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 8, 1996
The Providence Journal Company
(Exact name of registrant as specified in its charter)
Delaware 0-26928 05-0481966
(State or other jurisdiction (Commission File (IRS Employer
of organization) Number) Identification No.)
75 Fountain Street Providence, Rhode Island 02902
(Address of principal executive offices) (Zip code)
(401) 277-7000
(Registrant's telephone number, including area code)
<PAGE>
ITEM 5. Other Events.
At a regular meeting of the Board of Directors of The Providence Journal
Company (the "Company") held on May 8, 1996, the Board of Directors approved and
adopted the Rights Agreement, dated as of May 8, 1996, between the Company and
The First National Bank of Boston, as Rights Agent (the "Rights Agreement").
Capitalized terms used herein are defined in the Rights Agreement.
On May 8, 1996, the Company declared a dividend of one Class A right (a
"Class A Right") for each outstanding share of Class A Common Stock and one
Class B right (a "Class B Right"; and together with the Class A Rights, the
"Rights") for each outstanding share of Class B Common Stock. The dividend will
be payable to stockholders of record on May 8, 1996 before the consummation of
the underwritten public offering of the Company's Class A Common Stock and the
direct placement offering of the Company's Class A Common Stock (the
"Offerings") in connection with which the Company has filed a Registration
Statement on Form S-1 with the Securities and Exchange Commission on April 22,
1996. Each Class A Right will entitle the registered holder to purchase from the
Company one share of Class A Common Stock of the Company at a price of $70 per
share of Class A Common Stock (the "Class A Purchase Price"), subject to
adjustment. Each Class B Right will entitle the registered holder to purchase
from the Company one share of Class B Common Stock of the Company at a price of
$70 per share of Class B Common Stock (the "Class B Purchase Price"; and
together with the Class A Purchase Price, the "Purchase Price"), subject to
adjustment.
Until the earlier to occur of (i) 10 days following a public announcement
that a person or group of affiliated or associated persons (an "Acquiring
Person") have acquired beneficial ownership of (A) 15% or more of the Voting
Power (as defined in the Rights Agreement) of the Common Stock or (B) 35% or
more of the Voting Power of the Class A Common Stock or (ii) 10 business days
(or such later date as may be determined by action of the Board of Directors
prior to such time as any person or group of affiliated persons becomes an
Acquiring Person) following the commencement of, or announcement of an intention
to make, a tender offer or exchange offer the consummation of which would result
in the beneficial ownership by a person or group of either 15% or more of the
Voting Power of the Common Stock or 35% or more of the Voting Power of the Class
A Common Stock (the earlier of such dates being the "Distribution Date"), the
Class A Rights and the Class B Rights will be evidenced, with respect to any of
the Class A Common Stock certificates or Class B Common Stock certificates
outstanding as of the Record Date, by such Common Stock certificate with a copy
of the Summary of Rights attached hereto.
The Rights Agreement provides that, until the Distribution Date (or earlier
redemption or expiration of the Rights), the Rights will be transferred with and
only with the Common Stock. Until the Distribution Date (or earlier redemption
or expiration of the Rights), new Common Stock certificates issued after the
Record Date upon transfer or new issuance of Common Stock will contain a
notation incorporating the Rights Agreement by reference. Until the Distribution
Date (or earlier redemption or expiration of the Rights), the surrender for
transfer of any certificates for Common Stock outstanding as of the Record Date,
even without such notation or a copy of the Summary of Rights being attached
thereto, will also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate. As soon as practicable following
the Distribution Date, separate certificates evidencing the applicable Rights
("Right Certificates") will be mailed to holders of record of the Common Stock
as of the close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights. Class B Rights may only be
transferred to Permitted Transferees (as such term is defined in the Rights
Agreement).
The Rights are not exercisable until the Distribution Date. The Rights will
expire on May 7, 2006 (the "Final Expiration Date"), unless the Final Expiration
Date is extended or unless the Rights are earlier redeemed or exchanged by the
Company, in each case as described below.
The Purchase Price payable, and the number of shares of Class A Common
Stock, Class B Common Stock or other securities or property issuable, upon
exercise of the Rights are subject to adjustment from time to time to prevent
dilution (i) in the event of a stock dividend on, or a subdivision, combination
or reclassification of, such Common Stock, (ii) upon the grant to holders of
such Common Stock of certain rights or warrants to subscribe for or purchase
such Common Stock at a price, or securities convertible into such Common Stock
with a conversion price, less than the then-current market price of such Common
Stock, or (iii) upon the distribution to holders of such Common Stock of
evidences of indebtedness or assets (excluding regular periodic cash dividends
paid out of earnings or retained earnings or dividends payable in Common Stock)
or of subscription rights or warrants (other than those referred to above).
The number of outstanding Class A Rights and Class B Rights and the number
of shares of Class A Common Stock or Class B Common Stock issuable upon exercise
of each such Right are also subject to adjustment in the event of a stock split
of the Class A Common Stock or Class B Common Stock, as applicable, or a stock
dividend on the Class A Common Stock or Class B Common Stock, as applicable,
payable in the related Common Stock or subdivisions, consolidations or
combinations of the Common Stock occurring, in any such case, prior to the
Distribution Date.
In the event that the Company is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are sold after a person or group has become an Acquiring Person, proper
provision will be made so that each holder of a Right will 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, will have market value of two times the
Purchase Price of the Right. In the event that any person or group of affiliated
or associated persons becomes an Acquiring Person, proper provision shall be
made so that each holder of a Class A Right and a Class B Right, other than
Rights beneficially owned by the Acquiring Person (which will thereafter be
void), will thereafter have the right to receive upon exercise that number of
shares of Class A Common Stock or Class B Common Stock, as applicable, having a
market value of two times the Purchase Price of such Right.
At any time after any person or group becomes an Acquiring Person and prior
to the acquisition by such person or group of 50% or more of the Voting Power of
the Common Stock, the Board of Directors of the Company may exchange the Rights
(other than Rights owned by such person or group which will have become void),
in whole or in part, at an exchange ratio of one share of Class A Common Stock
or Class B Common Stock per related Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional share of Common Stock will be issued and in
lieu thereof, an adjustment in cash will be made based on the market price of
the Common Stock on the last trading day prior to the date of exercise.
At any time prior to the acquisition by a person or group of affiliated or
associated persons of beneficial ownership of 15% or more of the Voting Power of
the Common Stock or 35% or more of the Voting Power of the Class A Common Stock,
the Board of Directors of the Company may redeem the rights in whole, but not in
part, at a price of $.01 per Right (the "Redemption Price"). The redemption of
the Rights may be made effective at such time on such basis with such conditions
as the Board of Directors in its sole discretion may establish. Immediately upon
any redemption of the Rights, the right to exercise the Rights will terminate
and the only right of the holders of Rights will be to receive the Redemption
Price.
The terms of the Rights may be amended by the Board of Directors of the
Company without the consent of the holders of the Rights, including an amendment
to lower certain thresholds with respect to the Voting Power of the Common Stock
described above to not less than 10% and with respect to the Voting Power of the
Class A Common Stock to not less than 25%, except that from and after such time
as any person or group of affiliated or associated persons becomes an Acquiring
Person, no such amendment may adversely affect the interests of the holders of
the Rights.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.
This summary description of the Rights does not purport to be complete and
is qualified in its entirety by reference to the full text of the Rights
Agreement, which is attached hereto as Exhibit 4.1.
EXHIBIT INDEX
Exhibit Description
Exhibit No. 4.1 Rights Agreement between The Providence Journal Company
and The First National Bank of Boston, as Rights Agent, dated
as of May 8, 1996.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
THE PROVIDENCE JOURNAL COMPANY
Registrant
By:/s/ John L. Hammond
______________________________
John L. Hammond,
Vice President - General
Counsel and Chief Administrative
Officer
Dated: May 8, 1996
THE PROVIDENCE JOURNAL COMPANY
and
THE FIRST NATIONAL BANK OF BOSTON
Rights Agent
Rights Agreement
Dated as of May 8, 1996
------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
Section 1 Certain Definitions 1
Section 2. Appointment of Rights Agent 6
Section 3. Issue of Right Certificates 6
Section 4. Form of Right Certificates 9
Section 5. Countersignature and Registration 9
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates;
Mutilated, Destroyed, Lost or
Stolen Right Certificates 10
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights 15
Section 8. Cancellation and Destruction of
Right Certificates 16
Section 9. Availability of Common Shares 16
Section 10. Common Shares Record Date 17
Section 11. Adjustment of Purchase Price, Number of
Shares or Number of Rights 17
Section 12. Certificate of Adjusted Purchase Price
or Number of Shares 25
Section 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power 25
Section 14. Fractional Rights and Fractional Shares 26
Section 15. Rights of Action 28
Section 16. Agreement of Right Holders 28
Section 17. Right Certificate Holder Not Deemed a
Stockholder 29
Section 18. Concerning the Rights Agent 29
Section 19. Merger or Consolidation or Change of
Name of Rights Agent 30
Section 20. Duties of Rights Agent 30
Section 21. Change of Rights Agent 33
Section 22. Issuance of New Right Certificates 34
Section 23. Redemption 34
Section 24. Exchange 35
Section 25. Notice of Certain Events 36
Section 26. Notices 37
Section 27. Supplements and Amendments 38
Section 28. Successors 38
Section 29. Benefits of this Agreement 38
Section 30. Severability 39
Section 31. Governing Law 39
Section 32. Counterparts 39
Section 33. Descriptive Headings 39
Signatures 40
Exhibit A - Form of Right Certificate, Class A Rights
Exhibit B - Form of Right Certificate, Class B Rights
Exhibit C - Summary of Rights to Purchase Common
Shares
<PAGE>
Agreement, dated as of May 8, 1996, between The Providence Journal Company,
a Delaware corporation (the "Company"), and The First National Bank of Boston
(the "Rights Agent").
The Board of Directors of the Company has authorized and declared a
dividend of one class A common share purchase right (a "Class A Right") for each
Class A Common Share (as defined herein) of the Company outstanding on , 1996
(the "Record Date") and one class B common share purchase right (a "Class B
Right") for each Class B Common Share (as defined herein) of the Company
outstanding on the Record Date, each Right representing the right to purchase
one Class A Common Share (as defined herein) or Class B Common Share (as defined
herein), as applicable, upon the terms and subject to the conditions herein set
forth, and has further authorized and directed the issuance of one Class A Right
with respect to each Class A Common Share and one Class B Right with respect to
each Class B Common Share, in each case, 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 herein).
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
1. Certain Definitions. For purposes of this Agreement, the following terms
have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which, together with
all Affiliates and Associates of such Person, shall be the Beneficial Owner of
either (i) 15% or more of the Voting Power of the Common Shares or (ii) 35% or
more of the Voting Power of the Class A Common Shares but shall not include (i)
the Company, (ii) any Subsidiary of the Company, or (iii) 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. Notwithstanding the
foregoing, no Person shall become an "Acquiring Person" as the result of an
acquisition of either Class A Common Shares and/or Class B Common Shares by the
Company which, by reducing the number of such Common Shares outstanding,
increases the proportionate Voting Power of Common Shares beneficially owned by
such Person to 15% or more of the Voting Power of the Common Shares or 35% or
more of the Class A Common Shares of the Company then outstanding; provided,
however, that if a Person shall become the Beneficial Owner of 15% or more of
the Voting Power of the Common Shares or 35% or more of the Class A Common
Shares then outstanding 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 or Class A Common Shares, as the case may be, 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 otherwise be an "Acquiring
Person," as defined pursuant to the foregoing provisions of this paragraph (a),
has become such inadvertently, and such Person divests as promptly as
practicable a sufficient number of the applicable Common Shares so that such
Person would no longer be an "Acquiring Person," as defined pursuant to the
foregoing provisions of this paragraph (a), then such Person shall not be deemed
to be an "Acquiring Person" for any purposes of this Agreement.
(b) "Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations under the
Exchange Act, as in effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of and shall be deemed
to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or Associates
beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or Associates has
(A) the right to acquire (whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement, arrangement or
understanding (other than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering of
securities), or upon the exercise of conversion rights, exchange rights, rights
(other than these Rights), warrants or options, or otherwise; provided, however,
that a Person shall not be deemed the Beneficial Owner of, or to beneficially
own, securities tendered pursuant to a tender or exchange offer made by 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 (B) the right
to vote pursuant to any agreement, arrangement or understanding; provided,
however, that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, any security if the agreement, arrangement or understanding to
vote such security (1) arises solely from a revocable proxy or consent given to
such Person in response to a public proxy or consent solicitation made pursuant
to, and in accordance with, the applicable rules and regulations promulgated
under the Exchange Act and (2) is not also then reportable on Schedule 13D under
the Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by any other
Person with which such Person or any of such Person's Affiliates or Associates
has any agreement, arrangement or understanding (other than customary agreements
with and between underwriters and selling group members with respect to a bona
fide public offering of securities) for the purpose of acquiring, holding,
voting (except to the extent contemplated by the proviso to Section 1(c)(ii)(B))
or disposing of any securities of the Company;
provided that holders of Class B Common Shares shall not be deemed to be
Beneficial Owners of Class A Common Shares solely by virtue of such holders'
right to convert such Class B Common Shares into Class A Common Shares.
Notwithstanding anything in this definition of Beneficial Ownership to the
contrary, the phrase "then outstanding," when used with reference to a Person's
Beneficial Ownership of securities of the Company, shall mean the number of such
securities then issued and outstanding together with the number of such
securities not then actually issued and outstanding which such Person would be
deemed to own beneficially hereunder; provided that any Person, in determining
such number of securities, may rely on the information set forth in the
Company's most recent quarterly or annual report, and any current report
subsequent thereto, with respect to the number of outstanding Common Shares,
Class A Common Shares or Class B Common Shares, filed with the Securities and
Exchange Commission pursuant to the Exchange Act, unless such Person knows or
has reason to believe that the information contained therein is or has become
inaccurate.
(d) "Business Day" shall mean any day other than a Saturday, a Sunday, or a
day on which banking institutions in the Commonwealth of Massachusetts or the
State of Rhode Island are authorized or obligated by law or executive order to
close.
(e) "Class A Common Shares" shall mean the shares of class A common stock,
par value $1.00 per share, of the Company.
(f) "Class A Purchase Price" shall have the meaning set forth in Section
7(b).
(g) "class a right" shall have the meaning set forth in the second
paragraph hereof.
(h) "Class A Right Certificate" shall have the meaning set forth in Section
3(a).
(i) "Class B Common Shares" shall mean the shares of class B common stock,
par value $1.00 per share, of the Company.
(j) "Class B Purchase Price" shall have the meaning set forth in Section
7(b).
(k) "Class B Right" shall have the meaning set forth in the second
paragraph hereof.
(l) "Class B Right Certificate" shall have the meaning set forth in Section
3(a).
(m) "Close of Business" on any given date shall mean 5:00 P.M., Boston
time, on such date; provided, however, that, if such date is not a Business Day,
it shall mean 5:00 P.M., Boston time, on the next succeeding Business Day.
(n) "Common Shares" when used in reference to the Company shall mean the
Class A Common Shares and the Class B Common Shares. "Common Shares" when used
with reference to any Person other than the Company shall mean the capital stock
(or equity interest) with the greatest voting power of such other Person or, if
such other Person is a Subsidiary of another Person, the Person or Persons which
ultimately control such first-mentioned Person.
(o) "Distribution Date" shall have the meaning set forth in Section 3.
(p) "Equivalent Common Shares" shall have the meaning set forth in Section
11(b).
(q) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(r) "Exchange Ratio" shall have the meaning set forth in Section 24(a).
(s) "Final Expiration Date" shall have the meaning set forth in Section 7.
(t) "NASDAQ" shall mean the National Association of Securities Dealers,
Inc. Automated Quotation System.
(u) "Permitted Transferee" shall have the meaning set forth in Section 6.
(v) "Person" shall mean any individual, firm, corporation or other entity,
and shall include any successor (by merger or otherwise) of such entity.
(w) "Purchase Price" shall mean, as applicable, the Class A Purchase Price
and/or the Class B Purchase Price.
(x) "Record Date" shall have the meaning set forth in the second paragraph
hereof.
(y) "Redemption Date" shall have the meaning set forth in Section 7.
(z) "Redemption Price" shall have the meaning set forth in Section 23(a).
(aa) "Rights" shall mean, as applicable, the Class A Rights and/or the
Class B Rights.
(ab) "Right Certificates" shall mean, as applicable, the Class A Right
Certificates and/or the Class B Rights Certificates.
(ac) "Rights Agent" shall have the meaning set forth in the preamble
hereof.
(ad) "Shares Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person that an Acquiring Person has
become such.
(ae) "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 interest is owned, directly or indirectly, by such Person.
(af) "Summary of Rights" shall have the meaning set forth in Section 3(b).
(ag) "Trading Day" shall have the meaning set forth in Section 11(d)(i).
(ah) "Voting Power", when used with reference to the capital stock of, or
units of equity interests in, any Person, shall mean the power to vote in the
election of directors of such Person (if such Person is a corporation) or to
participate in the management and control of such Person (if such Person is not
a corporation). For purposes of determining the percentage of Voting Power of a
Person with respect to the Company at any such time, such Voting Power shall be
calculated by dividing the number of votes such Person is entitled to cast by
the total number of votes which may be cast at the time of such calculation;
provided that in determining the total number of votes which may be cast at such
time the Person making such determination may rely on the information set forth
in the Company's most recent quarterly or annual report, and any current report
subsequent thereto, with respect to the number of outstanding Common Shares,
Class A Common Shares or Class B Common Shares, filed with the Securities and
Exchange Commission pursuant to the Exchange Act, unless such Person knows or
has reason to believe that the information contained therein is or has become
inaccurate.
2. Appointment of Rights Agent. The Company hereby appoints the Rights
Agent to act as agent for the Company and the holders of the Rights (who, in
accordance with Section 3 hereof, shall prior to the Distribution Date also be
the holders of the Common 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.
3. Issue of Right Certificates. (a) Until the earlier of (i) the tenth day
after the Shares Acquisition Date or (ii) the tenth Business Day (or such later
date as may be determined by action of the Board of Directors of the Company
prior to such time as any Person becomes an Acquiring Person) after the date of
the commencement by any Person (other than 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 Common Shares for or pursuant to the terms of any
such plan) of, or of the first public announcement of the intention of any
Person (other than 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 Common Shares for or pursuant to the terms of any such plan) to
commence, a tender or exchange offer the consummation of which would result in
any Person becoming the Beneficial Owner of either (i) 15% or more of the Voting
Power of the Common Shares or (ii) 35% or more of the Class A Common Shares then
outstanding (including any such date which is after the date of this Agreement
and prior to the issuance of the Rights; the earlier of such dates being herein
referred to as the "Distribution Date"), (x) the Rights will be evidenced
(subject to the provisions of Section 3(b) hereof) by the certificates for the
applicable Common Shares registered in the names of the holders thereof (which
certificates shall also be deemed to be Right Certificates) and not by separate
Right Certificates, and (y) the right to receive Right Certificates will be
transferable only in connection with the transfer of Common Shares. As soon as
practicable after the Distribution Date, the Company will prepare and execute,
the Rights Agent will countersign, and the Company will send or cause to be sent
(and the Rights Agent will, if requested, send) by first-class, 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, a Class A Right Certificate or Class B Right Certificate, as
applicable, in substantially the form of Exhibit A (a "Class A Right
Certificate") or Exhibit B (a "Class B Right Certificate"), as applicable,
evidencing one such Right for each Class A Common Share or Class B Common Share,
as applicable, so held. As of the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.
(b) On the Record Date, or as soon as practicable thereafter, the Company
will send a copy of a Summary of Rights to Purchase Common Shares, in
substantially the form of Exhibit C hereto (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 Record Date, until the Distribution Date, the Rights will
be evidenced by such certificates registered in the names of the holders thereof
together with a copy of the Summary of Rights attached thereto. Until the
Distribution Date (or the earlier of the Redemption Date or the Final Expiration
Date), the surrender for transfer of any certificate for Common Shares
outstanding on the Record Date, with or without a copy of the Summary of Rights
attached thereto, shall also constitute the transfer of the Rights associated
with the Common Shares represented thereby.
(c) Certificates for Common Shares which become outstanding (including,
without limitation, reacquired Common Shares referred to in the last sentence of
this paragraph (c)) after the Record Date but prior to the earliest of the
Distribution Date, the Redemption Date or the Final Expiration Date shall have
impressed on, printed on, written on or otherwise affixed to them the following
legend:
This certificate also evidences and entitles the holder hereof to
certain rights as set forth in a Rights Agreement between The
Providence Journal Company and The First National Bank of Boston, dated
as of May 8, 1996 (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 The Providence Journal Company.
Under certain circumstances, as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and will no longer be
evidenced by this certificate. The Providence Journal Company will mail
to the holder of this certificate a copy of the Rights Agreement
without charge after receipt of a written request therefor. Under
certain circumstances, as set forth in the Rights Agreement, Rights
issued to any Person who becomes an Acquiring Person (as defined in the
Rights Agreement) may become null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate 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.
4. Form of Right Certificates. The Right Certificates (and the forms of
election to purchase Common Shares and of assignment to be printed on the
reverse thereof) shall be substantially the same as Exhibit A, in the case of
Class A Rights, and Exhibit B, in the case of Class B Rights, and may have such
marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Rights
may from time to time be listed, or to conform to usage. Subject to the
provisions of Section 22 hereof, the Right Certificates shall entitle the
holders thereof to purchase such number of Class A Common Shares or Class B
Common Shares, as applicable, as shall be set forth therein at the price per
such Common Share set forth therein (the "Purchase Price"), but the number of
such Common Shares and the applicable Purchase Price shall be subject to
adjustment as provided herein.
5. Countersignature and Registration. The Right Certificates shall be
executed on behalf of the Company by its Chairman of the Board, its Chief
Executive Officer, its President, any of its Vice Presidents, or its Treasurer,
either manually or by facsimile signature, shall have affixed thereto the
Company's seal or a facsimile thereof, and shall be attested by the Secretary or
an Assistant Secretary of the Company, either manually or by facsimile
signature. The Right Certificates shall be manually countersigned by the Rights
Agent and shall not be valid for any purpose unless countersigned. In case any
officer of the Company who shall have signed any of the Right Certificates shall
cease to be such officer of the Company before countersignature by the Rights
Agent and issuance and delivery by the Company, such Right Certificates,
nevertheless, may be countersigned by the Rights Agent and issued and delivered
by the Company with the same force and effect as though the person who signed
such Right Certificates had not ceased to be such officer of the Company; and
any Right Certificate may be signed on behalf of the Company by any person who,
at the actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this 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, books for registration and transfer of the Right
Certificates issued hereunder. Such books shall show the names and addresses of
the respective holders of the Right Certificates, the number of Rights evidenced
on its face by each of the Right Certificates and the date of each of the Right
Certificates.
6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates. (a) Subject to the
provisions of Section 14 hereof, at any time after the Close of Business on the
Distribution Date, and at or prior to the Close of Business on the earlier of
the Redemption Date or the Final Expiration Date, any Class A Right Certificate
or Class B Right Certificate (other than such Right Certificates representing
Rights that have become void pursuant to Section 11(a)(ii) hereof or that have
been exchanged pursuant to Section 24 hereof) may be transferred, split up,
combined or exchanged for another Right Certificate or Right Certificates of the
same class, entitling the registered holder to purchase a like number of Common
Shares as the Right Certificate or Right Certificates surrendered then entitled
such holder to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Right Certificate or Right Certificates shall make such
request in writing delivered to the Rights Agent, and shall surrender the Right
Certificate or Right Certificates to be transferred, split up, combined or
exchanged at the principal office of the Rights Agent. Thereupon the Rights
Agent shall countersign and deliver to the person entitled thereto a Right
Certificate or Right Certificates, as the case may be, as so requested. The
Company may require payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer, split up,
combination or exchange of Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will make and deliver a new
Right Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.
(c) (i) Notwithstanding anything contained herein to the contrary, no
Person holding Class B Rights as of or after the date of this Agreement may
transfer, whether by sale, assignment, gift, devise, bequest, appointment or
otherwise, such Class B Right except to a "Permitted Transferee" of such holder,
provided, however, that a holder of Class B Rights may sell to the Company, and
the Company may purchase from such Person, Class B Rights. The term "Permitted
Transferee" shall have the following meaning:
(A) In the case of a holder of Class B Rights who is a natural
person holding beneficial ownership of the Class B Rights in question,
"Permitted Transferee" means: (1) the spouse of such holder of Class B
Rights, (2) a parent of such holder of Class B Rights, (3) a lineal
descendant of a parent of such holder of Class B Rights (said lineal
descendants, together with the holder of Class B Rights and his or her
parents and spouse, are hereinafter referred to as "Family Members" of
such holder of Class B Rights), (4) the trustee of a trust solely for
the benefit of one or more Family Members of such holder of Class B
Rights, (5) a corporation, all the outstanding capital stock of which
is owned by, a limited liability company, all the members of which are,
or a partnership, all of the partners of which are, Family Members who
are holders of Class B Rights; provided that if any share of capital
stock of such corporation (or any survivor of a merger or a
consolidation of such a corporation), or any membership or partnership
interest in such a limited liability company or partnership, as the
case may be, is acquired by any Person who is not a Family Member of a
holder of Class B Rights or which is not a corporation, all the
outstanding capital stock of which is owned by, a limited liability
company, all the membership interests of which are owned by, or a
partnership, all the partnership interests of which are owned by,
Family Members who are holders of Class B Rights, all Class B Rights
then held by such corporation, limited liability company or
partnership, as the case may be, shall be deemed without further act on
anyone's part to be converted into Class A Rights and shall thereupon
and thereafter be deemed to represent a like number of Class A Rights,
and (6) the estate of any such deceased holder of Class B Rights; and
(B) In the case of a holder of Class B Rights holding the
Class B Rights in question as trustee pursuant to a trust other than a
trust described in paragraph (c)(i)(C) below, "Permitted Transferee"
means (1) the Person who established such trust; and (ii) a Permitted
Transferee of the Person who established such trust determined pursuant
to paragraph (c)(i)(A) above;
(C) In the case of a holder of Class B Rights holding Class B
Rights in question as trustee pursuant to a trust which was irrevocable
on the record date for determining the persons to whom Class B Common
Shares were first distributed by the Company (the "Original Class B
Record Date"), "Permitted Transferee" means any Person to whom or for
whose benefit principal may be distributed either during or at the end
of the term of such trust whether by power of appointment or otherwise;
(D) In the case of a holder of Class B Rights holding record
(but not beneficial) ownership of Class B Rights in question as nominee
for the person who was the beneficial owner thereof on the Original
Class B Record Date, "Permitted Transferee" means such beneficial owner
and a Permitted Transferee of such beneficial owner determined pursuant
to the other clauses of this Section 6(c)(i);
(E) In the case of a holder of Class B Rights which is a
partnership or a limited liability company holding beneficial
ownership of the Class B Rights in question, "Permitted Transferee"
means any partner of such partnership or any member of such limited
liability company; provided that if any partnership or membership
interest in such partnership is acquired by any Person who is not a
Family Member of a holder of Class B Rights or which is not a
corporation, all the outstanding capital stock of which is owned by, a
limited liability company, all the membership interests of which are
owned by, or a partnership, all the partnership interests of which are
owned by, Family Members who are holders of Class B rights, all Class
B Rights then held by such partnership or limited liability company
shall be deemed without further act on anyone's part to be converted
into Class A Rights and shall thereupon and thereafter be deemed to
represent a like number of Class A Rights;
(F) In the case of a holder of Class B Rights which is a
corporation holding beneficial ownership of Class B Rights in
question, "Permitted Transferee" means any stockholder of such
corporation receiving Class B Rights through a dividend or through a
distribution made upon liquidation of such corporation and any
survivor of a merger or consolidation of such corporation; provided
that if any share of capital stock of such corporation (or any
survivor of a merger or a consolidation of such corporation) is
acquired by any person who is not a Family Member of a holder of Class
B Rights or which is not a corporation, all the outstanding capital
stock of which is owned by, a limited liability company, all the
membership interests of which are owned by, or a partnership, all the
partnership interests of which are owned by, Family Members who are
holders of Class B Rights, all Class B Rights then held by such
corporation shall be deemed without further act on anyone's part to be
converted into Class A Rights and shall thereupon and thereafter be
deemed to represent a like number of Class A Rights; and
(G) In the case of a holder of Class B Rights which is the
estate (or representative thereof) of a deceased holder of Class B
Rights and provided such deceased held beneficial ownership of the
Class B Rights in question, "Permitted Transferee" means a Permitted
Transferee of such deceased as determined pursuant to paragraphs
(c)(i)(A), (B) and (C) above, as the case may be.
(ii) Notwithstanding anything to the contrary set forth herein, any holder
of Class B Rights may pledge such Class B Rights to a pledgee pursuant to a bona
fide pledge of such Rights as collateral security for indebtedness due to the
pledgee, provided that such Rights shall not be transferred to or registered in
the name of the pledgee and shall remain subject to the provisions of this
paragraph (c). In the event of foreclosure or other similar action by the
pledgee, such pledged Class B Rights may only be transferred to a Permitted
Transferee of the pledgor or converted into Class A Rights, as the pledgee may
elect.
(iii) Any purported transfer of Class B Rights, other than to a Permitted
Transferee, including, without limitation, any transfer to a bankruptcy estate
of any Person who is holder of Class B Rights shall be null and void and of no
effect and the purported transfer by a holder of Class B Rights, other than to a
Permitted Transferee, including, without limitation, any transfer to a
bankruptcy estate of any Person who is holder of Class B Rights, will result in
the immediate and automatic conversion of the Class B Rights of such holder into
Class A Rights.
(iv) Class B Rights shall be registered in the name(s) of the beneficial
owner(s) thereof (as hereafter defined) and not in "street" or "nominee" names;
provided, however, that certificates representing Class B Rights may be
registered in "street" or nominee" name if such Rights are being held in such
manner only for the benefit of a holder of Class B Right(s) who is the
beneficial owner(s) of such Rights. For the purposes of this paragraph (c), the
term "beneficial owner(s)" of any Class B Rights shall mean the person or
persons who possess the power to dispose of, or to direct the disposition of,
such Rights. Any Class B Rights registered in "street" or "nominee" name may be
transferred to the beneficial owner of such Rights upon proof satisfactory to
the Company that such person is in fact the beneficial owner of such Rights. Any
Class B Rights to be registered in "street" or "nominee" name may be so
registered only upon proof satisfactory to the Company that such Rights are to
be held only for the benefit of a holder of Class B Right(s) who is the
beneficial owner(s) of such Rights.
(v) The Company shall note on the certificates representing the Class B
Rights the restrictions on transfer and registration of transfer imposed by this
paragraph (c). The Company may, as a condition to the transfer of or the
registration of transfer of Class B Rights to a purported Permitted Transferee,
require the furnishing of such affidavits or other proof as it deems necessary
to establish that such transferee is a Permitted Transferee.
(vi) For purposes of this paragraph (c):
(A) Each joint owner of Class B Rights shall be considered a holder of
Class B Rights of such Rights.
(B) A minor for whom Class B Rights are held pursuant to a Uniform Gifts to
Minors Act or similar laws shall be considered a holder of Class B Rights of
such Rights.
(C) The relationship of any Person that is derived by or through legal
adoption shall be considered a natural one.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) The registered holder of any Right Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein) 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 on the reverse side thereof duly executed,
to the Rights Agent at the principal office of the Rights Agent, together with
payment of the Purchase Price for each Common Share as to which the Rights are
exercised, at or prior to the earliest of (i) the Close of Business on May 7,
2006 (the "Final Expiration Date"), (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof (the "Redemption Date"), or (iii) the
time at which such Rights are exchanged as provided in Section 24 hereof.
(b) The Purchase Price for each Class A Common Share purchasable pursuant
to the exercise of a Class A Right shall initially be $70.00 (the "Class A
Purchase Price") and the purchase price for each Class B Common Share
purchasable pursuant to the exercise of a Class B Right shall be $70.00 (the
"Class B Purchase Price"), and shall be subject to adjustment from time to time
as provided in Section 11 or 13 hereof and shall be payable in lawful money of
the United States of America in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable Rights,
with the form of election to purchase duly executed, accompanied by payment of
the applicable 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 hereof by certified check, cashier's
check or money order payable to the order of the Company, the Rights Agent shall
thereupon promptly (i) (A) requisition from any transfer agent of the applicable
Common Shares certificates for the number of Common Shares to be purchased and
the Company hereby irrevocably authorizes its transfer agent to comply with all
such requests, or (B) requisition from the depositary agent depositary receipts
representing such number of Common Shares as are to be purchased (in which case
certificates for the Common 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 such request, (ii) when
appropriate, requisition from the Company the amount of cash to be paid in lieu
of issuance of fractional shares in accordance with Section 14 hereof, (iii)
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, deliver such cash to or upon
the order of the registered holder of such Right Certificate.
(d) 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 to the registered holder of such Right Certificate or to his duly
authorized assigns, subject to the provisions of Section 14 hereof.
8. Cancellation and Destruction of Right Certificates. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any 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.
9. Availability of Common Shares. The Company covenants and agrees that it
will cause to be reserved and kept available out of its authorized and unissued
Common Shares or any Common Shares held in its treasury, the number of Common
Shares of each class of Common Shares that will be sufficient to permit the
exercise in full of all outstanding Rights in accordance with Section 7. The
Company covenants and agrees that it will take all such action as may be
necessary to ensure that all Common Shares delivered upon exercise of Rights
shall, at the time of delivery of the certificates for such Common 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 Common Shares upon the exercise of Rights. The Company shall not, however,
be required to pay any transfer tax which may be payable in respect of any
transfer or delivery of Right Certificates to a Person other than, or the
issuance or delivery of certificates or depositary receipts for the Common
Shares in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or to issue or to deliver
any certificates or depositary receipts for Common Shares 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 Certificate at the time of surrender) or until it
has been established to the Company's reasonable satisfaction that no such tax
is due.
10. Common Shares Record Date. Each Person in whose name any certificate
for Common Shares is issued upon the exercise of Rights shall for all purposes
be deemed to have become the holder of record of the Common Shares 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
applicable 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 Common Shares transfer books of the Company are closed, such Person
shall be deemed to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day on which the Common
Shares transfer books of the Company are open. Prior to the exercise of the
Rights evidenced thereby, the holder of a Right Certificate shall not be
entitled to any rights of a holder of Common Shares for which the Rights shall
be exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and shall
not be entitled to receive any notice of any proceedings of the Company, except
as provided herein.
11. Adjustment of Purchase Price, Number of Shares or Number of Rights. The
Purchase Price, the number of Common Shares covered by each Right and the number
of Rights outstanding are subject to adjustment from time to time as provided in
this Section 11.
(a) (i) In the event the Company shall at any time after the date of this
Agreement (A) declare a dividend on the Class A Common Shares or the Class B
Common Shares payable in such Common Shares, (B) subdivide the outstanding Class
A Common Shares or the Class B Common Shares, (C) combine the Class A Common
Shares or the Class B Common Shares into a smaller number of such Common Shares
or (D) issue any shares of its capital stock in a reclassification of the Common
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(a), the applicable 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 related 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 Common 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;
provided, however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one Right.
(ii) Subject to Section 24 of this Agreement, in the event any Person
becomes an Acquiring Person, each holder of a Right shall thereafter have a
right to receive, upon exercise thereof at a price equal to the then current
applicable Purchase Price multiplied by the number of Class A Common Shares or a
Class B Common Shares, as applicable, for which such Right is then exercisable,
in accordance with the terms of this Agreement such number of Class A Common
Shares or Class B Common Shares, as applicable, of the Company as shall equal
the result obtained by (x) multiplying the then current applicable Purchase
Price by the number of such Common Shares for which such Right is then
exercisable and dividing that product by (y) 50% of the then current per share
market price of the Company's Class A Common Shares or Class B Common Shares, as
applicable (determined pursuant to Section 11(d) hereof) on the date of the
occurrence of such event. In the event that any Person shall become an Acquiring
Person and the Rights shall then be outstanding, the Company shall not take any
action which would eliminate or diminish the benefits intended to be afforded by
the Rights.
From and after the occurrence of such event, any Rights that are or were
acquired or beneficially owned by any Acquiring Person (or any Associate or
Affiliate of such Acquiring Person) shall be void and any holder of such Rights
shall thereafter have no right to exercise such Rights under any provision of
this Agreement. No Right Certificate shall be issued pursuant to Section 3 that
represents Rights beneficially owned by an Acquiring Person whose Rights would
be void pursuant to the preceding sentence or any Associate or Affiliate
thereof; no Right Certificate shall be issued at any time upon the transfer of
any Rights to an Acquiring Person whose Rights would be void pursuant to the
preceding sentence or any Associate or Affiliate thereof or to any nominee of
such Acquiring Person, Associate or Affiliate; and any Right Certificate
delivered to the Rights Agent for transfer to an Acquiring Person whose Rights
would be void pursuant to the preceding sentence shall be cancelled.
(iii) In the event that there shall not be sufficient Class A Common Shares
or Class B Common Shares, as applicable, issued but not outstanding or
authorized but unissued to permit the exercise in full of the related Rights in
accordance with the foregoing subparagraph (ii), the Company shall take all such
action as may be necessary to authorize additional Class A Common Shares or
Class B Common Shares, as applicable, for issuance upon exercise of the related
Rights.
(b) In case the Company shall fix a record date for the issuance of rights,
options or warrants to all holders of either Class A Common Shares or Class B
Common Shares entitling them (for a period expiring within 45 calendar days
after such record date) to subscribe for or purchase such Common Shares (or
shares having the same rights, privileges and preferences as such Common Shares
("Equivalent Common Shares")) or securities convertible into such Common Shares
or Equivalent Common Shares at a price per Common Share or Equivalent Common
Share (or having a conversion price per share, if a security convertible into
Common Shares or Equivalent Common Shares) less than the then current per share
market price of the related Common Shares on such record date, the applicable
Purchase Price to be in effect after such record date shall be determined by
multiplying such Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the number of such Common Shares
outstanding on such record date plus the number of such Common Shares which the
aggregate offering price of the total number of such Common Shares and/or
Equivalent Common Shares so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would purchase
at such current market price and the denominator of which shall be the number of
such Common Shares outstanding on such record date plus the number of such
additional Common Shares and/or Equivalent Common Shares to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible); provided, however, that in no event shall
the consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable upon
exercise of one such Right. In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the value
of such consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent. Common Shares owned by or held for the account of
the Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a record
date is fixed; and in the event that such rights, options or warrants are not so
issued, the applicable Purchase Price shall be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of the Class A Common Shares or the Class B Common
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 or assets (other than a regular quarterly cash
dividend or a dividend payable in Common Shares) or subscription rights or
warrants (excluding those referred to in Section 11(b) hereof), the applicable
Purchase Price to be in effect after such record date shall be determined by
multiplying such Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the then current per share market
price of the applicable Common Shares on such record date, less the fair market
value (as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the Rights
Agent) of the portion of the assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable to one such
Common Share and the denominator of which shall be such current per share market
price of such Common Shares; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company to be issued
upon exercise of one such Right. Such adjustments shall be made successively
whenever such a record date is fixed; and in the event that such distribution is
not so made, the Purchase Price shall again be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, the "current per share
market price" of any security (a "Security" for the purpose of this Section
11(d)(i)) on any date shall be deemed to be the average of the daily closing
prices per share of such Security for the 30 consecutive Trading Days (as
defined herein) immediately prior to such date; provided, however, that in the
event that the current per share market price of the Security is determined
during a period following the announcement by the issuer of such Security of (A)
a dividend or distribution on such Security payable in shares of such Security
or securities convertible into such shares, or (B) any subdivision, combination
or reclassification of such Security and prior to the expiration of 30 Trading
Days after the ex-dividend date for such dividend or distribution, or the record
date for such subdivision, combination or reclassification, then, and in each
such case, the current per share market price shall be appropriately adjusted to
reflect the current market price per share equivalent of such Security. The
closing price for each day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported 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, 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. 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
relevant Common Shares are not publicly held or 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, whose determination shall
be described in a statement filed with the Rights Agent.
(e) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the
applicable Purchase Price; provided, however, that any adjustments which by
reason of this Section 11(e) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 11 shall be made to the nearest cent or to the nearest one
one-millionth of a Common Share or one ten-thousandth of any other share or
security as the case may be. Notwithstanding the first sentence of this Section
11(e), any adjustment required by this Section 11 shall be made no later than
the earlier of (i) three years from the date of the transaction which requires
such adjustment or (ii) the date of the expiration of the right to exercise any
Rights.
(f) If, as a result of an adjustment made pursuant to Section 11(a) hereof,
the holder of any Right thereafter exercised shall become entitled to receive
any shares of capital stock of the Company other than Common 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 Common Shares
contained in Section 11(a) through (c), inclusive, and the provisions of
Sections 7, 9, 10 and 13 with respect to the Common Shares shall apply on like
terms to any such other shares.
(g) All Class A Rights or Class B Rights originally issued by the Company
subsequent to any adjustment made to the related Purchase Price hereunder shall
evidence the right to purchase, at such adjusted Purchase Price, the number of
Common Shares purchasable from time to time hereunder upon exercise of such
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Class A Purchase Price or the Class B
Purchase Price as a result of the calculations made in Sections 11(b) and (c),
each related Right outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase, at such adjusted
Purchase Price, that number of Class A Common Shares or Class B Common Shares
(calculated to the nearest one one-millionth of a Common Share), as applicable,
obtained by (i) multiplying (x) the number of shares covered by such Right
immediately prior to this adjustment by (y) the related Purchase Price in effect
immediately prior to such adjustment of such Purchase Price and (ii) dividing
the product so obtained by the related Purchase Price in effect immediately
after such adjustment of such Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the
Class A Purchase Price or the Class B Purchase Price to adjust the number of
related Rights, in substitution for any adjustment in the number of related
Common Shares purchasable upon the exercise of such Right. Each of the Class A
Rights or Class B Rights, as applicable, outstanding after such adjustment of
the number of such Rights shall be exercisable for the number of related Common
Shares for which such Right was exercisable immediately prior to such
adjustment. Each such Right held of record prior to such adjustment of the
number of such Rights shall become that number of Rights (calculated to the
nearest one ten-thousandth) obtained by dividing the related Purchase Price in
effect immediately prior to adjustment of such Purchase Price by such Purchase
Price in effect immediately after adjustment of such Purchase Price. The Company
shall make a public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the date on which
the related Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 10 days later than the date of
the public announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the Company
shall, as promptly as practicable, cause to be distributed to holders of the
applicable Right Certificates on such record date Right Certificates evidencing,
subject to Section 14 hereof, the additional Rights to which such holders shall
be entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders in substitution and replacement
for the Right Certificates held by such holders prior to the date of adjustment,
and upon surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein and shall be registered in
the names of the holders of Right Certificates on the record date specified in
the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or the
number of Common Shares issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to express the
Purchase Price and the number of Common Shares which were expressed in the
initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then par value, if any, of the related Common Shares
issuable upon exercise of the Class A Rights or Class B Rights, as applicable,
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 Class A Common Shares or Class B Common Shares, as
applicable, at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event the
issuing to the holder of any Right exercised after such record date of the
Common Shares and other capital stock or securities of the Company, if any,
issuable upon such exercise over and above the Common 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 such holder's right to receive such additional
shares upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Class A Purchase Price
or the Class B Purchase Price, as applicable, 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 related Common Shares, issuance wholly for cash of any
related Common Shares at less than the current market price, issuance wholly for
cash of related Common Shares or securities which by their terms are convertible
into or exchangeable for such Common Shares, dividends on related Common Shares
payable in such Common Shares or issuance of rights, options or warrants
referred to hereinabove in Section 11(b), hereafter made by the Company to
holders of such Common Shares shall not be taxable to such stockholders.
12. Certificate of Adjusted Purchase Price or Number of Shares. Whenever an
adjustment is made as provided in Section 11 or 13 hereof, the Company shall
promptly (a) prepare a certificate setting forth such adjustment, and a brief
statement of the facts accounting for such adjustment, (b) file with the Rights
Agent and with each transfer agent for the Common Shares or the Common 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 hereof.
13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power.
In the event, directly or indirectly, at any time after a Person has become an
Acquiring Person, (a) the Company shall consolidate with, or merge with and
into, any other Person, (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 any other Person (or the Company) or cash or any other property,
or (c) the Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell 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 other
than the Company or one or more of its wholly-owned Subsidiaries, then, and in
each such case, proper provision shall be made so that (i) each holder of a
Right (except as otherwise provided herein) shall thereafter have the right to
receive, upon the exercise thereof at a price equal to the then current related
Purchase Price multiplied by the number of Common Shares for which such Right is
then exercisable, in accordance with the terms of this Agreement and in lieu of
such Common Shares, such number of Common Shares of such other Person (including
the Company as successor thereto or as the surviving corporation) as shall equal
the result obtained by (A) multiplying the then current related Purchase Price
by the number of Common Shares for which such Right is then exercisable and
dividing that product by (B) 50% of the then current per share market price of
the Common Shares of such other Person (determined pursuant to Section 11(d)
hereof) on the date of consummation of such consolidation, merger, sale or
transfer; (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 Agreement; (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 hereof) 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 the Common Shares thereafter deliverable upon the exercise of
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 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 provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers.
14. Fractional Rights and Fractional Shares. (a) The Company shall not be
required to issue fractions of Rights or to distribute Right Certificates which
evidence fractional Rights. In lieu of such fractional Rights, there shall be
paid to the registered holders of the Right Certificates with regard to which
such fractional Rights would otherwise be issuable, an amount in cash equal to
the same fraction of the current market value of a whole Right. For the purposes
of this Section 14(a), the current market value of a whole Right shall be the
closing price of the Rights for the Trading Day immediately prior to the date on
which such fractional Rights would have been otherwise issuable. The closing
price for any day shall be the last sale price, regular way, or, in case no such
sale takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Rights are not listed or
admitted to trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Rights are listed or
admitted to trading or, if the Rights are not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter market,
as reported by NASDAQ or such other system then in use or, if on any such date
the Rights are not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a market
in the Rights selected by the Board of Directors of the Company. If on any such
date no such market maker is making a market in the Rights, the fair value of
the Rights on such date as determined in good faith by the Board of Directors of
the Company shall be used.
(b) The Company shall not be required to issue fractions of Common Shares
upon exercise of the Rights or to distribute certificates which evidence
fractional Common Shares. In lieu of fractional Common Shares, the Company shall
pay to the registered holders of Right Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of the
current market value of one related Common Share. For the purposes of this
Section 14(b), the current market value of a Common Share shall be the closing
price of a Common Share (as determined pursuant to the second sentence of
Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of
such exercise.
(c) The holder of a Right by the acceptance of the Right expressly waives
his right to receive any fractional Rights or any fractional shares upon
exercise of a Right (except as provided above).
15. Rights of Action. All rights of action in respect of this Agreement,
excepting the rights of action given to the Rights Agent under Section 18
hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common 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, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Right Certificate in the manner provided
in such Right Certificate and in this Agreement. Without limiting the foregoing
or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific performance of
the obligations under, and injunctive relief against actual or threatened
violations of the obligations of any Person subject to, this Agreement.
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) after the Distribution Date, the Right Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the principal
office of the Rights Agent, duly endorsed or accompanied by a proper instrument
of transfer; and
(c) the Company and the Rights Agent may deem and treat the person in whose
name the Right Certificate (or, prior to the Distribution Date, the 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.
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 Common 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 25 hereof), 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.
18. Concerning the Rights Agent. The Company agrees to pay to the Rights
Agent reasonable compensation for all services rendered by it hereunder and,
from time to time, on demand of the Rights Agent, its reasonable expenses and
counsel fees and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the acceptance
and administration of this Agreement, including the costs and expenses of
defending against any claim of liability 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 Agreement in reliance upon any Right Certificate or
certificate for the Common Shares or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement, or other paper or
document believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper person or persons, or
otherwise upon the advice of counsel as set forth in Section 20 hereof.
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 stock transfer or
corporate trust powers of the Rights Agent or any successor Rights Agent, shall
be the successor to the Rights Agent under this Agreement without the execution
or filing of any paper or any further act on the part of any of the parties
hereto; provided, that such corporation would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21 hereof. In case at the
time such successor Rights Agent shall succeed to the agency created by this
Agreement, any of the Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Right Certificates so countersigned;
and in case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
In case at any time the name of the Rights Agent shall be changed and at
such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
20. Duties of Rights Agent. The Rights Agent undertakes the duties and
obligations imposed by this Agreement upon the following terms and conditions,
by all of which the Company and the holders of Right Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the
Chief Executive Officer, the President, any Vice President, the Treasurer or the
Secretary of the Company and delivered to the Rights Agent; and such certificate
shall be full authorization to the Rights Agent for any action taken or suffered
in good faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any other
Person only for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right Certificate; nor shall it
be responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 11(a)(ii) hereof) or any adjustment in
the terms of the Rights (including the manner, method or amount thereof)
provided for in Section 3, 11, 13, 23 or 24, or the ascertaining of the
existence of facts that would require any such change or adjustment (except with
respect to the exercise of Rights evidenced by Right Certificates after actual
notice that such change or adjustment is required); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Common Shares to be issued pursuant to this
Agreement or any Right Certificate or as to whether any Common Shares will, when
issued, be validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the Chief Executive Officer, the President,
any Vice President, the Secretary or the Treasurer of the Company, and to apply
to such officers for advice or instructions in connection with its duties, and
it shall not be liable for any action taken or suffered by it in good faith in
accordance with instructions of any such officer or for any delay in acting
while waiting for those instructions.
(h) The Rights Agent and any stockholder, director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other securities
of the Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting in any
other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or through
its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common Shares by registered or certified mail, and to the holders of the
Right Certificates by first-class mail. The Company may remove the Rights Agent
or any successor Rights Agent upon 30 days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the Common Shares 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 Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right Certificate
(who shall, with such notice, submit his Right Certificate for inspection by the
Company), then the registered holder of any Right Certificate may apply to any
court of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be a corporation organized and doing business under the laws of the United
States or of any state of the United States which is authorized under such laws
to exercise corporate trust or stock transfer powers and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50 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 mail a notice thereof in writing to the registered
holders of the Right Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Right Certificates evidencing Rights in such 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 Agreement.
23. Redemption. (a) The Board of Directors of the Company may, at its
option, at any time prior to such time as any Person becomes an Acquiring
Person, redeem all but not less than all the then outstanding Rights at a
redemption price of $.01 per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date hereof
(such redemption price being hereinafter referred to as the "Redemption Price").
The redemption of the Rights by the Board of Directors of the Company may be
made effective at such time, on such basis and with such conditions as the Board
of Directors of the Company in its sole discretion may establish.
(b) Immediately upon the action of the Board of Directors of the Company
ordering the redemption of the Rights pursuant to paragraph (a) of this Section
23, and without any further action and without any notice, the right to exercise
the Rights will terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price. The Company shall promptly give public
notice of any such redemption; provided, however, that the failure to give, or
any defect in, any such notice shall not affect the validity of such redemption.
Within 10 days after such action of the Board of Directors of the Company
ordering the redemption of the Rights, the Company shall mail a notice of
redemption to all the holders of the then outstanding Rights 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 24 hereof, and
other than in connection with the purchase of Common Shares prior to the
Distribution Date.
24. Exchange. (a) The Board of Directors of the Company may, at its option,
at any time after any Person becomes an Acquiring Person, exchange all or part
of the then outstanding and exercisable Rights (which shall not include Rights
that have become void pursuant to the provisions of Section 11(a)(ii) hereof)
for the applicable Common Shares at an exchange ratio of one such Common Share
per related Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof (such exchange
ratio being hereinafter referred to as the "Exchange Ratio"). Notwithstanding
the foregoing, the Board of Directors of the Company shall not be empowered to
effect such exchange at any time after any Person (other than the Company, any
Subsidiary of the Company, or 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 Voting Power of the
Common Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to paragraph (a) of this Section 24
and without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of the applicable Common Shares equal to
the number of such Rights held by such holder multiplied by the applicable
Exchange Ratio. The Company shall promptly give public notice of any such
exchange; provided, however, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. The Company promptly
shall mail a notice of any such exchange to all of the holders of such Rights at
their last addresses as they appear upon the registry books of the Rights Agent.
Any notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of exchange 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 Rights which have become void pursuant to the
provisions of Section 11(a)(ii) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient Class A Common Shares
or Class B Common Shares issued but not outstanding or authorized but unissued
to permit any exchange of Rights as contemplated in accordance with this Section
24, the Company shall take all such action as may be necessary to authorize
additional Class A Common Shares or Class B Common Shares, as applicable, for
issuance upon exchange of the Rights.
(d) The Company shall not be required to issue fractions of Class A Common
Shares or Class B Common Shares or to distribute certificates which evidence
fractional Class A Common Shares or Class B 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 an amount in cash equal to the same fraction of the
current market value of such whole Common Share. For the purposes of this
paragraph (d), the current market value of a whole Common Share shall be the
closing price of a Common Share (as determined pursuant to the second sentence
of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of
exchange pursuant to this Section 24.
25. Notice of Certain Events. (a) In case the Company shall propose (i) to
pay any dividend payable in stock of any class to the holders of its Common
Shares or to make any other distribution to the holders of its Common Shares
(other than a regular quarterly cash dividend), (ii) to offer to the holders of
its Common Shares rights or warrants to subscribe for or to purchase any
additional Common Shares or shares of stock of any class or any other
securities, rights or options, (iii) to effect any reclassification of its
Common Shares (other than a reclassification involving only the subdivision of
outstanding Common Shares), (iv) 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, (v) to effect the
liquidation, dissolution or winding up of the Company, or (vi) 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 each holder of a Right
Certificate, in accordance with Section 26 hereof, a notice of such proposed
action, which shall specify the record date for the purposes of such stock
dividend, or distribution of rights or warrants, or the date on which such
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 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
(i) or (ii) above at least 10 days prior to the record date for determining
holders of the Common Shares for purposes of such action, and in the case of any
such other action, at least 10 days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of the
Common Shares, whichever shall be the earlier.
(b) In case the event set forth in Section 11(a)(ii) hereof shall occur,
then the Company shall as soon as practicable thereafter give to each holder of
a Right Certificate, in accordance with Section 26 hereof, a notice of the
occurrence of such event, which notice shall describe such event and the
consequences of such event to holders of Rights under Section 11(a)(ii) hereof.
26. Notices. Notices or demands authorized by this Agreement to be given or
made by the Rights Agent or by the holder of any Right Certificate to or on the
Company shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Rights
Agent) as follows:
The Providence Journal Company
75 Fountain Street
Providence, Rhode Island 02902
Attention: John L. Hammond, Esq.
Vice President-General Counsel
& Chief Administrative Officer
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
The First National Bank of Boston
Shareholder Services Division
Mail Stop 45-02-16
150 Royall Street
Canton, Massachusetts 02021
Attention: Colleen H. Shea
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
27. Supplements and Amendments. The Company may from time to time
supplement or amend this Agreement without the approval of any holders of Right
Certificates in order to cure any ambiguity, to correct or supplement any
provision contained herein which may be defective or inconsistent with any other
provisions herein, or to make any other provisions with respect to the Rights
which the Company may deem necessary or desirable, any such supplement or
amendment to be evidenced by a writing signed by the Company and the Rights
Agent; provided, however, that from and after such time as any Person becomes an
Acquiring Person, this Agreement shall not be amended in any manner which would
adversely affect the interests of the holders of Rights. Without limiting the
foregoing, the Company may at any time prior to such time as any Person becomes
an Acquiring Person amend this Agreement to lower the thresholds set forth in
Sections 1(a) and 3(a) with respect to the Voting Power of the Common Shares to
not less than 10% and with respect to the Voting Power of the Class A Common
Shares to not less than 25%.
28. Successors. All the covenants and provisions of this Agreement by or
for the benefit of the Company or the Rights Agent shall bind and inure to the
benefit of their respective successors and assigns hereunder.
29. Benefits of this Agreement. Nothing in this 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 Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date, the Common Shares).
30. Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or other authority to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
31. Governing Law. This Agreement and each Right Certificate issued
hereunder shall be deemed to be a contract made under the laws of the State of
Delaware 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.
32. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
33. Descriptive Headings. Descriptive headings of the several Sections of
this Agreement are inserted for convenience only and shall not control or affect
the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.
THE PROVIDENCE JOURNAL COMPANY
Attest:
By__________________________ By________________________________
Name: Name:
Title: Title:
THE FIRST NATIONAL BANK OF BOSTON
Attest:
By_________________________ By________________________________
Name: Name:
Title: Title:
