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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
HERITAGE MEDIA CORPORATION
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(Exact name of registrant as special in its charter)
IOWA 42-1299303
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(State of incorporation (IRS Employer
or organization) Identification No.)
13355 NOEL ROAD, STE. 1500, DALLAS, TEXAS 75240
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(Address of principal executive office) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
TO BE SO REGISTERED EACH CLASS IS TO BE REGISTERED
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None None
Securities to be registered pursuant to Section 12(g) of the Act:
PREFERRED STOCK PURCHASE RIGHTS
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(Title of Class)
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Item 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
On August 15, 1994, the Board of Directors of Heritage Media
Corporation, an Iowa corporation (the "Company"), declared a dividend of one
preferred stock purchase right (a "Right") for each outstanding share of Class A
Common Stock, $.01 par value, and Class C Common Stock, $.01 par value
(collectively, the "Common Stock"), of the Company. The dividend is payable to
shareholders of record on August 29, 1994 (the "Record Date"). Each Right will
entitle the registered holder thereof, until the earlier of August 29, 2004 (the
"Final Expiration Date") and the redemption or exchange of the Rights, to
purchase from the Company one one-hundredth (1/100) of a share of Series A
Junior Participating Preferred Stock, without par value (the "Series A Preferred
Stock"), of the Company at a purchase price of $70.00, subject to adjustment
(the "Purchase Price"). The description and terms of the Rights are set forth
in the Rights Agreement dated as of August 15, 1994 (the "Rights Agreement"),
between the Company and The Bank of New York, as Rights Agent.
The Rights will be represented by the certificates for the Common
Stock, together with a copy of the Summary of Rights to Purchase Shares of
Series A Junior Participating Preferred Stock substantially in the form of
Exhibit C to the Rights Agreement (the "Summary of Rights"), will not be
exercisable and will not be transferable apart from the Common Stock until the
earlier of (i) the tenth day after a public announcement that a Person (as
defined in the Rights Agreement), other than the Company, any Subsidiary (as so
defined) of the Company, any employee benefit plan of the Company or any
Subsidiary of the Company or any entity holding shares of Common Stock for or
pursuant to the terms of any such plan, alone or together with Affiliates (as so
defined) and Associates (as so defined) of such Person (an "Acquiring Person"),
has become the Beneficial Owner (as defined in the Rights Agreement) of 15% or
more of the outstanding shares of Common Stock (or, if such date occurs before
the Record Date, the Record Date) or (ii) the tenth business day (or such later
date as may be determined by action of the Board of Directors prior to such time
as any Person becomes an Acquiring Person) following the commencement of, or
announcement of an intention to commence, an offer the consummation of which
would result in a Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or any Subsidiary of the Company or any
entity holding shares of Common Stock for or pursuant to the terms of any such
plan) beneficially owning 15% or more of the outstanding shares of Common Stock
(the earlier of (i) or (ii) being called the "Distribution Date").
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Until the Distribution Date (or earlier redemption or expiration of
the Rights), new Common Stock certificates issued after August 29, 1994 upon
transfer or new issuance of shares of Common Stock will contain a notation
incorporating the Rights Agreement by reference. Until the Distribution Date
(or earlier redemption or expiration of the Rights), the surrender for transfer
of any Common Stock certificates outstanding as of the Record Date, even without
such notation or a copy of the Summary of Rights attached thereto, will also
constitute the transfer of the Rights associated with the shares of Common Stock
represented by such certificate. Following the Distribution Date, or, with
respect to shares of Common Stock issued on or after the Distribution Date and
prior to the earlier of the Redemption Date and the Final Expiration Date by
reason of the exercise of any option, warrant, right or conversion or exchange
privilege contained in any option, warrant, right or convertible or exchangeable
security issued by the Company prior to the Distribution Date (other than the
Rights), simultaneously with the issuance of such shares of Common Stock,
separate certificates for the Rights will be mailed to holders of record of the
shares of Common Stock as of such date. The Rights may then begin trading
separately from the shares of Common Stock.
In the event that on or after the first date of public announcement by
the Company or an Acquiring Person that an Acquiring Person has become such (the
"Share Acquisition Date") the Company is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are sold in one or a series of transactions (other than in the ordinary
course of business), proper provision will be made so that each holder of a
Right will thereafter have the right to receive, upon the exercise thereof at
the then current Purchase Price of the Right, that number of shares of common
stock of the acquiring company which at the time of such transaction will have a
market value of two times the Purchase Price of the Right. In the event that
any Person, together with its Affiliates and Associates, becomes the Beneficial
Owner of 15% or more of the shares of Common Stock then outstanding, proper
provision shall be made so that each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will thereafter be void), will
thereafter have the right to receive upon exercise that number of shares of
Common Stock of the Company having a market value of two times the Purchase
Price of the Right. Under no circumstances may a Right be exercised following
the occurrence of an event set forth in the preceding sentence prior to the
expiration of the Company's right of redemption.
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At any time prior to the earlier to occur of (i) the tenth business
day (subject to extension) after the Share Acquisition Date or (ii) the Final
Expiration Date, the Company may redeem the Rights in whole, but not in part, at
the price of $.01 per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after August 15, 1994 (the
"Redemption Price"). The redemption of the Rights may be made effective at such
time, on such bases and with such conditions as the Board of Directors in its
sole discretion may establish. After the redemption period has expired, the
Company's right of redemption may be reinstated in certain instances if an
Acquiring Person reduces its beneficial ownership to 10% or less of the
outstanding shares of Common Stock of the Company in a transaction or series of
transactions not involving the Company. Promptly upon the action of the Board
of Directors of the Company electing to redeem the Rights, the Company shall
make announcement thereof, and from and after the date of such election by the
Board of Directors to redeem 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 per Right.
At any time after any Person becomes an Acquiring Person and prior to
the acquisition by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or any Subsidiary of the
Company or any entity holding shares of Common Stock for or pursuant to the
terms of any such plan), together with all Affiliates and Associates of such
Person, of 50% or more of the outstanding shares of Common Stock of the Company,
the Board of Directors of the Company may exchange the Rights (other than those
Rights owned by the Acquiring Person or its Affiliates or Associates which have
become void), in whole or in part, at an exchange ratio of one share of Common
Stock, or one one-hundredth of a share of Series A Preferred Stock (or of a
share of a class or series of the Company's preferred stock or common stock
having equivalent rights, preferences and privileges), per Right (subject to
adjustment).
The Rights are not exercisable until the Distribution Date. The
Rights will expire on the Final Expiration Date, unless the Final Expiration
Date is extended or unless the Rights are earlier redeemed or exchanged by the
Company, in each case as described herein. Until a Right is exercised, the
holder thereof, as such, will have no rights as a shareholder of the Company,
including, without limitation, the right to vote or to receive dividends.
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The Purchase Price payable, and the number of shares of Series A
Preferred Stock, Common Stock or other securities or property issuable upon
exercise of the Rights are subject to adjustment from time to time to prevent
dilution (i) in the event of a stock dividend on, or a subdivision, combination
or reclassification of, the Series A Preferred Stock, (ii) upon the grant to
holders of the shares of Series A Preferred Stock of certain rights or warrants
to subscribe for or purchase shares of Series A Preferred Stock at a price, or
securities convertible into shares of Series A Preferred Stock with a conversion
price, less than the then current market price of the shares of Series A
Preferred Stock or (iii) upon the distribution to holders of the shares of
Series A Preferred Stock of evidences of indebtedness or assets (excluding a
regular quarterly cash dividend not in excess of 125% of the rate of the last
regular quarterly cash dividend theretofore paid on, or a dividend payable in
shares of, Series A Preferred Stock) or of subscription rights or warrants
(other than those referred to above).
The number of outstanding Rights and the number of one one-hundredths
of a share of Series A Preferred Stock, Common Stock or other securities or
property issuable upon exercise of each Right are also subject to adjustment in
the event of a stock split of the Common Stock or a stock dividend on the Common
Stock payable in shares of Common Stock or subdivisions, consolidations or
combinations of the Common Stock occurring, in any such case, prior to the
Distribution Date.
Shares of Series A Preferred Stock purchasable upon exercise of the
Rights will not be redeemable. Each share of Series A Preferred Stock will be
entitled to a minimum preferential quarterly dividend payment of $.25 per share
but will be entitled to an aggregate dividend of 100 times the dividend declared
per share of Common Stock. In the event of liquidation of the Company, the
holders of the shares of Series A Preferred Stock will be entitled to a minimum
preferential liquidation payment of $1.00 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of the shares of Series A
Preferred Stock shall be entitled to an aggregate payment of 100 times the
payment made per share of Common Stock, as adjusted to reflect any dividend on
the Common Stock payable in shares of Common Stock or any subdivision,
combination or reclassification of the Common Stock. Each share of Series A
Preferred Stock will have 100 votes and vote together with the Common Stock.
Finally, in the event of any merger, consolidation or other transaction in which
shares of Common Stock are exchanged, each share of Series A Preferred Stock
will be entitled to receive 100 times the amount received per share of Common
Stock. These rights are protected by customary antidilution provisions.
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Because of the nature of the dividend, liquidation and voting rights
of the Series A Preferred Stock, the value of the one one-hundredth interest in
a share of Series A Preferred Stock purchasable upon exercise of each Right
should approximate the value of one share of Common Stock.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional shares of Common Stock or Series A Preferred
Stock will be issued (other than fractions which are integral multiples of one
one-hundredth of a share of Series A Preferred Stock) and in lieu thereof, an
adjustment in cash will be made based on the market price of the Common Stock or
Series A Preferred Stock on the last trading day prior to the date of exercise.
The terms of the Rights may be amended by the Board of Directors of
the Company in any manner (including to shorten or lengthen any time period such
as the redemption period) at any time prior to the Distribution Date and
thereafter by the Board in certain respects, including: (a) generally to
shorten or lengthen any time period, PROVIDED, HOWEVER, that the Rights
Agreement cannot be amended to lengthen (i) any time period unless (A) approved
by a majority of the Disinterested Directors (as defined in the Rights
Agreement) and (B) such lengthening is for the benefit of the holders of the
Rights or (ii) a time period for redemption at such time as the Rights are not
then redeemable; and (b) other amendments not adverse to the interests of
holders of the Rights.
One Right will be distributed to shareholders of the Company for each
share of Common Stock owned of record by them on August 29, 1994. The Company
will issue one Right with each share of Common Stock that shall become
outstanding prior to the Distribution Date. In addition, Rights will be issued
(unless the Board of Directors otherwise provides) with each share of Common
Stock issued before or after the Distribution Date upon the conversion of
convertible securities or the exercise of options issued or granted prior to the
Distribution Date.
The Rights have certain antitakeover effects. The Rights may cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Board of Directors of the Company. The Rights
should not interfere with any merger or other business combination approved by
the Board of Directors because the Rights may be redeemed by the Company at $.01
per Right as described above.
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The Rights Agreement specifying the terms of the Rights, which
includes as exhibits thereto the form of the Articles of Amendment establishing
the terms of the Series A Preferred Stock, the form of Rights Certificate and
the form of the Summary of Rights, is attached hereto as an exhibit and is
incorporated herein by reference. The foregoing description of the Rights and
the Series A Preferred Stock is qualified in its entirety by reference to such
exhibit.
Item 2. EXHIBITS.
1. Rights Agreement dated as of August 15, 1994, between Heritage
Media Corporation and The Bank of New York, which includes the
form of Articles of Amendment establishing the terms of the
Series A Junior Participating Preferred Stock, without par value,
as Exhibit A, the form of Rights Certificate as Exhibit B and the
Summary of Rights to Purchase Shares of Series A Junior
Participating Preferred Stock as Exhibit C. Pursuant to the
Rights Agreement, printed Rights Certificates will not be mailed
until as soon as practicable after the earlier of (i) the tenth
day after public announcement that a person or group has acquired
beneficial ownership of 15% or more of the outstanding shares of
Common Stock or (ii) the tenth business day after a person
commences or announces its intention to commence a tender or
exchange offer the consummation of which would result in the
beneficial ownership by a person or group of 15% or more of the
outstanding shares of Common Stock.
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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.
HERITAGE MEDIA CORPORATION
Date: August 29, 1994 By: /S/ JOSEPH D. MAHAFFEY
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Name: Joseph D. Mahaffey
Title: Executive Vice President
and Chief Financial Officer
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EXHIBIT INDEX
Exhibit
NUMBER DESCRIPTION OF EXHIBIT
1 Rights Agreement dated as of August 15, 1994, between Heritage Media
Corporation and The Bank of New York, which includes the form of
Articles of Amendment establishing the terms of the Series A Junior
Participating Preferred Stock, without par value, as Exhibit A, the
form of Rights Certificate as Exhibit B and the Summary of Rights to
Purchase Shares of Series A Junior Participating Preferred Stock as
Exhibit C. Pursuant to the Rights Agreement, printed Rights
Certificates will not be mailed until as soon as practicable after the
earlier of (i) the tenth day after public announcement that a person
or group has acquired beneficial ownership of 15% or more of the
outstanding shares of Common Stock or (ii) the tenth business day
after a person commences or announces its intention to commence a
tender or exchange offer the consummation of which would result in the
beneficial ownership by a person or group of 15% or more of the
outstanding shares of Common Stock.
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RIGHTS AGREEMENT
DATED AS OF AUGUST 15, 1994
BETWEEN
HERITAGE MEDIA CORPORATION
AND
THE BANK OF NEW YORK,
AS RIGHTS AGENT
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TABLE OF CONTENTS
SECTION PAGE
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1 Certain Definitions............................. 1
2 Appointment of Rights Agent..................... 6
3 Issuance of Rights Certificates................. 7
4 Form of Rights Certificates..................... 9
5 Countersignature and Registration............... 10
6 Transfer, Split Up, Combination and Exchange
of Rights Certificates; Mutilated, Destroyed,
Lost or Stolen Rights Certificates........... 11
7 Exercise of Rights; Purchase Price;
Expiration Date of Rights.................... 12
8 Cancellation and Destruction of
Rights Certificates.......................... 14
9 Reservation and Availability of
Preferred Stock.............................. 14
10 Record Date of Preferred Stock
Ownership.................................... 16
11 Adjustment of Purchase Price, Number of
Shares or Number of Rights................... 16
12 Certificate of Adjusted Purchase Price
or Number of Shares.......................... 26
13 Consolidation, Merger or Sale or Transfer
of Assets or Earning Power................... 26
14 Fractional Rights and Fractional Shares......... 29
15 Rights of Action................................ 30
16 Agreement of Holders of the Rights.............. 31
17 Rights Certificate Holder Not Deemed
a Stockholder................................ 32
18 Concerning the Rights Agent..................... 32
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SECTION PAGE
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19 Merger or Consolidation or of the Rights Agent.. 33
20 Duties of the Rights Agent....................... 33
21 Change of the Rights Agent....................... 37
22 Issuance of New Rights Certificates.............. 38
23 Redemption...................................... 38
24 Exchange........................................ 40
25 Notice to Holders of Rights Certificates
of Certain Events............................. 42
26 Other Notices................................... 43
27 Supplements and Amendments...................... 44
28 Successors...................................... 45
29 Determinations and Actions by the
Board of Directors, etc...................... 45
30 Benefits of this Agreement...................... 45
31 Severability.................................... 45
32 Governing Law................................... 46
33 Counterparts.................................... 46
34 Descriptive Headings............................ 46
Signatures...................................... 47
Exhibit A - Form of Articles of Amendment Establishing
Series A Junior Participating Preferred Stock
Exhibit B - Form of Rights Certificate
Exhibit C - Summary of Rights to Purchase Shares of Series A
Junior Participating Preferred Stock
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RIGHTS AGREEMENT
Rights Agreement dated as of August 15, 1994 (the "Agreement") between
Heritage Media Corporation, an Iowa corporation (the "Company"), and The Bank of
New York, a New York banking corporation (the "Rights Agent").
W I T N E S S E T H :
WHEREAS, the Board of Directors of the Company has authorized and
declared a dividend of one preferred stock purchase right (individually a
"Right" and collectively the "Rights") for each share of Common Stock (as
hereinafter defined) of the Company outstanding on August 29, 1994 (the "Record
Date"), each Right representing the right to purchase one one-hundredth of a
share of Preferred Stock (as hereinafter defined) upon the terms and subject to
the conditions herein set forth, and has further authorized and directed (i) the
issuance of one Right with respect to each share of Common Stock which shall
become outstanding between the Record Date and the earliest of the Distribution
Date, the Redemption Date and the Final Expiration Date (as each of such terms
is hereinafter defined) and (ii) the issuance of one Right with respect to each
share of Common Stock which shall become outstanding between the Distribution
Date and the earlier of the Redemption Date and the Final Expiration Date by
reason of the exercise of any option, warrant, right or conversion or exchange
privilege contained in any option, warrant, right or convertible or exchangeable
security (other than the Rights) issued by the Company prior to the Distribution
Date, unless the Company's Board of Directors shall expressly provide to the
contrary at the time of issuance of any such option, warrant, right or
convertible or exchangeable security.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the respective meanings indicated:
(a) "ACQUIRING PERSON" shall mean any Person who or which, together
with all Affiliates and Associates of such Person, shall be the Beneficial Owner
of 15% or more of the shares of Common Stock of the Company then outstanding,
but shall not include (i) the Company, (ii) any Subsidiary of the Company and
(iii) any employee benefit plan of the Company or of any Subsidiary of the
Company or any entity holding such shares of Common Stock for or pursuant to the
terms of any such plan. Notwithstanding the foregoing, no Person shall become
an "Acquiring Person" as the result of an acquisition by the Company of its
shares of Common Stock which, by reason of reducing the
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number of such shares of Common Stock outstanding, increases the number of
shares of Common Stock Beneficially Owned by such Person to 15% or more of such
shares of Common Stock then outstanding; PROVIDED, HOWEVER, that if any Person,
other than a Person excepted in the first sentence of this definition, shall
become the Beneficial Owner of 15% or more of such outstanding shares of Common
Stock by reason of any purchase by the Company of its shares of Common Stock and
shall, after such purchase, become the Beneficial Owner of any additional such
shares of Common Stock, then such Person shall be deemed to be an "Acquiring
Person".
(b) "ADJUSTMENT EVENT" shall mean any Section 11(a)(ii) Event or any
Section 13 Event.
(c) "ADJUSTMENT SHARES" shall have the meaning set forth in Section
11(a)(ii).
(d) "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; PROVIDED, HOWEVER,
that any Subsidiary of the Company, any employee benefit plan of the Company or
of any Subsidiary of the Company or any entity holding shares of Common Stock of
the Company for or pursuant to the terms of any such plan shall not be deemed an
Affiliate or Associate.
(e) A Person shall be deemed the "BENEFICIAL OWNER" of, and shall be
deemed to "BENEFICIALLY OWN," any securities which:
(i) such Person and such Person's Affiliates and Associates
beneficially own, directly or indirectly;
(ii) such Person and such Person's Affiliates or Associates,
directly or indirectly, have: (A) the right to acquire (whether such
right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (other than
customary agreements with and among underwriters and selling group
members with respect to a bona fide public offering of securities),
upon the exercise of conversion or exchange rights, rights (other than
the Rights), warrants or options or otherwise; PROVIDED, HOWEVER, that
a Person shall not be deemed the Beneficial Owner of, or to
Beneficially Own, (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, (II) securities
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issuable upon exercise of the Rights at any time prior to the occurrence of an
Adjustment Event or (III) securities issuable upon exercise of the Rights from
and after the occurrence of an Adjustment Event if such Rights were acquired by
such Person or such Person's Affiliates or Associates prior to the Distribution
Date, pursuant to Section 3(a) or Section 22 or pursuant to Section 11(a)(i) in
connection with an adjustment made with respect to any of the Rights heretofore
specified in this clause (III); or (B) the right to vote pursuant to any
agreement, arrangement or understanding; PROVIDED, HOWEVER, that a Person shall
not be deemed the Beneficial Owner of, or to Beneficially Own, any security if
the agreement, arrangement or understanding to vote such security (I) arises
solely from a revocable proxy or consent given to such Person or any of such
Person's Affiliates or Associates in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable rules and
regulations promulgated under the Exchange Act or (II) is made in connection
with, or is to otherwise participate in, a proxy or consent solicitation made or
to be made pursuant to, and in accordance with, the applicable rules and
regulations promulgated under the Exchange Act, in the case of either clause
(I) or (II) of this proviso whether or not such agreement, arrangement or
understanding is also then reportable by such Person on Schedule 13D promulgated
under the Exchange Act (or any comparable or successor report then in effect);
or
(iii) are beneficially owned, directly or indirectly, by any
other Person with which such Person or any of such Person's Affiliates
or Associates has any agreement, arrangement or understanding (other
than customary agreements with and among underwriters and selling
group members with respect to a bona fide public offering of
securities) for the purpose of acquiring, holding, voting (except to
the extent contemplated by the proviso to Section 1(e)(ii)(B)) or
disposing of any securities of the Company.
Notwithstanding anything in this definition to the contrary,
(A) the phrase "then outstanding," when used with reference to a
Person's Beneficial Ownership of securities of the Company, shall mean
the number of such securities then issued and outstanding, plus the
number or amount of such securities not then actually issued and
outstanding which such Person would be deemed to Beneficially Own
under this definition;
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(B) any agreement, arrangement or understanding (whether or not in
writing), or any communication or discussion, among two or more Persons
with respect to any matter relating to the management, operation or conduct
of the business of the Company, including any discussion or agreement on,
or any communication with respect to, a position with respect to any such
matter and the disclosure of such communication, discussion, agreement or
position to other Persons (including shareholders of the Company) or to the
Company shall not constitute an agreement, arrangement or understanding
contemplated by Section 1(e)(ii)(B); and (C) a Person shall not be deemed
to be the "Beneficial Owner" of, or to "Beneficially Own," pursuant to
subparagraph (i), (ii) or (iii) of this subsection (e), shares of Common
Stock or other securities of the Company beneficially owned by the Company,
any Subsidiary of the Company, any employee benefit plan of the Company or
of any Subsidiary of the Company or any entity holding shares of Common
Stock of the Company for or pursuant to the terms of any such plan.
(f) "BUSINESS DAY" shall mean any day other than a Saturday, a Sunday
or a day on which banking institutions in the State of New York are authorized
or obligated by law or executive order to close.
(g) "CLOSE OF BUSINESS" on any given date shall mean 5:00 P.M., New
York time, on such date or, if such date is not a Business Day, then 5:00 P.M.,
New York time, on the next succeeding Business Day.
(h) "COMMON STOCK" when used with reference to the Company, shall
mean the Class A Common Stock, $.01 par value, and the Class C Common Stock,
$.01 par value, of the Company. "Common Stock," when used with reference to any
Person other than the Company, shall mean the capital stock (or equity interest)
with the greatest voting power of such other Person or, if such other Person is
a Subsidiary of another Person, the Person or Persons which ultimately control
such first-mentioned Person.
(i) "CURRENT PER SHARE MARKET PRICE" shall have the meaning set forth
in Section 11(d)(i).
(j) "CURRENT VALUE" shall have the meaning set forth in Section
11(a)(iii).
(k) "DISINTERESTED DIRECTOR" shall mean any member of the Company's
Board of Directors who is unaffiliated with an Acquiring Person or any Affiliate
or Associate of an Acquiring
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Person and was a member of the Company's Board of Directors prior to the time
that an Acquiring Person became such, and any successor of a Disinterested
Director who is unaffiliated with an Acquiring Person or any Affiliate or
Associate of an Acquiring Person and is recommended to succeed a Disinterested
Director by a majority of Disinterested Directors then on the Company's Board of
Directors.
(l) "DISTRIBUTION DATE" shall have the meaning set forth in
Section 3(a).
(m) "EQUIVALENT COMMON STOCK" shall have the meaning set forth in
Section 11(a)(iii).
(n) "EQUIVALENT PREFERRED STOCK" shall have the meaning set forth in
Section 11(b).
(o) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
(p) "EXCHANGE RATE" shall have the meaning set forth in
Section 24(a).
(q) "FINAL EXPIRATION DATE" shall have the meaning set forth in
Section 7(a).
(r) "GROUP" shall mean two or more Persons acting as a partnership,
limited partnership, syndicate or other group for the purpose of acquiring,
holding or disposing of the shares of Common Stock of the Company.
(s) "PERSON" shall mean any individual, firm, corporation,
partnership or other entity or Group, and shall include any successor (by merger
or otherwise) thereof; PROVIDED, HOWEVER, that when two or more Persons act as a
partnership, limited partnership, syndicate or other Group for the purpose of
acquiring, holding or disposing of the shares of Common Stock of the Company,
such partnership, limited partnership, syndicate or other Group shall be deemed
a single "Person".
(t) "PREFERRED STOCK" shall mean the Series A Junior Participating
Preferred Stock, without par value, of the Company having the rights and
preferences set forth in the Articles of Amendment attached to this Agreement as
Exhibit A.
(u) "PRINCIPAL PARTY" shall have the meaning set forth in
Section 13(b).
(v) "PURCHASE PRICE" shall have the meaning set forth in Section 4.
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(w) "RECORD DATE" shall have the meaning set forth in the recital
clause at the beginning of this Agreement.
(x) "REDEMPTION DATE" shall have the meaning set forth in
Section 7(a).
(y) "RIGHTS" shall have the meaning set forth in the recital clause
at the beginning of this Agreement.
(z) "RIGHTS CERTIFICATE" shall have the meaning set forth in
Section 3(a).
(aa) "SECTION 11(A)(II) ADJUSTMENT DATE" shall have the meaning set
forth in Section 11(a)(iii).
(bb) "SECTION 11(A)(II) EVENT" shall mean the event transaction set
forth in Section 11(a)(ii).
(cc) "SECTION 13 EVENT" shall mean any event or transaction set forth
in clause (i), (ii) or (iii) of Section 13(a).
(dd) "SHARE ACQUISITION DATE" shall mean the first date on which there
shall be a public announcement by the Company or an Acquiring Person that an
Acquiring Person has become such.
(ee) "SPREAD" shall have the meaning set forth in Section 11(a)(iii).
(ff) "SUBSIDIARY" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity securities
or equity interest is owned, directly or indirectly, by such Person.
(gg) "SUBSTITUTION PERIOD" shall have the meaning set forth in Section
11(a)(iii).
(hh) "SUMMARY OF RIGHTS" shall have the meaning set forth in
Section 3(b).
(ii) "TRADING DAY" shall have the meaning set forth in Section
11(d)(i).
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. 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 upon ten (10) days' prior written notice to the Rights
Agent. The Rights Agent shall have no duty to supervise, and shall in no event
be liable for, the acts or omissions of any
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such Co-Rights Agent. In the event the Company appoints one or more Co-Rights
Agents, the respective duties of the Rights Agent and of any Co-Rights Agents
shall be as the Company shall determine.
SECTION 3. ISSUANCE OF RIGHTS CERTIFICATES. (a) Until the earlier
of (i) the 10th day after the Share Acquisition Date (or, if such 10th day
occurs before the Record Date, the Record Date) and (ii) the 10th 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 shall become an Acquiring Person)
after the date of (x) the 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 entity holding shares of Common Stock of
the Company for or pursuant to the terms of any such plan) of, or (y) the first
public announcement of the intention of any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company or any entity holding such shares of Common Stock for
or pursuant to the terms of any such plan) to commence, a tender or exchange
offer the consummation of which would result in any Person becoming the
Beneficial Owner of such shares of Common Stock aggregating 15% or more of such
shares of Common Stock then outstanding, including any such date which is after
the date of this Agreement and prior to the issuance of the Rights (the earlier
of clause (i) and (ii) being hereinafter called the "Distribution Date"), the
Rights shall be evidenced (subject to the provisions of Section 3(b)) by the
certificates for shares of Common Stock (which certificates shall also be deemed
to be Rights Certificates) and not by separate Rights Certificates, and the
right to receive Rights Certificates shall be transferable only in connection
with the transfer of such shares of Common Stock. As soon as practicable after
the Distribution Date or, with respect to any such shares of Common Stock issued
on or after the Distribution Date and prior to the earlier of the Redemption
Date and the Final Expiration Date by reason of the exercise of any option,
warrant, right or conversion or exchange privilege contained in any option,
warrant, right or convertible or exchangeable security (other than the Rights)
issued by the Company prior to the Distribution Date, unless the Company's Board
of Directors shall expressly provide to the contrary at the time of the issuance
of any such option, warrant, right or convertible or exchangeable security,
simultaneously with the issuance of such shares of Common Stock, the Company
shall prepare and execute, the Rights Agent shall countersign and the Company
shall send or cause to be sent (or the Rights Agent will, if requested, send, at
the Company's expense), by first-class mail, postage prepaid, to each record
holder of such shares of Common Stock as of the Close of Business on the
Distribution Date
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or, with respect to shares of Common Stock issued on or after the Distribution
Date (unless otherwise provided with respect thereto as aforesaid), to the
record holder of such shares of Common Stock on the date of issuance, at the
address of such holder shown on the records of the Company, a Rights Certificate
in substantially the form of Exhibit B hereto (a "Rights Certificate"),
evidencing one Right for each such share of Common Stock so held. As of and
after the Distribution Date, the Rights shall be evidenced solely by such Rights
Certificates.
(b) On the Record Date, or as soon as practicable thereafter, the
Company shall send a copy of the Summary of Rights to Purchase Series A Junior
Participating Preferred Stock, in substantially the form of Exhibit C hereto
(the "Summary of Rights"), by first-class mail, postage prepaid, to each record
holder of shares of Common Stock of the Company as of the Close of Business on
the Record Date, at the address of such holder shown on the records of the
Company. Certificates for shares of Common Stock of the Company outstanding as
of the Record Date, until the Distribution Date or the earlier of the Redemption
Date or the Final Expiration Date, shall be deemed also to constitute
certificates for the Rights associated with the shares of Common Stock
represented by such certificates, together with a copy of the Summary of Rights
attached thereto, and the registered holders of the shares of Common Stock
represented thereby shall also be registered holders of the associated Rights.
Until the Distribution Date or the earlier of the Redemption Date and the Final
Expiration Date, the surrender for transfer of any such certificate, with or
without a copy of the Summary of Rights attached thereto, shall also constitute
the transfer of the Rights associated with the shares of Common Stock
represented thereby.
(c) Certificates for shares of Common Stock of the Company which
become outstanding (including, without limitation, shares of Common Stock
referred to in the last sentence of this subsection (c) which shall be
subsequently reissued) after the Record Date and prior to the earliest of the
Distribution Date, the Redemption Date and the Final Expiration Date shall also
be deemed to constitute certificates for the Rights, but shall have impressed,
printed or written thereon, or otherwise affixed thereto, the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Rights Agreement, dated as of
August 15, 1994 (the "Rights Agreement"), between Heritage Media
Corporation and The Bank of New York, the terms of which are
incorporated herein by reference and a copy of which is on file at the
principal executive office of Heritage
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Media Corporation. Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate certificates and will
no longer be evidenced by this certificate. Heritage Media Corporation
will mail to the holder of this certificate a copy of the Rights Agreement
without charge after receipt of a written request therefor. Under certain
circumstances described in the Rights Agreement, Rights issued to or held
by any Person who is, was or becomes an Acquiring Person or an Affiliate or
Associate thereof (as such terms are defined in the Rights Agreement),
whether currently held by or on behalf of such Person or any subsequent
holder, may become null and void.
Certificates containing the foregoing legend, until the Distribution
Date or the earlier of the Redemption Date and the Final Expiration Date, shall
also be deemed to constitute certificates for the Rights associated with the
shares of Common Stock represented by such certificates, and the surrender for
transfer of any such certificate shall also constitute the transfer of the
Rights associated with the shares of Common Stock represented thereby. In the
event that the Company shall purchase or acquire any of its shares of Common
Stock after the Record Date but prior to the Distribution Date, any Rights
associated with such shares of Common Stock shall be deemed cancelled and
retired so that the Company shall not be entitled to exercise any Rights
associated with shares of Common Stock which are no longer outstanding.
SECTION 4. FORM OF RIGHTS CERTIFICATES. (a) The Rights Certificates
(and the Form of Election to Purchase and Certification of Status and the Form
of Assignment and Certification of Status to be printed on the reverse thereof)
shall be substantially in the forms set forth in 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, or as may be required to
comply with any applicable law or any rule or regulation made pursuant thereto
or with any rule or regulation of any stock exchange on which the Rights may
from time to time be listed, or to conform to usage. The Rights Certificates
shall be in a machine printable format and in a form reasonably satisfactory to
the Rights Agent. Subject to the provisions of Sections 11 and 22, the Rights
Certificates, whenever distributed, shall be dated as of the Record Date (or, in
the case of Rights with respect to shares of Common Stock originally issued
after the Record Date, the same date as the certificate evidencing such shares
of Common Stock), shall show the date of countersignature and shall entitle the
holders thereof to purchase such number of one one-hundredths of a share
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<PAGE>
of Preferred Stock as shall be set forth therein at the price per one one-
hundredth of a share of Preferred Stock set forth therein (the "Purchase
Price"), but the number of such one one-hundredths of a share of Preferred Stock
and the Purchase Price shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) or Section
22 hereof that represents Rights beneficially owned by: (i) an Acquiring Person
or any Associate or Affiliate of such Acquiring Person, (ii) a transferee of an
Acquiring Person or an Affiliate or Associate of such Acquiring Person who
becomes a transferee after the Acquiring Person becomes such or (iii) a
transferee of an Acquiring Person or an Affiliate or Associate of such Acquiring
Person 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
of the Company has determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect avoidance of Section 11(a)(ii), and any
Rights Certificate issued pursuant to Section 6 or Section 11 hereof upon
transfer, exchange, replacement or adjustment of any other Rights Certificate
referred to in this sentence, shall contain (to the extent feasible) the
following legend:
The Rights represented by this Rights Certificate are or were beneficially
owned by a Person who is, was or became an Acquiring Person or an Affiliate
or Associate of an Acquiring Person (as such terms are defined in the
Rights Agreement). Accordingly, this Rights Certificate and the Rights
represented hereby are or may become void in the circumstances specified in
Section 11(a)(ii) of such Rights Agreement.
The Company shall instruct the Rights Agent in writing of the Rights
Certificates which should be so legended and shall supply the Rights Agent with
such legended Rights Certificates.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION. The Rights
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, its President, any of its Vice Presidents or its Treasurer, either
manually or by facsimile signature, shall have affixed thereto the Company's
seal or a facsimile thereof attested by the Secretary or any of its Assistant
Secretaries, either manually or by facsimile signature. The Rights Certificates
shall be manually countersigned by an author-
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<PAGE>
ized signatory of the Rights Agent and shall not be valid for any purpose unless
so countersigned. In case any officer of the Company who shall have executed
any of the Rights Certificates or who shall have attested the Company's seal
thereon shall cease to be such officer of the Company before countersignature by
an authorized signatory of the Rights Agent and issuance and delivery by the
Company, such Rights Certificates, nevertheless, may be countersigned by the
Rights Agent and issued and delivered by the Company with the same force and
effect as though the person who executed such Rights Certificates or who
attested the Company's seal thereon had not ceased to be such officer of the
Company; and any Rights Certificate may be executed on behalf of the Company and
the Company's seal may be attested by any person who, at the actual date of such
execution or attestation, shall be a proper officer of the Company, although at
the date of the execution of this Rights Agreement such person was not such an
officer.
After the Distribution Date, the Rights Agent shall keep or cause to
be kept, at its principal office, books for registration and transfer of the
Rights Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Rights Certificates, the number of
Rights evidenced on its face by each Rights Certificate and the date of each
Rights Certificate.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS CERTIFICATES. Subject
to the provisions of Section 4(b) and Section 14, at any time after the Close of
Business on the Distribution Date, and at or prior to the Close of Business on
the earlier of the Redemption Date and the Final Expiration Date, any Rights
Certificate or Rights Certificates (other than Rights Certificates representing
Rights which shall have become void pursuant to Section 11(a)(ii) or which have
been exchanged pursuant to Section 24) may be transferred, split up, combined or
exchanged for one or more Rights Certificates, entitling the registered holder
to purchase the same number of one one-hundredths of a share of Preferred Stock
as the Rights Certificate or Rights Certificates surrendered then entitled such
holder to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Rights Certificate or Rights Certificates shall make
such request in a writing delivered to the Rights Agent, and shall surrender the
Rights Certificate or Rights Certificates to be transferred, split up, combined
or exchanged, with the Form of Assignment and Certification of Status properly
executed, along with a signature guarantee and such other and further
documentation as the Rights Agent may reasonably request, at the designated
office of the Rights Agent. Thereupon the Company shall prepare and execute,
and the Rights
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<PAGE>
Agent shall countersign and deliver, to the person entitled thereto one or more
Rights Certificates as so requested. The Company may require payment by the
holders of Rights Certificates of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer, split
up, combination or exchange of Rights Certificates.
Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Rights Certificate, and, in the case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and, at the Company's
request, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Rights Certificate if mutilated, along with a signature
guarantee and such other and further documentation as the Rights Agent may
reasonably request, the Company shall prepare and execute, and the Rights Agent
shall countersign and deliver to the registered holder in lieu of the Rights
Certificate so lost, stolen, destroyed or mutilated, a new Rights Certificate of
like tenor.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS. (a) Subject to Section 11(a)(ii), the registered holder of any Rights
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein, including, without limitation, the restrictions on
exercisability set forth in Section 9, Section 11(a)(iii) and Section 23(a)), in
whole or in part, at any time after the Distribution Date, upon surrender of
such Rights Certificate, with the Form of Election to Purchase and Certification
of Status on the reverse side thereof duly executed, to the Rights Agent at the
designated office of the Rights Agent, along with a signature guarantee and such
other and further documentation as the Rights Agent may reasonably request,
together with payment of the Purchase Price for each one one-hundredth of a
share of Preferred Stock (or such other securities, cash or assets, as the case
may be) as to which the Rights are then being exercised, at or prior to the
earliest of (i) the Close of Business on August 29, 2004 (the "Final Expiration
Date"), (ii) the time at which the Rights are redeemed as provided in Section 23
(the "Redemption Date") and (iii) the time at which such Rights are exchanged as
provided in Section 24.
(b) The Purchase Price for each one one-hundredth of a share of
Preferred Stock upon the exercise of a Right shall initially be $70.00, shall be
subject to adjustment from time to time as provided in Sections 11 and 13 and
shall be payable in lawful money of the United States of America in accordance
with subsection (c) of this Section 7.
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<PAGE>
(c) Upon receipt of a Rights Certificate representing then
exercisable Rights, with the Form of Election to Purchase and Certification of
Status on the reverse side thereof duly executed, accompanied by payment of the
Purchase Price for the shares of Preferred Stock (or such other securities, cash
or assets, as the case may be) to be purchased and an amount equal to any
applicable transfer tax (as determined by the Rights Agent) required to be paid
by the holder of such Rights Certificate in accordance with Section 9 by
certified or cashier's check or money order payable to the order of the Company,
the Rights Agent shall thereupon promptly (i) requisition from any transfer
agent of the shares of Preferred Stock certificates for the number of shares of
Preferred Stock to be purchased, the Company hereby irrevocably authorizing any
such transfer agent to comply with all such requests, or otherwise requisition
or obtain from the appropriate Person or Persons such other securities, cash or
assets, as the case may be, the Company hereby irrevocably authorizing any such
request, (ii) when appropriate, requisition from the Company the amount of cash
to be paid in lieu of the issuance of fractional shares in accordance with
Section 14, (iii) after receipt of such certificates, other securities or assets
cause the same to be delivered to or upon the order of the registered holder of
such Rights Certificate, registered in such name or names as may be designated
by such registered holder, and (iv) after receipt, deliver such cash to or upon
the order of the registered holder of such Rights Certificate.
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing the Rights remaining unexercised shall be prepared and executed by
the Company and countersigned and delivered by the Rights Agent to the
registered holder of such Rights Certificate or to his duly authorized assigns,
subject to the provisions of Section 14.
(e) Notwithstanding subsection (a) of this Section 7, a holder of a
Right may exercise such Right after the Distribution Date but prior to the
receipt of the associated Rights Certificate by so notifying the Rights Agent in
writing and furnishing to the Rights Agent such information and evidence as to
such election as the Rights Agent may reasonably request; PROVIDED, HOWEVER,
that the Rights Agent shall not be required to take any of the actions specified
in subsection (c) of this Section 7 until such holder has satisfied the
requirements specified therein.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to any Rights or
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Rights Certificate upon the purported transfer or exercise thereof unless the
registered holder thereof shall have (i) completed and signed the Certification
of Status following the Form of Election to Purchase or the Form of Assignment
set forth on the reverse side of the Rights Certificate surrendered for such
exercise or assignment and (ii) provided such additional evidence as to the
identity of the Beneficial Owner (or former Beneficial Owner) thereof or the
Affiliates or Associates thereof as the Company shall reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES. All
Rights Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form
or, if surrendered to the Rights Agent, shall be cancelled by it; and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
this Agreement. The Company shall deliver to the Rights Agent for cancellation,
and the Rights Agent shall cancel, any other Rights Certificate purchased or
acquired by the Company otherwise than upon the exercise thereof.
SECTION 9. RESERVATION AND AVAILABILITY OF PREFERRED STOCK. (a)
The Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued shares of Preferred Stock (and,
following an Adjustment Event, shares of Common Stock or other securities), or
any authorized and issued shares of Preferred Stock (and, following an
Adjustment Event, shares of Common Stock or other securities) held in its
treasury, the number of shares of Preferred Stock (and, following an Adjustment
Event, shares of Common Stock or other securities) required to permit the
exercise in full of all outstanding Rights.
(b) The Company covenants and agrees that it will take all such
action as may be necessary to insure that all shares of Preferred Stock (and,
following an Adjustment Event, shares of Common Stock or other securities)
delivered upon exercise of the Rights shall, at the time of delivery of the
certificates for such shares of Preferred Stock, Common Stock or other
securities upon payment of the Purchase Price therefor, be duly and validly
authorized and issued and fully paid and nonassessable.
(c) So long as the shares of Preferred Stock (and, following an
Adjustment Event, shares of Common Stock or other securities) issuable upon the
exercise of the Rights are listed on any national securities exchange, the
Company shall use its best efforts to cause, from and after the Distribution
Date, all shares of Preferred Stock (and, following an Adjustment Event,
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<PAGE>
shares of Common Stock or other securities) reserved for such issuance to be
listed on such exchange upon official notice of issuance.
(d) The Company shall use its best efforts, as soon as practicable
following the first occurrence of an Adjustment Event, to (i) file a
registration statement under the Securities Act of 1933, as amended (the "Act"),
with respect to the securities purchasable upon exercise of the Rights (and, if
legally required, the Rights themselves) on an appropriate form, (ii) cause such
registration statement to become effective as soon as practicable after such
filing and (iii) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Act) until the
expiration of the Rights. The Company will also take such action as may be
appropriate under the blue sky laws of the various states. The Company may
temporarily suspend, for a period of time not to exceed ninety (90) days, the
exercisability of the Rights in order to prepare and file such registration
statement or in order to comply with such blue sky laws. Upon any such
suspension, the Company shall issue a public announcement, and shall give
simultaneous written notice to the Rights Agent, stating that the exercisability
of the Rights has been temporarily suspended. Notwithstanding any provision of
this Rights Agreement to the contrary, the Rights shall not be exercisable in
any jurisdiction, unless the requisite qualification in such jurisdiction shall
have been obtained, or an exemption therefrom shall be available and until any
necessary registration statement has been declared effective. In the absence of
actual written notice from the Company, the Rights Agent may assume that any
Right exercised is permitted to be exercised under applicable law and shall have
no liability for acting in reliance upon such assumption.
(e) The Company further covenants and agrees that, subject to
Section 6, it will pay when due and payable any and all federal and state
original issue or transfer taxes and charges which may be payable in respect of
the issuance or delivery of the Rights Certificates or of any shares of
Preferred Stock (or Common Stock or other securities) issued upon the exercise
of the Rights. The Company shall not, however, be required to pay any transfer
tax which may be payable in respect of any transfer or delivery of any Rights
Certificate to a person other than, or the issuance of certificates for shares
of Preferred Stock (or Common Stock or other securities) upon exercise of the
Rights represented thereby in a name other than that of, the registered holder
of such Rights Certificate or to issue or deliver any certificates for shares of
Preferred Stock (or Common Stock or other securities) upon such exercise until
any such tax shall have been paid (any such tax being payable by
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the holder of such Rights Certificate at the time of surrender) or until it has
been established to the Company's reasonable satisfaction that no such tax is
due.
SECTION 10. RECORD DATE OF PREFERRED STOCK OWNERSHIP. Each Person in
whose name any certificate for shares of Preferred Stock (or Common Stock or
other securities) is issued upon the exercise of any Rights shall for all
purposes be deemed to have become the holder of record of the shares of
Preferred Stock (or Common Stock or other securities) represented thereby on,
and such certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered to the Rights Agent with proper
payment of the Purchase Price and all applicable transfer taxes; PROVIDED,
HOWEVER, that if the date of such surrender and payment shall be a date upon
which the transfer books of the Company for the Preferred Stock (or Common Stock
or other securities) are closed, such Person shall be deemed to have become the
record holder of such shares of Preferred Stock (or Common Stock or other
securities) on, and such certificate shall be dated, the next succeeding
Business Day on which the transfer books of the Company for the Preferred Stock
(or Common Stock or securities) are open.
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER
OF RIGHTS. The Purchase Price, the number and kind of shares covered by each
Right and the number of Rights outstanding are subject to adjustment from time
to time as provided in this Section 11.
(a)(i) In the event that the Company shall at any time after the date
of this Agreement (A) declare a dividend on its Preferred Stock payable in
shares of Preferred Stock, (B) subdivide its outstanding shares of Preferred
Stock, (C) combine its outstanding shares of Preferred Stock into a smaller
number of shares of Preferred Stock or (D) issue any shares of any class in a
reclassification of its Preferred Stock (including any such reclassification in
connection with a combination or merger in which the Company is the continuing
or surviving corporation), except as otherwise provided in this Section 11(a),
the Purchase Price in effect at the time of the record date for such dividend or
the effective date of such subdivision, combination or reclassification, and the
number and kind of shares of any class issuable upon exercise of the Rights at
such time, shall be proportionately adjusted so that the registered holder of
any Right exercised after such time shall be entitled to receive the aggregate
number and kind of shares of any class which, if such Right had been exercised
immediately prior to such time and at a time when the Preferred Stock transfer
books of the Company were open, such holder would have owned upon such exercise
and after giving effect to such dividend, subdivision, combination or
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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 the Company issuable upon the exercise thereof. If an event
occurs which would require an adjustment under both this Section 11(a)(i) and
Section (11)(a)(ii), the adjustment provided for in this Section 11(a)(i) shall
be in addition to, and shall be made prior to, any adjustment required pursuant
to Section 11(a)(ii).
(ii) Subject to Section 24, in the event that any Person (other than
the Company, any Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company or any entity holding shares of
Common Stock of the Company for or pursuant to the terms of any such plan) shall
become the Beneficial Owner of 15% or more of such shares of Common Stock then
outstanding (such occurrence being deemed to be a "Section 11(a)(ii) Event"),
then proper provision shall be made so that each holder of a Right, except as
otherwise provided in this paragraph (ii), shall thereafter have a right to
receive, upon the exercise thereof at a price equal to the then current Purchase
Price multiplied by the number of one one-hundredths of a share of Preferred
Stock for which a Right is then exercisable, in accordance with the terms of
this Agreement, and in lieu of shares of Preferred Stock, such number of shares
of Common Stock of the Company determined by (x) multiplying such current
Purchase Price by the number of one one-hundredths of a share of Preferred Stock
for which a Right is then exercisable and (y) dividing the product so obtained
by 50% of the then Current Per Share Market Price of the shares of Common Stock
of the Company, determined as provided in Section 11(d), on the fifth day after
the date of the occurrence or the date of first public announcement, whichever
shall be less, of the Section 11(a)(ii) Event requiring such adjustment (the
number of shares of Common Stock so determined being hereinafter called the
"Adjustment Shares"); PROVIDED, HOWEVER, that if the Section 11(a)(ii) Event
otherwise requiring such adjustment is also subject to the provisions of
Section 13, then only the provisions of Section 13 shall apply and no adjustment
shall be made pursuant to this Section 11(a)(ii).
From and after the first occurrence of a Section 11(a)(ii) Event, any
Rights that are or were acquired or Beneficially Owned by (i) an Acquiring
Person or any Affiliate or Associate of such Acquiring Person, (ii) a transferee
of an Acquiring Person or any Affiliate or Associate of such Acquiring Person
who becomes a transferee after such Acquiring Person becomes such or (iii) a
transferee of an Acquiring Person or any Affiliate or Associate of such
Acquiring Person who becomes a transferee prior to or concurrently with such
Acquiring Person becoming such and receives such Rights pursuant to either (A) a
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transfer (whether or not for consideration) from such 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
of the Company has determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect the avoidance of this Section 11(a)(ii)
shall be void, and any holder of such Rights shall thereafter have no right to
exercise such Rights under any provision of this Agreement. No Rights
Certificate shall be issued pursuant to Section 3 that represents Rights
Beneficially Owned by an Acquiring Person whose Rights would be void pursuant to
the preceding sentence or to any Affiliate or Associate thereof; no Rights
Certificate shall be issued at any time upon the transfer of any Rights to an
Acquiring Person whose Rights would be void pursuant to the preceding sentence
or to any Affiliate or Associate thereof or to any nominee of such Acquiring
Person, Affiliate or Associate; no Rights Certificate shall be issued at any
time upon the transfer of any Rights to any transferee whose Rights would be
void pursuant to the preceding sentence; and any Rights Certificate delivered to
the Rights Agent for transfer to any Person whose Rights would be void pursuant
to the preceding sentence shall be cancelled.
(iii) In the event that the number of shares of Common Stock authorized
by the Company's Amended and Restated Articles of Incorporation, as amended (the
"Articles"), which are not outstanding or reserved for issuance for purposes
other than the exercise of the Rights is insufficient to permit the exercise in
full of the Rights in accordance with paragraph (ii) of this subsection (a), the
Company shall: (A) determine the excess of (1) the value of the Adjustment
Shares issuable upon the exercise of each Right (the "Current Value") over
(2) the Purchase Price (such excess being hereinafter called the "Spread") and
(B) with respect to each Right, make adequate provision to substitute for the
Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash,
(2) a reduction in such Purchase Price, (3) Common Stock or other equity
securities of the Company having the same rights, privileges and preferences as
the Common Stock (hereinafter called "Equivalent Common Stock"), (4) debt
securities of the Company, (5) other assets or (6) any combination of the
foregoing having an aggregate value equal to the Current Value, such aggregate
value to be determined by the Board of Directors of the Company based upon the
advice of a nationally recognized investment banking firm selected by such Board
of Directors; PROVIDED, HOWEVER, that if the Company shall not have made
adequate provision to deliver aggregate value pursuant to clause (B) above
within 30 days following the later of (x) the first occurrence of a Section
11(a)(ii) Event and (y) the date on which the Company's right to redeem the
Rights pursuant to Sec-
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<PAGE>
tion 23(a) shall expire (the later of such events being hereinafter called the
"Section 11(a)(ii) Adjustment Date"), then the Company shall be obligated to
deliver, upon the surrender for exercise of each Right and without requiring
payment of such Purchase Price, shares of Common Stock (to the extent available)
and then, if and to the extent necessary, cash, which shares of Common Stock
and/or cash have an aggregate value equal to the Spread. If the Board of
Directors of the Company shall determine in good faith that it is likely that
sufficient additional shares of Common Stock could be authorized for issuance
upon exercise in full of the Rights, the 30-day period specified in the
preceding sentence may be extended to the extent necessary, but in no event more
than 90 days after the Section 11(a)(ii) Adjustment Date, in order that the
Company may seek shareholder approval for the authorization of such additional
shares of Common Stock (such 30-day period, as it may be extended, being
hereinafter called the "Substitution Period"). To the extent that the Company
shall determine that action is required to be taken pursuant to the first and/or
second sentences of this Section 11(a)(iii), the Company (A) shall provide,
subject to Section 11(a)(ii), that such action shall apply uniformly to all
outstanding Rights and (B) may suspend the exercisability of the Rights until
the expiration of the Substitution Period in order to seek any authorization of
additional shares and/or to decide upon the appropriate form of distribution to
be made pursuant to such first sentence and to determine the value thereof. In
the event of any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily suspended, as
well as a public announcement of the time after which such suspension shall no
longer be in effect. For purposes of this Section 11(a)(iii), the value of the
Adjustment Shares shall be calculated upon the basis of the Current Per Share
Market Price of the shares of Common Stock of the Company, determined as
provided in Section 11(d), on the Section 11(a)(ii) Adjustment Date, and the
value of any share of Equivalent Common Stock shall be deemed to be equal to
such Current Per Share Market Price.
(b) In the event that the Company shall fix a record date for the
issuance of options, warrants or rights to all holders of its Preferred Stock
entitling them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase shares of Preferred Stock (or equity
securities of the Company having the same rights, privileges and preferences as
the Preferred Stock, the "Equivalent Preferred Stock") or securities convertible
into or exchangeable for Preferred Stock or Equivalent Preferred Stock at a
price per share of Preferred Stock or per Equivalent Preferred Stock (or having
a conversion or exchange price per share, in the case of securities convertible
into or exchangeable for Preferred Stock or Equiva-
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<PAGE>
lent Preferred Stock) less than the then Current Per Share Market Price of such
shares of Preferred Stock on such record date, the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of shares of Preferred Stock outstanding
on such record date, plus the number of shares of Preferred Stock which the
aggregate offering price of the total number of shares of Preferred Stock and/or
Equivalent Preferred Stock so to be offered (and/or the aggregate offering price
of the convertible or exchangeable securities so to be offered) would purchase
at such Current Per Share Market Price, and the denominator of which shall be
the number of shares of Preferred Stock outstanding on such record date, plus
the number of additional shares of Preferred Stock and/or Equivalent Preferred
Stock so to be offered (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 the
Company issuable upon the exercise thereof. In case such subscription price may
be paid in a consideration part or all of which shall be in a form other than
cash, the value of such consideration shall be as determined in good faith by
the Board of Directors of the Company, whose determination shall be described in
a statement filed with the Rights Agent and shall be binding on the Rights
Agent. Preferred Stock owned by or held for the account of the Company shall
not be deemed outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date is fixed; and
in the event that such options, warrants, rights or securities are not so
issued, the Purchase Price shall be adjusted to the Purchase Price which would
have been in effect if such record date had not been fixed.
(c) In the event that the Company shall fix a record date for the
making of any distribution to all holders of its Preferred Stock (including any
such distribution made in connection with a combination 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 at a rate not in excess
of 125% of the rate of the last regular quarterly cash dividend theretofore paid
or a dividend payable in such shares of Preferred Stock) or options, warrants or
rights (excluding those referred to in Section 11(b)), the Purchase Price to be
in effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the then Current Per Share Market Price of such
Preferred Stock on such record date, less the fair market value (as determined
in good faith by the Board of Directors of the Company, whose
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<PAGE>
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent) of the evidences of indebtedness or assets
so to be distributed, or of such options, warrants or rights, properly
attributable to one share of Preferred Stock and the denominator of which shall
be such Current Per Share Market Price; 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 the Company issuable upon the exercise
thereof. Such adjustment shall be made successively whenever such a record date
is fixed; and in the event that such distribution is not so made, the Purchase
Price shall be adjusted to the Purchase Price which would have been in effect if
such record date had not been fixed.
(d)(i) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii), the "Current Per Share Market
Price" of any security, including the shares of Common Stock of the Company
(hereinafter in this Section 11(d)(i) called a "Security"), on any date shall be
deemed to be the average of the daily closing prices per share of such Security
for the 30 consecutive Trading Days immediately prior to such date and, for the
purpose of computations made pursuant to Section 11(a)(iii), the "Current Per
Share Market Price" of any Security on any date shall be deemed to be the
average of the daily closing prices per share of such Security for the 10
consecutive Trading Days immediately following such date; PROVIDED, HOWEVER,
that in the event that the Current Per Share Market Price of any Security is
determined during a period commencing with the announcement by the issuer of
such Security of (A) a dividend or distribution on such Security payable in such
Security or securities convertible into or exchangeable for such Security, or
(B) any subdivision, combination or reclassification of such Security, and
ending prior to the expiration of such 30 Trading Days or 10 Trading Days, as
the case may be, after the ex-dividend date for such dividend or distribution,
or the record date for such subdivision, combination or reclassification, then,
and in each such case, the Current Per Share Market Price of such Security shall
be appropriately adjusted to reflect the effect of such dividend, distribution,
subdivision, combination or reclassification. The closing price for each day
shall be the last sale price, regular way, or, in case no such sale shall take
place on such day, the average of the closing bid and asked prices, regular way,
in either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the American
Stock Exchange or, if the Security is not listed or admitted to trading on the
American Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading on the
principal national securities exchange on which the
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<PAGE>
Security is listed or admitted to trading or, if the Security is not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities
Dealers, Inc. Automated Quotations System ("NASDAQ") or such other system then
in use or, if on any such day the Security is not quoted by any such
organization, the average of the closing bid and asked prices, as furnished by a
professional market maker making a market in the Security selected by the Board
of Directors of the Company. The term "Trading Day" shall mean a day on which
the principal national securities exchange on which the Security is listed or
admitted to trading is open for the transaction of business or, if the Security
is not listed or admitted to trading on any national securities exchange, a
Business Day.
(ii) For the purpose of any computation hereunder, the Current Per
Share Market Price of the Preferred Stock shall be determined in accordance with
the method set forth in Section 11(d)(i). If the Preferred Stock is not
publicly traded, the Current Per Share Market Price of the Preferred Stock shall
be conclusively deemed to be the Current Per Share Market Price of the Common
Stock as determined pursuant to Section 11(d)(i) (appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the date hereof), multiplied by one hundred. If neither the Common Stock nor
the Preferred Stock of the Company is publicly traded, the "Current Per Share
Market Price" thereof shall mean the fair value per share as determined in good
faith by the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent and shall be binding on the
Rights Agent.
(e) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the Purchase
Price; PROVIDED, HOWEVER, that any adjustments which by reason of this
subsection (e) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest one one-millionth
of a share of Preferred Stock or one ten-thousandth of any other share or
security, as the case may be. Notwithstanding the first sentence of this
subsection (e), any adjustment required by this Section 11 shall be made no
later than the earlier of (i) three years from the date of the event or
transaction which requires such adjustment and (ii) the Final Expiration Date.
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<PAGE>
(f) If as a result of an adjustment made pursuant to Section 11(a) or
Section 13(a) the holder of any Right thereafter exercised shall become entitled
to receive any shares of any class of the Company other than Preferred Stock,
thereafter the number of such other shares so receivable upon exercise of any
Right shall be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with respect to the
Preferred Stock contained in subsections (a), (b), (c), (e), (g), (h), (i), (j),
(k), (m) and (n) of this Section 11, and the provisions of Sections 7, 9, 10, 13
and 14 with respect to the Preferred Stock shall apply on like terms to any such
other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths of a
share of Preferred Stock 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 the election provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations required to be made by subsection (b) or (c) of this Section 11,
each Right outstanding immediately prior to the making of such Purchase Price
adjustment shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, the number of one one-hundredth of a share of Preferred Stock
(calculated to the nearest one one-millionth) determined by (i) multiplying the
number of one one-hundredths of a share of Preferred Stock purchasable upon
exercise of such Right immediately prior to such Purchase Price adjustment by
the Purchase Price in effect immediately prior to such Purchase Price adjustment
and (ii) dividing the product so obtained by the Purchase Price in effect
immediately after such Purchase Price adjustment.
(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 substitution
for any adjustment in the number of one one-hundredths of a share of Preferred
Stock purchasable upon the exercise of a Right. Each Right outstanding after
such adjustment in the number of Rights shall be exercisable for the same number
of one one-hundredths of a share of Preferred Stock as a Right was exercisable
for immediately prior to such adjustment. Each Right held of record prior to
such adjustment shall become the number of Rights (calculated to the nearest one
ten-thousandth) determined 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
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<PAGE>
its election to adjust the number of Rights, indicating the record date for the
adjustment and, if known at such time, the amount of the adjustment to be made.
Such record date may be the date on which the Purchase Price is adjusted or any
day thereafter, but, if the Rights Certificates have been issued, shall be at
least 10 days after the date of such public announcement. If the Rights
Certificates have been issued, upon each adjustment of the number of Rights
pursuant to this subsection (i), the Company shall, as promptly as practicable,
but subject to Section 11(a)(ii), cause to be distributed to each registered
holder of the Rights Certificates on such record date Rights Certificates
evidencing, subject to Section 14, the additional Rights to which such
registered holder shall be entitled as a result of such adjustment or, at the
option of the Company, shall cause to be distributed to each such registered
holder, in substitution and replacement for the Rights Certificates held by such
registered holder prior to the date of adjustment, and upon surrender thereof,
if required by the Company, new Rights Certificates evidencing all the Rights to
which such registered holder shall be entitled after such adjustment. Rights
Certificates so to be distributed shall be executed and countersigned in the
manner provided for herein and shall be registered in the names of the
registered holders of the Rights Certificates on the record date specified in
the aforesaid public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of one one-hundredths of a share of Preferred Stock issuable upon the
exercise of the Rights, the Rights Certificates theretofore and thereafter
issued may continue to express the Purchase Price and the number of one one-
hundredths of a share of Preferred Stock which were expressed in the Rights
Certificates originally issued hereunder.
(k) Before taking any action which would cause an adjustment reducing
the Purchase Price below one one-hundredth of the then par value, if any, of the
shares of Preferred Stock issuable upon exercise of the Rights, the Company
shall take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid and
nonassessable shares of Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date of
the Preferred Stock and other shares or securities of the Company, if any,
issuable upon such exercise in excess of the shares of Preferred Stock and other
shares or securities of the Company, if
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<PAGE>
any, issuable upon such exercise on the basis of the Purchase Price in effect
prior to such adjustment; PROVIDED, HOWEVER, that the Company shall deliver to
such holder a due bill or other appropriate instrument evidencing such holder's
right to receive such additional shares of Common Stock and other shares or
securities, if any, upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to the adjustments expressly required by this Section 11, as and to the
extent that the Company, in its sole discretion, shall determine to be advisable
in order that any combination or subdivision of its shares of Preferred Stock,
or any issuance of its shares of Preferred Stock solely for cash at less than
the current market price thereof, any issuance solely for cash of shares of
Preferred Stock or securities which by their terms are convertible into or
exchangeable for shares of Preferred Stock, any dividend on its shares of
Preferred Stock payable in shares of Preferred Stock or any issuance of options,
warrants or rights subject to Section 11(b) hereafter made by the Company to the
holders of its shares of Preferred Stock, shall not be taxable to such
stockholders.
(n) In the event that at any time after the date of this Agreement
and prior to the Distribution Date, the Company shall (i) declare or pay any
dividend on the shares of Common Stock payable in shares of Common Stock or (ii)
effect a subdivision, combination or consolidation of the Common Stock (by
reclassification or otherwise than by payment of dividends in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in any
such case (i) the number of one one-hundredths of a share of Preferred Stock
purchasable after such event upon proper exercise of each Right shall be
determined by multiplying the number of one one-hundredths of a share of
Preferred Stock so purchasable immediately prior to such event by a fraction,
the numerator of which is the number of shares of Common Stock outstanding
immediately before such event and the denominator of which is the number of
shares of Common Stock outstanding immediately after such event, and (ii) each
share of Common Stock outstanding immediately after such event shall have issued
with respect to it that number of Rights which each share of Common Stock
outstanding immediately prior to such event had issued with respect to it. The
adjustments provided for in this subsection (n) shall be made successively
whenever such a dividend is declared or paid or such a subdivision, combination
or consolidation is effected. If such an event occurs which would require an
adjustment under Section 11(a)(ii) and this subsection (n), the adjustment
provided for in this subsection
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<PAGE>
(n) shall be in addition to and prior to any adjustment required pursuant to
Section 11(a)(ii).
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF
SHARES. Whenever any adjustment shall be required by Section 11 or 13, the
Company shall promptly (i) prepare a certificate setting forth such adjustment
and a brief statement of the facts requiring such adjustment, (b) file with the
Rights Agent and with each transfer agent for the Common Stock or the Preferred
Stock of the Company a copy of such certificate and (c) mail a brief summary
thereof to each registered holder of a Rights Certificate in accordance with
Section 25.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER. (a) In the event that, on or after the Share Acquisition Date,
directly or indirectly: (i) the Company shall consolidate with, or merge with
and into, any other Person and the Company shall not be the continuing or
surviving corporation, (ii) any Person shall consolidate with the Company, or
merge with and into the Company, and the Company shall be the continuing or
surviving corporation and, in connection with such consolidation or merger, all
or part of the outstanding shares of Common Stock of the Company shall be
changed into or exchanged for shares or other securities of any other Person (or
the Company), cash and/or other property or (iii) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer), in a transaction or a series of transactions other than in the
ordinary course of business, assets or earning power aggregating 50% or more of
the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any Person or Persons other than the Company or one or more of its
wholly-owned Subsidiaries, then, and in each such case, proper provision shall
be made so that (w) each holder of a Right (except as otherwise provided herein)
shall thereafter have the right to receive, upon the exercise thereof at a price
equal to the then current Purchase Price multiplied by the number of one one-
hundredths of a share of Preferred Stock for which a Right is then exercisable
in accordance with the terms of this Agreement and in lieu of shares of
Preferred Stock, the number of freely tradable shares of Common Stock of the
Principal Party, free and clear of all liens, encumbrances or other adverse
claims, determined by (A) multiplying such current Purchase Price by the number
of one one-hundredths of a share of Preferred Stock for which a Right is then
exercisable and (B) dividing the product so obtained by 50% of the then Current
Per Share Market Price of the shares of Common Stock of such Principal Party,
determined as provided in Section 11(d), on the date of consummation of such
consolidation, merger, sale or transfer; (x) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such consolidation,
merger, sale or
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<PAGE>
transfer, all the obligations and duties of the Company under this Agreement;
(y) the term "Company" shall thereafter be deemed to refer to such Principal
Party, it being specifically intended that the provisions of Section 11 shall
apply to such Principal Party; and (z) such Principal Party shall take such
steps (including, but not limited to, the reservation of a sufficient number of
its shares of Common Stock in accordance with Section 9) in connection with such
consummation as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably possible, in relation to the
shares of Common Stock thereafter deliverable upon the exercise of the Rights.
The Company shall not consummate any such consolidation, merger, sale or
transfer unless prior thereto the Company and such Principal Party shall have
executed and delivered to the Rights Agent a supplemental agreement so
providing. The Company shall not enter into any transaction of the kind set
forth in this subsection (a) if at the time of the consummation of such
transaction there are any options, warrants, rights, conversion or exchange
provisions or securities outstanding or any agreements or arrangements in effect
which, as a result of the consummation of such transaction, would eliminate or
substantially diminish the benefits intended to be afforded by the Rights. The
provisions of this Section 13 shall similarly apply to successive mergers,
consolidations, sales or other transfers. If, in the case of a transaction of
the kind described in clause (iii) of the first sentence of this subsection (a),
the Person or Persons to whom assets or earning power are sold or otherwise
transferred are individuals, then the preceding sentences of this subsection (a)
shall be inapplicable, and the Company shall require as a condition to such sale
or transfer that such Person or Persons pay to each holder of a Rights
Certificate, upon its surrender to the Rights Agent and in exchange therefor
(without requiring any payment by such holder), cash in the amount determined by
multiplying the then current Purchase Price by the number of one one-hundredths
of a share of Preferred Stock for which a Right is then exercisable.
(b) "Principal Party" shall mean, in the case of any transaction of
the kind described in clause (i) or (ii) of the first sentence of Section 13(a),
the Person which is the issuer of any securities into which shares of Common
Stock of the Company are converted in such transaction or, if there shall be
more than one such issuer, the issuer having shares of Common Stock with the
greatest aggregate market value; or if no securities are so issued, the Person
which is the other party to such transaction or, if there is more than one such
Person, the Person having shares of Common Stock with the greatest aggregate
market value; and in the case of any transaction of the kind described in
clause (iii) of the first sentence of Section 13(a), the Person which is the
party receiving the greatest portion of
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<PAGE>
the assets or earning power transferred pursuant to such transaction or
transactions; PROVIDED, HOWEVER, that in any such case (i) if the shares of
Common Stock of such Person shall not at the time of the consummation of such
transaction have been continuously registered under Section 12 of the Exchange
Act during the preceding 12-month period, and such Person shall be a direct or
indirect Subsidiary of another Person the shares of Common Stock of which shall
have been so registered, "Principal Party" shall mean such other Person; and
(ii) if such Person shall be a Subsidiary, directly or indirectly, of more than
one Person, the shares of Common Stock of two or more of which shall have been
so registered, "Principal Party" shall mean whichever of such Persons is the
issuer of shares of Common Stock having the greatest aggregate market value.
(c) The Company shall not consummate any such consolidation, merger,
sale or transfer unless the Principal Party shall have sufficient Common Stock
authorized to permit the full exercise of the Rights and prior thereto the
Company and such Principal Party shall have executed and delivered to the Rights
Agent a supplemental agreement providing for the terms set forth in Sections
13(a) and (b) above and further providing that, as soon as practicable after the
date of any consolidation, merger or sale of assets mentioned in Section 13(a)
above, the Principal Party will:
(i) prepare and file a registration statement under the Act,
with respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form, and will use its best
efforts to cause such registration statement to (A) become effective
as soon as practicable after such filing and (B) remain effective
(with a prospectus at all times meeting the requirements of the Act)
until the Final Expiration Date; and
(ii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form
10 under the Exchange Act.
In the event that one of the transactions described in Section 13(a)
hereof shall occur at any time after a Section 11(a)(ii) Event, the Rights which
have not theretofore been exercised shall thereafter become exercisable in the
manner described in Section 13(a).
(d) In no event shall the Rights Agent have any liability in respect
of any such Principal Party transactions,
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<PAGE>
including, without limitation, the propriety thereof. The Rights Agent may rely
and be fully protected in relying upon a certificate of the Company stating that
the provisions of this Section 13 have been fulfilled. Notwithstanding anything
in this Agreement to the contrary, the prior written consent of the Rights
Agent, which consent shall not be unreasonably withheld, must be obtained in
connection with any supplemental agreement which alters the rights or duties of
the Rights Agent.
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. (a) The
Company shall not be required to issue fractional Rights or to distribute Rights
Certificates which evidence fractional Rights. In lieu of fractional Rights,
there shall be paid to the registered holders of the Rights Certificates with
respect to which fractional Rights would otherwise be issuable an amount in cash
equal to the same fraction of the current market value of one Right. For the
purposes of this Section 14(a), the current market value of one Right shall be
the closing price per Right for the Trading Day immediately prior to the date on
which fractional Rights would have been otherwise issuable. The closing price
for any Trading Day shall be the last sale price, regular way, or, in case no
such sale shall take 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 American Stock Exchange or, if the Rights are not
listed or admitted to trading on the American Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the principal national securities exchange on
which the Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such Trading Day the Rights are not quoted by
any such organization, the average of the closing bid and asked prices, as
furnished by a professional market maker making a market in the Rights selected
by the Board of Directors of the Company. If on any such Trading Day no such
market maker is making a market in the Rights, the current market value of one
Right on such Trading Day shall be the fair value thereof as determined in good
faith by the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent and shall be binding on the
Rights Agent.
(b) The Company shall not be required to issue fractional shares of
Preferred Stock (other than fractions which are integral multiples of one one-
hundredth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates
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<PAGE>
which evidence fractional shares of Preferred Stock (other than fractions which
are integral multiples of one one-hundredth of a share of Preferred Stock). In
lieu of fractional shares of Preferred Stock that are not integral multiples of
one one-hundredth of a share of Preferred Stock, the Company shall pay to the
registered holders of the Rights Certificates at the time Rights represented
thereby are exercised, as herein provided, an amount in cash equal to the same
fraction of the current market value per share of Preferred Stock. For the
purposes of this Section 14(b), the Current Market Value Per Share of Preferred
Stock shall be the closing price per share of Preferred Stock (determined as
provided in Section 11(d)) for the Trading Day immediately prior to the date of
such exercise.
(c) Following the occurrence of an Adjustment Event, the Company
shall not be required to issued fractional shares of Common Stock upon exercise
of the Rights or to distribute certificates which evidence fractional shares of
Common Stock. In lieu of fractional shares of Common Stock, the Company shall
pay to the registered holders of the Rights Certificates at the time Rights
represented thereby are exercised, as herein provided, an amount in cash equal
to the same fraction of the Current Market Value Per Share of Common Stock. For
the purposes of this Section 14(c), the Current Market Value per Share of Common
Stock shall be the closing price per share of Common Stock (determined as
provided in Section 11(d)) for the Trading Day immediately prior to the date of
such exercise.
(d) Each holder of a Right, by accepting the same, expressly waives
such holder's right to receive any fractional Rights or any fractional shares of
Common Stock or Preferred Stock upon exercise of such Right (except as provided
above).
SECTION 15. RIGHTS OF ACTION. All rights of action in respect of
this Agreement, excepting the specific rights of action given to the Rights
Agent under Section 18, are vested in the registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
shares of Common Stock); and any registered holder of any Rights Certificate
(or, prior to the Distribution Date, of the shares of Common Stock), without the
consent of the Rights Agent or of the holder of any other Rights Certificate
(or, prior to the Distribution Date, of the shares of Common Stock), may, on
such registered holder's own behalf and for such registered holder's own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, such registered
holder's right to exercise its Rights in the manner provided in such Rights
Certificate and in this Agreement. Without limiting the generality of the
foregoing or any remedies available to the holders of the Rights, it is
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specifically acknowledged that the registered holders of the Rights would not
have an adequate remedy at law for any breach of this Agreement and will be
entitled to specific performance of the obligations under, and injunctive relief
against any actual or threatened violations of the obligations of any Person
subject to, this Agreement. Each holder of the Rights shall be entitled to
recover the reasonable costs and expenses, including attorneys' fees, incurred
by such holder in any action to enforce the provisions of this Agreement.
SECTION 16. AGREEMENT OF HOLDERS OF THE RIGHTS. Each 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:
(i) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Stock
of the Company;
(ii) after the Distribution Date, the Rights Certificates will
be transferable on the registry books of the Rights Agent only if
surrendered at the designated office of the Rights Agent, duly
endorsed or accompanied by a proper instrument of transfer and with
the appropriate forms on the reverse side thereof fully executed,
along with a signature guarantee and such other and further
documentation as the Rights Agent may reasonably request;
(iii) subject to Sections 6 and 11(a)(ii), the Company and the
Rights Agent may deem and treat the person in whose name a Rights
Certificate (or, prior to the Distribution Date, the associated Common
Stock certificate) is registered as the absolute owner thereof and of
the Rights represented thereby (notwithstanding any notations of
ownership or other writing on such Rights Certificates or the
associated Common Stock certificate made by anyone other than the
Company or the Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent shall be affected by any notice to
the contrary; and
(iv) 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
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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 that the Company must use its best efforts to have any such order,
decree or ruling lifted or otherwise overturned as soon as possible.
SECTION 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No
holder, as such, of any Rights Certificate shall be entitled to vote, to receive
dividends or other distributions or to exercise any preemptive rights, or shall
be deemed for any other purpose to be the holder of shares of Preferred Stock or
any other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby; nor shall anything contained herein
or in any Rights Certificate be construed to confer upon the holder of any
Rights Certificate, as such, any of the rights of a shareholder of the Company
or any right to vote for the election of directors or upon any other matter
submitted to shareholders at any meeting thereof, to give or withhold consent to
any corporate action, to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 25) or to receive dividends,
subscription rights or other distributions, until the Right or Rights
represented by such Rights Certificate shall have been exercised in accordance
with the provisions hereof.
SECTION 18. CONCERNING THE RIGHTS AGENT. The Company agrees to pay
to the Rights Agent such compensation as shall be agreed to in writing between
the Company and the Rights Agent for all services rendered by it hereunder and,
from time to time, on request of the Rights Agent, its reasonable expenses and
counsel fees and expenses incurred in the acceptance and administration of this
Agreement and the 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 gross negligence, bad faith or willful
misconduct on its part, for anything done or omitted by it in connection with
the acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability arising therefrom, directly
or indirectly. The provisions of this Section 18(a) shall survive the
expiration of the Rights and the termination of this Agreement.
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 Rights Certificate or
certificate for Preferred Stock or Common Stock or for other securities of the
Company, instrument of assignment or transfer, power of
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attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document believed by it to be genuine
and to be signed and executed by the proper Person or Persons, or in reliance
upon the advice of counsel as set forth in Section 20.
SECTION 19. MERGER OR CONSOLIDATION OF THE RIGHTS AGENT. Any
corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the stock transfer or
corporate trust 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 successor Rights Agent under the provisions of Section 21. In case at the
time such successor Rights Agent shall succeed to the agency created by this
Agreement any of the Rights Certificates shall have been countersigned but not
delivered, such successor Rights Agent may adopt the countersignature of its
predecessor Rights Agent and deliver the Rights Certificates so countersigned;
and in case at such time any of the Rights Certificates shall not have been
countersigned, such successor Rights Agent may countersign such Rights
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 Rights Certificates
shall have the full effect provided therein and in this Agreement.
In case at any time the name of the Rights Agent shall be changed and
at such time any of the Rights Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver the Rights Certificates so countersigned; and in case at such
time any of the Rights Certificates shall not have been countersigned, the
Rights Agent may countersign such Rights Certificates either in its prior name
or in its changed name; and in all such cases such Rights Certificates shall
have the full effect provided therein and in this Agreement.
SECTION 20. DUTIES OF THE RIGHTS AGENT. The Rights Agent undertakes
the duties and obligations expressly imposed by this Agreement (and no implied
duties or obligations shall be read into this Agreement against the Rights
Agent) upon the following terms and conditions, by all of which the Company and
the holders of Rights Certificates, by accepting the same, shall be bound:
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(a) The Rights Agent may consult with legal counsel of its
selection (who may be legal counsel for the Company), and the opinion
of such counsel shall be full and complete authorization and
protection to the Rights Agent as to any action taken or omitted by it
in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that
any fact or matter be proved or established by the Company prior to
taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a
certificate signed by any one of the Chairman of the Board, the
President, any Vice President, the Treasurer or the Secretary of the
Company and delivered to the Rights Agent; and such certificate shall
be full and complete authorization and protection to the Rights Agent
as to any action taken or omitted by it in good faith in reliance upon
such certificate.
(c) The Rights Agent shall be liable hereunder to the Company
and any other Person only for its own gross negligence, bad faith or
willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or
in the Rights Certificates (except its countersignature thereof) or be
required to verify the same, but all such statements and recitals are
and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights Agent)
or in respect of the validity or execution of any Rights Certificate
(except its countersignature thereof); nor shall it be responsible for
any breach by the Company of any covenant or condition contained in
this Agreement or in any Rights Certificate; nor shall it be
responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 11(a)(ii)),
for any adjustment or change in the terms of the Rights (including any
adjustment or change in the Purchase Price or in the number or kind of
shares or other securities or property issuable upon the exer-
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cise thereof) provided for in Section 3, 11, 13, 23 or 24 or for
ascertaining the existence of facts which would require any such change
or adjustment (except with respect to the exercise of Rights evidenced
by Rights 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
shares of Preferred Stock or Common Stock to be issued pursuant to this
Agreement or any Rights Certificate or as to whether any shares of
Preferred Stock or Common Stock will, when issued, be validly authorized
and issued and fully paid and nonassessable, nor shall the Rights
Agent be responsible for the legality of the terms hereof in its capacity
as an administrative agent.
(f) The Company agrees that it will inform the Rights Agent
promptly upon the Company's determination that a Person has become an
Acquiring Person, and the Rights Agent will not be responsible for
determining whether a Person has become an Acquiring Person prior to
such notification, except as such status may be indicated in the Form
of Certification of Status accompanying a Rights Certificate submitted
to the Rights Agent. The Company further 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 or the Secretary of the Company, and to apply
to such officers for advice or instructions in connection with its
duties; and the Rights Agent shall not be liable for any action taken
or omitted by it in good faith in accordance with the written
instructions of any such officer or for any delay in acting while
waiting for such instructions. Any application by the Rights Agent
for written instructions from the Company may, at the option of the
Rights Agent, set forth in writing any action proposed to be taken or
omitted by the Rights Agent under this Agreement and the date on
and/or after which such action shall be taken or such omission shall
be
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effective. The Rights Agent shall not be liable for any action taken by,
or omission of, the Rights Agent in accordance with a proposal included
in such application on or after the date specified in such application
(which date shall not be less than five Business Days after the date any
officer of the Company actually receives such application, unless any
such officer shall have consented in writing to any earlier date) unless
prior to taking any such action (or the effective date in the case of an
omission), the Rights Agent shall have received written instructions in
response to such application specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in the Rights, the
Common Stock or any 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, and may
otherwise act as fully and freely as though it were not the Rights
Agent under this Agreement; and nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or for
any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any of its duties hereunder
either directly 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 attorney or agent or for
any loss to the Company resulting from any such act, default, neglect
or misconduct, provided the Rights Agent exercised reasonable care in
the selection of such attorney or agent.
(j) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the Form of Certification
of Status attached to the Form of Election to Purchase or the Form of
Assignment, as the case may be, has either not been completed or
indicates an affirmative response to Question 1 and/or 2 thereof, the
Rights Agent shall not take any further action with respect to the
requested exercise or transfer without first consulting with the
Company.
(k) No provision of this Agreement shall require the Rights
Agent to expand or risk its own funds or otherwise incur any financial
liability in the
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performance of any of its duties hereunder or in the exercise of its rights
if there shall be reasonable grounds for believing that repayment of such
funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(l) In addition to the foregoing, the Rights Agent shall be
protected and shall incur no liability for, or in respect of, any
action taken or omitted by it in connection with its administration of
this Agreement if such acts or omissions are in reliance upon (i) the
proper execution of the Form of Certification of Status attached to
the Form of Election to Purchase or the Form of Assignment unless the
Rights Agent shall have actual knowledge that, as executed, such
certification is untrue, or (ii) the non-execution of such
certification, including, without limitation, any refusal to honor any
otherwise permissible assignment or election by reason of such
non-execution.
(m) The Company agrees to give the Rights Agent prompt written
notice of any event or ownership which would prohibit the exercise or
transfer of the Rights Certificates.
SECTION 21. CHANGE OF THE RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' prior notice mailed to the Company. The Company may
remove the Rights Agent or any successor Rights Agent upon 30 days' prior notice
mailed to the Rights Agent or successor Rights Agent, as the case may be, and to
each transfer agent of the Common Stock and Preferred Stock by registered or
certified mail, postage prepaid, and to each registered holder of the Rights
Certificates by first-class mail, postage prepaid. If the Rights Agent shall
resign or be removed or shall otherwise become incapable of acting, the Company
shall appoint a successor Rights Agent. If the Company shall fail to make such
appointment within 30 days after giving notice of such removal or after
receiving notice of such resignation or incapacity either from the resigning or
incapacitated Rights Agent or from the registered holder of a Rights Certificate
(who shall, with such notice, submit his Rights Certificate for inspection by
the Company), then the Rights Agent or the registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for the appointment
of a successor 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 of America or the State of New York
(or of any other state
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so long as such corporation is authorized to do business as a banking
institution in the State of New York), be in good standing under the laws of the
jurisdiction of its incorporation, have an office in the State of New York, be
authorized under such laws to exercise corporate trust or stock transfer powers,
be subject to supervision or examination by federal or state authority and have
at the time of its appointment as Rights Agent a combined capital and surplus of
at least $50 million. After its appointment, the successor Rights Agent shall
be vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock and Preferred Stock, and mail notice thereof to the registered
holders of the Rights Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the appointment
of any successor Rights Agent.
SECTION 22. ISSUANCE OF NEW RIGHTS CERTIFICATES. Notwithstanding any
other provision of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Rights Certificates evidencing the Rights in such
form as may be approved by its Board of Directors to reflect any adjustment or
change in the Purchase Price or in the number or kind of shares or other
securities or property issuable upon the exercise of the Rights in accordance
with the provisions of this Agreement; PROVIDED, HOWEVER, that (i) no such
Rights Certificate shall be issued if, and to the extent that, the Company shall
be advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or to the Person to whom such
Rights Certificate would be issued and (ii) no such Rights Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
SECTION 23. REDEMPTION. (a) The Board of Directors of the Company
may, at its option, at any time prior to the earlier of (i) the Close of
Business on the 10th Business Day after the Share Acquisition Date (or, if the
Share Acquisition Date shall have occurred prior to the Record Date, the Close
of Business on the 10th Business Day following the Record Date) and (ii) the
Final Expiration Date, redeem all, but not less than all, of the then
outstanding Rights at a redemption price of $.01 per Right, appropriately
adjusted to reflect any stock split,
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stock dividend or similar transaction occurring after the date hereof (such
redemption price being hereinafter called the "Redemption Price"); PROVIDED,
HOWEVER, that if the Board of Directors of the Company shall authorize the
redemption of the Rights in the circumstances set forth in clause (i) or (ii)
below, then there must be Disinterested Directors in office and such
authorization shall require the concurrence of a majority of such Disinterested
Directors: (i) such authorization occurs on or after the date a Person becomes
an Acquiring Person or (ii) such authorization occurs on or after the date of a
change (resulting from a solicitation of either proxies or one or more
shareholder written consents) in a majority of the directors in office at the
commencement of such solicitation if any Person who shall be a participant in
the solicitation of such proxies or consents has stated (or, if upon the
commencement of any such solicitation, a majority of the Board of Directors of
the Company shall determine in good faith) that such Person (or any of its
Affiliates or Associates) intends to take, or may consider taking, any action
which would result in such Person becoming an Acquiring Person or which would
cause the occurrence of an Adjustment Event. In considering whether to redeem
the Rights, the Board of Directors of the Company may consider (x) the effects
on the Company's employers, suppliers, creditors and customers; (y) the effects
on the communities in which the Company operates; and (z) the long-term and
short-term interests of the Company and its shareholders, including the
possibility that such interests may be best served by the continued independence
of the Company and any other pertinent factors, whether or not they are
enumerated in Article XII of the Articles. The redemption of the Rights by such
Board of Directors may be made effective at such time, on such basis and with
such conditions as such Board of Directors in its sole discretion may establish.
In addition to the right of redemption reserved in the first sentence of this
subsection (a), if there are Disinterested Directors then in office, such Board
of Directors may redeem, with the concurrence of a majority of such
Disinterested Directors, all, but not less than all, of the then outstanding
Rights at the Redemption Price after the occurrence of a Share Acquisition Date,
but prior to the occurrence of any transaction of the kind described in Section
13(a), if either (i) a Person who is an Acquiring Person shall have transferred
or otherwise disposed of such number of shares of Common Stock of the Company,
in one transaction or a series of transactions not directly or indirectly
involving the Company or any of its Subsidiaries or the occurrence of any
transaction of the kind described in Section 13(a), as shall result in such
Person thereafter being a Beneficial Owner of 10% or less of the outstanding
shares of Common Stock of the Company, and after such transfer or other
disposition there are no other Acquiring Persons, or (ii) in connection with any
transaction of the kind described in Section 13(a) in which all holders of the
shares of
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Common Stock of the Company are treated the same and which shall not involve an
Acquiring Person, an Affiliate or Associate of an Acquiring Person, any other
Person in which such Acquiring Person, Affiliate or Associate has any interest
or any other Person acting, directly or indirectly, on behalf of or in
association with any such Acquiring Person, Affiliate or Associate.
Notwithstanding any other provision of this Agreement, the Rights shall not be
exercisable after the first occurrence of a Section 11(a)(ii) Event until such
time as the Company's right of redemption hereunder has expired.
(b) Immediately after any action by the Board of Directors of the
Company directing the redemption of the Rights pursuant to subsection (a) of
this Section 23, notice of which shall be filed with the Rights Agent, and
without any further action and without any notice, the right to exercise the
Rights shall terminate and each registered holder of the Rights shall thereafter
be entitled to receive only the Redemption Price per Right. The Company shall
give prompt public notice of any redemption directed pursuant to such subsection
(a); 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
action by such Board of Directors directing the redemption of the Rights, the
Company shall mail a notice of redemption to all registered holders of the then
outstanding Rights at their last addresses appearing upon the registry books of
the Rights Agent or, prior to the Distribution Date, on the registry books of
the transfer agent for the Common Stock of the Company. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not
received by the registered holder to whom sent; PROVIDED, HOWEVER, that the
failure to give, or any defect in, any such notice shall not affect the validity
of any such redemption. Each such notice of redemption shall state the method
by which payment of the Redemption Price shall be made.
(c) The Company may, at its option, pay the Redemption Price in cash,
shares of Common Stock (based on the Current Per Share Market Price of the
shares of Common Stock at the date of redemption) or any other form of
consideration deemed appropriate by the Board of Directors of the Company.
SECTION 24. EXCHANGE. (a) The Board of Directors of the Company
may, at its option, at any time after any Person shall have become an Acquiring
Person, exchange all or any part of the then outstanding and exercisable Rights
(which shall not include Rights which have become void pursuant to the
provisions of Section 11(a)(ii)) for shares of Common Stock of the Company at an
exchange rate of one share of Common Stock per Right, appropriately adjusted to
reflect any transaction of the type
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specified in clauses (A) through (D), inclusive, of Section 11(a)(i) but with
respect to the Common Stock and Section 11(n) and occurring after the date
hereof (such exchange rate being hereinafter called the "Exchange Rate");
PROVIDED, HOWEVER, that the Board of Directors shall not be empowered to effect
such an exchange at any time after any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or any
Subsidiary of the Company or any entity holding shares of Common Stock of the
Company for or pursuant to the terms of any such plan), together with all
Affiliates and Associates of such Person, shall have become the Beneficial Owner
of 50% or more of the shares of Common Stock of the Company then outstanding.
(b) Immediately after any action by the Board of Directors of the
Company directing the exchange of any Rights pursuant to subsection (a) of this
Section 24, notice of which shall be filed with the Rights Agent, and without
any further action and without any notice, the right to exercise such Rights
shall terminate and each registered holder of such Rights shall thereafter be
entitled to receive only the number of shares of Common Stock which shall equal
the number of such Rights held by such registered holder multiplied by the
Exchange Rate. The Company shall give prompt public notice of any exchange
directed pursuant to such subsection (a); PROVIDED, HOWEVER, that the failure to
give, or any defect in, any such notice shall not affect the validity of such
exchange. Within 10 days after action by such Board of Directors directing the
exchange of such Rights, the Company shall mail a notice of exchange to all
registered holders of such Rights at their last addresses appearing upon the
registry books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the shares of Common Stock of the
Company. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not received by the registered holder to whom sent;
PROVIDED, HOWEVER, that the failure to give, or any defect in, any such notice
shall not affect the validity of any such exchange. Each such notice shall
state the method by which the exchange of shares of Common Stock for Rights will
be effected and, in the event of any partial exchange, the number of Rights
which will be exchanged. Any partial exchange shall be effected pro rata among
the registered holders of the Rights based upon the number of Rights held
(excluding Rights which have become void pursuant to the provisions of Section
11(a)(ii)); and in such case, a new Rights Certificate evidencing the Rights not
being exchanged shall be prepared and executed by the Company and countersigned
and delivered by the Rights Agent to the registered holder of such Rights,
subject to the provisions of Section 14.
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(c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute shares of Preferred Stock (or Equivalent Preferred Stock)
for shares of Common Stock exchangeable for Rights, at the initial rate of one
one-hundredth of a share of Preferred Stock (or Equivalent Preferred Stock) for
each share of Common Stock, as appropriately adjusted to reflect adjustments in
the voting rights of the Preferred Stock pursuant to the terms thereof, so that
the fraction of a share of Preferred Stock delivered in lieu of each share of
Common Stock shall have the same voting rights as one share of Common Stock.
(d) In the event that there shall be an insufficient number of shares
of Common Stock or Preferred Stock authorized but unissued or issued and held in
the treasury of the Company to permit an exchange of Rights directed by the
Board of Directors of the Company, the Company shall take all such action as may
be necessary to authorize additional shares of Common Stock or Preferred Stock
for issuance upon such exchange of the Rights. In any such exchange, the
Company may, at its option, substitute shares of Equivalent Common Stock for
some or all of the shares of Common Stock otherwise exchangeable for the Rights.
(e) The Company shall not be required to issue fractional shares of
Common Stock or Preferred Stock in exchange for Rights or to distribute
certificates which evidence fractional shares of Common Stock or Preferred
Stock. In lieu of fractional shares of Common Stock or Preferred Stock, the
Company shall pay to the registered holders of the Rights with respect to which
such fractional shares of Common Stock or Preferred Stock would otherwise be
issuable an amount in cash equal to the same fraction of the Current Market
Value Per Share of Common Stock or Preferred Stock. For the purposes of this
subsection (e), the Current Market Value Per Share of Common Stock or Preferred
Stock shall be determined as provided in Section 14.
SECTION 25. NOTICE TO HOLDERS OF RIGHTS CERTIFICATES OF CERTAIN
EVENTS. (a) In the event that the Company shall propose (i) to pay any
dividend payable in shares of any class to the holders of its Preferred Stock or
to make any other distribution to the holders of its Preferred Stock (other than
a regular quarterly cash dividend at a rate not in excess of 125% of the rate of
the last regular quarterly cash dividend theretofore paid), (ii) to distribute
to the holders of its Preferred Stock options, warrants or rights to subscribe
for or purchase any additional shares of Preferred Stock or shares of any other
class or any other securities, rights or options, (iii) to effect any
reclassification of its Preferred Stock (other than a reclassification involving
only the subdivision of its outstanding shares of Preferred Stock), (iv) to
effect any consolidation or merger into or with, or to effect any sale or other
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transfer (or to permit one or more of its Subsidiaries to effect any sale or
other transfer), in one or more transactions not in the ordinary course of
business, of 50% or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to, any other Person, (v) to effect the
liquidation, dissolution or winding up of the Company or (vi) to declare or pay
any dividend on the Common Stock payable in shares of Common Stock or to effect
a subdivision, combination or consolidation of the Common Stock (by
reclassification or otherwise than by payment of dividends in shares of Common
Stock) then, in each such case, the Company shall give to each registered holder
of the Rights, and to the Rights Agent, in the manner provided in Section 26,
written notice of such proposed action, which shall specify the record date for
such stock dividend or distribution or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution or winding up is
expected to take place (and the date of participation therein by the holders of
the Common Stock and/or Preferred Stock if any such date is to be fixed). Such
notice shall be given (a) in the case of any action covered by clause (i) or
(ii) of the preceding sentence, at least six days prior to the record date and
(b) in the case of any other such action, at least 10 days prior to the date of
the taking of such proposed action or the date of participation therein by the
holders of Common Stock and/or the Preferred Stock, whichever shall be the
earlier.
(b) In case any Section 11(a)(ii) Event shall occur, then the Company
shall, as soon as practicable thereafter, give to each registered holder of the
Rights, and to the Rights Agent, in the manner provided in Section 26, written
notice of the occurrence of such transaction, which notice shall describe such
transaction and its consequences in reasonable detail.
SECTION 26. OTHER NOTICES. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the registered holder of
any Rights or Rights Certificate to or on the Company shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed (until
another address shall be filed in writing with the Rights Agent) as follows:
Heritage Media Corporation
13355 Noel Road, Suite 1500
Dallas, Texas 75240
Attention: President
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the registered holder of any
Rights or Rights Certificate to or on the Rights Agent shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed (until
- 43 -
<PAGE>
another address shall be filed in writing with the Company) as follows:
The Bank of New York
101 Barclay Street, Floor 12 West
New York, New York 10286
Attention: Equity Tender and Exchange Department
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the registered holder of any Rights or Rights
Certificate shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the last address of such holder as
shown on the registry books of the Rights Agent or, prior to the Distribution
Date, on the registry books of the transfer agent for the Common Stock of the
Company.
SECTION 27. SUPPLEMENTS AND AMENDMENTS. Prior to the Distribution
Date, the Company and the Rights Agent shall, if so directed by the Company,
supplement or amend any provision of this Agreement, without the approval of any
holders of certificates representing the Common Stock. From and after the
Distribution Date, the Company and the Rights Agent shall, if so directed by the
Company, supplement or amend this Agreement, without the approval of any holders
of the Rights or the Rights Certificates, in order: (i) to cure any ambiguity,
(ii) to correct or supplement any provision contained herein which may be
defective or inconsistent with any other provision herein, (iii) to shorten or
lengthen any time period specified hereunder or (iv) to change or supplement the
provisions hereunder in any manner which the Company may deem necessary or
desirable and which shall not adversely affect, as determined by the Company,
the interests of the holders of the Rights or the Rights Certificates (other
than an Acquiring Person or an Affiliate or Associate of an Acquiring Person);
PROVIDED, HOWEVER, that this Agreement may not be supplemented or amended
pursuant to clause (iii) of this sentence (A) to lengthen any time period unless
(1) approved by a majority of the Disinterested Directors and (2) such
lengthening is for the purpose of protecting, enhancing or clarifying the rights
of, and/or the benefits to, the registered holders of the Rights or (B) to
lengthen any time period relating to when the Rights may be redeemed if at such
time the Rights are not then redeemable. Upon the delivery of a certificate
from an appropriate officer of the Company stating that the proposed supplement
or amendment is in compliance with the terms of this Section 27, the Rights
Agent shall execute such supplement or amendment. Prior to the Distribution
Date, the interests of the holders of the Rights shall be deemed coincident with
the interests of the holders of the Common Stock of the Company.
Notwithstanding any other provision hereof, the Rights Agent's
- 44 -
<PAGE>
consent, which consent shall not be unreasonably withheld, must be obtained
regarding any amendment or supplement pursuant to this Section 27 which alters
the Rights Agent's rights or duties.
SECTION 28. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns.
SECTION 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS,
ETC. For all purposes of this Agreement, any calculation of the number of
shares of Common Stock outstanding at any particular time, including for
purposes of determining the percentage of such outstanding shares of Common
Stock of which any Person is the Beneficial Owner, shall be made in accordance
with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and
Regulations under the Exchange Act. The Board of Directors of the Company (or,
as set forth herein, certain specified members thereof) shall have the power and
authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board of Directors of the Company or to the Company,
or as may be necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power to (i) interpret the
provisions of this Agreement and (ii) make all determinations deemed necessary
or advisable for the administration of this Agreement, including, without
limitation, a determination to redeem or not to redeem the Rights or to
supplement or amend this Agreement. All such calculations, actions,
interpretations and determinations (including, for purposes of clause (ii)
below, all omissions with respect to the foregoing) which are done or made by
the Board of Directors of the Company (or such specified members thereof) in
good faith shall (i) be final, conclusive and binding on the Company, the Rights
Agent and the holders of the Rights and (ii) not subject any director to any
liability to the holders of the Rights.
SECTION 30. 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 and the Rights Certificates (and,
prior to the Distribution Date, the registered holders of the Common Stock of
the Company) 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 and the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock of the Company).
- 45 -
<PAGE>
SECTION 31. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other lawful authority to be invalid, void or unenforceable, the remaining
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
PROVIDED, HOWEVER, that, notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company shall determine in good faith that severing the same
from this Agreement would adversely affect the purposes or effect of this
Agreement, the right of redemption set forth in Section 23 shall be reinstated
and shall not expire until the Close of Business on the 20th day following the
date of such determination by the Board of Directors of the Company.
SECTION 32. GOVERNING LAW. This Agreement and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Iowa and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State, PROVIDED, HOWEVER, that the
rights and obligations of the Rights Agent shall be governed by and construed in
accordance with the laws of the State of New York.
SECTION 33. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall for all purposes be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
SECTION 34. 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.
- 46 -
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and their respective corporate seals to be affixed and
attested, all as of the day and year first above written.
HERITAGE MEDIA CORPORATION
By /S/ DAVID N. WALTHALL
--------------------------
(Corporate Seal) Name: David N. Walthall
Title: President
Attest:
By /S/ JAMES P. LEHR
----------------------
Name: James P. Lehr
Title: Assistant Secretary
THE BANK OF NEW YORK,
AS RIGHTS AGENT
By /S/ EDWARD T. PEYTON
--------------------------
(Corporate Seal) Name: Edward T. Peyton
Title: Vice President
Attest:
By /S/ PATRICK P. FALCIGLIA
----------------------------
Name: Partick P. Falciglia
Title: Vice President
- 47 -
<PAGE>
EXHIBIT A
FORM
OF
ARTICLES OF AMENDMENT
OF THE
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
HERITAGE MEDIA CORPORATION
ESTABLISHING
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
To the Secretary of State
of the State of Iowa:
Pursuant to the provisions of Section 490.602 and Section 490.1006 of
the Iowa Business Corporation Act, the undersigned corporation hereby amends its
Amended and Restated Articles of Incorporation, and for that purpose, submits
the following statement:
1. The name of the corporation is Heritage Media Corporation (the
"Corporation").
2. On August 15, 1994, the Corporation adopted an amendment to its
Amended and Restated Articles of Incorporation, the text of which is
attached hereto as Exhibit A.
3. The amendment was duly adopted by the board of directors without
shareholder approval, as shareholder approval is not required pursuant
to Section 490.602 of the Iowa Business Corporation Act.
Date: August , 1994
--
HERITAGE MEDIA CORPORATION
By:
--------------------------------
Name:
Title:
<PAGE>
DESIGNATION, PREFERENCES AND RIGHTS OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
OF
HERITAGE MEDIA CORPORATION
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Corporation (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the Amended and
Restated Articles of Incorporation, as amended (the "Articles"), the Board of
Directors hereby creates a series of Preferred Stock, without par value (the
"Preferred Stock"), of the Corporation and hereby states the designation and
number of shares, and fixes the relative rights, preferences, and limitations
thereof as follows:
Series A Junior Participating Preferred Stock:
Section 1. DESIGNATION AND AMOUNT. The shares of such series shall
be designated as "Series A Junior Participating Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting the Series A Preferred
Stock shall be 400,000. 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.
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 Class A Common
Stock, par value $.01 per share, and Class C Common Stock, par value $.01
per share (collectively, the "Common Stock"), of the Corporation, and of
any other junior stock, shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the last business day of
November, February, May and August in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"), commencing on
the first Quarterly Dividend Payment Date after the first issuance of a
share or fraction of a share of Series A Preferred Stock, in an amount per
share (rounded to the nearest cent) equal to the greater of (a) $.25 or
(b) subject to the provision for adjustment hereinafter set forth, 100
times the aggregate per share amount of all cash dividends, and 100 times
the aggregate per share amount (payable in kind) of
<PAGE>
all non-cash dividends or other distributions, other than a dividend payable in
shares of Common Stock or a subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date, or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series A Preferred Stock. In the event the Corporation
shall at any time declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the amount to which
holders of shares of Series A Preferred Stock were entitled immediately prior to
such event under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); provided
that, in the event no dividend or distribution shall have been declared on
the Common Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date, a dividend of
$.25 per share on the Series A Preferred Stock shall nevertheless be
payable on such subsequent Quarterly Dividend Payment Date.
(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
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.
A-2
<PAGE>
Accrued but unpaid dividends shall not bear interest. Dividends paid on
the shares of Series A Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such shares
shall be allocated pro rata on a share-by-share basis among all such shares
at the time outstanding. The Board of Directors may fix a record date for
the determination of holders of shares of Series A Preferred Stock entitled
to receive payment of a dividend or distribution declared thereon, which
record date shall be not more than 60 days prior to the date fixed for the
payment thereof.
Section 3. VOTING RIGHTS. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Preferred Stock shall entitle the holder thereof to
100 votes on all matters submitted to a vote of the shareholders of the
Corporation. In the event the Corporation shall at any time declare or pay
any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment of
a dividend in shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then in each such case the number of votes per
share to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) Except as otherwise provided herein, in any other Articles of
Amendment 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 shareholders 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.
A-3
<PAGE>
Section 4. CERTAIN RESTRICTIONS.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section 2 are in
arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred
Stock outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other distributions,
on any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock;
(ii) declare or pay dividends, or make any other distributions,
on any shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except dividends paid ratably on the Series A
Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock, provided that the Corporation may at any time redeem, purchase
or otherwise acquire shares of any such junior stock in exchange for
shares of any stock of the Corporation ranking junior (either as to
dividends or upon dissolution, liquidation or winding up) to the
Series A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration
any shares of Series A Preferred Stock, or any shares of stock ranking
on a parity with the Series A Preferred Stock, except in accordance
with a purchase offer made in writing or by publication (as determined
by the Board of Directors) to all holders of such shares upon such
terms as the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series or
classes.
A-4
<PAGE>
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any
shares of stock of the Corporation unless the Corporation could, under
paragraph (A) of this Section 4, purchase or otherwise acquire such
shares at such time and in such manner.
Section 5. REACQUIRED SHARES. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
subject to the conditions and restrictions on issuance set forth herein, in the
Articles or in any other Articles of Amendment creating a series of Preferred
Stock or any similar stock or as otherwise required by law.
Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received $1 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Series A
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders of shares of
Common Stock, or (2) to the holders of shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, except distributions made ratably on the Series A
Preferred Stock and all such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the aggregate amount to which
holders of shares of Series A Preferred Stock were entitled immediately prior to
such event under the proviso in clause (1) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of
A-5
<PAGE>
which is the number of shares of Common Stock that were outstanding immediately
prior to such event.
Section 7. CONSOLIDATION, MERGER, ETC. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each share of
Series A Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. NO REDEMPTION. The shares of Series A Preferred Stock
shall not be redeemable.
Section 9. RANK. The Series A Preferred Stock shall rank, with
respect to the payment of dividends and the distribution of assets, junior to
all series of any other class of the Corporation's Preferred Stock.
Section 10. AMENDMENT. The Articles shall not be amended in any
manner which would materially alter or change the powers, preferences or special
rights of the Series A Preferred Stock so as to affect them adversely without
the affirmative vote of the holders of at least two-thirds of the outstanding
shares of Series A Preferred Stock, voting together as a single class.
Section 11. FRACTIONAL SHARES. Series A Preferred Stock may be
issued in fractions of a share which shall entitle the holder, in proportion to
such holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.
A-6
<PAGE>
EXHIBIT B
[FORM OF RIGHTS CERTIFICATE]
CERTIFICATE NO. R- RIGHTS
NOT EXERCISABLE AFTER AUGUST 29, 2004 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 DESCRIBED IN THE RIGHTS AGREEMENT, RIGHTS
ISSUED TO OR HELD BY ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING
PERSON OR AN AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED
IN THE RIGHTS AGREEMENT), WHETHER CURRENTLY HELD BY OR ON BEHALF OF
SUCH PERSON, OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL
AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR
WERE BENEFICIALLY OWNED BY A PERSON WHO IS, WAS OR BECAME AN ACQUIRING
PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 11(a)(ii) OF THE RIGHTS
AGREEMENT.](1)
- -----------------------------
1 The portion of the legend in brackets shall be inserted only if applicable
and shall replace the preceding sentence.
<PAGE>
RIGHTS CERTIFICATE
HERITAGE MEDIA CORPORATION
This certifies that _________________________, or registered assigns,
is the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement dated as of August 15, 1994 (the "Rights Agreement")
between Heritage Media Corporation, an Iowa corporation (the "Company"), and The
Bank of New York, a New York banking corporation (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., New York time, on
August 29, 2004 at the designated office of the Rights Agent, or at the office
of its successor as Rights Agent, one one-hundredth of a fully paid and
nonassessable share of Series A Junior Participating Preferred Stock, without
par value (the "Preferred Stock"), of the Company at a purchase price of $70.00
per one one-hundredth a share of Preferred Stock (the "Purchase Price"), upon
presentation and surrender of this Rights Certificate with the Form of Election
to Purchase and the Form of Certification of Status duly executed, along with a
signature guarantee and such other and further documentation as the Rights Agent
may reasonably request. The number of Rights evidenced by this Rights
Certificate (and the number of one one-hundredths of a share of Preferred Stock
which may be purchased upon the full exercise hereof) set forth above, and the
Purchase Price set forth above, are the number and the Purchase Price as of
August 15, 1994, based on the Preferred Stock as constituted on such date. As
provided in the Rights Agreement, the Purchase Price and the number of one one-
hundredths of a share of Preferred Stock which may be purchased upon the full
exercise of the Rights evidenced by this Rights Certificate are subject to
change and adjustment upon the happening of certain events. Capitalized terms
not defined herein have the respective meanings specified in the Rights
Agreement.
Upon the occurrence of a Section 11(a)(ii) Event, if the Rights
evidenced by this Rights Certificate are Beneficially Owned by (i) an Acquiring
Person or any Affiliate or Associate of such Acquiring Person, (ii) a transferee
of an Acquiring Person or any Affiliate or Associate of such Acquiring Person
who becomes a transferee after such Acquiring Person becomes such or (iii) under
certain circumstances specified in the Rights Agreement, a transferee of an
Acquiring Person or any Affiliate or Associate of such Acquiring Person who
becomes a transferee prior to or concurrently with such Acquiring Person
becoming such, such Rights shall become void, and no holder hereof shall have
any right to exercise such Rights from and after the occurrence of such Section
11(a)(ii) Event.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which
<PAGE>
terms, provisions and conditions are incorporated herein by reference and made a
part hereof, to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of the
Rights Certificates, which limitations of rights include the suspension of the
exercisability of the Rights represented hereby under the circumstances set
forth in the Rights Agreement. Copies of the Rights Agreement are on file at
the principal executive office of the Company and at the designated office of
the Rights Agent and are also available upon written request to the Secretary of
the Company.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the designated office of the Rights Agent, along with a
signature guarantee and such other and further documentation as the Rights Agent
may reasonably request, may be exchanged for one or more Rights Certificates of
like tenor and date evidencing Rights entitling the holder to purchase the same
aggregate number of shares of Preferred Stock as the Rights evidenced by the
Rights Certificates surrendered. If this Rights Certificate shall be exercised
in part, the holder shall be entitled to receive, upon surrender hereof, one or
more Rights Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Rights Certificate (i) may be redeemed by the Company at a
redemption price of $.01 per Right or (ii) may be exchanged, in whole or in
part, for shares of Preferred Stock or shares of the Company's Class A Common
Stock, $.01 par value.
No fractional share of Preferred Stock will be issued upon the
exercise of any Rights represented hereby (other than fractions which are
integral multiples of one one-hundredth of a share of Preferred Stock), but in
lieu thereof a cash payment will be made as provided in the Rights Agreement.
No holder, as such, of this Rights Certificate shall be entitled to
vote, to receive dividends or other distributions or to exercise any preemptive
rights, or shall be deemed for any other purpose to be the holder of shares of
Preferred Stock 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 shareholder of the Company or any right to vote for the
election of directors or upon any other matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate
B-2
<PAGE>
action, to receive notice of meetings or other actions affecting shareholders
(except as provided in the Rights Agreement) or to receive dividends,
subscription rights or other distributions, until the Right or Rights evidenced
by this Rights Certificate shall have been exercised in accordance with the
provisions of the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by an authorized signatory of the
Rights Agent.
IN WITNESS WHEREOF, this Rights Certificate has been executed by the
Company by the duly authorized facsimile signature of a proper officer of the
Company and a facsimile of its corporate seal has been imprinted hereon and duly
attested by the duly authorized facsimile signature of a proper officer of the
Company.
Dated as of , .
----------- ----
HERITAGE MEDIA CORPORATION
By
---------------------------
Name:
Title:
[CORPORATE SEAL]
ATTEST:
- ------------------------------
Countersigned: THE BANK OF NEW YORK,
as Rights Agent
- ------------------------------
By----------------------------
Authorized Signature
Date of Countersignature: , .
----------- ----
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<PAGE>
[Reverse Side of Rights Certificate]
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed by the registered holder
if such holder desires to exercise Rights
represented by this Rights Certificate)
To Heritage Media Corporation
The undersigned hereby irrevocably elects to exercise __________
Rights represented by this Rights Certificate to purchase the shares of
Preferred Stock issuable upon the exercise of such Rights (or other securities
of the Company or of any other persons that may be issuable upon exercise of all
Rights) and requests that certificates for such shares of Preferred Stock (or
other such 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 represented by this Rights
Certificate, a new Rights Certificate for the remaining unexercised Rights shall
be registered in the name of and delivered to:
Please insert social security
or other identifying number: ____________________
________________________________________________________________
(Please print name and address)
________________________________________________________________
Dated: _______________, ____
_______________________________________
Signature
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<PAGE>
Signature Guaranteed:
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Rights Agent, which requirements include
membership or participation in STAMP or such other "signature guarantee program"
as may be determined by the Rights Agent in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
CERTIFICATION OF STATUS
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights Certificate
/ / is
/ / is not
being exercised, assigned or transferred by or on behalf of a Person who is or
was an Acquiring Person or an Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned,
it
/ / did
/ / did not
acquire the Rights evidenced by this Rights Certificate from any person who is,
was or subsequently became an Acquiring Person or an Affiliate or Associate
thereof.
_______________________________________
Signature
Date: _______________, ____
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<PAGE>
NOTICE
------
The signature(s) on the foregoing Form of Election to Purchase and
Certification of Status must correspond to the name written upon the face of
this Rights Certificate in every particular, without alteration or enlargement
or any change whatsoever.
In the event the Certification of Status set forth above is not
completed, the Company will deem the Beneficial Owner of the Rights represented
by this Rights Certificate to be an Acquiring Person or an Affiliate or
Associate thereof (as such terms are defined in the Rights Agreement) and, in
the case of the issuance of a new Rights Certificate, will affix a legend to
such effect on any Rights Certificates issued in exchange for this Rights
Certificate.
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<PAGE>
[Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer this Rights Certificate)
FOR VALUE RECEIVED _________________________ hereby sells, assigns and
transfers unto ______________________________
________________________________________________________________
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _________________________
Attorney, to transfer the within Rights Certificate on the books of the within-
named Company, with full power of substitution.
Dated: _______________, ____
_______________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Rights Agent, which requirements include
membership or participation in STAMP or such other "signature guarantee program"
as may be determined by the Rights Agent in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
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<PAGE>
CERTIFICATION OF STATUS
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights Certificate
/ / is
/ / is not
being sold, assigned or transferred by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate thereof (as such terms are defined
in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned,
it
/ / did
/ / did not
acquire the Rights evidenced by this Rights Certificate from any person who is,
was or subsequently became an Acquiring Person or an Affiliate or Associate
thereof.
_______________________________________
Signature
Date: _______________, ____
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<PAGE>
NOTICE
------
The signature(s) on the foregoing Form of Assignment and Certification
of Status must correspond to the name written upon the face of this Rights
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
In the event the Certification of Status set forth above is not
completed, the Company will deem the Beneficial Owner of the Rights represented
by this Rights Certificate to be an Acquiring Person or an Affiliate or
Associate thereof (as such terms are defined in the Rights Agreement) and, in
the case of an Assignment, will affix a legend to such effect on any Rights
Certificates issued in exchange for this Rights Certificate.
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<PAGE>
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE SHARES OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
On August 15, 1994, the Board of Directors of Heritage Media
Corporation (the "Company") declared a dividend of one preferred stock purchase
right (a "Right") for each outstanding share of Class A Common Stock, $.01 par
value, and Class C Common Stock, $.01 par value (collectively, the "Common
Stock"), of the Company. The dividend is payable on August 29, 1994 (the
"Record Date") to the shareholders of record of Common Stock at the close of
business on such date. Each Right entitles the registered holder to purchase
from the Company one one-hundredth of a share of Series A Junior Participating
Preferred Stock, without par value (the "Series A Preferred Stock"), at a price
of $70.00 per one one-hundredth of a share of Series A Preferred Stock (the
"Purchase Price"), subject to adjustment. The description and terms of the
Rights are set forth in the Rights Agreement dated as of August 15, 1994 (the
"Rights Agreement") between the Company and The Bank of New York, as Rights
Agent (the "Rights Agent"). Capitalized terms not defined herein have the
respective meanings specified in the Rights Agreement.
Until the earlier to occur of (i) 10 days after the first public
announcement that a Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or any Subsidiary of the
Company or any entity holding Shares of Common Stock for or pursuant to the
terms of any such plan) (an "Acquiring Person"), either alone or together with
its Affiliates and Associates, has become the Beneficial Owner of 15% or more of
the outstanding shares of Common Stock and (ii) 10 Business Days (or such later
date as may be determined by action of the Board of Directors prior to the time
any Person becomes an Acquiring Person) after the commencement of, or the
announcement of an intention to commence, a tender or exchange offer the
consummation of which would result in any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or any
Subsidiary of the Company or any entity holding Shares of Common Stock for or
pursuant to the terms of any such plan) becoming the Beneficial Owner of 15% or
more of such outstanding shares of Common Stock (the earlier of clause (i) and
(ii) being hereinafter called the "Distribution Date"), the Rights will be
evidenced, with respect to any of the Common Stock certificates outstanding as
of the Record Date, by such Common Stock certificates, with a copy of this
Summary of Rights attached thereto.
The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred with and only with the Common Stock. Until the
Distribution Date (or the earlier redemption or expiration of the Rights), new
Common Stock certificates issued after the Record Date, either upon transfer of
outstanding shares of Common Stock or the original issuance of additional shares
of Common Stock, will contain a notation
<PAGE>
incorporating the Rights Agreement by reference. Until the Distribution Date
(or the earlier redemption or expiration of the Rights), the surrender for
transfer of any certificate for shares of Common Stock outstanding as of the
Record Date, without such notation and whether or not a copy of this Summary of
Rights is attached thereto, will also constitute the transfer of the Rights
associated with the shares of Common Stock represented by such certificate. As
soon as practicable following the Distribution Date, separate certificates
evidencing the Rights ("Rights Certificates") will be mailed to the registered
holders of the shares of Common Stock as of the close of business on the
Distribution Date, and such separate Rights Certificates will thereafter
constitute the sole evidence of the Rights. Each share of Common Stock issued
after the Distribution Date and prior to the earlier of the redemption or
expiration of the Rights, pursuant to the exercise of any option, warrant, right
or conversion or exchange privilege contained in any option, warrant, right or
convertible or exchangeable security (other than the Rights) issued by the
Company prior to the Distribution Date, shall also include the right to receive
a Right (unless the Board of Directors expressly provides to the contrary at the
time of issuance of any such option, warrant, right, convertible or exchangeable
security) and Rights Certificates evidencing such Rights shall be issued at the
time of issuance of such shares of Common Stock.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on August 29, 2004 (the "Final Expiration Date"), unless the
Final Expiration Date is extended or unless the Rights are earlier redeemed or
exchanged by the Company, in each case as described below.
The Purchase Price payable, and the number of shares of Series A
Preferred Stock or other securities, cash or property issuable, upon exercise of
the Rights are subject to adjustment from time to time to prevent dilution
(i) in the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Series A Preferred Stock, (ii) upon the grant to the
holders of shares of Series A Preferred Stock of certain options, warrants or
rights to subscribe for or purchase shares of Series A Preferred Stock at a
price, or securities convertible into or exchangeable for shares of Series A
Preferred Stock with a conversion or exchange price, less than the then current
market price of the shares of Series A Preferred Stock or (iii) upon the
distribution to the holders of shares of Series A Preferred Stock of evidences
of indebtedness or assets (other than a regular quarterly cash dividend at a
rate not in excess of 125% of the rate of the last regular quarterly cash
dividend theretofore paid or a dividend payable in
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<PAGE>
shares of Series A Preferred Stock) or options, warrants or rights (other than
those referred to above).
The number of outstanding Rights and the number of one one-hundredths
of a share of Series A Preferred Stock issuable upon exercise of each Right are
also subject to adjustment in the event of a stock split of the Common Stock or
a stock dividend on the Common Stock payable in shares of Common Stock or a
subdivision, consolidation, combination, or reclassification of the Common Stock
occurring, in any such case, prior to the Distribution Date.
Shares of Series A Preferred Stock purchasable upon exercise of the
Rights will not be redeemable. Each share of Series A Preferred Stock will be
entitled to a minimum preferential quarterly dividend payment of $.25 per share
but will be entitled to an aggregate dividend of 100 times the dividend declared
per share of Common Stock. In the event of liquidation, the holders of the
shares of Series A Preferred Stock will be entitled to a minimum preferential
liquidation payment of $1 per share, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment, provided that the holders of the shares of Series A Preferred
Stock shall be entitled to an aggregate payment of 100 times the payment made
per share of Common Stock, as adjusted to reflect any dividend on the Common
Stock payable in shares of Common Stock or any subdivision, combination or
reclassification of the Common Stock. Each share of Series A Preferred Stock
will have 100 votes, voting together with the Common Stock. Finally, in the
event of any merger, consolidation or other transaction in which shares of
Common Stock are exchanged, each share of Series A Preferred Stock will be
entitled to receive 100 times the amount received per share of Common Stock.
These rights are protected by customary antidilution provisions.
Because of the nature of the dividend, liquidation and voting rights
of the Series A Preferred Stock, the value of the one one-hundredth interest in
a share of Series A Preferred Stock purchasable upon exercise of each Right
should approximate the value of one share of Common Stock.
In the event that any Person, together with its Affiliates and
Associates, becomes the Beneficial Owner of 15% or more of the Shares of Common
Stock then outstanding, proper provision shall be made so that each registered
holder of a Right will thereafter have the right to receive upon exercise
thereof at the then current Purchase Price of the Right that number of shares of
Common Stock of the Company having a market value of two times such Purchase
Price. Notwithstanding the
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<PAGE>
foregoing, after the occurrence of the event described in this paragraph, all
Rights which are, or (under certain circumstances specified in the Rights
Agreement) were, Beneficially Owned by an Acquiring Person or any Affiliate or
Associate thereof will be void. Under no circumstances may a Right be exercised
following the occurrence of a transaction described in this paragraph prior to
the expiration of the Company's right of redemption.
In the event that, on or after the first public announcement by the
Company or an Acquiring Person that an Acquiring Person has become such (the
"Share Acquisition Date"), the Company is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are sold or transferred (in one transaction or a series of transactions
other than in the ordinary course of business), proper provision shall be made
so that each registered holder of a Right (except Rights which have become void
as specified above) will thereafter have the right to receive, upon the exercise
thereof at the then current Purchase Price of the Right, the number of shares of
common stock of the acquiring company (or of another Person affiliated therewith
as provided in the Rights Agreement) which at the time of such transaction will
have a market value of two times such Purchase Price.
At any time after any person becomes an Acquiring Person and prior to
the time such Person, together with its Affiliates and Associates, becomes the
Beneficial Owner of 50% or more of the outstanding shares of Common Stock, the
Board of Directors of the Company may exchange the Rights (other than Rights
which have become void), in whole or in part, at the exchange rate of one share
of Common Stock, or one one-hundredth of a share of Series A Preferred Stock (or
of a share of a class or series of the Company's preferred stock having
equivalent rights, preferences and privileges), per Right, subject to adjustment
as provided in the Rights Agreement.
With certain exceptions, no adjustment in the Purchase Price will be
made until the cumulative adjustments required equal at least 1% of the Purchase
Price. No fractional shares of Series A Preferred Stock will be issued (other
than fractions which are integral multiples of one one-hundredth of a share of
Series A Preferred Stock), but in lieu thereof a payment in cash will be made
based on the market price of the shares of Series A Preferred Stock on the last
trading day prior to the date of exercise or exchange.
At any time prior to the earlier of (i) the 10th Business Day after
the Share Acquisition Date (subject to one or
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<PAGE>
more extensions by a majority of the Disinterested Directors) and (ii) the Final
Expiration Date, the Board of Directors of the Company may redeem the Rights in
whole, but not in part, at a redemption price of $.01 per Right, appropriately
adjusted to reflect any stock split, stock dividend, subdivision or combination
or any similar transaction occurring after the date of the Rights Agreement (the
"Redemption Price"); PROVIDED, HOWEVER, that, under certain circumstances
specified in the Rights Agreement, the Rights may not be redeemed unless there
are Disinterested Directors in office and such redemption is approved by a
majority of such Disinterested Directors. 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 shall establish. After the redemption
period has expired, the Company's right of redemption may be reinstated, under
the circumstances specified in the Rights Agreement, which include the
concurrence of a majority of the Disinterested Directors, if an Acquiring Person
shall have reduced to 10% or less the number of outstanding shares of Common
Stock Beneficially Owned in a transaction or series of transactions not
involving the Company and not constituting specified transactions which result
in a discounted Purchase Price under the Rights Agreement. Immediately after
any action by the Board of Directors directing the redemption of the Rights, the
right to exercise the Rights shall terminate and thereafter the registered
holders of the Rights shall be entitled to receive only the Redemption Price per
Right.
The term "Disinterested Director" means any member of the Company's
Board of Directors who is unaffiliated with an Acquiring Person or any Affiliate
or Associate thereof and was a member of the Company's Board of Directors prior
to the time that an Acquiring Person became such and any successor of a
Disinterested Director who is unaffiliated with an Acquiring Person or any
Affiliate or Associate thereof and is recommended to succeed a Disinterested
Director by a majority of Disinterested Directors then on the Company's Board of
Directors.
Prior to the Distribution Date, the terms of the Rights may be
supplemented or amended by the Board of Directors of the Company in any manner
and thereafter the Rights may be supplemented or amended by such Board of
Directors, without the approval of any holders of the Rights or the Rights
Certificates, in certain respects which shall not adversely affect, as
determined by the Company, the interests of such holders; PROVIDED, HOWEVER,
that the Rights Agreement cannot be amended to lengthen (i) any time period
unless (A) such lengthening is approved by a majority of the Disinterested
Directors and (B) such lengthening is for the benefit of the
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holders of the Rights or (ii) any time period relating to when the Rights may be
redeemed if at such time the Rights are not then redeemable.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends.
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
________________, 1994. A copy of the Rights Agreement is available free of
charge from the Company. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, which is hereby incorporated herein by reference.
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