Commission File No. 1-4166
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------------
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
Frontier Corporation
--------------------------------------------------
(Exact name of registrant as specified in its charter)
New York 16-0613330
----------------------- -----------------
(State of incorporation (I.R.S. Employer
or organization) Identification No.)
180 South Clinton Avenue
Rochester, New York 14646
---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
If this Form relates to the If this Form relates to the
registration of a class of registration of a class of
debt securities and is debt securities and is to
effective upon filing pursuant become effective
to General Instruction A(c)(1) simultaneoulsy with the
please check the following effectiveness of a concurrent
box. / / registration statement under
the Securities Act of 1933
pursuant to General
Instruction A(c)(2) please
check the following box. / /
Securities to be registered pursuant to Section 12(b) of the Act:
(None)
Securities to be registered pursuant to Section 12(g) of the Act:
Title of each class Name of each exchange on which
------------------- ------------------------------
to be so registered each class is to be registered
------------------- ------------------------------
Preferred Share Purchase Rights New York Stock Exchange
<PAGE>
Item 1. Description of Registrant's Securities to be Registered
-------------------------------------------------------
On April 9, 1995, the Board of Directors of Frontier
Corporation (the "Company") declared a dividend of one preferred
share purchase right (a "Right") for each outstanding share of
common stock, par value $1.00 per share, of the Company (the
"Common Stock"). The dividend is payable on April 24, 1995 (the
"Record Date") to the shareowners of record on that date. Each
Right entitles the registered holder to purchase from the Company
one one-hundredth of a share of Series A Junior Participating
Class A Preferred Stock, par value $100 per share (the "Preferred
Stock"), of the Company at a price of $80 per one one-hundredth
of a share of Preferred Stock (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set
forth in a Rights Agreement dated as of April 9, 1995, as the
same by be amended from time to time (the "Rights Agreement"),
between the Company and The First National Bank of Boston, as
Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following the
first date of a public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") have
acquired beneficial ownership of 20% or more of the outstanding
shares of Common Stock or such earlier date as a majority of the
Board of Directors shall have become aware of the existence of an
Acquiring Person, or (ii) 10 business days (or such later date as
may be determined by action of the Board of Directors prior to
such time as any person or group of affiliated persons becomes an
Acquiring Person) following the commencement of, or announcement
of an intention to make, a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by
a person or group of 20% or more of the outstanding shares of
Common Stock (the earlier of such dates being 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 certificate together with a
copy of this Summary of Rights.
The Rights Agreement provides that, until the
Distribution Date (or earlier redemption or expiration of the
Rights), the Rights will be transferred with and only with the
Common Stock. Until the Distribution Date (or earlier redemption
or expiration of the Rights), new Common Stock certificates
issued after the Record Date (including, without limitation, upon
transfer or new issuances of Common Stock) will contain a
notation incorporating the Rights Agreement by reference. Until
the Distribution Date (or earlier redemption or expiration of the
Rights), the surrender for transfer of any certificates for
shares of Common Stock outstanding as of the Record Date, even
without such notation or a copy of this Summary of Rights, will
also constitute (except as otherwise provided in the Rights
Agreement) the transfer of the Rights associated with the shares
of Common Stock represented by such certificate. As soon as
<PAGE>
practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be
mailed to holders of record of the Common Stock as of the Close
of Business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution
Date. The Rights will expire on April 24, 2005 (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
Preferred 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
Preferred Stock, (ii) upon the grant to holders of the Preferred
Stock of certain rights or warrants to subscribe for or purchase
Preferred Stock at a price, or securities convertible into
Preferred Stock with a conversion price, less than the
then-current market price of the Preferred Stock or (iii) upon
the distribution to holders of the Preferred Stock of evidences
of indebtedness or assets (excluding regular periodic cash
dividends or dividends payable in Preferred Stock) or of
subscription rights or warrants (other than those referred to
above).
The number of outstanding Rights 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 Preferred Stock purchasable upon exercise of
the Rights will not be redeemable. Each share of Preferred Stock
will be entitled, when, as and if declared, to a minimum
preferential quarterly dividend payment of $1 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 Preferred Stock will be entitled to a minimum
preferential liquidation payment of $100 per share (plus any
accrued but unpaid dividends) but will be entitled to an
aggregate payment of 100 times the payment made per share of
Common Stock. Each share of 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 converted or exchanged, each share of 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.
- 2 -
<PAGE>
Because of the nature of the Preferred Stock's
dividend, liquidation and voting rights, the value of the one
one-hundredth interest in a share of Preferred Stock purchasable
upon exercise of each Right should approximate the value of one
share of Common Stock.
In the event that any person or group of affiliated or
associated persons becomes an Acquiring Person, each holder of a
Right, other than Rights beneficially owned by the Acquiring
Person (which will thereupon become void), will thereafter have
the right to receive upon exercise of a Right at the then current
exercise price of the Right, that number of shares of Common
Stock having a market value of two times the exercise price of
the Right.
In the event that, after a person or group has become
an Acquiring Person, 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, proper provision
will be made so that each holder of a Right (other than Rights
beneficially owned by an Acquiring Person which will have become
void) will thereafter have the right to receive, upon the
exercise thereof at the then current exercise price of the Right,
that number of shares of common stock of the person with whom the
Company has engaged in the foregoing transaction (or its parent),
which number of shares at the time of such transaction will have
a market value of two times the exercise price of the Right.
At any time after any person or group becomes an
Acquiring Person and prior to the acquisition by such person or
group of 50% or more of the outstanding shares of Common Stock,
the Board of Directors of the Company may exchange the Rights
(other than Rights owned by such person or group which will have
become void), in whole or in part, at an exchange ratio of one
share of Common Stock, or one one-hundredth of a share of
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).
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 Preferred Stock will be issued (other than fractions
which are integral multiples of one one-hundredth of a share of
Preferred Stock, which may, at the election of the Company, be
evidenced by depositary receipts) and in lieu thereof, an
adjustment in cash will be made based on the market price of the
Preferred Stock on the last trading day prior to the date of
exercise.
At any time prior to the time an Acquiring Person
becomes such, the Board of Directors of the Company may redeem
the Rights in whole, but not in part, at a price of $.01 per
Right (the "Redemption Price"), subject to adjustment. The
- 3 -
<PAGE>
redemption of the Rights may be made effective at such time, on
such basis and with such conditions as the Board of Directors in
its sole discretion may establish. Immediately upon any
redemption of the Rights, the right to exercise the Rights will
terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
For so long as the Rights are then redeemable, the
Company may, except with respect to the redemption price, amend
the Rights in any manner. After the Rights are no longer
redeemable, the Company may, except with respect to the
redemption price, amend the Rights in any manner that does not
adversely affect the interests of holders of the Rights.
Until a Right is exercised, the holder thereof, as
such, will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to receive
dividends.
Item 2. Exhibits.
--------
1. Rights Agreement, dated as of April 9, 1995, between
the Company and The First National Bank of Boston,
which includes the Form of Certificate of Amendment of
the Restated Certificate of Incorporation of Frontier
Corporation as Exhibit A, the Form of Right Certificate
as Exhibit B and the Summary of Rights to Purchase
Shares of Preferred Stock as Exhibit C. Pursuant to the
Rights Agreement, printed Right Certificates will not
be mailed until as soon as practicable after the
earlier of the tenth day after public announcement that
a person or group has acquired beneficial ownership of
20% or more of the shares of Common Stock or the tenth
business day (or such later date as may be determined,
in accordance with the terms of the Rights Agreement,
by action of the Board of Directors) after a person
commences, or announces its intention to commence, a
tender offer or exchange offer the consummation of
which would result in the beneficial ownership by a
person or group of 20% or more of the outstanding
shares of Common Stock.
- 4 -
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned hereto duly authorized.
FRONTIER CORPORATION
By: /s/ Louis L. Massaro
----------------------------
Louis L. Massaro
Corporate Vice President-
Finance and Chief Financial
Officer
Dated: April 13, 1995
- 5 -
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
1. Rights Agreement, dated as of April 9, 1995,
between the Company and The First National Bank of
Boston, which includes the Form of Certificate of
Amendment of the Restated Certificate of
Incorporation of Frontier Corporation as Exhibit
A, the Form of Right Certificate as Exhibit B and
the Summary of Rights to Purchase Shares of
Preferred Stock as Exhibit C. Pursuant to the
Rights Agreement, printed Right Certificates will
not be mailed until as soon as practicable after
the earlier of the tenth day after public
announcement that a person or group has acquired
beneficial ownership of 20% or more of the shares
of Common Stock or the tenth business day (or such
later date as may be determined, in accordance
with the terms of the Rights Agreement, by action
of the Board of Directors) after a person
commences, or announces its intention to commence,
a tender offer or exchange offer the consummation
of which would result in the beneficial ownership
by a person or group of 20% or more of the
outstanding shares of Common Stock.
- 6 -
Exhibit 1
---------
____________________________________
FRONTIER CORPORATION
AND
THE FIRST NATIONAL BANK OF BOSTON,
Rights Agent
RIGHTS AGREEMENT
DATED AS OF APRIL 9, 1995
____________________________________
<PAGE>
TABLE OF CONTENTS
Page
----
Section 1. Certain Definitions . . . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent . . . . . . . . . . . 6
Section 3. Issue of Right Certificates . . . . . . . . . . . 6
Section 4. Form of Right Certificates . . . . . . . . . . . . 8
Section 5. Countersignature and Registration . . . . . . . . 8
Section 6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost
or Stolen Right Certificates . . . . . . . . . . 9
Section 7. Exercise of Rights, Purchase Price; Expiration
Date of Rights . . . . . . . . . . . . . . . . 10
Section 8. Cancellation and Destruction of Right
Certificates . . . . . . . . . . . . . . . . . 11
Section 9. Availability of Shares of Preferred Stock . . . 11
Section 10. Preferred Stock Record Date . . . . . . . . . . 13
Section 11. Adjustment of Purchase Price, Number of Shares
and Number of Rights . . . . . . . . . . . . . 13
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares . . . . . . . . . . . . . . . . . . 23
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earnings Power . . . . . . . . . . . 23
Section 14. Fractional Rights and Fractional Shares . . . . 27
Section 15. Rights of Action . . . . . . . . . . . . . . . . 28
Section 16. Agreement of Right Holders . . . . . . . . . . . 29
Section 17. Right Certificate Holder Not Deemed a
Stockholder . . . . . . . . . . . . . . . . . 29
Section 18. Concerning the Rights Agent . . . . . . . . . . 30
Section 19. Merger or Consolidation or Change of Name of
Rights Agent . . . . . . . . . . . . . . . . . 30
Section 20. Duties of Rights Agent . . . . . . . . . . . . . 31
- i -
<PAGE>
Page
----
Section 21. Change of Rights Agent . . . . . . . . . . . . . 33
Section 22. Issuance of New Right Certificates . . . . . . . 34
Section 23. Redemption . . . . . . . . . . . . . . . . . . . 35
Section 24. Exchange . . . . . . . . . . . . . . . . . . . . 35
Section 25. Notice of Certain Events . . . . . . . . . . . . 37
Section 26. Notices . . . . . . . . . . . . . . . . . . . . 37
Section 27. Supplements and Amendments . . . . . . . . . . . 38
Section 28. Successors . . . . . . . . . . . . . . . . . . . 39
Section 29. Benefits of this Agreement . . . . . . . . . . . 39
Section 30. Determinations and Actions by the Board of
Directors . . . . . . . . . . . . . . . . . . 39
Section 31. Severability . . . . . . . . . . . . . . . . . . 39
Section 32. Governing Law . . . . . . . . . . . . . . . . . 39
Section 33. Counterparts . . . . . . . . . . . . . . . . . . 40
Section 34. Descriptive Headings . . . . . . . . . . . . . . 40
EXHIBITS
--------
Exhibit A Form of Certificate
Exhibit B Form of Right Certificate
Exhibit C Summary of Rights
- ii -
<PAGE>
RIGHTS AGREEMENT
----------------
Agreement, dated as of April 9, 1995, between FRONTIER
CORPORATION, a New York corporation (the "Company"), and THE
FIRST NATIONAL BANK OF BOSTON, a national banking association
(the "Rights Agent").
PREAMBLE
--------
The Board of Directors of the Company has authorized and
declared a dividend of one preferred share purchase right (a
"Right") for each share of Common Stock (as hereinafter defined)
of the Company outstanding as of the Close of Business (as
defined below) on April 24, 1995 (the "Record Date"), each Right
representing the right to purchase one one-hundredth (subject to
adjustment) 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 the issuance of
one Right (subject to adjustment as provided herein) with respect
to each share of Common Stock that shall become outstanding
between the Record Date and the earlier of the Distribution Date
and the Expiration Date (as such terms are hereinafter defined);
provided, however, that Rights may be issued with respect to
-------- -------
shares of Common Stock that shall become outstanding after the
Distribution Date and prior to the Expiration Date in accordance
with Section 22.
Accordingly, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as
follows:
Section 1. Certain Definitions. For purposes of this
-------------------
Agreement, the following terms have the meaning indicated:
(a) "Acquiring Person" shall mean any Person (as such term
is hereinafter defined) who or which shall be the Beneficial
Owner (as such term is hereinafter defined) of 20% or more of
the shares of Common Stock then outstanding, but shall not
include an Exempt Person (as such term is hereinafter
defined); provided, however, that if the Board of Directors of
-------- -------
the Company determines in good faith that a Person who would
otherwise be an "Acquiring Person" has become such
inadvertently (including, without limitation, because (i) such
Person was unaware that it beneficially owned a percentage of
Common Stock that would otherwise cause such Person to be a
"Acquiring Person") and without any intention of changing or
influencing control of the Company, and such Person, as
promptly as practicable after being advised of such
determination, divests himself or itself of Beneficial
Ownership of a sufficient number of shares of Common Stock so
that such Person would no longer be an Acquiring Person, then
such Person shall not be deemed to be or to have become an
<PAGE>
"Acquiring Person" for any purposes of this Agreement.
Notwithstanding the foregoing, no Person shall become an
"Acquiring Person" as the result of an acquisition of shares
of Common Stock by the Company which, by reducing the number
of shares outstanding, increases the proportionate number of
shares beneficially owned by such Person to 20% or more of the
shares of Common Stock then outstanding, provided, however,
-------- -------
that if a Person shall become the Beneficial Owner of 20% or
more of the shares of Common Stock then outstanding by reason
of such share acquisitions by the Company and thereafter such
Person shall become the Beneficial Owner of any additional
shares of Common Stock, then such Person shall be deemed to be
an "Acquiring Person" (i) unless upon the consummation of the
acquisition of such additional shares of Common Stock such
Person does not own 20% or more of the shares of Common Stock
then outstanding or (ii) the proviso to the first sentence of
this Section 1(a) is applicable. The phrase "then
outstanding", when used with reference to a Person's
Beneficial Ownership of securities of the Company, shall mean
the number of such securities then issued and outstanding
together with the number of such securities not then actually
issued and outstanding which such Person would be deemed to
own beneficially hereunder.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General
Rules and Regulations under the Exchange Act as in effect on
the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of,
shall be deemed to have "Beneficial Ownership" of and shall be
deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates
or Associates is deemed to beneficially own, directly or
indirectly, within the meaning of Rule 13d-3 of the General
Rules and Regulations under the Exchange Act as in effect
on the date of this Agreement;
(ii) which such Person or any of such Person's Affiliates
or Associates has (A) the right to acquire (whether such
right is exercisable immediately or only after the passage
of time) pursuant to any agreement, arrangement or
understanding (other than customary agreements with and
between underwriters and selling group members with respect
to a bona fide public offering of securities), or upon the
exercise of conversion rights, exchange rights, rights,
warrants or options, or otherwise; provided, however, that
-------- -------
a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, (x) 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,
(y) securities which such Person has a right to acquire on
-2-
<PAGE>
the exercise of Rights at any time prior to the time a
Person becomes an Acquiring Person or (z) securities
issuable upon exercise of Rights from and after the time a
Person becomes an Acquiring Person if such Rights were
acquired by such Person or any of such Person's Affiliates
or Associates prior to the Distribution Date or pursuant
to Section 3(a) or Section 22 hereof ("original Rights") or
pursuant to Section 11(i) or Section 11(n) with respect to
an adjustment to original Rights; 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
by reason of such agreement, arrangement or understanding
if the agreement, arrangement or understanding to vote such
security (1) arises solely from a revocable proxy or
consent given to such Person in response to a public proxy
or consent solicitation made pursuant to, and in accordance
with, the applicable rules and regulations promulgated
under the Exchange Act and (2) is not also then reportable
on Schedule 13D under the Exchange Act (or any comparable
or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or
any of such Person's Affiliates or Associates has any
agreement, arrangement or understanding (other than
customary agreements with and between underwriters and
selling group members with respect to a bona fide public
offering of securities) for the purpose of acquiring,
holding, voting (except to the extent contemplated by the
proviso to Section 1(c)(ii)(B)) or disposing of any
securities of the Company;
provided, however, that no Person who is an officer, director
-------- -------
or employee of an Exempt Person shall be deemed, solely by
reason of such Person's status or authority as such, to be the
"Beneficial Owner" of, to have "Beneficial Ownership" of or to
"beneficially own" any securities that are "beneficially
owned" (as defined in this Section 1(c)), including, without
limitation, in a fiduciary capacity, by an Exempt Person or by
any other such officer, director or employee of an Exempt
Person.
(d) "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.
(e) "Close of Business" on any given date shall mean 5:00
P.M., New York City time, on such date; provided, however,
-------- -------
that if such date is not a Business Day it shall mean 5:00
P.M., New York City time, on the next succeeding Business Day.
-3-
<PAGE>
(f) "Common Stock" when used with reference to the Company
shall mean the common stock, presently par value $1.00 per
share, of the Company. "Common Stock" when used with
reference to any Person other than the Company shall mean the
capital stock (or, in the case of an unincorporated entity,
the equivalent 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.
(g) "Common Stock Equivalents" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(h) "Current Per Share Market Price" shall have the
meaning set forth in Section 11(d)(i) hereof.
(i) "Current Value" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(j) "Distribution Date" shall have the meaning set forth
in Section 3(a) hereof.
(k) Equivalent Preferred Shares" shall have the meaning
set forth in Section 11(b) hereof.
(l) "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
(m) "Exchange Ratio" shall have the meaning set forth in
Section 24(a) hereof.
(n) "Exempt Person" shall mean the Company, any Subsidiary
(as such term is hereinafter defined) of the Company, any
employee benefit plan of the Company or of any Subsidiary of
the Company, or any entity or trustee holding Common Stock for
or pursuant to the terms of any such plan or for the purpose
of funding any such plan or funding other employee benefits
for employees of the Company or of any Subsidiary of the
Company.
(o) "Expiration Date" shall have the meaning set forth in
Section 7 hereof.
(p) "Final Expiration Date" shall have the meaning set
forth in Section 7 hereof.
(q) "Invalidation Time" shall have the meaning set forth
in Section 11(a)(ii) hereof.
(r) "New York Stock Exchange" shall mean the New York
Stock Exchange, Inc.
-4-
<PAGE>
(s) "Person" shall mean any individual, firm, corporation
or other entity, and shall include any successor (by merger or
otherwise) of such entity.
(t) "Preferred Stock" shall mean the Series A Junior
Participating Class A Preferred Stock, par value $100 per
share, of the Company having the rights and preferences set
forth in the Form of Certificate of Amendment attached to this
Agreement as Exhibit A.
(u) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
(v) "Purchase Price" shall have the meaning set forth in
Section 4 hereof.
(w) "Record Date" shall have the meaning set forth in the
Preamble hereof.
(x) "Redemption Date" shall have the meaning set forth in
Section 7 hereof.
(y) "Right" shall have the meaning set forth in the
Preamble hereof.
(z) "Right Certificate" shall have the meaning set forth
in Section 3(a) hereof.
(aa) "Section 11(a)(ii) Trigger Date" shall have the
meaning set forth in Section 11(a)(iii) hereof.
(ab) "Securities Act" shall mean the Securities Act of
1933, as amended.
(ac) "Security" shall have the meaning set forth in
Section 11(d)(i) hereof.
(ad) "Spread" shall have the meaning set forth in Section
11(a)(iii) hereof.
(ae) "Stock Acquisition Date" shall mean the first date of
public announcement (which for purposes of this definition,
shall include, without limitation, a report filed pursuant to
Section 13(d) of the Exchange Act) by the Company or an
Acquiring Person that an Acquiring Person has become such or
such earlier date as a majority of the Board of Directors
shall become aware of the existence of an Acquiring Person.
(af) "Subsidiary" of any Person shall mean any corporation
or other entity of which securities or other ownership
interests having ordinary voting power sufficient to elect a
majority of the board of directors or other persons performing
similar functions are beneficially owned, directly or
-5-
<PAGE>
indirectly, by such Person, and any corporation or other
entity that is otherwise controlled by such Person.
(ag) "Substitution Period" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(ah) "Summary of Rights" shall have the meaning set forth
in Section 3(b) hereof.
(ai) "Trading Day" shall have the meaning set forth in
Section 11(d)(i) hereof.
Section 2. Appointment of Rights Agent. The Company
---------------------------
hereby appoints the Rights Agent to act as agent for the Company
and the holders of the Rights (who, in accordance with Section 3
hereof, shall prior to the Distribution Date also be the holders
of Common Stock) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment.
The Company may from time to time appoint such co-Rights Agents
as it may deem necessary or desirable.
Section 3. Issue of Right Certificates. (a) Until the
---------------------------
earlier of (i) the tenth day after the Stock Acquisition 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) after the date of the
commencement by any Person (other than an Exempt Person) of, or
of the first public announcement of the intention of such Person
(other than an Exempt Person) to commence, a tender or exchange
offer the consummation of which would result in any Person
becoming the Beneficial Owner of shares of Common Stock
aggregating 20% or more of the 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
such dates being herein referred to as the "Distribution Date"),
(x) the Rights will be evidenced (subject to the provisions of
Section 3(b) hereof) by the certificates for Common Stock
registered in the names of the holders thereof and not by
separate Right Certificates, and (y) the Rights will be
transferable only in connection with the transfer of Common
Stock. As soon as practicable after the Distribution Date, the
Company will prepare and execute, the Rights Agent will
countersign, and the Company will send or cause to be sent (and
the Rights Agent will, if requested, send) by first-class,
insured, postage-prepaid mail, to each record holder of Common
Stock as of the Close of Business on the Distribution Date (other
than any Acquiring Person or any Associate or Affiliate of an
Acquiring Person), at the address of such holder shown on the
records of the Company, a Right Certificate, in substantially the
form of Exhibit B hereto (a "Right Certificate"), evidencing one
Right (subject to adjustment as provided herein) for each share
of Common Stock so held. As of the Distribution Date, the Rights
will be evidenced solely by such Right Certificates.
-6-
<PAGE>
(b) On the Record Date, or as soon as practicable
thereafter, the Company will send a copy of a Summary of Rights
to Purchase Shares of Preferred Stock, in substantially the form
of Exhibit C hereto (the "Summary of Rights"), by first-class,
postage-prepaid mail, to each record holder of Common Stock as of
the Close of Business on the Record Date (other than any
Acquiring Person or any Associate or Affiliate of any Acquiring
Person), at the address of such holder shown on the records of
the Company. With respect to certificates for Common Stock
outstanding as of the Record Date, until the Distribution Date,
the Rights will be evidenced by such certificates registered in
the names of the holders thereof together with the Summary of
Rights. Until the Distribution Date (or, if earlier, the
Expiration Date), the surrender for transfer of any certificate
for Common Stock outstanding as of the Record Date, with or
without a copy of the Summary of Rights, shall also constitute
the transfer of the Rights associated with the Common Stock
represented thereby.
(c) Certificates issued for Common Stock (including,
without limitation, upon transfer of outstanding Common Stock,
disposition of Common Stock out of treasury stock or issuance or
reissuance of Common Stock out of authorized but unissued shares)
after the Record Date but prior to the earlier of the
Distribution Date or the Expiration Date shall have impressed on,
printed on, written on or otherwise affixed to them the following
legend:
This certificate also evidences and entitles the
holder hereof to certain rights as set forth in a
Rights Agreement between Frontier Corporation and The
First National Bank of Boston, as Rights Agent, dated
as of April 9, 1995, as the same may be amended from
time to time (the "Rights Agreement"), the terms of
which are hereby incorporated herein by reference and
a copy of which is on file at the principal executive
offices of Frontier 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. Frontier 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, as
-------------------------------
set forth in the Rights Agreement, Rights owned by or
-----------------------------------------------------
transferred to any Person who becomes an Acquiring
--------------------------------------------------
Person (as defined in the Rights Agreement) and
-----------------------------------------------
certain transferees thereof will become null and void
-----------------------------------------------------
and will no longer be transferable.
-----------------------------------
With respect to such certificates containing the foregoing
legend, until the Distribution Date, the Rights associated with
the Common Stock represented by such certificates shall be
evidenced by such certificates alone, and the surrender for
-7-
<PAGE>
transfer of any such certificate, except as otherwise provided
herein, shall also constitute the transfer of the Rights
associated with the Common Stock represented thereby. In the
event that the Company purchases or otherwise acquires any Common
Stock after the Record Date but prior to the Distribution Date,
any Rights associated with such Common Stock shall be deemed
cancelled and retired so that the Company shall not be entitled
to exercise any Rights associated with the Common Stock which are
no longer outstanding.
Notwithstanding this paragraph (c), the omission of a
legend shall not affect the enforceability of any part of this
Agreement or the rights of any holder of the Rights.
Section 4. Form of Right Certificates. The Right
--------------------------
Certificates (and the forms of election to purchase shares and of
assignment to be printed on the reverse thereof) shall be
substantially in the form 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 with any rule or regulation made
pursuant thereto or with any rule or regulation of the New York
Stock Exchange or of any other stock exchange or any quotation
system on which the Rights may from time to time be listed, or to
conform to usage. Subject to the provisions of Sections 11 and
22 hereof, the Right Certificates shall entitle the holders
thereof to purchase such number of one one-hundredths of a share
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.
Section 5. Countersignature and Registration. (a) The
---------------------------------
Right Certificates shall be executed on behalf of the Company by
the Chairman of the Board of Directors, the President or a Vice
President, and by the Secretary, an Assistant Secretary, the
Treasurer or an Assistant Treasurer of the Company, in each case
either manually or by facsimile signature, and shall have affixed
thereto the Company's seal or a facsimile thereof. The Right
Certificates shall be manually countersigned by the Rights Agent
and shall not be valid for any purpose unless so countersigned.
In case any officer of the Company who shall have signed any of
the Right Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance
and delivery by the Company, such Right Certificates, neverthe-
less, may be countersigned by the Rights Agent and issued and
delivered by the Company with the same force and effect as though
the Person who signed such Right Certificates had not ceased to
be such officer of the Company; and any Right Certificate may be
signed on behalf of the Company by any Person who, at the actual
date of the execution of such Right Certificate, shall be a
-8-
<PAGE>
proper officer of the Company to sign such Right Certificate,
although at the date of the execution of this Agreement any such
Person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at an office or agency designated for
such purpose, books for registration and transfer of the Right
Certificates issued hereunder. Such books shall show the names
and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each
of the Right Certificates and the date of each of the Right
Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
-----------------------------------------------
Right Certificates; Mutilated, Destroyed, Lost or Stolen Right
--------------------------------------------------------------
Certificates. (a) Subject to the provisions of Sections 7(e),
------------
11(a)(ii) and 14 hereof, at any time after the Close of Business
on the Distribution Date and prior to the Close of Business on
the Expiration Date, any Right Certificate or Right Certificates
may be transferred, split up, combined or exchanged for another
Right Certificate or Right Certificates, entitling the registered
holder to purchase a like number of one one-hundredths of a share
of Preferred Stock as the Right Certificate or Right Certificates
surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up, combine or
exchange any Right Certificate or Right Certificates shall make
such request in writing delivered to the Rights Agent, and shall
surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the office or
agency of the Rights Agent designated for such purpose.
Thereupon the Rights Agent shall countersign and deliver to the
Person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company
may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Right
Certificates.
(b) Subject to the provisions of Section 11(a)(ii) hereof,
at any time after the Distribution Date and prior to the Close of
Business on the Expiration Date, upon receipt by the Company and
the Rights Agent of evidence reasonably satisfactory to them of
the loss, theft, destruction or mutilation of a Right Certifi-
cate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's
request, reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Right Certificate if
mutilated, the Company will make and deliver a new Right
Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
-9-
<PAGE>
Section 7. Exercise of Rights, Purchase Price; Expiration
----------------------------------------------
Date of Rights. (a) Except as otherwise provided herein, the
--------------
Rights shall become exercisable on the Distribution Date, and
thereafter the registered holder of any Right Certificate may,
subject to Section 11(a)(ii) hereof and except as otherwise
provided herein, exercise the Rights evidenced thereby in whole
or in part upon surrender of the Right Certificate, with the form
of election to purchase on the reverse side thereof duly ex-
ecuted, to the Rights Agent at the office or agency of the Rights
Agent designated for such purpose, together with payment of the
Purchase Price for each one one-hundredth of a share of Preferred
Stock as to which the Rights are exercised, at any time which is
both after the Distribution Date and prior to the time (the
"Expiration Date") that is the earliest of (i) the Close of
Business on April 24, 2005 (the "Final Expiration Date"), (ii)
the time at which the Rights are redeemed as provided in Section
23 hereof (the "Redemption Date") or (iii) the time at which such
Rights are exchanged as provided in Section 24 hereof.
(b) The Purchase Price shall be initially $80 for each one
one-hundredth of a share of Preferred Stock purchasable upon the
exercise of a Right. The Purchase Price and the number of one
one-hundredths of a share of Preferred Stock or other securities
or property to be acquired upon exercise of a Right shall be
subject to adjustment from time to time as provided in Sections
11 and 13 hereof and shall be payable in lawful money of the
United States of America in accordance with paragraph (c) of this
Section 7.
(c) Except as otherwise provided herein, upon receipt of a
Right Certificate representing exercisable Rights, with the form
of election to purchase duly executed, accompanied by payment of
the aggregate Purchase Price for the shares of Preferred Stock to
be purchased and an amount equal to any applicable transfer tax
required to be paid by the holder of such Right Certificate in
accordance with Section 9 hereof, in cash or by certified check,
cashier's check or money order payable to the order of the
Company, the Rights Agent shall thereupon promptly (i) (A)
requisition from any transfer agent of the Preferred Stock
certificates for the number of shares of Preferred Stock to be
purchased and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests, or (B)
requisition from the depositary agent depositary receipts
representing interests in such number of one one-hundredths of a
share of Preferred Stock as are to be purchased (in which case
certificates for the Preferred Stock represented by such receipts
shall be deposited by the transfer agent with the depositary
agent) and the Company hereby directs the depositary agent to
comply with such request, (ii) when appropriate, requisition from
the Company the amount of cash to be paid in lieu of issuance of
fractional shares in accordance with Section 14 hereof, (iii)
promptly after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of
the registered holder of such Right Certificate, registered in
-10-
<PAGE>
such name or names as may be designated by such holder and (iv)
when appropriate, after receipt, promptly deliver such cash to or
upon the order of the registered holder of such Right
Certificate.
(d) Except as otherwise provided herein, in case the
registered holder of any Right Certificate shall exercise less
than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the exercisable Rights remaining
unexercised shall be issued by the Rights Agent to the registered
holder of such Right Certificate or to his duly authorized
assigns, subject to the provisions of Section 14 hereof.
(e) 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 a registered
holder of Rights upon the occurrence of any purported transfer or
exercise of Rights pursuant to Section 6 hereof or this Section 7
unless such registered holder shall have (i) completed and signed
the certificate contained in the form of assignment or election
to purchase set forth on the reverse side of the Right
Certificate surrendered for such transfer or exercise and (ii)
provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Right
-------------------------------------
Certificates. All Right Certificates surrendered for the purpose
------------
of exercise, transfer, split up, combination or exchange shall,
if surrendered to the Company or to any of its agents, be
delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled
by it, and no Right Certificates shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this
Agreement. The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel
and retire, any other Right Certificate purchased or acquired by
the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all cancelled Right Certificates to the
Company, or shall, at the written request of the Company, destroy
such cancelled Right Certificates, and in such case shall deliver
a certificate of destruction thereof to the Company.
Section 9. Availability of Shares 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 or any shares of Preferred Stock held
in its treasury, the number of shares of Preferred Stock that
will be sufficient to permit the exercise in full of all
outstanding Rights.
(b) So long as the shares of Preferred Stock (and,
following the time that a Person becomes an Acquiring Person,
shares of Common Stock and other securities) issuable upon the
-11-
<PAGE>
exercise of Rights may be listed or admitted to trading on the
New York Stock Exchange or listed on any other national
securities exchange or quotation system, the Company shall use
its best efforts to cause, from and after such time as the Rights
become exercisable, all shares reserved for such issuance to be
listed or admitted to trading on the New York Stock Exchange or
listed on any other exchange or quotation system upon official
notice of issuance upon such exercise.
(c) From and after such time as the Rights become
exercisable, the Company shall use its best efforts, if then
necessary to permit the issuance of shares of Preferred Stock
(and following the time that a Person first becomes an Acquiring
Person, shares of Common Stock and other securities) upon the
exercise of Rights, to register and qualify such shares of
Preferred Stock (and following the time that a Person first
becomes an Acquiring Person, shares of Common Stock and other
securities) under the Securities Act and any applicable state
securities or "Blue Sky" laws (to the extent exemptions therefrom
are not available), cause such registration statement and
qualifications to become effective as soon as possible after such
filing and keep such registration and qualifications effective
until the earlier of the date as of which the Rights are no
longer exercisable for such securities and the Expiration Date.
The Company may temporarily suspend, for a period of time not to
exceed 90 days, the exercisability of the Rights in order to
prepare and file a registration statement under the Securities
Act and permit it to become effective. Upon any such suspension,
the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as
well as a public announcement at such time as the suspension is
no longer in effect. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable in
any jurisdiction unless the requisite qualification in such
jurisdiction shall have been obtained and until a registration
statement under the Securities Act (if required) shall have been
declared effective.
(d) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all shares of
Preferred Stock (and, following the time that a Person becomes an
Acquiring Person, shares of Common Stock and other securities)
delivered upon exercise of Rights shall, at the time of delivery
of the certificates therefor (subject to payment of the Purchase
Price), be duly and validly authorized and issued and fully paid
and nonassessable shares.
(e) The Company further covenants and agrees that it will
pay when due and payable any and all federal and state transfer
taxes and charges which may be payable in respect of the issuance
or delivery of the Right Certificates or of any shares of
Preferred Stock (or shares of Common Stock or other securities)
upon the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax which may be payable in respect
-12-
<PAGE>
of any transfer or delivery of Right Certificates to a Person
other than, or the issuance or delivery of certificates or
depositary receipts for the Preferred Stock (or shares of Common
Stock or other securities) in a name other than that of, the
registered holder of the Right Certificate evidencing Rights
surrendered for exercise or to issue or deliver any certificates
or depositary receipts for Preferred Stock (or shares of Common
Stock or other securities) upon the exercise of any Rights until
any such tax shall have been paid (any such tax being payable by
that holder of such Right Certificate at the time of surrender)
or until it has been established to the Company's reasonable
satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each Person in
---------------------------
whose name any certificate for Preferred Stock is issued upon the
exercise of Rights shall for all purposes be deemed to have
become the holder of record of the shares of Preferred Stock
represented thereby on, and such certificate shall be dated, the
date upon which the Right Certificate evidencing such Rights was
duly surrendered and payment of the Purchase Price (and any
applicable transfer taxes) was made; provided, however, that if
-------- -------
the date of such surrender and payment is a date upon which the
Preferred Stock transfer books of the Company are closed, such
Person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next
succeeding Business Day on which the Preferred Stock transfer
books of the Company are open. Prior to the exercise of the
Rights evidenced thereby, the holder of a Right Certificate shall
not be entitled to any rights of a holder of Preferred Stock for
which the Rights shall be exercisable, including, without
limitation, the right to vote or to receive dividends or other
distributions, and shall not be entitled to receive any notice of
any proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares
----------------------------------------------
and Number of Rights. The Purchase Price, the number of shares
--------------------
of Preferred Stock or other securities or property purchasable
upon exercise of each Right and the number of Rights outstanding
are subject to adjustment from time to time as provided in this
Section 11.
(a) (i) In the event the Company shall at any time after
the date of this Agreement (A) declare a dividend on the
Preferred Stock payable in shares of Preferred Stock, (B)
subdivide the outstanding Preferred Stock, (C) combine the
outstanding Preferred Stock into a smaller number of shares of
Preferred Stock or (D) issue any shares of its capital stock
in a reclassification of the Preferred Stock (including any
such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section
11(a), the Purchase Price in effect at the time of the record
date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number
-13-
<PAGE>
and kind of shares of capital stock issuable on such date,
shall be proportionately adjusted so that the holder of any
Right exercised after such time shall be entitled to receive
the aggregate number and kind of shares of capital stock
which, if such Right had been exercised immediately prior to
such date and at a time when the Preferred Stock transfer
books of the Company were open, the holder would have owned
upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification;
provided, however, that in no event shall the consideration to
-------- -------
be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the
Company issuable upon exercise of one Right.
(ii) Subject to Section 24 of this Agreement and except as
otherwise provided in this Section 11(a)(ii), in the event any
Person becomes an Acquiring Person, each holder of a Right
shall thereafter have the right to receive, upon 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 (or at the option of the Company, such number of one
one-hundredths of shares of Preferred Stock) as shall equal
the result obtained by (x) 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 and
dividing that product by (y) 50% of the then Current Per Share
Market Price of the Company's Common Stock (determined
pursuant to Section 11(d) hereof) on the date of the occur-
rence of such event. Notwithstanding anything in this
Agreement to the contrary, however, from and after the time
(the "Invalidation Time") when any Person first becomes an
Acquiring Person, any Rights that are beneficially owned by
(x) any Acquiring Person (or any Affiliate or Associate of any
Acquiring Person), (y) a transferee of any Acquiring Person
(or any such Affiliate or Associate) who becomes a transferee
after the Invalidation Time or (z) a transferee of any
Acquiring Person (or any such Affiliate or Associate) who
became a transferee prior to or concurrently with the
Invalidation Time pursuant to either (I) a transfer from the
Acquiring Person to holders of its equity securities or to any
Person with whom it has any continuing agreement, arrangement
or understanding regarding the transferred Rights or (II) a
transfer which the Board of Directors has determined is part
of a plan, arrangement or understanding which has the purpose
or effect of avoiding the provisions of this paragraph, and
subsequent transferees of such Persons, shall be void without
any further action and any holder of such Rights shall
thereafter have no rights whatsoever with respect to such
Rights under any provision of this Agreement. The Company
shall use all reasonable efforts to ensure that the provisions
of this Section 11(a)(ii) are complied with, but shall have no
-14-
<PAGE>
liability to any holder of Right Certificates or other Person
as a result of its failure to make any determinations with
respect to an Acquiring Person or its Affiliates, Associates
or transferees hereunder. From and after the Invalidation
Time, no Right Certificate shall be issued pursuant to Section
3 or Section 6 hereof that represents Rights that are or have
become void pursuant to the provisions of this paragraph, and
any Right Certificate delivered to the Rights Agent that
represents Rights that are or have become void pursuant to the
provisions of this paragraph shall be cancelled. From and
after the occurrence of an event specified in Section 13(a)
hereof, any Rights that theretofore have not been exercised
pursuant to this Section 11(a)(ii) shall thereafter be
exercisable only in accordance with Section 13 and not
pursuant to this Section 11(a)(ii).
(iii) The Company may at its option substitute for a share of
Common Stock issuable upon the exercise of Rights in
accordance with the foregoing subparagraph (ii) such number or
fractions of shares of Preferred Stock having an aggregate
current market value equal to the Current Per Share Market
Price of a share of Common Stock. In the event that there
shall not be sufficient shares of Common Stock issued but not
outstanding or authorized but unissued to permit the exercise
in full of the Rights in accordance with the foregoing
subparagraph (ii), the Board of Directors shall, to the extent
permitted by applicable law and any material agreements then
in effect to which the Company is a party (A) determine the
excess of (1) the value of the shares of Common Stock issuable
upon the exercise of a Right in accordance with the foregoing
subparagraph (ii) (the "Current Value") over (2) the then
current Purchase Price multiplied by the number of one one-
hundredths of shares of Preferred Stock for which a Right was
exercisable immediately prior to the time that the Acquiring
Person became such (such excess, the "Spread"), and (B) with
respect to each Right (other than Rights which have become
void pursuant to Section 11(a)(ii)), make adequate provision
to substitute for the shares of Common Stock issuable in
accordance with subparagraph (ii) upon exercise of the Right
and payment of the applicable Purchase Price, (1) cash, (2) a
reduction in the Purchase Price, (3) shares of Preferred Stock
or other equity securities of the Company (including, without
limitation, shares or fractions of shares of preferred stock
which, by virtue of having dividend, voting and liquidation
rights substantially comparable to those of the shares of
Common Stock, are deemed in good faith by the Board of
Directors to have substantially the same value as the shares
of Common Stock (such shares of Preferred Stock and shares or
fractions of shares of preferred stock are hereinafter
referred to as "Common Stock Equivalents")), (4) debt
securities of the Company, (5) other assets, or (6) any
combination of the foregoing, having a value which, when added
to the value of the shares of Common Stock actually issued
upon exercise of such Right, shall have an aggregate value
-15-
<PAGE>
equal to the Current Value (less the amount of any reduction
in the Purchase Price), where such aggregate value has been
determined by the Board of Directors upon the advice of a
nationally recognized investment banking firm selected in good
faith by the Board of Directors; provided, however, if the
-------- -------
Company shall not make adequate provision to deliver value
pursuant to clause (B) above within thirty (30) days following
the date that the Acquiring Person became such (the "Section
11(a)(ii) Trigger Date"), then the Company shall be obligated
to deliver, to the extent permitted by applicable law and any
material agreements then in effect to which the Company is a
party, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, shares of Common
Stock (to the extent available), and then, if necessary, such
number or fractions of shares of Preferred Stock (to the
extent available) and then, if necessary, cash, which shares
and/or cash have an aggregate value equal to the Spread. If,
upon the date any Person becomes an Acquiring Person, the
Board of Directors 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, then, if the Board of Directors so elects, the thirty
(30) day period set forth above may be extended to the extent
necessary, but not more than ninety (90) days after the
Section 11(a)(ii) Trigger Date, in order that the Company may
seek shareowner approval for the authorization of such
additional shares (such thirty (30) day period, as it may be
extended, is herein called the "Substitution Period"). To the
extent that the Company determines that some action need be
taken pursuant to the second and/or third sentence of this
Section 11(a)(iii), the Company (x) shall provide, subject to
Section 11(a)(ii) hereof and the last sentence of this Section
11(a)(iii) hereof, that such action shall apply uniformly to
all outstanding Rights and (y) may suspend the exercisability
of the Rights until the expiration of the Substitution Period
in order to seek any authorization of additional shares and/or
to decide the appropriate form of distribution to be made
pursuant to such second sentence and to determine the value
thereof. In the event of any such suspension, the Company
shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended,
as well as a public announcement at such time as the
suspension is no longer in effect. For purposes of this
Section 11(a)(iii), the value of the shares of Common Stock
shall be the Current Per Share Market Price (as determined
pursuant to Section 11(d)(i)) on the Section 11(a)(ii) Trigger
Date and the per share or fractional value of any "Common
Stock Equivalent" shall be deemed to equal the Current Per
Share Market Price of the Common Stock. The Board of
Directors of the Company may, but shall not be required to,
establish procedures to allocate the right to receive shares
of Common Stock upon the exercise of the Rights among holders
of Rights pursuant to this Section 11(a)(iii).
-16-
<PAGE>
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of
Preferred Stock entitling them (for a period expiring within
45 calendar days after such record date) to subscribe for or
purchase Preferred Stock (or shares having the same rights,
privileges and preferences as the Preferred Stock ("Equivalent
Preferred Shares")) or securities convertible into Preferred
Stock or Equivalent Preferred Shares at a price per share of
Preferred Stock or Equivalent Preferred Shares (or having a
conversion price per share, if a security convertible into
shares of Preferred Stock or Equivalent Preferred Shares) less
than the then Current Per Share Market Price of the Preferred
Stock (determined pursuant to Section 11(d) hereof) 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 and Equivalent Preferred Shares outstanding
on such record date plus the number of shares of Preferred
Stock and Equivalent Preferred Shares which the aggregate
offering price of the total number of shares of Preferred
Stock and/or Equivalent Preferred Shares so to be offered
(and/or the aggregate initial conversion price of the con-
vertible securities so to be offered) would purchase at such
current market price, and the denominator of which shall be
the number of shares of Preferred Stock and Equivalent
Preferred Shares outstanding on such record date plus the
number of additional shares of Preferred Stock and/or
Equivalent Preferred Shares to be offered for subscription or
purchase (or into which the convertible securities so to be
offered are initially convertible); provided, however, that in
-------- -------
no event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the
shares of capital stock of the Company issuable upon exercise
of one Right. In case such subscription price may be paid in
a consideration part or all of which shall be in a form other
than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement
filed with the Rights Agent. Shares of Preferred Stock and
Equivalent Preferred Shares owned by or held for the account
of the Company shall not be deemed outstanding for the purpose
of any such computation. Such adjustment shall be made
successively whenever such a record date is fixed; and in the
event that such rights, options or warrants are not so issued,
the Purchase Price shall be adjusted to be the Purchase Price
which would then be in effect if such record date had not been
fixed.
(c) In case the Company shall fix a record date for the
making of a distribution to all holders of the Preferred Stock
(including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing
or surviving corporation) of evidences of indebtedness or
-17-
<PAGE>
assets (other than a regular quarterly cash dividend or a
dividend payable in Preferred Stock) or subscription rights or
warrants (excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction,
the numerator of which shall be the then Current Per Share
Market Price of the Preferred Stock (determined pursuant to
Section 11(d) hereof) on such record date, less the fair
market value (as determined in good faith by the Board of
Directors of the Company whose determination shall be
described in a statement filed with the Rights Agent) of the
portion of the assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants
applicable to one share of Preferred Stock, and the
denominator of which shall be such Current Per Share Market
Price (determined pursuant to Section 11(d) hereof) of the
Preferred Stock; provided, however, that in no event shall the
-------- -------
consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital
stock of the Company to be issued upon exercise of one Right.
Such adjustments shall be made successively whenever such a
record date is fixed; and in the event that such distribution
is not so made, the Purchase Price shall again be adjusted to
be the Purchase Price which would then be in effect if such
record date had not been fixed.
(d) (i) Except as otherwise provided herein, for the
purpose of any computation hereunder, the "Current Per Share
Market Price" of any security (a "Security" for the purpose of
this Section 11(d)(i)) on any date shall be deemed to be the
average of the daily closing prices per share of such Security
for the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date; provided,
--------
however, that in the event that the Current Per Share Market
-------
Price of the Security is determined during a period following
the announcement by the issuer of such Security of (A) a
dividend or distribution on such Security payable in shares of
such Security or securities convertible into such shares, or
(B) any subdivision, combination or reclassification of such
Security, and prior to the expiration of 30 Trading Days after
the ex-dividend date for such dividend or distribution, or the
record date for such subdivision, combination or
reclassification, then, and in each such case, the Current Per
Share Market Price shall be appropriately adjusted to reflect
the current market price per share equivalent of such
Security. The closing price for each day shall be the last
sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices,
regular way, in either case as reported by the principal
consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock
Exchange or, if the Security is not listed or admitted to
trading on the New York Stock Exchange, as reported in the
-18-
<PAGE>
principal consolidated transaction reporting system with
respect to securities listed on the principal national
securities exchange on which the Security is listed or
admitted to trading or, if the Security is not listed or
admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter market,
as reported by NASDAQ or such other system then in use, or, if
on any such date the Security is not quoted by any such
organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in
the Security selected by the Board of Directors of the
Company. The term "Trading Day" shall mean a day on which the
principal national securities exchange on which the Security
is listed or admitted to trading is open for the transaction
of business or, if the Security is not listed or admitted to
trading on any national securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder, if the
Preferred Stock is publicly traded, 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 but the Common
Stock is 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 deter-
mined pursuant to Section 11(d)(i) multiplied by one hundred
(appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date
hereof). If neither the Common Stock nor the Preferred Stock
is publicly traded, "Current Per Share Market Price" shall
mean the fair value per share as determined in good faith by
the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent.
(e) No adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or decrease
of at least 1% in the Purchase Price; provided, however, that
-------- -------
any adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest cent or to the
nearest one ten-thousandth of a share of Preferred Stock or
share of Common Stock or other share or security as the case
may be. Notwithstanding the first sentence of this Section
11(e), any adjustment required by this Section 11 shall be
made no later than the earlier of (i) three years from the
date of the transaction which requires such adjustment or (ii)
the Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of cap-
ital stock of the Company other than the Preferred Stock,
-19-
<PAGE>
thereafter the number of such other shares so receivable upon
exercise of a 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 Sections 11(a), 11(b), 11(c), 11(e), 11(h),
11(i) and 11(m), and the provisions of Sections 7, 9, 10, 13
and 14 hereof 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 Prefer-
red Stock purchasable from time to time hereunder upon exer-
cise of the Rights, all subject to further adjustment as pro-
vided herein.
(h) Unless the Company shall have exercised its election
as provided in Section 11(i), upon each adjustment of the
Purchase Price as a result of the calculations made in
Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evi-
dence the right to purchase, at the adjusted Purchase Price,
that number of one one-hundredths of a share of Preferred
Stock (calculated to the nearest one ten- thousandth of a
share of Preferred Stock) obtained by (i) multiplying (x) the
number of one one-hundredths of a share covered by a Right
immediately prior to such adjustment by (y) the Purchase Price
in effect immediately prior to such adjustment of the Purchase
Price and (ii) dividing the product so obtained by the
Purchase Price in effect immediately after such adjustment of
the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of
Rights, in 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 of the Rights outstanding
after such adjustment of the number of Rights shall be
exercisable for the number of one one-hundredths of a share of
Preferred Stock for which a Right was exercisable immediately
prior to such adjustment. Each Right held of record prior to
such adjustment of the number of Rights shall become that
number of Rights (calculated to the nearest one
ten-thousandth) obtained by dividing the Purchase Price in
effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment
of the Purchase Price. The Company shall make a public
announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known
at the time, the amount of the adjustment to be made. This
record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Right Certificates
have been issued, shall be at least 10 days later than the
-20-
<PAGE>
date of the public announcement. If Right Certificates have
been issued, upon each adjustment of the number of Rights
pursuant to this Section 11(i), the Company may, as promptly
as practicable, cause to be distributed to holders of record
of Right Certificates on such record date Right Certificates
evidencing, subject to Section 14 hereof, the additional
Rights to which such holders shall be entitled as a result of
such adjustment, or, at the option of the Company, shall cause
to be distributed to such holders of record in substitution
and replacement for the Right Certificates held by such
holders prior to the date of adjustment, and upon surrender
thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be
entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and countersigned in the
manner provided for herein and shall be registered in the
names of the holders of record of Right Certificates on the
record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of one one-hundredths of a share
of Preferred Stock issuable upon the exercise of the Rights,
the Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price and the number of one
one-hundredths of a share of Preferred Stock which were
expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then par
value, if any, of the Preferred Stock or other shares of
capital 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 or other such shares 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 capital stock or securities of the
Company, if any, issuable upon such exercise over and above
the Preferred Stock and other capital stock or securities of
the Company, if any, issuable upon such exercise on the basis
of the Purchase Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such
-------- -------
holder a due bill or other appropriate instrument evidencing
such holder's right to receive such additional shares upon the
occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
-21-
<PAGE>
reductions in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to
be advisable in order that any consolidation or subdivision of
the Preferred Stock, issuance wholly for cash of any shares of
Preferred Stock at less than the current market price,
issuance wholly for cash or Preferred Stock or securities
which by their terms are convertible into or exchangeable for
Preferred Stock, dividends on Preferred Stock payable in
shares of Preferred Stock or issuance of rights, options or
warrants referred to hereinabove in Section 11(b), hereafter
made by the Company to holders of its Preferred Stock shall
not be taxable to such shareowners.
(n) Anything in this Agreement to the contrary
notwithstanding, 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 Common
Stock payable in Common Stock or (ii) effect a subdivision,
combination or consolidation of the Common Stock (by reclas-
sification or otherwise than by payment of a dividend payable
in Common Stock) into a greater or lesser number of Common
Stock, then in any such case, the number of Rights associated
with each share of Common Stock then outstanding, or issued or
delivered thereafter, shall be proportionately adjusted so
that the number of Rights thereafter associated with each
share of Common Stock following any such event shall equal the
result obtained by multiplying the number of Rights associated
with each share of Common Stock immediately prior to such
event by a fraction the numerator of which shall be the total
number of shares of Common Stock outstanding immediately prior
to the occurrence of the event and the denominator of which
shall be the total number of shares of Common Stock
outstanding immediately following the occurrence of such
event.
(o) The Company agrees that, after the earlier of the
Distribution Date or the Stock Acquisition Date, it will not,
except as permitted by Sections 23, 24 or 27 hereof, take (or
permit any Subsidiary to take) any action if at the time such
action is taken it is reasonably foreseeable that such action
will diminish substantially or eliminate the benefits intended
to be afforded by the Rights.
Section 12. Certificate of Adjusted Purchase Price or
-----------------------------------------
Number of Shares. Whenever an adjustment is made as provided in
----------------
Section 11 or 13 hereof, the Company shall promptly (a) prepare a
certificate setting forth such adjustment, and a brief statement
of the facts accounting for such adjustment, (b) file with the
Rights Agent and with each transfer agent for the Common Stock or
the Preferred Stock a copy of such certificate and (c) mail a
brief summary thereof to each holder of a Right Certificate in
accordance with Section 25 hereof (if so required under Section
25 hereof). The Rights Agent shall be fully protected in relying
-22-
<PAGE>
on any such certificate and on any adjustment therein contained
and shall not be deemed to have knowledge of any such adjustment
unless and until it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of
--------------------------------------------
Assets or Earnings Power. (a) In the event, directly or
------------------------
indirectly, at any time after any Person has become an Acquiring
Person, (i) the Company shall merge with and into any other
Person, (ii) any Person shall consolidate with the Company, or
any Person shall merge with and into the Company and the Company
shall be the continuing or surviving corporation of such merger
and, in connection with such merger, all or part of the Common
Stock shall be changed into or exchanged for stock or other
securities of any other Person (or of the Company) or cash or any
other property, or (iii) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer), in one or more transactions, assets or
earning power aggregating 50% or more of the assets or earning
power of the Company and its Subsidiaries (taken as a whole) to
any other Person (other than the Company or one or more of its
wholly-owned Subsidiaries), then upon the first occurrence of
such event, proper provision shall be made so that: (A) each
holder of record of a Right (other than Rights which have become
void pursuant to Section 11(a)(ii)) 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
was exercisable immediately prior to the time that any Person
first became an Acquiring Person (as subsequently adjusted
thereafter pursuant to Sections 11(a)(i), 11(b), 11(c) and
11(i)), in accordance with the terms of this Agreement and in
lieu of Preferred Stock, such number of validly issued, fully
paid and non-assessable and freely tradeable shares of Common
Stock of the Principal Party (as defined herein) not subject to
any liens, encumbrances, rights of first refusal or other adverse
claims, as shall be equal to the result obtained by (1)
multiplying the then current Purchase Price by the number of one
one-hundredths of a share of Preferred Stock for which a Right
was exercisable immediately prior to the time that any Person
first became an Acquiring Person (as subsequently adjusted
thereafter pursuant to Sections 11(a)(i), 11(b), 11(c) and 11(i))
and (2) dividing that product by 50% of the then Current Per
Share Market Price of the Common Stock of such Principal Party
(determined pursuant to Section 11(d)(i) hereof) on the date of
consummation of such consolidation, merger, sale or transfer;
provided that the Purchase Price and the number of shares of
--------
Common Stock of such Principal Party issuable upon exercise of
each Right shall be further adjusted as provided in Section 11(f)
of this Agreement to reflect any events occurring in respect of
such Principal Party after the occurrence of such consolidation,
merger, sale or transfer; (B) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such
consolidation, merger, sale or transfer, all the obligations and
duties of the Company pursuant to this Agreement; (C) the term
-23-
<PAGE>
"Company" shall thereafter be deemed to refer to such Principal
Party; and (D) 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
hereof) in connection with such consummation of any such
transaction as may be necessary to assure that the provisions
hereof shall thereafter be applicable, as nearly as reasonably
may be, in relation to the shares of its Common Stock thereafter
deliverable upon the exercise of the Rights; provided that, upon
the subsequent occurrence of any consolidation, merger, sale or
transfer of assets or other extraordinary transaction in respect
of such Principal Party, each holder of a Right shall thereupon
be entitled to receive, upon exercise of a Right and payment of
the Purchase Price as provided in this Section 13(a), such cash,
shares, rights, warrants and other property which such holder
would have been entitled to receive had such holder, at the time
of such transaction, owned the Common Stock of the Principal
Party receivable upon the exercise of a Right pursuant to this
Section 13(a), and such Principal Party shall take such steps
(including, but not limited to, reservation of shares of stock)
as may be necessary to permit the subsequent exercise of the
Rights in accordance with the terms hereof for such cash, shares,
rights, warrants and other property.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in (i) or (ii)
of the first sentence of Section 13(a) hereof: (A) the Person
that is the issuer of the securities into which the shares of
Common Stock are converted in such merger or consolidation,
or, if there is more than one such issuer, the issuer the
shares of Common Stock of which have the greatest aggregate
market value of shares outstanding, or (B) if no securities
are so issued, (x) the Person that is the other party to the
merger, if such Person survives said merger, or, if there is
more than one such Person, the Person the shares of Common
Stock of which have the greatest aggregate market value of
shares outstanding or (y) if the Person that is the other
party to the merger does not survive the merger, the Person
that does survive the merger (including the Company if it
survives) or (z) the Person resulting from the consolidation;
and
(ii) in the case of any transaction described in (iii) of the
first sentence in Section 13(a) hereof, the Person that is the
party receiving the greatest portion of the assets or earning
power transferred pursuant to such transaction or
transactions, or, if each Person that is a party to such
transaction or transactions receives the same portion of the
assets or earning power so transferred or if the Person
receiving the greatest portion of the assets or earning power
cannot be determined, whichever of such Persons as is the
issuer of Common Stock having the greatest aggregate market
value of shares outstanding;
-24-
<PAGE>
provided, however, that in any such case described in the
foregoing clause (b)(i) or (b)(ii), (1) if the Common Stock of
such Person is not at such time or has not been continuously over
the preceding 12-month period registered under Section 12 of the
Exchange Act, and if such Person is a direct or indirect
Subsidiary of another Person the Common Stock of which is and has
been so registered, the term "Principal Party" shall refer to
such other Person, or (2) if such Person is a Subsidiary,
directly or indirectly, of more than one Person, the Common Stock
of all of which is and has been so registered, the term
"Principal Party" shall refer to whichever of such Persons is the
issuer of Common Stock having the greatest aggregate market value
of shares outstanding, or (3) if such Person is owned, directly
or indirectly, by a joint venture formed by two or more Persons
that are not owned, directly or indirectly, by the same Person,
the rules set forth in clauses (1) and (2) above shall apply to
each of the owners having an interest in the venture as if the
Person owned by the joint venture was a Subsidiary of both or all
of such joint venturers, and the Principal Party in each such
case shall bear the obligations set forth in this Section 13 in
the same ratio as its interest in such Person bears to the total
of such interests.
(c) The Company shall not consummate any consolidation,
merger, sale or transfer referred to in Section 13(a) hereof
unless prior thereto the Company and the Principal Party involved
therein shall have executed and delivered to the Rights Agent an
agreement confirming that the requirements of Sections 13(a) and
(b) hereof shall promptly be performed in accordance with their
terms and that such consolidation, merger, sale or transfer of
assets shall not result in a default by the Principal Party under
this Agreement as the same shall have been assumed by the
Principal Party pursuant to Sections 13(a) and (b) hereof and
providing that, as soon as practicable after executing such
agreement pursuant to this Section 13, the Principal Party will:
(i) prepare and file a registration statement under the
Securities Act, if necessary, with respect to the Rights and
the securities purchasable upon exercise of the Rights on an
appropriate form, use its best efforts to cause such
registration statement to become effective as soon as
practicable after such filing and use its best efforts to
cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the
Securities Act) until the Expiration Date, and similarly
comply with applicable state securities laws;
(ii) use its best efforts, if the Common Stock of the
Principal Party shall be listed or admitted to trading on the
New York Stock Exchange or on another national securities
exchange, to list or admit to trading (or continue the listing
of) the Rights and the securities purchasable upon exercise of
the Rights on the New York Stock Exchange or such securities
exchange, or, if the Common Stock of the Principal Party shall
-25-
<PAGE>
not be listed or admitted to trading on the New York Stock
Exchange or a national securities exchange, to cause the
Rights and the securities receivable upon exercise of the
Rights to be reported by such other system then in use;
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party which comply in all
respects with the requirements for registration on Form 10 (or
any successor form) under the Exchange Act; and
(iv) obtain waivers of any rights of first refusal or
preemptive rights in respect of the Common Stock of the
Principal Party subject to purchase upon exercise of
outstanding Rights.
(d) In case the Principal Party has provision in any of
its authorized securities or in its certificate of incorporation
or by-laws or other instrument governing its corporate affairs,
which provision would have the effect of (i) causing such
Principal Party to issue (other than to holders of Rights
pursuant to this Section 13), in connection with, or as a
consequence of, the consummation of a transaction referred to in
this Section 13, shares of Common Stock of such Principal Party
at less than the then current market price per share thereof
(determined pursuant to Section 11(d) hereof) or securities
exercisable for, or convertible into, Common Stock of such
Principal Party at less than such then current market price, or
(ii) providing for any special payment, tax or similar provision
in connection with the issuance of the Common Stock of such
Principal Party pursuant to the provisions of Section 13, then,
in such event, the Company hereby agrees with each holder of
Rights that it shall not consummate any such transaction unless
prior thereto the Company and such Principal Party shall have
executed and delivered to the Rights Agent a supplemental
agreement providing that the provision in question of such
Principal Party shall have been cancelled, waived or amended, or
that the authorized securities shall be redeemed, so that the
applicable provision will have no effect in connection with, or
as a consequence of, the consummation of the proposed
transaction.
(e) The Company covenants and agrees that it shall not, at
any time after a Person first becomes an Acquiring Person, enter
into any transaction of the types contemplated by clauses (i)
through (iii) of Section 13(a) hereof if (x) at the time of or
immediately after such consolidation, merger, sale, transfer or
other transaction there are any rights, warrants or other
instruments or securities outstanding or agreements in effect
which would substantially diminish or otherwise eliminate the
benefits intended to be afforded by the Rights, (y) prior to,
simultaneously with or immediately after such consolidation,
merger, sale, transfer of other transaction, the stockholders of
the Person who constitutes, or would constitute, the Principal
Party for purposes of Section 13(a) hereof shall have received a
-26-
<PAGE>
distribution of Rights previously owned by such Person or any of
its Affiliates or Associates or (z) the form or nature of
organization of the Principal Party would preclude or limit the
exercisability of the Rights.
Section 14. Fractional Rights and Fractional Shares. (a)
---------------------------------------
The Company shall not be required to issue fractions of Rights or
to distribute Right Certificates which evidence fractional
Rights. In lieu of such fractional Rights, there shall be paid
to the registered holders of the Right Certificates with regard
to which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a),
the current market value of a whole Right shall be the closing
price of the Rights for the Trading Day immediately prior to the
date on which such fractional Rights would have been otherwise
issuable. The closing price for any day shall be the last sale
price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the
Rights are not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Rights
are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average
of the high bid and low asked prices in the over-the-counter
market, as reported by NASDAQ or such other system then in use
or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the
Rights selected by the Board of Directors of the Company. If on
any such date no such market maker is making a market in the
Rights, the fair value of the Rights on such date as determined
in good faith by the Board of Directors of the Company shall be
used.
(b) The Company shall not be required to issue fractions
of 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 which
evidence fractional shares of Preferred Stock (other than
fractions which are integral multiples of one one-hundredth of a
share of Preferred Stock). Interests in fractions of Preferred
Stock in integral multiples of one one-hundredth of a share of
Preferred Stock may, at the election of the Company, be evidenced
by depositary receipts, pursuant to an appropriate agreement
between the Company and a depositary selected by it; provided,
--------
that such agreement shall provide that the holders of such
depositary receipts shall have all the rights, privileges and
preferences to which they are entitled as beneficial owners of
-27-
<PAGE>
the Preferred Stock represented by such depositary receipts. 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 Right
Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the
current market value of one share of Preferred Stock. For the
purposes of this Section 14(b), the current market value of a
share of Preferred Stock shall be the closing price of a share of
Preferred Stock (as determined pursuant to Section 11(d)(i)
hereof) for the Trading Day immediately prior to the date of such
exercise.
(c) The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Rights or
any fractional shares upon exercise of a Right (except as
provided above).
Section 15. Rights of Action. All rights of action in
----------------
respect of this Agreement, excepting the rights of action given
to the Rights Agent under Section 18 hereof, are vested in the
respective registered holders of the Right Certificates (and,
prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Right Certificate
(or, prior to the Distribution Date, of the Common Stock),
without the consent of the Rights Agent or of the holder of any
other Right Certificate (or, prior to the Distribution Date, of
the Common Stock), on his own behalf and for his own benefit, may
enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in
respect of, his right to exercise the Rights evidenced by such
Right Certificate (or, prior to the Distribution Date, such
Common Stock) in the manner provided in such Right Certificate
and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an
adequate remedy at law for any breach of this Agreement and will
be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of, the
obligations of any Person subject to this Agreement.
Section 16. Agreement of Right Holders. Every holder of a
--------------------------
Right, by accepting the same, consents and agrees with the
Company and the Rights Agent and with every other holder of a
Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the
Common Stock;
(b) after the Distribution Date, the Right Certificates
are transferable only on the registry books of the Rights
Agent if surrendered at the office or agency of the Rights
-28-
<PAGE>
Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat
the Person in whose name the Right Certificate (or, prior to
the Distribution Date, the Common Stock certificate) is
registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership
or writing on the Right Certificates or the 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.
Section 17. Right Certificate Holder Not Deemed a
-------------------------------------
Stockholder. No holder, as such, of any Right Certificate shall
-----------
be entitled to vote, receive dividends or be deemed for any
purpose the holder of the Preferred 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 Right Certificate be construed to confer upon
the holder of any Right Certificate, as such, any of the rights
of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings
or other actions affecting stockholders (except as provided in
this Agreement), or to receive dividends or subscription rights,
or otherwise, until the Rights evidenced by such Right
Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. Concerning the Rights Agent. (a) The Company
---------------------------
agrees to pay to the Rights Agent reasonable compensation for all
services rendered by it hereunder and, from time to time, on
demand of the Rights Agent, its reasonable expenses and counsel
fees and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of
its duties hereunder. The Company also agrees to indemnify the
Rights Agent for, and to hold it harmless against, any loss,
liability or expense, incurred without negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything
done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the
costs and expenses of defending against any claim of liability
arising therefrom, directly or indirectly.
(b) The Rights Agent shall be protected and shall incur no
liability for, or in respect of any action taken, suffered or
omitted by it in connection with, its administration of this
Agreement in reliance upon any Right Certificate or certificate
for the Preferred Stock or Common Stock or for other securities
of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction,
-29-
<PAGE>
consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and,
where necessary, verified or acknowledged, by the proper Person
or Persons, or otherwise upon the advice of counsel as set forth
in Section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of
--------------------------------------------
Rights Agent. (a) Any corporation into which the Rights Agent
------------
or any successor Rights Agent may be merged or with which it may
be consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the
stock transfer or corporate trust powers of the Rights Agent or
any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any
paper or any further act on the part of any of the parties
hereto; provided, that such corporation would be eligible for
--------
appointment as a successor Rights Agent under the provisions of
Section 21 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any
of the Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such
Right Certificates so countersigned; and in case at that time any
of the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates
either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall
be changed and at such time any of the Right Certificates shall
have been countersigned but not delivered, the Rights Agent may
adopt the countersignature under its prior name and deliver Right
Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the
Rights Agent may countersign such Right Certificates either in
its prior name or in its changed name and in all such cases such
Right Certificates shall have the full force provided in the
Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
----------------------
undertakes the duties and obligations imposed by this Agreement
upon the following terms and conditions, by all of which the
Company and the holders of Right Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who
may be legal counsel for 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 opin-
ion.
-30-
<PAGE>
(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 of Directors, the
President, any Vice President, the Treasurer, the Controller
or the Secretary of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization to the
Rights Agent for any action taken or suffered in good faith by
it under the provisions of this Agreement in reliance upon
such certificate.
(c) The Rights Agent shall be liable hereunder to the
Company and any other Person only for its own negligence, bad
faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason
of any of the statements of fact or recitals contained in this
Agreement or in the Right Certificates (except its
countersignature thereof) or be required to verify the same,
but all such statements and recitals are and shall be deemed
to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility
in respect of the validity of this Agreement or the execution
and delivery hereof (except the due execution hereof by the
Rights Agent) or in respect of the validity or execution of
any Right Certificate (except its countersignature thereof);
nor shall it be responsible for any breach by the Company of
any covenant or condition contained in this Agreement or in
any Right Certificate; nor shall it be responsible for any
change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 11(a)(ii) hereof) or
any adjustment in the terms of the Rights (including the
manner, method or amount thereof) provided for in Sections 3,
11, 13, 23 and 24, or the ascertaining of the existence of
facts that would require any such change or adjustment (except
with respect to the exercise of Rights evidenced by Right
Certificates after receipt of a certificate furnished pursuant
to Section 12, describing such change or adjustment); 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 other
securities to be issued pursuant to this Agreement or any
Right Certificate or as to whether any shares of Preferred
Stock or other securities will, when issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
-31-
<PAGE>
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 person reasonably believed by the
Rights Agent to be one of the Chairman of the Board of
Directors, the President, a 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
it shall not be liable for any action taken or suffered by it
in good faith in accordance with instructions of any such
officer or for any delay in acting while waiting for those
instructions. 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 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 any such
application on or after the date specified in such application
(which date shall not be less than five Business Days after
the date any officer of the Company actually receives such
application, unless any such officer shall have consented in
writing to an earlier date) unless, prior to taking any such
action (or the effective date in the case of an omission), the
Rights Agent shall have received written instructions in
response to such application specifying the action to be taken
or omitted.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal
in any of the Rights or other securities of the Company or
become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to
the Company or otherwise act as fully and freely as though it
were not Rights Agent under this Agreement. Nothing herein
shall preclude the Rights Agent from acting in any other
capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or
agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company
resulting from any such act, default, neglect or misconduct,
provided reasonable care was exercised in the selection and
continued employment thereof.
(j) If, with respect to any Rights Certificate surrendered
to the Rights Agent for exercise or transfer, the certificate
-32-
<PAGE>
contained in the form of assignment or the form of election to
purchase set forth on the reverse thereof, as the case may be,
has not been completed to certify the holder is not an
Acquiring Person (or an Affiliate or Associate thereof), a
Rights Agent shall not take any further action with respect to
such requested exercise of transfer without first consulting
with the Company.
(k) The Rights Agent's duties shall be determined only
with reference to this Agreement and the Rights Agent shall
not be charged with knowledge of or any duties or
responsibilities in connection with any other document or
agreement.
Section 21. Change of Rights Agent. The Rights Agent or
----------------------
any successor Rights Agent may resign and be discharged from its
duties under this Agreement upon 30 days' notice in writing
mailed to the Company and to each transfer agent of the Common
Stock or Preferred Stock by registered or certified mail, and,
following the Distribution Date, to the holders of the Right
Certificates by first-class mail. The Company may remove the
Rights Agent or any successor Rights Agent upon 30 days' notice
in writing, mailed to the Rights Agent or successor Rights Agent,
as the case may be, and to each transfer agent of the Common
Stock or Preferred Stock by registered or certified mail, and,
following the Distribution Date, to the holders of the Right
Certificates by first-class mail. If the Rights Agent shall
resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights
Agent. If the Company shall fail to make such appointment within
a period of 30 days after giving notice of such removal or after
it has been notified in writing of such resignation or incapacity
by the resigning or incapacitated Rights Agent or by the holder
of a Right Certificate (who shall, with such notice, submit his
Right Certificate for inspection by the Company), then the
registered holder of any Right Certificate may apply to any court
of competent jurisdiction for the appointment of a new Rights
Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be a corporation organized and
doing business under the laws of the United States or the State
of New York (or of any other state of the United States so long
as such corporation is authorized to do business as a banking
institution in the State of New York), in good standing, having
an office in the State of New York, which is authorized under
such laws to exercise corporate trust or stock transfer powers
and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights
Agent a combined capital and surplus of at least $50 million.
After appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities as if
it had been originally named as Rights Agent without further act
or deed; but the predecessor Rights Agent shall deliver and
transfer to the successor Rights Agent any property at the time
held by it hereunder, and execute and deliver any further
-33-
<PAGE>
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 or
Preferred Stock, and, following the Distribution Date, mail a
notice thereof in writing to the registered holders of the Right
Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the
case may be.
Section 22. Issuance of New Right Certificates.
----------------------------------
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new
Right Certificates evidencing Rights in such forms as may be
approved by its Board of Directors to reflect any adjustment or
change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the
Right Certificates made in accordance with the provisions of this
Agreement. In addition, in connection with the issuance or sale
of Common Stock following the Distribution Date and prior to the
Expiration Date, the Company may with respect to shares of Common
Stock so issued or sold pursuant to (i) the exercise of stock
options, (ii) under any employee plan or arrangement, (iii) upon
the exercise, conversion or exchange of securities notes or
debentures issued by the Company or (iv) a contractual obligation
of the Company in each case existing prior to the Distribution
Date, issue Right Certificates representing the appropriate
number of Rights in connection with such issuance or sale.
Section 23. Redemption. (a) The Board of Directors of
----------
the Company may, at any time prior to such time as any Person
first becomes an Acquiring Person, redeem all but not less than
all the then outstanding Rights at a redemption price of $.01 per
Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof
(the redemption price being hereinafter referred to as the
"Redemption Price"). The redemption of the Rights may be made
effective at such time, on such basis and with such conditions as
the Board of Directors in its sole discretion may establish.
(b) Immediately upon the action of the Board of Directors
ordering the redemption of the Rights pursuant to paragraph (a)
of this Section 23 (or at such later time as the Board of
Directors may establish for the effectiveness of such
redemption), and without any further action and without any
notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be to
receive the Redemption Price. The Company shall promptly give
public notice of any such redemption; provided, however, that the
-------- -------
failure to give, or any defect in, any such notice shall not
affect the validity of such redemption. Within 10 days after
such action of the Board of Directors ordering the redemption of
-34-
<PAGE>
the Rights (or such later time as the Board of Directors may
establish for the effectiveness of such redemption), the Company
shall mail a notice of redemption to all the holders of the then
outstanding Rights at their last addresses as they appear upon
the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent
for the Common Stock. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption shall state
the method by which the payment of the Redemption Price will be
made.
Section 24. Exchange. (a) The Board of Directors of the
--------
Company may, at its option, at any time after any Person first
becomes an Acquiring Person, exchange all or part of the then
outstanding and exercisable Rights (which shall not include
Rights that have become void pursuant to the provisions of
Section 11(a)(ii) hereof) for shares of Common Stock at an
exchange ratio of one share of Common Stock per Right, (such
exchange ratio being hereinafter referred to as the "Exchange
Ratio"). Notwithstanding the foregoing, the Board of Directors
shall not be empowered to effect such exchange at any time after
any Person (other than an Exempt Person), together with all
Affiliates and Associates of such Person, becomes the Beneficial
Owner of shares of Common Stock aggregating 50% or more of the
shares of Common Stock then outstanding.
(b) Immediately upon the action of the Board of Directors
of the Company ordering the exchange of any Rights pursuant to
paragraph (a) of this Section 24 and without any further action
and without any notice, the right to exercise such Rights shall
terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of shares of Common Stock
equal to the number of such Rights held by such holder multiplied
by the Exchange Ratio. The Company shall promptly give public
notice of any such exchange; provided, however, that the failure
-------- -------
to give, or any defect in, such notice shall not affect the
validity of such exchange. The Company shall promptly mail a
notice of any such exchange to all of the holders of the Rights
so exchanged at their last addresses as they appear upon the
registry books of the Rights Agent. Any notice which is mailed
in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of exchange
will state the method by which the exchange of the 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 based on the
number of Rights (other than Rights which have become void
pursuant to the provisions of Section 11(a)(ii) hereof) held by
each holder of Rights.
(c) In the event that there shall not be sufficient shares
of Common Stock issued but not outstanding or authorized but
unissued to permit any exchange of Rights as contemplated in
-35-
<PAGE>
accordance with this Section 24, the Company may, in its
discretion, take such action as may be necessary to authorize
additional shares of Common Stock for issuance upon exchange of
the Rights. In the event that the Company shall determine not to
take such action or shall, after good faith effort, be unable to
take such action as may be necessary to authorize such additional
shares of Common Stock, the Company shall substitute, to the
extent of such insufficiency, for each share of Common Stock that
would otherwise be issuable upon exchange of a Right, a number of
shares of Preferred Stock or fractions thereof (or Equivalent
Preferred Shares as such term is defined in Section 11(b)) having
an aggregate Current Per Share Market Price (determined pursuant
to Section 11(d) hereof) equal to the Current Per Share Market
Price of one share of Common Stock (determined pursuant to
Section 11(d) hereof) as of the date of issuance of such shares
of Preferred Stock or fractions thereof (or Equivalent Preferred
Shares).
(d) The Company shall not, in connection with any exchange
pursuant to this Section 24, be required to issue fractions of
shares of Common Stock or to distribute certificates which
evidence fractional shares of Common Stock. In lieu of such
fractional shares of Common Stock, the Company shall pay to the
registered holders of the Right Certificates with regard to which
such fractional shares of Common Stock would otherwise be
issuable an amount in cash equal to the same fraction of the
current market value of a whole share of Common Stock. For the
purposes of this paragraph (d), the current market value of a
whole share of Common Stock shall be the closing price of a share
of Common Stock (as determined pursuant to the second sentence of
Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events. (a) In case the
------------------------
Company shall at any time after the earlier of the Distribution
Date or the Stock Acquisition Date propose (i) to pay any
dividend payable in stock 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), (ii) to offer to the holders of its Preferred Stock
rights or warrants to subscribe for or to purchase any additional
shares of Preferred Stock or shares of stock of any class or any
other securities, rights or options, (iii) to effect any
reclassification of its Preferred Stock (other than a
reclassification involving only the subdivision of outstanding
Preferred Stock), (iv) to effect the liquidation, dissolution or
winding up of the Company, or (v) to declare or pay any dividend
on the Common Stock payable in Common Stock or to effect a
subdivision, combination or consolidation of the Common Stock (by
reclassification or otherwise than by payment of dividends in
Common Stock), then, in each such case, the Company shall give to
each holder of a Right Certificate, in accordance with Section 26
hereof, a notice of such proposed action, which shall specify the
record date for the purposes of such stock dividend, or
-36-
<PAGE>
distribution of rights or warrants, or the date on which such
liquidation, dissolution or winding up is 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, and such
notice shall be so given in the case of any action covered by
clause (i) or (ii) above at least 10 days prior to the record
date for determining holders of the Preferred Stock for purposes
of such action, and in the case of any such other action, at
least 10 days prior to the date of the taking of such proposed
action or the date of participation therein by the holders of the
Common Stock and/or Preferred Stock, whichever shall be the
earlier.
(b) In case any event described in Section 11(a)(ii) or
Section 13 shall occur, then the Company shall as soon as
practicable thereafter give to each holder of a Right Certificate
(or if occurring prior to the Distribution Date, the holders of
the Common Stock) in accordance with Section 26 hereof, a notice
of the occurrence of such event, which notice shall describe such
event and the consequences of such event to holders of Rights
under Section 11(a)(ii) and Section 13 hereof.
Section 26. Notices. Notices or demands authorized by
-------
this Agreement to be given or made by the Rights Agent or by the
holder of any Right Certificate to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing
with the Rights Agent) as follows:
Frontier Corporation
180 South Clinton Avenue
Rochester, New York 14646
Attention: Secretary
Subject to the provisions of Section 21 hereof, any notice or
demand authorized by this Agreement to be given or made by the
Company or by the holder of any Right Certificate to or on the
Rights Agent shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
The First National Bank of Boston
Customer Service
P.O. Box 644
M/S 45-02-09
Boston Massachusetts 02102-0644
Re: Frontier Corporation Rights Agreement
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any
Right Certificate shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at
the address of such holder as shown on the registry books of the
Company.
-37-
<PAGE>
Section 27. Supplements and Amendments. Except as
--------------------------
provided in the penultimate sentence of this Section 27, for so
long as the Rights are then redeemable, the Company may in its
sole and absolute discretion, and the Rights Agent shall if the
Company so directs, supplement or amend any provision of this
Agreement in any respect without the approval of any holders of
the Rights. At any time when the Rights are no longer
redeemable, except as provided in the penultimate sentence of
this Section 27, the Company may, and the Rights Agent shall, if
the Company so directs, supplement or amend this Agreement
without the approval of any holders of Rights Certificates in
order to (i) cure any ambiguity, (ii) correct or supplement any
provision contained herein which may be defective or inconsistent
with any other provisions herein, (iii) shorten or lengthen any
time period hereunder, or (iv) change or supplement the
provisions hereunder in any manner which the Company may deem
necessary or desirable; provided that no such supplement or
--------
amendment shall adversely affect the interests of the holders of
Rights as such (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person), and no such amendment may
cause the Rights again to become redeemable or cause the
Agreement again to become amendable other than in accordance with
this sentence. Notwithstanding anything contained in this
Agreement to the contrary, no supplement or amendment shall be
made which changes the Redemption Price. Upon the delivery of a
certificate from an appropriate officer of the Company which
states 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.
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 hereunder.
Section 29. Benefits of this Agreement. Nothing in this
--------------------------
Agreement shall be construed to give to any Person other than the
Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common
Stock) any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive
benefit of the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution
Date, the Common Stock).
Section 30. Determinations and Actions by the Board of
------------------------------------------
Directors. The Board of Directions of the Company shall have the
---------
exclusive power and authority to administer this Agreement and to
exercise the 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
-38-
<PAGE>
administration of this Agreement (including, without limitation,
a determination to redeem or not redeem the Rights or to amend
this Agreement). All such actions, calculations, interpretations
and determinations (including, for purposes clause (y) below, all
omissions with respect to the foregoing) that are done or made by
the Board of Directors of the Company in good faith, shall (x) be
final, conclusive and binding on the Company, the Rights Agent,
the holders of the Rights, as such, and all other parties, and
(y) not subject the Board of Directors to any liability to the
holders of the Rights.
Section 31. Severability. If any term, provision,
------------
covenant or restriction of this Agreement or applicable to this
Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no
way be affected, impaired or invalidated.
Section 32. Governing Law. This Agreement and each Right
-------------
Certificate issued hereunder shall be deemed to be a contract
made under the laws of the State of New York and for all purposes
shall be governed by and construed in accordance with the laws of
such State applicable to contracts to be made and performed
entirely within such State.
Section 33. Counterparts. This Agreement may be executed
------------
in any number of counterparts and each of such counterparts shall
for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same
instrument.
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.
-39-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and attested, all as of the day and
year first above written.
FRONTIER CORPORATION
By: /s/ John K. Purcell
---------------------------
Name: John K. Purcell
Title: Corporate Vice President
Attest:
By: /s/ Josephine S. Trubek
---------------------------
Name: Josephine S. Trubek
Title: Corporate Secretary
THE FIRST NATIONAL BANK OF BOSTON
By: /s/ Katherine S. Anderson
---------------------------
Name: Katherine S. Anderson
Title: Administration Manager
Attest:
By: /s/ Caroline F. Rees
---------------------------
Name: Caroline F. Rees
Title: Account Manager
-40-
<PAGE>
Exhibit A
---------
FORM
OF
CERTIFICATE OF AMENDMENT
OF THE
RESTATED CERTIFICATE OF INCORPORATION
OF
FRONTIER CORPORATION
(Under Section 805 of the
Business Corporation Law of the State of New York)
___________________
We, the undersigned, JOHN K. PURCELL and JOSEPHINE S.
TRUBEK, being respectively a Corporate Vice President and the
Corporate Secretary of Frontier Corporation, do hereby CERTIFY
that:
1. The name of the Corporation is "Frontier
Corporation". The name under which the Corporation was
incorporated is "ROCHESTER TELEPHONE CORPORATION".
2. The Certificate of Incorporation of the Corporation
was filed in the Department of State of the State of New York on
February 25, 1920. A Restated Certificate of Incorporation was
filed in the Department of State of the State of New York on
April 2, 1968. A second Restated Certificate of Incorporation
was filed in the Department of State of the State of New York on
February 17, 1995 (such second Restated Certificate of
Incorporation, the "Restated Certificate of Incorporation").
3. The Restated Certificate of Incorporation is hereby
amended to add a provision to Article FOURTH thereof stating the
number, designation, relative rights, preferences and limitations
of the Series A Junior Participating Class A Preferred Stock as
fixed by the Board of Directors of the Corporation and to set
forth in full the text of such provision. To effect the
foregoing, Article FOURTH of the Restated Certificate of
Incorporation is amended to add the following at the end of such
Article FOURTH:
<PAGE>
I. Series A Junior Participating Class A Preferred
Stock
There is hereby established a series of Class A
Preferred Stock of the number and designation, and having
relative rights, preference and limitations as follows:
Section 1. Designation and Amount. The shares of such
----------------------
series shall be designated as "Series A Junior Participating
Class A Preferred Stock" (the "Series A Preferred Stock")
and the number of shares constituting the Series A Preferred
Stock shall be 3,000,000. Such number of shares may be in-
creased 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 of the Corporation (or any
similar stock) ranking prior and superior to the Series A
Preferred Stock with respect to dividends, the holders of
shares of Series A Preferred Stock, in preference to the
holders of Common Stock of the Corporation and of any other
stock of the Corporation ranking junior to the Series A
Preferred Stock, shall be entitled to receive, when, as and
if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in
cash on the first day of January, April, July, and October
in each year (each such date being referred to herein as a
"Dividend Payment Date"), commencing on the first Dividend
Payment Date after the first issuance of a share or fraction
of a share of Series A Preferred Stock, in an amount per
share (rounded to the nearest cent) equal to the greater of
(a) $1 or (b) subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate per share
amount of all cash dividends, and 100 times the aggregate
per share amount (payable in kind) of all non-cash dividends
or other distributions other than a dividend payable in
shares of Common Stock, declared on the Common Stock since
the immediately preceding Dividend Payment Date or, with
respect to the first 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
A-2
<PAGE>
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
Dividend Payment Date and the next subsequent Dividend
Payment Date, a dividend of $1 per share on the Series A
Preferred Stock shall nevertheless be payable, when, as and
if declared, on such subsequent Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative,
whether or not earned or declared, on outstanding shares of
Series A Preferred Stock from the 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 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 Dividend Payment
Date or is a date after the record date for the
determination of holders of shares of Series A Preferred
Stock entitled to receive a quarterly dividend and before
such Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such
Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series A
Preferred Stock in an amount less than the total amount of
such dividends at the time accrued and payable on such
shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of
holders of shares of Series A Preferred Stock entitled to
receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 50 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 and except as otherwise provided
herein or in the Restated Certificate of Incorporation or
A-3
<PAGE>
required by law, each share of Series A Preferred Stock
shall entitle the holder thereof to 100 votes on all matters
upon which the holders of the Common Stock of the
Corporation are entitled to vote. 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 or in the
Restated Certificate of Incorporation or in any other
Certificate of Amendment creating a series of Preferred
Stock or any similar stock, and except as otherwise required
by law, the holders of shares of Series A Preferred Stock
and the holders of shares of Common Stock and any other
capital stock of the Corporation having general voting
rights shall vote together as one class on all matters
submitted to a vote of stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise
provided by law, holders of Series A Preferred Stock shall
have no special voting rights and their consent shall not be
required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking
any corporate action.
Section 4. Certain Restrictions.
--------------------
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as
provided in Section 2 are in arrears, thereafter and until
all accrued and unpaid dividends and distributions, whether
or not earned or 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
(as to dividends) 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 (as to dividends) with the Series A Preferred
Stock, except dividends paid ratably on the Series A
A-4
<PAGE>
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 (as to dividends and
upon dissolution, liquidation or winding up) to the
Series A Preferred Stock or rights, warrants or options
to acquire such junior stock;
(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 (either as
to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Stock, except
in accordance with a purchase offer made in writing or
by publication (as determined by the Board of
Directors) to all holders of such shares upon such
terms as the Board of Directors, after consideration of
the respective annual dividend rates and other relative
rights and preferences of the respective series and
classes, shall determine in good faith will result in
fair and equitable treatment among the respective
series or classes.
(B) The Corporation shall not permit any subsidiary of
the Corporation to purchase or otherwise acquire for
consideration any shares of stock of the Corporation unless
the Corporation could, under paragraph (A) of this Section
4, purchase or otherwise acquire such shares at such time
and in such manner.
Section 5. Reacquired Shares. Any shares of Series A
-----------------
Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and
cancelled promptly after the acquisition thereof.
Section 6. Liquidation, Dissolution or Winding Up.
--------------------------------------
Upon any liquidation, dissolution or winding up of the
Corporation, no distribution shall be made (A) to the
holders of the Common Stock or of shares of any other stock
of the Corporation ranking junior, upon liquidation,
dissolution or winding up, to the Series A Preferred Stock
unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received $100 per share, plus an
amount equal to accrued and unpaid dividends and
distributions thereon, whether or not earned or declared, to
A-5
<PAGE>
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 (B) to the holders
of shares of stock ranking on a parity 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 (A) 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.
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 converted into, 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
converted into, exchanged for 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 converted, exchanged or converted.
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
conversion, 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
A-6
<PAGE>
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 from any holder.
Section 9. Rank. The Series A Preferred Stock shall
----
rank, with respect to the payment of dividends and the
distribution of assets upon liquidation, dissolution or
winding up of the Corporation, junior to all other series of
Preferred Stock and senior to the Common Stock.
Section 10. Amendment. If any proposed amendment to
---------
the Restated Certificate of Incorporation (including this
Certificate of Amendment) would alter, change or repeal any
of the preferences, powers or special rights given to the
Series A Preferred Stock so as to affect the Series A
Preferred Stock adversely, then the holders of the Series A
Preferred Stock shall be entitled to vote separately as a
class upon such amendment, and the affirmative vote of
two-thirds of the outstanding shares of the Series A
Preferred Stock, voting separately as a class, shall be
necessary for the adoption thereof, in addition to such
other vote as may be required by the Business Corporation
Law of the State of New York.
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.
4. This Certificate of Amendment of the Restated
Certificate of Incorporation of the Corporation was authorized by
a majority vote of the Board of Directors of the Corporation
pursuant to Section 502 of the Business Corporation Law of the
State of New York.
IN WITNESS WHEREOF, the undersigned have executed and
subscribed this Certificate of Amendment of the Restated
Certificate of Incorporation of the Corporation this ___ day of
April, 1995.
--------------------------
John K. Purcell
Corporate Vice President
--------------------------
Josephine S. Trubek
Corporate Secretary
A-7
<PAGE>
Exhibit B
---------
Form of Right Certificate
Certificate No. R- ____ ___ Rights
NOT EXERCISABLE AFTER APRIL 24, 2005 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE
SUBJECT TO REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE
ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT REFERRED TO
BELOW. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE
RIGHTS AGREEMENT, RIGHTS OWNED BY OR TRANSFERRED TO ANY
PERSON WHO BECOMES AN ACQUIRING PERSON (AS DEFINED IN THE
RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES THEREOF WILL
BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.
Right Certificate
FRONTIER 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
April 9, 1995, as the same may be amended from time to time (the
"Rights Agreement"), between Frontier Corporation, a New York
corporation (the "Company"), and The First National Bank of
Boston (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 City time, on
April 24, 2005 at the office or agency of the Rights Agent
designated for such purpose, or of its successor as Rights Agent,
one one-hundredth of a fully paid non-assessable share of Series
A Junior Participating Class A Preferred Stock, par value $100
per share (the "Preferred Stock"), of the Company, at a purchase
price of $80 per one one-hundredth of a share of Preferred Stock
(the "Purchase Price"), upon presentation and surrender of this
Right Certificate with the Form of Election to Purchase duly
executed. The number of Rights evidenced by this Rights
Certificate (and the number of one one-hundredths of a share of
Preferred Stock which may be purchased upon exercise hereof) set
forth above, and the Purchase Price set forth above, are the
number and Purchase Price as of April 9, 1995, based on the
Preferred Stock as constituted at such date. As provided in the
Rights Agreement, the Purchase Price, the number of one
one-hundredths of a share of Preferred Stock (or other securities
or property) which may be purchased upon the exercise of the
Rights and the number of Rights evidenced by this Right
Certificate are subject to modification and adjustment upon the
happening of certain events.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
<PAGE>
provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the
Right Certificates. Copies of the Rights Agreement are on file
at the principal executive offices of the Company and the
above-mentioned office or agency of the Rights Agent. The
Company will mail to the holder of this Right Certificate a copy
of the Rights Agreement without charge after receipt of a written
request therefor.
This Right Certificate, with or without other Right
Certificates, upon surrender at the office or agency of the
Rights Agent designated for such purpose, may be exchanged for
another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder to purchase a like
aggregate number of shares of Preferred Stock as the Rights
evidenced by the Right Certificate or Right Certificates
surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be
entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights
not exercised.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Certificate (i) may be redeemed by the
Company at a redemption price of $.01 per Right or (ii) may be
exchanged in whole or in part for shares of Preferred Stock or
shares of the Company's Common Stock, par value $1.00 per share.
No fractional shares of Preferred Stock will be issued
upon the exercise of any Right or Rights evidenced hereby (other
than fractions which are integral multiples of one one-hundredth
of a share of Preferred Stock, which may, at the election of the
Company, be evidenced by depositary receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Right Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any
purpose the holder of the 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 stockholder of the
Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement) or to
receive dividends or subscription rights, or otherwise, until the
Right or Rights evidenced by this Right certificate shall have
been exercised as provided in the Rights Agreement.
B-2
<PAGE>
This Right Certificate shall not be valid or obligatory
for any purpose until it shall have been countersigned by the
Rights Agent.
WITNESS the facsimile signature of the proper officers
of the Company and its corporate seal. Dated as of ____________.
FRONTIER CORPORATION
By:
---------------------------
Name:
Title:
Attest:
By:
------------------------------
Name:
Title:
Countersigned:
The First National Bank of Boston,
as Rights Agent
By:
------------------------------
Authorized Signature
B-3
<PAGE>
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate)
FOR VALUE RECEIVED _________________________ hereby
sells, assigns and transfer unto ___________________________
____________________________________________________________
(Please print name and address of transferee)
____________________________________________________________
Rights represented by this Right Certificate, together with all
right, title and interest therein, and does hereby irrevocably
constitute and appoint ___________________ Attorney, to transfer
said Rights on the books of the within-named Company, with full
power of substitution.
Dated: _________________
______________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a
registered national securities exchange, a member of the National
Association of Securities Dealers, Inc., or a commercial bank or
trust company having an office or correspondent in the United
States.
------------------------------------------------------------
(To be completed)
The undersigned hereby certifies that the Rights
evidenced by this Right Certificate are not beneficially owned
by, were not acquired by the undersigned from, and are not being
assigned to, an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement).
______________________________
Signature
B-4
<PAGE>
Form of Reverse Side of Right Certificate - continued
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to exercise
Rights represented by the Right Certificate)
To FRONTIER CORPORATION:
The undersigned hereby irrevocably elects to exercise
__________________ Rights represented by this Right Certificate
to purchase the shares of Preferred Stock (or other securities or
property) issuable upon the exercise of such Rights and requests
that certificates for such shares of Preferred Stock (or such
other securities) be issued in the name of:
______________________________________________________________
(Please print name and address)
______________________________________________________________
If such number of Rights shall not be all the Rights evidenced by
this Right Certificate, a new Right Certificate for the balance
remaining of such Rights shall be registered in the name of and
delivery to:
Please insert social security
or other identifying number
______________________________________________________________
(Please print name and address)
______________________________________________________________
Dated: ____________________
________________________
Signature
(Signature must conform to holder specified on Right Certificate)
Signature Guaranteed:
Signature must be guaranteed by a member of firm of a
registered national securities exchange, a member of the National
Association of Securities Dealers, Inc., or a commercial bank or
trust company having an office or correspondent in the United
States.
B-5
<PAGE>
Form of Reverse Side of Right Certificate -- continued
_________________________________________________________________
(To be completed)
The undersigned certifies that the Rights evidenced by
this Right Certificate are not beneficially owned by, and were
not acquired by the undersigned from, an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights
Agreement).
______________________
Signature
_________________________________________________________________
NOTICE
------
The signature in the Form of Assignment or Form of
Election to Purchase, as the case may be, must conform to the
name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change
whatsoever.
In the event the certification set forth above in the
Form of Assignment or the Form of Election to Purchase, as the
case may be, is not completed, such Assignment or Election to
Purchase will not be honored.
B-6
<PAGE>
Exhibit C
---------
UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS
AGREEMENT REFERRED TO BELOW, RIGHTS OWNED BY OR TRANSFERRED
TO ANY PERSON WHO BECOMES AN ACQUIRING PERSON (AS DEFINED IN
THE RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES THEREOF WILL
BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.
SUMMARY OF RIGHTS TO PURCHASE
Shares of Preferred Stock
On April 9, 1995, the Board of Directors of Frontier
Corporation (the "Company") declared a dividend of one preferred
share purchase right (a "Right") for each outstanding share of
common stock, par value $1.00 per share, of the Company (the
"Common Stock"). The dividend is payable on April 24, 1995 (the
"Record Date") to the shareowners of record on that date. Each
Right entitles the registered holder to purchase from the Company
one one-hundredth of a share of Series A Junior Participating
Class A Preferred Stock, par value $100 per share (the "Preferred
Stock"), of the Company at a price of $80 per one one-hundredth
of a share of Preferred Stock (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set
forth in a Rights Agreement dated as of April 9, 1995, as the
same by be amended from time to time (the "Rights Agreement"),
between the Company and The First National Bank of Boston, as
Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following the
first date of a public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") have
acquired beneficial ownership of 20% or more of the outstanding
shares of Common Stock or such earlier date as a majority of the
Board of Directors shall have become aware of the existence of an
Acquiring Person, or (ii) 10 business days (or such later date as
may be determined by action of the Board of Directors prior to
such time as any person or group of affiliated persons becomes an
Acquiring Person) following the commencement of, or announcement
of an intention to make, a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by
a person or group of 20% or more of the outstanding shares of
Common Stock (the earlier of such dates being 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 certificate together with a
copy of this Summary of Rights.
The Rights Agreement provides that, until the
Distribution Date (or earlier redemption or expiration of the
Rights), the Rights will be transferred with and only with the
Common Stock. Until the Distribution Date (or earlier redemption
or expiration of the Rights), new Common Stock certificates
issued after the Record Date (including, without limitation, upon
transfer or new issuances of Common Stock) will contain a
<PAGE>
notation incorporating the Rights Agreement by reference. Until
the Distribution Date (or earlier redemption or expiration of the
Rights), the surrender for transfer of any certificates for
shares of Common Stock outstanding as of the Record Date, even
without such notation or a copy of this Summary of Rights, will
also constitute (except as otherwise provided in the Rights
Agreement) 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 ("Right Certificates") will be
mailed to holders of record of the Common Stock as of the Close
of Business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution
Date. The Rights will expire on April 24, 2005 (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
Preferred 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
Preferred Stock, (ii) upon the grant to holders of the Preferred
Stock of certain rights or warrants to subscribe for or purchase
Preferred Stock at a price, or securities convertible into
Preferred Stock with a conversion price, less than the
then-current market price of the Preferred Stock or (iii) upon
the distribution to holders of the Preferred Stock of evidences
of indebtedness or assets (excluding regular periodic cash
dividends or dividends payable in Preferred Stock) or of
subscription rights or warrants (other than those referred to
above).
The number of outstanding Rights 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 Preferred Stock purchasable upon exercise of
the Rights will not be redeemable. Each share of Preferred Stock
will be entitled, when, as and if declared, to a minimum
preferential quarterly dividend payment of $1 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 Preferred Stock will be entitled to a minimum
preferential liquidation payment of $100 per share (plus any
accrued but unpaid dividends) but will be entitled to an
aggregate payment of 100 times the payment made per share of
Common Stock. Each share of Preferred Stock will have 100 votes,
C-2
<PAGE>
voting together with the Common Stock. Finally, in the event of
any merger, consolidation or other transaction in which shares of
Common Stock are converted or exchanged, each share of 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 Preferred Stock's
dividend, liquidation and voting rights, the value of the one
one-hundredth interest in a share of Preferred Stock purchasable
upon exercise of each Right should approximate the value of one
share of Common Stock.
In the event that any person or group of affiliated or
associated persons becomes an Acquiring Person, each holder of a
Right, other than Rights beneficially owned by the Acquiring
Person (which will thereupon become void), will thereafter have
the right to receive upon exercise of a Right at the then current
exercise price of the Right, that number of shares of Common
Stock having a market value of two times the exercise price of
the Right.
In the event that, after a person or group has become
an Acquiring Person, 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, proper provision
will be made so that each holder of a Right (other than Rights
beneficially owned by an Acquiring Person which will have become
void) will thereafter have the right to receive, upon the
exercise thereof at the then current exercise price of the Right,
that number of shares of common stock of the person with whom the
Company has engaged in the foregoing transaction (or its parent),
which number of shares at the time of such transaction will have
a market value of two times the exercise price of the Right.
At any time after any person or group becomes an
Acquiring Person and prior to the acquisition by such person or
group of 50% or more of the outstanding shares of Common Stock,
the Board of Directors of the Company may exchange the Rights
(other than Rights owned by such person or group which will have
become void), in whole or in part, at an exchange ratio of one
share of Common Stock, or one one-hundredth of a share of
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).
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 Preferred Stock will be issued (other than fractions
which are integral multiples of one one-hundredth of a share of
Preferred Stock, which may, at the election of the Company, be
evidenced by depositary receipts) and in lieu thereof, an
adjustment in cash will be made based on the market price of the
C-3
<PAGE>
Preferred Stock on the last trading day prior to the date of
exercise.
At any time prior to the time an Acquiring Person
becomes such, the Board of Directors of the Company may redeem
the Rights in whole, but not in part, at a price of $.01 per
Right (the "Redemption Price"), subject to adjustment. The
redemption of the Rights may be made effective at such time, on
such basis and with such conditions as the Board of Directors in
its sole discretion may establish. Immediately upon any
redemption of the Rights, the right to exercise the Rights will
terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
For so long as the Rights are then redeemable, the
Company may, except with respect to the redemption price, amend
the Rights in any manner. After the Rights are no longer
redeemable, the Company may, except with respect to the
redemption price, amend the Rights in any manner that does not
adversely affect the interests of holders of the Rights.
Until a Right is exercised, the holder thereof, as
such, will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to receive
dividends.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a
Registration Statement on Form 8-A dated April 13, 1995. 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, as the same may be amended from time to
time, which is hereby incorporated herein by reference.
C-4
