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
CONESTOGA ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania 23 2565087
(State of incorporation or (I.R.S. Employer
organization) Identification No.)
202 East First Street, Birdsboro, Pennsylvania 19508
(Address of principal executive offices) (Zip Code)
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
Common Stock Purchase Rights
Item 1. Description of Registrants Securities to be Registered
On February 29, 2000, the Board of Directors of Conestoga
Enterprises, Inc. (the Company) declared a dividend
distribution of the right (a Right) to purchase one share of
common stock, par value $1.00 per share (the Common Stock), for
each outstanding share of the Common Stock of the Company to
shareholders of record at the close of business on April 1,
2000 (the Record Date) at a price of $180.00 (as the same may
be adjusted, the Purchase Price). The description and terms of
the Rights are set forth in a Rights Agreement (as the same may
be amended from time to time, the Rights Agreement) dated as of
March 1, 2000, between the Company and First Union National
Bank, as Rights Agent (the Rights Agent ).
Initially, the Rights will be evidenced by all Common
Stock certificates representing shares then outstanding, and no
separate Rights certificates will be distributed. The Rights
will separate from the Common Stock and a Distribution Date
will occur upon the earlier of (i) 10 business days following a
public announcement that a person or a group of affiliated or
associated persons (an Acquiring Person) has acquired, or
obtained the right to acquire, beneficial ownership of 15% or
more of the outstanding shares of Common Stock (the Stock
Acquisition Date), or (ii) 10 business days following the
commencement of a tender offer or exchange offer that would
result in a person or group beneficially owning 15% or more of
such outstanding shares of Common Stock. Until the
Distribution Date, (i) the Rights will be evidenced by such
Common Stock certificates and will be transferred with and only
with such Common Stock certificates, (ii) new Common Stock
certificates issued after the Record Date will contain a
notation incorporating the Rights Agreement by reference, and
(iii) the surrender for transfer of any certificates for Common
Stock outstanding will also constitute the transfer of the
Rights associated with the Common Stock represented by such
certificates. 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, thereafter, such separate Rights Certificates alone
will evidence the rights.
The Rights are not exercisable until the Distribution
Date and will expire at the close of business on March 1, 2010,
unless earlier redeemed by the Company as described below.
In the event that (i) the Company is the surviving
corporation in a merger or the acquiring corporation in a
statutory share exchange with an Acquiring Person and its
Common Stock is not changed or exchanged, (ii) an Acquiring
Person engages in certain self dealing transactions with the
Company, (iii) a Person (other than the Company and its
affiliates) becomes the beneficial owner of 15% or more of the
then outstanding shares of Common Stock, or (iv) during a time
that there is an Acquiring Person, one or more specified events
occur that result in such Acquiring Persons ownership interest
in the Company being increased by more than 1%, the Rights
Agreement provides that proper provision shall be made so that
each holder of a Right will thereafter have the right to
receive, upon exercise, Common Stock (or, in certain
circumstances, cash, property or other securities of the
Company) having a value equal to two (2) times the exercise
price of the Right.
For example, at an exercise price of $180.00 per Right,
each Right not owned by an Acquiring Person (or by certain
related parties and transferees of the Acquiring Person)
following an event set forth in the preceding paragraph would
entitle its holder to purchase $360.00 worth of Common Stock
(or other consideration, as noted above) for $180.00. Assuming
that the Common Stock had a per share value of $180.00 at such
time, the holder of each valid Right would be entitled to
purchase two shares of Common Stock for $180.00.
In the event that, at any time following the Distribution
Date, (i) the Company is acquired in a merger, statutory share
exchange or other business combination transaction in which the
Company is not the surviving corporation, (ii) the Company
engages in a merger or other business combination transaction
with another person in which the Company is the surviving
corporation, but in which its Common Stock is changed or
exchanged, or (iii) 50% or more of the Companys assets or
earning power is sold or transferred, the Rights Agreement
provides that proper provision shall be made so that each
holder of a Right shall thereafter have the right to receive,
upon exercise of the Right, common stock or other consideration
of the acquiring company having a value equal to two (2) times
the exercise price of the Right.
Notwithstanding any of the foregoing, following the
occurrence of any of the events set forth in the preceding
paragraph and the third preceding paragraph (the Triggering
Events ), any Rights that are, or (under certain circumstances
specified in the Rights Agreement) were, beneficially owned by
any Acquiring Person shall immediately become null and void.
Also, under no circumstances may a Right be exercised following
the occurrence of an event set forth in clause (iii) of the
third preceding paragraph prior to expiration of the Companys
right of redemption.
The Purchase Price shall be paid, at the option of the
holder, in cash or shares of Common Stock having an equivalent
value. The Purchase Price payable, and the number of shares of
Common Stock or other securities or property issuable, upon
exercise of the Rights are subject to adjustment from time to
time to prevent dilution (i) in the event of a stock dividend
on, or a subdivision, combination or reclassification of, the
Common Stock, (ii) upon the grant to holders of the Common
Stock of certain rights or warrants to subscribe for Common
Stock or convertible securities at less than the then current
market price of Common Stock, or (iii) upon the distribution to
holders of the Common Stock of evidences of indebtedness or
assets (excluding regular quarterly cash dividends) or of
subscription rights or warrants (other than the Rights).
No adjustment in the Purchase Price will be required
until cumulative adjustments amount to at least 1% of the
Purchase Price. No fractional shares will be issued upon
exercise of a Right and, in lieu thereof, an adjustment in cash
will be made based on the market price of the Common Stock on
the last trading date prior to the date of exercise.
The term Continuing Directors means any member of the
Board of Directors of the Company who was a member of the Board
prior to the date of the Rights Agreement, and any person who
is subsequently elected to the Board if such person is
recommended or approved by a majority of the Continuing
Directors, but shall not include an Acquiring Person, or any
affiliate or associate of an Acquiring Person, or any
representative of an Acquiring Person or of an affiliate or
associate of an Acquiring Person.
At any time until ten (10) business days following the
Stock Acquisition Date, the Board of Directors may cause the
Company to redeem the Rights in whole, but not in part, at a
price of $0.01 per Right, subject to adjustment (the
Redemption Price); provided, however, if the Board of Directors
of the Company authorizes redemption of the Rights in either of
the circumstances set forth in clauses (i) and (ii) below, then
such authorization requires the concurrence of a majority of
Continuing Directors then in office: (i) such authorization
occurs on or after the time a person or group acquires
beneficial ownership of 15% or more of the outstanding Common
Stock, or (ii) such authorization occurs on or after the date
of a change in a majority of the directors resulting from a
proxy solicitation if the solicitor (or any participant in the
solicitation) indicates an intention to become an Acquiring
Person or to cause a Triggering Event. Thereafter, the
Companys right of redemption may be reinstated if an Acquiring
Person reduces his beneficial ownership to 10% or less of the
outstanding shares of Common Stock in a transaction or series
of transactions not involving the Company and there is then no
other Acquiring Person.
Immediately upon the action of the Board of Directors of
the Company, with, where required, the concurrence of the
Continuing Directors, ordering redemption of the Rights, the
Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such,
will have no rights as a stockholder of the Company, including,
without limitation, the right to vote or to receive dividends.
No amendment of the Rights Agreement may change the
Purchase Price, Redemption Price or final expiration date or
may reduce the number of shares of Common Stock for which a
Right is exercisable unless such amendment is approved by a
majority of the Continuing Directors then in office. Subject
to those restrictions, the provisions of the Rights Agreement
may be amended by the Board of Directors, prior to the
Distribution Date, in any manner, including without limitation
shortening or lengthening any redemption period. After the
Distribution Date, amendments may not be made to lengthen any
redemption period, but other amendments or modifications not
adverse to the interests of Rights holders may be made.
Item 2. Exhibits.
1. Rights Agreement, which includes as Exhibit A the Form of
Rights Certificate and Form of Election to Purchase and
as Exhibit B the Summary of Rights.
SIGNATURE
Pursuant to the requirements of Section 12 of the
Securities Exchange Act of 1934, the registrant has duly caused
this amendment to the registration statement to be signed on
its behalf by the undersigned, thereto duly authorized.
CONESTOGA ENTERPRISES, INC.
DATED: March , 2000 By:
Name: Albert H. Kramer
Title: President
EXHIBIT INDEX
Exhibit No. Description
1. Rights Agreement, which includes as Exhibit A the Form of
Rights Certificate and Form of Election to Purchase and
as Exhibit B the Summary of Rights.
CONESTOGA ENTERPRISES, INC.
and
FIRST UNION NATIONAL BANK
Rights Agent
Rights Agreement
Dated as of March 1, 2000
TABLE OF CONTENTS
Section 1. Certain Definitions 1
Section 2. Appointment of Rights Agent 4
Section 3. Issuance of Rights Certificates 4
Section 4. Form of Rights Certificates 6
Section 5. Countersignature and Registration 7
Section 6. Transfer, Split Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost
or Stolen Rights Certificates 8
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights 8
Section 8. Cancellation and Destruction of Rights
Certificates 10
Section 9. Reservation and Availability of Capital Stock 11
Section 10. Common Stock Record Date 12
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares and Number of Rights 12
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares 21
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power 21
Section 14. Fractional Rights and Fractional Shares 23
Section 15. Rights of Action 24
Section 16. Agreement of Rights Holders 24
Section 17. Rights Certificate Holder Not Deemed a
Shareholder 25
Section 18. Concerning the Rights Agent 25
Section 19. Merger or Consolidation or Change of Name
of Rights Agent 26
Section 20. Duties of Rights Agent 26
Section 21. Change of Rights Agent 28
Section 22. Issuance of New Rights Certificates 29
Section 23. Redemption and Termination 29
Section 24. Notice of Certain Events 30
Section 25. Notices 31
Section 26. Supplements and Amendments 32
Section 27. Successors 32
Section 28. Determinations and Actions by the Board of
Directors, etc. 33
Section 29. Benefits of this Agreement 33
Section 30. Severability 33
Section 31. Governing Law 33
Section 32. Counterparts 34
Section 33. Descriptive Headings 34
EXHIBITS
EXHIBIT A FORM OF RIGHTS CERTIFICATE 1
EXHIBIT B CONESTOGA ENTERPRISES, INC. SUMMARY OF RIGHTS
TO PURCHASE COMMON STOCK 1
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of March 1, 2000 (the Agreement),
between Conestoga Enterprises, Inc, a Pennsylvania corporation
(the Company), and FIRST UNION NATIONAL BANK, a national
banking corporation (the Rights Agent).
BACKGROUND:
On February 29, 2000 (the Rights Dividend Declaration
Date), the Board of Directors of the Company authorized and
declared a dividend distribution of one right (a Right) for
each share of common stock, par value $1.00 per share, of the
Company (the Common Stock) outstanding at the close of business
on April 1, 2000 (the Record Date), and has authorized the
issuance of one Right for each share of Common Stock of the
Company issued between the Record Date and the Distribution
Date, each Right initially representing the right to purchase
one share of Common Stock of the Company, upon the terms and
subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth and intending to be legally
bound, the parties hereby agree as follows:
Section 1. Certain Definitions TC Section 1. Certain
Definitions \f C \l 1. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) Acquiring Person shall mean any Person who or
which, together with all Affiliates and Associates of such
Person, shall be the Beneficial Owner of 15% or more of the
shares of Common Stock then outstanding, but shall not include
the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the
Company, or any person or entity organized, appointed or
established by the Company for or pursuant to the terms of any
such plan.
(b) Adjustment Shares shall have the meaning set
forth in Section 11(a)(ii).
(c) Affiliate and Associate shall have the
respective meanings ascribed to such terms in Rule 12b2 of the
General Rules and Regulations under the Securities Exchange Act
of 1934, as amended (the Exchange Act), as in effect on the
date of this Agreement.
(d) A Person shall be deemed the Beneficial Owner
of, and shall be deemed to beneficially own, any securities:
(i) which such Person or any of such
Persons Affiliates or Associates, directly or
indirectly, has the right to acquire (whether
such right is exercisable immediately or only
after the passage of time) pursuant to any
agreement, arrangement or understanding
(whether or not in writing) 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, (A) securities
tendered pursuant to a tender or exchange
offer made by such Person or any of such
Persons Affiliates or Associates until such
tendered securities are accepted for purchase
or exchange, or (B) securities issuable upon
exercise of Rights at any time prior to the
occurrence of a Triggering Event;
(ii) which such Person or any of such
Persons Affiliates or Associates, directly or
indirectly, has the right to vote or direct
the voting of or to dispose of or direct the
disposition of or beneficial ownership of (as
determined pursuant to Rule 13d3 of the
General Rules and Regulations under the
Exchange Act, as in effect on the date of
this Agreement), including pursuant to any
agreement, arrangement or understanding,
whether or not in writing; provided, however,
that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own,
any security under this subparagraph (ii) as
a result of an agreement, arrangement or
understanding to vote such security if such
agreement, arrangement or understanding: (A)
arises solely from a revocable proxy given in
response to a public proxy or consent
solicitation made pursuant to, and in
accordance with, the applicable provisions of
the General Rules and Regulations under the
Exchange Act, and (B) is not also then
reportable by such Person on Schedule 13D
under the Exchange Act (or on any comparable
or successor report); or
(iii) which are beneficially owned, directly
or indirectly, by any other Person (or any
Affiliate or Associate thereof) with which
such Person (or any of such Persons
Affiliates or Associates) has any agreement,
arrangement or understanding (whether or not
in writing), for the purpose of acquiring,
holding, voting (except pursuant to a
revocable proxy as described in the proviso
to subparagraph (ii) of this paragraph (d))
or disposing of any voting securities of the
Company.
(e) Business Day shall mean any day other than a
Saturday, Sunday or a legal holiday on which the New York Stock
Exchange is closed.
(f) 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.
(g) Common Stock shall mean the common stock, par
value $1.00 per share, of the Company, except that Common Stock
when used with reference to any Person other than the Company
shall mean the capital stock of such Person with the greatest
voting power or the equity securities or other equity interest
having power to control or direct the management of such
Person.
(h) Common stock equivalent shall have the
meaning set forth in Section 11(a)(iii).
(i) Continuing Director shall mean (i) any member
of the Board of Directors of the Company, while such Person is
a member of the Board, who is not an Acquiring Person, or an
Affiliate or Associate of an Acquiring Person, or a
representative of an Acquiring Person or of any Affiliate or
Associate of an Acquiring Person, and was a member of the Board
prior to the date of this Agreement, or (ii) any Person who
subsequently becomes a member of the Board, while such person
is a member of the Board, who is not an Acquiring Person, or an
Affiliate or Associate of an Acquiring Person, or a
representative of an Acquiring Person or of any Affiliate or
Associate of an Acquiring Person, if such Persons nomination
for election or election to the Board is recommended or
approved by a majority of the Continuing Directors.
(j) Current market price shall have the meaning
set forth in Section 11(d).
(k) Current Value shall have the meaning set
forth in Section 11(a)(iii).
(l) Distribution Date shall mean the earlier of
(i) the close of business on the tenth business day after the
Stock Acquisition Date, or (ii) the close of business on the
tenth business day after the date that a tender or exchange
offer by any Person (other than the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company, or any Person or entity organized,
appointed or established by the Company for or pursuant to the
terms of any such plan) is first published or sent or given
within the meaning of Rule 14e2(a) of the General Rules and
Regulations under the Exchange Act, if upon consummation
thereof, such Person would be the Beneficial Owner of 15% or
more of the shares of Common Stock then outstanding.
(m) Equivalent common stock shall have the
meaning set forth in Section 11(b).
(n) Expiration Date and Final Expiration Date
shall have the meanings set forth in Section 7(a).
(o) Outstanding Certificates shall mean
certificates representing shares of Common Stock in respect of
which Rights have been issued which were issued after the
Record Date and prior to the date of this Agreement and which
were outstanding as of the date of this Agreement.
(p) Person shall mean any individual, firm,
corporation, partnership or other entity.
(q) Principal Party shall have the meaning set
forth in Section 13(b).
(r) Purchase Price shall have the meaning set
forth in Section 4, as the same may be adjusted from time to
time pursuant to the provisions of this Agreement.
(s) Record Date shall have the meaning set forth
in the Background section of this Agreement.
(t) Redemption Price shall have the meaning set
forth in Section 23.
(u) Rights Dividend Declaration Date shall have
the meaning set forth in the Background section of this
Agreement.
(v) Section 11(a)(ii) Event shall mean any event
described in Section 11(a)(ii)(A), (B) or (C) hereof.
(w) Section 13 Event shall mean any event
described in clauses (w), (x), (y) or (z) of Section 13(a)
hereof.
(x) Spread shall have the meaning set forth in
Section 11(a)(iii).
(y) 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) under the Exchange Act) by the
Company or an Acquiring Person that a Person has become an
Acquiring Person.
(z) Subsidiary shall mean, with reference to any
Person, any corporation or other entity of which an amount of
voting securities sufficient to elect a majority of the
directors or Persons having similar authority of such
corporation or other entity is beneficially owned, directly or
indirectly, by such Person, or otherwise controlled by such
Person.
(aa) Substitution Period shall have the meaning
set forth in Section 11(a)(iii).
(bb) Trading Day shall have the meaning set forth
in Section 11(d).
(cc) Triggering Event shall mean any Section
11(a)(ii) Event or any Section 13 Event.
Section 2. Appointment of Rights Agent TC Section 2.
Appointment of Rights Agent \f C \l 1. 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 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 appropriate.
Section 3. Issuance of Rights Certificates TC Section 3.
Issuance of Rights Certificates \f C \l 1.
(a) Until the Distribution Date, (i) the Rights
will be evidenced (subject to the provisions of paragraph (b),
(c) and (d) of this Section 3) by the certificates for the
Common Stock registered in the names of the holders of the
Common Stock (which certificates for Common Stock shall be
deemed also to be certificates for Rights) and not by separate
certificates, and (ii) the Rights will be transferable only in
connection with the transfer of the underlying shares of Common
Stock (including a transfer to the Company). As soon as
practicable after the Distribution Date, the Rights Agent will
send by first class, postage prepaid mail, to each such record
holder of the Common Stock as of the close of business on the
Distribution Date, at the address of such holder shown on the
records of the Company, one or more right certificates, in
substantially the form of Exhibit A hereto (the Rights
Certificates), evidencing one Right for each share of Common
Stock so held, subject to adjustment as provided herein. In
the event that an adjustment in the number of Rights per share
of Common Stock has been made pursuant to Section 11(i) hereof,
at the time of distribution of the Rights Certificates the
Company shall make the necessary and appropriate rounding
adjustments (in accordance with Section 14(a) hereof) so that
Rights Certificates representing only whole numbers of Rights
are distributed and cash is paid in lieu of any fractional
Rights. As of and after the Distribution Date, the Rights will
be evidenced solely by such Rights Certificates.
(b) As promptly as practicable following the
Record Date, the Company will send a copy of a Summary of
Rights, in substantially the form attached hereto as Exhibit B
(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, at the address of such holder
shown on the records of the Company. As soon as practicable
after the date of this Agreement, the Company shall file with
the Securities and Exchange Commission the full text of this
Agreement and a summary thereof in substantially the form of
the Summary of Rights. With respect to certificates for the
Common Stock outstanding as of the Record Date, until the
Distribution Date, the Rights will be evidenced by such
certificates for the Common Stock and the registered holders of
such Common Stock shall also be the registered holders of the
associated Rights. Until the earlier of the Distribution Date
or the Expiration Date (as such term is defined in Section 7
hereof), the transfer of any certificates representing shares
of Common Stock in respect of which Rights have been issued
shall also constitute the transfer of the Rights associated
with such shares of Common Stock.
(c) Rights shall be issued in respect of all
shares of Common Stock which are issued after the Record Date
but prior to the earlier of the Distribution Date or the
Expiration Date (including the issuance of Common Stock
pursuant to the exercise of rights under the Companys benefit
plans and pursuant to the conversion of the Companys
Convertible Preferred Stock), unless the Board of Directors
provides to the contrary by resolution adopted at or before the
time of the issuance. Certificates representing such shares of
subsequently issued Common Stock shall also be deemed to be
certificates for Rights.
(d) Any Outstanding Certificates shall be deemed
to bear, and, except as set forth in the previous clause, any
certificates issued by the Company after the date of this
Agreement, that represent shares of Common Stock in respect of
which Rights have been issued shall bear, the following legend:
This certificate also evidences and entitles the
holder hereof to certain Rights as set forth in the
Rights Agreement between Conestoga Enterprises, Inc. (the
Company) and First Union National Bank (the Rights Agent)
dated as of March 1, 2000 (as such Rights Agreement 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
offices of the Company. Under certain circumstances, as
set forth in the Rights Agreement, such Rights will be
evidenced by separate certificates and will no longer be
evidenced by this certificate. The Company will mail to
the holder of this certificate a copy of the Rights
Agreement, as in effect on the date of mailing, without
charge promptly after receipt of a written request
therefor. Under certain circumstances set forth in the
Rights Agreement, Rights issued to, or held by, any
Person who is, was or becomes an Acquiring Person or any
Affiliate or Associate thereof (as such terms are defined
in the Rights Agreement), whether currently held by or on
behalf of such Person or by any subsequent holder, may
become null and void, and the transfer of such Rights may
be deemed to be restricted.
With respect to such certificates containing the
foregoing legend (or deemed to contain such legend), until the
earlier of (i) the Distribution Date or (ii) the Expiration
Date, the Rights associated with the Common Stock represented
by such certificates shall be evidenced by such certificates
alone and registered holders of Common Stock shall also be the
registered holders of the associated Rights, and the transfer
of any of such certificates shall also constitute the transfer
of the Rights associated with the Common Stock represented by
such certificates.
Notwithstanding this paragraph (d), 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 Rights Certificates TC Section 4.
Form of Rights Certificates \f C \l 1.
(a) The Rights Certificates (and the forms of
election to purchase and of assignment to be printed on the
reverse thereof) shall each be substantially in the form set
forth in Exhibit A 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 National
Association of Securities Dealers, Inc. or any stock exchange
on which the Rights may from time to time be listed, or to
conform to usage. Subject to the provisions of Section 11 and
Section 22 hereof, the Rights Certificates, whenever
distributed, shall be dated as of the Record Date (or in the
case of Rights issued in respect of Common Stock issued by the
Company after the Record Date, as of the date of issuance of
such Common Stock), shall note the date of issuance, and on
their face shall entitle the holders thereof to purchase such
number of shares of Common Stock as shall be set forth therein
at the price set forth therein (such exercise price per share
being referred to herein as the Purchase Price), but the amount
and type of securities purchasable upon the exercise of each
Right and the Purchase Price thereof shall be subject to
adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to
Section 3(a) or Section 22 hereof that represents Rights
beneficially owned by: (i) an Acquiring Person or any Associate
or Affiliate of an Acquiring Person, (ii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person becomes such,
or (iii) a transferee of an Acquiring Person (or of any such
Associate of Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether
or not for consideration) from the Acquiring Person to holders
of equity interests in such Acquiring Person or to any Person
with whom such Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights
or (B) a transfer which the Board of Directors of the Company
has determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect avoidance of Section
7(e) hereof, and any Rights Certificate issued pursuant to
Section 6 or Section 11 hereof upon transfer, exchange,
replacement or adjustment of any other Rights Certificate
referred to in this sentence, shall bear (to the extent
feasible) the following legend:
The Rights represented by this Rights Certificate
are or were beneficially owned by a Person who was or
became an Acquiring Person or an Affiliate or Associate
of an Acquiring Person (as such terms are defined in the
Rights Agreement). Accordingly, this Rights Certificate
and the Rights represented hereby may become null and
void in the circumstances specified in Section 7(e) of
such Agreement, and the transfer of such Rights may be
deemed to be restricted.
Section 5. Countersignature and Registration TC Section
5. Countersignature and Registration \f C \l.1
(a) The Rights Certificates shall be executed on
behalf of the Company by its Chairman of the Board, its
President or any Vice President, either manually or by
facsimile signature, and shall have affixed thereto the
Companys seal or a facsimile thereof which shall be attested by
the Secretary or an Assistant Secretary of the Company, either
manually or by a facsimile signature. The Rights Certificates
shall be countersigned by an authorized signatory of the Rights
Agent but it shall not be necessary for the same signatory to
countersign all of the Rights Certificates issued hereunder.
The Rights 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 Rights Certificates shall cease to be
such officer of the Company before countersignature by the
Rights Agent and issuance and delivery by the Company, such
Rights Certificates, nevertheless, may be countersigned by the
Rights Agent and issued and delivered by the Company with the
same force and effect as though the person who signed such
Rights Certificates had not ceased to be such officer of the
Company; and any Rights Certificates may be signed on behalf of
the Company by any person who, at the actual date of the
execution of such Rights Certificate, shall be a proper officer
of the Company to sign such Rights Certificate, although at the
date of the execution of this Rights 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 its principal office or
offices designated as the appropriate place for surrender of
Rights Certificates upon exercise or transfer, books for
registration and transfer of the Rights Certificates issued
hereunder. Such books shall show the names and addresses of
the respective holders of the Rights Certificates and the date
of each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange
of Rights Certificates; Mutilated, Destroyed, Lost or Stolen
Rights Certificates TC Section 6. Transfer, Split Up,
Combination and Exchange of Rights Certificates; Mutilated,
Destroyed, Lost or Stolen Rights Certificates \f C \l 1.
(a) Subject to the provisions of Section 4(b),
Section 7(e) and Section 14 hereof, at any time after the close
of business on the Distribution Date, and at or prior to the
close of business on the Expiration Date, any Rights
Certificate or Certificates may be transferred, split up,
combined or exchanged for another Rights Certificate or
Certificates, entitling the registered holder to purchase a
like number of shares of Common Stock (or, following a
Triggering Event, other securities, cash or other assets, as
the case may be) as the Rights Certificate or Certificates
surrendered then entitled such holder (or former holder in the
case of transfer) to purchase. Any registered holder desiring
to transfer, split up, combine or exchange any Rights
Certificate or Certificates shall make such request in writing
delivered to the Rights Agent, and shall surrender the Rights
Certificate or Certificates to be transferred, split up,
combined or exchanged at the principal office or offices of the
Rights Agent designated for such purpose. Neither the Rights
Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such surrendered
Rights Certificate until the registered holder shall have
completed and signed the certificate contained in the form of
assignment on the reverse side of such Rights Certificate and
shall have provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or Affiliates
or Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to Section 4(b),
Section 7(e) and Section 14 hereof, countersign and deliver to
the Person entitled thereto a Rights Certificate or Rights
Certificates, as the case may be, as so requested. The Company
may require payment from the holder of the Rights of a sum
sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination
or exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights
Agent of evidence reasonably satisfactory to them of the loss,
theft, destruction or mutilation of a Rights Certificate, and,
in case of loss, theft or destruction, of indemnity or security
reasonably satisfactory to them, and reimbursement to the
Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Rights Certificate if mutilated, the
Company will execute and deliver a new Rights Certificate of
like tenor to the Rights Agent for countersignature and
delivery to the registered owner in lieu of the Rights
Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights TC Section 7. Exercise of
Rights; Purchase Price; Expiration Date of Rights \f C \l
1.
(a) Subject to Section 7(e) and the last sentence
of Section 23(a) hereof, the registered holder of any Rights
Certificate may exercise the Rights evidenced thereby (except
as otherwise provided herein including, without limitation, the
restrictions on exercisability set forth in Section 9(c),
Section 11(a)(iii) and Section 13(a) hereof) in whole or in
part at any time after the Distribution Date upon surrender of
the Rights Certificate, with the form of election to purchase
and the certificate on the reverse side thereof duly executed,
to the Rights Agent at the principal office or offices of the
Rights Agent designated for such purpose, together with payment
of the aggregate Purchase Price with respect to the total
number of shares of Common Stock (or other securities or
property, as the case may be) as to which such surrendered
Rights are then exercisable, at or prior to the earlier of (i)
the close of business on March 1, 2010 (the Final Expiration
Date), or (ii) the time at which the Rights are redeemed as
provided in Section 23 hereof (the earlier of (i) and (ii)
being herein referred to as the Expiration Date).
(b) The Purchase Price for each share of Common
Stock pursuant to the exercise of a Right shall initially be
$180.00, and shall be subject to adjustment from time to time
as provided in Section 11 hereof and shall be payable in
accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate
representing exercisable Rights, with the form of election to
purchase and the certificate duly executed, accompanied by
payment, with respect to each Right so exercised, of the
Purchase Price per share of Common Stock (or other shares,
securities or property, as the case may be) to be purchased as
set forth below and an amount equal to any applicable transfer
tax, the Rights Agent shall, subject to Section 20(k) hereof,
thereupon promptly, (i) (A) requisition from any transfer agent
of the shares of Common Stock (or make available, if the Rights
Agent is the transfer agent for such shares) certificates for
the total number of shares of Common Stock to be purchased and
the Company hereby irrevocably authorizes its transfer agent to
comply with all such requests, or (B), if the Company shall
have elected to deposit the total number of shares of Common
Stock issuable upon exercise of the Rights hereunder with a
depositary agent, requisition from the depositary agent
depositary receipts representing such number of shares of
Common Stock as are to be purchased (in which case certificates
for the shares of Common Stock represented by such receipts
shall be deposited by the transfer agent with the depositary
agent) and the Company will direct the depositary agent to
comply with such request, (ii) requisition from the Company the
amount of cash, if any, to be paid in lieu of fractional shares
in accordance with Section 14 hereof, (iii) after receipt of
such certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such
Rights Certificate, registered in such name or names as may be
designated by such holder, and (iv) after receipt thereof,
deliver such cash, if any, to or upon the order of the
registered holder of such Rights Certificate. The payment of
the Purchase Price (as such amount may be reduced (including to
zero) pursuant to Section 11(a)(iii) hereof) may be made in any
combination of (x) cash or certified bank check or bank draft
payable to the order of the Company, or (y) delivery of a
certificate or certificates (with appropriate stock power
executed in blank attached thereto) for whole numbers of shares
of Common Stock, which shall be credited at their current
market price (as determined pursuant to Section 11(d) hereof).
If the Company receives payment from any holder of Rights in a
number of whole shares of Common Stock with a current market
price (as determined pursuant to Section 11(d) hereof) that
exceeds the total Purchase Price due from such holder, the
Company may, at its election, (i) accept only such whole number
of shares with a current market price (as determined pursuant
to Section 11(d) hereof) that is less than the total Purchase
Price and require that the balance of the total Purchase Price
be paid under clause (x), above, or (ii) make a cash refund of
the difference between the current market price (as determined
pursuant to Section 11(d) hereof) of the whole number of shares
received and the total Purchase Price due from such holder. In
the event that the Company is obligated to issue other
securities of the Company, pay cash and or distribute other
property pursuant to Section 11(a) hereof, the Company will
make all arrangements necessary so that such other securities,
cash and or other property are available for distribution by
the Rights Agent, if and when appropriate.
(d) In case the registered holder of any Rights
Certificate shall exercise less than all the Rights evidenced
thereby, a new Rights Certificate evidencing Rights equivalent
to the Rights remaining unexercised shall be issued by the
Rights Agent and delivered to, or upon the order of, the
registered holder of such Rights Certificate, registered in
such name or names as may be designated by such holder, subject
to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to
the contrary, from and after the first occurrence of a Section
11(a)(ii) Event, (i) any Rights beneficially owned by an
Acquiring Person or an Associate or Affiliate of an Acquiring
Person, (ii) any Rights transferred by an Acquiring Person (or
any such Associate or Affiliate) after the Acquiring Person
becomes such, or (iii) any Rights transferred by an Acquiring
Person (or any such Associate or Affiliate) prior to or
concurrently with the Acquiring Person becoming such and if the
transferee receives such Rights pursuant to either (A) a
transfer (whether or not for consideration) from the Acquiring
Person to holders of equity interests in such Acquiring Person
or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement or understanding regarding
the transferred Rights or (B) a transfer which the Board of
Directors of the Company has determined is part of a plan,
arrangement or understanding which has a primary purpose or
effect the avoidance of this Section 7(e), shall become null
and void without any further action and no holder of such
Rights shall have any rights whatsoever with respect to such
Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to
ensure that the provisions of this Section 7(e) and Section
4(b) hereof are complied with, but shall have no liability to
any holder of Rights 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.
(f) Notwithstanding anything in this Agreement to
the contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a registered
holder upon the occurrence of any purported exercise as set
forth in this Section 7 unless such registered holder shall
have (i) completed and signed the certificate contained in the
form of election to purchase set forth on the reverse side of
the Rights Certificate surrendered for such 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 Rights
Certificates TC Section 8. Cancellation and Destruction of
Rights Certificates \f C \l 1. All Rights Certificates
surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or
any of its agents, be delivered to the Rights Agent for
cancellation or in cancelled form, or, if surrendered to the
Rights Agent, shall be cancelled by it, and no Rights
Certificates shall be issued in lieu thereof except as
expressly permitted by 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 Rights Certificate purchased or acquired by
the Company otherwise than upon the exercise thereof. The
Rights Agent shall deliver all cancelled Rights Certificates to
the Company, or shall, at the written request of the Company,
destroy such cancelled Rights Certificates, and in such case
shall deliver a certificate of destruction thereof to the
Company.
Section 9. Reservation and Availability of Capital Stock
TC Section 9. Reservation and Availability of Capital Stock
\f C \l 1
(a) The Company covenants and agrees that prior
to the occurrence of a Triggering Event it will cause to be
reserved and kept available out of its authorized and unissued
shares of Common Stock, the number of shares of Common Stock
that, except as provided in Section 11 (a)(iii) hereof and
without consideration of the adjustments under Section
11(a)(ii), will be sufficient to permit the exercise in full of
all outstanding Rights. The Company covenants and agrees that
following the occurrence of a Triggering Event it will cause to
be reserved and kept available out of its authorized and
unissued shares of Common Stock and or other securities, the
number of shares of Common Stock and or other securities that,
except as provided in Section 11(a)(iii) hereof, will be
sufficient to permit the exercise in full of all outstanding
Rights.
(b) 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
with the National Association of Securities Dealers, Inc. or on
any national securities exchange on which the Companys Common
Stock then trades upon official notice of issuance upon such
exercise.
(c) The Company shall use its best efforts to (i)
file, as soon as practicable following the earliest date after
the first occurrence of a Section 11(a)(ii) Event on which the
consideration to be delivered by the Company upon exercise of
the Rights has been determined in accordance with Section
11(a)(iii) hereof, or as soon as is required by law following
the Distribution Date, as the case may be, a registration
statement under the Securities Act of 1933 (the Act), with
respect to the securities purchasable upon exercise of the
Rights on an appropriate form, (ii) cause such registration
statement to become effective as soon as practicable after such
filing, and (iii) cause such registration statement to remain
effective (with a prospectus at all times meeting the
requirements of the Act) until the earlier of (A) the date as
of which the Rights are no longer exercisable for such
securities, and (B) the date of the expiration of the Rights.
The Company will also take such action as may be appropriate
under, or to ensure compliance with, the securities or blue sky
laws of the various states in connection with the
exercisability of the Rights. The Company may temporarily
suspend, for a period of time not to exceed ninety (90) days
after the date set forth in clause (i) of the first sentence of
this Section 9(c), the exercisability of the Rights in order to
prepare and file such registration statement. Upon any such
suspension, the Company shall issue a public announcement
stating, and notify the Rights Agent, 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.
(d) The Company covenants and agrees that it will
take all such action as may be necessary to ensure that all
Common Stock and or other securities delivered upon exercise of
Rights shall, at the time of delivery of the certificates for
such shares (subject to payment of the Purchase Price), be duly
and validly authorized and issued and fully paid and
nonassessable.
(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 Rights Certificates and of any
certificates for shares of Common Stock and or other
securities, as the case may be, upon the exercise of Rights.
The Company shall not, however, be required (i) to pay any
transfer tax which may be payable in respect of any transfer or
delivery of Rights Certificates to a Person other than, or the
issuance or delivery of Common Stock and or other securities,
as the case may be, in respect of a name other than that of,
the registered holder of the Rights Certificates evidencing
Rights surrendered for exercise or, (ii) to issue or deliver
any certificates for Common Stock and or other securities, as
the case may be, in a name other than that of the registered
holder upon the exercise of any Rights until such tax shall
have been paid (any such tax being payable by the holder of
such Rights Certificate at the time of surrender) or until it
has been established to the Companys satisfaction that no such
tax is due.
Section 10. Common Stock Record Date TC Section 10.
Common Stock Record Date \f C \l 1. Each person in whose
name any certificate for shares of Common Stock and or other
securities, as the case may be, is issued upon the exercise of
Rights shall for all purposes be deemed to have become the
holder of record of such shares represented thereby on, and
such certificate shall be dated, the date upon which the Rights
Certificate evidencing such Rights was duly surrendered and
payment of the total Purchase Price therefor (and all
applicable transfer taxes) was made; provided, however, that if
the date of such surrender and payment is a date upon which the
applicable 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 applicable stock transfer
books of the Company are open. Prior to the exercise of the
Rights evidenced thereby, the holder of a Rights Certificate
shall not be entitled to any rights of a shareholder of the
Company with respect to shares for which the Rights shall be
exercisable, including, without limitation, the right to vote,
to receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any
notice of any proceedings of the Company, except as provided
herein.
Section 11. Adjustment of Purchase Price, Number and Kind
of Shares and Number of Rights TC Section 11. Adjustment of
Purchase Price, Number and Kind of Shares and Number of Rights
\f C \l 1. The Purchase Price, the number and kind of shares
covered by each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this
Section 11.
(a) (i) In the event the Company shall at any
time after the date of this Agreement (A) declare a
dividend on the Common Stock payable in shares of
Common Stock, (B) subdivide or split the
outstanding Common Stock, (C) combine the
outstanding Common Stock into a smaller number of
shares, or (D) issue any shares of its capital
stock in a reclassification of the Common 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) and
Section 7(e) hereof, the Purchase Price in effect
at the time of the record date for such dividend or
at the time of the effective date of such
subdivision, combination or reclassification, and
or the number and kind of shares of Common Stock or
capital stock, as the case may be, issuable on such
date, shall be proportionately adjusted so that the
holder of any Right exercised after such time shall
be entitled to receive, upon payment of the
Purchase Price then in effect, the aggregate number
and kind of shares of Common Stock or capital
stock, as the case may be, which, if such Right had
been exercised immediately prior to such date and
at a time when the Common Stock transfer books of
the Company were open, he would have owned upon
such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination
or reclassification; provided, however, that in the
case of a dividend on the Common Stock payable in
shares of Common Stock as referenced in clause (A)
of this Section 11(a)(i), where the record date of
such dividend is prior to the Distribution Date and
where each share of Common Stock issued pursuant to
such dividend is issued Rights under Section 3(c)
hereof, then in such case the Purchase Price shall
be reduced (and no other adjustment shall be made
pursuant to this Section 11(a)(i)) on the record
date of such dividend to a number which is equal to
the result obtained by multiplying the Purchase
Price then in effect by a fraction, the numerator
of which is the number of Rights outstanding prior
to such dividend and the denominator of which is
the number of Rights outstanding immediately
following such dividend. If an event occurs which
would require an adjustment under both this Section
11(a)(i) and Section 11(a)(ii) hereof, the
adjustment provided for in this Section 11(a)(i)
shall be in addition to, and shall be made prior
to, any adjustment required pursuant to Section
11(a)(ii) hereof.
(ii) In the event:
(A) any Acquiring Person or any
Associate or Affiliate of any Acquiring
Person, at any time after the date of
this Agreement, directly or indirectly,
(1) shall merge into the Company or
otherwise combine with the Company and
the Company shall be the continuing or
surviving corporation of such merger or
combination and the Common Stock of the
Company shall remain outstanding and
unchanged, (2) shall effect a statutory
share exchange with the Company, after
which the Company is not a Subsidiary
of any Acquiring Person or any
Associate or Affiliate of any Acquiring
Person, (3) shall, in one or more
transactions, other than in connection
with the exercise of Rights or the
exercise or conversion of securities
exercisable or convertible into capital
stock of the Company or any of its
Subsidiaries, transfer any assets to
the Company or any of its Subsidiaries
in exchange (in whole or in part) for
shares of any class of capital stock of
the Company or any of its Subsidiaries
or for securities exercisable for or
convertible into shares of any class of
capital stock of the Company or any of
its Subsidiaries or otherwise obtain
from the Company or any of its
Subsidiaries, with or without
consideration, any additional shares of
any class of capital stock of the
Company or any of its Subsidiaries or
securities exercisable for or
convertible into shares of any class of
capital stock of the Company or any of
its Subsidiaries (other than as part of
a pro rata distribution to all holders
of Common Shares), (4) shall sell,
purchase, lease, exchange, mortgage,
pledge, transfer or otherwise dispose
(in one or more transactions), to,
from, with or of, as the case may be,
the Company or any of its Subsidiaries,
assets, including securities, on terms
and conditions less favorable to the
Company than the Company would be able
to obtain in arms length negotiation
with an affiliated third party, (5)
shall receive any compensation from the
Company or any of the Companys
Subsidiaries other than compensation
for services as a director or for full
time employment as a regular employee,
in either case at rates in accordance
with the Companys (or its Subsidiaries)
past practices, or (6) shall receive
the benefit, directly or indirectly
(except proportionately as a
shareholder), of any loans, advances,
guarantees, pledges, or other financial
assistance or any tax credits or other
tax advantage provided by the Company
or any of its Subsidiaries, or
(B) any Person (other than the
Company, any Subsidiary of the Company,
any employee benefit plan of the
Company or of any Subsidiary of the
Company, or any Person or entity
organized, appointed or established by
the Company for or pursuant to the
terms of any such plan), alone or
together with its Affiliates and
Associates, shall, at any time after
the Rights Dividend Declaration Date,
become the Beneficial Owner of 15% or
more of the shares of Common Stock then
outstanding, other than pursuant to any
transaction set forth in Section 13(a)
hereof,
(C) during such time as there is an
Acquiring Person, there shall be any
reclassification of securities
(including any reverse stock split), or
recapitalization of the Company, or any
merger or consolidation of the Company
with any of its Subsidiaries or any
other transaction or series of
transactions involving the Company or
any subsidiary of the Company (whether
or not with or into or otherwise
involving an Acquiring Person) which
has the effect, directly or indirectly,
of increasing by more than 1% the
proportionate share of the outstanding
shares of any class of equity
securities or of securities exercisable
for or convertible into securities of
the Company or any of its Subsidiaries
that is directly or indirectly owned by
any Acquiring Person or any Associate
or Affiliate of any Acquiring Person,
then within five (5) days after the
date of the occurrence of an event
described in Section 11(a)(ii)(B)
hereof and promptly following the
occurrence of any event described in
Section 11 (a)(ii)(A) or (C) hereof,
proper provision shall be made by the
Company so that each holder of a Right
(except as provided below and in
Section 7(e) hereof) shall thereafter
have the right to receive, upon
exercise thereof at the then current
Purchase Price in accordance with the
terms of this Agreement, in lieu of the
number of shares of Common Stock for
which the Rights were theretofore
exercisable, such number of shares of
Common Stock of the Company as shall
equal the result obtained by (x)
multiplying the then current Purchase
Price by the then number of shares of
Common Stock for which a Right was
exercisable immediately prior to the
first occurrence of a Section 11
(a)(ii) Event and dividing that product
(which, following such first
occurrence, shall thereafter be
referred to as the Purchase Price for
each Right and for all purposes of this
Agreement) by (y) 50% of the current
market price (determined pursuant to
Section 11(d) hereof) per share of
Common Stock on the date of such first
occurrence (such number of shares, the
Adjustment Shares).
(iii) In the event that the number of shares
of Common Stock which are authorized by the
Companys articles of incorporation but not
outstanding or reserved for issuance for
purposes other than upon exercise of the
Rights are not sufficient to permit the
exercise in full of the Rights in accordance
with the foregoing subparagraph (ii) of this
Section 11(a), and subject to such
limitations as are necessary to prevent a
default under any agreement for money
borrowed as presently constituted to which
the Company is a part and subject to any
limitations contained in Section 1551 of the
Pennsylvania Business Corporation Law of
1988, as amended, the Company shall: (A)
determine the excess of (1) the value of the
Adjustment Shares issuable upon the exercise
of a Right (the Current Value) over (2) the
Purchase Price (such excess, the Spread), and
(B) with respect to each Right, make adequate
provision to substitute for the Adjustment
Shares, upon payment of the applicable
Purchase Price, (1) cash, (2) a reduction in
the Purchase Price, (3) Common Stock or other
equity securities of the Company (including,
without limitation, shares, or units of
shares, of preferred stock which the Board of
Directors of the Company has deemed to have
the same value as shares of Common Stock
(such shares of preferred stock, common stock
equivalents)), (4) debt securities of the
Company, (5) other assets, or (6) any
combination of the foregoing, having an
aggregate value equal to the Current Value,
where such aggregate value has been
determined by the Board of Directors of the
Company based upon the advice of a nationally
recognized investment banking firm selected
by the Board of Directors of the Company;
provided, however if the Company shall not
have made adequate provision to deliver value
pursuant to clause (B) above within thirty
(30) days following the first occurrence of a
Section 11(a)(ii) Event, then the Company
shall be obligated to deliver, 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, cash,
which in the aggregate are equal in value to
the Spread. If the Board of Directors of the
Company shall determine in good faith that it
is likely that sufficient additional shares
of Common Stock could be authorized for
issuance upon exercise in full of the Rights,
the thirty (30) day period set forth above
may be extended to the extent necessary, but
not more than ninety (90) days following the
first occurrence of a Section 11(a)(ii)
Event, in order that the Company may seek
shareholder approval for the authorization of
such additional shares (such period, as it
may be extended, the Substitution Period).
To the extent that the Company determines
that some action needs to be taken pursuant
to the first and or second sentences of this
Section 11(a)(iii), the Company (x) shall
provide, subject to Section 7(e) 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
first sentence and to determine the value
thereof. In the event of any such
suspension, the Company shall issue a public
announcement stating that the exercisability
of the Rights has been temporarily suspended,
as well as a public announcement at such time
as the suspension is no longer in effect.
For purposes of this Section 11(a)(iii), the
value of the Common Stock shall be the
current market price (as determined pursuant
to Section 11(d) hereof) per share of the
Common Stock on the date of the first
occurrence of a Section 11(a)(ii) Event and
the value of any common stock equivalent
shall be deemed to have the same value as the
Common Stock on such date.
(b) In case the Company shall fix a record date
for the issuance of rights, options or warrants to all holders
of Common Stock entitling them to subscribe for or purchase
(for a period expiring within forty five (45) calendar days
after such record date) Common Stock (or shares having the same
rights, privileges and preferences as the shares of Common
Stock (equivalent common stock)) or securities convertible into
Common Stock or equivalent common stock at a price per share of
Common Stock or per share of equivalent common stock (or having
a conversion price per share, if a security convertible into
Common Stock or equivalent common stock) less than the current
market price (as determined pursuant to Section 11(d) hereof)
per share of Common Stock on such record date, the Purchase
Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the
numerator of which shall be the number of shares of Common
Stock outstanding on such record date, plus the number of
shares of Common Stock which the aggregate offering price of
the total number of shares of Common Stock and or equivalent
common stock so to be offered (and or the aggregate initial
conversion price of the convertible securities so to be
offered) would purchase at such current market price, and the
denominator of which shall be the number of shares of Common
Stock outstanding on such record date, plus the number of
additional shares of Common Stock and or equivalent common
stock to be offered for subscription or purchase (or into which
the convertible securities so to be offered are initially
convertible). In case such subscription price may be paid by
delivery of consideration part or all of which may be in a form
other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights
Agent and the holders of the Rights. Shares of Common Stock
owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation.
Such adjustment shall be made successively whenever such a
record date is fixed, and in the event that such rights or
warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect
if such record date had not been fixed.
(c) In case the Company shall fix a record date
for a distribution to all holders of Common Stock (including
any such distribution made in connection with a consolidation
or merger in which the Company is the continuing corporation)
or evidence of indebtedness, cash (other than a regular
quarterly cash dividend out of the earnings or retained
earnings of the Company), assets (other than a dividend payable
in Common Stock, but including any dividend payable in stock
other than Common 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 current market price (as
determined pursuant to Section 11(d) hereof) per share of
Common Stock on such record date, less the fair market value
(as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement
filed with the Rights Agent) of the portion of the cash, assets
or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to a share of Common
Stock and the denominator of which shall be such current market
price (as determined pursuant to Section 11(d) hereof) per
share of Common Stock. 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 be adjusted to be the Purchase Price which would have
been in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder,
other than computations made pursuant to Section 11(a)(iii)
hereof, the current market price per share of Common Stock on
any date shall be deemed to be the average of the daily closing
prices per share of such Common Stock for the thirty (30)
consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date, and for purposes of
computations made pursuant to Section 11(a)(iii) hereof, the
current market price per share of Common Stock on any date
shall be deemed to be the average of the daily closing prices
per share of such Common Stock for the ten (10) consecutive
Trading Days immediately following such date; provided,
however, that in the event that the current market price per
share of the Common Stock is determined during a period
following the announcement by the issuer of such Common Stock
of (A) a dividend or distribution on such Common Stock payable
in shares of such Common Stock or securities convertible into
shares of such Common stock (other than the Rights), or (B) any
subdivision, combination or reclassification of such Common
Stock, and prior to the expiration of the requisite thirty (30)
Trading Day or ten (10) Trading Day period, as set forth above,
after the exdividend date for such dividend or distribution, or
the record date for such subdivision, combination or
reclassification, then, and in each such case, the current
market price shall be properly adjusted to take into account
exdividend trading. The closing price for each day shall be
the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New
York Stock Exchange or, if the shares of Common Stock 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 shares of Common
Stock are listed or admitted to trading or, if the shares of
Common Stock are not listed or admitted to trading on any
national securities exchange, the last reported sale price as
reported on the National Market System of the National
Association of Securities Dealers, Inc. Automated Quotation
System (NASDAQ), or in case no such reported sale takes place
on such day, the average of the reported closing bid and asked
quotations in such System, or such other system then in use,
or, if on any such date the shares of Common Stock 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 Common Stock selected by the Board of
Directors of the Company. If on any such date no market maker
is making a market in the Common Stock, the fair value of such
shares on such date as determined in good faith by the Board of
Directors of the Company shall be used. The term Trading Day
shall mean a day on which the principal national securities
exchange on which the shares of Common Stock are listed or
admitted to trading is open for the transaction of business or,
if the shares of Common Stock are not listed or admitted to
trading on any national securities exchange, a Business Day.
If the Common Stock is not publicly held or not so listed or
traded, current market price per share shall mean the fair
value per share as determined in good faith by the Board of
Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent and shall
be conclusive for all purposes.
(e) Anything herein to the contrary
notwithstanding, no adjustment in the Purchase Price shall be
required unless such adjustment would require an increase or
decrease of at least one percent (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 ten thousandth of a share of
Common Stock or other share, 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 (3) years from the date of the
transaction which mandates such adjustment, or (ii) the
Expiration Date.
(f) If as a result of an adjustment made pursuant
to Section 11(a)(ii) or Section 13(a) hereof, the holder of any
Right thereafter exercised shall become entitled to receive any
shares of capital stock other than Common Stock, thereafter the
number of such other shares so receivable upon exercise of any
Right and or the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the
Common Stock contained in Section 11(a), (b), (c), (e), (g),
(h), (i), (j), (k), and (m), and the provisions of Sections 7,
9, 10, 13 and 14 hereof with respect to the Common Stock shall
apply on like terms to any such other shares.
(g) All Rights first issued by the Company
subsequent to any adjustments made to the Purchase Price
hereunder shall evidence the right to purchase, at the adjusted
Purchase Price, the number of shares of Common Stock
purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised 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
evidence the right to purchase, at the adjusted Purchase Price,
that number of shares of Common Stock (calculated to the
nearest ten thousandth) obtained by (i) multiplying (x) the
number of shares covered by a Right immediately prior to this
adjustment, by (y) the Purchase Price in effect immediately
prior to such adjustment of the Purchase Price, and (ii)
dividing the product so obtained by the Purchase Price in
effect immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of
any adjustment of the Purchase Price to adjust the number of
Rights, in lieu of any adjustment in the number of shares of
Common Stock purchasable upon the exercise of a Right. Each of
the Rights outstanding after the adjustment in the number of
Rights shall be exercisable for the number of shares of Common
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 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 Rights Certificates have been issued, shall be at
least ten (10) days later than the date of the public
announcement. If Rights Certificates have been issued, upon
each adjustment of the number of rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable,
cause to be distributed to holders of record of Rights
Certificates on such record date Rights 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 Rights Certificates held by such holders
prior to the date of adjustment and upon surrender thereof, if
required by the Company, new Rights Certificates evidencing all
the Rights to which such holders shall be entitled after such
adjustment. Rights Certificates so to be distributed shall be
issued, executed and countersigned in the manner provided for
herein (and may bear, at the option of the Company, the
adjusted Purchase Price) and shall be registered in the names
of the holders of record of Rights 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 shares of Common Stock
issuable upon the exercise of the Rights, the Rights
Certificates theretofore and thereafter issued may continue to
express the Purchase Price per share and the number of shares
which were expressed in the initial Rights Certificates issued
hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then stated or
par value, if any, of the number of shares of Common 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 Common Stock at
such adjusted Purchase Price.
(l) In any case in which this Section 11 shall
require that an adjustment in the Purchase Price be made
effective as of a record date for a specified event, the
Company may elect to defer until the occurrence of such event
the issuance to the holder of any Right exercised after such
record date the shares of Common Stock and other capital stock
or securities of the Company, if any, issuable upon such
exercise over and above the number of shares of Common 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 holders right to receive
such additional shares (fractional or otherwise) or securities
upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to
the extent that in its good faith judgment the Board of
Directors of the Company shall determine to be advisable in
order that any (i) consolidation or subdivision of the Common
Stock, (ii) issuance wholly for cash of any shares of Common
Stock at less than the current market price, (iii) issuance
wholly for cash of shares of Common Stock or securities which
by their terms are convertible into or exchangeable for shares
of Common Stock, (iv) stock dividends or (v) issuance of
rights, options or warrants referred to in this Section 11,
hereafter made by the Company to holders of its Common Stock
shall not be taxable to such shareholders.
(n) The Company covenants and agrees that it
shall not, at any time after the Distribution Date, (i)
consolidate with any other Person, (ii) merge with or into any
other Person, (iii) effect a statutory share exchange with any
Person, or (iv) sell or transfer (or permit any Subsidiary to
sell or transfer), in one transaction, or a series of related
transactions, assets or earning power aggregating more than 50%
of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons,
if at the time of or immediately after such consolidation,
merger, statutory share exchange or sale 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.
(o) The Company covenants and agrees that, after
the Distribution Date, it will not, except as permitted by
Section 23 or Section 26 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 otherwise eliminate the benefits intended to
be afforded by the Rights.
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares TC Section 12. Certificate of Adjusted
Purchase Price or Number of Shares \f C \l 1. Whenever an
adjustment is made as provided in Section 11 and Section 13
hereof, the Company shall (a) promptly prepare a certificate
setting forth such adjustment and a brief statement of the
facts accounting for such adjustment, and (b) promptly file
with the Rights Agent, and with each transfer agent for the
Common Stock, a copy of such certificate. The Rights Agent
shall be fully protected in relying on any such certificate and
on any adjustment therein contained, and shall not be obligated
or responsible for calculating any adjustment nor shall it be
deemed to have knowledge of any such adjustment unless and
until it shall have received such a certificate.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power TC Section 13. Consolidation, Merger
or Sale or Transfer of Assets or Earning Power \f C \l 1.
(a) In the event that, following the Stock
Acquisition Date, directly or indirectly, (w) the Company shall
consolidate with, or merge with and into, any other Person, and
the Company shall not be the continuing or surviving
corporation of such consolidation or merger, (x) any Person
shall consolidate with, or merge with or into, the Company, and
the Company shall be the continuing or surviving corporation of
such consolidation or merger and, in connection with such
consolidation or merger, all or part of the outstanding shares
of Common Stock shall be changed into or exchanged for stock or
other securities of any other Person or cash or any other
property, (y) the Company shall be a party to a statutory share
exchange with any other Person after which the Company is a
Subsidiary of any other Person, or (z) the Company shall sell
or otherwise transfer (or one or more of its Subsidiaries shall
sell or otherwise transfer), in one transaction or a series of
related transactions, assets or earning power aggregating more
than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or Persons, then,
and in each such case, proper provisions shall be made so that:
(i) each holder of a Right, except as provided in Section 7(e)
hereof, shall thereafter have the right to receive, upon the
exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, such number of
validly authorized and issued, fully paid, nonassessable and
freely tradeable shares of Common Stock of the Principal Party
(as such term is hereinafter defined), 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
shares of Common Stock for which a Right is exercisable
immediately prior to the first occurrence of a Section 13 Event
(or, if a Section 11(a)(ii) Event has occurred prior to the
first occurrence of a Section 13 Event, multiplying the number
of such shares for which a Right was exercisable immediately
prior to the first occurrence of a Section 11(a)(ii) Event by
the Purchase Price in effect immediately prior to such first
occurrence), and dividing that product (which, following the
first occurrence of Section 13 Event, shall be referred to as
the Purchase Price for each Right and for all purposes of this
Agreement) by (2) 50% of the current market price (determined
pursuant to Section 11(d) hereof) per share of the Common Stock
of such Principal Party on the date of consummation of such
Section 13 Event; (ii) such Principal Party shall thereafter be
liable for, and shall assume, by virtue of such Section 13
Event, all the obligations and duties of the Company pursuant
to this Agreement; (iii) the term Company shall thereafter be
deemed to refer to such Principal Party, it being specifically
intended that the provisions of Section 11 hereof shall apply
only to such Principal Party following the first occurrence of
a Section 13 Event; (iv) such Principal Party shall take such
steps (including, but not limited to, the reservation of a
sufficient number of shares of its Common Stock) in connection
with the consummation of any such transaction as may be
necessary to ensure that the provisions hereof shall thereafter
be applicable, as nearly as reasonably may be, in relation to
its shares of Common Stock thereafter deliverable upon the
exercise of the Rights; and (v) the provisions of Section
11(a)(ii) hereof shall be of no effect following the first
occurrence of any Section 13 Event.
(b) Principal Party shall mean (i) in the case of
any transaction described in clause (w), (x) or (y) of the
first sentence of Section 13(a), the Person that is the issuer
of any securities into which shares of Common Stock of the
Company are converted in such merger, consolidation or
statutory share exchange, and if no securities are so issued,
the Person that is the other party to such merger or
consolidation; and (ii) in the case of any transaction
described in clause (z) of the first sentence of Section 13(a),
the Person that is the party receiving the greatest portion of
the assets or earning power transferred pursuant to such
transaction or transactions; provided, however, that in any
such case, (1) if the Common Stock of such Person is not at
such time and has not been continuously over the preceding
twelve (12) month period registered under Section 12 of the
Exchange Act, and such Person is a direct or indirect
Subsidiary of another Person the Common Stock of which is and
has been so registered, Principal Party shall refer to such
other Person; and (2) in case such Person is a Subsidiary,
directly or indirectly, of more than one Person, the capital
stocks of two or more of which are and have been so registered,
Principal Party shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest aggregate market
value.
(c) The Company shall not consummate any such
consolidation, merger, statutory share exchange, sale or
transfer unless the Principal Party shall have a sufficient
number of authorized shares of its Common Stock which have not
been issued or reserved for issuance to permit the exercise in
full of the Rights in accordance with this Section 13 and
unless prior thereto the Company and such Principal Party shall
have executed and delivered to the Rights Agent a supplemental
agreement providing for the terms set forth in paragraphs (a)
and (b) of this Section 13 and further providing that, as soon
as practicable after the date of any consolidation, merger,
statutory share exchange or sale of assets mentioned in
paragraph (a) of this Section 13, the Principal Party will
(i) prepare and file a registration
statement under the Act, with respect to the
Rights and the securities purchasable upon
exercise of the Rights on an appropriate
form, and will use its best efforts to cause
such registration statement to (A) become
effective as soon as practicable after such
filing and (B) remain effective (with a
prospectus at all times meeting the
requirements of the Act) until the Expiration
Date; and (ii) will deliver to holders of the
Rights historical consolidated financial
statements for the Principal Party and each
of its Affiliates which comply in all
respects with the requirements for
registration on Form 10 under the Exchange
Act.
The provisions of this Section 13 shall similarly apply
to successive mergers or consolidations or statutory share
exchanges or sales or other transfers. In the event that a
Section 13 Event shall occur at any time after the occurrence
of a Section 11(a)(ii) Event, the Rights which have not
theretofore been exercised shall after the occurrence of a
Section 13 Event be exercisable in the manner described in
Section 13(a).
Section 14. Fractional Rights and Fractional Shares TC
Section 14. Fractional Rights and Fractional Shares \f C
\l 1.
(a) The Company shall not be required to issue
fractions of Rights or to distribute Rights Certificates which
evidence fractional Rights. In lieu of such fractional Rights,
there shall be paid to the registered holders of the Rights
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
purposes of this Section 14(a), the current market value of a
whole Right shall be the closing bid 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 of the Rights 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 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 shares of Common Stock upon exercise of the Rights
or to distribute certificates which evidence fractional shares
of Common Stock. In lieu of fractional shares of Common Stock,
the Company may pay to the registered holders of Rights
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 Common Stock. For
purposes of this Section 14(b), the current market value of one
share of Common Stock shall be the closing price of a share of
Common Stock (as determined pursuant to Section 11 (d) hereof)
for the Trading Day immediately prior to the date of such
exercise.
(c) The holder of a Right by the acceptance of
the Rights expressly waives his right to receive any fractional
Rights or any fractional shares upon exercise of a Right,
except as permitted by this Section 14.
Section 15. Rights of Action TC Section 15. Rights of
Action \f C \l 1. All rights of action in respect of this
Agreement are vested in the respective registered holders of
the Rights Certificates (and, prior to the Distribution Date,
the registered holders of the Common Stock in respect of which
Rights have been issued); and any registered holder of any
Rights Certificate (or, prior to the Distribution Date, of
such Common Stock), without the consent of the Rights Agent or
of the holder of any other Rights Certificate (or, prior to
the Distribution Date, of such Common Stock), may, in his own
behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise
the Rights evidenced by such Rights Certificate in the manner
provided in such Rights 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 shall be entitled to
specific performance of the obligations hereunder and
injunctive relief against actual or threatened violations of
the obligations hereunder of any Person subject to this
Agreement.
Section 16. Agreement of Rights Holders TC Section 16.
Agreement of Rights Holders \f C \l 1. 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
Common Stock;
(b) after the Distribution Date, the Rights
Certificates are transferable only on the registry books of the
Rights Agent if surrendered at the principal office or offices
of the Rights Agent designated for such purposes, duly endorsed
or accompanied by a proper instrument of transfer and with the
appropriate forms and certificates fully executed;
(c) any restriction on transfer deemed to be
imposed by this Agreement is valid and enforceable against the
holder and any transferee of the holder in accordance with
Section 1529 of the Pennsylvania Business Corporation Law of
1988, as amended, or any successor provision; and
(d) subject to Section 6(a) and Section 7(f)
hereof, the Company and the Rights Agent may deem and treat the
person in whose name a Rights Certificate (or, prior to the
Distribution Date, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership
or writing on the Rights Certificates or the associated Common
Stock certificate made by anyone other than the Company or the
Rights Agent) for all purposes whatsoever, and neither the
Company nor the Rights Agent, subject to the last sentence of
Section 7(e) hereof, shall be required to be affected by any
notice to the contrary.
(e) notwithstanding anything in this Agreement to
the contrary, neither the Company nor the Rights Agent shall
have any liability to any holder of a Right or other Person as
a result of its inability to perform any of its obligations
under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court
of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by any
governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company
must use its best efforts to have any such order, decree or
ruling lifted or otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a
Shareholder TC Section 17. Rights Certificate Holder Not
Deemed a Shareholder \f C \l 1. No holder, as such, of any
Rights Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the shares of Common
Stock or any other securities of the Company which may at any
time be issuable on the exercise of the Rights represented
thereby, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any
Rights Certificate, as such, any of the rights of a shareholder
of the Company or any right to vote for the election of
directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other
actions affecting shareholders (except as provided in Section
24 hereof), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such Rights
Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. Concerning the Rights Agent TC Section 18.
Concerning the Rights Agent \f C \l 1.
(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
disbursements 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, its directors, officers,
employees and agents for, and to hold each of them harmless
against, any loss, liability, or expense, incurred without
gross negligence, bad faith or willful misconduct on the part
of the Rights Agent, for anything done or omitted by the Rights
Agent or such other indemnified parties in connection with the
acceptance and administration of this Agreement or the
performance of the Rights Agents duties hereunder including the
costs and expenses or defending against any claim of liability
in the premises.
(b) The Rights Agent shall be protected and shall
incur no liability for or in respect of any action taken,
suffered or omitted by it in connection with its administration
of this Agreement or the performance of the Rights Agents
duties hereunder in reliance upon any Rights Certificate or
certificate for Common Stock or for other securities of the
Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction,
instruction, 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.
(c) The indemnity provided in this Section 18
shall survive the expiration of the Rights and the termination
of the Agreement.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent TC Section 19. Merger or Consolidation or Change
of Name of Rights Agent \f C \l 1.
(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 Agents or any
successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust business of the Rights Agent
or any successor Rights Agent, shall be the successor to the
Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of
the parties hereto; provided, however, 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 Rights Certificates shall have
been countersigned but not delivered, any such successor Rights
Agent may adopt the countersignature of a predecessor Rights
Agent and deliver such Rights Certificates so countersigned;
and in case at that time any of the Rights Certificates shall
not have been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the
predecessor or in the name of the successor Rights Agent; and
in all such cases such Rights Certificates shall have the full
force provided in the Rights 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 Rights
Certificates shall have been countersigned but not delivered,
the Rights Agent may adopt the countersignature under its prior
name and deliver Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have
been countersigned, the Rights Agent may countersign such
Rights Certificates either in its prior name or in its changed
name; and in all such cases such Rights Certificates shall have
the full force provided in the Rights Certificates and in this
Agreement.
Section 20. Duties of Rights Agent TC Section 20.
Duties of Rights Agent \f C \l 1. 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 Rights 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
advice or 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 advice or opinion.
(b) Whenever in the performance of its duties
under this Agreement the Rights Agent shall deem it necessary
or desirable that any fact or matter (including, without
limitation, the identity of any Acquiring Person and the
determination of current market price) 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 the Chairman of the Board, the President,
any Vice President, the Treasurer, any Assistant Treasurer, the
Secretary or any Assistant Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be
full authorization to the Rights Agent for any action taken or
suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder
only for its own gross negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be liable for or
by reason of any of the statements of fact or recitals
contained in this Agreement or in the Rights Certificates or be
required to verify the same (except as to its countersignature
on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the
Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement or
the execution and delivery hereof (except the due execution
hereof by the Rights Agent) or in respect of the validity or
execution of any Rights Certificate (except its
countersignature thereof); nor shall it be responsible for any
breach by the Company of any covenant or condition contained in
this Agreement or in any Rights Certificate; nor shall it be
responsible for any adjustment required under the provisions of
Section 11 or Section 13 hereof or responsible for the manner,
method or amount of any such adjustment or the ascertaining of
the existence of facts that would require any such adjustment
(except with respect to the exercise of Rights evidenced by
Rights Certificates after actual notice of any such
adjustment); nor shall it by any act hereunder be deemed to
make any representation or warranty as to the authorization or
reservation of any shares of Common Stock or other securities
to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any shares of Common Stock or
other securities will, when so issued, be validly authorized
and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform,
execute, acknowledge and deliver or cause to be performed,
executed, acknowledged and delivered all such further and other
acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the
Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and
directed to accept instructions with respect to the performance
of its duties hereunder from the Chairman of the Board, the
President, any Vice President, the Secretary, any Assistant
Secretary, the Treasurer or any Assistant Treasurer of the
Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be
liable for any action taken or suffered to be taken by it in
good faith in accordance with instructions of any such officer
or for any delay in acting while awaiting instructions. At any
time the Rights Agent may apply to the Company for written
instructions with respect to any matter arising in connection
with the Rights Agents duties and obligations arising under
this Agreement. Such application by the Rights Agent for
written instructions from the Company may, at the option of the
Rights Agent, set forth in writing any action proposed to be
taken or omitted by the Rights Agent with respect to its duties
or obligations under this Agreement and the date on and or
after which such action shall be taken and the Rights Agent
shall not be liable for any action taken or omitted in
accordance with a proposal included in any such application on
or after the date specified therein (which date shall be not
less than one business day after the Company receives such
application, without the Companys consent) unless, prior to
taking or initiating any such action, the Rights Agent has
received written instructions in response to such application
specifying the action to be taken or omitted.
(h) The Rights Agent and any shareholder,
director, officer or employee of the Rights Agent may buy, sell
or deal in any of the Rights or other securities of the Company
or become pecuniarily interested in any transaction in which
the Company may be interested, or contract with or lend money
to the Company or otherwise act as fully and freely as though
it were not Rights Agent under this Agreement. Nothing herein
shall preclude the Rights Agent from acting in any other
capacity for the Company 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, however, that the Rights Agent was not grossly
negligent in the selection and continued employment thereof.
(j) No provision of this Agreement shall require
the Rights Agent to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its
duties hereunder or in the exercise of its rights if there
shall be reasonable grounds for believing that repayment of
such funds or adequate indemnification against such risk or
liability is not reasonably assured to it.
(k) If, with respect to any Right Certificate
surrendered to the Rights Agent for exercise or transfer, the
certificate attached to the form of assignment or form of
election to purchase, as the case may be, has either not been
completed or indicates an affirmative response to clause 1 and
or 2 thereof, the Rights Agent shall not take any further
action with respect to such requested exercise of transfer
without first consulting with the Company.
(l) The Rights Agent undertakes only the express
duties and obligations imposed on it by this Agreement and no
implied duties or obligations shall be read into this Agreement
against the Rights Agent.
(m) Anything in this Agreement to the contrary
notwithstanding, in no event shall the Rights Agent be liable
for special, indirect or consequential loss or damage of any
kind whatsoever (including but not limited to lost profits).
Section 21. Change of Rights Agent TC Section 21.
Change of Rights Agent \f C \l 1. The Rights Agent or
any successor Rights Agent may resign and be discharged from
its duties under this Agreement upon thirty (30) days notice
in writing mailed to the Company, and to each transfer agent
of the Common Stock, by registered or certified mail. The
Company may remove the Rights Agent or any successor Rights
Agent upon thirty (30) days notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be,
and to each transfer agent of the Common Stock, by registered
or certified mail, and to the holders of the Rights
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 thirty (30) days after giving notice of
such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Rights Certificate (who
shall, with such notice, submit his Rights Certificate for
inspection by the Company), then any registered holder of any
Rights Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by
such a court, shall be a corporation organized and doing
business under the laws of the United States or of the State
of New York or of the Commonwealth of Pennsylvania (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 or of the Commonwealth of Pennsylvania if
such authorization is required in order to fulfill its
responsibilities under this Agreement), in good standing,
having a principal office in the State of New York or of the
Commonwealth of Pennsylvania which is authorized under such
laws to exercise corporate trust powers and is subject to
supervision or examination by federal or state authority and
which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $100,000,000. After
appointment, the successor Rights Agent shall be vested with
the same powers, rights, duties and responsibilities as if it
had been originally named as Rights Agent without further act
or deed; but the predecessor Rights Agent shall deliver and
transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further
assurance, conveyance, act or deed necessary for the purpose.
Not later than the effective date of any such appointment, the
Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common
Stock and the Preferred Stock, and mail a notice thereof in
writing to the registered holders of the Rights Certificates.
Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent
or the appointment of the successor Rights Agent, as the case
may be.
Section 22. Issuance of New Rights Certificates TC
Section 22. Issuance of New Rights Certificates \f C \l.
Notwithstanding any of the provisions of this Agreement or of
the Rights to the contrary, the Company may, at its option,
issue new Rights Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price and the number or
kind or class of shares or other securities or property
purchasable under the Rights Certificates made in accordance
with the provisions of this Agreement. In addition, the
Company may, if deemed necessary or appropriate by the Board
of Directors of the Company, issue Rights Certificates
representing the appropriate number of Rights in connection
with the issuance or sale of shares of Common Stock following
the Distribution Date.
Section 23. Redemption and Termination TC Section 23.
Redemption and Termination \f C \l 1.
(a) The Board of Directors of the Company may, at
its option, at any time prior to the earlier of (i) the close
of business on the tenth business day following the Stock
Acquisition Date, or (ii) the Final Expiration Date, redeem all
but not less than all the then outstanding Rights at a
redemption price of $.01 per Right, as such amount may be
appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof
(such redemption price being hereinafter referred to as the
Redemption Price); provided, however, if the Board of Directors
of the Company authorizes redemption of the Rights in either of
the circumstances set forth in clauses (i) and (ii) below, then
such authorization shall require the concurrence of a majority
of the Continuing Directors then in office: (i) such
authorization occurs on or after the time a Person becomes an
Acquiring Person, or (ii) such authorization occurs on or after
the date of a change (resulting from a proxy or consent
solicitation) in a majority of the directors in office at the
commencement of such solicitation if any Person who is a
participant in such solicitation has stated (or, if upon the
commencement of such solicitation, a majority of the Board of
Directors of the Company has determined in good faith) that
such Person (or any of its Affiliates or Associates) intends to
take, or may consider taking, any action which would result in
such Person becoming an Acquiring Person or which would cause
the occurrence of a Triggering Event; provided further,
however, that if, following the occurrence of a Stock
Acquisition Date and following the expiration of the right of
redemption hereunder but prior to any Triggering Event, (i) a
Person who is an Acquiring Person shall have transferred or
otherwise disposed of a number of shares of Common Stock in one
transaction or series of transactions, not directly or
indirectly involving the Company or any of its Subsidiaries,
such that such Person is thereafter a Beneficial Owner of 10%
or less of the outstanding shares of Common Stock, and (ii)
there are no other Persons, immediately following the
occurrence of the event described in clause (i), who are
Acquiring Persons, then the right of redemption shall be
reinstated and thereafter be subject to the provisions of this
Section 23. Notwithstanding anything contained in this
Agreement to the contrary, the Rights shall not be exercisable
(i) after the first occurrence of a Section 11(a)(ii) Event
until such time as the Companys right of redemption hereunder
has expired, or (ii) during the period in which the Companys
right of redemption shall have been reinstated under Section 30
hereof.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the redemption of the Rights,
evidence of which shall have been filed with the Rights Agent
and without any further action and without any notice, the
right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right so held. Promptly after the
action of the Board of Directors ordering the redemption of the
Rights, the Company shall give notice of such redemption to the
Rights Agent and the holders of the then outstanding Rights by
mailing such notice to all such holders at each holders last
address as it appears 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 will state the method by which the payment
of the Redemption Price will be made.
Section 24. Notice of Certain Events TC Section 24.
Notice of Certain Events \f C \l 1.
(a) In case the Company shall take action, at any
time after the Distribution Date, (i) to pay any dividend
payable in stock of any class to the holders of Common Stock or
to make any other distribution to the holders of Common Stock
(other than a regular quarterly cash dividend out of earnings
or retained earnings of the Company), or (ii) to offer to the
holders of Common Stock rights or warrants to subscribe for or
to purchase any additional shares of Common Stock or shares of
stock of any class or any other securities, rights or options,
or (iii) to effect any reclassification of its Common Stock
(other than a reclassification involving only the subdivision
of outstanding shares of Common Stock), or (iv) to effect any
consolidation or merger into or with any other Person, or to
effect a statutory share exchange with any Person, or to effect
any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one
transaction or a series of related transactions, of more than
50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons,
or (v) to effect the liquidation, dissolution or winding up of
the Company, then, in each such case, the Company shall give to
each holder of a Rights Certificate, to the extent feasible and
in accordance with Section 25 hereof, a notice of such proposed
action, which shall specify the record date for the purposes of
such stock dividend, distribution of rights or warrants, or the
date on which such reclassification, consolidation, merger,
statutory share exchange, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of
participation therein by the holders of the shares of Common
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 twenty (20) days prior to the record date
for determining holders of the shares of Common Stock for
purposes of such action, and in the case of any such other
action, at least twenty (20) days prior to the date of the
taking of such proposed action or the date of participation
therein by the holders of the shares of Common Stock whichever
shall be the earlier.
(b) In case any of the events set forth in
Section 11(a)(ii) hereof shall occur, then, in any such case,
(i) the Company shall as soon as practicable thereafter give to
each holder of a Rights Certificate, to the extent feasible and
in accordance with Section 25 hereof, a notice of the
occurrence of such event, which shall specify the event and the
consequences of the event to holders of Rights under Section
11(a)(ii) hereof, and (ii) all references in the preceding
paragraph to Common Stock shall be deemed thereafter to refer
to other securities, if appropriate.
Section 25. Notices TC Section 25. Notices \f C \1 1.
Notices or demands authorized by this Agreement to be given or
made by the Rights Agent or by the holder of any Rights
Certificate to or on the Company shall be sufficiently given or
made if sent by first class mail, postage prepaid, addressed
(until another address is filed in writing with the Rights
Agent) as follows:
Conestoga Enterprises, Inc.
202 East First Street
Birdsboro, PA 19508
Attention: Corporate Secretary
Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company
or by the holder of any Rights 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:
First Union National Bank
1525 West W.T. Harris Boulevard, 3C3
Charlotte, North Carolina 28262 1153
Attention: Shareholder Services Group
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any
Rights Certificate (or, if prior to the Distribution Date, to
the holder of certificates representing shares of Common Stock)
shall be sufficiently given or made if sent by first class
mail, postage prepaid, addressed to such holder at the address
of such holder as shown on the registry books of the Company.
Section 26. Supplements and Amendments TC Section 26.
Supplements and Amendments \f C \l 1. Prior to the
Distribution Date and subject to the next to last sentence of
this Section 26, the Company and the Rights Agent shall, if the
Company so directs, supplement or amend any provision of this
Agreement without the approval of any holders of certificates
representing shares of Common Stock. From and after the
Distribution Date and subject to the next to last sentence of
this Section 26, the Company 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 (i)
to cure any ambiguity, (ii) to correct or supplement any
provision contained herein which may be defective or
inconsistent with any other provisions herein, or (iii) to
change or supplement the provisions hereunder in any manner
which the Company may deem necessary or desirable and which
shall not materially adversely affect the interests of the
holders of Rights Certificates (other than an Acquiring Person
or an Affiliate or Associate of an Acquiring Person); provided,
that this Agreement may not be supplemented or amended to
lengthen, pursuant to this sentence, a time period relating to
when the Rights may be redeemed. 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 26, the Rights Agent
shall execute such supplement or amendment. Notwithstanding
anything contained in this Agreement to the contrary, no
supplement or amendment shall be made (1) that changes the
Redemption Price, the Final Expiration Date or the Purchase
Price, (2) that reduces the number of shares of Common Stock
for which a Right is exercisable or (3) that amends this
Section 26, unless such supplement or amendment is approved by
a majority of the Continuing Directors then in office, and no
supplement or amendment that changes the rights or duties of
the Rights Agent under this Agreement shall be effective
without the consent of the Rights Agent. Prior to the
Distribution Date, the interests of the holders of Rights shall
be deemed coincident with the interests of the holders of
Common Stock.
Section 27. Successors TC Section 27. Successors \f C
\l 1. 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 28. Determinations and Actions by the Board of
Directors, etc TC Section 28. Determinations and Actions by the
Board of Directors, etc \f C \l 1. For all purposes of this
Agreement, any calculation of the number of shares of Common
Stock outstanding at any particular time, including for
purposes of determining the particular percentage of such
outstanding shares of Common Stock of which any Person is the
Beneficial Owner, shall be made in accordance with the last
sentence of Rule 13d3(d)(1)(i) of the General Rules and
Regulations under the Exchange Act. The Board of Directors of
the Company (and, where specifically provided for herein, the
Continuing Directors) shall have the exclusive power and
authority to administer this Agreement and to exercise all
rights and powers specifically granted to the Board, or the
Company (or, where specifically provided for herein, the
Continuing Directors), 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 decisions and
determinations deemed necessary or advisable for the
administration of this Agreement (including without limitation
a decision to redeem or not redeem the Rights or to amend the
Agreement and a determination of whether or not a person is or
was an Acquiring Person or beneficially owns a certain
percentage of stock of the Company). All such actions,
calculations, interpretations, decisions and determinations
(including, for purposes of clause (y) below, all omissions
with respect to the foregoing) which are done or made by the
Board (or, where specifically provided for herein, by the
Continuing Directors) in good faith, shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the
holders of the Rights Certificates and all other parties, and
(y) not subject the Board or the Continuing Directors to any
liability to the holders of the Rights.
Section 29. Benefits of this Agreement TC Section 29.
Benefits of this Agreement \f C \l 1. Nothing in this
Agreement shall he construed to give to any Person other than
the Company, the Rights Agent and the registered holders of the
Rights Certificates (and, prior to the Distribution Date,
registered holders of 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 Rights
Certificates (and, prior to the Distribution Date, registered
holders of the Common Stock).
Section 30. Severability TC Section 30. Severability \f
C \l 1. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions
of this Agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated; provided,
however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction
is held by such court or authority to be invalid, void or
unenforceable and the Board of Directors of the Company
determines in its good faith judgment that severing the invalid
language from this Agreement would adversely affect the purpose
or effect of this Agreement, the right of redemption set forth
in Section 23 hereof shall be reinstated and shall not expire
until the close of business on the tenth business day following
the date of such determination by the Board of Directors.
Section 31. Governing Law TC Section 31. Governing Law
\f C \l 1. This Agreement, each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract
made under the laws of the Commonwealth of Pennsylvania and for
all purposes shall be governed by and construed in accordance
with the laws of such Commonwealth applicable to contracts made
and to be performed entirely within such Commonwealth.
Section 32. Counterparts TC Section 32. Counterparts \f
C \l 1. 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 33. Descriptive Headings TC Section 33.
Descriptive Headings \f C \l 1. Descriptive headings of
the several Sections of this Agreement are inserted for
convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate
seals to be hereunto affixed and attested, all as of the day
and year first above written.
Attest: CONESTOGA ENTERPRISES, INC.
By:
Name: Name:
Title: Title:
Attest: FIRST UNION NATIONAL BANK
By:
Name: Name:
Title: Title:
EXHIBIT A
Form of Rights Certificate TC EXHIBIT A FORM OF RIGHTS
CERTIFICATE \f F \l 1
Certificate No. R Rights
NOT EXERCISABLE AFTER MARCH
1,2010, OR EARLIER IF REDEEMED
BY THE COMPANY. THE RIGHTS ARE
SUBJECT TO REDEMPTION, AT THE
OPTION OF THE COMPANY, AT $.01
PER RIGHT (SUBJECT TO
ADJUSTMENT) ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES,
RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON (AS SUCH TERM
IS DEFINED IN THE RIGHTS
AGREEMENT) AND ANY SUBSEQUENT
HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID. [THE
RIGHTS REPRESENTED BY THIS
CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON
WHO WAS OR BECAME AN ACQUIRING
PERSON OR AN AFFILIATE OR
ASSOCIATE OF AN ACQUIRING
PERSON (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS
AGREEMENT). ACCORDINGLY, THIS
RIGHTS CERTIFICATE AND THE
RIGHTS REPRESENTED HEREBY MAY
BECOME NULL AND VOID IN THE
CIRCUMSTANCES SPECIFIED IN
SECTION 7(e) OF SUCH
AGREEMENT.]
Rights Certificate
CONESTOGA ENTERPRISES, INC.
This certifies that , or registered
assigns, is the registered owner of the number of Rights set
forth above, each of which entitles the owner thereof, subject
to the terms, provisions and conditions of the Rights
Agreement, dated as of March 1, 2000, (the Rights Agreement),
between Conestoga Enterprises, Inc., a Pennsylvania corporation
(the Company), and First Union National Bank, a national
banking corporation (the Rights Agent), to purchase from the
Company at any time prior to 5:00 P.M. (New York City time) on
March 1, 2010, at the office or offices of the Rights Agent
designated for such purpose, or its successors as Rights Agent,
one fully paid, non assessable share of Common Stock, par value
$1.00 per share (the Common Stock) of the Company, at a
purchase price of $180.00 per share (the Purchase Price), upon
presentation and surrender of this Rights Certificate with the
Form of Election to Purchase and related Certificate duly
executed. The Purchase Price shall be paid, at the election of
the holder, in cash or shares of Common Stock of the Company
having an equivalent value. The number of Rights evidenced by
this Rights Certificate (and the number of shares which may be
purchased upon exercise thereof) set forth above, and the
Purchase Price per share set forth above, are the number and
Purchase Price as of March 1, 2000 based on the Common Stock as
constituted at such date.
Upon the occurrence of a Triggering Event (as such term
is defined in the Rights Agreement), if the Rights evidenced by
this Rights Certificate are beneficially owned by (i) an
Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person,
Associate or Affiliate, or (iii) under certain circumstances
specified in the Rights Agreement, a transferee of a person
who, after such transfer, became an Acquiring Person, or an
Affiliate or Associate of an Acquiring Person, such Rights
shall become null and void and no holder hereof shall have any
right with respect to such Rights from and after the occurrence
of such Triggering Event and the transfer of such rights may be
deemed to be restricted.
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of
the Rights Certificates, which limitations of rights include
the temporary suspension of the exercisability of such Rights
under the specific circumstances set forth in the Rights
Agreement. Copies of the Rights Agreement are on file at the
above mentioned office of the Rights Agent and are also
available upon written request to the Rights Agent.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the principal office or offices
of the Rights Agent designated for such purpose, may be
exchanged for another Rights Certificate or Rights Certificates
of like tenor and date evidencing Rights entitling the holder
to purchase a like aggregate number of shares of Common Stock
as the Rights evidenced by the Rights Certificate or Rights
Certificates surrendered shall have entitled such holder to
purchase. If this Rights Certificate shall be exercised in
part, the holder shall be entitled to receive upon surrender
hereof another Rights Certificate or Rights Certificates for
the number of whole Rights not exercised.
Subject to certain rights of extension and the other
provisions of the Rights Agreement, the Rights evidenced by
this Certificate may be redeemed by the Company at its option
at a redemption price of $.01 per Right (subject to adjustment)
at any time prior to the earlier of the close of business on
(i) the tenth business day following the Stock Acquisition Date
(as such time period may be extended pursuant to the Rights
Agreement), and (ii) the Final Expiration Date. Under certain
circumstances set forth in the Rights Agreement, the decision
to redeem shall require the concurrence of a majority of the
Continuing Directors. After the expiration of the redemption
period, the Companys right of redemption may be reinstated if
an Acquiring Person reduces his beneficial ownership to 10% or
less of the outstanding shares of Common Stock in a transaction
or series of transactions not involving the Company.
No fractional shares of Common Stock will be issued upon
the exercise of any Right or Rights evidenced hereby, but in
lieu thereof a cash payment will be made, as provided in the
Rights Agreement.
No holder of this Rights Certificate shall be entitled to
vote or receive dividends or be deemed for any purpose the
holder of shares of Common 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 shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or, to receive notice
of meetings or other actions affecting shareholders (except as
provided in the Rights Agreement), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights
evidenced by this Rights Certificate shall have been exercised
as provided in the Rights Agreement.
This Rights 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 facsimile corporate seal.
Dated as of , 20
ATTEST: CONESTOGA ENTERPRISES, INC.
By:
Countersigned:
By:
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires
to transfer the Rights Certificate).
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint Attorney, to transfer the within Rights
Certificate on the books of the within named Company, with full
power of substitution.
Dated: , 20
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being
sold, assigned and transferred by or on behalf of a Person who
is or was an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person (as such terms are defined pursuant
to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights
Certificate from any Person who is, was or subsequently became
an Acquiring Person or an Affiliate or Associate of an
Acquiring Person.
Dated: , 20
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and Certificate
must correspond to the name as written upon the face of this
Rights Certificate in every particular, without alteration or
enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights
represented by
the Rights Certificate)
To: CONESTOGA ENTERPRISES, INC.:
The undersigned hereby irrevocably elects to exercise
Rights represented by this Rights Certificate to purchase the
shares of Common Stock issuable upon the exercise of the Rights
(or such other securities of the Company or of any other person
which may be issuable upon the exercise of the Rights) and
requests that certificates for such shares be issued in the
name of and delivered to:
Please insert social security or
other identifying number
(Please print name and address)
If such number Rights shall not be all the Rights
evidenced by this Rights Certificate, a new Rights Certificate
for the balance of such Rights shall be registered in the name
of and delivered to:
Please insert social security or
other identifying number
(Please print name and address)
Dated: , 20
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [
] are [ ] are not being exercised by or on behalf of a Person
who is or was an Acquiring Person or an Affiliate or Associate
of any such Acquiring Person (as such terms are defined
pursuant to the Rights Agreement).
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights
evidenced by this Rights Certificate from any Person who is,
was or became an Acquiring Person or an Affiliate or Associate
of an Acquiring Person.
Dated: , 20
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the
face of this Rights Certificate in every particular, without
alteration or enlargement or any change whatsoever.
EXHIBIT B
CONESTOGA ENTERPRISES, INC.
SUMMARY OF RIGHTS TO PURCHASE COMMON STOCK TC EXHIBIT B
CONESTOGA ENTERPRISES, INC. SUMMARY OF RIGHTS TO PURCHASE
COMMON STOCK \f F \l 1
On February 29, 2000, the Board of Directors of Conestoga
Enterprises, Inc. (the Company) declared a dividend
distribution of the right (a Right) to purchase one share of
common stock, par value $1.00 per share (the Common Stock), for
each outstanding share of the Common Stock of the Company to
shareholders of record at the close of business on April 1,
2000 (the Record Date) at a price of $180.00 (as the same may
be adjusted, the Purchase Price). The description and terms of
the Rights are set forth in a Rights Agreement (as the same may
be amended from time to time, the Rights Agreement) dated as of
March 1, 2000, between the Company and First Union National
Bank, as Rights Agent (the Rights Agent).
Initially, the Rights will be evidenced by all Common
Stock certificates representing shares then outstanding, and no
separate Rights certificates will be distributed. The Rights
will separate from the Common Stock and a Distribution Date
will occur upon the earlier of (i) 10 business days following a
public announcement that a person or a group of affiliated or
associated persons (an Acquiring Person) has acquired, or
obtained the right to acquire, beneficial ownership of 15% or
more of the outstanding shares of Common Stock (the Stock
Acquisition Date), or (ii) 10 business days following the
commencement of a tender offer or exchange offer that would
result in a person or group beneficially owning 15% or more of
such outstanding shares of Common Stock. Until the
Distribution Date, (i) the Rights will be evidenced by such
Common Stock certificates and will be transferred with and only
with such Common Stock certificates, (ii) new Common Stock
certificates issued after the Record Date will contain a
notation incorporating the Rights Agreement by reference, and
(iii) the surrender for transfer of any certificates for Common
Stock outstanding will also constitute the transfer of the
Rights associated with the Common Stock represented by such
certificates. 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, thereafter, such separate Rights Certificates alone
will evidence the rights.
The Rights are not exercisable until the Distribution
Date and will expire at the close of business on March 1, 2010,
unless earlier redeemed by the Company as described below.
In the event that (i) the Company is the surviving
corporation in a merger or the acquiring corporation in a
statutory share exchange with an Acquiring Person and its
Common Stock is not changed or exchanged, (ii) an Acquiring
Person engages in certain self dealing transactions with the
Company, (iii) a Person (other than the Company and its
affiliates) becomes the beneficial owner of 15% or more of the
then outstanding shares of Common Stock, or (iv) during a time
that there is an Acquiring Person, one or more specified events
occur that result in such Acquiring Persons ownership interest
in the Company being increased by more than 1%, the Rights
Agreement provides that proper provision shall be made so that
each holder of a Right will thereafter have the right to
receive, upon exercise, Common Stock (or, in certain
circumstances, cash, property or other securities of the
Company) having a value equal to two (2) times the exercise
price of the Right.
For example, at an exercise price of $180.00 per Right,
each Right not owned by an Acquiring Person (or by certain
related parties and transferees of the Acquiring Person)
following an event set forth in the preceding paragraph would
entitle its holder to purchase $360.00 worth of Common Stock
(or other consideration, as noted above) for $180.00. Assuming
that the Common Stock had a per share value of $180.00 at such
time, the holder of each valid Right would be entitled to
purchase two shares of Common Stock for $180.00.
In the event that, at any time following the Distribution
Date, (i) the Company is acquired in a merger, statutory share
exchange or other business combination transaction in which the
Company is not the surviving corporation, (ii) the Company
engages in a merger or other business combination transaction
with another person in which the Company is the surviving
corporation, but in which its Common Stock is changed or
exchanged, or (iii) 50% or more of the Companys assets or
earning power is sold or transferred, the Rights Agreement
provides that proper provision shall be made so that each
holder of a Right shall thereafter have the right to receive,
upon exercise of the Right, common stock or other consideration
of the acquiring company having a value equal to two (2) times
the exercise price of the Right.
Notwithstanding any of the foregoing, following the
occurrence of any of the events set forth in the preceding
paragraph and the third preceding paragraph (the Triggering
Events), any Rights that are, or (under certain circumstances
specified in the Rights Agreement) were, beneficially owned by
any Acquiring Person shall immediately become null and void.
Also, under no circumstances may a Right be exercised following
the occurrence of an event set forth in clause (iii) of the
third preceding paragraph prior to expiration of the Companys
right of redemption.
The Purchase Price shall be paid, at the option of the
holder, in cash or shares of Common Stock having an equivalent
value. The Purchase Price payable, and the number of shares of
Common Stock or other securities or property issuable, upon
exercise of the Rights are subject to adjustment from time to
time to prevent dilution (i) in the event of a stock dividend
on, or a subdivision, combination or reclassification of, the
Common Stock, (ii) upon the grant to holders of the Common
Stock of certain rights or warrants to subscribe for Common
Stock or convertible securities at less than the then current
market price of Common Stock, or (iii) upon the distribution to
holders of the Common Stock of evidences of indebtedness or
assets (excluding regular quarterly cash dividends) or of
subscription rights or warrants (other than the Rights).
No adjustment in the Purchase Price will be required
until cumulative adjustments amount to at least 1% of the
Purchase Price. No fractional shares will be issued upon
exercise of a Right and, in lieu thereof, an adjustment in cash
will be made based on the market price of the Common Stock on
the last trading date prior to the date of exercise.
The term Continuing Directors means any member of the
Board of Directors of the Company who was a member of the Board
prior to the date of the Rights Agreement, and any person who
is subsequently elected to the Board if such person is
recommended or approved by a majority of the Continuing
Directors, but shall not include an Acquiring Person, or any
affiliate or associate of an Acquiring Person, or any
representative of an Acquiring Person or of an affiliate or
associate of an Acquiring Person.
At any time until ten (10) business days following the
Stock Acquisition Date, the Board of Directors may cause the
Company to redeem the Rights in whole, but not in part, at a
price of $0.01 per Right, subject to adjustment (the
Redemption Price); provided, however, if the Board of Directors
of the Company authorizes redemption of the Rights in either of
the circumstances set forth in clauses (i) and (ii) below, then
such authorization requires the concurrence of a majority of
Continuing Directors then in office: (i) such authorization
occurs on or after the time a person or group acquires
beneficial ownership of 15% or more of the outstanding Common
Stock, or (ii) such authorization occurs on or after the date
of a change in a majority of the directors resulting from a
proxy solicitation if the solicitor (or any participant in the
solicitation) indicates an intention to become an Acquiring
Person or to cause a Triggering Event. Thereafter, the
Companys right of redemption may be reinstated if an Acquiring
Person reduces his beneficial ownership to 10% or less of the
outstanding shares of Common Stock in a transaction or series
of transactions not involving the Company and there is then no
other Acquiring Person.
Immediately upon the action of the Board of Directors of
the Company, with, where required, the concurrence of the
Continuing Directors, ordering redemption of the Rights, the
Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such,
will have no rights as a stockholder of the Company, including,
without limitation, the right to vote or to receive dividends.
No amendment of the Rights Agreement may change the
Purchase Price, Redemption Price or final expiration date or
may reduce the number of shares of Common Stock for which a
Right is exercisable unless such amendment is approved by a
majority of the Continuing Directors then in office. Subject
to those restrictions, the provisions of the Rights Agreement
may be amended by the Board of Directors, prior to the
Distribution Date, in any manner, including without limitation
shortening or lengthening any redemption period. After the
Distribution Date, amendments may not be made to lengthen any
redemption period, but other amendments or modifications not
adverse to the interests of Rights holders may be made.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Current
Report on Form 8 K dated March 3, 2000. A copy of the Rights
Agreement is available free of charge from the Rights Agent.
This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the
Amended and Restated Rights Agreement, which is incorporated by
herein by reference.
