
of shares of capital stock of the corporation which are
beneficially owned by the person, and (d) all other information
relating to the person that is or would be required to be
disclosed in a solicitation for proxies for election of directors
pursuant to the Rules and Regulations of the Securities and
Exchange Commission under Section 14 of the Securities Exchange
Act of 1934, as amended (including such person's written consent
to being named in the proxy statement as a nominee and to serving
as a director if elected); (ii) as to the shareholders giving
such notice or demand (a) the name and record address of the
shareholders, (b) the class and number of shares of capital stock
of the corporation which are beneficially owned by each such
shareholder and also which are owned of record by each such
shareholder and (c) any material interest or relationship each
such shareholder has in or with the proposed nominee; and (iii)
as to each beneficial owner, if any, on whose behalf the
nomination is made, (a) the name and address of such person, (b)
the class and number of shares of capital stock of the
corporation which are beneficially owned by such person and (c)
any material interest or relationship such person has in or with
the proposed nominee. The corporation may require any proposed
nominee to furnish such other information as may reasonably be
required by the corporation to determine the eligibility of such
proposed nominee to serve as a director of the corporation. No
person shall be eligible for election as a director of the
corporation unless nominated in accordance with the procedures
set forth herein. The Presiding Officer shall determine whether
the nomination is made in accordance with the foregoing
procedures. If the Presiding Officer should determine that the
nomination was not made in accordance with the foregoing
procedures, the Presiding Officer shall state such determination
to the meeting, whereupon any such defective nomination shall be
disregarded and not otherwise brought before the meeting.
Notwithstanding the foregoing provisions of this Article III,
Section 3.2.1, a shareholder shall also comply with all
applicable requirements of the Securities Exchange Act of 1934,
as amended, and the rules and regulations thereunder with respect
to the matters set forth herein.
Section 3.3 Regular Meetings. A regular meeting of the
Board of Directors shall be held without other notice than this
bylaw immediately after, and at the same place as, the annual
meeting of shareholders. The Board of Directors may provide by
resolution the time and place, within or without the State of
Oregon, for the holding of additional regular meetings without
other notice than such resolution.
Section 3.4 Special Meetings. Special meetings of the
Board of Directors may be called by, or at the request of, the<PAGE>
Chairman of the Board, Chief Executive Officer or a majority of
the directors. The person or persons authorized to call special
meetings of the Board of Directors may fix any place, within or
without the State of Oregon, as the place for holding any special
meeting of the Board of Directors called by him, her or them.
Section 3.5 Notice of Meeting. Notice of the date, time
and place of any special meeting shall be given at least two (2)
days prior to the meeting by written notice delivered personally
or mailed to each director at his or her business address, or by
facsimile or telegram. If mailed, the notice shall be deemed to
be delivered when deposited in the United States mail, so
addressed, with postage thereon prepaid. If delivered by
facsimile, the notice shall be deemed to be delivered when the
facsimile is transmitted by the corporation to the facsimile
number maintained by the director at his or her business. If
notice is delivered by telegram, the notice shall be deemed to be
delivered when the telegram is delivered to the telegraph
company. Any director may waive notice of any meeting. The
attendance of a director at a meeting shall constitute a waiver
of notice of such meeting, except where a director attends a
meeting for the express purpose of objecting to the transaction
of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the
purpose of, any regular or special meeting of the Board of
Directors need be specified in the notice or waiver of notice of
such meeting.
Section 3.6 Quorum. A majority of the number of
directors fixed by Section 3.2 of this Article 3 shall constitute
a quorum for the transaction of business at any meeting of the
Board of Directors, but if less than such majority is present at
a meeting, the majority of the directors present may adjourn the
meeting from time to time without further notice.
Section 3.7 Manner of Acting. The act of the majority of
the directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors.
Section 3.8 Action Without Meeting. Any action required
or permitted to be taken at a Board of Directors' meeting may be
taken without a meeting if the action is taken by all members of
the Board of Directors. The action shall be evidenced by one or
more written consents describing the action taken, signed by each
director, and included in the minutes or filed with the corporate
records reflecting the action taken.
Section 3.9 Vacancies. Any vacancy occurring in the
Board of Directors, including a vacancy resulting from an
increase in the number of directors, may be filled by the
shareholders or by the affirmative vote of a majority of the
remaining directors though less than a quorum of the Board of
Directors. A director elected to fill a vacancy shall be elected
for the unexpired term of his or her predecessor in office, or in<PAGE>
the event of a vacancy resulting from an increase in the number
of directors, until the next election of directors by the
shareholders.
Section 3.10 Compensation. By resolution of the Board of
Directors, each director may be paid his or her expenses, if any,
of attendance at each meeting of the Board of Directors and may
be paid a stated salary as director or a fixed sum for attendance
at each meeting of the Board of Directors, or both.
Section 3.11 Presumption of Assent. A director of the
corporation who is present at a meeting of the Board of Directors
at which action on any corporate matter is taken shall be
presumed to have assented to the action taken unless the
director's dissent shall be entered in the minutes of the meeting
the director shall file his or her written dissent to the action
with the person acting as the secretary of the meeting before the
adjournment of the meeting, or the director shall forward such
dissent by registered mail to the secretary of the corporation
immediately after the adjournment of the meeting. The right to
dissent to a particular action shall not be available to a
director who voted in favor of the action.
Section 3.12 Action of Directors by Communications
Equipment. Any action required or which may be taken at a
meeting of directors, or of a committee thereof, may be taken by
means of a conference telephone or similar communications
equipment by means of which all persons participating in the
meeting can hear each other at the same time. Participation by
such means shall constitute presence in person at a meeting.
Section 3.13 Limitation of Director Liability. No
director of the corporation shall be personally liable to the
corporation or its shareholders for monetary damages for conduct
as a director, provided that this Section 3.13 shall not
eliminate the liability of a director for any act or omission for
which such elimination of liability is not permitted under the
Oregon Business Corporation Act. No amendment to the Oregon
Business Corporation Act that further limits the acts or
omissions for which elimination of liability is permitted shall
affect the liability of a director for any act or omission which
occurs prior to the effective date of such amendment.
Section 3.14 Committees. Pursuant to the authority
granted under the Oregon Business Corporation Act, and subject to
the restrictions stated therein, the Board of Directors may
create one or more committees and appoint members of the Board of
Directors to serve on such committees.
ARTICLE 4
OFFICERS<PAGE>
Section 4.1 Number. The officers of the corporation
shall be a Chairman of the Board, a Chief Executive Officer, a
President, one or more Vice Presidents (the number to be
determined by the Board of Directors), a Secretary and a
Treasurer, each of whom shall be elected by the Board of
Directors. Such other officers and assistant officers as may be
deemed necessary may be elected or appointed by the Board of
Directors. Any two or more offices may be held by the same
person.
Section 4.2 Election and Term of Office. The officers of
the corporation to be elected by the Board of Directors shall be
elected annually by the Board of Directors at the first meeting
of the Board of Directors held after each annual meeting of the
shareholders. If the election of officers shall not be held at
such meeting, such election shall be held as soon thereafter as
may be convenient. Each officer shall hold office until his or
her successor shall have been duly elected and shall have
qualified or until his or her death or until he or she shall
resign or shall have been removed in the manner provided in
Section 4.3 of this Article 4.
Section 4.3 Removal. Any officer or agent may be removed
by the Board of Directors whenever in its judgment the best
interests of the corporation will be served thereby, but such
removal shall be without prejudice to the contract rights, if
any, of the person so removed. Election or appointment of an
officer or agent shall not of itself create contract rights.
Section 4.4 Vacancies. A vacancy in any office because
of death, resignation, removal, disqualification or otherwise may
be filled by the Board of Directors for the unexpired portion of
the term.
Section 4.5 Chairman of the Board of Directors. The
Chairman of the Board of Directors shall be a director and shall
preside at all meetings of the Board of Directors and of the
shareholders. The Chairman of the Board shall perform such
duties as the Board of Directors may from time to time designate
Section 4.6 Chief Executive Officer. The Chief Executive
officer shall be the principal officer of the corporation and,
subject to the control of the Board of Directors, shall supervise
and control all of the business and affairs of the corporation.
The Chief Executive Officer may sign, with the Secretary,
Assistant Secretary or any other proper officer of the
corporation so authorized by the Board of Directors, certificates
for shares of the corporation, and any deeds, mortgages, bonds,
contracts or other instruments which the Board of Directors has
authorized to be executed, except in cases where the signing and
execution of any of the same shall be expressly delegated by the
Board of Directors or by these Bylaws to some other officer or
agent of the corporation, or shall be required by law to be
otherwise signed or executed. The Chief Executive Officer shall<PAGE>
exercise the executive powers normally associated with such
office and shall perform such other duties as the Board of
Directors may from time to time designate.
Section 4.7 President. The President shall perform such
duties as the Chief Executive Officer or the Board of Directors
may from time to time designate. In the event the Board of
Directors shall not elect a Chief Executive Officer, or in his or
her absence or in the event of his or her death, inability or
refusal to act, the President shall be deemed to be the principal
officer of the corporation and, subject to the designation of
duties by the Board of Directors, shall have the authority and
responsibilities of the Chief Executive Officer.
Section 4.8 Vice President(s). In the absence of the
President or in the event of his or her death, inability or
refusal to act, the Vice President (or in the event there be more
than one Vice President, the Vice Presidents in the order
designated at the time of their election, or in the absence of
any designation, then in the order of their election) shall
perform the duties of the President and, when so acting, shall
have all the powers of and be subject to all the restrictions
upon the President. The Vice President(s) shall perform such
duties as the Chief Executive officer, the President, and the
Board of Directors may from time to time designate.
Section 4.9 Secretary. The Secretary shall: (a) keep the
minutes of the proceedings of the shareholders and of the Board
of Directors in one or more books provided for that purpose; (b)
see that all notices are duly given in accordance with the
provisions of these Bylaws or as required by law; (c) be
custodian of the corporate records and the seal of the
corporation and see that the seal of the corporation is affixed
to all documents the execution of which on behalf of the
corporation under its seal is duly authorized; (d) keep a
register of the shareholders of the corporation, in a form that
permits preparation of a list of the names and addresses of all
shareholders in alphabetical order by class of shares showing the
number and class of shares held by each; (e) sign with the Chief
Executive Officer certificates for shares of the corporation, the
issuance of which shall be authorized by resolution of the Board
of Directors; (f) have general charge of the stock transfer books
of the corporation (which duty, if authorized by the Board of
Directors, may be delegated to a third party acting as stock
transfer agent); and (g) in general perform all duties incident
to the office of Secretary and such other duties as from time to
time may be assigned to him or her by the Chief Executive
Officer, the President, and by the Board of Directors.
Section 4.10 Treasurer. The Treasurer shall: (a) have
charge and custody of and be responsible for all funds and
securities of the corporation; (b) receive and give receipts for
moneys due and payable to the corporation from any source
whatsoever, and deposit all such moneys in the name of the<PAGE>
corporation in such banks, trust companies or other depositories
as shall be selected in accordance with the provisions of Article
6 of these Bylaws; and (c) in general perform all of the duties
incident to the office of Treasurer and such other duties as from
time to time may be assigned to him or her by the Chief Executive
Officer, the President, and the Board of Directors. If required
by the Board of Directors, the Treasurer shall give a bond for
the faithful discharge of his or her duties in such sum and with
such surety or sureties as the Board of Directors shall
determine.
Section 4.11 Assistant Secretaries and Assistant
Treasurers. The Assistant Secretaries, when authorized by the
Board of Directors, may sign with the Chief Executive Officer or
the President certificates for shares of the corporation the
issuance of which shall have been authorized by a resolution of
the Board of Directors. The Assistant Treasurers, if required by
the Board of Directors, shall give bonds for the faithful
discharge of their duties in such sums and with such sureties as
the Board of Directors shall determine. The Assistant
Secretaries and Assistant Treasurers shall perform such duties as
shall be assigned to them by the Secretary or the Treasurer,
respectively, and by the Chief Executive Officer, President and
the Board of Directors.
Section 4.12 Salaries. The salaries and all other
compensation of the officers shall be fixed from time to time by
the Board of Directors. No officer shall be prevented from
receiving salary or other compensation by reason of the fact that
the officer is also a director of the corporation.
ARTICLE 5
CERTIFICATES FOR SHARES AND THEIR TRANSFER
Section 5.1 Certificates for Shares. Certificates
representing shares of the corporation shall be in such form as
shall be determined by the Board of Directors. Such certificates
shall be signed by the Chief Executive Officer or President and
by the Secretary or an Assistant Secretary and shall be
consecutively numbered or otherwise identified. The name and
address of each person to whom shares are issued, the number of
shares and the date of issue shall be entered on the stock
registrar of the corporation. All certificates surrendered to
the corporation for transfer shall be entered on the stock
transfer books of the corporation. All certificates surrendered
to the corporation for transfer shall be cancelled. No new
certificate shall be issued until the former certificate for a
like number of shares shall have been surrendered and cancelled.
In the case of a lost, destroyed or mutilated certificate, a new
certificate may be issued upon such terms and indemnity to the
corporation as the Board of Directors may prescribe.<PAGE>
Section 5.2 Transfer of Shares. Transfer of shares of
the corporation shall be made only on the stock registrar of the
corporation by the holder of record or by his or her legal
representative, who shall furnish proper evidence of authority to
transfer, or by his or her attorney so authorized by power of
attorney duly executed and filed with the Secretary of the
corporation, and on surrender for cancellation of any certificate
for such shares. The person in whose name shares stand on the
books of the corporation shall be deemed by the corporation to be
the owner of such shares for all purposes.
ARTICLE 6
CONTRACTS, LOANS, CHECKS AND DEPOSITS
Section 6.1 Contracts. The Board of Directors may
authorize any officer, officers, agent or agents to enter into
any contract or execute and deliver any instrument in the name of
and on behalf of the corporation and such authority may be
general or confined to specific instances.
Section 6.2 Loans. No loans shall be contracted on
behalf of the corporation and no evidence of indebtedness shall
he issued in its name unless authorized by a resolution of the
Board of Directors. Such authority may be general or confined to
specific instances.
Section 6.3 Checks, Drafts, Other Orders. All checks,
drafts or other orders for the payment of money, notes or other
evidences of indebtedness issued in the name of the corporation
shall be signed by such officer, officers, agent or agents of the
corporation and in such manner as shall from time to time be
determined by resolution of the Board of Directors.
Section 6.4 Deposits. All funds of the corporation not
otherwise employed shall be deposited from time to time to the
credit of the corporation in such banks, trust companies or other
depositories as the Board of Directors or Chief Executive Officer
may select.
ARTICLE 7
DIVIDENDS
The Board of Directors may, from time to time, declare and
the corporation may pay dividends on its outstanding shares in
the manner and upon the terms and conditions provided by law and
the corporation's Articles of Incorporation.
ARTICLE 8<PAGE>
CORPORATE SEAL
The Board of Directors may provide a corporate seal which
shall be circular in form and have inscribed on it the name of
the corporation and the state of incorporation and the words
"Corporate Seal."
ARTICLE 9
WAIVER OF NOTICE
Whenever any notice is required to be given to any
shareholder or director of the corporation under the provisions
of these bylaws, the Articles of Incorporation, or the Oregon
Business Corporation Act, a waiver of the notice in writing,
signed by the person or persons entitled to the notice, whether
before or after the time stated in the notice, shall be deemed
equivalent to the giving of the notice.
ARTICLE 10
INDEMNIFICATION
Section 10.1 Indemnities and Indemnified Acts. Each
person who was or is made a party or is threatened to be made a
party to or was otherwise involved in any action, suit or
proceeding, whether civil, criminal, administrative or
investigative (a "proceeding"), by reason of the fact that he or
she is or was a director, officer or employee of the corporation
or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation or of
a partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans (an
"indemnitee"), whether the basis of the proceeding is alleged
action in an official capacity or as director, officer, employee
or agent or in any other capacity while serving as a director,
officer, employee or agent, shall be indemnified and held
harmless by the corporation to the fullest extent authorized by
the Oregon Business Corporation Act, as it exists on the date
hereof or may subsequently be amended (but, in the case of any
such amendment, only to the extent that such amendment permits
the corporation to provide broader indemnification rights than
the Act permitted the corporation to provide prior to the
amendment), against all expense, liability and loss (including
attorneys' fees, judgments, fines, ERISA excise taxes or
penalties and amounts paid in settlement) reasonably incurred or
suffered by the indemnitee in connection therewith and the
indemnification shall continue as to an indemnitee who has ceased
to be a director, officer, employee or agent and shall inure to
the benefit of the indemnitee's heirs, executors and
administrators; provided, however, that except as provided in
Section 10.2 hereof with respect to proceedings to enforce rights
to indemnification, the corporation shall indemnify any
indemnitee in connection with a proceeding (or part thereof)<PAGE>
initiated by the indemnitee only if the proceeding (or part
thereof) was authorized by the Board of Directors of the
corporation. The right to indemnification conferred in this
Article 10 shall be a contract right and shall include the right
to be paid by the corporation the expenses incurred in defending
any such proceeding in advance of its final disposition (an
"advancement of expenses"); provided, however, that if the Oregon
law requires, an advancement of expenses incurred by an
indemnitee in his or her capacity as a director or officer (and
not in any other capacity in which service was or is rendered by,
such indemnitee, including without limitation service to an
employee benefit plan) shall be made only upon delivery to the
corporation of an undertaking by or on behalf of the indemnitee
to repay all amounts so advanced if it shall ultimately be
determined by final judicial decision from which there is no
further right to appeal that such indemnitee is not entitled to
be indemnified for such expenses under this Section or otherwise
(hereinafter an "undertaking").
Section 10.2 Right of Indemnitee to Bring Suit. If a
claim under Section 10.1 is not paid in full by the corporation
within 60 days after a written claim has been received by the
corporation, except in the case of a claim for an advancement of
expenses, in which case the applicable period shall be 20 days,
the indemnitee may at any time thereafter bring suit against the
corporation to recover the unpaid amount of the claim. If
successful in whole or in part in any such suit or in a suit
brought by the corporation to recover an advancement of expenses
pursuant to the terms of an undertaking, the indemnitee shall be
entitled to be paid also the expense of prosecuting or defending
such suit. In (i) any suit brought by the indemnitee to enforce
a right to indemnification hereunder (but not in a suit brought
by the indemnitee to enforce a right to an advancement of
expenses) it shall be a defense that, and (ii) any suit by the
corporation to recover an advancement of expenses pursuant to the
terms of an undertaking, the corporation shall be entitled to
recover such expenses upon a final adjudication that the
indemnitee has not met the applicable standard of conduct set
forth in the Oregon law. Neither the failure of the corporation
(including its Board of Directors, independent legal counsel or
its shareholders) to have made a determination prior to the
commencement of such suit that indemnification of the indemnitee
is proper in the circumstances because the indemnitee has met the
applicable standard of conduct set forth in the Oregon Business
Corporation Act, nor an actual determination by the corporation
(including its Board of Directors, independent legal counsel, or
its shareholders) that the indemnitee has not met such applicable
standard of conduct, shall create a presumption that the
indemnitee has not met the applicable standard of conduct or, in
the case of such a suit brought by the indemnitee, be a defense
to such suit. In any suit brought by the indemnitee to enforce a
right hereunder, or by the corporation to recover an advancement
of expenses pursuant to the terms of an undertaking, the burden
of proving that the indemnitee is not entitled to be indemnified<PAGE>
or to such advancement of expenses under this Section or
otherwise shall be on the corporation.
Section 10.3 Non-Exclusivity of Rights. The rights to
indemnification and to the advancement of expenses conferred in
this Section shall not be exclusive of any other right which any
person may have or hereafter acquire under any statute, the
corporation's articles of incorporation or bylaws, agreement,
vote of shareholders or disinterested directors or otherwise.
Section 10.4 Insurance. The corporation may maintain
insurance, at its expense, to protect itself and any director,
officer, employee or agent of the corporation or another
corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not
the corporation would have the power to indemnify such person
against such expense, liability or loss under the Oregon law.
Section 10.5 Indemnification of Agents of the Corporation.
The corporation may, to the extent authorized from time to time
by the Board of Directors, grant rights to indemnification and
the advancement of expenses, to any agent of the corporation to
the fullest extent of the provisions of this Article 10 with
respect to the indemnification and advancement of expenses of
directors, officers and employees of the corporation.
ARTICLE 11
AMENDMENTS
These Bylaws may be altered, amended or repealed and new
Bylaws may be adopted by the Board of Directors or by the
shareholders at any regular or special meeting.
ARTICLE 12
BOOKS AND RECORDS
Section 12.1 Corporate Records. The corporation shall
keep as permanent records minutes of all meetings of its
shareholders and Board of Directors, a record of all actions
taken by the shareholders or Board of Directors without a meeting
and a record of all actions taken by a committee of the Board of
Directors in place of the Board of Directors on behalf of the
corporation. The corporation or its agent shall maintain a
record of its shareholders in a form that permits preparation of
a list of the names and addresses of all shareholders in
alphabetical order by class of shares showing the number and
class of shares held by each.
Section 12.2 Copies of Resolutions. Any person dealing
with the corporation may rely upon a copy of any of the records
of the proceedings, resolutions, or votes of the Board of<PAGE>
Directors or stockholders, when certified by the Chief Executive
Officer, President, or Secretary.
ARTICLE 13
FISCAL YEAR
The fiscal year of the corporation shall begin on the first
day of April and end of the last day of March in each year.
The foregoing 1995 Restated Bylaws of RENTRAK CORPORATION
restate in their entirety the 1991 Restated Bylaws of Rentrak
Corporation approved and adopted by the Board of Directors on
April 4, 1991 as amended by Amendment No. 1 to the 1991 Restated
Bylaws approved and duly adopted by the Board of Directors on
April 4, 1991, and an Amendment to the 1991 Restated Bylaws
approved and duly adopted by the Board of Directors on May 25,
1995, at which time the Board of Directors directed that these
Bylaws be restated to incorporate all amendments approved and
adopted since the 1991 Restatement of the Bylaws, and the Chief
Executive Officer and Secretary of the corporation were
authorized and empowered to authenticate these Bylaws by their
signatures below.
Ron Berger, President and Chairman of
the Board
ATTEST:
_________________________
F. Kim Cox, Secretary
AJB/71287.01<PAGE>
RENTRAK CORPORATION
and
U.S. STOCK TRANSFER CORPORATION
as Rights Agent
Rights Agreement
Dated as of May 18, 1995
<PAGE>
RIGHTS AGREEMENT
Agreement, dated as of May 18, 1995, between Rentrak
Corporation, an Oregon corporation (the "Company"), and U.S.
Stock Transfer Corporation, a California corporation, as Rights
Agent (the "Rights Agent").
RECITALS
The Board of Directors of the Company has authorized
and declared a dividend of one right (a "Right") for each Common
Share (as defined in Section 1.6) of the Company outstanding at
the close of business on June 5, 1995 (the "Record Date") and has
authorized the issuance of one Right (subject to adjustment as
provided herein) with respect to each Common Share that shall
become outstanding between the Record Date and the earliest of
the Distribution Date, the Redemption Date and the Final
Expiration Date (as such terms are defined in Sections 3.1 and
7.1), each Right initially representing the right to purchase one
one-hundredth of a share of Series A Junior Participating
Preferred Stock (the "Preferred Shares") of the Company having
the rights, powers and preferences set forth in the form of
Certificate of Designations attached hereto as Exhibit A, upon
the terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and
the mutual agreements herein set forth, the parties hereby agree
as follows:
Section 1. Certain Definitions. For purposes of this
Rights Agreement, the following terms have the meanings
indicated:
1.1 "Acquiring Person" shall mean any Person (as such
term is hereinafter defined) who or which, together with all
Affiliates and Associates (as such terms are hereinafter defined)
of such Person, shall be the Beneficial Owner (as such term is
hereinafter defined) of 15% or more of the Common Shares of the
Company then outstanding but shall not include the Company, any
Subsidiary of the Company or any employee benefit plan of the
Company or of any Subsidiary of the Company or any entity holding
shares of capital stock of the Company for or pursuant to the
terms of any such plan, in its capacity as an agent or trustee
for any such plan. Notwithstanding the foregoing, no Person
shall become an "Acquiring Person" as the result of an
acquisition of Common Shares by the Company which, by reducing
the number of shares outstanding, increases the proportionate
number of shares beneficially owned by such Person to 15% or more
of the Common Shares of the Company then outstanding; provided,
however, that if a Person shall become the Beneficial Owner of
15% or more of the Common Shares of the Company then outstanding
solely by reason of share purchases by the Company and shall,
after such share purchases by the Company, become the Beneficial
Owner of any additional Common Shares of the Company, then such
Person shall be deemed to be an "Acquiring Person."
Notwithstanding the foregoing, if the Board of Directors of the
Company determines in good faith that a Person who would<PAGE>
otherwise be an "Acquiring Person," as defined pursuant to the
foregoing provisions of this Section 1.1, has become such
inadvertently, and such Person divests as promptly as practicable
a sufficient number of Common Shares so that such Person would no
longer be an Acquiring Person, as defined pursuant to the
foregoing provisions of this Section 1.1, then such Person shall
not be deemed to be an "Acquiring Person" for any purposes of
this Agreement (so long as such Person does not become an
Acquiring Person after such divestiture).
1.2 "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations, as in effect on the date of this
Rights Agreement, under the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
1.3 A Person shall be deemed the "Beneficial Owner" of
and shall be deemed to "beneficially own" any securities:
(i) which such Person or any of such
Person's Affiliates or Associates beneficially owns,
directly or indirectly (as determined pursuant to
Rule 13d-3 of the General Rules and Regulations under
the Exchange Act as in effect on the date of this
Agreement);
(ii) which such Person or any of such
Person's Affiliates or Associates, directly or
indirectly, has (A) the right to acquire (whether such
right is exercisable immediately, or only after the
passage of time, compliance with regulatory
requirements, fulfillment of a condition or otherwise)
pursuant to any agreement, arrangement or
understanding, whether or not in writing (other than
customary agreements with and between underwriters and
selling group members with respect to a bona fide
public offering of securities), or upon the exercise of
conversion rights, exchange rights, rights (other than
the Rights), warrants or options, or otherwise;
provided, however, that a Person shall not be deemed
the Beneficial Owner of, or to beneficially own, (1)
securities tendered pursuant to a tender or exchange
offer made by or on behalf of such Person or any of
such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or
exchange or (2) securities which such Person or any of
such Person's Affiliates or Associates may acquire,
does or do acquire or may be deemed to have the right
to acquire, pursuant to any merger or other acquisition
agreement between the Company and such Person (or one
or more of his Affiliates or Associates) if such
agreement has been approved by the Board of Directors
of the Company prior to such Person's becoming an
Acquiring Person; or (B) the right to vote pursuant to
any agreement, arrangement or understanding (whether or
not in writing); provided, however, that a Person shall
not be deemed the Beneficial Owner of, or to<PAGE>
beneficially own, any security under this clause (B) if
the agreement, arrangement or understanding to vote
such security (1) arises solely from a revocable proxy
or consent given to such Person in response to a public
proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations
of the Exchange Act and (2) is not also then reportable
on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) which are beneficially owned,
directly or indirectly, by any other Person (or any
Affiliate or Associate thereof) with which such Person
or any of such Person's Affiliates or Associates has
any agreement, arrangement or understanding (other than
customary agreements with and between underwriters and
selling group members with respect to a bona fide
public offering of securities), whether or not in
writing, for the purpose of acquiring, holding, voting
(except pursuant to a revocable proxy as described in
the proviso to Section 1.3(ii)(B)) or disposing of any
securities of the Company.
1.4 "Business Day" shall mean any day other than a
Saturday, Sunday, or a day on which banking institutions in the
State of Oregon are authorized or obligated by law or executive
order to close.
1.5 "close of business" on any given date shall mean
5:00 p.m., Oregon time, on such date; provided, however, that if
such date is not a Business Day it shall mean 5:00 p.m., Oregon
time, on the next succeeding Business Day.
1.6 "Common Shares" when used with reference to the
Company shall mean the shares of common stock, par value $.001
per share, of the Company. "Common Shares" when used with
reference to any Person other than the Company shall mean the
capital stock with the greatest voting power, or the equity
securities or other equity interest having power to control or
direct the management, of such other Person or, if such Person is
a Subsidiary of another Person, the Person or Persons which
ultimately control such first-mentioned Person, and which has
issued and outstanding such capital stock, equity securities or
equity interest.
1.7 "Continuing Director" shall mean (i) any member of
the Board of Directors of the Company, while such Person is a
member of the Board, who is not an Acquiring Person, or an
Affiliate or Associate of an Acquiring Person, or an employee,
director, representative, nominee or designee of any Acquiring
Person or of any such Affiliate or Associate, and was a member of
the Board prior to the time that any Person becomes an Acquiring
Person or (ii) any Person (during such period in which such
Person is a member of the Board) who, after the time that any
Person becomes an Acquiring Person, becomes a member of the Board
and who is not an Acquiring Person, or an Affiliate or Associate
of an Acquiring Person, or an employee, director, representative,<PAGE>
nominee or designee of an Acquiring Person or of any such
Affiliate or Associate, if such Person's nomination for election
or election to the Board is recommended or approved by a majority
of the Continuing Directors.
1.8 "Person" shall mean any individual, partnership,
joint venture, limited liability company, firm, corporation,
unassociated association, trust or other entity, and shall
include any successor (by merger or otherwise) of such entity.
1.9 "Shares Acquisition Date" shall mean the first
date of public announcement (which, for purposes of this
definition, shall include, without limitation, the filing of a
report pursuant to Section 13(d) of the Exchange Act or pursuant
to a comparable successor statute) by the Company or an Acquiring
Person that an Acquiring Person has become such or that discloses
information which reveals the existence of an Acquiring Person.
1.10 "Subsidiary" of any Person shall mean any
corporation or other entity of which a majority of the voting
power of the voting equity securities or equity interests is
owned, of record or beneficially, directly or indirectly, by such
Person.
1.11 A "Trigger Event" shall be deemed to have occurred
upon any Person becoming an Acquiring Person. Notwithstanding
the foregoing, a Trigger Event shall not be deemed to have
occurred if the event causing the 15% ownership threshold to be
crossed is an acquisition of Common Shares made pursuant to a
cash tender offer made pursuant to the rules and regulations
under the Exchange Act and filed with the Securities and Exchange
Commission on Schedule 14D-1 (or any successor form) for all
outstanding Common Shares not beneficially owned by the Person
making such offer (or by its Affiliates or Associates) so long as
the Board of Directors of the Company determines, after receiving
advice from one or more investment banking firms, that such offer
is (i) at a price and on terms which are fair to stockholders
(taking into account all factors which such members of the Board
deem relevant, including without limitation, prices which could
reasonably be achieved if the Company or its assets were sold on
an orderly basis designed to realize maximum value) and (ii)
otherwise in the best interests of the Company and its
stockholders; provided, however, that there must be Continuing
Directors then in office and any such determination shall require
the concurrence of a majority of such Continuing Directors.
1.12 The following terms shall have the meanings
defined for such terms in the Sections set forth below:
<TABLE>
<CAPTION>
Term Section
<S> <C>
Adjustment Shares 11.1.2
common stock equivalent 11.1.3
Company Recitals
current per share market price 11.4
Current Value 11.1.3
Distribution Date 3.1
equivalent preferred stock 11.2<PAGE>
Exchange Act 1.2
Exchange Consideration 27.1
Final Expiration Date 7.1
Nasdaq 9
Preferred Shares Recitals
Purchase Price 4
Record Date Recitals
Redemption Date 7.1
Redemption Price 23.1
Right Recitals
Right Certificate 3.1
Rights Agent Recitals
Security 11.4
Spread 11.1.3
Substitution Period 11.1.3
Summary of Rights 3.2
Trading Day 11.4.1
</TABLE>
Section 2. Appointment of Rights Agent. The Company
hereby appoints the Rights Agent to act as agent for the Company
and the holders of the Rights (who, in accordance with Section 3,
shall prior to the Distribution Date also be the holders of the
Common Shares) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment.
The Company may from time to time appoint such co-Rights Agents
as it may deem necessary or desirable. In the event the Company
appoints one or more co-Rights Agents, the respective duties of
the Rights Agent and any co-Rights Agent shall be as the Company
shall determine. Contemporaneously with such appointment, if
any, the Company shall notify the Rights Agent thereof.
Section 3. Issuance of Right Certificates.
3.1 Rights Evidenced by Share Certificates. Until the
earlier of (i) the 10th day after the Shares Acquisition Date or
(ii) the 10th day after the date of the commencement of, or first
public announcement of the intent of any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan
of the Company or of any Subsidiary of the Company or any entity
holding shares of capital stock of the Company for or pursuant to
the terms of any such plan, in its capacity as an agent or
trustee for any such plan) to commence, a tender or exchange
offer the consummation of which would result in any Person
becoming the Beneficial Owner of Common Shares aggregating 15% or
more of the then outstanding Common Shares of the Company (the
earlier of (i) and (ii) being herein referred to as the
"Distribution Date," whether or not either such date occurs prior
to the Record Date), (x) the Rights (unless earlier expired,
redeemed or terminated) will be evidenced (subject to the
provisions of Section 3.2) by the certificates for Common Shares
registered in the names of the holders thereof (which
certificates for Common Shares shall also be deemed to be Right
Certificates) and not by separate certificates, and (y) the
Rights (and the right to receive certificates therefor) will be
transferable only in connection with the transfer of the
underlying Common Shares. As soon as practicable after the
Distribution Date, the Rights Agent will send, by first-class,<PAGE>
postage-prepaid mail, to each record holder of Common Shares 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
certificates for Rights, in substantially the form of Exhibit B
hereto (a "Right Certificate"), evidencing one Right (subject to
adjustment as provided herein) for each Common Share so held. As
of the Distribution Date, the Rights will be evidenced solely by
such Right Certificates.
3.2 Summary of Rights. On the Record Date or as soon
as practicable thereafter, the Company will send or cause to be
sent a copy of a Summary of Rights to Purchase Preferred Shares,
in substantially the form attached hereto as Exhibit C (the
"Summary of Rights"), by first-class, postage-prepaid mail, to
each record holder of Common Shares as of the close of business
on the Record Date at the address of such holder shown on the
records of the Company. With respect to certificates for Common
Shares outstanding as of the close of business on the Record
Date, until the Distribution Date (or the earlier Redemption Date
or Final Expiration Date), the Rights will be evidenced by such
certificates for Common Shares registered in the names of the
holders thereof together with a copy of the Summary of Rights and
the registered holders of the Common Shares shall also be
registered holders of the associated Rights. Until the
Distribution Date (or the earlier Redemption Date or Final
Expiration Date), the surrender for transfer of any certificate
for Common Shares outstanding at the close of business on the
Record Date, with or without a copy of the Summary of Rights,
shall also constitute the transfer of the Rights associated with
the Common Shares represented thereby.
3.3 New Certificates After Record Date. Certificates
for Common Shares which become outstanding (whether upon issuance
out of authorized but unissued Common Shares, issuance out of
treasury or transfer or exchange of outstanding Common Shares)
after the Record Date but prior to the earliest of the
Distribution Date, the Redemption Date or the Final Expiration
Date, shall be deemed also to be certificates for Rights, and
shall have impressed, printed, stamped, written or otherwise
affixed onto them the following legend:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Rights
Agreement between Rentrak Corporation and U.S. Stock
Transfer Corporation, dated as of May 18, 1995, as the
same may be amended from time to time (the "Rights
Agreement"), the terms of which are hereby incorporated
herein by reference and a copy of which is on file at
the principal executive offices of Rentrak Corporation.
Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this
certificate. Rentrak Corporation will mail to the
holder of this certificate a copy of the Rights
Agreement without charge after receipt of a written<PAGE>
request therefor. As described in the Rights
Agreement, Rights which are held by or have been held
by Acquiring Persons or Associates or Affiliates
thereof (as defined in the Rights Agreement) shall
become null and void.
With respect to such certificates containing the foregoing
legend, until the Distribution Date (or the earlier Redemption
Date or Final Expiration Date), the Rights associated with the
Common Shares represented by such certificates shall be evidenced
by such certificates, with or without a copy of the Summary of
Rights, and the surrender for transfer of any such certificates
shall also constitute the transfer of the Rights associated with
the Common Shares represented thereby. In the event that the
Company purchases or acquires any Common Shares after the Record
Date but prior to the Distribution Date, any Rights associated
with such Common Shares shall be deemed cancelled and retired so
that the Company shall not be entitled to exercise any Rights
associated with the Common Shares which are no longer
outstanding.
Section 4. Form of Right Certificates. The Right
Certificates (and the forms of election to purchase Preferred
Shares, certification and assignment to be printed on the reverse
thereof) shall be substantially the same as Exhibit B hereto and
may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company
may deem appropriate and as are not inconsistent with the
provisions of this Rights Agreement, or as may be required to
comply with any applicable law or with any rule or regulation
made pursuant thereto or with any rule or regulation of any stock
exchange or trading system on which the Rights may from time to
time be listed or quoted, or to conform to usage. Subject to the
terms and conditions hereof, the Right Certificates, whenever
issued, shall be dated as of the Record Date, and shall show the
date of countersignature by the Rights Agent, and on their face
shall entitle the holders thereof to purchase such number of one
one-hundredths of a Preferred Share as shall be set forth therein
at the price per one one-hundredth of a Preferred Share set forth
therein (the "Purchase Price"), but the number of such one one-
hundredths of a Preferred Share and the Purchase Price shall be
subject to adjustment as provided herein.
Section 5. Countersignature and Registration. The
Right Certificates shall be executed on behalf of the Company by
its Chairman of the Board of Directors, the Chief Executive
Officer, President or any Vice President, either manually or by
facsimile signature, and shall have affixed thereto the Company's
seal or a facsimile thereof which shall be attested by the
Secretary or any Assistant Secretary of the Company, either
manually or by facsimile signature. The Right Certificates shall
be manually countersigned by an authorized signatory of the
Rights Agent, but it shall not be necessary for the same
signatory to countersign all of the Right Certificates hereunder.
No Right Certificate shall be valid for any purpose unless so
countersigned. In case any officer of the Company who shall have
signed any of the Right Certificates shall cease to be such<PAGE>
officer of the Company before countersignature by the Rights
Agent and issuance and delivery by the Company, such Right
Certificates, nevertheless, may be countersigned by the Rights
Agent, and issued and delivered by the Company with the same
force and effect as though the person who signed such Right
Certificates had not ceased to be such officer of the Company;
and any Right Certificate may be signed on behalf of the Company
by any person who, at the actual date of the execution of such
Right Certificate, shall be a proper officer of the Company to
sign such Right Certificate, although at the date of the
execution of this Rights Agreement any such person was not such
an officer.
Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its principal office in Glendale,
California books for registration and transfer of the Right
Certificates issued hereunder. Such books shall show the names
and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each
of the Right Certificates, the certificate number of each of the
Right Certificates and the date of each of the Right
Certificates.
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates; Mutilated, Destroyed, Lost or
Stolen Right Certificates. Subject to the provisions of Section
11.1.2 and Section 14, at any time after the close of business on
the Distribution Date, and at or prior to the close of business
on the earlier of the Redemption Date or the Final Expiration
Date, any Right Certificate or Right Certificates (other than
Right Certificates representing Rights that have become void
pursuant to Section 11.1.2 or that have been exchanged pursuant
to Section 27) may be transferred, split up or combined or
exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of one
one-hundredths of a Preferred Share as the Right Certificate or
Right Certificates surrendered then entitled such holder to
purchase. Any registered holder desiring to transfer, split up
or combine or exchange any Right Certificate shall make such
request in writing delivered to the Rights Agent, and shall
surrender, together with any required form of assignment and
certificate duly completed, the Right Certificate or Right
Certificates to be transferred, split up or 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 Right Certificate or Right Certificates until
the registered holder shall have completed and signed the
certificate contained in the form of assignment on the reverse
side of such Right Certificate or Right Certificates and shall
have provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall countersign and deliver to the
person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company
may require payment from the holders of Right Certificates of a<PAGE>
sum sufficient to cover any tax or governmental charge that may
be imposed in connection with any transfer, split up or
combination or exchange of such Right Certificates.
Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Right Certificate, and, in case of
loss, theft or destruction, of indemnity or security reasonably
satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Right Certificate if
mutilated, the Company will make and deliver a new Right
Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of
the Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights.
7.1 Exercise of Rights. Subject to Section 11.1.3 and
except as otherwise provided herein, the registered holder of any
Right Certificate may exercise the Rights evidenced thereby in
whole or in part at any time after the Distribution Date upon
surrender of the Right Certificate, with the form of election to
purchase and certification 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
Purchase Price for each one one-hundredth of a Preferred Share as
to which the Rights are exercised, at or prior to the earliest of
(i) the close of business on May 18, 2005 (the "Final Expiration
Date"), (ii) the time at which the Rights are redeemed as
provided in Section 23 (the "Redemption Date"), (iii) the closing
of any merger or other acquisition transaction involving the
Company pursuant to an agreement of the type described in Section
1.3(ii)(A)(2), at which time the Rights are deemed terminated, or
(iv) the time at which the Rights are exchanged as provided in
Section 27.
7.2 Purchase Price. The Purchase Price for each one
one-hundredth of a Preferred Share pursuant to the exercise of a
Right shall initially be $40.00, shall be subject to adjustment
from time to time as provided in Sections 11, 13 and 26 and shall
be payable in lawful money of the United States of America in
accordance with paragraph 7.3.
7.3 Payment Procedures. Upon receipt of a Right
Certificate representing exercisable Rights, with the form of
election to purchase and certification duly executed, accompanied
by payment of the Purchase Price for the shares to be purchased
and an amount equal to any applicable transfer tax required to be
paid by the holder of such Right Certificate in accordance with
Section 9, by certified or cashier's check or money order payable
to the order of the Company, the Rights Agent shall thereupon
promptly (i)(A) requisition from any transfer agent of the
Preferred Shares (or make available, if the Rights Agent is the
transfer agent) certificates for the number of Preferred Shares<PAGE>
to be purchased and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests, or (B) if the
Company shall have elected to deposit the total number of
Preferred Shares issuable upon exercise of the Rights hereunder
with a depositary agent, requisition from the depositary agent
depositary receipts representing such number of one one-
hundredths of a Preferred Share as are to be purchased (in which
case certificates for the Preferred Shares represented by such
receipts shall be deposited by the transfer agent with the
depositary agent) and the Company hereby directs the depositary
agent to comply with all such requests, (ii) when appropriate,
requisition from the Company the amount of cash to be paid in
lieu of the issuance of fractional shares in accordance with
Section 14, (iii) promptly after receipt of such certificates or
depositary receipts, cause the same to be delivered to or upon
the order of the registered holder of such Right Certificate,
registered in such name or names as may be designated by such
holder and (iv) when appropriate, after receipt, promptly deliver
such cash to or upon the order of the registered holder of such
Right Certificate. In the event that the Company is obligated to
issue other securities of the Company, pay cash and/or distribute
other property pursuant to Section 11.1.3, the Company will make
all arrangements necessary so that such other securities, cash
and/or other property are available for distribution by the
Rights Agent, if and when appropriate.
7.4 Partial Exercise. In case the registered holder
of any Right Certificate shall exercise less than all the Rights
evidenced thereby, a new Right Certificate evidencing Rights
equivalent to the Rights remaining unexercised shall be issued by
the Rights Agent and delivered to the registered holder of such
Right Certificate or to his duly authorized assigns, subject to
the provisions of Section 14.
7.5 Full Information Concerning Ownership.
Notwithstanding anything in this Rights Agreement to the
contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a registered
holder of Rights upon the occurrence of any purported exercise as
set forth in this Section 7 unless the certificate contained in
the form of election to purchase set forth on the reverse side of
the Right Certificate surrendered for such exercise shall have
been duly completed and signed by the registered holder thereof
and the Company shall have been provided with such additional
evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the
Company shall reasonably request.
Section 8. Cancellation and Destruction of Right
Certificates. All Right Certificates surrendered for the purpose
of exercise, transfer, split up, combination or exchange shall,
if surrendered to the Company or to any of its agents, be
delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled
by it, and no Right Certificates shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this
Rights Agreement. The Company shall deliver to the Rights Agent<PAGE>
for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or
acquired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all cancelled Right Certificates
to the Company, or shall, at the written request of the Company,
destroy such cancelled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital
Stock. The Company covenants and agrees that from and after the
Distribution Date it will cause to be reserved and kept available
out of its authorized and unissued Preferred Shares (and,
following the occurrence of a Trigger Event, out of its
authorized and unissued Common Shares or other securities or out
of its shares held in its treasury) the number of Preferred
Shares (and, following the occurrence of a Trigger Event, Common
Shares and/or other securities) that will be sufficient to permit
the exercise in full of all outstanding Rights.
So long as the Preferred Shares (and, following the
occurrence of a Trigger Event, Common Shares and/or other
securities) issuable upon the exercise of Rights may be listed on
any national securities exchange or traded in the over-the-
counter market and quoted on the National Association of
Securities Dealers, Inc. Automated Quotation System ("Nasdaq"),
the Company shall use its best efforts to cause, from and after
such time as the Rights become exercisable, all shares reserved
for such issuance to be listed on such exchange or so traded in
such over-the-counter market, upon official notice of issuance
upon such exercise.
The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all Preferred
Shares (and, following the occurrence of a Trigger Event, Common
Shares and/or other securities) delivered upon exercise of
Rights shall, at the time of delivery of the certificates for
such shares (subject to payment of the Purchase Price), be duly
and validly authorized and issued and fully paid and
nonassessable shares.
The Company further covenants and agrees that it will
pay when due and payable any and all Federal and state transfer
taxes and charges which may be payable in respect of the issuance
or delivery of the Right Certificates or of any Preferred Shares
(or Common Shares and/or other securities, as the case may be)
upon the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax which may be payable in respect
of any transfer or delivery of Right Certificates to a person
other than, or the issuance or delivery of certificates for the
Preferred Shares (or Common Shares and/or other securities, as
the case may be) in a name other than that of, the registered
holder of the Right Certificate evidencing Rights surrendered for
exercise or to issue or deliver any certificates for Preferred
Shares (or Common Shares and/or other securities, as the case may
be) in a name other than that of the registered holder upon the
exercise of any Rights until any such tax shall have been paid
(any such tax being payable by the holder of such Right<PAGE>
Certificate at the time of surrender) or until it has been
established to the Company's satisfaction that no such tax is
due.
Section 10. Preferred Shares Record Date. Each person
in whose name any certificate for Preferred Shares (or Common
Shares and/or other securities, as the case may be) is issued
upon the exercise of Rights shall for all purposes be deemed to
have become the holder of record of the Preferred Shares (or
Common Shares and/or other securities, as the case may be)
represented thereby on, and such certificate shall be dated, the
date upon which the Right Certificate evidencing such Rights was
duly surrendered and payment of the Purchase Price (and any
applicable transfer taxes) was made; provided, however, that if
the date of such surrender and payment is a date upon which the
Preferred Shares (or Common Shares and/or other securities, as
the case may be) transfer books of the Company are closed, such
person shall be deemed to have become the record holder of such
shares (fractional or otherwise) on, and such certificate shall
be dated, the next succeeding Business Day on which the Preferred
Shares (or Common Shares and/or other securities, as the case may
be) transfer books of the Company are open.
Section 11. Adjustment of Purchase Price, Number of
Shares or Number of Rights. The Purchase Price, the number of
shares covered by each Right and the number of Rights outstanding
are subject to adjustment from time to time as provided in this
Section 11.
11.1 Post Execution Events.
11.1.1 Corporate Dividends, Reclassifications, Etc.
In the event the Company shall at any time after the date of this
Rights Agreement (A) declare a dividend on the Preferred Shares
payable in Preferred Shares, (B) subdivide the outstanding
Preferred Shares, (C) combine the outstanding Preferred Shares
into a smaller number of shares or (D) issue any shares of its
capital stock in a reclassification of the Preferred Shares
(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 11.1, 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 capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive the
aggregate number and kind of shares of capital stock which, if
such Right had been exercised immediately prior to such date and
at a time when the Preferred Shares transfer books of the Company
were open, he would have owned upon such exercise and been
entitled to receive by virtue of such dividend, subdivision,
combination or reclassification. If an event occurs which would
require an adjustment under both Section 11.1.1 and Section
11.1.2, the adjustment provided for in this Section 11.1.1 shall
be in addition to, and shall be made prior to, the adjustment
required pursuant to, Section 11.1.2.<PAGE>
11.1.2 Acquiring Person Events; Triggering Events.
Subject to Sections 23.1 and 27 of this Agreement, in the event
(A) any Acquiring Person or any Associate or
Affiliate of any Acquiring Person, at any time after the
date of this Rights Agreement, directly or indirectly, shall
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 the Common
Shares of the Company shall remain outstanding and not be
changed into or exchanged for stock or other securities of
any other Person or the Company or cash or any other
property, or
(B) that a Trigger Event occurs,
then, from and after the first occurrence of such event, each
holder of a Right, except as provided below, shall thereafter
have a right to receive, upon exercise thereof at a price per
Right equal to the then current Purchase Price multiplied by the
number of one one-hundredths of a Preferred Share for which a
Right is then exercisable (without giving effect to this Section
11.1.2), in accordance with the terms of this Rights Agreement,
such number of Common Shares as shall equal the result obtained
by (x) multiplying the then current Purchase Price by the then
number of one one-hundredths of a Preferred Share for which a
Right is then exercisable (without giving effect to this Section
11.1.2) and (y) dividing that product by 50% of the current per
share market price of the Common Shares (determined pursuant to
Section 11.4) on the first of the date of the occurrence of, or
the date of the first public announcement of, one of the events
listed above in this Section 11.1.2 (the "Adjustment Shares");
provided, however, that if the transaction that would otherwise
give rise to the foregoing adjustment is also subject to the
provisions of Section 13, then only the provisions of Section 13
shall apply and no adjustment shall be made pursuant to this
Section 11.1.2; provided, further, that the Purchase Price and
the number of Adjustment Shares shall thereafter be subject to
further adjustment pursuant to Section 11.1.1 hereof. Notwith-
standing the foregoing, upon the occurrence of either of the
events listed above in this Section 11.1.2, any Rights that are
or were acquired or beneficially owned by (1) an Acquiring Person
or any Associate or Affiliate thereof, (2) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person becomes such, or
(3) a transferee of an Acquiring Person (or of any such Associate
or Affiliate) who becomes a transferee prior to or concurrently
with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity
interests in such Acquiring Person or to any Person with whom the
Acquiring Person has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer
which the Board of Directors of the Company has determined is
part of a plan, arrangement or understanding which has as a
primary purpose or effect avoidance of this Section 11.1.2, shall
become void, and any holder (whether or not such holder is an<PAGE>
Acquiring Person or an Associate or Affiliate of an Acquiring
Person) of such Rights shall thereafter have no right to exercise
such Rights under any provision of this Rights Agreement or
otherwise. The Company shall not enter into any transaction of
the type described in this Section 11.1.2 if at the time of such
transaction there are any rights, warrants, instruments or secu-
rities outstanding or any arrangements which, as a result of the
consummation of such transaction, would eliminate or
substantially diminish the benefits intended to be afforded by
the Rights. Any Right Certificate issued pursuant to Section 3
or Section 22 that represents Rights beneficially owned by: (1)
an Acquiring Person or any Associate or Affiliate thereof, (2) a
transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person
becomes such, or (3) a transferee of an Acquiring Person (or of
any such Associate or Affiliate) who becomes a transferee prior
to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether
or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with
whom the Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or
(B) a transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding which
has as a primary purpose or effect avoidance of this Section
11.1.2, and any Right Certificate issued pursuant to Section 6,
7.4 or 22 or this Section 11 upon transfer, exchange, replacement
or adjustment of any other Right Certificate referred to in this
sentence, shall contain the following legend (provided, however,
that the Rights Agent shall not be responsible for affixing such
legend unless it has actual knowledge as to the foregoing
circumstances or the Company has notified the Rights Agent in
writing thereof):
The Rights represented by this Right Certificate are
held or have been held by a Person who is or was an
Acquiring Person or an Affiliate or an Associate of an
Acquiring Person or a nominee thereof. This Right Cer-
tificate and the Rights represented hereby have become
null and void as specified in Section 11.1.2 of the
Rights Agreement.
The Company shall use all reasonable efforts to insure
that the provisions of this Section 11.1.2 are complied with, but
shall have no liability to any holder of Right Certificates or
other Person as a result of its failure to make any
determinations with respect to any Acquiring Person or its
Affiliates, Associates or transferees hereunder.
11.1.3 Insufficient Shares. In the event that upon
the occurrence of one or more of the events listed in Section
11.1.2 above there shall not be sufficient Common Shares
authorized but unissued, or held by the Company as treasury
shares, to permit the exercise in full of the Rights in
accordance with the foregoing Section 11.1.2, the Company shall
take all such action as may be necessary to authorize additional
Common Shares for issuance upon exercise of the Rights, provided,<PAGE>
however, that if the Company determines that it is unable to
cause the authorization of a sufficient number of additional
Common Shares, then, in the event the Rights become exercisable,
the Company, with respect to each Right and to the extent
necessary and permitted by applicable law and any agreements or
instruments in effect on the date hereof to which it is a party,
shall: (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, the
"Spread") and (B) with respect to each Right, make adequate
provision to substitute for the Adjustment Shares, upon payment
of the applicable Purchase Price, (1) cash, (2) a reduction in
the Purchase Price, (3) Common Shares or other equity securities
of the Company (including, without limitation, shares, or units
of shares, of preferred stock which the Board of Directors of the
Company has deemed to have the same value as Common Shares) (each
such share of preferred stock constituting a "common stock
equivalent")), (4) debt securities of the Company, (5) other
assets or (6) any combination of the foregoing having an
aggregate value equal to the Current Value, where such aggregate
value has been determined by the Board of Directors of the
Company based upon the advice of a nationally recognized
investment banking firm selected by the Board of Directors of the
Company; provided, however, that if the Company shall not have
made adequate provision to deliver value pursuant to clause (B)
above within thirty (30) days following the first occurrence of
one of the events listed in Section 11.1.2 above, then the
Company shall be obligated to deliver, upon the surrender for
exercise of a Right and without requiring payment of the Purchase
Price, Common Shares (to the extent available) and then, if
necessary, cash, which in the aggregate are equal to the Spread.
If the Board of Directors of the Company shall determine in good
faith that it is unlikely that sufficient additional Common
Shares could be authorized for issuance upon exercise in full of
the Rights, the thirty (30) day period set forth above may be
extended and re-extended to the extent necessary, but not more
than ninety (90) days following the first occurrence of one of
the events listed in Section 11.1.2 above, in order that the
Company may seek stockholder approval for the authorization of
such additional shares (such period as may be extended, the
"Substitution Period"). To the extent that the Company
determines that some action need be taken pursuant to the first
and/or second sentences of this Section 11.1.3, the Company (x)
shall provide that such action shall apply uniformly to all
outstanding Rights, and (y) may suspend the exercisability of the
Rights until the expiration of the Substitution Period in order
to seek any authorization of additional shares and/or to decide
the appropriate form of distribution to be made pursuant to such
first sentence and to determine the value thereof. In the event
of any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has
been temporarily suspended as well as a public announcement at
such time as the suspension is no longer in effect. For purposes
of this Section 11.1.3, the value of a Common Share shall be the
current per share market price (as determined pursuant to Section
11.4) on the date of the first occurrence of one of the events
listed in Section 11.1.2 above and the value of any "common stock<PAGE>
equivalent" shall be deemed to have the same value as the Common
Shares on such date.
11.2 Dilutive Rights Offering. In case the Company
shall fix a record date for the issuance of rights, options or
warrants to all holders of Preferred Shares entitling them (for a
period expiring within 45 calendar days after such record date)
to subscribe for or purchase Preferred Shares (or securities
having the same rights, privileges and preferences as the
Preferred Shares ("equivalent preferred stock")) or securities
convertible into Preferred Shares or equivalent preferred stock
at a price per share of Preferred Shares or per share of
equivalent preferred stock (or having a conversion or exercise
price per share, if a security convertible into or exercisable
for Preferred Shares or equivalent preferred stock) less than the
current per share market price of the Preferred Shares (as
defined in Section 11.4) on such record date, the Purchase Price
to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be
the number of Preferred Shares outstanding on such record date
plus the number of Preferred Shares which the aggregate offering
price of the total number of Preferred Shares and/or equivalent
preferred stock to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered)
would purchase at such current per share market price and the
denominator of which shall be the number of Preferred Shares
outstanding on such record date plus the number of additional
Preferred Shares 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 in a consideration part or
all of which shall be in a form other than cash, the value of
such consideration shall be as determined in good faith by the
Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent and shall be
binding on the Rights Agent and the holders of the Rights.
Preferred Shares owned by or held for the account of the Company
or any Subsidiary of the Company shall not be deemed outstanding
for the purpose of any such computation. Such adjustments 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.
11.3 Distributions. In case the Company shall fix a
record date for the making of a distribution to all holders of
the Preferred Shares (including any such distribution made in
connection with a consolidation or merger in which the Company is
the continuing or surviving corporation) of evidences of
indebtedness, cash, securities or assets (other than a regular
periodic cash dividend at a rate not in excess of 125% of the
rate of the last regular periodic cash dividend theretofore paid
or, in case regular periodic cash dividends have not theretofore
been paid, at a rate not in excess of 50% of the average net
income per share of the Company for the four quarters ended
immediately prior to the payment of such dividend, or a dividend<PAGE>
payable in Preferred Shares (which dividend, for purposes of this
Agreement, shall be subject to the provisions of Section
11.1.1(A) hereof)) or convertible securities, or subscription
rights or warrants (excluding those referred to in Section 11.2),
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 per share market price of
the Preferred Shares (as defined in Section 11.4) on such record
date, less the fair market value (as determined in good faith by
the Board of Directors of the Company, whose determination shall
be described in a statement filed with the Rights Agent) of the
portion of the cash, assets, securities or evidences of
indebtedness so to be distributed or of such subscription rights
or warrants applicable to one Preferred Share and the denominator
of which shall be such current per share market price of the
Preferred Shares. Such adjustments shall be made successively
whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be
adjusted to be the Purchase Price which would then be in effect
if such record date had not been fixed.
11.4 Current Per Share Market Value.
11.4.1 General. For the purpose of any computation
hereunder, the "current per share market price" of any security
(a "Security" for the purpose of this Section 11.4.1) on any date
shall be deemed to be the average of the daily closing prices per
share of such Security for the thirty (30) consecutive Trading
Days (as such term is hereinafter defined) immediately prior to
such date; provided, however, that in the event that the current
per share market price of the Security is determined during any
period following the announcement by the issuer of such Security
of (i) a dividend or distribution on such Security payable in
shares of such Security or securities convertible into such
shares or (ii) any subdivision, combination or reclassification
of such Security, and prior to the expiration of thirty (30)
Trading Days after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the
"current per share market price" shall be appropriately adjusted
to reflect the current market price per share equivalent of such
Security. The closing price for each day shall be the last sale
price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the
Security is not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Security
is listed or admitted to trading or, if the Security is not
listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average
of the high bid and low asked prices in the over-the-counter
market, as reported by Nasdaq or such other system then in use,<PAGE>
or, if on any such date the Security is not quoted by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the
Security selected by the Board of Directors of the Company. If
on any such date no such market maker is making a market in the
Security, the fair value of the Security on such date as
determined in good faith by the Board of Directors of the Company
shall be used. The term "Trading Day" shall mean a day on which
the principal national securities exchange on which the Security
is listed or admitted to trading is open for the transaction of
business or, if the Security is not listed or admitted to trading
on any national securities exchange, a Business Day. If the
Security is not publicly held or not so listed or traded,
"current per share market price" shall mean the fair value per
share as determined in good faith by the Board of Directors of
the Company or, if at the time of such determination there is an
Acquiring Person, by a majority of the Continuing Directors then
in office, or if there are no Continuing Directors, by a
nationally recognized investment banking firm selected by the
Board of Directors, which shall have the duty to make such
determination in a reasonable and objective manner, whose
determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes.
11.4.2 Preferred Shares. Notwithstanding Section
11.4.1, for the purpose of any computation hereunder, the
"current per share market price" of the Preferred Shares shall be
determined in the same manner as set forth above in Section
11.4.1 (other than the last sentence thereof). If the current
per share market price of the Preferred Shares cannot be
determined in the manner described in Section 11.4.1, the
"current per share market price" of the Preferred Shares shall be
conclusively deemed to be an amount equal to 100 (as such number
may be appropriately adjusted for such events as stock splits,
stock dividends and recapitalizations with respect to the Common
Shares occurring after the date of this Agreement) multiplied by
the current per share market price of the Common Shares. If
neither the Common Shares nor the Preferred Shares is publicly
held or so listed or traded, "current per share market price" of
the Preferred Shares shall mean the fair value per share as
determined in good faith by the Board of Directors of the
Company, or, if at the time of such determination there is an
Acquiring Person, by a majority of the Continuing Directors then
in office, or if there are no Continuing Directors, by a
nationally recognized investment banking firm selected by the
Board of Directors of the Company, which shall have the duty to
make such determination in a reasonable and objective manner,
which determination shall be described in a statement filed with
the Rights Agent and shall be conclusive for all purposes. For
purposes of this Agreement, the "current per share market price"
of one one-hundredth of a Preferred Share shall be equal to the
"current per share market price" of one Preferred Share divided
by 100.
11.5 Insignificant Changes. No adjustment in the
Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least 1% in such price.<PAGE>
Any adjustments which by reason of this Section 11.5 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-millionth of a Preferred Share or the nearest ten-
thousandth of a Common Share, as the case may be.
11.6 Shares Other Than Preferred Shares. If as a
result of an adjustment made pursuant to Section 11.1, the holder
of any Right thereafter exercised shall become entitled to
receive any shares of capital stock of the Company other than
Preferred Shares, thereafter the number of such other shares so
receivable upon exercise of any Right shall be subject to
adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the
Preferred Shares contained in Sections 11.1 through 11.3,
inclusive, and the provisions of Sections 7, 9, 10 and 13 with
respect to the Preferred Shares shall apply on like terms to any
such other shares.
11.7 Rights Issued Subsequent to Adjustment. All
Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence
the right to purchase, at the adjusted Purchase Price, the number
of one one-hundredths of a Preferred Share purchasable from time
to time hereunder upon exercise of the Rights, all subject to
further adjustment as provided herein.
11.8 Effect of Adjustments. Unless the Company shall
have exercised its election as provided in Section 11.9, upon
each adjustment of the Purchase Price as a result of the
calculations made in Sections 11.2 and 11.3, each Right
outstanding immediately prior to the making of such adjustment
shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of one one-hundredths of a Preferred
Share (calculated to the nearest one-millionth of a Preferred
Share) obtained by (i) multiplying (x) the number of one one-
hundredths of a Preferred Share covered by a Right immediately
prior to this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and
(ii) dividing the product so obtained by the Purchase Price in
effect immediately after such adjustment of the Purchase Price.
11.9 Adjustment in Number of Rights. The Company may
elect on or after the date of any adjustment of the Purchase
Price to adjust the number of Rights, in substitution for any
adjustment in the number of one one-hundredths of a Preferred
Share issuable upon the exercise of a Right. Each of the Rights
outstanding after such adjustment of the number of Rights shall
be exercisable for the number of one one-hundredths of a
Preferred Share for which a Right was exercisable immediately
prior to such adjustment. Each Right held of record prior to
such adjustment of the number of Rights shall become that number
of Rights (calculated to the nearest ten-thousandth) 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<PAGE>
shall make a public announcement of its election to adjust the
number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be
made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least ten (10) days
later than the date of the public announcement. If Right
Certificates have been issued, upon each adjustment of the number
of Rights pursuant to this Section 11.9, the Company shall, as
promptly as practicable, cause to be distributed to holders of
record of Right Certificates on such record date Right
Certificates evidencing, subject to Section 14, the additional
Rights to which such holders shall be entitled as a result of
such adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior
to the date of adjustment, and upon surrender thereof, if
required by the Company, new Right Certificates evidencing all
the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be
issued, executed and countersigned in the manner provided for
herein (and 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 Right Certificates on the record date
specified in the public announcement.
11.10 Right Certificates Unchanged. Irrespective of
any adjustment or change in the Purchase Price or the number of
one one-hundredths of a Preferred Share issuable upon the
exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the Purchase Price per
share and the number of one one-hundredths of a Preferred Share
which were expressed in the initial Right Certificates issued
hereunder.
11.11 Par Value Limitations. Before taking any action
that would cause an adjustment reducing the Purchase Price below
one one-hundredth of the then par value, if any, of the Preferred
Shares issuable upon exercise of the Rights, the Company shall
take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and
legally issue fully paid and nonassessable Preferred Shares at
such adjusted Purchase Price.
11.12 Deferred Issuance. In any case in which this
Section 11 shall require that an adjustment in the Purchase Price
be made effective as of a record date for a specified event, the
Company may elect to defer until the occurrence of such event the
issuing to the holder of any Right exercised after such record
date of the Preferred Shares and other capital stock or
securities of the Company, if any, issuable upon such exercise
over and above the Preferred Shares and other capital stock or
securities of the Company, if any, issuable upon such exercise on
the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to
such holder a due bill or other appropriate instrument evidencing<PAGE>
such holder's right to receive such additional shares upon the
occurrence of the event requiring such adjustment.
11.13 Reduction in Purchase Price. Anything in this
Section 11 to the contrary notwithstanding, the Company shall be
entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section
11, as and to the extent that it in its sole discretion shall
determine to be advisable in order that any consolidation or
subdivision of the Preferred Shares, issuance wholly for cash of
any of the Preferred Shares at less than the current market
price, issuance wholly for cash of Preferred Shares or securities
which by their terms are convertible into or exchangeable for
Preferred Shares, dividends on Preferred Shares payable in
Preferred Shares or issuance of rights, options or warrants
referred to hereinabove in this Section 11, hereafter made by the
Company to holders of its Preferred Shares shall not be taxable
to such stockholders.
11.14 Company not to Diminish Benefits of Rights. The
Company covenants and agrees that after the Distribution Date it
will not, except as permitted by 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
substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights.
11.15 Adjustment of Rights Associated with Common
Shares. Notwithstanding anything contained in this Agreement to
the contrary, in the event that the Company shall at any time
after the date hereof and prior to the Distribution Date
(i) declare or pay any dividend on the outstanding Common Shares
payable in Common Shares, (ii) effect a subdivision or
consolidation of the outstanding Common Shares (by
reclassification or otherwise than by the payment of dividends
payable in Common Shares), or (iii) combine the outstanding
Common Shares into a greater or lesser number of Common Shares,
then in any such case, the number of Rights associated with each
Common Share 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 Common Share following any such event shall equal the result
obtained by multiplying the number of Rights associated with each
Common Share immediately prior to such event by a fraction, the
numerator of which shall be the total number of Common Shares
outstanding immediately prior to the occurrence of the event and
the denominator of which shall be the total number of Common
Shares outstanding immediately following the occurrence of such
event. The adjustments provided for in this Section 11.15 shall
be made successively whenever such a dividend is declared or paid
or such a subdivision, combination or consolidation is effected.
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares. Whenever an adjustment is made as provided in
Sections 11 and 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<PAGE>
with the Rights Agent and with each transfer agent for the Common
Shares or the Preferred Shares a copy of such certificate and (c)
mail a brief summary thereof to each holder of a Right
Certificate 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.
Section 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power.
13.1 General. In the event that, from and after the
first occurrence of a Trigger Event, directly or indirectly, (A)
the Company shall consolidate with, or merge with and into, any
other Person and the Company shall not be the continuing or
surviving corporation, (B) any Person shall consolidate with the
Company, or merge with and into the Company and the Company shall
be the continuing or surviving corporation of such merger and, in
connection with such merger, all or part of the Common Shares
shall be changed into or exchanged for stock or other securities
of the Company or any other Person or cash or any other property,
or (C) the Company shall sell, exchange, mortgage or otherwise
transfer (or one or more of its Subsidiaries shall sell,
exchange, mortgage or otherwise transfer), in one or more
transactions, assets or earning power aggregating 50% or more of
the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person or Persons, then, and in
each such case, proper provision shall be made so that (i) each
holder of a Right (except as provided in Section 11.1.2 and as
otherwise provided herein) shall thereafter have the right to
receive, upon the exercise thereof at a price per Right equal to
the then current Purchase Price multiplied by the number of one
one-hundredths of a Preferred Share for which a Right was
exercisable immediately prior to the first occurrence of a
Trigger Event (as subsequently adjusted pursuant to Sections
11.1.1, 11.2, 11.3, 11.8, 11.9 and 11.12), in accordance with the
terms of this Rights Agreement and in lieu of Preferred Shares,
such number of Common Shares of such other Person (including the
Company as successor thereto or as the surviving corporation) as
shall be equal to the result obtained by (x) multiplying the then
current Purchase Price by the number of one one-hundredths of a
Preferred Share for which a Right was exercisable immediately
prior to the first occurrence of a Trigger Event (as subsequently
adjusted pursuant to Sections 11.1.1, 11.2, 11.3, 11.8, 11.9 and
11.12) and (y) dividing that product by 50% of the then current
per share market price of the Common Shares of such other Person
(determined pursuant to Section 11.4) on the date of consummation
of such consolidation, merger, sale or transfer; provided, that
the price per Right so payable and the number of Common Shares of
such Person so purchasable shall thereafter be adjusted in
accordance with Sections 11.1.1, 11.2, 11.3, 11.8, 11.9 and 11.12
by reason of such subsequent events covered thereby occurring in
respect of such Person; (ii) the issuer of such Common Shares
shall thereafter be liable for, and shall assume, by virtue of
such consolidation, merger, sale or transfer, all the obligations
and duties of the Company pursuant to this Rights Agreement;<PAGE>
(iii) the term "Company" shall thereafter be deemed to refer to
such issuer; and (iv) such issuer shall take such steps
(including, but not limited to, the reservation of a sufficient
number of its Common Shares in accordance with Section 9) in
connection with such consummation as may be necessary to assure
that the provisions hereof shall thereafter be applicable, as
nearly as reasonably may be, in relation to its Common Shares
thereafter deliverable upon the exercise of the Rights. The
Company shall not enter into any transaction of the kind referred
to in this Section 13 if at the time of such transaction there
are any rights, warrants, instruments or securities outstanding
or any agreements or arrangements which, as a result of the
consummation of such transaction, would eliminate or
substantially diminish the benefits intended to be afforded by
the Rights. The Company shall not consummate any such
consolidation, merger, sale or transfer unless prior thereto the
Company and such issuer shall have executed and delivered to the
Rights Agent a supplemental agreement so providing. The
provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers.
13.2 Approved Acquisitions. Notwithstanding anything
contained herein to the contrary, in the event of any merger or
other acquisition transaction involving the Company pursuant to a
merger or other acquisition agreement between the Company and any
Person (or one or more of such Person's Affiliates or Associates)
which agreement has been approved by the Board of Directors of
the Company prior to any Person becoming an Acquiring Person,
this Rights Agreement and the rights of holders of Rights
hereunder shall be terminated in accordance with Section 7.1.
Section 14. Fractional Rights and Fractional Shares.
14.1 Cash in Lieu of Fractional Rights. The Company
shall not be required to issue fractions of Rights or to
distribute Right Certificates which evidence fractional Rights.
In lieu of such fractional Rights, there shall be paid to the
registered holders of the Right Certificates with regard to which
such fractional Rights would otherwise be issuable an amount in
cash equal to the same fraction of the current market value of a
whole Right. For the purposes of this Section 14.1, the current
market value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on which
such fractional Rights would have been otherwise issuable. The
closing price for any day shall be the last sale price, regular
way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Rights are not
listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal
national securities exchange on which the Rights are listed or
admitted to trading or, if the Rights are not listed or admitted
to trading on any national securities exchange, the last quoted
price or, if not so quoted, the average of the high bid and low<PAGE>
asked prices in the over-the-counter market, as reported by
Nasdaq or such other system then in use or, if on any such date
the Rights are not quoted by any such organization, the average
of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected
by the Board of Directors of the Company. If on any such date no
such market maker is making a market in the Rights, the fair
value of the Rights on such date as determined in good faith by
the Board of Directors of the Company shall be used.
14.2 Cash in Lieu of Fractional Shares. The Company
shall not be required to issue fractions of Preferred Shares
(other than fractions which are integral multiples of one one-
hundredth of a Preferred Share) upon exercise of the Rights or to
distribute certificates which evidence fractional Preferred
Shares (other than fractions which are integral multiples of one
one-hundredth of a Preferred Share). Fractions of Preferred
Shares in integral multiples of one one-hundredth of a Preferred
Share may, at the election of the Company, be evidenced by
depositary receipts, pursuant to an appropriate agreement between
the Company and a depositary selected by it; provided, that such
agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences to
which they are entitled as beneficial owners of the Preferred
Shares represented by such depositary receipts. In lieu of
fractional Preferred Shares that are not integral multiples of
one one-hundredth of a Preferred Share, the Company shall pay to
the registered holders of Right Certificates at the time such
Rights are exercised as herein provided an amount in cash equal
to the same fraction of the current per share market price of one
Preferred Share. For purposes of this Section 14.2, the current
per share market price of a Preferred Share shall be the closing
price of a Preferred Share (as determined pursuant to the second
sentence of Section 11.4.2) for the Trading Day immediately prior
to the date of such exercise.
14.3 Waiver of Right to Receive Fractional Rights or
Shares. The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or
any fractional shares upon exercise of a Right, except as
permitted by this Section 14.
Section 15. Rights of Action. All rights of action in
respect of this Rights Agreement, except the rights of action
given to the Rights Agent under Section 18, are vested in the
respective registered holders of the Right Certificates (and,
prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common
Shares), without the consent of the Rights Agent or of the holder
of any other Right Certificate (or, prior to the Distribution
Date, of the Common Shares), may, in his own behalf and for his
own benefit, enforce this Rights Agreement, and may institute and
maintain any suit, action or proceeding against the Company to
enforce this Rights Agreement, or otherwise enforce or act in
respect of his right to exercise the Rights evidenced by such
Right Certificate in the manner provided in such Right<PAGE>
Certificate and in this Rights Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it
is specifically acknowledged that the holders of Rights would not
have an adequate remedy at law for any breach of this Rights
Agreement and shall be entitled to specific performance of the
obligations under, and injunctive relief against actual or
threatened violations of, the obligations of any Person
(including, without limitation, the Company) subject to this
Rights Agreement.
Section 16. Agreement of Right Holders. Every holder
of a Right by accepting the same consents and agrees with the
Company and the Rights Agent and with every other holder of a
Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common
Shares;
(b) as of and after the Distribution Date, the Right
Certificates are transferable only on the registry books of the
Rights Agent if surrendered at the office of the Rights Agent
designated for such purpose, duly endorsed or accompanied by a
proper instrument of transfer with all required certifications
completed; and
(c) the Company and the Rights Agent may deem and
treat the Person in whose name the Right Certificate (or, prior
to the Distribution Date, the associated Common Shares
certificate) is registered as the absolute owner thereof and of
the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated
Common Shares certificate made by anyone other than the Company
or the Rights Agent) for all purposes whatsoever, and neither the
Company nor the Rights Agent shall be affected by any notice to
the contrary.
Section 17. Right Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Right Certificate shall
be entitled to vote, receive dividends or be deemed for any
purpose the holder of the Preferred Shares or any other
securities of the Company which may at any time be issuable on
the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Right Certificate be
construed to confer upon the holder of any Right Certificate, as
such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as
provided in Section 24), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by such
Right Certificate shall have been exercised in accordance with
the provisions hereof.
Section 18. Concerning the Rights Agent. The Company
agrees to pay to the Rights Agent reasonable compensation for all<PAGE>
services rendered by it hereunder in accordance with a fee
schedule to be mutually agreed upon and, from time to time, on
demand of the Rights Agent, its reasonable expenses and counsel
fees and other disbursements incurred in the administration and
execution of this Rights Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to
indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability, or expense, incurred without negligence, bad
faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with
the acceptance and administration of this Rights Agreement,
including the costs and expenses of defending against any claim
of liability in the premises.
The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or
omitted by it in connection with its administration of this
Rights Agreement in reliance upon any Right Certificate or
certificate for the Preferred Shares or the Common Shares or for
other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter,
notice, instruction, direction, consent, certificate, statement,
or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged,
by the proper person or persons.
Section 19. Merger or Consolidation or Change of Name
of Rights Agent. Any corporation into which the Rights Agent or
any successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the
corporate trust or stock transfer business of the Rights Agent or
any successor Rights Agent, shall be the successor to the Rights
Agent under this Rights Agreement without the execution or filing
of any paper or any further act on the part of any of the parties
hereto, provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of
Section 21. In case at the time such successor Rights Agent
shall succeed to the agency created by this Rights Agreement, any
of the Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such
Right Certificates so countersigned; and in case at that time any
of the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates
either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in the Right
Certificates and in this Rights Agreement.
In case at any time the name of the Rights Agent shall
be changed and at such time any of the Right Certificates shall
have been countersigned but not delivered, the Rights Agent may
adopt the countersignature under its prior name and deliver Right
Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the<PAGE>
Rights Agent may countersign such Right Certificates either in
its prior name or in its changed name; and in all such cases such
Right Certificates shall have the full force provided in the
Right Certificates and in this Rights Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Rights
Agreement upon the following terms and conditions, by all of
which the Company and the holders of Right Certificates, by their
acceptance thereof, shall be bound:
20.1 Legal Counsel. The Rights Agent may consult with
legal counsel selected by it (who may be legal counsel for the
Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to
any action taken or omitted by it in good faith and in accordance
with such opinion.
20.2 Certificates as to Facts or Matters. Whenever in
the performance of its duties under this Rights Agreement the
Rights Agent shall deem it necessary or desirable that any fact
or matter be proved or established by the Company prior to taking
or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of
the Board of Directors, the Chief Executive Officer, the
President, the Chief Financial Officer, any Vice President, the
Treasurer, the Secretary or any Assistant Treasurer or 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 Rights Agreement in reliance upon such
certificate.
20.3 Standard of Care. The Rights Agent shall be
liable hereunder only for its own negligence, bad faith or
willful misconduct.
20.4 Reliance on Rights Agreement and Right
Certificates. The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained in
this Rights Agreement or in the Right Certificates (except as to
its countersignature thereof) or be required to verify the same,
but all such statements and recitals are and shall be deemed to
have been made by the Company only.
20.5 No Responsibility as to Certain Matters. The
Rights Agent shall not be under any responsibility in respect of
the validity of this Rights Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the validity or execution of any Right
Certificate (except its countersignature thereof); nor shall it
be responsible for any breach by the Company of any covenant or
condition contained in this Rights Agreement or in any Right
Certificate; nor shall it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void<PAGE>
pursuant to Section 11.1.2) or any adjustment required under the
provisions of Sections 3, 11, 13, 23 or 27 or responsible for the
manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any
such adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after actual notice of any such
adjustment); nor shall it by any act hereunder be deemed to make
any representation or warranty as to the authorization or
reservation of any Preferred Shares to be issued pursuant to this
Rights Agreement or any Right Certificate or as to whether any
Preferred Shares will, when so issued, be validly authorized and
issued, fully paid and nonassessable.
20.6 Further Assurance by Company. The Company agrees
that it will perform, execute, acknowledge and deliver or cause
to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out
or performing by the Rights Agent of the provisions of this
Rights Agreement.
20.7 Authorized Company Officers. The Rights Agent is
hereby authorized and directed to accept instructions with
respect to the performance of its duties hereunder from any one
of the Chairman of the Board of Directors, the Chief Executive
Officer, the President, the Chief Financial Officer, any Vice
President, the Treasurer, the Secretary or any Assistant
Treasurer or Assistant Secretary of the Company, and to apply to
such officers for advice or instructions in connection with its
duties under this Rights Agreement, and it shall not be liable
for any action taken or suffered to be taken by it in good faith
in accordance with instructions of any such officer or for any
delay in acting while waiting for these instructions. Any
application by the Rights Agent for written instructions from the
Company may, at the option of the Rights Agent, set forth in
writing any action proposed to be taken or omitted by the Rights
Agent with respect to its duties or obligations under this Rights
Agreement and the date on and/or after which such action shall be
taken or omitted. The Rights Agent shall not be liable to the
Company for any action taken or omitted in accordance with a
proposal included in any such application on or after the date
specified therein (which date shall not be less than three
business days after the date any such officer actually receives
such application, unless any such officer shall have consented in
writing to an earlier date) unless, prior to taking of any such
action (or the effective date in the case of omission), the
Rights Agent shall have received written instructions in response
to such application specifying the action to be taken or omitted.
20.8 Freedom to Trade in Company Securities. 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
Rights Agreement. Nothing herein shall preclude the Rights Agent<PAGE>
from acting in any other capacity for the Company or for any
other legal entity.
20.9 Reliance on Attorneys and Agents. 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, omission, default,
neglect or misconduct of any such attorneys or agents or for any
loss to the Company resulting from any such act, omission,
default, neglect or misconduct, provided that reasonable care was
exercised in the selection and continued employment thereof.
20.10 Rights Holders List. At any time and from time
to time after the Distribution Date, upon the request of the
Company, the Rights Agent shall promptly deliver to the Company a
list, as of the most recent practicable date (or as of such
earlier date as may be specified by the Company), of the holders
of record of Rights.
Section 21. Change of Rights Agent. The Rights Agent
or any successor Rights Agent may resign and be discharged from
its duties under this Rights Agreement upon thirty (30) days'
notice in writing mailed to the Company and to each transfer
agent of the Common Shares and/or Preferred Shares, as
applicable, by registered or certified mail. The Company shall
promptly notify the holders of the Right Certificates by first-
class mail of any such resignation. The Company may remove the
Rights Agent or any successor Rights Agent upon thirty (30) days'
notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the
Common Shares and/or Preferred Shares, as applicable, by
registered or certified mail, and to the holders of the Right
Certificates by first-class mail. If the Rights Agent shall
resign or be removed or shall otherwise become incapable of
acting, the resigning, removed, or incapacitated Rights Agent
shall remit to the Company, or to any successor Rights Agent
designated by the Company, all books, records, funds,
certificates or other documents or instruments of any kind then
in its possession which were acquired by such resigning, removed
or incapacitated Rights Agent in connection with its services as
Rights Agent hereunder, and shall thereafter be discharged from
all duties and obligations hereunder. Following notice of such
removal, resignation or incapacity, the Company shall appoint a
successor to such Rights Agent. If the Company shall fail to
make such appointment within a period of thirty (30) days after
giving notice of such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right
Certificate (who shall, with such notice, submit his Right
Certificate for inspection by the Company), then the registered
holder of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent.
Any successor Rights Agent, whether appointed by the Company or
by such a court, shall be a corporation organized and doing
business under the laws of the United States or of the State of
New York (or any other state of the United States so long as such<PAGE>
corporation is authorized to do business as a banking institution
in the State of New York in good standing, having a principal
office in the State of New York, which is authorized under such
laws to exercise stock transfer or corporate trust powers and is
subject to supervision or examination by Federal or state
authority and which has at the time of its appointment as Rights
Agent a combined capital and surplus of at least $10 million.
After appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities as if
it had been originally named as Rights Agent without further act
or deed; but the predecessor Rights Agent shall deliver and
transfer to the successor Rights Agent any property at the time
held by it hereunder, and execute and deliver any further
assurance, conveyance, act or deed necessary for the purpose.
Not later than the effective date of any such appointment the
Company shall file notice thereof in writing with the predecessor
Rights Agent and each transfer agent of the Common Shares and/or
Preferred Shares, as applicable, and mail a notice thereof in
writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Rights Agreement or
of the Rights to the contrary, the Company may, at its option,
issue new Right Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price and the number or kind
or class of shares or other securities or property purchasable
under the Right Certificates made in accordance with the
provisions of this Rights Agreement. In addition, in connection
with the issuance or sale of Common Shares following the
Distribution Date and prior to the exchange, termination or
expiration of the Rights, the Company (a) shall, with respect to
Common Shares so issued or sold pursuant to the exercise of stock
options or under any employee plan or arrangement, granted or
awarded as of the Distribution Date, or upon exercise, conversion
or exchange of securities hereinafter issued by the Company, and
(b) may, in any other case, if deemed necessary or appropriate by
the Board of Directors of the Company, issue Right Certificates
representing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i) no such Right
Certificate shall be issued if, and to the extent that, the
Company shall be advised by counsel that such issuance would
create a significant risk of material adverse tax consequences to
the Company or the Person to whom such Right Certificate would be
issued, (ii) no such Right Certificate shall be issued if, and to
the extent that, appropriate adjustment shall otherwise have been
made in lieu of the issuance thereof and (iii) at the time of a
determination by the Board of Directors to cause the Company to
issue a Right Certificate under clause (b) above, there must be
Continuing Directors then in office and any such determination
shall require the approval of at least a majority of such
Continuing Directors.<PAGE>
Section 23. Redemption.
23.1 Right to Redeem. The Board of Directors of the
Company may, at its option, at any time prior to the occurrence
of a Trigger Event, redeem all but not less than all of the then
outstanding Rights at a redemption price of $.01 per Right,
appropriately adjusted to reflect any stock split, stock
dividend, recapitalization or similar transaction occurring after
the date hereof (such redemption price being hereinafter referred
to as the "Redemption Price"). The redemption of the Rights by
the Board of Directors may be made effective at such time, on
such basis and with such conditions as the Board of Directors in
its sole discretion may establish. The Company may, at its
option, pay the Redemption Price in cash, Common Shares (based on
the current per share market price at the time of the redemption)
or any other form of consideration deemed appropriate by the
Board of Directors. Anything contained in this Rights Agreement
to the contrary notwithstanding, the Rights shall not be
exercisable following a transaction or event described in Section
11.1.2 prior to the expiration of the Company's right of
redemption hereunder.
23.2 Redemption Procedures. Immediately upon the
action of the Board of Directors of the Company ordering the
redemption of the Rights, 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.
Within ten (10) days after the action of the Board of Directors
ordering the redemption of the Rights, the Company shall give, or
cause the Rights Agent to give, notice of such redemption to the
holders of the then outstanding Rights by mailing such notice to
all such holders at their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the Distribution
Date, on the registry books of the transfer agent for the Common
Shares. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the
notice. Each such notice of redemption will state the method by
which the payment of the Redemption Price will be made. Neither
the Company nor any of its Affiliates or Associates may redeem,
acquire or purchase for value any Rights at any time in any
manner other than that specifically set forth in this Section 23
or in Section 27, and other than in connection with the purchase,
acquisition or redemption of Common Shares prior to the
Distribution Date.
Section 24. Notice of Certain Events. In case the
Company shall propose at any time after the Distribution Date (a)
to pay any dividend payable in stock of any class to the holders
of Preferred Shares or to make any other distribution to the
holders of Preferred Shares (other than a regular periodic cash
dividend at a rate not in excess of 125% of the rate of the last
regular periodic cash dividend theretofore paid or, in case
regular periodic cash dividends have not theretofore been paid,
at a rate not in excess of 50% of the average net income per
share of the Company for the four quarters ended immediately
prior to the payment of such dividends, or a stock dividend on,<PAGE>
or a subdivision, combination or reclassification of the Common
Shares), or (b) to offer to the holders of Preferred Shares
rights or warrants to subscribe for or to purchase any additional
Preferred Shares or shares of stock of any class or any other
securities, rights or options, or (c) to effect any
reclassification of its Preferred Shares (other than a
reclassification involving only the subdivision of outstanding
Preferred Shares), or (d) to effect any consolidation or merger
into or with, or to effect any sale or other transfer (or to
permit one or more of its Subsidiaries to effect any sale or
other transfer), in one or more transactions, of 50% or more of
the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to, any other Person (other than pursuant to a
merger or other acquisition agreement of the type described in
Section 1.3(ii)(A)(2)), or (e) to effect the liquidation,
dissolution or winding up of the Company, or (f) to declare or
pay any dividend on the Common Shares payable in Common Shares or
to effect a subdivision, combination or consolidation of the
Common Shares (by reclassification or otherwise than by payment
of dividends in Common Shares), then, in each such case, the
Company shall give to the Rights Agent and to each holder of a
Right Certificate, 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 Preferred Shares and/or Common
Shares, if any such date is to be fixed, and such notice shall be
so given in the case of any action covered by clause (a) or (b)
above at least ten (10) days prior to the record date for
determining holders of the Preferred Shares for purposes of such
action, and in the case of any such other action, at least ten
(10) days prior to the date of the taking of such proposed action
or the date of participation therein by the holders of the
Preferred Shares and/or Common Shares, whichever shall be the
earlier.
In case any event set forth in Section 11.1.2 of this
Rights Agreement shall occur, then, in any such case, (i) the
Company shall as soon as practicable thereafter give to the
Rights Agent and to each holder of a Right Certificate, in
accordance with Section 25, a notice of the occurrence of such
event, which notice shall describe the event and the consequences
of the event to holders of Rights under Section 11.1.2, and
(ii) all references in this Section 24 to Preferred Shares shall
be deemed thereafter to refer to Common Shares and/or, if
appropriate, other securities.
Notwithstanding anything in this Rights Agreement to
the contrary, prior to the Distribution Date a filing by the
Company with the Securities and Exchange Commission shall
constitute sufficient notice to the holders of securities of the
Company, including the Rights, for purposes of this Rights
Agreement and no other notice need be given.<PAGE>
Section 25. Notices. Notices or demands authorized by
this Rights Agreement to be given or made by the Rights Agent or
by the holder of any Right Certificate to or on the Company shall
be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Rentrak Corporation
7227 Northeast 55th Avenue
Portland, Oregon 97218
Attention: President
Subject to the provisions of Section 21, any notice or demand
authorized by this Rights Agreement to be given or made by the
Company or by the holder of any Right Certificate to or on the
Rights Agent shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
U.S. Stock Transfer Corporation
1745 Gardena Avenue
Glendale, CA 91204
Attention: President
Notices or demands authorized by this Rights Agreement to be
given or made by the Company or the Rights Agent to the holder of
any Right Certificate (or, prior to the Distribution Date, to the
holder of any certificate representing Common Shares) shall be
sufficiently given or made if sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder
as shown on the registry books of the Company.
Section 26. Supplements and Amendments. Prior to the
Distribution Date and subject to the last sentence of this
Section 26, the Company and the Rights Agent may, if the Company
so directs, supplement or amend any provision of this Rights
Agreement without the approval of any holders of certificates
representing Common Shares. From and after the Distribution Date
and subject to the last sentence of this Section 26, the Company
and the Rights Agent may from time to time supplement or amend
this Rights Agreement without the approval of any holders of
Right Certificates (i) to cure any ambiguity or to correct or
supplement any provision contained herein which may be defective
or inconsistent with any other provisions herein, (ii) to shorten
or lengthen any time period hereunder (which shortening or
lengthening, after the time a Person becomes an Acquiring Person,
shall be effective only if there are Continuing Directors and
shall require the approval of at least a majority of such
Continuing Directors) or (iii) so long as the interests of the
holders of the Right Certificates (other than an Acquiring Person
or an Affiliate or Associate of an Acquiring Person) are not
adversely affected thereby, to make any other changes or
provisions in regard to matters or questions arising hereunder
which the Company and the Rights Agent may deem necessary or
desirable, including but not limited to extending the Final
Expiration Date. Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed<PAGE>
supplement or amendment is in compliance with the terms of this
Section 26, the Rights Agent shall execute such supplement or
amendment. Without limiting the foregoing, at any time prior to
such time as any Person becomes an Acquiring Person, the Company
and the Rights Agent may amend this Agreement to lower the
thresholds set forth in Sections 1.1 and 3.1 to not less than the
greater of (i) any percentage greater than the largest percentage
of the outstanding Common Shares then known by the Company to be
beneficially owned by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the
Company or any Subsidiary of the Company, or any entity holding
Common Shares for or pursuant to the terms of any such plan) and
(ii) 10%.
Section 27. Exchange.
27.1 Exchange of Common Shares for Rights. The Board
of Directors of the Company may, at its option, at any time after
the occurrence of a Trigger Event, exchange Common Shares for all
or part of the then outstanding and exercisable Rights (which
shall not include Rights that have become void pursuant to the
provisions of Section 11.1.2) by exchanging that number of Common
Shares having an aggregate value equal to the Spread (with such
value being based on the current per share market price (as
determined pursuant to Section 11.4) on the date of the
occurrence of a Trigger Event) per Right, appropriately adjusted
to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such amount per Right being
hereinafter referred to as the "Exchange Consideration").
Notwithstanding the foregoing, (i) the Board of Directors shall
not be empowered to effect such exchange at any time after any
Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or any such Subsidiary,
or any entity holding Common Shares for or pursuant to the terms
of any such plan), together with all Affiliates and Associates of
such Person, becomes the Beneficial Owner of 50% or more of the
Common Shares then outstanding and (ii) the Board shall not be
empowered to effect an exchange for more than that number of
Rights for which there are sufficient Common Shares authorized
but unissued, or held by the Company as treasury shares, to
permit the exchange for Rights.
27.2 Exchange Procedures. Immediately upon the action
of the Board of Directors of the Company ordering the exchange
for any Rights pursuant to Section 27.1 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 Common Shares equal to
the number of such Rights held by such holder multiplied by the
Exchange Consideration. 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<PAGE>
receives the notice. Each such notice of exchange will state the
method by which the exchange of the Common Shares 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 the
Rights which have become void pursuant to the provisions of
Section 11.1.2) held by each holder of Rights.
27.3 No Fractional Shares Upon Exchange. The Company
shall not be required to issue fractions of Common Shares or to
distribute certificates which evidence fractional Common Shares.
In lieu of such fractional Common Shares, the Company shall pay
to the registered holders of the Right Certificates, with regard
to which such fractional Common Shares would otherwise be
issuable, in an amount in cash equal to the same fraction of the
current market value of a whole Common Share. For the purposes
of this Section 27.3, the current market value of a whole Common
Share shall be the current per share market price (as determined
pursuant to Section 11.4) for the Trading Day immediately prior
to the date of exchange pursuant to this Section 27.
Section 28. Successors. All the covenants and
provisions of this Rights Agreement by or for the benefit of the
Company or the Rights Agent shall bind and inure to the benefit
of their respective successors and assigns hereunder.
Section 29. Benefits of this Rights Agreement.
Nothing in this Rights Agreement shall be construed to give to
any Person or corporation other than the Company, the Rights
Agent and the registered holders of the Right Certificates (and,
prior to the Distribution Date, the Common Shares) any legal or
equitable right, remedy or claim under this Rights Agreement; but
this Rights Agreement shall be for the sole and exclusive benefit
of the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date, the
Common Shares).
Section 30. Severability. If any term, provision,
covenant or restriction of this Rights Agreement is held by a
court of competent jurisdiction or other authority to be invalid,
void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Rights Agreement shall remain
in full force and effect and shall in no way be affected,
impaired or invalidated.
Section 31. Governing Law. This Rights Agreement and
each Right Certificate issued hereunder shall be deemed to be a
contract made under the laws of the State of Oregon and for all
purposes shall be governed by and construed in accordance with
the laws of such State applicable to contracts to be made and
performed entirely within such State.
Section 32. Counterparts. This Rights Agreement may
be executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and
the same instrument.<PAGE>
Section 33. Descriptive Heading. Descriptive headings
of the several Sections of this Rights Agreement are inserted for
convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
[Signature Page to Follow]<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Rights Agreement to be duly executed and their respective
corporate seals to be hereunto affixed, all as of the day and
year first above written.
RENTRAK CORPORATION
By /s/ Mervyn Benjet
Name: Mervyn Benjet
Title: Senior Vice President and
Chief Financial Officer
U.S. STOCK TRANSFER CORPORATION
By /s/ Carter McIntyre
Name: Carter McIntyre
Title: Vice President<PAGE>
Exhibit A
FORM
of
CERTIFICATE OF DESIGNATIONS
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
RENTRAK CORPORATION
(Pursuant to Section 60.134 of the
Oregon Revised Statutes)
_____________________________
Rentrak Corporation, a corporation organized and existing
under the Revised Statutes of the State of Oregon (hereinafter
called the "Corporation."), hereby certifies that the following
resolution was adopted by the Board of Directors of the
Corporation as required by Section 60.134 of the Oregon Business
Corporation Act at a meeting duly called and held on May 18,
1995.
RESOLVED, that pursuant to the authority granted to and
vested in the Board of Directors of this Corporation (hereinafter
called the "Board of Directors" or the "Board") in accordance
with the provisions of the Articles of Incorporation, the Board
of Directors hereby creates a series of Preferred Stock, par
value $.001 per share (the "Preferred Stock"), of the Corporation
and hereby states the designation and number of shares, and fixes
the relative rights, preferences, and limitations thereof as
follows:
Series A Junior Participating Preferred Stock:
Section 1. Designation and Amount. The shares of such
series shall be designated as "Series A Junior Participating
Preferred Stock" (the "Series A Preferred Stock") and the number
of shares constituting the Series A Preferred Stock shall be
300,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided, that no decrease
shall reduce the number of shares of Series A Preferred Stock to
a number less than the number of shares then outstanding plus the
number of shares reserved for issuance upon the exercise of
outstanding options, rights or warrants or upon the conversion of
any outstanding securities issued by the Corporation convertible
into Series A Preferred Stock.<PAGE>
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares
of any series of Preferred Stock (or any similar stock)
ranking prior and superior to the Series A Preferred Stock
with respect to dividends, the holders of shares of Series A
Preferred Stock, in preference to the holders of Common
Stock, par value $.001 per share (the "Common Stock"), of
the Corporation, and of any other junior stock, shall be
entitled to receive, when, as and if declared by the Board
of Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on the first day of
April, July, October, and January in each year (each such
date being referred to herein as a "Quarterly Dividend
Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction
of a share of Series A Preferred Stock, in an amount per
share (rounded to the nearest cent) equal to the greater of
(a) $1.00 or (b) subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate per share
amount of all cash dividends, and 100 times the aggregate
per share amount (payable in kind) of all non-cash dividends
or other distributions, other than a dividend payable in
shares of Common Stock or a subdivision of the outstanding
shares of Common Stock (by reclassification or otherwise),
declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date or, with respect to the
first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series A
Preferred Stock. In the event the Corporation shall at any
time declare or pay any dividend on the Common Stock payable
in shares of Common Stock, or effect a subdivision,
combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in
each such case the amount to which holders of shares of
Series A Preferred Stock were entitled immediately prior to
such event under clause (b) of the preceding sentence shall
be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or
distribution on the Series A Preferred Stock as provided in
paragraph (A) of this Section 2 immediately after it
declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock);
provided that, in the event no dividend or distribution
shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the
next subsequent Quarterly Dividend Payment Date, a dividend
of $1.00 per share on the Series A Preferred Stock shall
nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.<PAGE>
(C) Dividends shall begin to accrue and be cumulative
on outstanding shares of Series A Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of
issue of such shares, unless the date of issue of such
shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such
shares shall begin to accrue from the date of issue of such
shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the
determination of holders of shares of Series A Preferred
Stock entitled to receive a quarterly dividend and before
such Quarterly Dividend Payment Date, in either of which
events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Series A Preferred Stock in
an amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may
fix a record date for the determination of holders of shares
of Series A Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date
shall be not more than 60 days prior to the date fixed for
the payment thereof.
Section 3. Voting Rights. The holders of shares of Series
A Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment
hereinafter set forth, each share of Series A Preferred
Stock shall entitle the holder thereof to 100 votes on all
matters submitted to a vote of the stockholders of the
Corporation. In the event the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision, combination
or consolidation of the outstanding shares of Common Stock
(by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the
number of votes per share to which holders of shares of
Series A Preferred Stock were entitled immediately prior to
such event shall be adjusted by multiplying such number by a
fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in any other
Certificate of Designations creating a series of Preferred
Stock or any similar stock, or by law, the holders of shares
of Series A Preferred Stock and the holders of shares of
Common Stock and any other capital stock of the Corporation
having general voting rights shall vote together as one
class on all matters submitted to a vote of stockholders of
the Corporation.<PAGE>
(C) Except as set forth herein, or as otherwise
provided by law, holders of Series A Preferred Stock shall
have no special voting rights and their consent shall not be
required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking
any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as
provided in Section 2 are in arrears, thereafter and until
all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, the Corporation
shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior
(either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred
Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a
parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred
Stock, except dividends paid ratably on the Series A
Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to
the total amounts to which the holders of all such
shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior
(either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred
Stock, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any
such junior stock in exchange for shares of any stock
of the Corporation ranking junior (either as to
dividends or upon dissolution, liquidation or winding
up) to the Series A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock,
or any shares of stock ranking on a parity with the
Series A Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of
such shares upon such terms as the Board of Directors,
after consideration of the respective annual dividend
rates and other relative rights and preferences of the
respective series and classes, shall determine in good
faith will result in fair and equitable treatment among
the respective series or classes.<PAGE>
(B) The Corporation shall not permit any Subsidiary of
the Corporation to purchase or otherwise acquire for
consideration any shares of stock of the Corporation unless
the Corporation could, under paragraph (A) of this Section
4, purchase or otherwise acquire such shares at such time
and in such manner.
Section 5. Reacquired Shares. Any shares 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
shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of
a new series of Preferred Stock subject to the conditions and
restrictions on issuance set forth herein, in the Articles of
Incorporation, or in any other Certificate of Designations
creating a series of Preferred Stock or any similar stock or as
otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon
any liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (1) to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock
unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received $100 per share, plus an
amount equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such payment,
provided that the holders of shares of Series A Preferred Stock
shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth,
equal to 100 times the aggregate amount to be distributed per
share to holders of shares of Common Stock, or (2) to the holders
of shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except distributions made ratably on the Series
A Preferred Stock and all such parity stock in proportion to the
total amounts to which the holders of all such shares are
entitled upon such liquidation, dissolution or winding up. In
the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock,
or effect a subdivision, combination or consolidation of the
outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the aggregate amount to which holders of
shares of Series A Preferred Stock were entitled immediately
prior to such event under the proviso in clause (1) of the
preceding sentence shall be adjusted by multiplying such amount
by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that
are outstanding immediately prior to such event.<PAGE>
Section 7. 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 changed into other stock or
securities, cash and/or any other property, then in any such case
each share of Series A Preferred Stock shall at the same time be
similarly exchanged or changed into an amount per share, subject
to the provision for adjustment hereinafter set forth, equal to
100 times the aggregate amount of stock, securities, cash and/or
any other property (payable in kind), as the case may be, into
which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in shares
of Common Stock, or effect a subdivision, combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in
shares of Common Stock) into a greater or lesser number of shares
of Common Stock, then in each such case the amount set forth in
the preceding sentence with respect to the exchange or change of
shares of Series A Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of which is
the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to
such event.
Section 8. No Redemption. The shares of Series A Preferred
Stock shall not be redeemable.
Section 9. Rank. The Series A Preferred Stock shall rank,
with respect to the payment of dividends and the distribution of
assets, junior to all series of any other class of the
Corporation's Preferred Stock, except to the extent that any such
other series specifically provides that it shall rank on a parity
with or junior to the Series A Preferred Stock.
Section 10. Amendment. The Articles of Incorporation of
the Corporation shall not be amended in any manner which would
materially 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 at least
two-thirds of the outstanding shares of Series A Preferred Stock,
voting together as a single class.<PAGE>
IN WITNESS WHEREOF, this Certificate of Designations is
executed on behalf of the Corporation by its Chairman of the
Board this ___ day of June, 1995.
______________________________
Chairman of the Board<PAGE>
[Form of Right Certificate]
Certificate No. R- _______ Rights
NOT EXERCISABLE AFTER MAY 18, 2005 OR EARLIER IF NOTICE OF
REDEMPTION OR EXCHANGE IS GIVEN OR IF THE COMPANY IS MERGED
OR ACQUIRED PURSUANT TO AN AGREEMENT OF THE TYPE DESCRIBED
IN SECTION 1.3(ii)(A)(2) OF THE RIGHTS AGREEMENT. THE
RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES (SPECIFIED IN
SECTION 11.1.2 OF THE RIGHTS AGREEMENT), RIGHTS BENEFICIALLY
OWNED BY AN ACQUIRING PERSON, OR ITS AFFILIATES OR
ASSOCIATES, OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS
CERTIFICATE ARE HELD OR HAVE BEEN HELD BY A PERSON WHO IS OR
WAS AN ACQUIRING PERSON OR AN ASSOCIATE OR AFFILIATE OF AN
ACQUIRING PERSON OR A NOMINEE THEREOF. THIS RIGHT
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY HAVE BECOME
NULL AND VOID AS SPECIFIED IN SECTION 11.1.2 OF THE RIGHTS
AGREEMENT.]
Right Certificate
Rentrak Corporation
This certifies that , or
registered assigns, is the registered owner of the number of
Rights set forth above, each of which entitles the owner thereof,
subject to the terms, provisions and conditions of the Rights
Agreement, dated as of May 18, 1995, as the same may be amended
from time to time (the "Rights Agreement"), between Rentrak
Corporation, an Oregon corporation (the "Company"), and U.S.
Stock Transfer Corporation, a California corporation, as Rights
Agent (the "Rights Agent"), to purchase from the Company at any
time after the Distribution Date and prior to 5:00 P.M. (Oregon
time) on May 18, 2005, at the offices of the Rights Agent, or its
successors as Rights Agent, designated for such purpose, one one-
hundredth of a fully paid, nonassessable share of Series A Junior
Participating Preferred Stock, par value $.001 per share (the
"Preferred Shares") of the Company, at a purchase price of $40.00
per one one-hundredth of a share, subject to adjustment (the
"Purchase Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase and
certification duly executed. The number of Rights evidenced by
this Right Certificate (and the number of one one-hundredths of a
Preferred Share which may be purchased upon exercise thereof) set
forth above, and the Purchase Price set forth above, are the
number and Purchase Price as of June 5, 1995 based on the
Preferred Shares as constituted at such date. Capitalized terms
used in this Right Certificate without definition shall have the
meanings ascribed to them in the Rights Agreement. As provided
in the Rights Agreement, the Purchase Price and the number of
Preferred Shares which may be purchased upon the exercise of the<PAGE>
Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the
Right Certificates. Copies of the Rights Agreement are on file
at the principal offices of the Company and the Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the offices of the Rights Agent
designated for such purpose, may be exchanged for another Right
Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like
aggregate number of one one-hundredths of a Preferred Share as
the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to
purchase. If this Right Certificate shall be exercised in part,
the holder shall be entitled to receive upon surrender hereof
another Right Certificate or Right Certificates for the number of
whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the
Board of Directors may, at its option, (i) redeem the Rights
evidenced by this Right Certificate at a redemption price of $.01
per Right at any time prior to the occurrence of a Trigger Event
or (ii) exchange Common Shares for the Rights evidenced by this
Certificate, in whole or in part, after the occurrence of a
Trigger Event.
No fractional Preferred Shares will be issued upon the
exercise of any Right or Rights evidenced hereby, but in lieu
thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Right Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any
purpose the holder of the Preferred Shares or of any other
securities of the Company which may at any time be issuable on
the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder
hereof, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to
receive dividends or subscription rights, or otherwise, until the
Right or Rights evidenced by this Right Certificate shall have
been exercised as provided in the Rights Agreement.
If any term, provision, covenant or restriction of the
Rights Agreement is held by a court of competent jurisdiction or<PAGE>
other authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of
the Rights Agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated.
This Right Certificate shall not be valid or binding
for any purpose until it shall have been countersigned by the
Rights Agent.
WITNESS the facsimile signature of the proper officers
of the Company and its corporate seal. Dated as of
_______________.
RENTRAK CORPORATION
By ______________________ By _________________________________
Name:
Title:
Countersigned:
U.S. STOCK TRANSFER CORPORATION
By_____________________________
Name:
Title:<PAGE>
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Right Certificate.)
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto
(Please print name and address
of transferee)
this Right Certificate and the Rights evidenced thereby, together
with all right, title and interest therein, and does hereby
irrevocably constitute and appoint
Attorney, to transfer the within Right Certificate on the books
of the within-named Company, with full power of substitution.
Dated:
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a
registered national securities exchange, a member of the National
Association of Securities Dealers, Inc., or a commercial bank or
trust company having an office or correspondent in the United
States.<PAGE>
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate
[ ] are [ ] are not beneficially owned by an Acquiring Person
or an Affiliate or an Associate thereof; and
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned [ ] did [ ] did not acquire the
Rights evidenced by this Right Certificate from any person who
is, was or subsequently became an Acquiring Person or an
Affiliate or Associate thereof.
Dated:
Signature<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To: RENTRAK CORPORATION
The undersigned hereby irrevocably elects to exercise
__________________ Rights represented by this Right Certificate
to purchase the Preferred Shares issuable upon the exercise of
such Rights (or such other securities of the Company or of any
other Person which may be issuable upon the exercise of the
Rights) and requests that certificates for such shares be issued
in the name of:
Please insert social security
or other identifying number
____________________________________________________________
(Please print name and address)
____________________________________________________________
If such number of Rights shall not be all the Rights evidenced by
this Right Certificate, a new Right Certificate for the balance
remaining of such Rights shall be registered in the name of and
delivered to:
Please insert social security
or other identifying number
____________________________________________________________
(Please print name and address)
____________________________________________________________
Dated: __________________
______________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a
registered national securities exchange, a member of the National
Association of Securities Dealers, Inc., or a commercial bank or
trust company having an office or correspondent in the United
States.
_________________________________________________________________
___________
The undersigned hereby certifies by checking the appropriate
boxes that:<PAGE>
(1) the Rights evidenced by this Right Certificate [ ]
are [ ] are not beneficially owned by an Acquiring Person or an
Affiliate or an Associate thereof; and
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned
[ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate thereof.
Dated:_______________
________________________
Signature
NOTICE
The signature in the foregoing Form of Assignment and Form
of Election to Purchase must conform to the name as written upon
the face of this Right Certificate in every particular, without
alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form
of Assignment or Form of Election to Purchase is not completed,
the Company will deem the beneficial owner of the Rights
evidenced by this Right Certificate to be an Acquiring Person or
an Affiliate or Associate hereof and, in the case of an
Assignment, will affix a legend to that effect on any Right
Certificates issued in exchange for this Right Certificate.<PAGE>
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On May 18, 1995 the Board of Directors of Rentrak
Corporation (the "Company") declared a dividend of one Right for
each share of common stock, par value $.001 (the "Common
Shares"), of the Company outstanding at the close of business on
June 5, 1995 (the "Record Date"). As long as the Rights are
attached to the Common Shares, the Company will issue one Right
(subject to adjustment) with each new Common Share so that all
such shares will have attached Rights. When exercisable, each
Right will entitle the registered holder to purchase from the
Company one one-hundredth of a share of Series A Junior
Participating Preferred Stock (the "Preferred Shares") at a price
of $40.00 per one one-hundredth of a Preferred Share, subject to
adjustment (the "Purchase Price"). The description and terms of
the Rights are set forth in a Rights Agreement, dated as of May
18, 1995, as the same may be amended from time to time (the
"Rights Agreement"), between the Company and U.S. Stock Transfer
Corporation as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) the 10th day after a
public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired, or
obtained the right to acquire, beneficial ownership of 15% or
more of the Common Shares or (ii) the 10th day after the
commencement or announcement of an intention to make a tender
offer or exchange offer the consummation of which would result in
the beneficial ownership by a person or group of 15% or more of
the Common Shares (the earlier of (i) and (ii) being called the
"Distribution Date," whether or not either such date occurs prior
to the Record Date), the Rights will be evidenced, with respect
to any of the Common Share certificates outstanding as of the
Record Date, by such Common Share certificate.
The Rights Agreement provides that, until the Distribution
Date, the Rights will be transferred with and only with the
Common Shares. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Share
certificates issued after the close of business on the Record
Date upon transfer or new issuance of the Common Shares will
contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption,
exchange, termination or expiration of the Rights), the surrender
for transfer of any certificates for Common Shares, with or
without a copy of this Summary of Rights, will also constitute
the transfer of the Rights associated with the Common Shares
represented by such certificate. As soon as practicable
following the Distribution Date, separate certificates evidencing
the Rights ("Right Certificates") will be mailed to holders of
record of the Common Shares as of the close of business on the
Distribution Date and such separate Right Certificates alone will
evidence the Rights.<PAGE>
The Rights are not exercisable until the Distribution
Date. The Rights will expire on May 18, 2005, subject to the
Company's right to extend such date (the "Final Expiration
Date"), unless earlier redeemed or exchanged by the Company or
terminated.
Each Preferred Share purchasable upon exercise of the
Rights will be entitled to a minimum preferential quarterly
dividend payment of $1.00 per share but will be entitled to an
aggregate dividend of 100 times the dividend, if any, declared
per Common Share. In the event of liquidation, the holders of
the Preferred Shares will be entitled to a minimum preferential
liquidation payment of $100 per share but will be entitled to an
aggregate payment of 100 times the payment made per Common Share.
Each Preferred Share will have 100 votes and will vote together
with the Common Shares. Finally, in the event of any merger,
consolidation or other transaction in which Common Shares are
exchanged, each Preferred Share will be entitled to receive 100
times the amount received per Common Share. These rights are
protected by customary antidilution provisions. Because of the
nature of the Preferred Share's dividend, liquidation and voting
rights, the value of one one-hundredth of a Preferred Share
purchasable upon exercise of each Right should approximate the
value of one Common Share.
The Purchase Price payable, and the number of Preferred
Shares or other securities or property issuable, upon exercise of
the Rights are subject to adjustment from time to time to prevent
dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of the Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of
certain rights or warrants to subscribe for or purchase Preferred
Shares or convertible securities at less than the current market
price of the Preferred Shares or (iii) upon the distribution to
holders of the Preferred Shares of evidences of indebtedness,
cash, securities or assets (excluding regular periodic cash
dividends at a rate not in excess of 125% of the rate of the last
regular periodic cash dividend theretofore paid or, in case
regular periodic cash dividends have not theretofore been paid,
at a rate not in excess of 50% of the average net income per
share of the Company for the four quarters ended immediately
prior to the payment of such dividend, or dividends payable in
Preferred Shares (which dividends will be subject to the
adjustment described in clause (i) above)) or of subscription
rights or warrants (other than those referred to above).
In the event that a Person becomes an Acquiring Person
(except pursuant to certain cash offers for all outstanding
Common Shares approved by the Board) or if the Company were the
surviving corporation in a merger with an Acquiring Person or any
affiliate or associate of an Acquiring Person and the Common
Shares were not changed or exchanged, each holder of a Right,
other than Rights that are or were acquired or beneficially owned
by the 15% stockholder (which Rights will thereafter be void),
will thereafter have the right to receive upon exercise that
number of Common Shares having a market value of two times the
then current Purchase Price of the Right. With certain<PAGE>
exceptions, in the event that the Company were acquired in a
merger or other business combination transaction or more than 50%
of its assets or earning power were sold, proper provision shall
be made so that each holder of a Right shall thereafter have the
right to receive, upon the exercise thereof at the then current
Purchase Price of the Right, that number of shares of common
stock of the acquiring company which at the time of such
transaction would have a market value of two times the then
current Purchase Price of the Right.
At any time after a Person becomes an Acquiring Person
(except pursuant to certain cash offers for all outstanding
Common Shares approved by the Board) and prior to the acquisition
by such Acquiring Person of 50% or more of the outstanding Common
Shares, the Board of Directors may cause the Company to acquire
the Rights (other than Rights owned by an Acquiring Person which
have become void), in whole or in part, in exchange for that
number of Common Shares having an aggregate value equal to the
Spread (the excess of the value of the Common Shares issuable
upon exercise of a Right after a Person becomes an Acquiring
Person over the Purchase Price) per Right (subject to
adjustment).
The Rights may be redeemed in whole, but not in part, at a
price of $.01 per Right (the "Redemption Price") by the Board of
Directors at any time prior to the first date that a Person has
become an Acquiring Person (except pursuant to certain cash
offers for all outstanding Common Shares approved by the Board).
The redemption of the Rights by the Board of Directors may be
made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may
establish. The Company may, at its option, pay the Redemption
Price in cash, Common Shares (based on the current per share
market price at the time of the redemption) or any other form of
consideration deemed appropriate by the Board of Directors.
Immediately upon the action of the Board of Directors of the
Company electing to redeem the Rights, the Company shall make an
announcement thereof, and upon such election, the right to
exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such,
will have no rights as a stockholder of the Company beyond those
as an existing stockholder, including, without limitation, the
right to vote or to receive dividends.
Any of the provisions of the Rights Agreement may be
amended by the Board of Directors of the Company prior to the
Distribution Date. After the Distribution Date, the Company and
the Rights Agent may amend or supplement the Rights Agreement
without the approval of any holders of Right Certificates to cure
any ambiguity, to correct or supplement any provision contained
therein which may be defective or inconsistent with any other
provisions therein, to shorten or lengthen any time period under
the Rights Agreement (so long as, under certain circumstances, a
majority of Continuing Directors approve such shortening or
lengthening) or so long as the interests of the holders of Right<PAGE>
Certificates (other than an Acquiring Person or an affiliate or
associate of an Acquiring Person) are not adversely affected
thereby, to make any other provisions in regard to matters or
questions arising thereunder which the Company and the Rights
Agent may deem necessary or desirable, including but not limited
to extending the Final Expiration Date. The Company may at any
time prior to such time as any Person becomes an Acquiring Person
amend the Rights Agreement to lower the thresholds described
above to not less than the greater of (i) any percentage greater
than the largest percentage of the outstanding Common Shares then
known by the Company to be beneficially owned by any person or
group of affiliated or associated persons and (ii) 10%.
The term "Continuing Directors" means any member of the
Board of Directors of the Company who was a member of the Board
prior to the time that any Person becomes an Acquiring Person,
and any person who is subsequently elected to the Board if such
person is recommended or approved by a majority of the Continuing
Directors. Continuing Directors do not include an Acquiring
Person, or an affiliate or associate of an Acquiring Person, or
any representative of the foregoing.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Current
Report on Form 8-K. A copy of the Rights Agreement is available
free of charge from the Company. This summary description of the
Rights does not purport to be complete and is qualified in its
entirety by reference to the Rights Agreement, which is
incorporated herein by reference.<PAGE>
[Rentrak Letterhead]
June 5, 1995
To Our Shareholders:
On May 18, 1995, the Board of Directors of Rentrak
Corporation adopted a Shareholder Rights Plan that is intended to
protect your interests in the event you and Rentrak are
confronted with coercive takeover tactics.
The Plan provides for a dividend distribution of Rights
to purchase shares of a newly created series of Rentrak Preferred
Stock. Under certain circumstances, the Rights could become
exercisable to purchase Rentrak Common Stock, or securities of an
acquiring entity, at one-half of the market value. The Rights
may be exercised only if certain events occur. You are now the
owner of one Right for each share of Rentrak Common Stock you
own. The Plan has been adopted in order to strengthen the
ability of the Board to protect your interests.
We are attaching a summary description that outlines
the principal features of the Plan, and we urge you to read the
summary carefully. This letter reviews our reasons for issuing
the Rights.
No action by shareholders is required or permitted at
this time, and no money should be sent to Rentrak. The Rights
will automatically attach to the shares of Common Stock you hold
and will trade with them. Separate Right certificates will be
sent to shareholders only if a person or group acquires 15% or
more of Rentrak's outstanding Common Stock or makes a tender
offer for 15% or more of the Common Stock. Rentrak Common Stock
certificates issued after June 5, 1995 will contain a reference
to the Rights Plan, but there is no need to send in your
certificates to have this reference added.
The Rights are not being distributed in response to any
specific effort to acquire control of the Company. The Rights
are designed to protect shareholders in the event of an
unsolicited attempt to acquire the Company, including through an
accumulation of Common Stock in the open market, a partial,
two-tier or inadequate tender offer that does not treat all
shareholders equally and other abusive takeover tactics which the
Board of Directors believes are not in the best interests of
shareholders. These tactics unfairly pressure shareholders,
squeeze them out of their investment without giving them any real
choice and deprive them of the full value of their Common Stock.
We consider these Rights to be a valuable means of protecting
both your right to retain your equity investment in the Company<PAGE>
and the full value of that investment, while not foreclosing a
fair acquisition bid for the Company.
The Rights are not intended to prevent a takeover of
Rentrak and will not do so. They are designed to deal with the
possibility of unilateral actions by hostile acquirors that could
deprive the Board of Directors and shareholders of Rentrak of
their ability to determine the Company's destiny and obtain the
highest price for their Common Stock.
Adoption of the Plan should not by itself affect any
prospective acquiror who is willing to make an all-cash offer at
a full and fair price or who is willing to negotiate with the
Company's Board of Directors. The Plan certainly will not
interfere with a merger or other business combination transaction
approved by the Board of Directors.
The issuance of the Rights has no dilutive effect, will
not affect reported earnings per share and is not taxable to the
Company or to you. Shareholders may, under certain
circumstances, recognize taxable income if the Rights become
exercisable.
Our overriding objective is to continue building value
for Rentrak's shareholders, and we feel that the Plan will assist
in that effort.
Sincerely,
Ron Berger
Chairman, President and
Chief Executive Officer<PAGE>
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On May 18, 1995, the Board of Directors of Rentrak
Corporation (the "Company") declared a dividend of one Right for
each share of common stock, par value $.001 (the "Common
Shares"), of the Company outstanding at the close of business on
June 5, 1995 (the "Record Date"). As long as the Rights are
attached to the Common Shares, the Company will issue one Right
(subject to adjustment) with each new Common Share so that all
such shares will have attached Rights. When exercisable, each
Right will entitle the registered holder to purchase from the
Company one one-hundredth of a share of Series A Junior
Participating Preferred Stock (the "Preferred Shares") at a price
of $40 per one one-hundredth of a Preferred Share, subject to
adjustment (the "Purchase Price"). The description and terms of
the Rights are set forth in a Rights Agreement, dated as of May
18, 1995, as the same may be amended from time to time (the
"Rights Agreement"), between the Company and U.S. Stock Transfer
Corporation as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) the 10th day after a
public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired, or
obtained the right to acquire, beneficial ownership of 15% or
more of the Common Shares or (ii) the 10th day after the
commencement or announcement of an intention to make a tender
offer or exchange offer the consummation of which would result in
the beneficial ownership by a person or group of 15% or more of
the Common Shares (the earlier of (i) and (ii) being called the
"Distribution Date," whether or not either such date occurs prior
to the Record Date), the Rights will be evidenced, with respect
to any of the Common Share certificates outstanding as of the
Record Date, by such Common Share certificate.
The Rights Agreement provides that, until the
Distribution Date, the Rights will be transferred with and only
with the Common Shares. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Share
certificates issued after the close of business on the Record
Date upon transfer or new issuance of the Common Shares will
contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption,
exchange, termination or expiration of the Rights), the surrender
for transfer of any certificates for Common Shares, with or
without a copy of this Summary of Rights, will also constitute
the transfer of the Rights associated with the Common Shares
represented by such certificate. As soon as practicable
following the Distribution Date, separate certificates evidencing
the Rights ("Right Certificates") will be mailed to holders of
record of the Common Shares as of the close of business on the
Distribution Date and such separate Right Certificates alone will
evidence the Rights.<PAGE>
The Rights are not exercisable until the Distribution
Date. The Rights will expire on May 18, 2005, subject to the
Company's right to extend such date (the "Final Expiration
Date"), unless earlier redeemed or exchanged by the Company or
terminated.
Each Preferred Share purchasable upon exercise of the
Rights will be entitled to a minimum preferential quarterly
dividend payment of $1.00 per share but will be entitled to an
aggregate dividend of 100 times the dividend, if any, declared
per Common Share. In the event of liquidation, the holders of
the Preferred Shares will be entitled to a minimum preferential
liquidation payment of $100 per share but will be entitled to an
aggregate payment of 100 times the payment made per Common Share.
Each Preferred Share will have 100 votes and will vote together
with the Common Shares. Finally, in the event of any merger,
consolidation or other transaction in which Common Shares are
exchanged, each Preferred Share will be entitled to receive 100
times the amount received per Common Share. These rights are
protected by customary antidilution provisions. Because of the
nature of the Preferred Share's dividend, liquidation and voting
rights, the value of one one-hundredth of a Preferred Share
purchasable upon exercise of each Right should approximate the
value of one Common Share.
The Purchase Price payable, and the number of Preferred
Shares or other securities or property issuable, upon exercise of
the Rights are subject to adjustment from time to time to prevent
dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of the Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of
certain rights or warrants to subscribe for or purchase Preferred
Shares or convertible securities at less than the current market
price of the Preferred Shares or (iii) upon the distribution to
holders of the Preferred Shares of evidences of indebtedness,
cash, securities or assets (excluding regular periodic cash
dividends at a rate not in excess of 125% of the rate of the last
regular periodic cash dividend theretofore paid or, in case
regular periodic cash dividends have not theretofore been paid,
at a rate not in excess of 50% of the average net income per
share of the Company for the four quarters ended immediately
prior to the payment of such dividend, or dividends payable in
Preferred Shares (which dividends will be subject to the
adjustment described in clause (i) above)) or of subscription
rights or warrants (other than those referred to above).
In the event that a Person becomes an Acquiring Person
(except pursuant to certain cash offers for all outstanding
Common Shares approved by the Board) or if the Company were the
surviving corporation in a merger with an Acquiring Person or any
affiliate or associate of an Acquiring Person and the Common
Shares were not changed or exchanged, each holder of a Right,
other than Rights that are or were acquired or beneficially owned
by the 15% stockholder (which Rights will thereafter be void),
will thereafter have the right to receive upon exercise that
number of Common Shares having a market value of two times the
then current Purchase Price of the Right. With certain<PAGE>
exceptions, in the event that the Company were acquired in a
merger or other business combination transaction or more than 50%
of its assets or earning power were sold, proper provision shall
be made so that each holder of a Right shall thereafter have the
right to receive, upon the exercise thereof at the then current
Purchase Price of the Right, that number of shares of common
stock of the acquiring company which at the time of such
transaction would have a market value of two times the then
current Purchase Price of the Right.
At any time after a Person becomes an Acquiring Person
(except pursuant to certain cash offers for all outstanding
Common Shares approved by the Board) and prior to the acquisition
by such Acquiring Person of 50% or more of the outstanding Common
Shares, the Board of Directors may cause the Company to acquire
the Rights (other than Rights owned by an Acquiring Person which
have become void), in whole or in part, in exchange for that
number of Common Shares having an aggregate value equal to the
Spread (the excess of the value of the Common Shares issuable
upon exercise of a Right after a Person becomes an Acquiring
Person over the Purchase Price) per Right (subject to
adjustment).
The Rights may be redeemed in whole, but not in part,
at a price of $.01 per Right (the "Redemption Price") by the
Board of Directors at any time prior to the first date that a
Person has become an Acquiring Person (except pursuant to certain
cash offers for all outstanding Common Shares approved by the
Board). The redemption of the Rights by the Board of Directors
may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may
establish. The Company may, at its option, pay the Redemption
Price in cash, Common Shares (based on the current per share
market price at the time of the redemption) or any other form of
consideration deemed appropriate by the Board of Directors.
Immediately upon the action of the Board of Directors of the
Company electing to redeem the Rights, the Company shall make an
announcement thereof, and upon such election, the right to
exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as
such, will have no rights as a stockholder of the Company beyond
those as an existing stockholder, including, without limitation,
the right to vote or to receive dividends.
Any of the provisions of the Rights Agreement may be
amended by the Board of Directors of the Company prior to the
Distribution Date. After the Distribution Date, the Company and
the Rights Agent may amend or supplement the Rights Agreement
without the approval of any holders of Right Certificates to cure
any ambiguity, to correct or supplement any provision contained
therein which may be defective or inconsistent with any other
provisions therein, to shorten or lengthen any time period under
the Rights Agreement (so long as, under certain circumstances, a
majority of Continuing Directors approve such shortening or
lengthening) or so long as the interests of the holders of Right<PAGE>
Certificates (other than an Acquiring Person or an affiliate or
associate of an Acquiring Person) are not adversely affected
thereby, to make any other provisions in regard to matters or
questions arising thereunder which the Company and the Rights
Agent may deem necessary or desirable, including but not limited
to extending the Final Expiration Date. The Company may at any
time prior to such time as any Person becomes an Acquiring Person
amend the Rights Agreement to lower the thresholds described
above to not less than the greater of (i) any percentage greater
than the largest percentage of the outstanding Common Shares then
known by the Company to be beneficially owned by any person or
group of affiliated or associated persons and (ii) 10%.
The term "Continuing Directors" means any member of the
Board of Directors of the Company who was a member of the Board
prior to the time that any Person becomes an Acquiring Person,
and any person who is subsequently elected to the Board if such
person is recommended or approved by a majority of the Continuing
Directors. Continuing Directors do not include an Acquiring
Person, or an affiliate or associate of an Acquiring Person, or
any representative of the foregoing.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Current
Report on Form 8-K. A copy of the Rights Agreement is available
free of charge from the Company. This summary description of the
Rights does not purport to be complete and is qualified in its
entirety by reference to the Rights Agreement, which is
incorporated herein by reference.<PAGE>
CONTACT:
Dick Gersh
RICHARD GERSH ASSOCIATES
(212) 757-1101
Mervyn Benjet - Senior V.P. & C.F.O.
RENTRAK CORPORATION
(503) 284-7581 Ext. 364
FOR IMMEDIATE RELEASE
RENTRAK CORPORATION DECLARES DIVIDEND
DISTRIBUTION OF PREFERRED SHARE PURCHASE RIGHTS
Portland, OR - (May 19, 1995) - The Board of Directors
of Rentrak Corporation on May 18, 1995, declared a dividend
distribution of one Preferred Share Purchase Right on each
outstanding share of Rentrak common stock. Each right will
entitle stockholders to buy one one-hundredth of a share of
newly created Series A Junior Participating Preferred Stock
of the Company at an exercise price of $40. The Rights will
be exercisable if a person or group acquires 15% or more of
the Company's common stock or announces a tender offer for
15% or more of the common stock. The Rentrak Board will be
entitled to redeem the Rights at $.01 per Right at any time
before a person has acquired 15% or more of the outstanding
common stock.
The Rights are not being distributed in response to any
specific effort to acquire control of the Company. The
Rights are designed to assure that all Rentrak stockholders
receive fair and equal treatment in the event of any
proposed takeover of the Company and to guard against
partial tender offers, open market accumulations and other
abusive tactics to gain control of Rentrak without paying
all stockholders a control premium.<PAGE>
- more -
If a person acquires 15% or more of the outstanding
common stock of Rentrak, each Right will entitle its holder
to purchase, at the Right's then-current exercise price, a
number of common shares of Rentrak having a market value at
that time of twice the Right's exercise price. Rights held
by the 15% holder will become void and will not be
exercisable to purchase shares at the bargain purchase
price. If Rentrak is acquired in a merger or other business
combination transaction which has not been approved by the
Board of Directors, each Right will entitle its holder to
purchase, at the Right's then-current exercise price, a
number of the acquiring common shares having a market value
at that time of twice the Right's exercise price.
"The Rights are intended to enable all Rentrak
stockholders to realize the long-term value of their
investment in the Company. They do not prevent a takeover,
but should encourage anyone seeking to acquire the Company
to negotiate with the Board of Directors prior to attempting
a takeover. Over 1,500 other public companies have adopted
rights plans in recent years," said Ron Berger, Chairman,
President and Chief Executive Officer of Rentrak.
The dividend distribution will be payable to
stockholder of record on June 5, 1995. The Rights will
expire in ten years unless extended by the Board. The
Rights distribution is not taxable to shareholders.<PAGE>
Rentrak Corporation markets Pay-Per-Transaction (PPT),
and innovative form of videocassette distribution based on
the concept of revenue sharing and operates the Pro Image
chain of licensed apparel retail shops.
- end -
5/19/95<PAGE>
CONTACT
Dick Gersh
RICHARD GERSH ASSOCIATES
(212) 757-1101
Mervyn Benjet - Senior V.P. & C.F.O.
RENTRAK CORPORATION
(503) 284-7581 Ext. 364
FOR IMMEDIATE RELEASE
RENTRAK REPORTS REVENUES UP 63% AND NET
INCOME UP 529% FOR YEAR ENDED MARCH 31, 1995
Portland, OR - (May 30, 1995) - Rentrak Corporation
(NASDAQ: RENT) reported revenues of $37,815,571 and a net
income of $1,269,600 for its fourth quarter ended March 31,
1995. This compares to revenues of $20,513,122 and net
income of $2,181,448 for the same period last year. Primary
earnings per share of $.10 this quarter compares to $.21
last year. The number of shares used for calculating
primary earnings per share for the quarter was 14,484,120
compared to 10,621,186 shares used last year. Fully diluted
earnings per share of $.10 this quarter compares to $.21
last year. The number of shares used for calculating fully
diluted earnings per share for the quarter was 15,934,120
compared to 10,621,186 shares used last year.
For the twelve months ended March 31, 1995 (the<PAGE>
- more -
Company's fiscal year-end), revenues of $112,166,231
increased 63% from $68,896,487 reported last year. Net
income of $5,113,523 increased 529% from $813,065 reported
last year. Primary earnings per share of $.41 this year
compares to $.08 per share reported last year. The number
of shares used for calculating primary earnings per share
for the four quarters to date was 13,397,951 compared to
10,162,461 used last year. Fully diluted earnings per share
of $.40 this year compares to $.08 per share reported last
year. The number of shares used for calculating fully
diluted earnings per share for the four quarters to date was
14,317,380 compared to 10,162,461 used last year.
Revenues for the Rentrak Home Entertainment Division
(PPT) were $25,554,692 for the quarter and $79,793,584 for
the year. For the same periods last year revenues were
$18,580,510 and $62,005,968, respectively. The Pro Image
(TPI) revenues were $10,910,954 for the quarter and
$26,363,211 for the year. For the same periods last year,
revenues were $838,738 and $3,950,705, respectively.
The Company amortized in the quarter an expense of
$467,000 associated with the value of warrants issued to
several key program suppliers and customers. The increase
in shares of common stock and common stock equivalents used
in calculating earnings per share for the quarter and the
year ended March 31, 1995 is primarily attributable to the
increase in warrants issued during the year. For the same
quarter last year, earnings were positively impacted by a<PAGE>
- more -
reduction in the Company's reserve for bad debts of $750,000
and a tax benefit of $855,000.
Ron Berger, Chairman and CEO of Rentrak, stated, "The
Company's sixth consecutive quarter of profitability and
record revenue growth affirms the strategic growth
objectives for our Rentrak Home Entertainment and our Pro
Image licensed sports apparel businesses."
The Company also announced that on May 25, 1995, the
Board of Directors adopted amendments to the Company's
Bylaws generally establishing a 60-day notice requirement
that shareholders must satisfy to bring business before a
meeting of shareholders or nominate persons for election to
the Board of Directors.
Rentrak Corporation markets Pay-Per-Transaction (PPT),
an innovative form of videocassette distribution based on
the concept of revenue sharing and operates the Pro Image
chain of licensed sports apparel retail shops.
- more -<PAGE>
<TABLE>
RENTRAK CORPORATION
STATEMENT OF OPERATIONS
FOR THE PERIODS ENDED MARCH 31, 1995
<CAPTION>
THREE MONTHS ENDED
March 31, 1995 March 31, 1994
<S> <C> <C>
Revenue $ 37,815,571 $ 20,513,122
Cost of Sales 28,709,497 15,649,014
Selling and Administrative 8,196,666 3,637,248
Income from Operations 909,408 1,226,860
Other Income 126,443 2,689
Income Tax Benefit 233,749 820,981
Losses Attributable to Minority Partner Interests - 130,918
Net Income 1,269,600 2,181,448
Primary Earnings Per Share $0.10 $0.21
Number of Shares Used in Primary Earnings
Per Share Calculation 14,484,120 10,621,186
Fully Diluted Earnings Per Share $0.10 $0.21
Number of Shares used in Fully Diluted
Earnings Per Share Calculation 15,934,120 10,621,186
<CAPTION>
TWELVE MONTHS ENDED
March 31, 1995 March 31, 1994
<S> <C> <C>
Revenue $112,166,231 68,896,487
Cost of Sales 83,533,328 52,161,827
Selling and Administrative 26,183,434 17,293,198
Income (Loss) from Operations 2,449,469 (555,538)
Other Income 3,391,285 476,766<PAGE>
Income Tax (Provision) Benefit (727,231) 763,919
Losses Attributable to Minority Partner Interests - 130,918
Net Income 5,113,523 813,065
Primary Earnings Per Share $0.41 $0.08
Number of Shares Used in Primary Earnings
Per Share Calculation 13,397,951 10,162,461
Fully Diluted Earnings Per share $0.40 $0.08
Number of Shares Used in Fully Diluted
Earnings Per Share Calculation 14,317,380 10,162,461
5/30/95 - end -<PAGE>
</TABLE>
