<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
--------------
PRONET INC.
(Exact name of registrant as specified in its charter)
DELAWARE 75-1832168
(State of Incorporation (I.R.S. Employer
or organization) Identification Number)
600 DATA DRIVE
SUITE 100
PLANO, TEXAS 75075
(Address of principal (Zip code)
executive offices)
Securities to be registered pursuant to Section 12(b) of the Act: NONE
Securities to be registered pursuant to Section 12(g) of the Act:
TITLE OF EACH CLASS
TO BE SO REGISTERED
-------------------
RIGHTS TO PURCHASE SERIES A JUNIOR PARTICIPATING PREFERRED STOCK,
PAR VALUE $1.00 PER SHARE
<PAGE>
ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED
On March 30, 1995, the Board of Directors of ProNet Inc., a Delaware
corporation (the "Company"), declared a dividend of one preferred share
purchase right (a "Right") for each outstanding share of common stock, par
value $.01 per share (the "Common Shares"), of the Company. The dividend is
payable to the stockholders of record on April 10, 1995 (the "Record Date").
As of March 31, 1995, 6,128,131 Common Shares were issued and outstanding.
Each Right entitles the registered holder to purchase from the Company one
one-thousandth of a share of Series A Junior Participating Preferred Stock,
par value $1.00 per share (the "Preferred Shares"), of the Company, at a
price of $105 per one one-thousandth of a Preferred Share (the "Purchase
Price"), subject to adjustment. The description and terms of the Rights
are set forth in a Rights Agreement (the "Rights Agreement") dated as of
April 5, 1995, between the Company and Chemical Shareholder Services Group,
Inc., as Rights Agent (the "Rights Agent").
DETACHMENT OF RIGHTS; EXERCISE. Initially, the Rights will attach to
all Common Share certificates representing outstanding shares and no separate
Right Certificate will be distributed. The Rights will separate from the
Common Shares and a Distribution Date will occur upon the earlier of (i) 10
business days following a public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") has acquired
beneficial ownership of 20% or more of the outstanding Voting Shares (as
defined in the Rights Agreement) of the Company, or (ii) 10 business days
following the commencement or announcement of an intention to commence a
tender offer or exchange offer the consummation of which would result in the
beneficial ownership by a person or group of 20% or more of such outstanding
Voting Shares.
Until the Distribution Date (or earlier redemption or expiration of the
Rights) (i) the Rights will be evidenced, with respect to the Common Shares
outstanding on the Record Date, by the certificates representing such Common
Shares with a copy of the Summary of Rights to Purchase Preferred Shares
included as Exhibit 4 hereto (the "Summary of Rights") attached thereto,
(ii) the Rights will be transferred with and only with the Common Shares,
(iii) new Common Share certificates issued after the Record Date, upon
transfer or new issuance of the Common Shares, will contain a notation
incorporating the Rights Agreement by reference, and (iv) the surrender for
transfer of any certificates for Common Shares 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 Shares represented by such certificate.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights (the "Right Certificates") will be mailed
to holders of record of the Common Shares as of the close of business on the
Distribution Date and such separate Right Certificates alone will thereafter
evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on April 21, 2005 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or the Rights are earlier redeemed or exchanged by
the Company as described below.
If a person or group were to acquire 20% or more of the Voting Shares of
the Company, each Right then outstanding (other than Rights beneficially owned
by the Acquiring Person which would become null and void) would become a right
to buy that number of Common Shares (or under certain circumstances, the
equivalent number of one one-thousandths of a Preferred Share) that at the
time of such acquisition would have a market value of two times the Purchase
Price of the Right.
If the Company were acquired in a merger or other business combination
transaction or more than 50% of its consolidated assets or earning power were
sold, 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 would have a
market value of two times the Purchase Price of the Right.
<PAGE>
PREFERRED SHARES. The dividend and liquidation rights, and the non-
redemption feature, of the Preferred Shares are designed so that the value of
one one-thousandth of a Preferred Share purchasable upon exercise of each
Right will approximate the value of one Common Share. The Preferred Shares
issuable upon exercise of the Rights will be non-redeemable and rank junior to
all other series of the Company's preferred stock. Each whole Preferred Share
will be entitled to receive a quarterly preferential dividend in an amount per
share equal to the greater of (i) $1.00 in cash, or (ii) in the aggregate,
1,000 times the dividend declared on the Common Shares. In the event of
liquidation, the holders of the Preferred Shares will be entitled to receive a
preferential liquidation payment equal to the greater of (i) $1,000 per share,
or (ii) in the aggregate, 1,000 times the payment made on the Common Shares.
In the event of any merger, consolidation or other transaction in which Common
Shares are exchanged for or changed into other stock or securities, cash or
other property, each whole Preferred Share will be entitled to receive 1,000
times the amount received per Common Share. Each whole Preferred Share shall
be entitled to 1,000 votes on all matters submitted to a vote of the
stockholders of the Company, and Preferred Shares shall generally vote
together as one class with the Common Stock and any other capital stock on all
matters submitted to a vote of stockholders of the Company.
The offer and sale of the Preferred Shares issuable upon exercise of the
Rights will be registered with the Securities and Exchange Commission and such
registration will not be effective until the Rights become exercisable.
ANTIDILUTION AND OTHER ADJUSTMENTS. The number of one one-thousandths
of a Preferred Share or other securities or property issuable upon exercise of
the Rights, and the Purchase Price payable, are subject to customary
adjustments from time to time to prevent dilution.
The number of outstanding Rights and the number of one one-thousandths
of a Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such
case, prior to the Distribution Date.
EXCHANGE OPTION. At any time after the acquisition by a person or group
of affiliated or associated persons of beneficial ownership of 20% or more of
the outstanding Voting Shares of the Company and before the acquisition by a
person or group of 50% or more of the outstanding Voting Shares of the
Company, the Board of Directors may, at its option, issue Common Shares in
mandatory redemption of, and in exchange for, all or part of the then
outstanding and exercisable Rights (other than Rights owned by such person or
group which would become null and void) at an exchange ratio of one Common
Share (or one one-thousandth of a Preferred Share) for each two Common Shares
for which each Right is then exercisable, subject to adjustment.
REDEMPTION OF RIGHTS. At any time prior to the first public
announcement that a person or group has become the beneficial owner of 20% or
more of the outstanding Voting Shares, the Board of Directors of the Company
may redeem all but not less than all the then outstanding Rights at a price of
$0.01 per Right (the "Redemption Price"). The redemption of the Rights may be
made effective at such time, on such basis and with such conditions as the
Board of Directors in its sole discretion may establish. Immediately upon the
action of the Board of Directors ordering 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.
NO RIGHTS AS STOCKHOLDER. 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.
AMENDMENT OF RIGHTS. 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 extend the Final Expiration Date, and,
provided a Distribution Date has not occurred, to extend the period during
which the Rights may be redeemed, except that after the first public
announcement that a person or group has become
2
<PAGE>
the beneficial owner of 20% or more of the outstanding Voting Shares, no
such amendment may materially and adversely affect the interests of the holders
of the Rights.
The foregoing description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights Agreement, form of
Certificate of Designation of Series A Junior Participating Preferred Stock,
form of Right Certificate, form of the Summary of Rights and the specimen of
the legend to be placed on new Common Share certificates, filed as exhibits
hereto and incorporated by reference herein.
ITEM 2. EXHIBITS.
1. Rights Agreement, dated as of April 5, 1995, between the Company
and the Rights Agent, specifying the terms of the Rights, which includes the
form of Certificate of Designation of Series A Junior Participating Preferred
Stock as Exhibit A, the form of Right Certificate as Exhibit B and the form of
the Summary of Rights as Exhibit C.
2. Form of Certificate of Designation of Series A Junior
Participating Preferred Stock (included as Exhibit A to the Rights Agreement
filed as Exhibit 1 hereto) setting forth the terms of the Series A Junior
Participating Preferred Stock, par value $.001 per share.
3. Form of Right Certificate (included as Exhibit B to the Rights
Agreement filed as Exhibit 1 hereto). Pursuant to the rights Agreement,
printed Right Certificates will not be delivered until as soon as practicable
after the Distribution Date.
4. Form of Summary of Rights to Purchase Preferred Shares (included
as Exhibit C to Rights Agreement filed as Exhibit 1 hereto) which, together
with certificates representing the outstanding Common Shares of the Company,
shall represent the Rights prior to the Distribution Date.
5. Specimen of legend to be placed, pursuant to Section 3(d) of the
Rights Agreement, on all new Common Share certificates issued by the Company
after April 10, 1995 and prior to the Distribution Date upon transfer,
exchange or new issuance.
3
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereto duly authorized.
PRONET INC.
Date: April 7, 1995 By: /s/ Mark A. Solls
-------------------------------
Name: Mark A. Solls
Title: Secretary and General Counsel
4
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIALLY
NUMBER DESCRIPTION NUMBERED PAGE
- - -------- ----------- --------------
<S> <C> <C>
1 Rights Agreement, dated as of April 5, 1995,
between the Company and Chemical Shareholder
Services Group, Inc., as Rights Agent,
specifying the terms of the Rights, which
includes the form of Certificate of Designation
of Series A Junior Participating Preferred
Stock as Exhibit A, the form of Right
Certificate as Exhibit B and the form of the
Summary of Rights as Exhibit C.
2 Form of Certificate of Designation of Series A
Junior Participating Preferred Stock (included
as Exhibit A to the Rights Agreement filed as
Exhibit 1 hereto) setting forth the terms of
the Series A Junior Participating Preferred
Stock, par value $.001 per share.
3 Form of Right Certificate (included as Exhibit
B to the Rights Agreement filed as Exhibit 1
hereto). Pursuant to the rights Agreement,
printed Right Certificates will not be
delivered until as soon as practicable after
the Distribution Date.
4 Form of Summary of Rights to Purchase Preferred
Shares (included as Exhibit C to Rights
Agreement filed as Exhibit 1 hereto) which,
together with certificates representing the
outstanding Common Shares of the Company, shall
represent the Rights prior to the Distribution
Date.
5 Specimen of legend to be placed, pursuant to
Section 3(d) of the Rights Agreement, on all
new Common Share certificates issued by the
Company after April 10, 1995 and prior to the
Distribution Date upon transfer, exchange or
new issuance.
</TABLE>
<PAGE>
RIGHTS AGREEMENT
between
PRONET INC.
and
CHEMICAL SHAREHOLDER SERVICES GROUP, INC.,
as Rights Agent
Dated as of April 5, 1995
<PAGE>
TABLE OF CONTENTS
Section 1. Certain Definitions . . . . . . . . . . . . . .-1-
Section 2. Appointment of Rights Agent . . . . . . . . . -10-
Section 3. Issue of Right Certificates . . . . . . . . . -11-
Section 4. Form of Right Certificates. . . . . . . . . . -13-
Section 5. Execution, Authentication and Delivery. . . . -15-
Section 6. Registration, Registration of Transfer and
Exchange. . . . . . . . . . . . . . . . . . . -16-
Section 7. Mutilated, Destroyed, Lost and Stolen Right
Certificates. . . . . . . . . . . . . . . . . -18-
Section 8. Exercise of Rights; Purchase Price;
Expiration Date of Rights . . . . . . . . . . -19-
Section 9. Cancellation and Destruction of Right
Certificates. . . . . . . . . . . . . . . . . -21-
Section 10. Reservation and Availability of Shares. . . . -22-
Section 11. Record Date . . . . . . . . . . . . . . . . . -23-
Section 12. Adjustment of Purchase Price, Number of
Shares or Number of Rights. . . . . . . . . . -24-
Section 13. Certificate of Adjusted Purchase Price or
Number of Shares. . . . . . . . . . . . . . . -34-
Section 14. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power . . . . . . . . . . . -34-
Section 15. Fractional Rights and Fractional Shares . . . -36-
Section 16. Rights of Action. . . . . . . . . . . . . . . -38-
Section 17. Agreement of Right Holders. . . . . . . . . . -39-
Section 18. Right Certificate Holder Not Deemed a
Stockholder . . . . . . . . . . . . . . . . . -40-
Section 19. Concerning the Rights Agent . . . . . . . . . -41-
Section 20. Duties of Rights Agent. . . . . . . . . . . . -41-
Section 21. Merger or Consolidation or Change of Name of
Rights Agent. . . . . . . . . . . . . . . . . -44-
Section 22. Change of Rights Agent. . . . . . . . . . . . -45-
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Section 23. Issuance of New Right Certificates. . . . . . -46-
Section 24. Redemption. . . . . . . . . . . . . . . . . . -47-
Section 25. Mandatory Redemption and Exchange . . . . . . -48-
Section 26. Notice of Certain Events. . . . . . . . . . . -50-
Section 27. Securities Laws Registrations . . . . . . . . -51-
Section 28. Notices . . . . . . . . . . . . . . . . . . . -52-
Section 29. Supplements and Amendments. . . . . . . . . . -53-
Section 30. Successors. . . . . . . . . . . . . . . . . . -54-
Section 31. Benefits of this Agreement. . . . . . . . . . -54-
Section 32. Severability. . . . . . . . . . . . . . . . . -54-
Section 33. Governing Law . . . . . . . . . . . . . . . . -54-
Section 34. Counterparts. . . . . . . . . . . . . . . . . -54-
Section 35. Descriptive Headings. . . . . . . . . . . . . -55-
Exhibits
Exhibit A - Certificate of Designation of Preferred Shares Series A
Junior Participating Preferred Stock
Exhibit B - Form of Right Certificate
Exhibit C - Summary of Rights To Purchase Preferred Shares
-ii-
<PAGE>
RIGHTS AGREEMENT
This Rights Agreement, dated as of April 5, 1995, is between
ProNet Inc., a Delaware corporation (the "Company"), and Chemical
Shareholder Services Group, Inc., as Rights Agent.
WHEREAS, the Board of Directors of the Company, having
determined its actions to be in the interests of the Company, has
authorized the creation of Rights, has authorized and directed
the issuance to the Holders of record of Common Shares of the
Company outstanding on April 10, 1995 (the "Record Date"), of one
Right with respect to each Common Share of the Company
outstanding on the Record Date, and has further authorized and
directed the issuance of one Right with respect to each Common
Share that shall become outstanding between the Record Date and
the earlier of the Distribution Date, the Redemption Date and the
Final Expiration Date; and
WHEREAS, the Board of Directors of the Company has
authorized and directed that the terms and conditions under which
the Rights are to be distributed, including without limitation
those affecting the exercise thereof, the securities or other
property to be acquired thereby and the purchase price to be paid
therefor, shall be set forth in a written agreement between the
Company and a rights agent made for the benefit of the holders of
the Rights to the extent so provided therein.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereto agree as
follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this
Agreement, the following terms shall have the meanings indicated:
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(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 20% or more of the
Voting Shares of the Company then outstanding, but shall not
include the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of
the Company or any trustee of or fiduciary with respect to
any such plan when acting in such capacity. Notwithstanding
the foregoing, no Person shall become an "Acquiring Person"
as the result of an acquisition of Voting Shares by the
Company which, by reducing the number of shares outstanding,
increases the proportionate number of shares beneficially
owned by such Person to 20% or more of the Voting Shares of
the Company then outstanding; PROVIDED, HOWEVER, that, if a
Person shall become the Beneficial Owner of 20% or more of
the Voting Shares of the Company then outstanding by reason
of share purchases by the Company and shall, after such
share purchases by the Company and at a time when such
Person is the Beneficial Owner of 20% or more of the Voting
Shares of the Company then outstanding, become the
Beneficial Owner of any additional Voting Shares of the
Company, then such Person shall be deemed to be an
"Acquiring Person". Notwithstanding the foregoing, if the
Board of Directors of the Company determines in good faith
that a Person who would 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 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.
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(b) "Agreement" shall mean this Rights Agreement as
hereafter amended from time to time.
(c) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of
the General Rules and Regulations under the Exchange Act as
in effect on the date of this Agreement.
(d) A Person shall be deemed the "Beneficial Owner" of
and shall be deemed to "own beneficially" any securities
which (without duplication):
(1) such Person or any of such Person's
Affiliates or Associates has the right to acquire
(whether such right is exercisable immediately or only
after the passage of time, compliance with regulatory
requirements, the fulfillment of a condition or
otherwise) pursuant to any oral or written agreement,
arrangement or understanding (other than customary
agreements with and between underwriters and selling
group members (A) with respect to a bona fide public
offering of securities or (B) in connection with a
placement of securities pursuant to Rule 144A under the
Securities Act), or upon the exercise of conversion
rights, exchange rights, rights (other than these
Rights), warrants or options, or otherwise; or 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, (i) 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 (ii) securities issuable upon
exercise of Rights at any time prior to any Person
becoming an Acquiring Person;
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<PAGE>
(2) such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has
the right to vote or dispose of or has "beneficial
ownership" of (as determined pursuant to Rule 13d-3 of
the Exchange Act), including pursuant to any agreement,
arrangement or understanding, whether or not in
writing; PROVIDED, HOWEVER, that a Person shall not be
deemed the Beneficial Owner of, or to "beneficially
own," any security under this subparagraph (3) as a
result of an agreement, arrangement or understanding to
vote such security (A) which arises solely from a
revocable proxy or consent given to such Person in
response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable
rules and regulations of the Exchange Act and (B) is
not also then reportable on Schedule 13D under the
Exchange Act (or any comparable or successor report);
or
(3) 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 oral or written agreement, arrangement or
understanding (other than customary agreements with and
between underwriters and selling group members (A) with
respect to a bona fide public offering of securities or
(B) in connection with a placement of securities
pursuant to Rule 144A under the Securities Act) for the
purpose of acquiring, holding, voting (other than
voting pursuant to a revocable proxy as contemplated by
the proviso to subparagraph (3) of this paragraph) or
disposing of any securities of the Company.
Notwithstanding anything in this definition to the
contrary, the phrase "then outstanding", when used with
reference to a Person's Beneficial Ownership of securities
of the Company (or to the number of such securities
"beneficially owned"), shall mean
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<PAGE>
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.
(e) "Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in
the State of Texas are authorized or obligated by law or
executive order to close.
(f) "Close of Business" on any given date shall mean
5:00 P.M., Dallas, Texas time, on such date; PROVIDED,
HOWEVER, that if such date is not a Business Day it shall
mean 5:00 P.M., Dallas, Texas time, on the next succeeding
Business Day.
(g) "Closing Price", with respect to any security,
shall mean the last sale price, regular way, on a specific
Trading Day or, in case no such sale takes place on such
Trading 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 such security is not then
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 such security is listed or admitted to trading or, if
such security is not then listed or admitted to trading on
any national securities exchange, the last quoted price or,
if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated
Quotations System or such other system then in use, or, if
on any such Trading Day such 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 such security selected by
-5-
<PAGE>
the Board of Directors of the Company. If such security is
not publicly held or so listed or traded, "Closing Price"
shall mean the fair value per unit of such security as
determined in good faith by the Board of Directors of the
Company, whose determination shall be described and the
Closing Price set forth in a statement filed with the Rights
Agent.
(h) "Common Shares" when used with reference to the
Company shall mean shares of capital stock of the Company
which have no preference over any other class of stock with
respect to dividends or assets, which are not redeemable at
the option of the Company and with respect to which no
sinking, purchase or similar fund is provided and shall
initially mean the shares of Common Stock, par value $.01,
of the Company. "Common Shares" when used with reference to
any Person other than the Company shall, if used with
reference to a corporation, 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 and, if used with
reference to any other Person, mean the equity interest in
such Person (or, if the net worth determined in accordance
with generally accepted accounting principles of another
Person (other than an individual) which controls such
first-mentioned Person is greater than such first-mentioned
Person, then such other Person) with the greatest voting
power or managerial power with respect to the business and
affairs of such Person.
(i) "Company" shall mean ProNet Inc., a Delaware
corporation, and its successors.
(j) "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the
Board, its President or a Vice President, and by
-6-
<PAGE>
its Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary, and delivered to the Rights Agent.
(k) "Corporate Trust Office" means the principal
office of the Rights Agent at which it administers its
corporate trust business, which, in the case of Chemical
Shareholder Services Group, Inc. shall, until hereafter
changed, be its office at 2323 Bryan Street, Suite 2300,
Dallas, Texas 75201.
(l) "Distribution Date" shall mean the earlier of (1)
the tenth Business Day after the Shares Acquisition Date or
(2) 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 commencement by any
Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any
Subsidiary of the Company, or any trustee of or fiduciary
with respect to any such plan when acting in such capacity)
of, or after the date of the first public announcement of
the intent of any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company, or any trustee
of or fiduciary with respect to any such plan when acting in
such capacity) to commence, a tender or exchange offer the
consummation of which would result in any Person becoming
the Beneficial Owner of 20% or more of the then outstanding
Voting Shares of the Company; PROVIDED, HOWEVER, that an
occurrence described in clause (1) of this definition above
shall not cause the occurrence of the Distribution Date if
the Board of Directors of the Company shall, prior to such
tenth Business Day (or such later date as described in
clause (2) above), determine that such tender or exchange
offer is spurious, unless, thereafter, the Board of
Directors of the Company shall make a contrary
determination, in which event the
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<PAGE>
Distribution Date shall occur on the later to occur of such tenth Business
Day (or such later date as described in clause (2) above) and the date
of such latter determination.
(m) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and any successor statute thereto.
(n) "Final Expiration Date" shall mean the Close of Business on
February 10, 2005.
(o) "Person" shall mean any individual, firm, corporation,
partnership, limited partnership, limited liability company, trust or
other entity, and shall include any successor (by merger or otherwise)
of such entity.
(p) "Preferred Shares" shall mean shares of Series A Junior
Participating Preferred Stock, par value $1.00 per share, of the
Company having the rights and preferences set forth in the form of
Certificate of Designation of Series A Junior Participating Preferred
Stock attached hereto as EXHIBIT A.
(q) "Purchase Price" shall mean the initial price at which the
holder of a Right may, subject to the terms and conditions of this
Agreement, purchase one one-thousandth (1/1000) of a Preferred Share
(which initial price is set forth in Section 8(b) hereof), as such
price shall be adjusted pursuant to the terms of this Agreement.
(r) "Redemption Date" shall mean the time at which the Rights are
redeemed pursuant to Section 24 herein or the time at which all of the
Rights are mandatorily redeemed and exchanged pursuant to Section 25
hereof.
(s) "Redemption Price" shall have the meaning specified in Section
24(b) herein.
(t) "Right" shall mean one preferred share purchase right which
initially represents the right of the registered holder thereof to
purchase one one-thousandth
-8-
<PAGE>
(1/1000) of a Preferred Share upon the terms and subject to the conditions
herein set forth.
(u) "Right Certificate" shall mean a certificate, in substantially
the form of EXHIBIT B attached to this Rights Agreement, evidencing the
Rights registered in the name of the holder thereof.
(v) "Rights Agent" shall mean Chemical Shareholders Services Group,
Inc., a Delaware corporation, and any successor thereto appointed in
accordance with the terms hereof, in its capacity as agent for the
Company pursuant to this Agreement.
(w) "Rights Register" and "Rights Registrar" shall have the meanings
specified in Section 6.
(x) "Securities Act" shall mean the Securities Act of 1933, as
amended, and any successor statute thereto.
(y) "Shares Acquisition Date" shall mean the first date of public
announcement (which for purposes of this definition shall include without
limitation a report filed pursuant to Section 13(d) or Section 16(a) of
the Exchange Act) by the Company or an Acquiring Person that an Acquiring
Person has become such.
(z) "Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the outstanding capital stock or other
equity interests having ordinary voting power in the election of
directors or similar officials is owned, directly or indirectly, by
such Person.
(aa) "Summary of Rights" shall mean a Summary of Rights to Purchase
Preferred Shares in substantially the form attached as EXHIBIT C to this
Agreement.
(ab) "Trading Day" shall mean a day on which the principal national
securities exchange on which any of the Voting Shares of the Company are
listed or admitted to
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trading is open for the transaction of business or, if none of the Voting
Shares of the Company is listed or admitted to trading on any national
stock exchange, a Business Day.
(ac) "Voting Shares" shall mean (1) the Common Shares of the Company
and (2) any other shares of capital stock of the Company entitled to vote
generally in the election of directors or entitled to vote together with
the Common Shares in respect of any merger or consolidation of the
Company, any sale of all or substantially all of the Company's assets or
any liquidation, dissolution or winding up of the Company. Whenever any
provision of this Agreement requires a determination of whether a number
of Voting Shares comprising a specified percentage of such Voting Shares
is, was or will be beneficially owned or has been voted, tendered,
acquired, sold or otherwise disposed of or a determination of whether a
Person has offered or proposed to acquire a number of Voting Shares
comprising such specified percentage, the number of Voting Shares
comprising such specified percentage of Voting Shares shall in every
such case be deemed to be the number of Voting Shares comprising the
specified percentage of all the Company's then outstanding Voting Shares.
(ad) "Wholly-Owned Subsidiary" of a Person shall mean any corporation
or other entity all the outstanding capital stock or other equity
interests of which having ordinary voting power in the election of
directors or similar officials (other than directors' qualifying shares
or similar interests) are owned, directly or indirectly, by such Person.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints
the Rights Agent to act as agent for the Company in accordance with the terms
and conditions hereof, and
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the Rights Agent hereby accepts such appointment. The Company may from time
to time appoint such co-Rights Agents as it may deem necessary or desirable.
Section 3. ISSUE OF RIGHT CERTIFICATES. (a) Until the Distribution
Date, (1) outstanding Rights will be evidenced (subject to the provisions of
paragraph (b) of this Section 3) by the certificates for outstanding Common
Shares of the Company and not by separate Right Certificates, and (2) the
right to receive Right Certificates will be transferable only in connection
with the transfer of Common Shares of the Company. As soon as practicable
after the Distribution Date, the Company will prepare and execute, and the
Rights Agent will countersign and send, by first-class, insured,
postage-prepaid mail, to each record holder of Common Shares of the Company
as of the Close of Business on the Distribution Date, at the address of such
holder shown on the stock transfer records of the Company, a Right
Certificate evidencing one Right for each Common Share so held, subject to
adjustments as provided herein. From and after the Distribution Date, the
Rights will be evidenced solely by such Right Certificates.
(b) On the Record Date, or as soon thereafter as practicable, the
Company will send a copy of a Summary of Rights, by first-class,
postage-prepaid mail, to each record holder of Common Shares of the Company
as of the Close of Business on the Record Date, at the address of such holder
shown on the stock transfer records of the Company. With respect to Common
Shares outstanding on the Record Date, the certificates evidencing such
Common Shares shall, together with copies of such Summary of Rights,
thereafter also evidence the outstanding Rights (as such Rights may be
amended or supplemented) distributed with respect thereto until the earlier
of the Distribution Date or the date of surrender thereof to the Company's
transfer agent for registration of transfer or exchange of Common Shares.
Until the Distribution Date (or, if earlier, the Redemption Date or Final
Expiration Date), the surrender
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for registration of transfer or exchange of any certificate for Common Shares
outstanding as of the Close of Business on the Record Date, with or without a
copy of the Summary of Rights attached thereto, shall also constitute the
surrender for registration of transfer or exchange of the outstanding Rights
associated with the Common Shares represented thereby.
(c) The Company agrees that, at any time after the Record Date and
prior to the Distribution Date (or, if earlier, the Redemption Date or Final
Expiration Date) at which it issues any of its Common Shares upon original
issue or out of treasury, it will concurrently distribute to the holder of
such Common Shares one Right for each such Common Share, which Right shall be
subject to the terms and provisions of this Agreement and will evidence the
right to purchase the same number of one one-thousandths (1/1000) of a
Preferred Share at the same Purchase Price as the Rights then outstanding.
(d) Certificates for Common Shares issued after the Record Date
but prior to the earliest of the Distribution Date, the Redemption Date and
the Final Expiration Date, whether upon registration of transfer or exchange
of Common Shares outstanding on the Record Date or upon original issue or out
of treasury thereafter, 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 ProNet Inc. and Chemical
Shareholder Services Group, Inc., dated as of April 5,
1995 (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
ProNet Inc. Under certain circumstances, as set forth
in the Rights Agreement, such Rights will be evidenced
by separate certificates and will no longer be
evidenced by this certificate. ProNet Inc. will mail
to the holder of this certificate a copy of the Rights
Agreement without charge after receipt of a written
request therefor. As described in the Rights
Agreement, Rights issued to or acquired by any
Acquiring Person or any Affiliate or Associate thereof
(each as defined in the Rights Agreement) shall, under
certain circumstances, become null and void.
With respect to certificates containing the foregoing legend,
until the earlier of the Distribution Date or the Final
Expiration Date, outstanding Rights associated with the Common
Shares
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represented by such certificates shall be evidenced by such certificates
alone, and the surrender of any such certificate for registration of transfer
or exchange of the Common Shares evidenced thereby shall also constitute
surrender for registration of transfer or exchange of the outstanding Rights
(as such Rights may be amended or supplemented) associated with the Common
Shares represented thereby.
(e) If the Company purchases or acquires any of its Common Shares
after the Record Date, but prior to the Distribution Date, any Rights
associated with such Common Shares shall be deemed cancelled and retired so
that the Company shall not be entitled to exercise any Rights associated with
the Common Shares which are no longer outstanding.
Section 4. FORM OF RIGHT CERTIFICATES. (a) The form of Right
Certificates (and the forms of election to purchase Preferred Shares (or
other securities) and of assignment to be printed on the reverse thereof)
shall in form and substance be substantially the same as EXHIBIT B hereto and
may have such marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this Agreement, 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 as may be necessary to
conform to usage. Subject to the provisions of Section 23 hereof, the Right
Certificates, whenever issued, shall be dated as of the date of
authentication thereof, but, regardless of any adjustments of the Purchase
Price or the number of Preferred Shares (or other securities) as to which a
Right is exercisable (whether pursuant to this Agreement or any future
amendments or supplements to this Agreement), or both, occurring after the
Record Date and prior to the date of such authentication, such Right
Certificates may, on their face, without invalidating or otherwise affecting
any such adjustment, expressly entitle the holders thereof to
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purchase such number of Preferred Shares at the Purchase Price per one
one-thousandth (1/1000) of a Preferred Share as to which a Right would be
exercisable if the Distribution Date were the Record Date; no adjustment of
the Purchase Price or the number of Preferred Shares (or other securities) as
to which a Right is exercisable, or both, effected subsequent to the date of
authentication of any Right Certificate shall be invalidated or otherwise
affected by the fact that such adjustment is not expressly reflected on the
face or in the provisions of such Right Certificate.
(b) Pending the preparation of definitive Right Certificates, the
Company may execute, and upon Company Order the Rights Agent shall
authenticate and send, by first-class, insured, postage-prepaid mail, to each
record holder of Common Shares of the Company as of the Close of Business on
the Distribution Date, temporary Right Certificates which are printed,
lithographed, typewritten, mimeographed or otherwise produced substantially
of the tenor of the definitive Right Certificates in lieu of which they are
issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Right Certificates may
determine, as evidenced by their execution of such Right Certificates.
(c) If temporary Right Certificates are issued, the Company will
cause definitive Right Certificates to be prepared without unreasonable
delay. After the preparation of definitive Right Certificates, the temporary
Right Certificates shall be exchangeable for definitive Right Certificates,
upon surrender of the temporary Right Certificates at the Corporate Trust
Office of the Rights Agent, without charge to the holder. Upon surrender for
cancellation of any one or more temporary Right Certificates, the Company
shall execute and the Rights Agent shall authenticate and deliver in exchange
therefor one or more definitive Right Certificates, evidencing a like number
of Rights. Until so exchanged, the temporary Right
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Certificates shall in all respects be entitled to the same benefits under this
Agreement as definitive Right Certificates.
(d) Any Right Certificate issued pursuant to Section 3(a) or
Section 23 hereof that represents Rights beneficially owned by (1) an
Acquiring Person or any Associate or Affiliate of an Acquiring Person, (2) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person becomes such, or (3) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring Person
becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom such
Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board of
Directors has determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect avoidance of Section 8(e) hereof,
and any Right Certificate issued pursuant to Section 6 or Section 7 hereof
upon transfer, exchange, replacement or adjustment of any other Right
Certificate referred to in this sentence, shall contain (to the extent
feasible) the following legend:
The Rights represented by this Right
Certificate are or were beneficially owned by
a Person who was or became an Acquiring
Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined
in the Rights Agreement). Accordingly, this
Right Certificate and the Rights represented
hereby may become null and void in the
circumstances specified in Section 8(e) of
such Agreement.
Section 5. EXECUTION, AUTHENTICATION AND DELIVERY. (a) The Right
Certificates shall be executed on behalf of the Company by its Chairman of
the Board, its President or one of its Vice Presidents, under its corporate
seal reproduced thereon attested by its Secretary or one
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of its Assistant Secretaries. The signature of any of these officers on the
Right Certificates may be manual or facsimile.
(b) Right Certificates bearing the manual or facsimile signatures
of individuals who were at any time the proper officers of the Company shall
bind the Company, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of such
Right Certificates or did not hold such offices at the date of authentication
of such Right Certificates. At any time and from time to time after the
execution and delivery of this Agreement and prior to the Distribution Date,
the Company may deliver Right Certificates executed by the Company to the
Rights Agent for authentication, together with a Company Order for the
authentication and delivery of such Right Certificates; and the Rights Agent
in accordance with such Company Order shall authenticate and deliver such
Right Certificates as in this Agreement provided and not otherwise.
(c) No Right Certificate shall be entitled to any benefit under
this Agreement or be valid or obligatory for any purpose unless there appears
on such Right Certificate a certificate of authentication substantially in
the form provided for herein executed by the Rights Agent by manual
signature, and such certificate upon any Right Certificate shall be
conclusive evidence, and the only evidence, that such Right Certificate has
been duly authenticated and delivered hereunder.
Section 6. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE. From
and after the Distribution Date and prior to the earlier of the Redemption
Date and the Final Expiration Date, the Company shall cause to be kept at the
Corporate Trust Office of the Rights Agent a Rights Register (a "Rights
Register") in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Right
Certificates and of transfers of Rights. The Rights Agent is hereby
appointed the registrar and transfer agent (the "Rights
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Registrar") for the purpose of registering Right Certificates and transfers
of Rights as herein provided and the Rights Agent agrees to maintain such
Rights Register in accordance with such regulations so long as it continues
to be designated as Rights Registrar hereunder.
Upon surrender to the Rights Agent for registration of transfer of any
Right Certificate, the Company shall execute, and the Rights Agent shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Right Certificates evidencing a like number of
Rights.
At the option of the holder, Right Certificates may be exchanged for
other Right Certificates upon surrender of the Right Certificates to be
exchanged to the Rights Agent. Whenever any Right Certificates are so
surrendered for exchange, the Company shall execute, and the Rights Agent
shall authenticate and deliver, the Right Certificates which the holder
making the exchange is entitled to receive.
All Right Certificates issued upon any registration of transfer or
exchange of Right Certificates shall be the valid obligations of the Company,
evidencing the same Rights, and entitled to the same benefits under this
Agreement, as the Right Certificates surrendered upon such registration of
transfer or exchange.
Every Right Certificate presented or surrendered for registration of
transfer or exchange shall (if so required by the Company or the Rights
Agent) be duly endorsed, or accompanied by a written instrument of transfer
in form satisfactory to the Company and the Rights Registrar duly executed,
by the holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Right Certificates, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Right
Certificates, other than exchanges not involving any transfer.
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The provisions of this Section 6 shall be subject to the provisions of
Section 4(d), Section 8(e) and Section 15.
Section 7. MUTILATED, DESTROYED, LOST AND STOLEN RIGHT CERTIFICATES.
(a) If any mutilated Right Certificate is surrendered to the Rights Agent,
the Company shall execute and the Rights Agent shall authenticate and deliver
in exchange therefor a new Right Certificate of like tenor, for a like number
of Rights and bearing a registration number not contemporaneously outstanding.
(b) If there shall be delivered to the Company and the Rights
Agent (1) evidence to their satisfaction of the destruction, loss or theft of
a Right Certificate and (2) such security or indemnity, if any, as may be
required by them to save each of them and any agent of either of them
harmless, then, in the absence of notice to the Company or the Rights Agent
that such Right Certificate has been acquired by a bona fide purchaser, the
Company shall execute and upon its request the Rights Agent shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen Right
Certificate, a new Right Certificate of like tenor, for a like number of
Rights and bearing a registration number not contemporaneously outstanding.
(c) Upon the issuance of any new Right Certificate under this
Section, the Company may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Rights Agent)
connected therewith.
(d) Every new Right Certificate issued pursuant to this Section
in lieu of any destroyed, lost or stolen Right Certificate shall constitute
an additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Right Certificate shall be at any time enforceable
by anyone, and shall be entitled to all the benefits of this Agreement
equally and proportionately with any and all other Right Certificates duly
issued hereunder.
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(e) The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect
to the replacement or payment of mutilated, destroyed, lost or stolen Right
Certificates.
Section 8. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS. (a) Subject to the provisions of Section 8(e) hereof, 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 its Corporate Trust Office, together with payment of the
Purchase Price for each one one-thousandth (1/1000) of a Preferred Share (or
other securities) as to which the Rights are exercised, at or prior to the
earliest of (1) the Close of Business on the Final Expiration Date, (2) the
time of redemption on the Redemption Date or (3) the time at which such
Rights are mandatorily redeemed and exchanged as provided in Section 25
hereof.
(b) The Purchase Price for each one one-thousandth (1/1000) of a
Preferred Share pursuant to the exercise of a Right shall initially be $105,
shall be subject to adjustment from time to time as provided in Sections 12
and 14 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 Purchase Price for the securities 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 10 in cash, or by
certified check or cashier's check payable to the order of the Company, the
Rights Agent shall thereupon promptly (1) (A) requisition from any transfer
agent of the Preferred Shares (or other securities) certificates for such
number of one one-thousandths of a Preferred Share (or
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other securities) as are to be purchased and registered in such name or
names as may be designated by the registered holder of such Right
Certificate or, if appropriate, in the name of a depositary agent or
its nominee, and the Company hereby irrevocably authorizes its transfer agent
to comply with all such requests, or (B) if the Company shall have elected to
deposit the total number of Common Shares issuable upon exercise of the
Rights hereunder with a depositary agent, requisition from such depositary
agent appointed by the Company, depositary receipts representing such number
of one one-thousandths of a Preferred Share as are to be purchased and
registered in such name or names as may be designated by such holder (in
which case certificates for the Preferred Shares represented by such receipts
shall be deposited by the transfer agent with such depositary agent), and the
Company hereby directs such depositary agent to comply with all such
requests, (2) when appropriate, requisition from the Company the amount of
cash to be paid in lieu of issuance of fractional shares in accordance with
Section 15 hereof, (3) promptly after receipt of such certificates or
depositary receipts registered in such name or names as may be designated by
such holder, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate and (4) when appropriate, after
receipt, promptly deliver such cash to or upon the order of such holder. In
the event that the Company is obligated to issue other securities (including
Common Shares) of the Company, pay cash and/or distribute other property
pursuant to Section 12(a) hereof, the Company will make all arrangements
necessary so that other securities, cash and/or other property are available
for distribution by the Rights Agent, if and when appropriate.
(d) If the registered holder of the Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equal 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 15 hereof.
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(e) Notwithstanding anything in this Agreement to the contrary,
if any Person shall become an Acquiring Person, thereafter any Rights
beneficially owned by (1) such Acquiring Person or an Associate or Affiliate
of such Acquiring Person, (2) a transferee of such Acquiring Person (or of
any such Associate or Affiliate) who becomes a transferee after the Acquiring
Person becomes such, or (3) a transferee of an Acquiring Person (or of any
such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or
to any Person with whom the Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a
transfer which the Board of Directors has determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect the
avoidance of this Section 8(e), shall become null and void without any
further action and no holder of such Rights shall have any rights whatsoever
with respect to such Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to insure that the
provisions of this Section 8(e) and Section 4(d) hereof are complied with,
but shall have no liability to any holder of Right Certificates or other
Person as a result of its failure to make any determinations with respect to
any Acquiring Person or its Affiliates, Associates or transferees hereunder.
Section 9. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All
Right Certificates surrendered for the purpose of exercise, transfer, split
up or exchange shall, if surrendered to the Company or to any of its other
agents, be delivered to the Rights Agent for such purpose and for
cancellation or, if surrendered to the Rights Agent for such purpose, shall
be cancelled by it. No Right Certificates shall be authenticated in lieu of
or in exchange for any Right Certificates cancelled as provided in this
Section except as expressly permitted by any of the
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provisions of this Agreement. The Company shall deliver to the Rights Agent
for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
cancelled Right Certificates to the Company, or shall, pursuant to a Company
Order, destroy such cancelled Right Certificates and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 10. RESERVATION AND AVAILABILITY OF SHARES. (a) The Company
covenants and agrees that it will cause to be reserved and kept available out
of its authorized and unissued Preferred Shares or any Preferred Shares held
in its treasury, the number of Preferred Shares that will be sufficient to
permit the exercise in full of all outstanding Rights.
(b) The Company further covenants and agrees that it will, from
and after the Distribution Date, 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 the Company that will be sufficient
to permit the exercise in full of all outstanding Rights if adjusted pursuant
to Section 12(a)(2).
(c) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Preferred Shares or Common
Shares of the Company issued upon exercise of Rights shall (subject to
payment of the Purchase Price) at the time of delivery of the certificates
representing any such Preferred Shares or Common Shares be duly authorized,
validly issued, fully paid and nonassessable. The Company further covenants
and agrees that it will pay when due and payable any and all federal and
state transfer taxes and charges which may be payable in respect of the
issuance or delivery of the Right Certificates or of any Preferred Shares (or
depositary receipts therefor) or Common Shares of the Company upon the
exercise of Rights. The Company shall not, however, be required to pay any
transfer
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tax which may be payable in respect of any transfer or delivery of Right
Certificates to a Person other than, or in respect of the issuance or
delivery of certificates or depositary receipts for the Preferred Shares or
Common Shares of the Company upon exercise of Rights evidenced by Right
Certificates in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for transfer or exercise or to
issue or deliver any certificates or depositary receipts for Preferred Shares
or Common Shares of the Company 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 thereof) or until it has been
established to the Company's satisfaction that no such tax is due.
(d) So long as the Common Shares issuable and deliverable upon
the exercise of the Rights may be listed on any national securities exchange,
the Company shall use its best efforts to promptly cause, from and after such
time as the Rights become exercisable, all Common Shares and other securities
reserved for such issuance to be listed on such exchange upon official notice
of issuance upon such exercise.
Section 11. RECORD DATE. Each Person in whose name any certificate for
Preferred Shares or Common Shares of the Company is issued upon the exercise
of, or upon mandatory redemption and exchange of, Rights shall for all
purposes be deemed to have become the holder of record of the Preferred
Shares or Common Shares represented thereby on, and such certificate shall be
dated, (a) in the case of the exercise of Rights, the date upon which the
Right Certificate evidencing such Rights was duly surrendered and payment of
the Purchase Price (and any applicable transfer taxes) was made, or (b) in
the case of the mandatory redemption and exchange of Rights, the date of such
mandatory redemption and exchange; PROVIDED, HOWEVER, that, if the date of
such surrender and payment or mandatory redemption and exchange is a date
upon which the transfer books of the Company for its Preferred Shares or
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Common Shares, as the case may be, 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 such transfer books of the
Company are open. Prior to the exercise of (or the mandatory redemption and
exchange of) the Rights evidenced thereby, the holder of a Right Certificate
shall not be entitled to any rights of a holder of Preferred Shares (or Common
Shares of the Company) for which the Rights shall be exercisable, including
without limitation the rights to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled
to receive any notice of any proceedings of the Company, except as provided
herein.
Section 12. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER OF
RIGHTS. The Purchase Price, the number and kind of shares of capital stock
of the Company covered by each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 12.
(a) (1) If the Company shall at any time after the date of this
Agreement (A) declare a dividend on the Preferred Shares payable in Preferred
Shares, (B) subdivide the outstanding Preferred Shares, (C) combine the
outstanding Preferred Shares into a smaller number of Preferred Shares or (D)
issue any shares of its capital stock in a reclassification of the Preferred
Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 12(a), the
Purchase Price in effect at the time of the record date for such dividend or
of the effective date of such subdivision, combination or reclassification,
and the number and kind of shares of capital stock issuable on such date,
shall be proportionately adjusted so that the holder of any Right exercised
thereafter shall be entitled to receive, upon payment of the Purchase Price
for the number of one one-thousandths of a Preferred Share for
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which a Right was exercisable immediately prior to such date, the aggregate
number and kind of shares of capital stock which, if such Right had been duly
exercised immediately prior to such date (at a time when the Preferred Shares
transfer books of the Company were open), such holder would have acquired
upon such exercise and been entitled to receive upon payment or effectuation
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. If an
event occurs which would require an adjustment under both Section 12(a)(i)
and Section 12(a)(ii), the adjustment provided for in this Section 12(a)(i)
shall be in addition to, and shall be made prior to, any adjustment required
pursuant to Section 12(a)(ii).
(2) Subject to action of the Board of Directors of the Company
pursuant to Section 25 of this Agreement, if any Person shall become 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 Purchase
Price multiplied by the number of one one-thousandths of a Preferred Share
for which a Right is then exercisable, in accordance with the terms of this
Agreement and in lieu of Preferred Shares, such number of Common Shares of
the Company as shall equal the result obtained by (x) multiplying the then
current Purchase Price by the number of one one-thousandths of a Preferred
Share for which a Right is then exercisable and dividing that product by (y)
50% of the then current per share market price of the Company's Common Shares
(determined pursuant to Section 12(d)) on the date such Person became an
Acquiring Person. If 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.
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(3) If on or after the Distribution Date there shall not be
sufficient Common Shares issued but not outstanding, or authorized but
unissued, to permit the exercise in full of all outstanding Rights in
accordance with the foregoing subparagraph (2) of this Section 12(a), the
Company agrees to take all such action as is within its power, including
without limitation appropriate action by its Board of Directors, as may be
necessary to amend the Company's charter to authorize additional Common
Shares for issuance upon exercise of the Rights. If, notwithstanding the
foregoing, the shareholders shall not approve an amendment to the Company's
charter authorizing such additional Common Shares, the adjustment prescribed
in Section 12(a)(2) shall not be made but, in lieu thereof, each holder of a
Right shall thereafter have the right to receive, upon exercise thereof in
accordance with the terms of this Agreement, such number of one
one-thousandths of Preferred Shares as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the number of one
one-thousandths of a Preferred Share for which a Right is then exercisable
and dividing that product by (y) 50% of the then current per share market
price of one one-thousandth of a Preferred Share (determined pursuant to
Section 12(d)) on the date such Person became an Acquiring Person.
(b) If the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Shares entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Preferred Shares (or shares having the same rights,
privileges and preferences as the Preferred Shares ("equivalent preferred
shares")) or securities convertible into or exchangeable for Preferred Shares
or equivalent preferred shares at a price per Preferred Share or equivalent
preferred share (together with any additional consideration required upon
conversion or exchange in the case of a security convertible into or
exchangeable for Preferred Shares or equivalent preferred shares), less than
the current per share market price of the Preferred Shares (determined
pursuant to Section 12(d)
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on such record date), the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the number of Preferred Shares outstanding on such record date plus
the number of Preferred Shares which the aggregate offering price of the
total number of Preferred Shares and/or equivalent preferred shares so to be
offered (together with the aggregate of any additional consideration required
upon conversion or exchange in the case of any convertible or exchangeable
securities so to be offered) would purchase at such current market price and
the denominator of which shall be the number of Preferred Shares outstanding
on such record date plus the number of additional Preferred Shares and/or
equivalent preferred shares to be offered for subscription or purchase (or
into or for which the convertible or exchangeable securities so to be offered
are initially convertible or exchangeable); PROVIDED, HOWEVER, that in no
event shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital stock of the
Company issuable upon exercise of one Right. In case all or part of such
subscription or purchase price may be paid 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. Preferred Shares owned by or held for
the account of the Company or any of its Subsidiaries shall not be deemed
outstanding for the purpose of any computation described in this Section
12(b). The adjustment described in this Section 12(b) shall be made
successively whenever such a record date is fixed; and, if none of such
rights, options or warrants are so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(c) If the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a
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consolidation or merger in which the Company is the continuing or surviving
corporation) of evidences of indebtedness or assets (other than a regular
quarterly cash dividend or a dividend payable in Preferred Shares) or
subscription rights or warrants (excluding those referred to in Section
12(b)), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the then
current per share market price of the Preferred Shares (determined pursuant
to Section 12(d)) 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
Preferred Share and the denominator of which shall be such current per share
market price of the Preferred 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 the exercise of one Right. Such adjustments shall be made
succes- sively whenever such a record date is fixed; and, if 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)(1) For the purpose of any computation hereunder, the "current
per share market price" of the Common Shares on any date shall be deemed to
be the average of the daily Closing Prices per share of such Common Shares
for the 30 consecutive Trading Days immediately prior to such date; PROVIDED,
HOWEVER, that, if the issuer of such Common Shares shall announce (A) a
dividend or distribution on such Common Shares payable in such Common Shares
or securities convertible into such Common Shares or (B) any subdivision,
combination or reclassification of such Common Shares, and the ex-dividend
date for such dividend or
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distribution, or the record date for such subdivision, combination or
reclassification, shall occur during such period of 30 Trading Days, then,
and in each such case, the current per share market price of the Common
Shares shall be appropriately adjusted to reflect the current market price
per Common Share equivalent.
(2) For the purpose of any computation hereunder, the
"current per share market price" of the Preferred Shares
shall be determined in the same manner as set forth above
for Common Shares in paragraph (i) of this Section 12(d).
If the current per share market price of the Preferred
Shares cannot be determined in the manner provided above,
the "current per share market price" of the Preferred Shares
shall be conclusively deemed to be the current per share
market price of the Common Shares (determined in the manner
provided above) multiplied by one thousand.
(e) No adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in the
Purchase Price; PROVIDED, HOWEVER, that any adjustments which by reason of
this Section 12(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 12 shall be made to the nearest cent or to the nearest ten-thousandth
of a Common Share or other share or one ten-millionth of a Preferred Share,
as the case may be, and references herein to the "number of one
one-thousandths of a Preferred Share" (or similar phrases) shall be construed
to include fractions of one one-thousandth of a Preferred Share.
Notwithstanding the first sentence of this Section 12(e), any adjustment
required by this Section 12 shall be made no later than the earlier of (1)
three years from the date of the transaction which requires such adjustment
or (2) the thirtieth day preceding the Final Expiration Date.
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(f) If as a result of an adjustment made pursuant to Section
12(a), the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock of the Company other than Preferred
Shares, thereafter the number of such other shares so receivable upon
exercise of any Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions
with respect to the shares contained in this Section 12, and the provisions
of this Agreement, including without limitation Sections 8, 10, 11 and 14,
with respect to the Preferred Shares shall apply on like terms to any such
other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall, whether or not the
Right Certificate evidencing such Rights reflects such adjusted Purchase
Price, evidence the right to purchase, at the adjusted Purchase Price, the
number of one one-thousandths of a Preferred Share purchasable from time to
time hereunder upon exercise of the Rights, all subject to further adjustment
as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 12(i), upon each adjustment of the Purchase Price
pursuant to Section 12(b) or 12(c), each Right outstanding immediately prior
to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price per one one-thousandth of a
Preferred Share, that number of one one-thousandths of a Preferred Share
obtained by (1) multiplying (x) the number of one-thousandths of a share
covered by a Right immediately prior to this adjustment by (y) the Purchase
Price in effect immediately prior to such adjustment of the Purchase Price
and (2) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
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(i) The Company may elect on or after the date of any adjustment
of the Purchase Price to adjust the number of Rights outstanding in lieu of
any adjustment in the number of one one-thousandths of a Preferred Share
purchasable upon the exercise of a Right. Each Right outstanding after such
adjustment of the number of Rights shall be exercisable for the number of one
one-thousandths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment of the Purchase Price. Each Right held
of record prior to such adjustment of the number of Rights shall become that
number of Rights (calculated to the nearest one ten-thousandth) obtained by
dividing the Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after adjustment
of the Purchase Price. The Company shall make a public announcement of its
election to adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to be
made. This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Right Certificates have been
issued, shall be at least 10 days later than the date of the public
announcement. Until such record date, however, any adjustment in the number
of one one-thousandths of a Preferred Share for which a Right shall be
exercisable made as required by this Agreement shall remain in effect. If
Right Certificates have been issued, upon each adjustment of the number of
Rights pursuant to this Section 12(i), the Company shall, as promptly as
practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing, subject to
Section 15 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date
of adjustment, and upon surrender thereof, if required by the Company, new
Right Certificates evidencing all the Rights to which such holders shall
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be entitled after such adjustment. Right Certificates so to be distributed
shall be issued, executed and authenticated in the manner provided for herein
and shall be registered in the names of the holders of record of Right
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of one one-thousandths of a Preferred Share 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 one
one-thousandths of a Preferred Share 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 one one-thousandth of the amount of
consideration per Preferred Share determined by the Board of Directors of the
Company to be capital, or below one one-thousandth of the par value, if any,
per Preferred Share issuable upon exercise of the Rights, the Company agrees
to take such corporate action as is within its power, including without
limitation appropriate action by its Board of Directors, and which is, in the
opinion of its counsel, necessary in order that the Company may validly and
legally issue fully paid and nonassessable one one-thousandths of Preferred
Shares at such adjusted Purchase Price.
(l) In any case in which this Section 12 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record
date of the Preferred Shares or other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the Preferred
Shares or 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
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deliver to such holder a due bill or other appropriate instrument evidencing
such holder's right to receive such additional securities upon the occurrence
of the event requiring such adjustment.
(m) Anything in this Section 12 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Purchase Price,
in addition to those adjustments expressly required by this Section 12, as
and to the extent that it in its sole discretion shall determine to be
advisable in order that any combination or subdivision of the Preferred
Shares, issuance wholly for cash of any of the Preferred Shares at less than
the current market price, issuance wholly for cash of Preferred Shares or
securities which by their terms are convertible into or exchangeable for
Preferred Shares, dividends on Preferred Shares payable in Preferred Shares
or issuance of rights, options or warrants referred to in subsection (b) of
this Section 12, hereafter effected by the Company to holders of its
Preferred Shares shall not be taxable to such shareholders.
(n) If at any time prior to the Distribution Date, the Company
shall (1) declare or pay any dividend on the Common Shares payable in Common
Shares or (2) effect a subdivision or combination of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares)
into a greater or lesser number of Common Shares, then in any such case (A)
the Purchase Price in effect at the time of the record date for such dividend
or of the effective date of such subdivision or combination shall be adjusted
by multiplying such Purchase Price by a fraction, the numerator of which is
the number of Common Shares outstanding immediately before such event and the
denominator of which is the number of Common Shares outstanding immediately
after such event, and (B) the number of Rights outstanding immediately after
such event shall be adjusted, either through cancellation of outstanding
Rights or through distribution of additional Rights (but without duplication
of the Company's obligations under Section 3(c)), so that the certificate
evidencing each Common
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Share outstanding immediately after such event shall also evidence the
associated Right to purchase the same number of one one-thousandths of a
Preferred Share as to which a Right would have entitled the holder thereof to
purchase immediately prior to such event. The adjustment provided for in
this Section 12(n) shall be made successively whenever such a dividend is
declared or paid or such a subdivision or combination is effected. If an
event occurs which would require an adjustment under Section 12(a)(2) and
this Section 12(n), the adjustments provided for in this Section 12(n) shall
be in addition and prior to any adjustment required pursuant to Section
12(a)(2).
Section 13. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF
SHARES. Whenever an adjustment is made as provided in Section 12 or 14
hereof, the Company shall (a) promptly prepare a certificate setting forth
such adjustment, and a brief statement of the facts accounting for such
adjustment, (b) promptly file with the Rights Agent and with each transfer
agent for the Common Shares of the Company and the Preferred Shares a copy of
such certificate and (c) mail a brief summary thereof to each holder of
record of a Right Certificate in accordance with Section 28 hereof.
Section 14. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER. If, directly or indirectly, (a) the Company shall consolidate
with, or merge with and into, any other Person, (b) any Person shall merge
with and into the Company and the Company shall be the continuing or
surviving corporation of such merger and, in connection with any such merger,
all or part of the Common Shares of the Company 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 a series of two or more transactions, assets of the
Company or its Subsidiaries which constitute more than 50% of the assets or
which produce
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more than 50% of the earning power of the Company and its Subsidiaries (taken
as a whole) to any Person or any Affiliate or Associate of such Person other
than the Company or one or more of its Wholly-Owned Subsidiaries, then, and
in each such case, the Company agrees that, as a condition to engaging in any
such transaction, it will make or cause to be made proper provision so that
(1) each holder of a Right (except as otherwise provided herein) shall
thereafter have the right to receive, upon the exercise thereof in accordance
with the terms of this Agreement and in lieu of Preferred Shares, such number
of Common Shares of such other Person (including the Company as successor
thereto or as the surviving corporation) or, if such other Person is a
Subsidiary of another Person, of the Person or Persons (other than
individuals) which ultimately control such first-mentioned Person, as shall
be equal to the result obtained by (X) multiplying the then current Purchase
Price by the number of one one-thousandths of a Preferred Share for which a
Right is then exercisable (without taking into account any adjustment
previously made pursuant to Section 12(a)(2)) and dividing that product by
(Y) 50% of the current per share market price of the Common Shares of such
other Person (determined pursuant to Section 12(d) hereof) on the date of
consummation of such consolidation, merger, sale or transfer; (2) 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; (3) the term "Company",
as used herein, shall thereafter be deemed to refer to such issuer; and (4)
such issuer shall take such steps (including without limitation the
reservation of a sufficient number of shares of its Common Shares in
accordance with Section 10) 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 enter into any transaction of the kind referred to in this
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Section 14 if at the time of such transaction there are outstanding any
rights, warrants, instruments or securities or any agreement or arrangements
which, as a result of the consummation of such transaction, would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights. The Company shall not consummate any such
consolidation, merger, sale or transfer unless prior thereto the Company and
such issuer shall have executed and delivered to the Rights Agent an
agreement supplemental to this Agreement complying with the provisions of
this Section 14. The provisions of this Section 14 shall similarly apply to
successive mergers or consolidations or sales or other transfers. For the
purposes of this Section 14, 50% of the assets of the Company and its
Subsidiaries shall be determined by reference to the book value of such
assets as set forth in the most recent consolidated balance sheet of the
Company and its Subsidiaries (which need not be audited) and 50% of the
earning power of the Company and its Subsidiaries shall be determined by
reference to the mathematical average of the operating income resulting from
the operations of the Company and its Subsidiaries for the two most recent
full fiscal years as set forth in the consolidated and consolidating
financial statements of the Company and its Subsidiaries for such years;
PROVIDED, HOWEVER, that, if the Company has, during such period, engaged in
one or more transactions to which purchase accounting is applicable, such
determination shall be made by reference to the pro forma operating income of
the Company and its Subsidiaries giving effect to such transactions as if
they had occurred at the commencement of such two-year period.
Section 15. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. (a) The Company
shall not be required to issue or distribute Right Certificates which
evidence fractional Rights. If, on the Distribution Date or thereafter, as a
result of any adjustment effected pursuant to Section 12(i) or otherwise
hereunder, a Person would otherwise be entitled to receive a Right
Certificate evidencing a fractional Right, the Company shall, in lieu
thereof, pay or cause to be paid to
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such Person an amount in cash equal to the same fraction of the current
market value of a whole Right. For the purpose of this Section 15(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.
(b) The Company shall not be required to issue fractions of Preferred
Shares (other than fractions which are integral multiples of one
one-thousandth of a Preferred Share) upon exercise of the Rights or to
distribute certificates which evidence fractional Preferred Shares (other
than fractions which are integral multiples of one one-thousandth of a
Preferred Share). Fractions of Preferred Shares in integral multiples of one
one-thousandth of a Preferred Share may, at the election of the Company, be
evidenced by depositary receipts, pursuant to an appropriate agreement
between the Company and a depositary selected by it, provided that such
agreement shall provide that the holders of such depositary receipts shall
have all the rights, privileges and preferences to which they are entitled as
beneficial owners of the Preferred Shares. If, on the Distribution Date or
thereafter, as a result of any adjustment effected hereunder in the number of
one one-thousandths of a Preferred Share as to which a Right has become
exercisable, a Person would otherwise be entitled to receive a fractional
Preferred Share that is not an integral multiple of one one-thousandth of a
Preferred Share, the Company shall, in lieu thereof, pay to such Person at
the time such Right is exercised as herein provided an amount in cash equal
to the same fraction (which is not an integral multiple of one one-thousandth
of a Preferred Share) of the current market value of one Preferred Share.
For purposes of this Section 15(b), the current market value of a Preferred
Share shall be the Closing Price of a Preferred Share for the Trading Day
immediately prior to the date of such exercise.
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(c) Should any adjustment contemplated by Section 12(a)(2) or any
mandatory redemption and exchange contemplated by Section 25 occur, 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. If after any such adjustment or mandatory
redemption and exchange, a Person would otherwise be entitled to receive a
fractional Common Share of the Company upon exercise of any Right Certificate
or upon mandatory redemption and exchange as contemplated by Section 25, the
Company shall, in lieu thereof, pay to such Person at the time such Right is
exercised as herein provided or upon such mandatory redemption and exchange
an amount in cash equal to the same fraction of the current market value of
one Common Share. For purposes of this Section 15(c), the current market
value of a Common Share shall be the Closing Price of a Common Share for the
Trading Day immediately prior to the date of such exercise or the date of
such mandatory redemption and exchange.
(d) The holder of a Right by the acceptance thereof expressly waives
his right to receive any fractional Rights or any fractional shares upon
exercise or mandatory redemption and exchange of a Right (except as provided
above).
Section 16. RIGHTS OF ACTION. (a) All rights of action in respect of
the obligations and duties owed to the holders of the Rights under this
Agreement are vested in the registered holders of the Rights; and, without
the consent of the Rights Agent or of the holder of any other Rights, any
registered holder of any Rights may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or
proceeding, judicial or otherwise, against the Company to enforce, or
otherwise to act in respect of, such holder's right to exercise such Rights
in the manner provided in the Right Certificate evidencing such Rights 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
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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.
(b) No right or remedy herein conferred upon or reserved to the
registered holder of Rights is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy, whether hereunder or otherwise, shall not
prevent the concurrent assertion or employment of any other appropriate right
or remedy.
(c) No delay or omission of any registered holder of Rights to exercise
any right or remedy accruing hereunder shall impair any such right or remedy
or constitute a waiver of any default hereunder or an acquiescence therein.
Every right and remedy given hereunder or by law to such holders may be
exercised from time to time, and as often as may be deemed expedient, by such
holders.
Section 17. 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 of the
Company;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the Corporate Trust Office of the Rights Agent duly endorsed or accompanied
by a proper instrument of transfer;
(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
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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,
and neither the Company nor the Rights Agent shall be affected by any notice
to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any
holder of a Right or other Person as a result of its inability to perform any
of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or executive order
promulgated or enacted by any governmental authority, prohibiting or
otherwise restraining performance of such obligation; PROVIDED, HOWEVER, the
Company must use its best efforts to have any such order, decree or ruling
lifted or otherwise overturned as soon as possible.
Section 18. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No
holder, as such, of any Right (whether or not then evidenced by a Right
Certificate) shall be entitled to vote, receive dividends or be deemed for
any purpose the holder of Preferred Shares, Common Shares of the Company or
any other securities of the Company which may at any time be issuable on the
exercise (or mandatory redemption and exchange) of the Rights represented
thereby, nor shall anything contained herein or in any Right Certificate be
construed to confer upon any such holder, as such, any of the rights of a
stockholder of the Company, including without limitation any right to vote
for the election of directors or upon any matter submitted to stockholders at
any meeting thereof, to give or withhold consent to any corporate action, to
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receive notice of meetings or other actions affecting stockholders (except as
provided in Section 26) or to receive dividends or subscription rights or
otherwise.
Section 19. CONCERNING THE RIGHTS AGENT. (a) The Company agrees to
pay to the Rights Agent reasonable compensation for all services rendered by
it hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify
the Rights Agent for, and to hold it harmless against, any loss, liability or
expense, incurred without 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.
(b) The Rights Agent shall be protected and shall incur no liability
for, or in respect of any action taken, suffered or omitted by it in
connection with, its administration of this Agreement in reliance upon any
Right Certificate or certificate for Preferred Shares, Common Shares or other
securities of the Company, Company Order, 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 executed and, where necessary,
verified or acknowledged, by the proper person or persons, or otherwise upon
the advice of its counsel as set forth in Section 20 hereof.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for
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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 President, any Vice President, the Treasurer, any Assistant Treasurer,
the Secretary or any Assistant Secretary of the Company and delivered to the
Rights Agent; and such certificate shall be full authorization to the Rights
Agent for any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company or any
other Person only for its own negligence, bad faith or willful misconduct.
Anything in this Agreement to the contrary notwithstanding, in no event shall
the Rights Agent be liable for special, indirect or consequential loss or
damage of any kind whatsoever (including, but not limited to, lost profits),
even if the Rights Agent has been advised of the likelihood of such loss or
damage and regardless of the form of action.
(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 authentication 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 have any responsibility with respect to
the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the
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Rights Agent) or with respect to the validity or execution of any Right
Certificate (except its authentication 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 12(a)(2) hereof) or any adjustment in the terms of
the Rights (including the manner, method or amount thereof) provided for in
Sections 3, 12, 14, 24 and 25, or the ascertainment 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 Preferred Shares or Common Shares to be issued pursuant to
this Agreement or any Right Certificate or as to whether any Preferred Shares
or Common Shares will, when issued, be duly authorized, validly 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 President, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary
of the Company, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action taken
or suffered to be taken by it in good faith in accordance with instructions
of any such officer.
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(h) The Rights Agent and any shareholder, 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.
(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 of 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. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS
AGENT. Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without the
execution or filing of any 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 22.
If at the time such successor Rights Agent shall succeed to the agency
created by this Agreement any of the Right Certificates shall have been
authenticated but not delivered, any such successor Rights Agent may adopt
the authentication of the predecessor Rights Agent and deliver such Right
Certificates so authenticated, and, if at that time any of the Right
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Certificates shall not have been authenticated, any successor Rights Agent
may authenticate 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.
If at any time the name of the Rights Agent shall be changed and at such
time any of the Right Certificates shall have been authenticated but not
delivered, the Rights Agent may adopt the authentication under its prior name
and deliver Right Certificates so authenticated; and, in case at that time
any of the Right Certificates shall not have been authenticated, the Rights
Agent may authenticate such Right Certificates either in its prior name or in
its changed name; and in all such cases such Right Certificates shall have
the full force provided in the Right Certificates and in this Agreement.
Section 22. 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 for the Common Shares of the Company and the Preferred
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 for the Common Shares of the Company and the Preferred 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 registered holder of a
Right Certificate (or, prior to the Distribution Date, of Common Shares),
then any registered holder of a Right
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Certificate (or, prior to the Distribution Date, of Common Shares) 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 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 for the Common Shares of the Company and the Preferred 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 22,
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 23. 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 Rights Certificates evidencing Rights
in such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price per share and the number or kind or
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class of shares or other securities purchasable under the Right Certificates
made in accordance with the provisions of this Agreement.
Section 24. REDEMPTION. (a) The Rights may be redeemed by action of
the Board of Directors of the Company pursuant to paragraph (b) of this
Section 24, or may be redeemed and exchanged by action of the Board of
Directors of the Company pursuant to Section 25 herein, but shall not be
redeemed in any other manner.
(b) The Board of Directors of the Company may, at its option, at any
time prior to the time any Person becomes an Acquiring Person redeem all but
not less than all the then outstanding Rights at a redemption price of one
cent ($0.01) per Right then outstanding, appropriately adjusted to reflect
any adjustment in the number of Rights outstanding pursuant to Section 12(i)
herein (such redemption price being hereinafter referred to as the
"Redemption Price"). Any such redemption of the Rights by the Board of
Directors may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
(c) The right of the registered holders of Right Certificates to
exercise the Rights evidenced thereby or, if the Distribution Date has not
theretofore occurred, the inchoate right of the registered holders of Rights
to exercise the same shall, without notice to such holders or to the Rights
Agent and without further action, terminate and be of no further force or
effect effective as of the time of adoption by the Board of Directors of the
Company of a resolution authorizing and directing the redemption of the
Rights pursuant to paragraph (b) of this Section 24 (or, alternatively, if
the Board of Directors qualified such action as to time, basis or conditions,
then at such time, on such basis and with such conditions as the Board of
Directors may have established pursuant to such paragraph (b)); thereafter,
the only right of the holders of Rights shall be to receive the Redemption
Price. The Company shall promptly give public
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notice of any redemption resolution pursuant to paragraph
(b) of this Section 24; 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 the adoption
of any redemption resolution pursuant to paragraph (b) of this
Section 24, the Company shall give notice of such redemption to
the holders of the then outstanding Rights by mailing such notice
to all such holders at their last addresses as they appear upon
the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agents
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 shall state
the method by which the payment of the Redemption Price will be
made.
(d) Neither the Company nor any of its Affiliates or
Associates may acquire (other than, in the case of such
Affiliates and Associates, in their capacity as holders of Common
Shares of the Company), redeem or purchase for value any Rights
at any time in any manner other than as specifically set forth in
this Section 24 or in Section 25 herein, and other than in
connection with the purchase of Common Shares prior to the
Distribution Date.
Section 25. MANDATORY REDEMPTION AND EXCHANGE. (a) The
Board of Directors of the Company may, at its option, at any time
after any Person becomes an Acquiring Person, issue Common Shares
of the Company in mandatory redemption of, and in exchange for,
all or part of the then outstanding and exercisable Rights (which
shall not include Rights that have become null and void pursuant
to the provisions of Section 8(e) hereof) at an exchange ratio of
one Common Share for each two Common Shares for which each Right
is then exercisable pursuant to the provisions of Section
12(a)(2) hereof. Notwithstanding the foregoing, the Board of
Directors shall not be empowered to effect such redemption and
exchange at any time after any Person (other than the Company,
any Subsidiary of the Company, any employee benefit plan
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of the Company or of any such Subsidiary, or any trustee of or
fiduciary with respect to any such plan when acting in such
capacity), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of 50% or more of the Voting
Shares then outstanding.
(b) Immediately upon the action of the Board of Directors
of the Company ordering the mandatory redemption and exchange of
any Rights pursuant to subsection (a) of this Section 25 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 such
number of Common Shares as is provided in paragraph (a) of this
Section 25. The Company shall promptly give public notice of any
such redemption and exchange; PROVIDED, HOWEVER, that the failure
to give, or any defect in, such notice shall not affect the
validity of such redemption and exchange. The Company promptly
shall mail a notice of any such redemption and exchange to all
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 mandatory redemption and exchange shall state the method by
which the redemption and exchange of the Common Shares for Rights
will be effected and, in the event of any partial redemption and
exchange, the number of Rights which will be redeemed and
exchanged. Any partial redemption and exchange shall be effected
pro rata based on the number of Rights (other than Rights which
have become null and void pursuant to the provisions of
Section 8(e) hereof) held by each holder of Rights.
(c) In any mandatory redemption and exchange pursuant to
this Section 25, the Company, at its option, may substitute
Preferred Shares (or equivalent preferred shares, as such term is
defined in Section 12(b) hereof) for Common Shares, at the
initial rate of one one-
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thousandth of a Preferred Share (or equivalent preferred share)
for each Common Share, as appropriately adjusted.
Section 26. NOTICE OF CERTAIN EVENTS. If the Company
shall, on or after the Distribution Date, propose (a) to pay any
dividend or other distribution payable in stock of any class of
the Company or any Subsidiary of the Company to the holders of
its Preferred Shares, (b) to distribute to the holders of its
Preferred Shares rights or warrants to subscribe for or to
purchase any additional Preferred Shares or shares of stock of
any class or any other securities, rights or options, (c) to make
any other distribution to the holders of its Preferred Shares
(other than a regular quarterly cash dividend), (d) to effect any
reclassification of its Preferred Shares (other than a
reclassification involving only the subdivision of outstanding
Preferred Shares), (e) 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 more than 50% of the
assets or earning power of the Company and its Subsidiaries (de-
termined as provided in Section 14 herein) to, any other Person
(other than the Company or a Wholly-Owned Subsidiary or Wholly-
Owned Subsidiaries), (f) to effect the liquidation, dissolution
or winding up of the Company or (g) if the Rights have thereto-
fore become exercisable with respect to Common Shares pursuant to
Section 12(a)(2) herein, to declare or pay any dividend or other
distribution on the Common Shares payable in Common Shares or in
stock of any other class of the Company or any Subsidiary of the
Company or to effect a subdivision or combination 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 28 hereof, notice of such proposed action, which
shall specify the date of authorization by the Board of Directors
of the Company of, and record date for, such stock dividend or
such distribution of rights or warrants
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or the date on which such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution, winding up, subdivision or
combination is to take place and the date of participation therein
by the holders of the Common Shares of the Company or the Preferred
Shares, or both, if any such date is to be fixed. Such notice
shall be so given in the case of any action covered by clause
(a), (b) or (g) above at least 20 days prior to the record date
for determining holders of the Preferred Shares or of the Common
Shares of the Company, as the case may be, for purposes of such
action, and in the case of any such other action, at least 20
days prior to the date of the taking of such proposed action or
the date of participation therein by the holders of the Preferred
Shares or Common Shares of the Company, as the case may be,
whichever shall be the earlier.
If any of the events set forth in Section 12(a)(2) of this
Agreement shall occur, then, in any such case, the Company shall
as soon as practicable thereafter give to each holder of a Right
Certificate, in accordance with Section 28 hereof, a notice of
the occurrence of such event, which shall specify the event and
the consequences of the event to holders of Rights under
Section 12(a)(2) hereof.
Section 27. SECURITIES LAWS REGISTRATIONS. To the extent
legally required, the Company agrees that it will prepare and
file, no later than the Distribution Date, and will use its best
efforts to cause to be declared effective, a registration
statement under the Securities Act registering the offering, sale
and delivery of the Preferred Shares issuable upon exercise of
the Rights, and the Company will, thereafter, use its best
efforts to maintain such registration statement (or another)
continuously in effect so long as any Rights remain outstanding
and exercisable with respect to Preferred Shares. Should the
Rights become exercisable with respect to securities of the
Company or one of its Subsidiaries other than Preferred Shares,
the Company agrees that it will, to the extent legally required,
promptly thereafter prepare and file,
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or cause to be prepared and filed, and will use its best efforts to
cause to be declared effective, a registration statement under such
Act registering the offering, sale and delivery of such other securities
and the Company will, thereafter, use its best efforts to maintain such
registration statement (or another) continuously in effect so
long as any outstanding Rights are exercisable with respect to
such securities. The Company further agrees to use its best
efforts, from and after the Distribution Date, to qualify or
register for sale the Preferred Shares or other securities of the
Company or one of its Subsidiaries issuable upon exercise of the
Rights under the securities or "blue sky" laws (to the extent
legally required thereunder) of all jurisdictions in which
registered holders of Right Certificates reside determined by
reference to the Rights Register.
Section 28. 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:
ProNet Inc.
600 Data Drive, Suite 100
Plano, Texas 75075
Subject to the provisions of Section 22 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:
Chemical Shareholder Services Group, Inc.
2323 Bryan Street, Suite 2300
Dallas, Texas 75201
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
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by first-class mail, postage prepaid, addressed to such holder at
the address of such holder as shown on the Rights Register of the
Company or, prior to the Distribution Date, on the stock transfer
records for the Common Shares of the Company.
Section 29. SUPPLEMENTS AND AMENDMENTS. The Company may
from time to time supplement or amend this Agreement (which
supplement or amendment shall be evidenced by a writing signed by
the Company and the Rights Agent) 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, to
make any other provisions in regard to matters or questions
arising hereunder, or to add, delete, modify or otherwise amend
any provision, which the Company may deem necessary or desirable,
including without limitation extending the Final Expiration Date
and, provided that at the time of such amendment or supplement
the Distribution Date has not occurred, the period during which
the Rights may be redeemed; PROVIDED, HOWEVER, that, from and
after such time as any Person becomes an Acquiring Person, any
such amendment or supplement shall not materially and adversely
affect the interests of the holders of Right Certificates.
Without limiting the foregoing, the Board of Directors of the
Company may by resolution adopted at any time prior to such time
as any Person becomes an Acquiring Person amend this Agreement to
lower the threshold set forth in the definitions of Acquiring
Person and Distribution Date herein from 20% to a percentage not
less than the greater of (a) any percentage greater than the
largest percentage of the outstanding Voting Shares then known to
the Company to be beneficially owned by any Person (other than
the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company, or any
trustee of or fiduciary with respect to any such plan when acting
in such capacity), and (b) 10% if the Board of
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Directors shall determine that a Person whose interests are adverse
to the Company and its shareholders may seek to acquire control of the
Company.
Section 30. SUCCESSORS. All the covenants and provisions
of this Agreement by or for the benefit of the Company or the
Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
Section 31. BENEFITS OF THIS AGREEMENT. Nothing in this
Agreement shall be construed to give to any Person other than the
Company, the Rights Agent and the registered holders of the
Rights 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 Rights.
Section 32. 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.
Section 33. 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.
Section 34. 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.
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Section 35. 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.
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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.
PRONET INC.
Attest:
By ______________________ By ______________________
Title: Secretary Title:
CHEMICAL SHAREHOLDER SERVICES GROUP, INC.
As Rights Agent
Attest:
By ______________________ By ______________________
Title: Authorized Officer Authorized Officer
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EXHIBIT A
CERTIFICATE OF DESIGNATION
OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
PRONET INC.
Pursuant to Section 151 of the General
Corporation Law of the State of Delaware
ProNet Inc., a Delaware corporation (the "Corporation"),
through the undersigned duly authorized officer, in accordance
with the provisions of Sections 103 and 151 of the General
Corporation Law of the State of Delaware, DOES HEREBY CERTIFY:
That, the Board of Directors of the Corporation on March 30,
1995, pursuant to the authority conferred upon the Board of
Directors by the Restated Certificate of Incorporation, as
amended, of the Corporation (the "Certificate of Incorporation")
and in accordance with the provisions of Section 151 of the
General Corporation Law of the State of Delaware, adopted the
following resolution creating a series of 150,000 shares of
Preferred Stock, par value $1.00 per share:
RESOLVED, that, pursuant to the authority expressly granted
to and vested in the Board of Directors of the Corporation in
accordance with the provisions of Article IV, Section B of its
Certificate of Incorporation, a series of the Preferred Stock of
the Corporation, par value $1.00 per share, be, and it hereby is,
created and that the voting powers, designations, preferences and
relative, participating, optional and other special rights of the
shares of such series, and the qualification, limitations or
restrictions thereof are as follows:
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK:
Section 1. DESIGNATION AND AMOUNT. The shares of such
series shall be designated as "Series A Junior Participating
Preferred Stock" (the "Series A Preferred Stock") and the number
of shares constituting the Series A Preferred Stock shall be
150,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors; PROVIDED, that no decrease
shall reduce the number of shares of Series A Preferred Stock to
a number less than the number of shares then outstanding plus the
number of shares reserved for issuance upon the exercise of
outstanding options, rights or warrants or upon the conversion of
any outstanding securities issued by the Corporation convertible
into Series A Preferred Stock.
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Section 2. DIVIDENDS AND DISTRIBUTIONS.
(a) Subject to the rights of the holders of any shares of
any series of Preferred Stock (or any similar stock) ranking
prior and superior to the Series A Preferred Stock with respect
to dividends, the holders of shares of Series A Preferred Stock,
in preference to the holders of Common Stock, par value $0.01 per
share (the "Common Stock"), of the Corporation, and of any other
junior stock, shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally available
for the purpose, quarterly dividends payable on the first
business day of February, May, August and November in each year
(each such date being referred to herein as a "Quarterly Dividend
Payment Date") as provided in paragraphs (b) and (c) of this
Section 2 in an amount per share (rounded to the nearest cent)
equal to the greater of (1) $1.00 in cash or (2) subject to the
provision for adjustment hereinafter set forth, 1,000 times the
aggregate per share amount (payable in cash) of all cash
dividends, and 1,000 times the aggregate per share amount
(payable in kind) of all non-cash dividends or other
distributions, other than a dividend payable in shares of Common
Stock or a subdivision of the outstanding shares of Common Stock
(by reclassification or otherwise), declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date
or with respect to the first Quarterly Dividend Payment Date,
since the first issuance of any share or fraction of a share of
Series A Preferred Stock. If the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in shares
of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise) into a greater or lesser number of
shares of Common Stock, then in each such case the amount to
which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under clause (2) of the preceding
sentence shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that
was outstanding immediately prior to such event.
(b) The Corporation shall declare a dividend or
distribution on the Series A Preferred Stock as provided in
paragraph (a) of this Section 2 immediately after it declares a
dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); PROVIDED that, if no
dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date, a
dividend of $1.00 per share payable in cash on the Series A
Preferred Stock shall nevertheless accrue and be cumulative on
the outstanding shares of Series A Preferred Stock as provided in
paragraph (c) of this Section 2.
(c) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such
shares, unless the date of issue of such shares is prior to the
record date for the first Quarterly Dividend Payment Date, in
which case dividends on such shares shall begin to accrue from
the date of issue of such shares, or unless the date of issue is
a Quarterly Dividend Payment Date or is a date after the record
date for the determination of holders of shares of Series A
Preferred Stock entitled to receive a quarterly dividend and
before such Quarterly Dividend Payment Date, in either of which
events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares
of Series A Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such
shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding.
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The Board of Directors may fix a record date for the determination of
holders of shares of Series A Preferred Stock entitled to receive payment
of a dividend or distribution declared thereon, which record date
shall be not more than 60 days prior to the date fixed for the
payment thereof.
Section 3. VOTING RIGHTS. The holders of shares of
Series A Preferred Stock shall have the following voting rights:
(a) Subject to the provisions for adjustment hereinafter
set forth, each share of Series A Preferred Stock shall entitle
the holder thereof to 1,000 votes on all matters submitted to a
vote of the stockholders of the Corporation. If the Corporation
shall at any time declare or pay any dividend on Common Stock
payable in shares of Common Stock, or effect a subdivision or
combination of the outstanding shares of Common Stock (by
reclassification or otherwise) into a greater or lesser number of
shares of Common Stock, then in each such case the number of
votes per share to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction the numerator
of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the
number of shares of Common Stock that was outstanding immediately
prior to such event.
(b) Except as otherwise provided herein, in any other
Certificate of Designation creating a series of Preferred Stock
or any similar stock, or by law, the holders of shares of
Series A Preferred Stock and the holders of shares of Common
Stock and any other capital stock of the Corporation having
general voting rights shall vote together as one class on all
matters submitted to a vote of stockholders of the Corporation.
(c) Except as set forth herein or as otherwise provided by
law, holders of Series A Preferred Stock shall have no special
voting rights and their consent shall not be required (except to
the extent they are entitled to vote with holders of Common Stock
as set forth herein) for taking any corporate action.
Section 4. CERTAIN RESTRICTIONS.
(a) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided
in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on
shares of Series A Preferred Stock outstanding shall have been
paid in full, or declared and a sum sufficient for the payment
therefor be set apart for payment and be in the process of
payment, the Corporation shall not:
(1) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding
up) to the Series A Preferred Stock;
(2) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Stock, except
dividends paid ratably on the Series A Preferred Stock and
all such parity stock on which dividends are payable or in
arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
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(3) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as
to dividends or upon liquidation, dissolution or winding up)
to the Series A Preferred Stock, PROVIDED that the
Corporation may at any time redeem, purchase or otherwise
acquire shares of any such junior stock in exchange for
shares of any stock of the Corporation ranking junior (as to
both dividends and upon dissolution, liquidation or winding
up) to the Series A Preferred Stock; or
(4) redeem or purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock or any
shares of stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such
shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and
other relative rights and preferences of the respective
series and classes, shall determine in good faith will
result in fair and equitable treatment among the holders of
the respective series or classes.
(b) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration
any shares of stock of the Corporation unless the Corporation
could, under paragraph (a) of this Section 4, purchase or
otherwise acquire such shares at such time and in such manner.
Section 5. REACQUIRED SHARES. Any shares of Series A
Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and
cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of
a new series of Preferred Stock subject to the conditions and
restrictions on issuance set forth herein, in the Certificate of
Incorporation, or in any other Certificate of Designation
creating a series of Preferred Stock or any similar stock or as
otherwise required by law.
Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon
any liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (a) to the holders of shares of stock
ranking junior (either as to dividends or as to amounts payable
upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of Series A
Preferred Stock shall have received an amount per share (rounded
to the nearest cent) equal to the greater of (1) $1,000 per
share, or (2) an amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 1,000 times the
aggregate amount to be distributed per share to holders of Common
Stock, plus, in either case, an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment, or (b) to the holders of
stock ranking on a parity (either as to dividends or as to
amounts payable upon liquidation, dissolution or winding up) with
the Series A Preferred Stock, except distributions made ratably
on the Series A Preferred Stock and all such parity stock in
proportion to the total amounts to which the holders of all such
Shares are entitled upon such liquidation, dissolution or winding
up. If the Corporation shall at any time declare or pay any
dividend on Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or
otherwise) into a greater or lesser number of shares of Common
Stock, then in each such case the aggregate amount to which
holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under the proviso in clause
(a)(2) of the preceding sentence shall be adjusted by multiplying
such amount by a fraction the numerator of which is the
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<PAGE>
number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common
Stock that was outstanding immediately prior to such event.
Section 7. CONSOLIDATION, MERGER, ETC. If the
Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common
Stock are exchanged for or changed into other stock or
securities, cash or any other property, or any combination
thereof, then in any such case each share of Series A Preferred
Stock shall at the same time be similarly exchanged or changed
into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 1,000 times the aggregate amount
of stock, securities, cash or any other property (payable in
kind), or any combination thereof, as the case may be, into which
or for which each share of Common Stock is changed or exchanged.
If the Corporation shall at any time declare or pay any dividend
on the Common Stock payable in shares of Common Stock, or effect
a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with
respect to the exchange or change of shares of Series A Preferred
Stock shall be adjusted by multiplying such amount by a fraction,
the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that was
outstanding immediately prior to such event.
Section 8. REDEMPTION. The shares of Series A Preferred
Stock shall not be redeemable. So long as any shares of Series A
Preferred Stock remain outstanding, the Corporation shall not
purchase or otherwise acquire for consideration any shares of
stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock unless
the Corporation shall substantially concurrently also purchase or
acquire for consideration a proportionate number of shares of
Series A Preferred Stock.
Section 9. RANK. The Series A Preferred Stock shall
rank, with respect to payment of dividends and the distribution
of assets, junior to all series of any other class of the
Corporation's Preferred Stock.
Section 10. AMENDMENT. The Certificate of Incorporation
of the Corporation shall not be amended in any manner which would
materially alter or change the powers, preferences, privileges or
special rights of the Series A Preferred Stock so as to affect
them adversely without the affirmative vote of the holders of at
least two-thirds of the outstanding shares of Series A Preferred
Stock, voting together as a single class.
A-5
<PAGE>
IN WITNESS WHEREOF, this Certificate of Designation is
executed on behalf of the Corporation by its President, and
attested by its Secretary, this ____ day of April, 1995.
PRONET INC.
By:________________________
Jackie R. Kimzey
Chairman
ATTEST:
By:____________________________
Mark A. Solls
Secretary
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<PAGE>
EXHIBIT B
Form of Right Certificate
Certificate No. R- _____ Rights
NOT EXERCISABLE AFTER APRIL 10, 2005 OR
EARLIER IF REDEMPTION OR EXCHANGE OCCURS.
THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01
PER RIGHT AND TO EXCHANGE ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY
ACQUIRING PERSONS (AS DEFINED IN SECTION 1 OF
THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT
HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
Right Certificate
PRONET INC.
This certifies that _____________________________, or registered assigns,
is the registered owner of the number of Rights set forth above, each of
which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated as of April __, 1995 (the "Rights
Agreement"), between PRONET INC., a Delaware corporation (the "Company"), and
Chemical Shareholder Services Group, Inc. (the "Rights Agent"), to purchase
from the Company at any time after the Distribution Date (as such term is
defined in the Rights Agreement) and prior to 5:00 p.m., Dallas, Texas time,
on April 10, 2005, at the Corporate Trust Office of the Rights Agent (or at
the office of its successor as Rights Agent), one one-thousandth (1/1000) of
a fully paid non-assessable share of Series A Junior Participating Preferred
Stock, par value $1.00 per share (the "Preferred Shares"), of the Company, at
a purchase price of [$120.00] per one one-thousandth (1/1000) of a Preferred
Share (the "Purchase Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase duly executed. The number
of Rights evidenced by this Right Certificate (and the number of one
one-thousandths of a Preferred Share which may be purchased upon exercise
hereof) set forth above, and the Purchase Price set forth above, are the
number and Purchase Price as of April 10, 1995, based on the Preferred Shares
as constituted at such date. As provided in the Rights Agreement, the
Purchase Price and the number of one one-thousandths of a Preferred Share
which may be purchased upon the exercise of the Rights evidenced by this
Right Certificate are subject to modification and adjustment upon that
happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by
B-1
<PAGE>
reference and made a part hereof and to which Rights Agreement reference is
hereby made for a full description of the rights, limitations of rights,
obligations, duties and immunities hereunder of the Rights Agent, the Company
and the holders of the Right Certificates. Copies of the Rights Agreement
are on file at the principal executive offices of the Company and the
Corporate Trust Office of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the Corporate Trust Office of the Rights Agent, may be exchanged
for another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Preferred Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If
this Right Certificate shall be exercised in part, the holder shall be
entitled to receive upon surrender hereof another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate (i) may be redeemed by the Company at a redemption price
of $.01 per Right or (ii) may be exchanged by the Company in whole or in part
for Preferred Shares or shares of the Company's common stock, par value $0.01
per share.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-thousandth of a Preferred Share, which may, at the
election of the Company, be evidenced by depositary receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Preferred Shares or
of any other securities of the Company which may at any time be issuable on
the exercise hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such, any of the
rights of a stockholder of the Company or any right to vote for the election
of directors or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be entitled to any benefit under the
Rights Agreement or be valid or obligatory for any purpose until it shall
have been authenticated by the Right Agent.
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<PAGE>
WITNESS the facsimile signatures of the proper officers of the Company
and its corporate seal.
Dated as of ___________________, ____.
ATTEST: PRONET INC.
[SEAL]
_______________________________ By:____________________________________
Secretary Chairman
Authentication:
This is one of the Right Certificates referred to in the within-mentioned
Rights Agreement.
Chemical Shareholders Services Group, Inc., as Rights Agent
By:____________________________________
Authorized Signature
B-3
<PAGE>
[Form of Reverse Side of Right Certificate)
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Right Certificate)
FOR VALUE RECEIVED, __________________________________________ hereby
sells, assigns and transfers unto ___________________________________________
_____________________________________________________________________________
(Please print name and address of transferee)
______________________________________________________________________________
this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ___________________________
Attorney, to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution.
Dated as of ___________________, ____.
_________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent n the United States.
______________________________________________________________________________
[To be executed if statement is correct]
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights Agreement).
_________________________________
Signature
______________________________________________________________________________
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<PAGE>
[Form of Reverse Side of Right Certificate -- continued]
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate)
TO PRONET INC.:
The undersigned hereby irrevocably elects to exercise _____________
Rights represented by this Right Certificate to purchase the Preferred Shares
(or other securities) issuable upon the exercise of such Rights and requests
that certificates for such Preferred Shares (or other securities) be issued
in the name of:
Please insert social security
or other identifying number:
______________________________
______________________________________________________________________________
(Please print name and address)
______________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number:
_______________________________
______________________________________________________________________________
(Please print name and address)
______________________________________________________________________________
Dated as of ___________________, ____.
_________________________________
Signature
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<PAGE>
[Form of Reverse Side of Right Certificate -- continued]
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
[To be executed if statement is correct]
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights Agreement).
_________________________________
Signature
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
NOTICE
The signature in the foregoing Form of Assignment or Form of Election to
Purchase must conform to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any
change whatsoever.
In the event the certification set forth above in the Form of Assignment
or the Form of Election to Purchase, as the case may be, is not completed,
the Company and the Rights Agent will deem the beneficial owner of the Rights
evidenced by this Right Certificate to be an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights Agreement) and such Assignment
or Election to Purchase will not be honored.
B-6
<PAGE>
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On March 30, 1995, the Board of Directors of ProNet Inc. (the
"Company"), authorized the issuance of one preferred share purchase right (a
"Right") with respect to each outstanding share of common stock, $0.01 par
value (the "Common Shares"), of the Company. The rights were issued on April
10, 1995 to the holders of record of Common Shares on that date. Each Right
entitles the registered holder to purchase from the Company one
one-thousandth of a share of Series A Junior Participating Preferred Stock,
$1.00 par value (the "Preferred Shares"), of the Company at a price of $[120]
per one one-thousandth of a Preferred Share (the "Purchase Price"), subject
to adjustment. The description and terms of the Rights are set forth in a
Rights Agreement (the "Rights Agreement") dated as of April 5, 1995, between
the Company and Chemical Shareholder Services Group, Inc., as Rights Agent
(the "Rights Agent").
DETACHMENT OF RIGHTS; EXERCISE. Initially, the Rights will attach to
all Common Share certificates representing outstanding shares and no separate
Right Certificate will be distributed. The Rights will separate from the
Common Shares and a Distribution Date will occur upon the earlier of (i) 10
business days following a public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") has acquired
beneficial ownership of 20% or more of the outstanding Voting Shares (as
defined in the Rights Agreement) of the Company, or (ii) 10 business days
following the commencement or announcement of an intention to commence a
tender offer or exchange offer the consummation of which would result in the
beneficial ownership by a person or group of 20% or more of such outstanding
Voting Shares.
Until the Distribution Date (or earlier redemption or expiration of the
Rights) (i) the Rights will be evidenced, with respect to any of the Common
Shares outstanding on April 10, 1995, by the certificates representing such
Common Shares with a copy of this Summary of Rights attached thereto, (ii)
the Rights will be transferred with and only with the Common Shares, (iii)
new Common Share certificates issued after April 10, 1995, upon transfer or
new issuance of the Common Shares will contain a notation incorporating the
Rights Agreement by reference, and (iv) the surrender for transfer of any
certificates for Common Shares outstanding as of April 10, 1995, even without
such notation or a copy of this Summary of Rights being attached thereto,
will also constitute the transfer of the Rights associated with the Common
Shares represented by such certificate.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights (the "Right Certificates") will be mailed
to holders of record of the Common Shares as of the close of business on the
Distribution Date and such separate Right Certificates alone will thereafter
evidence the Rights.
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<PAGE>
The Rights are not exercisable until the Distribution Date. The Rights
will expire on ____________, 2005 (the "Final Expiration Date"), unless the
Final Expiration Date is extended or the Rights are earlier redeemed or
exchanged by the Company as described below.
If a person or group were to acquire 20% or more of the Voting Shares of
the Company, each Right then outstanding (other than Rights beneficially
owned by the acquiring person which would become null and void) would become
a right to buy that number of Common Shares (or under certain circumstances,
the equivalent number of one one-thousandths of a Preferred Share) that at
the time of such acquisition would have a market value of two times the
Purchase Price of the Right.
If the Company were acquired in a merger or other business combination
transaction or more than 50% of its consolidated assets or earning power were
sold, 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 would have a
market value of two times the Purchase Price of the Right.
PREFERRED SHARES. The dividend and liquidation rights, and the
non-redemption feature, of the Preferred Shares are designed so that the
value of one one-thousandth of a Preferred Share purchasable upon exercise of
each Right will approximate the value of one Common Share. The Preferred
Shares issuable upon exercise of the Rights will be non-redeemable and rank
junior to all other series of the Company's preferred stock. Each whole
Preferred Share will be entitled to receive a quarterly preferential dividend
in an amount per share equal to the greater of (i) $1.00 in cash, or (ii) in
the aggregate, 1,000 times the dividend declared on the Common Shares. In
the event of liquidation, the holders of the Preferred Shares will be
entitled to receive a preferential liquidation payment equal to the greater
of (i) $1,000 per share, or (ii) in the aggregate, 1,000 times the payment
made on the Common Shares. In the event of any merger, consolidation or
other transaction in which Common Shares are exchanged for or changed into
other stock or securities, cash or other property, each whole Preferred Share
will be entitled to receive 1,000 times the amount received per Common Share.
Each whole Preferred Share shall be entitled to 1,000 votes on all matters
submitted to a vote of the stockholders of the Company, and Preferred Shares
shall generally vote together as one class with the Common Stock and any
other capital stock on all matters submitted to a vote of stockholders of the
Company.
The offer and sale of the Preferred Shares issuable upon exercise of the
Rights will be registered with the Securities and Exchange Commission and
such registration will not be effective until the Rights become exercisable.
ANTIDILUTION AND OTHER ADJUSTMENTS. The number of one one-thousandths
of a Preferred Share or other securities or property issuable upon exercise
of the Rights, and the Purchase Price payable, are subject to customary
adjustments from time to time to prevent dilution.
The number of outstanding Rights and the number of one one- thousandths
of a Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event
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<PAGE>
of a stock split of the Common Shares or a stock dividend on the Common
Shares payable in Common Shares or subdivisions, consolidations or
combinations of the Common Shares occurring, in any such case, prior to the
Distribution Date.
EXCHANGE OPTION. At any time after the acquisition by a person or group
of affiliated or associated persons of beneficial ownership of 20% or more of
the outstanding Voting Shares of the Company and before the acquisition by a
person or group of 50% or more of the outstanding Voting Shares of the
Company, the Board of Directors may, at its option, issue Common Shares in
mandatory redemption of, and in exchange for, all or part of the then
outstanding and exercisable Rights (other than Rights owned by such person or
group which would become null and void) at an exchange ratio of one Common
Share (or one one-thousandth of a Preferred Share) for each two Common Shares
for which each Right is then exercisable, subject to adjustment.
REDEMPTION OF RIGHTS. At any time prior to the first public
announcement that a person or group has become the beneficial owner of 20% or
more of the outstanding Voting Shares, the Board of Directors of the Company
may redeem all but not less than all the then outstanding Rights at a price
of $0.01 per Right (the "Redemption Price"). The redemption of the Rights
may be made effective at such time, on such basis and with such conditions as
the Board of Directors in its sole discretion may establish. Immediately upon
the action of the Board of Directors ordering 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.
NO RIGHTS AS STOCKHOLDER . 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.
AMENDMENT OF RIGHTS. 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 extend the Final Expiration Date, and,
provided a Distribution Date has not occurred, to extend the period during
which the Rights may be redeemed, except that after the first public
announcement that a person or group has become the beneficial owner of 20% or
more of the outstanding Voting Shares, no such amendment may materially and
adversely affect the interests of the holders of the Rights.
THIS SUMMARY DESCRIPTION OF THE RIGHTS DOES NOT PURPORT TO BE COMPLETE
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE RIGHTS AGREEMENT, WHICH
IS HEREBY INCORPORATED HEREIN BY REFERENCE.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A
dated April __, 1995. A copy of the Rights Agreement is available free of
charge from the Company.
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<PAGE>
EXHIBIT 5
Specimen of legend to be placed, pursuant to Section 3(d) of the
Rights Agreement, on all new Common Share certificates issued by the Company
after April 10, 1995 and prior to the Distribution Date upon transfer,
exchange or new issuance.
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Rights Agreement
between ProNet Inc. and Chemical Shareholder Services Group, Inc.,
dated as of April 5, 1995 (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 ProNet Inc.
Under certain circumstances, as set forth in the Rights Agreement,
such Rights will be evidenced by separate certificates and will no
longer be evidenced by this certificate. ProNet Inc. will mail to
the holder of this certificate a copy of the Rights Agreement
without charge after receipt of a written request therefor. As
described in the Rights Agreement, Rights issued to or acquired by
any Acquiring Person or any Affiliate or Associate thereof (each
as defined in the Rights Agreement) shall, under certain
circumstances, become null and void.
